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tv   Trending Business  Bloomberg  February 15, 2016 8:00pm-10:01pm EST

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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 stock, announcing a buyback
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worth almost $4.5 billion. shares jumped the most in seven years. singapore airshow, with the future of asian air travel and the cream of the aviation world in attendance, we are live at the airport. let us know what you think about that top stories by following me on twitter. don't forget to include #trending business. breaking news out of south korea, the central bank has kept its key interest rates on hold at a record low of 1.5%. that is after cutting four times since 2014. surveyed werests not expecting a cut, however in ars have been pricing rate cut very soon after japan adopted a negative interest rate, which kicks off today. again, the central bank of korea keeping rates on hold at a
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record low of 1.5%. let's take a quick look at the korean trading. down half a percent. the china and hong kong markets get underway in about 80 minutes. singapore, taiwan and malaysia have just come online. here's a look at what is happening so far. we weren't expecting much of a change in terms of what we are getting out of the bank of korea. a bit of a reaction, a bit more extended in terms of the korean down half ang percent. we had gains of 3/10 of 1% yesterday. a bit of a reaction on the currency markets in korea to hold interest rates at its meeting. elsewhere around the region, the but it up 7/10 of 1%, has been a volatile day.
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asian equities struggling to carry through from yesterday's rally. the really strong today rally coming out of european equities, as well. we should be seeing stronger gains if you look at the comments coming out from the acb, mario draghi saying policymakers will not be hesitant to ask if global markets continued to deteriorate. similar from the bank of japan. also, general sentiment that the selloff has been overdone. instead, we see a very much mixed picture. .own by .5% gains when it comes to the minors, but gold miners are leading the decline, down under. new zealand, up 3/10 of 1%. taiwan up. numbers later this afternoon are expected to show contraction in exports and
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imports. southeast asia coming online at a bit of a mixed picture. it is about japan. japanese market had the biggest rally in more than seven years yesterday. today, giving back some of those gains. the nikkei down by 0.1%. let's talk about volatility. topics is now the at the highest since march 2011. when we had the earthquake. we are seeing volatility really, worse now than the markets in china, greece, argentina. pretty extraordinary company to be in in terms of the volatility index. that measure has swung more than 3% today over the past five sessions. two sessions where they have assed down by more than 5% well in terms of the declines. the nikkei volatility is trending up. up by almost 64%. in terms of valuations, topics down 23% on the year. we are trading up.
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the valuations going back to the start of shinzo abe's administration. like going back in time. we will have to see how that volatile day plays out for the rest of the session. some of the top movers, we are seeing a bit of movement in the energy space. seeingners down under .osses to the tune of 2.6% some of the minors in oil related energy companies are doing quite well. expectations that they will get something out of this meeting between russia and saudi arabia. shery: we will continue talking about possible meetings between -- with oil trading near $30 per barrel. erin clark joins us now from tokyo. we are now hearing of this possible meeting between saudi arabia and russia. what do we expect out of this?
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arabia's oil minister and his russian counterpart will meet today. speculation, of course, they would talk about supply cuts and ways to boost prices. both these countries have been skeptical in the past about supply cuts. saudi arabia has said they will not agree to any supply cuts unless there is a grand bargain between opec and non-opec countries. russia said last week, they would defend market share. there is skepticism that anything would emerge from this. at least, in terms of a grand bargain to cut supplies. at the same time, there is a renewed pressure on producers to do something, to take some action, although oil is rallying it is still trading at $30 per barrel. supplye not seen the reaction that many people expected, although oil rigs
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drilling in the u.s. have declined significant over -- significantly over the past few weeks, production is only down for-5%. bp expects the first half of this year to be choppy and the surplus is about one million of productiony above consumption. there is a large overhang and little response in terms of the cutback from producers. pressure is weighing down on big suppliers even more, particularly saudi arabia and russia as well as the smaller producers. they are looking for any boost they can get to the price. shery: thanks for that. clark in tokyo. we will take a more detailed look later. we want your opinion. please tweet us your thoughts @sheryahnnews. softbank is surging today after saying it is ready to shore up its share price and spend a record amount buying back stock.
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pavel joins us now from tokyo. almost $4.5e worth billion. how does that compare with their own past purchases, and with others? pavel: at ¥500 billion, this is one of the biggest buybacks in the market, for sure. it will be worth about 14% of softbank's outstanding shares. it is the record acquisition by the company. it compares to a buyback earlier this month. for loan separate, softbank shareholders, this could not have come sooner. the shares have been hammered this year, falling 28% because of the concerns of various performances for companies' shareholdings. forcompanies' outlooks earnings have not been reflected in the share price.
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a to be seen whether the rally will survive. it will not borrow more money to pay for the buybacks. it is reliant on asset sales as well as its own cash reserves to pay back or the shares. shery: thanks for joining us. look at some of the other stories we are watching this morning. here is julia, taking look at a potential megadeal in the electronics sector. >> good morning. we are watching shares on the open in taipei. no clarity on reports that it is to acquire sharp. up by in tokyo, sharp shares look like this after rising more than 7% yesterday. pretty unchanged today. the nikkei news reports shares are not -- they are not supposed a analysts have issued a note
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saying investors should stay on the sidelines until there is more details about a potential deal, saying any acquisition could dilute earnings for this year and also next. die what has reduced -- they have cut their price tag at $277 taiwanese dollars over the past 12 months. shares are rising today in tokyo. reports that the president may be replaced in june when the company holds its shareholder meeting. up by almost 5% there. reports toshiba may bailout of computer production and sell its chinese plant. toshiba is in talks with chinese companies to sell its plant in china. says it isinoff close to a deal to merge with the computer units of toshiba and fuji two. it is understood to shiva
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products would be produced at a different plant. the timing could delay the merger. toshiba shares hit hard over the past 12 months in the wake of its accounting scandal. aslowdown in china has seen soaring number of bad loans. nonperforming loans at chinese commercial banks are now at 2006, not seen since june up 51% to $196 billion. the nations lenders bad loan ratio has climbed. the industry bad loan coverage ratio, its ability to absorb potential losses from bad credit, has weakened to 181% from more than 200% one year earlier. -- hedge fund manager claims chinese banking systems may see losses of more than four times those suffered by u.s.
