Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20150217

Bloomberg predicted that and that is what we got. But see what is happening market was. Batch market wise. Today the keywords in asia greece. A call for start on tuesday office start cautious start on tuesday after collapse. We do not have leads from wall street, it was closed on a Public Holiday so analysts are saying that europe is the focus. Asian stocks retreat because of concerns over retreating as of concerns over greece, it has fallen the most last week. South korea came out with bb ok decision to keep rates unchanged at a record low of 2 . They have been trying to portrait prices and you can frustrate at a record push up prices. Singapore down. 3 , opening down although fourthquarter gdp numbers beat analyst estimates but still lower than the Third Quarter so maybe that is taking a toll. Japan nikkei down from a sevenyear high because japan exited recession yesterday. We heard that the gdp grew at an annualized 2. 2 in the three months in december ending in december. Lets look at the yen, it has climbed against the dollar and euro and has games. Gains. The boj, with the policy meeting, we will see what happens, trading at 118. 34. Did you look at europe, of course, take a look at the euro, of course, the big story. It has dropped against the dollar, dropping to a oneweek low versus the unknown monday yebnhn on monday. In the focus is on the wednesday meeting. Top stories, greece and creditors have met and talked and listened and completely failed to reach differences, the meeting breaking up without them saying that europes conditions with them saying that europes conditions were observed. All the good has evaporated. Is a bad situation as it stands. The wednesday meeting did not work out, that was an emergency meeting. This one is the crucial one after three hours of talks nothing happened. The euro zone, 18 ministers gave the ultimatum, saying if you are not agreed to bailout by friday, clearly we have to pay you not pay you. They must agree to this friday. Greece are now antibailout. This is that they will do whatever it takes but on their terms. If they were to agree by friday, it means that the ministers may austerity later in the year rollback austerity later in the year but they will give them 7 billion in rolling funding which they desperately need. Areas the genetic press conference here he is speaking at a press conference. First, the greek finance minister. In the history of the European Union, nothing good has come out of ultimatums. In the history, we proceed from crisis to crisis and this is how we improve it. I have no doubt within the next two days in the notion of an ultimatum will be withdrawn any notion of an ultimatum will be withdrawn. After everything that has happened, i am very skeptical because the greek government has not moved at all. This is not a question for negotiation but a decision for greece, what it actually wants. Whether it wants to go down ina path to win back the trust of the markets. Were looking at this again overall the situation as they must decide by friday. Deadlines come over this is serious. The 20th of february come and go but this is serious greeted. The 28th of february is when this runs out. The Banking System in other parts of the eurozone fear of getting a haircut, that is a bit worried. Jpmorgan has deposits being taken out of greek banks. That is people taking money out of the savings physically and putting it under the mattress. That is the concern. S p is doing great in the banks, a massive roller coaster ride. 12 down one day, the next, the next up the next, down the next. If they do not give them the money, the default and goodbye euro. I think they meet friday again and have thoughts on the run up. Friday is the crucial, they must agree by friday. I said crucial every week. Lets see. The reserve bank of australia outlining the decision to cut the cash rate to a record low of 2. 1 . What do they say prompted the move . The reserve bank of australia has doubts in its own word about domestic spending words about domestic spending pickups. They said that that is part of the problem here. Investment in the Mining Industry has fallen off a cliff and australians desperately need something to replace it. The rba at something to say about confidence which has been lacking. The appetite to take on risk have the potential to lead to stronger bond Mining Investment although on friday nonMining Investment although on friday they testified to Parliament Saying that the impact of rate cuts has become less and when it comes to lessened when it comes to Consumer Spending. This is there is a lack of clarity in the chinese Property Market. In the light of weakening commodity prices, the Australian Dollar is overvalued and they feel it has a distance to fall particularly against the Major Trading partners. What about the timing here . Why did they move when they did . Is there any notion of when they will move again . The timing was discussed by the rba Board Members and the february meeting was the first meeting of 2015 but in the end of a decided that moving early offered they decided that moving early offered a communication in terms of what happens next, they do not say. 70 chance of another cut in march. Paul, thanks for that. All elements of me. Paul allen in sydney. This company is struggling to boost prices with iron ore prices dropping what planning but planning to raise production. Shares are seemingly unchanged in sydney. M profit n to profit trickling, selfies ages biggest developer reported revenue of more than 1 billion u. S. We are focusing on homes and offices and shopping they are focusing on homes and offices and shopping. Stay with singapore because the economy grew more than anticipated, the strengthening u. S. Recovery and the falling price of oil, all of that together, demand for iron export getting a boost. This was way ahead of analyst predictions. Have a look at the Taiwan Semiconductor going head to head with samsung, battling it out to meet the booming demand for apple goods. Record spending 12 billion. Will billion dollars on plants and equipment, 1 billion more 12 billion on plans and equipment, 1 billion more than intel has ever spent. That is in response to samsung, analysts saying they are ahead in terms of technology but they are moving aggressively now. Again you talk about the tables turning quickly, samsung has been the supplier of the most important trip for the iphone since its debut so they have bet the farm in terms of spending. When the iphone 6 came in, that is when the tables turned. They are mostly manufactured by Taiwan Semiconductors. We will see the demand in the u. S. Is huge. In china, even with the reduced 7 expansion in the economy, it is five times greater than the eurozone. The boom for suppliers will be huge, materials and research. 