Skip to main content

tv   Bloomberg Markets Asia  Bloomberg  December 27, 2016 8:00pm-10:01pm EST

8:00 pm
rishaad: this is bloomberg markets asia. write down all down, toshiba losing a third of its value. u.s. losses could be in the billions of dollars. respect, but no apology. shinzo abe offers his
8:01 pm
condolences to the victims of war. singer laura, taiwan and kuala lumpur are just coming online. david: i don't have anything lost to say. we are caught in this lul; between-- loll christma an new years. you look at some of these markets. they are basically treading water. bobbing between gains and losses. that's the case in new zealand and japan. at a lack ofg capital. do you keep in mind come as we move into the last few days of this year, we seen a lot of money get sucked out.
8:02 pm
malaysia, taiwan, the philippines, these are some of that have really gotten sucked out. we are flat in the regional benchmark. it might get interesting when china and hong kong open up. currency markets as promise, we are seeing dollar -- dollar strength come through. thing is quite thin. there's not a lot of activity going on. it comes at a time of the day when a lot of these banks in japan come up with their daily yen fixes, if you will.
8:03 pm
have a look at sterling and cable. lack of news? i'm not going to speculate on why we are seeing these moves. 1.2287 is what we're looking at here. we are pulling back hair by about a third of 1%. way, we go, by the talked about oil. natural gas in new york hopping a two-year high ahead of what is expected to be another very cold january. were talking just yesterday about toshiba and its woes. since the holiday break, we have toshiba losing a third of its value. tell us about this unit that
8:04 pm
left to siva swimming and ready. toshiba -- left swimming in red ink. booming toshiba was when it bought westinghouse back in 2006. westinghouse built a reactor and they are building for them in the united states. and,are delayed, over cost because of that, toshiba decided to per the company that theracts -- constructs reactors. of cb&i last unit year. now it looks like they will have to take over the cost overruns in the value of that asset has dropped significantly, making them potentially have to make a write-down of as much as ¥4.3 nhk.on, according to what does a charge this
8:05 pm
big mean for toshiba was balance sheet? that is exactly the thing. a charge as big as 4.3 billion dollars means they may have to go back to the bank. they may have to provide them with preference equity, which could in turn, when they converted to regular equity, potentially dilute shares. which is one of the reasons why the price is plummeting today in tokyo. we have to look at what the charge will be. they are still figuring out what it will be. 3.4 billion is what they will have to do it they will have to go back to the bank. maybe they can get through. they have enough cash on hand to take care of that charge. it will wipe all of their earnings for the year.
8:06 pm
that would be quite bad for them, of course. rishaad: absolutely. what is the company's nuclear ambitions? so manyse there are problems with this write-down, it's what to do two things to their nuclear business, according to the analysts i talked to. lookit just makes them bad it. if you are a country like india or china, they will want a nuclear reactor built that is affordable and on time. there are units in the united states are over cost and delayed. maybe china and india will look to a different company, maybe a domestic company to build a reactor. maybe india look to russia to build a reactor. that might hurt their image abroad and their ability to sell reactors. time, by having less
8:07 pm
money on hand, by having a big write-down, that helps toshiba's ability to finance a reactor. not only does it hurt their image, but their ability to finance a deal and get enough id through. so it is hitting them from both -- and get an fid through. so it is hitting them from all sides. rishaad: who gains from all this? stephen: other nuclear reactor makers could gain. while, westinghouse was thought to be the preferred in china. there were going to secure maybe 12 reactors in india. since the fukushima disaster, china has put a lot of money in developing their own nuclear technology. they are constructing currently their first homegrown reactor, which they could export to
8:08 pm
markets. and according to some a la no lists, that reactor -- to some analysts, that reactor is 30% of westinghousehan a reactor. so maybe china is the winner in all of this. rishaad: thank you very much. moving to the first word headlines. japanese prime minister shinzo abe has visited pearl harbor. did not apologize for strike that killed more than 2000 people. matcheshistory president obama's trip to hiroshima this year. says it does not objective china sending warships past taiwan. an aircraft carrier and five other vessels sailed past on monday in what beijing said was
8:09 pm
a routine training exercise. sayington responded by that the u.s. recognizes the lawful use of international waters and the same freedom of navigational rights apply to china and other nations. production of solar cells are set to start in the summer and will bring 1400 jobs to the buffalo area. total investment is not know. but panasonic says it is putting more than $215 million into the project. tesla is expanding its manufacturing base in the u.s.. elon musk is on president-elect donald trump's advisory team. actress carrie fisher, known for her role as princess leia, has died. she suffered a massive heart attack on a flight from london to los angeles last week. in addition to star wars, fisher appeared in films, including "the blues brothers," "when harry met sally," and "hannah and her sisters."
8:10 pm
rishaad: getting to some economic data came out of japan. this is shy of expectations by about .2%. not all bad news. >> in fact, even though it missed expectations, it was the biggest rise in five months. [indiscernible] it is the biggest rise in almost two years. some littled, but spots of green toward the end of the year in your chart. went rising int december. to expansion in
8:11 pm
the fourth quarter, which was expected. exports have rebounded sharply, one of the key things driving this output figure. strength and exports in november. -- strength in exports in november. saw the yen weakening. donald trump, they give a much. -- thank you very much. the numbers did miss estimates. but there's positivity amongst those numbers. with a: let's look broader picture. yesterday, we had cpi numbers oh. a tads numbers, just higher than expected. retail sales this morning also.
8:12 pm
rosalind: a mixed bag coming out of japan. november.s rose in that is the first gain since february. yesterday, we had core inflation, the key number that the boj looks at. that fell .4 percent in november. boj isd seem that the getting further away from its inflation target. however, there are mixed -- we are getting the same figure -- exports are rebounding. the yen is weakening. rishaad: nominal gdp should be increasing, to? -- too?
