Points on trade yesterday. We are getting local reports there could be a stimulus , and potentially mna reforms as well to keep growth at pace within a reasonable range. We have seen that slow down really weighing on policy makers and their ability to do anything about it. We also had comments from the willmario draghi saying he do whatever it takes policymakers will react. To some of the volatility we have seen. Again look at the quick movers, are biggest movers in china. With oil related stocks surging on hopes of the deal from the venezuela and russia and saudi arabia meeting. One of the top decks in surging by 18 of 1. 8 . Angie borrowing binge in china last month sought credit reaching a record, bigger than the entire South African economy. 2. 5 trillion yuan, or three and. That is a lot of cash. Reporter before i came on here, i was taking my job the ground. Much higher than expected. We dont know for sure yet. Somebody is linked to pick up a mortgage amount, companies trying to pay off foreign debt, and also a suspicion we are going to get the old labor. Playbook. Angie how much of it is supporting the yuan . Guest the point is that people are worried the yuan will weaken further. This is way theyre trying to get loans out of u. S. Dollars and back into the yuan. As part of what is behind this story. There is also the feeling that it will be shortterm, that this surge in lending will not last forever. China toxicity leveraging structural reform. Angie what does it mean for the chinese economy . Is pboc propping things up. One thing is a shows the rates are working now. A family shows credit is starting to shore up it finally shows credit is starting to shore up. Auditors say it mitigates against further rate cuts. Why would you need further cuts if you are having a surge in demand . Start we say, how sustainable is this . The central bank does not need to be in the game anymore. But if it is a oneoff, and the pboc will need to cut rates further. There is a little bit of watch and wait. Angie either way, a lot of people taking their jaws up off the floor this morning. Oil is rising today on reports that two of the worlds leading players may meet to discuss prices and production. We will discuss the importance of this with our Bloomberg Energy reporter. Who are we talking about here, and what might come out of the talks . Reporter given that it is saudi arabia, that is perhaps the most important factor in this. Saudi arabia has led opecs decision to maintain output and squeeze other producers out of the market. Saudi arabia has in the past spoken about, that they are coordinate among opec members and nonopec members. That is the problem. Coordination. If you cast your mind back to the 30 million barrel quota that they once had, and none of the producers actually stuck to that. There are also doubts about whether russia, even if they wanted to cut, whether it there infrastructure can do that and they can go about that. We also had a ceo saying they would defend traditional markets and expressed doubts about the possibility of a cut. Iran,so have a run starting to ramp up production. Cut,say they will not until they get back to the presanction level exports. You have all these factors in play. It is positive there is a meeting saudi arabia was at. Whether anything was will come out of it remains to be seen. Angie how sustainable is it . We have been talking about it to death, where low prices at some point has to curb output. Reporter we have been talking about it, yet we have not seen it. Most have thought the cuts would come, but it has not happened. The outlook is perhaps one of two, we would see a bleak time the first months in 2016, and we have seen that with reports from exxon to bp, cutting profits and cutting jobs. Theree thinking is that will be a rebalancing over the next 1280 months, and that the market, without intervention from saudi arabia, will rebalance. The question is and the thing is, this is saudi arabias intention, to drive out producers. Angie they stated that from day one. Reporter absolutely, so why would they cut . Angie why would they, indeed. And they cannot look at what that is going to look at for like for that future. We have been talking about oil all day. Currently, there is a 91 correlation with equity prices. We would like to see opec and russian and saudi arabia start to take a proactive step to cut all production, because that is positive for growth, positive for sentiment, and equity markets as well. Cutting all Production Oil production, picking up inventory, and then we will see equity markets rallying. It is good news around. We would hope there would be cuts coming in today. Everyone is going to have to contribute. Theres a lot of talk, but not a lot of action. I think you really need is the hefty production cuts coming out of the higher cost. That is probably still some time away. Getting towards storage limits in crude and a lot of distillates for provides Downside Risk as well. Most equities out there are a pretty strong recovery. Most of them would be passing about 50 oil. Angie that is the word from asia on oil. Other stories making headlines today. Sharp is reported to be sending a group to meet foxconn executives in taiwan. They say the two sides are not expected to reach a concrete decision on the foxconn takeover bid. They are said to have offered more