Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20140728

David, what do we have so far . From the ings shanghai fda did confirm the factory in shanghai did tamper with the production dates of some of the meat pies. E mean the pattys that go into the burghers. Chicken must have had a hand. Chicken was taken off the enu here in hong kong. We are seeing the postgame account, these are processing plants in china that have export license to export to other places. Now what they found as i mentioned is that they did tamper with the production dates. Almost 70 of the repackaged pies have been sold to the market. That s yet Parent Company runs this and nine other plants in china said full recall all products sold from this specific plant in china. We want to rebuild the trust of the customers and cooperate with the fortunatelies. We are compelled to withdraw all products manufactured from his specific facility. Give it back. Dont sell it. In hong kong they are in even more hot water. Yeah. It is a tricky p. R. Mess that they have gotten themselves into. On friday they pulled the items off the menu. Previously, and i think it is here in the newspaper. South China Morning post. The front page they are basically saying that we are sorry for the lack of clarity but did not clarify. They basically held a press briefinglies and did not take questions. They apologized for what they called a lack of clarity. Last week they basically said from ey did not force plant in shanghai. They are apologizing for not being able to communicate properly causing a lot of confusion among people and authorities are trying to determine whether or not they knowingly sold the meat, tainted meat. We will continue to follow the story. David, thank you very much. Ok. We will have a look at the markets this monday morning. Trading sessions getting underway. Also there are quite a few closed, including singapore. That is right. A few markets are closed. We have indonesia, singapore and malaysia all closed for market holidays. Indonesia included in that. That is why that screen looks kind of bare at this moment. Taiwan starting their session. You out what is happening see modest gains there. Of course we will be looking ahead in 30 minutes time for the data that we got from china over the weekend. Industrial profits as well as the jobs market, the labor market. We will see how that impacts stock when trade gets underway. We have the market, index in the region slipping from a sixyear high. A nice performance to end out the week. Lets check in on the japanese markets. Ou are seeing a modest gain. Hi tacha chemicals, up 11 in the session. That stock rising as the First Quarter sales coming in stronger than estimated. Bloomberg reported hitachi may be open to closer links. Lets have a look at nissan in the north American Division recalling more than 200,000 calls. Recalls down to faulty air bags. This does come on the heels of a million vehicles being recalled. Craig, what is the latest . These models are more than 10 years old. They may ring a bell for headlines you may have seen for weeks related to a japanese parts supplier that supplied faulty air bags across the industry. The problem is the inflators in he bags. It has resulted in pretty scary accidents where serious injuries can result from this rupture. So you have seen a number of vehicles recalled by nissan and by honda and toyota and by u. S. Automakers and european automakers as well. It is a recall that they will take a substantial charge for that essentially may wipe out the expectations for profit for that parts supplier this fiscal year. Thanks for joining us. Lets find out about nissan and rival honda. They are reporting today and tomorrow. Steve, welcome to the show. Talk about what we are looking for here. Sure. I think we will have a mixed look last week they had a lot of currency head ind. Japanese had a currency head wind. You look over in the u. S. And their home market it is a different story. The u. S. You have honda basically sales performance. It is below u. S. Auto sales. You have toyotas in line. Nissan is performing better than u. S. Auto sales. In japan you have the april 1 tax hike that is impacting sales now. How does the yen play here . We mentioned it but what is it doing now . The yen is pretty much stable. So the yen impact will be muted. It will be more related to what happened in the andus what happened in the japan market. Now you mentioned the sales tax hike. Up to 8 now. They warned they would be absolutely crushed by this. What has been the deal though . Well, it is a ship and demand story here. Basically what happened, before april 1 we had a huge surge in sales. People were thinking like i better buy these cars now because it gets expensive because of the higher sales tax. They bought a lot of cars before april 1. Now we are seeing sales flat to down slightly. If you talk to industry observers and our Research Indicates sales may remain soft and may even go down further. Ok. When we look at what happened because china is the biggest car market in the world here. We have had this spat between beijing and tokyo over these disputed islands that crushed sales of japanese vehicles in china. Is there a follow through on that . Well, the sales have