Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20140217

That is after a disappointing gdp report for the most recent quarter. More on that and a moment. It is driving japanese stocks lower. We are seeing safe haven buyers into the yen. Gold is rising. Both of those happening in tandem. Investors taking risk off the table, concerned that the looming sales tax increase will have an impact on the market. The market is down, the nikkei lower by 0. 5 . Mscithough the asiapacific is advancing, it is early going. We will see how that changes when hong kong and shanghai come online. The nikkei looks like this in terms of stocks that are moving. On the upside, some of the insurers. Take a look at those declining. We will also be watching the exporters today. Those move likely when we see the yen rise. That is negative for those companies, the big exporters like toyota and sony because it hurts their earnings as they bring back earnings from abroad. Is up 0. 4 . He kospi hyundai is higher by about 8 . Those are some of the local names in that market. As Southeast Asia gets underway, malaysia starts with a modest advance. You poor looks like this. These are the early movers. A mobile carrier up 1 . Logistic properties seeing a 1 gain. We will be watching japan as the session moves on. U. S. Markets are closed later today for a holiday. Meeting minutes tomorrow from the fed. There is a lot of indication of what is happening. Just take you to the japan Growth Numbers . A bit of a disappointment as we have been hearing. The equityn goes up, market moves in the inverse direction. David has a look at the preliminary figures. What you got was, you still had growth. You have two metrics but it didnt show the pickup in activities that most people wanted to see. Had the record trade deficit in the last three months of the year. That is what has pulled down these growth figures for japan. The forecast was for 2. 8 . The quarter figure, that one was for 0. 7 . The estimate was just barely above zero. There was a revision for nominal gdp to 0. 2 . Based on the headline nubbers, it appears that exports had a bigger than expected impact on growth. I went into that earlier. About theing at just biggest trade deficit on record, ¥3. 5 trillion. It is not exactly the best thing at this point in time for japan. You mentioned the sales tax increasing in april. It has become a bigger risk at this point because you now have these latest numbers, the recent statements that yes, japan may be able to withstand the sales tax increase. There wasnt enough momentum leading up to that. A lot of these assumptions are being rethought. The risk is that there is a big transition coming up this april. The consumption tax rate is going to go up. That will pull down domestic demand. If japan is to keep going, it has to be taken over by capital expenditure. This week, we get a sense of risk that the japanese economy based may stall. To put that into context, you have two pillars, exports and consumption. Consumption is expected to take a hit when the sales tax kicks in. , the economy will actually contract in the second quarter. A lot of those purchases that would have been taking place will be frontloaded before the tax kicks in. The hope in that, exports will that and getoffset japan to bounce back. Act veryay need to soon. David, thank you. Just checking in again with the singapore market, equities moving slightly higher despite export numbers coming in a tad weaker than expected. Lets get to our Southeast Asia correspondent. Give us an idea of how bad it was. All exports falling more than expected, 3. 3 drop year on year. Economists are looking for a decline of 1. 2 . Electronics contributing to the weaker number. Plunging 17 . One Economist Says this recovery we are hoping for seems to the sputtering again. Singapore exports dropped in nine out of 11 months last year. Thanpore has done worse neighbors such as south korea, even malaysia. What is not helping here is moving to cut its dependence on cheap overseas labor and boost productivity. The fallout puts singapore at risk of losing out as overseas demand strengthens this year. We are seeing recoveries in the u. S. And europe not benefiting singapore. Because of that the imf says that will help raise its global fourth growth forecast. Not with such sluggish import numbers. Thanks for that, Haslinda Amin looking at the export numbers weaker than expected, decline taking place there. Lets take a look at the other stories we are looking at today. Three Credit Card Companies suspended after a data theft that affected almost half the population. They will be barred from adding new clients for three months. The companies were unaware of the theft until informed by regulators. Tokyo. In getting intoers instant messaging, buying privately held viber. Withen aims to complete the likes of tencenrat and othe. Icbc betting on the middle east. They want to boost earnings from the region by 50 this year. Icbc is also opening a branch in saudi arabia, making it the First Chinese bank there. It also has plans for kuwait and the united arab emirates. Here we go again, the credit crunch in china, bank lending their soaring to the highest level we have seen since 2010. What does this indicate . A shift in emphasis for the pboc or is it just Lunar New Year aberration . Stephen engles is in hong kong, what is going on . These concerns and my earpieces giving me trouble again. Im going to take it out. We had a bit of a cash crunch. The pboc is concerned about shadow banking. In debt levels we had december, there is concern that the tightening by the bank is going to choke off potential growth in the chinese economy, dipping below 7 potentially. Look at these numbers here. In january, new lending, 1. 3 trillion. That is 1. 3 trillion, the highest number since 2010. Do the math, almost triple decembers number. Flip the page and look at aggregate lending. Should be we should we be worried . Look at this, this is a record high. 2. 50 8 trillion yuan in january. That is the highest figure. Lending in china is often frontloaded in january. So you are saying these figures are skewed. There are definitely skewed. Whether this is going to be a continuing trend is that a question. Most economists we have spoken to saying, no it is going to slow down. The bank is still concerned by the excess credit and rather credit is going to. You alwaysut say this time of year we get to do chinese new year. That of course also makes a mockery of many of these numbers. Ofhave to take the aggregate the first three months and work it out from there. It to look at 113, we had more than a trillion in new of then january i had Lunar New Year holiday. In march, we had another trillion. February, low. Same thing happening this year. January is 1. 