First time since jay y. Lees arrest. Questions about the corporate structure. We have coverage in sydney with of the latest on the li keqiang trade mission. We will discuss malaysias crackdown on currency fixing. And from tokyo, an update on toshibas ongoing battle. And from new york, all the market action. And the word from a host of the fed the speakers. And on the day of the samsung agm, we will lifted the lid on the unique culture of the electronics a giant. This is daybreak asia coming live from bloomberg, u. S. And asian headquarters. I am betty liu in new york, it is just after 7 00 p. M. After 7 00s just a. M. In hong kong. I am shery ahn. It is not over. So much coming out, janet yellen and others. It was a factor. Not to mention, the chinese premiers visit in australia. Betty that is right. More clarity on what he meant by taking trade to the next level. What are we talking about . Clarity is really what we need when it comes to that meeting. But also clarity about where we are headed in the u. S. With the Health Care Reform bill after the delay that happened just hours ago. We are expecting to see something on that front. The asian markets anxiously awaiting if there will be changed or vote happening. Right now we could see positioning ahead of the weekend. Look at the markets in play. It new zealand, unchanged at the moment with the kiwi dollar not doing much. This afternoon it new zealand posted its largest annual trade deficit in eight years. Take a look at australia. Because it rose in the last session, the aussie dollar is unchanged. But only after falling the most against the dollar compared to other policies. Asx 200 not doing much. We are also counting down to the opening in japan. This is up 2 10 of 1 . The nikkei rose yesterday with the japanese yen weakening slightly but only after eight consecutive games against the dollar. The japanese market is something we do have to keep a close eye on. Reform the Health Care Bill and what that will mean for markets on wall street. What doest is right, it mean for wall street and investors . It hit the markets as we headed to the close. We have more on the market action. We see the dollar fluctuated between gains and losses. On this a lot riding some the first showdown for trump. It is a hold a vote, they do not have what they need for approval. A lot of gains early in the session were given back. Overs,ook at the big there was exposure to medicaid made it vulnerable. Fedex gave back some of the post earnings. It is quite a squeeze, they will sell more shares as opposed to raising capital. Investors not crazy about that. Lets look at the terminal. This is about the options. This track health care at the top. Options are down below. You can see there is a neutral position by the market. This, all the at wrangling on health care, this even though we have rising interest rates, that white line, we definitely see a continuation of strong sales. I wonder if some of that is people going in and buying in anticipation of higher rates . That will be borne out in the next few months. Focusing i know were pbh. Su pbh owns calvin klein and tommy hilfiger. They blew it out in terms of their forecast. Importantly, they doubled the size of their business in china over the next five years. You see a jump in stock up 10 intraday. In terms of what they are saying, they believe that International Growth is really the key here. Domestic sales, but what they see continued strength and is overseas, more than 60 of their revenue outside the u. S. The ceo says china has shown no sign of slowing down. Lets go to the big picture chart for pbh trading. You can see almost 10 trading today, the biggest since 2014. Shery another company grabbing headlines was ordered. They cut their outlook. What is going on here . Two issues, reduce production in the u. S. Because of a decline in demand. And seento the chart despite record sales from 2016, they came down with earnings per share surging at 30, 35 for the first quarter. That is well below the 47 projection. Much. Thank you so lets get first word news with courtney collins. First up, white house says President Trump talk to scores of Republican House makers after they delayed a vote on the Health Care Bill. The Freedom Caucus wants a broader repeal of obamacare. The Nonpartisan Congressional Budget Office says proposed changes would never the bills deficit reduction by more than half, further complicating conservative support. Obviously, there is a little bit of a balancing act that goes on as you try to get to 216 in this case. We continue to make progress every day. We walked out with more members in support of the American Health care act then we started the day with and we continue to see that number climb, hourbyhour. I anticipate we will get there. The man behind londons worst terror attack in a decade had a string of convictions for the violence and had once been investigated for extremism. Britishborn Khalid Masood has been named the killer of three civilians and a Police Officer before he himself was shot dead. He had a history of relatively minor convictions between the years of 1983 and 2003, but none were terrorrelated. We will carry on cooperation with our allies across europe and the world. Gathering intelligence to make sure all of us are kept as safe as we can. We have to remind ourselves that not just london, but new york, orlando, paris, brussels, major cities across the western world have been targets of evil, twisted individuals trying to. And toour way of life, attack our shared values we will not let them succeed. Seeing a slide in energy rises, china takes biggest offshore gas producer fell 97 , leaving them with their lowest annual profit. Bigger tax credits help them avoid a loss in the summer. We will check cnoocs shares when the hong kong session happens. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am courtney collins, this is bloomberg. Shery Chinese Premier Li Keqiang continues talks with australian Prime Minister Malcolm Turnbull. Lets get the word from paul allen in sydney. Can we expect new details on this trade relationship . One would hope so. Had so far is broad strokes, the Prime Minister Malcolm Turnbull talking about how the trade relationship is going, what he calls the next level. Liursday we had premier giving a wellreceived speech in which he said china would like to import more from australia, giving australian consumers more choices. He talked about more beef exports from australia to china, something we have been talking about this week. The two leaders are meeting right now. When the meeting is over, there will be a signing ceremony and joint press conference. Hopefully we will have a few more details of then about what this means. Betty what is the rest of premier lis schedule look like for today . Paul he is wrapping up later this afternoon and will be meeting with the Prime Minister in sydney with ceos at a roundtable. Then there will be a speech in the early evening. Saturday it is slowpaced. He will be attending an australian rules football, it could be entertaining to watch him politely smile his way through that baffling game played only in this country. Sunday he wraps up his australian visit and goes to new zealand. That is rougher than playing golf with the president. We are getting breaking news. Robert kaplan giving a talk right now in chicago, some of the headlines coming out, he is saying fiscal reforms could provide upside growth to their forecast. We are making reasonably Good Progress on 2 inflation. We are also approaching full employment. Policy mentioned the about workforce growth raising concerns. Now he is talking more about bank regulations. Less market moving than some of the other comments he has made so far on inflation and growth. Saying we are making reasonably Good Progress on 2 inflation. Shery basically restating things he has said earlier this week. He has talked about full employment. He has talked about achieving 2 inflation target. Earlier this week he said the fed should hike rates two more times this year. We are hearing more on thoughtful reviews of regulations, that would make more sense that he is more focused on this regulatory relief for small banks, as well. Bloomberg said drivers can listen to Robert Kaplan speaking on their terminal at live. You will also see diary entries today. Betty still ahead, cracking down the measures malaysia is taking to curb excess rigging. Gets ready to take on the de facto head. We focus on Corporate Culture. This is daybreak asia, i am betty lou in new york. Shery and i am shery ahn in hong kong. Toshiba sword the most in a potentialite the bankruptcy of its arm. Shares closed 7 . Wouldley house itself decide to ask for chapter 11. At toshibareport executives said there is no interest from inside japan into the companys chip unit. Betty being thrown another lifeline despite pending orders. The Export Import Bank of korea will provide 2. 6 billion in additional loans and 1. 5 billion to equity. They have posted a fourth consecutive loss last year. There was a demand for more ships and offshore products. Shery offshore bloomberg told they may sell stocks to raise capital by listing part of its swiss unit. Our sources say they could have new shares representing 10 of stocks. Anding an accelerated sale to Money Managers would not mean investor approval. Fell 3. 6 after the report. Big moment. Is a it Shareholders Meeting today for the First Time Since the arrest of the companies to fact though head, jay y. Lee. The annual general Shareholders Meeting will be an opportunity to question the board is it reviews its corporate structure. Someone who knows quite a bit about the structure it samsung and Corporate Culture is the cofounder and u. S. Director of red associates. His company helped samsung with highend design of some of its products. I am hoping you will say not the samsung 7. No. Betty you know a bit about the Corporate Culture. Next week they will be unveiling the new note 8. Talked with you before what insight can you give us on the culture, as to why it may have led to the situation that samsung sees itself in now . Is an impressive company. It has grown from very little to a lot in 10, 15 years. It has taken korea out of poverty with it. Of this. He context but doing that and competing on a global market, they are probably pushed things quite far. Pushed the salespeople, engineers. Sometimes when you push a lot you end up with a something snapping. That is not just samsung. Samsung may be one of the aggressive ones but it is the global market. Betty you might say that also about uber or apple. Is there a big difference with samsung being