recovered since the antijapan protests. It has been relatively stable. What it did was expose some of the weaknesses except for nissan. Nissan has a different strategy. They are more aggressive. They introduce a lot more models. The consumer responded to that. Thank you so much for joining us steve. Now lets get the latest now on this conflict in the middle east. Fighting has resumed in gaza following the collapse of a fragile ceasefire. Hamas said they would stop firing rockets but israels cabinet discussed they sent a new wave of missiles over the border. It has killed more than 1,000 alestinians. Washington has released Satellite Photos it says show russia shelling across the oarder into ukraine. Claims are coming as the netherlands said heavy fighting prevented investigators from reaching the crash site. Up next can a name change the fate of Malaysia Airlines . We will discuss the future of the carrier. That and more coming up after the break. Well, reports the malaysian government is considering a new name for its struggling national carrier. They were losing money long before the disappearance in march and shooting down of mh17 over the ukraine. The carriers future has been questioned and the Financial Times says other options are being considered to protect the company. Andrew, thanks so much for joining us. I want to get to what the netherlands are saying that they are having difficulty to get to the crash site. What can be done about this . Well, it is truly shocking more than a week after this tragedy we still do not have full access to the site. Some investigators made their way there as journalists and that has captured a lot of mportant evidence. More tragic is recovery of the bodies is not complete. The Prime Minister trying to negotiate with the rebels and other efforts to get control of the site so the investigators can complete that work and the recovery of any remains. One week on from it we have more certainty now as to what really did happen. How much of the initial claims by the west that it was ukrainian rebels that shot down the plane have been corroborated . The evidence has accumulated on many fronts. The finger pointing continues as to who initiated the attack but we will leave somebody else to decide on that. What was clear is that it was shot down. The thing is Malaysia Airlines with two disasters taking place in the span of four months people are questioning its survival. Can it survive in the manner it is existant today . I have every confidence they will survive and recover and come back from this stronger. To suffer an accident or two is devastating for any carrier and it will take a considerable effort to rebuild complete rust in the carrier. This airline has a good reputation for safety. It is a fivestar airline in the awards. You know it continues to fly every day and carry tens of thousands of people every day. The challenge now is to focus on supporting the family and next of kin and to support the accident investigation when that can take place properly and meanwhile to keep the airline running. Rebuilding confidence is typical practice to stop advertising and there is a point it makes sense to start advertising. The message around that and the brand how you restore full confidence in the brand. The key thing is to build on the strength that you have with consumers and then to move forward from there. Perhaps the exercise in renaming it. It would just be smoke and mirrors and people would see through that, wouldnt they . Yeah. And there are special circumstances when you are talking about an airline that shares a brand with a country. You do not rebrand countries. So i think one has to look at that and the government is a major owner. He will have a big say in the strategy going forward. I think personally the restructuring was a task ahead of the airline like Many Airlines long before these accidents. Just a o be revisited final question here. These two events have shaken confidence. I think you should put into context how safe flying actually is. Indeed. It is a part of every day modern life. Last year 3. 3 billion flew. That is close to 10 Million People a day flying. You have to think about that. The accident rate keeps Getting Better over time. It is running at 1 in 3 million flights is lost in an accident. That trend has been improving. But every accident is a tragedy. People can rest assured flying is extraordinarily safe and we will continue this trend of improvements in safety. Thank you for that. Lets have a quick look at the stories we are tracking for you today. Beats is facing an action from bose to block noise canceling headphones. It has filed similar suits against other rival headphone makers. Apple agreed to buy beats in ts biggest ever acquisition. Hitachis c. E. O. Says he is open to talks between two of the largest manufacturers. Hey merged their businesses. We built a relationship where we can talk to them frankly. I will not deny the topic of merger may come up in a conversation. We will take a break. Coming up next, a look at the big beast that could transform the marine corps. A special report in a couple of minutes. Lets check some of the stories making headlines around the world now. Two u. S. Citizens contracted ebola in liberia. He medical