Also, the Straits Times index, as well, and lets check in with Malaysia Airlines stock. I think that is up, as well, a gain, but overall, lets just get a feeling of what is going on market wise with david. Thanks, and lets keep in that asia is used to waking up after the u. S. Session. And korea,ng on, japan, and australia, new zealand, a mixed picture, needed 225 getting a lift. The japanese yen is back over 104. The last i checked for the japanese currency, the weakest level since january, so lets see if we do see a continuation of the breakout we have seen starting in mid august for the japanese currency. Things you want to see. Inflation data, the bank releasing minutes from the latest policy meeting, and that is at 3 00 p. M. Hong kong singapore time, and we will wait for the markets to really get wound up. Are watchingt we very closely is the one in australia. And this is simply because the rba decision that comes out, in about 20, 20 five minutes, and we have the current account deficit. 14 billion. Send iteantime, i will back to you. Ok, malaysian airlines, stocks on the way up. On friday on hold after its sixth consecutive quarterly loss. It is cutting thousands of jobs in the hope of returning to profit. Re are several key areas several carriers. Ok. Well, they have got it all to do, havent they . The offer price of 27, i suppose, but are there any precedents for that . Aviation is a tough business. The business is very tough. The airlines are constantly trying to keep revenues and cost in line, and it is tough to make a profit. Malaysian airlines, like others, has a need to restructure. They have come up with a plan that is radical, ambitious. Japan airlines went through a similar very substantial restructuring, and it is now rejuvenated. And the american carriers we were talking about earlier, setting up thanks for malaysia to do this. Running,was a carry on and there was a similar mechanism in japan. And from a passenger point of view, operating without interruption. The thing is here, two disasters in a year, how do you come back from that . That is the whole point. Planes are extraordinarily safe, but they are traumatic for all concerned, and malaysia suffered of two hime fx enormously tragic events, each of which is positive, but ines do have faith, two questions. How long should this take . And what should Malaysia Airlines look like after it . I think they are getting themselves a six month timetable for the new company, and that will involve renegotiating contracts with staff, tough conversations with suppliers and thin on fears, and they are probably looking at the debt to equity, so that is a process that could take several months, and i think by the middle of they would migrate, but the structure continues. Needed to do this probably before they had these disasters. Yes, it was on the agenda already. A radical restructuring. Worldare in a part of the which is competitive. Well, we talk a lot about overcapacity, and it is certainly tough to make a profit, certainly for lowcost carriers. You see the results right now. We are seeing growth. Profits are hard to come by. Overall, i do not think there is a lot of excess capacity. Ofonly takes a little bit excess capacity to take some of that pricing power, and that is what undermines margins. So they need to look at their long whole Route Network as a whole also . The fleet is in good shape. They have got some good equipment. And the use to focus on the and they will maintain a balance. Importantly, the productivity. That is the trick, isnt it, how you cannot actually reduce the cost base without actually cannibalizing your product. Yes, and they have awardwinning cabin service, so they need to cape that keep that and maintain revenue. So it is a balancing act. They need to improve productivity and get the cost down. It is so much more to it go that way and build up. Going down, isnt it . Yes, you can grow in scale. Challenging in other parts of the world. The face of the competition coming from the likes of easyjet and ryanair. Yes, and there is competition for the middle east, and this is part of the dynamic. Is universal across the industry. Thank you so much for coming. With asiapacific airlines. The of course, one of things we have been watching out for is what is going on with the foreign exchanges, and we look at the euro under pressure. This is in focus as we have that reserve Rate Decision. Lets find out more from david. This is just about at the level of about 4 00 a. M. Is how ior a catalyst would describe it. And would that be the rba decision . It is with just about every single economist. They do expect them not to leave things at 2. 5 . There is the current account deficit. Expectations in the forecast, almost tripling. From the previous period, and we are talking 14 billion. We continue to watch that. And the dollar yen, we are closer to 1450. And this is a session over in tokyo right now. What do we have . At take a look, and it is its weakest levels since the start of the year. 105. 30. January 1, we have seen a breakout. Will it continue . And we had manufacturing data, with the exception of greece and france, and there is a little bit of expansion. It is just about every country in the eurozone seeing a lot of pressure. And this is what is being priced in. 131. 27. And this is 2013. We break below this level, and we go towards 128 if you look at some of these tentacles, and very quickly, lets just end with this currency. Seven. 31. Ernie and back to you. 37 point 31. Somee are having a look at of these enormous deals on the table. Absolutely enormous, it would make sense that they would look east, with Options Limited in terms of dealing with the United States as well as the eu, and lets not forget, gazprom supplies about one third of the gas needs, and it is not directly affected by sanctions, but the secondbiggest company is doing a huge deal. Basically, this is russia asking china to join the secondlargest oil project. It is a very big deal, 440,000 barrels per day. And it is about 4 of china ok, lets clarify this. This is not part of the deal they have been able to sign. Giant, thisoil pipeline is historic. And a key part of the kremlin strategy in terms of energy, it shows increasing attempts for the western alliances, and to focus more on the east, this part of the world. Thank you. Ok, still underway, stuck in the slow lane. Car sales in japan falling to their lowest level in three years. We will find out why. Is back in two minutes. With on theck with me, rishaad salamat. More than 835 Million Dollars, and they did it just weeks before the bank bailout. Project, andoil they offloaded some, as well, goldman here declining to comment. And an investment worth billions of dollars. More than 170 million coal mining licenses after the process was illegal. It may be some relief. The government is recommending they arebout 40, but not close to starting production. Needing aated stocks boost. Nearly six point 5 . The bank of japan says another sales tax rise, and Prime Minister shinzo abe may go ahead with this. Clearcut asnot be they have cut spending. And, indeed, the higher sales tax has taken another bite out of the economy. Domestic sales tumbling to threeyear lows. Well find out when we get to our Bloomberg News reporter in tokyo. Talk to me about this. What led to it . Was it all down to the sales tax hike . Hi. You would think five months removed from the sales tax increase that at this point, maybe we would be seeing a bit of an upturn, that we would have suffered some payback in the immediate months after this increase, and you had a number of customers who were able to get their orders in at the very last minute, and those orders did not necessarily translate immediately to sales the way the dealers count them, so you had customers getting in and really sort of building an order backlog that, in a sense padded response for the first months, and this is when the tax increase went into effect. So you actually had some fairly decent months with some small decreases, even a small gain in the immediate months following the tax increase, and here we are in september, and we are looking back at august, so we had the steepest rocks since the tax increase, 9. 