an Asian Company and into korean culture . Christian they are a very aggressive company. But there are many Aggressive Companies out there. I do not think it is particularly samsung that is like it. It is a global competition that pushes people to make a lot of decisions that end up with a big recall of auto. Betty you worked with some detroit automakers, as well. How do companies as big as this with armies of people, how do they course correct . Christian samsung is interesting because it is a very thoughtful place. They think before they act. When they act, they execute like no one else. But before that they actually think through what is going on in the world, how they are going to engage in peoples homes and lives in general. Beenis what i have thinking, that is how they change things. They have a very sophisticated way of doing that. Betty what about the lessons from their exploding phones . You have not seen apple face that issue. Christian it was rather unfortunate, yes. Betty how do they course correct from that . Christian i do not know how they do that. It is not just samsung, facing a recall situation. Many companies have. It is new for us to see phones exploding. But it is not new to see cars have big issues. They will learn that maybe they ought to not push as much as they have done. Shery christian, it is interesting you mention the college of samsung. I went to college and korea. Anyone who could get into samsung would have their lives made. Their future was guaranteed. The right now we are living in very troubling times for south korea. The last time i was there last week, people are not forgiving against these conglomerates. Political changing and social landscape in south korea affecting samsung . We have a lothink to thank samsung for in terms of Economic Prosperity and what kind of costs they drive and foods they eat. Samsung has a core role in that. They also inspire the other companies. Automakers inthe south korea are inspired by samsung. We are really talking about the heart of the Economic Situation in that country. I think it is still in a new place a place for the best students to go, yet they have options in other places in the world. It is not a cocoon anymore. Shery should we be expecting any surprises out of this Shareholders Meeting . Corporate restructuring or anything significant . I think samsung would take the time to think through what happens here. I do not think you would see anything radical. They wait until they know, and then they act. Messy as with American Companies where they stumble along. They are quite thoughtful. Christian, thank you so much. Plenty more to come to read betty this is daybreak asia, i am betty liu in new york. Shery i am shery ahn in hong kong. Warning against a global rise of protectionism. I spoke to former ibm ceo and the chairman of fund group and asked if asia should be worried about growing economic nationalism . I think it will affect asia but i think asia has now a very large consuming class. It is generating its own demand. Then new demand in the world is coming from developing economies, especially the ones in asia. Withcould actually do more an asia itself but i do not think that is the best thing. There should be continued globalization, continuing a multilateral treaty system. Help a perverse way, a get their innovation agenda. When you think about what is happening in technology, exports asia. He u. S. , export into if all of a sudden that intellectual property should you would seee you next celebration of innovation and ingenuity within the asian population. They have the skill, the great schools. I would watch and see what would happen. Just to reinforce that, one of the greatest factors around the world is the empowerment of the consumer. If you dig a little deeper, the empowerment of the asian consumer, is really rising. The asian consumer is fast becoming the most discriminating, monitor a bull monitorable consumer in the world. They have the spending power 10 years younger than they do in the west. We have a highly empowered consumer. A lot of new Business Models will evolve from that. These Business Models will not only be in asian markets but could also be applicable when reimported into the west. Everyone said all they did was copy google or amazon. But if you look at the fundamental applications they are providing, theyre much more advanced to what you are seeing in the western. Shery should the u. S. Be worried that china may play the leading role in this next phase of Global Growth . U. S. Think from the competitiveness perspective, you should worry about any portion of the economy where we are not participating in growth. If you are in business in the United States you need to participate in that growth. If you are a company, you need to export to that growth. You want a tax revenues associated with successful businesses and the jobs created by successful businesses. You would not want to cut yourself out out of that much economic opportunity. That is the problem with a regional approach if you are the United States of america. You are the largest economy in the world, you cannot grow enough to take care of your population. The only way you can do that is to connect with the world economy. Shery is regional trade as good as larger global trade and the multilateral approach . I think