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tv   First Up With Angie Lau  Bloomberg  February 15, 2016 6:00pm-8:01pm EST

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, signalsthering gloom from emerging markets are becoming a seriously weak link. market movers saudi arabia and russia meet today with oil around $30 amid a global plunge. and planning a record by back after shares fell to their lowest. welcome to first up, i'm angie lau coming to you live from the asian headquarters streaming on mobile and
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it is tuesday morning for us. we have equities climbing point 2% despite imports and exports from china weaker than expected. ba minuteswe get her from the february meeting out ahead today. we will see how they are dealing with market volatility. in new zealand, a gains of .33% higher. and we are counting down to the opens in japan and korea. will today be a day like yesterday? it was a whopper of a take climbing more than 7% higher. that helped lead asian markets to the best rally in seven years. futures in chicago pointing to a lower open this morning. this is likely why. we have a stronger yen. the relief rally that swept
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through asian markets really did carry through the european session with growing hope that the ecb will expand the malus. we have -- expand stimulus. mario draghi taking credit for the change in sentiment. we have been talking about the limits of the federal bank's ability to keep the stability and growth in the financial markets. we are seeing what happened when the dha took that drastic decision. we are back to that recovery. we saw those gains. it does seem like the european equities was very much a sentiment created by mario draghi. it is a reiteration of whatever it takes. the ideas that he has been referring to the financial market turbulence felt over the last few weeks. he talks about if that begets to undermine price stability, we need to point out it is just
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under the 2% target. financial and market turbulence with the decline of energy prices continues to weigh on that target, the ecb will not hesitate to react. whatever that means. march 10 is the next meeting. they are meeting in the context of this turbulence and volatility and uncertainty. and the question ability of what more central banks can do through monetary stimulus to try to restore growth. spoke about emerging markets and was not quite optimistic. saying things are looking a lot bleaker than previously thought when it comes to e.m.'s. angie: it's -- are we waiting? haidi: i think we can get some from mario draghi, these comments he made.
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>> it is a combination of factors. it is not a slightly weaker outlook. it is a seriously bleaker outlook in the emerging market economies. especially in one large economy. although, i should say, the very recent actions taken by the --nese government show that i remarked in the last press conference -- they are living up to their reputation for responsibility. the euro fell following those comments on expectations of potentially more action from deal with the and precedent of volatility that we have seen. stocks fell at first, but they did manage to regain their footing. of course. with stimulus coming their way, why not? haidi: it is interesting
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because, last month, last week was a horrible week. but take a look at this chart that we pulled up that shows the banking sector of stoxx 600. european equities in general, actually. let's see if we can bring up that chart that shows how the european banking sector has .aried in terms of those stocks this is how the broader benchmark is looking on a one-year basis. we are seeing signs of a recovery. in particular, the banking stocks really drove those gains that we saw. it was the best today rally we've seen since 2011. stock prices falling to the lowest since 2013 last week. perhaps the selloff was overdone. it's not a balance sheet issue. banks need to adjust to the new normals and the environment of long growth.
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and dealing with regulatory conditions as well. thanks for that. you can get more on that and the top stories on the digital destination. bloomberg business, bringing together the best of bloomberg news, business week, television, and digital content in one address. also at, we preview the south korea rate decision and why it should matter to you. plus, how much has japan spent to keep the yen week? find out on are saidbia and russia to be meeting today with trade of oil around $30. venezuela may join the talks in doha. we have bloomberg news energy tracking this for us. what might come out of this meeting? it is really hard to
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say what might come out of it. really, if you are in the -- the oil business, you look to see an agreement to make some production cuts. the saudi's have resisted that. the russians have resisted that. those are the two largest producers. if they were able to reach some sort of agreement and the saudi's were able to lead opec to make a few more cuts, you might see a pretty significant rally. it seems to be a little on the hush-hush. you don't normally expect an announcement out of that. again, they are the people that have the biggest levers. if they pull them, something big could happen. angie: absolutely. saudi arabia coming to the table is significant. russia and money managers extending their long positions. rise.xpect prices to is that evidence we will see a rebound?
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at some point, it has to be, right? in mid-january, the price got down to $26. it jumped up pretty quickly to $32. which was a bull market in oil. its foot down to $26 last week. it is back up over $30. it's almost like we have a bear market, bull market, and a bear market. we might be starting another bull market here in a matter of weeks. like the looks of that second hit of the bottom. it feels like it's a little more firm when you hit it twice and bounced twice. see, as theyll say. outlines --on other headlines for you now. bad loans in china rose to their
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highest level in a decade. nonperforming loans jumped 51% by december from a year ago to $196 billion. 1.6% to ratio jumped ..25% china's banking system may see losses four times greater than thee of u.s. lenders during crisis. considering selling itself after posting a bigger than expected fall due to china. the board had been urged to sell the bank by elliott management which owns a 10% stake. , theyng kong based lender say, is being mismanaged. it fell after business humbled 81% a year ago. an accounting scandal at toshiba forced many executives to leave the country. the president may be next.
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a company committee is considering replacing musashi miramashi. he took over last year and tried to cut costs. toshiba is expecting a record loss of $6 billion this year. toshiba may consider quitting the computer game and sell the pc plant in china. softbank is ready to dig deep in its own pockets to shore up its share price. the company is prepared to spend a record amount mine back stock. our managing editor peter ahlstrom joins us from tokyo. by $4.5 says it can billion in stock. how does that compare with their past purchases and others in japan? it is a record for softbank, as you say, angie. it is the biggest we have seen
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in japan in the recent years. it is certainly a very big signal from the company that they feel like a stock is undervalued at this point. they will put down a big chunk of money. they could buy as much as 14% of the shares. angie: is it about timing? why is softbank buying shares now? the fact that they think it is undervalued? you look at the stock, it's down 28% this year. they have evolved into a holding company where they have big assets. alibaba, a stake in sprint, gung ho, the game maker in japan. and yahoo! japan. and you look at softbank compared to those assets, there's a huge gap, something like 25%. he feels like the stock is a screaming by so he will start buying shares at this point. how are investors reacting to this?