1 in august. The worst result in three years, and there is very little reason to look at this and see much of anything to be optimistic about. It was negative almost across forboard, a 12 drop toyota, 15 decline for nissan, and the sort of loan piece of good news, if you are at honda, there was a gain their, really driven by the new small car, which has been selling quite well. Yes, 11 , and the thing is, can we expect any improvement when we look out over the next few months . What do you think of that . Backlog, soed that we dont have that anymore. The other reason to be looking , the japanesers Automotive Dealer Association is saying they are looking at going and this is looking like it is continuing to be alsoenging, and you are coming up in a. Timeme in a period of where it is difficult, and we saw the late last year the pull ahead, where customers were saying, you know what . Car,w i am going to buy a and i will buy it now and pay the 5 sales tax rather than 8 , so it is tougher for the andstry, for the near medium term. Thanks a lot for that. About the declining car sales in the country. Expectations, and a landslide victory. Now, one hundred days, assessing performance so far. \ lets check on some of the stories making headlines around the world, with ukraine , a crisis escalating outofcontrol, the west accusing russia of stoking the fighting. It is something they have denied. Proposed youn has taunt me for parts of ukraine. And tensions remain high in the pakistan capital of islam abroad after clashes between police and demonstrators in the socalled red zone, and earlier, antigovernment protesters stormed a state television, forcing them off the air, and they are calling on the Prime Minister to resign, accusing him of rigging last years election, and there are more cases of and it is the most cases of the diseases since the 1940s, and 19 people have been confirmed with the illness, and most of the software is were at a park in tokyo, and shares of a pesticide maker harley at a fouryear high. Is the iranian leader calling for clerics to be more tolerant of the internet, saying they cannot shut out the modern world. Has faced resistance from hardliners. Earlier this year, there were issues with people dancing to a song called happy. And lets have a look at indian futures. We have at the moment, a move to the downside in singapore on that futures contract, just a racing some of the gains we saw, with the nifty, up about 9 10 of 1 , and the Prime Minister marks 100 days in office there, so lets find out what the report card looks like. Wanting us is our Bloomberg View asia editor. What does this report card of yours have to say . Have the initial hopes been for filled . Well, it is a mixed record so far. Has clearly changed the democracy and has shaken up the ranks, making officials to show up on time and stay late, cutting out long lunches, and so on, and this kind of thing will have an impact over the longer term, but his supporters voted him into office with huge expectations and huge hopes for Major Economic reforms, and there has been no real sign of those yet. For them,preparing but his political mandate will never be stronger than it is now, so it is a little worrisome that he has not moved faster on some of those things. Moment, in japan at the very, very close buddies with of theabe, and i think three followers that he has, he is one of them, so what does this trip look like at the moment . It is a symbolic and strategic victory for india and japan. Look countries are interested in not just reviving their economies, reviving their National Strength and pride and place in asia, particularly visavis china, so a lot of what you have heard coming out of the summit, it has been the body language, and there are hugs between the two leaders, as well as talking about defense operation and worries about expansionist tendencies, which soa code word for china, whether it results in actual deals with Japanese Companies in India Remains to be seen. They face the same challenges as anybody does in india. There is obviously chemistry between the two, because they have been compared one to the other. Any ideas about how he will govern here . I think it should be a bit of a warning message to modi. Abe came into office the same way modi did, talking about the same things, finally breaking the deadlock in the bureaucracy, and pushing through the reforms that everyone knew they needed for a long time, and more than one year on, there has been great difficulty with this third era of reforms, so he has resorted to talking more about nationalism and asserting japans strength in a Foreign Policy sense, and that is something that modi should be very wary of. You can get yourself into attest to, abe can with his shrinking ratings. Toall right, we have got take a break. And we are having a look at learning from the past. After the break, a look at the hurray into h the markets, and we will have all of the opening numbers for you. On the move is back in a couple of minutes. Samsung goes for its lowest close after reports of falling profits. Infiltrating the cloud. Attacked byrage hackers, and lessons learned. What jack takes away from his last trip into the markets. Kong andng to hong shanghai this monday morning. We will find out how the sentiment is going. Here is david in glass. Yes, with the japanese yen, we had a lot of stuff coming out, and remember this one. So we areat 104. 40, just about at the lowest level since very early this year, the first two days of january. I also want to point out the and 1459. Rkets, it comes to fixing the reference rate here, the lowest since june 5. That is the offshore, by the way, you are looking at. And samsung, this is pulling down markets. Now, a lot of things are happening today. Out, a inflation coming few tips and lower. August, and for does this give more room for the bank of korea to be able to get more meat in . When they do come out with the minutes about 3 00 p. M. , the latest policy meeting. 225, they have added on to and perhapsins, this has to deal with the japanese yen. And there we are, asiapacific a little bit underwater. We see a lot of these markets under pressure. And we will be getting this at any moment, the data, and this is again under pressure, about 87 u. S. Dollars per metric ton, but i will leave it there for now. Back to you. Some breaking news, and this is for july. Lets have a look at these numbers. We go over to sydney and paul allen. The current account, the balance of payments for the Second Quarter not quite as bad as has been expected. Analysts were expecting a deficit, and they got a 13. 