Transcripts For BLOOMBERG Trending Business 20160825 : vimar

BLOOMBERG Trending Business August 25, 2016

Veteran investor mark moby says helicopter money will be that bojs next move, but may not have the desired effect here and follow me on twitter at rishaadtv, and use trendingbusiness. A lackluster session in the u. S. , slightly to the downside. Here is david. We are not seeing a lot of price action. Equity prices, volume, orex, the dollar on the downside. Equity markets mixed, volumes not quite there. Japan, but a pickup in australia. In china, we will be watching reaction there. The banks report later on. Hp reported last night, very disappointing. How theve a look at tech and computer makers are doing. It was disappointing. You look at sales for hp, personal computers came in flat, printing revenue declined 14 . That is on top of 16 last quarter. Sector inook at the taiwan, you are a competitor to hp or eight supplier to hp. Have a look at some of the decliners. Have a look at some of the gainers. Decliners are doing this, 1. 7 there. You get the picture. That is the story so far. We are counting down to the opening of markets in hong kong, earnings and focus. Rishaad an absolute tear when it comes to australia, despite a heavy loss. The numbers ring up here and why is stock moving to the upside like it is . ,aul ill give you the numbers 1. 3 billion net loss, in line with estimates, and perhaps why we are seeing share swing up. Theirave finally exited Home Improvement adventure, which did not work out well for them. Theyree separate deals, got rid of the last of those assets, which improves the bottom line by 380 million. Also exploring options to sell easy by. It has a Turnaround Program that will take them threefive years, so perhaps the market saying all the bad news is out of the way. Shares up 7 despite that heavy loss. A dividend of 33 since per share. South32,tell me about how did they fare . Paul fullyear underlying profit, 130 8 million, down 76 , we could prices, but still better than expected. Revenue 5. 8 billion. Looking forward to fiscal year 2017, Capital Expenditure and guidance unchanged. Shares off a little this morning, but south 32 paying its firstever dividend of one cent per share. Beating, off worse than of that is after a net loss 21 million. Rishaad thank you for that. Right. Oil, lets have a look at this one. Lets have a look at chinas oil giants outlook. How bad are things. Pretty bad for these oil giants. The worst ever halfyear results for petro china since they listed. Petro china barely avoided a loss in the first half. Forget the recent rally in crude , near 50 a barrel. Strikinganies pessimistic towns and their outlooks for this current second half of the year. International and the mystic uncertainties remain and prices face headwinds. Explorers have been facing high production costs, aging fields, and low prices. July oil output tell to a fiveyear low in july, leading to record crude imports. Rishaad lets get to it. How bad were they . Lets look at the numbers. Petro chinas net income just 8098 to million. The only thing that saved them from a loss was a 25 billion yuan gain. It was worse for chinas biggest offshore driller. Of 7. 7 4st a loss billion yuan. It booked a 10 billion yuan impairment on assets related to its canadian oilsands operations. It did provide a special dividend. Fell inthese adrs reaction to the result. Rishaad thank you for that. A more detailed look later on in the show. Tweet us your thoughts at rishaadtv, include trendingbusiness as well. Let catch up with some other stories. Hp results for the last quarter were a beat, and outlook fall short of estimates. . 34 touarter profit at . 30 a share, falling short of estimated . 40. Quarter, hp profit at . 48 a share, topping estimates of . 45. Shares fell an extended trade. Brace yourself, that helicopter money is coming to japan, so says mark mobius. He says the policy could be rolled out next month. Says the bank of japan will before to contemplate the move despite repeatedly ruling it out to put money directly into the hands of consumers. That after additional easing measures have caused people to save. He is worried that the policy could fall flat. They will engage in helicopter money with great care and reluctance. If they do it to carefully, it wont have the desired effect. This is the dilemma they are facing. Rosalind in italy, 159 earthquake. Buildings collapsed in small mountain towns. It is feared many more victims may be buried in the rubble. The trimmer cause shaking that could be felt in rome 100 kilometers away. Also on her website, chinas shadow finance sector echoing precrisis u. S. Loads more do, on trending business, including one of the World Largest Software Companies is needed in order to bridge the digital gap in asia. Waiting for brexit is like waiting for godot. Weakening further before it happens. Emerging markets have had a good run, but is it coming to an end . Next guest is still finding value in emerging economy assets. She joins us now. Thank you for coming on. And in whats value parts of the world are you talking about . In general, we like emerging markets. Them,is still value in especially earlier, there werent people with appetite to take on the markets. ,ow there is more appetite especially when you have negative Interest Rates in developed markets. Emerging markets start to look attractive. Thisad this is part of search for yield around the world, isnt it . It is, yes. This is what we are dealing with. Rishaad where are you looking . It is a broad church, isnt it . It is. Indonesia, we think indonesia offers good value. If you look at a whole spectrum, some parts of emerging markets right south africa and turkey, there is political turmoil and political risk, however if you look at them, they are still offering pretty attractive yields. Some investors are willing to take that risk. Rishaad right. Well, lets talk about china. Where do you invest if you do at all when it comes to that . We seem to be getting some growth, which must be real sure in you to some extent. I think the big