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tv   First Up With Angie Lau  Bloomberg  February 21, 2016 6:00pm-8:01pm EST

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drowning in that, peking at almost 300% of gdp. sales beat estimates on improving. crude behavior, nigeria backs plans for a production freeze with oil back below $30. welcome to "first up." i'm angie lau.
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let's check in on markets in asia this monday morning for us, to australia we go. 1%.tionallyally higher, 1/10 of australian dollar right now at 71 u.s. cents. let's head over to new zealand, and this is the view there. of 1%now it is 4/10 lower. we have the weakness in the new zealand dollar. growing pressure that perhaps the rb and said is going to have to react to cut rates on the heels of reduced dairy prices. we are counting down to the opens in japan and korea. pretty much every market pared back. below 16,000. chicagofutures in pointing to yet another lower open. this is possibly the reason why,
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check out the level of the yen right now. yen, and strengthening this is offsetting the outlook for exporters there. one market to tell you about is taiwan. -- thailand. they are celebrating a buddhist festival. china's ratio of debt to the size of its economy is expected to keep on climbing. how much longer is this debt going to keep mounting? >> at least seven out of 12 economists expect that to be 2019, up at least until four years from now. 283%is expected to peak at of gdp. party isommunist trying to put a floor on economic expansion. it already is at the slowest in
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more than two decades,, staying around 6.5%. this, they have to keep stimulus in the economy and that means more borrowing. already we saw last week figures coming out that china's new yuan peaked. billion of loans in january. if you look at aggregate financing, it is already soaring as well. there is a lot of concerns that overhang could last for a long time and have an impact on the overall economy. angie: in the past this has triggered pullback and financial crises for a lot of other nations. >> exactly. in china this continues to go on despite all of those concerns being out there. companies are doing a good job
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in trying to manage that debt. when it comes to state owned enterprises, that's a different story. soe's, instead of cutting debt, their debt has soared. private companies at least, the debt is being cut to 53% from 58% in 2007. a key problem here, all of these that surging saw, of new loans, most of them are going to be state owned enterprises. about 40% of bank loans go to actually onlyhich contribute about 10% to the chinese economy. singapore's largest lender is just out with results. we've got our correspondent on top of that. about onecoming in at
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billion state dollars. definitely a beat up by 20%, and that is because of interest margins rising. having said that, dbs in singapore is facing rising npl's, nonperforming loans, forcing banks to set aside more money to cushion bad loans so they can't fully gain from higher interest rates. of --f course, the loss the last of the three banks to report earnings. ocb, mpl surging 50 poor percent -- 54% in the same period. ands will stay vulnerable be exposed to weaknesses both at home and overseas. it is not help the regional economies are slowing down. dbsnt to show you how
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shares are doing. they are down 18% year to date, double the loss. also, bigger than uob. dbs was toppled by central asia. bca benefiting from its focus on indonesia, protecting it from slowing growth in greater china. that is how it sounds right now, ange. rated one of often the world's safest banks. what are the prospects for the lenders here? >> some in the markets say the prices over stock done. there are challenges from slower economic growth, but the long-term prospects look promising. if you look at the average price target, it is 20 singh dollars. the lender also gives a pretty good dividend, up 4%. toquarrie downgraded dbs
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neutral from outperform. of 24 hours we tracked. the company still pretty optimistic about it. in the end, dbs needs higher rates to grow its earnings and boost its share price. thank you for that, haslinda. china has fired the head of its securities regulator, who will be replaced by the former chairman of big bank. -- ag bank. sources tell us that yahoo! will begin approaching potential
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corporate and private equity buyers as soon as today. the web company is seeking bidders for its core business. verizon, comcast, and at&t are among those interested parties. ceo marissa mayer is under pressure from activist shareholders after struggling to boost sales and separate yahoo! from a $26 billion stake in alibaba. china's refiners are selling more diesel at home rather than exporting it, as prices set by the government make domestic prices were attractive. china has been flooding the region with diesel. experts in january fell 26%. imports jumped the most in 10 months. shares in blue scope steel currently looking like this in early trade, 3.6% higher after first-half profit and australia's biggest steelmaker
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beat estimates. let's get over to paul allen in sydney. how didlue scope to -- blue scope do? paul: net profits 200 million. they also beat upgraded guidance. revenue also up 2%. blue scope it did take some write-downs on this new zealand and australia still businesses, more than half $1 billion. the value of the asset in the united states, north star steel, also got a right up. saw plenty of challenges in the steelmaking businesses. a short time ago on a conference call, bluescope's ceo said the price of iron ore more likely to fall.