7 billion deficit, but the numbers for the First Quarter were also revised downwards from the 5. 7 billion deficit, and that has been blown up to seven point 8 billion, so the picture is not really improving a great deal, but this number, you have to go all of the way back to the 1970s, so it is really a question of how bad is acceptable, and that exports are down, subtracting. 9 of gdp, so that is going to have some impact when we get our gdp figures. If we take a look at some of the other data, the building 2. 5 for thejuly, month, beating analyst estimates of a one point 9 gain, and also turning around with the 5. 9 incline at we had back in june. This is the year on year figure of the increase, which is Pretty Healthy really, especially when you consider that construction was one of the areas that the reserve bank of australia has identified, and this gets them back on track as the investment boom winds down. In that context, the rba is going to announce the cash rate later on today. No changes expected. It is supposed to stay at 2. 5 , according to all of the economist surveyed. Atthanks, and taking a look the Economic Data coming through with the rba decision on the cost of borrowing, we can get a look at the opening. Getting reaction to this also in sydney. David . Yes, some of the movement we are seeing across the aussie dollar, a little bit of a downward move, and perhaps this has to do not so much with the number that came up but also with a revision. What is key is a revision upward, and 93. 14. And it is really about dollar strength. We are seeing weakness in the dollar index, 83, and that takes us to the strongest level, going all of the way back to the summer. There are certainly some moving parts, geopolitics, a lot of data points. Now, a bunch of stocks we are watching, going over to the equity market, what we are seeing in the opening minutes, a big drop yesterday for the casinos, following what came out of the government, showing it is not really too good. Casino revenues down. At thee a look evaluations. August was her rent this. Stock is down 10 , more or less. And valuations could have been driven down to a longterm average. Goldman sachs just coming out, and they are cutting their price just 1 10 of 1 , and of course, sand china, down 25 , and this is back in may. What we have been watching is. Hat this could signal you may remember that jack ma, we saw a long decline. And this is very near records. The thing is, when he lists, this is the top of the market. This is at a high point right 2000,nd this is since march, and alibaba is coming to the market, and they slightly delayed it, but they are expected to kick off during the week of september 8, and then following september 18, price saying to happen, and then listing starts, and this is like a deja vu scenario. And they lost billions in market cap, so really, what people are concerned about, are they overpricing the stock, and our people having the wrong opinion . It is different this time, isnt it . They do have more commissions coming from the market, but then again, there are some issues and as fighting counterfeit compliance. Ory these are issues that alibaba will have to be fighting long time, and this is about pricing. Is below the discount a 22 , but then again, it is 150 billion valuation still at thatprice, so it is still valuation. Again . September 18. Those are the two. This is taking place further down the field. To the globalver finance forum that is taking place in kuala lumpur, and so far this is the lender. This is a bank that was established with a finance operation in 2010, and the chief executive joins us. Thank you for joining us. How big a market is this for the products . Income fixed on . In kazakhstan . It is as big as the local markets, and the only restrictions are in terms of getting the legislative , andwork finetuned kazakhstan is the only country islamicat established finance legislation way back in 2009. It is rather comprehensive, and it is then that the different aspects that need to be andgrated with the system, it is 150 million, and we expect assets to double for the next three years. What about others what about others . What about other banks in kazakhstan . We do not necessarily view these as competition. This is complementary and supportive of the process. Say, one is ae to and we look at a others, and two they are looking into coming into the market. And the Capital Requirements i think would be the one issue that might give second path to anyone who is coming into a relatively new market. Are you seeing doing some of this in kazakhstan . Issue inhas been one kazakhstan, and interestingly, that was out of malaysia, rather than from the gulf, and i suppose one of the issues, there ,re slight differences including the malaysian ones. About what is taking place in the eu and the United States. How is this affecting Business Sentiment in central asia right now . When we talk about central asia, we tend to group these together. Areally, the differences quite significant. And this is the situation in ukraine. When we did an analysis, we wasd out that abu dhabi different when compared, so the differences are huge, and it is interesting that kazakhstan is part of the unit with russia and therefore, there are knockoffs from the situation, we feel in the marketplace, there is nothing substantial that has impacted us yet. And this is with the global evaluation. Indeed. We are seeing the currency at a record low. Thank you for joining us, from the bank. We have to take a break. Coming up, australia. Policymakers are watching. Their local dollar. This is on the move. And asiapacific stocks check, and a gorgeous day, with the nikkei getting a boost, a and weaky of gains, car sales not really affecting things right now, when it comes to the trading. And topics that we should be looking at, looking up, as well. And australia a while ago, the arerve bank, and economists and lets talk about the Interest Rates in australia. Down the line . Well, john dawson examines that. Strong stubbornly situation. It is no surprise, as some are calling for changing rates. The aussieuntries, is the strongest currency this year by far. It has almost gained 5 against u. S. Currency, and the next one is the neighboring key week, and then you have got the japanese yen. And the rba may soon find relief, thanks to expectations that the fed will raise rates, and the plunging price of iron ore, 38 so far this year due to weaker chinese issues, and this shows you the deepening convergence with the sliding price of exports. And the blue is for exports. The green there is the aussie dollar. And this is for one year overnight, and as you can see, theyre pricing in a greater chance the fed will raise rates next year. Again, the three lines will really matter. This will help alleviate the pressure with what to do with rates. I am john dawson. Right. Still to come this hour, days away from a much anticipated loan, and they find that the icloud has become the target of hackers, and we will tell you why, coming up next. I am