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tv   Bloomberg Daybreak Asia  Bloomberg  August 22, 2017 7:00pm-9:00pm EDT

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♪ 7:00 a.m. in hong kong. we are live for bloomberg's asian headquarters. lower political tensions sparked an appetite risk. the hong kong markets may not be among all the markets working today. businesses closing. >> welcome to daybreak asia. i'm betty liu. it is just after 7:00 p.m.. washington steps up sanctions on north korea despite welcoming
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the recent restraint. appealing to his core support in arizona. >> bracing for a big one. raised,ber eight being it was not too bad. we were laughing about it. but we are seeing things escalate. we are seeing dark clouds, wind and rain that could strengthen persistently. here is why. this storm heading straight to the city. on thed to make landfall western part of hong kong. there is a chance this could be bigger than a ta.
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already as you mentioned, reaction to this storm. we hope you stay safe. the stock exchange canceling premarket trade. limited transport services. ordered toe been shut down. the last time the markets were closed due to a storm was october 2016. this is not a regular occurrence by any means and one to watch how the fx trading in hong kong. news onsome breaking bhp. onre has been so much focus their earnings results. some saying they need to do more. we are getting headlines, they are changing around their board.
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appointing terry bell went to the board saying mel can brendan is stepping down as the nonexecutive director, saying grant king will be standing down as a direct or at their annual general meeting. they are going to be posting their shareholders meeting in a sober. thee are some changes after earnings report. we will watch bhp shares when they trade in sydney. we will watch the reaction to that. the u.s. markets, risk on again. a lack of any crazy headlines from washington eased investor fears. we saw markets rise substantially closing into the green. the dow up 200 points.
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setting you up, the rest of asia , a higher open. >> the buzz word is tax reform. six are making strides coming up with some plan that could be more than the proposal we saw in july. the hope it will wake up markets. trendaland continuing the , pretty much flat and not doing a lot now. we did see the dollar strengthen against most of the g10 currencies overnight. futures. up on equity well into the earnings season now. bhp did have a great day in london after it posted results and announced its exit out of
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u.s. shale. here but holding onto those losses. we are edging higher giving the risk on tomes we are seeing in the market. 171. up,ite tensions revving shrugging off the geopolitical risk. it could be an impetus for stocks. relationship tween stocks and yen seems to be abating. it is the weakest we have seen in years. >> let's get to the first word news. >> thank you. the u.k. prime minister conceded the eu's top court will continue to influence british law after brexit. talks.accelerate divorce
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later wednesday the u.k. will publish more details about it outside ofep london the jurisdiction of the court of justice. indonesia cutting its benchmark wage to spur growth and south asia's vast southeast asia's largest economy. it is now at 4.5%. a level predicted by six of 28 economists. growth.iled to spare the hong kong dollar continues to slide. it fell to 7.827 against its counterpoint. the currency approached a similar low before surging after the announcement of a bill sale. australian retailer will worth
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has reported $1.2 billion, boosted estimates. they do not see any improvement in losses at its struggling discount stores, paying a full-year dividend of 50 aussie cents per share. in0 journalists and analysts 120 countries. this is bloomberg. look at take a closer the advance we have seen in the dow and the change in risk on offers. >> it does have a lot to do with the fact there was concern tax reforms would not be pushed through. now it looks like there is a possibility. tech especially moved higher. highestaq 100 had its
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close since june. that is a sign. let's go to the big movers. high yetit a record again. it has practically doubled to hear today. another positive review. dsw shoe had another strong quarter. it really came out with strong numbers that caused investors to hire in. u.s. steel back in play. momentum is back on. a lot of futures activity. we go to the bloomberg. btv 202 one. the market continues to favor big caps. s&p 500 net noncommercial many futures. it has moved higher while the white equivalent index has moved
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lower. >> we solve the havens lower also higher. gold still has further to run with the hedge funds piling in. >> it was a risk on day. that put pressure on the gold bid. goldill see that many bonds are still in the game. merrill lynch, bank of america merrill lynch had a bullish note. .et's go into the bloomberg gold could be at a turning point. it is rising on the trend lower. it is on track for a four-year .igh by early next year they believe that has a lot to do again with trump having a few more challenges delivering economic reforms and what we are
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expecting to hear from jackson hole. what yellen would say, what mario draghi would say. expectation bid on the wednesday inventory data is going to show the eighth week of inventory declines in the u.s.. that is giving hope to the bulls that had thrown in the towel's on the opec output curves not denting global supply. >> thank you. president trump in arizona for a rally which he hopes may spark a rebound after a tumultuous few days. ofning us now, coming off the afghanistan speech the president made which someone said was a good moment. he stuck to the prompter. he was presidential. how could this change for the
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rally today? could we see a reset? >> one really never knows. last night was a good set piece speech for the president. he was mostly silent today to a ring a border patrol facility near the border with mexico. he just landed in phoenix. typically in these events he has got a same. this time it will be immigration , border enforcement. he will have talking points. he draws on the energy of the crowd and goes with it. he could be saying most anything. >> could this help his slot -- slumping approval rating? >> it will help him solidify his base. withpeech monday night afghanistan, he was presented as
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presidential and dealing with one of the consequential issues that face the office of the president. if he can keep that going and present a political event that and advancesoking his agenda, he can help himself. >> i want to turn to south korea. opened talks with south korea to renegotiate their trade pact with south korea. the south koreans rejected this. what is going to happen from here? >> this is the first stage in this renegotiation the administration would like to do. this has been fraught from the beginning. it was negotiated under george w. bush. obama did renegotiating to address some issues with auto
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companies and labor unions. it is going to be a tough negotiation. with somekoreans say backing from trade experts the trade pact is not the problem with u.s. south korea trade deficits. there are other factors at play. it is a little unclear exactly what the u.s. is demanding. it is only the opening salvo in these negotiations. >> these trade negotiations take years. thank you so much. our bloomberg news senior editor in washington. we have great asked to come. what interesting name. the real estate market in thailand. he's the head of international business. withd exclusive interview
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the cfo. you are watching out of sydney. this is bloomberg. ♪
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live pictures outside of victoria harbour. dark clouds are looming. winde hearing a lot of building up here. businesses are set to close. cancelingific flights. the exchange free market training canceled. this is daybreak asia. >> it looks ominous there. despite the odd stumble on the way this has been a strong year
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for the markets. investors have had to deal with washington, north korea. today we saw a rally. april.t since michael happen to be the biggest on the street. is that your badge of honor russian mark >> i don't know if i am the biggest on the street. i'm the lowest in earnings. we discussed that doesn't have to be, even if we do end up earnings, that doesn't have to be a disruptive thing for the market. but have markets been propelled by higher earnings? >> there are a lot of structural factors keeping risk appetite alive. lower bond yields. on,hose conditions stay
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risk will stay on. you may get better risk return elsewhere. but, right now i'm at 2350. still up on the year from 2016 but i do think in the next four weeks i will figure out whether i need to upgrade soon or not. >> why? >> i have been recommending by every dip for various reasons. i'm not convinced you have to buy this dip. ahead of september, things emerging as we clear the labor day holiday in the u.s.. earliers was on with us . he seems more optimistic about the markets primarily because the central bank is not going to pull away the punch bowl to quickly.