8:13 pm
roslyn: there was a moderate recovery. private consumption. kuroda said yesterday that 2016 was a tough year, but a headwind is turning into a tailwind. the japanese economy will take a big step forward to overcome deflation in 2017. he would have a positive however, thereh, is increasing optimism for the japanese economy. rishaad: thank you very much. looking ahead -- has singapore's commodity link defunct could be the canary in the coal mine in the coming year. and putting the brakes on china's growth.
8:14 pm
8:15 pm
8:16 pm
rishaad: australian retailer will work jumping in sydney appeared of is after it agreed to sell its natural gas stations the bp. will take on some 500 woolworth's branded outlets. the funds will show up woolworth's balance sheet in its fight to regain market share in the supermarket business. struggle deepening. six aircrafts to emirates will be shifted to a year later. airier this month, iran came to [indiscernible] latest china beige book reports shows economic in the
8:17 pm
fourth quarter with gains across all industries. andnue, profit, profits jobs were on the rise. new orders have been pretty much stable. growth metrics gained virtually across the board. yu just getting on thisan -- just getting on this yuan. let's discuss that. fortrajectory has been gradual weakness. it's only natural. indies. i think the cdc is trying to stabilize the army against the dollar as well. nb against the dollar as well.
8:18 pm
it is trying to manage expectations amongst chinese households and incorporates. you don't have this very mechanical and one-sided depreciation expectations. we do not expected to break seven this year. but next year, it is a different story. rishaad: this year held up better than last year. it bore up well. but next year, a little bit of weakness. maybe 6.7% growth. >> is right. rishaad: right. >> this year, we started with a very weak beginning and the government was pumping more stimulus through fiscal
8:19 pm
infrastructure and property also further than expected. so those to help. next year, we expect property will weaken a bit more. the government will continue to support growth, but i think they understand that you don't really 6.7% to support employment. i think they are also a bit more comfortable. there's also more uncertainty in the global economy ahead. so we are -- the government will set the target around 6.5%. rishaad: but a range perhaps, not an absolute target as they have had in the past. '>> right. so next year perhaps around a 6.7 -- maybe around 6.5%. ofhaad: what are the limits the fiscal stimulus that china can pump in? they must be nearby now.
8:20 pm
>> from a fiscal and financing pointed view, there is not them its limit. the government dead dad, including local government debt and platform debt are still reasonably manager opal -- manageable. rishaad: some people put it as high as 200% of gdp. 200% ofll debt, yes, is gdp. the government has been using cause i fiscal channels, meaning using corporate balance sheets and the china development bank, policy banks. from a develop an point of view, there is it that much of a limit right now or in the next couple of years. but increasingly, the limit is what are the -- project. dothink the most they can for a year is probably 2% -- two percentage points extra. the other story we've been reporting is that capital
8:21 pm
flows -- you know, how much money has been leaving the coffers as well. they tightened up capital controls. do you see that thing loosened out any point? >> if market expectations come down, they could loosen that. i think the general direction from further opening up has not changed. recently, the pbc has announced open further to domestic bond market to make it easier, in terms of tax policies and so on and so forth. becausehe moment, expectation depreciation is a strong, domestic outflow pressure is very strong. so they have to tighten. tighteningt kind of in monetary conditions, they could cut requirements. they could continue to inject more money to open market operations to make sure domestic liquidity is adequate.
8:22 pm
however, at the moment, the face to challenges. one is that the u.s. is raising rates. so international rates are for rising -- are rising. their the thing is they are concerned about domestic housing bubbles. you have the debt market bubble. in the last couple of weeks, they are tried to deliver on that front. we've seen a few episodes going on there. rishaad: thank you so much for joining us. what we've got coming up -- singapore's long shadow. plus, a look at the market open in hong kong and shanghai. first trading day of the week. seven minutes from now.
8:23 pm
8:24 pm
singapore's string of
8:25 pm
default in 2016 could be a bellwether for distress across asia. more companies are expected to face debt problems as the year unfolds. why the dive picture for 2017? we had five companies default thing in the island state. thismillion worth of bonds year. we see the dragnet writing next downturnhe commodities waves. billion in dollar bonds are maturing next year across the region. that's 26% more than this year. that is on the backdrop of rising interest rates. specificomes to countries, indonesia is likely
8:26 pm
to see restructuring. and china, more distress likely. policymakers not likely to help out companies and let them fail as they seek to control financial risk in the economy. rishaad: it is not looking for -- looking pretty for singapore. what does it mean -- i mean, you hinted about the water region. >> they have the export slump to continuing desk to contend with. authorities certainly have a lot to wrangle with. rishaad: thank you very much. foring at the prospects singapore in 2017. a quick look at the markets. we look at he is making his
8:27 pm
wishes. president obama pays his respects to the dead.
8:28 pm
8:29 pm
>> toshiba is plunging again after forecasting a loss of its u.s. nuclear units in the billions of dollars. it follows acquisition of a power system corporation last year. there have been arguments over new nuclear projects in the u.s. , which they did behind schedule and over budget. toshiba has lost a third of its value since markets returned from the holiday break. are yet to determine the final write-down amount, but it could be as much as billions of dollars that may affect our earnings. we apologize to all of our stakeholders on this matter and we ask you for your continued support. zinc producergest
8:30 pm
intends to cut output next year. they will reduce supply by 500 tons in january. zinc has rallied 60% this year. stanley has likely force them debt -- due to the lack of material. a lawsuit says they have confidential data and financial information related to india's biggest conglomerate. and the former argentinian president has been charged with corruption over construction contracts. the judge has also frozen her .ssets
8:31 pm
she has been prosecuted for manipulating currency exchange futures markets. global news 24 hours a day, andred by 2600 journalists analysts in more than 150 countries. rishaad: let's get straight to the open for hong kong and shanghai markets. david: the currency offshore, the nimby -- the renminbi playing catch-up. a little bit of u.n. strength coming through. perhaps it comes down to a lot it is thinre --
8:32 pm
trade as well. a lot of this will get exacerbated. have a look at what happened across aixa be markets are now. as you expect, not much happening or to write home about. a lot of these markets are flat. markets, as we open things up, nothing out of the ordinary moves between 4.3%. have a look at manila, up for a second straight day. the kospi index, apart from the prospect of higher rates ahead, in the u.s., someone coming out asking what are the top trades in the first few weeks of 2017. am also applying several risks involved. years and look at the other shanghai.
