tv Bloomberg Markets Asia Bloomberg February 12, 2018 8:00pm-11:00pm EST
made the and offload of assets in the united states. we are 30 minutes away from the open in china and hong kong and we are seeing this rally with stocks after the foundation day and trade comes back with more optimism overnight and you see the major u.s. markets back into the positive territory after the selloff we had and we talk about , buturn to volatility there is still a worry about a true recovery. this could just be a short-term bounce before another low. you have to imagine, based off of that magnitude in the move. >> you were talking about that and what came to mind is al
sunday, they given six inches in front of your face and the numbers will shift to markets, depending on what it is and we saw this and we are coming off of highs with 3/10 of 1% and nobody has really jump and we have the asian we are seeing but it is not gangbusters. chilled has given a with the extremity of the selloff. >> doesn't it always? china. why it is
you can see this running right hong kong time and with thisin the index specific one and you have the ofader view to get a sense the u.s. futures with what that rally andthe equity we see the session with the hang you see the gap down and that spike in the volumes and you are watching isse from last week and it at that level and we will get
that indicator. and there is aey risk appetite we get and we will see a spike. >> we are seeing some relative calm returned to the markets after the selloff and the nurse have not studied yet. the year the bond market will resume in the days ahead. with mark interesting wilson joining and saying that
and you talk about that rise in the yields and we will see the negative feedback continue. >> the problem for the markets is the change where the yields have been and there is not a sign of that combing and 80 b in the equity universe has to be nervous. we had the change in the yields and everybody so that is a good news story. what allowed that was the yields going up and coming down and settling down and the market went on rallying and did not worry too much about that. the pop in the yields has yet to settle down and any release this exhaustionmore like
rather than recovery. >> that is capitulation. that is what you are talking about and the volatility will not settle until the yield starts climbing. in the u.s.n curve is neither here nor there as a data point. >> they took a particular area with wages to set off the global meltdown and people said the inflation was coming and we actually have forecasts for weaker inflation and this raises a risk of the inflation train china gets shut down and that is the biggest economy and
stock market and there will be nervous traders. >> you have volatility. have a sit. you can get a market rundown with the ongoing commentary and analysis and find out what is in -- what is affecting your investments. let's get more from hong kong. a $4ump has offered , cuttingbudget domestic spending and he wants cuts in programs he thinks are wasteful. additionally, he wants cuts to
medicare and other safety net programs. >> they are pleased with the way they delegation was welcomed at the olympics. the sister extended an invitation to visit for talks in the near future. from where itd was and investors are grappling with the fallout of the prime minister's expansionary budget. the expansion was in line with a bloomberg survey and the r.b.i. sees a arise with government spending checking in on april 1. in a statement to the hong kong exchange, they -- 21 they have been forced to send
back payments. global news, 24 hours a day, journalists and analysts. this is bloomberg. >> thank you for that. a record number of new orleans economicsia correspondent joins us from hong kong and we usually get a egg bank number to start the year. was this overwhelming? there iss true and usually a lot of lending. record lending, we have dipped back from the growth like at does not sound lot, but it fits a bigger
picture that we know of authorities way to slow the growth and we are seeing a shrinkage in the gdp gap that was warned about and the credit is,y remains robust and it but it is tucked into specific areas. >> we have had this crack down with other regulators and products. does that mean we have seen rotation over way from the shadow sector into a conventional bank loan? >> we have seen the growth push back with the arrangements and that is what the regulators want and they want to keep their eyes supportce sheets and
the economy that relies on credit and what they are doing is eliminating risk in the going after they shadow banking sector that they don't have a handle of the scale on and it seems to be working. this suits what they are trying the murkyaning up parts of the banking system. china do aseen balancing act and we have not seen of the material reduction with growth. will that change? and yous interesting have to remember the market
ambitions and treasury yields and it will go through china and test what they are trying to do without the outright impact it that isted to have and happening with the global backdrop and will hurt global sentiment and play into china. themhere is a feeling of thereng things well and could be challenging circumstances. you for that and we will get more later in the hour. party has decided to recall the president as president and
we have heard reports of intense and they haveit been giving him a couple of days to step down with the south african president having said to refuse the call to resign. corruption battling allegations and pushing back against the pressure to quit since last year, when he was replaced as a leader and we are seeing weakness with the reluctance of the south african president to resign and we are getting more on this breaking news story. in the meantime, twitter is spreading their wings in asia and we will talk about developing the brand in the region and the markets settling
bloomberg markets here in sydney. the hedge fund manager says that the risk of a recession rises and that is something that investors are estimating. we want to bring you the head of markets here. bloomberg is the part of what we are seeing with the rally. ofre is a low risk recession, but does rate down leo have a point with the
arenical looking better and we missing a bigger picture of what happens? >> i should mention that we look at the recession probabilities. those look low and the fundamentals have lagged. there are times that probabilities are low, but the market goes into a bear market ad it is kind of self-fulfilling process. just because the chance of the recession is low does not mean that we should be complacent. this goes up. why? recession the becoming very tight and the excess money growth orb real
gdp yields trading above and we aren't there yet, but are forecasting when that will happen. it is best to watch. as it is now, the financial conditions are easy enough to not push us into a recession. >> you said that the correction was coming and you are holding about 30% in cash. >> this was a shocking correction and you look at the volatility index and the abrupt selloff. that gives us the opportunity to selectively buy back and we are doing it slowly. when you get moves like we have recoverydo get a short
and we will go to the fed and there march 9 will be more volatility weakness. usually, this is a way to build a base before committing heavily. that is what we're looking at. all, there is the leverage bond prices gravitating towards cyclical areas like energy and we take some of the profits out and we are putting some of them back in with the emerging market shares and i was impressed with the pickup in the volatility we have seen not affecting prices and that is a great sign.
this for equity markets. a hair market? >> you can never be 100% sure, but it feels like there has not been a contagion. where the areas the market have been leveraged the and and it was a reversal it wasn't the areas that you usually have before a recession. it was long overdue. if it had corrected earlier before it went parabolic, it wouldn't have been at long.
the market is healthy. thehat have you seen for dollar? it appears to be in the doldrums again. short on the dollar, you would have expected a balance, but you look at the fundamental side and you look at the u.s. lessiscal deficits with correlated demand for u.s. treasuries and outflows for europe. that the u.s. dollar will remain under pressure until this is high enough to attract the budget deficits and the trend seems to be down. top withis the
volatility climbing until treasury yields stop? be a good level for yields to come up and bounceback, but you look at this area of strong gdp growth with unemployment and wage growth coming back and infrastructure and i wouldrm expect this to be higher because the gdp bond yields are still below and there is still a long way to go. >> always a pleasure. the head of capital investors here with us. we will have a partner joining me as we look at the implication of the selloff and if this is a recovery or a bound.
>> this is bloomberg markets and we are counting down to deal and of the market gets. how are they looking? and see theetter and ippetite coming back neard note that we are not the levels from cup of weeks that and a lot of people will are convinced that the perfect time to come in and this is a drop from about 35 here and we as seeing this down and five
a measure. take a look at the futures here up for there contract and we were looking at withrly decent day at 6:32 3.15% and itn at new credit.with the break downe a quick of the hang seng index, this gives you the indication of that stuff there and the energy is in play and follows some of the worst proof armor's in this space over the last or so stop's is really encouraging. >> all right. we will take that.
>> we are counting down to the open in hong kong and they are joining the fray of recovery. cautious recovery. stocks are clawing back into neutral or positive territory on the year, after the massive markets arejapanese playing catch-up. containedngs are going into friday with the shutdown for the lunar new year there is a week and
bit of a natural circuit breaker, if you will. me get started here and there is the headline and the reports we're hearing that the president has refused to step down and the weakness in the currency is not quite back and and wegetting a spike can have a look at the open in hong kong and we are up with the ischmark here and manila running higher and taiwan is seeing some gains and we are some recovery, but not a
lot of volume. we are approaching chinese new year. this is one of the worst-hit markets last week and it opens in about 45 minutes from now. india, of force, is closed this week. the open. as i noted, there was a look at the measure and the volatility pointhere spikes and the is that we are not quite back the price of puts recovering and we will leave that there. so, that is a look at the markets at this time. yet.t of the woods
shares on the mainland plunged the most and regulators might get into the markets, having been asked to boost stock holdings. trying to see this correction that was deeper in the u.s.. why did we have such a large move for the chinese a 80's? >> you look at the comments on and youssy account would think this started in america, we know that the chinese markets are insulated from the foreign markets. fact your,the u.s. there is a chinese factor with a lot of concern over the next markets in the chinese
getting liquidated and accelerating decline in the markets. >> we have speculated about the intervention and the reappearance of the national team. has the government come to port the market? >> it seems like the policymakers were worried and resources tell us that mutual funds are looking to limit sales and major shareholders are looking to boost their stakes and submit trading plans for the week. so, it looks like they wanted to step in and prop up the market.
