Transcripts For BLOOMBERG Bloomberg Markets Asia 20240714

The hang seng was down more than 200 points. Talked about the violence that erupted overnight. We will talk about that later on. Strongerr seems to be on the back of asia fx currencies, like the south korean won. We saw the export and import numbers from south korea for the first 20 days not looking pretty. Chip exports plummeted 30 . Royal watching rick rude brent crude. Political tensions between the u. K. And iran. The latest on the strait of hormuz. We are seeing a mixed decision see yieldskets higher. Some of the boards will show you what we are watching out of china. All of the love has been in shanghai. The less rest of china is overlooked. Csi down 4 10 of 1 . Shanghai shares of lowered by close to 1 . Shenzhen and the chinx, i the liquidity is getting sucked out. , the liquidity is getting sucked out. Unofficially, what we have done at bloomberg is put together our own it inhouse custom index. It is based in market cap. Overall, we are up about 75 today. You do see why that is happening. Happening. Are up overe names some cases. 300 in we knew it would be a good day. Its really how sustainable this two, month 2,day 3, month four, month five. All about losing the valuations. We are in triple digits. About the stock the stock valuations. Not the helpful names that most investors are familiar with. Going to read on your terminal here at the moment. Lets get you caught up with the first word news with paul allen out of sydney. Paul more doom and gloom for exports in the first 20 days of this month a fell 14 from a year earlier. Semiconductor sales plunging 30 . China with the biggest buyer of south korean goods, fell by almost a fifth. This insight into julys data comes after figures for june. China opened its Financial Sector foreign investment. The pboc says overseas invest ins can take a state in control. Commercial banks, Pension Fund Managers and currency brokers. There were criticized by the beneficiaryesided that is now increasingly welcoming more overseas competition in the Financial Sector. New data from the u. S. Shows investment has collapsed since President Trump came to the white house. The group says direct investment peak with from the 46 billion in 2016 with just 5. 5 billion last year. Theythey ramped up regulations, tariffs and attitude in washington to reverse years of rising china standing in america. Government has iran with what it calls serious consequences. Lending is demanding the Immediate Release of the area ofker, and is advising u. K. The threats and the strata farmers. The 10 strait of hormuz. It showed showed them flying ann flag. Global news, 24 hours a day, on than 20 700 by more journalists and analysts in more than 120 countries. Tension is high and the gulf after iran sees a british oil tinker in the strait of oil tinker in the strait of ask what this means. Shinzo abe winning the upper house but missing super majority. We discussed the implications the sales tax, the economy and the constitution. All that is coming up. This is bloomberg. Welcome back. Shining. Is a star has been born and its on day, shining ever so brightly. We are talking about the star market of star board on the chinese mainland. We were talking about how everything is up. A couple hundred percent in some cases. Yvonne triple digits for some of these stocks. Ive think it is taking out we are talking about the star market of star board on the chinese mainland. Heat. We put it all together in the terminal for you to see. Reporter whor mliv watches the Chinese Markets for us. She joins us from seoul. What do you make of this debut today . How sustainable are these gains, really . Um, i think it is sustainable. The new board is causing liquidity to rain from the mainboard. We see the incident when the new. Hares are offered when the ipos were offered, the shanghai copper said took a hit. I think when the shanghai well, thecannot do success iser the new not good. Alone. Ar, china planned but this plan failed. They installed in the new security. It has two important to fill missions to make this tech board succeed. Shanghai composite also can some point in at also can some point in at the initial round of selloff. David we were just showing our the crazy gains. There is no way of describing these gains. This crazy today. Gauge of demand for this new board . Because we knew they were goingg to do well anyway on the first day. Its the first day. We should understand that, you c1w, the mainland are behaving. Ride. Set for a wild theiruld have known that easing and 10 for the mainboard, but there will be new prices during the for of five listing. He we are seeing that we are seeing that happening. I think this tech board is in a place for value investing. This is the wrong place. It is a place for investors to us on tech potential Growth Potential of technology. Very important to understand why china started this new tech board. This was initiated by president year. Ping last the deepening trade war with the u. S. The u. S. Targeted chinese Tech Companies. Has industry policies. Offerew tech board will private companies. Than the private companies will lead initially. Is i cannot say these first days of trading continue, but i think there is a good chance. Do you think this set up all this our Foreign Investors likely to embrace this . Chinas track record, this is truly invented for the domestic investor. Some of the Foreign Investors will be interested. Some Tech Companies with good potential and the reasonable valuations. It is mainly driven by the local investors for now. David ok, thank you so much. Youngwha live for us out of seoul. We are getting underway this new trading week. We have talking about the fed. We were talking closer to 50 pips. Pared back into the session on friday. We put that together on the chart. You have the contract for august. You are closer to 25 or 50 in terms of where those expectations are at this point in time. Lets bring in our next guest at a Citigroup Global markets asia. Very nice to see you. Very nice. How does the fed affect you . Just in terms of how these things change daytoday. How do you approach this . At the end of the day you have to have your own view. We have 50 fit 50 bits. Markets seem them to be gravitating now. We have been thinking that 25 is right one. E on a daytoday basis there has been volatility. The