tv Bloomberg Markets Asia Bloomberg May 14, 2017 9:00pm-12:01am EDT
foundations for a new east-west trade route. rishaad: the weekend hackers may strike again on monday. at apple's market capitalization in excess of $800 billion. if you add them up, you have a #8527,d capitalization, we are at roughly $3 trillion. quite something. that is what we have at the moment. some people saying these five have too much clout when it comes to soft power and real
power with the amount of data they have at their disposal. the tech names pushing higher with the rest of the market treading water. on the asian agenda, some china expected, retail sales come industrial production, some of that expected to have ease, particularly industrial activity , painting the picture q1 was week. i want to touch on the credit data over the weekend and on friday. , credit expansion continues to push forward despite the deleveraging campaign from beijing that has shaken the markets. we did see these numbers coming in stronger than expected, aggregate financing expanding to just over $200 billion, more
than expected. new home loans rising higher and april been markets have been expecting. shadowupside, we did see financing gauges falling, so it does seem in some respects the targeted deleveraging campaign is starting to take affect. we are 30 minutes away from the china and hong kong. singapore, taiwan, malaysia joining the fray. it has been a down start to the trading week. sentiment have looking fragile this monday in asian markets. take a look at the equity space. stocks in sydney and tokyo down, and the kospi swinging between gains and losses following concerns over north korea's latest missile test. we are still seeing .5% high from its record close. elsewhere, the weaker dollar find some traction for emerging currency such as the
ringgit and rupiah. ae won trading higher for third day. in the bond space, aussie bonds, tracking that move in treasuries following that friday data dump out of the u.s. showing inflation missing estimates. take a look at the commodities space. gold swinging between gains and losses given the appetite for haven assets. $50, wti belowe $48. opec members have initial deal to extend output cuts, but u.s. and drillers are adding to rigs in the shale patch. the total currently stands at 712 rigs come up more than doubled the 2016 low. while we do have based metals on the front foot, copper, iron ore, the biggest picture on
copper, worries over the chinese economy. copper prices have fallen in the five of the past six weeks, wiping out gains for the year, and money managers have cut their long net holdings to the lowest since november. a gauge of china's economic health at 10:00 a.m. industrial output may have slowed, but retail sales likely remaining steady. at the bottom of the hour, we check reaction of markets in china and hong kong to president -- president xi jinping's pledge of $70 billion towards the belt and road initiative. let's get over to sydney and have a look at the first word news headlines. here is paul allen. paul: thanks. the un security council is to discuss north korea's latest missile launch, which is seen as
a direct challenge to the south's new leader. sea ofket landed in the japan after reaching an unusually high multitude come although not thought to be capable of hitting the u.s. west coast. president trump and south korea's president said they will meet kim jong-un under the right circumstances. the weakens unprecedented global cyber attack will continue claiming victims even as system start returning to normal. malware uses a technique reportedly stolen from the nsa. it affected the british national health service, russia's ministry of interior, germany's rail system, automakers nissan and fedex. nothis is something we have seen before, the global reach is unprecedented. the latest count of countries is over 200,000 victims in at least 150 countries. reports from japan say toshiba mate when a government guarantee for almost $8 billion
in loans. the financial times said the state investment fund may take control of toshiba's chip business. the deal would include $2.7 billion each from them. last week, on high precision was seeking a loan of $15 billion for toshiba's chip unit. southern co. has agreed to take the lead on building to nuclear reactors from toshiba's bankrupt westinghouse unit. as early astart next month, the atlanta-based utility says it is in the process of working out a new service agreement. westinghouse's bankruptcy but the fate of four nuclear reactors and outcome of the other two and south carolina. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: china has been leading the framework for its new east-west trade route, known as
the belt and road initiative. president xi jinping describing the plan as "the project of the century." tom mackenzie is there. take us through the details of his grand plan. yes, this is president xi jinping and china doing nothing less than trying to recast globalization in china's image, trying to focused on investment and infrastructure tied to asia through infrastructure projects and through investments. president xi jinping committed $70 billion in funding on top of the funding that development banks have already harnessed for this project. he outlined this plan, it's historic links to the silk road and how it will open up markets
for all the pretenses -- participants involved. ,e have the president of russia saying he supports development about the ration area. we heard from the president of said the center of economic gravity is now shifting towards china, but there are big questions that remain as to whether or not this is about china expanding its influence, its political influence. or whether there will be an open and level playing field for companies from across the world to get involved in the health and road initiative. a key part of this plan is securing china's energy supplies. china is the number one importer of crude, and it was on this question and possible investments in the u.s. that we put exclusively to the chairman of china national petroleum corporation. take a listen to what he had to say.
they you as has very rich oil and gas resources, while china needs to diversify its imported crude supplies. american crude will certainly be one of our options as the u.s. government is loosening its restrictions on oil exports. importanttegically for china to expand the natural gas ratio in its primary energy tom the current 6% to 10% 15% in the next 5-10 years. paul: talking to us exclusively about the opportunity he sees for him chinese investment in the u.s., pulling the 100 day trade deal between the u.s. and china, while telling as he would be signing $20 billion worth of deals over the next few days,
and that also he was focusing on securing operations and expanding gas operations in central asia and oil and africa and the middle east. he also gave us an update on the pipeline from russia into china, saying he expects that to come online soon. energy security is increasingly important and central to development of the health and road initiative to china which was to diversify its energy mix. haidi: a fascinating interview. there have been challenges and warnings to this initiative from beijing. absolutely. one of them front and center is financing andf how china convinces private investors to get on board with this policy banks and development banks, and that is why we are here, bankers are , but also private banks
like standard chartered, morgan stanley. pullare here trying to together a framework for financing and trying to convince on the back of that, investors, private investors to get involved in what many see as risky infrastructure projects, risky investments around the world and around this belt and road initiative. we heard concerns voiced by germany's economic affairs minister. she said she was concerned that europeans were concerned that still there was not yet a level playing field for german corporations to get involved in the bidding processes. they want to ensure that when these tenders go out that it would just not be the big state owned and private chinese companies that get preferential treatment. the lot seven certainly still ahead. thank you for that. tom mackenzie, our china correspondent at the belt and road form in beijing.
♪ i am rishaad salamat in hong kong. haidi: i am haidi lun in sydney. a group including tpg capital has revise its bid for fairfax media to an all-cash offer of 2.8 billion australian dollars. the consortium has ditched a plan to cherry pick the publisher's prized assets and will now pursue the whole
operation. the offer is worth $1.20 a share. fairfax closed at $1.07 on friday. shares trading in sydney at the moment, upside of 7.25%. rishaad: the investment arm of abu dhabi's sovereign wealth fund planning to invest $15 billion in softbank's vision fund. it sees significant opportunity for returns and will make the investment over the next five years. softbank's fund will wrap up with $95 billion of commitments. lowi: airasia planning a cost carrier in partnership with the everbright group. ofis part of its ambition raising a pan-asian airline. ordered hundreds of planes and will invest in infrastructure, including a low-cost carrier terminal. let's turn our
attention to central banks, the fed on a tightening path, the ecb debating tempering its stimulus program. the ecb may raise rates, and the fed will hike three times. welcome.international, let's kick things off. the ecb has to taper before raising rates, but i think mario draghi seems to be reluctant. to taper.n't have he could raise interest rates a couple of times before he starts to taper. rishaad: that is controversial, isn't it? >> it is, but the benefit to savers, those harmed by rates would be helped by that. rishaad: why? rates,ity rates, saving they are already extremely low and that has what caused people to save for longer, which has
stopped spending. rishaad: they're not doing the same yield manipulation the boj is doing. between the difference the prg and the ecb as the ecb as the ecb is starting to see signs of inflation, where there is none in japan, and therefore you can't target long dated bonds. david, looking at this reflation story that has boosted the markets are persons the election, i want to throw up this chart #6061, concurring inflation levels. you can see that tempering when it comes to that white wine of u.s. inflation. given we had some of these signals last week suggesting on the consumer side, retail remains tepid, that consumption story might be week, then the issue of input prices falling over as well. do you still see the three hikes this year from the fed? david: i do.
