Eu to thing president is on the move. But we are trying to think our teeth into the first full trading a week of the year. David ingles is discussing this further. It is going it is going to cost the index, so we are starting this new trading year slow, things are quite light. Just give you a picture of what is moving up, our top three, and our bottom three percentage gainers and losers, so that is what you have in australia, the nikkei is up and the 119, the 120, that is what we have in the top three quarter, and then taiwan, singapore, and malaysia has the bottom three, but again, i of fairly company in our data out of japan, out of china of course in china come you had those manufacturing leads and quickly checking in with the euro, it is below 119 when we opened up so this is the lowest level in give or take about nine years, since about 2005. The euro in 2014 had its worst year in nine years. We had some comments from mario draghi who says that we cannot rule out the risk of inflation. And then we have information out of greece, and we do have an election in three weeks, so the new party might take more seats there. The Prime Minister was using a speech in friday to a run of the victory of the main party there in greece, and lord of a default and an exit from the eurozone. And then from spiegel magazine of this morning, these quotes of that germany is ready to accept the developments out of berlin that is inevitable, if it does take the win. Oil extending, where are we at . Four west texas and for the other forecast here from, let a just get you bernstein, there is a worth of 80 u. S. Dollars here. The brokerage is thinking that the oil will remain subdued this year. Especially when you consider some of the countries this year that are ramping up their production this year. Now, what about the Economic Data that we are looking at . We have bank of england ecb what about other parts of the world . They all came out in the summer 26 and later on in the week you have chinese inflation and producer prices, now, this is what we did see over the holidays, vietnam is coming up at about 6 , exports out of thailand are unexpectedly dropping by about 2 but lets take a look at what is happening, at least what we did see out of south korea, another record current account surplus there was a price pickup of 11 through 4 billion 11 4 billion. 11. 4 billion. Fresh foods out of japan dropped, and retail sales dropped. 3 on the month and still the was a 22 month low. We will have more on that in a little bit. Thank you so much, david ingles. 2014 was a good year and 2015 could be even better this year. Of course, 2014 was coming in at billions of dollars and i think we have been talking about it all morning. It is basically doubled here. Basically, you cant see that. Cant see that. They were selling 1. 1 million smartphones, and they have a lot more their ceo is sane next week that they will announce that they have a new product, we have no idea what that is a flagship product . It could be a flagship product, we dont know. [laughter] their valuation is already very high, and it could billion it could double to 100 billion and their inmate their main investor is a very happy camper. Very go, but what about samsung and apple . China is doing very well. Yes, xiaomi overtook samsung last august,. They have sort of been a avoiding of a larger a more developed markets like the u. S. And the u. K. , and it probably has to do with property and price. Price. They are already grappling with that. They are now competing with the boys. They were saying that two years ago, xiaomi started developing this ecosystem and now they are seeing significant progress there, and they are investing more than 20 hardware companies, and analysts are saying that if this ecosystem is similar to that of apple, which includes hardware and software services, that will be key for the company, but as you said, we have to keep an eye on xiaomi. They have so many Different Companies theyre looking at, and they are in the third spot in the market. Exactly, you can rise up so far, but can you maintain a position . Thank you so much, shery ahn. Nell is look at the Hong Kong Exchange we have been looking at low trading. It was only at an average of 342,000, now if you compare that to the nasdaq at 98 million a share, it is still subject to shareholder approval. If we look at Price Performance milk melco lost 37. 92 in the last year. Ok, more bodies have been recovered from that airasia plane disaster. Bev weather continues to slow down operations. They are not looking good, these conditions today, are they . You are right there has been no reprieve, weather has remained bad, the winds are high, the survey is strong, and they were unable to retrieve bodies because of these strong winds. The agency chief says that this poses a huge challenge because of the mind. The mud causes the cousin of the mud, divers cannot get into the water. We know that the fifth piece of debris has also been retrieved from the water, and it resembles parts of the tale. This is important, as you know black boxes are located in the tale, and now we need to pinpoint the location of those pieces so they can be retrieved. We know as well that there are five vessels equipped trying to do just that, they are trying to pick up the thing, the single tjehe signal but there has been such an enormous time trying to piece time piece together why 8501 went down. Part of the issue right now is trying to figure out how quickly indonesia and itself asia are responding. Take a listen. The regulatory authorities and other authorities and need to get up to task and they need to get their act together and get experts are around the world, if need be, but it is a worry for a lot of professional people in the industry at the moment where the Airline Industry is growing too quickly, and perhaps the management which is by net primarily financial management, is more worried about financial issues. In indonesia, airasia actually did not have permission to fly on that day. What do we know about that . Well, investigations are still ongoing right now. Airasia is allowed to fly only four days out of the week for the surabayasingapore route. Singapore Authorities Say that airasia has the authority to fly every single day of the season so that is why the investigation is ongoing, and try to figure out if airasia violated regulations. What we are fighting out is that Insurance Companies are reviewing