Telling to fight the sunni insurgents. President obama has not ruled putting troops on the ground. Andrew david is with us now. Andrew, can this violence be stopped . It is very unclear. They have swept in. This has been going on for a week. We saw a good chunk of the iraqi army collapse and evaporate. They are within 60 miles of baghdad. Clearly they have more support in the north than they would in the south and as you mentioned we are seeing calls for civilians to take up arms. But calling for that to stop an insurgency shows how desperate the situation is. There are reports that a quarter million iraqi soldiers may have defected. Al qaeda thinks they are too violent. That is pretty frightening. They have a lot of experience earned in syria fighting the civil war. They took much of the north in less than a week. They captured a lot of equipment. The iraqis have air support. You know the army evaporated in the north. Yes. Obviously we look at Market Reaction to all of this. We have seen stocks in the gulf in particular take a bit of a hit. Oil prices being key. Yeah. So far the equity markets have been relatively muted. We saw oil at 114 yesterday. Highest in nine months. Averaging 116 in the final quarter of the year. Most of the Iraqi Oil Production is in the south. Clearly there is some disruption in the north. Are not yeah. I think they wouldnt have had time to do that anyway. You know the iraqis will want more air support. Obama is in a tough place. He declared the war over. He wanted to get as far away from iraq. The republicans are pummeling him now on the fact that these forces are coming in from syria where they criticized obama. He is in a really tight spot. There is not all that much the americans can do there. They are evacuating personnel from the embassy in baghdad. That is not a good sign. Discuss how the oil markets lets have a look at how they are doing. David. We are seeing in equity markets. Still very early, obviously. It is about back to level. To see what is happening. In japan we are looking at turnover there. 25 to 30 thinner. Perhaps you can see it in this time of the day. The Energy Markets are continuing to fall. There you go. Crude and futures were contained. Now closer to 107. 15. Basically we are looking for brent above 113. Bloomberg did a survey and the thinking out there, the average at this point. Right now that could change as developments progress. 116 a barrel is the average price by year end. That is what is happening with the Energy Markets. Dollar index, there is any sort of dollar effect there. Just about flat there. A sharp up tick on friday with petroleum. The Service Provider in the energy sector. Upgraded to overrate. We are also seeing gains across most of the gold mining stocks in australia given that they do benefit from this defensive play of money moving into hings like gold. Six Straight Days for gold futures. A lot of risk aversion and defensive plays coming in. Yen, gold and the oil price at this point. Back to you. Thanks for that. Bloomberg market is out with the latest list of the worlds Strongest Bank it is. Once again it is a lender from this neck of the woods on top. Yes. Hang seng bank. Ssets are 1. 14 trillion. Strong capital base. They have come back from risky investments. The regulatory requirements, they are really on course. Very stable. Those are three of the reasons they are in this top tier. They were ranked 10 in 2013. This year number one. That is the situation at the top for the third year in a row an asian lender. 8 of the 21 banks are asian banks. Which are the other ones . O. B. C. , overseas china was number one in 2010 and 2011. Now they are number four. That is one of the examples. D. B. S. Does well as well. Yes. I agree with you. One of the key measures is this. You have to have a return if you are an equity investor. But you have to measure it the right way. Return on equity but this is a bank with very Strong Capital base. If you have a weak capital base you will always be higher. If you do it on a conservative basis like that returns of 25 . It is not just last year. It is consistent. You dont find that. Certainly it is better than any bank in asia. It is of course better than any bank in the u. S. Or europe. At least he agrees with both of us. That is the important thing. Retail banks in this survey. That can apply because clearly you are seeing a lot of the investment banks, british banks. Canada. Canada again. Three banks from canada rank in this ranking as well. That is very encouraging. John, thanks for that. You can read more about the worlds Strongest Banks in july in the julyaugust edition of bloomberg market magazine. In half an hour we will speak with the magazines executive editor to get more on this story. And the First Chinese bank to get a british license. They are set to get a license by the end of this year. That would be the worlds biggest lender to boost transactions and lend larger sums. China eastern agreeing to buy 83 jets in a deal worth 7. 5 billion. The biggest ever from boeing for a chinese carrier. They increased estimate for demand from china expecting airlines to need at least 5,000 more aircraft over the next two decades. Worlds biggest steelmakers says it is good news china may lift a decade long ban on Foreign Investment in the industry. Steve, how will chinas protective ways changing . Well, there is an argument on what should china do and what will china do with their ailing Steel Industry . The chinese mills are losing money, many of them. They are riddled with inefficiency. China consumes half the worlds steel as it has been urbanizing but it is also the worlds biggest producer and there is a glut of unused capacity at these inefficient chinese mills. To curb this overcapacity the government has been squeezing credit to the industry. About 80 of the major steelmakers had a combined loss of 2. 3 billion yuan. That in the First Quarter alone. What is being described by harshest s one of the perating events. The overcapacity issues need consolidation and he is raising his hand to help. But there are regulations prohibiting him from taking control of steelmakers. One of the few foreign steelmakers with investments in china since this ban on overseas control was imposed in 2005 but chinese authorities, given all of the troubles in the Steel Industry and the reform push, they are considering scrapping the ban which would significantly shape up the landscape here as china has seven times more steel demand right now than the u. S. And the u. S. Is the next biggest market after china. The big evaluate problem is that a lot of these steelmakers up in the north are stateowned and big contributors to the economy. They are big employers. So this is a politically charged discussion as well. Growth there are big areas in steel intensive industries such as car making i guess. The economy may be slowing but automobile sales are not. He says he sees that industry growing by 60 over the next eight years. They are already the worlds biggest auto market. That is why he says they are focused on making steel for Industries Like autoive as well as