Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20140210

Gains there. Also malaysia, taiwan. For december. Risinge u. S. Stocks are even though u. S. Jobs came in with a low forecast. You could blame the harsh winter and tapering. They may ease off the tapering plan. Story. Japan is the main more details on that and which stocks are reacting. The yen,t exporters, and more in a minute. Gpm, 2. 7 jam this year. We could be in for more swings when it comes to market rates in china. The source of the information couldnt be more credible. They are the only ones who have the tools to control where those rates go. It is the pboc, the central bank. For lack of a better word, putting on some sort of guidance to the market on these rates. Not only will they perhaps remain elevated but they will continue to be volatile. It is not necessarily a bad thing. They are trying to reduce the credit expansion or at least places where that liquidity goes. It has gone to fairly inefficient industries. They want wont step in as often as they did. February 8 was the date of the report. They say the market needs to tolerate reasonable rate changes so that they can be effective in allocating resources. Also, more discipline in terms of the behavior of market players. In other words, we wont be bankrolling these debt and investment growth. They do have a lot of tools at their disposal but there is obviously a limit to the f is busy of those tools. The efficacy of those tools. The specter of more defaults does manifest itself. What about that . Of take the argument the pay now or take the pain later but you dont know how much pain it will be. These trustot of funds for example. 570 billion worth of these trust products maturing in 2014. To put that in context, the one that caused a little bit of a scare in january was only half 1 billion. You have much more of these products maturing. Green, the economist we talked to says the interbank lending rates are where the the today. Wants them they know what they are doing. Right. We talk about these interbank lending rates for example. It is a natural symptom of the underlying liquidity conditions in china. It is probably good that it is coming from them. Usually they are very quiet about these things until the symptoms spike up. Should be good guidance ahead. David, thank you very much indeed. We will look at that deficit here again, widening again. John is having a look at the overall impact of all that. The yen weakening, key figures out this morning. We have Consumer Confidence out a few hours time from now. This is the main reaction, dollar yen. A slight change on that. Japanese Government Bonds, you can see a half percent difference. Lets go to the obvious ones reacting to this, the exporters. Soda, nisshin steel and jtekt, the obvious gainers. Other Companies Beating estimates. You have olympus rising the most in five months, beating forecasts. Ebara, ninemonth profit, up 26 . Meanwhile, acai glass shares falling the most in six months. They forecast net income to the below estimates. Stocks, all these Nuclear Reactor plants. Andbiggest decliners today the biggest decliners of the sector. They are falling. Tepco is down by 23 . China stepping up efforts to maintain incentives for electric cars. It is getting a Subsidy Program beyond its anticipated expiring time. Subsidies will also now be cut by five percent instead of the previously announced 10 . Wants local governments to help promote electric vehicles. U. S. Jobs data will not be persuading janet yellen from her vious decision to wind back the stimulus plan. Than the far less 180,000 that economists had been looking for. It is the weakest backtoback job gains in three years. One million indian Bank Employees are expected to stay away from work over a call for higher wages. They have been offered a 10 rise but once double that. Unions are protesting proposed reforms that would allow private companies into the Banking Sector. The strike is expected to continue tomorrow. Lets have a quick look at the futures session there, singapore starting off and the nifty there , 0. 4 higher. That is building on the friday game we saw. Still on the way, asian stocks gaining after jobs data from the u. S. Tim riddle will be telling us what it all means in emerging markets. We are back with on the move. Lets take a look at the evidence we are following for you. We have Quarterly Earnings from nissan. Toyota mazda reporting strong results last week. Analysts expect profits at nissan to be up 16 as 2013 wound to a close. Tuesday, sprint down with earnings. Softbank which owns sprint wants to buy tmobile. We will have a look at the chinese economy. On wednesday, exports expected to slow down, nearly grinding to a halt. Quarter forong sands china and wind macau. Analysts expect profit to be up to a record last year as millions of chinese gamblers were pouring into macau. Those numbers out on thursday. Getting back to what is going on as far as markets go and joining us now, tim riddle. Thank you very much indeed for joining us. Have thet theme, we followthrough from that jobs data on friday. What did you make of it all . Very mixed. Be headlines are going to seen as a disappointment for markets. The underlying data, especially the revision to the upside, we had the annual revision process come through. Also in the household survey, that showed quite a strong pickup in employment. Even though the Participation Rate increased, which is a surprise, the Unemployment Rate was lower. It is almost like the employments data is going well. It is not too hot. We are not going to get the fed accelerating its tapering or any talk of, when do they start to tighten rates . Assetsort of positive and it will allow the age and region asian region to focus on its own regional domestic issues. It takes away the weight of risk aversion that seems to be coming through late january into early february. For assets and for a region, it is positive. We are focusing on what is happening in our individual countries here. When we look at that 6. 6 figure and we have the fed drawing this figure of 6. 5 , how closely is janet yellen watching that . There have been a whole bunch of said reports coming out from regionals, research departments, saying that we need to be careful about pinning ourselves to precise levels of unemployment because there are so many structural changes in the u. S. Labor market. Yellen is a labor economist. She will be fully aware of this. I think she will use the congressional statements this week to address that. She is bound to be asked about it. She is going to get quizzed and she will be pushed hard as to what the labor data really means and what the fed is going to do about what seem to be very mixed reports. I think it is going to be an interesting week. Strengthll show her and credentials this week, i suspect. Asia. s also focus in on what are the implications of fed policy right now when it comes to the way you advise your clients . Something that is very relevant. Our corporate client base especially as saying, when do they have to start fixing term funding . They have been rolling their funding needs on very low rate structure in the short term. Do they suddenly have to say, i need to lock in term funding . It is predominantly geared towards the u. S. A lot of regional rates are very closely aligned to the u. S. Rates. A lot of corporates in the through u. S. Dollars or proxy u. S. Dollars. It is going to be important how they position their funding over the next two or three years. How they may be focus on nearterm funding. They need to get the sort of fiveyear 10 year funding over the next month in place. It is hugely important. Looking at what has been going on in the u. S. Bond market , looking at 10 year yields, up 2. 