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listen to what he said about that. >> people are capitulating we are not going to get anything done. progrowthbout the agenda has been priced out. we see that around small caps and cyclical stocks. >> that was the wrong sound bald -- sound bite. was, whateverying it takes attitude that is still there among the central banks. they don't want to initial conditions to tighten. i won it to get your thoughts on that. ecb, theyow, from the are torn between two poles. they would love to get rate hikes and the balance sheets. they don't really want to be disruptive to the economy. they can look at the respective stock markets and say we can have a little volatility there.
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it's not going to break down everything. i think they are going to a on the side of being cautious or very cautious. in that construct that doesn't mean the best returns are going to be the s&p 500. you might find better returns elsewhere. i think there is this reference to help priced in our these factors we saw after november 8? one of the reasons why i am cautious on this dip, that we just saw got bought today, we will see how much follow-through there is ahead of september. if you look at the charts, the large cap tech stocks have been doing the heavy lifting. those are not looking good at all. it has been a huge performer. if you are going to buy the
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equity basket it is a lot to ask for tech to lead the way going forward. that focuses on the trump reflation trade. i'm not convinced they are. it is a bet that if you're going to buy u.s. equities you are saying either tech has to kick it in again or you are going to be buying that trump is going to get traction. i think that is an aggressive ask right now. -- it isl, it is the interesting the turn of sentiment, the mention of tax reform, we see this risk on rally once again. what do we need to see from this ofn for us to see some type catalyst here? is tax cut's going to be enough?
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>> even tax cut's commit any of this real legislation is easier said than done. we had a taste of that with health care. i would argue even tax cut's is going to be tricky. you are starting to see increasing fishers through this republican party. you have the trump camp and moderate republicans in the tea party. this big push to get something done on tax is on top of the debt ceiling. the government will run out of money and not sober. that is not too far away. plays hardbally on their agenda, does that force republicans to get democratic votes? what concessions did they extract? the debt ceiling should be a nonevent. but if it gets messy it is going to be a symbol the republican fishers.growing
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-- fissures. that call option we got a taste of last winter is going to fall further out of the money that and has been. >> the weaker dollar is underpinning this divergence we have seen. you see any reversal? >> you should see a reversal. if you look at the euro it is overstretched. ,t still has been playing consolidating huge gains it has had. there is a regime shift underway. pairat other currency the upside in the economy relative to its stage in
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europe. obviously those can be reversed. i think the euro, you could see 120 and 125. if current conditions continue. >> all right. we have to leave it there. thank you. plenty more to come on daybreak asia.
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♪ we were trying to avoid a beauty shop. looking pretty brutal out there right now. asia'stes away from first major market of them. premarket trading in hong kong is canceled after this. >> we will see whether that does get raised. it is 7:30 p.m. on tuesday evening. a very different look out here in new york. a beautiful day, very hot and humid. i am betty liu, in new york. i am yvonne man in hong kong. trump is having
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a rally which he hopes will spark a rebound. he will address immigration into next, a subject that energizes his supporters and local authorities. sten -- stanton had urged trump to cancel the rally. after his comment in charlottesville. they are accused of helping kym johnson's weekly program. this is $11 million from companies based in china and singapore that they say help north korea with earlier sanctions. u.s. secretary of state rex tillerson says that north korea is showing a level of restraint that could open the way to dialogue, tillerson says it is worth noting that pyongyang has not conducted any missile launches says sanctions were imposed earlier this month.