white goods, washers, dryers, refridgerators as the consufpblgeds trend in china increases. Mittal is opening up this new venture. Guess what they are go to on . Ly be focusing automotive steel. Still to come, thailand accused of modern day slavery with thousands held against their will. Thailands military rulers are denying claims that they are forcing Migrant Workers to go home. Tens of thousands of cambodians have left the country. What are the authorities saying . Well, they are saying the accusations are groundless that there was no order to excel cambodians or other labors from neighboring countries and say the workers are returning home for the harvesting season. So essentially the allegations are just rumors. That is what they are saying. Still, we are seeing panic among cambodian workers, thai employers. More than 100,000 cambodians have fled tie lan on crackdowns here crossing the borders since the army seized power in late may and in recent days the number has increased. Reported that seven were killed over the weekend in a truck carrying returning cambodians crashed. The military ousted the government following seven months of political unrest. They denied the crackdown but they said they will take steps to control migrant labor because of concerns about Human Trafficking. What is happening on the thaicambodian border at the moment . Chaotic. Workers say tens of thousands of undocumented migrants were trying to flee over the weekend. The border checkpoints were overwhelmed. Thailand says that many as many as 4 million Migrant Workers in the country. About 400,000 from cambodia. About 2 million from myanmar working illegally in Industries Like agriculture, fishing, holding jobs not wanted by thais themselveses and make an important contribution to the economy. Thanks. Up next flash point iraq. We will look at the wider implications of the fighting on the oil price and the regional balance of power. This is on the move. It is monday june 16. These are your headlines. Lets start off with the top story. Fighting in iraq continues over the weekend. Iraqi military forces struck back at sunni militants as the government tries to reassert ntrol over large chunks of territory north of the capitol. They say the situation is improving. The sectarian war has now started to hit emerging market currency. Indian rupee drop to a onemonth low as concern the country a trade deficit will widen further. Keep in mind india is highly dependant on imported oil. Now to eco data. Remittances from the countrys 10 million strong overseas workers. Aprils figure is expected to have topped 1. 9 billion. Money spent from abroad is one of the pillars helping to drive consumption and property demand in the cunlt. Coming up, i was talking about the indian rupee. We saw on friday. 80 in ow north of 59 early asian trades. For india it is basically risk aversion. We look at a lot of these high yielding currency. The aussie dollar down by about a tenth of 1 . It has recovered a little over the past 0 minutes or so. Taking it above water there for the kiwi dollar. The measure of the u. S. Currency here we go. So those are the stories driving your market this monday morning. Lets get back to the top story, the crisis in iraq and how it is all affecting Energy Markets. Victor, thanks for joining us. What is your take on all of this . Well, you know this is a serious situation in terms of the global oil markets. Iraq is now the second largest producer within opec. The world market is counting on much more production coming from iraq going forward. So this situation in iraq really threatens potential supply growth going forward. Absolutely. Is there anybody out there . The saudis are the key swing producer. Can they make any difference with the short fall . Lyou know iraq produces about 3. 3 Million Barrels a day of crude. Within opec the spare Production Capacity is just about 3 Million Barrels per day. The spare Production Capacity within opec can offset all of iraqs production if the production gets disrupted. But you can see that. There is not really a whole lot of spare Production Capacity within opec. So if any iraqi production is really disrupted the market will get quite uncomfortable with the limited Spare Capacity within opec and we are going to see crude prices soar if there is any real disruption out of iraq. Indeed. We have not seen that yet because the insurgency is still taking place, north of baghdad in predominantly sunni areas. And mosul where it all started. If they encroach further south we will get to that pain barrier, right . Right. You know the much of since much of the revenue for the iraqi complement comes from oil. O the oil fields and the exports infrastructure in the outh are going to be attempted targets for these insurgents. And right now the disruption or the attacks have all been in the north. The Oil Infrastructure in the south has been out of harms way. But these are indeed tempting targets that we will need to keep an eye on developments going forward. All right. The thing is if the situation continues to escalate how high could oil prices go . I had a guest on last week suggesting if things worsen dramatically we can see oil at 130 on brent. I think when oil prices go above 120, you know if there were some disruption in oil, consuming nations will start discussing releasing strategic stocks. And that is going to put a lid on any significant surge in pricing. But i do agree that if there is real disruption out of iraq we ould see at least a 10 to 15 dollar rise in prices and consuming nations will discuss releasing stocks. Some of the airlines and car makers out there, are they feeling it yet or is their position already hedged so that they will not for a while . They are feeling that quite yet. In fact i would say the oil markets response to the situation in iraq has been quite muted so far. In large part because the world has seen a lot of growth in nonopec production out of north america so the crude supply situation is quite robust at the moment and no disruption as happened to the iraqi production. But if pricing rises by 10 or more sectors Like Airlines are going to be really quite severely affected. Is this the time to be buying oil . Stocks at the moment. Given as the prices go up, they become more profitable. I think that the oil market is going to get tighter. The iraq i situation is did not going to be resolved any time soon. We do have quite a bit of oil out of the market. Libyan supplier problematic. In the latter half of this year we are likely to see Oil Demand Going up. We are entering into the summer season. The demand for gasoline typically goes up. O we are likely entering a stronger market. Il producers will benefit. Victor, great talking to you. We have to take a break. On the move returns in a couple of minutes. We are rising for a fourth straight day waiting for the fourth straight day on news of violence from iraq. Bloomberg industries remaining optimistic on casinos in macau. The numbers on capital strength. One bank has risen to the top. It is hang seng. At the origins of Hang Seng Bank and how it made it to where