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lending -- lenders during the crisis. that claim has been disputed by analysts, including china international cap -- capital corp. shery: on our website, we are looking at the investment strategy of the world's biggest pension fund. that is a check it out. coming up, later in the show, we speak to a veteran china watcher who says, don't read too much into turmoil on the markets following the return from the lunar new year holiday. just ahead, we are live from the singapore airshow, where a ceo tells us about the trends in the indian and middle eastern markets. ♪
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shery: it is day one of the singapore airshow, and our coverage includes more big names from the aviation world. our southeast asia correspondent is at the -- haslinda airport. it is a hot, hot day at the singapore airshow. what is also hot are the budget carriers. they occupied over 50% of the market in asia. that is costing a lot of competition and one carrier that is not being affected by ceo joins us, the this morning. good to have you. congratulations on making it to profitability. the question is, is it sustainable? yes. >> yes. we have established ourselves. we had good root material.
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the future is looking good. haslinda: how far away into the future? how much clarity do you have? the next 12 months, the next few years? what is the plan you have? >> the foundation has been set. we have an efficient aircraft and a balanced network geographically. unit cost is among the lowest in the industry. it is declined 11% year on year. i think the foundation is solid. haslinda: you talk about the dreamliner. we have one just behind you. your fleet consists of the dreamliner. you says -- you said that is a game changer. it has lowered costs by 20% in terms of fuel consumption. it is a better passenger experience. the wind is, the air pressure. we have added attributes such as internet connections.
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from the customer experience, it is an improvement from an economic experience as an airline, it has been an improvement. overall, a good addition. reason tois there a acquire more planes? >> we have 10. we have 10 more on order. it is too early to make a decision on fleet acquisition. haslinda: your expanding into india. there are concerns, because you are awaiting approval to fly in their airspace. --we fly to asian city is cities. saudi arabia starts in may. in india, the first half of this year. indian regulatory process is a long one. we are assured of a conclusion, and it is imminent. we will in the next couple weeks. have beenthere complaints about high costs. why do you think you will be profitable in india? >> mastech is a different game. there are higher taxes.
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internationally, it is a competitive route, but it is a population with potential. we think, by adding new roots to the singapore hub, we can make a go of it. haslinda: what it makes sense to have a joint venture in india? >> at this juncture, no. distribution is something we are looking at, and partnership may be a reason to get that or a way to get that. but a joint venture, no. ipo, or: before you before you decide, you need to be profitable. now that you are, what happens to your plans? .> that was speculation we are owned by singapore airlines. we are owned for strategic reasons. we are delivering in the reasons we were set up for. would have to ask our shelter -- shareholders. haslinda: you see a possibility anytime soon? what challenge could you face? >> observed the capacity
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increase. 49% increase year on year. that brings a challenge in establishing in new markets and building profile, building yields. but it is investment in the future. the foundation is strong. we will make the capacity work in times to come. we will be better for it. scoot.a: the ceo of behind me, you can see, when you take a look around, a display of commercials, avionics. we will be here for the next two days and will keep you posted. lookinge will be forward to that. there is plenty more to come from the singapore airshow. in one hour, we hear from the head of sales of bombardier. a little later, we speak to his counterpart from gulfstream. stay with us for that. headliness making
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around the world, at least seven people were killed and dozens injured in a missile attack on a children's hospital in syria. five patients, a caretaker and a guide died. several staff members and other patients are missing. there is no word on who carried out the attack, but russian warplanes have been blamed. the u.n. says raids across syria killed 50 on monday. saudi arabia has indicated it may send ground troops to syria and has already deployed warplanes there. it is hosting what is called the largest and most important military exercises in the region. 20 nations are taking part in air, sea, and land attacks, which are expected to last 18 days. they are attacking shia rebels in yemen. pro-democracy groups have demonstrated outside the venue of the first-ever talks in the u.s.. 1960's andded in the
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is the center of america's -- several leaders did not come to power in fair and free elections. only indonesia and the philippines are regarded as open democracies. a number of groups have little time left in office, including president obama himself. over 2400 journalists around the world, this is bloomberg news. shery: still to come on "trending business," bargain-hunting time. in a moment, we look at how chinese stocks in hong kong are the cheapest in 15 years. ♪
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♪ shery: welcome back. you are watching "trending ahead to theoking chinese markets that open in a
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few minutes. chinese shares lifted in hong kong have all in close to 20% so far this year. emerging markets veteran mark mobius says, that means huge bargains. david has been digging through the wreckage for the best deal. david, what should we be buying? david: i'm afraid to look deeper. shares indexhina when your charge, that is the price level. 47% drop from may of last year. from the start of this year, down 18-19%. factoring in the gains we are seeing at the moment. that said, it is important to take note, this is where an --ex would be when all of it what all but one of its constituents are down for the year. also worth noting, this actually tends to have a risk premium built into it. lifting the bottom panel of my chart to show you, this is the
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rsi, relative strength index. to show you, can we focus on this bit? that is the story for january. trading in oversold terrain for this index. let's have a look at valuations. there are several ways to look at this. usinger to look at it price to book. looking at price to earnings, it takes us all the back to 2001. price to book is a bit more old-fashioned. it gives you a better idea of what the salvage value would be coming his aliens, and ravage the earth's economy. here is my alert for the shanghai composite. current price earnings at about .8. the five-year moving average comedy show you the difference, and the gap between the two is weually a long, the highest
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have ever seen. .e are at a ratio of two times going all the way back to 2011, this is a similar amount. to look at this gap between .8 and 1.56, just for your off 1.5e, price to book times, that is the five-year average. at the moment, s&p 500 is a 2.5 times shanghai composite, one of the worst performing indices, 1.6. nikkei, one point five. using this measure, it is really, really cheap in hong kong. cheap for a reason. let me wrap things up with individual names. not -- mr. mobius did not come out with that. but the cheapest of the cheapest, price-to-book, lowest, and there we go. there is a list of names. david.thanks,
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coming up next, more volatile than china, greece, or argentina. what is going on with japanese stocks? we investigate, when "trending business" returns. ♪ we live in a pick and choose world.