15 of revenue comes from tmsc. This is a Competitive Edge that these Semiconductor Companies have to do to keep up with Technology Overall and the brains of the chips. 12 billion. 12 billion. It is the first time they have beaten samsung and intel for overall capital spending. Still to come, south korea stays the course. We get reaction from hsbc right after this. Lets check on other stories making headlines. Egypt has confirmed launching airstrikes in libya in retaliation for claims that the Islamic State has murdered coptic christians. Video shows what seems to be a series of explosions. Libya is where Islamic State is at its strongest outside of syria and iraq. The ceasefire in the ukraine is under strain after claims of violations by both sides with five soldiers being killed near maripol. The European Union expanded travel band against russian we officials ban against russian officials. Pressure describes it as ridiculous. Russia describes it as ridiculous. Greek debt talks collapsed in three hours. The finance minister said that greece refused to be considered a debt colony but says he expects an agreement this week. The new greek government wants the current Bailout Program scrap and is seeking an 11 billion dollars bridge loan instead. Lets talk about south korea because the central bank leaving Interest Rates unchanged at 2 . They see a cut coming next month. We have hsbcs asiapacific economist ronald. Done deal 2 ,. But why not cut now . We have not seen a lot of pressure from the government side on the bank of korea to cut interest rate. In the recent g20 meeting, the finance minister noticed that it was more important than shortterm stimulus and this has dampened market expectation and that is why it was unanimous. I think looking ahead, what will happen to data . If it continues to decline then we have greater probability of a rate cut as early as march. A recap here is not designed to be curbing inflation rate cut here is not designed to be curbing inflation. It is trying to get one to weaken. Absolutely correct. We think the current income surplus will widen from 6 to 7 gdp this year. All else equal, on the rate policy perspective, this will lead to an accumulation of reserves. For the be ok, we think it bok we think they need to support exporters because korea is an export dependent economy. The thing is, where do we go next . As you said, stimulus would be a shortterm measure. I think the name of the game for the upcoming year is to raise the potential growth, from 3. 4 according to our estimates to what the government says around 4 . Does it worry you that this seems to be the only policy toward available for all of these countries policy tool available for all of these countries . Know because monetary and fiscal policy are being used together. That is traditionally the way that you operate economic policies, is it not . It is. We will see more rate cuts this year, we are expecting two. The government will deliver a supplementary budget where the growth hits the 3. 8 the government forecast. Korea must be developing internally from the oil crisis. The problem is you need to look into the details. The trade balance is strong but this is a recession for us exports are flat and imports are coming down. Domestic demand is under pressure. Domestic demand is under pressure not only because of Global Demand included into the local economy but wage stagnation is coming down sharply, flat by the end of last year. This is the key Downside Risk. Me bo the bok forecast, for much are they an independent central bank from the government influence and from the bank of japan . Bok is by law an independent institution but Government Military Monetary Policy tends to government and Monetary Policy tends to Work Together in korea. I would be boj and back korea the answer would be through a Downside Risk to koreas growth. We think the boj can influence bok, more stimulus would raise pressure to cut. Ronald, thank you. Up next, china announces changes to residency laws that of the leader your travel rush. Further details when on the move returns. Lets look at the Property Developer, shares have fallen 3. 5 in the premarket, hong kong dollar one hong kong dollar . 65. The biggest ways of human migration rumbles in china, millions of people at home for the spring festival holiday. H head home for the spring festival holiday. Lets have a look at the new year rush. For the migration have you ever done the migration . It is not recommended. I would try to get out of the country. I remember my first lunar migration, i was going down and it took me 80 plus hours. The train broke down it was a slow train not the highspeed. For does it go . How far does it go . The length of the country. It took 80 hours because the bridge was out, it was a long trip. I do not mean to disrespect the hundreds of millions of people were forced to do this because china has who are forced to do this because china has two weeklong holidays over the year. Let me give you staggering numbers, 2. 8 billion trips will be taken over the holiday. Lets break that down, 1. 3 billion people in the country and that is up to 1. 6 2. 6 for the return. Everybody is moving at once. I am astonished. It is a great testament to the country that they can move that many people. They move them quicker now because airtraffic is more readily available and highspeed rail but the demands are so incredible. In the next week alone, the actual spring festival, there will be upwards of 300 million trips on train alone, 57 million on airplanes. Avoid it if you can or hopefully leave early and come home late. Chris there is something called the system there is something called the system were you have Migrant Workers forced to go home because they cannot live in the cities. There is a new development on sunday were china will abolish the temporary residence permit because that is what ithey got. People are born with the huco, that is the place for they live. Margaret workers go to another city and get it Migrant Workers go to another city and get a permit. Can they change it . It is a complex and bureaucratic process. They will give migrants permanent residency which will give them rights Like Health Care and social benefits not schooling. School reform is a massive undertaking. We will be talking about this more in the course of the morning. Up next, a beijing policy measure limiting the drop in Property Prices. We will have a look at chinas latest figures, the next. The drama that keeps on going, greece rejects the debt extension and that sends the euro down. Setting itself up for trouble, china resuming trading in hong kong. Churning out billionaires. Why chinas ritualist keeps getting longer rich list keeps getting longer. Lets have a look at what is going on with the Shanghai Hong Kong open. Today the big word is Europe Markets reacting, a cautious start giving what is happening in greece and asian stocks are retreating, following the most since wednesday. Alling the most since wednesday. Today would be the seventh day of games, the hang seng down. 3 , it has been rising but opening on a lower note. We are expecting chinese january Property Prices out and will see how they react. Markets will be closed starting tomorrow because of the Lunar New Year, the weeklong Lunar New Year, and south korea as well. Down marginally, reacting to the bok keeping Interest Rates at a record low of 2 , they are trying to show prices which of them up prices which have been a record. Down despite gdp numbers coming in better than expected, and down. 3 , coming down from a sevenyear high because japan has been exiting from recession, we saw gdp numbers growing at an annualized 2. 