seem to be settling down be settling down. The Central Banks are dovish. Banks, the ecb and the banks, e fed, the doj, we will witness dovishness. Which is fairly good from a credit market point of view. What we have seen in terms of return. Going forward, we will dial back our expectations. Think expectations should be positive. But we are dialing back a bit. Yvonne everyone has started this whole search for yield. You are seeing it when it comes to the spreads. The risks continue to shrink. At a time of corporate they are still expanding the leverage. Bells . At ring alarm does. H it that is something we have been highlighting. Even though you would want it remained in the Corporate Credit market. It is extremely important to remain in the core quality names. We are moving away from being generic wrong to being on only the good quality names. If anything, recent cases are india on the and high side. A reflection. When it comes to smaller names, funding availabilities is still a concern. Via china or india. We need to be careful. We are picking up our thoughts. We are picking up our thoughts. Good quality names. David highyield chinese property and the renewables are two of the areas that do focus on. Perhaps we might see some of the pricing there. These are areas where we are more comfortable within the overall states. Leading that there is still the chinesee of names. Especially highquality chinese names. We are not trying to save these for a smaller names. Good quality names we are not trying to save these for a smaller names. Good quality names have access to markets. We still like them from our point of view. We think that the stable sector and the names which are in the market, those are the stable names. I am curious. When you say good quality chinese developers, what criteria do you use . What determines this . Manjesh how aggressive they of adding to their land. How good is their access to capital both onshore bond offshore bond markets. Onshore local banks connectivity. And whether they have tried to deleverage from where they have been. We all know that they have started to inflate. Positive been some measures towards the end of last year that translated to these property companies. There is always a year that translated to these property companies. Danger thatays a timee expand at the wrong in the cycle is starting to peak. Peak. We are starting to stay with those names. Yvonne are you expecting the strain of that to continue given the fact that the chinese are this phase of implicit charis . Manjesh i think what is important to realize is that defaults will continue. And the smaller space, or for small nonraking financial institutions, acquisition capital continues to be a big issue. We do not expect that to change in the near term. The paradox is that the good inlity names continue to get capital but exert smaller names with capital. Which means that default rates are going to pick up. Manjesh manjesh we are moving o earnings seasons. That is more on equity play. David we are moving into seasons. That is more on equity play. Seasons. That is more on equity play. Talk to us about japans market . We saw what happened over the weekend. That provides continuity. From our markets point of view, talk about offshore dollar markets for japan, i likelyhat market is less to get impacted by whatever we are seeing. In any case, this is not a big surprise in terms of the outcome. What is true is that some of the sectors, like shipping sectors, that looks expensive. When youre are talking about valuation for those names, they are expensive. But the other sectors we are generally more comfortable with. In japan, a lot of valuations are already fairly tied. Typicallycted, which continues to be changed by a lot of fund managers. This whole issue within the semiconductors, because that an addon effect against the supply chain. Is that something you are korea,g, whether it is taiwan or huawei . For sure. The kind of impact we are seeing on some of the chinese names as disruption ore potential disruption in the supply chain, i think it is impacts a lot of names in our space. The good thing, if you would, is that there are not many names highyieldn the territory. Its a bigger names that are there and our markets, which are from the space. Even though the lines are fairly it will, but for them still be surviving. Liquidityt face the or capital. Thankful in general on that segment, taking it very selectively. Selectively. Because we cannot preempt what is likely to happen from a political point of view. Yvonne we will leave it there. Citigroup Global Markets asia sector asia credit specialist. Up, the fifth week of protests in hong kong ramps pressure on the government. At the fallout from the latest demonstrations. This is bloomberg. A quick check of the latest business headlines. Cathay pacific has bop hong kong sold budget carrier. Amid growing competitions from a man chinese airlines. Was owned by ass jj. Of not been released. But in march cathay said it will to 290 million u. S. Dollars for Hong Kong Express and repay a similar amount of the airlines debt. Lets stay within the industry. Conglomerate has restarted discussions here forsting in jet airways supporting in the Business Standard newspaper. The report that they are funding to bring the airline back to the skies. The last talks were said to have down where jet airways has been grounded since april after running out of cash. Nissan is forgoing the suv and betting big on the sedan. Chief of planning said he is betting on ecofriendly driver transport,ss on betting on ecofriendly driver transport,ss on meaning traditional sedans will be more popular than the heavier suvs and people carriers. David in case you missed it, a fairly eventful weekend in hong kong. The Chinese Government office has condemned what it called a siege on a building by prodemocracy protesters. Tear gas to tear gas to disperse a group after a peaceful march. David is outside the Chinese Liaison Office in hong kong this morning. Tell us why this target this Liaison Office was targeted in the first place . Whats the significance of all that . I think what we really need to understand is that the Liaison Office is the symbol, but also the Representational Office of beijing and hong kong. As such, it is very much like an and doesnt attract protesters from time to time. I had been down here