it is today. Lets have a look at why hang give us an idea of some of the preconditions to get on. E list we assess the quality of their assets, their reserves, balance against the extent of their risks. Theyre not very exciting banks. They are very safe. That is one way of putting it. Take it early with what the world has been through and the Banking Industry has been through with the financial crisis of 2008 in 2009, safe and boring is a good place to be. Many are warning that hong kong could be facing a property bubble. It could have a negative impact. They have faced that before. It is cyclical. Hang seng bank is prudent and well protected in terms of balancing its risks with its reserves. The 10 of them on the list are asian banks. Out of the currency crisis of 1997 and 1998, the regulators here are mindful of what can happen and have imposed reserve requirements that tend to be in excess of what is required by the bank of international settlements. Hsbc and Standard Chartered are not on this list. Top 20. Te only the you have to have assets of 120 billion. There is only one u. S. Bank, which is u. S. Bank corp. Of minneapolis on the list. None from the list. What is stopping them . As i said, it has to do with the regulatory regimes. It is also a matter a measure of the kind of reserves you have versus the risks you take. Thank you very much. What is get a look at going on market wise. Thanks, rich. Youre talking about hang seng. For thisabout 24 years version of the worlds Strongest Bank. We have to go through a lot of numbers, five sets of criteria to be well above. Exactly as far as growth, but that is where your money is safe. That is another way of earning it. Here are three other banks have always been among the top 20. Dbs. Ave you kobe and let me clear this up so it is more clearer for you. Three other groups that did well. You have the three banks from singapore, hang seng is number one, then he have the german bank, three banks from germany. You have nordic tanks and the canadian banks also doing well rounding up the top 20. If you look at the top 29, out of 21, you have to banks tied for second place, they are from this part of the world which is obviously a big market. It has to do with the regulatory framework. Helps that the Hong Kong Monetary authority basically follows what the fed does. We have low deposit rates in hong kong. If you are borrowing 0. 1 , you dont have to be very aggressive to make a return on your capital. Rich, there you go. Ofg seng bank and of bunch eastern banks in singapore doing well on this annual list. Thank you. Lets have a look at some of the top corporate stories. Here is john. The uks sunday times says they are britains third richest train. Buy French Company alstom by siemens could be made today. They would buy alstoms gas turbines business. Mitsubishi and he taught she would merge your steam turbines with those of alstom. Japanese companies would take a Minority Stake in the venture. That is according to a report. They declined to comment on the number of jobs being lost. The company is involved in a review of its business. Those are the Tech Corporate headlines. Argentina kicking off their World Cup Campaign with a win against bosniaherzegovina. Scored another goal to give argentina a healthy lead. Bosnia could not force the draw. Thrash honduras 30. Germany is celebrating with victory at the u. S. Open. He led the field on all four days. Americans Rickie Fowler and erik compton were the only players american players to finish under par. Golf continues to enjoy a boom in support. Courses are opening daily, especially in china. Mike kurt is a chief executive kerr is going to tell us how rapidly golf is developing in this part of the world. It is developing very rapidly. Asia as a whole, it is difficult to consider them as a common market. There are some hotspots, particularly china. In terms of performance and interest in golf, we see that across the board from thailand into malaysia. India now really coming to the forefront in terms of growth and popularity of golf. Tour. Have the asia a top ranked asian player still has to go to europe and america to make a mark, right . Well, i think golfers are starting to consolidate on a global basis, so we are not that far behind europe. Certainly, we are a long way off the pga tour. An individual golfers point of view, it is about that Career Pathway and getting into the majors and getting into the bigger events that currently exist. Are currently on the European Tour and the pga tour. To make a mark in the world, it doesnt necessarily stand true that you need to be on the European Tour or the pga tour. That is starting to come true on the asian tour. We are getting more and more household names that are relevant in this part of the world. This is the growth of golf that is happening. This is where the center of gravity of golf is shifting, to the east. Give us an idea of some of the household names. Probably the most tomgnizable asian golfer is ranked 36 before coming in this weekend. He is probably the leading asian light, if you like. The former order of merit winner in asia as well. We see the performance of some of these golfers really coming to the fore. It is difficult to look at a single event like the u. S. Open that has obviously concluded last weekend. Two weeks ago we had winners on the pga tour, the European Tour and the japanese tour, all former order of merit winners on the asian tour. The successes about trends and not about a single event or a single golfer. We see the trend is that asian golf is certainly getting stronger. Asian golfers are starting to perform on the world stage. It is not going to be long before we see them really competing at all of the major tournaments around the world. , seemingly opening a new golf course more than one a day. We would like to see a chinese player also come to the fore. I think we will. We have some good chinese players. We have seen the superstar status or the press interest in some of the younger players coming out of china, we had in the masters in 2013, one perform very well. These guys are very young. I would not like to put more pressure on these Young Players until they reach the age of 18, 19, 20. That is when we really start to see these players coming through. We have a whole raft of those players from right across asia. Upandcoming players who are going to start making their mark in the next threefive years. What about the sponsors . Are they coming in as well . Weve had a few tournaments in hong kong where there were issues with getting sponsorship. Golf is no different to any other sport and any other marketing platform. It is about the understanding the world of into sponsorship and sports sponsorship and into the world of golf. I think golf, particularly, in this part of the world is very wellpositioned to give a sponsor a return on its investment and its a objectives which is really what you should be talking up about with sponsorship very like any business, there are markets asch may perform as good other markets. Again, overall, the trend in asia is that the understanding of