2 for the last quarter. Lets take a look at some of those big japanese stocks were seeing sony, panasonic nintendo. Sony saying that they plan to prioritize devices and operations. Panasonic is up today 1 , saying they plan to reorganize home appliances. Nintendo is only a briefing for analysts soon read holding a briefing for analysts and. Treating resuming in hong kong big news here clady resuming in on treating resuming in hong kong, the news here. Home prices falling month on month in december it was 65 cities so a slight recovery taking place. Beijing seeing a fall of. 1 . Shanghai seeing flat home prices for the time being at least. On a yearbyyear basis, 69 cities was these home prices which are currently just down as well. The headline, prices falling month on month in 64 cities down from 65 in december. Lets get to beijing, christine. Good morning christine. As you said, january home prices falling a little bit less than december this index tracks 70 cities. Now we have 64 cities falling, it is following a general trend. Home prices may have hit the bottom in key provinces of china last year. We saw prices hit bottom last september in beijing, guangzhou in october. The only major city that has continued to see prices drop is tryingchungdu. This is due to the rate cut and the central bank injections of liquidity through various means. Most think that the prices in the Housing Market in china are stabilizing and receiving some support. We do not know if they will start rising because there is a lot of excess inventory in many cities that most analysts but most analysts see support this year. To recap, month on month we saw a drop in beijing with prices falling to 0. 1 month on month, 0. 3 in december. Shanghai prices have remained unchanged. Courts against the question i guess the question i will be asking is, have we seen the worst of the woes afflicting the Property Market . It depends on if you were a glass halffull person. They will be cutting rates and easing and the topperforming Chinese Hedge Fund totals last week they are going back into property shares because they are confident the government will make borrowing cheaper. They have said that they see government measures improving home sales. Pessimists would point out that it is the government driving the recovery and it is not fundamentals like demand. The government did begin cutting back on liquidity because there was overheating in the market so the home price recovery and if they recover on easing measures, it is not so reassuring for the long run. Thanks, christine. Lets talk about a Property Developer that has extended, a. 8 drop in the open 840 drop in the overnight hong kong 8. 8 drop in the opening in hong kong. It resumes trading after we had it halted yesterday. Limbo leaves uncertainty, that is one of the stories from earlier. It has issued a profit warning a perfect storm for sure price in the wrong way, sending it 8. 8 down in the open. A. 2 now. 8. 2 down. We could be forgiven for thinking it is the 90s again in china because of private openings. Offerings. You know, who has joined the club . We have quite a lot, it is hard to keep track of the names. A few of the top ones, sprint airlines. All of them ipoded recently. The third is from beijing. Alibabas Financing Division produced 13 billionaires. Last month because they have the latest round of funding and valuation doubled. Were seeing 13 new billionaires including jack ma. That is 16 we have out of one company. Lets talk about companies why do they list on the hm market when there are so many controls and regulations . Especially the price control when they want to price the ipo, that is why the companies did so well after market. I interviewed one gentleman before the ipo and he was telling me the region he was relisting that the listing in shenzhen is that delisting in shenzhen is that you could get a better value. It is up since the ipo and trading at 17 times. Spring airlines, since it debuted, surrendered 5 up 305 up. They are the best performer. It is quite extraordinary. Lets have a look at the other stories making headlines now lets find out who is doing what in the corporate world. U. K. Regulators are looking into hsbcs internal practices following reports that the swiss unit help evade taxes helped evade taxes. They say they are working to answer questions and that there will not be a formal inquiry. They took out fullpage ads to apologize for the tax reservations. A troubled japanese developer admitting creditors, hoping to cut a deal and complete the process in april. The restructuring of the debt is a key condition of the share sale to arrive or developer. Two executives have been charged with vandalizing products made by samsung. The pictures show them allegedly damaging 2000 washing machine at an industry show in berlin. Lg says the executives are still employed but declined to make them available for comment. Those are the top corporate headlines this hour, i am you yvonne, talks between greece and creditors have broken up, saying that conditions are absurd. After the meeting broke up greek finance minister said that it was completely illogical to ask his government to as for an extension to a program it has already rejected ask for an extension to a program it has already rejected. They want them to change their approach to monitoring the Greek Economy and it was a short meeting but a dramatic one. It was presented with a plan that he was prepared to sign only to have it withdrawn. Europe will do anything. They will pull the good agreement out. We did it last wednesday, we will do it now. The expressed confidence that will come to an agreement but as finance ministers warned, time is running out. As they said, there will be a situation where greece is no longer protected by the program and that day is coming quickly. Given the timelines that we havent parliamentary deadlines, i think we can use this week but that is have and parliamentary deadlines, i think we can use this week but that is it. The euro dropped. There is the possibility that cost could