Factory are striking to support these protesters in the city center. Are closings streets, disrupting public transport. In the past few minutes, we heard about these workers as well. Lets just get you over to Rosalynn Chan down at the protests themselves. What does it feel like right now . It is pretty peaceful over here. There is generally a pretty good atmosphere. Are resting and staying out of the heat, they are still occupying the highway, blocking out ways of getting into the central part of hong kong. In fact, stopping people to get into the government building. We are standing right in front of the government complex. There are a lot of people over there, that is the driveway to enter the government complex. Ago, there were a lot of cheers coming from that direction. Generally, the mood is good over here. Very convivial as well. Reading thetesters newspapers. What ever they are doing, they are occupying the streets. They are occupying this highway and preventing people from getting in and out. That is having an impact on what is not a normal business day in hong kong. Week, wednesday and thursday, these are public holidays. Many of the processors say they will be here. They are not necessarily staying put but they are returning. On the public holidays, we could see them as well. Indeed. What are the Police Telling you hear, how long they are going to be allowed to effectively blockade central . That is a good question. Police are out in force as well. There are several trucks full of them. They are standing guard in front of the government building. Back fromlso pulled the scenes that we saw yesterday with the tear gas and pepper spray. A very different scene today. I have not heard any word as to whether the police will rain them back in and clear the streets, but right now they are being permitted to stay on the streets. There were talks this morning of police trying to get people to move along, at least open up one lane. The protesters said no. Right now, there is definitely a situation where protesters are being permitted to stay here and police seem to be pulling back compared to what you saw yesterday. Thanks a lot for that. Chen in central hong kong. They are watching this very closely in beijing. Right now, they have had little to say about the escalating protests. We have Stephen Engle joining us with a latest. Little comment but what do you think is going on the on the scenes . Going on behind the scenes . I wish i knew what is happening behind those secret walls of the leadership compound in beijing. Obviously they should be troubled by what they are seeing or hearing from hong kong. The question is, is it trying their patients . That is the dangerous question because it lead to could lead to the comparisons to what happened here in 1989. The hong kong chief executive has dismissed rumors that the government is planning to call in the Peoples Liberation army. We might be getting ahead of ourselves. Some have speculated that could be down the road. According to state media, the Central Government has said it is confident that hong kongs government can handle the movement lawfully. This is a term they use often. Things must he done according to the law. Whose law, that is up for interpretation. They are steadfast that they oppose illegal activities that could undermine the law and jeopardize social tranquility. I have commentary from the state mouthpiece, the global times. The comment the communist Party Newspaper saying hong kong stability faces unprecedented risks. The risks, though, are temporary. It goes on to say that hong kong should be a financial or fashion capital of asia rather than a political capital. It is a Financial Capital for sure. Last week, president xi jinping called in many of hong kongs richest tycoons in a behind closed door session where he stressed that any political change must be in strict accordance with the basic law, essentially ruling out demands by prodemocracy advocates to have a nomination system for the chief executive opened up to everybody. Rish, of course this week is national day. Golden week holiday, many chinese planning to go to hong kong. No word on whether the government would recommend them not to. That would be a huge blow to hong kong retailers which are already seeing sales dip about 2 . Those numbers coming out later on this afternoon. Thanks, steve. Earlier we did talk to a filmmaker who produced a documentary about student activists. They say it is not just about democracy but about hong kongs very identity. It comes to a time where it is no longer working to be politely asking. It is time for a fight. I think there is a feeling that all the promises that have been made to hong kong about allowing hong kong to rule itself have been broken. These protesters dont trust china. What you are seeing is not just for democracy. It is also about assertion of hong kong identity. Jpmorgan says that despite the political detentions, they will not be affected. We are coming to a very challenging juncture when it comes to politics in hong kong. The question becomes, what is next . , there are several people occupying parts of hong kong, and we are waiting for response from the government. Uncertainty is significant, but at the end of the day, we have a pretty strong system. Least some form of order has been restored. I think the business side of hong kong continues. The Hong Kong Democratic Party said that business should take a backseat over the question of basic rights. Who cares about business . All the Business People are not quiet. Many of them have now joined us because this is hong kong. This is our own future. This is democracy. This is freedom. This is the message, give us democracy or give us death. That indeed is the word from asia. How is this impacting sentiment in hong kong . Lets get back to the markets. We were talking about this all morning even before markets opened. We were expecting a selloff. That is what we have so far. You look at where current valuations are. The current earnings at about 10. If you look at the forecast, multiples of about 10. 