than five ilion dollars for sharp 5 billion for sharp. Toshibas president to be the next victim of the accounting scandal. The Company Committee is considering replacing him at that Shareholders Meeting in june. Toshiba is predicting a record loss, and they say they may sell the pc plant in china and quit computers altogether. However, sonys spinoff says they may merge their business with toshiba. A decision is expected next month. Bank of east asia has rejected calls to consider selling, even after posting bigger than expected fallen profit. Pa reporting income fell 17 afternoon profit in its China Business tumbled 81 from a year ago. Check out shares, one three quarters of a percent down. India has told vodafone japan, or face to pay out or face consequences. It has issued a letter about disputing a tax bill worth more than 2 billion. This has been going on for years. Here is the latest from juliet. Lets go from the beginning. What is this disagreement about . Juliet really big headache for vodafone, this disputed bill has been in the works since 2014. In january, the Supreme Court actually dismissed the Indian Governments bid for vodafone to pay a 2. 1 billion tax bill, but now they essentially say, they could actually freeze the assets of the vodafone in india if this is not paid. Bloomberg news has seen a copy of a letter from the Deputy Commissioner of income tax in india, which was sent to the companys dutch unit, in a letter dated february 4 essentially saying any overdue amounts may be recovered from assets of the nonresidents of vodafone, which are or may india. Be within they are saying, if you dont pay what we believe is this 2. 1 billion tax bill that vodafone says it does not have to pay in india, we are going to stop appraising your assets. This traces back to 2007, when vodafone had an issue or the Indian Government had an issue with vodafone over the billion. N, worth 11 that company is now owned by c. K. Hutchison. They have not been concerned that the Indian Government wanted vodafone to pay dues in the country it is operating in. Angie but i thought it was a brandnew day with Narendra Modi . This will have severe ramifications for india. Juliet absolutely. Analysts are saying it is a kneejerk reaction, ther were proposed changes to the income, which is why we are seeing this letter was sent to the dutch unit. Theyre saying they can look at places that are already open like this one and cases that, date back around six years or so, but not new ones. Companies than would be taxed twice. In india and also in the country they are generally operating in. Of course, a lot of analysts saying, this will have a damaging impact to asias thirdlargest economy. Businesses simply are not going to want to stay there. What happens next, we are not sure, but certainly at this stage another headache for vodafone in this longrunning disagreement. Angie thank you, juliet. Coming up later, after two years of fruitless trawling, the search for mh 370 is weeks away from coming to an end. We will see if there is much hope for the missing airliner. After the break, we find out what our next guest believes the u. S. Dollar is taking pressure off of chinas yuan. Back in two. Angie china has been on a seasonal lending binge with new yuan loans surging to a record 384 billion in january. Is this good news or bad . David is here with the numbers. David well, the non money is there. A few things to note. We have had cuts from late 20 2014. Rates are low. Every january, we typically see a spike in lending. That being said, the number we got earlier of 2. 5 trillion renminbi was head and shoulders above the highest estimate. This is how it looks. That is out of the local currency loans, going back to 1982. 1992. A spike in 2009 in response to the gst. In then we are back here january 2016, that is the big spike. As looking at the numbers when they broke. I scratched my head of little bit and wondered if it was a typo or error. But that is what we got. Very quickly before i go, lets put everything together with aggregate financing. That is the overall number. You had loans and sources of financing. 5 number we got was 5 520 billion u. S. Dollars. Financing, for the entire month of january. That is quite a big spike. The chart goes back to 2002. Angie lets bring in tai hui, chief Market Strategist at j. P. Morgan asset management, to try to wrap our heads around this. This is four times what we saw in december. Tai hui that is a huge number. A couple of factors at play. Obviously the pboc has been much more generous in and checking quotas into the system, even before the Chinese New Year started. Obviously, people are taking advantage. Secondly, bearing in mind that the past few months since november, we have seen a weakening trend of the yuan. That may actually encourage more people to move away from dollar borrowing to you one borrowing. I think this also contributed to the surge in you one borrowing. Of course, there are other factors. We need to look at the numbers in more detail, but these acted two things i can pick up immediately that partially explain the huge number in loans. Angie that is interesting on u. S. Dollar strength, they are looking to domestic currency for loans. Tai hui absolutely. In the fast past five or six years, the dollar was cheaper and the general expectation that the yuan will strengthen. But