Skip to main content

tv   Bloomberg Daybreak Asia  Bloomberg  April 4, 2017 7:00pm-9:01pm EDT

7:00 pm
♪ >> asia-pacific stocks are set to rise as four markets return to trade. wall street posted flat after an up-and-down session. >> stepping down over his role in a leak of confidential information. he says america is exceptional, but fears something is very wrong here. ahead of the presidential talks with look at the high profile on each side of the table.
7:01 pm
the world coverage on daybreak asia, live in beijing to talk about president xi jinping's upcoming visit to the u.s. and in sydney come out we look at the damage from a strike at a mine. two bigw york, eric stories, the resignation of lacker and a letter to shareholders, one of the widely read on wall street. this is daybreak asia live from u.s. and asia headquarters. i am betty liu here in new york, it is just after 7:00 p.m. just after 7:00 a.m. in hong kong. i am yvonne man. betty: south korea come out we have a $.4 billion, the balance. that is a rise from the prior number of 5.2 billion. 10.5 billion, much higher than the 7.8 that we saw earlier.
7:02 pm
[noas been interesting audio] betty: north korea and south korea are dealing with geopolitical risks. yvonne: definitely a trend for the insurance industry to explore. this swelling surplus add to the case when it comes to the u.s.. the treasury reports come out sometime in the next two weeks. south korea actually meets two of those three criteria.
7:03 pm
there on the monitoring list when it comes to currency manipulation. this might just add to the case for the u.s. to slap that label. we will see in two weeks' time. new zealand, we see a little pressure, 2/10 of 1% down for stocks. wall street has modest gains, but it was an up-and-down session. sydney, futures quite firm here today. 76 aussie well below the u.s. handle. balancinghillip lowe the hawks in his statement. japan, we were struggling for direction on tuesday. down 9/10 of 1%. the dollar-yen 110.82. this could help equities in tokyo. we have china, tokyo, taiwan coming online. we could see a more lively picture of markets here this
7:04 pm
wednesday morning. let's get to our top story. xi jinpingrump and getting ready to hold their first meeting at the white house. let's get the tom mackenzie joining us for more. atwill be all eyes mar-a-lago. how was china been preparing for this meeting? what do they hope to gain from it? tom: i have been speaking to people over the past few days that say the chinese will have been repairing until the very last minute. they want detailed protocols put in place, they want to know what is happening every minute, every second between the two presidents. orchestrated to and make sure it is as finally tuned as possible. of course they are dealing with president trump so there is an element of the unknown. he could have late night tweets. one advisor told me here in beijing, it will not be like dealing with angela marco.
7:05 pm
former head of cnooc. he said this will be about the two presidents getting to know each other, and he is also an advisor for the government here. chinad it will be about putting in place what it already has learned from previous presidents taking office and there are often problems, but those can be worked out over time. take a listen. >> we look into the u.s. thenistration in the past, first one or two coup years, the relationships between u.s. and china is difficult. -- or aftero years four years, it will be different. everybody needs to learn. everybody needs to understand
7:06 pm
the others. everybody needs others. he has already in the past set across the table from rex tillerson, u.s. secretary of state. he said tillerson is a man he can deal with, a good and fair negotiator, one that understands different cultures. clearly there is a sense here in beijing that if the likes of and jerod mattis, kushner are there, china will be better place. we'll be watching developments on the outside. someone said that china is looking to educate trump on the trade imbalance, and try to get borderore details on the adjustment tax policy the white house is drawing up. they are prepared to work sector by sector with of the americans to try to get some agreement on other two economies can work
7:07 pm
more closely together and iron out these differences. yvonne: any good negotiation means you have to have concessions. what areas is china willing to make concessions on? tom: this is interesting. sector basis, china is prepared to work with america. they might give some uncertain sectors, some are largely closed off to foreign investment. we spoke to a professor here in beijing who said the financial sector could be opened up. that could be one more concession. steps have been taken to liberalize the capital markets. some are pushing for that to happen more quickly. that could be an olive branch to the americans. trumpo said pressure from in the white house could play to the hands of reformers here in beijing. he wants to see a faster step up in terms of the performance of the economy and various sectors.
7:08 pm
it could prove positive for china's reform agenda, according to the professor. clearly the chinese are going to this meeting having done their homework. they had oned lines major issues. they will negotiate on the nuts and bolts of certain sectors and parts of the economy. betty: tom, thank you so much. tom mackenzie in beijing on this trip to read we will talk more about xi's trip to the u.s. later. int interview is that 8:10 hong kong. let's get to first word news. chiefsh korean defense are to hold an emergency meeting that north korea fired another rocket. the joint chiefs of staff said it was fired over the east sea. pyongyang says they are working
7:09 pm
on a rocket to deliver a nuclear weapon. today's missile flew 60 kilometers. president trump said america can deal with north korea alone. richmond fed president jeffrey lacker has resigned over his role of a 2012 leak of investigation about policy options. should'veitted he ended a call with an analyst that brought up a nonpublic detail and he failed to inform that the analyst have the confidential information. he was due to resign in october. became the biggest buyer of u.s. oil in february, surpassing canada by quadrupling its purchases. just a billion barrels in the month, boosting u.s. exports 431 billion barrels. this surge in american shipments asia comes as opec trends and tries to drain the global glut. for caret dimon has sold
7:10 pm
$59 million, setting a record for any gem at an auction. even years it went for an larger sum in geneva. diamond,ivid pink graded by the geological institute of america. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. after: we have an update this projectile we heard reported from north korea. we are hearing from the cabinet secretary of japan. he is talking a little bit about that now, saying this projectile did not fall in japan's economic zone. they did launch a ballistic missile, but in terms of how far it went, it only went a dozen kilometers or so. we heard a similar tone from
7:11 pm
south koreans about this. suga saying it did fall into the sea of japan. korea continues threats. will watch those lines coming out of south korea and japan. betty: can't help that timing before the u.s. president will meet chinese president xi jinping. trump over the weekend thing of china does not deal with north korea, we will, alone. back here in the u.s., geopolitical risk always in the background for investors. equities close with little change. they were weighing in numbers iss morning, joining us now elena. staples in takeover talks? >> that is right, growing 8.9%. the wall street journal said it
7:12 pm
is in buyouts with companies. walked awaycompany from home depot when a federal judge blocked the deal. fast-forward two months, here we go again. this comes one month after less thanported satisfactory earnings, a 7% decline in sales in north america. they will close 70 stores in the region. it certainly was one of the big movers. what is the market sentiment in the u.s.? this is after one of the best quarters since 2015. elena: the markets are assessing where we had -- head. some of the reforms proposed by donald trump, we have yet to see if this is going to happen.