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mercilessthreatened retaliations with a u.s. south,y drought in the it looked like a reservoir war. >> we help this is the beginning we were looking for, that they were ready to restrain, they were ready to restrain their provocative acts and perhaps we are seeing our time in then some near future having some dialogue. we need to see more on the top what i want to ignore the steps they had taken so far. >> china's ministry of finance says it will not go over. the pboc says operations will theimpact financial markets central bank is expected to buy over $60 billion and 30 billion of tenure securities. it will help set up the nation's wealth fund. this group says there may be significant inflows into china's
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debt market after the launch of the hong kong connect. this is after the underwriting license in china, china was to open up the third biggest market to help with apples and promote use of the yuan. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. this is bloomberg. we are counting on to some of one of the -- some of the major market opens in the asia-pacific. chris, good to see you. up theseeing the s&p 500 most in weeks and the nasdaq up the most in two months. chris: optimism is undimmed in
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many ways. the same things people were talking about yesterday was the sentiment steve mnuchin was talking about. it is worth bearing in mind that only a month ago, the collapse of health care reform came. once we market down a little bit. it does speak to this undying optimism in market for the moment. have a look at some of the charts. this is the sort of thing i am talking about. so,the last 12 months or the s&p 500 has been bouncing off its 50 day moving average. somes edging just below that we saw last week. yesterday and today searched right back through that level. i think information for that may be showing up when you look at the bottom chart. that shows the index of economic surprises. data seems to be passing to the downside this year. it is narrowing, we are getting
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more toward public territory. putting that together with what we see out of earnings season in is more, it consistently to the upside than the downside. you can see why markets have a strong optimism in them. yvonne: some of the gains at the american petroleum institute showed unexpectedly high levels of petroleum going on in gas and diesel. what is going on? we are still in the summer driving season. 2055 shows yout, the relationship between crude oil and gasoline. i think if we think about the refinery section, that tells us what has been going on. -- the crack spread measure of the refinery profits that can be made from crude gasoline and diesel, that has
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been strong. the strongest it has been in a couple of years -- this month. may be these things dissipated to some extent. if you look down at the yucatan peninsula, there is tropical storm harvey. another thing that is dissipating but seems to be reforming. heading back to the u.s. gulf coast, the real extension of the company. backdrop very sharply on tuesday. i think the underlying factor is global markets are pretty well-balanced thanks to some of the actions. in the u.s., we had a distinct oversupply. that seems to be widening. this one between bryant and the wti, the main global benchmarks in the u.s., that one has widened again, back toward some of the levels that we saw a few years ago. a real indicator that there was more oil than they could consume. yvonne: thank you david.
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what about the tech markets? the battle for consumer and investor intention, that is expect up, they plan to a galaxy note eight this week. the 10th anniversary of apple's iphone is still shrouded in secrecy. what can we expect from apple's flagship product? joining us now from san francisco, mark, this could be the best and biggest iphone yet. something about 3-d face technology, what are we talking about? mark: there will be three new phones. some people are calling the high and expensive one the pro or premium. it is going to make a big splash.
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people are going to want to siri using applications, and all sorts of other functionality that you can unlock using her face. -- your face. >> you said it is not exactly a feat of innovation. it is more about perfecting some of the features out there with samsung and other rivals as well. >> that is right, one of the folk point of this new phone is the screen, some of the functionality related to the new ar cameras. these are ideas that have been tried before. apple is going back to its original playbook. it is going to take those ideas, add to them, perfect them and turn them into mainstream features for the smartphone. >> everybody waiting in participation. from sans live francisco on that apple iphone.
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up next, one of the biggest head ofrs, siri's international business joins us next, this is bloomberg. ♪
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♪ >> we are counting down to the major market opens. looking at close markets in hong kong. japan will be open. up about 7/10 of 1%. we are looking at just over 15 minutes until the open of trade in tokyo. this is daybreak asia, i am betty liu. middle income chinese buyers, that is rising because of the lower cost of property in taiwan. declined investment can be expected because capital controls imposed by chinese authorities. y.
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great to have you. tell us about the real estate sector. i know you just launched with your luxury developments in bangkok. we have also seen a lot of developers and rivals that have shifted their stock it with discounts and incentives. an oversupply market at the moment? >> it depends on the location you are looking at. we focus on our domestic buyers from top to bottom. we are seeing good growth in the luxury area and mass-market as well. general is not the right word to use. yvonne: not the right word to use? i have a chart to show our users. this is 2047. there is a new housing project and land prices in taiwan, that is showing signs of cooling down a bit.
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in terms of price, how does bangkok stacked up? is there more room for long-term growth in kind of prices -- condo prices? >> yes, that is why we are seeing a new swarm of buyers. in china as well. a lot of people still see thailand as undervalued in terms of their home cities. a lot of our buyers are betting on the back of tourism. they make a purchase based on that. yvonne: nearly a third of the foreign buyers were from china. we see similar stories in many other residential cities as well. look at the u.s., australia and hong kong where they are heating substantially as
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well. we also see a tighter foreign ownership regulation in those countries. do you see demand shifting toward your part of the region in thailand? cobby: you are correct. it is big for the chinese to invest overseas in southeast asia as well as a whole. it is quite easy to enter and exit. it is a nice vehicle to on freehold properties. i think they see that as a goodbye option. yvonne: there are still some restrictions. i think as a foreigner, you're not able to buy an apartment. you have to go through some tricks, like leasing at 28 tie thai company. >> we are seeing some demand in the freehold economies.
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the restrictions are placed on the land. you can't buy restrictions out right. foreigners would not go for land property. we are seeing the purchase point in the freehold condos and all of the key areas throughout thailand and bangkok itself. i am curious about some of your most luxurious properties. 98 wireless is your most luxurious residence in thailand. i know a lot of your foreign investors come from right around the neighborhood in asia. do you expect properties like 98 be goingand may luxurious after that will track u.s. and european investors questios? cobby: we are interested in that. our asian buyers are stronger. we would like to cater to more investors.
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they make up 95 of our eyes across the board. what is the story that you are telling these potential western buyers? what is the story you're telling them? cobby: the luxury market -- a lot of the buyers do commit to one, two, 3 million u.s. if you're new to thailand, i think a lot of the buyers are riding on the back of tourism. they come here, visit, while in love with the food and culture and all of the fabulous destinations. that is where we see ourselves. youou talk american and mention all of the resorts in thailand, they get dreamy and they say i would love to go. there are quite a lot to do go over to thailand. go over to thailand. we talking about thailand vis-a-vis indonesia?