8 right now, what does that price and . Are you surprised it is that low at the moment . Not massively surprised it is so low. Awould suggest that we are in 2. 5, 3. 0 range. Going out to our client base and saying, if you are doing 10 years, this is the time to lock in. It is telling us that the market got overly buoyant on the back into the endrowth of last quarter. It would have been extra ordinary if we had seen that momentum growth continue in the u. S. Ned and thee market has taken a risk aversion profile which we consider to be too great. The u. S. Is doing a solid growth pickup. It looks like it is going to be sustainable. You should lock in rates in the 10 years in the u. S. We still see right through this 3. 5. Up towards to us, this is an opportunity, not a dangerous look at markets. That is the point, isnt it . We get up to 3. 5, 3. 3 75 alarm bell forn you . No. We are talking about the u. S. Having growth pushing towards 3 and inflation well above 1. 5 . Trying to lock in the perception of Interest Rates pushing towards 2 . Of 3. 5 is still pretty benign. It needs to be. The u. S. Economy and the developed World Economy is still in recovery mode but it is in recovery. Getting yields back up towards 3. 5 to may is no big shake. It is just painful for everyone who has been relying on remarkably accommodative policy over the last three or four years. It is necessary and we have to move towards that. That is what were going to get. Great talking to you as ever. Tim riddell from singapore. How lego is building for the future. Brick by brick. Back with on the move a former Health Minister and the new governor of turkey defeated to rival candidates in an election fought on economy, jobs as well as Nuclear Power. We can get over to tokyo and join our asia columnist there. Tell me something, is this result actually surprising . It is not a surprise. It was fully expected. It has been more complicated because a turnout was so bad. We have the biggest snowstorm over the weekend in 45 years. I am still shoveling my way out of it. It was difficult to get to work this morning. That really depressed turnout to a certain extent. Still, the result is a good result for shinzo abe, the Prime Minister. Youre looking for continuity. His guy won the tokyo governorship. Many would argue that the governorship is the second or third most important job in japan. It is a very powerful bully pulpit. To have always to have all his political stars aligned, someone who is focused on restarting Nuclear Power plants the way that the Prime Minister is focused on the olympics as well. He is focused on supporting abenomics and the different reforms that shinzo abe has promised. It really is good news for the Prime Minister. It is not a surprise but it certainly is a bit of relief. Walk us through you say that he is the man there. How closely aligned are his policies with the Prime Minister , given his nationalistic tendencies . Hadnt seen a lot of daylight with regard to the domestic policies, the social policies, the welfare policies. They are very similar to what the Prime Minister has talking about. The Foreign Policy is a bit of a wild card. Governorwho was tokyo had a tendency to really say a lot of things that set the chinese and the koreans. Government into buying the islands which precipitated a lot of the tension between japan and china. What the tokyo governor does and says means a great deal. He is a bit of a wild card. We are not sure how closely aligned he is with the Prime Ministers nationalistic tendencies. We are not sure what he will be saying. We will be paying close attention. Anything the new governor says to inflame tensions in the region is not going to help. I think he will be focused more so on domestic policies. Restarting Nuclear Power plants, making sure the business of the city is getting done. It hasnt got done in some time because the previous governor had to resign. And focusing on the olympics in 2020. Absolutely. The olympics is the major deal for tokyo. Governor manage it . The previous governor had to quit, didnt he . In many ways, i think the infrastructure of the olympic planning has been going on even without a governor. This is not so much tokyos olympics as japans. Shinzo abe flute and when osiris to make the case flew to aires to make the case. For shinzo abe, these olympics are a very interesting book and. Brought the 1964 olympics in tokyo. For the family, this is a nice end. It is more of a National Affair than a city affair. Great talking to you. Ok, we are going to turn to something completely different. The most popular childrens toy, number one at the box office as well. Taking 69ovie million in its first weekend in north america. The animated film is based on legos famous Building Blocks. It edged out George Clooneys monuments men. In Enormous Growth in recent years, building brick by brick to become the secondbiggest toy maker in the world. Lego is probably the most popular toy in the world. More than 560 billion pieces have been produced since the first were made in denmark in 1949. This has made lego the worlds second largest toy company. Only mattel is larger. Unlike mattel, lego is still owned by the family of christiansen, the companys founder and creator of the brand name lego, a contraction which means play well in danish. After carving wooden planes and buses for children, he bought the first lasting Injection Molding machine in denmark and began making small talk i colored bricks that snaps together. The design was an enduring success. In fact any lego brick made after 1958 will still work with pieces sold today. Legos prime customer was a nineyearold boy. After suffering a major loss in 1990 eight and teetering dangerously close to bankruptcy, the company bounced back in part by appealing to girls and afols , adult fans of lego. Their profit grew faster than apple between 2007 and 2011. I20 19, there will be more lego beces by 2019, there will more lego people than real people on earth. In a moment, the latest round in the battle for aircraft orders. Garuda, will it be boeing or airbus . We have the market open in hong kong and shanghai. A rebound in the asiapacific, stocks on the way straight weekly the client. Olympus private coming in ahead of estimates helped by a weaker yen. Dont expect stability. A warning from the chinese central bank. Shanghai is just about to start off the trading day. The Hong Kong Open kicking off too. The regional benchmark index is reporting its first advance. Japan is leading things as well. Lets have a look at how hong kong is looking at the start of the trading day. Youre going to cnn herding start in hong kong. The reason for that, u. S. Stocks rose even though we had the jobs figure weaker than forecast the second month and a road. In a row. That means the chance of tapering is a bit less than it was before. The new fed chair addresses congress twice. Her words will be closely scrutinized. That could explain why u. S. Stocks rose. They felt stocks were falling again today. Lets get you three examples on the screen right now. Stocks, Chinese New Year sales again rising more than forecast. Im going to show you the Hong Kong Open. This is the impact. Jewelry sales are jumping the most. China mobile also downgraded. Look at the mature stocks today. Mining is you that there. Look at the stocks that are rising. China coal is also rising as well. The openingou see slightly high. Tech, services there. One stock is currently rising, . 