3 trillion yuan. The Lunar New Year was the first week of february. It is probably going to do again. Will we see a pickup in march . That is the question. Every year, february is shorter. Steve, thanks so much. In a moment, the longrunning protests in thailand and their effect on the economy. Could show that gdp almost stall. This is on the move. This is on the move with rishaad salamat. Take a look at the latest, thailand. Right Police Meeting at all opposition as they begin dismantling antigovernment protest sites. They were forced to withdraw from one site when people refused to leave. The campaign will go on. He called on the Prime Minister to resign. Lets have a closer look at the thai economy. Joining us from our bangkok studios, andrew, thanks very much for joining us. What is going on at the moment . The two sides seem to be no closer, ever further as well. Has there been any movement . Very little. There was almost no room for compromise from both sides. Very Little Movement has been made. That leaves us in a very difficult situation where it a not be resolved right away. The governing party at the moment, Yingluck Shinawatras party has this right program where they buy rice from farmers and it is something the opposition is against. Is the rights issue at the epicenter of the problems facing the country lyrically . As i have looked at it over the years, in thailand, whenever you get a protest going on, the protesters end up having an advantage. They can wait it out and keep lobbing bombs at the government. This government is a caretaker government. They have already stepped down but they will continue to lob bombs at them to try to prevent the election process. The rice process alice he is one of cy is one of poli the bombs. It is just a matter of time before they get hit by that. Eventually, they knock them out. Themselves, the rice farmers have not been paid for a few months now. Uckthere a chance that yingl cancels the whole program . I dont think that is possible right now. It is a caretaker government. They are kind of stuck with their prior helices until the next government comes in. That is part of the problem, where the protesters have been cornered. They have them in a situation where because they have stepped down, they cant do much as far as disbursing funds or it is against the law for the caretaker government to be dispersing a lot of funds. Yet the farmers arent getting paid. Pressure is rising from both sides and the government simply cant do much in this case. How will it all play out in the end . The military seems to be not interested in intervening. I think what you are left with is what you would call a judicial coup, an opportunity must present itself over the next couple of weeks, maybe a month or so where the protesters and the opposition pretty closely aligned. The opposition keeps throwing things to the Constitutional Court. The other did independent potentially filing charges against the Prime Minister on the rice scheme. Between case is being given to the Constitutional Court and the National Anticorruption committee, these filing of cases and attacking the government through this method will eventually probably find them in a difficult situation where they may be banned or prevented from continuing on. Things kind of go into chaos and the protesters start to get their way, maybe a reconciliation government comes in or a restart government. How badly hit is the economy . We get growth figures a little bit later on. How bad are things . It is getting pretty bad. Rightea that i live in, near one of the protest sites downtown, you can pretty much walk in the street. There are no cars in the street, not many people. In the center of the city, there is a lot of shut down. Those people are working from home. Where youre getting a bigger hit, you have consumption slowing down, thailands consumption has already been not the best in asia. That is slowing down. Youre getting less fdi. Forward or future fdi is probably going to be limited as people make decisions about allocating money to thailand. It isnt going to be a great gdp number. Andrew, great talking to you. Stotz, independent analyst in bangkok. Up next, it could take years to find the right location. We meet the group that operates hotels when on the move returns. The Peninsula Hotel probably isnt coming to a city near you. The Company Behind it wont enter any new market. That is what mia saini found out in todays out of asia. We dont do many hotels. We try and focus to create places that will really make an impact in the location that they are situated. , [indiscernible] moments a very special for us to go back into shanghai. That was in 2010. When you take a look at the locations, you operate nine hotels globally. Youre not in europe yet. I know that is going to change. Why had you waited so long . The reason it has taken so long to go into london and paris is because of waiting for the right opportunity. We have looked at many opportunities particularly in london over the past 20 years. It wasnt until the middle of findyear, that we finally when will the london one open . Not for another five or six years. The building that we will be redeveloping, we will have to get planning approval and demolish the existing building and rebuild for the future hotel. Find a dealnaged to and that building has been in construction for about two years. Openlan is that it would in the coming summer. Of course, we were very excited about that. When you take a look at the next five years, what other locations are on your radar . The other two projects that we are already working on, one is london as we have mentioned. , whicher is in myanmar as we all know is now opening up and is a very exciting developing country. We are very excited to have a project which is right in the heart of the capital of myanmar and we will be focused on making that as well. Toond that, we would like look at something in india, maybe something in turkey or the middle east. Somewhere between europe and asia. We would like to look at south america. Because we are based in hong kong, traveling distance is rather far for us to go. Of course, Greater China represents many Growth Opportunities as well. These are some of the areas we are looking at strategically in terms of longerterm growth aspirations. Kwok gave us a guided tour of the peninsula in hong kong including some littleknown parts of the hotel. This is about 200 square meters, the original building of the peninsula hong kong. Tower that we built and blended in with the original building later on. This colonial look is very highlevel technology. The system we have is based on these touchscreen panels. These are located in various places in the room. This controls everything in your room from the lights to curtains , temperature, air conditioning. There are 11 manages programs. Language, note a only does it change on the tablet but it changes on all the panels you have on the walls. We very much believe in moving people around inside. Kong has ala hong fleet of 14 modern rollsroyces. We also have three vintage rollsroyce phantoms from the 1933 to 1934 era. This is very special. For ours is used weddings and special occasions. This lounge is on the top floor of the peninsula. It supports the helipad that we have on the roof. And the design is based on the china clipper. You can have private dinners here and people love the theme of being in this environment. Surely have a look at the helipad . A detective story in northern china has one at the berlin film festival. Like coal, thin ice is the story of a former policeman investigating a series of unsolved killings. The director studied at chinas Central Academy of drama. He has directed two other films. The film also picked up the best actor award. Icbrough it already beat c profit already beat. You look at its plans coming up as well as the hong kong open. Disappointing numbers out of japan, growth is slowing down and shares are dropping in tokyo. Foreign investment fleeing emerging markets. Moore has been pulled in 2014 than in the whole of last year. Kerry turns up the heat on Climate Change saying doubters are deluding themselves. As soon as you say that a share market is down, it moves to the upside. The nikkei turning around at the moment. We also have the shanghai composite now. We have a gain today, then it means that we have a raised the losses for the year thus far. Good morning to you, good morning everyone. We are closely watching the shanghai composite and hang seng for the indications on the market. As futures indicated, stocks are set to open higher in hong kong and shanghai. This on that record january credit growth, that lending data showing there were more loans out there than any we have seen on record. That will lays raise concerns on the health of the banking system. That is lifting markets all across the asiapacific today. Those commodity sensitive stocks in places like australia and stocks for the trading partners of china across Southeast Asia. Lets take a look at the numbers as the markets come online in hong kong and shanghai. It does appear according to the futures and the initial indications that we are seeing a gain on the shanghai composite this monday. That is consistent with what the market watchers were saying. Markets in thee asiapacific post six weeks of the kleins. Moves oneen commodities, a lot of concerns among investors about the health of the asian economy. In hong kong, the hang seng up 1 . Shanghai extending the game, 0. 