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♪ shery: the top stories trending this hour, asian stocks are lunch awaiting after monday brought tokyo's brigade -- biggest gain in seven years. japanese equities are more volatile than those in china, greece, and argentina. markets in hong kong and shanghai are set to open higher. earlier, european stocks jumped almost 3%, helped by eatery -- mario draghi saying he is ready to act if turmoil to that -- threatens stability. a record $4.5 billion buying
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back 15% of stock. softbank says it will not resort to more loans. instead, it will use cash and asset sales to make up the total shares. they are still down 18% this year. $30 inmaking gains above new york, with saudi arabia and russia set to me today. sources say venezuela may join the talks. wti rose to an eight-month high yearte stocks hitting a 90 high. traders shrugged off concerns that iran's return to the market would add to the glut. haidi is monitoring the opening. we saw downward pressure yesterday. how is today looking? haidi: we are seeing a turnaround in markets. in the late afternoon session yesterday, we saw mainland
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stocks coming off the worst of the day pass lows. down by about 2% at yesterday's open. today, at the open, shanghai up .ike .6% building on yesterday's gains. we had a stellar relief rally for all of asia, the asia-pacific up by 4.1%, the biggest rally we have seen since last september. we are giving some of that back, particularly when it comes to these markets like the sx sydney, stocks down by .4%. big iron ore miners gaining, but the losses are being tracked by risk of miners as the sentiment starts to pull back a little bit. gold prices starting to come down after the last couple weeks of gains. also around the region, the nikkei has actually jumped, turned green by .1%. the biggest rally in more than
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seven years for japanese stocks on monday, after shedding -- close to 12%. volatility on the japanese equities markets is now more severe than china, argentina, even the greek stock market at this point. taiwan extending gains, up by .9% ahead of trade data coming out a little bit later. i want to check in on the yen, because this is what is bleeding into the volatility we are seeing in the japanese market. seeing the flatten out a little bit. sitting at the same levels as yesterday, little bit stronger. that is weighing on equities. japanese stocks are swinging between gains and losses on morning. currently, back in positive territory, but that is after monday's huge jump. all of this, coming while the boj's negative interest rates kick off today.
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we have been tracking this. what is going on? most,an was one of the one of the hardest hit developed countries this year. we saw the nikkei and the topics down 20% this year. a lot of people are saying, the, japan has obviously, yen is stronger, which will eat into corporate profits. the fundamentals are not terrible. but japan has been hit hard. sides all these technical showing things were so oversold and on a price-to-book ratio, things fell. the lowest level since shinzo abe came into power. p/e ratio spell. fell.ratios no one was buying. things looked yesterday and we saw the market rally 8%. prior to that, the week of four, stocks were closing down 5%, and
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this is something that doesn't really happen in japan. volatility is surging like crazy here. when things move, they move a lot. part of it is almost inexplicable. people are shocked by what is going on. shery: is volatility here to stay? what do people -- where do people think the market is going? saying,ople are still we can't quite say this is bottom. as you can see, today, things are not looking particularly stronger, either. it is a case of come are we trying to find the bottom? are we building here? saying, we have to wait for a little bit longer to see if china's economy is improving, it oil is really going to stop falling now. and if the g-20, the g-20 countries will come out and say, we will do more to support financial markets. also, we have the negative interest rates today. people will look to see whether
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it does have a positive impact on the economy. as we have seen, it has been terrible for shares so far. we'll see if it turns positive from now on. shery: thanks. oil is surging in new york, up about 4% after sources told bloomberg that saudi arabia may meet with russia today to discuss the markets. for more on that, here is our energy reporter. then, what can we expect out of this meeting? the fact that saudi arabia is involved in a meeting is positive. you see that reflected in the prices. saudi's have always said they are willing to cut output as long as it is coordinated among opec members and non-opec members. therein lies the problem. turn your mind back today when they had a quasi-target of 30 million barrels per day. no countries could stick to that target. getting consensus among
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producers is the issue. people said last week that a quarter needed approach, -- a coordinated approach, he said the company would defense traditional markets. you have the wildcard of iran. productionping up and exports. they are starting to load cargo to europe. there are a few problems and .uestions for the meeting by cutting output, do you save market shares to other producers? 12-18is a consensus that months down the road, the market will rebalance itself by maintaining the status quo. meeting willor the be interesting, to see whether it is just a diplomatic thing. but the fact that they are meeting is positive for the market. shery: ultimately, the question is, are these prices going to affect global production? is anybody cutting back at this point? are not seeing significant cuts the many predicted.
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those cuts were largely seen to come from u.s. shale. it has proved resilient at this stage. front, thets on that last three weeks from u.s. government data shows marginal. we are seeing, if you look at companies in the reports coming out, extreme pain on that side. dividends cut, jobs lost, profit down. it is a tale of two halves, the first being very hard and bleak, the second being a rebalancing when we see the cuts coming through. , for the cuts to happen, whether that happens remains to be seen. shery: we have talked about rebalancing for so long. ben sharples with the latest on oil. checking in on other stories, a struggling chinese developer set to lack the necessary support for restructuring. the company needs 75% approval from investors, but it's senior advisers say it has only garnered 52% so far.
