Transcripts For BLOOMBERG First Up With Angie Lau 20160306

We are seeing the aussie stocks of a third of 1 , extending the gains we saw last week of five Straight Days of gains. The aussie dollar seeing a little bit of weakness. Lets take a look at how new zealand is faring. We are also looking at the opens in japan and korea. The nikkei 225 into the day on friday a third of 1 up. We could be seeing some modest gains. It is going to be a weaker yen today. 113. 81. Note trading in mumbai no trading in mumbai. It is all about china today. China has rejected fears of a hard landing as leaders outland outline their target in the latest fiveyear plan. Rule number one will be development. He acknowledges difficult times ahead. Haidi is in beijing for us. They still have this growth addiction. On the back burner. Development and growth our top priorities. He spoke to the nation and the world on saturday morning. 6. 5 or 7 out that growth target for 2016. 6. 5 is the baseline. A lot of economists saying it is far too high in order for china to be able to go through these supplyside reforms that have been promised. Pi, we expected it is going to be a tough ask to have the target. Money supply increase. That is interesting for beijings tolerance for more leverage. We also had them dropping the trade growth altogether. Last year, they miss the target. Policymakers in beijing to be able to predict and meet these growth target in light of the headwinds. The premier spoke about competitiveness when it comes to private enterprises. Lets take a listen to what he had to say fulls to what he had to say. We will relax restrictions on markets. We will remove the hidden barriers and encourage private companies to increase investment in these fields and participate in these reforms of state owned enterprises. Private companies will enjoy the same treatment afforded to state owned ones. Haidi as you can hear, not much in the way of details. He spoke in very generic terms. We have had reports of 6 million workers being laid off over the next three years alone, but that was not confirmed. We did not get any numbers at all. Ago, thehat 15 years last round of reforms, 28 million workers relate off. Were laid off. It seems like this wrongful be more gentle. What does chinas economy really need . Yvonne may not be as rapid as mr expect in. Policymakers have struck a resolute tone. Haidi chinese policymakers, they like to take any opportunity to rebuff these china bears, including george soros. We heard from the top economic planner. We are certainly able to run chinas economy within a reasonable range. We are fully confident about our prospects. I can say that chinas economy will never suffer a hard landing. Those predictions of a hard landing will surely fail. Haidi there you have it, the rhetoric is there will be no hard landing at any cost. Growth is the top priority. He spoke about what cost it comes that. There are concerns about chinas debt levels. Double theedging to debt ceiling. We could see debt to gdp surged to as much as 260 . Yvonne life in beijing, thank you so much live in beijing, thank you so much. He supports supplyside reforms. Lets talk to stephen engle, taking a closer look. Stephen he just went through it with haidi as well. China has relied on throwing fiscal spending on those railways and bridges. So muche built up overcapacity. They need to work that off. They need to have these supplyside reforms falls to otherwise, if they have this record deficit, there is going to be running the risk of higher debt problems. They will run right back into the same problems they had following the amount of stimulus in 2009. The are hearing is Central Bank Governor supports the states plan to overhaul state owned enterprises. A lot of vested interest against that. Lets see the quote from him. He was cornered in the legislative hallway yesterday afternoon in beijing. He said supplyside Structural Reforms will help fiscal policy to be more effective from a functional point of view. He is supporting supplyside reforms. It is a big venture when you are trying to really go for shortterm growth. Yvonne especially if you have a target of 6. 5 at least. When it comes to the composition of foreign reserves, we are seeing a little bit of transparency. Stephen which has been a big problem. Christine lagarde criticized chinese authorities for their lack of transparency. What they do in their policies and the shifting of policies the Deputy Governor of the pboc, he disclosed the sources of nondollar assets. We know about their dollar holdings. There fx reserves, which you can see halved when told of bit their fx reserves, which you can see have dwindled a little bit. One thing he did not do, he did not reveal the amount of those holdings. Yvonne not complete clarity there. We will get a little bit more on that later today. We have been talking exclusively weineredin ceo jeff about his experiences doing business in china. China is a very challenging market, highly competitive landscape. It has exceeded our expectations. Had amassed 4 million members in english over 10 years. We have seen that substantially grow by virtue of our core offering. Yvonne we will your more from jeff weiner on how linkedin is how linkedin is faring. That is coming up in 25 minutes. An iranian businessman is said to have been sentenced to death after being found guilty of fraud. A court found enough evidence to convict him and two other people of embezzling 2. 7 billion from National Iranian oil. They are ordered to repay a quarter of the money they laundered. Negative Interest Rates around the world may be working, according to the bank of international settlements. Few negative effects. But there may be a Tipping Point if rates go to low. Low. Too of china metals says their opportunities overseas. He is in touch with all the worlds leading miners in the Chinese Companies will continue to look for foreign assets. Metals has interest minmetals has interest abroad. Lets go to paul allen, live in sydney. A lot of publicity given to australias expensive housing market. The issue is over corporate loans. Paul that is right. They expect provisions to rise to 5. 3 billion by 28 teen. That would be the highest 2018. That would be the highest level in nine years. Bad debt charges have been climbing. Profit growth is expected to decline. Against this backdrop, the cost of insuring all of this debt is steadily rising. Despite all of these predictions, shares of all australias big four banks are rising in early trade. Australias financial learning ise are expanding its probe into the other big banks as well. Paul that is right. We brought you to the weve brought you the story on friday that the regulator was taking aims. This is over the bank swap bill rate. It accuses of attempting to manipulate over 44 separate days between 2010 and 2012. It is widening its probe to the other banks as well. Is investigating whether to bring a class action against anz. They deny any wrongdoing. Yvonne not the end of that issue. Coming up next, the target has been cut on warnings of a difficult auto ahead. Ahead. Icult these are the stories making headlines around the world. Korea and the u. S. Are starting their annual military exercises. They will run into the end of april. Says if fighting breaks out, it will be neither can find to the peninsula confined to the peninsula nor traditional. There were 51 people on board an emergency teams say 25 have been rescued so far. Linked to hong kong critical of china has been returned to the city. He went missing in october and has declined to provide any vehicles details about what happened. Another man returned to hong kong on friday. They have been investigated by chinese authorities. Yvonne Deutsche Bank chief economist is joining us live in the studio. A lot of headlines coming through. Was it just business as usual . This commitment to growth and addiction . An addiction . The target was 6. 