be priced looks to income and it will be one more after that, three for this year. i'm not sure we will see a fourth that some that officials are talking about him a but i do leave there will be three this year. youkey point to the issue raised in your commentary is we are likely to see one next year, and the fed will be on hold for next year onwards. the chinese yuan reference rate, the strongest level since april 26. that is telling us one thing, but i guess it also depends on what the dollar does, and what the dollar does is what the fed will do in the future as well. #5548 to show how that tightening cycle is working in the u.s. this is essentially where we are with this policy diversion. does that mean they then have to
come everybody else has to push operates as well because the pressure is on? david: the ecb, yes. the boe and boj have reasons not to. inflation not see any at all. abenomics has not worked for that reason. rishaad: someone argue there has been too little abenomics. david: fair point. the boe also has a reason to say there is a lot of uncertainty. the ecb has less argument to make they should be diverting from the u.s. the fed hasaid learned its lesson from the taper tantrum. want to talk about china, because it feels like there is a taper tantrum, #8576, the chinese 10-year sovereign. we are looking at the yield jumping 41 basis points in less than two months does that seem
irrational to you? is this china liquidity versus deleveraging? opportunity, it feels to me a lot like when the and the federal reserve started their first commentary and first actions towards raising interest rates. that turned out to be a big opportunity for bond investors. it seems there is a natural impulse action when the start of the tightening cycle comes come of it than it tends to come back down, so the message i'm giving investors is that it looks like an opportunity to me. rishaad: i want to get to what boe, lessng with the of the case for raising rates. a lot of people say the pressure is on mark carney to do so, but inflation is there because of base fx and because
of brexit naturally and the effect of sterling's depreciation, wouldn't you agree? david: i would agree. core inflation is starting to the uncertainty surrounding brexit is enormous, and i think it it will be a position the boe will state that they can't raise rates with that level of uncertainty. rishaad: right. boe will raise rates at some stage? they have to. that is a stupid question at the end of the day, but the question is win. david: i think it will be a long time in the future unless inflation takes hold. they can wait and wait arguing this brexit story, so on hold for another couple of years at least. rishaad: thank you. coming up, watching china's airlines, greater access to the united states and europe. ♪
markets: asia." i'm haidi lun in sydney. rishaad: i am rishaad salamat in hong kong. we count you down to the start of the trading day. ,ree market looking like this up point 3%, futures indicating a slightly higher rise than that. chinese airlines at the start of the session. or thes they negotiate civil aviation administration of china does for more air rights due to greater demand from china. we are seeing part of this travel boom taper off a little bit as airlines have depleted existing air rights, the united states in particular. discussions are designed to enhance them to the administrator of the civil aviation administration said in on therview said
sidelines of the belt and road form. they are looking to boost air links with countries that fall within that one belt and road. i will be watching some of these gas producers. they are likely to react to that exclusive conversation with the head of cnpc. we have had output with chinese in gg production -- energy production falling to have have the story with beijing wanting to impose a 6% on gas district or investment returns to conserve fuel consumption, getting that energy mix right to raise the share of natural gas to 10% from 6% last year. that is the hong kong listed trading up,fcnpc and the number of gas producers falling in the previous session on friday.
♪ is the scene, victoria harbour, rainy day, thunderstorms expected. we are counting you down to the start of the trading day in the territory and greater china. i am rishaad salamat from bloomberg's asia headquarters. haidi: i am haidi lun in sydney. data,utes, china hopefully a complete picture of whether the first quarter was as good as it gets when it comes to the robust growth numbers out of china, retail sales, industrial production, and fixed asset investment all coming through. credit number suggesting plenty of liquidity in the markets of the moment. , well,: looking also
home loan data from australia. how chart showing australia's debt binge has gotten worse, no growth when it comes to housing finance loans. that data should be out any minute. this is what we see at the moment. we get straight to soapy with the open in hong kong and shanghai. chinese stock still finding support as president xi jinping host two dozen leaders for the belt and road summit. the shanghai composite for a third straight day. on the forex front, the pboc fixng -- setting the yuan higher for the third straight day, the highest level since april 26. given president xi jinping's pledge for $70 billion in the for and road initiative funding for projects, the
shanghai, breaking it down by sectors. industrial and materials gaining , up .6%. there is a lot of potential when it comes to infrastructure projects in cooperation with countries along that new silk road. on hong kong stocks, developers in particular. this after hong kong regulators are looking to tighten vending to the property space. we do have real estate up .4%. regulators are seeking to contain risk in the city's booming real estate market. some equity movers, let's look at petrochina. cnpc, thested unit of chairman telling bloomberg the company as looking beyond the belt and road plan and setting its sights on u.s. energy as
china's reliance on imports grow. production has plummeted, prompting china to become the biggest importer in the world. b shares in hong kong after trading resumed, the company considering the legal ruling that of the the granting of a waiver should be made conditional on the outcome of a shareholder vote. plunging 6% today. haidi: thank you for that. let's get to first word news. paul: thanks. the first quarter profit rose led by gains in its and nuts and spices unit, as well as food staples, increasing 27% to $103 million, overall revenue up 22%. tic trading jumped to
sales in its food unit. the chinese aviation officials say beijing is negotiating with the u.s. and france for more air rights to meet growing demand from mainland airlines for direct flights. the discussions are aimed at enhancing existing rights. the talks with friends or part of china's plan to boost air links with countries involved in the belt and road trade initiative. a real estate project linked to jared kushner's family has failed to attract any financial commitments after an investor presentation and for chinese cities. about 50 people attended a sunday event at the four seasons . similar events in beijing and shanghai last week in rate controversy after jerod kircher's sister and vote president trump. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries.
this is bloomberg. i am paul allen. haidi: thanks for that. numbersgetting some through when it comes to home loan data out of australia. month on month in march, home loans fell .5%. we were expecting no change. it also fell .5% in the previous month. lending for investment properties gaining .8% after a decline of close to 6%. when it comes to the owner occupied homeland values rising .9% as well. a mixed bag when it comes to assessing whether these macro prudential measures, whether some of these concerns over financial stability as result of higher household debt and mortgage holdings have really started to come off somewhat. let's get to north korea, the latest missile test is weighing on the markets, drawing
condemnation from around the world. it comes days after south korea elected a new president, and is being seen as a challenge to washington. peter paige joins us now with the latest on this. more saber rattling as the new president and south korea grapples with some enormous challenges. >> yes, indeed. the response has obviously been overwhelming condemnation of north korea. what has been more alarming i supposed to this regular provocation by north korea is the claim today, particularly by north korea's news service, that it was capable of carrying a large nuclear warhead. that is a claim that will need to be verified and could easily be discredited as north korea's thatous claim last year they had detonated a hydrogen
bomb, which was widely discredited as well, so it remains to be seen what kind of advancement that made in nuclear weapons development. rishaad: that's just it, isn't it? we also have this new president in the south where you are who has been making some conciliatory noises towards pyongyang. timing cametest's as china was holding its big belt and road for them. days afterso a few south korea elected a liberal president who has talked about a softer stance towards north korea, has openly said he would go to pyongyang and have an open dialogue with north korea, so a much more engaged approach. test will play into his decision, into his policy decisions, remains to be
seen, but definitely a challenge. something, howe will beijing interpret this given donald trump saying they have been putting a lot of pressure on the north, on the leadership there. it seems like it has come to n aught. >> china's response would be key. they have already banned imports of north korean coal, which was a significant hit to that country. additionalf sanctions china will impose on north korea is going to be key, mainly because china and north korea, china has -- accounts for 70% of north korea's trade. was donaldteresting trump's comment about russia. it almost seemed to imply that he was also trying to get russia's help in in posing the sanctions and putting the squeeze on north korea. rishaad: thank you very much in
the. pae in seoul,- korea. airasia starting a budget airline with its partner everbright group. to haslinda amin. just an: no longer asean carrier, looking to be more pan-asian. china seems to be the next logical step. , everbright, and the government signed an agreement for that joint venture. it represents the final piece of the airasia
puzzle. it can now live up to its name as the only airline that connects travelers across the asia-pacific. airasia has ordered hundreds of planes worth billions of dollars the airbus to meet expansion strategy. at the same time, it is also in the process of selling its plane leasing unit to raise more cash. big plans, but still lots of questions here, like when will this venture takeoff. where will the budget carrier fly to? we will have to nail down the answers. about i have a question what kind of investment airasia is expected to make in china in terms of infrastructure. do we have any details? haslinda: we don't have the nuts and bolts, but airasia plans to invest in aviation infrastructure, a dedicated terminal for low-cost carriers. plans to set up an
academy to train pilots, crew, engineers, as well as maintenance repair and overhaul facilities to service aircraft. will bens airasia training local talent, so quite an investment there. you can see why. estimates suggest the number of people flying two, front, and within china will double to almost 930 million annually by 2025. by 2035, expect that number to reach 1.3 billion. however you look at it, a staggering number. haidi: staggering in the. thank you so much for that. coming up, as china launches the one belt, one road initiative, kpmg says there is much to be optimistic about, but potential obstacles too. this is bloomberg. ♪
markets: asia." i am haidi lun in sydney. rishaad: i am rishaad salamat in hong kong. the business flash headlines, nomura in talks to sell a third of its property unit with japan post considering a bid for nomura a majority stake in nomura real estate. was to boostn profits by strengthening its property business. real estate has a property value of $3.4 billion. haidi: bhp billiton going back l plain old bhp, about the aunch i campaign. the company says it needs to change the way the community thinks about it. it says the change has been in the works for 18 months and has nothing to do with elliott management's recent calls for reform. rishaad: changes to mitsubishi