rishaad salamat, and it is tuesday, september 2, and these are our top stories. In talksan separatists in belarus, and the west is accusing russia of stoking the fighting. That is something it denies. Proposingutin is autonomy for parts of ukraine, and even statehood for the eastern part of the country. And the ruble dropped to a low on expectation russia will face new sanctions. And it has been revealed that Goldman Sachs loaned more than 835 Million Dollars before a bank bailout, and the money was used on a Venezuelan Oil project, the wall street journal saying Goldman Sachs held some of it but offloaded some of that also. Japans salestax taking another tight out of the economy, and this time, sales of loans crashed to a threemonth low. This was easing into growth and household spending. And apples Security Standards are under scrutiny. For hacking into the icloud. They are figuring out who targeted celebrities in the u. K. And, indeed, the United States, and here is that the. What do we know . Onthe images began appearing sunday, and jennifer lawrence, the oscar nominee, who won for her role in Silver Lining playbook, after naked images of her and many other celebrities began appearing on a filesharing website, and we are not going to tell you which one that is, however, officials are looking at this very closely. The fbi is said to be involved now, according to the associated press, looking into account at apple icloud that were hacked into. And this is something that many and theyd to upload are now looking into the those sites, leaking 100 photographs, and this raises a lot of questions. Clearly, this is a problem for apple, especially because we have this in the cards. The ketek, that is when they will come out with a wider screen iphone. That may come out, and that is what the analysts are saying, as well as a wearable device, but the key question, with these devices together at home, at work, on the go, who is able to access your photos, and where do they go . That is one question, or perhaps your Bank Account Numbers or your telephone, and any information that can be incriminating or embarrassing in the case of these new photos. Thank you so much for that. We will take a look. Airships. Over a century now. Americans tell me they are going to take them to new heights in a reusable blimp in a box, and this could also be a lowcost addition for surveillance. Of course, you can get more on that and all of our days top stories, and it is bloomberg. Com, your source for business and market news each day and every day, 24 7, bloomberg. Com. And it is a bit weaker when it comes to the seng, 24nd the hang thousand. The shanghai pretty much unchanged, and looking at what is going over going on over in australia, so more positive Economic Data ahead of the reserve bank of australia decision. Economists we talked to say there will be no change. And the sun is putting on more of a light show. Flares, fromevel thesurface on the cover of last seven days, featuring a number of. Energycurs when magnetic buildup in the atmosphere and is suddenly released. It falls over and 11year period, and we are currently in a solar cycle. Hello, everybody. Were live in hong kong, and this is on the move. Threats of more sanctions against russia and the ruble at an alltime low. A suspected privacy breach at apple, an investigation into the cloud is underway. And the threat to occupy. Hong kong democracy protesters consider their next move. Heres one of our top stories. Ruble down two off fresh new lows. The west preparing new sanctions against russia. In response, moscow is raising energy ties with china. We have a look at the big deals on the table. What are we talking about here . This is really china, putin in siberia again, and he basically wants to offer china to take part in a massive project, a big, big deal, and china is a crucial, crucial partner. This is russias second biggest jet currently in operation. Second quarter, it turned out 440,000 barrels a day, about 4 what china requires every day. Its amazing, isnt it . China will take a stake. Details are not forthcoming as yet. Any details, well give you them. And they may offer big money. The big story, the comment from president putin was vankor is one of the biggest operations today and very promising. Overall we take a cautious approach to our foreign partners, who have no restrictions from our chinese friends. Aha. Ruble, of course, hitting alltime lows, and weve got this energy tie in the face of further sanctions against russia. Thats clearly with the ruble, thats escalating tensions. The ruble is going down, down. Theres been a massive issue the last few weeks, months. Again, also based on that says , the vice premier china is a reliable partner, and i can assure you everything s under control. Again, it goes to the implications, and thats been an issue, so well see again how that plays out. But overall, again, also you mentioned sanctions. Angela merkel is the one who wants to put a sanction against russia. We shall see. We shall see indeed. A long time to go to winter at the moment. Thank you. Thanks a lot, john dawson. Separatists holding talks in belarus, a warning that the crisis is escalating out of control. West accusing russia of skirting the fighting. It is something that they deny. However, president Vladimir Putin has proposed greater autonomy for parts of ukraine and even hinted at a former statehood for the rest of the country. The ruble dropping to record lows, weve been reporting, and expectations that russia will face new sanctions. There are clashes between police and demonstrators in the socalled red zone. Earlier antigovernment protesters stormed state tv, temporarily forcing the channel off air. They are calling on the Prime Minister to resign and accuse him of rigging the election. The iranian leader is urging clerics to be more tolerant of the internet, saying they cant shut out the modern world. The president is vowing to expand media and internet freedom, but he has faced resistance from hardliners. Earlier this year, six iranians were angry about them dancing to a video. Iranian law bans them from dancing and going outside without the hijab on. The rise may signal good timing for alibabas highly anticipated i. P. O. But this is deja vu here. The Share Offering soared, a big increase, but then it declined as well. The question is, what are the lessons which we can learn from this . The Market Conditions do look familiar, flike 2007. What we saw was after the high point, when it reached 2008 end, the stock had already lost more than 20 billion in valuation, and then in 2011 they had to delist that business unit, partly due to this fraud situation that happened. So a lot of investors are concerned, are we going to compete the same mistake . Is there an overselling in the stock . Those are some of the risks. Theres reportedly a discount on this as well. In the latest survey that we did, there is a 22 discount, so at the pricing of the i. P. O. , people are expecting the 150 billion evaluation. But after that, posti. P. O. Are you telling me Early September 18 is when we get the pricing . Yes. Tentatively. But people are saying this time its going to be different. Well, what are the differences . Well, if you look at the business model, its a lot different. Its a