8:33 pm
you have this renewed rally across commodity markets. so everything from roberta copper to aluminum to whatever the contract as you are looking at right now. chances are, you are going to be looking at games. anywhere from 2% to 4%. that is how things break down along the shanghai composite. gas, take a look at cold. coal. that was a very interesting story that played out a few months ago when they basically reduce the number of operating dates, if you will, that these goals can operate in china that strikelets a start -- a in prices. that is something to watch as we make our way into 2017.
8:34 pm
a set from that, there are some trading debuts. a lot of the stocks are trading for the first time. thanks. let's get the ocean's abe visited pearl harbor. he is the first sitting japanese leader to tour the site of the attack that through the u.s. into world war ii. paid his respects for did not apologize for the strike. president obama, people promisede world, as are japan, i offer my sincere condolences to the souls who lost their lives here as well as to those men and women whose lives were taken by a war. and also to the souls of the countless people who became victims of the war. rishaad: let's get more from brian fowler.
8:35 pm
tell us about the significance of this visit and how it has been received for you are in japan. brian: it is quite significant. time.s the first a is the first time since prime minister has dissipated in a ceremony like that when it pearl harbor. it is part of a pattern we've shownin which mr. abe has global leadership. becomes on the heel of him hising president putin in own hometown. that was a bit risky, considering that the j seven has imposed sanctions on russia. one of the real messages of this visit is to send a signal to the next u.s. administration that primus trade it -- prime minister abe is someone with
8:36 pm
whom the u.s. should collaborate. rishaad: what did he actually say? what precisely did he say today? >> it was quite a beautiful speech. it was 17 minutes long, fairly long. and it was formal, read goal. be good say it was elegant. as we noted earlier in the show, he expressed his sincere condolences, which is a very formal way of expressing sadness in japan. he had a couple of phrases in english that stood out a little bit. he said the brave respect the brave. phrase thed the power of reconciliation. my think that is a message he wanted to deliver. on the one hand, he was reciprocating for obama's visit to hiroshima. again, he was looking forward to 2017, trying to emphasize some of these messages that will be important as he starts to work
8:37 pm
with the new administration. he talked a lot about the importance of tolerance. i think that has some significance for him. chording donald trump, as we know. what about when it comes to broader u.s.-japan ties? a i think prime minister of -- prime minister abe thinks that it would. any recent survey, some japanese fear that the jump administration will have a negative impact on japan-u.s. ties. is doing hisr abe best to push back on that, to present trump as summative they can be trusted, that japan can work with. he obviously had the first meeting with mr. trump following the victory in the election.
8:38 pm
and he is going to meet again posted not gratian. so he's doing his best to work with mr. drum, to engage, and to provide a sense that there is stability and there is optimism. rishaad: thank you very much. now let's take a look at what else is going on. the u.s. has charged three-alledge +'s hackers. one of the accused have been arrested in hong kong. >> and you thought profiting from insider information was bad enough, right? now it's a case of stealing insider information and then problematic -- profiting off of that. three chinese hackers scored about $4 million in illegal profits by raking into corporate law firms here in new york. at least seven law firms were involved. at least three hacks were
8:39 pm
detailed. one involved in, the chipmaker. another is a biotech company. and then there is pitney bowes, the business services company. hackers bought shares in the chipmaker alcara. hackedthat, they had into the law firm. million as made $1.4 the share price rose on media reports. and then sold their shares before the deal was announced. bought shares in the e-commerce site. they made $800,000. as for how they did it, the security and exchange commission say there were similar tactics in all three. they put in malware on a server that then let them access emails .nd executives
8:40 pm
they got the data and looked over for whatever was useful for their dealings that they could then trade-off of. one in 2014, they took 10 gigabytes of confidential data. it turns out they weren't always successful. in 16-month period, the men allegedly tried more than 100 thousand times to break into a law firm. it was not successful. but they did us -- did police score $4 million. they have been identified and charged with hacking as well as insider trading. one man has only been arrested in hong kong. he is expecting extradition to the united states. rishaad: 2016 could be the year that virtual reality turned a corner. kaylynn: 2016 may be rumored as
8:41 pm
a turning point for virtual reality technology. two years after a surprise to billion-dollar acquisition by facebook, oculus released the headset rift. -- thelling this the in best new devices the iphone. >> i think this is one of our strongest launch lineups. the site was quickly started as an issue. soon after, htc debuted in even dancewear >>. we built this in partnership with val, who also owns steam. customers,5 million really hard-core gamers, people that already have that high-end
8:42 pm
pc were talking about. they will ashley use it without doing any kind of upgrade. vr hardware could generate sales of about $2.3 billion in 2016. rounding out the 2016 launches, sony's playstation vr might be the bells -- the best built-in market advantage. and $400, it is cheaper than the others. instead of a pc, it can run on a ps4. one thing all three products have in common, they are all still waiting for market demand to catch up. we still have yet to develop what the vocabulary is to describe it or the syntax and grammar. we are all trying to design that environment. the idea that america's not so much linear but it is all around you. it creates a holder experience. and without a breakout hit,
8:43 pm
industry heavyweights are still in weight-and-c mode. -and-see mode. >> in the end, it is about providing consumers that compelling experience that brings a particular form of technology to life. and i don't believe we've seen that yet through vr. >> while 2016 may not have been the year that vr took off, there is always hope for next year. of $4.8xpecting sales billion in 2017. as the yearing up, draws to a close and with the trump era about to begin, where is a black croc going with their beds.