>> it seemed like a catch a falling knife to asian polls >> there was a rebound with these stocks going up and the rebound looks to can sinew. we did see more announcement from the major shareholders boosting stakes and some of them have listened to the regulators. >> thank you so much for that. we're look at a potential for state intervention with chinese equities stop let's go to hong kong. >> the reports from south africa say that the president has been told to resign following the meeting of the executive committee over a series of scandals. he says he is refusing to go. and is expected
to be the next president. embassyunt of the u.s. in beijing has been flooded with stock growth. 10,000 messages after the shanghai composite fell. use,ges violated terms of but they did not turn off the comment section for any post. bloomberg intelligence says that the cryptocurrency could plunge 90% in the environment of unsustainable supply. to $900.ould plummet the reserve bank of australia lucy ellis -- the unemployment rate went up as
more people look for work. that she and her calling see no reason to change views. the london airport is expected emergency services are removing a bomb that dates back to the second world war. the bomb was found during development work. the capital was heavily bombed during the war. global news powered by journalists and analysts. age and a group local propertyto developers for $2 billion and they are trying to unwind overseas assets amid the mounting pressures to repay.
we have the story from beijing. andre at the share price investors are feeling the pressure come up some and this is amid the stake with the potential loan release. bit?e pressure coming up a >> you would suspect it would be is propertiest it and made ther sold , which indicates pressure they are under and they say they want to softly assets and the first half and they are towards that target with the first
quarter. they have these flagship stakes andeutsche bank and hilton we are keeping our eyes on that. step in the right direction for them, they have a way to go to unwind the investments in the next weeks and months. is the bond market reacting? the bond isably and is the blued that the yields spikes and
bonds and to issue they had to cancel. the analysts that we spoke to said it is unlikely that they will be able to with the pressures they are under and it is difficult for them and will liquidity crunch comes to the fore front now. progresshey made any with selling assets? it has been high profile and not without controversy. forhe waldorf was purchased a record price and they got the
strategic hotel and resource acquisitionsse were made from blackstone group blackstonehearing has made moves to start conversations to see if they and we buy back assets have heard about these conversations starting, but not any deals yet. of course, they held a majority howe in hilton and that is that deal came about. the problem started for them last year with their chairman regulatorsained and
went to shore up this and they were told they need to sell off assets and they could sell a been somethings they are looking at. >> that is certainly tightening. thank you for the latest on that. profit, butmade a where are the new products. we will speak to the asia director right here on bloomberg. this is bloomberg.
was a strong showing with national operations, but there is a strong increase in social media in our part of the world. >> there was a growth in revenue and a lot of that was contributed by the asia pacific we did very well. quantify that. >> yes. and weamazing momentum returned to global growth with quarter andofitable the audience grew in double digits. internationally, we saw 17% in ah and a contribution significant way. >> quantify that.
withrea had strengths business coming out of japan, growthand strong continuing momentum with chinese wepanies going global and and theinternet startup super bowl used as an advertiser to connect with audience. we see the love growth driving and it becomes mainstream. what drives the user base and revenue? >> this is the fastest
-growing market and we see advertisers making resurgence is and this is a hot topic. we had the budget and audiences in india want to connect with the cultural moments and twitter is a platform for them. >> live streaming grows phenomenally. how do you monetize that? announce the partnerships bring this type of sponsorship opportunity to we continue to advertiserss from and it is a great opportunity to
associate the brand with premium content and that is distributed ina wide set of audiences asia. >> is the audience the driving force with the video events? >> the millennial's will be in for to twitterre more andnd consume more live video and that is their way of life and a core driver for video consumption in asia. >> will growth to you anticipate? year are excited for the and we have cultural moments and are locally-resident championship games important to
fifa coming up.ee for also elections in the region that are a conversation video.and video, video, onot more and we are working meeting demand for online video available and we are experimenting with programmatic in the region and that could continue to play out. expanding and is what kind of investment are you looking at? they continue to focus on bringing the premium and had
quality content to the platform moments.ng relevant in also, continuing to improve the market, introducing twitter into the region and experimenting in indonesia, indonesia, the philippines, and continuing to refine that to do more experimentation around twitter apps and you will see us continue to refine that. channels and revenue. >> and hiring. the best kind of problem to solve. we higher in multiple markets and we are excited to bring the
best talent to twitter and stay locally-relevant. >> twitter is facing fake accounts and abuse. how is it handling that? us andty is important to we have a focus on making sure the information quality on the platform is strong and we are aiming to do that in two or and we're looking at spam and automated malicious attacks and focus on elevating the quality of content with amazing content. be?hat would that partnershipso
around video. >> thank you. she is the director of asia-pacific for twitter. you have a strong following. .ou are a millennial >> i am a millennial. thank you. bloomberg news is among the video partners. will invite to bring to your attention the interactive tv function and you can watch us live and see previous interviews and dive into any of the bloomberg functions we talk about to become part of the conversation. send us instant messages. check it out at tv . this is bloomberg.
bloomberg markets. the gaming market is looking open as it prepares to new resort. the opening capitalizes on the year holiday. we are very pleased with the response we had with the junket operators and we think that balancing this between ourselves, we are confident we can deliver on the expectations the market has for us.
>> they have lined up $106 this woulddebt and be the biggest corporate loan and they say that 100 billion of and come from 12 lenders the corporate debt has been weakening this year. canada has launched a national security review of a local company. said that they expect the deal to go through in the second quarter. 19 canadianat dollars and were below the lowest since october 25, the day the deal was announced. walgreens is said to be an early a -- to purchase after
they said they discussed the possibility of buying a walgreens and neither company has offered a comment. all right. let's get a check of how things asia-pacific. the we have seen this play out through the asian trading morning. it seems like intervention with brokerages purchasing stocks and this may study sentiment somewhat and place catch up after that public a holiday.