reconvene on friday but that is only if talks could reconvene on friday but that is only if greece asks for an extension. Reporting from brussels. Get all of the latest on greece on bloomberg and modules live forever you are, to get the bloomberg app, watch us wherever you are, to get the bloomberg app, downloaded. Download it. No wobble when it comes to the chinese Real Estate Market reaction to the latest Property Prices coming up after this. Chinese Property Prices fell this month. They say there is no bubble at this stage. Journey us in the studio is the managing director joining us in the studio is the managing director. Lets start off with numbers, 64 cities month on month declines in new homes versus 65 in december. Is the chinese residential Property Market coming out of the woods . I do not think it is out of the woods yet, 64 is better than 65 but it is still a horrible set of data. I think what you said about prices perhaps getting closer to the bottom is probably true but you do have a situation where we have a way to go before you start seeing a real pickup and a real momentum and obviously the government will have to and i believe will want to continue to provide easing measures. They want to support the Property Market, the residential side keeps people happy. It seems to be a huge falling of their net worth, that will not keep them happy and to keep them in power they need to have contentment. Governments around the world might like the goldilocks reference but goldilocks scenarios are what governments want and they are hard to achieve. It wont Property Prices to go up so everyone is comfortable but not by too much because then you marginalize people and cause inflation. Actually getting that is very hard. The dems to run up and then you put into many measures and it falls it tends to run up and then you put into many measures and it falls. A command economy. There is a degree of command but there are a few traps, the other one being that there are a billion people. What is going on, there is a distinction between private Balance Sheet and corporate Balance Sheets private Balance Sheets are not in bad condition, there is excessive borrowing but corporate Balance Sheets are showing stress. You are talking about one of them, i think there will be more of those who cry a lot of the woodwork to crawl out of the woodwork. Could we see cases where it is one of the first . I dont want you to speculate as to who would be next. I think there could be i think there is over leverage in the sector. We went through a. Bag of time where everyone wanted to expand market share and they did that a period of time where everybody wanted to expand market share and they did that. If you look at china overall the Residential Market is struggling definitely. The Office Market is struggling commercial property not as badly as residential but there is less demand and expansion. The real good news is retail spending which is strong. We see the differences when we have the tier one and tier two and tier three cities, very different scenarios. What is clearly happening is that the tier one cities and the major coastal cities and the capital are starting to show signs of recovering before the regional cities, if you like. And that is not unsurprising. Obviously in most economic recoveries you will see the centers recovering first. It does suggest that we might in a pricing sense becoming near to the bottom of the downturn. The problem is i think it will be some time to work through the remaining inventory that we have. What about the lack of credit out there . Theres been a shortage of liquidity in the system and unwillingness by the banks to lend money. The authorities are hoping that will get the wheels moving. It is a big problem. And it is a problem ball for borrowers in individual sense but going back to what i was talking about with the corporate Balance Sheets that is particularly a problem because a lot of developers have projects across china. There is a real problem with being able to fund a large number of multiple projects across the country. Lets also look at what happens next. How does this work its way through . You exact timeline on it is difficult but china putting an exact timeline on it is difficult but china surprises on recovery. Do you have a lot of bullets with the central bank the cuts to ease . They do and they will continue to roll goes forward but that is 12 or 18 months before we start to garner a real recovery. Commercial property, but on that . Quick on that . The Office Market is depressed is is a lack of extension, the yields required has moved down because the funding has come down and credit is tight. Retail is the standout. Samestore sales growth is there, Consumer Spending is strong. Thank you so much for coming in. Avenue look at the latest Property Price data, 64 taking a look at the latest Property Price data, the four cities seeing Property Prices on the way down as opposed 64 cities seeing Property Prices on the way down as opposed to 65 in december. Lets check in on headlines having a look at india and sri lanka, they have signed a nuclear deal in an attempt to reduce dependency on china. The new president met with Prime Minister modi and hailed close relations between the countries. India will provide expertise. They said it will expand defense and security ties. The indonesian president has won a significant battle over his choice with the police chief. His nominee was chosen in a corruption inquiry but they say he should not be considered a suspect and removed any legal obstacles to taking the job. Disgraced cyclist Lance Armstrong has been told a pay 10 million to a Promotional Company that paid him bonuses for his Tour De France victories. They cited an unparalleled pageant over fraud and conspiracy to cover up his use of performanceenhancing drugs. They say that the ruling is contrary to texas laws and that it will be overturned in court. Next our special reporter on the occupied protests and how a british journalist obtained his dreams of pop stardom. This is on the move coming to you live from hong kong. If you ever dreamed of giving up the day job and changing your life, this man could be an inspiration. He has thrown from a london reporter with a drink to being a pop star in hong kong thanks to a song that became the anthem of protest. This is the song that changed his life. This is my life this is my dream this is the reason in 2013 he was working as an entertainment journalist. Four years he had been trying to make it in the Music Industry. He was about to give up when he got a break in hong kong. Courts i would send out quest i would send out the demo unsolicited i would send out the demo unsolicited. Ricky wong was fulfilling his dream of taking up the Hong Kong Television market. Wong used this is my dream as a theme tune. But they rejected the bid, the song