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when you talk to the u.s. and european buyers, what are your biggest competitive markets? >> i wouldn't say the western markets. ,f you look at our neighborhood malaysia got a lot of foreign investment, vietnam is quite hot at the moment. based on the pricing, it is well under the value of thailand. if you come to thailand, you can get some of the value outside of bangkok. we also products from ching mike, all down the south. >> you mentioned how chinese buyers are a big part of your business in terms of your international side, how concerned are you of the government in beijing and their grip on capital control at the moment? after it is a concern but going through the sales records on our books, that money is outside of china already. we don't make recommendations
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based on purchasing the projects or channels to come through. we accept purchases through all international banking standards channels. it is interesting, what we did find is that the capital controls did not affect our business so far. question, before we let you go, thailand is to return to democracy next year. there is talk that we could see mortal it -- political discord in that region. what does that mean for sansiri? cobby: there are interesting prospects, we had some stability under military rule. there are some big project railway, high-speed they will double under the next new year's. it is hard to say until we get to that stage. you, the headve
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of sansiri international business online. out, not only can you watch us live but also died into -- dive into the securities and oceans. -- functions. you can become part of the conversation by sending us an instant message during our show. this is for bloomberg survived scares -- subscribers only. check it out on tv . this is bloomberg. ♪
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♪ this is daybreak asia, i am yvonne man in hong kong. >> i am betty liu in new york. a quick check of the latest business flash headlines. ratings --
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the agency confirmed its dublin escort was removed from creditwatch negative. when s&p said was uncertain over the finding of the deal. inore abandoned brookshire favor of separate energy. mark cuban says he is investing in one confirmation, it will raise $20 million to invest in block chain raised companies. was in a bubble. rather than buying crypto currency through initial offerings or the secondary market, one confirmation plan to invest in early-stage companies and then took a discounted price on their offering. have scrappedrs plans to merge after finding it hard to agree on terms. this vision follows three months of talks. upon -- rhblaysia is malaysia's biggest bank.
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ammb seeks to refocus on is the best of lending market. >> scrapping plans to buy land in london, let's get to our north asia correspondent was following the story for us. part of it diversifying from their assets versus being another sign that china is intensifying scrutiny over these companies. new rules talking about this wedding companies to them tot -- forbidding go into irrational areas beyond their competency. raising the amount of debt levels, wanda has been one of the more aggressive pursuers of m&a along with anbang, hna, also others that are under scrutiny by the chinese government. the chair is under pressure.
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of theght the west bank thames river -- nine home square 6066 u.s.lms square, dollars, -- states hundred 66 u.s. dollars, they say they are no longer in pursuit of that hong kong listed, they are teaming up with another hong kong developer, cc land which is the owner of london's tower. the have replaced wanda as buyers of that land. what wanda announced was that they were selling the majority of their hotels and impart properties -- theme park properties. definitely downsizing. >> so interesting. goneman wong has
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from being china's richest man to having to upload all of these precious overseas assets. how is he right now? >> from hearing from people were familiar with the situation, one man has deftly fallen out of favor with authorities because allegedly, they are violating these capital control rules -- rules. he has been quite aggressive in purchases. there are hundreds of different deals and projects across the land. -- hereugh he is being then divers finally from property into more -- diversified away from property. inhad hundreds of projects 65 markets with estimated values of some $40 billion. wanda film holdings -- they had gone into the entertainment industry, that is restructuring. in hong kong have
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been suspended since july, ongoing restructuring there. there is not only pressure on the property side, there is pressure on the entertainment side all across the board. >> so fascinated. thank you so much, stephen engle. plenty more to come with asia's first major market open just moments away. yvonne? -- we: hong kong trades are many know that premarket trading has been canceled. flights from hong kong have been canceled. the grim view outside, asian futures are starting firmer. u.s. markets are catching the optimistic buzz in the post bannon-trump era. watch out for japan's preliminary reading of august.
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in sydney, we are keeping an eye on earnings. kobe to show you some of the stocks in focus. hoping to show you some of the stocks in focus. this doesn't seem to have a trend continuing. casino operators are looking toward domestic demand to drive growth particularly in sydney as well as the gulf coast. they see less high rollers on the international scale. watch for japan, tobacco in tokyo. -- japan tobacco in tokyo. they are looking to buy the second-biggest tobacco company. this is after the acquisition of an indonesian cigarette company .ack in early august macro viewve a big of the optimism, we have some micro drivers along with what is
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going on in the commodities space. metal is under pressure, steel, copper, iron ore. we see some of that rally under pressure this morning. here is what we will be watching. this is bloomberg. ♪ ♪
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>> here in hong kong, we are live from bloomberg's asia headquarters. welcome to daybreak asia. though herc markets, political tensions sparked a renewed appetite for risk. in hong kong, unlikely to be among markets working today, typhoon auto is moving into day. bloomberg's global headquarters, i am betty liu, it is just past 8:00 p.m. on this tuesday evening. washington has stepped up sanchez on north korea. despite welcoming pyongyang's reason restraint.