lot more retailfocused this. Time they do have their core asset in the i. P. O. , and then also, just in the latest filing, we learned that they were going to theres a possibility of tying some assets of ali pay and its Parent Company back into the alibaba group, so that also increases the value of the company. But then go, again, there is the regulatory uncertainty and how Chinese Government is going to deal with the financial payment systems. That was one of the issues that caused the yahoo dispute. Again, this overhangs. Lulu, thank you very much, joining us to go through this weve gone on forever waiting for this i. P. O. Right, lets find out whats going on marketwise. Lets get it over to david. David . The nikkei 225, what do we have there . Dollar yen, 104, north of 104, just about the lowest level, weakest level for a japanese currency since january. Thats pushing it up over in japan. You look at the thai index and the kospi in south korea, its simply a story of heavyweighted stocks. You look at samsung and hyundai pulling the index down. A lot of that also has to do it was alluded to whats happening with the forex market. Euro, lets look at this officially, 131. 19, 131. 20 is the level that we basically saw last september 5. Lets get a twoyear chart so you can see it very clearly. Next stop, 128 here for the common currency. Its fairly clear for you. So this is september 5. This is where we are right now. 128, thats what you have as far as common i mean, you look across the markets. I cant see another currency really under just look at how these reports are playing out. You had p. M. I. Data out. You had the e. C. B. , the bank of england also coming up with a Rate Decision, at least Monetary Policy statement late this week, and obviously people are pricing in a weaker euro. You look at the net short position, 150,000 as of last week. Not even considering, of course, the weak data that we saw on monday. What else do we have, dollaryen . Lets get a twoday chart. There we go. Thats pushing up equities in japan. You have a lot of local banks basically fixing the japanese yen at much weaker levels compared to the close yesterday, so 104. 40 is the one. 104. 69, either you look at what economists are saying, october likely the month that we say see as far as more stimulus or more actions concerned. South koreaian, what do we have . You had inflation coming in, 1. 4 , a little bit lower than expectations of 1. 6 . Does that give the bank of korea more room to ease rates . Well, well get more details, and we get the minutes later on in the afternoon, 3 00 p. M. Eastern, bank of korea minutes. Let me wrap things up. Aussie dollar at noon, and, of course, you have the current account deficit, just a little bit lower than expectations. But it was a revision for the First Quarter which perhaps did his in,. 9317 at this point. Back to you. Busy week for the economy in australia, as david just mentioning. G. D. P. And Rate Decision and comments from the head of the central bank there. Well, we did indeed get that credit im sorry, current account number which came out, and lets get there with paul allen. Has the balance of payment situation overall looking for australia, paul . Well, its never a particularly cheerful number. I dont believe its been in surplus since the 1970s, and today was no different. It was a deficit for the Second Quarter, a little better than expected though. Analysts had picked a 14 billion decline. But as david said just there, the First Quarter was revised 7. 8 billion a deficit. Experts were also down to 81 billion. But the price, of course, is famously been slipping, and were expecting to see net exports to offer a. 9 drag on g. D. P. Were getting that number out tomorrowish. Ok, better news they had, didnt they, paul . Yeah, that was a better read, and the reserve bank of australia will be pleased about that. It was up 2. 5 in july, better than expected, 1. 9 increase had been expected and turns around a decline from june. The annual figure is also looking Pretty Healthy, up 9. 4 year on year. The reserve bank of australia also talks about Residential Construction in particular as an area of the economy it would like to see really get going as the mining infrastructure begins to wind down. So theyre getting the up tick theyre looking for, it appears. The r. B. A. Does, of course, meet or make their announcements in a couple of hours time on the cash rate. All 27 economists surveyed expect that to stay put at 2. 5 . No heres certainly surprises to suggest they might reconsider t. Pal even, thanks very much. Coming up next, a debate over democracy here in hong kong after the break. Well meet one of the founders of the occupy central movement. Right, from our Central Studios in hong kong, streaming on bloomberg. Com, as well as your mobile device, this is on the move. China has defended its decision to limit democracy in hong kong. Beijing will vet candidates in 2017 for the election. Its called on opposition lawmakers to support the plan or risk losing the chance to elect the citys next chief executive by popular vote. Police have been using pepper spray to try to break through barricades as chinas representatives addressed law makers and business leaders. Joining us now is the cofounder of occupy central. Now, benny, did you really think that beijing would back down on this . Well, i think the movement now, we are organizing, the main purpose is not to cause a backdown of beijing, but more its about a social awakening of hong kong people with such an unjust system. I think hong kong people should stand up and disobey such a decision. Our guest yesterday said look what happened in 1997 when there was no democracy and the british handed over the territory to china. Weve seen an immense amount of improvement and reform to get to us where we are right now. Ow do you respond to that . Were talking about suffrage, the kind of chinese characters, where suffrage, which the candidates before you can roll is a iranian kind of democracy. I dont think that is the kind of democracy we expect in hong kong and hong kong people deserve to have. Both sides seem to be entrenched here. Is there any room for maneuver . At this stage now, the decision of the Standing Committee will be there, and the counselors are going to veto that, and that also will be there, and that is a fact. I think now we have to consider that what may happen after that. Ok, the thing is there were some signs coming out of the chinese representative from nbc that there could be a reform to the electoral system, further reform, but then there was back tracking here. Well, i dont think so, because the kind of socalled concession they may be allowing will not change the nature of the whole system, the undemocratic nature of the system. It was totally dominate by the Chinese Communist party the kind of system you cannot even call that democratic. Theres another way here, because being a bit of a cynic, playing devils advocate, lets say you get full democracy, the type you want. Then 30 years down the line, we get the special status of hong kong removed, and it reverts to the mainland proper and it will be totally undemocratic again. No, i dont think so, because according to our constitution and basic law, is it t does not mean it will end in 2047. E can continue