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became thekaisa first chinese developer to default on dollar notes. it may seek corporate approval to vote again. green energy will get more than $500 million in loans as it looks to pay off all that and restructure. the struggling solar panel maker is set to secure loans from china's development bank. usually was once the biggest i was manufacturer -- yingl once the biggest solar manufacturer. shares have fallen 80% in the past year. forecasting a return to profit this year after posting its first annual loss since 1949. the japanese brewer says net income for 2016 says it will probably be $527 million. it plans to use the investment
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in myanmar brewery to strengthen profits. they recorded a net loss for .016 -- -- for 2015 it plans to make the brazil business profitable by 2019. shares are tumbling by the most in two years in tokyo trading. shares in national australia bank are falling today, even showed aning updates increase in cash profit. let's look into this with paul allen in sydney. paul, a positive first-quarter? : the numbers looked encouraging. cash profits up 8% for the december quarter to $1.7 billion. interestue to higher margins and strong performance in the wealth department and bad debts down 52% to $84 million. we will this closely. as the first update since the
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merger with clydesdale, the bank says that cost them 4.2 billion dollars but said that loss was reflected in first-half earnings and will not affect the dividend. none of this has impressed the market. nab was up, but has given up the gains, currently off .85%. csl out with first-half earnings today. how did they do? paul: up 3.8%. healthy, expecting profit growth of 5%. the critically -- that does not include novartis, a flu vaccine business that csl acquired in 2014. they are expecting a loss from that division between $90
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million-$100 million. the second half expected to be good for csl. a number of products coming through the pipeline. again, the market unimpressed by this after a bright start. csl now off 1.77%. there inul allen sydney, thanks for that. , needless, foolish shortsighted. just some of the terms our next guest uses to describe the pboc 's fight to bolster the yuan. the co-author of "red capitalism and privatizing china" joins us next. ♪
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♪ shery: breaking out of india, the government has asked vodafone to pay tax or face
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asset seizures. that is according to a document seen by bloomberg. again, india asked the british telecom giant to pay taxes or face seizure. they got notice to pay india $2.1 billion in a tax bill, that is according to a letter seen by bloomberg. making headlines around the world. >> australian police have seized liquid metal -- methamphetamine .orth $900 million three hong kong citizens and one person from china have been charged. the liquid could've made 500 kilos of high grade crystal meth. it is one of the biggest drug bust in australian history. the man leading the search for the missing malaysia and -- may fail.airline
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it is been unpredictable. the plane disappeared two years ago with 239 people on board. the search will wrap up in june if nothing else is found. beenlion components have recovered. an american cargo jet has been impounded in zimbabwe after officials found a dead body and a large amount of cash on board. the plane was from -- flying from germany to south africa, and had landed to refuel. it is registered with western global airlines in florida. authorities say the money belongs to the south african reserve bank. the airline says the dead man is presumably a stowaway. powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news. now, let's get a quick check of the chinese market. shanghai and shenzhen rebounding today after moderate losses
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yesterday. shanghai composite up one point 4%. shenzhen up nearly 2%. all of this, after the shanghai composite lost nearly 20% this year already. with fraserget more howie, co-author of "red capitalism and privatizing china." thank you for joining us today. we have seen a lot of fear and anticipation of what might happen in china. how significant are these market moves when you take a look at chinesed -- the broader economy and word you see it going? >> ultimately, not important. the chinese market for a long time has been entertainment value for most investors. if you not have money in the game, it is not a big issue. but any market that is falling 20% in the first month of the year can easily be bouncing around 4% or so. that is not an issue. ultimately, for the big names, since last year.
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i think we will get more volatility. i have no confidence in the policy leadership to get clear direction. we will get more volatility. i think one of your other guests pointed out, this is, for those who know what they want to buy, there will be great opportunities. we are seeing volatility with chinese currency, the yuan. what is your take on how the pboc has can -- handle the currency? >> very badly. , and ia lot of respect think they have done a great job in difficult circumstances as head of pboc. but it is taken them six months to give us an interview and let people know what his thinking is. it tells you how bad the communication has been. also, i think a lot of their focus is misplaced. to go after speculators, which are an intrinsic part of any market, it seems petty.
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this is the world's second-largest economy. they seem to be basing their financial policy on what new york texas hedge fund managers think. that is a bad idea. certainly, if they want to become an international currency and rival the dollar, this is not the way to go about it. shery: it seems like policy makers just don't have a clear idea of where they are going. exacts, aing policies reform followed by control again by the government. it comes in different cycles. where are we at now, and where are we headed? >> i think one of the key things to remember, while it is easy to talk about, and china is the government of the pboc and you can put them beside other central bank governors, he is ultimately, he is not independent and he has to enter -- answer to his political masters. given the volatility in the
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country, there are mixed messages coming from the top by leaders who are probably not, they just one less volatility, not china making headlines. ofhas the difficult job trying to interpret the messages and implement a policy that has a middle ground. i think we will continue to see this. you will get these mixed messages. you clearly have a leadership that takes a lot of responsibility or control. he is economically savvy and it is difficult for those below him to implement a cohesive policy. shery: you are critical of policy makers in china. is there anything that the government or the pboc has done well so far? well, i'm not sure if i would theinto that problem in first place. he has problems -- they are -- doing the best
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they can. the economy is not about to collapse. what people say about the debt, i do not think that that will cause a financial meltdown or crash in china. the good news, they will probably be able to muddle through. the economy might not be about to collapse, but weren't we expecting more? it was supposed to be a time for xi jinping to carry out reforms. >> that is the point that is forgotten in all of this. say, they did a good job in difficult circumstances. it has not been bad. the economy will not collapse. of xiomise of his -- jinping was more than this. they promised a strong reform , a liberalization program economically. that hasn't happened. the market was supposed to be a decisive factor. that factor has been forgotten. the other aspect, the state,
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would still have control of the commanding part of the economy. that has happened. muddling through, not having a collapse in china, me be a good result, but they did promise more and have failed to deliver. briefly, tell us about the liquidity conditions in china. do you think we are seeing monetary conditions, at least, improving? >> possibly. the pboc is keen on that. it is not something i follow. i am not an economist. but the pboc is aware of that. i think the danger is, both onshore and liquidity offshore is highly controlled. it is difficult to know what the market is telling you, or the price is telling you every day, because the pboc is so involved in taking liquidity and a doubt of the system. i don't see a collapse in china, it -- at least not because of
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the collapse in the economy. we, co-authorhow of "red capitalism and privatizing china," joining us from singapore. next, stay in or go? that is the message the u.k. government is getting ahead of the brexit vote. ♪
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♪ shery: you are watching "trending business," live from hong kong. brexit ealed plan b for and says asia is bumpy. what is hsbc saying? >> the ceo has been talking to bloomberg. he said that asia may slow slightly. they had said previously they
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were going to put about 4000 stocks in asia. they would hire in the region in the southern part of china. but now, he is saying they may be doing that more slowly, slightly slower than originally planned. asia is still important, it still produces most of the pretext profits here. fellt in asia last year 4.4 percent, but in europe, they were down 44%. that is a stark contrast. asia is a driver for hsbc. he did say, you mentioned asia is up right now. bet means a -- hsbc needs to streetwise about how to proceed. but he says they are committed to the pivot to asia, and he , the growth of gdp in asia in general belief faster in the next 10 years than anywhere else in the world. the results are out on monday. they will update their plan for asia. people see whether they will
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pivot to asia -- we will see whether they pivot to asia. shery: after speculation, what are they saying about the u.k. possibly quitting europe? issue has weighed bankers mines. the hsbc says it could move 1000 investment bankers to france, and that is really the most followed bit of them permission -- information. shery: thank you for that. mitsubishi is set to order 20 m r.j. jets. mr. beatty -- mitsubishi's order is highly valued. the order is set to be from the u.s. 20 jets, orders for mitsubishi heavy.