10 ten cent . Lenovo is on the rise. Volumes are quite low. Keep your eyes on those. Right out lets have a look at what we can expect out of china this week. We have Economic Data in the form of consumer and price news. Lets get more on this as we go over to beijing. Coming out of the Lunar New Year holiday, china is showing some signs of living losing momentum . That is right, rish. At the beginning of the year, there was an expectation that we would see a strong first half of 2014 for china. So far the data is not supporting that thesis. We have had weak Manufacturing Survey data from china. At chinese ports have been falling. The Service Sector is also selling signs of losing momentum. It has been a pretty inauspicious start to 2014. Have we seen a sharp shift in Investor Sentiment away from the emerging markets . How do china play into that . Mind ishing to keep in that this is a hard landing in china causing the shift in sentiment of emerging markets. About emerging markets are increasing. Another thing to bear in mind is that all emerging markets are not created equal. Emerging markets with a current account deficit which are more reliant on external funding have been suffering more. China of course has a current account surplus. That means it is not reliant on external funding. As the fed papers, other emerging markets should be suffering more than china does. Tell us about the data we have got out this week. Inflation, export figures as well. I think the two focuses for this week should be the new loan data. We are expecting that any day this week. The central bank has been trying to raise Interest Rates to cut off the sort of surging growth in credit in china. All the fines are that we have seen very robust growth in lending in china in january. That raises questions about whether the central bank will have to do even more in terms of raising rates. The second thing which people are going to be paying attention to is the export data. There was a white red expect widespread expectation that we would see increasing Global Demand this year. So far it has been difficult to see that in the numbers. We will be looking for more signs of that when the data comes out on wednesday. Thanks very much indeed, tom in beijing. Lets get you up to speed with some of the stories which are making headlines as our. Barclays is looking into the possible theft of client information. An initial inquiry suggests details of up to 27,000 customers were taken. It is unclear how the files were stolen. Information was sold to brokers. Tokyos is gaining in after profits Beat Estimates last quarter. It was helped by a weaker yen and growth in medical systems. Foxconn plans to invest 1 billion in indonesia over the next three to five years. The supplier released a statement saying it will work with National Authorities and local government to come up with a firm plan over the next few months. Those are the top corporate stories we are tracking. The Singapore Air show gets underway today. Asiapacific carriers are enjoying the second strongest overall growth in the world. Lets have a look by the numbers at the industry and how it performed last year. Earlier we spoke to the turkish airlines. Company isnthe expanding in asia as quickly as in some other parts of the world. Some countries are hesitating. China, india. We are very busy. We are expanding to africa. And in the next hour we will be seeking with the Airline Industrys body. We will be talking to the director general. Tune in for that, coming up in about half an hour. We will be joined by the chief executive of the buddha garuda in indonesia. One question we will be putting to him is. To purchaseready new aircraft. What do we know . Last time we talk to the ceo of the company, he said they are looking for two things. They want to expand their fleet and retire some of these older planes. According to people familiar with the matter, we understand that garuda is in negotiations with airbus. What we know in terms of specifics is that they are a330s. O buy 10 that is a deal that could be worth 2. 4 billion. Betweencal a330 costs 220 Million Dollars and 245 million. On average, i am talking about. They get discounts. That is a good point. On the highend, this deal could be about 2. 5 billion. The airline is considering buying more twin aisle planes. We understand this decision will happen in the coming weeks. To add to this, there is also the potential purchase of the airbus superjumbo a380 but that decision wont be made until elections later this year. Garuda on friday in terms of the way that stock was trading, it has been off for the year. On friday. Ce gain if you take a look at the volumes, the volume was more than 3700 from the day before. That was before this news was announced. We will be watching to see how the stock from indonesia does start trading. Garuda says they want to have about 350 planes by 2025. I want to get some breaking news out. Boeing announcing the garuda is just one of these airlines which are expanding. Tell us about the others. There are many others that are going to benefit. Ts look right on target. They will ultimately benefit and airbus will ultimately benefit. It goes down to a thematic issue. You have more carriers providing cheaper options for travel. If you have never been able to fly before even within the country, you are looking at these fairs becoming a lot more likely that youre willing to spend. According to statistics we have, carriers in Southeast Asia are expecting 600 Million People to travel more in the next year. That is why youre seeing more of these airlines. Of indonesias Biggest Airlines already has 700 craft and their lead. Theyre looking to add 1000 or more in the next two to three years. They want to make sure they are well positioned to capture this growth. Thank you very much indeed. More headlines coming through from this boeing story. See this huge market developing in the asiapacific, saying it is going to be worth 1. 9 trillion over the course of the next 20 years. That is a bullish assessment for the asiapacific. Up next, not just a flight as a fancy. Cory johnson addresses some weighty issues next on on the move. The quick check on asiapacific, one of the biggest snowstorms to hit tokyo in 40 years. People have trouble getting to work. The nikkei on the up. That is flowing into the hands of people who are bullish on exporters. The asiapacific trend on the way up. Moment. 0. 