found new life, the anthem for antigovernment protest. I was back in england doing my everyday job when i got all of these alerts in email that people are on loan uploading your song on youtube. It was the most downloaded track on hong kong itunes beating lady gaga. He did not leave the opportunity behind. He moved to hong kong and signed a recording contract. It might seem crazy to some people to give up a life to establish for yourself in a different country and move on a whim but it did not go to badly so far. [laughter] a song written in frustration in the u. K. Has pushed kashy into the spotlight. If you dont succeed in london, you can try again in hong kong. Paula, bloomberg, hong kong. Up next, as has the macau gaming industry become a losing bet . The latest market moves as well. See you when a couple of minutes. Developments in china. Troubled case returns to the trading floor. Europe giving greece an ultimatum on debt. And oil holds on to its gains for the Third Straight advance. Lets find out what is going on. Shanghai. Rising for seven Straight Days and enhancing index. Rating marginally higher. Although shanghai came up, marginally up rising seven days a straight, rising four days straight, the rest of asia is actually pretty cautious today because of those concerns over greece. Asian stocks retreating today, following the most since alas wednesday. Since last wednesday. Msci reported exit with gdp numbers growing. Singapore not doing that great. Down. 5 . We have those gdp numbers coming in that event analysts expected but still lower than the previous quarter. South korea, the coffee trading is almost unchanged. Also, the Rate Decision today to keep rates at a record low 2 to push up prices. We have indonesia coming out with its decision so that is another thing we will keep an eye on for the rest of today. Back to you. Lets have a look at what is going on as far as treating. Investor sentiment goes out globally to greece. They talked, they listen and failed to bridge their differences. We have been looking at all of this and we had that good, where has it gone . They have been very urgent with the tone of this meeting. It is making the eurogroup, they called Cypress Development encouraging. Greece has been saying, we will do whatever it takes in brackets and their terms. The rest of europe is saying no, you will accept a bailout extension. That is the only offer on the table. If you do not, well not give you an extension on the loan. The offer is 7 billion and greece will default and the greek Banking System will be cut off from the euro system liquidity. That is the concern. They could actually introduce measures to stop capital flight. There is no bridge solution. The first Debt Repayment is not due until the middle of march. A few weeks but time flies end of this experience. We have had various comments coming out in the last few hours. The talks have lasted three hours. They broke down without any results. Friday is the deadline for greece to accept the extension. The Prime Minister of greece is saying to me cannot give us an ultimatum. You cannot give us an ultimatum. They are very skeptical. And the history of the European Union, nothing good has come out of ultimatum. In the history of the European Union we went from crisis to crisis and this is how we improve it. I have no doubt the ultimatum will be withdrawn. After everything that has happened i am a very skeptical because the greek government has not moved at all. This is not a question for negotiations but a decision for greece, what it actually wants, whether they want to go down a path that will win back the trust of the markets. The Prime Minister expects a greek agreement to meet half way within the next 48 hours. The rest of europe does not want how way. Either a extension or no loan. They were ready to sign but then eurogroup stepped in and said, no, this is our way or the highway. They say, if you are willing design, sign to sign, sign once. Clearly a concern. The banks cut off from the ecb liquidity they are physically taking the money out of the bank and putting it somewhere like a mattress. That is an it. Panic. Jpmorgan has said the greek banks are losing deposits 2 billion every week. Thank you very much. This is said to run for a while. Friday is key. The 28th is key. That is when the bailout ends. New home prices fell in some 64 cities. Percentagewise, they also felt less than in december. Christine going through these numbers. Are we seeing the bottom . Like we said, we are looking at month to month numbers. A lot has changed in a year so we did see home prices falling and 64 cities. In 64 cities, better than december where we saw 65 cities. Overall, prices in january fell 0. 2 versus the 0. 3 decline in december. Just for major cities, beijing, new home prices fall 0. 1 . Shanghai, prices were unchanged. They were unchanged in beijing month by month. They may have just last year in the key parts of china the index leading five cities hitting lows. The only major city that is of interesting compress we saw the cut and reserve rate ratios and the bank injecting into the system. The Housing Market is stabilizing, receiving a little bit of support. Thank you. On the Global Commodities front, taking toll on the minors. Profit plunging 80 . The company struggling to boost earnings with prices tumbling by fortis you still planning to raise production this year even after cutting jobs. Anz taking a tumble. They will double their contributions outside of new zealand and australia over the next two years. Currently moving to the upside by nearly 3 . They expect profit to be at the upper end of its previously forecast range. An increase between 10 and 20 . Rba outlining what was behind its decision to cut the countries cash ratio to live record lows. Two record lows. What do they say was behind this . You would expect the reserve bank made a number of points but mainly addressed domestic spending and considerable uncertainty to the timing and extent of expected increase in Household Consumption growth as well as Mining Investments, which is a particular issue. It also said in terms of confidence, and improvement for the business to take on risk has the potential to lead to stronger growth. On the subject of rate cuts, it was last week the governor Glenn Stevens said the impact is becoming somewhat diminished particularly when it comes to getting Consumer Spending moving. We also made a few points about china saying, there is uncertainty on chinese Property Markets, obviously weakening demand from china for allstar and commodities. The lower commodity price has forced the dollar down although not down far enough. They still feel it has some distance to go. What about the timing . Why did they move when they did and were there any clues as to when it they will be moving against him . Again soon . They lower the cash rate to two point 2 . 