obviously, that expectation is smashed in the past couple of years, with the one repeating, and gradually weakening against the u. S. Dollar. I think expectations are starting to change a little bit, and that is why we see more people willing to borrow in you rather than the dollar. Angie everybody is taking a look at this number and it is a head scratching. In context, is this good or bad or is it healthy for china . Tai hui i do think it is healthy in the long run. Ultimately, we have seen a massive accumulation of debt in the corporate sector, and at some stage, it needs to deleverage. In the long run, not healthy. But in the search term, it does address liquidity as she is issues. In the shortterm, it is good news. But it nearly kicks the can down the road a little bit more in terms of the whole that accumulation story for china. Angie let me ask you this question, what are you using the money for . Are you using it to invest in infrastructure in Capital Expenditures you need to build a business, or are you paying off debts . Tai hui i think some of it will be used to roll over debt. Incentive, time, the or if of investing on infrastructure or business expansion, especially in the utility sector, is pretty low. I dont think that is where the money is going towards. However, we have seen indy the health care sector, technology, they are with relatively low gearing and at the same time, the environment is more favorable. Maybe we need may see a bit more uses of loans for that part of the business, but not the traditional manufacturing as we know it. Angie and also an indicator that the pboc prefers reverse repo rather than rrr cuts, because this is easy to manipulate and a lot more flexible for the pboc. Tai hui we have seen them using a lot more money market instruments to manipulate a level of liquidity, probably because they dont want to rely on the banking center, they want to use other channels also to get liquidity into the system. Are seeing now a greater use of starter term money market servants shorter term money market instruments. And the next few months, we may see more Interest Rates reforms, and i would change the policy Rate Mechanism in china, and therefore they will be relying less on the lending rates are rrr, and instead using a market force lead instrument to enforce n china. Angie until we see reforms, we could be seeing more numbers coming through. We will let and see of course, as they say. In 20 come on back minutes from now. Coming up, National Australia bank posting a healthy profit increase, and the Balance Sheet is strong. But is it enough to convince investors . In sydney, when asia edge, returns. Reporter stories making headlines around the world. At least seven people were killed and dozens more injured on a missile attack at a Childrens Hospital in northern syria. Five caretakers died and several members of staff are missing. The mss did not say who carried out the attack, but local opposition groups blame the russian warplanes. 50 people were killed on monday. Saudi arabia has indicated it may send Ground Troops to syria and has already declared deployed warplanes. They are and playing Largest Military exercises in history. There are taking place in air, sea, and lynn exercises lasting 18 days. They are tasking attacking shia rebels in yemen. Prodemocracy groups have demonstrated outside the venue of the first ever talks in the u. S. The group was founded in 1960s against communism. Didver, several leaders come to power through free and fair elections. Anumber of the group have limited time left in office, including president obama. This is bloomberg news. Im rosalind chin. Angie shares in National Australia bank are trading just a 10th of 1 down today. In cash profit, it has given back the gains of the morning. Lets look at this with paul allen in sydney. It was a positive first counter quarter, but investors have decided the changed their minds just now. Yes, underwhelmed would be the word that springs to mind. The trading updates looked really good. Of 1. 7 billion, revenue up 4 as well. To debt charges down, 52 84 million. Even the hint from the merger of Clydesdale Bank was not too bad. But as you say, after initial gains, followed by initial losses, they have stopped looking rather started to look rather flat at the moment. Angie more australian companies, earnings coming out, csl coming out with first earnings today. How did they do . 3. 8 ,er a big week, up to 738 million. The pipeline looks very encouraging, they are expecting 5 Profit Growth for the second half. That excludes the flu vaccine business. It is expected to realize a loss 90 million and 120 million. Same similar story with National Australia bank. The stock was up, and currently csl up. 17 of a percent. Angie thank you for watching that frost today in sydney. Disney is not prepared to let aken. Ower of the force weeke the force of akins was disneys most successful with film film. Released new actors for the cast. Production picking up where episode seven left off. Do a mermaid, a man from a cow and monkey king have in common . It is immensely popular with Chinese New Year ago ors Chinese New Year moviegoers over the break. Comedy. Action the latest on japans reopening after the break. Stay with us. Angie you are watching asia edge. Asian shares extending their rally, fueling a global rebound inequities. Chinas benchmark jumped more than 2. 