This is Bloomberg Markets asia. Will be looking at the companies and tell you the name and a short while. Upshop 60 in and of the day at 9 . We are about to start this trading session i want to bring up a chart for you. This is the straight terms index. The moving average here. A key been acting as piece. We saw that here. Markets. He local the benchmark gauge up 18 so far so its biggest rise in five years. Tabs. In a moment keeping not doing much of a markup. We have seen pretty much and uninspired reaction here. Picking up from the losses we saw overnight. Youre talking earlier about what difference caps off paramedics when it comes to have an investment. Also questioned what different it makes into the equity market. It is quite clearly seen that stroke. Session,straight looking more moves in terms of the dixon the selloff. We have stocks, but the focus is on the bond market. Euros yields have nikkeind we have the resuming losses. The yen sticking up above 113. Losing about 8 10 of 1 . Lumpur, we are seeing shares higher by about 2 10 of a percent. Inhad inflation growing november as expected in the data came out. , keep an eye on that. We have stocks extending losses while the same dollar is steady. Checking on one mover in , we do have the stock gaining 2 . Taiwan, we havent rising for a second day. That is expected to be kept unchanged for a six straight meeting. Keep in mind those have been at the heart of the rise. 2017 shipments to rise. That sector gaining about a quarter of a percent today. A for at jim a halting drop. Most andas risen the intrusive shares arising after its earnings update. Moving in the other direction, we do have cyber been falling after a fiveday boost. That is sliding after agreeing to minimal resources. Faces aowngraded and reform push. Thanks a lot. What looking at fiscal reform in , lets get that story in the first word news in new york. Andver to washington, republicans finally passed their tax bill and we are told President Trump aims to sign that on january 3 of next year. This is the most expensive extensive change in three decades and hands the president his first major victory. Shorter term for individuals, but not a single democrat voted for this measure. Reports from north korea saying the wall street journal sites sources saying it was targeted by north korean hackers in april. The hackers escaped with almost 20 of its assets and then the Exchange Went into bankruptcy after that attack. Asr lost a case in the eu judges regulate it should be a tax taxed as a nontech company and a tax company taxi company. It is seen as a challenge to other companies such as airbnb. The kiwi dollar strengthened against its u. S. Peers after new zealand posted thirdquarter gdp numbers. Business confidence are unsigned that they will be no rush to raise Interest Rates. And one we go to a leading chinese think tank saying the economy will likely slow. Forecastingacademy 6. 7 down through about the same age. This year, coming as Senior Leaders announced a threeyear drive against what they call critical battles. Message, supposing the leveraging best it like dinner focus is the banking system. They want to control the perhaps with that means, is they andannouncing the leverage the finances some. System. They indicated this unless year there were no implications. Digits. Globally, banks are tightening. Weekeople you see last tightening, but really theres notification to tighten benchmark lending. Most economists dont think it will do any in the first half, so we had is money everyone they are pretty much in a cautious vote. They are not rushing towards any tightening mode. I dont think that will happen. We have been circling these to get themes and trying more quality. What did we get that we knew about corporate deleveraging. We know a lot of the bad debt i dont think it is a get out of jail path. I think they will nursing nurse things along gently. Focus is onm getting the Financial System right, but i dont necessarily anticipate it will be completely gone. I think the message they are trying to get out. Trying to strike a delicate balance here. Much for that. Still ahead, is google getting no results in its search for success in china . Particular to the latest reggie to try and crack the market there. The latest development in the u. S. Tax debate. We get the view. This is bloomberg. The tax bill has been passed and has gone to the white house. What doeshat happens, it do for Corporate America . A look at the bloomberg charts. Expecting President Trump to sign on january 3. What it means for Corporate America is just the enthusiasm we are seeing in terms of the highest tax companies. The yellow lines are the baseline. Anything about that is doing better than the s p 500. Look at the right hand side, you seeing the pop in the past few days. We did see certainty that this was definitely going to pass. Also, it had been under that see when youcan look to the lefthand side there was so much enthusiasm when donald trump was first elected thinking the Corporate Tax reform would pass early on. Several months later, this is where we are. Lets zoom into the next bloomberg terminal charge. This is a onemonth look in terms of what happened. The blue line has been flat over the past. Lets pull it back. To the 40ne closer year timeframe. We are seeing the Corporate Tax rate has actually fallen and is half over the past four years. Theres no mistaking the numbers. The corporate rate has fallen to about 40 . Personal tax rate. Charlie thank you very much. Charlie lets bring in singapores head of management. Is it going to do the job . I think that is a big question about tax reform. I think it is a pretty good analysis. I think the consensus appears to onthe initial impact will be corporate earnings. I think the jury is pretty much out in terms of the broader applications of the u. S. Economy. I think President Trump is pretty bullish about corporate investments. They have a lot of money on the Balance Sheet as it is. Effectively, if you look at the unemployment rates, we havent really seen much wage push inflation coming at. I think you have to look at it and you might translate. Theres a lot of different commentators thats a basically due to technology disruption, whole bunch of different reasons. It is unlikely to move on the individual front in terms of stoking inflation. It looks like the cuts on the individual side are really not targeting the part of the demographic you will need to spend. One of the possible indications is we come up, it is a fundamental improvement. Ministry, i think you are not seeing that. I think the navigation is if we get increased connectivity and all that coming back, the possible indication is that inflation could pick up. There could be a negative application. Is this a dollar positives or thetives given a lot of criticism comes on the side of fiscal responsibility . 