ufj financial, consolidating corporate counts at its trust banking division into commercial operations, seeing a drop represent is to bank of tokyo, hoping to boost negative interest rates to boost profitability. around $106wings of million. right, breaking news coming through, western digital, one of the companies looking to get a hold of toshiba's chip division. they were saying earlier they would try to block the toshiba deal and wanted more transparency into who toshiba would sell the chip business too. they were going to announce legal action and arbitration, but the sheep is saying western digital has no ground to interfere in the bidding process. it will handle the chip sale business appropriately, saying noticenot received any of arbitration as well. this is a story we are monitoring for you. haidi: let's get back to one of
our top stories, the incredible belt and road initiative coming out of beijing without form underway. the chairman of international auditor kpmg says he remains bullish when it comes to china as it launches one belt, one road, however, he told us beijing faces a major challenge in attracting private capital to what are some pretty risky projects. >> i think there is probably and questioning if i am really honest at this point as opposed to enthusiasm. i think people are beginning to say, wait a minute, there could be great opportunities here. there are some sectors, financial services are more engaged, the banks and insurance companies recognize they need to pay attention to what belt and road can do, so i think it is a combination of interest and some building enthusiasm for it,
depending on what sector you are in. the opportunities it can provide for you, along with that uncertainty of needing to understand better what it could mean. where are we in terms of the appetite from private investors to get involved, whether through public-private initiatives, partnerships, the belt and road initiative, or direct investments? >> there is a big gap. there is a lot of progress the needs to be made. if you ask what are the biggest risks right now to belt and road , it is attracting private capital that will have to get engaged, and frankly we are talking about attracting capital to some pretty high risk projects in some very emerging markets, and so private capital will i think do tremendous diligence and it will be interesting to see what kind of
hurdle rates will have to be in place to attract the capital they are talking about. tom: what would you say to the chinese government in terms of what they need to do, their priorities, to move this forward? >> there will not be us over bullet. this is complicated, and you run right into the issues that companies deal with when they are trying to operate on a global stage. that areregulators very much country-based, tax authorities that are very much country based. all of those things will be important to a lot of the infrastructure projects that are ,mbedded within belt and road and china will need to understand how to work with the eu commission as they look at real opportunities. tom: should the u.s. play a greater role? >> i think the u.s. will. i am a big believer in the pragmatism of our leaders as well, and frankly, the recent
100 day plan and 10 point initiative that was just announced, while you can debate whether some of those things would have been in play anyway, i thought it was a positive signal in terms of giving some rhetoric thate has been coming out of the u.s. i thought it signaled a willingness to be more pragmatic and work with chinese leadership on things where there is mutual interest. tom: given the set up and equities -- selloff in equities and bonds, weaker pmi or slowing exports, does that change or calculation regarding china's growth outlook for 2017? bullish on the importance of china, and i think the strength of the chinese economy, as you look long term, 3-5-10 years, we will have ups and downs during that time. i tend not to get too distracted
or fixated on the next 6-12 months, because i am such a strong believer in the importance of this economy, and frankly the strength of this economy and the next five years and beyond. now, china's largest oil and gas producer expect to sign 12 new deals during resident xi jinping's belt and road for them. the country is looking closely at u.s. crude to meet china's growing demand. >> china's reliance on imported oil is over 60%. that means that almost 300 million tons of crude oil are imported every year. the u.s. has very rich oil and gas resources. china needs to diversify its
imported crude supplies. berican crude will certainly one of our options as the u.s. government is loosening its restrictions on oil exports. importanttegically for china to expand the natural gas ratio in its primary energy mix from the current 6% to 10% to 15% in the next 5-10 years. would you consider investing in u.s. lng terminals? we are interested in investing in u.s. lng projects. now that america has lifted export restrictions on lng. if there are opportunities and building natural gas projects and plans and transportation facilities or investing in lng projects, we would definitely consider them.
the russian pipeline that seems to have faced a number of delays in terms of coming online , that will bring russian gas to china, those delays, what are the reasons for those delays and we do expect that pipeline to come online? >> the cooperation between china and russia is strategic. we are planning to complete the construction of natural gas pipelines linking the two countries by the end of 2018, and begin transporting gas in 2019. up both sides are speeding the pipeline projects. the exploitation of gas fields, as well as the building of processing facilities. cnpc: that was the chairman speaking to tom mackenzie. coming up, hackers attacking more than 200,000 computers across more than 150 countries at the weekend.
♪ rishaad: this is "bloomberg markets: asia." i am rishaad salamat in hong kong. haidi: i am haidi lun in sydney. companies around the world are bracing for a second wave of cyber attacks after more than 200,000 computers across 150 countries were hit by ransonware . ramy inocencio has the latest. is one ofa cry, that the popular names of this ransonware program in fracking hundreds of thousands of computers. if you get infected, well, it could make you wanna cry because it holds her computer hostage, froming -- locking you out your files. the only way to regain access is to pay the cyber attackers.
$300, andis upward of if you don't pay, you lose all of your data. uk's national health service was spain'ssan, fedex, telefonica, along with russia's interior ministry, and china's sinopec and bank of china. that also shows which companies are using older versions of microsoft windows that also have not downloaded a critical patch the company made available in march. if you have not downloaded that patch, do it now. is "taking theit high the unusual step of providing a security update for old windows platforms." the finger-pointing has started, and while russia has in blame for cyber attacks linked to the u.s. election, moscow may not be the perpetrator here. kasperky labs say russia was hit
the hardest. microsoft's president also took a thinly veiled swipe at the nsa. brad smith said the governments of the world should treat the attack is a wake-up call. we need governments to consider the damage to civilians that comes from hoarding these front abilities and the use of exploits. the nsa reportedly developed the leaked ransonware now making its way around the world. let's do a quick state of play when it comes to markets trading around the region. sydney, quite a nice day, but marginal gains for the asx, up by .1%, pretty steep declines in that friday session. really treading water when it comes to the currency and equities ahead of that china data. rishaad: retail sales come industrial production as well. singapore looking like that. hong kong, gains equally as
a.m. in almost 10:00 hong kong and singapore. i am rishaad salama. haidi: this is bloomberg markets: asia. ♪ rishaad: hong kong lifts the regional benchmark, wary of tepid united states data. launchthe korea missile seen as a direct challenge to washington and seoul, korea. rishaad: toshiba facing legal
action over the flash memory unit. victims in 150 countries. experts say the weekend hackers could strike again on monday. rishaad: i'm going to go to steve engle's right next to me. reporter: let's change the pace. 10.7%.sales, the survey was 10.8%. pace ins the highest one year. 10.7% is a little below estimates but also robust. let's look at industrial production. it is coming in at 8.9%, below the consensus estimate that we were expecting good that is considerably below.
6.5%.rial production, it was 7% in the survey. pace of the fastest growth since 2014. 6.5% is considerably below estimates. rishaad: the number does include a bit of volatility. retail sales, 10.7%. you can sense stability. reporter: that is pretty steady growth. the industrial production number is interesting. we were expecting a higher-than-expected number. that sounds funny. [laughter] because of the low base effect, we thought there would be deceleration. .t went lower than expectations 6.5% growth for industrial
production. as another conference is wrapping up, infrastructure spending is the key. you changed the page on the. there we go. where are we? 8.9%. we were expecting 9.2%. we are seeing stability. first quarter, most economists are saying that that will be the peak of the recovery that we are starting to see. these numbers suggest the beginning of a deceleration trend. rishaad: any move on the shanghai composite? holding steady at zero 20% -- 0.2%. reporter: the authorities are trying to used ability to tackle risk but also leverage. the first four months of this
year, we're seeing more than one trillion yuan each month in lending. so, lending came in above expectations. rishaad: so they are really dealing with leveraging. reporter: they are trying to do leverage but it will take some time. rishaad: let's get to markets with sophie. reporter: despite the data showing growth in china, it seems to be slowing down. that is not knocking the socks off course. aboutnchmark still up 0.4%. we saw asian stocks reversing from the drop this morning. on the terminal, we are largely seeing green. stocks looking resilient despite geopolitical tension. over 1%re jumping today heading for a march high with
infrastructure and financials leading the gains. china pledging a significant amount of money toward rebuilding roads. metals, copper and iron ore also joining the movers here. take a look at equity movers. utilities falling almost 1% today. , utility player is in china under pressure amid reports that the government is investments in urban areas. china resources gas falling as much as 13%. now i want to take a look at some other equity movers in asia. one stock continuing to slide in hong kong. that stuck has been caught to
neutral. noble continuing to drop and sega sammy continuing to plunge in tokyo. guidancesay that the .irs on the conservative side this is the biggest tumbler for that stock since 2014. haidi: let's get the first world news here now. reporter: the un security council will discuss north korea's missile launch which is seen as a challenge to the south's new leader. the rocket landed in the ocean after reaching a high altitude. it is not thought to have been capable of hitting the united states. the south korean and united states presidents say that they will meet with kim jong-il and.
security experts say the unprecedented cyber attack will continue to claim victims as systems return to normal. it uses a technique purportedly stolen from the u.s. national security agency. it affected the british national health service, as well as the german rail system and fedex. >> this is something we haven't seen before. the global reaches unprecedented compared the latest count is over 200,000 victims in 150 countries. truceer: g7 signaling a in south america as steve mnuchin says the group was seven to understand washington's position. it mirrored the language from earlier in the of but suggested a more pragmatic tone. he declined to sean protectionism -- shun protectionism.
