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tv   Trending Business  Bloomberg  February 24, 2016 9:00pm-10:01pm EST

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, shares soaring in sydney, australia. tracks, upgrading india's massive railway network. is equivalent to the amount he wants to invest. seeing some loss of steam after a last-minute rally. online, things are dragged it down. we are off the lows of the session. the shanghai composite down 1%. the australian stocks continue to see pressure. g-20tocks falling as the
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starting in shanghai. pbocdn't get some news of injecting 340 billion yen into the system. the parity weaker for a third day. rebound, half hour away from the lunch break. that therts from tokyo government is considering an extra budget, boosting its budget by $45 billion. that is boosting some equities today. the yen has been gyrating all morning. we are seeing some strength, 100 1207 -- 112 .07.
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the last time we saw that trade around that level was september 2014. it is and just think to market and look here, but if the fed forgoes a rate hike in march, then the bank of japan can't be aggressive about further easing. the dollar really facing a big turn around here, the u.s. can no longer tolerate the stronger dollar and shifting to a weaker dollar policy. up to now the dollar has been lenient to the currency weakness when it comes to europe and japan, but the dollar-yen still strengthening today. rishaad: talking about japan,
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sharp's board ending a meeting, no decision revealed. they are considering competing offers. peter elton joins us. we have some breaking news. what are the key issues they have been discussing? written, have directors on sharp's forward have been focused on the business viability of the two plans, foxconn, and innovation network corp. of japan. under both plans, existing shareholders will not receive anything directly. the money would be put into sharp through the purchase of additional shares, and foxconn would give money to the holders of preferred shares. linead: we do have this coming out that foxconn is set
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to buy sharp. there is no confirmation. on an absolute flyer. how do the two bids stack up? networkation corporation of japan said it would put ¥300 billion into sharp to the purchase of additional shares. that,n will put more than 600 ¥60 billion over all, and some of that money would go to preferred shares, by land, so it would put more money directly into sharp with the purchase of additional shares. foxconn will pay off the two primary bangs, so that is the big difference. forward, the two bidders have different plans for sharp. reversal taking place when it comes to the share price come all over the place.
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as we wait for any confirmation and see the share price settle a look ats have japan's openness to foreign acquisitions. it is not something that japanese corporate like. >> it is a good point. this would be a his story good deal in the sense that japan has not been that opened to foreign acquisitions, particularly for high profile companies. , observersnning thought it was virtually impossible for somebody to come in from the outside and acquire sharp, but in this case it looks like the directors at sharper giving serious consideration to both sides. it looks like the arts are in favor of a foxconn deal. odds are inlike the favor of a foxconn deal. as we been reporting, nikkei news saying that foxconn
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has one out in this battle. a flashs crossed as headline from the japanese news agency. it sent a sharp share price soaring as much as 5.8%, then suddenly the shares have fallen 5.2%. now were just off by one yen, so were waiting to see if this is confirmed that foxconn is buying sharp. and where unchanged. imfme talk to you about the , the world's biggest economy urgently need to, with ways to support demand and contain risk. engle with a closer look at what is going on. what is behind the rhetoric?
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g-20, want to talk about that? story is fascinating and foxconn. , 2000 nine the g-20 members declared themselves the guardians of the global economy. it straddled advanced and emerging economies. australia, china, indonesia, east asian and pacific countries in the g-20, turkey and russia to others that straddle it. is insteadhaving now of rallying around the shared goal that we have seen in the aftermath of the global financial crisis, we're seeing the verging policy and policy makers looking after their own needs. formation of ae currency war with japan and others in this part of the
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world, and lack of clear messaging from china, then of agendas inrgent rate the united states and the ecb, so it is a very interesting time whether we will actually get any kind of coordinated agreement out of this two day meeting in shanghai. quite a lot imf has of sway with these economies. you can have one policy that fits all. what do they recommend for individual countries? >> we will talk about the risks and the recommendations. an imf according to report that came out on the eve of the g-20 meeting in shanghai, staffers at the imf. the main risks are persistent market turbulence and tighter financial conditions. sharper than expected slowdown in china, weighing on markets
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including turmoil. then, a further drop in oil prices that will exacerbate the problems these economies are having. recommended suggestions in the janet, to the fed, yellen, must have clear evidence of inflation for any further hikes. japan, if you go into negative rates, complement that would support of policies. china, clear communication. hopefully they will say something that will be useful. , asaad: i tell you what were talking i'm looking at sharp. no confirmation, just nikkei reporting that flash headline that foxconn has one out. up, then down 5.2% -- 5.8% up, then down 5.2% -- bybig block cell, big block
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big blockck sell, live. rishaad: let's look at some other stories. there could be a big announcement from china's richest man. he is planning to invest in a retail development outside of paris that will include a theme park and hotel. speaking at oxford university, the chairman said he was willing to invest billions into a new project outside the u.k.. he is in talks on a comprehensive project with in the u.k. that is expected to create 10,000 jobs. would add to his conglomerates growing overseas portfolio. listedin the hong kong company have slumped over the past 12 months, down almost 32%.