2. 2 . This would give them an opportunity to explain why they did it. They also noted Global Forces as well. Particularly the easing of the European Union, the swiss abandoning their currency and bond yields. There were no clues as to when or if the reserve bank of australia will cut rates again but maybe we can take our cue from the market. Slot traders predicted this month a 70 chance of another one next month. Thank you for that. Up next, preparing for a fallout and extensive declines ahead and the end of the recent rally for oil. More on the move after this break. Back as we check in on some of these stories making headlines. Eastern ukraine under strain amid claims of the violations on both sides, at least five soldiers killed. A spokesman said his forces were not ready to withdrawal. The eu expands its travel ban against russian officials. Moscow is described as ridiculous. The most serious crisis between russia and the west since the cold war. Egypt declared they launched airstrikes in libya amid claims the islamic militants killed a group of christians. Libya is where the Islamic State has its is its strongest. Egypt is lobbying all strong and the United States for a military response. Sri lanka signed a new deal in an attempt to reduce independence on china. The new president met with the Prime Minister and held hailed the relationship between the countries. The leaders also said they would expand security ties. Lets get the what is going on in the world of commodities. Oil holding on to reason gains but it will be rally continue . Lets been oil has had quite a good rebound over the last few weeks. Partly over the expectation the supply in the u. S. Will fall. There has been some Short Covering and commercial. People hedging as well as top we think it is unlikely to continue. You are running out of space to put the spare oil. We estimate there is around 70 Million Barrels left. You fill 510 Million Barrels every week. In two months that is exhausted. That type of scenario, you need the spread to widen. It has. It has been rebounding and our target has been 10. Part of the reason is you run out of this storage in the u. S. You need one lesser import of crude oil into the u. S. Maybe with the storage gone, we see a Cutting Supply perhaps. Ultimately, that is where we need to get to. That is why we expect prices to fall down to 30 a barrel. The reason is we need to breach the cash operating cost. Then how big becomes the spread between wti and brent . You had gone to near parity in january. You widen back out and move out. We think 10 for q2 and q3 is the right amount. Lets move elsewhere. Lets take a look at gold. Many people have been predicting the price to fall. It doesnt seem to materialize in the matter they thought. Gold has caught up. We think what is most likely is you will shop in a volatile range for the remainder of the year. You have positives around the concern about Economic Growth in europe and china, around the central bank easing. As well as these political risks you are seeing crop up whether it down the economic side in greece or in terms of security in lasers like nigeria. These are likely to continue and expand to other regions places like nigeria. You have the strengthening u. S. Dollar. The fed hiking rates. That relationship with the dollar that gold has has not really been behaving itself. It was up and down. You did not see that as you saw these Economic Risks in the central bank using the rest of the road to dominate. You see gold trade back lower because of the strong dollar. 2014 is characterized the price plunged. Is it now at the right value if there is such a thing or do we see further weakness . These producers instead of cutting back our increasing supply. The problem is he still have a massive increase of supply this year. You have had a bit of a break over the past six months. It has come from weaker demand and a leveraging impacts. Now, starting in q2 and q3, you see supply reexamine from brazil and australia. What about opera . Copper . We think the First Quarter this year marks the lows in prices and fundamental market balances. Demand is likely to improve significantly, particularly china. We strong supply growth we have seen over the past six months is also on a month to month basis likely to slow down in the second half of the year. Commodities complex. What you are looking at a particular. Copper, nickel, palladium. We are Short Crude Oil and iron. Thank you very much. Up next, chinas latest industry success creating billionaires. A look at the latest members of the rich club. On the move is back in a couple of minutes. We could be forgiven for thinking it is the 1990s all over again because a wave of ipos is turning out billionaires on an industrial scale. Strolling along is in singapore with us this morning. Which people are on the rich list . There have been about two dozen new billionaires created this year in china alone. They include the chairman of spring ally. Spring is known to be really thrifty. Its executives when they go on business trips reportedly Share Hotel Rooms and they instant noodles. So, that may be why long is a billionaire now. Another is the leader of the Consumer Electronics company. They recently acquired this maker of a google last like product. Google glass like product. His mission is to develop the business well. There is also the chairman of beijing technology. It is an internet video game developer. When this Companies Shares went public, it jumped 10 for nine consecutive days. That made his wealth grow and now he is at 1. 8 billion after the ipo. That tells you why these ipos are doing fantastic with. We are looking at spring airlines. The ipo was 305 up. Exactly. Firstly, the china market has really done pretty well the past couple of years. Last year, the shanghai composite was the best index and the entire world. This year, the bull run has continued in shenzhen. They are up top percent this year. Ipos in particular have been performing well because there have been a pentup demand. There was a halt in ipos for about 14 months and the only reason they resumed last year. One analyst said it was manmade. I was talking with our colleague and we are talking about alibaba creating the most number of billionaires. How do they do it . Right, it is not a surprise that alibaba will be the company that creates the most billionaires. This time, it is actually the finance. It is like the Parent Company of alipay. They recently doubled their valuation to 30 billion. That doubling has created some 13 new billionaires. They include the alibaba ceo jonathan lou and the chief officer. Of course, jack ma has benefited in this valuation. The added about 7 billion to his wealth this year. He now stands at 35 billion, making him asias richest person. From singapore with a look at the latest on the bloomberg billionaire list. Sony planning to focus on several key areas over the next three years. A newspaper saying the company will prioritize its prices. This month, they posted their best quarterly profit in seven years with its biggest conservator as the devices unit. Sony down for tens of a percent. Capital land doubling. Homes, offices, and shopping centers. You can see, shares up. Next, chinas announcing changes to residency laws ahead of the Lunar New Year travel rush. We bring you details when on the move returns right after this. Scoring up to samsung, taiwan and raises stakes in the battle of the chips. Beijing announces a new residency rule for the new year travel surge. If at first he dont succeed, try again. The wouldbe singer who made it big in hong kong. Saintsaens companies battling it out to try to win chip orders. Samsung companies are. More spending than greece needs. More than what intel is spending. 