Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20140407

Aat better way to launch with 4 billion deal in the generic drugs industry. John is here with the details. We are talking about ranbaxy. Thats right. Clearly, shares were rising in that region, but sun pharma agreed to by ranbaxy at 4. 1 billion. Here,sting, the movement the Japanese Company owning a large part of ranbaxy. It is a done deal essentially . Yes. In 2008, the Company Bought ranbaxy for for for 1 billion. With u. S. Ssues authorities. It has been a problem child. Ranbaxy, for plans that didnt pass muster with the u. S. Authorities. The fda, the food and Drug Administration in the states, ranbaxy had to recall some batches of its generic cholesterollowering drugs. That is a concern clearly. It is not good for the image. , and indian company, is agreeing to by ranbaxy. Ranbaxy shares soared last week 26 . Encouraging for earnings. It will become the fifth biggest speciality generic drug company in the world. They must deal with this u. S. Issue. That is a concern. Japans thirdbiggest drug company they bought it back in november 2008. It give them a foothold in the generic space. There have to be some alarm bells with ranbaxy shares going up 8 on friday. How did that happen . You dont have to answer that, of course i will try. It is a great deal. It is a great price. They need to deal with the u. S. , and obviously, sun pharma can do with that. If they can deal with it head on, it will be good. They have a new partner or iici shares are rising, as well. You also have ranbaxy shares rising 25 last week, all very encouraging. We will see how sun pharma does when the trading day gets underway. And how they deal with the u. S. Authorities. Thanks a lot for that, john dawson. A quick look on prospects for the Indian Trading day. At the country is headed to the polls this morning. Lets have a look at how things are bearing this morning. No changes after the nearly two thirds of 1 fall we saw friday. It is the worlds biggest democracy, and it is a mammoth task in selecting a new government. We look at the faces behind it, the battle for power in a moment in on, but lets check the indian stock markets. They have been among the best performers in the world this year. Lets see what kind of reception we can expect from the Financial Markets and what Financial Markets have been telling us as far. Here is david. It is a vote of confidence clearly ahead of the crucial vote that begins today in india. How much money has been funneled into Financial Markets in india from Foreign Investors, just from the start of the year, for stocks, to add to what you showed earlier, we are looking at 4. 9 billion as far as the net stock inflows are concerned. That is more than any emergingmarket that we track at bloomberg. We have the sensex and nifty outperforming most of the other indices this year here in asia with the exception of a few in southeast asia. It has also driven up the value of the currency. If you are looking at dollarrupee, a twoyear chart. The peak when things appear to be getting out of hand. Can the Bank Central Bank bring confidence back into the markets . Yes, they have raised rates. We are at 59. 9. We are below the 60 handle. If you look at the technical the 50daywe show moving average, it is now trading below the 200day. You have this crucial technical cross. Perhaps, does it signal a change in the dollarrupee . Something to watch out for certainly. We talked about stocks, the currency. What about the bond markets . We have seen a substantial amount of money flow into fixed income in india. Last illion, the checked, net inflows into fixed income, but yields, as you can see here, on Indian Government bonds remain stubbornly high. Spread looking at the between japan, u. S. , australia, indonesia, and india. Japan, for example, the 10 year bond yields you about we will get to that in a moment for india, we are at about 9 , which shows you over the past month, we have seen 360 million being pulled out. We are still in positive terrain, but more recent moves have showed some concern whether or not perhaps the central bank has an inflation the inflation problem in check. That is reflected in the yields of these government bonds, over 9 , still quite high for these indian and 10 years these indian tenyears. Zed is here with the candidates, the protagonists, the issues. When we say a mammoth task, we say that because it doesnt get bigger than this. It doesnt. We are talking about the population of the u. S. , the population of europe combined voting in this and more. 850 Million People. I have prepared some key graphics with the breakdown of the key issues. We have inflation running out of control, or at least it did late last year. That has had an impact. Social issues we will begin live in 70 of voters rural areas in india. They are grappling with the fastest inflation rate in asia. In fact, november Consumer Prices topped 11 . This is underscored by some of the slowest growth we have seen in the country in some time. Laster, hitting a decade low of 4. 4 . The currency has recovered. It is up about 3. 2 over the past quarter. It has strengthened. Have theirness, they concerns, as well. Concerns about regulation, onerous regulations and tax laws, an unclear judicial perceivedso discrimination of foreign firms, and crumbling infrastructure. Add it all up, and we look at the candidates, the front hesr, Narendra Modi, considered to be business friendly. If you listen to what jim oneil, the former Goldman Sachs manager, the father of the term, weerm brics interviewed him over the weekend. Hear his thoughts. In indias case, what they have missed is decisive leadership. Leading amodi coalition government, i would look for quite a lot Better Things out of india at least. L and the rest of the Investment Community watching. It is a big deal. That is one of the protagonists, Narendra Modi. Also the other one in the right the out of the gun gandhi dynasty. 43 years old. He represents the congress party, the Prime Ministers party. It has suffered a defection of voters, this because of corruption issues, grafts. He is pledging 8 gdp growth. That is a tall order. It is also promising expanded access for the poor to health but, affordable housing, indeed he must overcome the Congress Partys reputation for scandal. The opposition, as you pointed years olddra modi, 63 a controversial figure when it comes to a secular state given some of the things he has been accused of in gujarat. In 2002, and it alienated a large fortune of the Muslim Population in india. Bjp, the, the Opposition Party is a hindu nationalist party. He is charismatic, but he is also considered divisive. He is campaigning on a probusiness platform. Chief minister in gujarat, he attracted the likes of ford motor company, for example. He wants a minimum government, maximum governance. That is his platform. We will see whether he is able to amass a coalition. Polls so far put him ahead in the standings, but at this stage, he may fall short of a majority. Thank you very much indeed. Lets turn now to some of the other stories were following for you today. Chinas biggest Microblogging Service has valued itself at a fraction of rival twitter as it prepares for a share cell. Aboutis hoping to raise 380 million, according to a filing in new york. Oftter has a market value 24 billion. The australian gas lobby is calling on the government to ay, some cooks earning more than 300,000. Some welders, more than 400,000. 