tv Trending Business Bloomberg October 6, 2016 9:00pm-10:01pm EDT
blooming philippine market running out of steam. me on twitter. markets in hong kong getting under way at the bottom of the hour. malaysia just coming online. a is about the pound, recovery, the biggest plunge since the brexit. the pound just plunging, as much as 1% one point. the big question, what happened? because of sensitive worries about a possible hard brexit. first we heard from mitsubishi, this drop could be treated as a wrong order. of course, we saw a plunge, and it is retracing those losses. now we are hearing from dealers
that it was a failure of the algorithm, that things got worse because liquidity disappeared and we saw those deals not being able to load the bids on their platforms. and in the over-the-counter market being triggered, 1.23. , a cap tradersy -- theept traders japanese yen against the dollar was not even moving. that is not the case anymore because it is strengthening .25% for the first time in nine days, reversing eight days of a recess and halting that longest losing streak since march. rishaad: what about the yen's strength, how does this play
into it? -- affectingasked exporters in japan, the nikkei losing ground, falling plate 1%. the nikkei has been one of the strongest markets across asia this week, boosting into the benchmark index. it is unchanged, and is headed for a second week regain. eyeo have to keep a close on what happens to that. but they had been doing well this morning after the third quarter estimates. even for samsung, falling even .3%. losing new zealand stocks falling for a third consecutive session. rishaad: when we look at electronics, a closely watched set of numbers.
it offers the potential impact for this note 7 crisis. david is on top of the story today for samsung. tell us about it. david: we got the initial reports, these are unaudited, we do not have a breakdown across different businesses. we always run the risk of over reading into these numbers. said, sales missed estimates. we are looking at around 44 billion u.s. dollars. i think we have a graphic, we can get that up for viewers. that being said, from these two things, we have a 16% operating margin. can obviously see which business is did well. they sold less but are still making more money. these are semiconductors, for example. but if you do not have the
breakdown across business positions, that, along with net income, will be out, along with audit predictions at the end of the month. rishaad: nothing on the potential financial recall from this -- financials from this recall? david: $1 billion to $2 billion in u.s. dollars is the number we are looking at. but that is on the air because we could look at a bigger recall right now. a look at that in a moment. but look at the bloomberg chart rehab. what it shows you is gross margins for samsung against apple. it is not apples to oranges, no pun intended. samsung, less than half of their business comes from mobile. -- samsung not as big as apple, but when you do
get this impact, when we see this number coming out on the impact potentially for the recall, it could hit margins. it is a one off. we will see how this all plays out. quickly, we have a look at the potential of the former executive director for the consumer watch, who said that this is the incident that happened, the phone smoked in his pocket, there will be another recall for samsung. rishaad: and let's get to the other story with regards to samsung, something we look at yesterday. this whole moved by this activist, that split the company into two. david: we have a report from the wall street journal, that the proposal on the table is roughly in line with what the
controllers have. samsung declined to comment. the leasing unit for an airline has become a big world leader, avalon making a $10 this hasurchase, cit, much wider implications. hna has been on a big acquisition hunt, spending more than $10 million in deals. they are doubling already what they have announced as far as their hunt. have an aircraft leasing unit which they bought a while back. this is expected to close in the first quarter of 2017, you saw cit shares in after-hours closing pretty flat. but up 7.5%, they will pay about
$10 billion. this is an example of how aggressive chinese companies are becoming to acquire assets, including hna airlines. rishaad: it fits well with an industrial strategy. what are they building here? what is hna actually building? this will become a leasing powerhouse. on top of that, you have airlines. >> they are the number one leasing company, the big leasing giant founded back in the day. make hna's avalon the global number three lessor in the world. valued at more than 43 billion 1600 aslars, they have
the global leader in their own, or manage, or on order. goal, according to the ceo of avalon, saying our strategic objective is to build the number one aircraft leasing company in the world, in terms of size, shape, and scale. they are on their way to that. rishaad: we're looking at what -- it ise germans catching attention, let's get to that story and others. >> of these are the latest developments with deutsche bank, they have talks about raising capital, should its mounting legal bills require it. theyes telling bloomberg are speaking to the bank about a potential share fall. they say the banks are offering to help underwrite stocks, should deutsche need that. that is the most they can sell