>> we do not want to be protectionists but we will reserve our right to be protectionists because we believe that trade is not free and fair. our approach is to balance trade. >> protectionism is off the table. there was no disagreement on the fact that trade promotes growth and it has to be inclusive. i am very satisfied. there are differing views across the g-20. i am confident that we can reach a common view on these issues. win aer: toshiba may government guarantee for almost a billion dollars in loans. one company may take control of their chip business. week, under the company saw
a loan of $15 billion for their chip unit. work on a new power plant can start as soon as next month for westinghouse. their bankruptcy but the fate of .our nuclear reactors in doubt global news 24 hours a day powered by more than 2600 journalists and analysts. this is bloomberg. haidi: thank you for that. we would like to bring to your attention our interactive television function. you can find it online to see previous interviews like the one tom did if you missed out on that or dive into any of the securities and functions that we
talk about. you can become part of the conversation by sending us instant messages during our shows. check it out. rishaad: looking ahead. japan banks facing declining profits. we will preview the earnings report live from tokyo. next, that factory retail investment data that just came through from china. this is bloomberg. ♪
billion to cherry pick prize assets from a publisher. the offer is worth $1.20 per share. there seeing a nice pop re. rishaad: abu dhabi will invest as much as $15 billion in a soft fund. it is said to be a good return. up fundingll wrap into-three weeks. weeks.-3 a low airasia is planning .ost carrier for china
they have already launched carriers in several asian countries. they will invest in a low cost carrier terminal at a major airport. rishaad: we are getting to the ongoing story of the global cyber attack claiming new victims. this time, it is in south korea. there have been nine cases of damage from this rant somewhere. -- ransomware. we have also had problems with the u.k. and russia. let's get you back to the data, industrial production. [indiscernible] saw?is it that you commoditieshinese
recovery has ended. industrial production is clearly disappointed. it was 6.5%. rishaad: that was compared with last year. guest: that is true. pmi i am looking at is the data from last week for telling today's data. a lot of us any of actuaries -- will of manufacturers continue to see this for a couple months. rishaad: let's stick with us. is this why we are seeing iron ore prices under such pressure? some hedge funds are saying that copper has a long way to run. guest: this is very sector-specific.
this correction is largely expected. we should not be surprised by today's data. the stock level is already consistent with the commodity price that happened in the past few months. has only been declining. extent, the data continues to paint the picture that we have been expecting. you are going to see this reflation story starting to peter out. i want to talk about the weekends money supply numbers. 52. when you look at the monetary conditions creating a temper tantrum in the chinese markets from bonds all the way to
equities, but if you look at some of these numbers, there is not a lot of deleveraging going on. it is kind of just leveraging. guest: exactly. we have to make it clear that the financial deleveraging going on is called financial deleveraging. the government is trying to correct activities, wealth management projects, the relationship between lending between banks and financial institutions. reason is thathe the inflation outlook is not very strong and the inflation numbers are barely touching 1.5 cents i do not think they were going to change their policy. the money market has been clouded by this financial
deleveraging. copper defunding. mismatch thathis we are starting to see. and to coming in the way than expected. -- m2 coming in lower-than-expected. m2 growth has the been slow for more than a year. the interestat rate on the deposit side is so low that they would rather go for opportunistic investment strategies. rishaad: absolutely. that is the difference because of the bank account situation. why not go for m4?
--st: ithaad: if you look at m4, might tell the whole story. m2 is not very indicative of the overall leverage iing. rishaad: we are trying to make everything kosher in other words. preventhe goal is to any financial bubble burst. that is the bottom line of the government. rishaad: christine lagarde was told that there would be stability in china. that is what their ultimate aim is. guest: before the bubble bursts, they would like to deflated.
-- deflate it. if there is any other stock market collapse similar to the 13 years ago or the major financial one, they will not be susceptible. this number is still growing at about a 9% clip. infrastructure is still a key component of growth in china. i want to talk to you about this one road initiative, $78 billion pledged for xi jinping. what are your main concerns when it comes to how effectively the funding is deployed? obviously, this is at a very promiscuous stage. domestically, china has backed the original investment. that will continue to boost the economy through infrastructure spending.
last year, a tremendous amount of money was approved to channel into infrastructure investments. the underlying fundamental favors infrastructure investment. there is an economic zone that is another key example. infrastructure investment will continue booming. haidi: essentially, this deleveraging is only playing out in the financial markets and the impact when it comes to credit tightening. guest: obviously, some of the --erest rates i wouldn't say that the deleveraging will not hurt the economy but the extent should be limited because if the government feels that the
sustainable in a while the price may recover, he does not expect to see $100 again. [speaking chinese] working inrently over 50 products in 19 different countries within the belts in roads framework. of the 12 products we are signing at the summit, some are upgrades of existing projects. some are completely new projects . depending on local resources in different countries, we mainly invest in gas projects. in russia, and in central asia. in centralerations africa. >> how can the country mitigate dependence on overseas energy supply? >> on one hand, chinese oil and
gas companies like us must continue to play the role -- on the other hand, we need to speed up our efforts in collaborating with resource-rich countries to jointly develop assets in order to replenish our country's ever-growing demand for oil and gas. in this way, we can balance our heavy reliance on imports with better use of foreign resources. >> what is your outlook for oil prices and do you think that the opec cuts can balance the markets? >> i do not think it is realistic for the oil price to hike significantly and continuously in the short-term. at the moment, the global supply and demand is undergoing a transition. in the balance between supply and demand is the foundation for
a stable trading price. we estimate that in 2017, price per barrel will be around $50 with possible short-term upturn. $50 is not sustainable. the oil price will see a slow recovery in 2018-2020. however, prices will not get back toward 2014 levels. cnpc chairman talking to tom mackenzie there. in beijing, we have xi jinping speaking at the moment. this comes one day after his , appear in on the front page of every website in china. at the moment, we have him just
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of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc. paul: these are the first word headlines. foundationaid the for a new east-west trade route. president xi jinping said the belt and road initiative was inspired by the ancient silk road that link china to europe. president she didn't think repeated his support for globalization, saying it is a force for peace and a world full of challenges. belt and road routed in is the silk road.
the pursuit of this initiative is based on extensive consultation and its benefits will be shared by all. china's premier says policymakers will continue with prudent monetary policy and maintain stability and financial markets. the imf chief christine lagarde that beijing will prioritize preventing financial risks, while continuing with a managed exchange rate. li says china will strike a balance between market stability, deleveraging, and economic growth. a chinese aviation official says beijing is negotiating with the u.s. and france for more air rights to meet growing demand. focused on existing rights, which china says have been depleted. it is part of china's plan to boost air links with countries involved in the one belt, one road initiative. a real estate project linked to the family of presidents trump's son-in-law has failed to attract any commitments from china and
the despite investor presentations and four cities. about 50 people attended the sunday event. similar events in beijing and shanghai generated controversy after jerod kircher's sister invoked his work at the white house. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am paul allen. right, indeed, i am rishaad salamat in hong kong. data at the top of the hour, didn't we? haidi: yes, that's right. more or less in line if you take a bigger picture, a decline i suppose when it comes to industrial production, but i guess telling the story that the first quarter may have been the teak of the strength when it comes to the chinese economy. rishaad: industrial production came in at 6.5%, tough base effect of the previous april,
that perhaps affecting it. ahead ofan expected expectations, if that means anything. butil sales, a decline, that as we come from base effects which were much weaker as we get this move towards a service-oriented economy. tokyo one of the few markets down in the asia-pacific. strength elsewhere. japan, mostly higher when it comes to other asian equities markets, japanese session closing out the morning session lowered weighed by a stronger yen and mixed earnings. up .2%,the rosalind: struggling but shrugging off the latest provocation.