7:13 pm
investors are pausing while they wait to see what the next direction is. we will look at the data in the next few days. we are assessing it. we are expecting to see it on wednesday, and we will see what will happen. the fed minutes and jobs report is on friday. is that the data point investors are waiting for this week? elena: exactly. the big question, what is the strength of the u.s. economy? investors are taking any data points to assess. a big issue is the minutes from the open market committee on wednesday. the odds of the fed hike in june are now at a high, 57%. two weeks ago, they were 50%. there were questions when the fed would hike.
7:14 pm
see when toting to expect the next hike. reade: thank you you lloyd's of london has big plans for asia. we speak alive with of the ceo. warning,us, dimon's saying there is something wrong with the u.s. ♪ ♪
7:15 pm
7:16 pm
we are counting down to asia's first major market opening. rally, up a nice almost 6/10 of 1%, under 45 minutes away from the open in tokyo. this is daybreak asia, i am betty lou in new york area -- new york. a six-month strike at a
7:17 pm
escondido copper mine in chile. a loss of output, we have an operational view later this month. they say the construction means a loss of up to 230,000 tons. that would be 1% of annual global production, worth more than $1 billion at today's prices. -- thecam china has won largest foreign acquisition one step closer to the finish line. the two companies have been asked to divest pesticides in the u.s., a $43 billion deal. chinese authorities have their own discussion. toshiba wants more leeway. they requested and a new credit line to brief investors on the
7:18 pm
chapter 11 filing. toshiba will need extra cash to carry through the bankruptcy. separately, a report toshiba may have an audited earnings result. shares fell sharply tuesday. jp morgan's ceo jamie dimon has released his annual letter to shareholders, offering his assessment of some of america's economic problems. he writes, it is clear something is wrong and is holding us back. collective economic growth and opportunity has led to deep and understandable frustration among so many americans. here with more is jenny. was it unusual to see jamie dimon speak out on something like this? >> not so much unusual. if you look to when he first to go over as ceo, he was focusing on how the bank as performed the last year. more active role in politics and public policy, he takes opportunity to lay out
7:19 pm
his vision for america's future. given that his bank has been doing better and better, certainly gives him a bigger platform to say these things. give an to point out to idea of how well jpmorgan has done, let's bring up that chart. , j.p. morganhear shares of the white line, how much it has outperformed not only the s&p, but the financials index, as well. what is going right here at jp? they: -- jenny: they are biggest lender in the u.s., they have their hands in a lot of things. that whenn will say america does well, or thinks it is doing well, banks do well. we have seen consumer confidence sky rocket, small business owners have that tepid optimism that the banks want to latch onto. americas benefit when
7:20 pm
is thinking on the bright side. about howt's speak j.p. morgan spent $10 billion on technology last year. fintech was a big topic. what does that look like? interesting, we got almost a $10 billion figure and he broke it down further. a third, $3st billion, was on new initiatives. you see the bank branching out of its longtime initiatives and going after these new things. withted there turner ship another online small business vendor. he talked about all their partnerships with different auto finance and online lenders. bank'shim promoting the partnerships this year. yvonne: in terms of regulations, he was quite frank about
7:21 pm
dodd-frank, as well. jenny: it was interesting with dodd-frank. he said, we are not calling for an entire rollback of the law. takee hoping regulators this opportunity with the new administration to open the book, shed some light, see what is working and talk about what is not. betty: did he talk about his own future? so many people wonder, what is next for jamie dimon? jenny: he did not, actually. i thought it was interesting he did not spend much time on the bank at all. there were three sections. the first was about growth and the bank's initiatives. the last two, we saw an entire section on dodd-frank, and public policy was another big one. you wonder if that is his future aspirations. he talked with college students today, and how he sees himself
7:22 pm
responsible for going out and accomplishing a lot of these initiatives they talked about in the letter. we will see what that means. betty: thank you so much. you can follow more on this story and all the day's trading on our markets live blog. market run down in one click. there was commentary and analysis from our expert editors say you can find out what is affecting your investments right now. ♪ ♪
7:23 pm
7:24 pm
this is daybreak asia, i am betty lou in new york area yvonne: i am yvonne man in hong kong. a chinese film maker has spoken exclusively to bloomberg about a big box office failure of his big-budget hollywood production, the great wall. thehe said it will not stop
7:25 pm
u.s. and china cooperating on the big screen. they asked if he would transform the most iconic movies and virtual reality. i hope so, nowadays movies are important elements that all theme parks, such as disneyland or universal studios. i think i can put my works in their, -- there, too. wall," "hero," and others. "great wall" struggled at the box office. but you can see further exposure. the movies are the beginning of a new genre. we talked about a deep cooperation between china and the u.s. in terms of creating new genres. first attempt, and the first step is always a struggle. it is the beginning of a new thing and it is very important.
7:26 pm
we should not focus on "great wall,"'s box office. the future will be better. >> what is wrong with the chinese moovit -- movie industry? in 20 had the worst performance in recent history. what is wrong? >> it is complicated, it is a sudden drop. i had a meeting two days ago. he asked me if i knew what the record was in january and february for the number of new screens being built in a single day. 85 in one day. i was so surprised. 85 more screens in china in one day. he also said china now has 43,000 screens, which means we have more screens in north america, including the u.s. and canada. he said this has not been confirmed, but it is pretty close. sometimes there is an abrupt fall in china's move the market.