6 gain at the overall, asiapacific stocks on the way up. The regional index heading for its longest streak of daily gains since december. Just a slightly tepid move up there in hong kong. About 15 minutes of trading their. Playing seng is not like the rest of the region. Bank ofhis against the chinas crackdown on access. It is affecting swiss watchmakers. Bain and companys most recent china report shows a Luxury Goods Market will continue to slow down this year. Chinese customers are the bylds biggest luxury buyers nationality accounting for about 29 of purchases last year. Mainland sales have slowed as shoppers now by more than two thirds of their items overseas. Between 30 to 40 lower in europe and as much as 25 lower here in hong kong. The growth dropped to 2 in 2013. Bain estimates that chinas domestic luxury market was worth 19 billion last year. Spending on expensive menswear and watches, both fell in china. You can see that also reflected in swiss watches. Exports rose 1. 9 last year in totality. The slowest rate since the financial crisis. Exports advanced to 24. 1 billion though according to the federation of swiss watches industry. Timepieces make up more than 1 10 of switzerlands total exports, led by brands including rolex and omega. Demand from midland china which displaced france as the biggest market for swiss watches in 2012, that felt 13 . They are pretty optimistic about the future. In 2014. Cast a gain exports to hong kong, the largest market for swiss watches, declined 5. 6 in 2013. By comparison, shipments to the u. S. That show you a modest gain of 2. 4 . The biggest market saw a gain of close to 11 . Estimates that swiss watch exports will probably rise 5 in 2014. They are looking for creative ways to lower these Chinese Shoppers back. It is the beginning of a new era rebasing business. Is expanding their operation as well. You can see looking at the entire year, based off the month and a half, most of these big retailers are offt. Ods off. Tods down 20 . I am mia saini in hong kong. Getting back to that breaking a 1. 9om boeing, trillion 20 year market for the asiapacific, 12000 planes over the next few years. Do between 715to and 725 aircraft through 2014. We have a new space race underway with private enterprise leading the way. Richard bransons Virgin Galactic is said to make its Maiden Voyage this year. A Company Called zero g is helping tourists prepare for the trip. Cory johnson looks at the business of weightlessness. I am cory johnson and right now this is one of the most enjoyable moments of my life. It wasnt always that way. Just a few minutes ago, i looked like this. I am down in Cape Canaveral on my way to experience zero gravity with a Company Called zero g. I am exactly the wrong person to be doing this flight. Zero g has recently partnered up with Richard Bransons Virgin Galactic where passengers have already purchased tickets on one of his suborbital flights to get acclimated to the experience of weightlessness. Services offering the to anyone else who will pony up 5,000 for the experience. Feet,ane climbs to 24,000 in our case over the gulf of mexico, and goes into a series of parabolic arcs. The aircraft climbs at an extreme angle, 45 degrees. At 34,000 feet, it begins to dive for half a minute. At that moment, passengers experience weightlessness. Then they do it again and again. There is a reason this plane is known as the vomit comet. Less than 4 of our participants get sick. It is very rare. Our zero gne of guides. Im going to need some numerical handholding. It is becoming more of a reality. Companies are starting to talk about training and are bringing their customers on board. It is really a wideopen market being created now. That brings us to where we all start. This is crazy. This experience comes at a price. A Virgin Galactic ticket costs 250,000 for about six minutes of weightlessness. That is 694 per second. Zero g is charging 5,000 ahead for 7. 5 minutes of weightlessness. That is only 11 a second. Weightlessness on the cheap. Zero g has its eyes on more than space tourists and thrill seekers. There is big money moving from nasa. Several companies are vying for a lucrative contract from the increasingly outsourced space agency. The private corporation capitalist space race is on. It is all going to be private companies now. Right now, nasa is paying the russians about 70 million each time a u. S. Astronaut hitches a ride to the International Space station. A private space maker says it will charge 90,000 or suborbital flights but only has room for one passenger at a time. Amazon Ceo Jeff Bezos is in the testing phase for his company, blue origin. He hopes to take three astronauts on their new cap so. The odds of that working, before i can figure that out, we are back on the ground. Paying 5,000 might seem like a lot of coin but think of the extra perks. You get to keep the flight suit. Then there is the set of twitter pictures that will make you the envy of your friends. Can you really put a price on that . One small step for me, one giant leap for bloomberg television. Johnson on they race into space. After the break, we are having a look at some of the stories making headlines around the world including the australian state of victoria battling its worst wildfires in five years. In on theust check stories making headlines around the world. The owners of a garment factory where a fire killed dozens of workers in 2012 have surrendered to the law. The owners face murder charges. They were denied bail by the court. At least 120 people were killed in the disaster. The emergency exits were locked. Factory made clothes for several big western retailers. Wildfires are said to be the worst in five years with seven blazes out of control across the torilla state. That is threatening the victoria state. That is threatening rural towns. The conditions have created dangerous conditions there. 173 people have been killed and 2000 homes destroyed by fires on a single day in february 2009. Sports news, the Winter Olympics are barely underway but we are already looking at the next games as well. We will be looking at those hosted by south korea. Chang showcases the preparations for 2018. The city will take over as the Pacific Coast at the end of the so she gains. Sochi games. Something you do not want to miss tomorrow, Goldman Sachss chief executive Lloyd Blankfein exclusively on bloomberg television. 10n john dawson and him at past 9 00 in the morning. In the next hour, the Airline Industry will make a record profit this year. Find out why. Hello, everybody. I am rochon salamat, live in hong kong. This is on the move. And a rebound after the route. The asiapacific heading to its longest winning streak of the year, and a deeper deficit. Latest trade figures showed japan is out of balance, and propelling the new governor of tokyo. All of this is playing out when it comes to where your money is at the moment. It did have a topsyturvy session at the start of hong kong, john dawson is examining this. We have got the nikkei so far ahead of about 1. 