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far, it looks like in the short-term, it is being taken as a positive step. they have traded offshore in europe so far. in the long term he had some serious problems he needs to address. the biggest is probably sprint which has been losing money and shares in the u.s. market. this is the big concern. alibaba is their most valuable holding at this point. they went public about a year and a half ago. as china has slowed down, people have gotten more customers to buy alibaba's outlook. alibaba needs to show that they can continue to maintain momentum as the china economy is slowing. what they have done over the long-term. angie: peter, thanks for that.
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eyeingt guest is opportunities in europe and japan on the expectation of further stimulus. the gas at management's executive -- teak asset managemen ♪
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>> the stories making headlines around the world. seven people killed and dozens injured in a missile attack on a hospital. five patients, a caretaker and a guard died. several members of staff and other patients are missing. local opposition groups blame russian warplanes. drone strike killed 50 people on monday. saudi arabia may send ground troops to syria and it deployed warplanes there. it is hosting the largest and most important military exercises in the region's history.
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they are taking part in air, sea, and land exercises expected to last 18 days. it is part of the us-led coalition fighting the islamic state in attacking shia rebels. jet has beenargo impounded in zimbabwe after officials found a dead body. the plane was carrying millions of rounds and was trying to refuel. authorities say the money belongs to the reserve bank. they say the dead man is presumably a stowaway. powered by 2400 journalists in 150 bureaus around the world, this is bloomberg news. have some right, we breaking earnings coming out of singapore for you right now ahead of the market open. overseas bank fourth-quarter net income coming , about $564llion
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million u.s.. reporting 2015 earnings coming dollars 2 billion singh . we will be watching that when singapore opens an hour from now. the recovery in advanced economies is said to be progressing. but that moment am emerging markets has weekend. european stocks extended games -- gains as the ecb president spoke. isio draghi repeating he ready to act should the recovery come under threat. mario draghi: in recent weeks, we have increasing concerns about prospects for the global economy. trade data has been weaker than expected. markets have
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intensified and commodity prices have declined further. in the light of the recent financial turmoil, we will analyze the state of transmission to our monetary policy. in particular, by the banks. , the pricers stability. we will not hesitate to act. the falling prices was amplified by the perceptions that banks may have to do more to adjust their business models to the lower growth. the lower interest rate environment. and the strength and international regulatory framework that has been put in place since the crash. angie: are these mario draghi othds enough to so the savage beast of the markets? he said he will do whatever it
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takes. do you believe him? do you put your money behind that? that phrasing? thanks very much for having us this morning. we saw mario draghi come out with some very stern words about witnessing commodities -- weakness in commodities, banks, and global growth. he is ready to act. he may or may not and we believe he probably may release further stimulus to devalue the currency and shore up banks. saw deutsche bank unleash a $5 million -- $5 billion buyback. the stock price went up 11%. comments were well received. we saw your indexes up 23%. angie: there is growing sentiment that, perhaps, regardless of what mario draghi
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is saying, the credibility and ability of central banks to be able to stimulate growth is in question. >> absolutely. we see weakness in global growth. the bank of japan came out saying that global growth is weak. we saw the gdp figures yesterday. for 2015. lower than -1.2%. up market index in japan was 7.1% on the back of the news. what we are seeing is that bad news is actually good news. and we see markets on the back of firmer -- further stimulus. angie: let me ask you this question. if you were to find growth or look for growth outside any kind of central-bank action and just look at the fundamentals, where would you put your money?
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>> fundamentals are still strong. u.k. unemployment is at 4.9%, a 10 year low. u.s. unemployment sitting below 5%. we have the minutes coming out today. we have employment figures coming out thursday. the markets and what we have been saying is that markets are very irrational at the moment. a lot of it is driven by the oil price. it will be an interesting day whether opec, russia, and saudi arabia cap production. we see that is a strong positive barometer for global growth. at these levels of $30, has everyone shaken out to a point where russia and saudi arabia are comfortable with the competition? that on friday night, oil futures of 12% on
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suspicion that opec will cut production. want to see them start to take some sort of proactive step to cut oil production because it is positive for growth. it is positive for sentiment and equity markets as well. picks upil production inventories and we see rallies on the back of the news. we hope there would be some cuts coming in today. angie: all right, so oil. but this economy -- commodity slump has done a number on australian names. god earnings coming out? -- god earnings coming out? anything that you would hang your clients money on? >> the national australia bank came out this morning with a $1.7 billion orderly profit. we saw debt reduced and margins strong. the commonwealth one dollar 98
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dividend. banks are undervalued at these levels. saudi's andthe russia do cut production of oil, we see these trading below net tangible asset value. angie: always good to talk to you. live from melbourne from peak asset management. plan b should the u.k. quit the european union. next.e details, coming up ♪
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angie: hsbc may slow down plans for asia. the bank said they are still committed to the region, but it comes with conditions. what do they think? >> they had been planning to move 4000 staff to the delta
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region of china, the southern part. in an interview with bloomberg, the ceo says it still plans to do this. but it may have to slow down the pace slightly. that is because of economic volatility. the slowdown in china. hsbc is planning a redeployment of about 100 billion assets to asia as well. they say asia is "bumpy right now." asia.ill committed to the gdp growth will be faster in asia than anywhere else in the world. that is the strategy they revealed last june. asia accounts for the majority of hsbc profit. about 52%. if you look at what they've been making in the different regions, profit in asia fell 4%, 4.4%
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versus europe's 44%. angie: wow. talking yesterday and reported hsbc staying in london and not coming to asia. gulliver did say that he voiced concerns and said that .hey may move some bankers investment bankers, about a thousand of them. hsbc does have a large banks division. said a brexit would affect the consumer business. in fact, it is one of the strongest statements we have heard so far about the issue. out what theyd might do in the event that the u.k. does leave the eurozone. angie: thanks for that.