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after more than two years of delays and ballooning costs, bombardier is ready for takeoff. ♪
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shery: good morning. this is trending business. ♪ live from tokyo and singapore this hour but this is what we are watching this morning. oil is strengthening on news that saudi arabia and russia will meet to discuss prices and production. brent crude has recovered most of its losses this year. softbank says it is ready to apport its stock, announcing
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buyback worth more than $4.5 billion. and, going bargain-hunting with the veteran investor who says there are nuggets to be found among the wreckage of shares in hong kong. twitter andow me on do not forget to include the #trending business. markets in china are seeing a slight rebound. what is happening, heidi? heidi: we are looking a lot better than we were earlier in the session. we have shanghai extending gains, more than 6/10 of 1%. asia-pacific seeing its best rally since september of last year, putting up over 4% yesterday. chinese markets did not partake in the enthusiasm. seeing a little bit of change in sentiment.
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shanghai is up by less than 1%. inare seeing some strength particular when it comes the financials. stocks these oil related are hoping the meeting between saudi arabia and russia may actually come out with some sort of decision to ease prices or ease the downward pressure on crude prices. of 1%, doing better, but very volatile. this more volatile compared in tokyo, china and greece over the last. i think there has been three days -- all of those sessions are seeing the intraday moves of 3% or more. two of those sessions ending with more. very volatile session when it comes to the japanese market. i do want to touch on the movers today because we're seeing quite a bit of gains when it comes to
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these minors. better withtly 2.5%. along with the decline in gold prices, along with the rally we have seen over the past two weeks, a more risk on getting away from those safe haven assets, getting away from gold and the yen. it the downside of over 3% today. taking a look at the financial s because we have a stellar rally yesterday. it was a much-needed recovery. today is a day the bank of japan's decision comes into play but we have seen banks holding on strong in tokyo. an 3% up by close th with nomura. we arechinese markets,
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seeing strength really coming through financial sector. these big four banks up by -- nothing confirmed that we are getting media reports that the government may announce a wide sweeping package of tax and fisc al to be sure growth comes in at a reasonable range for 2016 given all of these downward pressures, given the terrible read on january trade we had yesterday and that seems to be moving markets outside. we also have comments from a state council meeting that says the government has huge amounts of tools in the box and the economy has a huge amount of potential to the outside. i want to look at oil because we are seeing the rally continue. $34.38 at the
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again, a lot of room about whether we can get some kind of agreement between the saudis and russia. that is certainly boosting sentiment when it comes to crude in the early asian sessions. we are seeing the january aggregate financing came in at ¥3.24 trillion. again, aggregate financing at 3.4 trillion. we also have january new loans coming in at 2.5 one trillion. also, beating estimates of 1.9 trillion. we also have the money supply rising 14%, slightly higher than the estimate of 13.5%. it goes to show you how the pboc's tools for liquidity are bearing fruit. yuan,ns at 2.51 trillion
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showing flush liquidity conditions in china. all of those numbers beating estimates. let's turn to our other top story. oil is rising on news that saudi arabia and russia are set to meet later today to discuss rice is an production -- prices and production. what can we expect from this meeting? >> the saudi arabian ministers reaching his russian counterpart today, according to people familiar. we don't have further details about the meeting but we do know they will be talking about the markets. venezuela will be at this meeting. boths sides, russia and saudi arabia, have been fairly skeptical about price cuts. there is speculation they could be talking about price cuts and trying to boost oil prices. saudi arabia has said they are open to cutting price if opec
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and non-opec nations will act together. russia has concerns about market shares, preserving its market share. it is possible nothing may come out of these discussions. venezuela has been trying to rally oil producers around the world to shore up prices to cut production, but they have been hit by the falling oil price. -- if they have enough money to go around anyone in the consensus. they want to do something at a time prices are fairly low and iranian is low. softbank is nearly 14% after saying it is really to selloff its share price and will spend a record amount buying up stock. we are joined now from tokyo. this could be worth almost $4.5
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billion. how does this compare with their own past purchases as well as others? >> that is right. ¥500 billion, this is by far the largest eye back in -- by back in its history. to give you a comparison, so ftbank's biggest rival in japan has announced another buyback. for shareholders, the stock was clobbered this year, falling 28% as of yesterday before the buyback announcement. this puts the market value below the some of the value of its shareholdings which include sprint, alibaba, a game maker and yahoo! japan. softbank says it will not borrow more money to be able to buy back. the company is already 100 billion dollars in debt -- $100
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million in debt. they will have cash holdings and asset sales to pay for the acquisition. the shares are having their best day in seven years but whether the rally will last depends on the prospects of the chinese economy and how that reflects in the value of alibaba, as well as the progress on sprint. shery: thank you for that. pavel joining us from tokyo. let's take a look at some of the other stories we are watching today. here is juliet taking a look at a company that could be facing trouble in india. >> that is if they don't pay the $2.1 billion fine. bloomberg news has learned india's deputy commissioner of income tax sent a letter informing the company of its due. vodafone has been fighting
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indian authorities over years over its purchase of a 67% stake in 2007. while vodafone says it is not oh the indian government money because it was conducted offshore canadian authorities are looking to collect taxes because it involves assets in its country. it is not clear with the government's next step will be. shares listed in london are down close to 10% over the last 12 months. we are also watching early trade in taipei. there is no clarity on reports it is to require sharp with shares up by 1%. in tokyo, sharp is in focus after rising more than 7% yesterday. the two sides are not expected to reach any decision on a deal. hon hai has not responded to our calls for comments. analysts have issued a note saying investors should stay on
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the sidelines until there is more details. they see the acquisition could dilute the earnings this year and next. it has reduced its rating on hon hai from hold to buy and cut the cost target from 110 shares. it is down nearly 8% over the last 12 months. toshiba shares also in focus. the company is disputing reports it is considering ending production. its share price is soaring in tokyo. there has an earlier speculation they may bailout of computer productions and sell its china pc plants. there are also reports of the company president could be replaced in june. and potential sale of to shiba could delay the supposedly are with vio. toshiba shares have been pummeled over the past 12 months in the wake of the accounting
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scandal. shery: thank you for that. on our website, we're looking at how much japan has spent in keeping the yen weak. you can find that and lots more on and coming up, bucking the trend. we will be live at the singapore airshow to find out how a company is grabbing orders despite a slowdown in demand. been worthhis plane the wait? we will talk to one of the companies top executives. ♪
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shery: mitsubishi heavy shares are taking off on reports of
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picked up a big order for its airliner. american company has signed for 20 planes with a book price of $945 million. but hasect is close been dogged by delays and cost overruns. the original 2008 budget was almost $1.5 billion. that is expected to have doubled. let's stay with aviation and go back to the singapore airshow. our correspondent has been there for us. what is the mood like this year? >> the mood is cautiously optimistic. aviation has become such a competitive space. bombardier knows that too well. compete ago, set out to with airbus and boeing with its series but it was not as planned. it is now penny stocks.