1 , and the china composite is up, so big gains for china and also japan. Strong gains. U. S. Stocks rose on friday even though the jobs figure was below estimates, and that means that tapering may not be as aggressive as was once thought to be, because jobs have been down to months in a row. Asia slightly lower. Hong kong, taiwan, jakarta, and the straight also up. The weak yen driving that higher, and of course, a record in december. Exporters, for example, and rising imports, that is one of the key reasons. The nikkei rising. We are currently seeing samsung one of the gainers, a very strong start to the week. Gains, we are going to see china. Thanks, john. Investors in china, are they prepared for more volatility when it comes to bank lending rates . Well, they should be, because the source of that information is rather credible, isnt it . The central bank itself. I would imagine it would be a problem if you did not come up with somebody more credible. Yes. They said they essentially had the message where gone are the days where they would essentially bankroll a lot of this debt. Theyl remember 2009, when pumped the economy with 4 trillion renminbi in credit to avoid an economic crisis. Now, they are trying to avert another crisis, saying they are trying to roll back liquidity, making sure it goes where it is supposed to go, and just to quote part of that report, reasonable rate changes, so that then becomes an effective mechanism. Capital,f allocating they do recognize that all of this construction they will be monitoring these risks and keeping these liquidity levels at the appropriate level, which, in other words, means it is going to get a little bit tight. Yes, tight. The ramifications are that we have money market rates going up, and that makes it more expensive for these companies to finance their debt, and the prospect of default looms ahead also. Very thin profit margins. We got used to very cheap finance, and when the tide rises, that can leave you feeling naked. The tide goes out. Saw jen soc. Gen. , conditions ripe for defaults. Credit,growth, slowing higher cost of capital intervention and tighter regulations, but it is not necessarily a bad thing. Standard chartered, they say are exactlyg rates where the pbmc wants them to be, so it is really about dealing with it now rather than dealing with it later when we do not really know how much trouble is going to come from all of this. Thanks a lot for that, david inglis. Steps up efforts to tackle air pollution. The government is looking at electric cars, extending a subsidy. This is expiring in two years time. Subsidies for this year will also be cut by five percent as opposed to the previously thought 10 . You want to promote electric vehicles. Any economists are saying the latest u. S. Jobs data will not dissuade the fed chairman, janet yellen, rum her predecessors decision. Jobs, far fewer than had been forecast. It is the weakest backtoback job gain in three years. And one million indian banking employees expected to stay away from work over calls for higher dues. Protesting reforms that would allow other companies into the Banking Sector are. This strike is expected to continue tomorrow, as well. Economic data out of japan, the latest reads their coming out. We had trade numbers from mia isr, and media with us. This is for the month of december, the most recent reading we have in terms of how this trade scenario is playing out. If you take a look at why we are seeing it, it is no support is that it has been over the past year or so because of imports. Specifically, you are seeing an increased demand for Foreign Energy because of all of these closures, so this is something that has been haunting the i in ei equation, and we are also seeing a surge in demand before a sales tax hike. It is expected to go from five percent to eight percent, and we will also grab see a contraction in the quarterly gdp for the Second Quarter as a result of that, but, again, according to analysts and we were talking to, these are factors playing a role. Wider you have to think about what the central bank of japan is thinking, what issues are based thinking. With the problems when it comes to, you know, that they are looking to create an economy that can stay away from the imports and really boost their exports. Thank you very much, indeed, mia sanely. We are going to tell you about a former Health Minister in japan enjoying the support of the ruling party, and he is now the new governor of tokyo, defeating two rival candidates in an election focusing on the economy, and jobs, and our willie,ific, missed, tell us something, what was the thinking there . Is this really a surprise . It is not a surprise. It is a little bit more complicated than it could have been because we had the biggest snowstorm in 45 years over the weekend. We are still shoveling our way out in some ways, and a lot of people do not bother going to the polls. This was not a surprise. Shinzo abe bank shinzo abes guy won. Arguably, the governor of tokyo is the second or third most important job in japan. Powerful bully pulpit, and now when you have the governor of tokyo speaking a similar language as shim both a in shins onot , this isshinzo abe certainly a good day for him. Is there any daylight between what he thinks should be happening and what the Prime Minister does . Tell us about some of the people who lost out, as well. In terms of Economic Policy and social policy and welfare policy and in terms of immigration holocene or the lack thereof, there is not a lot of daylight there, the question is more about the Nuclear Power stance. Again, there is not a lot there abe has beenhinzo trying to restart the plants for quite a while. There is energy overseas, so they are having bad insulation, and the efforts to restart the Nuclear Power plant is there. This will in some ways accelerate his process, because the governorship is very important or the company that runs the fukushima Nuclear Power plant, tokyo electric, and also for the starts. The nuclear industry, as well, is quite happy. From an international standpoint, people do spend attention looking at what he says, and it will be interesting to see what he says about japans role in the region and about south korea. Will it in flame tensions . He also has a history of sexist comments, which could make him a bit of a wild card also. It will be fun. , our bloomberg view, list. And you would think with a proNuclear Power man or a governor in tokyo in place, you would think other Energy Companies would be getting a lift, but teco is now down about four percent. Now down. S yes, these three stocks are seeing big declines. And another are out of earnings. Olympus had a pretty hard year last year. Their profits beat forecasts. And machinery and pumps, their nine months profits rose, and that left their annual forecast unchanged. Exporterod for a big of glass, and they are forecasting net income to be below estimates, disappointing, but you have got these three, and the trade figures coming out, the deficit a record in december. That, ae main factor in machinery company, and there are three key export they are affecting the nikkei today, so these are examples. You have the overall picture. The Government Bond and the dollar yen. Was a higher number before the figures out on trade. Now the price is more or less unchanged. By a bit, andina both major markets there seeing gains. Again, the week yen pushing it higher. International the aviation body expecting airlines to post record profits through the course of this year. We will be live at the Singapore Air show with the chief executive. Showing asian carriers are enjoying the second strongest growth in the world last year. Lets take a look at the numbers. Ofl, lets get more on all this and get over to