sponsorship and the value of sponsorship is certainly growing. Quickly, and hr guinn, that is something, isnt it . That is fantastic. He certainly had the halfway record in terms of his performance and he was second overall in terms of his performance. He really dominated this week. That happens in golf. That is one of the fantastic attributes of sport which translates into business and sponsorship. You just dont know what is going to happen. It is live drama unfolding on the screen. That is one of the real valuable assets and valuable aspects of golf as a sport. Thank you for coming along. Mike kerr for the asian tour. The southn korean wan is one of the best performing currencies. We will talk more about that when we return. Unspecified action against thailand. The state is investigating what are claimed to be severe violations of human rights area paul allen has more. Windom chan wields his bag through the airport. He considers himself lucky not only to have his freedom, but lucky to be alive. In 2006, he left his native myanmar looking for work. He claims his employment agent tricked him and he was sold onto a thai fishing boat for 600. I asked, where are you taking us . The captain answered, your agent to q2 this boat to work on this boat. It will be for six months. You can go home when you have worked for six months. It is ok to come back if you want to work for one year, but you have to work at least six months on this boat. After one year of hard labor he had tuberculosis and no pay. It dawned on him that he was a slave miles from land with little hope of escape. It was better to die by jumping into the water than to die by being tortured by these people. When i was about to jump, my friend grabbed me from the back and saved me. He finally made a risky break for freedom during a rare visit to port. While there is no official figure on how many workers have been trafficked, the Thai Foundation issues there are 200,000 migrants laboring on fishing boats. The United Nations survey of six hundred workers found almost none had a contract and 40 had suffered unexplained pay cuts. In the last few years we have been working so hard to come back. Police were making their arrests. The problem is still there. But it is getting better. Thailand is the Worlds Largest thirdlargest seafood importer. The state department is warning thailand to clean up its labor practices or face consequences. Paul allen, bloomberg. The world cup is making all the headlines in recent days. It has been a bit of a war. Here is a dashers the outlook with david english. The south korean wan is the best performing among 31 major currencies that we have tracked. Analysts are predicting that mr. Wan will be hitting a wall soon. Over the High Exchange rates. The me show you a chart which n. That isrst the wo the line in white. The line in yellow as a Foreign Exchange reserves which rose to a record 360 one billion u. S. Dollars last month. The take away from this chart is that the bank of korea is buying up the currency. Essentially, one of the most accurate forecasts for the currency. He says that intervention is certainly a hurdle. Caution is needed from here. Won to weaken. The economys exports are getting fairly expensive. Another chart i want to show you is a sixyear chart of growth in south korean exports. It fell negative only three times in the past six years. First, Global Financial crisis, second when he had rival exporting in the end. The third is here touch was last month when you did see the yen the won hitting sixyear highs. Normally youd see that in other countries, but south koreas export accounts for over half of the gdp. The biggest most wellknown Corporate Company gets over 90 of its sales from abroad. In fact, the socalled wall appears to be, if you look at the chart, right below where we now, 1020 against the u. S. Dollar. See officialswe come out and say how concerned they are. If history is any guide, it will be ok. They will step in and buy up more u. S. Dollars. Since we are talking about south korea, the National Team opens the World Cup Campaign on wednesday morning against russia. Will their team be as good as their world beating currency . Coming up next, 2014 hasnt been a great year. s see why losing hand why a losing hand may be a winning bet. Fall evaluations and slowing growth. 2014 has not been great. A new report from Bloomberg Industries says that may all change next year. Give us an idea. Theyre still making phenomenal money. They are making phenomenal money, but that is clearly not what the market has been focused on this year. We have had stocks that have not from elation to, maybe depression, but clearly there has been a major shift from growth and momentum from late last year towards a focus on all of the nearterm pressures. You can see this chart looks at a valuation, a longterm average, which we have fallen back to at the end of last year. Hasth and momentum deflated. We have gone into negative momentum with nearterm pressures. Evaluations of falling accordingly. What is the difference between nearterm and longterm yucca with talked about it many times. It is a question of the drought. No new casinos coming on stream this year. An entirely different picture in the next couple of years, is knit . When does that get raised in. Get priced in . Not only do we not have any new capacity, but we run against the increasingly difficult year on year comparisons over the course of the next couple months. That has been building over the second quarter. Talkedshift that we about from vip towards mass market another pressure on top line growth. You can see how momentum builds through last year and starts to fade. That is the next couple of months. Aref we look at this, we assuming that this is going to work out beautifully. There is longterm opportunity which everyone is focused on not too long ago. They are not so sure now. Theres the possibility that china could step in and not allow so many people to go to these gaming tables. There is that, there is union pay, mobile payment issues. Lots of nearterm little tweaks. That is a smoking ban comes on in a month on the floors. That the items headline, topline growth number is going to come down further. That begs the question, does that change the longterm story . Nothing does grow in a straight line, does it. T . We experienced this distribution of stock in the group from growth and momentum towards value. That takes some time to work through. The interesting part, next year we start to see that next wave come on stream. Sands. Galaxy, melco, the Hotel Capacity that each of those will see next year is significant. Tim, thats all we have time for. This darkome, into underbelly of the thai shrimp industry. We live in hong kong. This is on the move. In hong kong. This is on the move. Claims of a massacre as the Iraqi Army Finds militants. Tank ds strongest Strongest Bank is a new number one. President barack obama sent an Aircraft Carrier to the gulf, but has ruled out putting troops on the ground. Is difficult trying to stop these militants. They have captured a lot more weapons and a lot more territory. They are supposedly battle hardened from the Syrian Civil War where they became congealed as a new organization. They are certainly on the move. Stick around with us. Have a look at how this is playing out when it comes to the oil markets. David english is with us. Prices here is a twoyear chart. 