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mobius saysxt, mark it is bargain-hunting time in china. we will look at the growing premium between mainland stocks listed in hong kong and those traded in shanghai and
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gie: it is 8:30 there in seoul. live picture there for you as we look ahead and rate for the south korean rate decision to come down the pike. it's estimated to remain unchanged at 1.5% but there is growing sentiment that at some point we will see cuts. we are 30 minutes from the opening of trading there as well as japan. you're watching "first up." mario draghi has told european lawmakers that the economy is progressing but that the momentum in the markets has weakened. the stock europe 600 index
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posting its biggest two-day game in 14 years. draghi saying he's ready to act should the recovery come under threat and saudi arabia and russia are set to be meeting today with oil trading around $30 resulting in a global glut. traders are betting on a rebound in oil. stockpiles hit a 90-year high and also said iran's return to the market would merely add to the supply glut. and softbank says it's prepared spend a record $4.5 billion buying back almost 15% of its stock. however, it said it won't resort to more loans. markets have fallen -- shares of
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stocks have fallen 28% so far this year. this is bloomberg news. checking on markets in asia for you right now. let's he would to australia, ere the markets are climbing 1/3% higher. over in new zealand, we are also seeing gains. .4% higher. however, we're seeing a weaker new zealand dollar. let's get to japan. checking futures trading in chicago, pointing to a lower open but we will see the gains we saw yesterday? a lot of thoughts they were in oversold territory. a big buyback, as oil also recovered. features opening to a lower low this morning.
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but the slowdown in china has been the focus. yesterday, exports, imports numbers came in disappointing and now concerns about a soaring number of bad loans. nonperforming loans at chinese commercial banks a now at levels that we have not seen since june 2006 and he juliet watching all of this for us. what does this mean for legenders? >> obviously not great news and it is going to impact on their returns. this is the official data from the china banking regulatory commission. all of this, as we see the weakest economic growth in china in a quarter of a century. bad loans at their highest level in almost a decade. we have a look at nonperforming loans, they're up 56% on the year. bad line -- loan ratio has risen and the from 1.25%
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bad-loan coverage race has weakened. now at 181%, now down from over 200% from a year earlier. i guess we're seeing the concern over the nation's borrowers to be able to pay back in debt. we have seen shares of the nation's four largest lenders. they're at valuations about 35% below their emerging market peers. >> and there's speculation that soured loans are actually worse than what's being reported. >> no real surprise there are question marks over these official data. kyle bastl is the hedge fund manager who predicted the subprime crisis. he said earlier this month the chinese banking system could see losses more than four times seen
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by u.s. legenders during the last crisis. that number has been disputed by a number of other analysts will you he's basically saying if we do see these bad loans have an impact on the assets of chinese $3.5 we could see about billion vanish. angie: ouch. thanks for watching that for us. bank stocks are some of the cheapest and the slowdown has project -- prompted mark mobius to say that there are good opportunities out there. we've had our own david digging through the rubble for the best deals. david? david: absolutely. obviously value has emerged. there's cheap and china eight shares cheap. what you're looking at is the price action of the index. where all but one of its
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constituents are down for the entire year so it's about 47% from the peak back in play. 7863. the bottom panel, can you lower the focus a little bit? this is your r.s.n. january. pretty much for most of january we were in oversold terrain. that's the price action. let's look at valuations here. lots of ways to look at this. ism prefer looking at price book just because i'm i think more pessimistic when it comes to mullah. iwuh tonight know what the salvage value is incase aliens ome and pillage the earth. this is the current level at the moment in white. tracked across six or seven years. 985 is where we are at the
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moment. the orange line or yellow line. that's more or less the five-year average. so long story short is that valuations are not only just near the record low but the discount to where it usually is it's at its highest level going all the way back to 2011. so this gap between where we are right now and, if you will, roughly the five-year moving average is at about two. so let's look at some of these individual names here. take note that mr. mobius, and you can look at the full story. it's on the website and also on the bloomberg. go to the top story, china. mr. mobius did not come out with specific names. but we do have some names here. these aren't recommendations by me. these are basically the bottom three based on price to books.
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these are obviously distressed levels. over half the index is trading below a price book of one. is the energy producers for obvious reasons. let me end on this -- the top based on consensus ratings. these are the favorites according to sell site analysts. five being the highest, one being the most bearish. as mr. mobius said it's very hard to call a bottom to this markets but what we need to focus on, he said is on these individual companies and their ability to weather an economic downturn. in other words, look for the hidden gems at the moment again, that's on the website and also on the bloomberg talk china go. ainge zi angie: david, thanks. we're also looking at shares at
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national australia bank. right now, the bottom third of your screen, it's trading half a percent higher. t's look into this with paul allen in sydney, joining us live from there. paul, positive first quarter? paul: yes, earnings light, trading update and we have cash billion. 8% to $1.7 revenue also up 4%. due to a higher knelt margin and strong performance of the werth department. this is the first update we've had from national australia bank since the merger of clydesdale. they were expecting to book a loss of 4.2 billion but that won't be on the first-half
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earnings and won't impact the dividend either, according to nab. it's up about half a percent but year to date down 15.2% so far. analysts still liking it. seven buyers, six holds and zero sells for national australia bank. angie: let's look at another company. pharma company also out with first half earnings today. how'd they do? paul: another good result here, up 3.8% for the year, their profits, 638 million from c.s.l. what the market really likes is profit guidance, expected to rise 5 wkt for the coming year. but that does exclude a global - they're expected to report a four-year loss.