director in monrovia. The other person works with the hospital manager. Nearly 700 people in west africa have kai died since march. It kills about 90 and it has no known cure or indeed treatment either. Insurgent fighting in libya has prompted the andus u. K. And others to advise citizens to leave the country immediately. Ighting has spread to tripoli. U. S. Evacuating staff from its embassy when a convoy came under fire in what is seen as an attempted carjacking. Banks and businesses have also been attacked. Ship hit a reef and capsized off the coast of tuscany killing 32 people. The hull will be searched for the remains of an indian waiter, the only body not yet to have been found. It has been a while since the u. S. Military has stormed any beaches but the marine corps is testing equipment that could revolutionize invasions that are done by sea. Lets have a look now. You can get more on that story. All you have to do that is download bloomberg plus to get it to your mobile or tablet. All of the basic food groups, and now we like hearing from you. You can follow me on twitter too. Ok. We are 25 past the hour at the moment. Minutes away from the starting of trading right here in hong kong. This is what it looks like. Hang seng closing out with a gain of what . We have declines there in the futures contracts. You might say a flat opening in prospect. Asian pacific stocks are generally speaking fluctuating i suppose you can say and the regional index is off the sixyear highs and we also have a few markets closed in this market of the world. Indonesia and malaysia and holy ore, all marking the uslim month. After the break he reveals his doubts over the countrys official economic model and we will hear what he has to say about that and indeed what is going on with the Property Market that he is so vocal about. Total recall. Chinas rising food scandal with mcdonalds and kfc. Applications for the japanese economy and the yen. Counting down to australias biggest debut in years. Straight to what is happening outside of the trading day. Fluctuations at the moment. What is going on. Well have a look of what is going on with australia and we will check in with him. Also malaysia and singapore as well. Not in the mix, jakarta. Of the holy month of ramadan. Find out what is happening with the biggest ipo in 4 years. A look at health scope. They are looking to raise 2. 5 billion with 2. 10 per share. That is the price indicated in the lead up. The biggest in years. In effect since the operator was funded. Controlled 44 clinics. Is forecast to make 147 million profit. Currently, it is held by a private Equity Company. The Carlyle Group and they will retain 38 of the shares. To getre plenty looking into this aging demographic. The malaysian employees and willalian and a blackrock be major investors. It will be the first time that ordinary investors are dan are going to get an opportunity to buy into healthscope. It will take place at midday local time. How much publicity has it had . Reasonable enough. It has not been a great deal of publicity and the local media because it has been a wellknown as the largest ipo in 4 years. Theres a bit of interest. It has not turned profit for a while. It is a bit of contention. Return to profitability in 2015. Populationtrys ages, it will be a good time to be in the health space. Paul allen joining us from sydney. Healthscope, what is it going to be debuting in . We are looking ahead to markets today. That is right. Good to see you. Region. Across the well start with australia. It is trading lower. The regional benchmark. For the week last week, we had a 1. 4 gain. As mark is again underway in hong kong and shanghai, moderate advances. Shanghai lifted by some of the data over the weekend. I want to take you to the asx and commodities because we are tracking Precious Metals with the ongoing gaza situation and a bit of a risk of the table of investors. This was you see. Crude oil in new york is pretty much unchanged. Copper in the middle space is a down. Gold am a look at it. It hit a oneweek high on friday. Gold, look at it. If we look at the aussie gold miners, this is what we have. All seem very nice gains. It seemed the best. The shanghai and the composite, eye onto keep an property investors. They authorized debt sales for the first time in five years and it is having an impact. Whose a list in the market. We will have a lift in the market. One of our relieving the movers on friday as well and they had results. The transport stocks moving downward. A subway operator in hong kong and a major priority for development here. Down about 0. 8 . Likehai composite looks its a best share performer, market performer. Key stocks moving to the upside. 