the latest data from china showing growth momentum could be slowing. the aussie back below $.74 on the back of those figures, but h-shares jumping 1%, set for a march i thanks to infrastructure and financial stocks. i want to show you some of those share on the hi can index. china railway group among the gainers as president she pledged $78 billion in financing towards belt and road projects. china merchant banks poised for the steepest decline since february. chinese carrier shares in hong kong, this as china is negotiating for more error rights with the u.s. and france. air china trading at the highs since november 2015. north korea's latest missile test weighing on markets , condemnation from around the world, this days after south
korea elected a new president. let's get to peter pae with the latest. >> how are you doing? ago,now about 15 minutes the blue house, the presidential office announced they were going to send envoys to four countries, the u.s., china, russia, and japan. these were the countries involved in six-way party talks to halt ago in efforts the north korean nuclear ambitions. it appears the new south korean alreadyration is engaged in perhaps restarting those talks. we will have to leave it there for a second. some breaking news. the saudi oil minister is speaking in beijing let's take a listen.
excellency, minister alexander novak, as you all know , saudi arabia and russia signed a framework agreement on september 5, 2016 that a sickly a framework for the cooperation between the two countries that addresses cooperation between the two industries on technical issues as well as a separate process and framework for consultation between the two sides on oil our joint interest to bring stability, reduce producers, and serve and consumers for the long-term
in ensuring a reliable, stable oil supplies for the global markets. that process has worked extremely well. the two countries catalyzed the agreements that have place in the end of november that tought together 24 countries sign the december 10 agreement that has since then stabilize , reduced volatility, and facilitated the return of investment flows into the oil industry. target back then was to bring inventories gently down towards the five-year average without causing any undue shocks to the market, and reviewing the
usgress since then, both of expressed our satisfaction that that has been largely achieved. areourse global inventories not that easy to manage, even data on inventories is not 100% clear and transparent, as well as the many forces affecting supply and demand. has been a marked reduction in inventories for 12 months where we want to be in terms of reaching the five-year average, and our consultation .as been ongoing the two of us through a number of meetings and telephone context, but more importantly between our technical teams, the
ministry of energy of saudi arabia and the russian ministry. we have come to the conclusion that the agreement needs to be extended. not reach the desired inventory level by the end of june, therefore, we also came to ending willon that probably be better at the end of , so arst quarter of 2018 statement will be released in a few minutes that expresses the toport of the two nations extend up to the end of march 2018. allocations that were included in the december 10 agreement that we entered into in december of last year.
course we had before coming to this announcement today reached out to many of our colleagues inside and outside of opec. i think there is general consensus that this is the right approach come of the right thing to do. that consultation will continue and we look forward to all countries joining us on may 24 of thefor consultations 24, and the ford meetings of the for the extension up to the end of march 2018. .nce again, i thank you i want to thank his excellency, minister novak, for his leadership, not only within russia, but with many countries
outside opec. i think one should never underestimate the critical role that russia has played in bringing the countries together to join hands with us and to work as one team to bring stability to the oil markets. mr. novak. rishaad: right, some headlines being made by khalid al-falih, the oil minister saying this should inventory deal end in the first quarter of 2018. it was signed the late last year, saudi arabia doing much of the heavy lifting. extending this opec deal alongside russia for the next nine months, and the oil cut deal needing to be extended as what they are saying. despite it as working
rishaad: this is "bloomberg markets: asia." i am rishaad salamat in hong kong. haidi: hi m haidi lun in sydney. quickly these lines from toshiba quite a time when it comes to getting earnings. netees full-year negative worth for the company of ¥540 billion, that is without the chip sale it is highly anticipating, saying the review of earnings is ongoing. had quite a tussle over these massive losses at its westinghouse unit, the nuclear unit, in the u.s., and the
dispute is still ongoing. some other lines in terms of what it sees as the forecast for fiscal 2017 come up full-year operating profit at ¥200 billion , the forecast when it comes to net is ¥50 billion, so just getting some of these numbers from toshiba. we will try to get more details, but the plan is to reverse negative worth for the company following that chip sale. analysts expecting annual profit at japan's megabanks to fall for a third straight year when they report earnings later, even as the impact of negative rates ease. what is the situation we are facing here when it comes to some of these japanese lenders? >> that's right. full-year results this afternoon after markets close, the average of 17 analysts saying they will be down a touch from last year. to make still on track
their own conservative forecasts. they could be well above that target, and we saw mitsubishi do quiteg they could well. it will be interesting to see how high they are, but they won't be going too high because of the negative interest rate environment and want to show the boj they can still post high profits, even with the headwinds they are facing. negative rates is one thing they are dealing with, but we are off the worst of that to actually have a yield every now and then. >> it has come back a little bit. the doj change policy and september to focus on the yield curve remove the threat of negative rates.
the squeeze saying on net interest margins may be coming to an end. there's not a lot more there, not further they can fall. so some positive signs there. the environment for the banks remains unclear, a situation that is unstable. we have north korea that keeps firing missiles at us, so there are still things that could go wrong for the banks. analysts are saying the forecast will be more conservative for the rest of this year. thank you a lot for that. just getting more breaking news from this news conference between saudi arabia and russia's oil ministers. mr. novak agreeing with khalid al-falih in their wish to extend the output cut they extended in december, saying good compliance
from the deal and that it is working for them. it is working for the oil price today. i can tell you that. we have currently with the wti contract up to present since the news conference did begin. you can have a look at the price action on the bloomberg, 2% up. the wti contract. brent, that is what is going on as far as the brent contract .1 percent up at the moment. this to chart showing the last five days. the latest business flash headlines come up first quarter profit rose by gains in its nuts and spices division and its food staples, increasing 27% to 103 million dollars, overall revenue up 22%, saying opportunist trading volumes in grains seeing olamp in sales, a third of
's business. extending its collapse over concerns it will be able to turn its business around and return to profitability. to 15 year lows following a 48% nosedive last week following a plunge in bonds. noble reported a loss of $130 million. the founder step down and said he can't see a profit anytime soon. rishaad: bhp billiton going back , broken hillbhp proprietary in the old days. a $10 million advertising billiton.ropping the company says it needs to change the way the community thinks about it and that the change has been in the works for 18 months and has nothing to do with elliott management's recent calls for reform. is in a name?
right, toshiba releasing delayed earnings, saying it has to sell to flash memory chip unit stay alive. also facing action over the chip unit itself. ahlstrom --in peter peter elstrom. what is going on at the moment? >> there are a couple of big developments. toshiba has had deep financial problems because of troubles in their westinghouse nuclear business. the are trying to sell off chips business to fill the blackhole they have had with they are trying to figure out what they will do with that westinghouse unit. over the weekend, southern agreeing to take control from toshiba, which limit some liabilities toshiba may have. at the same time, their partner , westernips unit
digital, is filing for arbitration to slow down the sale. rishaad: they want a say in terms of who it will be sold to. at the end of the day, it is perfectly valid as a request if you are a partner. >> the point toshiba would make is that western digital was not the original partner in that joint venture. they became a partner because they bought sandisk. any consentnot have rights over the sale, so toshiba is saying you cannot argue for rights we never got in the first place. they said in the contract it is clear there are no consent rights either way. haidi: these numbers we have gotten in the last 15 minutes or so, negative shareholder equity, is any of that surprising to you? these are not audited numbers. toshiba has not been able to get its auditors to sign off on its financial reports because they are trying to figure out how deep these troubles are with the westinghouse nuclear business.