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cost-cutting appears to be paying off here. paul: it does. it was august last year that bluescope was talking about having to shut its huge steelmaking facility in kindle. they did get the union on board. 500 jobs were cut. $200 million in cost savings sought. it's been a pretty wild ride for shareholders. traveling very nicely this morning, up 2.7%. there is also an entrance dividend of three cents per share. angie: paul allen, thanks for that. we are going to be speaking
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later this morning to the 9:40 live right here on bloomberg television. commodity markets this week will look to opec for further clarity on how the oil cartel plans to curtail the global glut. >> hopefully we can expect some clarity. u.s. supply data. we saw as u.s. supplies continue to be at a very high level. that's the key issue here, the output level leading to the global supply glut. there is increasing concern among analysts that the saudi accord does not do enough to achieve those output cuts. their decision to freeze output, the agreement between saudi arabia as well as russia, is a first step and it may indicate willingness to change
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their tune. certainly there's no binding element to this that would require the member states to put in any extra efforts to actually achieve these goals. it's a bit behind the game in terms of action that should have been taken. they are supposed to complete these talks by march 1. russia says the oil output freeze could work even without iran. they want to ramp up production, and their market share has been impacted from the years of sanctions. iraq as an interest, interest, and two end the global surplus and get past this 12 year low for crude oil, certainly output seem to be the only way to achieve it great angie: opec has introduced its fair share of uncertainty into the market. when is the next critical meeting? months toed several assess the impact of this agreement, whether it will have any demonstrable impact on the market. that takes us to june, the next
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emergency meeting. if they call an emergency meeting, it introduces further uncertainty into the marketplace . the speculators will have a difficult time trading on all of this, because opec itself has been the source of all of this uncertainty. angie: all right, thank you for that. --an's lackluster negative lackluster growth have investors heading for the doors. we are live in tokyo to hear the case for japan. ♪
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>> welcome back. these are the stories making headlines around the world. a suicide bombing in syria has killed at least 140 people. the u.s. and russia had agreed to the terms of at least a
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limited cease-fire. islamic state claimed responsibility for the attacks in damascus. u.s. secretary of state john kerry said he discussed the trade proposal with the russian foreign minister, but did not give details. concerns now that turkey and saudi arabia will become more heavily engaged in the war. half the water supply to india's capital has been disrupted after deadly unrest in a neighboring state. protesters from the community shut off a canal carrying water to 18 million people. 5000 troops have been deployed, while the unrest caused india's top carmaker to shut to factories over the weekend. the mayor of london says he will campaign for britain to leave the european union in june toss referendum. he says the decision caused him a huge amount of heartache, but he wants the british people to
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take back control. puts him insition direct opposition to david cameron. over 2400 journalists in 150 bureau's the world, for bloomberg news. japan's capital markets and investors summit begins in tokyo today. let's get more from bloomberg's stephen engle. after a volatile start to the year, what is the mood like their? : good morning. japan. to talk about in this week has been a volatile entry into 2016. just most recently with the boj and mr. corona, going back into we'veve rates territory, had a strengthening yen as a safe haven assets and we have so
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much to talk about with our first guest here at the asia-pacific investors cooperation. japan's summit. what is your investor viewed given what has happened in the beginning part of this year, and now negative rates? >> it's been a very volatile start to the year. it's been difficult for investors to look at that start over the last eight weeks. many of our investors are taking a long-term view. they are looking beyond that eight week period and they are going to assess opportunities over the next year or two, and as a long-term investor, do we see a lot of opportunity over the next few years? >> in particular, where? we have seen foreign sell in the equity markets.
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would you find areas to buy? >> rather than that, for many of our investors they are taking highly diversified approach. specialties, we go for risk diversification. that allows you to see through some of the short-term market volatility and try to think about the long-term positioning. equity markets have been very volatile over the last eight weeks. there's a lot of political risk out there. and political is, risk abroad. i was walking in tokyo yesterday. there was a protest against abe. risk andthe political to what we are seeing is the financial risk in japan? political risk always plays
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an important role in financial markets. there is global political risk in terms of japan specifically, to the extent there is political risk that also makes it difficult to enact economic policy. fundamentally, this isn't just about japan. this is about global risk at the moment. u.s.ook at brexit, presidential elections, and countries going into negative rate territory.. abenomics asou see a whole under threat? think it's going to be very interesting over the next 4 to 6 see what kuroda thi there is still a lot of opportunitynk -- i think there is still a lot of opportunity
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abenomics to come through. there's a number of different as abenomics . stephen: have there been successes? >> absolutely. you have almost 200 signatories signed up for that now. there's a real drive within japan focusing on that at the moment. stephen: what is the big risk if they are into this negative rates territory, how do you exit and if you go further down the way, on the other end, who will be buying up the jjb's when the prices will be falling? >> there's definitely issues there. constitution requires you to belong -- be l ong jjb's.
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there are certainly issues there, questions. we'll be very interesting over the next months to see where kuroda goes. stephen: generally you have high confidence in japan? >> we think japan is a great place to do business. highly talented people. we are confident about our business here. we have many more exclusive interviews here. lots more coming up. angie: thanks for that trading coming up, gaining support -- the tech world backs apple as its fight with the u.s. government over privacy intensifies. we'll hear from a top executive at google why the issue needs more debate. ♪
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the fbi wants apple to assist it in overcoming security measures on that iphone so he can recover information from the handset of a dead terrorist. apple argues the move sets a dangerous precedent for consumer privacy. google has also cited with apple in its fight against the court order. the company's senior vice president says the issue of privacy versus law enforcement needs more debate. >> we focus on building secure .roducts if requested or demanded by agencies, of course based on proper legal process, we will make information available to them. what were talking about here is where thet scenario tech industry is being asked, it sounds like, they are being asked to help in hacking their
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product. that's a different scenario from the way things work today. i think that requires a lot of .iscussion and debate i have a lot of respect for law enforcement, and of course don't have any respect for criminals. that's not what this is about. it's a new way of thinking about things and we need to debate that more. opponents oute there who are saying, this should be restricted to one criminal. if it's going to save lives, why would you put innocent people's lives at risk? it's a new area and it warrants more discussion to make sure how is this actually going to work, what kind of president is being sent. if that phone was an
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android phone, what would you tell the fbi? think we would feel the same way, that this is a different scenario now, so let's think this through more and have this debate. is at what do you think stake here? it's about privacy, which everyone agrees is important. easy to talk about these cases in general terms. matter.specifics do i'm not familiar with the specifics of the san bernardino-apple situation. an importantlike area that requires more discussion. angie: coming up next, it is a big week for earnings in hong
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kong and banks are expected to come under pressure. stay with us. we will get back to you in two. ♪
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angie: it is 8:30 in tokyo. looking ahead we have february figures for manufacturing. still in expansion territory. month'se what this figures will bring trade shinzo abe says, this market turmoil we are seeing, don't blame japan. blame it on china and the fed. we are 30 minutes away from the open of trading there, as well as south korea. top stories this hour, china's debt looks set to climb for another four years and could 200 -- around 280% of gdp.