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3% in in berkeley fell london as investors await earnings and a broader strategic update next tuesday. barclays will report avenue -- revenue declined in the fourth quarter. sources saying that it is cutting its corporate investment banking i 12%. beenay cut would have deeper if the bank had not already/1200 jobs. -- already cut 1200 jobs. persuadeattempting to top-performing employees to rebuff the advances of u.s. banks. heading the other way, shares announcingsydney, plans to reduce costs following a 94% fall in first half profit. jobs from its
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global operations will be cut. of one point three billion dollars. taking a write-down for roughly the same amount. plans to restructure the company and reduce its 27,000 workers by 17% by the end of next year. haver commodity prices seen south32 shares slump. you have more on south32. rishaad: absolutely. a little bit over half-an-hour, talking to them. chief executive joining us at 1:45 p.m. sydney time. still ahead on "trending business", new stations, modern tracks, bullet trains. were headed to mumbai for a look at india's railway budget. what the pboc is doing
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to the chinese currency. ♪
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guest things the chinese currency is unsustainable at current levels. he sees a sharp depreciation of ahead. he joins us now from tokyo. you are suggesting that the efforts by the pboc and other bodies to shore up the yuan is a fools errand? i think they are. a lot of the outflows from china
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are temporary. revenuers closing off left over from the renminbi trade, and chinese companies repaying debts. there is some capital smuggling in high net areas. i did a deep dive into the chinese balance of payments, line by line, and the most i can come up with is 45 alien dollars a month presently flowing out of the country that will stop. it would still leave china with the reserve loss of $55 billion. i don't think investors will become double that. we will be back to the situation that we have been in for the last few months, where investors know that no matter how big your reserves are, if you're intervening every month to keep the exchange rate up, at some point you have to give in and let it float. rishaad: surely the whole to not just valued
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yourself against the dollar, but actually to look at a basket of currencies instead. think that that is an important step in evolving how china manages its currency, and an important step from a trade perspective, but what started out as a strong dollar trade has morphed into a week renminbi trade. when the pboc mismanaged how it --municated change communicated a change in strategy, the market focused on the figures are published every month and lower than the previous month, and now we are in a situation where the currency is unsustainable until
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that reserve loss is stopped. it does not matter a little bit more or a little bit less competitive because it's managed in a basket framework rather than against the dollar. it is all about reserve loss and the markets interpretation of reserve loss. rishaad: let's have a look at what is behind it. the global economy right now? are looking at some of the week's global trade conditions that we have seen since the height of the global financial crisis. we are in the situation now where weak commodity and week oil prices are bad for growth because so much of world trade is driven by selling things to those same commodity exporters, so where used to thinking of
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cheap commodities and cheap oil as being a growth positive. it is not anymore. emergingliant on markets to drive or oil trade. without emerging markets, world trade is weak. suggesting that the medication being taken by the various economies around the world is incorrect. misdiagnosed? that on a global scale the only thing that would make me optimistic that global trade will pick up is if i have in oilough supply production to call the bottom in price. we are not yet at that point. that is a real economy adjustment. it has nothing to do with monetary policy in the u.s. or europe or japan.