singapore, where the aviation leadership is taking place before the air show. Iceland amen is there. Hey. 2014 march 100 years since the first commercial launch, and 100 years later, we have seen phenomenal growth. We are talking about more than 1000 airlines, but with growth comes challenges. Thes talk to the chief of association and also the former boss of cathay pacific. Good to have you with us. You say despite growth, one thing stands in the way, at least one. Who is responsible for that . Governments have to regulate in the area of safety. They need to do that, but the problem is when you get into areas of regulation that Cover Economic regulation and commercial regulation. There are a lot of rules and the government. Numerals, but different governments making different roles, and in a global industry, that is creating a mess. Is that more of a developing nation phenomenon or a developed nation phenomenon . There are Consumer Rights legislation, for example, and it makes it very confusing for airlines to operate globally. How airard recently asia was wanting to venture into a market, and the regulator came of with an ad for the people india to decide, to give feedback on if that is something they want. That is a regulation that goes back 100 years or you are you concerned . The regulations are pretty detrimental to the expansion of the industry . I do not know about that particular case. It is to facilitate the growth of industry and to facilitate the opening up of markets so that they can take commercial opportunities. Good for economies. And what are you doing to help normalize the industry . We are very busy persuading government to liberalize, and particularly for governments not to adopt stringent Consumer Protection legislations or regulations, which basically takes the decisions out of the market and puts it in the hands of bureaucrats. Airlines have an interest in satisfying their customers. They are very highly valued. We do not want to lose them. Have you been successful . We have. We are going to be more successful, and the more we talk to the governments, the more they will listen. Some pretty strong words, direct sony and taxes, taxes that we see imposed on alcohol. , itith the u. K. Government brings in over 3 billion pounds more than you would need to pay for all of the Carbon Emissions as a socalled green tax. Now it is going into the treasury. At a family of four does not , and also denying jobs to people in this market and others. Quantified that for us. How much is lost . In terms of revenue or passengers or other . I do not have a number. Taking 83 billion pounds out of the pockets of travelers. Imagine. Iata is Forecasting Global profits. Why is that . What is driving that growth . The billions for the whole industry in total revenue, and then there is a margin, and let me put that into human terms. This year, we expect the profitability for the average passenger to be less than six dollars. So this is not a hugely rich booming business. The business is keeping its head above water. It are several reasons for that. Yearse suffered in recent , and we have seen a change in structure, particularly in the north america. Pushed down our costs, and as we have done that, we have been able to bring down the cost. But it is still very vulnerable to increase fuel prices. Fuel is about one third of our costs. Any economicble to shocks. One last question. The about consolidation in industry . Yes, it is certainly coming. We have seen it run its course in north america. Europe still has further to go, and the rest of the world, but latin america has gone a long way, and the rest of the world has a long way to go. Asia . There will be consolidation, but i think it will be slow, because asian cities are very fragmented nationally. Or are the arcane regulations i was telling you about, and so it is very difficult to consolidate across political borders. Thank you. Lots of issues to be dealt with by the industry. In the meantime, back to you. Icelands for that, amen. Up next, the Building Blocks for success. A movie tops the u. S. Box office. Ok, we are just going to take a look at some of the headlines going around the world, a woman convicted of throwing nearly four t loews to the island and jailed for 20 years, and she appealed for clemency, citing her poor mental state. The president reduced her sentence by five years, and now she has been granted parole. Fire in a factory killed , ands of workers in 2012 the Company Owners face murder charges and were actually denied bail by the court. At least 120 people were killed, and survivors say that the few emergency factory exits were closed. It affected many retailers, including hong kongs li and fung. And 37 blazes out of control across victoria state, threatening towns and the capital of melbourne. Dry, windy conditions of to read and highly dangerous conditions, and 173 people were killed and on0 homes destroyed by fires a single day in february 2 thousand nine. Now, one of the most popular childrens toys are popular at the box office. Movie, and it is helping to edge out the George Clooney movie. And it all goes against this backdrop of lego having Enormous Growth. The secondbiggest toy maker in the world. Lego is probably the most popular toy in the world. It was first made in denmark, and this has made them the secondlargest toy company. Only mattel is older, but they are still owned by the family that was the Company Founder and owner of the brand name. It is a contraction of words meaning play well in danish. After having wooden buses and bought the first plastic Injection Molding machine in denmark and began making small, multicolored bricks that snapped together. The design was an enduring success, and anyone made after 1958 will still work with pieces sold today. For decades, their prime customer was a nineyearold boy, but after suffering a major loss in 1998 and teetering dangerously close to bankruptcy, the company battled back by appealing to girls and adult fans. In fact, their profit grew faster than apple between 2007 to 2011. By 2019, there will actually be lego people than real people on earth. A rebound after the rout. Asian stocks heading for their longest winning streak of the year. And a warning coming out of China Central bank. , say to expect less stability and getting close to order a aircraft, we will go over to get the latest on that with jakarta. And the japanese morning close, lets see what is going on as far as overall equity trading. Knows,o to the man who john dawson. Yes, so far, car stocks making significant gains. 