airasias insurance claims. They say they will not pay the claims if it was not following the exclusion of lists. Exclusion lists. Investigations have to be followed to see if airasia can make the claims that it wishes to. Thank thank you so much, lets take a look now as to what is going on now in india. There is a Holding Company for the companys countrys stakes. This comes against a backdrop with banks requiring loans. Lets have a look at the prospects of the trading days over there, this is the last session, where we had a gain of one third of 1 . The sgx is down, and it is essentially staying the same in mumbai. And the markets of taipei why . It is a brandnew year and a brandnew investment opportunity. How is 2015 doing . We have the chief officer of research at ubs singapore. What are your your expectations looking like . Yeah. We actually kept the position on u. S. Assets, especially the u. S. Dollar, so we are ahead of the curve especially ahead of break rate hikes. There is more stimulation in the economy, and we also feel very comfortable in turn of Investor Expectations on the high side so those are some of the key calls that we are making. India, in particular, and also export markets, like taiwan. Ok, lets start off perhaps with growing economics, lets start off with china, the biggie here. We were talking about the shanghai at market over the last six month, and with reform, how does that play out as beijing lowers its growth forecast . Yeah, growth forecasts are almost inevitable, we have a six play eight growth forecast on the side, but i think we are moving closer to our number here, so frankly that is still very enviable growth on a global scale. The gnu budget reforms and one reform, one kind of reform that our investors are directly benefiting from, because many of the big esso ease soes are it seems the government is serious in reforming those companies, and ultimately bringing the returns of equities up, but that should lead to more valuation, and that is one of the things that we like. Do we see further priming as it were . We expect the key rates to go down say 25 perhaps some or easing in the cards, so the chinese authorities are likely to tune a little bit more to the easing sides in 2015. Right, lets take a look at what is going on elsewhere lets move to india. Again, this is down perhaps to the tailwind gain of reform, the possibility of reform here as well . This is for me this is icing on the cake. Our experience is that the asian market in general, the sweet spot is when inflation comes up and the economy is not necessarily accelerating but india is moving into that sweet spot the administration is coming in. Certainly the administration helps, but where i would also put a highlight is the indian market, lots of time it is misunderstood, i believe as being purely domestic, unlike say china, which is an international market, but india has almost 40 exporters, as of this has really propelled a lot of growth, and the rethat the reason that we see doubledigit growth is because it actually comes with the exporting. This has to do with the situation on the ground. Very quickly, to mention that you are waiting on the u. S. , but it is the consumer there, at least the u. S. Consumer the into the hackable intifatigable u. S. Consumer, that. We are waiting for. Were we are waiting for. The u. S. Could accelerate a little bit but it really has to come into the picture in 2015 and we actually put on a lot of hope on that coming through as well, so when that happens, we have both of the consumers still strong, and then a strong recovery, and that should bode well for various markets. Final question, amongst the euro which is looming a large, very quickly, people dont seem to be that bothered, or as bothered as they would be a couple of years ago, with greece leaving the eurozone . We believe that the chances of sovereignty are increasing across the eu, i think for investors who do have an interest in europe i would look at switzerland, where you find very low yields you basically get to pick through the currency, so it is very good for exporters, and unlike also other european markets, there is more energy, so as a proxy here, it is good in europe but not in the euro zone. Have a great year, we have to take a break and we will talk more about the euro in that new year, it is at a nine year low and we come back. Back to Rishaad Salamat with on the move, and now we have john dawson. There is a nineyear low, almost a nineyear low, with the euro. There is a dramatic difference in weakness, but the Opposition Leader is a concern right now he had a speech two days ago that if the Opposition Party in greece does win, it would be a very strong chance of a greek default there would be a strong chance if greece would leave the euro zone, but at the same time their speaker is discussing the subject with germany and Angela Merkel and they are now looking at perhaps how they can manage the debt so overall that is my two bits there, the generally reaction is that it is going to happen, and that it is an election year. Here is commentary. The fact that he said we cannot rule out of a deflation or, and that we need to act on that, it is a very clear signal that the ecb will embark on it sooner rather than later. You heard from Glenn Maguire that the cb will have ecb will have a meeting, it might not happen this time, but quantitative easing is going to happen they are going to have a ecb meeting on the 22nd of this month, and again the euro there again if they dont act, we have a two day charts, overall the performance over the last six months for example as we can see, look at that again, clearly it is now at its lowest level since 2006. John dawson with the latest on the euro, and more to come in 2015 and of course we have the market open in hong kong and shanghai. Currency check, the euro is hitting a nineyear low, the prospect of the ecb meeting in mumbai. The asia crash and a difficult call. And we are getting back to one of our top stories, of course, the airasia plane crash. But weather is hampering investigations. We have the airasia transportation director, but first of all lets start up with what conditions are like at the moment, and indeed, what is being done currently . Actually following the accident for 8501 the rescue teams are still working there and they are still try to find the black box with the National Transportation safety board but i cannot speak more about that because