6. That is basically at the lowest range of valuations. , over 2 at one point in hong kong. Oversold terrain on the hang seng index which is why you are seeing more buying. It did drop to 23,100. 23,150, which is at about here, that is your moving average. Let me just show that for you. That is where we are seeing support at this point. The twoyear chart, let me drive roughly for you. That curve looks a little bit like that. We are still oversold, though. Lets look at the levels very quickly. ,ang seng, hang seng composite still seeing some red. You have the heavily weighted stocks turning around a little bit. At one was down over 3 point. You have the retailers, which we are watching closely. We are expecting a lot of tourists coming to the city perhaps prop up retail spending in the city. That is what we have for the moment. Wish, back to you. Ask the other stories we are cash following, aes the company protecting it from your. From kkr. Tpg wasis last month, had to also be in the running to match kkrs offer. A quick look at hyundai this monday morning. Leaders hope to resume talks over a longrunning dispute about bonuses. They canceled a partial strike that had been planned for today. New talks scheduled to start at 3 00. The indian Prime Minister wells the crowd in new york, saying he wont look back. Modi was given a rapturous reception at Madison Square garden. He promised the days of indias topheavy bureaucracy to be over with. Later, he will be in washington for talks with president obama. U. S. E u. S. In 2005, the denied them a visa. Coming up later on asia edge , softbank boss Masayoshi Son eyes up a new role in hollywood. We will look at a multibilliondollar deal that could be in the pipelines. Up next, the protest says it brought parts of hong kong to the standstill. Reaction to the demonstrations after this short break. Lets get more on the impact of this mornings protests. Both markets and the hong kong dollar taking a hit. We are joined by mark conan. We heard this coming but this happened very quickly. It spiraled out of the student protest. I think it caught a number of businesses off guard. Were activating contingency plans last night as we saw the situation develop on the ground. Were the markets caught off guard . You can see, it has sold off reasonably heavily. Although markets knew it was coming, it is never an event that actually occurs. Very little coming out of beijing at the moment. You can be sure they are talking a lot about it. That is going to be the longterm story. I think the reaction we are going to get from authorities in hong kong and beijing is going to have an impact on Investor Sentiment and the way businesses plan for what is next. Goingt know what that is to be but any comment is going to be scrutinized. The worst outcome here is a prolonged standoff. Think the pressure can be applied in certain ways . The problem with standoff is neither side wants to give in. The ability to cool down and moderate opinions diminishes each day a standoff goes on. From what i can tell, they want to be heard. They want some recognition. It is difficult to see how that can be broken. These pictures are broadcasting all around the world. What do you think the impact of what is happening in hong kong right now is impacting on our headke to o office in new york. Comments, theye thought the situation was worse than it was. We provided local content. They were surprised we were able to get to our offices today. I guess the context is very important. The view from outside the region, clearly magnified. [indiscernible] i think it adds to the pressure. I think that has an impact on the outcome, yes. Speaking of china, things are slowing down and if this spirals out of control as another front emerges for chinese leaders to figure it out, does this put under threat even that goal of 7. 5 . I think it is more an issue for hong kong. Of theseeing the impact clampdown on conspicuous consumption corruption. We have seen the latest consumption numbers over the weekend from hong kong which shows a deterioration. Another red figure. This will impact especially with golden week coming up. No one wants to get caught up in what is going on. A distraction to be sure. It depends how long it lasts. Of the big picture for china, this is not going to be to driver of what is going steer the economy back toward 7. 5 . There are structural issues in china which we are following closely. The slowdown in the property market, the shadow banking system, the ability to stimulate. What are the numbers telling us . Slowdown continues. There is always a negative bias when you talk about it. Fantastic growth, is it not . Once again, it is all in context. The country needs to maintain above 6. 5 to avoid some of the social unrest that is feared if unemployment starts to pick up. We have already seen a fairly weak employment market. How should we view currency plays . More volatile. Yen is continuing to be week. Extraordinary how it has depreciated so rapidly. I think partly strength in the dollar and the bank of japans commitment to further expansion of its balance sheet. It is bad in terms of trade. It is bad for trade prices. Bifurcationte word, in terms of u. K. U. S. It is a decent renovation. That is a better word. A it is desynchronization. That is a better word. Stick around with us. We have a lot more to discuss. Mark conan, thanks for making it in. Finally given legal permission to play. The first time in 14 years Chinese Shoppers will be able to buy gaming consoles in stores. What will they be able to buy . We will be live in beijing with the details when asia edge returns. Chinese gamers getting their first chance in 14 years to buy devices legally. Xbox went on sale