50 wages have risen nearly over the last six years. Workers groups say pay has not kept pace with Revenue Growth in the industry itself. Chinaricultural bank of the bank circulated a letter saying that price cuts of sing projects it outlined no specific measures. Bute got to take a break, asian shares are dropping back for the first time in eight sessions after that slightly poorer than anticipated u. S. Jobs data. We will be having a look at where markets are perhaps headed. Returns in three. Eight straight stations of equities. Japanese shares in particular driving the overall region index down. I guess the question weve got to be asking, is the party over for the time being . Where do you put your money if we see more weakness . Is it time to reverse the trend and get back into the developed markets as the trade has been all year . Yet, i think that the jobs report we had out from the u. S. On friday was pretty much in line with expectations, although there had been some rumors suggesting a much stronger number. Actually, therefore, unsightly surprise in the way in which markets reacted somewhat negatively, because actually the figure that came out on friday was more of an indicator that the fed will be maintaining its current policies, which are generally market friendly. You are talking about this number. All of this chapter that there was going to be a blowout number. We didnt get it. A blowout number would mean hikes coming sooner than expected, but the other side is, it would show the economy has some firm footing now there. Yeah, i think what we have seen is a continuation of what weve been seeing for the last six months or so, which is slow but steady recovery, but not Strong Enough to encourage the Federal Reserve to tighten the material he materially. So, generally, quite positive. I think it looks reasonably positive for emerging markets, which, as we know, have been quite significant underperformers for the past 14 months. Ok. That leads me to the question, what about the eurozone right now and noises coming out of the ecb . Some sort screaming of valley in the Industry Groups you look at. Atyes, we tend to look broader markets rather than necessarily specific sectors, but i think the data we are getting out from europe is still very supportive of markets generally. I wouldnt be surprised to see the ecb getting a little bit more activist in helping to promote a little bit more inflation than has been c urrently the case. If we are looking at and easing back on qe in the u. S. And u. K. , that is certainly not the case in continental europe, and i think that remains pretty positive for markets generally. Ok, lets talk about emerging markets. A look at what is going on in this part of the world. If we have a blowout and china when it comes to more defaults, what is the likely impact on the rest of the region . Think it would obviously be negative, but i hasten to stress that that is not what we are expecting. I think that there are increasing signs that the sent at the Central Government level that they feel perhaps tightening has gone as far as they want it to. The next major move is probably going to be and easing back on some of the restrictions that they have been in fomenting implementing. That would be a little bit more supportive, and indeed, we have also begun to see the market gradually beginning to pick itself up off the floor. Again, a big performance differential has opened up between china and not only the rest of asia but also relative to developed markets. It is beginning to look more attractive than it has for a while. I think it is early days, but we are certainly looking at that market quite closely. I keep going on about this, but we keep on having people valuation basis china looks cheap, but it doesnt do anything when it comes to equity markets. There has to be a catalyst for there to be a change in peoples mentality more than anything else. Yes, but youve also got to look at the fact that the index is not representative of what is going on inside the chinese economy. The index is very heavily overrepresented by banks and Property Companies. Those have struggled in the face of the tightening from the chinese government, but there isnt an awful lot going on elsewhere in the chinese economy. Youve only got to look at the continuing strength of a lot of consumerfocused names, which have continued to do quite well. We are anticipating that that is going to continue, but interestingly, it may well be eventually the return of interest in banks and Property Companies that prompts a recovery in the overall index. People get spooked with geopolitical events normally when it comes to emerging markets, and certainly we have had one in ukraine. Are we in the endgame there now . Is it going to be the status quote, crimea remains with russia, and we have the status quo in Eastern Ukraine . Have the tail risks of the ukraine crisis largely gone . I think it is very difficult to say. You would have to look deeply into Vladimir Putins eyes to answer that particular question. Who knows . We seem to have gotten a little bit more tension that has sprung up in Eastern Ukraine over the weekend. I doubt that it is going to spiral further out of control, but we have been surprised on a couple of occasions by this crisis over the last month or two. Whos to say that we wont get more out of that . Nonetheless, i think there seems to be a willingness to try and put a fence around that particular issue and to focus on broader economic issues, particularly within europe itself. Said thatnny you about looking into his eyes. I think george w. Bush looked deep into Vladimir Putins eyes and liked what he saw many years ago. What about his aspirations looking eastward rather than westward . I guess it is too early to tell what will happen on that front. Yes, i think it is. Manynk there are some Different Things that are going on with regards to Eastern Europe at present, not least of which is the fact youve got a newly reinvigorated russian military, which is flexing its benefiting from a significant increase in expenditure on the military over the past decade or so. When we look at that in the overall context, i think it is something to be aware of and something to be guarded about but not to get overly panicked about at this particular stage. Week. Ve, have a great joining us from singapore. Still to come, what can we expect from tomorrows decision out of japan . The Foreign Exchange headlines are coming up after this very short break. Im david inglis in hong kong. It is monday, april 7. These are your fx headlines. Begin in circular twoday policy meeting this monday. Most economists see the doj governor kuroda holding off from announcing any new policy stimulus tomorrow, but a growing number see the boj actually doubling their etf purchases with july as the most favored as far as timing is concerned that policy move. Elections in the Worlds Largest democracy begin today, and the indian election takes place over the next five weeks. Vote,of this crucial Foreign Investors have already voiced their vote of confidence, funneling over 10 billion into indias Financial Markets since the start of this year. , theoaden this theme out route and emergingmarket currencies is becoming more than a family a fitting memory. A fading memory. While you do have emergingmarket etfs billion in the first three days of april. If you take a look at the worstperforming currencies for the month of january, we do see that they have recovered a lot of their lost ground. Here is the lira. That is a recovery so far. We are looking at a six month chart. If you take a look at the rialto the central bank has hiked rates repeatedly there. We also see that struck that has strengthened quite sharply from the weak point earlier this year. If we look back at asias best performing and currencies, the rupiah, there is the recovery. I mentioned india. Here we go. We are just about 60 to the dollar at this point. We fell below the 60 handle a little bit earlier, but that is what we have so far. Those are the stories for your forex market this morning. Trading. Move to other andkly looking at japan south korea, as well. 1. 