>> i am haidi lun here in city. this is -- in sydney. this is "bloomberg markets: asia." japan catches up with the rebound. markets seem to be stabilizing after the biggest weekly route in two years. china's hna selling off land in hong kong for assets in the united states. central strategy in the face of age.ing changing demographics means policy is becoming less
effective. let's get you a quick check of markets trading in the asia-pacific. japan coming back online and playing catch-up from yesterday's respite. headwind from the u.s.. tailwind, i should say. markets flooring back to get back to neutral for the year. positive for some markets with the selloff in two years. kongeater china, hong stocks trading up by 1.7 percent. the shanghai, higher by 1.3%. state intervention may have steadied sentiment somewhat. it is a short trading week. in actual circuit breaker as we get into the chinese lunar new year holidays. not a lot expected before the end of the week. the nikkei 225 playing catch-up. over what percent. in korea, we have seen the strengthening won. these hopes that a warming of
relations between north and south and of course the vice president, mike pence, saying the u.s. may be ready to come into talks about north korea's nuclear program, saying the outperform when it comes to asian currencies -- the kospi trading up by one person. more moderate gains for the tech heavy market by .5%. as oilseeing gains of 1% really continues to wobble despite the overnight recovery after six days of declines and productionr shale . malaysia, the .2% higher. manila shares trading about .5% as well over in jakarta. markets, developed markets, all joining in the fray when it comes to this recovery. bounce wea short-term are seeing, but are we seeing a
prolonged leg up?rolonged next chart.look at this 1619 from our mliv team. just in the last hour. it provides a compelling argument with exhaustion from selling in the markets. perhaps don't get settled into much with expectations of a recovery. the volatility will be here to treasuryl such time as yields stop claiming. we had the yield touching the four-year high overnight. 3% seems to be the level we are destined to test. what happened to equities when we get to that point and beyond? let's get more analysis from mark cudmore, joining us from singapore. you don't have a lot of conviction in this bounce. mark: i don't have much conviction at all in the short-term. whether the next 3% is higher or
lower from here in the broad equity markets is very hard to say. i think we have more volatility, and ultimately, we will have more pain in the weeks ahead while these interest rates are so high. volatility will remain elevated while interest rates are very high. u.s. cpi.atalyst is people are kind of taking two very different stances on this, and it is unclear what the reaction will be in the market. short-term conviction must remain low for the next few days, and i would not read too much into a move in either direction of 2%. haidi: we are a bit data-light here. not much consequence? mark: at the very funny, because obviously, core cpi is expected down 1.7%, which is not high. there is a narrative that
inflation is running -- accelerating to the top side. back, the macro picture back, the macro picture is there are signs of inflation starting to slowly pick up in the u.s., but really few signs and not anything to get too carried away about just yet. some glimmers of inflation in the u.s.. the rest of the world's showing signs of inflation and oil prices have taped heavily in the last week. it has not got too much focus because of the large carnage in equity and rate markets. people have missed out how week commodities actually -- weak commodities actually are. the macro picture is some signs of inflation in the u.s. but very little find elsewhere. ultimately, they are coordinated. that will weigh on that in the long term. haidi: what happens to the u.s. bond market? we have been threatening to test the highs, three. three seems inevitable. what happens from there? got: i am surprised we even
this high and i am not convinced 3% is inevitable. it's important to note that the short position in the tenure treasuries is very large. that is one position that has not been cleaned out. what we saw is a lot of the consensus trade took a big hit. that was less so in 10 year treasuries. if inflation is a little bit of a disappointing number, we could see that position cleaned out. i am not sure that is inevitable. a binary print tomorrow. the trade for 10 year treasuries to rally quite hard. that is probably the base case, but i reiterated it with no conviction. going into that other argument, i suppose, if we see inflation again, failed to materialize this year, it's looking like a bond market that it's a much oversold. talk to me about the moves we are seeing in the rand. politics coming into play here. mark: it's going to be an important development to watch in the european time zone.
the reaction is a little volatile, but not too strong in either direction, because there is confusion in asia about what really has happened here. the african national congress has recalled zuma as president. want him not mean they to be president longer. they are asking him to step down. he has refused. he shows he is not when to go easily. he is after three months. the dnc don't want to give him three months. as we get into the european quite messymight be for the rand today to realize zuma will not step down without a fight. investors want zuma to step down so the new government under ramapo set can step -- markets hating and that uncertainty as he appears to be digging his heels in. that.you so much for mark cudmore, mliv market strategist. you can follow more on his musings.
and all his colleagues, the trading action on our blog on the bloomberg at mliv . in can get a market run down one click and there is commentary, analysis, from analysts.s expert let's get you caught up-to-date with the first word news now with rosalind chin in hong kong. president rosalind: trump has offered a budget and fiscal 2019, proposing deep for higherts spending on the military and immigration enforcement. he wants drastic reductions in programs he things are wasteful. 34% cut for the am i environmental protection best for the environmental protection agency. kim jong-un said it is important to maintain the newly- conciliatory move between them and is pleased with the way the north delegation was welcomed. he said --
she extended an invitation to moon jae-in to visit pyongyang for talks in the near future. isnit of conglomerate hna meeting in hong kong. u.s. dollars. in a statement, it's kic i am theyit is -- -- they said will be forced to push back repayments on loans. used -- eased.n investors grappling with the fallout of the expansionary budget. it was in line with a bloomberg survey. the r.b.i. sees that rising to 5.6% by september once government spending kicks in on april 1. the reserve bank of australia is warning wage growth could take
even longer to pick up if the jobless rate hits full employment. the assistant government and said that despite 400 thousand new jobs created in 2017, the unemployment rate edged up. toleagues see no reason change their views. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am rosalind chin. this is bloomberg. haidi: still ahead this hour, building on singapore's property turnaround. the n'sbe speaking to ceo about how home prices can claim. japan jumping back into action. how it is faring the environment with lgt capital partners, next. this is bloomberg. ♪
markets: asia." i am haidi lun in sydney. remarks from the bank of japan governor, hirohito kuroda, speaking in parliament, saying japan's economy needs easing. they are far away from the price target of 2%. the economy needs the bank of japan to continue its current policy. speaking about the japanese banks, they are capitalized. though rates have had an impact when it comes to profitability. the corporate profit in japan, they are improving. kuroda saying financial markets can have an impact on the real economy and they will continue to watch these developments. a reference to the recent selloff. economic fundamentals, corporate profits in japan, strong. also comments when it comes to crypto. corrupt as saying cryptocurrencies -- kuroda thing cryptocurrencies should be called cryptoassets. pretty wide-ranging set of remarks from the bank of japan
governor kuroda speaking. they werethey were often with a, going back in and saying catch-up. we are seeing signs of stability returning after the biggest weekly route into years. let's get thoughts on sustainability of the recovery. strategist.he lgt let's get through with comments coming from kuroda. nothing new of course. i thought it was interesting that shinzo abe was saying they have a blank slate for who becomes the next bank of japan governor after the media reports over the weekend in japan that he was going to have another five-year term. is it that are in terms of what the markets are looking for that they just go with what is known? guest: i think that is the market's preference and that baked intogely
expectations already. so i would be very surprised if it's not kuroda-san who is reappointed. haidi: and these remarks we are today, from kuroda-san really speaking to the script when it comes to, you know, this determination towards 2% target. is it strange to you that we have got fourth-quarter gdp coming up this week am expecting forlongest run of growth the japanese economy since the mid-1990's. it is a pretty buoyant picture when you take a look at the economy, a boy and picture when it comes to -- buoyant picture when a come to the markets as well. does inflation matter? mikio: it absolutely matters. the inflation target, once you have defined it as 2% overshoot, it's extremely important to meet at, so even though japan is doing well and, maybe in some sense, the economy or say does
easing, it'sher the bank of japan that needs to ease because it has to build its credibility that when it says something, it means it and it does it. the reason we need to easing, ds because when the next recession hits or the next internal shop his, when you don't have the credibility, the response will be much less efficient. it's very important for the bank of japan to deliver what they signal very clearly to the markets that they are not just putting some number out there and hope for the best, and that is the challenge mr. kuroda is facing in the second term. exit.ot about the it's not a problem. it's an obsession by some in the market, but not a problem. the problem is making sure they hit 2% target. the exit's not about from extraordinary monetary policy, is that what you mean? mikio: yes, yes. i mean, --
[crosstalk] haidi: continue. mikio: well, i was just referring to that very often, people talk about, you know, making an extra it -- a n exit strategy. the problem will be getting the 2% target and making sure you have the credibility when you -- when the next shock hits, so that you can support the economy. that is the real problem. haidi: what is the next internal shock then? and after we have seen the reaction of the markets to one tiny -- not tiny, but certainly not terribly significant data move in the u.s., do you think the chances of a policy misstep now are greater? mikio: i think so, but that is more of a short-term management thing from a central banker's point of view, at least. i meant something of the magnitude of the global
ofancial shock of tone it -- 2008. there is a monetary consequence of course. if you look at the u.s., for example, the u.s. is basically the only major economy, perhaps, excluding the u.k., but the only large economy that is on track to hit the 2% target and actually overshoot it if you look at the consensus forecast for this year. they are above 2% for the first time in quite a while, and inflation expectations are rising. for the fed, it is the right time to actually turn slightly more hawkish in their communication, and that is the potential risk, because of course, right now, markets are very jittery. but you know, that's what they would need to do in order to think,ze things, i because the weak dollar over the past six weeks and the surge in interest rates is a sign the market is afraid that the fed is falling slightly behind the curve on inflation. i would expect that once things
calm down a little bit to actually tweak their communication to a more hawkish tone. huge risk for jay powell as he goes into his first meeting given all the unknowns with the overly hawkish message. i want to get back to the markets, in particular, where this leaves japanese equities selloff. recent this is one example. this goes for all of asia. everything is looking pretty cheap at the moment. japanese equities, which i know you are a big fan of, the topix -- we are looking at the lowest quarter lastird year. is it a good time to get in and buy? you are seeing jpmorgan and morgan stanley saying after last week "buy the dip now." would agree that, you know, in my book, at least, the
correction that we saw is .argely over some of the exaggerations have been built up in markets, mainly in the u.s., i must say, have been corrected or largely corrected, at least, so i think this is a good level, especially in asia and emerging markets, to dip back into the equity markets, so i would consider this as largely haidi: done. has any -- largely done. haidi: has anything changed in your positioning? how have you, if at all, recalibrated? mikio: we have an investment strategist meeting, and we decided to do by that. as you may recall in december, even though we had knowledge the very good global macro outlook, and personally, i am positive on the global economy. our assetf allocation, we did take a defensive bias.