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recently, they got $1 billion from the canadian government to stay afloat. they have gotten certification from the canadian side of, the what about the faa? give us an update. >> thank you very much. i want to clarify one thing -- the $1 billion investment we got with respective certification, we got canadian certification back in december. as was planned from the beginning, we are working on faa and the european authorities. we are expecting to get those shortly. haslinda: by this year, the first half of this year? >> absolutely. we need the certification in order to deliver and for them to operate the aircraft. we are absolutely on plan.
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haslinda: you talked about the first half of this year. how many? is it on track to deliver what you promised? >> we are absolutely on track in terms of what we plan to deliver. we don't disclose commercial details, in particular the number of deliveries. i can assure you that we are delivering at plan. we are delivering as planned in the first half. the following aircraft in sequence to swift and other operators. haslinda: no reason to be concerned about your ramping up production prices? >> we started the ramp up of production. i would not say it is conservative. it is very much in line of what we know we can achieve. no concerns whatsoever whether it is with the aircraft or actual industrial aspect. haslinda: bombadier, hoits series about 10 years ago.
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it refused to give it because you were confident there would be submission demand. >> we believe, we understand the market and we believe that our pricing is competitive, in line with the market and what we are offering is more than just an aircraft at a price. it is a value proposition. what we bring to the market is a completely new product with lower fuel burn, even the re-engine competition. we offer lower maintenance costs. we offer better standards. overall, there is a lot more to an aircraft than price. haslinda: can you compete directly with airbus and boeing? >> yes, we can.
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airbus and boeing are trying to make our lives difficult. they realize this is in its ordinary product. it is an all new design in 30 years in that category. they know that all too well. product.he right we understand the market in where we are competing and we will win the campaign. haslinda: where is the demand coming from? for a very long time, bombadier had orders from china. >> we are having discussions across the world. this is an aircraft that is very versatile. whether it is europe, middle east, the americas, both north we south, and asia-pacific, believe we have an aircraft that is suitable for a number of applications.
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latin america is struggling right now so we are not putting a lot of focus there. i would say nearly every other part of the world is a potential for an upcoming order. north america, europe, asia and china. we are taking it to those markets. now.nda: cheap oil does that affect anything? five-yearr, two year, investment. this is a -- 14. you take delivery. [indiscernible] they are looking on a day-to-day basis. planning,f long-term they expect it. haslinda: colin joining us from
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bombadier. we are joining you live from the singapore airshow. it is a windy day. shery. shery: it definitely is windy and sunny there in singapore. thank you. >> at least seven people were killed and dozens more in an attack on a children's hospital in northern syria. are than five patients, caretaker and a guard died. they did not say who carried out the attack but local opposition groups blame russian airplanes. indicated it may send ground troops to syria and has deployed warplanes. their hosting what it calls the largest and most important military in the history. many people are taking part in
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exercises which is excited to last 18 days. the us-led coalition fighting the islamic state and attacking shia rebels in yemen. bloc was founded in the 1960's and is at the center of america's pivot to asia. several did not come to power. they are regarded as being open democracy. a number of the group have little left in office, including president obama. in 150 bureaus around the world, this is bloomberg news. shery: coming up, bargain-hunting. find out why mark mobius says the stock market slump has created opportunity here in hong kong. we will have the details after this short break. ♪
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shery: you are watching trending business. have listed in hong kong and fallen about 20% so far this year. emerging markets are better which is why mark mobius says it is better. david has been searching for the best deals. negative -- of the it is not in the bottom yet. it would be a mistake to call it the bottom as markets tend to overshoot. this drop in prices and valuation have really created some value and some good companies are out there if you are a longer-term player. pe ratio of under six for the entire index. that is obviously the lowest going back to 2001.
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that is just above the the price to book the s&p 500. it has come really low. let's look at price to book now. on this measure, this gives you a better idea of how the evaluations have become. a typical line in the sand would be anything below one which would be considered distressed. more than half of h-share constituents are trading above. just to show you how it looks on the graph -- it is a 6, 7 year chart. the current valuation in white, the five-year average. that is coming out yellow. we are talking about the gap which is often a record high. the last time we saw a gap this big, it was 2011 during this
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time. obius did not come out with specific names. he said some have become cheap. we have a similar story in hong kong. some casino stocks. it is on the website. it is the third one. it talks about how it is still very much china related, not part of h-shares. a few days ago, we had this measure of casino stocks. the average price of casino stocks over the hang seng index. what we have seen over the past few days is a growth above the 200 day moving average for the first time in 3.5 years. the last time this happened, we surged. back then, it was a completely different market. the economy was more healthy than now. shery.
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shery: thanks a lot. coming up next, talk of a grand bargain. we will have that when trending business returns. ♪
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shery: the top stories trending this hour -- oil making gains above $30 in new york with saudi arabia and russia set to be meeting today. sources say venezuela may join the talks. high despiteh stockpiles heading a 90 year high. traders drug off concern that iran's returned to the market would merely add to the glut. afone theyarning vodef
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may take assets due to a tax bill. it dates back to the $11 billion purchase of hutchison indian operation in 2007. analysts say the case may influence foreign investors' perception of the country and the tax bill remains under international arbitration. d after ithares soare said it would spend a record $4.5 billion buying back almost 15% of its stocks. it will use cash and the sale of some assets to make up the total. shares are still down 18% this year. now checking on some of the markets -- stories making headlines right now. >> the bank of east asia has rejected calls to consider selling itself even after posting a bigger than expected
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fall in profits. the board has been urged to sell by elliott management which holds a 7% stake and the hong kong-based lender is being mismanaged. 17%reported income fell last year after net profit in china tumbled 81% from a year earlier. developer chinese sets to have support for its restructuring plan. it needs 75% approval from investors but the advisor says it only has gotten 52% so far. last year, kaisa became the first developer to default on dollar notes. a source tells us the energy company will get more than $500 million in loans as it hopes to pay off debts and restructure.