today. Ews joins us from beijing. What challenges do these console makers face there . Thet does look like one of Biggest Challenges is the regulation of game content by chinas Central Government. They are being forced to release the consul with only 10 titles out of the hundreds that have been released so far. Among those, there arent any of the top 10 selling games in the u. S. Games like halo, or call of duty. The things that really drive sales of these devices to the hardcore gamers. Instead, they are being given games like a locally developed game or an International Title that is not a violent. They are missing the things that people associate with the xbox. Everybody wants to know is how big this market could be. China is clearly a large and growing market. They are expecting sales of games in china to grow about 39 to 18 billion this year. That is a market that is dominated primarily by online games. To mobile devices like smart phones and tablets, that is where the gaming is. The question is how much of a share can the consuls grab . Have spoken to said consuls may all the total. Japanese mobile carrier softbank may be going on a shopping spree again. Isorts say ceo Masayoshi Son in talks to buy Dreamworks Animation for 3. 4 billion after a series of acquisitions. Another potential acquisition here. How does this play into the companys strategy . Masayoshi son is now being iveled japans most acquisit ceo. Bloomberg data says softbank has made 51 billion in deals over the past few years. It already controls the thirdlargest u. S. Mobile operator, sprint. By buying Dreamworks Animation, it hopes that softbank will get content for its mobile carrier. In the bigger picture, Masayoshi Son wants to invest in 5000 companies by 2040. This might be one of them. What do we know so far about the details . It has been reported that son made a 3. 4 billion offer. It value shares at 32 each. That would come with a 43 premium on top of fridays closing price. With this could go deal because it is coming at a time when they are having a pretty rough time with lackluster box office results. Board had to hold an emergency meeting last week. People with knowledge of discussions say that ceo Jeffrey Katzenberg is considering the sale of the company and is open to other offers. Thanks. We have to take a break. Coming up, the world of watchmaking dissenting on hong kong this week. A will be hearing from relative newcomer to the luxury market. Returnsasia edge after this break. Ghost town, hong kong. Democracy protests drag down the market. Brazil calling. Alibabas popularity is on the rise in south america. And, breaking the silence. North korea admits kim jongun has health problems. Lets get the latest on the markets now. David ingles watching the fx markets. We were watching the hong kong dollar very closely but i want to point your attention to what is happening with the kiwi dollar. Fairly big story. You have the kiwi dollar now the first time it is trading close of 2013. Ince august we have all talked about how the central bank has been trying to talk down the Exchange Rate. The governor has been fairly vocal and very clear about how the Exchange Rate has remained at high levels. What we have this morning was, they said they sold 521 million kiwi dollars in the month of august. That immediately drove the kiwi dollar lower. As you are looking at relative value, you are seeing the aussie dollar fall as a function of that drop in the kiwi dollar. . 87. As i mentioned, kiwi is going the other way. Mixture, obviously. The aussie dollar, another one i want to mention is the kiwi singaporean dollar cross. We have seen the kiwi dollar trade below singapore. 98. 62. Go to are looking to singapore, maybe a good time to hedge those travel costs. Back to you. Thanks, david. Lets look at the other corporate stories we are following this morning. Sachs is said to have barred Investment Bankers from trading individual stocks and bonds to avoid a conflict of interest. Staff have been told they are not allowed to invest in hedge funds. The policy changes meant to reduce potential conflicts with clients. Alibabas venture into latin america has seen it become the third most popular website in brazil. The portuguese version of a;o express attracted three times as many as ebay. Told investorsa that brazil will be a linchpin for international expansion. Pimco is trying to calm clients after the departure of bill gross. The worlds biggest bond funds have started reaching out to investors across the world. Pimco says it will be business as usual and there will be no major changes in investment strategy. People watch pimco versus taking money out, there is no reason to believe the script is going to change significantly. Pimco has always relied on in, whether inn income mortgages or corporate bonds. Ofthat was a look at some your company news. I am Stephen Engle. Thise world of watches ends on hong kong this week. To hear from the industrys influential guests. Lets talk to one man who runs one of the most wellknown watch brands. Right here for the watches and wonders exhibition. Thank you for coming in. You guys have been in business for less than two decades now. The competition has been there for 200 years. How does this work out for you . We are a relatively young brand. By strong differentiation approach associated to exclusive categories, it is rare to have one brand. This is the watch you have on. This is the watch which is in the screen behind you. That is our iconic product. How much . 