tv Bloomberg Markets Asia Bloomberg November 19, 2019 9:00pm-11:00pm EST
david: two things that might come out in the next couple of minutes or so. we have this five-year census of the economy in china. the other thing we are waiting for is the latest minutes from the bank of thailand after a meeting when they cut rates. that should come out anytime. rishaad: we did get the prime rate cut to 4.15 percent, five basis points down from the previous month. and looking at alibaba, looking for anything else that might come out written regards to trade, looking back toward may end where they were when talks broke down and revisiting things that hadn't been agreed to at that point. and of course the house, rather the senate, doing the big one, putting out this piece of unanimously, and that will pressure china at least to try to maintain one country, two systems.
climbed down. david: both hong kong and mainland china have come out in opposition of that senate bill which passed this morning, risk off as you can see here, 8/10 of 1% on the nikkei 225. talking 25,000 for this one as well. china kospi down 1%, hind sang giving up about 230 points at the a sx 200 leading across the region, 1.3%. rishaad: banks are under a lot of pressure. also looking up what is going on elsewhere, other asset classes in play at the moment. the 10 year yield is unchanged in china, even as we got that caught. the 10 year yield is four basis points down in the u.s.. it was only about a week ago we were talking and questioning
whether we would get 2%. one thing adding a bit of negativity is the snp active afters, 3/10 of 1% lower a choppy session in the u.s., retailers really dragging things down, the snp lower all of nasdaq did hit a record high. cnh is to tenths of 1% lower. su keenan has your update on first word news. : u.k. prime minister boris johnson opposition leader jeremy corbyn clash in their first debate. johnson promised voters the years of austerity are over and that he will massively raise government spending if conservatism wins next month's pole. the british out
service would only be safe with labor in the administration. of u.s. has walked out military talks with south korea. bok at the u.s. demand that it pay five times more than usual for having american troops based their. the foreign ministry said it expected to discuss cost that were in acceptable range for both sides. it raises questions about the future of one of america's closest alliances. then you could call this the case of the missing missiles. a u.s. military audit misidentified the location of dozens of nuclear weapons prayed the pentagon audit failed to name the correct location of 79 minuteman rockets, about 1/5 of the stockpile. the air force says it has complete control and accountability of america's fleet of intercontinental ballistic missiles, and that any errors will be corrected as necessary. to the philippines now, which is banning vaping in public places.
it is also stopping the import of electronic cigarettes. the news comes after the department of health says a teenager who had been vaping for six months as well as smoking cigarettes developed a long injury. lung injury. it is thought to be the first case in asia of a mystery illness in the u.s. that has killed people. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. su keenan. this is bloomberg. ♪ the u.s. senate unanimously passed a bill aimed at supporting protesters in hong kong and warning china against a violent suppression of the demonstrations. this is in stark contrast to president trump's near silence on the issue. jodi schneider is with us. what does this mean and what is next for legislation, and doesn't really matter?
it should become fairly academic when we had the chinese insisting this should be overturned, because they were the only national legislature that has the right to decide on issues of constitutionality. did that ultimately the end of one country, two systems, effectively, i sank there long -- their law is superior to hong kong? jodi: that's a good question although the legislation is not done yet. the senate passed unanimously in the house passed it bipartisan support but they did not pass the same bill and they still have to reconcile it. the law requires the bill that goes to the president's desk is the exact same bill for both chambers. we haven't heard from president trump. interestingly, once they reconcile the bill, it may hit his desk just as they are trying thenchor -- trying to ink face-one trade deal. so he has kept silent on this.
china has made it very clear they don't want to see this bill , and they have warned of unspecified retaliatory measures if this was to pass. as we ares happening trying to find in this trade deal. at the same time, the senate also did pass a bill that would surprise like any teargas, or those conflicts, from going to the hong kong police. the house has not passed that bill. but that also ask planes the tension. expectingt are we today in hong kong, more disruptions? far we are seeing some disruptions. we still have protesters at polytechnic. that situation has not ended yet, even though a lot of them came out and a lot of them were arrested. it is a very tense situation
still, in hong kong. other students have gone back to school, but things are tense and the relationship between the tensionschina, these appear to be escalating, given everything that is happening in as legislatures in the u.s. well as what is happening in hong kong. rishaad: so many moving parts. and you mentioned that legislation could end up on the president's desk and he would have to ink that trade deal. where are we now if we are revisiting what broke down in may? it is interesting, back to may, right? it didn't work and may, but china is demanding for them to move forward with more purchases of u.s. agricultural goods, which is what the u.s. wants. but china is commending the uss to remove those tariffs. anything that came since may they want absolutely removed, and things that were before may, they want removed in stages.