it is out of my hands in east asia, but the National Transportation safety board in south asia and indonesias hands. Director general, lets get to what your job is i have known all these reports coming through about the airasia was not meant to be flying that day it did not have permission to fly that day, tell us a bit more about that . Yeah. The region in indonesia was getting context of the airline and from the government, in this case indonesia, we already gave this right to the airline for weekly for flights and it is monday, thursday 1, 2, 4 6, and one means monday. They implement it 1, 3, 5, 7, and that is not what we already give to them because that is against the regulations so they postponed yeah we postponed the permission to the airline itself. And this was completely denied by the government. But inspector general, the singaporean government said that they did not have permission to fly that day. What do you make of that . Yeah. Indonesia is the origin port. It is the origin country. Singapore is the destination country. And singapore is not considered over indonesia. They have their own right to decide what to give them to give them the credit, the schedule, to arrive in singapore. They have the same right to give the right to the airline or not because we decided the flight allocations and considered the right to fly from one point to the other point. And indonesia had to consider the request from the airline and 1, 2, 4 6. Indonesia had to decide whether they would give them that flight permission or not, and indonesia had to decide whether they would do that or not. About the events of that morning now if we can, and just, you know, we know the weather conditions were bad we know they were asking to go to a higher altitude. Do you think weather is responsible for this tragedy . Yeah. The weather in indonesia, the way it is organized, the information is collected from the agency, and in order to get the information from the investigator figuring out who is doing what is right and who is doing what is wrong is up to the investigative team. Djoko murjatmodjo, thank you very much for joining us there regarding airasia, or should i say the aviation general director general from indonesia. As far as training, it is a full trading day we have what is going on in hong kong, shanghai, and more. One of the key data points that investors will be looking at at least four hong kong and shanghai is the 80 domination of the investors, which is not entirely put up why australia but what their neighbors and what they would say. We are moving in opposite directions for the hang seng ends hang seng index, and some analysts predict this was greater happen in 2014 out of the gate. As we look across the region here in asia, we see some declines here, we have malaysia and we have singapore. You have a lot of these heavyweight stocks moving along but lets take a look at the opening levels for the hang seng, eight shares and in the composite, i have a forecast here for you, will it come to fruition . We have to wait a year, but we will wait anyway. Remember the number eight, that is the Consensus Forecast based on prices, the weighted price targets, if you take a look at the price targets, and we put them all together, we sort by waiting weighting, and we have all of the shares by 12,000 12,707. We have the year and forecast for that one, it is more or less a 12 point a greece to a 12 point increase to 26,803. Whichever way you want to look at it, between these two, you are going to see a threeyear high. There you go, if it is above 100 80 shares, but if you 180 shares, it is good, but that is what we have with these concerns, even with valuation. These of the estimated earnings so these are at a five year average, and they have earned 50 more the eight shares here in hong kong as far as valuations are concerned. We will have some changes in analyst ratings as we start off the year in trading, china mongo mung yo is up by. 31 and the price target for Country Garden is 3. 05 , and i will leave it there for ynow. Ris back to you. We have some special challenges facing president xi jinping and his government. We have a string of surprise decisions when it comes to chinas economy. Lets get over to the cabinet itself in beijing, there is great speculation about the gdp target Djoko Murjatmodjo gdp target. I think chinas capacity to grow is not what it should be. As the Worlds Largest exporter it is much reduced and if you put all that together, the expectation is really several years showing growth is ahead of us. China seem to recognize this towards the end of 2014 president xi jinping recognized its position in the world, and if you put all of that together it is at 7. 2 . Well the pboc, or the People S Bank of china, expects more. Do you expect more . Rishaad salamat i think that i think that is right. I think that is right. These conditions are still very tight, but that is because inflation continues to fall, and that means the real Interest Rates, the cost of borrowing for businesses, remains very high. At the same time, as you mentioned, Growth Continues to disappoint. So if you put those two points together, it all seems to point to further rate cuts coming in 2015, and Higher Expectations is going to make the bank move again in the third quarter. Tom, great talking to you that is our china economist, i should say. We have a special edition of on the move coming up in just under an hour in 50 minutes now, and coming up we are checking beijing, hong kong, and shanghai, and of course it is 1 00 in the afternoon in sydney. Hong kong, the united states, and china, they are looking at the market of ipos, what is going to happen this year . We will discuss that after this short break. We are predicting revenues for accounts this year, and it is as tricky as a point coin toss. This is especially in regard to conflicting forces, we will discuss bowls as well as bearers bulls as well as bears. We had an even number of analysts surveyed here at bloomberg who seek falling fortunes for the casino sector, and that comes of course after the first annual revenue decline in the count after a decade of expansion. We are talking about the Las Vegas Strip of asia, 2015, after last year, or was a 3 revenue drop, so analyst see this year as having an increase in revenue. The key factor that worked here with the corruption crackdown by the chinese government. High rollers continue to lay low and there are new restrictions