without having to get shareholder approval. they have declined to comment on that story. imf managing director says as soon as they reach a settlement ,ith the department of justice the bad settlement is oh is -- is better, and will meet -- and will mean certainty. there are seeing shares fall in the tokyo session, this after they unveiled their restructuring plan. profitable department stores will have an alliance with a local retailer. in japan they also established a company to redevelop some of the real estate currently occupied by a underperforming retail businesses as they turn into
housing for seniors and other residential and commercial uses. an overhaul comes with less consumer spending in japan. also, a decline in the population and increasing competition and saturation in the market. follows a very high-profile challenge by u.s. activists, they have been pushing them to focus more on their convenience stores in turn away from its department store business. o u.s. representatives from california, including the head of the intelligence committee -- they want extra scrutiny of chinese companies stating takeovers. they added their names to a bipartisan name of -- list. there was a september 15 letter. they want them to determine whether the committee in the
u.s. has kept pace with the growing number of foreign acquisitions, stateside. searching for the truth behind donald trump. we look at why some say the billionaire rides on the waves of other people's money. a plunge in the pound, we will take a look at what is going on, why some are blaming algorithms for today's crash. ♪
the senior strategist. not something you're going to dwell on today, but this is front and center now. what happened? -- >> it reminds me of flash crash.gold with most ofed east asia being fully online. stirling is normally pretty calm and it looks as though it is about to those comments tough negotiations on brexit. to talk about orders, like algorithms, most likely. it was a bit overdone.
these stoploss positions are in a narrow range. nothing to support sterling. , theome have even argued price indication does not reflect how low it went. there is a lot of debate on that, yes, some systems are well below what you will see on the 118.41.g screen, move, it is this not as medicare as euro swiss, but it is open for debate. i think the key is, where does it settle down, out what does london make of it?
but it is weaker, there is an obvious flaw. we are at a 31 year low, no particular reason it stops here, , at what has been triggered the conference. comes onwhen london stream, it is the biggest center, perhaps we should get some stability or clarity? >> it will be an interesting test, a lot of it has not been very upbeat. i think mostly this week, the heaviest selling on the sterling has come in the european time zone. u.k. investors and clients using london have tended to be among the more bearish on the pound. valve in, a release terms of brexit, what it will mean for the u.k. economy, the flexible currency, having a
weaker pound is guaranteed once you had the brexit vote. huge.k. is a running deficits. one way or the other, sterling has cheapened up. how to does it need to be? rishaad: talk about the yen. we have seen a run-up, we have seen it weaken. a bit of weakness creeping in. we want him to do something and come out with something more concrete, people have this expectation about it happening. but what will happen? >> the pressure will remain on the bank of japan. i think initially, they will be reasonably satisfied they can deliver a lot less than what people are expecting at the september meeting. 100.will not crash through
the yen was the weakest currency over the past week. is a higher positioning on the dollar-yen. if you look at the futures market, leveraged, they had the longest yen position since march of 2008. the yen has been a very profitable trade, and it looks over the past week, some of the money has come off the table. but i do not think too many people are changing their big picture view. rishaad: i am reading your you say is he u.s. counterpart has a very narrow trading range. what does it take to break out of that? they say australia's terms of trade are changing, but a lot of that is down. >> what we have really noticed,
for the aussie on the trade side, i do not think any of us are expecting the cold price -- coal price to explode. that it is important for australia. the prices were above $80 a ton for the first time in years. so, it is arguably at the upper end of the value ranges. if we do get further strengthen the u.s. dollar, perhaps in expectations or greater expectations of a fee hike in december, the aussie may find itself below $.75. rishaad: sean, have a fabulous weekend. race tohong kong in the bring home prices down, which policies are working and which do not. ♪
rishaad: your back with "trending business." he took00 days since place as president in the philippines, his war on drugs has taken the headlines. but what about his reform for curbing poverty and corruption? from manila, we , but what the misses has he achieved so far? >> so far, the first of the tax congress,kages to they're lowering taxes at the same time. some economists and other taxpayers are quite happy because it also includes taxes.ing some excise
-- he has curbed corruption, and besides wanting a simpler lifestyle for his cabinet officials, something he has spouses for himself. shorteningg at government processes to three days. he wants to do it nationwide. ,ince september, nearly 70% more than 1000 local government units survey were already compliant with that. how are people actually looking and taking this war on drugs at the moment? >> interestingly, on the ground, the approval rating is high. they gave him a rating of plus 64, or very good. there is public confidence in his campaign against drugs and criminality.