7:27 pm
really great wall," was unlucky. he said it was launched at the worst possible time and is just bad luck. if it had been on the big screens during the holiday, it it would have been totally different. >> doesn't make you change your views about coproductions with hollywood or whether you want to do this kind of movie again? >> i can't say. the movie is still in the theaters and it is just one movie. the box office is unpredictable. tell which movie will be hot and which will be a lot of money. this should not stop cooperation or experimentation. even if it fails, it will not stop the process. cooperation between china and hollywood will deepen. yvonne: that was the chinese director shang. -- zhang.
7:28 pm
we will be joined by the dow jones indices ceo. make sure to stay tuned. ♪ [ engine revs ] [ screams ] [ shouting ] brace yourself! this is crazy! [ tires screeching ] whoo! boom baby! rated pg-13. [ screams ] [ [ screams ] ] [ shouting ] brace yourself! this is crazy! [ tires screeching ]
7:29 pm
whoo! boom baby! rated pg-13. [ screams ]
7:30 pm
is 7:30 a.m. thursday morning in hong kong. markets coming back online, seven: 30 p.m. tuesday here in new york where markets closed a little bit tired but mostly higher. the index pretty much flat. kind of a gloomy day here in new york. a little bit down. i am betty liu in new york. yvonne: and i am yvonne man in hong kong. let's go to some breaking lines on toshiba. we are learning from reports in tokyo, asahi saying they have
7:31 pm
fromed 2 trillion yen their business. very much interested in the business of toshiba. there is a long list of other bidders. billion for the chip operation. we have also heard moments ago according to sources that the white house is worried chinese buyers may come in for the westinghouse nuclear unit. we're certainly going to be hearing more as toshiba restructures in the face of that. let's get the first word news. account korea's current to $8.4 billion in february from over 5.2 billion earlier. they say it is hard to be optimistic on continued export recovery, considering the tread -- trend toward trade protectionism.
7:32 pm
they said consumer and corporate sentiment are showing signs of improvement. jamie dimon has two big statements. america is an exceptional country and it is clear something is wrong. he runs down the way the u.s. a stronger than before, but has a longer list of what he calls self-inflicted problems he calls up setting. dollars onillions of wars and rising debts of students. is celebrating its 10th anniversary this week by the coming the largest fixed income mutual fund. say they have $79.1 billion, surpassing other bond funds. investors added $3 billion in march, a monthly record according to bloomberg estimates. china has launched the world's largest container ship, which can carry 20,000 boxes. it left on its maiden voyage.
7:33 pm
will be in the new transport corridor which links southeast asia and europe. accommodate an ultra large container ship. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you, we are counting down to major market opens in asia-pacific today. let's get to our reporter from sydney this morning. i know you are taking a look at the aussie dollar. we see declines after that statement, quite dovish. good morning, it has been a tumultuous 24 hours for the aussie after the initial kick down from the statement yesterday at 2:30 in the afternoon here in sydney. we had comments later in the evening during the speech.
7:34 pm
he was putting the hammer down to the banks and saying, just how they had been lending to borrowers who may have been stretched. he wanted to rain that in -- rein that it. doy may need to continue to a little bit more on their side in this runaway growth across the nation, particularly on the east coast. it is a problem in much of australia. the aussie is on the back burner. we had a good, strong start to the year. these pullbacks should be seen in the context of the strength we have seen in the aussie earlier this year. we should not make too much of it. but it is looking very interesting now for the aussie at these levels after these moves in the last 24 hours. major markets
7:35 pm
coming back online, hong kong, china, india, taiwan. what is expected when they reopened? adam: it will be a busy day, we will see volumes pick up in the china close since friday. they should get a lift when markets get underway there in a couple hours or so. ishink the big thing really that we got the minutes, that will give us the latest clues around what we can expect in terms of the timing of tightening of the u.s. monetary policy. we have heard a lot of fed speakers in the last week. toy range hugely from two three to four rate hikes earlier this year. it will be scrutinized further because there is quite a divergence between how people are seeing interest rate policy developing in the u.s.. across asia, we will see a bit of support as we open the equity
7:36 pm
markets. not a huge amounts of moving in currencies. we see weakening in the aussie. some of these big moves in markets over the last few months, especially with equities, we see record highs in march. are trying to assess just where we have gotten to now. at asset management, he is expecting a pullback, thanks sentiment for the economy is running too high and expectations need to come down a bit. we should also note that the stocks, we had bloomberg intelligence analysts look at the earnings on the s&p 500 relative to treasury yields. that is an interesting chart and one week come back to often at times like these with big moves and markets. stocks may be expensive on historical valuations, but on a
7:37 pm
short-term basis, they have a good value relative to the fixed income markets. betty: may be some opportunities there. thank you. tomorrow we are looking ahead to the minutes, they will be released from the central bank's march meeting. investors will be coming through those minutes. also, matt basel are here at bloomberg. will be tomorrow, but investors will be watching ahead. what are the highlights going to be? mind is any discussion they had about what they might do with their balance sheet. the balance sheet itself, which has a lot of questions surrounding it, but also what it means for their interest rates. we learned from the new york fed president in a bloomberg interview friday that when they begin to normalize the balance sheet, whether that is later this year or next, they will perhaps paul is with rate hikes
7:38 pm
at the beginning in order to facilitate that in see what types of effects the balance sheet run-up is having on the economy. dominatedpt has trading friday, monday, tuesday in new york. it is top of mind for investors at the moment. yvonne: what has been top of mind with the news of jeffrey lacker? fed president stepping down earlier than was expected this year over this role in a leaked case in 2012. matt: richmond fed president jeffrey lacker said he was not involved in this leak situation the fed has been investigating for years. it happened in 2012, like you said. a big question that remains, was who else was involved? the way that jeffrey lacker made it sound in that statement he released today, his mistake was not hanging up the phone when the analyst he was speaking with disclosed that she had some
7:39 pm
confidential information already s plans atfomc' upcoming meetings. the internal inspector said they would be closing their investigation of the leak. they did not say how soon for what we might expect to find there. certainly, it leaves open the question, who else was involved? yvonne: and why are they coming forward now? thank you, joining us from new york. lloyd of london ceo joins us to talk about brexit and the insurers asian ambitions. ♪ ♪
7:40 pm
7:41 pm
this is daybreak asia, i am in yvonne man in hong kong. betty: i am betty liu in new york. and be set extending a
7:42 pm
partnership in asia-pacific, boosting a partnership that currently covers only the u.s. fought for control over online and in-store transactions. the visa collaboration allows users of either system to choose how to pay. paypal expects to roll out the deal elsewhere in the world after asia, but has not decided where. yvonne: a chinese tech company says there was delayed pay with workers. they are normally paid on the 15th and last days of the month. but the march 31 checks were delayed until april 4. there was also a moving of money from china. they admitted that their struggle to raise cash and they were behind on payments. house raffle run is to close its flagship fifth avenue clothing store, with e-commerce operations, there is
7:43 pm
a $370 million shakeup. the ceo was leaving. he was supposed to lead the turnaround, but there were creative differences. the cfo will take over temporarily. insurer giant lloyds will reopen its ensuring branch in india this month as a strategy to get access to the largest and fastest growth economy. we bring in the ceo inga beale live in the hong kong studio. welcome to hong kong. this is a time when we see lloyd's and other insurers dealing with an environment of weak pricing, low returns. what does asia -- what role does asia played? been doingve business in this part of the world for many years, lloyd's has a 20 year history in hong kong.