on a junket operations and there is a push towards diversification. It is trying to make macau more family friendly, and that means the high rollers down bigger bucks on the tables. I think it is fairly will good fairly good been on a Hong Kong Stock Exchange . Yes, the benefits are good but they are going to be delisting, take a look at the numbers here melco promised 32 over the last year, but if you look at 2014, it was about down 43 . It also tells us a thing or two about the overall state of the market here in hong kong. Thanks deb zeb so this means there is one fewer company on the listing in hong kong. Now we take a look at the babies on the market and we want to talk about ey but you are not here about ey. As you say, it was dominated by Chinese Companies, there was a hong kong electric trade last year, and we are seeing more in hong kong obviously the big pipeline on the mainland is stimulating to most markets, people want to jump the queue to get to the mainland to to get off the mainland to come to hong kong quicker. I dont think thats topics like Voting Rights and other topics like that what it you tell us about that, because that is one of the reasons why alibaba is not listed in hong kong . There is a discussion document out from the stock exchange. I think the government has come down on the side that it might be a good thing to do. We are missing out on the trade. What you are saying is they are going to come down the side of banks . I think they are more in favor of that direction because the robust market here is a Strong Enough we actually have multiple stock listings here in hong kong already there are other companies that are mostly class companies, so i dont think it will be a huge change, and i think the market is Strong Enough to deal with it. The Capital Markets are most of ellis, so i am talking about Chinese Companies going back to the list are the most robust, so i am talking about Chinese Companies going back to the list . Lets talk about the Chinese Companies you expect to list their. List there. I think the big obvious want to come out of china would be interesting. Were talking about the sharing economy now, were talking the over ubers of the world. We are seeing the largest tech heavy Companies Going to market, and the next stage is the sharing economy. We have all of these tech companies, these Uber Companies these taxi like companies, they are looking at bringing their resources to the public. What we might be surprised by is a profitability, so they could command fairly large market capitalizations when they need to. They dont have any ability to do the legwork . Absolutely absolutely. What sort of numbers are we talking about in hong kong . 1200 . 1200, we think probably about the same globally and locally, the market situation is going to increase. Lester was an easy run up, there was low volatility in the marketplace, and it was a great place to be in the marketplace but the last couple of months got a bit more choppy but we are going to still see an upward trend that is going to be good for evaluation, but then we are going to see it becomes more of a whip lashing market. We will see similar numbers, but we think the same sort of value. Can we talk about the normalization of the numbers in the u. S. , because these companies out there can borrow so cheaply, but why do we need to go to the market in the first place . The first tradeoff is the whiplash if people are finding it difficult to get out there because of timing, then chief funding is going to help that make a difference. Keith, thank you very much indeed for joining us, a good year for ipos, hopefully. Especially for ey. We have robust economies, but not so hardcore in dubai. Welcome back, you can find us on bloomberg. Com as well as your mobile device. The latest style of this new device is all about the younger writers, and ducati is trying to attract them. Riders and ducati is trying to attract them. We are in the desert outside of california the roads are really great, and wine d, and it is really beautiful, as you can see windy, and it is really beautiful, as you can see. This bike is really great, this is the Ducati Scrambler, they discontinued this 40 years ago but as you can see this is the new one. This is from the Steve Mcqueen era of motorcycle, and that is what this is supposed to look like. This bike is definitely target for a young targeted for a young writer who is into urban writing, or highway riding. I think it is easy to ride pretty straightforward, very responsive, i am easy on the throttle, it has an easy clutch it is very accommodating to daily writing. Riding. This bike is really fun around curves, it does not feel as highly tuned as other sport bikes. The more serious rider can really love the ducati monster Ducati Scrambler more than other bikes, and the point of this bike is to bring new writers into two connie. You can easily get it for under 10,000, which is a great, great deal. Just buy it if you want to something that is a good allaround bike to have a lot of fun. Hannah was there looking at ducatis and it is looking for a new audience with new customers. Here is what coming what is coming up in an 60 minutes, or what is coming up in the next 60 minutes of on the move, i should say. What about the economy, what about opportunities as well . Stay with us, there is an on the move special 30 minutes from now. Hello, everybody. I am Rishaad Salamat. This is on the move. A new year and a familiar rally, games assisting stocks in shanghai. Theyearold taking a tolerable. And a flight in question. The euro taking a tolerable tumb the week ahead. The state of chinas economy and the challenges facing xi jinping this year. But, i have that, a look of what is going on a market is wise. What is currently, declining fortunes overall. Shanghai. A new year but the same case. Going the opposite. Not only hong kong. The rest of the region, the bright spot, the nikkei 2025. We were down as much as 1 . The hang seng at down only it has been a fairly busy week as far as holidays as Economic Data released. Fairly negative data out of china and japan. Japan, the weekend sells inflation, outputs. This week will be busier up because you have the Inflation Numbers out of china and building and you look at europe and the u. S. , the jobs numbers. Jobless claims and unemployment rate. The big one there will be inflation. And output in europe and we are seeing the euro declined. Anyway, for today what we have are declines being led by a few things. Big tech manufacturing and taiwan and about everything, the banks, the carmakers in japan. In hong kong leading declines. With the exception of the philippines which is starting up the new year on a good note. Up 0. 