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chinese policymakers are struggling to cope with the slowest growth in 1/4 century. nigeria is backing saudi arabia in russia's position to freeze oil production while africa's biggest oil producer supports their push to limit output. it says iran and iraq should be given some room to win back market share. nigeria's energy minister says at any ratel remain levels. sources say he will meet with his saudi arabia and counterpart later today. expectingsteal earnings to surge in the second half of the fiscal year. bluescope also announced first-half profits did more than double. powered by over 2800 journalists in 150 news bureaus around the world, this is bloomberg news. stocks starting off the week on
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a down note with oil back below $30 a barrel. .> we are signaling a drop take a look at how the asian markets are looking. so far this monday morning you are seeing the enzi top 50 down 1/3 of. 1% -- 1%. reallyon friday here, we did snap out of a brave week. the best performance we had seen since october in terms of the weekly performance. it was that concern on oil once again that snapped those gains in global markets on friday, with oil snapping back below $30 a barrel. on friday, this is how stocks in the u.s. and it. the dow jones down 1/10 of 1%. we also did get those inflation numbers coming up in the u.s. prices rising the most in four years.
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that is boosting the case for possibly more interest rate hikes coming up this year. those fed fund futures still signaling 40% that we will see a fed rate hike this year, down more than 90%. one thing to watch out for today are the minors. or, we really did see a quiet comeback recently. prices climbed the highest in three months, rising 2.9% on friday. we are near 50 bucks a ton right now. still 1/4 down from its 2011 peak. steel makerss boosting output after the lunar new year holiday. some of the biggest miners are posting slower growth in supplies as well. that is up more than 20% since monday. that stock really taking flight in the last week or so.
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some are optimism, but not everyone is convinced this rally is going to last. bank is predicting prices may pose the biggest loss among metals this year. citigroup also expecting to cb iron or medium term price at $35. morgan stanley also expecting to see more surplus as well, 45.8 million tons this year in seaboard surplus is what they are forecasting. this pace of downward spiral, the rba says is slowing. 10% in a fiscal year. starting off monday morning, pretty down note. back to you. angie: let's take a look at what ever -- what else we are following for you. >> we -- we will be watching shares of alibaba.
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china suspended a drug coding system developed and operated by the company. china's food and drug administration stopped using the system. the systems revenue potential has been a big influence on alibaba health shares. in january, reports about the coding system saw it plunged 20% before rebounding a day later. samsung is revealed its latest challenge to the iphone. the galaxy s7 looks almost identical to the s6 but has a longer battery life. it also has a memory card slot that was missing from the s6. s6 failed to set records as predicted last year. the company had to slash prices for the phone just three months after its launch. investors talking about a slowdown in hong kong's property not feelingoperties the pinch. it only took three hours for the
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developer to sell a luxury home in an exclusive neighborhood for $107 million. the fine venture house comes with a swimming pool, garden, an elevator, with unobstructed city views. the board may meet to consider rescue plans. that is according to a press report which says director smit over the weekend to discuss their options. met over the weekend to discuss their options. >> i believe our plan would be the best for shareholders, employees, and customers as well as all of japan. the two plants are often compared based on money. these are two totally different concepts. we believe sharp will consider
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them properly and i will be happy with whatever decision they make, as long as it works best for sharp. angie: that was a look at some .f the stories making headlines it's a frustrating weekend, it is again anyone's guess where the japanese and will move over the next few days. you have david poring over some charts and notes from analysts, trying to plot a course. what do you have, david? >> let me get started with this helpful note from our colleague in new york. what they are saying, alibaba going through this risk aversion we are seeing into monday morning, you look at how oil is , treasury yields, especially on the longer end of the curve, are continuing to come down. when they are saying is that we may actually test -- we are 1099, we hitt --
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that a few days ago. now, longer-term, let me broaden out the view here. goldman sachs coming out with a note and they are basically saying there's a lot of noise going on right now, but what you want to pay attention to are these outflows. let me get to my chart here. the level of outflows we have seen that of the japanese financial markets is unprecedented. that is, curious what i believe it is $23 billion year to date just out of equities alone. for our terminal bloomberg clients, you just run wfii go and that will give you a breakdown of how much money flowing in and out of these markets. goldman says dollar yen will be at 130. they are sticking by the earlier call that this is where we're going to be at this time next year or by the end of this year.
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dollar yen at 134. euro-yen, 12 month forecast is 1213 spot 5. that is goldman's call. if you want a better idea of the consensus, that will give you the make and forecast across analysts. last i checked, that was 123 for the dollar yen by the end of this year. out further, all of this depends on the policy outlook from the boj. there is a great story, it's on the website, it's on the bloomberg. story up there. i checked before i came up here. it's about how the boj manages to get out of this at some point. if it does work, how do they exit this trade with the debt piled this much? we don't want to buy
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all this debt coming from the boj. i will leave you to that. great story here and great analysis. angie? that, david. for it's a busy week for earnings in hong kong and expectations are mixed. let's take a look at what is to come with bloomberg first word reporter catherine larkin. what can we expect this week? >> expectations are actually becauseositive, valuations are so low. it's going to be hard to disappoint this market. there are some sectors we think may outperform. we are hearing some consumer ,taples, alcohol, baby products also potentially insurance and tech and telecom. tied very directly to mainland china as it slows down,
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the demand for baby products. insurance is interesting, considering where the r&d has been going. the other performers are probably what you would expect. you have banks increasing pressure on asset quality, consumer discretionary still facing declining tourism into hong kong. and the companies that are seeing the most positive chances of surprise, probably mainly in the tech, telecom and those kinds of companies. angie: thank you for highlighting that for us. don't expect massive monetary or fiscal stimulus in china. hear more from complete intelligence when "first up" continues. ♪
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>> these are the stories making headlines around the world. most of fiji was without
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electricity on sunday and residents were told to stay inside for a second straight night after the strongest storm ever recorded in the southern hemisphere. cyclone winston left at least six people dead and destroyed homes. pers reached 285 kilometers hour at the peak of the storm. curfew has been extended until monday morning. newly hired outside lawyer says a u.s. court order to unlock a dead terrorists iphone could imperil the privacy of millions around the world. former u.s. solicitor general ted olson says the order would open up pandora's box of privacy issues. apple is fighting the magistrates the cree, igniting a long simmering battle between the tech industry and government over civil liberties versus the fight against terrorism. edward snowden has told a gathering of supporters that he's willing to return to the u.s. if he is guaranteed a fair trial. he made the remarks via video link from russia to a libertarian meeting in new hampshire.