our system. Also, talking about 30 years from now, china may have changed quite a lot by then. So i think we have to look at it this way. Now, how fun is it do you think for you to get a senior lawmaker at the moment to come and join you . Well, its important, because i think in this movement, one very important thing is we resist the position, and we need them to support the hour decision that we can that we can do it. And actually in june this year, we have organized a civil referendum with 800,000 people participate. People youre preaching to the converted when you did that poll, really, at the end. Day. At least those people have voted. And so i think they will follow, and we have also promised several times that theyre going to follow the decision and theyre going to veto that decision. What about senior lawmakers, somebody in the government, he or she. How important would they be if they jumped ship . Well, i think at this stage now, we do not expect such a thing will happen f. That happen, surely it will help the movement. At this stage now, that may not be what we are planning, and we are still going to organize our action, veto the decision, and then wait for time for the change. Benny, arent you concerned though . Many students taking place in the occupy central. That you could damage Business Prospects of this territory, and that could lead to many of these people who are looking for jobs down the line, not being able to get them. Well, it depends on the way we are going to organize the occupation at, and we have promised that it will be nonviolent and cause the minimal disturbance to the society. But what we want to achieve is to demonstrate to hong kong people, to china, and to the whole world how determined the hong kong people want democracy. I think in the long run, for our young people, having a democratic system, having a fair system is something that will bring longterm benefits to them. So benny, when are you going to have the protest . Im not going to tell you the exact date. It will not be too far away, but it will not be in the coming few days. We need to do a lot of planning, and also we need time for hong kong people to reflkt. We are talking about people civil disobedience doesnt seem like peace and love. Its nonviolent. When you face unjust situations, people willing to sacrifice themself in order to achieve a just something, i think that is peace. So whats it going to be . How are you going to structure it . Is it going to be annoying the authorities for a few days before you have a mass demonstration . I think that the details we cant announce at this stage. Thats based on legal reason. If we allow the details now, i may be arrested. We will have more of the details we need. The basic law is derived from the agreement, which gives hong kong region rights for 50 years, which is lodged in the international court. True. The reason why is it was istrict attorney i think thats a limitation of our system. At the end, the constitution, the basic law will have to be determined by the National People of congress, which is the same institution, which has passed the matter. But in the end the matter will have to be interpreted again by the senate, so that will be something i think were not to help the situation a little more. Do you feel betrayed by london or beijing . Well, i will still see the Democratic Development as a matter of hong kong. And i think its a big promise by beijing. I think they will see more a relationship between hong kong and beijing. I think that london may be a main part in the picture. Ok, well, off to the protest. What happens then . Well, i mentioned were going to enter into a new age. It will be an age of disobedience. Now, this does not mean that you need to resist every time. Surely it includes element of resistance, but disobedience means that we disobey the order, and we are going to create our own order. In a civil society, we are robust and mature enough to develop our own democratic capacity and mechanisms for allowing hong kong people to design for themselves. I think that was a Positive Side of disobedience. We are going to enter you into a new age in fighting for our democracy, in building our democracy, in cultivating the different culture. Benny, are you ready to go to jail . Yes, im ready for that. At this stage, the kind of offenses were going to commit, actual ive been told by a judge that is not likely that i will be jailed. Benny, thank you very much indeed. Benny there from occupy central and also, of course, from Hong Kong University as well. Up next, how secure is the cloud . Apple launching an investigation after reports of leaked photos. Details are coming your way. Youre back with on the move. Apples Security Standards under scrutiny amid an inquiry into the hacking of the socalled icloud. Further investigators are trying to figure out who targeted slen hits in the United States and the u. K. Well have more on what is, i suppose, a developing story. It certainly is. Celebrities, ordinary folks like us, like using the spid Cloud Service to upload photos, documents, contacts, any sorts of information that you would keep on your iphone or ipad, for example, and that apparently is how hackers gained access to celebrities like jennifer lawrence, nude photos of hers were allegedly posted online at a file sharing site. This by anonymous hackers. It was an image sharing site, and this, according to the london telegraph, is now being investigated. Apple has launched its own probe, saying the f. B. I. Looking at it. Of course, criminality involved if, in fact, hackers were behind it. No word on which country they came from, but a number of victims, 100 people, celebrities of all sorts in the u. K. And the United States targeted here, and these images began surfacing on sunday. Jennifer lawrence in l. A. , for example, calling the cops when she saw those pictures online. You can imagine how horrified you would be, especially as a celebrity. Ok, very quickly as well, big day next week, expecting a new device or devices to be launched by apple. How might customers feel about all this, with security at the forefront . Well, you would expect a dip in the stock price. We havent necessarily seen a beg move. Customers still very optimistic about what apple is coming out with, said to be the largest screen iphone, as well as the new wear act device, a gadget like samsung. But the larger issue is all the data thats going back and forth between these devices, our photos, personal photos included. Is it secure . Can people access it . Apparently in this case they may have entered via the find my phone feature, something apple had worked on fixing before. Thank you very much indeed for that. Up next the first 100 days after the rate. Were heading over to mumbai with a performance report on the indian Prime Minister. Performance check. Indias Prime Minister marking 100 days in office. Samsung had its lowest close in two years on reports of falling profit. And infiltrating the cloud, apples data storage being attacked bihacers. Were looking at what else is going on across this part of the world. Lets find out why youre looking at, well, casinorelated stocks today. Well, the government coming out with revenue yesterday at about noon yesterday, which really shows, again, a continued decline in the gambling intake, of course, which is the stills largest gambling hub. Valuations have fallen. Stock prices have been driven lower. In fact, you look at the valuation, according to bloomberg intelligence, were just about near these longterm averages. Will we get a bounceback . Goldman sachs, let me quote them here, price target cut 22. 