8:44 pm
8:45 pm
rishaad: the world's biggest
8:46 pm
money managers says it welcomes donald trump's plans to move it to fiscal stimulus in the form of u.s. corporate taxes. we talked about the expectations for the incoming president. supporters of donald trump globally are right now projecting their greatest hopes into the future and the tractors are projecting their greatest fears. and there is an interplay between those fears and those hopes. but surprisingly, since we have arrived, there are more people who are hopeful about the pivot to fiscal, which blackrock has been calling for. the lessening of the reliance on monetary policies globally. so there's brought optimism. does the optimism surprise you? new yorkre to sample
8:47 pm
city or san francisco, and would not come to a similar point of view. >> no, you wouldn't. i find it surprising that international investors in particular and those investors abroad looking at the united states seem willing to be supporters or give their incoming administration the benefit of the doubt with regard to new changes. that is not what is being felt at home. : i heard the same thing in saudi arabia three weeks ago. i heard the same thing in mexico city with carlos slim. is a difference between optimism and expectation. when you meet with sovereign law funds, when you meet with other sovereign institutions, what kind of expectations to they have for the performance of the global economy and financial markets? >> there is a broad expectation and realization that, in actual fact, the overreliance -- i think we have to go back 10
8:48 pm
months, where we were in the beginning of the year. we were concerned about global deflation. we were concerned about a messy devaluation of the chinese are nimby. were going one direction -- down. that is not where we are at today. we seem to be romancing the idea of a deflationary environment -- reflationary environment. i think the certainty, the increased certainty in the united states is particularly welcome. >>l so these institutions are beginning to invest with an anticipation that global growth is going to pick up and we will see returns favoring equities over bonds? >> i will put it differently. investors came into the over there a lot of cash. there were very scared at the beginning of the year. there was a story this morning
8:49 pm
that donald trump sold all of -- inock in the july july. a lot of investors are underinvested pin they have way too much cash and this move has been relatively painful and unexpected. getting some news coming through. year on year, for the full year, gdp on the way up, 6.2%. 6.9% in the last year. they do see 2016 overall inflation cpi at 4.7%. coming up, a falling currency, frazzled divide -- fragile divide.
8:50 pm
8:51 pm
8:52 pm
is headinge yuan towards its biggest drop in a decade. ♪ the week yuan would have an impact on e-commerce sales and will likely boost all over -- overall e-commerce sales in the country. consciouse are more about how they allocate their shopping budget. and they may look for more bargains online.
8:53 pm
china shoppers can now buy these products online. we've seen tons of investments overseas, in hotels specifically. and will continue in 2018. there's two types of key investments that they make. [indiscernible] it generates steady profits. [indiscernible] the second type of investment is looking at global operators. on thee capitalizing fact that they have this high cash flow business, from management franchise fees, that whether through business cycles. that is what china's looking for. strong capital outflow from china to hong kong. -- inms of the panned terms of demand, this is how
8:54 pm
they sell one of them. next year, we may also see demand coming from china to hong kong. [indiscernible] fall against the u.s. dollar. billion u.s. $43 move to theng to outlook of shares in hong kong. i was very surprised. >> it had about $25 billion of shares issued to this year. new york only had $14 billion. yes, that was surprising. the hong kong has the advantage of being home to a lot of chinese government listings. and these are big, big companies that raise a lot of money.
8:55 pm
so that's the advantage hong kong always has. they are well stated though, aren't they? hong kong doesn't get the excitement, they don't get the chinese tech companies they really want. the deal class type structure is where owners have a small stake in the company yet control the way it is run. three-year track record for small companies. so that rules out a lot of tech firms. rishaad: is that the chief reason they don't list here? not a bigre is investor base for tech. that is the problem for hong kong. they don't have a huge investor base for technology. rishaad: everybody's way for
8:56 pm
this one. we could be the was biggest ipo, the biggest ipo ever. saudi aramco. they are going around looking at the various options they have and they haven't ruled out hong kong. they haven't ruled out tokyo even. it's hard to see japan getting it. but who knows. a lot of foreign companies have left japan in recent years. hong kong has a better case to be made. you can raise a lot of money in hong kong. the trouble for hong kong is a lot of foreign companies haven't been great. rishaad: i'm looking at samsonite. >> yeah. so this is the problem for hong kong. it can get the big chinese company and it can get big investors from china, which are thecornerstone investors,
8:57 pm
post listing liquidy, they just don't have it. yep, samsonite has moved up. looking at japan's corporate giants on the roof for they are on.
8:58 pm
8:59 pm
♪ rishaad: almost 10:00 a.m. in singapore, and 9:00 in new york city. i am rishaad salamat from our bloomberg headquarters in hong kong. this is "bloomberg markets: asia." ♪ meltdown,ight, toshiba losing a third of its value after admitting u.s. losses could be in the billions of dollars. industrial output in japan rose the most in five months with exports lifted by the yen. chinaate survey shows
9:00 pm
finishing 2016 strongly with improvement in all areas. the latest market to join us in the asia-pacific at the moment has their trading day starts. and indeed, a mixed bag so far, david. david: we are winding up the year. if bodesinteresting, well for southeast asia markets. markets last few weeks have been sold off, a lot of money coming out, an old story, higher rates in the u.s. leading to outflows. , indonesiase markets down nine straight days into last friday, they have started to pick up, point 8%, the third straight day of gains, second straight day in the philippines. the currencies have weakened
9:01 pm
substantially, and as we move into the new year, perhaps windowdressing, if you will. a lot of markets pushing lower and lower. when you look at other markets across the region, a case where japan, which has been bought up substantially, you are seeing a pause, even as the yen weakens. , now pushing to its highest level since august 2015. if you look at the historical chart going back to 2000, this move is like a development , so rightound 15% smack in the sweet spot, 7.5% year to date for australia. a lot of it has to do with the recent commodity rally. movers, thereig we go, resolute mining about the big gainers. vietnam opens up, let's see the
9:02 pm
latest gdp numbers, now, what are we looking at here? gas down 2% after touching a two-year high in the new york session. the weather forecasts, stuffally the u.s., cold coming in quite hard. chicago with a low for january night, could change, will change, 10 degrees fahrenheit, yes, very cold. west texas pulling back after a run the last 3-4 days, and gold above 1140, but near a 11-month low for gold prices. as you would expect, % 250% across0 the markets. rishaad: thanks.