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the solar panel maker is said to have secured the loan from the bank. it was once the world's biggest solar manufacturer. last year, had a debt of $1.9 billion and its shares have fallen more than 80% in the past 12 months. a forecast of a return to profit this year after posting its first annual loss since 1949. the japanese brewer says that income for 2016 will probably be $527 million. it plans to use an investment in myanmar breweries to strengthen its profits. it recorded in impairment for its brazilian unit. it hopes to make the brazil unit profitable. by 2019 shares are tumbling in tokyo.
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we have breaking news for you now -- softbank is surging to its upper limit in tokyo after announcing a $500 billion yen buyback plan. it is gaining by the most in seven years after reporting a share buyback of 15% of its stock. here's haidi with a look at what is moving the markets. a lot of green today. starting to move in the right direction after a shaky start this morning. building onxtending yesterday's rally. yesterday we was asia-pacific rallying, the biggest rally since september of last year. it was much needed after the aggressive selloff we had last week globally. it is up five 9/10 of 1%. it has been a super volatile session.
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japanese stocks considered to be more volatile than china, greece and even argentina. we are looking at some pretty jittery moves. we do have the bank of japan taking an interest rate decision today. we are rather seeing japanese sentiments. korean stocks extending gains by % after the bank of korea did not move on interest rate policies. not too much of a surprise either way, but we are seeing gains being led by strength coming out of the mainland market. shanghai up by 2%. we are seeing financials driving those gains. this is oil related companies which is in the hopes of getting a deal out of this meeting. we are getting rumors, or potentially a package of measures coming through from beijing, comprising monetary
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fiscal tax. maybe even some m&a reforms to keep growth within the reasonable range that has been stipulated by authorities that have been concerned. a lot of reports circulating domestically talking about that. we're seeing that driving some of those gains in the chinese market. let's take a look at some of the movers today. it is gaining in australia. doing slightly better with two quarters of 1%. on the other side of the spectrum, down, leading losses out of these gold miners as gold is seeing a little bit of a direction after two weeks. very strong gains. in tokyo, we are seeing gains extending on yesterday's stellar rally for financials. 4%.ra going up another these japanese banks have been down as much as 25% of peace at the end of january through the
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end of last week. shery: thank you. oil is surging in new york after sources told bloomberg that saudi arabia may meet with russia today to discuss the market. ben joins us now. what are we expecting out of this meeting? ben: the fact that saudi arabia is involved is the primary item. saudi arabia has always said it is willing to, but it just needs a coordinated approach among opec members. that is the problem here. quasi target of 30 billion barrels a day. they never stop to that target. also have doubts about russia. that comes down to the infrastructure. would defendthey traditional markets and
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expressed doubts about any coordinated cuts. iran this week was loading cargo to europe. they were ramping up their out and want to regain that market share they lost after international sanctions were imposed. the other question is by cutting outsource, do you allow room for market share for others to come and take it up? the consensus is the market will rebalance over the next months. does it make sense to cut? that is probably the biggest question. what happens in this meeting will be clearly watched and there is a lot of interest. shery: by rebalancing, are we talking about production being cut back? lower prices are finally affecting these producers? ben: it is essentially production cuts, and it has been seen from u.s. shale. we have been talking about that
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for quite some time. we have seen reports from bp an d and the pain is being felt by those producers. lves. a tale of two havl the second half of 2016, we will see the rebalancing. u.s. production coming out of the market and possibly starting to rise, and providing more relief. shery: i think we all feel like broken records. thank you for that. ben with the latest on oil. shares in the national australia bank are falling today after showing an increase in cash profits. let's look into this with paul allen. this was a positive first quarter for now. paul: yes, it is. earnings up 8%. it is at $1.7 billion. revenue up 4% as well. there is higher interest
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margins, higher performance. $84 million.% to this is the first update we have had since the demerger of clydesdale. that cost of the bank billions of dollars but that loss will not be reflected in the first half earnings or affect the dividends. it has seven buyers, six holds and zero seells. it is up .6 of a percent and more than 15% in year to date. shery: we also had pharma companies having earnings. how did they do? paul: another good result here. $738first-half earnings to million. guidance is very healthy.
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they expect profit growth at 5% for the coming year, although that excludes the flu vaccine business which csl acquired back in 2014. that is expected to post losses million. $120 they do have a strong pipeline of products on the way. again, have a look at the stock. i stand corrected -- i was about to say it is in the red, but it is making gains of about 1%. shery: stocks fluctuating these days. thank you, paul allen. returning live to the singapore airshow where our next guest company will be displaying one of the world's fastest civilian jets. hear from the gulfstream senior vp when trending business returns.
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shery: let's get back to our coverage of the singapore airshow. has, we are at the state of the private jet market in asia. >> oh, you bet. it is not just the commercial or defense aircraft. we are looking at the private jets as well. the commodities have rallied of. . one jet maker, gulfstream, has managed to outperform its rivals. scott neal joins us. you did pretty well in 2015. scott: we had a very solid year in 2015. we had strong market share in all the regions we compete. we had a good year and the asia-pacific.