we sold the em and u.s. equities, and we had a relatively high -- quite a pronounced overweight in cash, and we reduced about that cash pile by about one third in recent days to buy back into this correction. i think, by the way, this kind of strategy going forward will be important. i mean, to have -- to be prepared to have enough cash on the side when these things occurred. we are in a late stage of a bull market that has been going on for 10 years. toole are getting a bit overexcited sometimes. there is complacency in the markets. the markets will be more volatile than they were in the past. not an all clear in terms of investments but in terms of the economic outlook. the markets will be more difficult going forward. you will face the anti-cyclical behavioral pattern in place so you can exploit opportunities when they arise. just a final word.
we have this great story on the bloomberg today about how asian central bankers -- their biggest challenge is really demographics, right? there is very little they can do about it. japan being the poster child for the problems of an aging labor force and aging population. how much more can the bank of japan do to change that and what does the government need to do? course, think -- of central banks as institutions are looking to economic issues. should research and study demographics. again, i do not think that is a major problem, not even in japan . if demographics were a problem, countries like belarus would never have any inflation. the have plenty of inflation. inflation is the price of services and goods expressed in money. money is something the central controlthey have full
of it. a financials solution works. you cannot control inflation with the appropriate monetary policy. i would not mix these two things. in terms of which camp i am, if they want to hit 2%, they can hit 2%. does not really matter what demographics are doing. you some for that. always appreciate your insight. mikio kumada, global strategist, joining us in hong kong. one feature we would like to bring to your attention is our interactive tv function at tv on the bloomberg. but alsoatch us live, dive into any of the securities or bloomberg functions we talk about and also become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪
haidi: this is "bloomberg markets: asia." i am haidi lun in sydney. a quick check of the latest business flash headlines. canada has launched a national security review of a chinese bid for a local construction company. icon group extended the timeline of its proposed failed to a construction company. it also said it expects the deal to go through in the second quarter. it closed at 19 canadian dollars, 56% below the price, a day before the deal was announced here abroad, has lined up 100 $6 billion of debt financing to support its bid for qualcomm. that would be the biggest corporate loan on record. $100 billion of that would come from a group of 12 lenders including bank of america and jpmorgan chase. bloomberg barclays index has showed investment growth. corporate debt has been weakening this year. walgreens is said to be in early talks to buy the world -- a
company. an approach made by representatives. report said they discussed the possibility of walgreens buying part of a mirror source ource itnot -- ameris does not already own. paring back on department focused on selling online. the move is part of the move is part of a broader reorganization that includes hiring in cloud computing and for the alexa platform. is modest.on amazon counted more than 550,000 employees at the end of last year, up 66% due to largely that acquisition of whole foods. up, it is an age of conundrum. how the biggest challenge facing asian banks is a race against time. what can they do about it and what can governments do about it
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. i am rosalind chin with first word headlines. it considers lowering fuel economy targets by almost 25%. documents seen by bloomberg show it is evaluating the implications of weaker fuel efficiency as they discuss the ambitious standards set out under president obama. reports from south africa say they have told president's image to resign. the decision comes after a series of scandals. refusing to goe later this year. zuma was replaced by rapoza -- r
amapoza. history may come back to on them. bloomberg intelligence said the.com bubble indicates the cryptocurrency could climb 90% in an environment of unsustainable expanding supply. the strategist said that looking at the spectacular rise of amazon and nasdaq at the turn-of-the-century, bitcoin could plummet to $900. regal is the first company in the middle east to win a license to train cryptocurrencies. it will store other digital tokens in a commodity center. investors are reluctant to store large amounts of coins in online wallets due to the risk of hacking, identity theft, and malware. aey are clearing up after powerful storm overnight. widespread damage including the destruction of the parliament building.
it flattened homes and stores and cut the power supplies. 200 kilometers per hour when it made landfall. no reports of injuries or deaths. to miss major population centers. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am rosalind chin. this is bloomberg. haidi: let's get you a quick check of your markets trading here in asia. playing follow the leader when it comes to the recovery session, extending its gains. the shanghai composite seeing a bounce that after a -- bounce back after a jolt. we have had these reports of intervention to try and shore up support in the mainland markets. when it comes to the liquidity from. we had the slower start to lending with official credit loans numbers.
an injection from the pboc today ahead medium-term lending of the chinese new year. that has really been propelling the market in the day session. the nikkei 225 along with the topix seeing japanese equities playing catch-up. point 3% after the public holiday. a look at how korean markets are trading. we had the won outperforming against some of the other currencies today. overnight, quite a bit of strength on these hopes that tensions between the north and south are starting to improve somewhat with this invitation to visit pyongyang and the vice president, mike pence, saying the u.s. could be ready to talk about north korea's nuclear program. the kospi trading up by over 1%. in singapore, gains of over 1% as well. back to the inflation or the lack of itprogram. the kospi trading up by over, hg central bank decisions around the world.
when it comes to india, it's a different problem for the r.b.i.. too much inflation, not too little. kathleen hays has the numbers for us. were expecting this pullback closer to the target. were,en: you certainly haidi. the story in my estimation got bigger than we might have anticipated because it appears that india's inflation rate has eased. if he will jump into the bloomberg with me now, i want to illustrate that for you. #4398. the 4% target. and the blue line the cpi year-over-year. you can see a little bit of a peek at 5.2%, down at five point -- 5.07. .ere is the rub if you look at indian inflation, some are saying this may just be a pullback, because first of all, the january decline was due
mainly to food and fuel prices. that does not get to the core of what is driving inflation. it rose 0.5% to 5.14 year-over-year, highest since december of 2014. costs, housing, are among the factors driving the core cpi higher, which is where central banks look for the trend. capital economics pointing out real wages are rising, government spending they boost the core more as the economy picks up more momentum. interesting. the national institute for public finance. economists saying to forget about interest rate cuts in india. get ready for rate hikes. morgan stanley says the r.b.i. rate hikes will come in the october to december period. if not sooner. haidi: kathleen, what are investors now watching out for then? kathleen: certainly, we can see bond investors watching this very closely. last week a big hit
when prime minister modi's budget first came out, getting bigger. going above the previous target as a percent of gdp. let's look at #btv 2023. the blue line is corporate bond yield. the white line is the benchmark 10 year yield. they are following in step. happenkup and yields when the budget came out. there was a little bit of relief. to the far end, you can see the hook up. that is after the latest inflation numbers. bond investors are really on the lookout, very nervous after the loftier yields. the reserve bank of and yes these rising to 5.6% by bytember, driven largely more government spending, so that is one thing. ishink the irony, haidi, prime minister modi, one of the reasons he has this bigger deficit is the government wants to spend more money. theit into the rural areas,
farmers, support them. get some votes ahead of the election. rising yields may circumvent that a little bit. the focus now for anyone watching all of these forces play out will be the r.b.i. minutes on february 21 to get the thinking of the r.b.i.. are they more poised? are they willing to be patient to see how this all plays out? that will be a big focus in markets days from now. haidi: thank you so much for that come our global editor, kathleen hays, in new york. -- think is a much for that. our global editor, kathleen hays, in new york. in the face of aging demographics, monetary policy may not be that effective. efficacy may be capped. let's get more with our chief is economics correspondent, and the current. this is a situation where there is only so much they can do to fight these aging labor forces. it is one of these recurring themes. you might think asia does not
problem perraphic se, but it does have an aging workforce a key parts of the region. when it comes down to what central bankers can do, they are limited, indemnifying these problems, because an aging population or workforce means they have a restricted labor supply and a bigger burden on the public going forward to maintain an aging population, and a complete drag on growth. you don't have the big consumption that you would have for the much younger consumer-hungry population. it is a recurring theme, but it is not quite clear that central bankers have their toolkit to be able to fix it. that: the top economy comes to mind is obviously japan, the poster child for what happens when you have got an aging population. we talked a lot about china being on the path to that, but