8 as we interpret the latest data which came in pretty strong. Jobs was mixed over the weekend. Thanks, zeb. Questions around the countrys economic model. Our guest spoke to charlie rose. The data judge shows the open. Is completely wide and more and more credit is going to support less and less of growth. The chinese economy based on construction, charlie, it is really manufactured growth. The moment you put a bridge or building up, it counts as gdp. The problem is when you finish building, you have to put up another. Chineseorm that the felt was coming up is a little safer. And a lot of you will never be economic. Grown gones from gdp growth of double digits 7 plus. 1 to we have to color this with the concept that china is the only major industrialized nation that knows is a you will gdp on january 1. [laughter] because . It is what they are going to say it is going to be. Whatever they say it is going to be is what they will report . A cartoon of them and our presentation of all of them are round the table and say the growth as. 5 at how do we get there. Theres a lot of theres a lot. [laughter] going for thatot economy. The emerging middle class. Social tensions. They are making a serious effort to deal with corruption and clearly dealt with corruption. Try to deal with aleutian. It is a priority for them. The third priority is a sustainable economy. And try to deal with pollution. They also lead are very serious people and they are not to be underestimated. However, there is a saying in china, the mountains are high in the emperor is far away and all action happens at the local level. That is where the democrats even though they can correct things, theres a little bit too much faith put in the Planning Committee because the local level is still to produce numbers. Will catch in that chat with jim chanos at 11 00 p. M. Of the stories making corporate headlines today. Supply is the latest food scare. With bad dates. Almost all of the prepackaged meats have been sold. Closed andas been five people are under arrest. The bank of china has announced massive shares. Under new rules, the four biggest banks might face a shortfall by 2019. The battle for at travelers in india is heating up. Singapore airlines and a local partner are planning to start flights by september. Last month, air asia started u. S. As low as 2 dollars it is the summer and its time to plan the next holiday. The five leading cities in terms of tourism. All right. We have to take a break. We will hear from bank of america strategist. On the move is back in a couple of moments. A look of the trading day. Where off a six year we are off a six year high. As the ipo taking place. G is upngs hang sen 0. 8 . Some of the shares right here. We go. O, there up 0. 5 . No training in indonesia or malaysia. It is a public holiday. Are not quite what they used to be. Does it paint a picture of bad as it could be . That is the topic. For decades, the country was among the worlds most exported. If you look at to value of. Xports are down by 0. 25 policy makers have pointed to weak overseas demand. That it wasnt that are pointed to as a why we are seeing such sluggishness. Well . Whydoing is it doing well . Behind. Ports, lag why doesnt look so bad . Why does it look so bad . It fell against the dollar. 23 against the euro. If you look at the one we are seeing at 35 . Japanese exports are much cheaper. That is the point. Consider the word, exports. Despite electronics are popular. These if you buy outside of japan are not made in japan anymore. They are not considered exports. If you take a look at the japanese yen over the past 10 years, it has strengthened substantially against the u. S. The dollar. A lot of the Big Chinese Companies have moved. This is aptly what mitsuru pointed out. Japan is being left behind. Mainly because Japanese Companies accelerated the shift depreciatedthe yen after the lehman shock. Take a look at the auto sector. Japanese automobiles and the United States, we saw sales up 6. 2 the first few months of the year. Auto exports from japan into even the u. S. Was down. Toyota, setting production records in the u. S. Now exports out of the United States. When you take a look at all of be doing asmay not bad as the entire export picture paints. That is the Global Outlook for today. Joining us from tokyo, a chief japan strategist at bank of America Merrill lynch. Thank you for joining us. Why do you have that thinking . Well, thanks. Term, we are very on the yen. We expect the dollar yen to rise to 1. 08. Thekey driver will be Monetary Policy difference between the boj and the fed and it leads to an Interest Rate between the two countries. Corporate have japanese selling in the form of investment. Spread, we could see more japanese money flowing into securities. Is from the shift Foreign Exchange market perspective. You cannot continue sweeping the current siena hoping for prosperity. The currency and hoping for prosperity. Well, it is certainly lagging. A little bit difficult to separate structure. The laged one year of of the impact of exports. We should see moderate recovery from july to september quarter. If it is true that a better economy and Weaker Exchange or do not go forever, i do not think we are at that point just yet. Be structural to reforms in a place in japan and they start to work because it will it . And they will not start to work overnight, will it . The higher growth that might result in exchange rates. Massively easing right now. In terms of inflation and profit, i think it is possible that two Percent Inflation will probably not next year the boj currency expects. We think 2 inflation is a more of the story beyond 2015. How does the nikkei and stocks at the moment behave in regards to the currency . Nikkei boje correlation hasnt diminished this year. I think its because of the market is focusing on the growth strategy. Market danof a traders market. Modestlys been resilient. That is true. We have been talking what happens with the yen versus the dollar. What about the euro . That is exactly true. We have dollar yen and euro. For now, the boj is firmly on pause. Ecb has implemented further easing. Stance is a winning at the boj. The wait and see stance. It continues to be under pressure to the downside. Absolutely. As we continue as you are predicting, the devaluation of the yen. How much of it will be exacerbated if we have further monetary easing out of the bank of japan . Boj expects it to rise to 1. 