9:03 pm
right, let's get to first word news headlines. prime minister shinzo abe be has visited pearl harbor, the first japanese leader to to the site. abe did not apologize, but his visit matched president obama's trip to hiroshima earlier in the year. the u.s. says it does not object to china sending warships past taiwan. carrier and five other vessels sailed in the area. the u.s. recognizes lawful use of international waters and is saying freedom of navigation rights apply to china, america, and other nations. tesla production set to begin in the summer and may bring 1400 jobs to the buffalo area, the
9:04 pm
total investment is not known, but panasonic says it is putting more than $250 million in the project as tesla expands its manufacturing base, and elon musk is on donald trump's advisory team. died, aged she suffered a massive heart attack on a flight from london to los angeles last week. she appeared in films including the blues brothers, when harry met sally, and hannah and her sisters. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: well, toshiba is enduring another tough day, it's a stock falling by the limit in tokyo after the company forecast a losses at its american unit that could be in the billions of dollars.
9:05 pm
indeed, toshiba has lost a third of its value. is leavingut what toshiba swimming in the red? it is there an investment in nuclear and the hope that it would have boomed. they invested in westinghouse when they bought it in 2006 with the hopes of tripling its profit of its nuclear business over 10 years. today, fukushima and 2000 11, and the business is not doing so well. they put their hopes on four nuclear reactors to be built in the united states when they incurred the costs related to overruns, they decided to buy the company in 2015 that was building the reactors. that purchase was a way to get those reactors to be built on schedule, but also to get rid of some of those costs for the
9:06 pm
parent of that nuclear construction company. was supposed to take the overruns, but it is looking like toshiba may have to bear of those charges instead, and that's why they might have to take billions of dollars worth of charges over the next few months and decide exactly how much it will be. is,aad: well, the thing what does a charge this big mean for toshiba's balance sheet? can they whether this? the question all investors are asking right now. there is a big difference between $1 billion compared to $4.3 billion, which is what the national broadcaster nhk has forecasted for them. a $1 billion write-down, they might be able to use the cash on hand and be
9:07 pm
fine. if they have to take the full $4.3 billion or higher, then they may have to go to the banks to get financing and dilute shares if they have to give priority equity to the bank to secure that financing. it will be very hard for them, and they might have to restructure some of their nuclear business in the future. rishaad: indeed, what happens to the nuclear and of this company? >> exactly. and looking to export their nuclear reactor to india and china. as well as other markets around the world that are building reactors, but what this write-down does is have a double pronged attack on their nuclear business. on the one hand, it ruins their credibility. the company in india over chinese government is looking to purchase a nuclear reactor and
9:08 pm
you look at the one built by westinghouse, and see in the united states there are these write-downs, and they are putting this incredible and paramedic charged on the company, then maybe they choose a different company to build those reactors that doesn't have this in or and scandals year after year. it takes away a lot of the financing they have. rishaad: that's the point i wanted to get to, they decide they want to go somewhere else. who is poised to benefit as a consequence? >> now of course china has been trying to build their own nuclear reactor technology. they are currently constructing their first homegrown designed it to beand they tout cheaper than westinghouse's ap 1000, so china is one winner. another winner is russia. russia has a state own nuclear power company, and they are exporting to countries
9:09 pm
like india, because not only is the technology built on time and budget, but also gets the backing and the financing of the russian government. rishaad: thank you very much indeed. joining us in tokyo. now let's move to economic to economic the paid out japan, factory output numbers were slightly below expectations, but not all bad rosalind:. if you look at how much they 1.5%,isen, an increase of which is the most in five months, and even though it missed expectations of an increase of .7%. an increase of 4.6% year on year is the biggest rise in almost two years, so that is doing pretty well been in terms of factory output.
9:10 pm
economic a spansion in the fourth quarter, which was expected, 2% in december, 2.2% in january, they jumped 7.4% year on year, exports to china rising, so exports doing strongly, partly helped by the weaker yen. donald trump being elected as incoming president of the u.s. giving the dollar a boost their and affecting the yen. generally speaking, bloomberg intelligence sees export growth accelerating to 3.2% next year. rishaad: you look at the economic data, and it's all curious, isn't it? rosalind: there's a lot of mixed data at a japan this week. boj headline the figure saw an increase of 0.5%, but the boj's key number, it
9:11 pm
felt by 0.4%. jobless rate ticking up a little 3.1% from 3%, so the job market remaining pretty tight. there is optimism because consumer sentiment is improving showing optimism in the future, and there is some private consumption remaining resilient. overall, a sense of positivity about what the japanese economy can be doing in the year ahead. governor kuroda saying this year was a tough year, but the headwind is turning into a tailwind, and he is convinced the economy will take a big step forward in 2017, so this year blip,ll last month is a maybe one of the signs of an upturn in the months ahead. rishaad: yet, well, maybe that's it, maybe it can break
9:12 pm
confidence that becomes a self-fulfilling prophecy. right, the stratospheric australian wine with a price tag to match. westpac saying australia's prospects remain heavily dependent on offshore. ♪
9:13 pm
9:14 pm
quick check of the latest business flash headlines. woolworths has agreed to sell bp, creatingons to one of australia's biggest fuel and convenience networks. that will help to shore up the
9:15 pm
balance sheet and help in their fight to regain market share when it comes to the supermarket is this. the latest china beige book reports improvement in the fourth quarter with gains across all industries. jobs, androfits, capital expenditures rose from the first quarter, while in new orders stable. growth metrics in the chinese economy gained across the board with on your improvement described as "dramatic." delta and boeing have canceled a long-standing contract for the 787 dream later placed in 2005 by northwest airlines and eight model.87 8 specific details of the cancellation hasn't been released. of newll take possession jets 302019. a quick look at the aussie six-monthiding to a
9:16 pm