5 . Thing that came out very strongly this weekend and the last few weeks has been an emphasis on two things. Innovation and overcapacity. The discussion with overcapacity is about shrinking the sector. They promised to take about 10 of capacity out of the steel and coal industries. We have seen discussions of five or 6 Million People losing their jobs. There is a concrete plan to shrink the us so we is. The soes. In order to keep growth of 6. 5 or seven, they will have to shift the source of growth more to the private sector. On friday, xi jinping met with representatives from the private sector and for the first time, we saw this strong discussion from the president of the need for the party to align itself with the private sector to to understand their concerns and to encourage growth. Yvonne this target range they have set, still quite ambitious. At what cost . You are talking about an enormous piling of debt. In the near term, what they promised is fiscal monetary stimulus. This is innovation, encouraging the private sectors where you have some hope that over time, it requires less fiscal monetary stimulus, to the extent you encourage and stimulate the growth of the private sector. A rebalancing the structure of the economy in a way that would give you more Sustainable Growth with less reliance on this fiscal stimulus. Yvonne you talked about cleaning up the zombie enterprises. They will address this proactively and politically. Prudently. Suggests they will be reasonably quick to do this. Some of the targets for taking steel, three years. This is reasonably aggressive. After five or six years of talking about it and not doing very much. There is a balance in the government between people who want to act quickly and people who are more concerned about the social stability. The intention is to move swiftly. Yvonne we are expecting quite a slew of data coming from china this week. Drop in theting a reserves, i guess. We are seeing that rrr cut last week. Truthfully, yes. Reservestations, the will decline. There has been hopeful talk that reserves could be higher and i am not sure where that comes from. The rrr cut is a response to the last couple of months. They need to stabilize the narrow money in china. The Balance Sheet is growing very great. Ace money is shrinking in china. Base money is drinking in china is shrinking in china. Yvonne thank you so much. Yvonne welcome back. The man behind the most expensive piece of lingerie in the world says the diamond industry is under as much press pressure as any other business. Berraated a gem studded for victorias secret. The diamond and jewelry industry goes through a lot of different cycles and it is very much impacted by the economy. Time we arerst going through a global slowdown where there is not one Market Driving it. How has a chinas slowdown affected the industry . A lot more volume is happening at the lower point price points. Where peoplen is are having more difficulties. How much of my holding right now . You are holding 13 million in your hand. But what is the difference between a good longterm investment and one that is not so much . You want to go for the rarest possible jams gems. Nature produces a lot of diamonds, but very few are actually pure. Although this one is smaller, there is a tent of yellow tint of yellow. Go for the 50y caret. To middleyou cater eastern royalty. The marketsalize are changing. People will come back to different Asset Classes. This is one of the best Asset Classes you can invest in. Small, portable, very high value. You make these fantasy bras for victorias secret. Who buys one . A collectors of item. Them. P on this storyre and all the days top headlines 247 atebsite bloomberg. Com asia. The asx 200 looking like this right now. It is up 1 . Extending the gains we saw last week. The aussie dollar has seen some weakness today. Lets take look at new zealand. Coming up, going negative may be good. Why some say the decision to take rates below zero could work. Yvonne we are 30 minutes away from the open of trading in seoul. Youre watching first up. Has rejected fears of a hard landing as leaders outline their targets in the latest fiveyear plan. Unfoundedrns are because beijing still has the tools to maintain reasonable growth. Least 6. 5 growth this year, the slowest pace in a quarter of a century. Chinas Central Bank Governor has voiced his support for the governments plan to overhaul state owned enterprises. It will help fiscal policy be more effective. He said the pbocs monetary policies will also provide room to tackle issues such as overcapacity. Arerong his big four banks facing a rising risk of souring loans. Bad debt provisions are rising to their highest in eight years by 2018. Investors are nervous after slow Profit Growth at three of the nations four largest lenders. Lenders. T this is Bloomberg News. U. S. Stocks ended the best threeweek stretch since 2014 and middle eastern stocks are reaching new highs. The latest on the markets. Shery that positive sentiment in the u. S. Due to that surge in hiring, positive data from manufacturing to construction spending. 7 s p 500 gained more than in the past three weeks. Lets see how that is filtering through into asia. The asx 200 rising more than 1 . New zealand slightly higher. Data ina, february jobs about an hour. The aussie dollar is falling right now after searching surging every single day last week. Surprise, surprise, what is leading the gains in australia . Energy producers just leading the gains. All gaining more than 3 at the moment. Take a look at what oil is doing. Crude crude at 36. 40. It settled at the highest level in two months. Dhabi just entering a bull market. Yvonne thank you. Fears over aected hard landing as leaders outline their targets in the latest fiveyear plan. Rule number one will be development as china aims for at least 6. 5 growth. Joining us now is our economic correspondent. What was the main take away . Go for growth. A hint to the old playbook on display. The feeling is to make sure they hit that target rather than push through painful reforms. To do so, they will use more debt. One of their recurring debates, you have to deal with your debt problem. It looks like that is what they are doing. It is a bit of the old playbook. Yvonne business as usual. What does this mean for growth . Still pretty hard to achieve for china. Fort is a pretty high level any standard. Even if they end the year hitting their 6. 