which economy is hardest hit in asia? mikio: japan is kind of the case -- enda: japan is kind of the case for everyone. it is a recurring theme when you listen to governor kuroda and other policymakers. they talk about how they need a handle on their aging population. it is not just japan. south korea as well. the central bank is constantly thinking of the need for a higher birth rate. the risks that are posed, heavily indebted to society by an aging population. you move around and see similar issues in taiwan and malaysia and singapore also, who complain about this. the offset in asia are the young populations of india, bangladesh, and the philippines. you have a burgeoning yield consumer growth story, not quite the same fears that some of these other material economies like japan or korea have. haidi: and what does the venture relative look like? like?ntuality look
i was surprised to see thailand in the first economy that would become one out of its cohort as well. enda: it is fascinating. when my colleague was looking at saidissue, latin america not to do it. through reforms. got to push through majors to shake up the workforce. of asia thatts have not always been very receptive to immigration. upscalee the need to older workers and make sure they stay in the workforce and to ease to contribute the burden of the government. the feeling that asia needs lenders, learned a lesson from those, namely latin america. there is a lot of work to be done. haidi: really unpopular
haidi: this is "bloomberg markets: asia." in sydney.lun mgm china opens its $3 billion resort on the cal's cotai strip. cotai strip. it was very solid, and that is why we got a lot of people who want to come and visit us in cotai and macau. the bookings for macau are very strong. >> have seen that across all the
casino operators. you were allotted 125 gaming tables for this property, which was less than what the street was expecting a 150, which is what most have been operated in the -- allotted in the past. what are you going to be facing in? is there more -- phasing in? haver the opening date, we exactly the same number of tables as the other operators did. that is building up to the additional tables coming on in the future. we will be working with the government as we always will to try and ensure we are in the best possible position. as we have announced, we are opening primarily with an operation, but we will be introducing the appeal operations and we are very pleased with the response we have had from all of the junket operators, so by the time we get through into this year, down
ouring -- balancing inventory, we are positive we can deliver on the expectations that the market has for us. >> i wonder what investors are thinking though, because at least when the news drops about tables,n at 125 gaming the share price dropped by a percent. hop into the bloomberg terminal. i want to show us to our viewers. this in terms of the red line here. this is a one-day drop, 8%. 13.3%.own by what are you telling investors in terms of strategy? has only 125 gaming tables? >> life is about responding to what you have available. mgm has a great representation in terms of execution. we have demonstrated that we are going to do that exactly the same intertie. we are very clear about our strategy. we are not trying to create a
property for everybody. we are targeting the business, so therefore, the number of as critical as if you were going with the more general mass. we know what we have to do. we have developed strategies. as i say, we are positive. the critical point is that we are open today and we are going to get going in and clearly, our results -- the market will the results. for us, our future opportunities are very strong and very bright. >> i wish i were there. the results. for us, our futurethere is somen that you guys have been talking about, and the quote here is "advanced forms of entertainment." what does this specifically entail? >> we are excited because what we recognize globally as the transformation to the digital platform. everyone seems to live their lives in many different forms, and what we are doing is taking
a lot of that social media and creating an environment where that social media is part of the experience at mgm. i am standing here at the moment inside of the spectacle. that is a combination of some of walls with digital content from all over the world. content and opportunities for our guests to actively participate in the experience within our space. when you combine that with the natural environment we are trying to create, in asia, it's very warm and we have a fully air-conditioned area the size of two football fields. with all of those opportunities, non-gaming now is how we connect with our customers. that is what we do at mgm. that will be part of the future, particularly for the chinese consumer. bowie mgm macau ceo grant speaking on daybreak asia. plenty more to come. we will hear from the biggest property developer about its earnings and market at home and
now. juliette saly is standing by with the companies ceo. jules. juliette: haidi, that is correct. i am at the headquarters in singapore with the ceo. only has he delivered the fourth quarter and of course the full-year results today, but also announced the acquisition of a new set of apartments here in singapore, about five kilometers from where we are standing. thanks so much for joining us. fallen profit. can we expect more acquisitions like you announced this morning? >> we have to look at it on a full-year basis. we have profit of 30%. that is quite significant. if you look at the fourth quarter alone, obviously, the profit recognition is very much tied to the number it handed over. a lot more apartments. it was not recognized in the fourth quarter, but this is
recognition that will be taking place from 2018 onwards. the underlying business is in good shape. juliette: good shape, as you mentioned. but you have not been really aggressively looking after -- going after land in singapore. is that going to change? >> not really. we have always been actively seeking opportunities in singapore, but we maintain a very strict discipline on investment, so we want to say disciplined, and we only invest one with you get it's at the right value. they can give us a fair level of return. this is how we look at it. because we have access to many other opportunities, we do deploy our capital into markets that can give us a good return. in this particular case, we , ank this is a fair price fair transaction, that can give
us a reasonable level of return. juliette: you have divested some in china in the tier two and tier three cities. it are taking control over vantage of the belt and road initiative. tell us about your china strategy? >> in china, we focus on this around beijing, shanghai. and on the western side, three cities. in the center part of china, with focus on this. we can do skill. it allows us to then have to build up the customer stickiness for it. have the us to economies to compete effectively in those markets. juliette: is that affecting your? >> it has some impact, however,
i will say that given that it is overall, itd group, does not affect the group as a home, but it does affect the the business. having said that, i think the trading business has been doing well. juliette: you are on this acquisition or at least you announced one today. how many more can we see? what portfolio would you like in china? and august, you said 50% of your portfolio would be in china. level ofntain the same exposure. we are happy with that. at the same time, we are looking at opportunities outside of china. singapore is one where we -- if you find the right opportunities, we are more than ready to deploy capital. juliette: what about some of the emerging economies, say vietnam?
>> vietnam as a market we like very much. we see a lot of developments happening in the economic. infrastructure will be put in place. the land transportation network. that in itself will have to spur economic activities and allows many factories to be set up in surrounding some of the major cities, so that creates jobs. at the same time, it allows urbanization to take place, and we should create demand. juliette: let's talk about shareholder return. your shareholders did well. higher than what we saw in the time.l singapore you did increase your dividends. can we expect more shareholder return moving forward? >> this is something we want to work on>> to improve shareholder return. this is something that ,anagement takes very seriously
the board takes very seriously. what we have achieved is a good weication of the direction are taking. we believe this is sustainable. we are making a sustainable return for our shareholders. juliette: any potential roadblocks if we see rising interest rates in singapore? >> we expect interest rates to shift up. this to a large extent -- ,e look across our portfolio and we believe this is still something we can manage. juliette: i wanted to ask you as well -- it is very big in singapore. you have moved into artificial intelligence. tell us about sparkle. >> this was a very interesting aspect of this. we realize -- currently in singapore, we have 200,000 active members. a lot of questions. we created this. thank you for noticing that. [laughter] >> sparkle tries to answer most
of the questions individuals may have, individual members may have relating to that. juliette: a i could take over the future in property. thank you so much for joining us. that is the capital and ceo, with us at the headquarters in singapore, following their full year and fourth quarter results. haidi: great conversation. juliette saly with the ceo in singapore. ahead on bloomberg markets, haslinda and dave with the big stories of the day. david. we will get there. we have two other guests coming up in the next hour of "bloomberg markets: asia." we are seeing the recovery of risk assets in the asia-pacific. liveyasiel of ubp joins us out of our singapore studios -- the ceo of ubp joins us out of
our singapore studios. that is going to be interesting to call and how he is evolving his sort of protection or away intorategies longer japanese yen. sort of positions. we will behing talking about is india inflation. moderation but still above the rbi's target, so we will be joined by syed joining us to talk about that and where we go for the indian economy. lots more to talk about in terms of markets come economies, and all of this, coming up. state with us. this is bloomberg. ♪