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>> we had a lot i had for yvonne. by tomorrow we will be talking .bout jackson hole this shines the whole on economies all around the world. particularly here in the u.s.. this was one of our top read stories in bloomberg. it was this comment coming up from toll brothers. builder sayinge that one quarter of their buyers of luxury homes -- remember that these averages are just under a million dollars are now the millennial's. buyers are under the age of 35. if you have any hope that the u.s. economy will accelerate and
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that consumer spending will get back on track and we will see some acceleration, these onto the flaggers anymore. they may be our savior lying these homes with more disposable income -- buying these homes with more disposable income. of course, as we know, with the markets today, we saw a lot more buying, that risk on trade is back. we are awaiting the trump rally over in arizona. a lot going on here. especially with these report about tax reform and white house officials as well. lawmakers are making really big strides. they say they are coming up with some type of plan. somethingefinitely for the academia and the central bankers to think about when they do get to jackson hole. worth mentioning, it is confirmed that the governor is going to be rsp -- rsvping to
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wyoming. it will be interesting to see what he has to say. the dialogue for the boj is much different. like yellen, this might be one of his last jackson hole's. >> i think they like the scenery. they want to get there for the scenery. >> let's get to the first word news with paul allen. paul: thank you betty, the u.s. is raising the pressure on north korea, slapping sanctions on chinese and russian entities. they were accused of helping kim jong-un in his nuclear program. three russian individuals and to singapore companies are also accused of sending oil to north korea. rex tillerson says that north korea is showing a level of restraint that could open the way to dialogue. tillerson says it is worth noting that pyongyang hasn't
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conducted any missile launches since sanctions were imposed this month. earlier, the north threatened to .uote merciless retaliation we were hoping that this is the signal we were looking for. they are looking to restrain, their level of tensions, they are ready to restrain their level of provocative acts, we are seeing our pathway to some dialogue. we need to see more on their part but i want to a knowledge the steps that taken so far. conceded that has the u.k.'s top will continue to influence britain after brexit. the door for talks from the conservative party. the u.k. will publish more details on how they will keep london at the heart of european legal dispute but outside the
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jurisdiction of the european court of justice. this was the seven they were -- seven date repurchase rate. it ever predicted by just six of 28 economists. six cuts from last year failed to spur growth about 5%. global news, 24 hours a day, powered by over 2700 journalists and analysts in over 20 countries, i am paul allen, this is bloomberg. >> take a look at the open of the market in the asia-pacific, quite a bit of green on the screen. we are dealing with some pretty thin volumes in the month of august. in hong kong, they may not be taking part in all of this. >> we are seeing the wind and
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rain kick up in hong kong. can i show you some live shots, here is what is going on outside, betty called it ominous. storm signal number eight, that is to be enforced but that could be back should win strike. free market trade has been canceled. if the signal is still in force at 9:00 a.m., all sessions will be canceled and it will remain in effect at noon. plans, thoseravel got disrupted, 400 twenty place to hong kong have been canceled according to the hong kong airport authority. a few ripples are going to disrupt those ripples after wall street got caught up in the optimistic mood. captured inight be fresh catalyst.
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we are waiting on the pulmonary reading of japan's metta factor pmi. this is ahead of that. they have raised nearly all of these gains as of yesterday, even as the yen fell. interestingly, there is a more perceptive decoupling of japanese stock in particular with topix index as strong earnings indicate that japan may not be as vulnerable to a stronger yen. the yen is falling about 2/10 of a percent. trading at 209 per dollar. a thirdhares are about pressure. -- are at a high. looking study.s commodities are under pressure.
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abe dollar is looking steady. commodities are under pressure. iron ore and copper are also wavering, berkeley is saying don't believe the hype when it comes to perceived tightness in the copper markets. throughl come online 2020 and given the risk on gold, falling 2/10 of a percent. sophie cameron in there. the markets are waiting what one-two this policy message punch. is he likely to say something that will be market moving? >> he will be speaking in jackson hole. he gives the lunch address on friday.
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he said they will stick to the topic of the conference which is very dynamic global growth. nonetheless, he has a lot of things on the table, people are wondering if he will get any onse of where he stands tapering, when, does he sound very cautious, will he be ready to go in that direction? this is a really big topic, the most against the dollar is 2003, 12%, take a look at a bloomberg chart with me. it is #btv 2010. it is the move in the euro, year-to-date. what i thought percent, it has never gained this much through august. it is a really big move. they are saying that we are not afraid of mario draghi. he can't stop this move. here is their argument, we know the ecb is going to taper, the question is when. they have already laid out a plot plan -- broad plan.
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this is also in the playbook. jp morgan looks to be up to 1.25 against the dollar by the third quarter of next year. tony from pimco was on bloomberg television earlier, he said furthermore, there would be any kind of big change like the one mario draghi is signaling in june in italy. he said nothing big, probably not a big impact. >> there is reason to signal that marine policy will be changed, that is the most important thing that the markets can take away from this. traders are still worked up over this. they may see this in regards to some other bias. what about the fundamentals? address the surging euro's impact on the economy? news fromsome
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germany. investors felt that the idea is that this surging euro is making business people nervous about exports and therefore the economy. look at a chart with me, this is #btv 2041. here is the expectations index. this is what is so important. this is supposed to be around 15, it fell to 10 in august. this is the german stock market index. it factored out the big move in by taking ally relative to the s&p 500, bottom line, you can see how this trend stock market was, look how expectations were, look what has happened since the euro has surged. another thing is dieselgate. the scandal over diesel engines and all of that is simply a factor as well. draghi show is will
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some concern about the euro? that might alter expectations. that could make the euro even stronger. >> kathleen hays, thank you. any kind of decision we will get from the fed, whether it is wanting the balance sheet -- let's get to our chief economics correspondent. who is under threat? >> one of the big ambitions in asia is construction. we had three popular leaders in indonesia and the philippines had massive spending incomes for areas, roads and bridges. that is all fine as long as it can be paid for. at the same time, these counts are coming under some degree of pressure. the worry is as a fed trace its balance sheet, we haven't experienced this before.