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the -- 2.7% c.s.l. is up today. very expensive stock. traded 24 times but it's the seventh largest on the a.s. example. despite all of, that analysts still like that one as well. angie: paul allen, live from sydney, thanks for that. let's look at what else we're following if you -- for you on the bloomberg this morning. here's heidi. >> sharp is reported to be sending a group to meet foxconn executives in taiwan. the two sides aren't expected to eet a concrete decision on foxconn take over bid. they face a rival proposal from apan's fund n.j. posting its first annual loss since 1949.
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the japanese brewer says net in will probably be 526 million. rin recorded a net loss of $412 million for 2015 after recording an impairment at its unit in brazil. trug -- struggling chinese company needs 75% approval from investors but it's only gone 52% as well. last year, kaisa became the first china developer to fault on its notes. green energy will get more than $500 million in loans to pay off old dealt and restructure. it's said to have scurled help from china development bank and ingli was once the biggest
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manufacturer. a total debt of 1.9 million. shares have fallen more than 80% in the past 12 months. that was a look at some of the stories making headlines. angie: later this morning, we are going to be live from the singapore air show. and the next hour we're going to be joined by honeywell aero space president steve lynn. that's at 8:40 and don't miss our interview with kennedy wilson for those of you watching us in sydney. right after this break, china's insatiable appetite for smart fofpblese. we're going to look at the new winners and losers when "first up" continues.
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angie: the stories making headlines around the world. a tralians say they've found material worth around 900 million. the justice munster said the liquid is one of the biggest drug busts in australia's history. the missing malaysia airlines search says the mission may ultimately fail. the case has been unpredictable all the way through. the plane disappeared almost two on ago with 329 people board. the search will wrap up around june if no other clues are found. only three of the plane's components have been found. and government in the balkan say they may tighting -- tighten
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their own controls over refugees. serbia says they may have to do the same. hey expect refugees. powered by over 25,000 journalists and 100 bureaus around the world, this is bloomberg news. angie: and we're going to be watching taiwan semiconductor when trading kicks off in tay pie. they posted a near 19% drop in sales in january and they're expecting sales to continue to drop in the second quarter on waning demand for smart phones. while china's smart phone market hit a record in the last quarter of 2015 with more than 117 million devices shipped and the top three brands make nteresting reading here. china.oppled them in
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and a senior market analyst joins us right now. so last year's record, was that the peak? >> what we saw was actually one of the highest quarters for china. it was actually the highest quarter because of the brands nvolved but if you look at the ull year, it was only 2% growths and the market is starting to slow down in china. angie: is it because of the slowing economic fundamentals of china or is it something else? >> actually, it's not really related to the slowing economy in china but because the market has become very mature and a lot of people already have smart phones. quite a small number of people
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and -- we see that the market is starting to see repeat users every two months. that's why we've seen a fall in the china market. ngie: explain for us how and huawei and apple were able to kick others off the top? >> they reduced the subsidy so that was changed by the open market. and in this era, samsung came nto the market by offering its phones at limited low prices. very good products both in the
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low end and the mid range. that's why it has gained a lot of shares in the china market. angie: all right but your research is showing that perhaps theis online sales are not going to be as robust in 2016. what does that mean for all these smart phone providers? >> from what we have seen in the china market is that this vendor will be starting to increase their extensions with the belief that it's reached a peak in its online sales. it will not be going as much for the coming year so we'll see an expansion of shops and they'll be trying to increase the sales. angie: give us a sense of what's on the minds of chinese consumers when they go out and want to buy their next smart phone. what are they looking at?
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>> i think mostly they look at the brand and would you well perceived this brand is. the spence of it. i think this is one of the first things that comes to their mind and of course value for money. how much the phone will be worth the money, how long can be last. angie: so quality and also brand recognition, but for everybody else, this is still a very kind of maturing market. we're seeing that globally. will that mean that we're going to see consolidation in the smart phone maker space in china? >> for some of those in the china market, chinese vendors, i think that's a possibility. because the market is getting very saturated and there are currently too many players in the market. we believe that is something that may happen but for the larger vendor, they will continue to do well in the china market. angie: ok, in the china market
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as well but also these china-based smart phone makers are looking overseas. what's their strategy for 2016? hauwei you can see that has been successful expandingover seas to america. as well as western europe and it has invested a lot in marketing and sponsorship. that's why it's had some level of success expanding overseas. other companies' expansion has been limited and they need to improve on branding before they can see a larger share of this market. angie: thank you so much for joining us on the growing chinese smart phone market and perhaps the maturing of it as well. up next, betting on the house. to apanese company's plan
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buy back shares, will it prove to be a winning belt? ♪
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angie: welcome to the stock exchange. we're taking a look ahead to the opens in japan and south korea and we have our intrepid reporters to tell us which stocks to keep an eye on. david. uliet and heidi. [laughter] ok, -- engineering makes equipment using pachinko in gambling houses in japan. it's planning to buy back 6% of sales. on the terminal it's-like looking like this will see the stock pop on open. we're hoping for an uptick on this stock, which is down 16 .4% for the year. angie: all right, there you go. all right, david, top that? david: it's just a formality.