♪ >> it is almost 11:00 in singapore, to be evidence to date, i am haslinda amin? guest: and i am david english, welcome to bloomberg markets: asia to react -- bloomberg markets: asia. ♪ david: japan is catching up to what rebound markets, which seem to be stabilizing after the biggest weekly route in two years. guest: the volatility index fell. biggest advance in
over 18 months, but traders are still nervous about inflation and a rate hikes. david: china suffering a debt hangover. they are offloading assets into the united tape. haslinda: and a warning for bitcoin fans, bloomberg intelligence says history shows cryptocurrency could plunge 90%. ♪ david: the zero bound is i think what he was doing about cryptocurrencies. the story across markets right now is the recovery we are seeing across equity markets, the best day in two weeks. it does not even get close to recovering the levels we were at, we are about 25% from the bottom if we retrace about from january. volumes are coming back as well, japan coming back online. but it is ased, very good day across equities. we are also getting measures of
the volatility coming down. the vix right now there, and the you can also see the asian numbers coming down. risk aversion might be a thing of the past, hopefully. fingers crossed. haslinda: david, it feels like gold is likely here to stay. despite the gains we are seeing in the markets right now, there are sums lines of caution from ray dalio. 1029.s g #btv take a look at the recession probability right now, it is low right now. low for 2018, but if you look beyond 18-24 months on, there could be a risk of recession. this is rather risk and the market should be marketed and factored into. it is unclear how far the stock market is from it stop, according to array. the concern is really about the
unwinding of seminars. central banks will find it difficult to get a balance between growth and this unwinding area so we have to bear in mind, as we look forward to the markets. for now though, let us get the first word news with rosalind chin. : the former coming this party chief of china is leading the anticorruption campaign. prosecutors say that he illegally accepted money in exchange for providing benefits. africa hasm south the ruling a in the already has forced president jacob zuma to resign. this comes after the party executives met regarding. he is said to be refusing to go ahead of the end of his second term later this year. ancb zuma was the latest
leader, and he was expected to be the next president as well. the format for north korea head of state and his sister extended an invitation to the south korean president to visit kim jong-un -- pyongyang for talks. overnight, here are first pictures showing widespread damage including the discretion of the parliament building. houses andd hit power supplies. it is now headed for a fidgety but is it acted to miss major population centers. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am rosalind chin, this is
bloomberg. david: what happened last week's still very much in the minds of investors today. we have had a lot of comments in the program today about what happened last week. it is said that it remains an open question on whether or not the slump has finished as told by our guest here. >> the big change has been that people think it is overpriced. that is almost the definition of a bubble. if you think the market is overpriced but still has some time to go, and you are hanging in for that, it is a bubble. the question now is, is a bubble over? is the bursting over? fromnda: joining us singapore is the uvp chief investment officer of banking. glad to have you with us. is the selloff over? what are the indications you are looking for? guest: we don't think the
selloff necessarily is over, mainly because of the resetting in on deals is not yet complete. we think they need to move up from the 3.5% area. that is not even assuming inflation of more than 2% from here. we think talks need to digest and that. growth and earnings are still good, which means more volatility for stocks and an opportunity for investors to take a bottom-up approach. guest: with volatility comes opportunity. guest: correct. theinda: have you taken chance to capitalize on what we saw last week? guest: we used it as an opportunity to buy into volatility. shiftedtility spike has to selling put options we had in the market, and also looking to capture premiums from high volatility. haslinda: what will it take for
confidence in the market? despite the gains over the last few days, there is still trepidation within the market. what will it take for confidence to come back? guest: i think the market need to be comfortable that while the rate rises, when the normal resetting of rate happens, it needs to stabilize, render 3% area or so. we need to be comfortable that inflation will peak at 2%. the last thing is earnings. the earnings season was very, strong and they will continue strong and they will continue to go on the upside especially in places like emerging markets in japan. a combination of those things will bring people back to the market. david: norman, david here in hong kong. you said the cost of equity let's haswill bring people backe reaso risen. is that still the best way to hedge at this moment? guest: puts in the market now
are actually quite expensive. what we have done is exited those positions and started rotating our expectations. we are starting to buy japanese yen in portfolios, which if we get this risk scenario, you should see it strengthening in currencies. david: how are you getting exposure in the yen? are you looking at the dollar-yen or example? guest: we are quite bullish on the japan as a market and an economy, we think it represents great value. for investors looking for equity exposure, we would take japan and buy it unhedged. it is a contrast to what a lot of people have been doing for years, buying japan and hedging out the yen. haslinda: we are looking for catalyst, and this week will be filled with data. inflation seems to be the big event of the week.
how closely are you watching, and, if there is a surprise in india inflation numbers, do you think there will be an overreaction in the market? guest: i think we are on track for the first half, and inflation should be rising in the first half of the year again, toward 2%. if we do get near term surprises , again, given where positioning is in the bond market, people are still very long on bond -- that could bring volatility back into the equity markets when you see people unwind. as we move into march-april, i would give it to the earnings season once again, especially in places like japan. japanese corporate resetting expectations which are right now quite low, and we think they will set them higher for 2018, putting the floor under these particulars of the japanese market, we think. david: equity vols made a lastack like a tsunami
week, and we saw that come through in fixed income. as far it for currencies as those measures. why do you think we did not either contagion that we normally see across asset? guest: i think it was a situation where to be honest, in 2017, we were confused as to why bond yields kept declining and friends as well. spreads as -- and well. had very strong growth numbers, strong job numbers, and inflation started to rise. for the most part those expected, but a combination of all three met the bond market compression unwound shocking a lot of equity players, and forcing them out of the market. david: what does it mean for your face in the credit space? some of these spreads are quite tight. to i get out of it?
do i get into it a bit more? guest: since about mid last year, we have been reducing risk aggressively in the credit space. last year was a year we wanted to focus obviously on the generating returning credit, but in, credithave come and bonds in general are places where we are trying to manage risk, rather than generate return. haslinda: i would like to bring up this shot from my terminal, it shows how stocks in asia have been oversold. ofyou think the structure change will pick up -- do you selloff will pick up? guest: last year was pretty much a tech driven rally. what we are starting to see all around the world is that the breadth is starting to expand beyond tax, into more traditional and valley sectors.
we think of value selloff is a good opportunity for investors who have been focused on tech and other growth sectors, to begin moving toward value sectors around the world, and diversifying their portfolio. haslinda: stay with us, more to come after this break. goldman says 10 year treasury yields will reach 3.5% in the next six months. you will get ubc's stake on that. plus, why rising inflation may be a temporary reprieve for the indian government. a guest joins us to talk about that and the bigger stories in india as well. they with us, this is bloomberg. . ♪ that and the bigger stories in india as well.
let us continue the conversation about markets right now. goldman sachs with an aggressive call, 3.5% on the 10 years. our bloomberg chart put that together with the survey of where we are as far as the high-end, the median, and the low end. third-quarter, as it should become a 2.95 is a median. goldman is essentially saying that there will be for rate hikes this year, discontinuing unwind of the balance sheet. so, 3.5% is not far away. is direct amount spending on the back of the budget in the u.s. 3.5% seems far away, but we could get there very quickly. haslinda: it was not too long ago when people were saying, when would we get to three? now, goldman's saying 3.5.
we are joined by dormant once again from ub's the. is it ambitious -- from ubc. is that ambitious, norman? guest: we don't think so. we think bonds are resetting from the strong growth fundamentals that we have. up a bit moreomes than we expect, 3.6 is certainly viable in 2018. haslinda: are you assuming then for rate hikes this year, and a rate hike in march? guest: we are assuming three rate hikes. the expect one in march, but we expect the curve which has over flat,ear been very should start to steepen a bit more as we go forward. something like 3.5%, and only three rate hikes from here. david: norman, what does that mean for your financials, your sector picks? financials benefit from this yield curve.