5 target. They still talk that would put millions of people out of jobs, according to some estimates. Compensatingalance that with keeping growth on track . That will be the biggest challenge for the year. Yvonne do you think they will deliver on these plans . I think they will deliver on growth. They will make sure the economy takes over. Whether they can deliver on innovation, it remains to be seen. Yvonne thank you so much. Shanghais most senior Officials Say the citys Property Market is overheated. Residential home prices in chinas top tiered that is have fallen. Shareholders have voted to continue to back the chairman. The family controlled retail conglomerate held after an internal dispute. Newas proposing to form a board of directors giving him the role of ceo. Xiaomi says they have no plans to go public. The company was value. Warty 5 billion in 2014 was valued at 45 billion in 2014. The ipo is not on the agenda for the time being. Sales fell short last year, but they plan to introduce a highend advice. Breakingen a record zor zoor utopia four topia. That with a look at some of the stories making headlines. Rates negative interest at Central Banks good policy. The socalled Central Bank Says it is not clear how long this will be affect the. There has been a lot of criticism from banks and others in the financial industry that the negative rates are negatively impacting money markets, impacting cash. Concern the ecb, the boj policy and some of the policies out elsewhere switzerland has the lowest rate, 75 basis points. We did also has a low rate. There is a new study which validates these rates because they say the current negative rate policies are working. What does this mean . They say banks seek to avoid negative rate by extending maturities are lending to counterparties. Going forward, there are some key uncertainties about how long this can last and the impact on banks. Zero has not proven to be the technically binding lower limit. Rates can go how low can they go . Yvonne this study is pretty timely as we see the ecb meeting this week. The bojing is meeting next week. They need to be vigilant about the prolonged impact of these rates. There is uncertainty as to the and when the market there might be a quote Tipping Point. As you go into negative rate territory, be aware because these negative rate has had a profound impact on Financial Market this year. Linkedin off to a bad start this year. Jeff weiner spoke exclusively with emily chang. Was a surprise, we were not expecting that kind of response. When you look at the core elements of our business, they remain healthy. If you look at north american sales, samestore sales growth has remained consistent. Still theupdates Fastest Growing business we have. Post the launch of our reimagined flagship application on mobile, we have seen an acceleration of engagement is on mobile and death fault on mobile and desktop. Companies who in the history of every hypergrowth company, there comes an Inflection Point where the expectations analysts or investors start to outstrip the fundamentals of the business. The question is how companies execute from that. Emily they thought you were a fast growth company. Instead, you are a Slower Growth company. Jeff i think it is all relative. It is still Pretty Healthy growth. Emily you gave a rousing speech to an employees and you said linkedin is the same company, you are the same team, i am missing ceo i am the same ceo. Doesnt staying a little bit does it staying a little bit . Sting a little bit . Are we still able to create value for customers . You want to make sure our employees are ok. There is a number of us that have worked at companies that have gone through similar periods. The most valuable companies in the world have gone through similar corrections. They never lose sight on their longterm sense of purpose or vision or mission. It is about continuing to execute. Linkedin is a Business Card holder at best, at worst, a Delivery Service for spam. How do you respond to that . Everybody has their opinions. Sameompany is the exact company the day before earnings. Our core Product Offering has never been stronger. We had the best roadmap. We continue to see gains in engagement and that is what it is all about. Emily do you think you can we accelerate growth re accelerate growth . Situationatest impacted morale . Jeff it brings people closer together and the more you go through these kinds of challenges, you meet these challenges headon, and you are successful in recognizing that nothing fundamental has changed, the stronger the team becomes. Yvonne that was jeff weiner talking to emily chang. Our next guest believes china is still overly ambitious on growth. These are the stories making headlines around the world. The firsto found debris has discovered more that may be on the plane. Almost the same spot where he found the debris last july. Piece of debris found on mozambique was sent to australia. Reporting they say the 43yearold woman lived alone in the billing in the building and was thought to have starved to death. In 1971, he devised an application to send messages between computers. Wayundamentally change the people can indicate. Communicate. This is Bloomberg News. Yvonne chinas annual policy meeting has been told growth will be the priority over the next five years. We asked some of the delegates with the priority is for their region. I hope china can build a Prosperous Society by 2020. We should solidify our work on maintaining reform and opening to the challenges fourth by the party. Something we should do in the new normal phase. I hope hong kong can make use of its advantages in carrying out the 13th fiveyear plan. I hope to take this message back to hong kong. Yvonne our next guest says chinas targets are ambitious. Us in thenomics joins studio. They unveiled this record fiscal deficit and lowered their growth target. Win overall . Aimrowth is the overriding for the government. We need growth to make reforms. However, some reforms imply a tradeoff. If you want to cut excess capacity, if you want to do leverage the leverage, the message overall is that growth remains important. If you look at the details of the various reform areas. Yvonne how much progress do you expect out of the supplyside reforms . It does not inspire confidence as to the pace of these reforms. There is also language in the plan on what should be our approach. Proactive but prudence. If you look at the specifics, it is pretty timid compared to the problems there are. We are talking about large numbers of cuts they are planning to make. This will not resolve the problems going forward. We should be quite cautious with regard how much overcapacity will be cut. Yvonne those reforms are going to be cap it. Catepid. China definitely wants to grow. They still have the ammunition to make it work. I am not too worried. A is problem is not so much china in for a hard landing . Are they tackling the problems or are they pushing the problems along the way . Will issues like bad Balance Sheets and lossmaking, will those issues be tackled . Or will they continue . The other issue is how this will affect the yen. Next a relatively Stable Exchange rate, it is changing what it means overtime. At times it will mean relatively stable to the dollar. Progress andk in will depend on the situation. I would say at the moment, given all the anxiety about chinas Exchange Rate, they will not do much to it. Later in the year, if the financial outflows were to moderate, i would think they are more willing to let the Exchange Rate depreciate a bit. Yvonne we could be seeing more pressure on the currency. China did abandon that trade target after missing it last year. Is that showing the uncertainty about the external factors of Global Growth . Sure. This indicates how difficult it is to set targets on things like trade growth. Most governments do not set targets on Economic Growth. They are sticking to the target even though they are giving up targeting some of the underlying components. Thought they were headlines about the property sector as well. They would push for urbanization. For the outlook of the property sector, do you think that could be a little bit more positive than what we have seen recently . It is a plus for real estate construction. The main implication is very much that and this is one of the most positive aspects. China wants to continue rebalancing the pattern of growth by changing the nature of urbanization. If you give those Migrant Workers be access to Public Services and they can send their kids to school, they will take on a more urban lifestyle. Find,articular point, i is a positive one. They are quite committed to making this work. The issue is will the fiscal reforms that give money to the local governments to provide those Public Services, will those fiscal reforms be taken out. We will have to leave it there. Unsavory set of figures. Why a popular japanese fast food chain could be left with a bad taste. Yvonne welcome to the stock exchange. Say heard you japan samestore sales up for the month of february. We are all getting hungry. Ive actually never been, but a pretty popular brand. Their fullyear operating profit came in about half of what they were expecting. Beef eating. H it raised its profit forecast 13 . Since the beginning of 2015, shares have gone down 10. 4 . Yvonne we will be back in an hour to see how these stocks have done. A fiveyear view, china forecasts growth at the slowest paced and 25 years. Australias big four banks face the prospect of bad loans. Ceo said to be quitting when the foxconn deal goes through. , streamingfirst up on mobile and bloomberg. Com. I am yvonne man. China weighing on some currencies exposed to china. Falling, but stocks seeing a lift, up close to 1 . Lets head over to japan for the nikkei 225, pretty much flat on the index, but some weakness on the japanese yen. Not much move in tokyo. Korean yuan seeing some strengthening today. One market we want to mention that is closed, no trading in mumbai. China hasory, rejected fears of a hard landing as leaders outlined their targets and the latest fiveyear plan. Says the aimqiang is 6. 5 growth. He acknowledged difficult times ahead. Good morning. Difficult times ahead, indeed. Talk about global headwinds, challenging trade environment, but the message coming through from beijing is prioritizing growth and development on top of everything else, including supplyside reform, which has disappointed on a lot of analysts and economists coming out of the first session of the National Peoples congress. Going to those targets, gdp, 6. 5 to 7 . Defendedline figure all the way through 22020. , 1. 5 coming at 3 through at the moment. Essentially a blow out that seeming level set, widening fiscal deficit to reach growth target. Expansion of the money growth target as well, allowing for more debt. , hepremier li keqiang talked about opening up markets traditionally dominated sectors to allow for more private companies to come in. Lets take a listen. Restrictions on markets, electricity, telecommunications, transport, the trillium, and public utilities. Will remove bears and encouragend investment. Private companies will enjoy the same treatment afforded to state companies. He also spoke about the supplyside reforms, addressing zombie companies, debt restructuring through bankruptcies, but not a lot of detail in terms of the implementation. The numbers in terms of employment, we heard 6 million workers laid off over three years. The last time we had a round of soe reforms, 28 million workers laid off. No details given about how many people will be out of work this time. There is a 15 billion package to try ands move and a smooth over difficulties of state workers losing their jobs. Some disappointment on the supplyside reforms. Beijing policymakers choosing to prop up shortterm growth rather than put through reforms to rebalance the economy. Yvonne it seems like it will be painful. Policy makers have struck a resolute tone, firing back at people like george soros predicting a hard landing. It is interesting. Plan,untrys top economic they dropped trade growth for 2016. They have not done that before, and it highlights how difficult the Global Conditions are and how little beijing has control over trade volumes and demand, but he also struck out and said the idea of a hard landing in china is an impossibility. Anyone betting on it is doomed to failure be at we have heard that rhetoric from beijing. He did go through some of the challenges they do face in 2016. Lower, industrial prices have fallen, profits are down, fiscal revenue has been reduced. Ino, threats are mounting fiscal and financial fields. Therefore, the development of our country may face a more complicated situation in 2016, and we should absolutely not underestimate the risks. You spoke about what all of this growth comes at the expense of, and Structural Reforms is a big one. The other one is chinas debt situation. We are likely to see that to gdp rise to 260 . This is essentially a situation where we see beijing comfortable with letting that grow, something economists are concerned about. Debte starting to see that continues to mount. Beijing may hit its growth target, but will end up with serial structural problems by then. Yvonne that bad debt really taking a backseat there. Thank you. Governorentral bank says he supports supplyside reforms, even though the government plans to boost fiscal spending to boost the economy. Were taking a closer look at this. What is the governor saying now . This can cause problems for Monetary Policy makers. The just throw money at problem, as they did in 2009, causing structural problems, et bubbles, that loads, debt loads, and you run the risk of this happening again. Supplysideting the reforms, which can be painful. When the economy is slowing, some say that is the time to do it. At the same time, vested interests have a grip on their interests, especially state owned enterprises which benefit from fiscal stimulus packages. Lets hear what he had to say. He supports the states plan to es and reduce capacity. Supplyside