low because the sovereign yield curve continues to steepen. what does this tell us? head of market strategy at westpac, and indeed, robert, what have we got here? >> it has been an interesting end to the year from an aussie dollar point of view, fairly quiet when you look at the aussie dollar from a bigger picture point of view, most of the year around 74-75, weakening in the last couple of the weeks to more or less where we started. trump, tariff,on trade, and what policy we see developing from a china pointed view, and it is that factor that has seen the australian dollar underperform despite ongoing strength and that is a key point. i cdo strain dollar is cheap at these levels, but there is a risk early next year that we
9:17 pm
continue to weaken. rishaad: robert, what about these topics you have outlined in your latest report? look, from our point of view, there are factors which we need to watch closely next year. the markets are probably underestimating the strength and commodity markets. we have seen supply shocks and a number of key markets, crude, iron ore, and that should continue to see ongoing strength and commodity markets through the first half of next year. second area from our point of view is china, the market has been too pessimistic on the near-term risks for china. theee ongoing strength in chinese economy through next year, targeting 6.7% for much of the year, and i think that is something that it should continue to support the likes of
9:18 pm
the australian dollar. third though is the offshore risks. we are forecasting two rate hikes in the u.s., and there is a risk we see more, and we finish with a strong u.s. dollar, and that is potentially the factor as we move through the first quarter and finally, we have a very heavy run of european policy, q1, q2 next year, and that is something that should continue to depress the euro. i see it as possible that we move down towards and through parity for support asked year. rishaad: that is one thing we can look forward to. generally speaking apart from possible black swan events that we could be seeing in europe, elections in germany and france, but the data is getting better, are getting better when you look at what is going on in europe. optimistic,g quite
9:19 pm
does it mean that we can see perhaps a global economy getting back on its feet? certainly this year has marked a, well, two speed globe? point. is a very good we can see that continue. when you look at the risk of vince the global economy has had to deal with this year, the china devaluation early in the up to u.s.t, the run elections, and more recently the italian referendum as well, a key point when you step back and look at the global economy, we started the week, year rather very soft, and since then we have incrementally seen ongoing signs of strength. we probably finish this year expected.han i tend to think that story continues through next year, but i tend to think that to speed economy probably does continue. europe has its issues with dutch elections, french elections, and
9:20 pm
q3, german elections as well. our sense is that we see a modest slowing in the european down to japan carries on with the slow modest growth, .6%, .7%. economy, a modest strengthening, global growth carried through 2017. rishaad: of course we do have a european central bank continuing stimulus, and japan too. some day, ando in has surely suffered from the law of diminishing returns. >> i tend to agree with that. we are probably already seeing signs from the boj view in terms of slowing their asset purchase program. if you analyze what they have last three months,
9:21 pm
we have stepped down from 80 trillion will to 60 trillion tor, the slowest pace back late 2014, so we are beginning to see a soft taper from the bank of japan, and you probably could argue, even though the ecb extended its asset purchase program, it has stepped it down there as well. when central banks are clearly doing is anchoring the front end of their curves and as yield spreads widen compared to the u.s., that guarantees stronger u.s. dollar first quarter. so again, would not be surprised to see parity first quarter, dollar-yen up to 120. that is certainly a possibility through the first quarter of next year, driven by those relative interest rate differentials. very muchhank you indeed, joining us they are from westpac.
9:22 pm
right, up next, the united states posting a suspected chinese hacker for trading on information stolen from wall street law firms. the details just ahead from new york. ♪
9:23 pm
9:24 pm
rishaad: united states has charged three of alleged chinese hackers with breaking into servers of top law firms in new york and stealing and information. they have been arrested in hong kong. you thought profiting from insider information was bad enough, right? now it is a case of stealing insider information and profiting off that. three chinese hackers scored $4 million in illegal profits tiebreaking into law firms in new york. seven law firms were involved. they were not identified in a
9:25 pm
complaint unsealed today, but three hacks, one involving intel, and another is a biotech company, then pitney bowes. boughttel, hackers shares in the chipmaker altera, but before that, they had hacked into the law firm that until had hired for acquisition services. one point $4 made million as share prices sold, but sold their shares before the deal was announced. pitney bowes, they bought shares in a site and made $800,000. secor how they did it, the says there were similar tactics for all three. the hackers obtain the login and password of an employee, then put malware on a server that let them access emails of executives within that company, then got
9:26 pm
the data and looked over it for what ever was useful for their dealings that they could trade off. one day, they took 10 gigabytes of confidential data. it turns out they were not always successful. the men of allegedly tried more than 100,000 times to break into five law forms. that was not successful, but they did score at least $4 million, but now identified, charged with hacking and insider trading, and one man has a ready been arrested in hong kong, facing extradition to the united states. well, up next, japan's prime minister visiting pearl harbor and offering condolences to the victim of war. that of course, and the rest of the day stories as the japanese equity market showing some flatness, if you will, up a tad,
9:27 pm
19,000 407 is the dow in new york, edged up to a whisker below that, what, 20,000 level. there we go, asx in australia, gain strong, 1% to the upside. ♪
9:28 pm
9:29 pm
kong is 10:29 a.m. in hong . i am sophie kamaruddin. plunging after forecasting a loss at its u.s. nuclear unit. the write-down follows the acquisition of a power systems operator by its westinghouse unit. projects over budget involved. yet to determine the final write-down amount, but could be as much as billions of dollars and may affect our earnings. we apologize to all of our
9:30 pm
stakeholders on this matter and i would like to ask your continued support. china's biggest zinc producer plans to cut output. reduce supplies by about 5000 tons in january and february will be adjusted to market conditions. zinc has rallied 50% amid a global shortage. morgan stanley has flagged forced production cuts dude to a lack of material. charged with corruption over construction contracts, a judge has frozen assets, which are estimated at $640 million. she is being prosecuted for allegedly manipulating currency exchange futures markets are at global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: right, you are watching "bloomberg markets: asia".
