Of the year until now, it is an uproar. Anna and we are live in paris at the annual forum, where we speak to the organizations secretary general, angel gurria. Here, on bloomberg. A very warm welcome. I am anna edwards in london. Manus good morning. I am manus cranny, in dubai. The china danger, should be drawn into the moment of calm . What is really going on. Dollaryuan,w you near a five year low, the title of this chart is yuan on the brink. This is january time. That is the fiveyear low. Alone,back 1. 5 in may the biggest loss since the devaluation last year, which was back here when you saw that ratcheting spiked. But this is really the interesting part. The fx reserves in china, they are building a lot, 17 billion in march and april. Are they really that volatile about defending the yuan . Capital outflows are getting less and less. Low,ollaryuan, fiveyear do we just drift that lower on the back of that data . There is many more questions than our answers in terms of manufacturing and servicing. In the rebalancing is going on in china. Back to you. Of thate confluence domestic data out of china and the global picture around the bed very clear there. Let us show you the risk radar, a few key assets overnight. We said that abe has denounced the sales tax in 2019, fairly well debated. But more on that as we go through the day. 110. 26 is very are on dollaryen. Aussie dollar getting a boost. We have the commodity complex moving higher in terms of foreign exchange. Kiwi is higher. Gdp out of australia that are than estimated, the reason why. Wti, the price heading towards the opec minister meeting. That takes place tomorrow. Ryan chilcote on the ground. He will bring us details on all the walking and talking that is taking place with the oil ministers. Let us give the bloomberg first word news. Here is rishaad salamat. Says he will decrease the sales tax until 2019, and the move may help Consumer Spending but helps, kate the efforts for debt. Previously, only an economic shock. Lehman brothers or the major earthquake would prompt to delay. Data, a hatchet to jobs cutting Investment Banking positions as part of the ceo governors plan to reduce cost. According to knowledge of the matter, 30 positions shuttered in hong kong. Japan and india. About 8 of the workforce, following an industrywide trend that is scaling back on these trading volumes. Barclays,s, including had similar cuts this year. Larry saying he is expecting consolidation in the Asset Management industry. This is as they struggle to meet many money too managers struggling to get anything better than average returns. Larry we fundamentally believe there will be a massive shift, and we believe it is going to create a huge consolidation. Chinas official factory gauge expanded in territory in may, as gradual Economic Stabilization in the economy, pmi coming in at 5. 51. To private measures grew 49. 2. More or less in line with economists estimates, down from april. New Yorker Trent Doyle said it would be the longest decline, as opec ministers gather in vienna ahead of a meeting. Discussing production quality, the globals oversupply says prices slumping in 2014, and it is correcting itself. We will need to give the market sometime. And the market will correct itself, as we saw from the beginning of the year until now. It has been correcting upward, and i think all of those are good times. We just need to get negative inflation. Rishaad warning today that a vote by britain to leave the European Union would endanger future investment. Quitting the that eu would put a risk more than 107,000 manufacturing jobs. But believe side has hit back, saying the daily threats are becoming absurd. Global news each day, everyday. Bureausrnalists in 150 around the world. If youre a bloomberg terminal use, just use the top function. Rishaad thank you very much. Let us get up to speed with the markets. Dollaryen is on the move. Juliet has the news. Good day to you. Juliet it seems a little bit that the rumor is still in effect. Nikkei comeee the down 1 today, holding on those losses before these were announced. Very much widely affecting the market. We have Team Consumer stocks rise over the past two sessions in japan. But theyre in mind, volumes coming through today. We have seen the nikkei come off of one month high. That is weighing on the overall regional index, as the losses in australia really dragged down by lower crude prices. Hong kong down 1 10 of 1 . But we have seen a pickup in the as rishaad wasi, talking about, understand location. A new trading month in may. We actually saw the asian equities fall by 1. 5 . Smbc telling bloomberg that now is not a good time to actively buy into equity index, because such a busy month with the brexit vote, u. S. Jobs data, and the fed decision as well. Looking individually as stocks, we have seen higher. U. S. ,a shares fell in the this is on reports that they are offloading at 7. 9 billion stake in alibaba. And the aviation, the second biggest ipo we have seen in asia, going in hong kong today. Cutswas mentioning the down in sydney. A mixed day across asia. Anna, manus . Manus juliet, love that. Sell the facts. Anna chinas official factory gauge, signals improving condition and the Manufacturing Sector for third month. ,mi stood at 50. 