107. 23. . 10 off theabout high. It is still fairly clear that prices are elevated at this point. Youre looking at the highest level. It could go back all the way to september of last year. We were north of 110. At a bit of technical, it seems that the averages at about the 50 day average is at 102. Whatuld see a spike given has happened over the past few days. 112. 79. Ow you brent, their thinking by years and we could be looking at prices of 116 per barrel on average by year end. That is the thinking at this point. We are seeing movement into a lot of these futures contracts as well as gold. That is a twoyear chart third it is not very clear. Take a look at todays. There he go. 1282. Compare that to this time last where it was 30 more it was given all we are seeing on the weekend, of course what may still lie ahead. Back to you. We have andrew davis with us. Does unitedo, what states do now . Theyre in a terrible position. Obama declared the war over. He had no stomach for this war. He voted against it in the senate. Now he is really stuck. He is sending an Aircraft Carrier that clearly he cannot put boots on the ground anytime quickly. This whole insurgency has been a weeklong. It is not like were going to get american troops in there, but maybe air support and drone strikes. If the iraqi army cannot altogether and defend its own territory, it is per theres probably not that much the u. S. Can do. Weit is extraordinary that have iran and the United States almost on the same page. There have been reports that they are talking to each other and figure out how to stop this insurgency. It is incredible when you think of the around of iran in the u. S. Talking about this. The u. S. Clearly backed a rock ages ago in the iraniraq war. Think how dangerous are they . How far out are they . Clearly, they are incredibly effective militarily against the iraqi army. Now they have captured all this equipment. A huge chunk of the iraqi army has just evaporated or defected. Now there are reports that they are slaughtering their prisoners. It is just terrifying. They seem to be a reasonably effective military force. The iraqi army is probably not the best arm in the world, but pretty wellequipped. Thanks a lot. Protests taking place at the world cup taking a dramatic and here we have this image of a Police Officer caught on camera. Seeming to fire a live round at demonstrators. This incident happening near rio and the mara cannot anadium and the marac stadium. Protesters should the cameraman a live bullet. Gun and is, holding a threatening and swearing at the protesters. Witnesses later say that he did indeed fire his weapon twice. Thes take a look at some of corporate stories were tracking for you. Chinese to and getting a boost. It is the biggest ever for boeing from a chinese carrier. Airlines will need around 5000 more aircraft in the next few decades. The british Train Company porter broke has gotten an offer. They own the third of britains about 4. 2 billion. Ctc may be the First Chinese company to get a u. K. License. Would be the worlds biggest member to boost transactions and land larger sums. Larger sums. Again, the banks in this neck of the words are on top. Here is john with the details. Huge chunk of the Majority Bank is owned by hsbc. Trillion, Hang Seng Bank put into place quite soon. It was ranked number 10 back in 2013. Now it is ranked number one. As you mentioned before, asian lenders are now top for three consecutive years according to this survey. Of 21 banks, eight are asian banks. They have a very Strong Capital base. , there is not much risk. That is a bit of a change on that. Number one. S number one in 20102011. Still, there are three singaporean banks on the list. Abouted what he thought this magazine and he said he agreed. Here he is now. I agree with you. One of the key measures as this. You have to have returned if you are an equity investor. You have to measure it the right way. Adjusted equity, but for leverage, because this is a banquet very Strong Capital base. If you have a weak capital base you are always going to be higher. They do it on a conservative basis like that, it turns out they get a 5 . It is not just last year, it is consistent. You dont find that certainly is better than any bank in asia. It is of course better than any bank in the u. S. Or europe. Qatar middle east National Bank is the Strongest Bank in the middle east or africa. Canada is in there as well. Three canadian banks are top ranking as well. This, thatadd to oned on five criteria, to is efficiency and the other is tier one capital. They are very carefully constructed and judged. That is why the Hong Kong Bank is on top, you dont see many british or american banks. Thank you very much indeed. And about half an hour we will be speaking with the magazines executive editor. The shakeup in the Steel Industry. We will be headed to beijing next. On bloomberg. Com as well as your mobile device. The biggest dealmakers says it is good news that china may put out a ban on foreign trade. I dont know. Is speculative, Wishful Thinking on the part of one of the richest men in the industry and the world. He would like to he did try to take a stake in 2009 in a chinese steel mill, but that was not given approval. They have a venture, but they dont have controlling stake. L says could mitta help the profitability and efficiency of the Steel Industry. This is a sensitive topic in china. The problem right now is that many are losing money hand over fist. China consumed half the worlds steel as it organizes. It is also the worlds biggest producer. Theres a glut of unused capacity at the many chinese mills. Some of them are large, stateowned mills, some of them are smaller players. To curb this overcapacity and the problem of pollution, the government is squeezing credit to the industry. About 80 of the major steelmakers combined a loss of 370 million in the First Quarter alone in what is being described by many steel analysts as a harshest operating environment in history. Al says china needs help. Of the few foreign steelmakers with investments in china since that man was imposed in 2005. Controlling oversees control of steve mill of steel mills. Chinese authorities are considering scrapping this ban, which would significantly shape up the landscape. Again, the problem is a political one as well. Many steelmakers in the north are either state owned or they are very large parts of the economy. Their big employers, and shaking the rafters in these places means more than just shutting down are consolidating a steel mill, it is an entire economy. It is a big decision that has to be made. He does see bigger growth also. The intensive industries. About also talking carmakers here. A niche part of the steelmaking industry that will be profitable. One of the biggest growing