9:31 pm
. am rishaad salamat it is that time of the day when japanese traders leave their desks and have a lunch. the day is flat, at least the nikkei. what else is going on? david: those traders at work --ay looking at falla him's these volumes, you understand the markets are wrapping up their year. will be holding on to those gains. austria pushing to the highest level in 17 months. this market since 2000 has been whipsawed, given wild swings in commodity prices. we are year to date for australia 7.5%. jakarta one point 7% after nine straight days of declines, three s of gains.y
9:32 pm
philippines on the second straight day of gains. this is out of the industry website from china, talking about fuel prices. essentially says that starting tomorrow, china will be raising fuel prices, gasoline and diesel, between 90 renminbi and 95 renminbi per ton, up about 1%. a few trading debuts on the mainland, the same for the last few months, so looking at how the stocks are trading. i were not get into the details on these stocks, it is the same story. there we go. or did percent, shanghai, shenzhen.
9:33 pm
,he first one, that is a baker makes cakes and that sort of thing. now, let me wrap things up with a look at one of our big stories this morning that sophie was just talking about, toshiba. six-month chart, your drop, this is christmas. if you measure from here, a 33% wipeout in market cap, so where are we right now? if you fall again by limit, that takes the value to $8 billion or $9 billion. the 200 day moving average is at about 304. we have had at least five or six haveside analysts reinforced their call on the stock. buy, mostlya overweight. i was doing some simple math,
9:34 pm
the street estimate, a simple , so if you ¥433 think the bad news has been priced in, although we don't know how large the write-down will be, that is about a 40% return potential if you believe what the street says. rishaad: thank you very much indeed for that. right, let's focus on japan's ailing corporate giants, but smaller businesses have been on -- showing positive signs for the future. what is it about these deals that makes you feel that perhaps they are on the right track? there has been a lot of small-and medium-sized deals out of japan this year. last week, there were three that theyhlighted, but
9:35 pm
are doing a smart thing in doing deals with overseas companies. in this case, japanese companies are buying overseas companies to move sideways, horizontal integration, and so what we are seeing is that these are japanese companies deciding that there are certain areas they want to move into and may be they are not there yet, but by buying foreign companies with specialties in those areas, they can leverage what they do themselves and build up some kind of specialty in the future. sign,k that is a positive because it means they are looking to the future and not sitting on successes of the past. rishaad: is there a risk that these acquisitions could go wrong? what is the probability? not want to get you a probability percentage, but there is a real chance some of these deals could go wrong. so far, the deals are under $1
9:36 pm
billion. tdk did 141 $.3 billion. my concern there is that it is a lot of cash and eat into their cash pile up by half, and what they are buying is an unprofitable company. if you are engineering the financials correctly, yes there is still down side, but the other risk is that they don't do deals. they sit where they are and coast along their own given technology and ip and don't stretch themselves further, and that is a bigger risk than the fact that some of these deals may go badly. rishaad: right, well, what should we be looking out for in the new year? can they keep up the pace, that is the idea that i think you are alluding to, and a few doubts surrounding that? >> you know what, there are deals out there to be done from japanese buyers for foreign targets.
9:37 pm
i think they will continue into next year, because the deals are not very large in size. size deals,e small financially easy to do such a risk,but not as much easier for the board to pass a resolution for $300 million than $3 billion, so that kind of deal size makes them palatable him a but allows companies to find good targets, so i think there will be more deals next year in 2017 from the japanese corporate buyers and around the region, but we should look out for more deals to happen in 2017. let's stayce one, with all things japanese with shinzo abe visiting pearl harbor, the first japanese of the to tour the site attack bedroom drew the united states and world war ii. he paid his respects, but did not apologize for the attack. obama, the people
9:38 pm
of the united states of america and people around the world, as the prime minister of japan, i offer my condolences to the souls of those who have lost their lives here, and to the spirits of the brave men and women whose lives were taken by war. and also to the soles of the countless people who became victims of the war. rishaad: there is a lot of significant surrounding this visit. brian fowler is in tokyo for us. give us an idea of how this is old being received there in tokyo for instance. >> it is mostly being received in a positive way. percent of japanese surveyed ahead of the visit said they were in favor of him paying this visit to pearl harbor, and the media coverage so far has been very positive and i think the would like you to go. there have been a couple of
9:39 pm
criticisms, the head of japan's opposition democratic party japan criticized him a for talking about these while also ensuring that japan's defense spending is set to rise for the fifth straight year next year, so that was a criticism, and then we have the foreign ministry of china coming out and saying that japan can't really hope to put aside world war ii visit pearl. abe harbor, but rather a reconciliation with the rest of asia. thecan see in the criticism significance of the visit. coming out one the global stage yet again after hosting president vladimir putin, and he is making this move and solidifying his case as the leader in asia that is closest to the nine states, the leader that donald trump when he takes office should seek to engage and collaborate with. so let's get to the
9:40 pm
nitty-gritty. what did he say today? >> well, i don't know if it is so much what he said as the way he set it. it was an informal speech, 17 minutes long, and quite long by the standards of these things. the wording he used was formal, respectful, kind of like the sort of words we would see coming out of the imperial household agency really. toery high level that sought emphasize the need for tolerance. he used a few english phrases, and cited an american writer at one point. where he got that quote, the brave respect the brave, and he said that part in english. the power ofut reconciliation in english, that phrase, so a lot of his message
9:41 pm
which seeking to sue some of the pain left over from the war, but talk about what is ahead and put a positive spin on what is going forward and to hope to kind of get his relationship with the new administration often the right direction. dohaad: right, so, where u.s. and japan ties go from here? the ties between the two nations are actually pretty good. a have been good under president obama. he has worked closely with prime minister abe. things were going well in terms of trade, japan was excited about the tpp deal and thought that would bring the two nations closer together. there is a lot of doubt going forward. donald trump has been dismissive of tpp, saying they will not support that, which is a great concern to japan, which is why