and seen them myself. It is located in a part of townn whicht Hong Kong Island is away from the center of uptown. If you look over here, you can that the storefronts are not selling luxury goods. This is not the center of the International Financial center of hong kong. This is in west hong kong. Way. Out of the it is a nondescript building in a nondescript part of town. But after yesterdays peaceful radicals, ifoup of you like, came over to this part graffitied they outside of the building. The graffiti have already been cleaned up. The bottom part was covered in graffiti and its gone. Bricks andhrough basically attacked the building. In doing so, they are attacking the sovereignty of Chinas Office here. Nal as a group ofme protesters going to the Chinese Embassy in washington and attacking that embassy. Which is why there was the decision by the police to disperse the crowd here and disperse the crowd here and later with a fire to her gas at them. We are six weeks, into the six weeks of protests. The biggest impact on hong kong has been what . David t. david t. i think it will get worse. One of the other things that happen yesterday was another shirted white progovernment, or antiprotesters attacked a group batons. Sters with when these images go out overseas, a lot of people get worried about coming to hong kong. Forecast there will be 350,000 fewer mainland Chinese People coming in here to hong kong. Thats a lot of shopping. 5 to 10 represents of the global luxury goods sales. Last week we saw their sales being affected by the protests here in hong kong. We will get the owner of gucci also reporting this week. They say they very carefully look and see what they can say. People look as though peopleting worried about coming are getting worried about coming to hong kong. I dont think you have to be worried, what if you look at the media, people are getting kong ando come to hong that might undermine the economy. Live for us tweed on the streets of hong kong. We are tracking charts here on the bloomberg. What is the story . Up. Thalf net income is where your and your they think the damage will come from. Downgrade out of cicc. They are talking about their first annual sales drop that they have seen for some time. Taking a look at the casinos. Chinare downgrading with with macau and upgrading with trump international. You are watching China Oilfield Services down attempt of 1 . This is bloomberg. Is 10 29 a. M. In hong kong. Brexit. That is not something i could ever sign up to. Paul the former bank of india interested. Ot central banking has become more political. , it it comes to brexit understands the political situation in the country. David he has fallen short of a super majority. Yvonne david he has fallen short of a super majority. Yvonne lets get to chief correspondent Stephen Engle in tokyo. Correspondent Stephen Engle in tokyo. Mission . , legacyhis holy grail project. He got into politics in 1993 to rewrite japans wartime history. He wanted to be right the constitution. Has had to whittle down his revision to only legitimacy to the armed forces. Issue, so why go there . A majority of them did not want it to happen under Prime Minister abe, significant signifying a trust deficit. Be in next election will the next three years. Does this mean he does not dare to call an election monkey has a razor thin super majority . He could lose that. He will hold that as a cudgel to keep the party together. Will be a has this very tough road, given the fact that people in the party, the coalition and the public are not excited about public revision. He needs Something Else to focus on and his diplomacy has achieved very little. He has had a two thirds majority for six years. His legislative accomplishments have been modest. More. Of people expected he has not really achieved anything that he came to do. Is dead in the water . Pretty much. Household income is flat. He has not really energized the economy. Been welfare for the wealthy because the average person says they have not felt the love. How did he convince people that a tax increase is a good idea . A the as that the sleeve up the sleeve ace up the sleeve. He played out that he represents stability. It has not been bad, but it has not been great. There is more bad news looming because of the economy, the trade war, the erratic man in the white house. Look at what is happening with the South Koreans right now. He will get into trade negotiations with the u. S. Many ke he is the mini trump. Does the tax increase is that counterproductive . The global tradewinds are really turning heads. Does it plug the gap . Does it fund the education reform . It could do both. It could help to generate more revenue to stem the hemorrhaging red ink, but it is likely to stifle growth. Prospectsar, growth do not look very good. That is not only because of the tax increase but the Global Economy does not look very healthy. Most of thetten olympics out of the way already. I do not think the olympics is going to bail him out. Increased tourism has been helpful. Where does Monetary Policy go . He has proven that monetary easing on its own cannot really revive an economy. They have been waiting for significant structural reform. They have had half measures, but look at it as foreign migrant policy. They are talking over five years, 340,000 workers in a labor market of 62 to 63 million workers. More than a job or two drops. I asked my students about this. No connection to me. Just a bunch of old guys getting on with their program that has no impact on them. Has turned off, to doubt and we see that the voter turnout has also left across the board. People are unenthusiastic and they do not see politics as very exciting. I talked to my students about hong kong. I said what about here . They are very complacent. In one way, you could say that because things are not that bad here, people are not that interested, but it is not a it has no mandate whatsoever for anything. Quite a bit of a setback. Studies. F asian ok. We are going to talk about the woman side. She is an upper house legislator. She will have the perspectives on the woman vote in this election. David we are hitting the story at all angles. Stephen engle is live out of tokyo. It is going to be a big week for japan. Have a look at the charts. Not inexpensive market. Lifting thely market. Going into 30 Companies Reporting this week. Yvonne it is still an unloved market. World. Asiapacific, msci the pan is kind of the lower part of the list, but we are hearing more about it being undervalued. Here is where you are underperforming. That is the japan story. There is another story coming up in the program at we will get you the latest on the tech board. There is plenty more still ahead. We are just getting warmed up. This is bloomberg. David welcome back. Lets get you the latest headlines now. Aandard chartered may ask for pay cut, according to the Financial Times. The board is in discussion with shareholders. Newspaper that they have been focusing on the tension arrangement that is immature and unhelpful. Worst one of the performances in 20 years. The Financial Times that they lost 4. 