this is what they are tying to figure out. it is complicated because we have hundreds, perhaps thousands of products that have had tariffs imposed on both sides. and figuring out which tariffs get removed and how that would root -- and how that would work as a complicated process. apparently that is all being discussed before they can even ink what is already a pretty limited face-one deal, but even to get to that, they have to figure this out on the tariffs. david: and we haven't even gotten to the hard stuff. it is just phase one. jodi schneider, our senior international editor, thank you. in this interview with bloomberg, the veteran emerging markets investor touts hong kong's global importance while also giving his take on the issue that threatens to become another barrier for the
u.s.-china trade deal. mark: it is the only approach at u.s. can take, becasue the end of the dead -- because at the end of the day the u.s. stands for freedom, the rule of law, and so forth. and hong kong is critical to u.s. investors. we have a lot of investments in hong kong, in order to get into china. so i believe it is very, very critical. this equity risk premium we have here in hong kong has meant we have low valuations for the hang seng. let's bring in jim mccafferty, nomura equity researchers. we have seen this rally the past couple of days and people are scratching their heads as to why it is going on. what is your take? the hang sengong index, is it equity hong kong? let's think about big components of the market. you have truly asian companies, companies like aia and a lot of
their business is not just hong kong but of the parts of asia and also, we have $.10. again, a lot of the revenues are from mainland china. inthese companies we have hong kong are truly international. what we saw this week was the potential listing of alibaba. so i think when people look at and what is going on in the streets, clearly we are seeing a decline in economic activity that has an impact on some of the listed restaurants, for example, and retailers. but a lot of the big names that are listed in hong kong, it is not just single markets. considerat would you the most accurate hong kong benchmark question mark if it is not the hang seng index, what would it be? at: if you are looking trying to identify the outcome of the economy from these political protests, potentially cut gdp, the purchasers managers
index, that sort of thing, but the stock market is not a sense of what is going on locally. rishaad: where do we go with it then? surely people must look at all that and then figure that out, and we look at asia as asia, and divide even further apart. you the bigger picture, guys were talking about the u.s. senate and what it wants and what trump wants. trump want might -- trump might want something different than the senate and trump might want to use hong kong as a bargaining chip to get something done with china. and what if companies have been discouraged by the u.s. stock , and for that reason alibaba's first listing in hong kong. hong kong is pivotal for chinese authorities. it is not just a mystically here in hong kong or china, it is
also in korea where they are trying to negotiate offense agreements with south korea. so hong kong specifically in terms of where it is headed and what trump wants, it will be used as a bargaining chip. david: to translate what that means for earnings as well, we are pretty much done with earnings season. do you think with three quarters --?behind us. 2019 the biggest one of single components is msci china, and you take big names in msci china, 30% are alibaba on tencent. going into 2020 we are optimistic on markets. rishaad: how much of that has been factored in already with the rally we are seeing? valuations,ook at asia equities global context. tradinglike china are
on 11 times earning, japan for japan, 14 times earnings. will be growth in china ahead of the u.s., earnings growth in china, 6% to 7%, and that will be 8 -- earnings growth in japan, 6% to 7% and that will be a continuing theme. market like japan historically has always been seen as value, high quality companies with a lot of business interests, that from that perspective, we have not seen value come out in terms of where assets are trading and stock market terms. that will unfold next year as share buybacks take place. ofhaad: you have a target 25,000 on the nikkei 225. jim mccaffrey out of no more a -- out of nomura.
bank of thailand minutes are coming out and they remain concerned about the strength of the currency. this is from the meeting when they cut rates from 1.5% to 1.25%. rishaad: word is coming through that the thailand economy is growing slowly. they are saying financial stability risks as well. lots to come this hour, including bridging the divide. reimaginesent continued foreign direct investment, although the foreign investment law leads a lot to be desired. japan's economic recovery and we assess equities. that is next. this is bloomberg. ♪
rishaad: shinzo eight hits a milestone, becoming japan's largest-serving prime minister. 2% inflation has been a battle as price growth is stubbornly low. bondank of japan massive buying campaign feels inflation inside the central bank with the balance sheet that gets gross domestic product, but it contributes in to a key success of economics, a weaker yield. david: if you measure the economy in japanese yen, it is probably smaller. rishaad: currency risk. of no jim mccafferty
mura is with us. jim: we have a team of we have a at jomu -- team of strategists at nomura and what we think will happen is that during the first part of the year, you will see earnings start to come from more cyclical companies. be mindful, when you buy in japan you are not just buying japan corporate's, 50% of revenues, 50% of profits come from outside japan. although in our case, we are taking a bet on global recovery coming through. they are very sensitive to gdp growth outside japan. back andi want to dial talk about his seven years in power. give me a report card. jim: one thing i would point to in the current environment is
what we have in japan right now, stability. we don't have that another markets. we have the u.s., where we have an impeachment process, we have another presidential election next year. in the u.k., we have an election again this year. from a japan point of view, we have unity of policy, not just the policy which the government has embarked on, but the central bank. in the u.s. for example, you have this constant pressure between the fed at what the politicians want and in japan, you have economics working in tandem, the government and the bank of japan. that is something which willie abe's the legacy of success. rishaad: you have these two working in tandem, why can't they in other places? we have had material institutional change free take migration levels. like one andething
12 of the population is a non-japanese national. one thing pain has battled with over the last 20 years his demographics -- one thing japan has battled with over the last 20 years is demographics. something which could be ticked off. japan was criticized in the past for stakeholder engagements from a corporate point of view. that is coming back into fashion with esg investments, but at the same time we are saying japan actually has engaged on this big program of shared buybacks, listing what shareholders want, using that money to buy back shares and diversify. stockva took power the market was 10,000. we are looking at a 25,000 target -- ia but -- when abe took power last year,