6 . Before i headed back to you, take a look at the big movers. The life insurers and internet stocks. Thanks very much indeed for that. Alreadyg for topping every bank in the world and it comes to profits. Our china correspondent is right here, what do we have . We are talking about icbc, overseas expansion both organically and also acquisitions. In the middle east, they aim to triple overseas earnings by 2016. The middle east is going to play a significant part of that. We had an interview with the president of the middle east branch of icbc. They are targeting earnings. Theyre opening up retail branches in kuwait, saudi arabia and the united arab emirates. The ceo saying they are not ruling out, or they are actually looking for acquisitions. Last year, icbc was fairly active on the lending fund. Not only the chinese affiliates in the middle east but also middle Eastern Companies themselves. That is something they are going to be expanding. Million toome 600 middle eastern clients including qatar airways. Ceo of the middle eastern area is saying they will be looking at dubai property. It has certainly made a comeback since the massive fall that they did suffer. There were a lot of investors in dubai as well. That is an interesting sub story. May be the First Chinese bank to invest in that branch there. Other people may be looking at this. Do we have any idea whether others will follow them . Other chinese banks, i would assume so. Icbc will be opening the First Chinese branch in saudi arabia. China is saudi arabias number two trading partner. Exact i dont know the figure but over five years from 2007 to 2012, trade was up about 188 . There is a need definitely not only for trade finance but for other forms of lending in that market. Cheers, thanks for that. Else get you over to what is going on. Less than two months into 2014, Global Investors have pulled more money out of emerging markets than all of last year. What are people telling you . Is this expected to continue . Yes. That is the sense in the market. More selloff expected. Capital outflows are showing no signs of abating. We saw stocks, currencies from developing nations rise this month. That is probably just hariri. Here is a look at the fallout so far. 4. 5 billion withdrawn from funds last week. That brings the total for the billion. Shy of 30 for all of 2013, the amount was 29. 2 billion. Take a look at the msci emerging markets index, down 4. 5 this year so far. Short sellers increasing bets, em stocks will extend their decline. Retail investors led the exit. They are joined by the more visible institutional type investors. Larry think of blackrock says emergingmarket assets are looking pretty cheap right now. They are still concerned. Slowing china, trade deficit in turkey, the fed tapering also weighing on investors sentiment. We talk about emerging markets, we have got uncertainty in thailand. Out. H numbers are to a large extent, expect a slowdown, says the world bank. The prolonged political unrest will Impact Investment and tourism and disrupt policymaking. Economists we spoke to say the outlook is pretty bleak. Unrest is hurting look with amanda and delays Government Spending as well. It shows q4 gdp wont come in at 0. 3 , the slowest in about two years. The federal bank surprised the market when it kept rates unchanged last month. Economists expected a cut. Was cut fororecast 2013 and 2014. Poor gdp performance content expectations of a further rate cut at the next meeting. I want to show you the bus baht, the worst performer after the rupiah and the japanese yen. Thai Consumer Confidence at the lowest in years. Prime minister Yingluck Shinawatra declaring a state of emergency in bangkok to put a lid on violence. Thanks a lot for that, Haslinda Amin for us in singapore. Lets check in on the other stories making headlines this hour. George soros has a new favorite. Replacing microsoft with an israeli drugmaker, he added almost 6 million shares in teva pharmaceutical. Teva is now soross biggest holding. It represents 4 . Shares have really 10 this year. Is advancing in tokyo after announcing it expects profits to double to 300 million next fiscal year. The carrier is planning to step up its costcutting drive and adding new routes in asia. Gree is outmaker with results. Net estimates beat analyst net income beat analyst estimates. It wasmber, gree said looking at acquisitions outside of gaming. Those were the top or print headlines. Lets stay with the gaming theme. Did you know that out of all the apps downloaded these days, more than half our games . We have broken it all down by the numbers. Still to come, if it is too good to be true it is not. It is what our next guest is saying about chinas trade data. So much for fears of a credit crunch in china. Aggregate financing soared to a record last month. Lending new bank lending also up. Must take these new credit figures with a grain of salt. Thing is typically high in january ahead of the Lunar New Year holiday. Lets get more on the prospects. Ronald is chief china advisor at Asian Capital holdings. Welcome back to the program. What is your take on these numbers that we are getting . We deal with a lot of conflicting figures coming out of the chinese economy. Pmi showing slowdown but we see trading figures actually heading towards a new high. The Central Government is trying to crack down, however the new loans are reaching a real high. 1. 3 trillion we are talking about. Rushing people are inso we expect a lull february . Exactly, we need to look at february and march figures. I think the Central Government may try to clamp down on the new loansgrowth. I think there will be a slowdown eventually. What is the next thing we have to look forward to in china . Is it the next meeting that takes place, seeing what other reforms are in place . How concerned are they about the debt levels that china has . The first thing to look at is that the chinese economy is heading towards a structural reform. Will you know that anyway. The National Peoples Congress Meeting will be taking place next month. We are waiting for the new policies to come up. In the meantime, we need to look at something the chinese economy, whether it is heading towards a slowdown. It never really slows down. Is 7. 