7:44 pm
but we have had business in the region for many more years than that from london. us asly it is apparent to we get closer to our customer base, we cannot do everything remotely from london. hong kong, 20 years, japan, 20, china, 10. about gettingll closer to the customer and understanding their individual needs and bringing lloyd's specific expertise in insurance where the business is happening. yvonne: china and india, very much alike in the market, quite protectionist. you have to find a local partner and venture. are you more comfortable with the regulation environment in both those countries? inga: lloyd's is unique because we are in insurance market. we have the 60 different businesses operating within our market. the rules and regulations are different.
7:45 pm
we have to have special negotiations with the regulator and so far we have had really good reception. we managed to get a license granted in beijing a couple years ago. yvonne: what about capital curbs in china? inga: because we have a centralized model back to london, we do not have the same capital in the same way others do. countrycapital in the and people, and well over 100 people in china. we have different regulations and requirements. yvonne: take a look at the opportunities in asia. what is in high demand in china and a developing nation? is it agriculture, the health segment? we will do anything that is big and complex, traditional infrastructure development,
7:46 pm
construction projects, anything that is new, building businesses, buildings, tunnels. using new technology, this is where lloyd's brings our expertise. we will also get involved with natural catastrophes, exposure to flooding, earthquakes, typhoons and things like that. we offer quite a different range of insurance, but not personalized. more mass coverage for complex risks. do have a diversity of products, but overall the insurance industry is that overcapacity with the weaker pricing for years. how are you steering lloyd's around this? offering this new capacity and capital, we want to play in areas where there are a lot of statistics, data, and modeling. bring, because of our syndicated model, lots of
7:47 pm
different players in the lloyd's market, it is a take on the new risks. we were there when the first satellite went up into space, the first airplane took off. we are prepared to take risks when we did not have all the data. a lot of this new capital is not ready to do that. lloyd's is in a unique position to play. you take a rising demand for cyber insurance. not quite seeing it in asia yet, but certainly the u.s.. and europe cyberattacks, no business is safe. so we see a great demand for that. growth, 25% huge global market shares. there is still not a lot of data, somewhere like lloyd's and the syndicates are very prepared to put their capacity to use. include thishat
7:48 pm
relatively new area, insuring yourself against political risk as well? something we were just reminded of an hour and a half ago when we got news reports from north korea launching another missile. we have uncertainty in the world's. the more businesses and individuals look to insurers to protect them. for lloyds, we have seen an increase in demand for all kinds of political risk insurance. particularly if businesses are doing trades in other countries. they want to protect the fact that they might not get paid, if the government puts on a ban. there is great demand for that. also things like terrorism insurance. with the uncertainty around the world we see a demand for that. yvonne: how do you a price on a policy like that? it is not like preventing a hurricane or earthquake where you can go through data to
7:49 pm
measure the risk. it is the same with the cyberattacks. versus an sony hack attack in bangladesh? because of the way the risk is shared, we have many heads looking at the same risk. we write insurance for over 200 countries. fundamentally we have to think about what we do not know and the likelihood. particularly these man-made threats, they are very unpredictable. betty: just following up on that, unique lloyd's is in a position to take on some of these new areas other insurance companies are not. just on the political risk side come others are not jumping into this as much as lloyd's is? i want to be careful because this is a new area.
7:50 pm
you do not hear other insurance companies talk about it as much. it is really about where lloyd's has come from. we have always been at the forefront of anything that is new. hardly anyone alive today would when the first motor cars appeared on the street we were the first to ensure motor vehicles. now it is such a plain-vanilla type of insurance, but we were doing the things that were brand-new at the time. really supporting investment in anything new, and that has not changed. today we are still doing that, and that is what is unique about lloyds. we cover anything new that comes along. it was only said you could insure anything in lloyd's. the only thing to negotiate was the price. yvonne: good to have you, we will continue our conversation and talk about brexit. ♪ ♪
7:51 pm
7:52 pm
7:53 pm
this is daybreak asia, i am yvonne man in hong kong. betty: i am betty liu in new york. we are with the ceo of lloyd's of london. they are setting up a subsidiary business in brussels. a move outside the u.k. in direct response to brexit. let's continue our conversation with the ceo inga beale. i know you're a part of the u.k. governments financial trade and investment board. howve to ask you first, damaging do think brexit is going to be on the u.k. as this financial hub in the world? after having that role as
7:54 pm
being a financial center for so many years, nothing will change overnight. i think over the long run, london will remain a key part of the financial community, globally. for lloyds, we have $40 billion of revenues. are a major part of that financial center in london. a lot of that business comes directly into london. for us, brexit is only impacting 5% of that. we have chosen to set up a subsidiary in brussels, but only for 5% of our business. the rest will remain the same. will it have any disruption to your access to global capital? inga: we do not believe so. we have a vast array of capital providers and they will be able to, and invest in lloyd's, as they have done. what we have really been looking for is to get capital coming in from other markets around the world, perhaps markets where we
7:55 pm
have not traditionally had services. japanese investors are an important aspect to lloyd's market, now that they have been making acquisitions of lloyds asset. they make up 15% of lloyds capital at the moment. yvonne: japanese insurers and chinese buyers have been big. what can continue to attract the market conditions and the political disruption with brexit? inga: it is partly because of what lloyd's is. it is about specialist insurance. because of the history, 300 years, everyone knows about lloyds. these companies investing in asset, they'ds benefit from the licensing growth because of the marketing structure. if they want to be part of lloyd's, they can send the specialist business to lloyd's.