9 in the First Six Months of 2019 but managed to recover some of the losses. It comes after a strong 2018 when it gained almost 15 . Has been topped by the highest grossing film of all time, adventures and game. It has taken almost 2. 8 billion. Previous handheld the title for 10 years. Only factored in 16 if you factor in inflation. All right. Speaking of superheroes, what a super day. Just want to show you the market valuations. This is one of the key concerns for anyone looking at these stocks at the moment. Are notthese names helpful outside of china. Pe. E is average some could be as high as triple digit. What kind of picture does not paint for the retail side and the institutional side . David that was before the superhero moved that we saw today. You have six of the 25. We are looking at this now. That is just crazy. Ive hundred 20 . With the boards. We have a full list for you. Number 25. Can we get my bloomberg terminal on . There we go. You have six there. The last column is your percentage gain. People breezed through and scroll down to give you a sense of how magnified these moves are. This is really the testbed for china to drive these financial reforms. A lotng the restrictions of these Chinese Companies back home what a day it has been for shanghai. Just coming up to the session in india. There is a big story. We are there, guiding rates, moving forward. We will look at the set up. Week waslast lackluster, quite a big drop. What is the set up for today . Reason why the key that happened. Now we are holding onto that market. Most likely it will be with that much of a downside. That happens, at least the downside is open to about 11,200. That could be slightly concerning. Earnings have not excited the market at all. It is extremely low right now. Very disappointing numbers that they have posted. Yvonne right. You mentioned about the banking sector. Issue. Ole stress loan rising 40 quarter on quarter. The stock may not look too pretty today. They attract a very large premium. It was given that kind of premium. Aside from that, the collision number is so high on the back of the fact that there was stress. Provision on the back of unsecure as well. Questioning. People you can see a bigger connection. David thank you so much. She is live out of mumbai with the nds story. The governor has spoken to bloomberg about the state of shadow lenders and the overall policy. What was one of his first interviews since he took the topcoat. Yvonne lets bring in malcolm scott. He has the latest for us. Does he what clues offer when it came to the policy outlook . He talked about his views on how much stimulus he has already provided. He switched to annette, needed a two he switched to an accommodative stance. Certainly, it has been ahead of the curve, head of most of the region in reducing Interest Rates. He said there is some positive signs in the economy. He has talked about signs of a good monsoon. Ising all of this together not signaling that he is done for now. Needd also speak about the to sustain indias domestic demand. He has already done a lot in suggesting that there might be some bright spots coming for the economy after that tepid first quarter. We have to talk about its role. You talked about the shadow banking sector. Tryingd they say about to ensure that the Financial Sector does remain able, moving forward . There is the more clarity on these views. Looking at about 50 of these companies. Very eager to say see no contagion if they struggle to repay loans. Some of these struggle to pay back loans. That raises the question about, what about this . Could that spread contagion . He says they are really committed to ensuring that there is no contagion in that lease. Yvonne malcolm, thank you. Our editor joining us out of sydney. We go chart to chart and compete for our vote. You know what time it is. It is battle of the charts, coming up next. This is bloomberg. Yvonne time for the battle of the charts segment. Reporterr asian across. They pick their best charts against each other. David it is about to go down. There we go. For our clients, you can access their charts in a few minute. You will see the function at the bottom of your screen. Thats kick things off in tokyo. Lets kick things off in tokyo. What you are seeing is the crab. Displaymomentum based of support. You can see that it is trading within what is described as the cloud area. This happened after they broke below one of the support levels. Any of those looking at this as an indicator will be closely watching to see if they either break above the cloud area or below it. And analysts was saying that an increasing number of Foreign Investors are using this as an indicator, so you might want to check out what it is looking like if you are interested. Follow the cloud. For my chart, we are taking a look at singapore. The white line is singapore dollar. Is swap rates. Basically, we are talking about the fact that with the recent run of disappointing economic data, we are talking about the military authority stepping in and providing stimulus. Is can see the way that diverse. In singapore, the adjustment is not on the Interest Rate but on the currency, based on currencies against the singapore dollar. It reviews its policy twice a year. There is speculation that we could see them step in before. This one. Ike do you think . Yvonne you judge today. David give your opinion and i will give mine. Yvonne her chart talks about what we were just talking about. People are saying this is such an unloved market, but maybe it is time to go into it now. He also brings up the point of what it means. Our floor manager is going to decide this one for us. Guys can think each other there. Im sorry. It was more of a tie. I was split. There is lots more coming up. This is bloomberg. I am Juliette Saly. Yvonne we are entering the last hour session in hong kong. A strong start. Ll 25 take off one surgeon close to 5500 close to 500 . Listing a super majority. His plans for the constitution may be yvonne derailed. Signs of stress may be derailed. After signs of stress the collapse of a formal lender last year. This is Bloomberg Markets asia. A bit of a negative start to the trading week after we were still trying to get clarity over what the fed is going to do. Look at gold and there could be a 50 basis point cut. Japans market coming under pressure today, but a little bit of strength coming through in the chipmakers up by about 1. 