In credit and money supply, Chinas Central Bank has given another indication that would that it will hold off on any major stimulus. Live today from beijing. Scott, what does this say about the state of chinas economy . Not going toere see any big bang in stimulus these days. We are also not going to see any major pullback just yet. The economy grew at 7. 5 in the Second Quarter. The forecasts are that it is going to stay close to that rate for the rest of the year. We have heard these kinds of warnings before, but it is interesting coming directly from the central bank, which obviously should have a handle on the situation. A secondquarter Monetary Policy report. How does this one compare with the previous statements we have from the pboc . Actually, back in november, they issued a report, another quarterly Monetary Policy report and said it is going to be a longterm deal averaging in chinas economy. Not repeatedually that phrase since then and i dont believe it was in the latest report. Even though they are warning of high debt levels and rapid Credit Credit expansion, we might not get the point where china is ready to let its economy deleverage. We certainly see that to some extent. In thes a lot of risk Property Market. Is that one of the biggest risks for china, for its Financial System . Certainly a lot of people say that it presents the biggest risks of the economy and the Financial System. We dont have the kinds of to cure these and interconnections that maybe we saw when the u. S. Had its crisis back in 2007 2008. There are signs of froth in chinas system. Andes are really slowing are coming down in some areas. Construction is dropping, developers are cutting prices and so on. There is clearly some strain in the system and the government is figuring out how things are going to work out. As theill be watching markets get underway in about 30 minutes time. Bloomberg news China Economy editor joining us live from beijing. Thank you. In chinastwist food safety scandal has seen the arrest of six executives. The company is a supplier to mcdonalds, kfc and burger king, among others. Is facing an official investigation into allegations that expired meat was sent to customers. This monday, in the latest shakeup of state run businesses in china, Everbright Group is due to become a joint stock company. It is currently wholly owned by the government. It has 420 billion dollars of assets from banking and to tourism. Goals has taken over spirito. Gling banco is it is not it is now called novo banco. We start of a fresh week. It was a rocky end to the week on wall street areas david asia getsning us as underway. David . Were basically picking up where we left off on friday. Wall street not exactly having the best session to end the week. Overall, falcons are quite thin. There are a few macro themes to follow this week. First, will be the fx markets. Will we continue to see Dollar Strength . Last week we saw the biggest currenciesan including the japanese yen in three months. We saw a 12 decline. That is a chief theme to follow. We have some data coming out on the weekend from china. We had services bmi there, we had inflation in australia. Later on today, we have other metrics coming out of indonesia. Lets go back to australia. What are we seeing their . Were down half of 1 . Is a bit mixed. Although there is a key mover there. We are up one half percent on iron. These are your iron ore places. If you think there will be a rebound of iron ore prices, the stock presents a very good opportunity. The cheapest valuation among its a verymay present attractive acquisition target. Mind, iron ore prices have fallen 30 with the diluting assets of these companies. Unchanged at this point. Myer holdings, i mentioned retail sales are coming out. Look at that, treasury wine. Were watching the update on the news that it is getting a revised bid from kkr. I think we do have more details on this. Back to you. Us take a closer look at this. Let us take a closer look. Half revisedtten bid for australias treasury wine. Paul, what is the latest on this offer . Zeb, it is take two for kkr. Five dollars 20 5. 20. Ss worth they have had a rough ride recently. Theyre facing a 260 million in impairments. A few months ago, they announced they had to dump about half a million cases of old wine in the United States due to over supply problems. Theyre been cutting back exports as well. This offer is a big improvement on the one made back in april, 11 higher than that april offer of 4. 70 a share. Interesting, why was it not back tackle why was it knocked back . Had knowledgeer of the deal, so they ended up having to go public. If you take a look at the yearly price chart of treasury winds, you can see a couple pivotal moments where things happened. ,ack in january, the impairment business was not in full flow. Things looked pretty dire. And if you look at april, theres a big jump up third shares soared 18 after that initial takeover offer was revealed. Price open up over that offer, kkr is going to get a nonexclusive of the books. That does not rule out anybody else attention to making a bid for this company. The shares have opened again. Oday, prices have spiked again already closing in on that revised 5. 20 bid. Be watching it. Paul allen, live in sydney. The chicken other stories making headlines. United nations secretarygeneral von kee moon has announced a strike on another u. N. School in and as a moral outrage criminal act. 10 people died in the attack in fah. Washington said the school was hit by shells while palestinian officials and the yuan say it was an airstrike. The locations of all of these installations have been passed to the Israeli Military multiple times. They know where the shelters are. How this continues to happen, continues to happen, i have no idea. I dont have words for it. I dont understand it. Israel has announced a seven hours humanitarian truce in gaza, except in the southern the army has also pulled out Ground Forces as Prime Minister netanyahu signals the fourweek assault may be winding down. 1800 palestinians have been killed since july 8, while israel has lost 68 for soldiers and three civilians. Another big story were following, a strong earthquake in southwestern china has killed at least 381 people and injured nearly 2000 more. The quake measured 6. 