7 a slowdown . We know it is going to naturally slowdown. It has to because it cant keep growing at this breakneck speed. It sounds very ridiculous given the figures but i think that this government will not sit down and do nothing. They will do something to try to clamp down on this growth rate. Wanting a highquality growth. Mayink that the new policy try to streamline the economy, also tighten the credit. I think that the Property Market and the Banking Sector will be affected eventually. The shanghai composite opened, up 3. 1. 0. 3 . It you raised the losses we had this year. Can it go on . I think the economy is still kind of sluggish for the time being. Even though the figures are coming out and the market looks good. Try to take a waitandsee approach. The National Peoples Congress Party also the ipo market will open in march. So they might suck the liquidity out. They come to the market to raise money and then they just dont care. We need to look at where the pboc will ask will relax Monetary Policy. Lets talk about your dislikes and likes. You dont like the banks, icbc, we saw they are expanding around the world. You have your likes as well, the policy driven things. Consumer stocks, internet stocks, environmental stocks. Technology, health care, new energy, which i like quite a lot. In the meantime, i think the banking stocks, they may get some support. I think that will not be longlasting. Investorsm, i think should try to cash out. A pleasure to have you on the program as always. Ok, equities or bonds . Most analysts say get into the stock market but david is going to look at why bonds. Very good morning. Thanks for that, rish. For the most part of 2013, stocks outperformed bonds. In some areas of fixed income we have seen, one financial turn actually sees this as a contrarian signal. Lets clarify this for you. It is a fairly complex one here. Saying thatpeople investors are now shifting their money away from this equity fund and into a bond at the fastest pace in seven years. Individually stock and bond flows with buying and selling signals. You put this things together and those signals become more powerful. This chart shows you, the money flows into and etf. That tracks the s p 500. Would your looking at right here is that, the difference between the money moving into that fund and moving into the total bond fund managed by vanguard. If you take a look at this chart here, the more negative it is, the more cash is being transferred from stocks to bonds. Lets break this apart, two lines right here. The orange line shows the the the amount of money in millions going in and out of stocks. The white line shows you the same amount for bonds. Look at this difference, there is a difference between this peak here and its bottom right here. That is more than 2 billion. That is about the biggest swing in favor of bonds. What other companies saying . They are saying that these big swings offer contrarian signals. The selloff that we have seen in equities is driven more by fund flows been a problem in earnings. It is a strong signal for them to buy into bonds. If you take a look at history, each time this specific stock fund saw an outflow of more than 700 million or more, the s p average over. 5 on the next three months. Some things worth looking into further, if you want to take a look at what the markets are signaling at this point. That was your Global Outlook for today. Still to come, a bird, a plane, drones are causing problems with aviation authorities. We have a look at both sides of the story, coming up. Nine minutes to 11 00 in japan at the moment. At least a dozen people have reportedly died in the countrys second major snowstorm in two weekends. On theons created chaos roads and saw dozens of flights and bullet Train Service is canceled. Many areas reported around 20 centimeters of snow with tokyo seeing the most in 45 years. The storm has moved north toward hokkaido. Major Power Outages across the capital. Lets get more on this. Badly was tepco hit by this . It wasnt a major hit but the key here is that supply was disrupted. They have to put in more operating expenses in repairing those problems. Tepco ist a time where trying to cut costs. It is trying to cut costs by almost ¥5 trillion over a period at 10 years. Any extra expense is not great for the company which is already financially weak. Nuclear is at the heart of this. No Nuclear Power stations working since the soon on a and tragic events after that. How crucial would it be to get one of them going . You had the tokyo governor elections and he is pronuclear and the antinuclear guy did not get elected. That is a good sign. The japanese government is pronuclear right now. Chubu is taking advantage of that. The likelihood that it will happen over the coming months, it should happen. What you have to remember is that turning on a Nuclear Power plant is not like turning on the light switch. It actually takes several months to ramp it up. In the meantime, japan is facing huge imported commodity bills. The weakening of the yen did not help. Is it going to happen . We are reasonably confident it will. But not tomorrow morning. Rate talking to you. We are going to take a look at interest in Drone Technology and in the aircraft themselves. There is a growing argument about usage and flight rules. Megan hughes reports on the drone boom and the worries it is causing. We are airborne. Drones have gone mainstream. Even modern family character phil dunphy has one. He has borrowed it from his Real Estate Company to spy on his son. Real estate is one area where reallife drug use is widespread. Drones should video of properties and neighborhoods and home interiors. They are capturing surfers hanging 10 on hawaiis north shore. The film maker of a gettysburg documentary those did about the technology. It is mounted with a high death camera. It could shoot from a few feet off the ground to 400 feet in the air. They are beautiful shots that also may be illegal. The faa does not permit drone flights for commercial purposes. You cannot just acquire one of these vehicles and launch it into the airspace. That is not how it works. But you can. That is how it works. I and saying that the regulation needs to say that. Dronewent shopping at a dealership in maryland to see how easy it is to get one. For the one with the camera, that will be closer to the 1500 to 2000 of the range. Can we try it out . Bennett says doug the camera equipped phantom to is flying off the shelves and the sales are legal. How the drones are used is someone elses problem. Is there anything in here that is going to show me what the faa says i can and cant do with this thing . At the moment, this box will not tell you about the faa. While the faa is struggling to write new guidelines, he is worried about crashes. You can see a chopper in the drones airspace. The drone could bring down the helicopter. The faa hasnt done morse done much to enforce commercial bands. It issued just one fine. Orderonth, the faa did late made beer to stand down after an online video pitched beer delivery via drone to ice fishermen in minnesota. Megan hughes, bloomberg. Lets have a look at what is happening equitywise. Hong kong and shanghai, shanghai up 0. 4 . The hang seng moving 1. 