5 . We have been watching what has been happening with the japanese elections and little bit of money coming out. Saying the fact that there is a reality of a higher sales tax could create moves. We have seen money going into oil as well with u. K. Calling for a diffusion. By 1. 4 . It is all about what is happening in shanghai. As we mentioned, very solid debuts. We are hearing that there will be an official index after this 30th Country Company is launched. It looks like the index is up by about 75 . Some of these stocks are absolutely surging. Very very strong start. We will be getting more from shanghai. Yvonne we will see how longlasting the gains will be. We will bring you our latest. The r. B. I. Governor gave some telling comments about where they are in the cycle. Following this downtrend. The offshore bp also seeing weakness and yields are ticking lower. Key earnings reaction as well. Again provisions once rising. Lets get to the first word news with paul allen joining us out of sydney. Paul china has further opened its Financial Sector to foreign investment. Overseas investors can now take a stake in network control. China has long been criticized by the u. S. As a one said beneficiary but is now increasingly welcoming to competition. Chancellor says he intends to resign if Boris Johnson becomes the next Prime Minister. He is a favorite to win the race against jeremy hunt. Said he will not be able to accept the demand. I understand that his conditions for serving the government would include accepting a no deal brexit. That is not something that i could ever sign up to and it is important to have a chancellor that is closely aligned with him in terms of policy. Paul the British Government once the you and to intervene in the gulf and has threatened serious consequences. London is demanding the. Mmediate release of the tanker showed othersy flying the arabian iranian flag. Claiming victory in the upper house election. The super majority would allow revisedush through the agreement. He is short of the majority needed to make changes to a referendum. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Yvonne traders are backing off from a cut later on this month. James squires sticking to his call on that 25 basis point reduction. She was at the authority of singapore, leading the global credit. So good to see you again. They have had to hold back some of their expectations of the market that they would not go to aggressive by the end of july. Can they still perform . Can yields continue to go lower . Thinking about what is going on from these statements made last week, i think they are missing the bigger point. This has been very important. Why is the fed doing that . Time whenso the policy rates are entering a late stage cycle. Time,eans that the next they will have very limited ammunition. Tot i am trying to do is avoid having to face the music when the next one comes, avoiding that risk in the first place, which is why they are being preemptive here. Whether it is 25 or 15, you have seen the latest. Many think that the fed should cut. It is a divergence in the fed and i think we will get there. It is just a matter of one goal or two weeks. Yvonne i we reaching a point in the Economic Cycle where we are at the end . We are not there yet. It is a look across the economy. There is a bubble that we have seen. Those are definitely the necessary conditions. We are going through a rough patch. They are effectively trying to control the risk from materializing. Positive forlly a asset markets. Prices. Trying to boost if you are an investor, you probably would not want to fight the flow in the coming months. Is juliet in singapore. We are expecting to see accommodated bias, but there is limited action in terms of what the developed Central Banks can do. There is still some movement coming through developing markets. What particular market are you looking for . E. M. And it looks very interesting in the context of what they are looking like. Andave started to diversify we are finding many interesting opportunities. Indonesia much more accommodative policy. Trying to contain the indonesian ruby. Week theeen from last fact that it has materialized. At this time, it is a pretty substantial rule to decline from here, trading about 7 . Compelling value. What about search for yield in other areas . Saying you should look at gold particularly if we are going to be seeing a more aggressive cut. Following the most in about three years. Are you looking at any of these Asset Classes . Class that sset we are talking about say. Something in positioning in our books. You have to look at the credit space in terms of making the kerry worthwhile. Down theppy to go capital structures. It has to be done well here. That is something that we want to search you. Increased sick scrutiny to be joining a. Think thatyou do not the ecb can join in . Deliver,u still whatever it takes . His first day on the job, he has not disappointed. He has delivered. That they can surprise. They can do it for the set changes. Mix of what they will buy. Crudity, they will likely be looking at a good portion of sovereign and corporate bonds. I wanted to bring it back to singapore. We saw quite a lot of premium shrinking on easing. We had that disastrous export number coming through. What do you think they do . This is not centric to singapore. Few of thein asia, a opening economies are closely linked to the supply chain. On that front, i think it is something that we have to understand. In terms of where we are thinking right now, there are some