80. The shares are a little bit higher, but not quite as high as initially penciled in by Goldman Sachs. And china up about 1 here, so that basically raises the loss to about, well, 23. 5 . Moving on, exdivedepped the story. So obviously the move that you would see after, of course, we do well, the day after they do announce, but they do announce the exdividends. What else are we watching in japan . N. T. N. , raised the bar at Goldman Sachs. Price target, 530 a share. Square enix, the story here, if you have sony, the play station 4, the news today was that sony will actually offer one of their games on that new console. Let me get you the name of that game. It is crag onquest, yeah. Were down 1 or the game isnt any good. Of course, i havent played the game, by the way. Shinko electric, moving on, a few other movers across asia. In fact, one of the biggest movers, epistar, a taiwanlisted l. E. D. Chipmaker. The c. E. O. Coming out based on a report saying that revenue actually peaked in the Second Quarter, and we may actually see a single digit decline this quarter, third quarter, according to the economic daily, citing the chairman of the company. Earnings concern there at hyundai motor. We had august sales coming out falling for the month. Hyundai motor, of course, 2. 4 on top of a lot of headaches that come with having a lot of these labor actions its been grappling with over the past few weeks. Indonesias president elect hopes to curb inflation in 2015 enough to allow a rate cut. Lets find out more. Bloomberg tv indonesia dahlia, very good morning to you. What are we talking about here . Very good morning to you. Inflation is recorded and expected. Limited, significantly slower than 3. 9 from the previous month. And inflation lower in two months, but would increase slightly in november and december. Central bank targets inflation at 5. 3 in 2014. But theyre cautious on inflation risk going forward, as well as the current account deficit due to precedentelections plan to cut fuel subsidy as soon as he is sworn in. Hey say the team study shows theres a price hike. Big path ahead to create room. And also aiming to reduce inflation rate next year to enable Interest Rate cut. 2015 inflation paced the target at 4 out of that reducing subsidies. They plan to increase the budget by 10 trillion. Euros and yen next year, 13 higher than this year. And also to finance the deficit in the state budget. Back to you. Also coming out and trading over in india just over an hour to go. Its when trading does start up. Gold is apparently pouring back into the country. Imports surging 65 in june. The cap was in place on gold exports, but since been relaxed, looking like its working. The current account deficit ell 64 on the year. An investment worth billions of dollars to the government there, proposing canceling more than 170 coal mining licenses after a court said the permit allocation process was illegal. There could be some relief. The government has recommended saving about 14 mines that are in or close to starting production. Up next the first 100 days after the break. We look at the performance of the indian Prime Minister. Going to go live to mumbai for that. Also coming up, its an Industry Worth trillions. We look at the growing demand for Islamic Banking. The accepted honeymoon and today the return of the Prime Minister. Now this is the performance, get over to mumbai and bloomberg tvs in business anchor. Great to see you. What is your report card say, good effort, must try harder, etc. . Well, things couldnt have been more opportune for the 100 days to be completed. Stock markets trading at alltime highs, back with 30 billion. Indias g. D. P. Is back to twoyear highs at 5. 7. You couldnt ask for better timing. If you look at how this government has sort of performed the last 100 days, its been extremely high on ntent. This is indias most strongest government in the last 30 years, and expectations were ky high. For example, he disbanded the Planning Commission of india, sending a message loud and clear that india 2014 cannot be run of the 1950s. Therefore, if you were to take a view of what happened so far, more of these 100 days, its a ost like a job, has begun, job well done. More importantly, if i were to categorize this, this has not been a quick plan. Its been more like bringing a death match, where its been slow and stead. There have been very important singles, but very few flamboyant fixers. In that case, would have een a big hit. Every time youre talking about policy, you talk about oreign policy. Its been welcomed by Corporate India and investors alike. On the other hand, on the insurance sector, its not been able to. It hasnt had the political advantage to push through the insurance bill so far. On the Foreign Policy, they made a huge symbolic win by inviting all the leaders of the nation. He followed that up to the neighborhood in nepal. Hes now in japan where hes building an extremely important relationship. Later this year hes going to schmooze with president barack obama and the chinese president , so these are significant wins as far as india is concerned. But talks with pakistan have collapsed. Its been hanging in the balance, the visit has done very little to push that through. There have been a few wins. Some are still a work in progress. If you look at the government and how it was formed, slow and stead, but yet not big wins. When we look at his trip to japan, you know you can look at it as being mutually beneficial when it comes to economic ties, but also could be sending the wrong signals to beijing now. What are people saying about hat . This is significant. He relationship, and forging a relationship with japan was always there. Two important factors. One is the government is not making it clear that hes not going to depend on apolitical country for funding or technology transfer. Japan in the scheme of things of investors where it badly needs investment. It does not mean theres not simi quation with china. Indias Foreign Policy has always been about relationships. China will feature as well, and youre going to see that the meeting happens later this year. The relationship with the United States is going to be significant, and that meeting is also later this year. Lets look at what else is oing on. Gain access to photos of celebrities in the nude. The cloud lets users store personal information on external systems that can be accessed virtually. The alleged Security Breach comes as apple prepares to launch the new iphone on september 9. Many suitors, including banks have come and gone, but iliad is refusing to give up on t mobile. Sources say the French Company is talking to private equity firms about making a sweetened offer. Last month soft bank controlled sprint abandoned its pursuit of t mobile. Its never too late for a change of career, especially if the boss makes it happen. Mizuho financial plans to encourage Equity Research analysts to become investment bankers. The