7 . The inflation data out of thailand. Let me just wrap a wrapup of what is happening with oil prices. Resuming declines after the 40 plunge. The latest out of iraq and russia. You have output numbers from december and we are looking at oil supplies at their highest levels in decades. Postsoviet record. In iraq 2. 5 four dead 2. 5 4 Million Barrels a day. 2. 54 Million Barrels a day. Undeniable for longterm investors but in the longterm, lets leave it there. Back to you. Well, more on the euro as we have been hearing, the lowest it has been. Lets bring in john dawson with a look. 2014 was the year where we do not talk much about the single currency but it is grabbing everybodys attention. That is right. It was not on the radar because [indiscernible] and everything was going smoothly along. Debt grows and grows and grows and greece have a lot of it. The election on the 25th of this month, we will see again we cannot really see it here. 118. The lowest in almost nine years. There is a reason there may be a victory which is the greek parliament. Samaras as saying in vessels the case, greece will default is saying if that is the case greece will default. The fiveyear chart there. The other factor, after the greek story,. Angela merkel is ready to accept a brief exit. A greek exit. People are saying that. The second area is the ecb. We have already seen in action on mr. Drive the. Mr. Mario draghi. And the markets will be really angry about that. We are definitely going to see quantitative easing of sorts. That is the crucial bit. The head of assets for asiapacific and talking about mr. Draghi and the comments you are ready heard and what the markets expect to happen. The fact he said we cannot rule out a deflation risk and acts upon it is a very clear signal that the ecb is considering and will embark on qe sooner rather than later. On the first indication, inflation data out of the eurozone of wednesday of this week and look forward to that or not. The case is the meeting. As in greek. And payrolls could play into what happens. The events within euro and the eurozone it self. The ecb which has to a greek elections. If it is a reason to default could be an exit. Could be. Thank you, john dawson. More bodies recovered from the airasia for disaster airasia flight disaster. Outside haslinda is looking at what are you looking what are you hearing about the conditions . In fact, some say the ways go as high as four major the way things as high as four meters. It is making it impossible for divers to get down into the bottom of the sea into the fuselage of the airplane. As far as the agency he said they did a huge issue, a huge challenge. As far as what has been retrieved, a total of 34 bodies. We know a fifth piece of debris was located and was almost 10 meters long one meter wide. It resembles part of the tail and has been located. It is where the black boxes are located. Five vessels are trying to do just that, locate and pick up the ping the black boxes are designed to email those for 30 days after a plane crashes in the water. The rescue efforts have been pretty difficult given the weather conditions. Thank you very much indeed. Lets keep on the subject. Our next guest specialize a risk communication. He said the way airasia and Tony Fernandes have handled the disaster is [indiscernible] a lot has been learned, has it not from the disappearance Malaysian Airline flight mh370 . That is the case. The initial time the plane went missing, there was confusion about who was saying what and what information. It is due to Tony Fernandes really apt as social media and understand the value and that social media can save reputations. I think you said in your Research Material that [indiscernible] it is at the heart of trying to get out there and project. Absolutely. Communications and expressing care to passengers, coherence and clarity. One voice one message in writing the textbook as how to come across. The first 48 hours are critical for people to judge where an organization reserve support. Using words like Worst Nightmare on twitter and staying focused. It is a sign of a very good leader. What he has to be aware of and how to sustain and he will be aware that anything that happens in the incidence of the last 24 hours, using precaution. Indeed. Any missteps you make you go from the back pages right to the front, dont you . Something that 12 months ago 40 months ago would be on page 20 instantly page one. It is magnified. Therefore, the focus of the authorities is on anything to do with any area that i honestly could have seriously issues. One of the issues referred to is the airline was not allowed to fly this route according to indonesia on the day that it did. That has become frontpage news. How important is it overall though . You have to put everything into context. The claims, counterclaims, investigations, and so on. What airasia and Tony Fernandes must do is kneejerk reaction. It was a bit of a blind side piece of information. They have handled it very well. We cannot say anything more. Thats the way of handling that. Moving on, a key point is about the families, and the relatives of those people who are missing. Absolutely and our prayers are with the families. This is a blueprint for not just other aviation disasters but just problems disasters and other companies altogether. One that comes to mind is the mishandling of bp and the deepwater horizon. Exactly. Bp made unfortunate comments, which basically disrupted the communication process can be a few misplaced words for example, i want my life back can significantly damage the reputations and affordability of the organization. The lesson here is you must stay focused, you must show compassion and you can not drop the ball halfway through and thats a huge cap area i would not want to and thats a huge task. I would not want to be and Tony Fernandes shoes right now. To continue in the way he has. As you said, Tony Fernandes has done an exemplary job. Lessons to be learned from something that is kneejerk and perhaps come from a natural born leader. Is a good question. Other organizations are asking do we have a Tony Fernandes at our location . Would they be cold and calculating