1 in may compared to the median estimates at 50 a bloomberg economist. Stabilization in the world and the worlds secondlargest economy. For more, lets bring in our chief asian correspondent, enda curran. The to have you. What does this meeting really tell us then . Well, good morning. Like you say, at the very least, adding to the narrative now that the economy is maybe stabilizing. And we had some decent figures coming out of march, the we had a few wobbles in april. Now the start of the picture seems to be that things are somewhat finding a footing. But the same time, no real evidence that the economy is gaining momentum either. That is what is coming out of the numbers today. Sure, hobbling along. Not getting any worse. But when you consider all of the stimulus, all the money the government spent, the various channels of their open to get money into the economy, we know there was a record level of credit. We know the warnings of debt. Thenow all the engines central bank is taken. We still have a picture where commissions are getting more precise. But theyre not exactly taking off either. Not much to write home on pmi today. I would say. Manus all of it rather flat. At the top of the show, i was showing the yuan at a fiveyear low. That is drifting. Money is not leaving as aggressively as it was earlier in the year. So, what are they worried about . Raising alarm bell over . Well, interestingly enough, they cannot with a warning about how, you know, when you look at a sub index, the new orders for the indexers, i just go to illustrate the story. China still remains under some pressure, no matter how you cut it. And the exporters are struggling. In many respects, that reflects the global picture. Demand is down for all of the exporting nation. It is not a unique to china problem. But the same time, china has to deal with it or it may have to rely on the old steelmakers and cement makers. While the export side of things clean. I think it is goes to show that all of these risks, even as china models true, but all of these risks having gone away, you have to look too far on the rising to see the fed meeting next week. If they will come out, either with an outright Interest Rate move, that in of itself would definitely ricochet into china. Putting pressure on people to get money out of capital in china. And we will quickly see a flareup of some of the oil problems that seemed to have gone away. Anna thank you, enda curran, chief correspondent joining us there from hong kong. Let us bring in our next guest. Ussen joins us. Give us your thoughts than on the problem facing china. Excesslking about the capacity, the state enterprises, and how china seems to be hobbling along right now. Yes, stabilizing a bit in the latest data. But a lot left to go. Key point. At is the you need to throw more and more stimulus to get the same growth outcome. And what we have seen, when you look at the momentum of credit growth in china, if we think about it as elasticity, you now need to get 1 extra credit growth is to get half a next her point of gdp. I think that is where you see creditna challenge, elasticity has really come off. You to throw more and more credit growth, at an economy that, at the same time, a huge capacity problem, deleveraging credit, you see that challenging credit off between the shortterm issues and the medium term for the chinese economy. That gives you what we have been calling a bumpy landing. It is the same kind of idea. And when you look at the policy response to try and tackle these excess capacities, underperforming loans that result from that, and of course the job losses will eventually result from it, you see the to put a policy response in front. And there again, we expect there to be a trial and error approach. We will probably see more choppiness coming out of china. Manus good morning. I mean, you stirred a whole host of thoughts there. Having reached the limit of Monetary Policy on a global braces . We will circle back to that. Let us deal with what we are moderately good at, adjusting currency. Yuan on the brink. That is the title of the chart. If Monetary Policy is nearly spent globally, or the elasticity is dissipating, that leaves me as currency with the adjuster. Michala we can all have a weak currency. And you have to raise the other question as well. If currency is as powerful a tool as it used to be, if we look at what is going on in global trade patterns, the idea that global trade has been white lackluster in this environment for everyone. And one of the reasons for that, when you look at the composition of gdp, investment seems to be the most intensive component of gdp. And when investment is lackluster, that means that trade is lackluster. It all feeds one into the other. And the idea that large economies, be a japan that tried it or the euro area that also had a go at it or be a china, discontinuing to try to drive yourself to exports in a world where demand is lackluster and everyone would like to have a weaker currency, i think it is becomes quite a dangerous game. Anna lets talk a little bit about japan dan. That takes us into the conversation, Prime Minister abe denouncing the delay in income tax. Only going from 8 to 10 captures economic imagination somehow. So much emphasis has been placed on the sales tax increase. Is this the right call right now, were you surprised . Which question the use of do you prefer . Michala does not come as a surprise. But more importantly, as a shift in economic policy, if we listen to what were hearing from the ecb, and it will be interesting to see if that is reiterated this week, coming back to manu point, Monetary Policy in isolation is less effective. That is the message we have been hearing over the past couple of weeks so with Monetary Policy is less effective in isolation, what does that mean . It means you need structural reform. And some kind of fiscal boost. And that is essentially what abe has come out with now, delaying the consumption tax hike. The last time japan did this, and basically push the economy back into a low growth environment. And i think he is very keen to avoid that kind of a situation again. And i would not be surprised that we see more fiscal stimulus. And again, that was one of the things that came out of the g7. Anna thanks for the analysis. Michala stays with us on the program. Manus . Manus let us set out the slate of the day ahead. We have a slew of manufacturing pmi out today. Data for the eurozone as a whole, 9 00 a. M. U. K. Time. Two big events to watch for. Oecd releases the economic outlook, and shinzo abe will hold a news conference. Two hours after that, we have the Mortgage Applications in the United States. Anna up next, we speak to the ceo of the Nordic Telecom giant, live from the World Economic forum in kuala lumpur. We will have that for you next on countdown. Anna welcome back. 1 19 in the afternoon if youre watching in hong kong. 6 19 in london. Let us to the Bloomberg Business flash. Here is rishaad salamat. D former barclays director being accused by the u. S. About getting tips to a plumber friend in exchange of cash. Arrested by fbi agents yesterday, he faces conspiracy wire fraud and other charges. The largest investment in alibaba says he will sell the least 7. 