250,000 swiss francs. Is it worth that, really . , youu pay for exclusivity pay for the hours that the watchmakers need. These are limited editions. You are wearing the titanium one . Yes. The watch industry remains one of the most exclusive. You have something called the geneva seal. You claim the you claim you are the only watchmaker that is 100 certified. What is the geneva seal . We are the only one to qualify all our products with a geneva seal. It is a guarantee of origin. They are made in geneva. Geneva is a territory. It has to be handmade. You have a guarantee of longevity. They are all handmade. How do you grow the business . How many watches do you sell a year . Because it is all handmade, we have 250 employees in our company. Hours to makech one of these watches. Our production is one of the most limited in the world. Margins . We never talk about margins. [laughter] good try. If bloomberg is reporting its profit, but we never mention that. We have the rish mont numbers but we will never give any numbers. Chemont does not tell you where all the stuff is coming from. Any difference between a customer in the United States, europe or asia in terms of what they want . All the customers are people know what theych want. Also afterry much avoiding complication. This is the baseline. What are the differences . , assortmentches about 100 watches. Chooseans would probably smaller watches than the americans, but basically the type of people who we have are people who are interested by exclusivity. What makes a good watch . Precision. Status. And the beauty to wear a piece of art on your wrist. Are you worried about apples iwatch . Im sure you would expect a reply. Basically we are in business for longevity. Our watches are here to last. It is something you want to keep for many years. We are not in obsolescence. We are in longevity. How do you get your brand out there . You do a lot of advertising. We have seen that. This brand must be very specific when it comes to a watch like yours. The beauty for the brand is the personal contact we have with each of our customers. Have a mass approach of our brand. We are building by being recognized for the quality of our product and the quality of our service, which is one of the most important aspects. Thank you so much for joining us. Thank you. Reactions from the Business Community on the protests in hong kong. Our top story after this break. Practically of this is asia edge we are back. This is asia edge. We were talking about progress in hong kong. Thats a longterm impact. The hope is that it is not a longterm standoff. I think businesses will be looking at it very closely. It remains to be seen. Price why does it have to be the final word . Impact because longterm , there will be an impact. People are wondering when it is going to stop. People are going to lose faith on either side. They are calling for him to step down. The likelihood of that . The political outcome is unclear. There needs to be some sort of compromise. Was that it would be something to reinvigorate the markets here in hong kong and in china, getting more foreign money into china through hong kong. This is disruptive. I am wondering how that is going to affect china as a whole. We are seeing immediate stocks shocks coming to hong kong. What does it have to do with china as a whole . We commented earlier on the impact on china on an economic level. It is fairly limited. This is an issue for hong kong. On top of the data we are seeing out of china. The Biggest Issue is the structure in china. This is not going to be on the same scale as some of the issues they are facing economically. Would you buy into these stocks . Look at the hang seng. We have been holding a little more cash, not because of the issue here, but more an issue around whether or not we revisit some of the events of last year. Now with the prospect of u. S. Rates moving up more quickly than anticipated, we are revisiting all those discussions around the fragile five in terms of emerging economies likely to be impacted from a potential reversal in fund flow. For those reasons, we have been holding more cash. We see opportunities shortterm in the trading environment. We will be certainly adding two positions. They keep on changing. They do keep changing. There is now a separation from those that depend on commodities and those that are dependent on exports. You look at the markets that have done well, india has been considered within that. You are pretty optimistic about india. Of course, because it is less dependent on, oddities. Brazil is much more dependent on commodities. Those things break down a little bit. You tend a linning it between the components. Those exporters are tending to do better. It is less likely to be sensitive to that turn in Interest Rates. Picking up on what you said earlier about Interest Rate quicker g perhaps the consensus seems to be following janet yellen speech. It is going to occur at a faster pace once it starts. Commodities,f australia finally cut the Apron Strings and take advantage of a weaker Australian Dollar to boost the rest of its nonmining economy. That is the hope but they have not done allout about it not done a lot about it. Clearly, that leaves quite a chasm. We have seen a weaker aussie dollar as a result. Do you think there are still bets to be made . In terms of commodities . I think so. We are looking at a burgeoning recovery in the United States and that is hopefully going to trickle down to consumption. The latest numbers and the revisit of the q2 gdp numbers suggest faster growth. It wasnt coming through in consumption in the way you would hope. Absolutely. Talking about rates here, the bond markets dont seem to be believing that we will get rate hikes sooner rather than later. We have seen yields backup from the lows. There is posturing but we are still at that point. As we saw last year, it is emerging markets which suffer the most. India has Monetary Policy meeting tomorrow. They have an opportunity to pause in terms of their policy implementation. Inflation edging up slightly. [indiscernible] not much change. What about korea . Is cheap. It is struggling because of china. And of course with the yen being very weak, we talked about it earlier, that deflationary impact on global trade