this, even as the percent of people killed has risen, more than 2000 victims of extrajudicial killing. they say these are faulty pronouncements. they want addicted ability. plus, the government does not seem worried. credit ratings are affecting their importance. their first priority is reducing poverty rates in the country. 100 days does not seem to be enough. rishaad: thank you very much. we will have a latest -- we will have a look at the latest headlines from an oil company. talking its chief their investment baking consultants talk about the biggest ever initial public offering. exchange, also
in london, and hong kong and new york. goldmine, andthe and is the first this is the first time they have a visited mongolia's borders. they are continuing and underground expansion. they hope for more than 500,000 tons by 2027. a shortage seen in the next two years. >> what the copper story is [indiscernible] what is important is to understand the civilized side of the story. supply coming online. it is a long-term story, it is about supply. more to come right here
♪ rishaad: samsung posting better-than-expected third-quarter earnings. recall.s that note 7 they are up 5%. the financial impact on the be $1 billion to $2 billion. the pound rising, but the biggest decline we have seen since the brexit referendum result was announced. struggling to immediately onlain, some are blaming it
algorithmic disorders. doings hna group, business, $10 billion, all cash. if the deal goes through, their havediary, avalon, will 910. it is a second acquisition may have announced this year. idea of hong kong and the currency market. >> hong kong has been in the positive throughout the week. we have seen one of the hottest markets here in asia, not being able to counter all of the negative sentiment we are seeing across the region, right now down .1% at the open.
the nikkei was one of those markets they gave a huge boost to asian markets, now down .2%. .25% -- cost be falling -- .25%. falling .2 samsung, not pulling the benchmark index into the green. let's take a look at the nikkei, it is the first reversal. there falling .2%, with consumer services and telecom leading those declines. not surprising, we are seeing such a move here with the nikkei. the japanese yen, which has fallen against the dollar for eight consecutive sessions is gaining momentum. .25%.strengthening that the finance
minister is that the meeting with the u.s. secretary of treasury, and others. now, what is happening with the yen and the dollar, the dollar gains momentum. the dollar gaining momentum we are seeing low growth currency losing ground as opposed to the japanese yen right now. for example, the indonesian --ee while positive sentiment coming from the u.s.. for thoseting non-bond payrolls on friday. again of 174,000 is the consensus, gaining .2%. before we go, a look at oil. it was surging and getting past that $50 level. before we go, a look at oil. but it is unchanged and losing some of that momentum after we
saw that search. 52.54. this is coming in, the foreign exchange reserves from china at the end of september, we look at 3.1, $8 trillion is the estimate, that is a little bit below. for an exchange reserves held by china at the end of september. samsung managing to be gods despite the global recall of its note 7 phones. now there is talk of a second recall. bloomberg intelligence is with me now. most people would attribute -- we're not quite sure how many provisions the company has made on the note 7 recall.
there is a memory chip price pickup, and the uncertainty on the proficiency of the note 7. they have not made the phone proficient yet and that affects the earnings. rishaad: you should remember this is not a one trick pony. the huge amount of products it has, and the memory chip is one of its biggest. what about chip pricing, how does that play into the earnings? >> chip prices picked up stronger than expected. if we look at micron's earnings a few days ago, they are getting good update guidance, even next year. they are expecting supply to be slightly weaker than demand. that means supply demand is quite -- isn't quite healthy condition. the outlook is pretty positive. rishaad: lots of concerns swirling around samsung at the moment. arguingactive investors
this company needs to be split into two. tell us why. proposals,ank, the are not new to the management. this is in line with market expectations of its future and structure. investors are most concerned to what extent the company will take the advice. that eases its way for samsung to do things in the meantime. it could take time to carry out, but again, this news supports the share price, given the optimism. rishaad: thank you very much, from bloomberg intelligence. we take a look at other stories, billion in an auction it hoped would rake in more than 8 -- more than $80 million.