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angie: sorry? all right. manufactures it semiconductors. two things. you have macquarie raising the outlook for the stock to outperform from neutral. the price target was 5450 but tsmc, we were talking about this, reported an 18%, 19% drop. it's an industry bell weather. this upgrade for macquarie shares are poise told plunge. >> oh, directional and -- i'm pretty impressed. heidi, you have to step up. heidi: i don't know which direction to go in it's a built of a strange call from j.p. morgan raising its rating on this company. cosmo energy is actually a holding company. it imports and sells and refines
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crude oil in japan. it's been raised from neutral. the other half of the story is there's the third japanese oil company to begin importing u.s. crude after that ban was lifted so that's expected to boost them because at the moment, the country relies on a pretty unstable supply from the middle east. that first delivery is expected in april but that is starting in mid february. two buys, three holds and one sell. angie: all right, that's it. that's the verdict from the stock exchange. let's see how they do. stocks reported are based on news events. we'll be back in an hour. ow, what do a mermaid, a man and a cow have in common? they're very popular.
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monthic comedy "the mermaid" tops the china box office. the monkey king came in third. a l
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♪ angie: gathering gloom. draghi says signals from emerging markets are becoming bleak. softbank plans a record by that. b for welcome to "first up." i am angie lau, coming to you from our asian headquarters in hong kong. markets in the asia-pacific,
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this is where we are at. paring backities gains of the morning. we have a stronger aussie dollar ahead of the minutes for the february meeting. 7% gains5 paring back yesterday. close to 1% down right now. a stronger yen, safety haven. kospi, .4% higher. 1.18. at at $30 a barrel on reports that the saudi arabia will meet with russia to discuss the market. brent crude looking like this. the relief rally that swept through asian markets yesterday
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carried through the european section. we are seeing a mixed market. we have more on this. coming in with action, ready to act? seems to be the favorite tool of central bankers , given there is a sense of doubt over what else is left. we know mario draghi favors the "whatever it takes" approach to market jitters and boost sentiment. that seemed to work in this case. basically, he is focusing on the recent global volatility, truly unprecedented. if that starts to affect the , and alsoility goal if declining energy prices continue to wane the way they have over the past year or so, creating deflationary pressers.
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will nothat the ecb hesitate to act. it has its next meeting on march 10. they are meeting in an environment of enormous global instability, slowing growth and uncertainty out of china. all these jitters we have been seen. he specifically pointed out the risks when it comes to emerging markets. take a listen. >> it is a combination of factors. bleaker outlook. bleakerseriously outlook in emerging economies. although i should say that the very recent actions taken by the what, inovernment show
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fact, i remarked in the last press conference. they are leaving -- living up to their reputation for responsibility. >> a seriously bleaker outlook for emerging markets. mario draghi making it clear policy will not hesitate to do more, whatever that may be. angie: that certainly helped out banks. >> we have that strong rally coming in on a friday session following the ecb comments. european banking sector was the source of all the volatility and the selloff throughout much of europe. asia as well. yesterday, we had a strong session for the asian banks. well.korean brokerages as there was a sense that the selloff, when it comes to european banks, has been overdone in terms of not really a balance sheet issue.
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i says there are issues in terms of challenges, but it is an internal -- external environment of slowing growth and a regulatory environment that is much stricter. as a result, we saw european banks really surge. ifwill have to wait and see the rally continues. the asian session is looking shaky. angie: softbank is ready to shore up its share price and spend a record amount buying back stock. we have our stock reporter joining us from tokyo. this could be worth $4.5 billion. how does this compare with their own past purchases? >> that is right, $4.4 billion. that is about 14% of outstanding
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shares, by far the largest buyback in softbank's history. to give you a comparison, their biggest rival announced a 500 billion buyback. angie: why is softbank buying shares now? >> softbank stock has been hammered this year because of concerns of recovery at sprint and the china turned down, which is affecting its shareholdings in alibaba. stocks were down 28% before the announcement. that put the company's value below the sum of total shareholdings, which, for a lot of people, did not make sense. angie: how are investors reacting to this? >> i do not know where shares are trading right now. they were 11%,
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higher, which is a great boost for a company seeing shares continuously plummet. what helps is softbank says they will not borrow more money to pay for this. it will come from asset sales and cash reserves. the company is $100 billion in debt. but the long-term question remains to be seen, whether sprint can turn around or if the company is liable at all and if the chinese economy can bring back alibaba's value to appoint they can enjoy. angie: thank you for that. checking in on other headlines, toshiba's president could be the next victim of the accounting scandal. consideringis replacing him at a shareholders meeting in june. toshiba is expecting a record loss of $6 billion. in may sell its plant in china
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and quit computers altogether. vaio is near a deal to merge its pc business with toshiba and fujitsu. kirin is forecasting a return to profit. japanese brewer said net income for 2015 will probably be $527 million. they plan to use its investment in myanmar brewery to strengthen profit. they reported losses for 2015 after an impairment at its brazil unit. they plan to make it profitable by 2019. -- asia of east azor has rejected calls to consider selling. the board has been urged to sell management,elliott which holds a 7% stake.
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bea reported income fell 17% less year after that income in china tumbled 81% from a year ago. the slowdown in china has seen a silver number of bad loans at chinese commercial banks. they are at a level we have not seen since june 2006. ette watching this. juliette: this is having an impact in the equity market and net profits. the latest official data from the china banking regulatory commission shows the lending industry's ability to absorb losses has weakened. seeing the weakest economic growth in a quarter-century and bad loans at their highest level since almost a decade. nonperforming loans, 51% on the year.