industries in china, forget the flowing economy, forget the restrictions on the road, the Automobile Industry here is growing. He says is the worlds biggest market, but it will grow by over 60 over the next eight years. That is why he is focusing on making steel with this new venture in the hunan province. Will make steel for Industries Like automotive, as well as white goods, which are washing machines, dryers, refrigerators and the like, as the consumption trend in china increases. Thanks for that, steve. China before setting up his own trading house, he is the chairman and ceo. What you make of this change of heart in beijing . I think it was expected in the pipeline. The switch on the consumption of product is changing. It is what goes into the white goods. The last five years that china was evolving it was more focused on the infrastructure, development and those kinds of things. As we move into the consumer markets, you will see the shifts taking place. The demand for white goods will increase the demand for flat products. You need more investments and all that. They want foreign money. Becoming a very big issue in china today. To have environment control you need these technologies. We were talking about the steel mills that are there are hugely inefficient. They could do with a massive shakeup. That is true. Today, Steel Production in china is close to 810 million tons. Product needs consolidation. Like steve said earlier, most of the steel mills with lower margins are going to be losing money. I think the shift was very necessary. Harry, as is a growth area . Is only a growth area if it is profitable. There has to be consolidation here, too. Absolutely right. Consolidation has already taken place over the last 35 years. Anymore. Avoid that what are you going to do . Do you see this as an opportunity for you . For us is a big type line. The product is, whether it goes into a long product or a flat irrelevant to us. The product is important and the pipeline is important. What is going on with iron ore . A 20 showing it is near month 21 month 21month low. Is that capacity . Share is overcapacity. Sure thatn expected surplus in the balance sheet. Going forward in the next few years, this surplus could go up to as much as 200 million tons. The path of least resistance is for the price of iron ore to keep falling. Today, the majors are between 50 and 60 a ton. There is a margin for the producers. It looks like your business. Is the differential between the spread. Obviously, as long as there is volume if there is no market you have no business. That is right. You deal with also some other things within the steelmaking process as well. Is there anything you are bullish on in this industry . I think the only bullish part iron ore we are not bullish. Side, the logistics steel growth goes on. That is where we are involved in the shipping part of it. We are more bullish on shipping them we are iron ore prices. The chinese economy is seeing a bit of a slowdown. What will happen next. Global freight is very much dependent on the chinese. The total global trade of 106 billion times, it is ultimately all about china today. , two to three years with india coming on the scene, i think it could change if it. You could have another china in the making. Thank you very much indeed. Harry is ceo and chairman of the caravelle group. We willclear clear the air for you when on the move returns. Returns. On the move china is boosting its claim to islands disputed with vietnam. It is close to an oil rig that is sparked clashes between chinese and vietnamese ships area and i says one of its fishing ships was rammed and sunk. Selfies china is also on typhoon alert. Forecasters say the typhoon will bring torrential rain and damaging wind over the next three or four days. Thousands of ships and fishing boats have order to remain in port. Workers have been ordered to stay on the mainland. China is by no means the only place with dirty air. London is one of the main culprits as well. Here is tom gibson. The west and in central london, a constant flow buses and taxis ferry shoppers to the capitals retail heartland. This town has a dirty secret. In a cruel twist, it also has the highest nitrogen oxide levels in london. Is coughed dioxide up by diesel engines. The u. K. Set the limit at 40 micrograms per meter cubed of air. It is quite high. Last year, this monitoring station recorded an average of three times the limit. These levels are the highest in europe, greater than even beijing. The u. K. Government estimated there are 29,000 premature deaths in 2010 as a result of n 02 poisoning. It is a law of unintended consequences. Anothermits less of lieutenant, carbon dioxide. In london, the majority of the bus and taxi fleets run on diesel. But, two minutes walk from the hustle and bustle of oxford street, it is not all doom and gloom. There are five or 6000 particles per cubic centimeter, where we were getting levels around 70,000, 73,000 on oxford street. For those of us without airquality monitors, andrew has developed an app designed to show areas of contamination. You can see in Grosvenor Square that the levels are much lower. If youre commuting or traveling each day, one of the ways you can reduce your exposure to pollution is by taking back ets. While the u. K. Struggles to bring in a two under control, to bring n02 under control. All the days top stories on a website. News eachnd market day and every day. That is bloomberg. Com. Do check it out. Towards theead current lunchtime break in tokyo. The nikkei up by one half of 1 . Chinas composite is bucking the trend across the rest of asia pacific. We have a look to the downside. A look at the times index. Pretty much flat. Break. Ht, take a mike and workers fleeing thailand claiming that the army is staging a crackdown. Returns after this very short break. Denying claims they are forcing Migrant Workers to go home. Mainly cambodians have left the country. What is the military saying . Say theunta leaders accusations are groundless. Neighboring countries also say that they are returning home for the harvesting season. They are saying that the allegations are just rumors. Among we are seeing panic cambodian workers. Human Rights Groups say more than 100,000 cambodians have fled thailand on crackdown fears. They have been crossing the border since the army seized power in may. In recent days, the numbers have increased. It was reported that seven people were killed over the weekend when a truck crash near bangkok. The military ousted the government following seven months of political unrest. It has denied the crackdown but it has said it will take steps to control migrant laborers. That is because of concerns of Human Trafficking. Reports of scenes at the thai border with cambodia. Chaotic, even dramatic on the border. Ofs of thousands undocumented cambodian migrants were trying to flee over the weekend. The border checkpoints were overwhelmed. Thailand says there may be as many as 4 million Migrant Workers in the country. That 400,000 from cambodia, about 2 million for myanmar. They were illegally in Industries Like