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when i see central banks taking interest rates negative, i think that is a foolish solution to the wrong problem. rishaad: great talking to you. always a pleasure. >> these are the stories making headlines. the u.s. and china have agreed nations security resolution to punish north korea for its recent tests. diplomats say a vote could come this week. reports say the u.s. is seeking chinese support to curb north korea's access to financing. heavy fighting has continued in syria ahead of a planned partial cease-fire beginning on saturday. russian and syrian warplanes have been pounding positions
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near aleppo. the united nations dropped 21 with 200,000ies, civilians under siege. the company that ran the fukushima power plant admitted that it withheld the announcement for months. company regulations state that a meltdown should be declared when damage to the reactor core exceeds 5%. damage had already surpassed 50% after three days. -- tepcoill announce will announce why the announcement was not made -- will investigate why the announcement was not made. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. are having a look at investor reaction, coming up next. ♪
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rishaad: back with "trending business". shares in new zealand on the way down. , is thatealand, 154% the low fuel price responsible? >> yes, you pretty much nailed it. ae low fuel price providing low million dollar -- the fuel price providing a $122 million boost. the may surge further on low phil price, up 70% -- on the
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low fuel price, up 50%. the benefits are eroded by a week new zealand dollar. air new zealand to say about that. of our cost base, it costs us more in u.s. dollars. to participate in 82% of the downward price on fuel. we have been able to convert the million,ciencies, $150 , so still a million growth in revenue story. air new zealand got a decent boost from verge in australia, they hold a 25% stake in that. there will be a tencent evident
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for shareholders come up from 6.5 cents. after beingice down up 1% early this morning. rishaad: paul allen there in sydney. staying with aviation, boeing bettingthat china's -- that china's market will surge. made 55 orders and commitments. the plane maker predicting that china will need 1000 cargo planes over the next 20 years. on -- expecting to receive a recovery in the macau casinos. more tourists from china visited.
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sands china planning to open its $2.7 billion resort by september. isck to the script, why fifa telling its would-be president to watch what he says. ♪
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rishaad: a look at top stories, ofrp shares swinging wildly to the nikkei reported that foxconn would buy the company. the bailout was up against a bid from the japanese government. south32, surging in sydney after announcing plans to cut the global workforce by 1700. a 94% plunge and first of earnings, following the
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collapsing commodity prices. new zealand's expansion plans paying off with profit up as it benefits from the lower cost of fuel. 150%, there than airline predicting earnings good job by 70%. tokyo closing out that morning session. where having a look at what is going on. yvonne: the index weighed down by china. the shanghai composite extending losses, down 1.6% as we near the g-20, meetings underway, starting today, hang seng down. we are seeing tech and industrial companies retreating today. there is speculation that the on thegain we have seen shanghai composite is overdone compared to the fundamentals of the economy, the outlook and earnings so far this year. so we might be seeing some
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profit taking in shanghai and hong kong today. climb steadily after the lunar new year holiday. shanghai composite, still below that 3000 psychological line. japan, a rebound after a couple of days of losses. austrian stocks extending losses after falling more than 2% yesterday. out to you about some movers real quick and japan. -- i will tell you about some real movers in japan. the government is planning to boost its budget, so they could soadding $25 billion here, that some say is a commendable move. there seeing some of construction and real estate stocks are doing well today in tokyo.
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to some extent the raw materials stocks as well. japan playing that fiscal card as we head into that g-20 after controversy over monetary easing to weaken the yen. ,et's talk about casino stocks talking about the recovery, galaxy entertainment reporting earnings today. pretty bullish moves on the stock so far. we are expecting profit to rise for a second straight quarter. macau casino stock higher this year and the best performer on the hang seng. rishaad: breaking news, the sayingout with --
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foxconn will buy it sharp, $6.2 billion. >> this is what we are hearing. rishaad: there is no confirmation. >> a couple of other sources have put it out as well. ¥700 billion, $6.2 billion, it appears that sharp favors finances over politics. the other bid was the state backed fund. it is massive that the third teen directors have approved this bill. we know there has been a lot of effort to keep companies within ownership. we are seeing japan become more open. , they will be able to integrate sharp products along
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with its own. there was that whole concern about the preferred stock. foxconn offering more money and offering to buy the preferred stock. this way it will be able to stay whole under one order. we just got the chief , butet secretary talking he would not be wrong on this and did not want to talk about it, so a no comment. >> it will be interesting to see what the, once -- the comments are. japan'sle is willingness to open up to foreign companies. the prime minister appealing for market reforms and overseas investment to boost growth.