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1.20 7 trillion -- 1.27 trillion yuan. its ability to absorb losses has 1% from 200%.8 our'ss at the nation's f largest lenders are 35% below a gauge of their peers in emerging markets. angie: are these even the real figures? juliette: there is a lot of speculation, of course. a hedge fund manager successfully cold the subprime crisis and said the chinese banking system could see losses times that wasur
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suffered by u.s. lenders during the last crisis. that claim is this -- disputed by other analysts. he is saying if we see 10% of assets in china's banks lost because of nonperforming loans, trillionsee 3.5 dollars in equities vanish. we are seeing that profits at the lowest level since they started releasing the data in 2011. marketsoming up, global seem to have rebounded from last week's selloff. is the worst over? we will ask a tribeca management portfolio manager. ♪
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>> stories making headlines around the world. at least seven people were killed and dozens injured in a missile attack on a children's hospital in syria.
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, a caretaker, and a guard died. msf did not say who carried out the attack. raids across syria killed 50 on monday. saudi arabia may send ground troops to syria. is hosting what it calls the largest and most important military exercise in the region's history. exercises are expected to last 18 days. they are part of the u.s. coalition fighting islamic state and attacking shia rebels in yemen. beenmerican cargo jet has impounded in zimbabwe after officials found that body and dead body and cash on board. it is registered with western global airlines in florida. the airline says the dead man is
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presumably a stowaway. powered by 2400 journalists in 150 bureaus around the world, this is bloomberg news. angie: let's look at the markets in the asia-pacific right now. 225 is selling off this morning and really pa ring back gains we saw yesterday. more than 1% down. bright spot only where we are seeing australian equities down. let's bring in sean fenton, or folio manager at tribeca. joins us now from sydney. is their conviction in this market at all? conviction asot much as uncertainty.
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we are trying to find a bottom of the trading range. it has certainly put the market on a back foot. markets out there, with less support from market makers. we are in volatile times. when we lose confidence, we tend to shoot on the downside. i think we are at the bottom of a trading range here. to do a little work probably before moving higher in the next couple of months. angie: will it take the next couple of months and more inter- bank action to fuel optimism here? i think there is enough value starting to emerge in certain areas that investors eventually take advantage. but nobody wants to step in
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front of a moving train. we saw to -- the ecb soften its tone. banks will try to talk the markets down a little bit. angie: financials really got big support from mario draghi's words. how about you? are you looking to get back in? a lot of asset managers have been hit hard. there are challenges out there with aspects -- assets under pressure. a lot of assets under management.
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performance is hard to come by, but we see good value there. appetite for you when it comes to oil and energy stocks, especially saudi arabia and russia coming to the table, maybe joined by venezuela as well? >> a lot of talk, but not a lot of action. you really need to see hefty production cuts out of the high-cost producers. getting towards storage limits in crude provides downside risk to me. have auities out there strong recovery in the oil price. there is not a lot of value there. stocks that represent value, but certainly not in the capital.
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angie: i have to ask you about japanese equities. watching theash money sloshing around here. ,he story on the bloomberg here pessimism in japan. the market swings like argentina. volatility is incredible. surged 8% yesterday, today, selling off 1%. what is going on in japan? >> huge amounts of liquidity trying to offset stagnant growth for decades. not surprising. we are seeing it all around the world. ramifications of the fed tightening, drawing liquidity out of the u.s. banking system, has triggered results around the world.
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japan has been delaying serious restructuring for quite a while. the main policy work has been ongoing q.e. environment, you see vulnerability. i think that is where we are at. fenton, thank you so much, joining us live from sydney. coming up next, the yuan posted its biggest monday gain since the peg to the dollar was scrapped. ♪
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16.t is tuesday, february yuan enjoyed its biggest one-day rally after the dollar peg was scrapped.
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the governor is talking down expectations of further depreciation. part of the gains driven by the onshore yuan, playing catch-up after the new year holiday. yuan search the most since july 2005. term, job comments over the weekend reflect a view of stabilization. a stronger fixed by the pboc eased jitters, helping a dollar rout against the euro and yen. policy makersaid would not hesitate to act if price stability comes under threat. large hedge funds cut dollar gains last week by the most since june. the yen fell after lackluster japanese gdp data.
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the likelihood of the fed raising rates in 2016 have fallen to 33% from more than 90% at the end of last year. of volatility for the pound is at its highest since 2011, suggesting traders are bracing for a rough few months after referendum on eu membership. there were concerns that british voters will opt to exit. traders will likely play it cautious ahead of a summit this not seen asbrexit comfortable for sterling bulls or bears. let's look at how fx is shaping up. we have a bank of korea decision coming out at my clock. -- 9:00.
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downside of about half a percent. we are also looking at the daily yuan fix from the pboc. .2%, -- onshore gain, .2%. we sawoking at the yen, weakness driving gains in equities yesterday. a little strength today playing out in sentiment in tokyo equities. those are the stories driving the for-ex markets this morning. hsbc may slow down plans for asia, but they say it is still committed to the region. had said they would move 4000 personnel to the region. they still want to do that, but they may have to slow down its
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planned slightly because of the slowing economy in china. the market volatility. it also said before it will move $100 billion of risk-weighted assets as well. ceo stuart gulliver said asia is hsbc has tonow, and be streetwise about how it precedes. in the last 10 years, the gdp has grown faster than in any other area, which is partly why they're committed. quarterook at the third , profits in asia fell 4.4%. hsbc are going to update their plans for asia as well as generally on monday. angie: we already talked about this.
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they are committed to london as well. brt happens if there is a exit? rosalind: stuart gulliver said if there is a brexit, hsbc is likely to move 1000 invest in bank or to paris. they have about 5000 in london. paris./5 would move to that is inl line is its best economic interest to remain in a reformed eu. angie: before we go to break, breaking news for softbank. it is coming online and rising as much as 14% in tokyo trading. this is the most since november 2008. we have been reporting to you all morning softbank is planning a huge share buyback that is really propping up stock price
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for investors. coming up next, we will have australia's view of market turmoil when the rba releases its latest meeting minutes. ♪
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angie: it's 9:30 p.m. in seoul, korea, and in about -- 9:30 a.m. in seoul, korea, and in about half an hour, we are expecting a rate decision. expecting no change at one point 5%, but there is an indication that at some point we will see a rate cut from be ok. that is what the markets and an increasing number of traders are betting on. you are watching "first up." stories this hour. it has been a cautious start to trading on asian markets.