1 to the upside as well. Just moments away from a rate decision. We will have the news direct from the bank governor. Hello, everybody. This is on the move. Gains for stocks across asia. The market in japan shrugging off weaker than expected numbers. Helipad. P to the behind the scenes at hong kongs oldest hotel. A flavor of what is going on marketwise. Good morning, everyone. General gains for stocks across the asiapacific. Lifted by the latest lending data out of china. We are watching the msci asiapacific. , for the most part, advancing significantly. Raising declines from 2013. That is the big piece of news from there. We have an Interest Rate decision injury lock up. In sri lanka. Breaking news. Governor, what is it to be . Where there is no change. We think that the rates are appropriate in these kind of conditions. We have seen inflation and thath having the momentum they need to have. Overall, the effects of qe tapering will not have any effect on the sri lanka economy. When you take the idea of the big picture, we feel that what we have today is appropriate and we are holding firm. Do you have advice looking ahead . Attemptedu might be to loosen policy going ahead . We think that the next couple of months should stay on course as we have right now. It is a little bit too early to see if the growth momentum has changed in any way. Initial figures that we have been receiving tell us that the momentum is there. There is no change. Not too much, not too little. Inflation has been behaving is appropriate. We would tend to stay on course as it is. We have also seen a fair amount of Infrastructure Development that has taken place. We did not achieve the results that we wanted to. Huge capacity has been built up over the last couple of years. That capacity needs to be utilized a little more. We will be watching closely to see whether that capacity will now be turned into real economic activity. If that happens that would perhaps give us momentum without the accompanying inflation that could sometimes arise if not. About theickly, what Federal Reserve as it normalizes Monetary Policy . Is it pretty much as it was . Before, thee stated way the sri lankan economy has been moving and investors have been coming in, it has been more valid longterm, the response. We have seen a quick, spore attic investment that has taken place in bonds and equity. We feel more comfortable that the next change in the tapering exercise will not have a further impact and we will probably see very little change as far as the sri lankan economy is concerned. Fairly comfortable with that. We would expect the economy to stay stable notwithstanding changes it will take place in the global economy. Always a pleasure talking to you. The sri lankan governor of the central bank. Find out if there has been any reaction to general trends we are seeing at the moment. Good morning to you. Lets take a look at how sri lankan stocks finished fridays session. It finished friday modestly lower. Today, we are seeing gains across the asiapacific. That is what we are watching today given the data out of china. Stronger trade numbers and lending numbers over the weekend. That is lifting stocks in hong kong and shanghai. We begin with the hang seng index. Insurers doing well and china lightning up insurance. Decliners include some of the macau casino shares. Energy and commodityrelated news today, gold seeing its steepest jump since august. We are watching this closely. We are also tracking crude oil today. And the mining stocks are those advancing. Up inlly gold miners all the order of 7 9 in that session. Keep an eye on the goldrelated stocks as that continues. Betweenet is swinging gains and losses today. Started the day lower after that disappointing Economic Data. Slower than expected and that is concerning given the fact that it is scheduled for april. We are seeing electric power stocks advancing for the utilities in a country. Take a look at the decliners. Show us shell. This is the major oil and gas conglomerate in japan. It is down nearly 4 . Watch what is happening with those commodity related stocks today. Lets turn our attention to some of the top corporate stories that we are tracking this morning. George soros has a new favorite. Sharesd almost 6 million in the last quarter. Of the 9nts 4 billion fund. Have rose 10 this year. Ana expects profit to double the next fiscal year. They are planning to step up costcutting drives and look to add new routes in asia and europe. Ee is hours result. Atnovember, it was looking exhibitions outside gaming. Those are the top corporate headlines this hour. Its latests released reading of gdp this morning. Limoneira growth figures for the Fourth Quarter. Quite a disappointment. They also realized thirdquarter nominal gdp as well. Lets get to the Fourth Quarter numbers. You have year on year. We are looking at growth from one percent. Difference, massive 2. 8 and 1 . How did they get it so wrong . I was looking at the forecast. It was lower than the lowest end of the forecast. That also goes the same for the quarter on quarter figure. There we go. Over the last few minutes, i want to mention this. Setatement on this latest of Growth Numbers. According to them, they do see the economy firmly on the rise. When it comes to exports, that is where the problem is. He says it is struggling to improve so they will be keeping an island that an eye on that. Not exactly what you would call a signal of confidence ahead of the failed tax increase. You have two colors of the economy. The third is investment. You have exports not doing really well. A deficit in the last three months of 2013. You would expect them doing well enough to build momentum. Japan may be that able to withstand the increase of consumption tax were based on the assumptions that you had this momentum flowing. A lot of these assumptions are being rethought right now. The person we talked to when the numbers came out this morning put this all into context. There is a big transition coming up this april. The consumption tax rate is going to go up. That will slow down the mistake man. If japan is to keep growing, it has to be taken over by exports and capital expenditure. This week, exports gave us a sense of risk that the japanese economy may significantly stall after april. So he thinks that the boj ease policyd further. That is what he thinks will be the best action. Goldman sachs, before these numbers came out, actually said they may need to eat some dues. Thank you for that. Speaking of japan, a tumble for records and for rakuten. Saying tog out and sell the shares. It is buying privatelyheld viber. Viber has 300 million users. They will look to compete with the line service. Be the return of Nuclear Energy in japan . This is on the move. Here we go again. Just a month or two after the credit crunch in china, bank lending soaring to the highest level since 2010. That does indicate a shift in emphasis for the peoples bank of china. Aberration,year even. Don ingles is here with us in hong kong this week. Read from this . It is probably a lunar new layer new year aberration. It is traditionally a heavy time for bank lending and that is what we are seeing, which brings us to the first chart, where we see new loans from banks. Trillion 1. 3 trillion yuan. Just about three times december. Again, we had these credit crunch concerns. He authorities coming out worried about shadow banking and excessive lending and where the lending is going to. So there was a bit of a squeeze going on. , new year,e around new concerns that the restrictions were choking off growth. So we saw a surge. This is the highest since 2010. Lets look at aggregate financing, the combined credit in the economy that includes corporate debt issuance is an shadow banking or estimates of shadow banking. Yu 2. 