they are also struggling with more than $60 billion worth of debt, and revenues have taken a hit as customers switch from a voice called to apps. starbucks increasing its presence in cambodia, opening a new 7000 square foot outlet. they have a 10% annual increase in coffee production, the american company wants to saturate. china, traditionally a key drinking country, mostly responsible for that. losing biggest wall street a similar move by tesla and morgan stanley. musk under pressure to rally investors, said to raise as much as $2 billion in fund-raising. we often compare the property
market in hong kong to that of singapore, and indeed, prices in the two cities show distant trajectories. one sees a stump, the other, a rally. both have measures to rein in prices. tell me about this bifurcated trend. [laughter] hong kongit simply, has failed, that is what it comes due. shota look this particular , singapore's home prices, the orange line, falling. for hong kong, restrictions have done very little. little,e line gets a but now prices defined gravity, so to speak. that is causing issues in the city for the widening wealth gap. it is hard to be inclusive when home prices are beyond the reach of a lot of people. weigh onlem may
executives, when elections are held. we do not know if we will seek another town. but his popularity has already taken a big hit. his approval rating, down to 39%. before he took office. you could say he is in a precarious position. it is difficult to own a home here in hong kong. but it has worsened, hasn't it? has, for sure. hong kong housing is the least affordable in 11 years, according to a survey of large markets. let's show you this shot that explains what is happening. hong kong, the orange bar. see how much more difficult it is due own a house in your city. household in hong kong takes 19 years to purchase a home, and singapore takes less time.
-- in gapore 80% singapore, they have public housing. it is not to be compared with the likes of the u.k. not cheap, but cheaper than private housing, for sure. increasingly, people are feeling poorer in the city. even in global cities like new york. new york is having its own housing issues. rishaad: they certainly are, indeed. thank you. fundsget to the managing boss, calling for global policymakers to go into action mode. she also raised concerns about the banking and insurance sectors. gfsr, findings of the
even if the economic situation improves, as we hope it will, if policymakers make the right decision and go into action mode, there is still 25% on the banking system that is not going to be prosperous. that is cause for re-examination, the work any business leader has to do going into this business. >> the financial stability report, this speaks to steve majors, looking at low rates and substitutes. the sovereignty of many life insurance companies and pension funds is threatened by a low interestiod of rates. you provided leadership on them. saying, it is about duration, the chronic issue of low rates. how do negative rates fold into this chronic sense of a lack of return? calling for re-examination. the insurance sector and pension
fund sector, particularly the life insurance sector. where a level of prescribed by law. in a company like japan, for instance, it under the law, requires to serve a particular level of return on those life insurance policies. there is work to be done in those two sectors, as well. the know it, they are doing work, perhaps a bit quietly. but there is urgency about it. central banksk policies are coming at the end of the line, and how difficult is it for the government to pick up when it is so indebted? >> i want to call caution on that massive number of $152 trillion, which is about to a 5% of global gdp.
some of that is corporate debt, household debt, one third is sovereign debt. countries are not in the same positions. some are heavily indebted, some are held by domestic holders, which is particularly problematic. cannot say it is a huge problem, we need to be country, -- country-specific. but there is the debt burden. there is an issue of what monetary policy can be conducted , as has been the case for too long. it is the reason we call for a three pronged approach. they have to come together. rishaad: that is the managing director in washington speaking with my colleagues. coming up, white house contenders on stage this weekend
rishaad: quick check of the latest business headlines, speculations government as antibusiness as it prepares to leave the european union. we have comments coming up from theresa may. trying to make capitalism more fair for workers. >> this is a pro-business government, strongly supported by open and free markets, free trade. problem, and it is not a british problem. it is a developed world problem.
populations, and economic models. officials at the goldman sachs funding the $4 debt offerings debt popular with yields for investors. selling a mixed martial arts privatee, backed by equity firm, silver lake. company making semiconductors, making progress on a big technology decision of the year. nxp favors and all cash deal.