9 next year. We think it is a little it takes a little bit more time for the kind of structural change that the boj is pricing in right now to take place. Perhaps 2016 and this of course means the boj will face some achieve theorder to objective for the next year. We think the earliest time in the boj can ease additionally will be this october when the boj makes an assessment of the price and growth outlook. You know, what more can itd do . If you have further easing, the policy is not working . Well, the policy is definitely working if you look at cpi. It is well above 2 . What i was just saying for the boj to keep credibility, it may showto do something to that it is committed to achieving its 2015 target. If you look at the economy, it is doing well. If you look at long term, they are reading quite high. Easing ismonetary feeding into a broader category in my view. Some of the Economic Data points that are coming out and we look at any inflation number we had last year. 3. 3 . That is what the expectation was. The sales tax hike according to the boj, taking points off of it. Yes, that is true. Cpi right now is 1. 3 excluding the tax hike impact. It is kind of true that the data is still a mixed and inconclusive in terms of the economy response to the tax hike. I think this Third Quarter will be the key quarter for the boj to determine if it has to do something or not. Started raising wages starting in the june july period. The results of the negotiations and the juno number will be out this thursday. I think it will be a focus point for the time being. Shusuke yamada from bank of America Merrill lynch. The prospects of the yen. Thinking it will weaken. This is bloomberg and this is on the move. All right, a quick market check. Seeing gains. Shanghai composite up even more. Taking a look at that. There you go to the upside. Hello, everybody. I am rishaad salamat. This is on the move. About to make the trading debut. Australias largest ipo since 2010. Asian stocks at six year high. The recall in chinas food scandal and snares mcdonalds and kfc. Zeb is having a look and watching numbers for us. A reverse. We do. More markets are rising than a declining. Look at the shanghai composite and hang seng. Given some of the encouraging industrial profit numbers we had over the weekend. Japan and south korea, both down. The philippines are seeing a moderate to move. You may be wondering why no malaysia or indonesia, they are closed for a public holiday. The trade for healthscope. A major ipo. What we see in the fx 200. Down. We will bring you up to speed up to speed very quickly as the countdown to the opening. At 12 00posed to be sydney time. The final price is 2. 10 a share. Give it to paul allen in a minute. On the other piece of the market, other stocks moving in australia. The commodities shares. In 4 years. St ipo it was telling minutes ago. Let us look at healthscope and how much is this thing worth . Well, they are looking to raise two point 5 billion. Trading is underway. It. Ook like they price and they are looking to raise 2. 5 billion. Was down slightly but back to its original pricing. Hospital for it a private hospital operator. It is the biggest on the asx in 4 years. Held mostly by the private Equity Company and Carlyle Group and they are holding on to 38 of their stake. There is strong interest from superfunds looking to get into the aging demographic especially in malaysia and australia and blackrock among the major businesses. Thatve minor investors want to have a chance to get involved. If we take a look at the price, it has not moved a tremendous amount. Just a shade from the listing price of 2. 10. Well watch for the rest of the week. Thank you for that. A media scandal. Meat scandal. The government has been taking action. What is developing the right now . You had some finding out of the shanghai fda and a statement from the Parent Company which a lot of people sort of overlooked and all of the relationship between the supplier and mcdonalds. They followed mcdonalds into china. If you look at the scale the Company Operates into a look at the website, serving 40 countries around the world. Some of those production bases are used to export to other places. , they stoppedan all chicken exports from this group. Yes, the mcnuggets. Lutettuce. His even the findings over the weekend confirmed the plants were tampered with. On was all were repackaged. I talked about the company putting out a statement and they are basically saying, we are doing a total recall. And thing that went out of the plant, we are calling back. Is on your