all of these are better than financial relationships, in my mind. Against private business, especially small and mediumsized enterprises. If you have different sets of girls four Different Countries in a series of bilateral relationships, you have a very complex situation in which they will find themselves very hard to manage. World like that, it benefits everybody that you can make the region as big as hopefully, a global, multilateral trading system. Ibm f that was a former ceo andung german speaking to shery ahn. Coming up, malaysia takes measures to catch wrongdoing. Show me academy of Country Music awards. Thank you so much for that down home welcome. Show me female vocalist of the year. Thank you so much. Thank you so much acms, i appreciate it. Show me acm best moments. I could never have wished for, asked for and dreamt of anything more than this. Catch your favorite moments from the acm awards and an exclusive encore performance by Kelsea Ballerini following the show on xfinity x1. The acm awards. Live on sunday, april 2nd 8 7 central on cbs. It is 7 30 here in hong kong. Happy friday. We are 30 minutes away from asias first market open. Betty it is 7 30 p. M. Here thursday in new york. Markets have finished. We can see lower. Late breaking news about the Health Care Reform bill. A big blow to the white house. I am betty liu in new york area new york. Shery i am shery ahn in hong kong. Lets get first word news with courtney collins. Pass Republican Leaders delayed a vote on their embattled Health Care Bill. The delay in jacks new doubts about the president s ability to deliver on his promise to repeal and replace obamacare. The white house says it expects this bill will pass friday morning. Struggling french president has come under attack from the man he would succeed. Francois hollande says he interfered in judicial proceeding. Fillon said his claims have no basis and interrupt the campaign. Fillons numbers continue to fall. Revelations from wikileaks adjust the cia has been able to hack iphones in a way that users cannot fix. Security experts say it is plausible there is little threat as many of the tricks are old. Fromvolved the 3g model 2008 and requires physical access to devices. Something the cia would use only for targeted individuals, not the broader population. Escsixweek strike at bhps ondida copper mine in chile. Unions plan to notify authorities they will invoke a seldom used legal provision to revert the old deal for 18 months. That means the company will not have to pay an end of strike those nets bonus. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am courtney collins, this is bloomberg. Lets get a check of the markets in play. David, only a couple markets open. But for now it looks positive. Is two for two. Not hard to do. Given the fact we were lower on wall street, this stall when it comes to Health Care Reform. Saida look at australia, it 10 here to give you an idea as far as developed market bonds. On the twoyear, 1. 2 on the fiveyear. As you make your way down,. One basis point an uneventful session. U. S. Yields where they were this time yesterday. Currency markets flat as a pancake. Across aading sideways lot of these major currencies. Have a look at what is happening in australia. You have to consider 16 of this time last year. Just about every single sector group is up. I. T. Up 1 . Your today chart, 16 . One of the bestperforming equity markets in this state. This is elusive. Above that level is a concern. The futures, japan in the mix. Dollaryen on the stronger side. This is your wei f. Moderate losses at the open here. 18,000 and 9. 8. We could be trading a little above 19,000. A little decline when you look at tokyo. The other thing i am watching closely is the yen. Below, its 100ll day average is a redline. The reason i bring this up, this is representative of two Big Questions in the market. First, our markets too complacent over europe as we get a bid on the way up . Havenat goes into safe currencies like the japanese yen. Which is more important . This chart answers that and says yen not headed toward the average. Thank you so much, david ingles. There is been a lot of said speak. Robert kaplan the still weighing in. He is giving a talk in chicago. I want to read the latest headlines that have come out toward a rate. He said the fed is accommodative. And that we are making progress toward inflation and job goals, but we should be gradually, patiently removing accommodations. Being very careful with his words. Is vintage Robert Kaplan. He makes the message. Very academic. He became an academic and now is the company president. As you can see on this moderated discussion in chicago, he has talked about a tighter labor market, inflation headed toward a 2 target. He was asked questions about europe and brexit. He says brexit is confined to the u. K. And does not spread more across europe, it is not a problem. But the fed is watching closely. He mentioned the french election. He was asked about china and talked about the challenges china is facing. How difficult it is to wind that down. Chinas gdp growth will have to slow down. Lets listen. Internallyave chosen to move some of their capital. China in response to that has put on very tight currency controls. Estimates16 the best are that they spent 1 trillion trying to keep their currency up and staunch those outflows. When you have got that kind of situation, they will have to allow their gdp to shift down from 6. 