5 , with gains in hong kong and korea. Japanese shares turned around, extending a surge which saw the topix jumped the most since 2008. The most in seven years on news of a record 4. 5 billion share buyback. That will cover almost 15 of its stock, and they say they will resort to new borrowing. Softbank will use assets to make the total. Oil is making gains at 30 per barrel in new york as saudi arabia and russia are said to be meeting. Venezuela may also join the talk. Positions on wti rose to an eightmonth high. Traders also shrugged off concerns that iran could add to the glut. What a day in the market. Lets get it to haidi. Haidi what a day, indeed. Original indices rebuilding on yesterdays rally, rallying by 4. 1 yesterday, the best session of gains we have had since september last year. But we did have a little shakiness earlier this morning in terms of volatility, particularly when it comes to the japanese market. More volatile measures for china and asia over the past five sessions, the intraday swings of more than 3 , twice over that session we have seen the market close to the tune of more than 5 down. As we get underway, the nikkei is still extending, going up by 9 10 of 1 . They have had their best rally in more than seven years yesterday, modest gains to build on that today. Shanghai saw losses yesterday, that is joining in on the rally today. 8 10 of 1 . Concerns are still high, particularly compared to the emergingmarket counterparts. Compared to similarly listed chinese stocks in hong kong, those same share listings of the premium of 50 at the moment. Also around the region, we are seeing that Supportive Oil price story driving some of these gains, particularly when it comes to stocks in southeast asia, malaysia, singapore, and australia, miners doing quite well there. Rumors of get more what is going to come out of this meeting between the saudis and russia, and no potentially venezuela, wti keeping its head above 30 per barrel. Another 4 from that today rally. That twoday rally. It has been a volatile session but what has been consistent is financials. The controversial negative Rate Decision coming into effect. Mitsubishi Holding Onto Gains from yesterday, up another 6 . Up. Ha some of these lenders have theten upgrades, and biggest later on the nikkei 225 record onp by 16 , a the reports of a buyback to the tune of 4. 4 billion. Valuations are very cheap at the moment, and they shouldnt be as cheap as where we are seeing the stock price sitting now. Angie thanks so much. Lets get more right now on softbank with our asia tech reporter. This buyback could be worth almost 4. 5 billion. And you cant even compare with softbanks, own past purchases a softbanks own past purchases. Thats right. This is by far the largest buyback in their history. It would be worth about 14 of their shares. Its also one of the biggest in the market. Softbanks biggest rival announced that 350 billion buyb ack earlier. Angie why are they doing it now . Softbank has been hammered this year. It was down 28 yesterday before the buyback announcement. Not only that wiped out a decent chunk of the ceos fortune, but brought the market cap below the value of its total shareholdings. For a lot of investors it could not have come soon enough. Angie ok. Shares are up by the daily limit today. What are the chances, though, that this rally will last . Thats right. I think the shares are having their best day in seven years. There are three major variables to softbank, one thing their domestic operations, which will probably remain a stable source of cash flow in the near future. Two source spots one is the valuation of alibaba, which will depend largely on the prospects for the chinese economy. And the real sore point is sprint. Some say that the turnaround is taking effect, and he has seen the light at the end of the tunnel, but it will take a lot of convincing to show investors that is actually true. Angie well one thing, is for sure he bought himself some reprieve today. Thank you so much. Isother news, kieran forecasting a return to normal after posting a loss. The japanese brewer says net income for 2016 will probably be 527 million. It plans to use its investment in beyond more breweries to strict in myanmar breweries to strengthen its profit. It reported an impairment of 3 billion, and plans to make its present business profitable by 2019. Shares tumbled in tokyo. Struggling Chinese Developers are laxing necessary support for restructuring plans. Investors,s 75 of but a Senior Advisor says it has only garnered 52 so far. Seek Court Approval to hold a creditors meeting. Shares are taking off today on reports that it has picked up a big order for its airliner. They signed for 20 planes with a book price of 945 billion. The project is close to fruition, but has been doved by delays. Wasoriginal 2008 budget 1. 