signs. They are increasing. In numbers will look weak the months to come. Take for example last week, we the expected to hear from local chipmaker here. Yvonne exports from south korea falling from 30 . I do not think that we are close to the bottom. We are bottoming. We have to look at what it looks like this. But they are half, pointing to is the uptick in more confidence in their spending plans. They are shifting up. Much more cautious sentiment. This is important to think about. We want to get more about your thoughts on tech. Please stay with us. Coming up. E more, we will check in on the shanghai tech board where all stocks are surging. The latest on the rising star startups, next. This is bloomberg. You are watching Bloomberg Markets asia. Yvonne getting off to a positive start on monday. I might be downplaying it a little bit. Take a look at the performance so far on the first day. Some seeing double digits, if not triple digits when it comes to the stock price. Nasdaq modeled after the stock market u. S. Trying to avoid losing the next alibaba or tencent. It is a testing ground for regulators as well. The firstit comes to day price limit. There were some suspensions earlier this morning, but this is basically to limit the volatility. Suspended potentially for 10 minutes before they resume. Welcoming companies that have yet to make a profit, as well as votingwith an equal right. A star, if you will for those companies. Beijing is trying to encourage companies. Mainland Companies May still want to raise dollars. Spotlight onng the loopholes that allow something called a variable interest entity. Kim tim joins us. That is the key point. Notou own shares, you do own a chinese internet company. You own shares in a Cayman Islands company. It has a contract with that company. We have not been whether or not those contracts are enforceable. If push comes to shove, it may be that the shareholders and the company could be left out to dry. Companies those we are talking 1. 3 trillion tied up in these kinds of companies. If you are doubtful, you really need to think about the investment. Yvonne it feels like these legal grayxist in a area. How sustainable is this . That is the key point, gray area. There is a new law passed in china recently. It did not ban them. Of course, it is good news that they are not banned, but they were enshrined. Gray area still exists. At some point in the future, beijing will decide that they want to shut them down or rain the men, or maybe reach these structures. One25 stock rise on day shows that there might be some kind of interest. China once those companies to list with china and not overseas. Structures could be in the firing line. What would beijing to shut it all down . Some kind of frustration that after all the attempt to get the alibaba and tencent to enlist in Mainland China do not actually succeed. That six months from now. At the end of the day, a lot of the companies that are listing , they want a hard currency exit, which means outside of china. Suddenly, you have the renminbi that you cannot get out very easily or you own shares in a listed company that cannot liquidate as easily. They want their money and u. S. Dollars outside of china. If they cannot get that liquidity back out, they will not be interested. I do not think it will happen tomorrow, but in the next five years, we need to keep and i on it tightening up. Yvonne thank you. Our Bloomberg Opinion columnist. Is our guest joining us in hong kong. We were just talking about the break and these stellar games we are seeing. How do you view all of this . Is thathing to say Foreign Investors are not the key investor base. Investors want more opportunity to get involved. We will talk about how chinese orders,nt will wish for s that one more for capital reasons. There is a lot to take away from this event. We might not be involved. Get any allocation . Getting involved from day one. There are opportunities available in china. Gets an opportunity to involved. How much of the catalyst does it give in general . It gives focus for what is going on in china. Is a very different conflict. Care of segments of health , industrials, much more so, which will have a larger proportion. On that front, i think that is the chinesel help, equity investing. This has no ipo restrictions. They believe are above 50 on average. Compared to the top five stocks. 10 years ago. The top five performing performers. Mid 40s. New companies are really prized. That is something to think about. Yvonne all right. Thank you so much. Joining us in hong kong, we have plenty more ahead. This is bloomberg. Yvonne you are watching Bloomberg Markets asia. Im Juliette Saly in singapore. A quick check of the latest flash headlines. The than refreshed about billion deal to buy the united almost 15 times. Shares slumped the most in over a year over concerns that have paid top price for a region slow growth. Return to discussions about airways. They are examining funding reports to bring the airline back to the skies. Talks were said to have broken down. Springing hong kongs will carrier to boost market ship. Hong kong express was owned by the conglomerate and able continue as a standalone carrier. Details have not been released but they said it would take close to 290 million and we pay a similar amount. Look at theng a market here. Talking about the offshore overnight. Jumping 71 basis points here. We will flesh it out in a little bit. This is bloomberg. It is almost 11 to date 11 30 a. M. Only two stocks out of the 30 listed on the index in the black today. You are seeing quite a bit of weakness today. Bloomberg intelligence is saying that the singapore slowdown could be worse worse than forecasted. We had not very awful export number coming through last week. Lets get to first word news with paul allen. Paul the governor of the reserve bank of india says policymakers are seeing signs in the banking sector. Lendersi. Is monitoring and other shadow banks to prevent contagion. Outstanding loans of about 135 billion last year according to the data. Doom and gloom for south korean exports. They sell 14 from a year earlier. Semi conductor sales plunging. Almost 1 5. This comes after figures for june showed falling by the most in three and a half years. Collapsedvestment has since President Trump came to the white house. Falleninvestment has since 2016 to just 5. 