took power, the stock market was 10,000. we are looking at a 25,000 target next year. insured that the gpi, the biggest single investor in japanese companies, has actually started engaging with its bond managers to -- with those we -- with its fund managers to ensure fund managers have direct relationships with portfolio companies. in the past a lot of those came from outside of japan on the u.s. hedge funds coming into japan, they have been a failure. what is happening now is coming from within. that is a key difference. local asset managers in japan are challenging japanese companies about the way they deal with shareholders and control their balance sheets. that is something which is largely unnoticed by western investors and that is changing into thousand 20. and corporate
malfeasance has certainly declined in the past couple of years, hasn't it? jim: i think it is transparency. in november we had a slew of announcements from big japanese companies, one company had a billion dollars share buyback. if you look at monthly numbers for july, august, september, october, those are receiving the average number of the first half of the year and that was double 2018. that is one of the reasons we are bullish on japanese equities. rishaad: that is one of the points when you talk about eps growth asked japan -- growth ex japan, hugely popular in turkey. ♪ ton in by sending messages
♪ let's check your latest business flesh headlines. us trillion agents are accusing westpac of the biggest breach and money laundering in australian history, including failure to detect payments that could have been used to facilitate child exploitation. ceo says the bank recognized the seriousness of the issue and is committed to solving financial crime. in the: saudi aramco long-awaited ipo backing, we are told that has nearly enough orders to cover the institutional portion of the deal with more than two weeks to go until a sale.
it prompted the kingdom to pressure local investors to back the offering. up an sony is setting artificial intelligence r and d board. will work on building a wide range of technologies including imaging platforms and will conduct research on things like ai ethics. the project will be overseen by a consumer science laboratory. of the momenttory a fairlykkei, theessing start to the day, u.s. has something to do with it. here are the movers, further consolidation in the medical industry, olympus 1.1% on the upside with specific job cuts. -- we have 5% up for
kong is 10:29 a.m. in hong and shanghai in 9:29 p.m. in new york. the u.s. senate has unanimously passed a bill supporting protesters in hong kong. also warning china against the violent secession of the demonstrations. it will require annual reviews under law. the house passed similar bills -- a somerville last month, but both chambers have to pass the same version before the president can sign it. bloomberg has been told that
u.s.-china trade deals that fell apart month ago is now being used as the benchmark to decide how much tariffs should be rolled back. both sides have discussed rolling back tariffs to the theiminary term before initial deal. [no audio] the value of overseas shipments dropped more than it 9% and that dates back to 2016. the drop is the largest and more than three years. >> global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries.
i am su keenan. this is bloomberg. japan just went into its lunch break. here's a look at assets, you have the equity story plus your feature's story. the dollars bid right now, pretty much risk off session today. , the bigof australia four aussie banks here leading the decline. any reason why we are seeing at 1.2%? the headlines here, you can read on bloomberg. 23 million money-laundering breaches. the seo says they are taking this very seriously at this time. 1.83%.
an uptrend in foreign investment despite the ongoing trade war. investors remain bullish and -- she adviseshe businesses and other organizations about investing in china all sub thank you for joining. of's get to the issue uncertainty and fbi on the way fdi on the way up. why? >> new companies open up in china from all around the world, europe and africa and elsewhere, the reason being, china's consumer market is growing and people see opportunity. china doina -- seen
business and that is helpful to stop the devil remains in the details, but this is an interesting time to be working in china and creating new services in china stop -- china. mpc when they the announced they were coming up with foreign investment. between then and what has been of it had -- they have had conversations. what is the update and are you happy with how that story develops? >> at least there is certainly an opportunity to see into the foreign investment law. for example, the chamber of
commerce and higher -- in china has been able to input views on aspects and regulations. of course, the foreign investment law does not cover everything when it comes to doing this is in china. there are still a lot of things being excluded. >> what is excluded and what needs to be worked on? suggestinggislation buyer beware? >> of course, there are different parts of the foreign investment law. there are regulatory barriers which are not necessarily covered and different companies will meet at different points in time. many countries have free trade but onces with china,
you start importing into china, you may need barriers. these are not necessarily covered by the foreign investment law, but the government needs to take action order to create more space for businesses to operate smoothly. >> it is obviously one piece of legislation. do you think it will affect companies from developed markets the people inom developing countries. will it affect those two differently? there's an ongoing trade war between the u.s. and [inaudible] it is trying to create a china and we see consent made a deal
recently for a new type of social media. ,evertheless, for african firms there are european firms, but sure the issue is making even the they may be interested is they can continue to operate and manage the operating costs. again, those aspects are not necessarily covered in the foreign investment law. doing a program on the belt and road initiative. it is one way it traffic that china can bring its companies and -- in.
is that changing at all? others are in the pipeline. >> that is right. we have seen china making a big push to try to open up more trade routes with other countries and effectively the majority of countries around the world want to start removing a ande deficit with china that includes many developing countries and many in africa. that opens up over 8000 product lines in china and in return, they have opened up their services, for example the financial services sector. that is progress, but again the devil remains in the detail
despite wine overall free trade agreement, especially in the , especiallyculture their governments which they negotiate on in particular, the area of agriculture is quite challenging. they have to agree to have numerous amounts of certification, so while the china international airport expo, there was even a trade expo in june, all of these are important signals, but we have to work on the ground at the base to make it happen. >> thank you, hannah rider from development.nd also taking place later this week, [inaudible] coming through as well.