Structural Reforms will help fiscal policy to be more effective from a functional point of view. Monetary policy is mainly for managing aggregate demand, which if done well, would give more room for supplyside policies. He is saying that if he does his job better managing Monetary Policy, then they will have better room for supplyside reform, which will be painful, job losses, structural changes, but has to be done. Yvonne most saying the prospect of that is tepid given what we heard from the report. C talkingeard the pbo about the composition of its reserves. Take it in baby steps, of course. Have beenthorities blasted internationally and at home for the lack of transparency, because china is not in isolation anymore. Its policies and communications can roil markets. The Deputy Governor at a press conference in a first for a pboc official this closed the source of nondollar affects assets in the fx reserves, but also includes euro, yen, and pound. What he kept out, he did not reveal the amount of those holdings. Yes, a little more transparency, but that is where the reserves have gone in the last six months , down 513 billion defending the yuan. Yvonne thank you so much. Investors have turned bullish on copper for the first time in four months. Money managers shifted just in time to reap the biggest weekly advance in five years, 18 since january, when futures were trading at the lowest since 2009. Optimism writing after mine owners announced cutbacks to erode the global glut, also betting a stabilizing Global Economy will lift demand. China state owned enterprises loading up on overseas loans as moodys warns ballooning debt is draining finances. They have topped 36 million this year, outstripping the record 23 billion for 2015. China fory chem its buyout. Moodys downgraded the outlook. Shareholders have voted continue to back the chairman of the family controlled retail conglomerate. There was an internal dispute, calling for his removal. A new proposing to form board of directors, giving himself the role of ceo. He says he intends to resubmit the proposals at the neck Shareholders Meeting in june. Sharp in the spotlight again today after media reports that to quit over the anticipated deal with foxconn,s shares surging, near the highest in over a week. Lets talk to our Bloomberg News asian tech reporter. Good morning. What you hearing now . What are you hearing now . Week sinceeen over a the negotiations folded over something called contingent liabilities, late in cost that could be triggered by layoffs or restructuring. Reported tot was step down over the deal, something sharp denied. Another report put the signing of the deal for march 9, and the extent of liabilities at 100 billion yen. Our sources tell us the deal could come today, and the terms could be largely unchanged. Yvonne its interesting. We are hearing that we could have this deal finalized this week. What exactly is foxconn offering . The deal, foxconn would inject ¥500 billion into sharp in the form making it sharps largest shareholder. ¥200 billion will go to new generation displays development and production. 100 billion yen will go to the legacy lcd screens. According to details released by sharp on february 25, the deal gives the company quite a bit of managerial independence and potentially spared from major breaking upwell as of the operations. Yvonne we will continue to watch that stock, making dramatic moves. Joining us live from tokyo, thank you. There wont bet a hard landing, but will the market take comfort from these assurances . Thats a question we put two Mike Mccarthy when first up returns. Yvonne the stories making headlines. Korea and the u. S. Starting their annual military exercises amid rising tensions over the north korean weapons test, launch, and sanctions. It will run until the end of april. Pyongyang has the announced them as dangerous rehearsals for war. If fighting breaks out, it will neither be confined to the peninsula or conventional. The search resumes for the survivors and victims of a fairy that capsized in indonesia. It was sailing from bali to java, and it is not clear what caused it to sink in what appeared to become waters. There were 51 people on board, emergency teams say 25 have been rescued so far. The boat was carrying trucks and other vehicles when it went down. Tributes being paid to the inventor of email, dying at the age of 74. In 1971, he devised an application to send messages between computers using the symbol that separates the username from the host name. Andinternet hall of fame acted him in 2012, saying he fundamentally changed the way people communicate. Friends and family say he was a modest man, but not a frequent checker of his email account. Powered by over 2400 journalists and 150 bureaus around the world, this is Bloomberg News. Time now for a look at the stories we are watching in asia this week. Chinas latest trade data on tuesday, economists expecting a surplus of around 50 billion for february, with exports falling 14 from a year earlier. Cathay pacific post fullyear earnings on wednesday, and an Analyst Survey expects the income to rise to 712 million. It is a significant increase from 405 million a year earlier. Itsbank of korea announces Interest Rate decision on thursday, most economists cutting rates 25 basis points to 1. 25 . Announcesmyanmar three potential president ial candidates. It will be interesting to see if Aung San Suu Kyi is among them. On friday, pboc governor is due to give a News Conference on the sidelines of the meeting. His comments last year helped to trigger a raging bull market, sending the shanghai composite soaring 53 in three months. How much should we invest in the statements from china over the weekend . Lets ask that chief Market Strategist live from sydney. Great to see you. There really wasnt anything new that we saw out of chinas work report, but it remains generally stable, one further bond and stock market reforms, but aussie dollar the under pressure this morning. The overall performance so far in the markets we do have open is positive to risk, so it looks like there is some willingness to place some trust in the statements from policymakers over the weekend. In particular, support and Commodity Markets with rises in thisrices as they open morning, and further support for industrial metal, as well as a rise in share market, but the open suggest there could be some faith put in the statements. It is a moderate statement, and i think youre right to say that few surprises here. There are convictions in committing to reform and liberalization, wheres talking about reducing overcapacity in certain markets. Conflicts forl chinas authorities and getting the balance right between the demand economy and further liberalization to move towards a market economy, but it looks as if the markets have given the statement a tech. Tick. Yvonne fiscal support mainly taking the form of tax cuts, ramping up in tech innovation, should we still be looking at those sectors and away from the old growth drivers, even though we did hear from the premier saying there is still fast growth and investment when it came to