20 see in terms of the dollar next year what you see in terms of the dollar next year . I think on one hand come on can say that yes, possible more connectivity. You could see a pickup in demand for dollar moving forward. On the other hand, the whole to push the reasons weakest. I think theres a lot of different moving parts. Our view on the dollar is that it could remain pretty much moving towards slightly weaker in 2018. Kennedy sustained can it be sustained . Plenty more to come. This is the number. Back with Bloomberg Markets. Thanks for sticking around with us. It is going to be one of those things looking towards 2018. All things which could be real derail what is happening. Basically, you look at possible risk happening. The situation appears to be relatively strong at this point. You could see synchronize growth. When you look and see some of risks, theres already tension in the middle east and how that might impact will prices is one of the most top issues we are concerned about. The beginning of this year, known expected a fed hike three times. Prices about 6465 and with all the tensions, there could be a situation with oil prices are higher and that would definitely translate down in the number of different markets. I think this is one of the key concerns that we are worried about. Quickly, what about the market itself . You in the general trend right now . Pretty cautious and taking money off the table the last couple months. Over equities up to about october. We have been under it pretty much the whole year. Interest rates are probably going to go up and effectively, we have been looking at the rotations. Space,the Global Equity before europe and japan, thisll be the u. S. In the emerging a market, we prefer asia because we think this uptrend will probably continue and benefit comes so that is pretty much how we are positioned. I think one of the biggest costs is whether to chase the tech rally. The client interest over the past several months over a number of tech names. Going to have to leave it there. Great to have you. Day ofs the penultimate 2017. Looking towards the International Congress and 9 29 here in hong kong. Looking at what has been on investors minds, tax cuts will be january 3. Regarded andmism as a result maybe it is better to look into the bond market treasuries. Not a lot expected. Not getting a boost, we are seeing caps. We are seeing china minted dairy retreating from the record high that it posted wednesday. Lets check out some other stock movers in hong kong. That is losing the most ground. Look on mya closer energies shares, we have real estate the one bright spot. Out the currency space. You have the offshore trading near a threemonth high and onshore rate they focus here after the daily fix. When you take a look at the regional space, we have Sothebys Asia currency. Check this out. We are seeing it rise to the highest level since september. The lets find out what is going on first word news wise. Thank you very much. First, the leading think tank says the economy will slow next year alongside the decline in investment growth. The projection comes as or leaders the middle east is looking for natural gas assets as it looks to me sort and demand among a major producer. He told bloomberg that aramco has failed despite years of expiration theyre looking for ways to bridge the gap. Possibilitybe a including the earlier, the also declining investments. Ofsoutheast asia, the Bank Thailand cap things unchanged, but raised growth this year. 1. 5 where it at has been ever since 2015. A more hawkish tone, reinforcing presentations might be ending. And taiwan, they are making a decision on thursday. New government has maintained and says high inflation with the u. S. Make it impossible to change course. Week. Took over last despite mexicos weak economy, inflation is more than twice the target. This is bloomberg. Thanks so much. Up bank of japan ramping 2017. No policies expected just yet. Looking atomics is signaling. That is what we are watching for. Change. Year of is a very big question. We know no policy changes today. Japans economy has grown for seven straight quarters. Im sure Prime Minister abe congratulated himself for that. However, they are a long way from the inflation target. Lineyou see here is the that is the blue line that has come down to 0. 2. You can see wages, the white line kind of plateauing, but the not a supercenter it a year ago, it was in negative territory and even then, you know they continue to say they are moving in the right direction, but not far enough to consider changing policy. Member hadgest board a very noteworthy dissent at the last meeting. He said the bank of japan not only can change policy to remove stimulus, it should be ready to do more. I think itll be interesting to see if we get another dissent. One of the reasons people have or is weve had this, yields around the world keep just above zero. Trading today at zero point 65, it is his the highest and about seven weeks. The summary see is upper lines. The latter where they are, you can see that tip up. Controlhe yield curve benchmark that is just above zero. We spoke earlier. He doesnt think boj is ready to move yet and he doesnt think they have to. What they are doing is separating the external pressure 0 . Ontain at to keep theg them Interest Rate and zero. Think as far is i as them having that, they would do that. Innovate, youhey have been a staunch defender of the. Will he be the head of the year jay in the first part of the year . Most people betting he will get that position again. Why primederstand minister abe is making that. Axolotl kathleen hays. Coming up, still searching for success, searching being the operative word. Is it time for google to give up on china . A quick check of the latest headlines. China will setback after regulators rejected its opecsition of its ownership structure. The company said it is controlled by two charities in new york. Hna saying it is disappointed by the decision. 