prices is not good at a time when we want to see trade pickup. If you were to look into this basket called asia, are you going to pick up some hong kong stocks . We are sort of neutral on china. Got the recession coming up so what do you think they are going to talk about . Hong kong is probably on the menu. I think it is going to be about enforcing the message of reforms. Pushing through those reform programs, hopefully the market will gain encouragement from that. Especially the crackdown on corruption in china. That is the balance. Corruption, aon fairly hardline sentiment coming from the central administration, is putting the reforms on the back burner when the focus is on trying to sort out the issues in the buildup. What does hong kong have going for it . You have the prospects of raising. Retail sales are coming down. A we have seen property little more supportive. Some of the other financials, some of the industrials of course, that is probably going to be shortterm. It is more about valuations and seeing where earnings are coming from. It pretty well positioned in terms of taking advantage. Ok, thank you very much for that. [indiscernible] that final word lasts a long time. We have loads more together ms ofver in ter these protests. Many people are braving the hot temperatures because it is that important. Many of them have been sleeping overnight while others stand watch. Police fired tear gas on protesters, trying to disperse the crowd. As you can see, it was in vain. Are going to check on the stories making headlines around the world. Reports from japan saying there is little hope for a group of climbers to survive the volcanic eruption. Mt. Ontake burst on saturday. Bodies have been removed from the mountain. Some 63 people have needed hospital treatment. Britain has now joined the International Coalition against Islamic State militants in iraq and syria. Tornado fighters are based in cyprus. Military defense saying they will be used when targets are identified. The Prime Minister said that britains involvement is critical to the countrys security and defeating the group is a matter of urgency. For more on this, the American Military has released pictures of an air strike in syria. This attack took place on saturday. The location is said to be just near the turkish border. We had the militant assault on a town sending more than 100,000 refugees seeking safety in turkey. U. S. And arab allies have launched their aerial campaign and that coalition now joined by britain and france. Acknowledging that the countrys leader, kim jongun, has some health problems. You can see the tv news images showing him to be limping. Has put on a great deal of weight as well. He recently visited a tile factory. The news agency said that kim is suffering some discomfort but declined to give any details. He failed to attend the last parliamentary session. He was last seen in public at a concert on september 3. Remainsop story today right here in hong kong. Democracy protesters remain on the streets of hong kong despite calls for them to go home. The City Transport system has been affected with roads closed and hundreds of bus routes diapered it or suspended. Some schools are shut today. Lets get more on the protests now. Joining us on the line is regina. How do you view what is happening on the streets of hong kong right now . These are well orchestrated protests which have been planned for more than a year. Everything is happening according to the organizers scenario. The current protest is different from the last protest, when the participants were largely spontaneous. This time, there are very effective online mobilizations. I think the protest will last for a couple of days. Peoplething is, a lot of are expressing concerns about their future. Do you think it is valid . Do you think this is the kind of process that will be listened to , the protest on the street . Very peaceful until the tear gas was deployed yesterday. I would correct you on that. We have a tradition of peaceful protest, but since friday night, the protesters deliberately staged an Unlawful Assembly and tried to break into government embassies. That is how the protest started to change radically. I wish to stress that the stated goals are pressing beijing to reverse the recent Standing Committee decision asking the chief executive to step down. We will start to see consultation on the election. That is totally unrealistic. Responda, i want you to it is the framework of the basic law. They should talk with the government. We want you to respond we seek determination. Responda, i want you to to what americans are saying. Kong is toat if hong express any political view, it must be done in a peaceful manner. Do you think that peace will come or do you hear that things could get violent . People need to continue to express their views as they have done all the time in a peaceful and lawful manner. Not to occupy thoroughfares, not to undermine business. Use demonstrations to put pressure on the government. I think they should put forward theistic goals and engage government in a rational and pragmatic manner. Is there room for compromise on both sides or have things evolved to where it is slowly becoming a standoff that could last for days, weeks to come . The standoff is quite unnecessary. Beijing has agreed on the framework but the details of local legislation, the detailed composition of the nominating committee and how the nominating committee would nominate, all these details are to be further discussed in stage two. They should right, as those discussions continue, those protesters continue as well. Thank you so much for joining us. That is it for this ed the following program is brought to you by supple, the new, revolutionary Health Regeneration drink. Hello, and welcome to the smart medicine show. We have a great show today. 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