7:56 pm
we have a lot of respected assessors.risk let's talk about digital strategy. insurance tech is big. they have developed their own niche with a strategy. they are going through to digital distribution with a joint partnerships with tencent. how does lloyd's position itself in a market oversaturated in this industry? because we do complex insurance, each risk is individually negotiated. the coverage might be tailor-made for that risk. therefore, this automated underwriting and fast flow business, does not necessarily work for lloyd's. for a lot of the business that gets traded in london, we have
7:57 pm
an old-fashioned trading floor where people are negotiating face-to-face still. that is because of the technicalities and individualities of risk. that means a lot of paper around still. but we are making sure we are digitizing the process. but we do not want to eliminate the human interface because it is talking to the expert that is creating the unique coverages we provide. but we will be looking at making the paper digital. betty: i imagine that how modern you make it depends on what markets you are in, the more developing markets it is about person-to-person contact. inga: yes. for us, we are selling a promise to pay in the future. so that trust element is very, very important. that is where the relationship and human interaction is so vital. betty: thank you much for joining us, inga beale visiting
7:58 pm
hong kong ahead of opening their india branch. ♪ ♪
7:59 pm
8:00 pm
yvonne: calculating the cost of the copper strike in chile, some say could be billions of dollars. betty: jamie dimon saying america is an exceptional country, but also fears something is wrong. yvonne: emergency security meetings underway after north korea launched another ballistic missile. betty: ahead of the china-u.s. presidential talks, we look at the high profile characters on each side of the table. this is the second hour of daybreak asia live from u.s. and asia
8:01 pm
headquarters. i am yvonne and in hong kong. betty: i am betty liu. we have plenty of things to watch today. we have this chart i wanted to show you, that really shows one of the stories we have been talking about. u.s. and china and the development of these two countries, really lays it out here among the banks. back in 2015 you had chinese banks as represented by the blue line, worth over $1 trillion, the top four. now we have a switch and it is the u.s. banks including jpmorgan, goldman sachs, bank of america, they are now above $1 trillion. you can see why the tensions are growing between the two. but also, where the economic fortunes are right now. yvonne: i was digging through the archives past week, in september jamie dimon didn't
8:02 pm
interview and talked about the rising importance of chinese banks. he said one day we could be bought by them. i wonder what he thinks now. very interesting outlook. let's look at the outlook in asian markets, looking positive, more lively with china, taiwan, it india markets act online today. >> looking more lively. taking a look at how stocks in tokyo are sizing up. -- 1%.f 1/2 a north korea had a ballistic missile test. spi fairly unchanged, not much reaction. these stocks moving up 2/10 of 1%, looking like they are liking the latest trade surplus numbers.
8:03 pm
looking fairly light, investors -- along with friday's u.s. jobs report. we do have dollar strength slipping this morning in asia after a two day rise against. we do have the yen looking weaker. we do have the yuan falling 2/10 of 1%. malaysian ringgit looking weaker, but now making some .04%. by look at the bond space and commodities. aussie bonds falling. we are seeing a pickup in the yields for all the bonds -- aussie bonds. in the commodity space, we have oil trading at 51.
8:04 pm
they did top that number in the new york session. we do not have gold, but it is trading softer after rising to a one-week high. let's look at what is moving in the broader spaces of the region. up, we do havext materials leading gains on the index in asia. this follows what we saw on wall street where energy producers offsetting the decline in financial stocks. consumer discretionary stocks falling 2/10 of 1%. following the news out of south korea with north korea's missile test, let's take a look at the space, stocks rising for tenths of 1% there in seoul. if we take a closer look, aerospace insight here. thatcould just click on
8:05 pm
real quick, we saw north korea launch missile tests last month. 1%. is up 1/3 of fast retailing, toshiba, and telecom song weaker sales in march. here afterthe rise quite a few headlines regarding his desire to extend its credit line along with other news. traded justeing tpg yet. fourth telco in singapore back in december. betty: thank you so much. let's get the first word news with rosalind chin. forces tell bloomberg the trump administration is so alarmed at the prospect of china buying pink wrapped westinghouse
8:06 pm
they're trying to find an alternative buyer. in theas been interested reactor builder for years and is been the repeated target of espionage. 11er filing for chapter coverage, toshiba is looking to sell it. toshiba stares of the tokyo open, up just over 1%. they have been offered $18 billion for chip conversion. and there is a similar bid. toshiba is said to be asking for more leeway from banks to carry the westinghouse bankruptcy. they requested a new credit line when they breached lenders. richmond fed president jeffrey lacker has resigned after his role in a 2012 leak of confidential information about central bank's policy options. he confirmed a nonpublic deal in a conversation with an analyst, and failing to inform the fomc
8:07 pm
that the analyst had the confidential information. he was due to resign in october this year. jamie dimon has two big statements. america is an exceptional country, and it is clear something is wrong. he talks about the u.s. being stronger than before, but a longer list of self-inflicted problems he describes as upsetting. some include trillions of dollars spent on war and the rising debt faced by students. south korean defense chief while holding an emergency meeting on reports the north has fired another rocket. the joint chiefs of staff say a ballistic missile was fired 50 kilometers over the east see -- sea. hastillerson says the u.s. said enough about north korea and has no further comment. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries.