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foxconn bid for sharp in 2012 when it offered ¥550 a share, not back. since then, sharp has been struggling. this is white we're seeing this rescue bailout. rishaad: social media as well going absolutely nuts. we have a social velocity alert. >> this is a special velocity alert for sharp. it is interesting that we will see a japanese iconic company go into foreign hands. rishaad: thank you very much indeed. we will have a look at what's going on elsewhere. were waiting for confirmation. we just have that line for nikkei news thus far. secretary declining
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to comment on which way this bid has gone. imf, the world's biggest economies need to come up with new ways to support demand as the outlook for growth worsens. the policymakers from the group of 20 countries must act now and with forts -- with force. in shanghai. what specifically is the imf calling for here? to begin with to set the next 2-3rtainly the days will determine what we may well report six months from now, whether the world economy enters what would be a global recession firell the global economy on all cylinders. what is ironic is that i am 60 floors high, the highest outside deck in china. i'm looking down at china's
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financial center. is that we are staring at these global challenges and looking up at some fairly hefty problems with the global economy. said, the imf for example has come out and said there are exist just sing -- our existing strategies in place and what we need is g-20 policymakers to get together and implement that aggressively. were talking over 80% of the global economy, a fairly hefty chunk, and also interesting that we are in china, arguably ground zero for all this uncertainty out there. the chinesed from finance minister saying that fiscal policy needs to play a part. intoon't be blamed thinking that monetary policy around the world may be reaching its limits or we are past that, so that talk is whether or not
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we do get a coordinated response from finance ministers to pump prime economies and avert a global recession. asking whether we will tangible to trade on. great expectation. it will be more of the same for her they will talk about what they can do to stimulate world growth. it is a tough time for policymakers. they are throwing everything they can at the problem. they don't have much more firepower left. it will be a difficult time, i think. are way up, as i mentioned, and as you look at the bond curve and the solvent yield curve, they are actually flattening. -- expectationan
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is that interest rates will remain low. years and eyes wide open, and hopefully i get to report something good and tangible, something that will calm financial markets. rishaad: great job. thank you for that. let's check on some other stories. says caving in into a court order to unlock an iphone used by a terrorist would be bad for america. the company is rejecting a request to provide tools that would help investigators break encryption software. complying would expose users to incredible vulnerabilities. this couldthat doing expose people to incredible vulnerabilities. this is not something that we would create. this would be bad for america. it would also set a precedent
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that i believe people in america would be offended by, and so when you think about those which are known compared to something , i believebe there we are making the right choice. rishaad: india said to raise nearly $730 million from shares in the company's egg is power generator this afternoon after this afternoon. it will cut holdings to 70% for the government. weaker asian currencies and volatile stock markets drinking -- dragging down profits for aia. the value of new businesses rose more than expected. ate making more than a fifth of its revenue from hong kong. aia making more than a fifth
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of its revenue from hong kong. authorities have begun hearings, looking in to claims that regardingwere misled the chinese property developer ever grand. accusers of market misconduct. that is back in 2012. the report claims that ever grand use accounting tricks, bribes, and it legal purchases. 20%, but that is after the report was released, but have recovered. they denied the claims and filed a police report. told the tribunal that the commission did not do
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enough. in an exclusive interview with bloomberg, he said it should be about shareholder rights and free speech. >> i wanted to defend what i wrote rid i wanted to show that for me this is more than how much money i can make on the trade, but rather hopefully to lay a footprint to let the hong --g market eve all and see hong kong market evolve and see something similar to what we have in the united states. it has led to a more efficient market. market misconduct trial said you have freedom of speech but cannot distort the
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market with the use of freedom of speech. come to hongll not kong. he faceses the case, fines and could be banned from dealing in the financial industry and hong kong. rishaad: you got the information from a whistleblower? that's right. the information he used was accessible, available, and off the internet. rishaad: coming up, the collapse in commodity prices taking a toll on south32. the company says it's balance sheet is stronger than ever. ♪
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>> welcome back.