thing about china is now that we see a great deal of stability, that is where the appetite for emerging markets comes in. An stabilityave surrounding china, there was greater fear around emerging markets, but with china data stable and we see policy really supportive of the economy, i think that adds a bit more cushion for emerging markets. Well, especially when we might have this Shanshan Feng a with hong kong coming up. Im sure you will be taking advantage of that. The shenzhen market as a window into chinas new economy, isnt it . All these steps that china is taking, whether connect,hai, shenzhen it is important to look at the bigger picture. Is moving towards cap role capital liberalization. That is when the things we are looking at for china. Rishaad right. We will have to wait and see what happens, but the elephant in the room has to be what the fed does next. We will be watching closely what janet yellen has to say at jackson hole, wont we . Absolutely. Especially because over the last week or so, we have heard a lot of different fed speakers, dudley, fisher, talking about putting september on the table, which is something the markets have not been pricing, so the markets are waiting for what janet yellen has to say and whether she is in that camp in saying that september is back in play. For now, the markets are still thinking that september is not on the table yet. Rishaad the thing is they have been talking out of school, havent they . Is this a way of putting pressure on her to actually move sooner rather than later . I think in general we will see it is hard to tell if it is pressure. We saw pressure early in the year on janet yellen in terms of putting hikes on the table sooner than expected, but she came out and was a lot more dovish than a lot of her colleagues, so in general it inws that there is a split the fed, and i think that is not surprising, but in general, we will see what janet yellen has to say, and what janet yellen has to say speaks to the markets more than her colleagues. Rishaad absolutely. Meets, they the fomc boj meeting in tokyo as well. Expect marks mobius does expect helicopter money and all by name i governor kuroda, but he does not reckon it will work. What is your view . I think the boj has been one of the harder ones to predict this year. We have been calling for some sort of easing since the start of the year. At the last meeting, they were disappointed. They did the bare minimum with etfs, but we are expecting more. I doubt they will name it helicopter money, but we will see some form of it coming soon. Were dollaryen is now, we have to see something from the boj. Rishaad final words about brexit, a bit like waiting for good tdot. They could do a bad deal, and that is the danger, isnt it . Sterling gets weaker, doesnt it . It does. We are quite there is shawn stirling. We are quite bearish on sterling. There is no president for what , so thesee or expect currency will bear the brunt of that unknown and the fear of the unknown in the market. Rishaad thank you very much indeed for joining us. We will look at some of the business flash headlines. Morgan stanley unit fined 2. 5 million in hong kong. Regulators saying the banks local Securities Division failed to avoid conflicts of interest. To meetfailed Disclosure Requirements related to shortselling orders. To an stanley agreed independent review as part of the settlement. It is still a long road to recovery at glencore, posting its worst profit in history. Pricesmping commodity causing profits to drop 70 , 300 million. Aftert about 400 million hedging future Gold Production before the price rally. It may resume Dividend Payments next year. Shares in london down by more than 3 . Monsanto revealing it has withdrawn its application for indian approval for its neck generation of seeds. Generation of seeds. Monsanto said it was reevaluating its is this in india. The companies saying it all the application last month because of regulatory uncertainties. Up next, Goldman Sachs making fx calls ahead of Janet Yellens speech. We will see which currencies make the biggest gyrations. This is bloomberg. Rishaad this is trending business. Investors getting ready for Janet Yellens speech on friday, but some need to be more prepared than others. Pound, therade the yen, and the kiwi dollar need to watch out for surprises. Theyese are the currencies could be most vulnerable if there is a surprise from janet yellen. The three currencies have been the most sensitive to changes in twoyear Interest Rate differentials between the u. S. And respective markets. We have seen in the past three , that yellow bars are the rate differential. You can see the differential for the dollaryen would be u. S. Minus japan Interest Rates. Again look at how that has been very closely correlated to that differential. These see this means that three currencies, the pound, the yen, and the kiwi, could be most affected. Goldman sachs saying in the event of a hawkish statement, attend basis point move in favor of the dollar, the yen weakening, and the dollar would go 1. 3 higher against the yen on such a move. Take a look at this of their function on the bloomberg. You can see the last time that the fed moved in december that they kiwi dollar, the yen, and the pound were the most affected there. Investor sentiment has shifted back and fourth in recent weeks with the currency volatility gauged starting to surge again this month, having already touched a onemonth high. How aggressive the fed will be in its of roche to monetary tightening after it raised borrowing cost in december for the First Time Since june 2006 will be key in what these currencies will do next. According to Goldman Sachs, the to a one basis point move in the rate differential being very pronounced for the pound, the yen, and the kiwi dollar, followed by the aussie dollar. Rishaad thank you very much indeed for that. I look at some stories making headlines. Dropping 3 after two patients were invalidated in the u. S. The patents were challenged by two rivals who want to make generic versions of the drug. Cn power reporting