these numbers are important for a number of reasons, even though they are not finalize numbers. in particular, they said the net worth would be -$5 billion if they are not able to proceed with this chip sale, so it is clear that urgency is very high right now. haidi: bringing that up, the status of the chip division sale is ongoing. everyone seems to want something different. what is the latest we haven't how quickly can we expect this to happen? >> westinghouse has thrown a monkey wrench in the process by filing for arbitration. they said they are proceeding apace and are expecting a second round of bids for the unit to come by the end of this week, the preliminary deadline, and there are bidders who are interested, broadcom in the as well, so the
bids are coming in aggressively. the question is what happens with this western digital issue and whether it slows down the sale. haidi: we will continue to watch that story. to have you are let's have a quick check of the state of play. interesting price activity when it comes to the oil patch following comments from the saudi and russian oil ministers, but the nikkei 225 ending down by .2%, some geopolitical jitters and concern over the u.s. consumption story, retail data tepid as well. in sydney, taking a look at how the asx is faring, really marginal gains on the back of losses in the previous session, but that has now turned negative .1%. we could see a rebound in the afternoon session when it comes to these energy names as we see that rebound in oil. rishaad: let's get over to singapore and look at the
straight times index, was up .4%, now correcting itself, up .5%. there you go. let's have a look at the picture for the hang seng, this run-up when it comes to h-shares helping things along. the hsi also roughly .5% up. the real story when it comes to oil, the oil ministers of saudi arabia and russia having a press conference, sending up rent crude and wti 2% each on the comments, saying they want to extend this decision they made in december about crude oil output and limiting that or another nine months. they will have to approach opec proper to get the rubber seal on that. should be extended to the first quarter of next year at the same volume as the cuts they have had. that is something we will look at when bloomberg markets
continue. david and angie will update you on that and the big stories of the day so far. tracking thel be chinese data as growth momentum seems to slow in the world's second-largest economy, but does this mean there are less bullish calls. we ask that of sean taylor of deutsche asset management talking about china ip and retail sales that they came out today, but also belt and road. finally, we keep track of toshiba's share price as investors gauge what that divestment means and whether or not there will be a holdup. that is next. ♪
♪ angie: it is almost 11:00 in hong kong. i am angie lau. david: i am david ingles. the first trading session of the week. welcome to "bloomberg markets: asia." ♪ chinese stocks paring gains as the aussie dollar and new data shows a slowdown on the factory floor. one of thefax media bigger winners, shares jumping after revising its offer to an all cash bid for the whole group. toshiba releases its much
delayed earnings, warning it must sell its chip unit to stay alive. david: oil surging after saudi arabia and russia said the output curbs should be extended to the first quarter of next year. the market at action, fairly quiet, the first few hours of trade, a lot of data out of china. you have these lines coming out of opec. markets, across equity an up arrow story. we will be fleshing out those stories later on, but essentially coming off session highs on the regional benchmark rate we are still on track for a decent start to the trading week. , 1.6%, u.s.at brent crude as well, well, on the same page, saudi arabia and russia. now perhaps looking to extend
cuts well into next year. the first quarter is the target, nine months more than the current set up. the other markets through we are tracking, softer inflation numbers out of the u.s. ,oney coming back into asia emerging markets come out of bonds, yields down. here across yields in the asia-pacific. let me shift to this along and talk about the other stories we are following closely. it's not just the equities markets we are focused on at the moment. angie: you are absolutely right. we got that m2 data, aggregate financing, coming out, and a possible impact in the bond market space, bond rout emerging in china. a lot of top analysts there, what are we seeing? david: they have had to revise
their forecast on where the 10 year in china will go. in march, the consensus was 3.4%, now 3.8% by the end of june. have a look at my bloomberg. the world is tightening in china. in the u.s., looser monetary conditions. there is your 10 year yield at the top. we will be fleshing out the story a little layered on. -- later on. that is the forecast for the end of the first half, so a good story to watch out for. it does price in a lot of ways the risks coming out of china. that's get over to paul allen with first word news. and russian oil ministers say the output cuts agreed by opec and some independence should be extended through the first quarter of next year. speaking in beijing and the past half-hour, khalid al-falih told
alexander novak that the curbs are helping to train the global shocks tout producing the market. the decision on production curbs will be made at opec's next meeting on may 25. toshiba says it sees negative shareholder equity of 4.8 billion dollars at the end of this fiscal year unless it sells its chip business. the forecast comes in an outline of fiscal 2016 earnings and 2017 forecasts am including net income for this fiscal year of $441 million. shares were higher before the lunch break. a news will hold conference at 2:00 p.m. tokyo time. has agreed to take the lead on building to nuclear reactors from toshiba's bankrupt westinghouse unit. work at the power plant in georgia could start as early as next month. the atlanta-based utilities of the process of working out a new service agreement. andinghouse's bankruptcy march put the fate of four
nuclear reactors in doubt, the other two are in south carolina. united nations security council is to discuss north korea's latest missile launch, which is seen as a direct challenge to south korea's new leader. the rocket landed in the cf of japan having reached an unusually high altitude. it is not want to have been capable of hitting the u.s. west coast. president trump and south korean president moon said they would meet kim jong-un under the right circumstances. experts say the weekends unprecedented global cyber attack will continue claiming victims even as system start returning to normal. the malware uses a technique stolen from the u.s. national security agency. it affected the british national health service, russia's ministry of interior, germany's rail system, logistics giant fedex. nothis is something we have seen before, the global reach is unprecedented. the latest count of countries is
over 200 thousand victims in at least 150 countries. paul: global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am paul allen. angie: oil is surging after that news conference between saudi arabia's and russia's oil minister saying they won outputs extended to the first quarter of next year. tom mackenzie was watching the announcement in beijing. interesting details indeed. absolutely. as you say, we heard from the energy minister from saudi arabia khalid al-falih and his russian counterpart, minister novak, and that was the point, the new detail came out when they said they wanted to extend these opec cuts for an additional nine months up until the end of march 2018. take a listen to what minister khalid al-falih had to say a few
minutes ago. >> we have come to the conclusion that the agreement needs to be extended. the desiredreach inventory level by the end of june, and therefore, we also came to the conclusion that will probably be better at the end of the first quarter of 2018. tom: the saudi energy minister saying he was confident and that they have had discussions with other opec members and non-opec members about this, and they were confident people and other members would get on board at that meeting on may 24 and 25. this is the cut of 1.8 million barrels per day. saudi arabia and russia coming out together to say they would like to see that extended beyond june 2016 for another nine
months up until the end of march 2018. we heard prior to this that saudi arabia had been mulling whether to push for an extension of cuts for an additional six months, but nine months is what has inspired the market, crude up around 1.5%. i got this statement from the saudi energy minister in front of me. he said, and this is interesting, taking a line from mario draghi, he said russia and saudi arabia will do what ever it takes to achieve the desired goal of stabilizing the market and reducing commercial oil inventories to that five-year average. said thoseeen they inventories come down, but have not reduced as quickly as they would have liked. thatsaid in april and may they noted an acceleration of oecd inventories -- in april and may, i should say, but it is not going fast enough and that is why they are advocating for this further extension of this opec cut.
russia getting on board with saudi arabia, these two oil and energy giants powering this now as it goes towards the opec meeting on may 24 and 25. other topics we would have liked to have asked, saudi aramco, whether they are looking to list in hong kong, also saudi aramco's deals and operations in a non--- yunnan. these extensions and cuts will go to the end of march, and it fascinating to hear that broken by the saudi arabian oil minister and his russian counterpart. angie: tom mackenzie live in beijing. you are seeing that spike and deputy i crude at 48 point 62 right now on the heels of that, part of that russia saudi arabia deal is that concern about demand coming out of china. in fact, momentum and sign a may be softening.
factory output investment and retail sales growth all slipping from the previous month in china, and all below forecasts. we have more here and hong kong with stephen engle. >> the numbers are good, but decelerating from march. the first quarter was a blowout with higher expected gdp growth at 6.9%, but which are starting to see is perhaps that march was the peak and we are starting to see a deceleration. not a lot, but a little bit. let me read you some comments from a press conference with the head of the national bureau of statistics, saying most industries seeing improvement in the supply and demand balance, so putting a positive spin on the numbers that were below forecast. retail sales, industrial production, fixed urban asset investment all below. keep achina is able to stable economy with improvement,
still faces pressure on overcapacity, and china need stronger private investment momentum. that is according to the head of the national bureau of statistics. the weaker data was partly due to fewer workdays, so fewer holidays in april, and china's sales growth remains stable, raw materials prices unlikely to keep rapid growth come and ppi moderation due to upstream industrial products. below sales at 10.7%, 10.8%. industrial production, 6.5% come expecting 7%. we were not going to get that through that was the fastest since december 2014, so 6.5%. it is still, if you take out march, still the highest pace of growth for factory output since march of last year. good.pretty fixed asset urban investment, 8.9%, below expectations. david: friday we also got credit
data out of china as well, well above estimates. clearing estimates like an olympic hurdler, well above seasonal averages, so what did we take away from that? have we hit a snag in this deleveraging effort out of beijing? government is trying to stress taking the risks out of the economy by forcing deleveraging, if you will, and reducing excess industrial capacity. the data would point to contrarian view that may be those moves are not working. take time tooes feed into the data. i did go back and look at once, the first time on record we have had more than one trillion yuan in new bank lending each month for the first four months of the year. never happened before, some more in new3 2 trillion yuan loans in january, february, march, and april, including 1.1 trillion in april, which was
well above the 815 billion we were expecting, so aggregate financing which includes bank lending and shadow financing components, it rose by 1.3 9 trillion yuan. that was higher than estimates. meanwhile, m2, the broadest measure of money supply, lower than expected and pointing according to a number of economists, representing deposits of the banks, this is potentially problematic. higher than expected aggregate financing a new lending, but lower than expected growth in m2, the mismatch could lead to a credit crunch down the road. david: absolutely. that mismatch as well, the m1 points to what we saw a few months ago, signs of the liquidity crunch in china. thank you for that. right, let's see how this is playing out across markets.