if you are advocating more into financials? guest: financials should continue to do well, we think that the way we are rotating is from a lot of the growth sector such as tech in particular. we have also taken money off the table in places like health care which is had a very good 2017. we are of financials, also looking at cyclic we driven sectors like energy, mining, which and benefit as inflation starts to rise. there are places where we are seeing very good earnings for divisions, and we think we will continue to see surprises as you move through the year. david: i have heard of a lot, norman the past week or so, the focus on economic fundamentals. i know that nothing substantially has changed when you look at fundamentals. do those fundamentals look the same, and do they hold with f -- rates7 the
? guest: the fundamentals look the same. the market will look at how low s got last year. we are about halfway there, about 3.5% from here. does the economy sustain at these types of interest rates? we think the answer is yes, from two perspectives. one, from a corporate perspective, a lot of them have extended the terms on their debt. we do not have a lot of maturities where they will have to end of paying higher rate. the property market in the u.s. will slow down a little bit, but it will be offset by the rising incomes that people will see in the u.s. from lower taxes. so, that should balance that off as well. we think the u.s. growth number will start to stabilize and we think that 2018 remains on track for a pretty good year in the
economy, in the u.s.. haslinda: we are looking at a higher inflation environment and gold is a hedge against inflation, usually. .old is not where it should the what is your take on where the metal is headed? guest: the challenge with gold is that it tends to do well with interest rates, after inflation is falling. when we have been seeing since the middle of last year is that interest rates have been rising, so we think that is a key headwind for gold here. tois not our favorite way protect the market right now, we think there are other ways to do it, but we think it is valuable for is protection for some of these geopolitical aspects that still remain on the table in 2018-2019. david: we have a chart, 7837 here, showing the rocks that we saw in the equity market last week, everything is cheaper. markets,asia, emerging
what looks attractive to you, and what should we avoid? guest: we think investors should begin their rotation having concentrated a lot on technology, and we think that rotation makes a lot of sense to older economic stories. in asia, we have chinese banks is chinese insurance companies. we think the japan story is very compelling for investors even how low valuations are, historically. on top of that, earning expectations are in the low single digits, and we think they can deliver 9% or 10%. that is an opportunity for money to go to work in the next few weeks. haslinda: wow, 9% or 10%? is amazing. if you are a bloomberg subscriber, you can catch up with all of our interviews by using our interactive function, tv go. you can also join the conversation by joining instant messages to our team and our
♪ haslinda: this is bloomberg markets asia, i am haslinda eyman. david: and i am david english. 100 company has lined up billion dollars of debt financing for qualcomm, which would be it biggest loan on record. a nervous time we look at credit markets. it says 100 billion of that would come from a group of 12 lenders including tank of america and j.p. morgan chase. bloomberg analysts say that corporate debt has been weakening. haslinda: walgreens is said to be in early talks to buy a merry source. it offer was made for the company last week.
e.amerisourc it discounts the possibility of walgreens buying part of america erisource that it does not already own. david: amazon cutting hundreds of jobs at its seattle headquarters and focusing on selling online. the move is part of a broader move which includes hiring and focusing on alexa. ,he reduction is rather modest as compared to when they cut my than 50,000 employees at the end of last year. haslinda: all right, david. a company we have been talking about for weeks now, china's group hoping to sell two sites in hong kong. they invested -- the investing conglomerate is trying to unwind its overseas assets amid funding
pressure from creditors. we have our china correspondent, tom. does it ease the pressure a little bit for hna? guest: it seems like it is easing the pressure temporarily, in particular if you look at the stock price of the unit it sold. the shares ticked up marginally today. that is some indicator of potentially easing pressure. they have a long way to go, obviously, because they sold the two plots and did not make a loss. they did sell them a little bit over a year after buying them, after bidding aggressively for them. they say that in terms of the asset sales, they want to sell about $15 billion worth. is $2 billion, so they have a long way to go. but clearly there is among some of the investors -- there has
been a big expansion plan over the next few years, of an acquisition strategy that pursued piling up on credit in places like deutsche bank and hilton. now the strategy has come undone and is under pressure, which is where you are seeing them selling these stakes, and also looking to sell some of the property portfolios in london and sydney, and the u.s., where they have about $4 billion worth of property assets. haslinda: when you look at the bond market, how has it reacted woes?'s tom: we have a chart here which shows the bond for hna which is usually picking up 14% last year, and this year it has doubled, which is the white line compared to the blue line. the analysts that we have spoken to say that it is unlikely that hna will be able to issue on because the market sentiment around the credit profile. ,avid: let us talk about anbang
tom. have they made any progress in selling their assets? tom: interestingly, we've heard that they have actually been in conversation with black so about selling but -- next on about selling back some of the assets that they purchased from blackstone. strategic hotels and resorts, from they bought blackstone for $6.5 billion. we have heard that it has been discussed but nothing has been sealed yet. from blackstonethey want to see if ty was to repurchase some of these asset as anbang again, as well as hna is under pressure. david: tom, thank you so much for that wrapup. let us have a look at markets across china right now. hong kong is entering the lunch break, 30 minutes left here. it is a good day, although we are not getting a lot of volume market, as we head into
retail. under pressure like never before. and its connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store
near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. the, 1.4% to the upside in new york. we are also looking north of a couple points here, that we were in the red for most of the asian morning session. it is 10:30 there, so for those of you still up and partying, go home, it is another day tomorrow. haslinda: and talking about parties, japan is late to the party. the nikkei up7, by 1.3%. we heard from governor kuroda and he said japan needs to
continue with the monetary policy, so it does look like easy money will persist in japan for some time yet.a there you have it. tokyo, looking like this. yen,ikkei, up 1.3% and the 108.71,' david: we are looking at 21,639 there. 0.7% to the upside on the topi unit. , we areikkei 225 entering the latter part of the earnings season in japan. we have blown over the last couple weeks or so, because of urgent important things in the market. it has been a very good earning season over in japan. that said, we are looking at a fairly cheaper nikkei 225. cycle, an upgrade
trading 17 times earnings there. so, a decent session so far across equity markets. let's get you an update on the first word news. reporter: the london airport is expected to open tuesday as emergency services improve. more than 100 flights were canceled monday after the device was discovered in a nearby dock. the bomb was found during construction work. this fan is warned, they could be haunted by history. the dotcom bubble indicates that the cryptocurrencies could plunge by 90%. looking at the spectacular rise of amazon and the nasdaq at the bitcointhe century, could be worth just $900. regal is the first company t in ae middle east to win
licensed company for the progresses. cryptocurrency investors are reluctant to store a lot of money in online while exchanges, because of the risk of hacking, identity theft and malware. skip thebenz will detroit auto show next year. mercedes says the complexity of the auto industry have prompted the detroit decision. they will decide on participating in future auto shows on a case-by-case basis. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. i am rosalind chin. this i bloombergs. haslinda: thank you for that. we have been talking about etfs. they have been in the spotlight after they recorded a record $31 billion in outflows last week and bloomberg intelligence says
active managers should be worried as well. here is our local manager. can etf outflows be a precursor to flows out of active funds? : well, first of all, it is worth noting that we did lose a record amount in terms of outflows coming out of the exchange traded funds last week. the magnitude of the moves in the markets obviously that's a lot of money just flowed out, but $31 billion worth went out just last week alone. you see that across the board in many markets. indeed some of the research shows this is a precursor to some active management outflows as well. they might be on the same level, maybe even more. given what i have been hearing from guests, certainly today -- we heard from the folks at amp earlier, and they said this
selloff could be just one little rally higher and then another significant selloff. then we could see further outflows from etfs and pressure on active funds as well. this chart shows that historically you get a struggle of active management during the drawdown period. that is based on analysis going back to the financial crisis and in periods like 2011 and 2015, the magnitude of the moves were not as big as we have experienced over the last few weeks or so, but they put a lot of pressure on active fees as that money walked out the door. if we do see another leg down for equities, it will be free tough environment for active managers. david: if money does go back into equities, do you think we will get etfs coming back into a better position? or do weells me etfs, get a comeback for active managers here? adam: it is a tricky one, david.
really, you are bound to see an immediate reaction in terms of etf flows. if it is a prolonged selloff, in a sense, that gives people a want and desire to go with active managers that can navigate the nuances of a prolongued bear market if we get into that kind of environment. of course, we are a long way away from that. moment, they are affecting short-term moves, where the money is running for the hills pretty quickly. if we do get into a pronounced iniod of declines equities, we will have to see how this does. research does show in the past that active has been under pressure during these periods. david: adam, better leave it there. joining us live out of sydney. or equities and etfs, checking on cryptocurrencies.