8:08 pm
i am rosalind chin, this is bloomberg/ betty: they have just started trading in australia, you can see shares up 2%. this is after the six week strike that had shut down the chilean mine. bhp is counting the cost, which could be $1 billion. paul allen in sydney with more. what are the numbers being thrown out right now? they will reveal that number later this month with an operational review. in the meantime, the chile copper agency says it is -- 20ted to be around 220 20,000 metric tons, 1% of global production annually. they calculate that to be around $1 billion at today's prices. -- much wasot just
8:09 pm
disrupted. including an except -- acceleration plan. wille coming weeks, bhp update us on exactly what the six-week disruption cost them. yvonne: wage disputes continue. what about more industrial action? paul: risk would be fairly high, no resolution was reached. the workers agreed to go back to work on their old contrast, kicking the can down the road. there will be another round of negotiations late next year. by that time, there will be a new labor code in chile, which means the existing contract can be used. we could see it happen all over again in 18 months. the bhp president in america says in the following 18 months we have an opportunity to establish a conversation with the workforce and bhp is hoping it will be positive. yvonne: stocks continued to
8:10 pm
climb more than 2%. thank you so much, live it from sydney. chinese filmmaker sometimes compared with apple. why its ceo says costco is a better fit. presidents the two set to make him china's laser focus on what it wants. can the trump administration match the focus? ♪ ♪
8:11 pm
8:12 pm
yvonne: this is daybreak asia, i am yvonne man in hong kong. betty: and i am betty liu in new york. president trump and his chinese counterpart xi jinping are having their first meeting ever thursday. tom mackenzie joins us for preview of this historic meeting. how is china been preparing? what exactly are they hoping at the very least to get out of this?
8:13 pm
from the people we have been speaking to, there is one clear objective for the chinese, and that is to have this face-to-face with president trump, get to know the man and assess the impact of the china policy still being formed by trump and his advisers. to sayple we have spoken they are coming to this thoroughly prepared and they will be wanting to control the meeting and the optics around it as much as possible. one adviser to the state council said it will not be like meeting with angela merkel. they know that trump can be volatile and they know they have to expect the unexpected. heording to the former head, is an advisor to the government, he said it was about pressing the flesh, but china was coming to this from experience. there is occasional volatility early in the relationship.
8:14 pm
take a listen. >> we look into the u.s. administrations in the past. in the first one or two coup years, the relationships between the u.s. and china is difficult. years or four years, it will be different. this means everybody needs to learn. everybody needs to understand the others. everybody needs others. fu also saying tillerson is a man china believes they can work with, the u.s. secretary of state. they said we are ready to talk about the trade imbalance and work with the u.s. on a sector by sector basis. but if it comes to a trade were, he says we are not afraid and would fight back. that is from an advisor to the state council. china coming to this feeling fairly confident after china
8:15 pm
back to the one china policy. but knowing trump can throw anything at them, wanting to be as prepared as possible. yvonne: let's bring in a china expert, chairman of the east asian institute live from singapore. it is interesting professor, we talk about the delegation that trump will be bringing at mar-a-lago like wrecks wilkerson -- rex tillerson and wilbur ross. who is it shaping foreign policy for trump? who is behind this right now? >> at this stage, no one is trying to shape anything. it is more a question of getting to know each other, the script has not been written out yet. but how to shape the script is what they are up to. the chinese are very experienced. xi jinping has been around for a ande, he knows the score,
8:16 pm
he knows what china wants. but he is not at all clear what president trump has in mind. i think he is quite right to say that he is prepared for anything, but not prepared to show too much of his hand. he wants to take it step by step because there is no rush. i do not think he is in any particular hurry to get things sorted out right now. betty: a very measured pace. i want to bring up a chart for our viewers, one i am sure you know very well, which is the u.s.-china trade relationship and the increasing reliance we have seen in the last decade of the u.s. on chinese trade. it is now almost 70% of their entire trade with the world. whereas looking at the far left corner in 2008, it was just a little above 12%. it certainly has grown more and more.
8:17 pm
what weat reliance, will see out of trump and the administration, perhaps a lot more talk with a very small stick. a lot of bark, but very little bite? >> i think the figures are clear, the interrelationship is so strong, the interdependence so strong, there is not match room to maneuver -- much room to maneuver. the trade deficit cannot go on like this. the chinese are prepared to buy a lot of things from the u.s. if americans will sell it to them. we cannot measure things by trade figures alone. the way they americans are attractive to the chinese, chinese are spending a lot of money in the united states, i do not know how much it adds up to,
8:18 pm
but it is considerable. that kind of link up with the american economy is not shown on these charts. there is a lot more happening below, and both leaders know that. there is no reason to just concentrate on one set of figures. there are many things to take into account, and both sides of experts looking into all that and know the situation is not as grim. as it may look on that chart asnne: it may not look at -- grim. this chart shows the dollar pulling back, that has helped when it comes to the u.s. trade deficit. it has a weekend and shrunk the trade deficit we do see with many nations. this chart shows a long way to go when it comes to the deficit for the u.s. what options does the trump administration have two address the trade balance with china?
8:19 pm
and who will make the most concessions here? tom: that is an interesting question. speaking toave been say the concerns for what the chinese will be saying on the trade imbalance is, they want to point out to trump and his advisers that from the chinese perspective, this is about structural, economic differences, not the fact that china has been gaming the system. the chinese point out they have a deficit with australia. they were slightly irked that the americans and trump are not taking attention to the fact it was massive chinese stimulus in 2008 in 2009 that helped strengthen the global economy. they are saying they are prepared to talk to americans on a sector by sector basis. there are many areas of the economy that are closed often limited to investors here in china. we may see some movements from the chinese on those areas to try to appease the americans.
8:20 pm
one expert we spoke to saying the financial sector could see faster reforms as another way to try to mollify the americans. the chinese saying it is an area they are not going to react to. it will not be a knee-jerk reaction, they won a comprehensive conversation about this issue. betty: they do. u.s. has talked about going it alone on north korea. we just heard from rex tillerson in a statement on this north korea missile launch, saying the u.s. has spoken enough about north korea. seemingly reiterating the stands the u.s. is prepared to deal with this unilaterally. how is this going to go over? i do not know what president trump means by going unilaterally. if he means they will meet to
8:21 pm
the north koreans, they could work on that. but if you mean something more reactive and bombastic, the chinese could keep very calm on this one. they are not at all happy with north korea, as everyone knows. but they are not in a position to make the north koreans do something they do not want to do. the north koreans have their own agenda, the chinese cannot change that. beyond a certain point, they cannot do anymore. americans think the chinese can do more, it is a mistake. both sides had to get together with others. i am surprised they have not drawn in russia more into the picture. russians can also help in other ways. professor, i have been speaking to one of your counterparts, and economist here in beijing yesterday.