12 billion total in spending there. They are calling it the prize to get apples attention with the high demand we saw in the u. S. , in china. Sales up 46 last quarter. They sold 74. 5 million iphones last quarter. Easy that demand there. This is a response to saintsaens as you mentioned. They are still ahead in terms of production type allergy reduction technology. They have the supplier for the chip for the iphone. They will spend close to 5 billion this year, up from last year. You will see how fast the tables can turn especially with the direction of iphone 6 because apples 88 chips are mostly many factored by tsmc. It is not just apple. They are also fighting chips from other companies. What does this mean for Health Business suppliers . You take a look at the u. S. , research. In asia, tokyo electron, nearly 15 of their revenue comes from Taiwan Semiconductor. Also, Screen Holdings in japan. You will see an increasingly expensive petition here because it is talked about 5 million to build a modern plant for these chips as they try to make the most efficient phones. Those plans are obsolete in five years or less. Most companies have to operate in these lands 24 hours a day. Plants 24 hours a day. Shere has a look at these australianjapanese equities. Let me get started with some chinese stocks rising for the fourth consecutive day. A look at msci. Hsbc rising, telecom also rising 2. 3 . That is despite they announced they may see a drop. We keep an eye on kaiser. A big drop there. Six. 5 after resuming trading in hong kong. 6. 5 . Bridgestone down 9 10 of a percent. It has not been able to block of the trend. Bridgestone today with reports. Keep an eye on bridgestone. No pharma o no pharma looking at the treatment of small cell lung cancer. A rise of 9 . The sales are dropping 1. 2 . Back to you. Lets have a look at some of these other stories that are making corporate headlines. We move comes after reports that swiss units did help clients. The authority says they are looking to address any questions raised by the banks operations. Sources say the sca does not plan to overthrow an inquiry, they just took out a full newspaper ad in u. K. To apologize. Troubled chinese developer kaiser is meeting with creditors after the company tries to restructure. They are hoping to cut a deal by the end of march and complete the process in april. The structuring of debt is a key condition of kaiser. From executives for executives from lg have been charged with vandalizing products from saintsaens. Samsung. Lg says they are still employed but declined to make them available for comment. Those are the top corporate headlines this hour. I am john dawson. This decision now being reversed. Anna is in jakarta. Is this a vote of confidence in the president . Not quite. Until then, there is still no confirmation whether the president will inaugurate or not. Were still waiting for that especially after he said he will give final decision on the chief police after the pretrial decision is out. Monday, the court ruled that the nominee should no longer be considered a suspect and this has removed any legal problems. I suspect was illegitimate and has no legal basis. The judge rejected all exceptions conveyed by the lawyers. Katie k also claimed the hearing did not have any authority. He was accused of receiving bribes through suspicious transactions. Rish. How difficult is the position after this . Jacoby was already in a difficult position before this ruling with money people hoping he would not inaugurate him as the police chief. Now, things are different. He has been endorsed for the role that parliament. By parliament. He is exposed to public last violating his campaign of fighting corruption and party free politics. It is that time of year again. It is the biggest wave of human migration. In china alone, millions of people will head home for the spring festival. Billions. That highlights a huge number of Migrant Workers. Lets find out more. Stephen engle is here. You have lived in china for years. It is something to behold. I have done this migration before. It took me 80 plus hours. They have highspeed rails now. They have an intricate air network as well. People are moving quicker but more people are moving ever than before. This year starting tomorrow through the 25th, in the actual festival, therell be about 300 million train trips alone in the next week. 2. 8 billion journeys estimated to be made over the 40 day period. 57 million plane rides. A lot of competing for space. That is the population of britain. All flying into china. I had this wonderful statistic. They have this Online System say do not have to queue up at the station. That opened december 7 for this current travel peri you canod. Travelperiod. There were 29. 7 billion hits in a day. That is every single chinese in china going to that website 21 times in a single day. It is beyond belief. It is true. Lets talk about the reform to this system. We could maybe end the day less than this rush. At be part of this, many people making these trips are margaret workers. There are more than 200 million Migrant Workers. So many people are going different places for work. You have 200 million plus Migrant Workers all going home and there is a new rule that came down for the ministry of Public Security as of sunday saying they will abolish the temporary residents permit system which was set up following 1984 when shin Engine Program was instigated where Migrant Workers got temporary workers permits. That allowed them to go beyond their hometown. They did not get any medical benefits, could not buy homes good gosh they were discriminated against. Now, they say we will do away with that system and Migrant Workers will get permanent residence. This is just north of macau. What does this all mean . They do need kouk huoku reform. This is not giving migrants that come it gives them permanent residency. They will be able to buy a house, a car, basic rights. They will