58ion trillion yuan, a record high since 2008. Is that going to be the continuing trend . That is the question. The pboc is still worried about shadow banking. We got that holiday week the first week of february. People no doubt wanted to buy presents. A lot of the resurgence comes after that. January 31 was the beginning of the Lunar New Year holiday this year as opposed to last year. What we have probably seen is a little more aggressive credit pushing by the banks this year. If we look at last year, january a new bankllion plus lending in january. Was down and another one trillion in march. Month,oing to dip this then we have to look at it going forward. The pboc, still excessive credit in this economy and where it is channeling two. To. Theets get you to some of events that we are watching this week. Bhp billiton out with results on tuesday. Looking for a figure around 7 billion. That is after rival rio gave back to its investors. They say criticism has been overspending on expansion. Jim mgm china has earned hundreds of millions over the years in macau. There was a gain in the final months of last year. Hordes of gamblers poured into the chinese territory. Families torn apart by the korean war get to meet for the first time in three years. Five days of meeting have been agreed to for those separated by the conflict. A similar event last september was canceled by the north. They did not give a reason why. Friday, g 20 finance ministers meeting in sydney for the first time. Boosting growth is at the top of their agenda. Shadow banking and tax evasion will also be discussed. Photosek, joe hockey that he thinks the agenda is a realistic one. At least a dozen reporters have been killed in japans second major snowstorm in two weekends. Chaos andions created saw dozens of flights and bullet Train Services canceled. Many reported around 20 centimeters of snow, with tokyo seeing the most in 45 years. The storm has now moved north. Major Power Outages across tokyo. A utilitiesre with analyst. Thats talk about cap go. Tepco. How badly hit were they . They were affected, but not the whole system collapsed. The key story here is going to mean more for tepco. They are in a bad position because they are financially weak. It has all the postfukushima issues that has to deal with. It is actually looking at cutting costs by almost 5 trillion over the next 10 years. This additional operating expense is not great. Jubal electric requesting a restart of their nuclear land. They are buying coal and gas. It is expensive. You can see it in their trade balance. Depreciating a yen. The bill that japan is facing is massive. The government is keen to restart some of the Nuclear Reactors as soon as possible so as to lower this energy bill. To me earlierying it is not as easy as flipping a switch on. And people forget, it is like a switch, but switching on the electric power when you look at nuclear, it takes months to ramp up. What does this mean looking at this closely, we see chubu getsba approval, right . Theiry are oneoff on Nuclear Capacity as well. The issue is safety. Joseph, thank you very much indeed. Up next, it could take years to find the right locations. We will meet the cruise that operate the hotels next. The Peninsula Hotel probably is not coming to a city year you near you. They will not just enter any new market as we found out. We do not do many hotels. And createocus properties that will really make an impact in the locations. Wait some time before we find the right location and right opportunity, the site in shanghai. That was a special moment for us to go back into shanghai. Thehen you take a look at location, you operate nine hotels globally. You are not in europe yet. I know that is going to change. Why have you waited so long to enter europe . It has taken so long to enter london and paris because we were waiting for the right opportunity. Many opportunities, particularly in london and it was not until the middle of last year that we developfind a place to a hotel in london. In londonll the one open . Not for another five or six years. The building that we are redeveloping is an existing building. He have to get approval and demolish the building and rebuild for the future hotel. Paris, we managed to find about five years ago and we found that deal. That building has been in construction for about three years now. In plan is that it will open the coming summer. Again, of course we are very excited about that. You take a look at the next five years, what locations are on your radar. The other two that we are working on, one in london. The other is in myanmar. Nowe all know, it is a very exciting, developing country. We are very exciting were are very excited to have a project right in the heart of myanmar. Beyond that, we would certainly like to look at some things in india, maybe turkey or the middle east, somewhere in between europe and asia. We would like to look at south america. Because we are based in hong kong, traveling distances are far for us. , china represents many Growth Opportunities as well. These are some of the areas we are looking at strategically in terms of longterm growth aspirations. More onan get a lot that and the other top headlines on the website. It is your source for business and market news. Do check it out, bloomberg. Com. Thriller set in northern china at the berlin film festival. It is the story of a former policeman turned private detective and investigating a series of unsolved killings. At the China Academy of drama, he has directed to other films. He also picked up the best actor award. Lets have a look at what is happening as far as trading goes. We have a japanese lunchtime close upon us in about four minutes from now. Lets take a look at that. Kei is lower and it was pulled down after we had growth data come out showing that the pace of growth was slower than any economist he had surveyed forecasted in the Fourth Quarter. Risks that underscoring to the recovery as we have the sales tax increase looming large in april. The taiex, kl, and philippines composition all. The Straits Times index up. 6 . To takep, we are going a break. Talking about the great Climate Change debate. Skeptics are told to bury their heads in the sand. Blunte john kerrys comments in indonesia on on the move, next. We go again to the asiapacific, the shanghai composite and raising declines for the year so far. The protest writing on in thailand, unrest may have bought growth to a near halt. Says Climate Change doubters are using shoddy science. We are live in jakarta. We have got that thai gdp figure coming out any minute now. Lets have a look at what is going on. As we await those numbers in the asiapacific, advancing this morning. We see all the markets in asia that are trading today posting in a dance. Hong kong is seeing the best performance, the hang seng up about one percent. January andng in better expected trade figures from last week. The shanghai composite reflecting that optimism, today advancing and erasing its declines for 2013. Key movers we are watching in the hong kong session, china life insurance. Those life and property insurers doing well in the chinese session. Along with tech stock. Tencent is up about 3 . Optimism is filtering through all across the asiapacific. Take a look at Southeast Asia. Malaysia continues its advance. 0. 