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it is a feeling that it would become more expensive for these companies to become foreign capital leaders from the infrastructure. they do not have it online, they will rely, that will become more expensive. we have to talk about how some of these economies are different. this is what we saw. they building up the fx reserves. day, 20 years and ago. remains veryowth good. the scale of these ambitions once 7% of gdp what this. the worry is that most of that
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money is similar, it may depend on external financing. onindonesia cut their rates tuesday, is that seen as a preemptive move? asia is decoupling from the fed, indonesia cutting off -- it goes to show you that the feeling in asia, the window open, once you push into this phase of a balance sheet tiding that, it is a further rate hike toward the end of the year. that could put pressure on asia's -- by tightening monetary conditions to support their currency. there is a window to ask before the fed -- this isstrates just how
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something of a different path right now. thank you so much, the chief asian economics correspondent. still ahead, the great wall polls more over its own ambitions to buy jeep. what happened with bill russo, the managing director of this. a former chrysler executive. >> turbulent times are ahead for the market, take a listen to why he is not into long volatility. short volatility is also pretty reckless, this is bloomberg. ♪
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♪ >> things are turning a little bit more of the now. this is outside of hong kong. we have an update from the hong kong weather observatory, raising the typhoon warning signal from eight to nine. we can see why.
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the wind and rains have strengthened. we are waiting on confirmation on what that will affect in terms of morning trading. this will have to continue on until 9:00 a.m. for them to cancel the morning session. if they do continue this way until noon, trading will be closed for the day if that signal is not lifted. we have to hear from businesses. schools are shut down here today. the city is hunkering down. >> it doesn't look too good for businesses as usual. let's talk about some volatility. market turbulent is starting to surge. investment management made 2.7 billion dollars in the global financial crisis. central banks will prevent any repeat of the unprecedented pricing in 2008. joining us now from singapore's founder and ceo steve daigle. thank you for joining us.
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we have seen spikes and volatility. i want to bring up a chart. this shows you how much volatility has spiked throughout this year. it seems like every time there is a tweak in spikes in volatility, -- every time we see a tweet from donald trump, there is a spike in volatility. steve: the complex web that is the modern financial empire, we don't really understand why volatility has phone to where it is and why persists. this is not an s&p phenomena. it is a global phenomena. it is happening everywhere, even in markets where logically, you would think there ought to be more volatility, most recently, korea has had a good strong run. they had increased tensions in north korea and still, stock
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markets show very little volatility. i call it the great financial mystery. i don't think anyone really understands why we are persistent at these low levels of volatility. questionicture -- portrayed is if you will get a spike that will reward you for being along the stuff. we think not. >> how do you make money in this low volatility environment? steve: that is the bigger problem. the right thing to do for the last seven or eight years was to be too short. if you have a patent on trade for that long, the trend is your friend, it sucks an awful lot of people into that trade. been continuous for nine years. i think that is incredibly dangerous. our recommendation to our investors, what we are doing is on it, i think that is expensive and problematic but
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short volatility is incredibly risky. >> don't do that, don't do long or short volatility. where do you regret profits, the great bloomberg story of outlining your views, it took a second glance before you reach your profits on you biotech companies and avocado orchids in new zealand and german real estate, quite eclectic. steve: i think for us, as unconstrained investors looking idiosyncratic pockets of value is the only way to go. we had this massive will market that has raised valuations in capital markets, government runs, blue-chip stocks to levels where as a long-term holder, you don't want to on these things. where do you put your money? inreasingly, we put them idiosyncratic things.
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we will get a 10% yield from avocados out of our orchard in new zealand. that is 20 times the rate you would get from owning the german government bond. you can find yield but you have to be more adventurous. we are not naturally farmers, we like the yield. avocados is a long-term investment. i like that. the inflection point right now? you talk about the bank of canada, why is that not a factor? steve: i think it is a factor. what is driving all caps on values has been to eat and -- q e and government involvement. this you remove
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multitrillion dollar government support, the market value changes. where we are worried is from a long volatility standpoint. if we get a repeat of anything like we saw in 2007 at 2008, when we see a complete changing central-bank activity? banks depressing volatility if we started to see ? in order to make some proper money, you need to have a real dislocation. if every time you start to have a minor dislocation, central banks come in and the present, you have what is a fundamental change in the volatility market because people used to talk about what was put in the markets, now it may be a volatility fall -- flaw. we don't know that that would
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are prettywe convinced that the central banks went stand back and let markets become dislocated the way they were in 2008. steve, great to have you. joining us live from singapore. you can get the stories that you need to get your day going. it is also available on the mobile on the bloomberg anywhere app. out, thisto check it is bloomberg. ♪
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♪ >> a quick check of the latest flash headlines.
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that shareholders are registering for potential class action against australia possible biggest bank. shareholders suffered a significant share price drop. they announced legal proceedings over alleged money-laundering breaches. is making a new service to china. star says it expects the service to attract about 35,000 extra chinese visitors to australia each year. asiaalready operate across for 20 destinations in china. let yourrtainment says income was 2.9 million u.s. dollars. they plan to open their own six star hotel by 2021. coming up, they are not see more
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changes, we are going to look at who is stepping in and who is stepping down, that is next, this is bloomberg. ♪
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>> yvonne: 8:30 in hong kong right now. we are waiting for landfall here in the city. it is set to come through in the late afternoon. we are hearing that free market trading has been canceled in the hong kong exchange. we will see if it persists. that rain is coming down hard. we can hear it here in the studio. --hard the dakar on site hardly a car on site. but get to the first word news with paul allen. is hopingident trump
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this will spark a rebound for his administration after a tumultuous few days. this is a subject that energizes both his energizes and his critics. authorities are bracing for large demonstrations. greg stanton had urged trump to cancel his rally after his comments on charlottesville. south korea has rejected u.s. trade dealvise their as the trump administration intends to cut its to a deficit. research would reveal the reasons for the imbalance. he says there is no reason to renegotiate the deal. bys allows for termination either side, that process would take 188 days. hong kong is inching closer to its weakest levels since 2007. it fell to 2007.87 against its you 7 -- against its u.s. counterpart. the currency approach a similar
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low earlier this month before surging. china's ministry of finance has consumed about $90 billion worth of government bonds next week. they are respected to but up all but $60 billion and 30 billion of tenure securities. they are hoping to set up china's sovereign wealth fund. citigroup says there may be significant inflows in china's debt market that is also when city obtained a bond underwriting this in china to come and fit for an institution to win such approval. china'ss to open up third-biggest debt market to help counter capital debt flows and help promote use of the yuan. this is bloomberg.