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former nsa contractor has lived in exile since leaking details of secret government eavesdropping in 2013, making charges that could land him in prison for up to 30 years. powered by over 2400 journalists in 150 bureaus around the world, this is bloomberg news. big names in tech are gathering of barcelona for the annual mobile congress. we will be talking about the latest tech trends and prospects for 2016. shares down 45% a year ago, and credit rating under pressure. investors are likely to question s dividend policy, which costs $6.5 billion.
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on wednesday we have hong kong announcing its budget for the current fiscal year. is forecasting a surplus of more than $12 billion, more than double the government forecast, and the biggest surplus since 2008. the financial secretary is expected to await charges for these. we have global policy leaders joining for the first g20 of the year. let's get more on the week ahead with the chief economist and managing partner at complete intelligence. tony, i think all eyes are on ont g20 meeting coming out the 26 and 27th of this week. what will you be expecting to hear from? >> it's really interesting to countries and
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central bankers as they blame each other for slow growth in their own country. it's notable this morning that came out-- mr. abe over the weekend blaming china. china has blamed the international environments. it will be interesting to see their consensus come around as to why things are slow. kind of looking forward to that in their final statement. ask tony we were to nash, who do you think is at fault here? it's commodity prices, it's generally industry capacity , it's slowdowns globally. china, u.s., japan, europe and so on. culprit, and the real indicator here is world trade. we have seen world trade completely flatline.
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is my biggest worry, and the indicator i'm really looking at is what's happening with world trade and how is that going to impact these economies, countries like japan, countries like china, korea, and so on, are really sensitive towards trade. obviously taiwan and others. thatneed to keep an eye on and do what they can to make sure it's growing. exports.ina's we look at the pmi's. they are not necessarily all that healthy. as you can tell, i don't have a lot of confidence in pmi's. i don't know what they telestrate we look more and export-import. look at those figures coming out of hong kong, they are worrisome indeed as to what it reflects about the chinese economy. that's right.
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i was in beijing for the week last week. i don't see collective panic in beijing. finished their working group meeting in january and it seems they have, with a strategy around daily open market operations and other things. they have their forward view. i think open market operations gives more flexibility around the currency and around monetary intervention as needed. we should see lower volatility in the chinese yuan markets, which would be a good thing for china, a very good thing for economies in asia. that's the first step. we are also looking at some of these repairs around the zombie companies and what they are calling supply fed reforms on the fiscal side, and that is really looking at things like productivity, which should
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really help on the export side. on exports,down 12% this is a problem. they are really looking to raise their capacity and productivity. angie: one of the most read stories on bloomberg right now is china's debt overhang. it is 283% gdp. at what point is this going to flour into a full-fledged crisis for china? the real problem with china's debt is that when you look at central government debt and provincial and local debt, the number you talk about is all of these together. the real underlying issue is that there is an implied guarantee from the central government that it will guarantee the local debt. you don't necessarily see this in many other countries. we saw a provincial level debt auction last month that went off
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successfully. it's only one, but we do see more of an environment for bringing that debt onto public markets. the perception is as you said, that there's going to be a backstop, the chinese government. but we have seen those fx reserves really quickly come halfhere, to the tune of $1 trillion in a couple of months. at what point does the chinese government not be able to afford being the backstop of all of these loans for local governments? $3 trillion sounds like a lot of money, but when you think about using that money is a guarantee for the overall money supply if there's a monetary shock, it's really not that much money when you look at how much is out there.
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i don't buy this $3 trillion is a whole lot and they have enough gunpowder for anything that happens. it's a major problem, but all of today thiss not due month or this year. in places like japan and other places, we have seen where the terms on those loans have been extended time and time again. i don't see that in my mind as a see those as temporary solutions until they figure out what else to do. they will have to recapitalize some of this stuff and figure out innovative ways of bringing this about. they will have to have bankruptcies for some of these large companies. return on assets for large entities is about 5.6%. these are highly inefficient companies. as they take care of some of these zombie cup, as they
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restructure their local government debt, this is a long-term solution. this is not something that will happen in the next 6 months. angie: you are right, and the worrisome part is that most of them are soe's? up, recalls are in the works. what does that mean for troubled companies' shares? ♪
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angie: we are taking a look ahead to the opens in china and australia. our reporters are here to tell us what stocks they are keeping an eyes on. >> i'm watching toccata -- takata. mitsubishi and must a recalling another 2 million vehicles. a recalling another 2
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million vehicles. takata is planning to present a restructuring plan to automakers in may. that mazda mitsubishi have said they are going to recall more cars could cause that price to come under pressure today. >> korean air, its pilots may go out on strike. authorize ao strike. we are talking about 1200 pilots here. the last strike was in 2005. the government had to intervene. serious, and korean air, its stock price is not been performing terribly well lately. it has been down significantly of thent years because
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discount carrier's giving it competition. a pilot strike does not really help the scenario. >> a stock that is not as closely tracked. parts,acturer of auto including regulators, seat recliners, and so on -- they're going to double their second half dividends. more money for investors. that means of site for the stock today. i picked it because it has big moves. last week in one day has a gain or loss of 10%. i'm thinking maybe something could happen. >> to 6 yen? >> to 6 yen. angie: that's not bad in a world where commodity prices have erased a lot of dividends. that's the verdict from the stock exchange. stocks our reporters highlighted are based on news events.