8:22 pm
he said the reaction from trump and his advisers on china could play into the hands of reformers here domestically to help speed up or -- reforms here in china. is that something you buy into? >> i do not think it makes much difference. as far as reforms are concerned, xi jinping is committed to reform. there are other factors and players. for example, the succession -- the question of leadership succession. these issues are more political than economic and are very important. reforms are happening very slow. the system itself does not allow it to make the kind of move that could completely change things. would harm dramatic the economy, it does not help. the chinese do know how to go about this, they know it needs to be carefully done.
8:23 pm
they cannot afford to make big mistakes. their economy is in a delicate space. protectionist concerns have died down since the start of the year. we had a dutch election, and coming up, france and germany. are you concerned about a possible trade war? >> i think the chinese are going to be very steady and consistent. they made it very clear that they want globalization and open trade, they are committed to that and have their own way of doing that, which is not always satisfactory. they are tied to the system they have been benefiting from all these decades. they will stay with it and not let this bother them that much. as long as they have support from europeans, other asian countries.
8:24 pm
if everyone is for globalization, i do not think the americans can change that much for the chinese. betty: thank you so much for joining us in this conversation on the xi jinping visit to the u.s. and thank you as well to tom mackenzie in beijing previewing this trip. you can get a roundup of the top stories here. isnne: absolutely, dayb where you can go for bloomberg subscribers. we have been delving into jamie dimon's annual letter. it is also available on your phone app. only get the news you care about. ♪ ♪
8:25 pm
8:26 pm
betty: this is daybreak asia, i am betty liu in new york. yvonne: i am yvonne man in hong
8:27 pm
kong. several senior executives have left deutsche bank after the lender slashed bonuses for a second straight year. europe's largest investment bank is seeking to -- there were misconduct finds. they say the lack of clarity on compensation will make it harder to retain talent. betty: wells fargo trade holders -- there was a fake account scandal. the board's corporate responsibility committee should be held liable for what it has called a clumsy response to revelation that at least 2 million accounts had been opened permission.omers' yvonne: rejecting the bank's proposal for $26 million in bonuses to the executive board. the advisory firm said that the amount is wholly inappropriate,
8:28 pm
given losses suffered by shareholders. -- 33% of its 33 shares. betty: jamie dimon and his shareholders, we will dig in. ♪
8:29 pm
8:30 pm
>> it is 8:30 in singapore. i am in hong kong. >> i am in new york. you are watching daybreak. counting the count for my in chilie. the agency says that the 1%ruption means the loss of of annual global production, than $1 billion.
8:31 pm
china became the biggest purchaser of u.s. oil and quadrupled purchases. it has jumped over $8 million exports.oosted canadian crude orders fell. rge comes as opec tries to trim the global glut. candidate was found to be the most convincing. fillon puts macron and ahead of marine le pen. she is seen as going through the first round of voting and losing in the run-up. -- runoff. this was knocked down in hong
8:32 pm
kong after going for a larger sum. it fell apart when a buyer defaulted. this was the largest pink diamond ever graded by the gemological institute. i am rosalind chin. this is bloomberg. >> shaping up on this wednesday morning. stocks inook at the sydney looking boy and and they like the trading number that shows a trade surplus smashing estimates. chart here ons the terminal, you can see that we have seen this surplus diminish and we are seeing it theing up and we did have j.p. morgan economist saying
8:33 pm
that this could get worse in the months ahead. inhave energy on the up sydney. i want to check what is happening offshore. the currency has trimmed the decline. 50is still stuck between the and 100 day averages and you can see that moving average and the is a signalaverage of lower volatility. this is in the lead up to the meeting this week. it could lighten that the market that heand trump said will talk about the trade inicit and it narrowed february to the lowest in a year. an economist said that that shrinking deficit is seasonal
8:34 pm
and will widen in march. >> thank you. has a letter containing two big statement. it says that america is exceptional and that something is wrong here. we have more on this broad letter that we got from jamie dimon to the world. >> this is his worldview and hat is happening in the u.s. he talked about china, mexico, brexit, everywhere the company is. i have lived pages that he sent out, in terms of shareholder meeting. it is pretty hefty. he talked about the conditions of j.p. morgan and things are good. we know that after donald trump got the white house.
8:35 pm
he goes on and talks about policy issues. a lot of it has to do with dodd-frank. policys to deal with the that could go to donald trump here. i want to highlight this first quote. is ans that it exceptional country here and he talked about counting his talked aboutand he everything from the united states having the strongest military to being the longest surviving democracy. he said that it would be the most transparent and financial in the world. he went on for seven more pages with kudos and criticism here. for example, one of the things he talked about his gdp growth and it is only 1% over that time
8:36 pm
frame. things are slowing down there, looking at the data. he said that gdp is at the lowest in 30 years. i want to show you this terminal chart. around the early to middle 80's. the u.s. productivity growth, he talked about the household incomes in the last 15 years and the average acis is lower. people sayn hearing that they are not feeling the richness and that they are not feeling the wealth. they are not as well off as 15 your's ago. -- 15 years ago. interestingly, he pointed to the said, if youd he
8:37 pm
don't put it towards wars, you could put it towards more growth. >> and a lot of people thought there was a shift in tone. usually, he is optimistic. what is his prescription? a lot oft through things that were central to the campaign rhetoric. one of them is infrastructure investment and another is corporate tax reform is up another is more favorable trade agreements. he said that there is not a compelling reason why china and america have to fight. improving the relations could be good for both parties. he talked about immigration policy and he said that it is vital to the strength of america. done right, it can be a cool for good. toolys that -- it can be a for good wil.