5 gdp growth to some natural level. Could kaplan said it cause more market volatility. He said he has been to china recently. He is saying rates can move higher gradually. Thehinks we are closer to point as rates, but that the Balance Sheet will have to be reduced. Earlier today we were waiting for janet yellen to speak and she did it a Community Development conference in talked about education. Education being the key to ending poverty. And they also talked about education. The San Francisco fed it did weigh in on rate hikes. In line with the fed speakers we heard this week talking about three rate hikes gradual. Rate get the balance reduction if we keep going on this path. Fedlots of spread the speak. Bloomberg talking to the head of mexico. Uncertainty over trumps policies is one reason the peso is undervalued. What is he talking about . Trumps donald policies toward mexico, immigration, etc. , have exacerbated that. I have a chart i want to call up. Showing you this chart from the bloomberg will put it in better perspective. 6272 is the chart. The white line is the peso. And the red line is the 200 day moving average. In november when donald trump was elected you could see the spike go down. You see a little recovery than it is spiking down on inaccurate inauguration. It has gone up a little. A lot of statements, no big moves yet. He talked about uncertainty weighing on the peso. He says he thinks it is about 10 of undervaluation because of gas prices. Price, another reason inflation is moving higher and why economists say the bank of mexico will have to raise its key rate again next week. Peso thankican you so much, Kathleen Hays joining us from new york. We will continue our centralbank discussion later this morning with a the philippines central bank. That is after the philippines chose to keep rates on hold at a record low of 3 while cutting its inflation forecast. Hat interview coming up malaysias central bank will crackdown on currency fixing. They will implement new measures by january to further curb speculation. Chief International Correspondent for Southeast Asia is on this story. Do we know what they are planning . Banks, beware. They will name and shame any wrongdoer and disclose the penalty amount. They say it will be very strict. Banks have been told about the new measure. It goes into effect next january. They are trying to ensure ringgit security. It is of the worst performance in asia giving the dwindling reserve. It is harder to intervene. Dropped. Es have at the end of january, it amounted to 95 billion down from 140 billion four years ago. Some are expecting overseas investors to be spooked. We saw what happened in december when bank negara impose restrictions on over short trading. Overshore trading. Are the new measures going to work in curbing ringgit volatility . What has been said about this . Lets put it this way, when bank negara imposed measures, volatility for the ringgit tumbled. If you look at the chart, ringgit volatility dropping to a low in 10 years. The thing is, some say the overall movement of the ringgit is used in the overall dollar trend. Tos, bank negaras inability resist it, weakness being a prolonged headache. Up, a gift to china. Former treasury secretary discusses President Trumps approach to trade. Shery this is daybreak asia, i am shery ahn in hong kong. Betty and i am betty liu in new york. Suspended chinese developer due to hold a Board Meeting about their and results. Releasing long overdue result is shenzhen condition the based developer needs to meet before lifting a twoyear suspension in hong kong. Over faulted on debt. Shery setting the terms of for a fail that could raise three quarters of 1 billion. Shares are up to weigh 4 discount from vote last close. In bank is seeking a offering and could seek more through a green shoe option. Bank of america and others are working on the deal. Betty persuading Goldman Sachs and other companies to take proactive steps to address and disparity in men and womens compensation. They were asked to disclose data. The five agreed to address the inequality. Noncommitted to closing that gap. Talks ofr li keqiang free trade in australia, one of President Trumps policy plans is being called a gift to china. Former treasury secretary Larry Summers says they are giving china a gift, nafta will hurt the u. S. I am just back from china. There is no bigger strategic and economic gift we could give china than for the United States to move away from nafta. It would mean less effective production and less efficient production in north america, which would be a huge windfall to chinalead asia. It would create an immense strategic opportunity for china by reducing the ties between mexico and the United States. Indeed, it is possible to imagine that if the united on a hostileo stay path to mexico, mexico could find itself with a government in china pution of 65 billion behind that government. Massivet risk of a chinese beachhead in our region on the trajectory we are following, if we really were to aggregate nafta. We need Pragmatic Solutions on both sides. Negotiated 22 years ago. A lot has changed. We need a new regime on digital issues. Those did not exist 22 years