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these are the stories making headlines. a small plane with 23 people has crashed in nepal, killing all. rescue workers have retrieved 17 bodies 200 kilometers northwest of kathmandu. to foreigners, one from china and one from kuwait. bad weather was the probable cause of the crash. 42 people have been confirmed dead after tropical cyclone winston swept through fiji. one of the strongest storms ever recorded obliterated villages. says theof unicef party is to get food, water, and kerosene for cooking for the thousands of people in emergency shelters. austria and the balkan nations have warned they will seal borders and less a solution can be found to the migrant crisis.
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the nine nations issued a statement saying they cannot allow in unlimited numbers of rivals. greece was not invited to the meeting. athens says the burden must be shared across all eu member states. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: were having a look at south32, share prices surging. plans to cut 17% of its work force after a 94% drop in profits. south32 chiefthe executive. you are announcing these major restructuring operations from columbia to australia. continued to see weakness in the commodities complex, how prepared are you to deepen that go as far as and
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closing some of these mines down. >> the way i think about it is that south32 has had quite clear mantra. we are not afraid to restructure, suspend, or close, but when you think about restructuring, keep in mind that this is the first six months we have been in control of the operation since the merger, so a lot of this is assets moving the south32 way. question iis is a ask of all mining executives. do you see any sign of a turnaround and rebound in prices? >> the challenge in the short-term is you have two impacts. in china, you have a slowdown compounded as they move their economy away from infrastructure driven to consumer services driven, so that's having an
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impact on commodity prices. long-term, demand for conemaugh oddities -- demand for commodities is good. the immediate challenge is oversupply. have built too much capacity and that will take a couple of years to work itself out of the system. you are the biggest player when it comes to that. what is your cash position like? >> one of the real strengths, if da, look at underlying ebit o we've gone to $36 million worth of net debt, the strongest balance sheet in the industry. rishaad: is this the right time to be taking out some of the competition, perhaps buying up some of these cheaper assets while they are cheap? >> i will give you two nuances
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to think about. today, where do we see opportunities, low risk. , where looking at opportunities, but we won't do it and the risk of compromising our balance sheet. what goodgue that assets are for sale today. the good stuff does not always come to the marketplace. people generally try to sell the stuff that is not working for them. rishaad: what about diversification. if you were to make an acquisition, would it be a bolt so-called consumer commodity like copper? the demand andat supply of copper, fundamentally it is attractive. you're talking about a real tear
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one. when we look for opportunities, the question i ask is can we afford it without compromising ourselves. two, through the regional model, what synergies can we bring to the table. if we can't create value, it is not doing anything for our shareholders. mean were looking, but we just have a very stringent test. rishaad: would you prefer bolt on or being diversified? >> we are diversified today. today, we are diverse appellate -- we're diversified by commodity and geographic or it it is more about finding the right value opportunity. ,ishaad: great talking to you
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south32 chief executive. after they said they would cut 17% of the workforce. coming up, showing its age, will india's railway budget make tracks? how it plans to modernize the network. we will head to mumbai right after this. ♪
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rishaad: 23 million people every railways are in need of modernization at the estimated cost of $124 billion. the company's railway budget might find some clues as to where that money will come from. what can we expect? deliver this afternoon, what will we find out? seet is unlikely we could any funding through this. today,get announcement but the big one on monday. the railway budget is a populist tool. it is a lifeline in india for
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some. it is the world's largest rail system. minister is not likely to launch any new services. fares are very crucial, and likely they won't the height, -- hiked, a populist move. the railway minister is likely to provide details about an effort to keep stations and railways clean, and likely to announce plans for bio toilets and vacuum toilets. likely offer a scheme for attracting more cargo. muchad: thank you very
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indeed for that. that indian budget is set to be delivered this afternoon. a quick look at markets in the asia-pacific, tokyo closing out the morning positive. 97 points above that psychologically important 19,000 level. that is it for this edition of "trending business". "asia edge" is next. saying the g-20 needs to take bold action. we will discuss that. ♪
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sounds like my ride's ready. don't get stuck on hold. reach an expert fast. comcast business. built for business. ♪ charlie: we begin this evening with our continued coverage of the encryption debate. should privacy be for second for security? apple's refusal to unlock a phone from one of the san bernardino shooters has revived this question. many from the tech industry and law enforcement has weighed in with their concerns. running me now from washington -- joining me now from washington is apple's attorney, ted olson.


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