5 billion, but they say that is expected to have doubled the future of mediation has been on our agenda today, on day one of the singapore airshow, or as a continues. Asian carriers have been on an unprecedented buying streak over the past two years, and the president of Honeywell Aerospace season continuing for years to come. We think it continues for the next 1020 years, and eventually asiapacific will absolutely have the largest demand air transport the largest manned air transport in the world. We are looking forward to the next two decades. Ier is one ofd several manufacturers looking to bring it to the market. Were joined by their senior vp of asset management. This should get u. S. And european certifications in. With respect to the we did get the canadian certification back in december. As is planned, we are working diligently on faa and the european authorities. We are expecting to get those we did get the canadian certification back in december. Why . By the first half of this year . Absolutely. We need the certification in order to deliver and to persuade them. Were absolutely on plan. Angie Campbell Wilson says booming demand of air travel poses a challenge it for air carriers as well. The why . Next challenge will be to absorb the capacity increase year on year. That always brings a challenge, establishing ourselves a new markets, building a profile, building yield. That it is investments in the future. I think the foundation is strong. We will make that capacity work in times to come and be better for it. Angie we go back live now to the singapore airshow, where it is day one. We have had has Haslinda Amin there for a while, bringing together the great and the good of commercial, military aviation. Has is there live. What is the mood like on day one . Haslinda absolutely blistering heat. The focus turns on defense, with rising tensions in the south china sea, and more recently in the korean peninsula. It is no surprise that their expectations made up their defense spending. Have to give us insight. Good to have you with us. Given the rising tensions i just talked about, are you expecting that to translate to orders, or perhaps a fighter . Well, this area has developing economies and the need for security. We think that over time will be alsotant, but [indiscernible] haslinda do you see the governments here in asia willing to spend more on defense . What are you hearing . We hear they want to spend more on defense, more on security, [indiscernible] haslinda so realistically, what are you looking for at this particular venue . At this show, we want to show technology, the fact that our group is a power group which is leading to innovation [indiscernible] haslinda so a sale for a euro fighter are you expecting see that here . Here, im not [indiscernible] haslinda how much exposure to you have in china, and how important this china . Its a large and important market, of course. We [indiscernible] haslinda are you keeping a close eye on the economy . Will that slow down conflate to slower spending . [indiscernible] haslinda youve been undergoing a restructuring to streamline this operation. Where are you . We have achieved all goals for last year, [indiscernible] haslinda your noncore business what is the status of that transaction . That has been accomplished. We managed to [indiscernible] haslinda so is that flexibility are you done . For the majority of that, [indiscernible] people in the industry say that it is a very competitive environment. Why do you have an advantage . Our advantage and innovation is in our [indiscernible] haslinda and going forward, given the environment right now, we have cheap oil. How is that translating in terms of what your business is doing . [indiscernible] haslinda all right. We have to leave it there. The defense area angie all right. Thanks so much for leaving that. Coming up next, could talks between saudi arabia and russia glut . Ng an end to the oil we will talk about that after the break. Angie stories making headlines around the world. Liquid methamphetamine worth around 900 million, much of it hidden. One person from china has been charged with the whole. The minister says it could have made 500 kilos of hybrid crystal mass. He says it is one of the a guest busts in history. The balkan swish up their borders to migrants as eu tightens their own control. Citeenia might immigration rules, but serbia and croatia say they may have to do the same. The eu expects one million middle easterns and african migrants this year. And an american cargo jet has been impounded in the subway after officials found a dead body and a large amount of cash on board. The plane was flying from germany to south africa and head arounad landed to refuel. Authorities say the money belongs to the South African bank. Th e man is presumably a stowaway. Powered by over 2400 journalists and 150 bureaus around the world, im rosalind chin. Angie welcome back. Ui,ning me now, tai h juliette saly. Another central banker, coming in, the calvary is here, waiting the promise of dollars or euros around. Is he to be believed . Are any of the central bankers to be believed anymore . If you look at their objectives and where the in terms of inflation. And as a result, they have to do something. The reality is the effectiveness is coming down. They are now resorting to negative Interest Rate policy, and the market is too afraid to know what it means for the global environment. We are still in the world of a lot of uncertainty in terms of where the Central Banks are adopting interest. I was looking at your notes you are saying we could be moving back into highyield. Do you think the likes of the rba are looking at this and saying, hm, i may need to be quicker than i would want, because what the boj did . I think so. If you look at Central Banks and what they are doing, they are