sophie is here to flesh out the other details. sophie. sophie: i want to focus on the commodities markets with oil prices in focus given what saudi and russia have just said regarding their support for extensions of that opec deal over nine months. wti and brent both jumping over 1.5%, but a final decision to be made at the may 2015 meeting in vienna. i want to focus on chinese markets, the mainland and hong that gains weakening after weaker economic data. h-shares on track for a march high, jumping 1.3% based on optimism over infrastructure spending. we do have macquarrie securities had saying growth still looking fine despite that meaningful slowdown. policy makers will keep their focus on reducing financial risks in the second quarter. a quick check on chinese cybersecurity stocks jumping amid a global hacking attack by
wanna cry, saying this will boost china's spending on with the focus on industry leaders gaining market share. we will check in on toshiba shares at the bottom of the heroin trading in tokyo resumes. david: absolutely, on that note, the gloves are off. we are talking western digital toshiba overght to the sale of its chip business. we will get the blow-by-blow later on in the show. ♪ next, china dolls back as authorities crackdown on swelling financial leverage. we will ask deutsche bank where it sees the economy heading. this is bloomberg. ♪
i am angie lau. data coming of through. sean taylor is the cio asia-pacific at deutsche asset management. thank you for coming on the program. on theitial thoughts data out of china? noticeable softening in backwards and forwards looking indicators. does this change your portfolio mix or not? >> no, i don't think so. teeth ofe realize the gdp was last quarter. we are going to expect softer data over the next couple of months. it has already been factored in in terms of oils and commodities. david: i want to bring up a chart here. angie: go ahead, david. david: i was going to ask to follow up on this point. i want to bring up a chart. a lot of the people we talked to hear have gone from neutral or
underweight emerging markets due to this chart. data comeing ppi through, and real loan growth and real rates have started to tighten. i'm wondering why you are still bullish emerging markets. flesh it out for us. >> there are a number of reasons. one of them is the pickup in china data. we think it will top out, but still be reasonably strong over the next few months. the trade data still is supportive. what is really important is that it is coming through in earnings growth. we have positive earnings growth being upgraded, and also relative to developed markets, some earnings acceleration relative to the celebration in developed markets. it is trading at a discount. probably in the short-term, it has gone too far and we will have a pause, but are structurally positive. is this indicative of
your time horizon if you're looking at short-term? you're seeing the spikes downward, but what is your long-term view on china, especially after this week data? do continue to be bullish? >> we are still bullish. we expected the data in the e the quarter to br peak. we still have growth for the rest of the year. it will be more volatile, but we are seeing restructuring on the bottom up, in terms of special dividends, and the most important thing is earnings this year and next year will be positive. angie: if you look at the bond space, investors are not believing the story. we are seeing yields rise for the 10-year and china. secondly, you also have concerns about the belt and road.
there is all this money pouring out of china into the global economy, but many say it is underfunded and ill organized. is ae belt and road long-term positive for two reasons. one it is changing the power shift globally and putting long-term money into frontier markets. that is very positive. short-term, it is not a trade. you can play it and your portfolio except for the odd construction stocks. it is positive for frontier and asean. what the markets are worried about now our expectations. emerging markets are up 17% on the year. have made money. we will get a pause. everything went right in europe n, risk premiums come down, but now we will have a pause. the fundamentals are better in emerging markets in asia then developed. angie: the fundamentals are
a cash and script offer last week, but has come back today with an all cash offer because the message was the previous offer was not going to cut the mustard. that offer was to cherry pick fairfax media's assets come the morning herald and others. back one weekme later as it said we would take it all off your hands in cash and see what happens from there. we will take the good and the bad, if you like. david: where do we go from here? is it looked like we will be getting shareholder approval with the revised bid? >> would you mind to saying that again? david: i was going to ask, where do we go from here? does it look like we will get approval from shareholders on this revised bid? is not indicating it is convinced this will be
enough. last time i checked, the fairfax stock was up 7%. that is still shy of the cash offer from tpg which is $1.20 a share, so it is not clear it will get all shareholders over the line. typically these things play out over weeks if not longer, so the debate is whether tpg is valuing the prime assets fairly enough, $1.20 a cash is not much more than fair value for the three mastheads, the prime mass tags, and the rest of the business are regional titles that shareholders, fairfax shareholders they were not going to be happy to get dumped with under the previous proposal. david: you could make an argument there is still a fair amount of discounts because
they are taking the good and bad. what does tpg plan to do? are we looking at a spinoff of domain? what else could we see after this? >> it's a good question. the plansclear what are. private equity buyout usually entails asset stripping or cost cuts, but no one is any doubt that the real engine driver of fairfax is the advertising portal. billion to $3$2 billion, which is potentially more than fairfax's entire market value. in newspapers play a role efforts for domain, so you could argue you need the newspapers not to necessarily break off the news, but act as a forum for the intoand to get the traffic the domain come which is the growth engine going forward. david: right, absolutely.
>> it is 11:29 in hong kong. i am paul allen with the latest first word news. saudi and russian oil ministers say the output cuts agreed by opec and some independents should be extended to the first quarter of next year. speaking in beijing and the past hour and a half, khalid al-falih alexander novak the curbs are helping to drain the global glut without introducing shocks to the market. the decision on introducing curbs will be made on may 25. toshiba says it sees as negative shareholder equity of 4.83 and dollars at the end of this fiscal year unless it sells its chip business.
an outlinet comes as of fiscal 2016 earnings and 27 forecasts, including net income of $441 million for this year. shares were higher before the lunch break. -- will hold a news conference at 2:00 p.m. tokyo time. china has laid the foundations for a new east-west trade route, calling it the project of the century. resident xi jinping told world leaders and business figures that the belt and road initiative was inspired by the ancient silk road that originally linked china to europe. president xi jinping repeated his support for globalization, describing the initiative as a forged this force of peace. the real estate project link to the family of president trump son-in-law has failed to attract any financial commitments from china despite investor presentations in four cities. attended a 50 people sunday event at the four seasons and guangzhou. similar events in
beijing and shanghai lest we generated controversy after jared kushner's sister invoked his work at the white house. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. sophie: a mixed bag in the equities space, earnings to digest alongside economic data out of china. take a look, up .4%, paring gains after the weakness in factory output, although that slowdown following that first quarter gdp number anticipated for the chinese economy there. , .5hang seng on the up percent come maintaining its rise above the 25,000 level. let's get it quick check of toshiba, shares following, take 1.5%., now climbing
noble group in singapore, trading at the lowest level since 2002. plummeting asds it reports a quarterly loss and does not see a return to black until 2018-2019. detailst is that china coming out of the world's second-largest economy, the ip story and retail sales. take a look. this is really the chart that all eyes are on right now as it comes to fruition. first quarter, perhaps we saw it peak, growth dropping in terms of momentum as industrial output rose 6.5% last month from a year ago. that is weaker than the 7% that a lot of people had been forecasting, and lower than what we saw in march. as you and i have been discussing all morning, including with sean taylor, it doesn't look like that this is
weakening, at least in the bullish outlook, for a lot of these money managers about china. david: it has come through, and sean was pointing out that despite the softening in the data that it has come through as far as earnings and earnings revisions upward. does stand, china out as far as that is concerned. we have seen a slowdown in industrial production, and the changing face of the chinese economy. have a look at my bloomberg. this shows you, the blue line, is this relentless buildup in inventories on iron ore. it tracks a lot of these stockpiles across ports in china. orehave the price of iron in white, prices are sticky and it does take time for traders to adjust their plans, but of course we are seeing a buildup, perhaps not getting worked out of the factory or warehouse is
because of the slowdown, so this is something we will continue to follow, #8578. staying in china, we are looking at the bonds market, the ferocity of the route surprising some in the market. figurese had revising and the recent surge in the 10 year, catching analysts off guard. well, take the cleaver out, rip up that forecast, and take yields back up. where now do expect the 10 year to go? >> the theory is that 10 year some timeke to 3.8% in june before moderating. the main concern is that it some point in time, borrowing costs are going really high, so treated to three point --
-- 3.2% or three point 3% last year could this is getting concerning. some people finding it difficult the pbocmoney, but deleveraging fx, but if you are a smaller company and have a need for cash, this could create trouble for you. angie: is this contained in the china divers -- china domestic market? >> you are seeing more of the domestic local if asked, and china, many watchers of are kind of positive on this effort to clean out the financial system, but at the end of the day, it does reduce risks. if you look at it from an overall picture, it is probably see good in the short-term. in the long term, because we out, but risks taken
expects the pboc to -- we are hoping that will continue. angie: it is hard to say these days. thank you for that. g7 finance chiefs wrapped up a three-day meeting in italy come issuing a pledge on global trade and laying the groundwork for the leaders summit in two weeks. matt miller reports. the group of seven finance ministers signed onto a watered-down pledge on trade as u.s. president donald trump looms on the world stage, rattling and established economic order. is officially part of the finance ministers track at the g7, however they did discuss it and steven mnuchin said while they don't practice protectionist measures specifically, they reserve the right to do so if they don't feel the trade is fair and
balanced. cybersecurity was also discussed after a cyber attack that affected 100 countries struck over the weekend. and, counterterrorism financing as well. finance minister said that greece was not specifically discussed because he did not feel that discussing it with the u.s. or japan would be appropriate, and the italian finance minister said that writes it was not discussed at all. -- that brexit was not discussed at all. angie: getting a check on toshiba shares, lower third of your screen, still trading higher, 2.6%. highs right now. this is after the company warned it sees its full-year net worth -540 billion yen without the sale of its chip unit. let's bring in peter elstrom.