infrastructure and industrial space . That certainly going to remain part of the mix of the fiscal stimulus and china. It is clear what the goal is, move towards consumer demand, so that means we should be looking beyond infrastructure, similar to the social measures and lending measures that might stimulate consumer behavior. There are sectors greatly exposed to the consumer over the 15 year horizon, and could be the most important to the economy. Yvonne talking about global stocks, threeweek rally, it seems like the concerns of recession have faded a bit. Is this the coma after the storm . Storm . Calm after the we are going to a modest repricing. There was a lot of fear at the beginning of year. People were selling, prices were lower. We rolled around all the different possible risks and causes that might direct markets in 2016, and yet none of them have stuck. The evidence and hard numbers that have come down have contradicted to those narratives scaring investors. The repricing goes on, modestly improvements for markets around the globe. It does not reflect optimism, but it taking back of some negativity. Although we might swing to optimism over the next quarter, it is likely it will contain more of the same, high volatility come up swings in sentiment driving markets, hard data contradicting narratives, and the big challenge this year is getting the balance right. Give somee cases support from the numbers, but its likely the argument will rage, as with the markets over the course of 2016. Yvonne a little bit of optimism starting things off, thank you so much. Coming up next, the dollars winning streak halted after wages delivered a big blow to the greenback. The details after this very short break. It is monday, march 7, and headlines. Our fx keep an eye on the euro this week. The last time mario draghi underwhelmed markets, the euro so its biggest rally since 2009. There are expectations the bank will deliver a rate cut. The expectation is for the year old to weaken euro the euro to weaken. The expectation is the yuan will be stable after there is no expectation of depreciation in the currency. Oficials disclose the source nondollar assets in Foreign Exchange reserves, the latest gesture to increase transparency of its currency policy. Hold, aar rally is on gauge of the green backdrop to a fourmonth low after u. S. Wages declined last month. Job gains, the mixed Employment Data will feed into the federal reserves assessment of the economy when it meets later this month to decide on Monetary Policy. Take a look at the dollar, currently unchanged, trading like this. , a fifth of analyst expect the euro to reach parity with the dollar as the ecb increases stimulants stimulus. The chinese yuan fluctuating a little bit, trading like this. Those are the stories driving the forex markets this morning. Take forf strays banks, debt rising, according to a survey. For more lets get to paul allen in sydney. Good to see you. A lot of publicity to the expensive housing market. The concern is over the corporate loans. Right, ins particular the agricultural, mining, and dairy sectors. The survey expects provisions to add debt charges to rise to 5. 3 billion by 2018, the highest level and eight years. Already we are seeing that debt to 2. 8rising, up billion. Everybody surveyed by bloomberg for the story believed that Profit Growth would also declined during the same time, down 4. 5 every year until 2018. There is another drag factor as well, the cost of insuring that is also up over the past 12 months, 59 basis points to 142 basis points. We do see shares and all four of the big banks rising this morning. They have been historically expensive and have lost by you over the past year, so a good buying opportunity here. Yvonne australias financial biggest raters regulators taken to court, and we could see the probe expand to the big banks. Paul yes, the regulator would take them to court over a similar matter. Libor on 44nt of separate days between 20102012, manipulating the market. I in z denies this, but the regulator is expanding its probe the upper three banks. This classaction claim as well. Yvonne thank you, joining us from sydney. More to come on first up is a 30od morning, it in singapore. We are just an half an hour away from trading their. We sort of the morning session, we will continue to see how things go with asian stocks today. You are watching first up. Top stories, china has rejected fears of a hard landing as leaders outline their targets in the latest fiveyear plan. They targeted at least 6. 5 growth this year, the slowest pace in a quarter of a century. The top economic planners say concerns are unfounded because beijing still has the tools to maintain regional growth. Chinas Bank Governor has voiced support for the plan to overhaul state owned enterprises. He says the reforms will help fiscal policy be more effective. Beating at the National Peoples congress, the Monetary Policy will tackle issues such as overcapacity. In tokyove jumped after reports that the ceo will resign over the takeover deal. A spokesperson denied the report. They said no final day had been set for signing off on the deal. Both sides were working hard to reach an agreement. Journalistsver 2400 in over 150 bureaus around the world, this is bloomberg is. Lets look at the markets. U. S. Stocks ended the best threeweek stretch since 2014, and middle eastern stocks are reaching new highs. Shery ahn has the latest. Chinas stocks have a big impact on asia, especially with the Economic Growth target being cut. Asian stocks swinging. Japanese stocks cap had their best week rally, and policy unchanged at the moment. Onitive territory, coming up thursday at a rate decision. Of the highest in two months. The aussie dollar falling to the after gaining last week. China is the biggest trading the cut and after that, in Economic Growth target, we are seeing the aussie dollar just falling. New zealand currently down 0. 1 . We the big it decision there on thursday. Big movers, it all seems to be about oil and producers rallying after that rebound in oil. 302 seeing this at oil, look at that surge. Oil and iron ore prices are the highest since october. Lets look at japanese stocks. A sharp gaining more than 4 . We are hearing from tv asahi, and their ceo may step down because of that deal with the taiwanese company. That has been in the news for quite some time. Tokyo steel falling. Both fujitsu and tokyo steel have been downgraded, cut to neutral. Korean stocks to look at, samsung gaining 2 . We are hearing from a local newspaper that the partnership with nbc, that would be part of the company. They would gain more than 2 . Also hearing kia motors is considering building a plant in india. Also, keep an eye on lotte stocks today. Shareholders have voted to continue bochy backing the shareholder after the internal dispute. Back to our top story this morning. Yvonne chinas low growth will be a continue our this that years. We now have use of beijing. Views in beijing. Reporter people are allowed to report from tiananmen square, it has been 10 days of political pageantry known as the peoples