>> welcome back. today, we speak to a woman leading the efforts for a more forl and inclusive future lgbt. >> the hong kong private rate it an annual feature since 2008. this year, the street parade was canceled because of the civil unrest. organizers held a low-key public meeting instead. while there is support for the lgbtq community here, it's still faces challenges. joining me now to talk about how hong kong can champion for the
community, by's chairman and an advocate for gay rights. >> good to have you with us. >> your father struggled to accept that you are gay which is not uncommon in a lot of families, but he offered a marriage bounty for a man to marry you and then you took an unusual step of writing an open level -- open letter to him and he said i'm sorry to mislead you to believe there was just a shortage of good men in hong kong. what is your relationship with him now? >> i have always written to my notes,and we do exchange
happy birthday, happy return and i remember when i went to boarding school in the u.k. and when i was struggling about whether to go, i wrote him a letter. these days, everything is on social media and i like to keep that practice. in some ways, it is my way of taking responsibility of coming out to him and telling him i understand a lot of what he has done is a result of helplessness and guilt, confusion about what to do with the gay and i want to take responsibility to let him know that it is just what i felt ever since i was a child. i have been very close to my father ever since and remain
very close. thes very supportive of relationship between myself and my girlfriend and he is accepting of me as a lesbian now stop -- now. >> the fact that you decided to write an open letter, was this done so that it would help other families accept their children as gay? >> i think so. i think a lot of the community, nobody wants to lose their privacy and be thrust into the limelight, but once it happened, i wanted to make good circumstances of it and share my experience of perhaps my parents in hong kong that are terrified of their children coming out and the shame and guilt that would result. >> we are seeing pockets of
progress. taiwan has legalized same-sex marriage. when i interviewed carrie lam, i asked her about that and asked her if hong kong is closer to legalizing same-sex marriage and she said i'm afraid not because this remains a very controversial issue in hong kong. are you optimistic? >> i am optimistic. i think in general, people are beginning to understand what equality and freedom to marry population.e if we don't stand up for each other and understand what rights are about and what loneliness is about, there's really no hope , so a lot of minority rights should not be left up to [inaudible]
minority rights have to be protected, especially in a system of democracy which we hold onto quite dearly. >> what can companies do, what can the financial sector do, what can businesses do to support? >> i think it is important for places like hong kong because we spend almost half or more of our waking lives at work. there's a lot more innovation and it requires a lot more creativity and teamwork and what differentiates us as human beings is that we work together and without famine or war, we are most in danger of our mental health destroying us in so as a recent study in scandinavia has ofd, the legalization same-sex marriage produces
suicide by a whopping 46% just are legalizing same-sex marriage. i think it is not just that, the prospects of equality and the understanding that society recognizes what equal rights is all about really changes people's mentalities and enables them to have more dignity as human beings. >> thank you very much and we wish you good luck in your efforts. wo -- auly inspiring truly inspiring woman. back to you. the indian open about an hour away. the start a look at of the session. divina is there in the mom -- in mumbai. theesterday session, we saw
says it appears manageable and it has already been part of their [indiscernible] however, liquidity issues and theyto persist have to decide on fundraising. without a report yesterday it would have been absolutely boring. coming up, we are talking qualcomm. the company is pays -- painting a very rosy picture. ceo.eak with the company this is bloomberg. ♪
$133, the market cap billion, the shares have jumped after the owner announced to cut the company's net to zero. japan's financial regulars expecting to expand -- this is just they will move it to large stocks and cut out stocks prone to big price fluctuations. >> let's talk about qualcomm. the company has been at the forefront of development, ceo hasg a -- the discussed the company's business carolyn.with our own
>> our china business is actually quite strong, driven by the same things we talked about already and all of these worldwide expansion opportunities of cellular. of course, we have a lot of that we sell to and it continues to be a big opportunity and big business for us and i would say in some ways actually isolated or insulated from the tray discussion. if you look, there's a lot of expansion happening worldwide and qualcomm is a big piece of that will stop it is a real story of if you have technology that people want or need and you are the strongest partner or a strong partner, you have the ability to win win. >> we've had a little bit of a change in the structure of the chinese market as the business
has entrenched into china. it has changed the share of that and what people have done is i'm going to celebrate my 5g plans and not spend much time on 4g. what has happened is it has accelerated the intensity of the 5g rollout. timee spending a lot of doing the chinese partners successful. >> do you think china is ahead of the u.s. russian mark -- u.s.? [no audio] work to make it an international standard, then you miss an opportunity worldwide. if you look at the deployment,