the bloomberg aggregator price $870.e going is 87 where do we go from here when it comes -- it is hard to draw a consensus here and really, just figure out what this means. ine analysts see a rebound the prize because we have concerns on the regulations i. obviously, look at the other side of the coin and the dotcom bubble as a sign that it will have much lower. let's bring in eric bland. here's with us in the studio. foun -- has it found its base? eric: we have seen a big move in equities. bitcoin has been relatively stable and has been on the way up. for some investors, that seems to be almost no news is good news. we did actually have a little bit of news that was i think,
taken quite well for investors. you mentioned the regulators speaking in the u.s. i think the fact that it was not cataclysmic was a positive at this point. given the price action we have seen over the last month or so. haslinda: so, a sign of stability, but if you refer to b.i.'s mike, he said bitcoin to go we lament hundred dollars. what is his argument there? eric: it is interesting. he points back to the dotcom crash of the late 1990's and early 2000's. bitcoin had a pretty long history, at this point, of booms and busts cycles. in terms of what might cause that at this point, he points to , we have had a couple forks with the coin and we have had a emerging.allcoins one of the key arguments with bitcoin is it is limited. the 21 billion cryptocurrency --
the 21 billion bitcoins that could exist. if you actually have an unlimited number of currencies -- cryptocurrencies, then that argument without the window. potentially -- if you look at what stocks were saved after the dotcom crash, we could see similarities with bitcoin that we are still a ways off until we get to the theoretical level with the coin. haslinda: talking about all things crypto. david: coming up, we will be talking about india. inflation seems to be working for now. at least, that is what some people are saying. we will discuss that. ♪
markets: asia." i'm haslinda amin. david: i'm david ingles. inflation is coming up. have a look at our bloomberg chart, 4225. we put that ahead of the forecast, which is in blue and the actual number came down to about 5% full a slight moderation from the previous read. but i think you can see this is the trend. it seems to be moving up and we are above the 4% target of the r.b.i.. haslinda: you are right and expectations are for it to go higher. let's get some thoughts and insight from moody's analytical economist, joining us from sydney. it does it seem like it is a temporary blip, maybe just for the short-term. expectations are that it will go up, given that the government will start spending soon. it will go up.e
cpi inflation has been increasing. it is largely due to higher food prices, but also the increase in commodity prices, which have placed pressure on headline inflation. this also allows for rental purposes. rents are going up. these factors have pushed up inflation. over the next six months, we expect inflation to increase further to 5.5% to 6.6%. thereality depends on how monsoon season of 2018 will unfold. haslinda: at the last r.b.i. meeting, the six committee members push for a 25 basis point hike. packed inb.i. stay a rising rate environment? look: i think they will
for every reason to because india's growth is increasing slowly. growth momentum is slowly picking up. i do not think the r.b.i. is looking to increase interest rates, but inflation does -- but if inflation nudges up to 6%, we could see the r.b.i. increasing the 25 basis points during the second part of the year. it will depend on the monsoon rains in 2018, as that tends to dictate the food prices. david hear from hong kong. one would argue though, that they need to move earlier. when you look at the pricing around the bond markets, we will get a chart up that shows you one year rate swaps also pushing higher in the spread above the rate.'s reference when you have a spread like this, typically you get a hike from the r.b.i. the next time they meet. you mentioned there are reasons for them to week. but what are the chances and
what needs to happen for you to bring forward that forecast, when the r.b.i. hikes? faraz: it would also depend on the forecasts for the monson rains. they tend to come during april, and that will give the indication as to whether the monsoon rains will be normal. i think in april if we see a low forecast of monson rains, which will increase with prices, then we bring forward the rate hike forecasts. at the moment, we expect the r.b.i. to remain on hold for the remainder of the year. david: so, if the monson rain is not as bad, let's put it that way, do you think inflation still blows up? faraz: i think 5.5% at best and during the second part of the year, i see inflation coming back down again, due to the base effects from india. they tend to stall to the second half of the year. 5.5% orget to be around
5.6%. in 2019 it will largely depend on how india's budget, the fiscal targets, are holding up. david: just before we move on from inflation, what do you think the number is that makes the r.b.i. uncomfortable? would you say six percent is a rate where we have got to move? 6% would benk a the trigger point for the rbi. around 5.5% we might see a move towardxs tightening buyers. at the moment they are sitting at a neutral position. at 6% would see a hike. araz, yesterday it was reported that india, $2 billion. that death was hidden within the banking industry. is that a reflection of the deeper problem in india? faraz: i think the government is
working on a closely with the r.b.i. we have seen recapitalization of public sector banks. we have seen the government announced measures to recapitalize the public sector banks this year. -- also,hink, soem of i think, some of the uncovering of that debt was in relation to the new bank of the close. i think it is a good thing that some of these bad debts are getting recognized now and that will help the public sector banks move forward and begin lending again. haslinda: are you saying you are satisfied with asset rate so far? rates sohe acisset far? faraz: i think it is working globally. i wonder what india's prospects will be. given what we have seen from janet yellen over the last couple years, we have seen investors become positive towards india in terms of the
equity flows and the debt flow we have seen over the last few years. bond yields are rising, and that is part of the global phenomenon. it should not be too much of a concern, but if inflation does rise, they will be sort of a global -- there could be a bit more of a global push against india. thank you for sharing your perspective. opec sales, it is not straight up shale, but should it be? this is bloomberg. ♪
the senior executive director told us that will not affect demand. >> we are very solid in that is why we had to go out there. we have a lot of people who wanted to visit us in cotai, and also friendly, in our property in macao. macao are also very strong. >> you were allotted 120 five gaming tables for this property, which was less than what was expected of 100 an150. what does this mean for the number of the ip tables you are going to be phasing -- the number of v.i.p. tables you will be phasing in? grant: for the opening date, we have the same number of tables that the others have. we will be building up two additional tables coming in the future. we will be working with the governor and, as we always will,
to ensure we are in the best possible position. as previously announced, we are working primarily with a mass table institution. pretty soon we will be junket operators. by the time we get through to this year, i think balancing the title revenue between ourselves, cotai and macao, i believe we can satisfy what the market needs from us. david: we heard you were coming in with 125 gaming tables and then the share price dropeped to 8.2%. this in terms of the drop on monday. since then, it is down by 13 point 3%. has thetand that cotai
capacity of 500, but you only have 500 gaming tables? like anything else, it is about responding what you have available. mgm has a great execution in terms of their gaming. we did not do that in cotai. we are not trying to figure out a property for everybody. we are targeting more upper market business. therefore, the number of tables specifically are not as critical if you are going to some of the more general meetings. we are already aware of the tables we have got and we have developed strategy and as i say, we are positive. the critical point for us is, we are open today, we are going to get going and clearly, the market will respond to the old stuff for us, our future opportunities of very strong and very bright. mgm shares are trading in hong kong, up by 0.2% right now. 22 hong kong dollars.
daybreaky speaking on asia now. a quick check on the latest. thehead of sales at snapchat parent is leaving. eff lucashis joins -- jack lu ares the other ceos who forced to leave. lastly, snap recorded sales that topped estimates. that caused shares to search. they're looking for a direct replacement of lucas. david: canada has launched a national security review of the .ocal construction group this is 16% below the bid price here, the lowest.
debtnda: no will be added today as part of a six with $7 billion takeover. the company is partnering with three danish funds for the former government monopoly. if this is completed, macquarie will own 50% of the carrier. soared 13%. faraz: another look at oil. recovery overnight. we have put the price together uph forecasts on hr there for you. the line that is dancing, that's the market price. we do have dispersion, obviously, between the top and the bottom. but essentially, not much from where we are. now, let's have a look at the
broader oil story right now because opec is raising the forecasts for growth in the thisgn oil supplies for year. the cartel president also said the rise in u.s. shale will not present a threat to opec's cane. >> miggy is opec is raising his demand cost. --you have to remember that opec is raising its demand cost. demand is meetings apply at some point. it is very confident in the rebalancing story. and you mentioned part of this earlier. headline price at $60, but around the quarterly price, it is averaging around $60 barrel and that is the highest since 2014. haslinda: opec is sticking to a
story. then the rebalance and the market seems to like it at the moment. >> on the down low, people's attention for the bottom of the curve. haslinda: -- david: for obvious reasons, we need to understand about the demand story side of the equation. they rated that and they said because of that, we do not have to worry about shale. >> absolutely, and you are seeing the demand from key places around the world, china is one of them. economiesent, global seem to be adjusting and adjusting well. and that is fitting demand. that better demand will make that better supply. obviously, opec does not want to give up too much market shares for u.s. shale but on the flip side, if you look at compliance, compliance has had much better than expected performance is itself.
a lot of people business opec, reach whether they would a deal. is looking much better for oil. haslinda: then, the question is always about oil price. $59 right now, where is it headed? >> that is a good question. a lot of revisions late. in early november we had one or two forecasts at $70 per barrel. analysts think $75 .n hour could be reach conservativet the investment around, brad might have $65. they are certainly up.
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