2 down,o 25, driving down the regional benchmark index. I, fallenbe kosp back as well. The top 50 in new zealand under some pressure, too. Up next, democracy on a record scale. The worlds biggest election is getting underway in india. We will be heading to mumbai after the break. Mmf exercise in democracy. The indian election gets underway. The best flu yet. Ships and planes hunt three electronic pings in the indian ocean. Cracking down on access weight. Excess weight. Another health issue facing china. Lets find out what is happening index as the asiapacific goes overall. We have some weakness, of course, taking place as far as japan goes. What is happening on the mckay is what i mean on the nikkei is waiting on the broader markets today. Decline oneeing a the msci asiapacific, snapping that eightday winning streak and we are off a twomonth high. Check out the msci, down by about 4 10 of 1 . Japan contribute into the big declines, 1. 3 . Check out the hang seng, the composite. We will be watching these closely today. Also, of course, india as the election gets underway, we will be taking you there in a few minutes. The chaos of time malaysia, starting with a modest advance. We are seeing the philippines composite modestly lower. In australia, checking the asx 200. We have libyan rebels opening two parts. That has brought down the price of brent crude, having an impact on the commodities markets. Lets take a look at that. It is impacting these commodity producers across the asiapacific today. This is what we have in terms of brent crude. 105 dollars a barrel. Down about three quarters of 1 today. Also falling. Nymex crude, falling into place, down around 100 per barrel. Gold is modestly higher. We will keep a watch on this. We have had a lot of volatility in currencies today. At the yen right now, pretty much unchanged, but we have seen some significant moves ahead of that bank of japan meeting. We do expect reports on Monetary Policy tomorrow, and the expectation is that the boj may double purchases of etfs in the coming months, this part of the second round of easing. The yen modestly moving, one of 3. 27 level. Ring it, climbing by 0. 5 . T, climbing by several stocks to keep in mind, a big mover in tokyo. This as son of pharmaceuticals in india says it will buy out the ranbaxy unit. It is part owned by daiichi sankyo. Bybaxy has been challenged daiichi from the start. Softbank, shares falling by about 4 . Softbank is looking for deals in europe, according to reports in forbes. A check in on you should know shinoya, famous for its its beef boxes. Its pulmonary form that your income coming in 36 higher, operating profit 36 higher, above target. That is a check on the markets in japan and across the region. A joy which awaits me just yet, yoshinoya. That are opening in india some observers say that is the most important and 30 years. E have polls opening up vote. , people starting to lets have a look at the issues and implications with our correspondent in mumbai. A very good morning to you. A big day in india and a big five weeks for india. A lot at stake. It doesnt get bigger than this. Voting has begun. In fact, right now, across those two states you mentioned, five seats in one and one in the other. The big fascinating contest between the two large political formations, the congressled upa, which has the incumbent government led by prime bjp led byaying, and modi. Is ais point in time, this long election, this is a ninephase election starting today it goes into the month of may. On the 16th of may we will know. Tommy something, Narendra Modi is the front runner right now. Could he actually be able to get an overall majority, that 272 figure, which is the magic one . If you look at opinion polls over the past couple of months, it is very clear that they have the most numbers at this point. Modi is the choice for the Prime Minister if you listen to most opinion polls. Heres the context of this. The upaled government has been facing allegations of bribery and corruption. In a phase of high growth high inflation and slow growth. On the other hand, youve got bjp and theis coalition called the nba, which clearly are on top. Narendra modi has a proven track record as a good administrator. What the markets want in india is somebody who can manage the goods deliver the goods. It is another matter if what you are seeing in the opinion polls will translate translate. What the Financial Markets want is a decisive, stable government, most likely to be headed by Narendra Modi. What do we know about Narendra Modi when it comes to his Economic Policy . There has been a vacuum when it comes to making policies public. Gandhi has been talking a lot about what he will do next. What is your view . Unit the nail on the head. Gandhi has been talking and only talking. Clearly ahead of the gandhi dynasty, who has neither displayed the political acumen modi. E on narendra if you look at what political observers are saying, this is no contest. Narendra modi comes with a track record of having been a good administrator. Excellent economic growth. He has managed to communicate or at least offer this perception that he means business. He is clearly probusiness because his economic agenda is clearly probusiness, and the one big hurdle that the government has been facing is allowing investment, allowing businesses to grow. That confidence in the congressled government gandhi has been unable to community that. Narendra modi has done an excellent job communicating his promises better than the other. Great talking to you. From the indian election to the indian ocean where weve got ships equipped with sophisticated listening devices searching this the vast body of water where a chinese vessel twice picked up electronic pulses. 37. 