congress. Behind me, 3000 delegates are gathered, from top officials to representatives from the military, as well as cultural spheres, ethnic minority groups as well. They are all descending upon the Nations Capital to discuss the next fiveyear development plan. It is known as something of a river step. We spoke to some delegates to see with a hope to achieve. I hope track to build a moderate, Prosperous Society within the fiveyear plan. I hope our people can live happily. Our workuld solidify while maintaining reform and opening up and adhering to the four cover hence is comprehensives put forward by the party. It is something we should do in the new normal phase. We are looking forward to see how supplyside reforms will be carried out. Kong can make use of its advantages in carrying out the 13th fiveyear plan. I hope to take this message back to hong kong. I really want to know how my hometown can take advantage of the policies under the 13th fiveyear plan. China looks to bolster growth, it is also seeking to increase influence in taiwan, looking at the possibility of a rail line between the mainland and the island. They hope this will bridge the political divide. Lets go to enter davis, joining us with details. We had a brief mention of this fiveyear plan. How feasible is it . How likely is it going to happen . Reporter it looks like a tremendous challenge of an engineering challenge. Politically, it is even bigger given china and taiwan. If you want to call taiwan a country, china will get upset. Deep. Fferences are pretty there is no reason to think it will be any kind of real resolution of the division between china and taiwan in the coming years, let alone by 2030. It is a tremendous project for analytical and engineering. Yvonne given the fact that the Taiwan Election early this year, the democratic progressive party, how are taiwanese likely to react . Reporter there are reports that the mainland came out and said, this is a political issue, we will have to look at it. Putting the brakes on pretty quickly. Yvonne which is expected. Over the weekend we heard mixed signals, messages on taiwan from the leader. Whether she reporter the dpp won the last election. They have a platform as part of their part of their platform basically. There was a lot of suspicion in beijing toward the dpp and their president , although she will not come intel may. Warnings,rs unveiled i would not say threats, but abandoned any thoughts of secession or independence. Relatively been accepting of the status quo. They havent spoken very openly about independent and secession and it well, but relations are tense and beijing is wary of the new government. Yvonne thank you. Enter davis on that story. Davis on that story. Most senioranghais Officials Say the Property Market is overheated. The leader will strengthen this without giving details. How prices in the top cities have surged after the government relaxed housing prices. Houses jumped 2. 2 from the previous month. Opportunities overseas as the Mining Industry over goes structural change. He keeps in touch with all of the world, and Chinese Companies will continue to look at foreign assets. China looking to lower outside resources dependence. Chinese smartphone maker xiaomi says it has no current plans to go public. It was valued at 45 billion in 2014 following around that help it secure more than 1 billion from investors. The ceo says an iphone isnt on the agenda for some time. Putsman down, but they will out a hiring device for locals. A person has been sentenced to death after being found guilty of fraud. The news agency said the court found enough evidence to convict this billionaire and two other people of embezzling 207 billion from the oil company. They are also required to repay the money they laundered. He denies the charges. That was a look at some of the stories making headlines. Yvonne negative Interest Rates is a good policy. That is according to the libelbased bank for an international settlement. The are not clear how much these rent will be effective rates will be effective. So far so good when it comes to negative rates. Is a validation of those with negative rates or those considering it. A validation at the boj, for example, sweden, switzerland, even the ecb. And this criticism by the banking sector, the financial companies, the lower the rates ago, for example europe, that cuts into profitability. European stocks falling precipitously as a result of that. These are benchmark rates. You can see the u. S. At the top. This is for the sake of comparison. Switzerland has the lowest points. Ate, 75 basis this study looks at these rates, and negative rates were transmitted to the money market essentially the same way positive rates are. Zero, not binding at the lower limit. Things could go lower lip. Negativefor prolonged rates is at risk. That is one of the Key Takeaways from this report. Yvonne if you go deeper into this whole, you could see you dont even know what could happen. Zeb exactly, and the impact on ey markets and settlement this study goes on to say banks are seeking to avoid negative Interest Rates by either extending maturities and riskier counterparties, but the longer this goes on, there is the risk of a Tipping Point happening. That would have a detrimental impact on the market. These Interest Rates are not taken positively, if you will, by market analysts. Yvonne we will see how the ecb reacts to that as well as the boj. Followinge plummeted a disappointing sales forecast, but lincoln ceo insists the company is still going on. The interview with jeff weiner after this short break. Is 843 in hong kong. The man who found the first debris from the Malaysian Airlines 370 has discovered more than may be from the plane. He discovered a 40 centimeter piece on the beach. He said it was in the same place for he found the wing propeller last july. It has no particles. This was found off the coast of mozambique and has been sent to australia by an allergist. Analysis. Power supply was cut by maintenance crews. Officials say this was cut on january 30, the didnt return to fix the elevator until march 1. The woman lives alone in the building and is said to have starved to death. Several people have been accused and arrested of voluntary month letter manslaughter. Ping is looking into his appearance. He provided no details about what happened. Thee others linked to current publisher have been investigated by chinese authorities. Powered by over 2400 journalists and over 150 bureaus around the world, this is Bloomberg News. Yvonne linkedin got the year off to a bad stop start, plummeting 40 . Jeff weiner spoke with emily chang. We began by asking if investor reaction was fair. Pick it was surprised. We werent expecting that kind of response. When you look at the core element of our business, they remain healthy. When you look at north american fuel cells for our flagship isject, sales growth consistent. Sponsored update, the core of marketing solutions, business line, still the Fastest Growing business we havent scale. And post the launch of the reimagined flagship application on mobile, we have seen an