10 , big gains, because it seems the Chinese Government is looking to extend vehicles such as these beyond 2015 to promote the use of new Energy Vehicles in more cities and regions. These three saw strong gains. And credit squeeze, they are increasing their target. Jewelry was driving up the market. In china mobile today downgraded due to ae generale rising market. Thank you very much, indeed. We are going to take a look at what we can expect out of the secondbiggest economy in the world. We have got Economic Data in the form of consumer prices, producer prices. Lets get over to beijing. Tom, tell me something. Coming out of the Lunar New Year holiday, china is showing some signs of momentum. Losing. On here . Oing i think that is completely right. I think a lot of people were expecting a strong start for china for 2014, and that really has not been materializing. We have had some week business had and china ports have pretty dismal start for the year. Investment that is so reliant on commodities. It is a sign that it is slow. A shift away from him urging markets, how does that play out when it comes to china, tom . I think the first thing to keep in mind is that a slowdown in china is one of the factors behind concerns about him urging markets, countries like brazil exporting huge amounts of commodities to china, and as the china demand slows, that has an impact on the rest of the emerging world. Havell, this week, we china data on inflation, x boards, and what are economists you are talking to right now suggesting . This is not in the change policy. The main concern going into 2014 is the massive increases in the high level of debt taken on by China Businesses and local government, so even though i think we are expecting inflation to stay low, most economists still think the China Central bank is going to keep Monetary Policy on a tightening bias to try to choke off new lending. The other thing that people are going to be focusing on this week, of course, is the exporting numbers. It is based on the expectation that a stronger u. S. And stronger europe are going to be buying more chinese products, so people will be paying attention to that data this week to see if that is actually starting to take place. Tom, thanks a lot, in beijing. Indonesian markets have been trading for about half an hour. We go over to the top stories there. At one, arent we, today . Right. And lets just do a very quick market update. The shares are dating for four consecutive days now, as well as regional stocks moving. Meanwhile, the rupiah and haynes the most in a month on optimism the current account deficit will , two percent of the gdp and the last quarter. And moving onto the big story that is in focus right now, the much awaited investment in indonesia that finally has seen the light of day. They were discussing plans of fox con investment in jakarta. They plan to invest in indonesia , and they have been doing the rounds in the second half of 2012. Investment is delayed due to an agreement with partners, land issues, and also relative to taxes. Week,ter the meeting last they have expressed the seriousness of jakarta for providing land and infrastructure support for the fox con investment. We are going to do take a close watch at their investment here, and other than that, we are focusing on the indonesian business expansion. Sources familiar with the matter say the guy she nations are going on in indonesia, and they are planning to purchase as many 0s, and that is a imum investment of about have thewill still agreement between the boeing and the dream liner. They will buy up to 250 aircraft. This is to deal with rising travel demand in asia. That to you in hong kong. Theyre in the indonesian capital. All right, we are going to be joined with a chief executive, at 7 40 hong be , andtime with angie lal lets take a look at some of the other stories making news this hour. Looking into the possible theft of client information, and they suggest that maybe 27,000 customers information was taken. Says theaper information was sold to brokers for what it calls investments. Getting into here this morning after profit Beat Estimates, helped by a weaker yen and growth in medical systems. Leaves the stock could be boosted further. And nokia has agreed to a collaboration. Htc will play pay royalties to nokia. They were looking at whether they would impose an import ban on some devices. And that is the top company news this hour. Right. When your business is working out, fitness, a fastivanovic industry. Me a sane he took a look at one player that is muscling its way in. From a single studio in hong kong in 2002 to more than 20 facilities in 2014, they are flexing their expansion muscles. They are setting out to be to the huge franchise gymnasiums. They first expanded outside of hong kong in 2005 as a studio in singapore. Taiwan and then new york. Last quarter, they expanded into china. I would like to see us in shanghai. We have one studio there. You need to build a cluster, so four or five other ones. We can then start moving on to other cities. Next city could very well be in the birthplace of yoga. India is probably near the top of the list, cause as you say, it is a huge middle class that is growing. Thailand or malaysia, some that are not on the radar, because the spending power is not as high, and if we have a couple of successful clubs in malaysia or the philippines, from a financial point of view, they will not make anywhere near the kind of money we can make in hong kong or singapore. Before they break into a new market, the do research to cater it to the market. In singapore, it is all about a suspension training class that uses ones own body weight for shanghai, itnd in is universal yoga, with multidirectional poses and sequences. Is veryng kong, boxing popular. I took that about a month ago. For a couple of reasons. Number one, it builds up the core strength. Number two, if you get stressed, this is good. Said if you have a hard day at the office, you just come and punch a bag. Yes, you destress, and it is a good cardio workout. A mix of many things. Beit is said they need to careful in marketing themselves around the world. This is quite a strength, but at the moment, you look at the way they communicate, consumers are more interested in and less about the back story as to why entrepreneurs set things up. If you cant tell the story in a good way, you can profit. Like a coach guiding its athletes, this talk is straightforward. Slowam a Firm Believer of and steady wins the race. I do not have to be the biggest. I just have to be good. That is their game plan, working hard so more people can work out all over the world. Me a sane he, hong kong. Up next, we will discuss all of the market action. Resulting in a healthy correction. Ext, when on the move returns. Equities, once again, having a look at what is happening there. We do have, generally speaking, the hang seng being one of the few ones that are bucking the trend. Some stocks extending the advances we saw last week. Its take a look at the challenges that do face investors. The asia managing director for a Risk Management company that advises asset and Portfolio Managers around the world joins us. Olivia, thank you for joining us. Seeing right now after, of course, the selloff we saw prior to this move higher, what is driving things, in your view . Hi. Thanks for having me on the program again. When we look at the selloff through the land of our risk models, you do not see any reason to panic. Last year, which was by all means a low volatility year, may and june were more volatile than the last couple of weeks again, so we are not talking about extraordinary volatility here, and when we look down below that as active strategies, for example, they have not seen any traditionalrisk, so contrarian strategies, momentum strategies, value, all of those things have been very, very steady, so the active managers, the rose themselves are not acting. In some ways, this is a healthy correction, but it does not single a change in a trend