the speed, china is going quite fast. i think i made comments how it will be in million next year alone. those are tremendously large numbers compared to the united states, but that does not mean the united states is going quickly as well. for the first time, you are seeing china and the united states launching in the same year. now, everyone worldwide is trying to figure out how to get to 5g quickly and that is good for us. bute will be live thursday, a big number remains including the ceo of goldman sachs. just a quick check of your markets. we are entering the last seconds of trade. we did get that expected
>> it is almost 11:00 here in singapore. >> we are entering the last hour of the morning session in hong kong and this is a look at our top stories. china threatens retaliation after the u.s. senate passes a for asking for protection hong kong protesters. >> that comes as the two sides revisit trade proposal and pressure builds to close out a deal. to a miss hong .ong listing at $760 per share
this is bloomberg markets. >> the latest on the u.s. china trade front and you think that reflected in u.s. futures as well, also showing hong kong retreat, but a lot of analysts have been saying those gains were very understood. we also had china cutting the lpr rate and money going back into safe havens, the nikkei under pressure and also what happened to banks in australia, accused of 23 million cases against anti-money-laundering and when we switch up the boards
, you can see the bond market down by four basis points, the aussie also under pressure. a little bit of weakness hitting the session lows and of course the fact we are not any closer to the phase would -- phase one trade deal. >> let's look at the prospects of the trading day, nearly half of 1%. futuresindicated by the . today, just looking for a flat .o low side of the session we were up by half of 1%. at the moment, seeing bond prices go up.
that could be one of the reasons we are down by four point basis points -- four basis points. a little bit of dollar strength in that is the 71 rupees in session. to new york. over >> we are going to start with the u.k. and that is where jeremy corbyn repeatedly crashed -- clashed over their first televised election debate. ofpromised that the years austerity are over and he would raise government spending and corbin said britain's health service would only be saved under a labor administration will stop a u.s. military audit has misidentified the location of dozens of nuclear weapons. the pentagon failed to name the rocket.location of 79
that is about a fifth of the u.s. stockpile. -- [indiscernible] it also says any errors would be corrected. now, banning vaping in public places. the move comes after the department of health said a teenager developed a long injury. it is thought to be the first known case of a mystery illness that has killed upwards of 40 people in the u.s.. japan will open the application process for casino approvals for the first time in 2021. -- nine local
governments including tokyo, yokohama and osaka are said to be considering entering the race. local polls suggest the public is against the idea. >> global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. >> the u.s. senate passing a bill aimed at protesters in hong kong. it is a stark contrast to president trump near silence on this issue. we have a different bill that passed the house. tell us what is next. >> they have to reconcile the
two pieces of legislation. they have to pass the same exact bill, so this is not the end. and will likely do that they passed them with overwhelming support unanimously and then it goes to president trump's desk. we have not heard from prison trump -- president trump. it comes at a time when he tries to ink the phase one deal with china. it, it wouldveto likely be override. what it would do is there would be annual inspections to see -- annual assessments to see whether hong kong was given semi-economist data and if that was not the case, they could
impose trade preferences that hong kong would see from the u.s. and it would allow chinese officials to be sanctioned if data.ere impeding that >> we have heard china saying there will be some kind of retaliation here, so what is next? that is going to play into the trade negotiations which continued to see -- seem to be a little bit of a stalemate. >> certainly coming at an interesting time and we don't know what that action would be. chinese officials repeated that the condemnation today, but they have been unspecified of retaliatory measures. certainly, it can't help the negotiations on the trade agreement which are at a sensitive point anyway.
certainly, we are looking at things beyond trade in terms of tensions between the u.s., china and hong kong. editor. you, our senior the hard stance against beijing. [indiscernible] the only way to protect the principles america stands for. he gave his take on an issue that birds to be another barrier on china's trade deal. day, the u.s. says we stand for freedom, democracy,
rule of law and so forth and you must remember hong kong is very critical of u.s. investors. i have a lot of investors, so believe it is very critical. >> let's bring in our guest at the head of icc strategy. how do you trade this because you say we are still proceeding if we will see a phase one agreement? was much more than a year ago, but i think the lesson is never a smooth one and that is why particularly over the next two weeks because we the summer to almost seeing it as a done deal.