on bothtion and gain mobile and desktop. So the court remains healthy. Analysts went so far as to say sorry we are wrong. Is there something they are not getting . Jeff i think it is expectations. Companies experiencing hypergrowth for periods of time, there is the inclination to ensure a late growth out of long periods of time. In the history of every hypergrowth company, literally every hypergrowth company, there comes a point where analysts or investors start to out script the fundamentals of business. How they execute through that is what matters. Thesisthey are very about what they did was wrong. They thought you were fast growth, but you are more slower like a service or a software company. What is right . Jeff it is all relative. Growing 30 , growing in the mid20s, that is still healthy by any standard, any measure. Rousing speech a to all employees and you said linked in is the same company before this happened, you are the same team, i am the same ceo. How does jeff weiner the person feel about this . Not the ceo, but you . Does it staying . Jeff i will not say it st ings, but you are to create value. Nothing has changed. You want to make your employees are ok, especially those that have not experienced thing like this before. People have worked at companies that have gone through similar periods. Companies have gone through significant corrections, and a few of those have gone through multiple corrections. They never loses sight of their longterm sense of purpose, longterm mission, longterm vision. It is about continuing to execute, so i want to remake focused. Emily there was a book on being deeper than valuation. They say linkedin is a Delivery Service for spam. How do you respond to that . Jeff everyone has their opinion, and it will not defocus us in any way. The company is the exact same that it was the day before earnings. I think the core Product Offering has never been stronger. We have the best road map in the seven years i have been in the company, and we continue to see gains in engagement, and that is what it is all about. Grading value for customers. Emily do you think you can accelerate growth . Jeff that is the objective over time. You want to execute, invest in opportunities. Emily has this latest situation, has this impacted or l at all . Morel at all . Jeff it brings people closer together. The more you go through these, you meet them head on, you recognize nothing has changed. The stronger the team becomes, the stronger we become as a company. Yvonne that was linked in ceo jeff weiner stalking exclusively to talking exclusively to emily chang. On monday arches morning with victory. Well find up when first up returns. Yvonne lets do a quick check of the rockets in play around the region. In japan, the emperors balance in the shares, a lot of pressure on. Stocks today. They slipped for the first time in five sessions as we saw the u. S. Index futures also dropped. In sydney, we did see reaction, the aussie falling after the china growth goal was cut. The shares have seen a boost 0. 9 , 936 is where it stands right now. Insole, the kospi, we are seeing gains at the start of the session. , and up to 1960. 30 singapore starts trading in six minutes time, futures pointing to a higher open today. In the u. S. , stocks have seen the best three week rally since 2014 with the s p 500 up more than 7 over this evening. We look at what is in the dairy in the next few days. Reporter the week ahead on wall street will bring answers to key questions. Can the threeweek rally continue . Is it bounce back or is the market actually raking higher . A lot of technical analysts are watching this. We have the odds on the second Interest Rate higher this year at 6 for the market reading. The september meeting showing a 50 likelihood. Investors focus on data heading our way. A slew of reports coming out, and that includes weekly job claims, consumer comfort data, and host wholesale inventory. The weekend is a big political week with primaries and caucuses. Mississippi, and washington dc among others. On capitol hill wednesday, the attorney general Loretta Lynch will be in the spotlight, probably facing questions about the Justice Department trying to secure apples help in unlocking a phone used by one of the shooters in the San Bernardino San Bernardino San Bernardino terrorist attack. A Senate Judiciary Committee Oversight hearing. Merck and prudential are among companies releasing earnings. Welcome to the stock exchange. Lets see what reporters are watching, trading in asia. The milk in my copy, what is in the diary, not dairy. We are looking at these burgers. Zeb or a milkshake. Yvonne anything with dairy. Mott mcdonald moved to the downside with 29 . Theyve had a current rough 2015. Coming back with a good story, but not looking like the stock is moving extend display enormously. Reporter they are specializing in the japanese rivals. That. Never tried even in hong kong, they are only operating half of what they had forecast, at ¥1. 6 billion in sit of ¥3 billion as they had expected. They are falling about 3 . Not up as much as the stock. People are more interested in building sheds and dowagers. A company that does all of the ¥1. 6, they reached their billion, more than 14 billion u. S. Dollars. It seems like investors appreciate that. Up by 4. 7 . And it has had a bit of a downward trend recently, but we are diverse to that in january reversed that in january. Yvonne things are looking better. Zeb in positive territory. I am catching up to you. By the time this day is through, i will shery maybe the flies with chocolate, is that helping . Coming out of japan. Zeb i think i will pass. David i have had potato chips with chocolate. Yvonne i had a friend that used to do that. All right, we will let you know, but roz takes the cake again. He is here, but he is in the back. Zeb i see him. Yvonne that is the stock exchange. Our reporters picked them based on news events. That is it for first up and rishaad has what is coming up. Rishaad looking at what has happened over the weekend. In beijing, the npc taking congress. Message with growth and reform. We got some of that, but cynicism suggesting not enough has been done when it comes reform, and how to deal with the debt crisis. According to some, china does face that at the moment. In about an hour, we should see analysts about that. The end of this dark tunnel, when it comes to these Mining Companies and indeed beyond that as well. Part of that is because of what we have been seeing in china. That slowdown affecting the prices of basic and raw materials. Looking at the new singapore flight, tracking legislation. It is all to prevent another mh 370. We are discussing that with light double flight global. We will do that 10 minutes from now. That is trending business for the next it is monday, the seventh of march. This is trending business. I am rishaad salamat. Rishaad right, heading to beijing, melbourne, what we are watching. 6. 5 ,targeting growth at the lowest in 25 years. They say they can manage the economy. Statevernment overhauling owned enterprises. They say it will make policy more effective