5 and struck late sunday afternoon in yunnan province. About 200 people are reported missing. Said about 1200 homes were destroyed. Power and communication lines are still shut off. To offer an paula abdul in dollars in credit to fund an infrastructure project, including hydropower plants. Modi said that they will double the amount of electricity it sends to nepal and will Start Building new power lines. The powerthat when lines are built, india will buy electricity from nepal. The plants turn the company around. He says hes aiming to restore confidence and is open to acquisitions. , thatd bloomberg tv india he plans to invest in startups. That withto augment completely new kinds of things that we will do, new kinds of innovations in new areas, bringing new software to life come together with clients and doing that in exemplary new ways. Also working with start up companies and investing in startup companies. We have a 100 million fund that are shareholders approved. Shareholders have approved. The sticker look at the numbers. Certainly, 7650. 1. 5 move. That is what we saw on friday. We are watching it very closely. Next, investors seeing negatives in the u. S. Jobs report. It did come in less than expected in terms of the number of jobs added in the u. S. We will be talking about that after the break to get their perspective about what it means to the u. S. And how asia will be trading. When we return. Lets take a look at some of the stories we are watching this week. Toyota out with earnings on tuesday. This last of the big japanese automakers to report results. While toyota has kept his lead in global sales, it may see lower profits. Atlysts expect net income 17 last quarter. Raised nearlyup 2 billion from its ipo. Macau,slowdown in Analysts Expect moffat at the casino which runs the city of dreams up 15 quarter on quarter. Big numbers from china. The latest trade figures. These are for july. Surplus probably got smaller for one Third Straight month. Check in the global state of play. It has been a rocky few days in the markets, not only in asia but certainly in the United States and europe. My next guest is head of. Inancial markets Research Good morning to you. Lets start off with the information that was released. The Monetary Policy report on china. Basically, it is saying to the market, dont expect any major stimulus anytime soon. Is that likely to happen . Think that is a 64 Million Dollar question, because we have seen similar messages from both the Chinese Government and from the pboc before. When they have attempted to try to scale back monetary easing on credit growth, we have seen a very Rapid Response and the chinese economy. Growth slows down very fast. At which point, they do a uturn and decide to start allowing credit to grow very strongly again. If the pboc really do stick to their guns on this, then obviously there will be a dramatic impact on the economy and on Financial Markets. In that respect, given that they are an arm of the government, i wonder if theyre willing to see growth slowdown as a consequence whether they will change their mind again. They speak quite candidly about the growth and credit and money supply. They say it has risen sharply and actually quiddity is not necessarily the solution or the prescription to fix the structural problems. Does that appear to be levelheaded response . At least to me it does. We dont throw more cash at a situation where yard he have a significant amount of credit out there. I would agree. I think it is an accurate assessment of chinas problems. They cans a platform build on to move forward. Unfortunately, this is the same pboc that over the last few months has introduced a relenting program with one point or 5 trillion to push into the economy in terms of new infrastructure and new social housing building. You could say that is a countercyclical type of demand boost. As executor china said it wants to move away from. I am not sure if the left hand knows with the right hand is doing. Very interesting. Much of this focuses on the Property Market. We have the imf warning last week that the Property Market in china, the biggest risk, would you agree . Absolutely. He look at the data, which are not the most accurate coming out of the chinese sector, they are extremely worrying. We saw a mini crash back in 2012 when they tried to cool down the market. I think the outlook Going Forward is extremely negative. Do think they will be able to pull it through or pull it out, if you will . I think they can prop up demand to a certain extent, but when you have massive oversupply combined with a very high with very high prices, it is a toxic cocktail. Im not sure how much downside they can limit. The mediator sense of Monetary Policy globally. We are payroll numbers out of washington not as strong as expected. China services, cmi not as strong as expected. Together, you think Monetary Policy is appropriately dealing with the current economic reality . Not really. Have a twotier global economy, both between countries and within countries. Monetary policy really makes that worse rather than helping when you have ultra low rates. We raisetely, if rates, which many respects would like to do, that wont help the situation, either. These problems move above and beyond Monetary Policy. Structural policy indeed problems indeed. Time, michael. Thank you for joining us. He is head of Financial Markets research for asia at probably at rabobank. Stay tuned for that when on the move returns. Shanghai and Hong Kong Exchanges tie up with the aim of craving new opportunities for mainland and international investors. Lets get more from Tim Craighead who is director of Asian Research for bloomberg intelligence. Good morning to you. Lets talk about this, give us some context. This comes up october 13. It is a fascinating thing to be looking at and exploring now. All the more timely it would and hong kongobal investor perspective to the degree that the market is rallying at a time when every thing else seems to have faded into the end of july. There are large flows that will go in both directions. 