hillary clinton and donald trump will be meeting again on sunday. this time, in missouri. it is the second of their three presidential debates. let's look ahead to what should be another lively event. we have the executive editor of bloomberg, and author of trump nation, the art of being the donald. thank you for coming on. tell me, how did we end up with these two candidates? how did 320 million americans and up facing a choice between these two? a perfectomething of storm. trump was nominated because the primary process was a little haywire. i think he touched on issues that matter quite a bit to postindustrial, working-class americans. i think he stumbled onto those issues. once he did, he ran with it. and in hillary clinton, you have someone who obviously comes out machine,inton legacy
an important force in democratic politics. money early on, like jeb bush did in the republican party. but she was able to make it to the finish line. rishaad: that is just it, let's talk about hillary for a minute. she comes down to the establishment of the democrat party. some have called it obama's third term. this is both a blessing and it curse for her, isn't it? >> in terms of whether or not she is her own person in the context of it being considered as obama's third term, is that what you are asking? ashaad: indeed, and being lieu-blooded democrat, i suppose. blooded democrat, i suppose. >> i think she has been weighed down by people feeling tired and
worn down by the clinton legacy. i think she is seen as an establishment politician in an era in which american voters are very discontented with the establishment across the board. not just the political establishment, but the business and media establishment. people feeling like u.s. institutions are delivering results that make a difference in their lives. bernie sanders completely spoke to that on the democratic side. to it on theken republican side. i think the issue is, what do effective leaders do with that discontent? where does a good, healthy, mature message come from? that is what is now being contested between clinton and trunk. who can offer a real set of solutions, both on the global
stage and the domestic stage, to these problems that are concerning people. rishaad: the point being, a lot of people are paying lip service , being seen to do something as opposed to actually doing something. that is where some of the discontent comes from. is that the mainspring for why donald trump is popular? because he is untested and not from the political establishment? that is where some of the discontent comes from. >> yes, i think so. some of it is the long hangover of the 2008 financial crisis in which you had a global-financial crisis in which the financial players were bailed out. i think that was a wise policy, but it happens. average people were not bailed out. peoples mortgages went under, they did not get the kind of assistance that the financial sector got. i think that fueled a lot of suspicion of both the financial system and of washington.
trump enters the picture saying, i feel your pain. you have been ignored. the reason you have job insecurity is because of immigrants. so, i will build a wall with mexico. and the reason you have job insecurity is because free trade is bad. therefore, i will vilify the chinese. and he made a great payoff from that. but the issue is, he is completely devoid of any kind of sophisticated policy prescription beyond that. rather than having a political -- pogo, he has a pog stick. rishaad: let's look ahead to the sunday debate, who won the first in your view, and what are the main issues in the next? >> i always think it is a little bit scary magic, saying who won any of these debates.
but looking to the first debate, i think trump came out in the beginning very strong. he was on message and when after hillary clinton on issues that resonated with her critics. immigration, her e-mail problems, and her career as a long legacy career politician. with trump, he went completely off message. and i think she recovered from the debate, and won it. is ae debate sunday, it very different format. it is a town hall debate. in the first there was a moderator and teleprompters. in this next debate, they will be taking questions from the audience. and, in a live format. themnk you can see both of killed as they go off script. ,ishaad: stick around with us
rishaad: we're back with timothy o'brien, executive editor at bloomberg. we were discussing the issues that will be at the forefront on sunday. will we see more policy, more concrete policies, coming out of donald trump's mouth? >> i do not think so, that is not his strength, even when he does tutorials, he does not absorb them. what he does is play to the emotional gravity that the people feel around him in the campaign. that is what you will see from trump. rishaad: doesn't matter what he mattern fact -- does it what he says, in fact? >> it matters in terms of how people feel about his character.
that has been a hurdle for him, he ends up stepping on his own talking points. i guess rivalry would be the word for, is it indicative of a polarized america? >> of course it is indicative of a polarized america. on a map, you can see the deep south and the plains estates fully republican. thatof the coasts and northeast, firmly democratic, and that will not change, either. rishaad: after brexit and the performance of bernie sanders, can trump pull this off? math is working hard against them. i think the gop has started to look at down ticket candidates. i think they are concerned about the senate, not the house. if i were a betting man, i would say trump has the odds heavily
♪ >> from our studios in new york city, this is charlie rose. charlie: the sole vice presidential debate took place last night. with only 33 days until the election, governor mike pence and senator tim kaine argued their candidates' positions. the consensus was governor pence performed better but failed to defend donald trump. the second of three presidential debates will be this sunday at 9:00. joining me now, the author of "audacity."