9 billion in the chinese ecommerce giant. And pay down debt. Even after the sales, softbank will remain the largest shareholder with a 28 stake. 21 since theined initial Public Offering, back in september 2014. Shares rising on the debut here in hong kong. This is after raising 1. 1 billion in anticipation of the aircraft releasing the bank of china. The second biggest ipo of the year in asia, providing new airplanes set to overtake the u. S. As the worlds biggest market for aircraft in two decades. That is your Bloomberg Business flash. Rishaad, thank you very much. The World Economic forum in kuala lumpur is underway. Haslinda amin is live the special guest. Over to you. Haslinda the focus here is growth. Given a slowdown across the board, where to governments and Companies Find growth . With me is telenors sigve brekke. Where are you finding growth . Sigve brekke we are finding growth in our asian markets. Haslinda where specifically . Sigve brekke six markets in asia. Markets like thailand and malaysia, where we find more growth and people consuming more data. And then anymore emerging part wherea, more in pakistan, people are still asking for basic services. It true thatt sales in thailand and malaysia are slowing down . Sigve brekke it is a tough competition right now. But this goes up and down. If you look at the need of consumer demand thre the data demand, is almost doubling. Were almost doubling every year. Which means that the customers are consuming almost twice as much data. And this is all coming from more and more services. Haslinda what are you doing to capitalize on more data . Sigve brekke the way to capitalize this is to make the service very relevant. That is why we move beyond the traditional communication services, all of that, into more localbased services. Doing a for example, lot of financial inclusions through cash government. We are doing health services. We are looking to do educational services. And this is a huge demand, especially in the mask market. Haslinda where are you in restructuring . You are not there yet. You are in the midst of a conversion. Sigve brekke that is a good question beard we really need to move from the Traditional Telecom player into being this. Which means we need to take away, but it also means we need to look a lot and being part of an ecosystem. We cannot do all of this alone anymore. We will be depending on partners. And that is a transformational journey. That the whole Telecom Sector is involved in. And i would say that we have given ourselves for our five years to go through that transformation. And we hopefully come out again as a service provider, and talking not about telecom anymore. Telcos, regulation is key. And it is usually a hindrance when it comes to expansion beard are you facing that in markets in Southeast Asia . Sigve brekke two answers your question. First, i really hope that they can harmonize regulations in asia. Now, they are very different from market to market. I think of some to learn from the European Union, where they are harmonizing not only telecom relations but others. The second one, we need to legalize. We are still facing regulations. And i see no reason for doing that. Thirdly, we also need new regulations and other types of services. Like banking for example, we need regulation for others to come in and take a part of the financial inclusion. So, yes, we are having a major hurdle for regulation. That is ultimately what is the most concerning issue. It is about regulation. Haslinda what is surprising is myanmar. It has opened up more than people thought. That has benefited tlelenor. Sigve brekke we got a license and myanmar in october 2014. That is a few years ago. Basically, no Telecom Service back in. A sim card cost more than 200 u. S. Dollars. 50d now we have 5 million customers. Surprisingly, 60 of that base are active users. More in thevested last 15 years. I will give credit to the myanmar government. With regulations, they were quite modern when they look at regulations, which i think the dry the Telecom Sector. Gve, i wantuickly, si to talk about your asset stakes. I where are you in that conversation . Sigve brekke we are preparing for that happen. Nothing is being sold. But we are quite definitely want to exit. However, we are not going to jump the stock. You will have a fair value. Haslinda what is a fair value . Sigve brekke that is yet to be seen. Haslinda when will you conclude talks sigve brekke the time is right, we will exit. Haslinda sigve brekke, thank you so much. Manus, back to you. Live from the kuala lumpur forum. Manus great work today. Well done, haslinda amin. Live to paris next for the forum ahead of the interview with the organizations secretarygeneral. The one and only angel gurria, friend of the show. We will talk brexit after this very short break, with anna edwards and myself. Manus it is 6 30 a. M. 9 30 in dubai. Let us get the first word news with rick sharga salamat. Rioshaad abe saying he will delay the increase in sales tax until 2019. It may help Consumer Spending but, it the government efforts to contain the debt effort. He had previously set only an economic shock on the scale of Lehman Brothers or major earthquake would prompt delay. Banks cutting Senior Investment positions, all part of the ceos threeyear plan. A person with knowledge of all of this saying they will shed around 30 positions from the cash equity businesses in japan, and india. It amounts to about 8 of the wo