5 cyclesre at per minute. That is the same frequency which is admitted by the black boxes on that missing malaysian airliner. Reconnaissance planes have also returned to the area today. Australian authorities are urging patience, saying that they are a long way from finding out what happened. Fromng us via webcam sydney is jason middleton, a professor at the university of new south wales, an expert in alsoography and aviation, holding a commercial pilots license, as well. Thank you much for joining us. What is your view . Asve got these pings, but the Australian Authorities are saying, we should be patient. We are still a long way away, wouldnt you say . It may be just the one vocational ping occassional ping here and there. At a distance, those would be small things. As fartill not certain as the black box recorder, which is what we would hope. The second thing is that the ship with the most sensitivity that will be the best possible identifier. Hopefully, thatll get the scene fairly soon, and there will be a number of pings. Professor, how far could the noise of those things pings actually travel . I know a lot of it is dependent on the temperature of the water. A ballpark figure . Probably only a few kilometers at most. That would depend also on the state of the battery, and as we know, the state of the battery now is probably in the running downstage. They will have to get relatively close in order to be able to hear the pinger. Certainly, the chance of being able to receive it on the surface of the ocean is very small, because the temperature variability on the surface is very high. Much lower, the temperature is much more stable. Ok, lets just hope for the best, that we do find this black box flight recorder. What are the lessons from air france 447 . Us, tok two years, pl retrieve that box. Of course. The black box pinger wasnt operating there, of course. And they had to use sonar. They knew very closely where the crash had occurred. The chances, if they dont locate the crash site, the chances of this occurring are in fact far more remote. Course, we need this black box to establish what happened to mh370. Various theories have been propounded. Which one do you think is the most credible . We dont know. Fortunately, someone out there in the science and engineering land has basically been able to replicate those figures, calculations done. That gives me a level of confidence. They havent provided us enough information. Now i think there is a much better chance of knowing where it was. Learned . O be we will have to wait and see. We really dont understand whether this was an illegal interference or some unfortunate system malfunction. The series are both credible, but of course, we wont know until the actual black box is recovered. Professor jason milton, thank you so much for joining us from the university of south wales. Up next, chinas chubby challenge. A slowing economy but expanding waistlines. I will tell you what we are talking about when on the move returns. Our series about health in asia. Lets have a look at the sort of challenges china is facing on the health front. Joining us is francis chan and stephen lamb. Pollution, an important issue. There are also insurance implications. If you talk about the health care expanding the asiapacific area, it is estimated to reach 1. 3 1. 3 trillion in 2013. In 2018, it is expected to rise to 1. 8 trillion. Most unfortunately, most asian governments dont have a project for it. They only pay for less than 50 of spending, which will leave huge room for growth of private Health Insurance companies. That is one of the big trades, isnt it . People investing in china, health care. It is one of the most crowded trades around. Therell be problems with Health Insurance. Yes, of course. What we have seen is that Companies Like picc have lost a lot of money and shaved off profits because of running these government commissioned programs. Up for. 5 billion yuan in Health Insurance premiums, but the average cost and the average premium per person is 45 yuan. Money . Do they make that is the problem. With pollution, but other things , andll Critical Illness one of the other critical things contribute to that is the growth of obesity. Type 2 diabetes is becoming a big problem. Diabetics, 100 Million People in china. It is like 7 of the whole population. We are talking about 100 Million People, which is the population of a few countries in the world. See a lot of Health Programs that cater to that kind china. Lem in gets us to other health issues. This is a western health problem, as well. Isnt that right, steven . They have to be prepared for that, these Health Care Insurance company. Exactly. That is the point. Chinese insurers are getting more innovative to try to grow out insurance policies like smart insurance, High Temperature insurance, what have you, to go around and try to ure out ways to monetize you have to get the actuaries hard at work. Exactly. Tell me about the general trends emerging in asia. Of course, we do see a fast rising medical costs in the region. If we tried to highlight the medical costs and china and india, they grew 15 over the past three years. That means over the next 56 years, they would double perhaps. To do with that problem, governments are try to leverage more technology, and also, they are trying to put a curb on any rising drug costs. For instance, the china on drugnt put a ban markets for Public Hospitals in 2015. Hopefully, Health Insurance companies can issue more products for the massmarket. Lower medical costs will make it more affordable. Did you have something to add . I was just going to add onto his point. In china specifically, the share total public spending in Health Care Expenditure rose quite rapidly over the last couple of years because of aging, pollution. The government is running a lot of higher costs. If they want to bring in private insurers to step in. And pick up the slack. Steve and francis, thank you very much from bloomberg industries. Here is something to chew on likemonday morning, if you a slab of crispy, salty bacon with your breakfast. You better get ready to pay more. Soar. Prices may be set to prepositioning by Global Investors tells us why. The price is set to get a lot more salty. This as a pig virus hits a global suppliers. More than 5000 cases of the epidemic have been reported in the United States, and the National Animal Health Laboratory says at least 27 states are fighting the pigletkilling the virus. It is Serious Business for the hog industry. It has led to a 30 jump in bacon prices, well above a fiveyear average grade in chicago where the futures are traded, prices jumped 49 the first quarter. They touched a record. The estimate for the second quarter, the rally could lead to 5. 71 a pound for pork prices. This is according to paragon economics in adel, iowa. Bloomberg has taken a closer look at this. Money managers have boosted their net long per positions in hog prices. Signal . S that it signals higher meat costs. Bacon prices typically increase in the u. S. During the summer months. In 2014, pork may rise by as much as 10 above last years average. States,e in the united it could be an expensive summer grilling season. Experts,ten to the steve meyer, a consultant for the National Pork board, says, it is very likely it will hit a record this year. Hard numbers are going to be short. Its going to get worse. Hogsct, the number of slaughtered this year, down about 4 from 2013 according to the u. S. Department of agriculture. That decline may ride into about 1210 12. 