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it was our strongest market outside of the united states. haslinda: how much visibility do you have in 2016? scott: looks like a lot like 2015. we are well-positioned. we are financially strong company and have a strong parent company in general dynamics. haslinda: you are taking market share. where and who from? scott: competitors from all over the world. haslinda: it has happened over the last few years. scott: we don't give market share specifically but all of the markets we compete. it has really created a new market in itself. our aircraft in the middle of the product line continue to have the leading share in the market in every market around the world. haslinda: why has it been so resilient for you and despite the routs in both commodities? scott: i think we have a strong
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product line. even though you see changing conditions around the world, we are positioned well. we are a strong company. we have a product line that helps people travel and do business internationally. our airplanes are doing what they say we will. haslinda: what do individuals want specifically? i know they want more room. scott: performance, comfort and safety. airplanes that deliver on time, deliver what we say they will do. that has been her only business for about 60 years in designing, selling and supporting airplanes and we do it better than anybody. haslinda: now, there is no companiese stigma of to take their own planes for business. heavy seen different attitudes or may be a heightened demand for that? scott: i think we have seen a
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real shift of people understanding the business aircraft are really for business. large companies and private individuals cannot do what they can do without the benefit of a corporate aircraft that allows them to travel on their schedule, allows them to get into smaller airports where the large airliners cannot. it provides flexibility to run an international business. haslinda: there has been a lot of talk about how congested it is in southeast asia. what is your strategy? scott: we will continue to invest in the region. haslinda: how so? scott: service and support. singapore, we have maintenance facilities for gulfstream airplanes. we built a product support at beijing capital airport. million worth of parts in the region to support our operators. we are well-positioned with
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people and parts and support to support our own operators in the region, plus of though that may transit through other parts of the world. haslinda: realistically, when thishis business in side of the world compete with europe and the u.s.? scott: it is growing. the u.s. has been the largest market for corporate aircraft. last year, the asia-pacific was the second largest market. haslinda: it overtook the u.s.? scott: it will take some time. years, maybe decades. there is such an installed base of corporate jet aircraft in the u.s. that it would take other regions some time to catch up. haslinda: oil is pretty cheap right now. is that impacting business, demand? scott: it has not had a significant impact one way or the other for our customers. they are so well deserves --
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diversified around the world. we have not seen much of an impact. haslinda: with conversations with your clients, what assumptions are you making as far as the prices? scott: i really cannot comment on oil prices. i know the impact we are seeing because of oil prices is minimal. we continue to see strong response from around the world. business has continued to expand and grow globally and any to fly to different places around the world. our airplanes are perfectly suited for that. haslinda: what is the biggest challenge for gulfstream? scott: it is really to support our customers around the world as our fleets grow. we are delivering 250 airplanes a year so we do expand our networks around the world to support those airplanes. we invest more than anybody else in the business, but it is a game we need to stay on top of to maintain our number one position.
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haslinda: can we talk about your airliner -- has production increased?> scott: it has. it has been the most successful corporate business jet ever. we have a strong backlog of orders. the next available delivery for a new one is and little over two years from now. haslinda: we thank you for your assessment today. we are coming to you live from the singapore airshow. stay with us. shery? shery: thank you for that. haslinda joining us from singapore. >> announce of the stories making headlines around the world -- liquid methamphetamine worth around $900 million in gel inserts. three hong kong citizens and one person from china has been charged. the liquid could have made 500 kilos of high-grade crystal
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meth. it is one of the biggest drug busts in australian history. the man leading the search for the militia and fast missing -- the search for the missing malaysia airlines flight has been unpredictable. it was lost almost two years ago with over 400 people on board. mponentshe jets' co has been recovered thousands of miles from the search site. an american cargo and jet has been impounded in zimbabwe after officials found a dead body and a large amount of cash on board. it was flying from germany to south africa. it's registered with western global airliners in florida. the money belongs to the south africa reserve bank. the airliners says the dead man is presumably a stable way -- stowaway. in 150 bureaus around the world,
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this is bloomberg news. shery: china reported its latest bid on new credit. debt, a surge in new aggregate financing which beat estimates. david is here breaking down the data for us. david: it was quite a surprise. just looking at it when the numbers broke and it took me a wild to actually realize how large these numbers were. i thought it was an error. before i chart this for you, let me show you how large it was compared to december, the amount of credit created by the banks and for the economy. can we get a close-up? what you have here is the prior number. 600 billion. the estimate was for 1.9 trillion and what we got was 2.5 trillion. we saw a surge in the amount of aggregate financing which is the second line here. i know that is hard to see. let me chart this for you for you to understand.
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let's start with new loans. binge, lending their way out of the crisis and saving the world. such a huge amount of loans. this chart goes back to 1992. a tracks the monthly amount of credit or new loans, new local currency loans that chinese banks lend out on any given month. 1992, close to zero. this is where we are at the moment -- this was during the global financial crisis. that is where we are at the moment. keep in mind, there also might be a seasonal affect. chinese new year, first week of february. i would imagine a lot of these banks frontloaded a lot of the loans but it really turned up the credit taps on this one. really quickly, lenny and on this. the amount of aggregate financing in the economy.
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take loans and everything else. that is the chart for you. that is billions of u.s. dollars new financing in the month of january. for those calling for support for the chinese economy, that is coming. $520 billion, record amount of financing. shery: thank you for that. coming up later in the show, slow and steady. hsbc says it may has to proceed carefully in asia, but is not giving up. details when trending business returns. ♪
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shery: hsbc has revealed plan b an says asia is bumpy. that could affect its plans. what are they saying now? >> in an interview with bloomberg, the ceo of eventually said it might slow down its plans for hiring in the region of china. originally, hsbc said it was going to add 4000 jobs in the region. now stuart gulliver is saying in might have to hire more slowly. it is also planning to move above $100 billion worth of risk to asset in asia as well. they will update these plans on monday. in its watch out because
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strategy last year it said it would pivot towards asia and that it was at its heart of the strategy. keeping the headquarters in london. gulliver has said that asia is bumpy right now which means hsbc has to be careful on how it proceeds. shery: thank you with the latest on hsbc's plans for the future. that is it for trending business today. stay tuned for asia edge. our guests on the show is from j.p. morgan asset management. stay with bloomberg tv. ♪
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angie: as middle of the asian trading day. this is "asia edge." ♪ the top stories this hour. ajax and the -- the recent route has uncovered -- ninja borrowing. a splurge from lunar new year has sent china credit spiraling to a new record. hour, half.up this india wants vodafone to settle a
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$2 billion ill or face possible asset seizures. haidi: timekeeping and i and asian markets. -- i am keeping an eye on the asian markets. all major indices seeing pretty gains.grains -- mutated in fact, up 9/10 of 1% after yesterday's rally, which was the most in over seven years. shanghai markets, also joining in on the rally. elsewhere, hong kong building on yesterday's rally, one and 7/10 of a percent. southeast asia seeing a modest gain as particular, strong sentiment coming out of china . this is despite the


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