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the asx 200 has given out its early advance. earlier, european stocks jumped out by mariolped draghi repeating that he is ready to act if financial threatens stability. oil gaining. russia and saudi arabia are set to be meeting today. venezuela may also join the talks. positions rose to an eight-month high despite stockpiles reaching a high. softbank shares have soared. it said it would spend a record billion -- record $4.5 buying back nearly 15% of its stock. however, softbank says it will more loans.o
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instead, it will use cash on the sale of assets to make up the total. 18%.s are still down powered by 2400 journalists in over 150 bureaus around the world, this is bloomberg news. breaking news out of australia. the rba has just released minutes of its february meeting. let's head to paul allen in sydney with the details. paul: the bank of australia remaining firmly on message. low 2%. a record they reiterate that lower needed and noted domestic newstive lately, especially on the employment front. there is little mining investment pickup.
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there is global volatility at the moment, particularly in china. challenge for chinese authorities regarding the exchange rate. very similar to what we heard from glenn stevens when he gave testimony to parliament last week. remaining firmly on message, as mentioned. where cash to know might go next, look no further than the swaps market. angie: paul, earnings season continues. let's talk about nab and csl today. >> a couple of good results here for national australia bank. a december trading update. profit up 8%. a cash profit of 1.7 billion dollars.
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revenue also up for percent. good performance of the wealth unit. this is the first update we have had from the national australia since we learned that clydesdale would cost them $4.2 billion. the stock is down .2% at the moment. the prophet is currently 730 $8 million, up 3.8%. also forecast -- profit is currently $738 million, up 3.8%. thanks for that. oil is making gains about -- up about $30. the talks in join doha. our energy news editor erin clark joins us from tokyo. what do you think is going to
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come out of that meeting? : the saudi arabia oil minister and his russian counterpart are said to be meeting today in doha. the speculation is they would talk about potential supply cuts and ways to boost the price of oil. in the past, both saudi arabia been skeptical about cuts. saudi arabia has said they would only agree to cut production if there was a wide ranging agreement that included opec and non-opec producers. russia said they would defend market share. there is a lot of skepticism that there would be a wide-ranging agreement that this would work. still, the fact that these two are meeting is significant news. the fact that oil remains around $30 a barrel could be putting pressure on the largest producers to think about ways to boost prices. globally, are we seeing
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producers cut back? is production being affected? >> there are signs here and there that they are, but why in producersy and large, are simply getting more efficient. the production remains quite high. the record was 9.6 million year or two ago, and it has only fallen about 4% or 5% from that peak. we are seeing producers get extremely efficient. at the same time, we are seeing some of the majors cut back on spending for future productions. we are seeing a lot of spending cuts. inis something we could see the future. right now, we are not seeing a huge falloff in production. thank you for that.
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let's take a look at what else we are following. >> the two sides are not expected -- sharp is scheduled .o meet with foxconn in taiwan chinese developer is said to lack the necessary support. the company needs 75% approval from investors. a senior advisor says it has only garnered 53% so far. last year, kaiser became the first developer to default on the dollar note. became the first developer to default on the dollar note. the struggling panel maker is said to have secured loans from china development bank.
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yingli was once the world's biggest solar manufacturer. shares have falling more than 80% in the last 12 months. disney wants to build on the power of the force. force awakens has become disney's most successful film and the fastest to taken billions of dollars. disney has revealed that many toroel toro -- benecio del will join the cast. that is a look at some of the stories making headlines. korea decidesk of on rates and about half an hour. although they are expected to hold, bond markets are signaling a cut. need for theing a be ok to bite the bullet and cut rates. david explains.
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david: we are looking at the big mac index to see which most under or overvalued against the japanese yen. it has obviously been the most volatile currency in recent weeks. i believe this is the third of fourth story on the list. this is the big mac index. this is purchasing power and parity. distorts the prices of big macs. in this case, it inflates the prices of the burger in correia by about 9%. to make a long story -- in by about 9%.rea short, theong story currency is falling against the yen the most of anyone in asia this year. that is a sign that the be ok may need to act. we will find out if they will in about 30 minutes time.
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let me give you a preview of what we are to expect from the be ok. what economists are saying is maybe not yet. it may not be the best time to cut rates. here is a chart for you. the seven-day repo rate. in blue, the three year bond yield. wide why have these two together? -- whye of those cases do i have these two together? it's the case of the yield doing one thing and the bond rate doing another. last week, the yield fell below the repo rate for the first time since early last year. why is that important? well, last year, the two times it happened that these two rates crossed, it preceded rate cuts of korea.m the bank these two lines tend to move in tandem. it's something to watch.