40 billion can flow into china, 50 billion can flow on the southbound train, as they call it, coming this direction. There are a number of different elements to think about. Theres a group of dualistic stocks that are already training third we can think about the premium and discounts. There are a lot of stocks that are opening up now newly on both sides of the investment. The second look at this. Some of the stocks are following our sect theres. This table lays out a couple of interesting elements. You can see right smack in the middle, energy and financials make up the core of both the hong kong and shanghai relevant groups of stocks that will be opened up to crossborder trading. If you look at the Hong Kong Chinese will be able to invest in here, you have got some very interesting differences. Theres a big swath of communications and consumer stocks that they have not had access to before. Some of these are chinese stocks. China mobile and china unicom and china telecom, big names that have been listed here and not there. At the same time there are also gambling stocks, luxury goods and stocks that clearly they have an affinity toward. On the other side of the equation, you have got 120 stocks that are in the industrial heartland, sort of small, midand largecap industrials that Global Investors will be able to get their hands on in china, very interesting. Lots of opportunities as you point out, what have we seen anticipation of this and how can investors start exploring. Have they already . A number of elements. If you think im going back to that dual listed aspect, there are 70 stocks that are listed both in shanghai and hong kong. Certainly, there is a comparability if not an arbitrage opportunity straight up. Premiums group, the basis is dropped to an alltime low. This is being driven right now by hong kong financials and Energy Stocks having been taken up. You can see the premium on this chart here, where the a share premium has historically been above 100 is now gone to discount. It is mostly financial and energy related. You lookng though, if at the average age share , you getnot market cap a heavy dose of consumer and industrial and material stocks with the premium is still very significant on the a share side. You will beopen up, able to start looking more closely at some of these arbitrage type of virginitys if you want to buy the as were the hs. Or the it becomes more compelling ween the ishares and the between the a shares and the h shares. Looks like an opportunity for investors to get into the market. I think it is particularly timely to the degree we are starting to see a little bit of a pickup in economic statistics, the pmi for example. The appetite for what went on moremay be all the enticing. All right, tim, great to see you. For that. Interesting research. Coming up next, man in a suitcase. While japans jet setting p. M. Seems to be on a mrs. The right back. Mission. To be on a be right back. A message in a bottle. Treasury wine jumps on a revised bid from kkr. Formeros formers advisor said the insured have been negative rates years ago. A man on a mission. Shinzo abe is the most traveled leader in japanese history. Much more on those stores in a moment. China and hong kong about to open up for the trading days. Youre watching several important names after important announcements late on friday. David inglis joins us with a check on the market. Thanks, zed. Youre basically opening up to a slightly better picture compared to an hour back when you did see basically broad lines across the early markets. At the open we are basically in china you have several things out on the weekend. From a policy perspective fairly important. Services pmi coming out with a sixmonth low. The continuing slump in the housing sector is having an impact on sentiment across other related industries. It makes up a big part of final demand in the economy. What else do we have . The pboc coming out with a secondquarter policy report. A key take away there is that they did acknowledge that there was relatively quicker growth as far as the debt levels were concerned, money supplies, for example. Credit also saw a huge increase. Her haps targeted support ahead, yes, maybe not. So much broad. There are some youre also able to bring down things like borrowing costs. The rate fell down about 22 basis points for the one week. It is the biggest drop in borrowing costs at least for july. We are watching stocks that we pointed out in hong kong and shanghai. A few names i want to mention very quickly. Resource stocks. That is one. We are talking about hong kong. Jpmorgan coming out with revised forecast in metals prices. Theyre basically saying things , theyreinum, copper forecasting higher prices for the two. Echo veryry watching heavily weighted stock here in hong kong. Two names up. In shanghai. Energy industrials in that space. Last friday, we have been following the stock since then. Money to aunits owes bank. They basically confirmed that the bank is not urging that unit. It went over do you like 29. Were talking 21 or 22 22 million. The court and china has ruled that its Logistics Unit has actually gone bankrupt. They put out a statement to the exchange late on friday. Theyre