5 next year according to a report. We will be watching pork prices as this epidemic continues to affect hogs in the United States and certainly prices around the world. That is your Global Outlook for today. I am zeb eckert. Hour to come this how do we know the good guys from the bad guys . If they are shooting at you, they are bad. We talked about it on friday. Good or bad . After the break, the Box Office Weekend verdict on the captain america sequel. This is on the move coming to live from our Central Hong Kong studios, streaming on bloomberg. Com as well as your mobile device. Lets have a look at some stories were tracking for you. China will be hosting the Global Business and political leaders when the when a forum kicks off tuesday. Iang will give the keynote address. He will identify new growth drivers. Australian Prime Minister tony abbott will attend the meeting. Tokyo is the venue for a twoday new economy summit that begins wednesday. They are bringing together Global Investors. There are a number of highprofile speakers taking part, including oracles cheek chief executive. Newsm,ia, releasing job unemployment reaching 16 in february. That is the highest level we have seen in over a decade. Last week, boeing, bp, and Philip Morris began the latest companies to announce they were going to have job cuts there. It was an explosive weekend at the box office. Disneys captain america the Winter Soldier earned nearly 100 million on its north american debut. The superhero beat paramounts noah in sales, setting a record for an april opening. It is also an early start to the summer film season, which normally kicks off in may. We have been hearing quite a lot about the new Michael Lewis flash boys but did you know he is no stranger to hollywood . The hit movie moneyball. Also, the blind side, Sandra Bullock won an oscar for that. It doesnt mean the author is popular on the movie set itself. Generally, the movie industry prefers their authors dead. They really would prefer that i just not be there. They are very sweet about it. Everybody is polite and pretends to be interested in what i think, but i had virtually no input on the making of the blind side or moneyball. No, the movie industry, unlike my booksindustry tend to hang on people. The people are doing something really interesting, often disruptive, changing industries. I would actually not be shocked if it got made into a movie. Is digested and the ramifications are understood, it could really work. Who would play brad . Unfortunately, the movie business has a history of taking asian heroes and turning them into white guys. Redick hit. What about brad pitt . I only write about things that really interest me. I do it sincerely. I just assume some of that rubs off on the reader. Nasa has released some remarkable pictures. A flare corrected from the face of the sun. The event happened last week. It is described as graceful on Nasas Youtube channel. A solar flare is a powerful burst of radiation, but nasa says harmful rays cannot pass through the earths atmosphere. Democracy on a record scale. The worlds biggest ever election is getting underway this morning, and it is getting underway, of course, in india. It details, coming up. The Largest Single Party in parliament with 214 seats. The election does end on the 12th of may with results expected write about four days later. The polls have started opening up. Some are saying this is the most important election in 30 years. In mumbai, we have these polls, a big day, a eight month for the country and a lot is at stake. Voting is underway in two of those states. This is a big contest between the last two parliament formations. The incumbent government is trying to get a chance to be back in office. The big challenger. 272. Agic number clearly is the political formation that manages to get them under that number will have the new government in india. Business and Financial Markets are hoping that there will be a decisive mandate in either partys favor so that policies of the new government can get indias economy out of its funk. Pictures of the voting starting off. It has been going on for half an hour to 40 minutes now. Bjppolls are suggesting a victory, arent they . Most opinion polls show that they are most likely to be victorious in most parts of the country. The question at this time is whether they and their allies will match up to the number of 272. They have managed to capture the population of the people saying that he means is nice and he will deliver the goods for india and try to get the economy out of its funk. In the hpe alliances in in bjp in different parts of the country. Not east of india, which is where voting is underway today. Not even modi has campaigned three or four times. Every seat is going to matter. Every constituency is going to matter. Not over until the last ball is bowled. There was such a surprise with that congress. Lets talk about the two major protagonists. Modi talking about what india needs without putting meat on these policies. You are bang on. You are right about the opinion polls. Most analysts were expecting the bjp to come back to power and that did not happen. It remains to be seen but all of turn out ton polls be right or if they have a go on their faces. He has not displayed any sort of political maturity. He wants to be the next Prime Minister of india. Has on the other hand communicated a confidence that gandhi has not been able to. India,the confidence of the confidence of the Financial Markets. One thing that modi has managed to do successfully is create the perception that he is a good administrator. There is a challenger. Leads the party that clung to fame by leading an anticorruption movement. Money would argue many would argue that it is not communicated that effectively and gandhis biggest challenge, if you look at some of the political observers, they would say that it is a no contest really because modi comes across as someone who is far more politically mature, someone who has results to show as gandhi comes across as someone who hasnt. But the point you made earlier, it remains to be seen whether these twom political formations will that translate into words . We will have to wait. Absolutely. May 12 is when the election concludes. Great talking to you. Indeed, it is a mammoth task selecting a new government. Vote, foreignat investors seem to have cast theres cast theirs. The indian market is among the best performing in the world today. There has been astounding amount of money in india. Outperforming. E we are just at the start of the fivewait process. What will happen within the next five weeks. I can show you first what has been happening. 4. 9y im a 4. 1 billion being funneled into the stock market in india. That has pushed up a lot of the stock indices. You look at the dollar rupee right now. It is the second best performing currency in asia right now just behind the indonesian rupiah. Terms, the dollarrupee, we are at about the 60 level, way below the 200day moving average, also below the 50day moving average. You look at the technicals, the 50day, we have moving average moving below the 200day. That is an indicator for a lot of traders. I mentioned money flowing in. That has been a lot of cash moving into the fixed income space in india. I am looking at just about 6 billion year to date of net inflows. Over the past month, we have seen that money some of that money pulled out. Atch is why we are looking 10year yields. There has been some uncertainty. Perhaps that shows you what the market is thinking right now, whether the r. B. I can keep inflation in check. We have seen them hiked rates. Will this be the case if you look at yields . It does not bode well for inflation when you have yields that high. And there is a big spread between indonesia, the closest one to india, as far as had those yields are. We will be watching this closely. Has been positive for the stock market, positive for the currency. Back to you. Thank you. Indeed, these elections are a big deal. Another big deal in india, a 4 billion one, when it comes to generic drugs. Majoritya headache for shareholder. It is now being sold for 4 billion to sun pharma. Clearly, what has happened in the last best it has run back. Yes. Under investigation by the fda. Facing troubles with the u. S. Includes fourhich of their indian facilities. They have banned exports to the