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we will be back in an hour to see how the three stocks we picked have done. picked have done. a going to ask the ceo of the the conference call. the ultimate arena for business. hour after hour of diving deep, touching base, and putting ducks in rows. the only problem with conference calls: eventually they have to end. unless you have the comcast business voice mobile app. it lets you switch seamlessly from your desk phone to your mobile with no interruptions. i've never felt so alive. make your business phone mobile with voice mobility. comcast business. built for business.
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♪ >> a droning in debt. economists warn the debt will go on for years, peaking at almost 300% of gdp. crude behavior. nigeria for a production freeze as oil slides below $30. sales beat estimates on improving exports to china. welcome to first step. i am and she lau, coming to you live right here in hong kong. barrel, u.s.0 per
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crude, powering the outlook for asian stocks. taking a look at the opens in japan and south korea. vonnie: we were seeing those futures in tokyo signaling big moves today down, and we are seeing them started things off at .6%. friday falling 1.4%, once again on this monday morning. we are expecting futures and the hang seng as well. a possible 100 point drop later this morning. closing 4/10 of 1% on friday. we are seem more ford investors by more korean stocks versus selling, but we are seeing pessimism back on today down .3%. today up .4%. we are seeing those gains. the top 50 extending those losses. .4%.
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really getting the thing -- sinking feeling for global stocks. here are some of the movers today. fairfax down 3.4%. earnings out early this morning, up 7.4%. let's head to tokyo here. the resurgence of the yen that -- we are going to get a pulse of the japanese manufacturing data. survey coming out expecting 52, edged down from the previous month of january at 50 2.3. as foreign investors flee japan, we see blackrock among one of the banks and asset managers actually betting for japan. docs, they say the negative rate move has actually spooked markets and could be one of the main things that pushes the backup. we seehere this morning,
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mazda, mitsubishi, adding more than 2 million more vehicles in the airbag recalls and we're seeing all the stocks up today. down two point 3% and mazda motors down 2.4 percent. mazda being one of the bigger recalls there. vehicles.8 million regarding this scandal. that latest confirms death we saw any u.s., back in december. japan is down .5% after sources start saying yahoo! will approaching potential buyers of its core business as soon as today. verizon, comcast, at&t, those are some of the names likely to be interested in parties. 2.4% in tokyo this morning, they and their production pant --
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panel production at its 10 rate plan. that foxconnng agreed to pay ¥100 billion for penalty fees if it changes. i want to end on securities here falling 1.6%. reporting they are investing in south eastern firms. they are rebooting the asian expansion. raising the stakes among brokerages in vietnam and malaysia, the stocks falling today. china's ratio of debt to the size of its economy is expected to keep on climbing. this underscores the risks facing policymakers working to prevent the still down without trip -- triggering a credit blowout. joining us with the latest, this is concerning for china and its debt. >> very much so. leastxpected for at another four years. seven out of 12 economists expect the debt to gdp ratio to keep growing to 2019.
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more of them expected to peak in 2020 or even later. shoot climax at 283% of gdp. remember china's communist party is trying to put a floor on economic growth as they hope to get an expansion of at least 6.5% through 2020. that could mean more debt. just last week, loans, they are just surging. we are seeing it just search along with aggregate finance. billion of new loans in january. we still have beta of that just last week. a very delicate -- delicate balancing act of at the same time not too fast. goldman sachs says there is not a specific level of debt to gdp at which the chinese economy would tip into a financial crisis.
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but it says the highest of fastest-growing debt in recent history. if you look at any other major company that has caused so much debt in a short amount of time, it has either gone through a financial crisis or a prolonged economic slowdown. angie: that is the real concern. reducing debt?es >> your research shows private companies are doing slightly better than their state owned enterprise peers. your debt to 53% assets to 58% in 2007, but, on piled up.hand, soe's debt jumping 52% from 55%. problem is the bank loans we have seen, 40% of them go to soe's and they make up only 10% of the chinese
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economy. this is a huge problem the president will probably address in beijing coming up next month. checking other headlines, china fired the head of its security regulator. shut down by the previous chairman of the bank and the former deputy governor. the market sword and tumbled, triggering government stock purchases, restrictions on state sales, and government banned ipo's. despite many foreigners choosing to export the market as stocks tumble. last month's doj to adopt interest rates to help hold the yen lower. they saw their best performance in six years last week but it is still down around 15% this year. considerhursday to competing rescue plans.
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it will respect the final .ecision i believe our plan would be the best for sharp shareholders, employees, and customers, as well as all of japan. of course, the plan is where -- very well considered. the two plans are often compared based on money. these are two totally different concepts. we believe sharp will consider them properly and i will be happy with whatever decision they make, as long as it works best for sharp. angie: china's refineries are selling more easel at home rather than exported. making domestic sale more attractive. a five-month low in january while china has been flooding.
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imports on the other hand jumped the most in 10 months. global glut which sent prices to a 12 year low. here with my -- what more we can expect in the year ahead. it drove equity markets last week. as wellll have this because of the big industry conference happening in houston and the saudi oil minister scheduled to speak there. saudi arabia is critical to the future direction of the oil market. it agreed to the production cap in russia last week. however, it is very unclear according to analysts whether that will make any difference at all. in ending the supply we see in the marketplace. what you really need is a long-term rebalancing of the oil market. that involves politics and everyone playing by the same
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rules. element of this. it's oil program is ready to come back to life. for being off-line so long. , iran'sonal tensions position on that all come into focus. this speech tomorrow is what we will be watching closely. angie: when is the next critical meeting with opec? >> the nest -- next meeting is in june. in thet more uncertainty market. it does appear that saudi arabia may be willing to give ruminants long-standing resistance to output cut.
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will bething people talking about this week in the industry, the key element that will drive basis. change its tune and will that lead to the overall rebalancing of the very complicated and global market. operatorsing up, the in the stock exchange is pushing ahead with his ipo. we's week exclusively with the ceo coming up next.
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angie: welcome back. suicide bombings in syria have killed at least 140 people in the u.s. said russia had agreed to the terms of the cease-fire. claimant was possibly for the attacks in the area of the province.
