Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20170625 :

BLOOMBERG Bloomberg Daybreak Asia June 25, 2017

Is no plan b. Is daybreak asia coming to you live from bloombergs u. S. And asia headquarters. The week and asia was too short, missing you already. Bit of a jolt to wake up asia, but also centralbank decisions, heads speaking this week. Lets take a look at asia, slow going on this monday morning. X 50. On the nz austria, counting down to the open in sydney, seoul, korea, and tokyo. 43, so couldve be a boost for equities. Slightly higher when it comes tospi 500 futures. Spi 500 futures. We could be seeing equities , a 40 point loss at the open in tokyo, so still looking pretty quiet. Today. Markets closed singapore,in malaysia, indonesia, philippines, and india. Thats right. Looks in thesia early going. We continue to watch headlines ,oming out about takata deciding to file for bankruptcy today in a tokyo district court. Far, no comments from the company, but we will be watching more detailsy and on this bankruptcy. Lets get to first word news. Haslinda south korea has joined nations buying american shale gas. Year deal will see cheniere lng sold to south korea. Has committed 19 billion to clean up to fail banks. The deal involves another lender taking over assets with state funding of more than 5 billion. The European Commission has approved the plan and says it is in line with the eurozone. Hong kongs richest man set the stage for a mutually beneficial relationship 20 years ago. Kashing says the handover has provided stability for the city, people, and businesses, and what he called a front road row seat to the economy. It provides flexibility to chinese leaders. Is gulf diplomatic crisis putting pressure on the qatari currency. Saudilede with the gcc has created a temporary dollar storage. Doha has been given a week to implement demands, including the Al Jazeera Network and cutting ties with iran. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. The week on wall street will see investors focus on a potential deal on what we could call merger monday, not exactly point asking third for a lot of change at nestle with his 3. 5 billion investment. Monday is often win investors focus on deal activity. Released an investor letter after bloomberg broke news that he had taken an interest in the company. Thats now been confirmed he has 40 million shares, including some options, about 3. 5 billion. This is according to the investor letter. Nestle a recent chart of. It has been under pressure, as have been many food companies, particularly companies that show candy or sugar products. Says that despite having arguably the best position portfolio in the Package Goods industry, nestle shares have significantly underperformed u. S. And european consumer staples. Tord point says it is rare find a business of nestles quality with so many avenues for improvement. It appears that what third point is hoping to do is pursue change with a greater sense of urgency. Has a reputation as an activist investor getting involved in pushing for change, changing up the board, changing up the action. Loreal. Ns 32 of for them to get out of that and pursue more accretive additions to the portfolio. Going to be busy for nestle on monday when it opens on wall street and europe. Report, andeconomic round two of the bank stress tests. Round two is more important than round one. These were put in place after the financial crisis. Round is more stringent and will show investors if the banks indeed have enough money put aside for buybacks, dividends, that kind of thing. Two key economic reports. Has recoveredme and a recovery in the Consumer Spending area. In terms of earnings, we will hear from monsanto and nike among others. And will tech stocks rebound. Key questions if we kick off the trading week as we kick off the trading week. Thank you. The new Prime Minister Narendra Modi meets donald trump in washington on monday, but underscoring the economic ties between the two countries, mr. Modi has met with the ceos of nearly two dozen u. S. Companies in the nations capital. Lets bring in remy innocence you for a review and preview of what to expect. The issue of h1b visas should be top of mind. It will be top of mind. It will not be top of discussion when they meet on monday in washington. Bet is because this will something where they will handshake, photo ops, then move ahead from here. Each country is trying to figure out what the other country is all about, possibly more so for donald trump trying to figure out what mr. Modi wants to have happened looking ahead. Lets talk about the synergies. , pakistan,e defense as well as terror in south asia, as well as with china. To aer, we were talking person who spoke specifically on china. What both parties in the upcoming summit will want to avoid is any sense or impression of combining and anything that appears to be an antichinese alliance. Both parties are concerned about the rise of china come increasingly strong, more assertive china, and particularly from indias perspective the way that plays in the pakistan. I want to show you something interesting. We are talking about avoiding any antichinese alliance. This is the trade relationship with india and its top trading countries. Number 1, 72 . 3 billion in 2016. The United States at 66. 