u. S. For not meeting standards and they have put out recalls again in the cholesterollowering medicine. That is the background of the concern. Pharma hass, sun ranbaxyo buy laboratories. Why it wants to buy it . It is because it wants to buy into the india markets and the u. S. Markets with a huge potential. With these u. S. Concerns, they must know how to deal with it. Daiichi shares it is all shares, isnt it . Yes, stock. Daiichi shares are down by 1 . It is more or less a done deal. They must deal with this u. S. Concern. Last year, shares gained 25 . Stocks have been bringing have been gaining ground. It was announced this morning, wasnt it, this deal . Yes. Three hours ago. Onthe stock went up 8 friday. Ok, thanks, john. Lets take a look at some of the others. Keeping the stimulus intact when they adjourned. The economy is fragile. More asset purchases, buying bonds, as well as possibly Exchange Traded funds as well. Concessions to the protesters in taiwan. The legislative speakers said they will delay a review of a trade pact with china. Students have occupied the legislature in taipei for 20 days now. Taiwan speaker urging to end of the city in which reflect skepticism of a greater economic tie with china. Looking to raise cash. Raise three to point 3. 9 billion. If you look at twitter, there is a market value of 24 billion. At expansion in china. And not in economic terms. We are having a look at beijings growing problem with obesity. Next, the voting underway in india and what will be the worlds biggest exercise in democracy. We will be discussing applications for the country and more. Coming to you live from Central Hong Kong studios. Worlds biggest democracy beginning the mammoth task of selecting a new government today. India has more than 800 million eligible voters. It will take about five weeks to complete lets take a look at the big numbers involved now. Whichever party emerges victorious, india faces a major challenge is. Pictures of how people vote over there. Voters in villages like this one, indeed, the biggest cities will really be added as these polls commence now for five long weeks. And a lot of people have been pointing to a bjp victory while others are saying, well, as long as somebody wins a clear mandate, that should be the most important thing. How likely is that to happen . Opinion polls are suggesting that the bjp is clearly ahead right now. In the past, we have seen that the opinion polls can be incorrect. I think i agree with the view that, as long as we get a stable government for the next five years, we can expect things to improve both in terms of decisionmaking and implementation on the ground. What about investment decisionmaking . Been flat as a percentage of gdp for almost two years. Our sense is that even though the ontheground situation has improved, sectors like the power sector, business investors are a sickly holding that right now to see the election decision. We should see a gradual revival in the Investment Climate this could be sped up or we could see a slowdown depending on the election results. Overall, we do think investment numbers will start pointing up i the end of this year. You have to get growth going. Saying from old clinton hogg in the u of in democracyhat, if changed anything, they would demolish it. I think it is a degree whether the Business Sentiment itself improves. We have seen some green shoots of recovery. Particularly if you look at our production, the pmi numbers. Further and to see a revival in private consumption demand, revival in durable goods, for that, we need a strong clinical mandate and something to tell people things are going to be ok and you can basically start planning ahead for the future. One thing that has been conspicuous is the absence of any real reform agenda being published by the bjp, real solid policy initiatives. Does that worry you . Yes and no. We have sense that i mean, this is something that is expected of a Lyrical Party to publish, a written document with a clear view around what is it they want to implement. But in terms of actually getting the message out, i mean the high thesterial candidate from bjp has been campaigning for a long time in which he has spelled out his vision. He essentially looking to privatize investment, infrastructure investment. He is looking to focus on urbanization as a source of road. About also spoken boosting productivity in the manufacturing and the agricultural. Something, i mean, in my own experience, i havent seen any Political Party spell out specifics before they actually have been given power. It is only on the bureaucracy level that certain things emerge from what needs to be done in order to get growth going or get momentum from that particular area of the economy. Very quickly here as well, the stock market has had a great run up. Have they effectively priced in a modi victory or even a Coalition Victory having the majority . That theld think foreign investor community, there has been a lot of optimism that is being deflected to the large inflows. What is missing is participation from domestic investors. I think it will come if they see a stable cover meant being formed stable government being formed. Great talking to you. Up next, carrying on the search for the missing malaysia net craft. Going to sydney for the latest on the potential signals being heard in the indian ocean. Is is on the move as the search for the missing malaysia narrow line is now thesed in on a search in indian ocean, things have been detected. Pings have been detected. What have we learned about the acoustic events now . Yes, weve had debris field and now acoustic events. You can call them encouraging that we have had 20 of encouraging so far in this mystery. Two pings for about 90 seconds of each incident, they were transmitting on the frequency 39. 7 kilohertz which is the same frequency that the black rocks flight recorders transmit their pings at. The area where the pings were detected, the british ship echo which is more specialized into taking these things, is expected to be in the area by this evening. While this is encouraging, the chief is urging caution. This is an important and encouraging lead. You to which i urge continue to treat carefully. We are working in a very big ocean and within a very large search area. So far, since the aircraft went missing, we have had a refueling which allow us to narrow the search area. People keep on saying that the window to find this lab boxes getting ever smaller. The battery is running out. Do we have any idea how big that window is . Strictly speaking, that window shuts today. 30 days since the plane went down. That is the battery life of the batteries in the black box. Of course we know with batteries, that is not a hard and fast way and there are estimates that there could they could be powered for another eight to 10 days. However, what is known is that, if the black box stops sending these things out, there is an extremely what is already a extremely difficult job could be nearly impossible. The things are affected by things like the topography of the ocean floor. So a very difficult job. If those batteries run out, it will become basically impossible. Thank you. Up next, back to the future. Tokyo. Basics, live in man and machine, toyota puts his faith in engineering over robot resources. A change of owner of indias biggest drugmaker. Tokyo just closed out its morning session. Adding drag overall in the asiapacific. We have fairly negative cues coming out of wall street as well as her that slightly worse than expected nonfarm payrolls report. Seeing a decline sparked by the nikkei 225. Of course, the selloff on wall street is still filtering through. And the selloff of tech shares on friday on the nasdaq. Lets check out the hang seng index, down less than half of 1 . Here is down for a. Second day casino shares of macau moving today. Property developers also in the mix you see nearly a 4 drop for new world development. It is not all bad news. You have Property Developers gaining. Quickly checking in on what we are seeing elsewhere across the region, a mixed portrait today, the jakarta composite starting the session higher by just about. 