or not as friendly . How do they engage in social media now . Airasia, one of the best on social media in the past few years and building their brand. New cannot suddenly become a social media darling if you like instantly you had not suddenly become a social media darling if you like instantly. What are facing a crisis, you have to be now about how you will deal with the events and will confront it and do they have a credibility and charisma to do that . Thank you very much. Griffith University Joining us on skype from that city. We have to take a break. Coming up next, chinas biggest cell phone maker is still hungry. Talking about the rise of xiaomi and when the most ambitious brands of the future. We are back in a couple of minutes. Not too many people had heard of this smart phone maker but it has become chinas biggest one, xiaomi revenue more than doubling last year. 12 billion is what we are talking about. Lets ring in shery ahn and their unstoppable rise. Talking about this morning at it is about making expensive devices and selling them cheaply. That is hitting their margins and they are selling 51. 1 million smart phones in 2014. The net margins is lower than out who apples in 2013. That margin is 61 million . The manufactured false. This year they are talking about 100 millions. They have big plans and they will be releasing their retina homes and new flat phones and new product which we do not know yet. There are word that are working on that right now. We are hearing that the billionaire investor is saying their valuation of 45 billion now could top 100 billion. They have to declare who this man is, an early investor. It is true. Right now, xiaomi, the thirdlargest mobilephone vendor just behind samsung and apple. Certainly, they are in china but not when it comes to the rest of the world. China, xiaomi did overtake samsung and is the largest cell phone maker there. Xiaomi is focusing on the markets and developing economies. And competing with apple and samsung in different markets. Xiaomi is trying to avoid bigger markets like the u. S. And the u. K. And they are still growing and making many new products and trying to the, a Consumer Product for china. Thank you. The Consumer Brands out there and we cannot not talk about some sun. It is moving from smartphones to tvs for his challenge to google. It will be displayed at the Consumer Electronics program in las vegas. It may top 7 trillion by 2020. Chinese conglomerate posted a winning club med. It is raising its offer before christmas nearly 30 a share. The valuation, the operator at 1. 1 billion and they said they cannot justify a higher bid. A person expects club meds future to come from china. Lets move from middle earth to the box office. The hobbit topping the Third Straight weekend. Bringing in another 22 million. It is ahead of into the woods. Studios and theaters looking to bounce back a slow 2014. Sales on the slide. The lowest number since 2011. Up next fuel and consequences in indonesia, unraveled. Well be heading to jakarta to find out more about this. That is all on the way. Indonesias new president is making a promise of what the drivers pay at the pump a he is ending subsidies which have been around for a decade. To jakarta. What is the reaction among the population there . Hey, rishaad, happy new year to you. We had the fluctuation in order to respond to development spending. The second listen to what the minister said to this. The premiums more than 10 billion and it will be by this year alone. Numbers will be increasing and the coming years and this makes more room for [indiscernible] the economy growing. The high cost of fuel subsidies commonly known as premium gasoline accounts for 65 of the total subsidies while maintaining a relatively small subsidy for kerosene and diesel. It would enable the government to cut funding for fuel subsidies up by 75 . Analysts say fuel subsidies is a big deal especially when subsidies were supposed to eat up more than 13 of total expenditure in 2015. Now down to a mere 1 . 270 trillion rupiah were earmarked in the 2015 budget prior to the price increase pretty even after the government decided to scrap the subsidies public transport fare remains unaffected with prices shooting up after government raise prices last year. It leads to higher inflation. 2. 46 percent year on year and inflation is 8. 3 . Back to you. Thanks a lot for that. So of the other stories making headlines. The Boston Marathon bombing trial starts today with the selection of a jury. Zohar tsarnaev is accused of planting and Dzhokhar Tsarnaev is accused of planting the bombs that killed three people. His lawyers have tried and failed to get the hearing moves away from boston arguing that he will not did a fair trial and he faces the death penalty. Joining the International Criminal court, the palestinians stay as say they plan to bring more charges against israel if it is successful. It is a key source of its revenue. Prime minister netanyahu saying they have chosen confrontation and israel will not sit by idly. North korea and discussions by ending decades of division with the south. State television saying the leader is calling for the rivals to reunify and create a strong and prosperous nation. The Committee Leaders said there are work has been hindered by Hostile Forces from within and abroad. They said Nuclear Weapons still hang over the two countries. Right, what we have coming up in the next 60 minutes 30 minutes i should say. Looking at china and accessing the country and economic challenges facing government and the year ahead. Looking at what the peoples bank of china might do in 2015 and what equity markets are likely to do given the next 365 days. A look at that and more after the break area a special on the move special report on china. You are back with on the move. And a special report on china and the challenges a superstate xi jinping. Facing president xi jinping. The economy and growing worries about pollution and debt. But first the state of play of the nation right now. Lets get over to beijing and bring in tom. Speculation about the growth there and it is getting harder and harder to get doubledigit growth especially as a country was shores. As it matures. I had a guest saying 8 even. I think it would be a little devil to rally an entire country around a target specific as 6. 8 but a lower growth target coming from 7 from 7. 