should bext week, we prepared for negotiations that could be bumpy. incentive toe more get negotiations. >> we're looking at how you tried that in the fx space as well. what do you see as the likelihood here? do we see a further upside or does it start to look more rocky question mark -- rocky? >> i think for us, it is about .he dollar in the short-term i think on trade, that has been one of the most trade sensitive currencies out there, but i wenk that is the one where could potentially see it as one of the biggest beneficiaries in the short-term stop --
short-term. >> we are having some much problem getting this phase one deal. this could be the easiest to resolve. doesn't this end badly for phases two and three? it is one of the points that we made in the past, if you look and everything was lumped into one negotiation, there are more controversial parts. it basically means that in the short-term, you can get some of the real parts across the line, but once we get across a phase one deal, we may have to get used to the fact it will be markets will need to stay with markets and investors like ourselves will have to take it
as one source of volatility. >> does that mean the dollar stays stronger for longer?not necessarily and --when he ink about trade >> not necessarily. about long-term trends like the dollar, our view the same fundamentals. those have actually been turning consistently and what we think is most interesting is actual global liquidity which we think what improve the market. that is still more important than trade which can be short-term as opposed to shifting short-term -- long-term. >> we have a chart showing the u.s. yields reducing the spread
-- e.m. dollarnd bond. >> it is one of the areas that is not awfully expensive. i think that is one factor in secondly is u.s. treasury. many bonds can be sensitive to sharp rises and when you take it off the table for a moment, then it looks interesting. the dollar starts looking more interesting and starts reducing overtime will stop >> please stay with us, sticking around here in singapore. still ahead, charting japan's economic recovery. we will look at the success or lack thereof.
that is a weaker yen. oflet's bring in the head ficc strategy. toa lot of that feeds back what we discussed on the dollar because absolutely, i think the yen is an even yield, it has been held at low levels, that has been one of the factors to keep the yen anchored. dollar, lesserer than the euro which is a bigger secondly, really yields do matter for investors and inflation being at some of the levels, it does not look as low as is suggested. >> we are talking about treasuries as well. the guest is pretty much a key
for investors. what are you expecting? hardly not too many surprises? , clearly we are getting to a phase now that is much more data dependent and i think that is quite interesting. when you look at the data, some of it is pushing signs of .ottoming we can debate whether there is one more or not, but i think the .ey is the high-frequency data that is the key to have the fed react. >> just want to get your view on what happens next. we have the fed looking at what japan has been doing, the bond
buying program, etc.. has corroded actually managed to do? >> it depends on which data you look at. if you want to argue the success economiclicy and growth on a per capita basis, but absolutely i think inflation has been the one big challenge and that is a debate that goes a little broader and i think that comes back as the japanese yen is not necessarily a straightforward case. i think the japanese yen is more and pushes policy rates even lower than where they are pictured the relative
is what changes on the market side, that will be much bigger rather than what happens on japanese policy. >> let's talk about what we have been stalking -- seeing on the curve flattening and whether or not it will get stuck. do you think it could occur? >> the u.s. curve, i think we had been through incursion. i hate to downplay the figure even though there are many good reasons it is different. i think there's a good chance it will stephen and it did come a little higher -- stephen -- steepen. has morehat interesting macroeconomic applications because we see a
pattern time and time again in cuts.so see many this looks more like 98 which is why we like e.m. bonds. >> you also like the pound which is very interesting. when you look at the euro versus the pound, wiry remaining [indiscernible] >> it is buying risk. it comes down to what we expect brexit to happen without a deal in the context is stepping back and looking at since brexit, it has become incredibly cheap, but for us, no matter what angle you look at, upcoming polls, the only thing that has been clear is avoidance of a hard brexit
and if you take that as a given, you can debate whether it should us that is40, but to still higher, so absolutely one trade we think that has been quite interesting. question, is that one trade you are utterly convinced about or is there one that you would put your house to do that over? >> our philosophy is never to bet the house on any one trade. i think we know where that ends up quite soon. i think the dollar is really the think dollarse i liquidity is the final piece of the puzzle. i think that is the third one that follows from emerging-market bonds.
service in september and may seek to price securities in the first three months of next year. the offering is expecting to include multi-your bonds. -- multi-your bonds -- multi-year bonds. [no audio] has upheld claims that mongolia did not follow the process on the agreement and this development -- in this development and may costs $2 billion more than forecast -- may costs $2 billion more than forecast. a bit of a consolidation, tell me more. they are offering to write -- by the drug and analysts say they stopped trading at its highest level since august of
last year and jumping the most .ince yesterday japan's largest chemical maker by sales is offering $4.5 seeion and this is going to them close. you can see over the course of the year, the stock is down and it would allow mitsubishi tanabe to focus on its pipeline so the buyout could actually allow them to focus on accelerating some of their own drugs and what they are doing in the pharmaceutical space. with have a look at what analysts recommendations are looking like. to get a glimpse of this and oner stocks, you must go your bloomberg terminal. >> a quick look at chinese
>> it's always 11:30 a.m. here in singapore. a risk obsession today, but you still see a number of stocks move higher. our of course yesterday, guest said to musick has been looking to expand u.s. deals were godless of the trade war, saying that the long-term investment thesis remains sound. let's get to first word headlines and out and head to new york with su keenan. su: we start with the u.s. senate which has unanimously support bill aiming to
u.s. protest -- aiming to support protesters in hong kong. reviews require annual of hong kong this's special status under u.s. law. there are slight differences between the senate and house bills, which means both chambers still have to pass the same version before sending it to the president where it would become law. bloomberg has been told the u.s.-trade deal that fell apart six months ago is now being used as the benchmark to decide how much tariffs should be rolled back. people familiar with the talks say both sides are discussing making the size of tariff rollbacks the preliminary discussion. japanese exports fell for an 11th straight month in october as the u.s.-china trade war continues to drag on global
demand. economists have been expecting a much smaller decline of 7.5%. the drop is the largest in more than three years. finally, bankrupt californian itsity pg&e has lowered estimate of homes likely to suffer power outages thursday. one hundred thousand homes and businesses still face being cut off, but that down from the more than 300,000 earlier. trying to avoid its power from sparking new wildfires amid hot and windy weather conditions. .lobal news 24 hours a day
i'm su keenan. this is bloomberg. look at let's have a what is happening in japan. asx 200 banking westpac the moment given 23 million breaching of money laundering laws more than 23 million times. let's have a look at indian markets. how far are we away from the start of the trading day? a mere 13 minutes or thereabouts.