7 of one percent. The philippines modestly higher today. The negate 225 down by 1. 3 . The yen has been inactive today. That is having an impact been one of the movers is daiichi sankyo. That is lifting that she sankyo. It has been a persistent challenge for the japanese we alsoutical maker simi, de nini ippon sumitomo. Again, tech shares significantly moving. So watch the tech space. It is active today following the big drop on wall street on friday with the nasdaq selling off sharply. Toyota is said to boast a record of ¥1. 9 trillion here that is about 19 billion year 19 billion for the fiscal year. Shares, look at those. On the way up in this declining market. The Company Turning back the clock to expand the field. Looking at craftsmanship and traditional human skills. Craig, back to craftsmanship, how can they justify that they can be more productive . How can toyota saved by using human skills . Toyota is a company that will build 10 million cars this year. It is not a company that can go back to the days of building but what toyota is reckoning is that the companies that can master their machines that enable that sort of production are the companies that will be able to operate costeffectively and efficiently the way to master the machine is to go back to sort of that era of more by hand process. We saw in toyotas oldest plant in japan an example of what is going on at a number of plants into an. Work being taken back from the robots and being done manually to kind of come to a better understanding of how these machines were, how they can be improved. You see the you hear the term that kaizan used when you talk about fiona and this is the next step for toyotas production intem to continue kaizan this era of automation and mechanization. Is toyota the only carmaker that is going in this particular direction . It is interesting. We talked with some manufacturing experts for this story. A number of carmakers have tried to replicate toyotas reduction system over the years. To these experts, it is significant in that it shows that everyone has, in trying to follow suit, has emphasized a lot of the values that toyota does. But this is a practice of developing people and it is very unique. You dont see this another car plants where work is being taken away from the machines and put that in the hands of workers on the line. So it is unique within the automotive industry. Why did toyota approve this initiative . It has something to do with the first job he had with the company. One of the first jobs he had was with Operations Management consulting division. This is the division that was set up back in the early 1970s by ono who founded the toyota Production System and is sort of the grandfather of it these are essentially taskmasters who are deployed to plans to root out waste and find ways of getting improvement out of processes and taking out waste. Catania to describe a time when toyota enabled the full i came in this division to of struggle and take time to find ways to improve processes and take out costs. This is an initiative to kind of get back to the roots and get back to how he was brought up in the company in his early days in his career. What are the risks in pursuing initiatives like this . The risk here obviously is this initiative is being pursued while toyota goes through a threeyear sort of freeze on new. Apacity while the company is betting on getting incremental capacity on its existing plans, the risk is that other carmakers are building plants aggressively, particularly in china. You see General Motors and volkswagen and even ordered building a number of a sibling plants. Toyota is not doing that. The risk is that it may be leading some sales on the table over the next few years whether or not they are able to keep up with those other carmakers with its existing capacity will be seen going forward. Thank you tensions between students and lawmakers in taiwan remained high. But there is a bit of a break. On we aregoing heading going on . We are going on three weeks with students having taken over the government chamber. They do not approve how they are handling a trade pact with china. They say he is pushing it through without the appropriate processes to the legislature and they stormed the chamber almost three weeks ago. Leader, theive , heker of the legislature went and he visited the students yesterday they keep right through was that he agreed with in principle the students demands and that is to first pass what the students are asking for, which is an oversight law. Any future deal with china would pass through an oversight law, have an oversight mechanism. Once that law was passed, the students will say, ok, we will agree with the Services Trade being looked at. So oversight law first, trade pact second. That is what the students have been saying. He met with the students and shook some hands and said, ok, lets do that. However, the breakthrough was shortlived because, not long after, the caucus leader of the same party, the ruling party, came out and said that is a shock. We didnt expect this. We didnt want this. We didnt agree to this. What we have seen in the last 24 hours is something we have seen in the last few weeks. What has become evident in taiwan is a split in the ruling team. The legislative leaders saying lets look down and look at things again get the ruling party of taiwan seems to be quite split in how they want to do with this going forward. Absolutely. The other side saying what they are saying because the trade deal is on hold and that does not sit well with some people, one would have thought. It is a lot of probusiness people. Come out in favor of the Services Trade pact. They believe it is important to lower the barriers to trade with china. The students are leading these protests, but there is a lot of people. There wereek ago, hundreds of thousands of people marching in the street against this tray pack. And not just students. They are taiwanese from all walks of life. Rich peoplefit the like foxconn, but the average joe blow will not get as much benefit from this Services Trade deal. So that is also the cleavage in taiwan, whos in favor and who is against, rich versus or kind of debate that is going on within taiwan right now. Thank you. Lets tell you what weve got coming up next. We will be reaching for the clouds because is the sky the limit for Cloud Computing . That is the question we will be asking after the short break. Welcome to cloud cover, our new series on Cloud Computing. Bigill be tackling the questions, the opportunities for Major Tech Companies and how big this market actually is and how could it grow and what it actually means for businesses and enterprises, both the big ones and also the smog is as well. First, we asked the