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>> it is time see how the asian markets are shaping up. we are seeing equities, hong kong could be missing out on all of this. we are moving to the sidelines for hong kong, we will check out, this rally market is continuing. this is in the top spot, gaining 6/10 of a percent. bonds are looking mixed, look at what is going on the currencies space is of the dollar. we are seeing weakness when it comes to the yen. the offshore yuan is marginally lower but the cure -- korean yuan is ginny for a third day and look at the losses we are seeing for the kiwi dollar as well as the aussie. the kiwi is under pressure after the new zealand government cut its budget surplus and gdp growth forecast ahead of the election next month. that dolomite be under pressure
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given that we are waiting on a jackson gathering which is giving buyers a bearish i did. keep in mind that iron ore is a main export for australia, we have iron ore, copper, aluminum, steel all under pressure. falling for tenths of a percent. the crew is staying just above that 47 level. currencies are the ones i want to focus on, checking out the g10 base. we do have the pound under pressure as well. the kiwi is leaving in that space. the euro is waiting on mario a speech inliver germany ahead of his attendance of jackson hole. not much might be said there. stick to theto script. the euro has strengthened about 12% in 2017. as yvonne noted earlier, it was
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like hong kong markets might have to sit out this stock rally. take a look at what we are waiting for, this is typhoon. it was due to make landfall on the western side of the island later this afternoon. we have morning trade closed so far. remains in force at 9:00 a.m. and then again at 12:00, noon, that means they are shutting up shop for the rest of the day. sophie, we are keeping her eye on that. the benchmark tends to be highly correlated to the yen. there are signs that the market may be completely separating that correlation. let's cross to sydney. why the correlation between the yen and japanese equities? why has it been so strong? >> typically what we always talk up,t his as the yen goes
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stocks go down at it seems like things are slightly different nowadays. one thing that we always look at is that there is a lot of japanese companies that sell their products outside of the local market. that means you have to factor in the foreign exchange. that always played a huge part report earnings and how that affects their stock. it seems like things are getting important -- >> what is causing the shift? news in of local good terms of the economy that is doing a little better and also household spending has gone up. as people spend more on japanese products within the local market, revenues increase within the country itself which helps with the prophets. it looks like investors are whetherin japan about
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countries will do more or not. >> what does that mean for earnings for some of japan? >>'s that the biggest factor for them? >> it definitely plays a huge part. at the end of the day, people are starting to realize that there is a little bit more to it than just the end. if you look at it, the yen has depreciated quite a bit. earnings from the last quarter when they reported, when companies reported, they were increased by 20%. i think people still plays quite a bit of importance into the yen and how it is moving. i think people are starting to look elsewhere and to see there are other things that could be used to make decisions on making investments in japanese stocks. >> thank you so much. i want to talk about one stock in particular that we have been watching for the last 48 hours.
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bhp is revamping after announcing a jump in earnings. also, a withdraw from u.s. shale. let's bring up david stringer. he has more on this story as well. a second on the board, will this management change affect bhp strategy? david: it has been a dramatic 24 hours. we already heard a plan to exit defer ad plans to project, we had a profit rebound from last year's load. then we heard from changes to the board. pretty interesting, andrew mackenzie, the ceo was on bloomberg tv and consistent that some of the changes in strategy were not the result of pressure we had from investors, including paul singer's management.
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with these changes to the board, they can point very directly to investor pressure. grant tinker appointed to the bhp board in march. he is the former ceo of origin and energy and australia. he has chosen not to stand for election at annual meetings later this year. oft is directly the result concerns raised by pressure according to bhp statements. certainly the active investors as they chalk up in history. in terms of the appointments, people will see some progress there. we saw the director of wesfarmers has limited. he is seen as bringing a real focus on return to the board, also, a former bc -- bp executive will add more
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expertise and oil and gas. as andrew mackenzie said, he is committed to more conventional offshore assets even as the exit from shale. >> you mentioned that plan to offset -- -- for the potential buyers? fi ho are the potential buyers? 50 thousand that acres, some of it in very promising areas, the basin is the hot ticket in the shell space -- shell space. that is the thing that people really want to get their hands on. analysts and investors really expect themselves to the estimates, i think that macquarrie has talked about potentially the shell expects -- assets raising. we have heard from investors in
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the past 24 hours a want to see more. they can see more than 10 billion in some of these assets. they will be sold off in four key basins and he's one of those areas has a different honor, we are already hearing suggestions of the likes of anadarko. they could all be interested because they have operations that are contiguous to bhp's assets. this can be successful for bhp. >> the timing of this, what about the timing of these sales? how much will they bring in for bhp? david: as we said, potentially, it could be more than 10 billion. bhp bought these assets back in 2011. we had to bear in mind that
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context, the timing is interesting. we are seeing a potentially brighter outlook for prices. that means buyers will be prepared to capture some of the upside. point of view, there is a process long in the making, it has been quietly backing away. it reduced the size of its shareholding by about half. the acreage has reduced by about 2012. ony said that it is focused petroleum, this is the time that it is prepared to signal that it is paired to get out completely from shale. >> thank you so much david. that is happening in the last hour, up next, china's great wall motor is really back its ambitions. chrysler, by fiat also, bill russell, we are initing the trump rally
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arizona, these are live pictures right now, everybody gathered there at the phoenix convention center. president trump will be holding a campaign rally in just a few seconds. he will try to rally his base in the face of some pretty rocky weeks in the u.s., this is bloomberg. ♪
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♪ asia.s is daybreak i am betty liu, in new york. >> i am yvonne man in hong kong. this one be the end of asian carmakers hunt for u.s. assets. they halted trading on tuesday but should resume today in shanghai. joining us now is bill russo. he joins us live from shanghai. great to have you, why the change of mind from the great
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wall? did it really come down to china and the government cracking down on foreign acquisitions? >> i don't think so, i think this is a positioning, they can come across as being too overly enthusiastic or aggressive. i think they have expressed assist -- interest and they are hoping that fiat chrysler is also interested. why can't they be a little bit more aggressive on this? yvonne: you are playing a key role back in 2008 introducing great wall to chrysler. what has changed? first of all, great wall and -- with the jeep in particular have a lot of synergy. she is the quintessential american brand. it is a premium, global brand. great wall has global ambitions.