7 , about 30 minutes into that trading day. We continue to follow the volcanic action there as well as secretary of state john kerrys visit to indonesia. The philippines seeing a gain of 1 . Foods nuvene have top of the list. Telecom and metro began to trust. As i noted, in japan we have seen gains on the nikkei 225 as trade continues in that market. We will get more on that in a moment. For now, we want to check in on what is happening in indonesia. The u. S. Secretary of state john kerry has lashed out at Climate Change deniers, saying they are deluding themselves. He was talking in jakarta. Give us the details. Good morning, rish. U. S. Secretary of state john kerry arrived here in jakarta on saturday, the last stop on his threenation asian tour to discuss Climate Change and push for more efforts by authorities to combat it. Speaking yesterday in jakarta, john kerry said that Global Warming is as big effort as terrorism. He also called on the International Community to do more now addressing Climate Change. But stick a listen. Lets take a listen. That speech came at the backdrop of the corruption of the volcano that disrupted air travel and forced cancellation of a planned meeting. This morning, john kerry is meeting his counterpart to discuss regional issues as well as matters related to u. S. Indonesia ties. His agenda today will include the signing of two deals, the first aimed at boosting cooperation on human rights and promoting democracy, and the second on combating wildlife trafficking. He is scheduled to leave for abu dhabi in the united arab era merits later on today. Back to you in hong kong. Thank you very much indeed. Lets find out what else is going on. We are having a look at Southeast Asian stocks right now. We saw that jakarta is advancing today as strength continues in the indonesian session, 0. 7 for stocks. That reflects the general games we are seeing across the region. In places like japan, we have had six weeks of declines. That is one of the more extreme examples of what is happening in some of these markets. It is good to see optimism filtering through. These are the movers that we are seeing in jakarta today. Equity developments up 34 . You have to consider the base level at which the stocks are trading. Keep that in mind as you look at the market here. We are seeing property shares moving as well in some of the financial related stocks in the indonesian session. I mentioned japan. Japan, heading into their lunch break, we have seen the nikkei swing between gains and losses. It started the day lower as the latest gdp report shows slowing in that economy. Ahead of that rise in the consumption tax. Stocks seem to be advancing. Utilities out in the lead. Sony financial is higher. I will eat you with a snapshot of the japanese yen. We had seen the yen rising, gold advancing as well. A bit of riska verse habits if you will in the markets. This is what we have with the yen. It is now weaker 0. 2 . Yen mayersal in the have an impact on Investor Sentiment today. Thanks. Thailand out with its fourthquarter gdp figures. Lets get straight to husband ammann. Haslinda amin. That are than expected numbers. Thai gdp coming in at 0. 6 . Economists were looking for 0. 3 . If you take a look at the numbers, compared to previous quarters, almost grinding to a stop. Not surprising given the prolonged political unrest. Dont forget about new investments, a lack of it. Investors are choosing to hold off pumping in more money and we have a caretaker government. That means economic progress and policies cant be put in place. The outlook, if you speak to economists, they say it looks pretty bleak. That is the sense in the market as well. That is enough reason to expect the central bank to cut rates at the next meeting. It surprised everyone when he kept rates unchanged at the last meeting. , want to touch on the baht down more than 3 in the last six months. The worst performer after the rupiah and the yen. Thai Consumer Confidence at the lowest level in years. 0. 6 better than what was expected which was 0. 3 , but way below how it has been performing quarters ahead. Thanks. Turmoils political affecting things when it comes to growth. Icbc is looking farther afield to boost a profit that already tops every bank in the world. Stephen engle is here with more on why the middle east is looking to lucrative. Icbc like many chinese companies, now that they have got saturation in their home market, they are looking overseas. Icbc has stated that they want to triple the overseas portion of earnings by 2016. The middle east is a big part of that overseas expansion post. They are looking to increase earnings in the middle east alone this year by 50 . How are they going to do that . They are increasing lending, obviously not only to chinese affiliates in the middle east, but also middle Eastern Companies. The ceo of the middle eastern unit of icbc is telling us they are on the lookout for potential acquisitions. What they are doing is opening up new branches, retail outlets, including the first one in saudi arabia. Also in kuwait and the united arab emirates. So they are going there. The First Chinese banks to expand into saudi in particular here. Other people will end up looking at this fairly closely. You would assume so. China Construction Bank and bank of china, i dont have any proof that they are but you would think they would be looking at saudi arabia as well. China is saudi arabias number two trading partner between 27 2007 to 2012. During that fiveyear period, trade increased 188 . Oil . It could be. Insatiableid to be demand in china for that. There is other areas as well. The other way . Absolutely. You have trade financing that is necessary. Theyre looking at lending directly into middle Eastern Companies like emirates airlines, qatar airways. Thank you very much, stephen engle. Up next, the gold bulls are back but for how long . Hat is when on the move returns. I am rishaad salamat. This is a look at our top stories. So much for fears of a credit crunch in china. Aggregate financing soaring to a record last month. New bank ending also rising to the highest in four years. The central bank called for lenders to control surging loans. Take these new credit figures with a grain of salt as new lending is typically higher in january ahead of the new year holiday. Gold still has some way to go. The longest rally we have seen since 2011. Billionaire john paulson maintain his holdings last year. Goldman sachs will probably say this rebound will falter. Growth nearly grinding to a halt in japan. Gdp coming in below forecast. Economistlf the paste half the pace economists reckoned. They see more worries ahead. The risk is that the japanese there is a big transition coming up this april. The consumption tax rate is going to go up. That will really cool down domestic demand. This week export performance gives us a sense of risk that the japanese economy may stall after april. Lets get the latest on the Foreign Exchange markets. Our next guest says the asian performance will switch places. The head of global currency strategy, great to see you. We had a story on gold just now. We had this bullish run for gold. Is it sustainable . It is bound to falter at some stage, of course. We remain bearish on gold. Nearterm, it looks fairly good. That being said, at the end of last week gold prices closed above 200day moving average. That is a very important level. There seems to be growing speculative demand. Etf demand has been picking up. You have a weaker dollar, u. S. Treasury yields, worries about growth, there are signs to suggest the gold momentum in the short term will continue. Further out, i think gold will come under pressure. Lets turn to the currencies themselves. They yen, we seem to have a bit of a block in it. Take toit going to break out of either side . 