5 million last year. They have ramped up regulation and a heartening attitude in washington. The governor of the reserve bank of india says that brexit is the main reason he is not ask excited. It has become more political in recent years but when it comes to brexit, they have somebody who understands the political situation within that country. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im paul allen and this is bloomberg. Yvonne thank you. The election, won but he fell short when it came to winning the super majority that would have let him push revisions. Lets get to our north asia correspondent in tokyo for us. Debating about whether this was a victory for shinzo abe. Was it a victory . They got the majority in the upper house, but they did not get the super majority. They needed 85 the super majority. They had that super majority by by ard then margin razor thin margin. He needs that majority in the upper and lower houses. Seems likeection, it a foregone conclusion that it could happen in october. They have to plug those gaps in some ofem, as well as these educational reforms. Across thegarten country and other necessary reforms in the economy. I would like to bring in our next guest. An upper house lawmaker. Thank you so much for joining us again. You do not stand for this election. Your term is for six years and you will be up for the next election. What do you think the priorities now must be . Welfare and economy. , he made a statement about the constitution. Reform has to be an issue as well. The number one issue is the economy. Cot theon the committee. Is it essentially a bit point now . Is going to be difficult. That is true. It is still six minus. There are other members of the parliament in the other party, for example the democratic party. Iof them are pretty think it is still possible with the other parties to form the constitutional reform. Why is it necessary to get that wording into the constitution to basically legalize the selfdefense course . Why not stick with the status quo . Minimum necessary change has already been made to the legislation that we passed two years ago. Urgent, as some people think. Personally, i think so. It is so difficult to revise the constitution. It is the most difficult to live by. You need to have two thirds majority. You need to majority in the national vote. It is really difficult. See a windowif you , might notity change . Are a lot of rekindled tensions with south korea. There is going to be tough bargaining on a trade deal. What should be the priority right now . Issues or other agendas . On the agenda. What should be on the top of shinzo abes diplomatic agenda . Now that the election is over, he can maybe concentrate on diffusing cant conflict with south korea . Is south korea that started the movement, not from japan. None of them were started by japan. , conflictanother agreements that they violated. Most serious one is the labor case. It is national verdicts. Nation to nation relations. What is happening in south korea has to be dealt by South Koreans. They think the 1965 treaty does not handle human rights issues. This is a factor. He had there is a clear negotiation. It is the south korean government. To eachal compensation of them. South koreans want the money as a whole. Government, itn is their responsibility to get the money to the people. Againstdict is so establishing a national law. Lets talk about the mystic issues. You are a proponent of more women in government. Lawmakers were female. Is that enough . Is not. There is always to go, but it is huge progress. When i have been three years ago, we made up 23 of women. , it is big progress. Half of the population is women. A lot ofthink it is progress this time. We will continue our coverage of the fallout from the election did winy as shinzo abe the majority. They did not get the super majority. Yvonne great conversation there. Our chief asian correspondent. Exporttalking about the and import data for june. The experts are looking better than expected but still falling 2. 1 . Imports seem to be looking much worse than expected. A 2. 5 imate was for decline. Widening. Us is we are not seeing a big reaction. Still one of the key performers when it comes to asia. They after whole lot we saw it missing. Coming up, tensions rising in the gulf. We will discuss what that could mean for the oil market. This is bloomberg. U. K. Is seeking to ease tensions with iran. The british Prime Minister theresa may is leading an emergency meeting today to discuss security of shipping in the persian gulf. Our Energy Reporter with how this is impacting oil. How does the market view this rising tension . Goes today and yesterday primarily because of the rise intention. We have seen some Oil Producers looking to avoid the strait of hormuz. It is causing a lot of anxiety in the market. If you look at last week, it was a loss for oil. Thisems to be trumping tension with iran. It is boosting prices over the last few days to a greater degree, looking at how the trade war will affect Oil Demand Going forward. Yvonne it has been above the demand concerns, but in case of an outright conflict, should we prepare for a spike in prices . What are analysts telling you now . We are hearing all kinds of things. Oil is around the 60 to 70 range. If there were outright work, you could see it rising to the 150 range. There are a lot of different scenarios that we have to look at, but one of the biggest things to look at come up with the strait of hormuz be shut . You can see oil spike. Analysts have told us that it would be impossible for iran to keep the street closed that long because you get the militaries involved to bring that together and bring safe passage for the oil. Price of also see the insurance increasing for vessels and the availability of muscles dropping. You cannot forget about natural gas. All of that has to go through the strait of her moods. Yvonne thank you. Our Energy Reporter in singapore. Lets take a look at Indian Markets that have just opened. To take us through. What to expect from todays session. Hows it looking for today . That is right. The last two days have not been great for the Indian Markets and we have been following thank you from the asian market indices, suggesting an opening in the red. Some crucial barriers as well. Today, once again, the opening is coming below that mark. The had been trading