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the you and secretary of state john kerry says he discussed the proposal. scaling back the violence has become more urgent as things mount. insurgents in saudi arabia already escaped in the war. more than half the water supply to the capital has been disrupted after deadly unrest in the neighboring state. protesters from the community carrying water to 18 million , a campaign for greater access to jobs and colleges. 5000 troops have been deployed while the unrest, india's top carmaker to shut to factories over the weekend. apple's newly hired outside lawyer says a court order to unlock a terrorist's iphone could put -- peril millions of people around the world's
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privacy. the -- this would open a pandora's box of privacy issues. a battle between the tech industry and the government. powered by over 2400 journalist than 100 and 50 bureaus around the world, bloomberg news. angie: stemcells fallen over 90% this year after investors sold off 2.5 billion dollars worth. we saw something of a turnaround helping to cap its best week in four months. stephen engle is to any by in tokyo at the japan summit for us all morning. what has been driving the rally in india? stephen: we are here in asia-pacific. the japan summit in tokyo.
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india'stalk about market, and we will talk with the ceo of the bombay stock exchange. good morning to you. thank you so much. we talk about the volatility we have seen on indian exchanges this year. not unlike what we have seen elsewhere in the world. we have divergent rate environments. here in japan, they have gone negative much like the ecb has done while the u.s. has started to hike. you see the diversion rate environments around the world? deflation, that is why the central banks are trying to prop up demand and so on and so forth. markets in particular are more in with the rest -- india would go down in terms of its market. the economy continued to grow. the markets would conform
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because a large part of the markets are getting on the outflow from the foreign shores. the indian markets go up or down and it has nothing to do with economic growth or the monetary policy. it basically has more to do with the rest of the world. year, indian economy this 7.6% growth in the fourth quarter. you are in an environment where you are lowering interest rates and are waiting for the budget on the 29th. how critical is that for potential monetary and fiscal policy? >> it will continue to grow at 7.528% for many years. is 50% of the 1.2 million population. that will remain for the next 30 years. effectively, that is the next
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engine for growth. monetary and fiscal policy kind of stimulating the growth. that would probably add up 100% more into overall growth. the economy is set to grow at a much faster pace. how the world is doing, there is an inflation deflation kind of trade-off. if you have an inflation us to jeanette hold sale prices -- wholesale prices, 4% in prices, it actually looks like you're going much slower compared to when you have inflation off at 10%. at 7.5. the perception in people's minds, deflation being that, but overall, i think india will grow
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at a much faster pace than the rest of the world. >> what are the challenges for you? you have the fastest exchange but also facing challenges from high-frequency trading. >> six microseconds of time, the exchanges include 60 micro seconds. will see the challenges because we can take up to $500,000 in a second with six microseconds. about 10 times more with minor modification hardware. to takingkind of used that, effectively, we do not consider it battle together but society has apprehensions. there are alleviation's.
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we need to be on our toes in terms of surveillance and check , the we're not providing any specific special rights to players and india, so we are .ittle more insulated quite sign a you had a stated goal. you wanted this to be a $20 trillion stock market by 2035. you are $1.4 trillion right now. are you going to achieve that, a lofty goal, and what are your ipo plans? click economic goal of reaching $33 million of gdp. if you have a gdp to market cap 2035 isn and ratio,
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around 20 years from now. if you grow at 7.5 or 10 sent, there is a chance you will reach 20 train dollars. today, despite 30 million , we have investing only reached 2% of india because india has 1.2 billion people. if you reach out to 10 times more, 30 million. 300 million people investing, you will be reaching out to more people and freeze the market cap. nsc.uld list itself on >> we will send it back to you. our guest is the ceo of the bombay stock exchange. the restokyo coming up of the morning. thanks. angie:
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deputy secretary-general joining us live during trending business, our exclusive that 10:10 hong kong time. coming up after this short break, the man who first called for negative interest rates two decades ago, has a thing or two to say to the bank of japan's -- more coming up next. ♪
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angie: it's february 22 and these are your headlines. falling for the most for more than a month. johnson said he is backing of the campaign to leave the european union. says johnson's decision would be the key for sterling given his position as one of the u.k.'s best-known politicians. david cameron secured a deal with membership terms for eu
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leaders. he vowed he would fight to keep britain in the block. a child evaluation was permitted long before now sees more turmoil in store. it is not just china there were about. not only do they see further declines in the end, forecasting a u.s. recession and said 10 year treasury yields pushed to all-time lows. this a european bankshares will tumble by half here the bank of japan five. being negative interest rates. who firstse banker called for subzero yields two decades ago. charge the decision to for some deposits part of the central bank is punishing those who hold the cash he just spent 2.5 years dumping into the economy. he says the doj is trapped and negative rates push-up
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inflation, but it will not be able to stop asset purchases once inflation takes hold. beat the risk of fiscal collapse. angie: there has been a ton of debate about the wisdom surrounding the doj's current policy stance. david has been digging through this debate through helpful content. what do you have? trap of the doj, if if you will,boj, you scroll down, and i re-created the chart and it is up for you. in green, this is in trillions of yen. in red, the balance sheet of the boj.
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the higher this one gets. thatme point, the hope is this is successful. economic growth spikes of and we start talking about how the boj exits. it normally should not be a problem but the story says, and you can look at details on the website, is one of the boj starts to exit, yields will go up, and who will be on the other side of the trade wanting to take on jg be, thinking that yields would go up. a vicious cycle, a great story. to put that into context, that is how it looks if you want to illustrate it. that to what is happening now in the markets, there is a lot of risk aversion in the markets right now. our in-house technical analyst we strategists are saying may test the level. do not be surprised if we test that low given what is happening at the moment.
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thanks for that. coming up, a gloomy outlook. a big week of earnings here in hong kong. we are back in two. ♪
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♪ , and: 8:30 in singapore our from the open of trading. we are watching "first up." top story after the biggest weekly rally, asian shares in decline. oil and a stronger yuan waiting on chinese equities, not much hope for rebound later in the day. stocks are pointing to a lower open. china's debt will climb for another four years and could of gdp.around 283% that according to a survey by bloomberg news. policymakers are trying to cope with this slowest growth in a quarter of a century. history suggests it is heading toward a financial crisis.