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we could be in for a surprise. economist are saying one thing. bond markets are signaling another. currencies are saying the be ok may need to act. let me wrap things up with this. the base case for barclays out , let me get a chart to show you what that looks like, the base case is maybe next month will be better than now. the be ok will have more data and be able to look at industrial production, exports, to be able to assess where the economy is and whether it is in line with their forecast. term for south korean exports. the growth in decline, 2014 was for south korean
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exports on record. every single month we saw a decline. it is the biggest exporter to china. it's about half of south korean gdp. i believe it there for now. the rate decision comes out in 30 minutes. angie: thanks. china'sp next, is latest deal with boeing and airbus any closer to take off? we will get the inside scoop after the break. ♪
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angie: australian police say they have seized liquid methamphetamine worth about $900 million, much of it hidden in gel inserts for push-up roz. -- push-up bras. several people have been charged
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in the hall. .- haul it is one of the biggest drug busts in australian history. the man leading the search for malaysia and airline flight says the mission may ultimately have failed. the case has been unpredictable all the way through. the plane disappeared almost two years ago with 239 people on board. the search will wrap up in june if no further clues are found. only one jet stream component has been found, a wing that washed up. as eu countries tighten their own controls, slovenia may tighten immigration rules after austria said it would shut out refugees once it's limit is reached. serbia and croatia may have to
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do the same. journalistsver 2400 in 150 bureaus around the world, this is bloomberg news. global aerospace leaders are gathering for singapore's air show, which officially starts today. it is asia's largest airspace event. our first guest joins us from the airport. >> good morning from singapore airshow. 1000 companies from 50 companies -- countries. it is touted as the finest and the biggest. lots of participation -- anticipation for some deals. we will talk about that, but first, china is developing its first aircraft to compete directly with the likes of boeing and airbus.
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after setbacks and delays, it has joined with honeywell to make that a reality. steve, good to have you with us. where are you with the c 919? how is it developing? steve: it's going very well. we are working with our customer to their schedule. we of interesting content on systems.l and avionics working with them, as we have been for the past six or seven years, we have seen nice progress. we saw the rollout last year. we are looking forward to flight certification coming up in the coming months and years. >> you say according to plan, but not quite. severaleen delayed times. is the prototype on track? steve: yes, as i said, we
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continue to work toward the customer plan. that is what we are looking towards, and we will continue to do that. >> production expected in 2018. some say that is ambitious and not realistic at all. >> 2018-2020. we do continue to work to the customer plan. any new commercial practice is a difficult program, and we continue to work together as we do with all of our airspace. itsan you vouch for efficiency, it's safety? what assurances can you give us? steve: it will be just as efficient and safe as predicted, as we are saying. you certify it standards, that's
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very rigorous. we are working to make sure we get it right. a if there could be challenge, what would that be in developing the aircraft? steve: on a certification basis? >> yes. steve: we will continue to follow the same processes we would if we were working with boeing are airbus. we do not anticipate a significant challenge to western standards. >> any indication how demand will be? we know there is interest within china, but outside of china is the big question. >> it's a tough field. the c 919 is going to continue to be the next version of the 737 or a320 and others. there are others coming in from different countries. not only in china, but another places across the world, that there will be significant demand for the aircraft, and that's why we are
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a part of it. has it been partnering with china? how has the experience been for honeywell? steve: it's been great. we have been in china for 25 years. we have facilities across china and support production different components as well as aftermarket for the airlines. we have been working closely in the community for decades. we have put the focus on the c one -- c 919. always when you work with new companies and different companies, and we were formed rather recently, as you know, there are always learning experiences on all sides. that said, no major hiccups for us and it has been a good experience learning and growing together. is being heldw amid a slowing economy,
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especially in china, but you are saying you are not eating that -- seeing that slowdown. steve: we may not have as many binary orders, but we continue digit mid to single high -- high single-digit growth. a lot of that is driven by the fact that there are fewer aircraft for people in southeast asia and china than there are in western europe. it's the ability to connect that -- disconnect that trend from the economy. evolvingases, it is an industry. >> is it a trend that is expected to continue? steve: we think it is a trend that will continue for the next 10 or 20 years. the asia-pacific will ultimately
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have the largest demand for air transport in the world. we are looking at robust growth for the next decade or two decades to come. joining us. for if you take a look around me, you will see the dreamliner. we will talk about that later. angie: thank you so much for that. coming up, finding out why a japanese manufacturer of gambling equipment could be two days -- one of today's biggest market movers. ♪
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to the stocke exchange. trading underway in asia. let's check in with our reporters. >> this is a formality. he said he was going to win. he's awfully quiet. so close. anyway, stock exchange. focusing in on mas engineering. it manufactures grambling parlors in japan. it has a 6% share buyback. that's worth about 1.9 billion yen. the stock is down about 15% over the last 12 months though.
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a much-needed pickup in engineering today. not necessarily a winner, but directionally higher. david: i am a gracious loser. but of course, it's not our job to speculate. it's our job to deliver the news. marsews was neutral for engineering corps. consolation. >> i didn't even make a directional call. but it makes sense it got an upgrade to overweight from neutral. in oil company. they refine and import. part of the story is it's going to be the first japanese oil imports afterrt
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the crude ban was lifted. the supplier is an ever unstable middle east. >> exactly right. good stuff, guys. that's the verdict from the stock exchange. you're ok, david? all right. down and juliet continues to celebrate, that is " forr us on "first up today. we do have "trending business" coming up next. what are you watching? the bank waiting for of korea's rate decision. it is forecast to leave the benchmark at a record low 1.5%. markets have been signaling a rate cut after the u.s. signaled
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a delay in monetary tightening. negative interest rates in japan kicking off today. japanese shares have become more volatile than china, greece, and even markets such as argentina, while the yen has surged in the two weeks since the governor outlined the negative rate strategy. a senior executive has been at singapore airshow. the company is displaying its all-new aircraft which, after a long delay, is scheduled to enter service in the coming year. only asian customer with a firm order is korean. all of that coming up on "trending business." ♪
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shery: good morning. it is tuesday, february 16. i am shery ahn and this is "trending business." we will be live in singapore, sydney and tokyo. first, here is what we are watching this morning. oil makes a headline today with saudi arabia and russia set to meet to discuss prices and production. hase is back above $30, but -- down about 17%. ready to dig deep to support


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