below 100 Day Moving Average and inching closer to the moving average. Opening with cuts of 36 points and down about 135 points. The bank has been weekend has been weak. The underperformance should be banking on this monday morning at for the Broader Market which have been wearying under pressure, it is not looking good at all. One concern for the markets, continuing to sell. Ofmarked the 14th deal selling. We were talking about reliance industries, one of the heavyweight. They have come through with numbers as well. How are investors reacting . They are both heavyweights that came out with numbers that were pretty much in line with what the industry was expecting. They have opened in the red, trading with cuts. The numbers look good. 23 profit growth. It is the commentary coming through. It is sounding cautious. They went hard because of the exposure. That is the reason the stock has been trading at alltime high levels. A mixed set of numbers coming in. Businessthe cash cow is falling. From the retail side, the company has been focusing on revenues from the retail side over 45 . Thank you as always. Spoken toernor has bloomberg about the state of indianas shadow lenders and the policy. Ets bring in our chief firstly, what kind of clues did the governor gave as to the policy outlook . Was quite guarded in the way of going forward. Anking to him over almost hour, stressing on the fact that the bank of india has maintained humility and growth. It seems like the growth part of the agenda is heavier. Ensures that it gets back to the growth level that the estimated. It was right here where growth is right now dominating the agenda. Outlookld mean that the remains accommodative. The course is also the banking regulator. Assuring Financial Stability . In thes dealt with shadow banking sector. They just emerged from a crisis in the banking system. It was possibly at one point in time the highest level in the world. It has managed to resolve some of those issues. The government lent a hand. A lot of management changed hands. Action was theof shadow banking crisis. Withg regular meetings lenders on a daily basis. He is holding meetings. Contagion because of the shadow banking sector. Players were showing signs of fragility. Was largely under control is what they told us. Yvonne thank you for bringing us that interview with the r. B. I. Governor. Coming up, we will talk a little bit more with china unit. We will discuss sales and where growth is becoming a luxury. This is bloomberg. You are watching Bloomberg Markets asia. The Chinese Government office in hong kong have condemned what it called ach of the building by a prodemocracy protester. Had dispersed a group that targeted the office after a peaceful mass march. It filled the city center streets. David is outside the office in hong kong. Tell us. We have seen this week after week where some of these protests have become violent. What comes next . How much longer can they continue to do this . That is a question like how long is a piece of string . As long as the demands of the protesters are not answered by the government, you will have part of the population here, which will remain angry. How long it will take for hundreds of thousands of protesters to come out in the street like we saw yesterday . Momentumwill see that starts to fade away, but one of the key things that happen here yesterday is that the protest moved to the chinese liaison ofice in the western part Hong Kong Island. This is a part of hong kong, which is out of the way. It is a nondescript area. These are not the luxury goods companies. These are the companies that are working in the area. The building itself is nondescript. We saw a group of protesters and a spontaneous attack on the. It is a little bit like an embassy. Because it was attacked, it was a direct attack on the sovereignty of china. Yvonne tell us about what beijing could do at this point. Are they likely to take any action . There is very little that beijing self can do. Imagine if the Chinese Embassy in london was attacked by protesters. He would get the police in london trying to disperse those protesters. You would not expect beijing to take direct action in london, and it is not and it is the same here. Beijing can do what it can to put pressure on the local government to make sure that Liaison Officers it is up to the government to get the situation under control. It can probably do that by moving to completely withdraw the extradition bill from having itther than under suspension and saying that the bill is effectively dead. Make as if they want to that extra step. Anger ofwill keep the some of these protesters it will continue to fuel the anger. That was our reporter that was our reporter in hong kong. Lets get says to the business flash headlines. The Flagship Fund has posted one of its worst performances in years. 4. 9 in the First Six Months of 2019 but managed to recover some of those losses this month. Quarter. After a strong foregoing the suv and going for a sedan. That new,s betting conscious Young Drivers will spend less on transport which means it will be more popular. Avatar has finally been toppled as the highest grossing film of all time. Disney says that avengers end game has taken almost two point 8 million in theaters worldwide. Avatar held the record for years. 16 with they ranked top chart still held by 1939 gone with the wind. Course, they announced on these lineups. A chinese superhero could be big in hong kong. All about that tech board in shanghai. Seeing quite a bit of red as we dial back those expectations for what the fed is going to do. You can see triple digits when it comes to percentage this morning. Some as much as 400 . This is bloomberg. The following is a paid program. The opinions and views expressed do not reflect those of bloomberg lp, its affiliates or employees. Announcer the following is a paid presentation brought to you by National Debt relief. Are your credit cards maxed out . Are you just making the minimum payments, or worse yet, falling behind in your bills . Are you stressed out all the time by your debt . Is debt keeping you awake at night . Theres reason to worry. Check out your credit card statement. If youre only making the minimum payment, it could take you over 20 years to pay off. Having debt is like having a tremendous weight on you and you cant lift it. And you dont know what too