5 count on themey as their top trading partner, but mr. Modi speaking about donald trump said indias growth presents a winwin partnership with United States moving ahead. We have already been seeing some kind of warmth, something we have not seen with donald trump and other world leaders, china, australia, middle eastern it has beennd it via twitter between both leaders are donald trump and mr. Modi growth have huge followers on social media. Take a look at what mr. Trump has been saying in advance of mr. Modi coming. He is saying, looking forward to welcoming indias Prime Minister modi, important issues to discuss with a true friend. It is important to note this will be the first dinner for a foreign dignitary at the white house. Mr. Modi replied saying, thank you potus for the warm welcome, looking forward to seeing you here. People are wondering whether it bromance, but we will see. We have some more breaking news on takata, the Tokyo Stock Exchange will be suspending shares of takata at a 20 local time. 8 20 local time. Less than 10 minutes from now, suspending shares of takata come the Tokyo Stock Exchange, also issuing that investor alert for this chunk on this bankruptcy report that we had from the nhk, saying they would be filing for bankruptcy and a tokyo district court, so we will be watching shares of takata after that suspension is released. Back to the meeting, what are some of the potential deals might we see coming out of this meeting . It looks like there is near certainty in terms of drones or do looking to a californiabased Company Called general atomics. There will be a sale of 22 unarmed drones that india could use to patrol its borders. That is worth an estimated 3 billion. There is also a potential deal in terms of armed drones. Not sure if that will happen because there is a security issue with pakistan and china, but we will see what happens there. , thisher thing unprecedented move to make f16s ta. India through tak this is also part of mr. Modis make in india program, trying to make it real. , we haveited states make America Great again, and mr. Modi has his own make in india. We will see as we go ahead on monday. Thank you. We will be following this historic meeting tomorrow. We will have more on Prime Minister modis washington visit just ahead. Fred newman joining us to talk trade and that bilateral approach. Later on, i health check on President Trumps plan for a obamacare. We will look at what is ahead in this weeks vote. This is bloomberg. We are counting down to asias first major market open. We are watching japanese futures closely. In the wake of these headlines that have come out, futures a touch higher in japan. , theng these headlines stock to open, headlines out of takata, the Tokyo Stock Exchange suspending shares in less than five minutes on the Tokyo Stock Exchange on this report from nhk , saying the company will be filing for bankruptcy today in a tokyo district court. There have been some wild swings in the stock ending this bankruptcy filing. The bids asook at well, expected to open 30 . Igher for takata we will see if it stays that way. Aboutshares suspended 7 20 hong kong time. Modi says he is looking forward to meeting President Trump monday in washington. Trade and fees are roles high on the agenda. Lets look at what is at stake with fred newman. He joins me on set. Good to see you. A very important relationship between the u. S. And india, a 60 billion trading relationship, the secondlargest trading partner. ,hey also have similar agendas both nationalistic in their approach and want to bring jobs in manufacturing home. Is there Common Ground between these two nations . Thats right. Want to raise job growth in the manufacturing sector. That is not complementary if you think about the relationship. On the other hand, you have strategic considerations here. ,ndia is a huge power in asia and so trump has a broader agenda to look at, which is to bring india into the broader security umbrella with the u. S. Is it because of the rise of china, the u. S. Taking a bit of a retreat now . Could this be seen as an alliance between the u. S. And india . , india as ane angle counterbalance to the rise of china, but also the terrorism agenda. India grapples with some of these issues, and so does the United States, the terrorism angle. With theou can also argue expected growth for india that india is a friend the u. S. Has to have. What degree do you see this growth prospected elevate ties . Big to ignore. Apple just opened a manufacturing plant in india, so big u. S. Companies are looking to india as an increasingly promising market. It used to be everything was china, but now it is clear that india is gaining that Critical Mass as well as a big consumer market, Smartphone Technology companies are looking at india, and Defense Companies as well, and on this particular trip, there might be something in that realm as well. Im curious about this whole h1b visa situation, that being a thorn in the side of this relationship that seems to be going swimmingly well between the two. Know the reforms being put in place on the h1b visa. We dont know what the in will be, but how much of a hit is that towards the elite tech executives and folks in india . Certainly a bit of a headache in the shortterm. You have a lot of indian i. T. Workers in the u. S. With restricted visa access, they will have to shift some staffing back to india, but why and large, indian i. T. Companies are very flexible, and nowadays physical location is not all that important anymore, so we expect the indian i. T. Sector to adapt to lower visa quotas in the u. S. And to ultimately grow. It is as you say a thorny issue in the near term, and an important constituency for prime and the i. T. Sector, the professional class of voters in india that feel they are impacted by this. Then . Uld he bring that up given what she said, they are very adaptable. Should he bring this up . It is such a big issue within india politically that certainly raising that issue while he is at the white house, i would be surprised if he did not broach the topic at all just because it is a big issue in india. Mightically speaking, it not be material for the next several years, but certainly on the agenda. Im kind of curious also. We have been talking quite a bit these last few hours about this relationship, personal chemistry, the Prime Minister modi had with obama, and it seems the so far in the beginning that he has with trump. How do you think from mr. Modi and other asian leaders are dealing with the transactional nature of the Trump Administration . This is a president who is all about transactions, you give me something, i will give you something