agriculture, fishing. They hold jobs not wanted by the thais themselves. The United States wanting to take unspecified action against thailand because of people trafficking and modernday slavery. Agencies are investigating what appeared to be severe violations of human rights. Chan wields his cart through the international airport. He considers himself lucky not only to. Have his freedom but lucky to be alive. Into the to be alive. In 2006, he left home looking for work. He said he was tricked and sold unto a fishing boat for 600. I asked where are you taking us. Us your agentld brought you to this vote to work on this vote. This this boat to work on boat. You can go home after six months. after one year, he had tuberculosis and ok. It dawned on him he was a slave with little hope of escape. I figured it was better to die by jumping into the water than to die by being tortured by these people. When i was about to jump, my friend grabbed me from the back and saved me. He finally made a risky attempt at freedom by running up the port. Ares estimated there 200,000 migrants laboring on thai fishing boats. Almost none had a contract and 40 had suffered the unexplained pay cuts. In the last few years, we have been working so hard to combat, tackle these Human Trafficking issues. Were ce him of the si the police, the si were doing their reports. Most product is shipped to the United States and the state department is warning thailand to clean up its labor practices or face consequent is. Face consequences. Chief ethical advisor of the mikong group. How bad is it . We are talking about 300,000 men and boys that are on these fishing boats. 5 to 25 that could be in trafficking circumstances. So you are talking about literally tens of thousands of people in the situation. Does it go beyond the fishing industry . Report showed that there was as many as half a inlion slaves in thailand, agriculture, sex industry, seafood packaging, and fishing as well. Paid. Y are not about 60 of the people on identified that there were murders that take place come excessive beatings, many are malnutrition simply because they dont get appropriate third. So many other crimes are happening as well. What can be done . It has to be a multisectoral approach. The police have to go out there, check the votes to make sure that the migrants are not getting abused. The private sector also needs to be involved. The products that are coming from the c are used in the are used in sea products in the United States and other parts of the world. So consumers and the private sector and the government have to come together and come up with a consolidated approach. I want to digress and ask you are things getting any better . I dont think that they have necessarily in the seafood industry. Ive been tracking cases for almost 10 years and they are pretty much the same as they were 10 years ago. There is a lot more awareness in the last year. The has been at least 10 articles on this and they are basically saying the same thing. So i think it is a status quo situation. Said there is a need to act together. But you are suggesting not to boycott. You are saying there should be a buycott. Organizations come and basically say, ok, lets stop buying products from a particular location because a certain percentage of them are tainted by slavery. And 80 are not. If you boycott the entire set of materials are coming from that particular industry, you are in fact kind of hurting the reputation of everybody. So youre punishing some of the people who have some decent ethical standards. Thats right. So it is like a glass halfempty and have full. So some of the Larger Companies need to go and demonstrate what they are doing to address the problem. Have proactive activities, have codes of conduct, more thirdparty audits going into identify whether or not there is slavery taking place, having a lot more aggressive approach. And those companies should be rewarded. Up until now, that is the difficulty. Toody has asked difficulties go below the top tier to look at the lower tiers of the supply chain. We are asking them to do that. It will cost money. It will require research and investigation. But thats where we are now. The world knows about this issue. They wanted to be stopped. And that is what consumers are actually pushing. Is not just thailand, is it . There are 21 million slaves in the world now. The profits generated from that is 150 billion. Just to put into perspective how much success has been made, last year, it is anticipated that maybe 50,000 people were held, less than 1 . Very few people know about the issue. If you dont know about it, you cant address it. What is needed is general awareness of everyone, the private sector, the government, the consumers, so we can get around basically saying slavery exists in the here and now. Modernday slavery. If a person doesnt get paid in the person cannot leave the situation, it is not modernday. It is just slavery and you have to call it what it is. Thank you. Lets check on some of the stories making headlines around the world. Shocking pictures being released of captured iraqi troops. They were posted by the militants across northern iraq. Bodies orhow the broadcast bodies of those after being shot. They call unbelievers to fight the sunni insurgency. They say their rent the real target is baghdad. A bomb killed at least 15 people. Another three were killed in a blast in a southern city. The u. S. Has sent an Aircraft Carrier to the gulf to be for its presence to beef up its presence by president obama has ruled out sending troops to the country. We cant do it for them. In the absence of this type of political effort, shortterm military action, including any assistance we might provide, wont succeed. So this should be a wake up call. Iraqs leaders have to demonstrate a willingness to make hard decisions and compromises on behalf of the iraqi people in order to bring the country together. Indonesias president ial candidates face off in the second televised event. Returns. On the move indonesias president ial candidates held their second televised event last night. Was on the agenda this time . Morning. Candidatesential challenged each other on economic and social welfare issues. Called a big you push strategy for a prosperous indonesia with a main focus on funds leaking out of the economy. Hecus of this economy said he would invest heavily on the sector to create more jobs and battle poverty. Economynfident the could grow more than 7 . His plans to improve regulations will give incentives for fouroriented exportoriented industries. Indonesia is the largest archipelago in the world. He insisted he is not against Foreign Investment. But he emphasized the importance of Mutual Benefit from both investors and indonesia. Is amply said the contract contract that needs to be respected. Even when both candidates seem debateood, the the could not come up with a the candidates were discussing to make up its. Thank you. Pickwick check on the markets and how they are doing. By. 6 by the end of its morning session. Going down the sydney, we do have some traction there when