an increase in profit, 541 million. Revenue was 36 higher. The government aiming to double its Nuclear Capacity by 2020. A hong kong developer beating two rivals with a 180 million offer for a plot of land. They will pay almost 800 per square foot for the land. That exceeded market estimates. Property companies have been vying to get their land banks in order. On this weeks edition of high flyers, we spoke with someone who had to take over when her father died. Now she runs a multimillion Dollar Company that supplies singapore airlines, marriott, burger king, and others. Food safety is number one in the food business. We want to ensure that whoever eats them has assurance. One of our core by use is the weegrity, so it is a trust want to have with our consumers, with our customers. Thats why we set up the labs to do research and development, auditory Quality Assurance and quality control. , and once the test is passed, we will send it out and distribute that. Rishaad you can catch that interview on bloombergs high fliers at 6 00 p. M. Hong kongsingapore time. Investors are shrugging off , 13ical risks in thailand billion into stocks and bonds. Look at our top stories, shares higher woolworths for woolworths for woolworths. Mark mobius says helicopter money will be japans next egg experiment. He says traditional easing measures have made people save instead of spending or barring. The boj towill force contemplate a policy it repeatedly rejected. Treasurer Scott Morrison says her run without recession is complacency towards the economy. Unemployment about 10 , Mortgage Rates at 18 , or spiraling inflation. Lets have a look at what is happening as we get to the hong kong open. Shanghai also here. Moving more to the downside. Margin deaths have been climbing up quietly. We are back to levels and february. In february. The big bang starting to release their results. Construction bank out with earnings. Before i get movers we are following in china, the other big macro story is the pboc. This money market tackett, 14 day repo rate, which a lot of people scratching their heads. It is using that 14 day to inject money into the system, 220 million renminbi injection billion renminbi. Important,that is people are wondering why they are turning to a longer view in the money markets. This is the initial reaction we saw when they first hit it yesterday. There was a spike up for basis points on the chinese 10 year yield. The 14 day repo rate is the highest. 3. 1 percent. Curb excessto leverage when it comes to trading in the fixed income space. Keep your eye on those rates. As promised, earnings we are following. These three are coming out with earnings fairly representative of their own industries. Have a look up the ones did come out with earnings. Cnooc reporting a loss here in hong kong. Rishaad thanks for that. Everng up on these worst Half Year Results for oil giants in china. Lets get more on these earnings. What is the outlook . Is the worst over . It has been crazy this year. We have switched between bull and bear five times. These chinese companies, petro china and cnooc, they are not taking anything for granted. Petro china singh headwinds for prices. Of them are basically putting it on Macro Economic Global Economic outlook. They see an oversupply continuing into the rest of the year. Even though we have seen prices come back, they are being very cautious. Rishaad one of these do benefit from being in the downstream area, right . Thats where you want to be really. Petro china better than expected refining returns helped them to whether this better. They each out a sliver of a profit. Eathey they got more than 3 billion off that. That really save them. Cnooc had flagged this earlier. The canadian assets took at 10 billion won writedown on those. Issued a dividend, and petro china also issued a special dividend. Cnooc have been able to cut the firsta third in half, and they are on track to beat their costcutting estimates for this year. Rishaad we had spending cuts from all the majors. This is down to prices falling. How has that affected production . Crude is down 5 so far this year. It is also in the worlds top five producers, so as production falls, it is tightening the market and helping to balance it. While they are gloomy about oil prices, this pain is putting au. S. Seething and a floor in the oil market. Exactly. With output falling, we might see a little upside. Rishaad thank you very much indeed. That is the state of Chinese Oil Companies and chinese economy and hugely important and growth rate is watched around the world. Economist should take inflation out of the equation and look at nominal gdp and not real gdp. Than our nextask to guess guest. In contrast to the usual acquisition that china pumps up its numbers, this is about moving the numbers. Rishaad we should define nominal gdp. Basically gdp but without the takesor, which usually off a little bit to account for inflation. In a deflationary environment, it can add something. Lets put away the real number and have a look at what is happening on the nominal front, and things start to look better in china, a bit more than one percentage point better in fact, so maybe that is a better gauge of where the economy is. Rishaad its all about these alternative measures. Does this all explained then is notr why the pboc adding to its stimulus . We have not had a triple r cut since february. We have not had the benchmark Interest Rate cut since october. Why has the pboc been on hold . Maybe it is looking at these nominal standards, factory inflation is motivating moderating. Look aes are starting to little bit better and nominal terms, so do you need further stimulus . Thank you a lot for that. Looking at the state of play when it comes to the chinese economy. China saying there is still a chance that the president will hold talks with shinzo abe. The foreign minister saying the an good must create atmosphere. There are concerns about north koreas latest missile launch. The United Nations Security Council meeting in emerg

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