110 predictions were for and further weakening along the line. Todays Growth Numbers are staggering. Staggeringly week. Difficultyowing the in getting a Sustainable Growth path for the japanese economy. The consumption tax hike is imminent. We may see a rebound in growth in the first quarter. Because of the hike, you will see less in the second quarter. You need to see higher u. S. Treasury yields versus japanese yields. It is the yield differential widening. You will see the yen come under pressure and you will see the yen weakening. A morey also need expansion array policy from the bank of japan. So far they have been hesitant to do that. The signals are that they are not going to do it for the time meeting. It seems unlikely despite the very weak data that we saw today that they are going to add more policy stimulus. Moreen yields start rising , what are they 2. 7 currently . There is a fear, but not so much a fear as if it happens in that manner. That is what you were looking for right now . The other is capital outflows. We had this many emerging market crisis in january. Japan saw a repatriation flow. We need to see a rebirth of these flows. It is a yield differential. It is capital outflow that is very important. Sustained improvement in Risk Appetite will help to reduce demand for the yen as a safe haven. This Dollar Strength story that everybody is mentioning hasnt really materialized when we look at the majors anywhere. Sterling, 166 or thereabouts. The euro trading, one heard it seven 137. These are currencies which are strengthening against the dollar. At almostlar is now the lowest level so far this year. Pressure seems to be continuing. Part of the reason for the dollar weakness is that we have seen a run of weaker Economic Data in the u. S. A lot of negative data surprises. Some of that because of the bad weather in the u. S. I think markets want to see more concrete signs of u. S. Recovery. That will of course transfer and be manifest in the higher treasury yields. In part, that is right. You will see the dollar come under more demand because of that. So far, the jury is out. The numbers are still week. This weeks data releases arent expected to be great either. I dont think we are going to see the dollar rally, at least not for now. What about these emergingmarket currencies . We are seeing quite a strong rebound in many emerging markets. We have been recommending the underperformance in asia to rebound. That seems to be the case. Korean won, the korean the filipino peso doing well right now. The bank of korea is fairly interventionist, arent they . They are. The yenkorean won rate will always be an issue for korea. Expect to see further rebound in the short term. I would rather play this against the euro. At these levels i think you want to play more asian currency strength. By versus euro rather than u. S. Dollar. I still like the philippine peso. View at all . Has beenai baht remarkably stable. Despite all the tensions and nervousness, i think that will be difficult to sustain. The Economic Outlook deteriorates the more the Political Uncertainty goes on. The support for the thai baht it is confidence in the currency as well. That is right. The more prolonged the uncertainty, the less the confidence will be in both the investment flows and the economic recovery. Great talking to you as ever. Still to come, first a surprise win at the state level but barely seven weeks later, he is gone. We will be live in mumbai next. Barely 50 days into his job, delhis chief minister has quit. Arvind kejriwal may be looking at the bigger picture, those National Reactions in maine. What is the latest here . This seems like quite a political gambit. He didnt even hit that 50 day mark. He resigned after 49 days in office. New foreign minister has been marked. He has protested against the police. He is taking on Power Companies in new delhi. He has said that he is protesting against an anticorruption bill, saying that it was not strong enough. He has also gone ahead and said that he had filed a Police Complaint against the oil minister. He has filed a Police Complaint against indias richest businessman as well as his company, alleging that the company was responsible for creating an artificial shortage of gas in the country. This seems to be targeted towards a larger role. We had the general elections coming up and he has announced he will be contesting a lot of those seats. It will be interesting to see what he does. Government has said [indiscernible] thank you very much. Interest in Drone Technology. Indeed, aircraft themselves. There is a growing argument about usage and flight rules here as well. Megan hughes reports on the drone boom and the worries that it is causing. Drones have gone mainstream. Even modern family character phil dunphy has one. Has borrowed it from his Real Estate Company to spy on his son. Real estate is one area where reallife tron use is widespread. Propertiest video of , neighborhoods and even home interiors. They are capturing servers on hawaiis north shore. The filmmaker of a gettysburg documentary toasted about the technology. It is mounted with a high death camera. It can shoot from a few feet off the ground to 400 feet in the air. They are beautiful shots that also may be illegal. Dronea does not permit flights for commercial purposes. You cannot just acquire one of these and launch it into the airspace. That is not how it works. But you can. That is how it works. I am saying that the regulation needs to say that. We went shopping at a drone dealership in maryland to see how easy it is to get one. This is in the 800 to 1000 range. For the one with the camera, that is closer to the 1500 to 2000 range. Technician doug bennett says the camera equipped phantom 2 is flying off the shelves and the sales are legal. How the drones are used is someone elses problem. Is there anything in here that is going to show me what the faa says i can and cant do with this . This box will not tell you about the faa. While the faa is struggling to write new guidelines, he is worried about crashes. You can see a chopper in the drones airspace. What is the worst case . The drone could bring down the helicopter. So far the faa hasnt done to enforce this commercial use dan. It issued 17 notices but just one fine. Last month, the faa did order lake made beer to stand down after an online video pitched beer delivery via drone to ice fishermen in minnesota. Megan hughes, bloomberg. Drones may have their fans but they are far outnumbered by mobile phone gamers. Of all the apps downloaded these days, more than half our games. We have breaking it down by the numbers. That is it for this monday edition of on the move. Asia edge is next. Angie will be joining me as we recap the top stories of the day so far, including a look at australias largest rail freight operator. This is asia edge. It is the middle of the asian trading day. That is a live image of hong kongs pictorial harbor. Victoria harbour. A look at our top story this hour, hong kong leading gains across the asiapacific. Shanghai has gone higher on the year. Japan ending the year with a disappointment. However, you have that slowdown in thailand, not quite as bad as had been thought. I am angie lau, also coming up this hour, the political tug of on in thailand. Hurting vitaly is holiday trade. We have a special report on bangkok tourism. Chinas bank lending last month rose to levels not seen since 2010. A shift in emphasis or a new year glitch . We will ask our correspondent. Largest rail freight operator is out with results. Ceo, all thathe and more in this monday edition of asia edge. Keeping an eckert eye on the markets today. We are seeing gains across the asiapacific as we begin a new trading week. We are seeing the cost the index up 0. 3 . Slowingnese economy with the latest gdp numbers showing the governments big task as it tries to raise the consumption tax. We are watching that closely. The hang seng advancing along with the shanghai composite. Shares in china erasing their