it comes to these commodities trades with oil and gold climbing to nearly threeweek highs with the escalation of violence in iraq. Looking at the hang seng, yes, we are just a little below are. Markets reacting with movements in crude and Precious Metals prices. And fixedincome assets, you see some escalation. Geopolitical shocks coming out of new edge. Singapore, a quick check of the Straits Times industry yes, we are flat. Runs one of only four International Operators in the mobile Satellite Services market. Companyned the ailing around, returning it to Revenue Growth and he joins us exclusively from singapore. Thank you very much indeed for joining us. Us talk about the transformation that you have in this company. Also, who buys satellite phones generally speaking . A lot of people by satellite phones. Good morning. This is a company that had been struggling a little bit between 2007 and 2010. In 2011 a Transformation Program that has led to two years of growth. Whole industry was down and were able to go against the tide. We have grown the company by 15 in 2013. The whole industry was down 4 . The focus on innovation, we have focused on making the industry and little bit more exciting. To usele that see need your phones, i suppose. Who else . Correct. We have different types of people who use them. First of all, they are government entities. Those can range from middle from military government to civil government to Border Patrol to coast guards. All of those need connectivity and they do not vote to the center. Operatet of times, they in an area [indiscernible] we recently found a very large deal with the philippines to offer satellite connectivity for seafarers. Half of the civic half of the seafarers in the world are filipino and they need to talk not only to man the operations of the ship, buffer crewcalling purposes so that people can call their families and stay in touch. So it is very important for the satellite market. The increasingly so because of all the activities. There is deep awareness that there is need for satellite connectivity. Lets talk a little bit about innovation in this field. It has been fairly slow. Really backward compared to their terrestrial counterparts. But you have made some strides, such as Something Like an iphone. Exactly. It is a very important device. Byod, bring your own device. Instead of competing with the terrestrial world, we are bringing satellite connectivity as an addon to the terrestrial world. In particular, for the iphone and the samsung galaxy, we have created devices that allow the user to turn their smartphone into satellite smartphone so that they have their own interface. It is the same apps they are used to all the time. They just extend off to the satellite. Terrestrial network is not available, they can you satellite. The innovation is quite a bit in the product but also the way you distribute as well. For us, we are also changing the way the distribution is done in this industry. Instead of just relying on specialized operators, we have terrestrial operators in japan, africa and philippines. We are disturbing through Virgin Megastore and dutyfree. We are also sending through western union. Western union is a Money Movement facility, but we are used but we are also using it for charging crash cards. Its not cheap. But our costs falling . It is a lot cheaper than people think. When i joined this business many years ago, it is to be the settle icon activity was five dollars a minute. Not even more not anymore. It can go much lower than that, especially for the maritime community. When youre talking about pricing, you are looking at prices that are more competitive than roaming, terrestrial roaming for example. We are looking to change, especially through those innovative channels and through more customer friendly. What happens next in your industry . What are the trends . Industryow, this is an that has lacked innovation and has lacked something you in a long time. We are turned to change that. Our competitors have put together plans for next generation consolation that are very reactionary. Vape put plans there a plastic constellations, in some cases that move away from them handheld market from the handheld market. Lifese we have a lot of left in our satellite, we are doing this quite early. We are putting some planning together and we are looking at the application of the future. What does the customer want 10 or 15 years on the road, not today . There looking at pushing boundaries of technology with their many fractures. Basically, what we want to do is have networks on the satellite side that are adaptable, that are in tandem with terrestrial network so that satellite there is no more of a gap between the satellite world and the terrestrial world but also providing coverage that is unparalleled, covers that the terrestrial world cannot provide, coverage that is not stability orhaving is not affected by natural disasters or manmade disasters. That is what we are looking to bring in the future to the world. Isil then, our focus introducing innovative products, continuing to introduce innovative channels to the market, continuing to grow asia. Asia has been growing. Im out of time, im afraid. But thank u so much for joining us and telling us the story. Got a bit of breaking news. There is no threepete. Spurs taking the series 41. This one at home was another blowout, 10487. Tim duncan scoring 14 points, one of the through thats one of the few players in the get to have four championship titles. Fast and easy fix, but tough decisions ahead. The new Prime Minister theres no easy fix for the economy in india. Comments coming in over the weekend from the Prime Minister modi, sounding a warning bell. That the recovery is some time away. And tough fiscal decisions will need to be taken and will be taken. Saying anster monday take the year to country out of its economic ill health, taking hard decisions and administering a bitter pill when required, will be necessary. There have been the real issue we have been looking at. We are watching at data coming out later today. We have been struggling with high anger high inflation as well as slow growth. Curbing wasteful expenditure is also likely to be on the agenda. There is an urgent need to clamp down on subsidies as well as withdraw some [indiscernible] if necessary. Thank you. Asia edge coming up. This is bloomberg. This is asia edge. Look at our top stories. The iraqi army strikes back. Crude oils sending games with production under threat. Whosw do we determine the world strums thanked . Thailands rulers are under five are under fire. There are claims of modernday slavery. Rolling out new regulations, organize newo ownership. And more on this monday edition of asia edge. Im tracking what is happening with your money this monday morning. Lets be honest. We saw this coming to respect. Two weeks back. We are basically well above what we saw last week, about 113 for Brent Futures at this point. We are off the highs we had on friday but we are so halfway through the asian trading session. A hundred is what the average estimate from analysts