8:38 pm
he says that as there is a second travel ban. regarding dodd-frank, he doesn't say he wants to throw it out entirely, but he says he wants to open up the rulebook and rework the rules and the regulations to free the financials to do more. he ended on an optimistic note here and said that the confidence in government is the secret sauce. right now, confidence with the white house is lacking. he says that is what is needed to move ahead. >> all right. thank you. lloyd's of london announced an eu subsidiary. they plan on opening an office in brussels to handle the business. will continueeo
8:39 pm
to be important. >> being the financial center for so many years, nothing will change overnight and i think that london will remain key to the financial community. have $40 billion in revenue and we are a major part of that financial center, with a of business coming. 5% of that host up we have chosen to do this in brussels, but it is only that part of our business. >> will there be disruption to your capital? >> we don't leave so. capitala vast array of providers investing and we have
8:40 pm
really been looking to get the japanese investors are contributing. insurers andse chinese buyers have been there in the past few years. what can track that? lloyds is an lloyds andnows about these companies investing have benefited from all of that with the market
8:41 pm
structure and that is why they like to be part of lloyds and they commit all of this business to lloyds and we have a lot of that is toxperts and invest in lloyds. >> that was the lloyds ceo. there is more. china has planned for an economic zone and we will assess the implications.
8:42 pm
8:43 pm
daybreak.s quick check of the headlines here. the financial fallout is worsening at fox news. five automakers and three drug
8:44 pm
companies have pulled advertisements from the o'reilly factor. months and months of negative headlines against -- r ailes and possible test of the trump tehran.owards boeing says that this job would sustain 18,000 jobs and some lawmakers have voiced concerns. boeing has a deal that is being finalized. >> securing rights to thursday night games. more than last year. the games will be broadcasted by
8:45 pm
, but theorks short-term is leading up to 2021, when the deals begin to expire. you cannot the in a better seat days -- roger goodell these days. everybody wants live sports. >> everybody is watching it on their phones and computers. >> absolutely. in china, a different type of football is played. china set up a new economic zone boost economic growth toward services and developing this area may be a step in that direction. let's bring in a senior emerging markets economist and how this
8:46 pm
is ranked as the number two in the forecast. these reports came out, investors started piling in in anticipation of the real estate prices skyrocketing. will that happen? >> well, you know, basically, it economy already and the has stopped any trading of this property. basically, i think there is still a black market their and the property prices are likely to be rising rapidly in the next few years. a challenging story that is in line with the overall behavior. i think that it will happen. job --ing for that next jackpot.
8:47 pm
here?ey create in other her here?ey create anot >> too early to say. this is a big deal and there is a special economic sound and the chinese authorities put this at the same level and what is seen asg in china was reform the chinese agenda in the 1980's and 1990's. new province, but we will need more time to see it. in the meantime, the timing is important because the communist
8:48 pm
party will hold the 19th congress later this year and china launched this economic zone, meaning that the chinese president has consolidated his power. >> there are more political than economic implications. china has had a long history of building these cities and they sometimes end up empty and i want to show the growth of some of these regions and the provinces where this will be built. we saw this slump and it has beijingd in line with and the overall growth in china right now. how successful will this transition be?
8:49 pm
this seems like it is over the capacity. this province, they have industry tom heavy a balance and that means the investment should pick up together and relies on manufacturing inside will stop for this area, i think that this is the most important thing, how it will integrate and we will see that. and howioned a big gap with the different inies and the top leadership the province to create or develop new special economic results and balance.
8:50 pm
approach,ore balanced that is important and the chinese authority stated that china wants to transfer some of the call functions into this economic sound and i think that organization. somee past, china created super cities, but china may need to think about that and creating to replace the cities in the future. >> we are seeing a need to release the pressure at the capital with overpopulation and pollution. when it comes to jumpstarting
8:51 pm
growth, how realistic is that? >> look at the overall chinese picture and the growth will continue to moderate investment services have not seen the reforms and, in the past five years, we have not seen seenprojects and we have the reform. think there is a commitment to the reform agenda in the future to give people more confidence and make the economic picture overtime. >> great to have you.
8:52 pm
ifwill be interesting to see there is investor euphoria. apple says that it is misunderstood and would prefer to be associated with the u.s. wholesaler.
8:53 pm
>> this is daybreak.
8:54 pm
>> they have been compared to products. their they say they are understood. this isoined now and surprising or not so surprising, depending on the performance of the phone. they say to not be compared to apple they want to be -- apple. they want to be compared to cosco. >> they jumped into international consciousness with explosive growth on these phones and they had these flash sales with limited sales and people went to the online stores to buy them. since that time, they have lost momentum to domestic competitors and the ceo has been struggling to articulate the next vision for them to stop he sat down with our reporters and said
8:55 pm
where he wants to go with the company. that is where the conversation came from. >> is it a mistake for them to go broad and diverse? they are selling different kinds of products. comparison to the cosco is absurd and they have many stores. lots of different products. what beijing was trying to articulate is that this is not just a smart phone company and they have a wide range of things that they sell in their stores and they say that they want to be able to sell things at low cost with advanced features. it is similar to cosco. they don't make any money on the products or sell mrs. -- or services.
8:56 pm
they sell the annual memberships. it is very different. >> very different. they are trying to cover the fact that the smartphone growth is growing. they have held a third factory in the country. what can they do differently? they are being toppled by local players. what can they do differently? have a are trying to broader strategy with a range of products and it is moving away from the smartphone sales. you have certain metrics that are interesting and they hoped to generate revenues of about $15 million -- $15 billion and they want to generate $1 billion in online revenue. you don't really associate that with a company that has been primarily smartphones.
8:57 pm
joining usu for live. that is almost it for us. time for a quick look at what is coming up here. what are you watching? >> we are tracking this story with news of the trump administration being concerned arm could falla into chinese-connected hands. that addsecretaries on this comes at a sensitive time, on the eve of that meeting i and trump. we will talk about japanese equities.
8:58 pm
8:59 pm
9:00 pm
>> 9:00 p.m. in new york. this is "bloombers markets: asia." ♪ haidi: asia-pacific stocks nudging higher. markets returned to training. the yen weaker for the first time in days. washington is worried about westinghouse. the trump administration does not want the reactor maker to go to china. exceptional, but he is also peering something is very wrong.


info Stream Only

Uploaded by TV Archive on