about a longterm bear market. The start of the new year, everyone is talking about this flight out of emerging markets. I am getting a sense there has been a bit of a turnaround in that sense, and people are looking closely again. Selectively, at emerging markets. What is your view . Yes, that is the key. The selective this selectiveness is the key. Ever since tapering came on last juno, the smart money and you saw a, very wide spread out across the emerging markets. Like koreansome, and thai one anothers, and they hated others, like india and brazil and so forth. You also had a huge increase in the currency volatility in some of these markets, which makes hedging costs higher, so the smart money is not about getting in and buying all markets across an etf right now. They want to be selective, and they want to move around. You are seeing that now. Brazil and indonesia, markets like that, which were out of favor in january are now part of bargain hunting. You see this back and forth across the emerging markets, where risk is going to go up and down, depending on what investors feel is the hot potato right now. See thise not going to broad etf movement anymore. The growth story for Southeast Asia in particular, this is, of course, u. S. Growth which is, at the moment, it it is getting solid growth. But also, lets not forget that japan is in the mix. These countries are going to genuinely see momentum when it comes to their growth story. Thatrtainly, we have seen play out last year. Both japan and the u. S. Market have gone up 30 to 50 in their local currencies, but what we have not seen is we have not seen the consumer show up in either of these places. Consumer growth is anemic in the u. S. And has not really started in japan, especially if you remove the impact from the sales tax increase that is going to kick in in april, so some people are buying stuff now before the sales tax increase, but other than that, and seamers have not shown up, and that Means Companies are not investing in because theyacity are not seeing the consumers show up, so until that happens, there is risk there that maybe you have bought something that will not be rewarded. Great talking to you. Have a great day. From singapore. We have to take a break. Strikeit to the bank, a looming in india. We will be over in dubai, riding out the details there, when on the move continues. Just about 20 past 8 00 in the morning over in mumbai, the session 55 minutes away, i guess what we have in the moment now, one of our jobs are as out of india, workers expected to stay away from work in a call for higher wages. They have been offered a 10 rise but one double that. We go to mumbai. This is a big deal, is it not . Absolutely, and coming at one of the worst possible times for the indian banking state, and here is why we are seeing this on the rise. Indias largest Public Sector one has said that tackling this is going to be off the radar for the next couple of quarters. Assets, which include what we were talking about, 10. 2 of the total debt for most banks in india, and that is at a decade high. We are also seeing the average advances byse, with september of this year. That is the expectation, and also backing off the kind of pressure we are seeing in the indian Banking Sector. One millionbout banking employees, which is going to extend right down to the lowest levels to the highest levels, is what we are understanding, demanding an increase as far as wages go. Just a couple of months ago, we saw a twoday strike, threatening to go on the strike, if their demands are not met, and then that strike could possibly get extended. Likes things a lot for that. For us. I and is space race is underway with private enterprise leading the way. Richard branson and Virgin Atlantic is set to help tourists prepare for the trip. Cory johnson looks at the business of weightlessness. I am cory johnson, and right now, this is one of the most enjoyable moments of my life, but it was not always that way. Just a few minutes ago, i looked like this. I am down in Cape Canaveral to experience zero gravity with a Company Called zero g. Recently partnered up with the Richard Branson and Virgin Galactic for passengers who have already purchased to get and want sub orbital flights to get acclimated to the experience of weightlessness. The company is also offering the experience for anyone else who will pony up five grand for the experience. It works. W 20,000 feet, in our case over the gulf of mexico, and then there are parabolic arcs. , nearly like 1. 8 g sending passengers to the floor, and they begins to dive at an angle,ly equally extreme and passengers experience weightlessness, and then they do it again and again. Actually, less than four percent of our participants get sick. It is very rare. One of our guides, and im going to need someone numerical. It is becoming more of a reality, so the companies are beginning to talk about training, and they bring their customers on board to experience microgravity, so it is really a wide open market being created. And that brings us to where we all started. This is crazy. I am liking it. And this experience comes at a price. Ticket costsctic 690 four dollars per each second, and this company is head, at 5,000 per only . 11 11 per second. Something money looming from nasa, and several companies are vying for a lucrative contract for the increasingly outsourced space agency. Ryba corp. Relations corporations. Right now, the u. S. Is paying the russians each time an astronaut catches a ride. 90,000 will charge dollars for a flight that only has room for one passenger at a time. Still inbaze owes is the testing phase for his company, blue origin. He wants to take three astronauts in their new cap soul. Capsule. So paying 5,000 may seem like a lot of coins, but think of the perks. You get to keep the flight suit, and then there is a set of twitter pictures that can make you the envy of your friends. And you put a price on that . One small step for me, one giant leap for bloomberg television. That was our bloomberg editor at large cory johnson on the race into space. Quickly, lets check in on the markets, taking a look at the hang seng, which has been fluctuating between gains and losses. The shanghai composite moving up one ande point two thirds percent. Morehina warning of volatility when it comes to market rates. The trade deficit in japan widening to a record. Thisis affecting trading morning, and that is how the nikkei did close out. Australia, sydney is up by about half of one percent. Our is it for this part of on the move. We are tracking the big stories of the day so far. Were live from hong kong and this is asia edge here go this is asia edge. Looking at our top stories for are seeing a fourth straight game for asian stocks. The trade imbalance is worth it. The air show this week in singapore. We will hear from the head of turkish airlines. We are going live in jakarta to look at an impending deal. There are other issues to consider, including dealing with zero gravity. I am john dawson. We are seeing strong gains for china and japan. China currently rising as we eat. Speak. Hong kong is now in the red. The singapore straits and the klein. Australia, jakarta, taiwan, a bit of a mixed picture but more or less a strong u. S. Gain, even their jobs came in