back. Is that working as well as he says it . Asian policymakers tend to be open to that approach. Soy are very pragmatic, transactional politics plays reasonably well in this region. If you think about the chinese leadership for example understands that there is a give and take, and thats probably one of the reasons the maralago meeting went reasonably well. A longer strategy, or what is the longer strategy behind this . There are still open questions. Terman have short successful summits, but the longterm strategy is still not entirely clear. Indian policymakers are wondering where india fits in in this new Asian Security arrangement that is being developed under the Trump Administration. You mentioned china. I want to talk about one belt, one road. Of this aseen wary well. They did not send big representatives to that meeting. How big of a hotbed issue would that be for india . There is such a glaring need for infrastructure across all of asia, including south asia and india. You think they will jump in . There will bent, some projects rolled out in is a more it difficult relationship between india and china, and there are still other issues that need to be ironed out. Here perhaps the u. S. Angle is also interesting because it helps india maneuver a little bit away from china and use the uss perhaps a counterweight to what they perceive as growing influence of china. Great to have you. One feature on the bloomberg we like to bring to your attention is our interactive tv function at tv. You can watch us live and see previous interviews and dive into the securities are bloomberg functions we talk about. All those have links on the right side of your screen. You can also become part of the conversation by sending us in his message during our show. This is for bloomberg subscribers only. Check it out at tv. This is bloomberg. This is daybreak asia in new york. Lets do a quick check of the business flash headlines. Softbanks vision fund looking in possible investment quantum computing, searching for new technology to replace current computer processors. Withnts to back the Group Quantum Computing hardware or software. Are alphabet, and microsoft the big names working on quantum technology. The bid for rio tintos coal mine leaves the group with the dilemma, except less money or risk upsetting its biggest customer. A proposalfering larger than its competitor. Its reserves are running out, making rio tintos minds and attractive proposition. Detainedresort staff in china will appear in court today, charged with illegally promoting gambling. The case is seen as beijings most public warning yet to foreigners trying to lower chinese citizens abroad to gamble. Including the head of high roller operations go on trial in jail, if convicted. An hour away from the open of trading in japan. Toata will be the key thing watch at the top of the hour on news from nhk that they have decided to file for bankruptcy. This could hate the way for that sale to key Safety Systems. The big question is how the stock will perform and what this means for the replacement and recall of those auto parts. Question formajor automakers, tour yoda to the big three in detroit, and also tesla. What does that mean for the recall . Up next my in hongn kong. Weekend withecent a little bit of rain, not a lot. A decent monday overall. P. M. In new 7 30 closed mixedkets on friday. The s p did finish a little bit higher. Look at this dutiful summer evening. I am betty lou. Yvonne i am yvonne man. You are watching daybreak asia. Posco to haslinda amin. Haslinda the director of the civ has said russia did investigate the american election. Mike pompeo said he could not provide details of the intelligence, but the evidence is there. The white house has downplayed this involvement, and some think that Trump Campaign colluded with the kremlin. Disabledttack communications in the parliament saturday with access to emails disrupted. A bunch of britain signal intelligence agencies, this came days after the password for employees and othera bunch of os were seen on russian hacking sites. 150 people were killed when a fuel tanker exploded in pakistan. Does not knowue what caused the truck to crash and villages are cleaning up spilled oil. The death toll will rise as many see extensive burns your this happened on the eve of eid. People are still missing after a landslide in southwest china. This happened in a village in the sichuan progress that included 61 homes. Manydies were found, but may not accounted for. The local government says an estimated 8 million cubic meters of earth and rock fell from the mountain. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. We finally get confirmation from takata as they have filed for bankruptcy in the u. S. After this airbag recall fiasco. They entered the u. S. Bankruptcy with a plan to cut deficits. We have yet to hear from that announcement, who will be the buyer, but sources have told us it will be a safety system. They have filed for bankruptcy in delaware and listed 10 billion in liabilities. The u. S. Bankruptcy filing includes the likes of takata in mexico as well as china. Lets get the latest from Bloomberg Asia Companies Editor joining us from tokyo on the latest on this. We were expecting this as early as today here. What is the sense you will get this from the next couple of days, what is next for the company . We have questions with the recalls and production and replacing of parts. Lot as you say, there is a left up in the air, so investors will be drilling down the statement and looking for key information. Who will pay the recall costs . They will touch on 5 billion globally, and that is to replace the airbags and to deal with the 5 billion, there is an estimate that 2 million of them takata covered by itself. 3 billion could be by the automakers that make supply. One of the key questions, looking at the numbers. Billion ined 100 liabilities, that is a massive number. They have got to

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