move comes as they focus on Investment Banking fees after low Interest Rates reduced revenue from loans. And those are the top corporate headlines this hour. Lets tell about you the global finance. Our next guest running the malaysias biggest lender. This is the chief executive. Thank you very much for joining us. Theres still growth. I mean, it is at the moment a growth story, but just how much do we see . Thank you very much. Good morning. It has been a Phenomenal Growth its financing and the deposits, particularly in malaysia. Its been a tremendous growth. Its been contributing to our shareholders value as well. We provided to the Group Approximately between 18 to 21 . All right, well you are really entrenched in malaysia. Do you have plans to expand overseas . F so, where do you want to go . Definitely our revenue is still in malaysia. Of course, in singapore, it has been sure a tremendous opportunity. Its provided good income to the group. Were very positive. There are key opportunity in the market that we are very confident on. Of course, if you heard u. K. , hong kong is exploring that as well. They had wholesale business, and were quite confident that its going to grow. With this in mind, how do you see the bank evolving over the next five years . Do you need to get involved ith consolidation . I believe a player like that, and particularly the key area of growth is definitely our focus. It could be linked to the global economy, and using the platform not only from the story, but using the platform of Islamic Banking growth. Im very confident that with the platform that we see, particularly like the banking businesses, we believe in serving the community. That could be a catalyst to grow not only in certain key market, but also across modern transaction. We apply these values to our organization. We see the values reap their profits and return some values, not only to our customers, but our stakeholders as well. Ok, lets talk about your product. How is the issuance of those islamic bonds going, and what lse do you have in mind . Well, very much in malaysia, the local currency has definitely outpaced the growth of the conventional. Over the last three or five ears, i am very confident that the currency, particularly a dollar, we see now the selling, its going to look at area of growth in the space of the global market. Youre seeing the demographic more dollar issuance, not only outside globally, but, of course, in the area, particularly out in saudi and u. A. E. Weve seen tremendous growth over the last three years. . What about more products i was asking about your pipeline in terms of what you offer customers, for instance. Well, our focus is very much 5050 between the wholesale business and the resale usiness. That is the key to our stability in terms of future growth. We see both sides. Of course, we have in malaysia at the moment controlling at least 1 3 both the deposits and the financing market in the Islamic Banking space. We would like to maintain that space, but weve also seen that growth in the recent space out of asia and singapore as well, although indonesia is small, it contributes about 4 at the moment in the industry. Im quite confident were growing at at least a 30 smaller base. If we continue that, im targeting at least five years, at least a contribution between 10 to 15 . Thank you very much for joining us. Up next back to the future plans new heights. This is on the move. Have a look at whats in store from the r. B. A. But first, our wrap of some of the stoferse were tracking for you right here on bloomberg. I have a check of the top headlines. Moscow is strengthening its energy ties with china as the west threatens more sanctions. Russia has offered beijing a stake in its second biggest oil project. Rosneft may offer 49 in the vankor project. Also, gasprom may sign a new deal with cnpc to supply natural gas. China has defended its decision to limit democracy in hong kong, and will vet candidates for the election in 2017. Beijing has called on the city to support the plan or risk losing the chance to elect the next chief executive by popular vote. Police clashed with protesters as chinas representative addressed law makers and business leaders. Central bank policy makers are meeting in australia today. Theyre likely to keep it low. The current account deficit widened slightly less than estimates. That is a check of the top stories today. Indeed, just picking up on what zeb was talking about, the Rate Decision. Theyre likely to leave rates on hold, but do further cuts lie ahead . John dawson has a closer look. Yes, indeed. We have glen stevens, seen at the r. B. S. , deciding on rates about an hours time from now. Its a tough call. Thats part to blame for unemployment being at a 12year high. After the low demand for companies to credit and also for the weakening export growth, no surprise that some are calling for a cut in rates, but not in this meeting, but down the line. The g10 country is the strongest currency this year by far. Its gained almost 5 on the list, also fun to have the next strongest currency, but up less, and then youve got the japanese yen there holding below 1 . The r. B. A. May soon find relief thanks to growing expectation that is the Federal Reserve will raise rates and to the plunging price. Its fallen 34 due to weaker chinese demand again over the period of time. This chart shows that deep being divergence between the strong aussie and the exports, n fact, resources in the blue. Throw in contracts, as you can see, they are pricing in a greater chance of the fed raising rates next year. Both forces may have weakened the aussie dollar, and that will alleviate the pressure on what to do with rates, at least in the short term. That, therefore, tells you the story of what could lie ahead for glen stevens and his team. Air ships have been around for over a century. Now a recuseable blimp in a box that could be a lowcost addition to stealth surveillance. This ises scene in victoria harbor in hong kong. It is the middle of the trading day, and youre watching asia edge. Our top stories this hour the f. B. I. Has been called in to investigate hacking reports at apple. The tax bite spreading in japan, cutting sales from nissan and toyota. And has it been a summer of love . Indias Prime Minister marking 100 days in office. Also coming up in this hour of asia edge, the lessons to be learned. We look at what they take from the last foray into the public markets. And im david inglis. What are we seeing today . Well, its a decent session. You have weak spots here and there, but the weight today really carried by the session were seeing in the nikkei 225. Its just a surging session. Volumes are quite heavy as well. Well, heavier than usual, about a third heavier compared to what we are seeing this time of the day. You have the nikkei 225 and the broader topix index having their best days in two days. Dollaryen spiking up this morning, so the yen is trading at its weakest level since very early this year. Now, elsewhere, australia just about flat. Were seeing some pressure there on the index and the a. S. X. Because of the weak session were seeing there for the banks and the mining stocks. Now, if you look at korea, you look at taiwan, down relatively by the same percentagewise. Its really a