marcus also being pressured by the impasse in trade talks, while russia is unlikely to agree to deepen output cuts. parts. moving tell us about how you would characterize was happening. -- what is happening. >> our view is that opec will push for countries like nigeria and iraq to be a little bit more compliant. rishaad: even iran with the sanctions? >> know, erect, sorry. what is dragging oil of it is around demand. if you look at the historical average, it's around 1.2-ish. if you look at our balances,
to oil ande risk inventory then draws, so it's difficult to make a case why oil prices go up materially next year. rishaad: this is coming at a time when demand is high, seasonally speaking, isn't it? the u.s.ng season in is perhaps less important than it used to be. >> demand this year has been pretty sluggish. to your point with inventory, if you look across most inventories around the world, they are around the higher end of historical averages. talking about $59 a barrel on average for 2020. what about where we see it in a year's time? it looks like you could be bullish on some of the increased compliance.
we take in our basecase views around opec, opec has this restriction until end of march next year. they are going to have to make some material deeper cuts post word -- post-- p that period. market inout the lng the demand? is there expected to be a bit of a supply gap in 2020? hosts argan every year global lng to are typically around asia. we went into the tour reasonably quite bullish lng with the view that demand growth remains reasonably robust. supply starts to disappoint and we have not sanctioned enough projects from 2020 onwards, and therefore, the market gradually tightens. we came away from that tour really with the fact that buyers over here are not really --
there is not much appetite for long-term agreement. when you look at china, which has driven a lot of lng demand growth, look at lng import growth, it is up around 17% compared to last year, it's up 40%. up demand in china is only 10% versus 18% last year, and more importantly, gas production growth in china is up 10%, so china is increasingly improving its supply. that's more incentive for chinese companies to drill. beenf the best sectors has the chinese oilfield sector which has done very well because activity is improving. to most buyers enter some accents dollars -- to some extent sellers around this part of the world, they would agree there's big disparity between an agent contract price, spot price, about 50% disparity probably continuing in the
coming years. rishaad: how is the world changing as we try to move toward more environmental friendly standards? it is a long process, i'm aware, but demand not particularly great this year. is that indicative of that? >> is a very good question. the dilemma of the oil industry wants morethe world oil. we just want lower carbon. it starts with the bigger oil countries, particularly europe and the u.k., where you are getting countries setting their own emissions targets, how they produce their own products. you are also getting investment more in new energy demands, if it's lng or power renewables, but you are also looking at .unding new energy technologies there's definitely a balance. i think the way the oil industry
is now, it's focusing not only on investing in the lower end of the energy cost curve, but now they need to be on the low end of the carbon spectrum as well. brings me nicely to two questions in one -- does the aramco ipo change the game? number two is -- we talked about also what about companies in this part of the world -- how did they fit in with that? >> good question. own if you look at our versus 2014 -- 2040, we still think oil will be up 24% or so. obviously this is economic growth dependent. what i have noticed in this part
of the world versus some of the other major companies in, say, your -- actually, if you look around here, i actually think some of the targets or some of those lower carbon projects i talked about, you don't really detail least outlined in . ultimately, if it's aramco or the other big oil companies, there is appreciation that the world is moving to a lower but it's aronment slower process. it is sort of adjusting your portfolio for returns and lower oil companywhatever it is. >> how are you adjusting that and what allocations are you
looking for for renewable companies? some of ourooked at esg q scores and what type of companies are screening well on that. if you look at what clients are or what clients are asking themselves, who is the best or worst carbon footprint, etc.. some environmental strategy. does not have to be renewables. could be more natural gas in the next or investments in power generation, etc. few years,the next this is sort of a corporate strategy over the next 10-plus years. i think those companies increasingly should do better than some of the other sectors. rishaad: thank you very much indeed.