ago. We learned about the importance of labor standards to protect workers in trade agreements. Those should be an enhanced part of the nafta mechanism. We need to do more to prevent the uncontrolled devaluation of the mexican peso. Something that ironically has been set off in recent months by u. S. Policy. We can strengthen north america as a unit by reforming socalled rules of origin so the goods that are exported from mexico to the United States rely on content that is produced in the United States and mexico,. Rather than produced in asia there is a pragmatic path forward if people on both sides are willing to find it. But this goes way beyond some commercial interests of companies. Central for what is keeping America Great. The strength of our north american homeland. What is our most fundamental area of competition in the world. Our competition with china. To summarize what you just said, america would be giving or could not possibly give a bigger strategic or economic gift to china then by effectively abrogating nafta . A characterinviting into the presidency of this country and allowing china to establish a beachhead in the americas . Have i got that right . That captured many of the ideas i was trying to express. You are framing the idea of keeping nafta in the president used to win the election . The would not choose language of America First given its historical connotation. I would not choose the language of make America Great again, given it is backwardlooking rather than forwardlooking. But our president has chosen that language. It is reasonable to give advice within that paradigm, that perspective. I cannot imagine a policy that would be putting america further behind than breaking north american community. That was former treasury secretary Larry Summers. We have big names joining us later. Joining us at 6 30 hong kong time. That is 6 30 a. M. In new york. Lock00 we hear from person parson blcok. Coming up on bloomberg television. Betty this is daybreak asia, i am betty liu in new york. Shery i am shery ahn in hong kong. An uncertain timeline for nafta. In mexico, the talks will become entangled with it the countrys president ial elections in next year. Bloomberg that mexico is committed to improving nafta for all three members. We have heard the past few weeks about trades from the trump administration. From secretary ross and peter herrera. An opportunity to make north america a powerhouse. Things have to change in nafta. Are in that we building a winwin for both sides. It is in the best interests of the u. S. The president has called nafta terrible deal, would you . No. It has been a good deal for the two countries. But it could be done better. We could make it better for america and mexico. What wouldlk about happen if no deal was reached. Larry summers, former treasury secretary, told me right here in o earlier go acapulc today, the u. S. Without nafta would be dire terms, a beachhead for china, it would create conditions for a strong man like chavez to become resident of the country. A system describe without nafta in dire terms . I think we have to prepare for all scenarios. If what is on the table is something that is not good for mexico, mexico will stay away from nafta. There members of the wto, wto, trade will be ruled by wto. We certainly think there would be a future without that. The question is, why would we want to do that . Why would u. S. , canada, mexico want to do that if we could have a trade deal much improved . Of course, you have to plan for different scenarios. We want to create value for the three sides and jobs. To be clear, if common sense prevailed and it is not a winwin, the winning part does not accrue enough for mexico, are you willing to say you are not part of the Free Trade Agreement anymore . Absolutely. It is quite a future to stare down. We have a tremendous opportunity. North america can be the most competitive region in the world. We can be an unparalleled manufacturing powerhouse. That is what we want to build. And create good jobs in mexico, the u. S. , canada. That is the opportunity we have in front of us and that is what we will seize. Betty that was mexican former secretary Luis Videgaray speaking to our correspondent. Lets bring a live shot where Chinese Premier Li Keqiang will be holding a joint News Conference with australian Prime Minister Malcolm Turnbull. They will have a signing ceremony and then beholding this joint News Conference and answering plenty of questions from the press. Headss before premier li to sydney. The first major market opens, moments away. Shery lets bring in david ingles to tell us what we should be watching at the opening in tokyo and south korea. It looks like it could be a quiet day, but i am not quite sure. David first off, relax, i am here. No need to betty fight over you . David it is friday. These are the stocks we are watching closely. Digital arts raised its revenues. Toshiba had a good day. Lots of things we will be talking about later on. 214 a share. An i yvonne asiapacific market signal caution after wall street negotiations on the new Health Care Bill drag on. Toshiba set and gary are ordered in new york set for another big day after adr sword in new york. And u. S. Inventories are at an alltime high. Says it is not
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