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nigeria is backing saudi arabia's decision to freeze oil production while africa's biggest oil producer supports the push to limit output. a random rack should be given to win back market share. nigeria ministry -- energy minister says he will meet the level. he will meet with his counterpart in saudi arabia later today. journalists,00 this is bloomberg news. markets trading in the asia-pacific, japan nikkei 225 22 a lower open all morning, but it swung back into gains. it is just about 20 odd points from that 16,000 mark. it is gaining, and we have gains in australia as well, 0.5% higher. korea is one present down. down. shows 1%e, the ceo
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higher in trading after first half trading, australia's biggest steelmaker beat first half estimates. how did blue scope do? reporter: very well. .hey also looked great particularly good results, 200,000,000.1 for the first half of from 70,000,001 year earlier. revenue up to $4.4 billion. half $1irments were billion on the new zealand and australia steel businesses, but a few boosts as well. they sold mcdonald's line, and the resulting improvement in the value with the exports of steel from the u.s.. in a conference call after these results were released, the ceo paul o'malley said the iron ore
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prices still likely to fall, and that is due to ongoing supply issues. he expects the same closure of iron mills in china and production to fall and production and exports as well. lots of headwinds in the steel business. angie: it looks like their aggressive cost-cutting appears to be paring off. -- paying off. reporter: there is talk in august last year that blue scale , theire to shut down works a few hours south of sydney. that would have meant the loss of 5000 jobs. they came to an agreement with last, they 5000 jobs got a payroll tax holiday from the federal government, and that has been head of whole -- has been helpful rid stomachlue scope strong to be a shareholder. today, revenues down.
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annual list liking this. to sales, angie. angie: thank you. this morning, we will be talking ceo paule scope o'malley. loans,ng rising bad earnings at singapore's biggest bank. we have haslinda amin with all of the details on the latest. breakdown the numbers for us. tsonga --one billion singapore dollars in profits. gain fromne-time selling its property investment by the way, 100 million u.s. dollars . those are the numbers.
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the balance sheet is healthy even though the slowdown in china is creating headwind. rivals you kobe -- uob, they are facing nonperforming loans. that would set aside more money to question bad loans. they can't get again from highest interest rates. the last of the three singapore banks to report earnings, if you remember, uob also reported higher upl's. 54% in the same period. in the market, singapore banks will stay vulnerable. they will be exposed weaknesses both at home and overseas. often rated one of the safest banks, what are the prospects for a lender? haslinda: if you look at the
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stocks, they are not doing so well, they have not been. some of the markets say the slump you have seen is prices are overdone. they are down 18% today, double kobe ss of ocbc and you --uob. it was toppled by an indonesian bank. thes benefiting from protection in indonesia, rejecting it from slower than a growth in china. some say the average price for pbs is 20 a piece. it is 40% lower than that, lenders also get a pretty good dividend. we are looking at 4%. not a bad stock to have. have alook, 21 out of 21 bottom brady on the company read what they really need is higher rates to grow a share price. we have to see if that happens.
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angie: thank you for that. earningsusy week for in hong kong. expectations unmixed. let's take a look at what is ours to come. you'll be taking a look, what can we expect? reporter: we have 94 companies on the composite index, expectations a little skewed in prices because the eurasians are so low. we are hearing stocks have limited downside, even if they reported well. more chance that we are going to see companies go up on results that are not as bad as people indicated. angie: which sectors are expected to open up? reporter: tech, telecom, consumer staples, also insurance. it is interesting. angie: who is going to underperform? reporter: banks are facing an increasing pressure on asset quality and nonperforming loans,
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so's consumer discretionary companies and competition with on till resellers -- online retailers are you --. lower oil prices and foreign-currency fluctuations are already priced into the shares. at what we may see is any company that gives an outlook or the year is not as bad as people exceeding a short-term boost to their shares. angie: thank you, we will be looking for all of that. let's take a look what else is coming up. there is that. be approachingl corporate equity buyers as soon as today. they are seeking bidders for the business. comcast, verizon, and at&t are interested, along with buyout companies.
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the ceo is under pressure from shareholders after struggling to boost sales and separate yahoo! from the $26 billion stake in alibaba. we'll be watching alibaba's health after china suspended the drug coating system operated by the company. they stopped using the system as it considers other ways to help identify counterfeit medicine. this revenue potential has been an influence on alibaba shares. the right to the coding system saw its stock plunged 20% before rebounding a day later. shares for an australian food manager patty up 5%. revenue was down 9% and profit after tax downfall percent on a year ago. the company suffered a contamination scandal when a hepatitis outbreak was linked to frozen dairy it imported from
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china. areysts and investors talking about a slowdown in hong kong's property market, but felix property is not feeling the pinch. it took three minutes for them to seal the deal with a $3 million home. they comes with a swimming pool, elevator, and unobstructed city and harbor views. it is less than the $193 million sale in august of another home on the peak, reportedly to alibaba's jake mark. i am zeb eckert. angie: time for a look at the big events we are going to be covering in asia this week. , taken from barcelona with the annual mobile congress. we will talk to linda. that is the latest tech trends and prospects for 2015 as global demand for smartphones contracts.