question what exactly is it . Do you know what Cloud Computing is . I dont know. Cloud . It is a cloud in the sky, right . Im sorry, i dont know nothing about figures. Is it a function on a computer . Cloud computing is here to stay. It means your computer no longer has to do all the heavy lifting. All you need is an Internet Connection and the rest happens in data centers far, far away. So no Annoying Software up rates and hardware breakdowns. Forget it. Not your headache either. The cost advantages are compelling. , taxes to savings computers that have cutting edge speed and massive memory for a far lower price. Second, scalability. If you need more usage, up it. If you need to scale down, pull it back. For one day or for one year, no problem. You pay for only what you use. Third, agility. Stories devices storage devices take ups they send are difficult to move. Nevada has 2 million square feet of servers. None of them will compare to the one in china, over 6 million square feet of data centers. Thank you the software reached 35 billion last year. That is expected to more than double in threeyears time. It is cloudy outside here hong kong, so it is appropriate we are talking about computing. I have two experts. What exactly is the biggest confusion when it comes to Cloud Computing . I think a lot of people see it as a buzzword. What is this cant computing, eckstein in simple terms to us. The way i put it is cloud is probably the last thing to come to the i. T. Industry which exists in other industries. When you go to a restaurant, you dont buy every meal in the restaurant. For Computing Resources when you use them and pay for what you use. Your role as a consultant is go from beingies disrupted to the disrupter itself. What role does Cloud Computing play in that . Cloud computing plays a major role. To movees Companies Towards a new business models, even deploy new types of services to their businesses and clients. In china last year, mobile payments increased by 200 . Talk to us about the growth industry. Every country will need to do business in the future. Cloud enables the storage of the data and also the storage of the surrounding infrastructure to providing the contacts of services. It is really vital to become a digital business. If you are not on the cloud, are you really going to suffer . What year will you say, if you are not on the cloud by x year, youre behind . Question of when. Cloud forg the right the Company Services and the service they want to deploy is the key. The three types, public, private, and hybrid. From your point of view and the clients you serve, what is the most popular . It depends on the user cases and country to country. But i do see a common theme to it. Often, people confuse it with being a cloud. Public lot is for everyone but not everything. I see a lot of companies now going from the immaturity may be using just public cloud to rapidly going to the hybrid cloud space. And it is different by country. If i go to a lot of places like to if i go my biggest concern is going to be . Is it safe . How secure is the cloud . It is pretty secure. As secure as any technology that is out there. Security is between the client and the company. The technology certainly exists to make the cloud very, very secure but there are other processes that the vendor and the client are rigged are jointly responsible for. You need to be compliant. There is a lot of regulatory compliance. And then the data security. Data security is something that you need to define. What type of data would you like to put on the cloud . [indiscernible] they point really on the secure, isfeel that the technology developing yearbyyear so the secured networks is becoming one of the key enablers of this on but then also the companies ramp up their internal security as well as the providers. Considerations on those two aspects. But it should not stop the companies from really exploring that. Often times, the cto is working closely with the cfo because this is a cost decision. There are cost savings involved. Describe what those cost savings are. First of all, infrastructure is at the core business. Somebody has to do it more efficiently. That is the first one. The cost benefits are also on the business side. Customers would like to adapt to Different Services now. Everything is moving towards the mobile. Companies should for example [indiscernible] you would deploy the application on the consumer side. You go to different websites and you have the iphone and you know where to go. Enterprises are having these app stores. A good example is like japan post. They deploy 16 different applications. They are different interest organizations, ranking organizations banking organizations can use the apps. It is not just the financial companies. Asis the telecoms as well industrials, really across the Spectrum Companies doing this. We are out of time. My thanks to both of you. I definitely feel smarter after the segment. I hope you do as well. Tightening the belt, a look at what china is doing to trim the waistline when on the move returns. Lets continue our series of health in asia. We are looking at china and the looming problem facing authorities. It is an extension of the waste and not the economy. A fastgrowing economy and easy access to good food has led to fastgrowing waistlines in china over the past two. Past two decades. 10 of over 18 were classified as obese in 2010 and that number is increasing rapidly. Our obesity ratio is not as high as europe or u. S. But we have a are Larger Population base and our rate of increase is very fast. We recorded an annual increase of 4 for weight for the overweight population. About 330 Million Dollars on Health Projects last year trying to get the nation moving. This mans concerns about his longterm health led him to join a program. Some friends of mine are getting cerebral thrombosis and hemorrhages when they are in their mid30s. I realize it is easy for overweight guys like us to get these diseases. That is why i am here. Living conditions are better. People are eating better than before. However, they are not selective about eating food. They stuff all kinds of Delicious Food in their mouth that have become fond of eating. Rates of obesityrelated diseases such as diabetes are rising in china. But government policy and Health Campaigns can change markets. South koreas Public Education program has managed to improve the intake of fruits and vegetables. Asia edge is coming up. Angie and i are recapping the stories of the day. Our guest is mark mobius. A look at our top stories. Ranbaxy changing hands once again. A concession to protesters in taipei but students still occupy the legislative chamber. It may be the best clue yet. Pingselectronic things in the deep indian ocean. The biggest exercise in democracy is underway as india chooses a new government. We will take a look at the impact the economic implication. The ultrasound breakthrough that could revolutionize production on earth and in space. We have a special report. Cracking down on excess weight. Our asia health check looks at another challenge facing china. All that and more on this monday edition of asia edge. Markets,g a nylon the asiapacific market seeing a bit of a selloff following the decline on wall street. Japan has been our most active market today. They are on a lunch break today. Hong kong seeing a decline of about one point hi percent today on some of the tech shares and gamy stocks. We will be gaming