not necessarily get their kids into schools. Foucault huoku reform is huge. This step is a first step in giving all people in china the same privileges and rights. Thank you. Up next gaming set to become a losing bet. On the move returns right after this. Talks between greece and credits have rogen up without and creditors have rogen up without an agreement. Broken up. The greek finance minister said it was completely illogical to ask his government to ask for an extension to a program it is already rejecting. He also said he wanted to have his eurozone partners rethink their approach to monitoring greeces economy and while it was a short mini short meeting, it apparently was a dramatic one. Europe will do the honorable thing, it will pull an honorable agreement out of what seems to be an impasse. He did express confidence they would come to an agreement in the coming days but time is running out. The finance minister said we will have situation mark reis is no longer protected by its program and that date where greece is no longer protected by its program. I think we can use this week but that is about it. When the news of the collapse came, the euro ended up dropping 0. 4 . There is a possibility the cost could reconvene on friday talks could reconvene on friday but that is only if greece asks for an extension. Back to you. Lets have a look at what else is going on. The indonesian president winning a significant battle over his choice for National Police chief. His judgment was questioned when he was named in a suspect in a crime. He was cleared and it removed any legal obligation. A gunman in denmark was shot dead by Danish Police and two others have been charged with assisting the attacks. Lance armstrong has been told to pay 10 million to a Promotions Company that gays and bonuses for his Tour De France victories. That gave him bonuses for his Tour De France victories. Armstrong said the ruling is contrary to texas and it will be overturned in court. Lets get to the big story this week. Millions expected to travel over the Lunar New Year. With the shift in spending trends, will consumers end up suffering . We are joined by jamie. You have a real downer. The emerging trends are clearly negative as we enter into Lunar New Year. To run a rates the week before, at an alltime low. All of the otelco rebookings are all of the hotel prebookings are down. The cost of casinos also indicated the policy has also been reduced. What we are expecting is not a headcount issue but an issue of quality. What is it done . Lets play multiple choice. Is it the clampdown on corruption a slowdown in china, or the gambling . I think a combination of the first two but not the last. Tell me what is going wrong in terms of this. We have the ip very weak. It is currently overall, the policy is a risk. We have seen an escalation in the Anticorruption Campaign since february of last or. Last year. The transit visa is an issue. It prohibits some frequent customers in coming as frequently as they would have liked to. We are talking about segment specific seeing poor liquidity and the environment where we saw a round of closures in january and we will expect more in march. This is down to the situation of people do not want to spend money. They can come in other ways cant they . For the mass market, a lot of it has been well discussed. I would like to point out that through the weaknesses, a number of services that have historically done this are being closed. Entertainment. Travel, transportation, liquidity. These things it was growing so fast but nothing grows in a straight line. We get a lot more capacity. A lot of new resorts opening. You are not entirely convinced that will work out. I know that the street is looking for a second half of recovery. To us, there is really no fundamental basis for this assumption. The ip, the mac is trending down. They could be going through the legs of singapore australia. There is a bit of pickup and the regional gaming. Small, regional. Do you recommend anything at the moment . Our order is not consensus. We prefer the operators with later casino openings. And stay away from . The ones that are opening this year. Thank you very much for that. A look at the markets. A bit of a band with these gaming companies. Up next, singing a new tuner. A democracy protest in hong kong helped a would be finger to top stardom. Pop stardom. Live from hong kong streaming on bloomberg. Com and or mobile device. If you ever dreamed of giving up your day job, cash he keegan could be an inspiration. He went from being a london reporter to a pop star in hong kong. His song became the anthem of a popular protest. This is the song that changed cash a keegan cash he keegan kashy keagans life. In 2013, yet been working as a journalist in london. He was about to give up on breaking into the Music Industry when he got a break in hong kong. I sent out demo after demo. It is when i gave up that everything happen. Half a world away, and entrepreneur was pursuing his dream of shaking up the tv market. He invested 100 million in the project. One the bid was rejected, the song found new light the anthem for an antigovernment protest. I got all of these alerts saying people were uploading my song on youtube. It is the most downloaded track on hong kong ideas beating lady gaga. You would not let that opportunity pass him by. He moved to hong kong, got a recording contract, and justreleased his first album. A lot of people think it is crazy to give up a life you have established and move here on a whim. It did not go too badly so far. A song written in frustration in the u. K. Has pushed him into the spotlight on the other side of the world. If at first he dont succeed in london, you can always try again in hong kong. More on that and all of the days top stories and you can watch us live, just get the bloomberg app. It works on the android, apple, windows operating systems. On twitter it is easier to stay in touch with us. You can follow me and my colleagues. Everything we do is available for you bloombergtv. That is it from this tuesday edition of on the move. Angie will rejoin me as we recap the big stories of the day. One of chinas against employments. It has almost 100 million registered users. This is bloomberg. It is the middle of the asian trading day and we had a live shot of us at the opera house. Shot of sydney opera house. Worried about domestic spending and chinas appetite for raw materials. This is asia edge. Greece rejects europes debt conditions as absurd. The flexible. A deal is expected. The impasse for common currency. The euro falls for a third day. The market may have bottomed out in china. Raising the stakes against samsung in the battle of the chips. A record investment to meet blooming demand in the u. S. That and more in this tuesday edition of asia edge. A cautious day after talks between greece and europe