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shares are down 45% on the year ago and credit rating under pressure. investors are likely to question miners dividend policy, which crossed $6.5 billion. they cut the hp's rating -- bhp's rating this month. for the current fiscal year, the pboc is forecasting told million dollars. that is the biggest forecast since 2008. they went to see which industries or affected by the economic downturn such as tourism and retail. people gather in shanghai for the first g-20 meeting of the year. japan's adoption of negative interest rates will be high on the agenda. deadpool held onto -- held onto its place in the box office, seeing off a challenge
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from three new releases. the 20th century fox film saw sales of $55 million in its second week. kung fu panda three stated took second place. and the witch and haverty single rounded off the top five at the north american box office. coming up next, could it be the phone that knocks apple off its perch? look at the galaxy s seven. that is coming up. ♪
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angie: welcome back. it is a: 44 in hong kong, 9:44 in tokyo. georgeor of london johnson says he will campaign for britain to lead the european union in the june referendum. the decision caused him a huge amount of heartache, but he wants the british people to save
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money and take back control. rent -- he wants to oust competition from his party leader david cameron. the pound is falling the most in three months. award snowden has told gathering of supporters he is willing to the return to the u.s. if he is guaranteed a fair trial. he gave this via a video link from russia to new hampshire. he has lived in exile since he leaked details of government eavesdropping and 2013. he faces charges that could land him in prison for up to 30 years. most of these was without electricity on sunday, and residents were told tuesday inside for a second straight night after the strongest storm ever recorded in the southern hemisphere. the cyclone winston left at least six people dead and destroyed homes. miles perhed 208
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hour. the curfeww has -- has extended to monday allowing police to make arrests without warrants. angie: samsung has unveiled its latest smartphone as it attempts to wrestle our market share from apple. of a popularurn feature. juliet has the latest. juliette: it looks my much like s62. 6 and it made a bit of a gamble by reducing to -- two of the key features customers enjoy. that was memory console and longer battery life. bringing them back for the s7 and s7 edge.
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they will win back customers not only from apple but also xiaomi. has a five point one inch screen. it could also survive in water, and they have a device which on virtualould put reality that google and facebook are going into. we heard from the president of samsung, he said the market is slowing down, but they are hopeful this is going to be the new product launch for them. >> the market for the smartphone is obviously slowing down a in china it is still growing. there is more than just a phone that you are holding in your hand. when you are using one of these devices, the s7 and the s7 edge, this is your camera, your mp3 recorder,ur tv, your
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this is everything and more and more areas. and more is coming. angie: will this be the jewel in the crown for samsung? juliette: the edge was actually the six was a zero. i hope it will go from zero to hero. s6 had its price reduced because of the fact it did not have pagers -- features, but they are hoping to some be hit samsung really need a hit product to maintain its ascendancy on the top of the smartphone gain. products,e innovative the ai feature. earnings are down, share prices have dropped in the last three years in early -- annually. they hope this new phone is
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going to be the product that will turn them around. angie: from zero to hero. thank you. call way is backing apple ceo tom cook. they will not override security measures from the phone from the dead terrorist. huawei agrees. >> we should really protect the consumer. the privacy and security. this is our key. we support that. it is popular. tim cook, his idea. angie: google has also cited with apple against the court order. the president for android said
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the issue of privacy versus law enforcement needs more debate. >> we focus on building secure products, but if requested or demanded by law, agencies, based on proper legal process we will make information available to them. but what we are talking about here is a completely different scenario where we are taking -- in the tech industry, apple is being asked to help in hacking their product. i think it is a very different scenario on the way things worked today. decision. lot of i have a lot of respect for law enforcement, and of course don't have any respect for criminals, that is not what this is about. it is just a completely new way of thinking about things. includingromise, president obama, saying this would be restricted to one criminal, and if it is going to
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save lives, isn't that more important? why would you do this? and it wantsrea, more discussion to make sure how it is mexico in to work, what kind of president -- how it is actually going to work, what kind of precedent you need to set. was anif that phone android phone, what would you tell the fbi? >> hard to get into hypothetical, that is not the case we are talking about now, but we certainly need to take a stance. we would feel the same way, this is a different scenario now, so let's take this through a little more and have that debate. emily: edward snowden will save this -- said this will be the most important tech case of the era. you have the power to control this as the head of android.
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privacy, which i think everyone agrees is important. it is easy to talk about these cases in general terms, but the specifics do matter. i am not familiar with the specifics of the san bernardino -apple situation. but it does feel like an important areas that does require morse -- more discussion. angie: troubles getting worse, 2 million more vehicles using it airbags are being recalled. details next. ♪
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angie: welcome to the stock exchange. let's check in on what everybody is watching in asia. juliette: i think we need to play this game past eight. my stock was down. now i am the loser. i am down 8/10. is a not about me, this serious story. there are going to be more recalled from mitsubishi and mazda. now nine airbags, fallacies linked to these. is going through a restructuring plan in may, and -- mazda and mitsubishi the latest to recall airbags.
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we still have three holds on takata, zero buys and zero sales. [speaking simultaneously] was first?u notice i korean air is up today on news of a possible pilot strike. no figure, the stock has not done well in recent months, recent years, but we will take any gains we can get. angie: sherry takes the cake right now. -- d: up 1.5%, doubling to six point -- you want. 10%,tock has gained about
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or lost, not sure. not many analysts track it. not oversold, or overbought. it is a manufacturer of window regulators and reset buttons for speed recliners and so on. juliette: u.s. people jump into it before the cutoff -- you might see people jump into it before the cut off. shery: i think i am so winning three of debt. angie: if you keep talking -- wrap up right now, shery ahn is the winner. we call that a time. [laughter] juliette: i slept in right after i said that. -- slipped in right after i said that. angie: you are all winners to me. that is the verdict from the stock exchange. that is it for "first up."
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what is going up? scope, paul blue o'malley will be joining us. we are actually 40 minutes. a company which has been cutting costs quite aggressively and managing to double their profits. i will see what the prospects are, and steve rice is looking ahead. looking at the state effectively of japan and asking whether economics are trailing, and looking ahead to the week with the head start coming up in 50 minutes from now. business" in the next two hours. ♪
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22ndad: it is monday, the of february. i'm rishaad salamat and this is "trending business." we've been popping over to singapore and turkey. here is what we are watching. economists calling china's borrowing binge the worst in years. goldman sachs already saying this could trigger a new financial crisis. food prices up slightly after nigeria said it will back an


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