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i think from a standpoint of giving great wall a way to accelerate its activities to become a global company, it makes sense. why take a pause or why slow down? first of all, you don't want to be too ambitious or two enthusiastic, that means it gives the chrysler side or the fiat chrysler side the advantage. i think that stepping back a little bit and hoping that chrysler comes to them, it allows them to be a little bit more of a level negotiation. definitely, this potential deal is not quite done. we are hearing from both sides on this. we talked to analyst about this and they say the reason why the great wall might be interested in jeep may be very similar to what we saw with the success with volvo. do you think a model like that is easy to replicate? is a simple merger able to give
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great wall more of a global status? >> first of all, cross-border alliances and mergers are very hard to navigate. i give them a lot of credit to manag for managing this quite effectively. it has grown as a result of that and the benefits of having more of the technology pipeline .vailable i think rate while would like to have that kind of relationship with a global brand. -- coupleouple months missed the great wall portfolio. jeep is not necessarily a brand that is rich with future technologies like ev and autonomous vehicle technologies. i don't think great wall gets
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that out of this deal. >> earlier this week, we spoke with dan and the former chairman and ceo who said this about the jeep brand. >> i think jeep is a good brand. i would have loved to have been able to buy it when i was at general motors if the opportunity presented itself. >> we know jeep is this crown jewel. the fact that great wall came in and they are not in yet or not in any more, that puts it out there, the jeep brand. do you think we will see other bids? what will happen in the next few months? >> it puts fiat chrysler -- especially the jeep brand and play. one of the reasons why great wall may want to pause is because there is a crown attached to it that has a lot of liabilities attached to that.
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cost in a lot of fixed a u.s. based company, particularly the liabilities from all the retired workers. you really have to take your time to look at what the value is of this type of deal. jeep is certainly the most valuable asset. jeep and the brand pickup trucks are the most valuable assets in the fiat chrysler brand right , right now. >> you don't think they would sell those alone do you?? >> they could carve it out, they did with ferrari. what is left after that? you have to continue to operate or you're going to have to retire those assets. it is difficult to carve out without having some difficulties
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for the group. thinkolutely, what do you within chrysler -- there has been talk about this for a little while and they had this comment from great wall and now they are taking it back. what you think is happening within this company? what does that due to the management and the board were seeing these headlines? >> i think it has been no secret that sergio and fiat chrysler have been for sale. they have been quite open about that. i think you have to decide strategically how they get the most value out of the asset called the chrysler -- fiat chrisystler. maximizes a part the pricing, they have to talk about that. most valuablee jewel out of the crown, you have to do with the assets that are remaining.
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i think the have to go through the calculation. is a carve out the right thing or could you get great wall or another company to step in and take a look? it does begin to set the market value of what chrysler is really -- fiat chrysler is really worth. >> thank you for joining us on this, bill. managing director and former senior executive for chrysler. here is our interactive tv function, you can find it at tv . you will not only be able to watch us live but you can see previous interviews, dive into any of the securities or the bloomberg functions that we talked about. you can become part of the conversation by sending us is messages during the show. this is for bloomberg subscribers only so check it out at tv . >> a quick check of the business flash headlines. green line is facing the payment problems for a project in the
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country's northeast. they are already in default on $30 million of debt. -- is 46% onas 46% by the shanghai government. japan tobacco is to buy the number two cigarette maker in the philippines for over a billion dollars. the assets of mighty core will help weakening demand in the home market. that deal would be the largest purchase in the philippines in over eight years by an overseas company. you can tobacco is buying an indonesian cigarette maker for $667 million. >> let's see what is looking for the ugly outside of hong kong. typhoon number nine. it is close to bearing down in the city right now. transportation will be quite difficult, we are seeing a couple of cars outside, braving the storms, npr is stopping its
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service. -- ntr is stopping its service. make sure you get to check out which areas are opening up. they are still hunkering down pretty hard right now, betty. betty: it looks like not only free market trade but -- has been trade canceled. this is bloomberg. ♪
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♪ >> these are the live pictures of the phoenix convention center. holdingt trump will be a campaign rally in just a few hours, firing of his base and trying to convince others who have lowered his approval ratings to a low of 40% in some of his key midwestern states. trying to get some back on board with trump and the trump rally. the trump reflation trade. we will see if this is a time to reset. meantime, time for a quick look at what is coming up
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in the next two hours here on bloomberg markets. the sides of the typhoon, we had to talk about central banks. this will be jackson hole, wyoming. markets is having a look at what mario draghi is talking about and what janet yellen is talking about. james clark is joining us, the chief financial officer and we are discussing the careers as well with the cmb private banking. looking forward to it, that is in for yvonne and i, stay safe, yvonne. this is bloomberg. ♪
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♪ 9:00 a.m. in hong kong. 9:00 p.m. in new york city. i am rishaad salamat. battered,is being markets closed, schools and businesses shut, flights grounded. washington imposing sanctions on noting pyongyang has been restrained as of late. market linked with the yen. that could be about to change. this is "bloomberg markets: asia." ♪


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