9:42 pm
japanese surveyed, 68%, said they were worried the trumpet ministration would harm japan-u.s. relations, so there are doubts going forward. prime minister abe is doing the right thing by trying to reach out. he met with mr. trump right after the election, the first global leader to do so, and he has made arrangements to meet with mr. trump after the inauguration, and in his public comments, everything he is saying is positive, trying to present donald trump is someone he can work with. i guess the big question is whether donald trump will take that up and reciprocate on his own. rishaad: thank you very much indeed. brian fowler for us in tokyo. health, wealth, and happiness, howear from fosun meditation and tai chi help him to stay on top. ♪
9:43 pm
9:44 pm
9:45 pm
rishaad: a quick check on the latest business flash headlines. , and thatuggling struggle seems to be getting worse, deliveries delayed now over the next two years. todover of six aircrafts emirates planned in 2017 shifted to 2019 as demand for four engine aircraft falls. order, butnceled an they still plan to deliver 12 per year. gaining after becoming the most downloaded app, shares , suggesting the wearable health tracker was a popular gift. it was downgraded after cutting sales forecast, but the latest
9:46 pm
success may ease worries about growth. christmas, the best season yet, shipping more than one billion items through the prime fulfillment services and receive record orders for its own alexa devices. sales of echoes speakers based on the software were nine times .ore than 2015 shares gaining more than 14% year to date. to date, a big year for the chinese conglomerate fosun which sold its business to liberty mutual for $3 billion. the company chairman and cofounder guo guangchang spoke to tom mackenzie about ambitions and inspirations. when we say learn from a company, that does not been we copy what they do. have the same we investment philosophy, a
9:47 pm
philosophy we appreciate. following our own strategy step-by-step is enough. there are two things we appreciate about berkshire hathaway, the insurance and value investing and investing discipline. we also differ from them in other ways. on a personal level, i am over 40 years old. he is over 80. on a company level, we are much younger so it is pointless to compare our present with their past. hisre learning from and logic and learning from what he did 30-40 years ago, so fosun follows its own strategy and take things one step at a time. what are your ambitions in the movie making world, particularly as we look at your friend from alibaba and wang jianlin dalian wanda from
9:48 pm
getting involved in the moviemaking business? there in mind it is riskier than insurance. jack ma and wang jianlin are good friends of mine. this is about the growth of consumption in china, including entertainment consumption and the positive outlook for the film industry. as they say, great minds think alike, but we have different approaches when it comes to industry development and cooperation with hollywood. fosun did not acquire hollywood studios. instead, we chose to cooperate with the best teams there. this is a next team with the ability to find the best screenplays and work with the best directors, as well as controlling costs. we are fully confident in our investment. investment in a single film may test plans toun invest in 3-5 films a year to
9:49 pm
spread that risk. projects.eloping more as the market changes, we have more options to invest in the industry. to sum things up, risk control lies within the team, the ability to read the markets and control costs. we are very confident in the team. this investment is not made through our insurance assets, but fire our own capital. this kind of investment is in accordance with our strategy, providing health, wealth, happiness, and family lifestyle solutions. it will have synergy with sports and fashion. the scale of the investment, approach, and team fit with fosun. my friends have their strategies, and there is no need to compare. you are a keen practitioner of tai chi, we have heard. helpoes practicing tai chi you in terms of getting a
9:50 pm
balance, how does it help you when you are running a business of this size and scope, and is that a key challenge for you, trying to get some kind of balance? two things are needed in order to run a global corporation like this. strong and healthy body, no time to adjust for jet like, no time for sleep. my team wants to pack my age and every hour, otherwise it is wasting the wealth of the company, so you need to be in good health. secondly, there are always tough decisions to be made and decisions to be faced, and that will make you anxious, so you must do a good job of managing your emotions. tai chi and meditation keeps me fit psychologically and physically. even though i have a lot of things to do, i can still keep happy. i like the motto, tap dancing to
9:51 pm
work. one of theming up, ipples comest with an eye watering price tag. we take a taste. that is next. ♪
9:52 pm
withad: you are back
9:53 pm
"bloomberg markets: asia". i am rishaad salamat. one of australia's most prestigious wines has earned a perfect score from the critics. what are we talking about here? penfolds grange, it has a six-figure price tag to match it as well. lovers, perhaps the only thing better than a bottle of grange is a big bottle of grange. has justvintage secured another perfect score from critics, so it is being released in the ultimate celebration size. imperialsbottled some previously, and every now and then we have released one at
9:54 pm
auction, and there is pandemonium, so we thought why not to release a few. is an imperial. it holds six leaders of grange. it is expensive as well. i am too scared to pick it up. there are only five of these being made. a bottle of wine like this needs a special serving. imperials are next to impossible this, the imperial service ritual. five of these decanters were made by hand. together, they are priced at $185,000. >> it is a piece of art. than 1800 simple diamond cuts one by one. >> most of the guests were
9:55 pm
content with a selfie with the version that is available for just over $2000. >> the refractions of the light in the crystal and the wine in the crystal is absolutely fantastic. it is so clever the way it is done. and theirthe five decanters, it has buyers already, but is fiercely protecting their identities. 185 thousand dollars there, paul allen with a look at that pricey vintage, the 2012 grange. let's get to the market action and look at the asia-pacific, a day characterized by thin volumes. its tollstmas taking on what is going on here. let's look at that hangs saying pretty much flat.
9:56 pm
shanghai, little or no movement. the straits times index on the way up after a fairly lackluster session there. bit more conviction taking place there. the philippines, indonesia, malaysia, and this, there we go. up by .3%. manila putting in a good spurt there, and even better out of jakarta. ok, i had on "bloomberg markets: asia", and she will be updating you with the big stories of the day. the year thatat has gone and the prospects for the year to come. ♪
9:57 pm
9:58 pm
9:59 pm
10:00 pm
>> from our studios in new york city, this is "charlie rose." charlie: tiger woods is here. he is considered one of golf's greatest players, if not at his best, the best. at age 21, he won his first major tournament at the masters by a record 12 strokes.


info Stream Only

Uploaded by TV Archive on