2.5% discount from its last closing in new york, but it means alibaba is poised to raise about $11 billion in its hong kong share sale. we reported there had been significant investor demand. we also know earlier that alibaba said it had cap a retail portion of the share sale at 188 hong kong dollars apiece. details could still change around this. we should be receiving final pricing numbers imminently. this of course is a very big deal for the hong kong exchange. also a vote of confidence showing hong kong is still a global financial hub even admitted increasing social unrest. it shows hong kong's decision to relax its listing goals are starting to pay off in that it can attract big chinese tech giants, which in the past they lost to new york exchanges. juliet: that was going to be my
thought because there have been a lot of questions about why alibaba is doing this, particularly why now amidst the unrest in hong kong. selina: it has long been jack ma's dream to list closer to home. it also curry favor with beijing. in addition to that, it helps the company diversify its investor base and hedge against u.s.-chinaal risk if trade tensions continue to worsen and some u.s. lawmakers are even calling for a forced delisting of chinese companies from u.s. exchanges. although alibaba already has plenty of capital, it could always use more in terms of expansion into new business lines like cloud computing and entertainment as well as expansion overseas. war are fighting a costly of subsidies. in terms of timing, timing of these is not perfect, but
business sentiment around alibaba has been improving. they beat quarterly estimates in their most recent earnings. they also surpassed expectations and reached a record for a recent shopping bonanza. , timing is not perfect, but there is a silver lining. julia -- juliet: let's head to mumbai now. markets have just opened. day foreeing a down most of asia, but it looks like india could buck that trend. i'm looking at some gains coming through. what do you think? >> absolutely. we are bucking the trend. that is what opening levels are suggesting. 130 pointsoints to away from record high levels we had seen in june. i think that will be the level
we will be looking for. gaining about 110 points in trade for the broader market. the bank index has gained 15% in the last month and among private banks, you have gains coming in for banks which have been doing well. the september quarter data will be coming out on november 29. economists are pegging growth rates of sub 5%. rishaad: what about some of the ofer stocks you are thinking or seeing waves?
>> heavyweight reliance continues to be in focus. stocks seen trading at all-time high levels. the stock also eclipsed british .etroleum it's up another 3% in trade. it is that there will be 3% tariffs in the next three weeks. credit suisse has said they expect annual cash flow of $1.5 billion from the price increase and they've also raised the target price to 1400. all three players have the potential to significantly alleviate stress. remember, these price hikes will come for the first time in the last three years. neutered margins were under pressure as a result of raw material costs. on a year-to-date basis, it has given you returns. under has found
reporting, and we are seeing negative reactions. shifts tonow fundraising, which management has said they will be having a bond meeting soon and consider fundraising by $1.2 million. rishaad: have a great day. coming up, west bank accused of systemically breaking money laundering laws more than 23 million times. we will have a look at what is ahead for the aussie banking giant. that is ahead. this is bloomberg. ♪
orders to cover the institutional portion of the deal with more than two weeks ago. australian brewery is buying u.s. craft brewer new belgium brewing. price not disclosed, but the deal expected to be completed by years end. similar acquisition last week from ab invev expanding into the u.s.. global sales of electric vehicles hitting the skids for a second straight month as china's cooling economy and reduced subsidies wait on demand. -- weighed onand deman. -- weighed on demand. both sold as many as twice as many vehicles as in the united states.
juliet: banking stocks down about 3% in sydney, holding at its lowest level since may. the country's financial crimes agency accusing westpac of the biggest breach of laundering and terrorism financing loss in history. tell us more about what westpac is being accused of. quickly accusation essentially from the bank, firstly not reporting a whole slew of , anti-money laundering, counterterrorism, financing reasons and easily breaches systems, so it is pretty serious. we have 23 million breaches in total, which by contrast, commonwealth bank of australia, which you remember, had its own issues with a regulator last year. rishaad: the point is how serious are these accusations?
23 million occasions they did it, you immediately think it is hugely serious, but tell us about where that is really the whole gamut of things. >> it is pretty serious. there's really not much point in trying to underplay this one. .ou have this headline number what will obviously be very hard for the bank to explain to the public as there are also did not havehey systems in place to properly suspiciousnts or patterns that could be associated with child exploitation. child exploitation are two words you never want in a headline with your institution name. juliet: this is really going to affect confidence in the banks. commonwealth bank has had its own issues as well. how do you think they recover from this?
>> is going to be slow. i've been on this show talking to you before about all the problems the australian banking industry has. they seem to keep building up. we have independent inquiries that lambaste them. we have court cases, these incredibly serious allegations. today is another blow for the sector which had hoped this was behind them. they spent their time talking about trust and how they want to rebuild. this is a setback for that. so much fork you that. we will be live at the new economy forum from beijing on thursday with a number of big names. a big number of names coming through for us and that is happening tomorrow in beijing. we are also seeing a little bit of downbeat movement coming
through in terms of equity moves here in asia today. we have been seeing these retaliatory threats, i guess, coming from china weighing on sentiment. rishaad: that hong kong bill going through, and we did see withes like the topics another letter going down. asx 200 1.3% down, the damage being done from the banks, financials adding a big drag to equities in sydney. streakg seng winning
coming to a shattering help for the time being. protestslso these news with, further regards to trade. >> the aussie dollar also under a little bit of pressure. we also had china trimming this at the one-year prime rate you have actually seen the offshore yuan trade at session lows today, down about .1% there against the dollar, and of course, as we've been mentioning, all these concerns about what happens next on the u.s.-china front really weighing into the currency markets, particularly amongst asian em as
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