punishing people with cash. As a result, you have already seen that developing in the sovereign debt market. Of course they are concerned foret corporate there this is partly between the copper market, and i suspect that cap will gradually close as people feel more comfortable with the corporate sector. Juliette we are seeing Interest Rates around the globe, a little bit of the renminbi. We will see a bit more supportive the renminbi, because they want to engineer more currency. You have a significant outflow, and at the same time there is some speculation between now pboc,rch, we may see the yuan is too the weak. But overall i would expect the dollar to be the strong currency. Angie Dollar Strength doesnt need to be the most popular trading bed county more. That has gone bed anymore. What you would be looking at . If you look back at the Central Banks intentions, that another place to focus they do need the currency to help the economy, the profitability, to help achieve inflation targets. You arerest of asia, seeing some of the Southeast Asian currencies gain against the dollar. The indonesians, relations angie sustainable . I dont think it is sustainable in the longer term, but in 2015, there is a bit of a buyback. However, you look at delivered centralbank policies. Angie and what about the impact on oil and all of that . With oil below 30, about 1 3 of Oil Producers are profitable. Thats not really sustainable. Clearly, russia and opec need to come up with some kind of an saudient, but ultimately, arabia is still reluctant to yield at this point in time. Rosalind i havent we seen you say 2 3 not profitable havent they gone away . I think it is the investment cost, of the operational cost. Operational cost is probably lower than 30, but we are seeing a significant stoppage in new investment, and that would impact on future production. We have seen a very pessimistic view of the world when it comes hen investorsd w start to think the world is not so bad, which i think is true, i think that will be supportive to oil in the shortterm, but we are not going back to the 60 or 70 anytime soon. It will probably return to 34. Angie i might be showing your age, but do you remember when oil was at 140 . [laughter] plenty think the rebalancing will happen . My best guesses toward the end of the year. Also, we would think about how long some of these governments can sustain, how long Oil Producing countries can sustain it. But obviously pressure is on saudi arabia, whos also running a very large fiscal deficit. They need to start sooner rather than later. Angie good things happen when you are here. Thank you very much for joining us. Good discussion. Coming up, almost two years on and the face of chris 70 is still a mystery. We will find out if we will ever know what happened. Angie the man leaning the search for the missing Malaysia Airlines flight says that mission may ultimately fail. And been almost two years since mh 370 vanished with 239 people on board. For more, lets head to Angus Whitley in sydney. Angus, is time running out . Anugs hi, angie. Well, it is certainly true we are getting closer to the point where mh 370 will become modern aviations biggest unsolved mystery. To finish ar edue searching the area off western australia, 120,000 square kilometers. They will finish that in june. Without fresh clues, that will be the end of it. There will be no more searches. The search wont be expanded. We will never know what happened to the flight. Angie heres the thing are the families and searchers ready to accept that mh 370 will never be found . Angus i think we should point out that theres still a lot of confidence in scientific analysis that has put them in the search area. Theyre confident that the plane did fly south to remote southern indian ocean. Thatt is also fair to say even the most hardened searchandrescue experts point out that this would be a remarkable feat to find it, if you just look at the challenges that confront the search team. First of all, they are looking in an area that could cover half the u. K. Its also peppered with submerged mountains, trenches. Itvery remotes its very remote. Last month they lost one of the vehicles. It hit an underwater volcano. If you look at physical challenges and staying optimistic, and i interview the head of the transport bureau in australia, and he told me that he was even struggling to see that they had missed a piece of debris. The challenges are great, and they have also searched most of the area scientists predicted would be the most likely landing spots for the plane. It would be remarkable if they pulled this off. Angie its incredible. Two years on and we still dont know what happened. Angus whitley,. Thank you for following that story for us it is still top of mind for the families and searchers. All of us are watching that mystery, yet to be resolved. Thats it for us, for this edition of asia edge. What a day it has been. We want to check the top stories continue through with the rest of bloomberg programming. Top stories after this very short break. Announcer the following is a paid advertisement for time lifes music collection. These are songs that can relax and soothe you. Somewhere, my love there will be songs to sing announcer songs that make you feel good. You are just too good to be true cant take my eyes offou announcer songs that take you