5 in 2014 is in the cards. That reflects reality, reflects chinas diminished capacity to grow as the working age population shrinks and the scepter tries to work in excess capacity. And the sector tries to work in excess capacity. Xi jinping set 7 growth would place china amongst the ruins of the fastestgrowing economies in the world. Ranks of the fastestgrowing economies in the world. The rate cut we sought in november but its enough to shore up growth . They could do more, couldnt they . I think that is right for you if you look at monetary conditions, conditions remain tighter than they have been at any point in the past decade. And that is low inflation which is pushing up the real cost of borrowing. It also affects a stronger yuan in connection with other currencies compared to japan which is plunging against the u. S. Dollar. As slowing growth and a slowing growth and well see more monetary easing and our expectation is we will see a second rate cut sometime in the first quarter. Lets talk about the currency of one of the biggest surprises last year, could we see 2015 witnessing another you of depreciation . I inc. The currency i think the currency really change completely. If you go back to 2007, china has a massive footprint and that was a key driver of expectations and continuation. Fastforward to 2015, the surplus and the imbalance in chakra raid with the rest of the world and the imbalance in trade with the rest of the world. Last year, we saw the the depreciation. This year with Great Expectations the fed likely to raise Interest Rates and the centralbank and china likely to keep Interest Rates low. We could be set for another year of yuan volatility and yuan depreciation. One of the key variables has been sales continue to go south. Yeah, that is right. The state has gone from being the key driver of china to one of the main drags area sales have been very weak sales contracted the most part of 2014. Developers are sitting on and on on a lot of unsold inventory. Really, the effect of new real estate in 2015, the outlook for developers wilderness to break ground on new projects is uncertain. On a negative look, what we could see is shrinking Real Estate Investment as a drag on the rest of the economy. Tom thank you for that. In beijing and he is an economist there. Over to david and an update on the Chinese Markets stellar rally we saw. But others on the way down. Shanghai is up . One of the things where shanghai is up at the hong kong markets are down. The composite, a rally in 2014. Insane, really. Some analysts would describe it. 32. 78. This is a fiveyear high. If you close above 3000 3303 and that would take us back to the high of december 2009. Key levels to watch. Volume is fairly heavy especially for this time of year. In china about 120 higher. I also want to mention, the repurchase rates a gauge of the availability of liquidity and the system. Dropping the most in two weeks. 4. 5 . I think. A look of what is happening in shanghai very quickly and the mining stocks. Mining energy and transport stocks. That see you. Angst. We are aches and we thanks and we are joined by a guest from merrill lynch. What are the prospects broadly speaking . 2015 will be a good year for china growth will be moderated. Around 7 . Inflation will be even lower. I think this is good for china because china has a net input of commodities and will enjoy games g a gains especially from oil. Is a function of supply . Mostly a function of supply especially for oil. And falling demand. Lets talk more on that. Is it the outlook in talk about going to be at the doorstep of falling Commodity Prices or other prices falling back especially agriculture and foodstuffs . I think it is all related. In large part, for urban areas and transportation. That is why i think it is a story. Critics what about the overhead we see their what about the overhead we see there . Chinas producers and for some there are losers and winners for the price. Reducing commodities and the world loses prices. [indiscernible] that is why i think maybe not so good for china but the big picture, mozilla chinas producers. Property prices and one of the major headaches people are saying we see a price follow our crash which wouldve not had and could be the biggest potential black spot for the economy. If we look back and many people have thought there would be [indiscernible] it turns out they are right and it will be about an adjustment. With the correction in 2014 especially in toptier cities secondtier cities, it will be all right. Ting lu stick around. We have loads more to talk about the weather the chinese economy goals stocks continuing their rise. Some are saying that shanghai has been insane. This is on the move special. Welcome back to the special report on china. We have seen equities what some analysts say it insane rally. 60 of for many of the stocks. Where do we go from here . A look at how these stocks became so expensive in china . Here is david. If you look at, without is indexed with a Price Premium or discount over the asian counterparts commit you look at the index and it shows you that we are at a threeyear high. The premium index and that number is a low hundred the shares are more expensive and clearly, that is not the case. That was the case last year. Up 32 by the rally. Threeyear high as you can see on your screen. The reason i mention and i want to point this out is 80 of volumes in china are driven by retail investors. In the past 4 weeks of 2014, we saw 2. 7 million new stock accounts open. Whether you are interested in the markets and some people are pointing to the rally was pushed up by uighur investors using a lot of debt. Some do not necessarily put a lot on fundamentals a usually take a cue from their neighbors. Where do we go from here . Will this gap mark the hang seng closed at will this gap close . The hang seng closed at 23, 858 ah shares, will look they close the gap . Not really. 12,70,\7 is the gap target. Leading up to the shanghai and hong kong trading link, the general think it was this gap would actually closed the disparity between the valuation and price would close. If arbitrage basically is not there anymore. But a lot of surprises there. Well see how it plays out. More on this search. Surge. Richard, with us now. Has it done, it was really great. That has not quite panned out has it . No. The head of Hong Kong Exchanges are slightly surreal. How they build this huge abridge and the only problem was there was not a huge amount of traffic going on. We have certainly seen, what youre looking at investors and to mainland shares its underperforming massively compared to what people thought. In terms of money coming from china into hong kong stocks one of the great hopes, less than 5 . That has been reflected in the different performances of the stock market. Last year, chinese stocks in the mainland up 50 . Hong kong stocks up about 1. 