20 holdings will be offloaded at 832 discount. Alipay is chasing tourists in japan, planning a growing number two in system and evaluating the longterm potential of the countries Digital Payment market. Times from grew up a september and now has 38,000 lenders using alipay across the country. Apple is said to have a plan add tech reported deathlike apple is working on some of its most significant changes to its mac operating system. The company is looking for a Way Developers expand ios apps to also work on that computer. This will solve a problem. Apple has a store that allows people to settle by applications, but in recent years, it has become a ghost town of sorts. Now, apple is going to allow iphoneo run ive had and applications. The plan is about Getting Developers to write more apps in users to bypass from apple and use them on any device. The company is working on this major initiative. They may begin discussing it with developers starting the summer at wwdc 2018. After that, the company will begin rolling it out over the next three years to endusers. Techre going to stay with and google is still searching for prospects of success in the chinese market. It still faces tough challenges. At a mentor has the story for us. Adam, who will keep going back to the wealth. He cant blame them. It is the Worlds Largest internet market. Derek, untold riches to be had, but it has not been easy for google. As far back as 2010, they decided they were not going to play by chinas rule for sintering search censoring search. Is there any prospect they will be more successful this time around . Idea is not to introduce a consumer product, but it is actually distribute in Opensource Software troubles that help Ai Developers create applications for their website so instead of hiring 20 people to design ai applications, you can hire one programmer who can customize googles tools and he will have ai on your side. It is very subtle, but there are lots of indications china government will not take kindly to this. How successful is the standing your ground type approach . Successfullyt will be of to get into this market . It is pretty unlikely. The Biggest Tech Companies i think an apple is a apple censorsis its app store regarding what can and cannot be in their. They have been successful in china because of that. That chinat being has a huge internetbased. Why would they ultimately want google to get involved in that . That is exactly it. China has twice in the last year stated publicly that Artificial Intelligence is a National Priority both as sort of a by China Initiative and also National Security initiative. Was is no way longterm this will continue. The fact of the matter is, google has not left china. The android operating system is on 750 million plus phones there. Or taking advantage of the huge datasets because ai operate on large data sets. Accesswould love to get to those dadoes so there are benefits. They certainly have the revenue and cash flow to support what is likely to be a muslim moneylosing operation for as long as anyone can see. Lose money, but through that research, make money elsewhere . Exactly. Lets not forget, as soon as the Chinese Tech Company has enough money to set up a base in silicon valley, they usually do. All of the Biggest Companies are in the area. For google, if they can get some developers accustomed to using it in china. They will take those skills and bring them to San Francisco and as these Internet Companies go global, perhaps the have the opportunity to use these tools that google has created elsewhere. It is not just going to happen in china. Great stuff. Up, a Chinese Company that has listed on the aztec. This is bloomberg. This is Bloomberg Markets. China with it into the nationwide financial services. Carson says the company is a fraud. China Internet Nationwide Financial Services and just in the name, the only thing accurate is china. Theres nothing internet or nationwide about it. From our vantage point, this thing is a complete fraud. You called it a king zero. What does that mean that means it is another one of these empty boxes where whatever real business there is, it is just a tiny fraction of what they report so it is hard to tell whether the percentage of lies parreater, but it is on with. Meaning it is worth this question mark yes, worthless. Is worthless . Yes, worthless. Shareholders dont even only operating business and we see that as a deliberate attempt to isolate them from anything that could possibly go wrong so one thing to understand and this is probably a bigger point, with these Companies List , nobody ever gets in trouble for it. They dont have to worry about any jail time and by setting the company up this way, theyll have to worry that the shareholders are going to get hold of the company or assets so it is guys sitting in china, laughing at the gullibility of u. S. Investors and that is what this company is all about. I want to come back to what, if anything anyone should be doing about it. Before we get there, walk us through some of your analysis. Had you determine that this is worthless . Lets take a look at the company claims. This business supposedly started 2015, it wasy clocking in Gross Margins of 97 . What do they do . They make loans to Small Medium Enterprises or arrange loans for small medium and a rises . Business that has been lying around waiting to be discovered for a couple of decades in china. When we look, pretty much any test every disclosure they make, every stone we can overturn, shows that it is zero. Borrowers, Lowes Companies look like shams controlled by the chairman and his friends, leaving us to conclude the loans never occurred. Other customers, same thing. These are companies that could never get financing they claim to have gotten in the appeared in the under common control. This looks like a classic china fraud where you have the company, set of big customers to create paperwork, but theres no business, no money being made, other than from the ipo. Speaking to our very own erik schatzker. Group signed ava billion dollar credit until the matures in may. Securing the waiver gives noble breathing room as it tries. London, new york and hong. Ong are seeking shares saudi arabia is seeking to sell as much as 5 to create the Worlds Largest wealth fund. The ipo expected sometime in 2018
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