>> a couple of important developments. the reason the shares are up is because they reached a deal with u.s. utility southern for which it was building these nuclear plants, and southern will take over control of construction of these plans the which is a big stumbling block for the company and a step forward for toshiba in terms of clarifying how much they will lose from these newer -- nuclear power construction plans. another thing is that western digital has jumped in and said that they are filing for arbitration to stop the sale of the chip unit and the bidding process because they have a joint venture with toshiba and want right of first negotiation with the country -- company is that proceeds. the company put out them in a earnings, not audited, but preliminary. angie: toshiba in disagreement about that because they say that in fact western digital does not
have a right to dictate who it can sell to, but if it is caught up in arbitration, which is that mean, especially if it's going to go negative without the sale of this chip unit? >> timing is very important. they have this big black hole and they need to sell the chip unit to get the cash to fill the black hole. if western digital is threatening to slow it down by arbitration, it is a problem for toshiba. they have some other bidders who are interested in the business come up with the need to be able to proceed with the sale. david: talk to me about this number. ¥540 billion, the negative worth without the chip sale, so essentially you could look at that is the hole. should we take solace in this number? number to negative have negative network on your balance sheet, and it is a problem from the listing standpoint because under the
rules of the tokyo stock exchange, you need a positive net worth if you have negative net worth two years in a row, they can delist you. this year is a problem. next year would be a bigger problem, and that's why they need to get the sale of the chip unit so they can fill that blackhole. you know what is also surprising is that when you look at the yen forecast coming the assumption, it is 100 per u.s. dollar. that is a strong level to assume, and i'm guessing at some point they've wished they get that artificial bump up the cousin they are trading at 113-115. later we have the press conference date it what should we watch out for their? >> yes, the assumption that the yen will trade at 100 per dollar is an optimistic assumption from their standpoint because they have these liabilities in the u.s., and if those liabilities are contained committee will be better for them.
last week and a plunge in the company's bonds. reporting a quarterly loss of $130 million. bhp billiton is going back to plain old bhp. the world's biggest miner about to launch a $10 million advertising campaign changing its logo and dropping billiton. the company says it needs to change the way the community thinks about it. it says the change has been in the works for 18 months and has nothing to do with elliott management's recent calls for reform. changes to mitsubishi ufj financial, consolidating corporate accounts into its commercial operation. it dropld see references to the bank -- drop references to the bank of tokyo. the changes will come into effect for about 2600 corporate customers with barring of $106
billion. angie: we turn now to video gaming come a deal involving hong kong and a company described as the apple of pc gaming. the cofounder and ceo of razer is partnering with hong kong's three group of c.k. hutchinson, and it looks like we have that li ka-shing arm looking into the future and seeing youth as a driving force of growth. >> this is really part of our relationship or partnership with three to do cobranding, focusing on the youth market, the gaming market, 2 billion gamers out there, and that is one of the big initiatives we have. angie: what are you guys doing? >> we will focus on all gamers all around the world. we are one of the biggest brands in de-sports and focusing on e-sports and the youth. on top of that, we are looking at mobile devices and working together with three, putting
together a focus on the gamers out there. finally, we will have three as one of the big distributors of the vern see -- and virtual currency we have created for gamers. angie: you have some big investors behind you. the philanthropy arm of li ka-shing, so many others. is there an ipo anytime soon? >> we have had really supportive investors. has invested through horizon ventures in razer, but when we look at things like the ipo, it's all about right time, right place come and we are exploring opportunities for but no comment about it at this point in time. us about industry trends. our people playing more on their smartphones now compared to pcs and consuls?
>> i think gaming is exploding everywhere. it is the largest segment in entertainment, outstripping movies, music, and e-sports, ,ormal people watching games more than that of all traditional sports, so i think gaming is growing unabated with pc gaming, mobile gaming, or console gaming. it is one of the biggest industry segments out there at this point in time. how are you position you also have hardware in that space , this new tie up with three. how is the company position for these changes and trends? the biggestone of lifestyle brands for gamers at this time. hardwaret just a company we have 35 million users that span all segments of gaming , so imobile, or console
think it is looking throughout the entire industry. we have our virtual currency that approaches ever single segment. there are 2 billion gamers, and we are one of the biggest brands for gamers. angie: i have to bring in the and rannna cry somewhere come the cybersecurity issue growing by leaps and bounds. where are you in terms of staying ahead of the curve in protecting your client base? >> fortunately we were not directly affected, but it is a wake-up call for everyone in the looking ato we are updating our clients software, looking at the server side of everything. it is one of the big things affecting the entire industry at this time. david: i want to ask you about your virtual currency. this may be a simplistic question because there has been a lot of question with bitcoin at $1800. is there a price on that
currency question of how does it work? closed currency. back in the day, there was no single currency for players out there, and most developers only one to use their own currency. content.create we are a hardware-software platform and bring premium users out there. it is a fiat currency for all gamers out there. going --t like that bitcoin. , sore able to distribute it we are excited to bring this to all three customers out there. you for your time. again, congratulations on your tie up with three. that is the ceo and cofounder of razer. up, the biggest oil and gas producer says forget $100 a
♪ angie: welcome back. this is "bloomberg markets: asia." i am angie lau. oild: we have to talk about , the largest oil and gas producer expecting to sign $20 billion of deals here at the belt and road foreman beijing. set oil atn of cnpc $60, well, not sustainable. while the price might cover next year, he does not see it topping $100. cnpc is currently working in over 50 projects in 19 different
countries within the belt and road framework. of the 12 projects we are signing at the summit, some are upgrades of existing projects. some are completely new projects. depending on local resources in different countries, we mainly invest in gas projects. , oilssia, and central asia operations in africa. tom: had you think the country can mitigate its dependence on overseas energy supplies? on one hand, chinese oil and gas companies like us must continue to play the role in terms of domestic oil exploitation. need tother hand, we spend up our efforts and collaborations with resource rich countries in order to
y'slenish how countr ever-growing demand for oil and gas. in this way, we can balance our heavy reliance on imports with better use of foreign resources. tom: what is your outlook for oil prices? do you think the opec cuts can balance the markets? >> i don't think it is realistic for the oil price to hike significantly and continuously in the short-term. at the moment, the global supply and demand is undergoing a the balanceand between supply and demand is the foundation for a stable trading price. we estimate that in 2017, the price per barrel will be around $50, with possible short-term $60, but it is not
sustainable. the oil price will see a slow recovery in 2018-2020, however, prices won't get back to 2014 $100. 's chairman was cnpc speaking to tom mackenzie. a quick check of the does/headlines. olam-quarter profit for increased, net income of 27% to 103 million dollars, overall revenue up 22%. opportunistic trading by ames ingrained contributed to a 64% jump in sales at its packed foods unit, which represents a third of olam's business. the investment arm of abu dhabi sovereign wealth fund planning to invest in the
softbank vision fund. it sees it as a significant opportunity and the company is planning to make its investment over the next five years. the fund for softbank is expected to wrap up into-three weeks with $95 billion worth of commitments. planning a low carrier in partnership with the everbright group, saying it is key to its vision of a pan asian airlines having already launched affiliates around the world. airasia has ordered hundreds of planes and will invest in infrastructure, including a low-cost carrier terminal. bloomberg markets middle east coming up at the top of the hour. yousef gamal el-din standing by in dubai. it looks like it is that oil output curb announcement out of beijing that seems to be the focus. >> the market had expected an extra measure, but now more
details coming through, a nine-month extension to the first quarter of 2018, brent and have uti moving to the upside. that will be an integral part of today's bloomberg markets middle east. we will look at what this means for the reflation story and the fed going forward. joining us is the chief international economist for deutsche bank securities. he has a view of where 10 year --. paper will go through from here. we will rush those china numbers and what that means for investing strategy. also, what is happening in this part of the world. the ceo of the karachi stock exchange, the index set to be upgraded from frontier market status to emerging market status. we have seen quite a bit of selling from foreigners when it comes to stocks. is this perhaps a turnaround story that is just that they? that and much more at the top of