5 . That is the divergence. There are looking at closing the premium. It has gone the other way. When it was first announced, asia, lacking for five years. Massive discounts in hong kong. You look at some the biggest us and china whether icbc, big commodity producers and vets traded early percent50 at a more expensive levels in the mainland. If you are an investor in looking at getting into the stocks, you would be reluctant to borrow at prices higher. The managers we spoke to said the ones they look so when they see them gaining 20 in weeks they are reluctant to joining because they do not believe they are there to stay. Continue for bank of america. I know you do not talk about equities. It is much my amusement when we see a weakening in the economy stocks on the slide. What about the fundamentals more on that. The first time in years but something we have not seen in china. The government, the fight of power and the belief it would be reformed to be carried out in 2015. The state of enterprises is key, isnt it . Part of the problem. Maybe local government reform and maybe the current regime and also some of the big projects. And it is kind of an opportunity and part of the grand story. Tell me something. It is strange when you an economy which slows down and a less growth and it is called a slowdown. How much is it that a falling market for houses . And going into equities . Wouldve heard people have been switching from the housing markets and the shift that has occurred is a few months ago, as the rally has started to accelerate the State Government and media and other forms were promoting the stock market as a healthy alternative investment to stocks and Wealth Management products and a shadow banking. That has a Company Hopes to lubricate that rally and has easing rules on margin financing. It has been financed by technology. The question is now, of course given the rally, do you think that is the feeling now that maybe it is overextended of than people had thought . That is the thing, of course but that is why people would hope it would be soft. I am explained the fundamentals behind the rally. Not totally inside or irrational that the rise has been too fast. I would say it plays a role, and newport and roll or maybe it plays a role and maybe not an Important Role and is not the root cause. When people see the rally and they are likely to borrow. Richard, thank you. And ting lu from bank of America Merrill lynch. Thank you for joining us. Up next, looking at chinas drive to tackle pollution. This is on the move. I am Rishaad Salamat. It is monday and the top stories out of china. Analysts blitting the outlook after casinos reported their first annual revenue drop. Conflicting predictions from xi jinpings anticorruption against gambling. Tourism is up making others bullish. Sales tax has tripled given revenue more than doubled. Xiaomi has the highest is the highest valued company not to go public in the above a News Conference this month. A chinese conglomerate has won the race for club med after their arrival dropped out. It is 30 a share value waiting the company at 14 1 billion. The other Companies Said they cannot justify a higher bid. When it comes to the backdrop of china, it extended subsidies for electric cars until the end of the decade to get people to go green. It could be good news for tesla as it tries to gain a foothold in china. We asked an analyst with the road holds in 2015. Red is my color, dont you think. It is a lucky color for china and tesla and they want to get into china big time. Very big time. It is the biggest market in the world. Over one point 3 billion people. China is spending a lot of money and doing rmb and getting people to buy electric vehicles. A lot of cities are very polluted. I want to see how this baby drives. Steve, if you think china is such an important market, what are they doing to promote since they have massive pollution problems . They not only subsidize purchases but spending a lot of money on r d and the charging infrastructure and Battery Technology in all types of technology. Are there competing technologies . Are definitely. Fuel sales have been catching on very quickly. We believe fuel cells is going to take a little longer to be adopted. Theres always a concern with safety. Fuel cells uses hydrogen and it is very volatile fuel so there will be a lot of work that needs to be done to get the consumers to get comfortable with having hydrogen in their vehicle. Drive us into the future. Tell us what 2015 is going to lowlife for automakers . I think china is still going to be a major market. A lot of moving parts in the china economy. We have had two years of strong growth. And i think consensus there will be a lot of risk Going Forward and limits to new car registration, especially in cities highly polluted, very congested. The economy is actually slowing down and growth. Consensus is actually forecasting gdp to only grow 7 and theres been downward revisions and the past few months of that number. Angie lau there with stephen and that tesla. Twitter, it is easy to stay in touch with us. I am my handle a you can follow my colleague, angie lau. You are following every body on everything we do here on bloomberg tv as well. Thats it for this edition of on the move. Stay tuned as asia age asia edge comes on. A private wealth advisory. Hello everybody. This is asia live. Stocks have rallied as 2015 gets underway. New years resolution, aiming to cell phones that sell phones. Why macau is a difficult call. I am angie lau. Currency check. We will figure look at the growing release take a look at the growing worries about deflation in europe. The worries continue in the south java sea over air asia. The road ahead for electric cars as beijing extends subsidies. All of this and more in the first asia live of the year. Item david inglis, keeping an eye on the markets. We kick things off with the first full trading week of 2015. Light across most markets, investors trickling in from the holidays. What we do have for today is negative on china and japan. China, manufacturing at