shelf, give it back. They are saying they are compelled. They also have a new Management Team in china to ensure the operations are efficiently and cooperating with authorities. The Shanghai Municipal government, the highest Ranking Member overseeing was commenting. He said the investigations would be candid and transparent. And broken rules will be punished severely. Chris and that is david in glass talking about that and that is David English talking about the applications. It is trouble. It is making the front pages of a lot of the periodicals. This was the China Morning post. Last week, they said they were proactively halting certain items. They initially said they did not buy from this shanghai plant. Over the weekend, a very brief press briefing where they said they were sorry for the lack of clarity but they were not clarified that they were buying food. They are doing a uturn. We will continue to follow this. Being investigated from what i understand. Theher or not they knew products were tainted. We will check on some of the stories. To the middle east. A fragile ceasefire in gaza. Hamas said it will stop firing ofkets ahead of the end ramadan. As the is really government as the Israeli Government talked over the sediment, there was a knot around. There was another round. Israel has lost 43 soldiers. We had 2 civilians killed in mortar attacks. Russia is shelling into the ukraine. The state department saying separatists are using heavy artillery here provided by russia to attack ukraine. The claims are common as the heavylands have said fighting has prevented them from reaching the side of the Malaysian Airline 17. There are reports that the malaysian government is making a new name for its national is losing stop it money long before the disappearance but for before mh 370. Other options are being considered to protect the company. Nk bearish on the dollar. Topill be talking to mabs strategist. That is coming up next. All right. Live from hong kong and streaming on bloomberg. A healthyn china saw jump in profits in june. It is almost double may. It is not the only chinese data people are talking about today. Zeb will explain. That number is reasonably reliable. Two numbers which leave a lot people scratching their heads is the labor market and jobless rate. There are two different set of numbers from two different are as. Urban unemployment. This is significant. In the worlds second largest economy, you want to have a good picture of the jobs market. You want to know how many people are in the labor force in certain areas. Take a look. The Ministry Reports a jobless rate while a Reform Commission reports 5. 01 . This is a divergence. It is a challenge that many economists face. Hot you get a clear picture how do you get a clear picture . The milliondollar question. That is right. Not a clear metric. Is analyst like jim chanos more skeptical. The minute you stick a shovel in the ground and put up a building or bridge, it is gbp. The problem is after you finish, you have to build another one. This reform that the chinese optimist had years ago is still elusive. Thats was jim chanos. Ok. He brought suspicions. Raised thisple have issue. You mentioned the labor market. With a lot of migrant workers. How does it play into this . A the government has moved to place where they look at the workers that are registered. That excludes migrants. Millions of them. A huge number not to be accounted in the statistics. Let us not forget the labor statistic is so crucial to leadership. Income,ave a job and you are happy and your life seems to be moving forward and that is stability in check. They think jobs and personal incomes are the most important they have to face today. Thank you for that. Zeb eckert. And ino to currency wise the Australian Dollar. Our next guest is bearish on it. Fx joins us from sydney. Ray, great to see you. People have been predicting this. What will it take or us to get the 10 you are mentioning . Quite a lot unfortunately. Obviously thomas it is by and large a big u. S. Story. We will need to see a combination of the u. S. Dollar aining more traction which is predictable policies story and we will need to see volatility return to something closer to his stork averages given we has stored whole store it historic averages given what we have seen. Happen andt has to what has started to happen. The markets will realize that it tends to trade from key export prices and it is associated with a weaker currency. We expect a perfect storm that would bring about the financial. Alling to the trading thee have a situation where central and reserve banks are doing what ever they have to do and the short term and the aussie. It is the u. S. The dollar story. The yield story emerged and it yields climbing. If that where you are saying is going to be the capital . If you look at the past week or two and the dollar in a narrow index terms, we close on friday above 81. That is the first time we have been above that since february. American bonds have been down. At the moment, we are getting upward momentum for the dollar. Woin growing believe around the timing of the first tightening over the said is askew towards earlier rather than later. Skewed towards earlier rather than later. It is moving higher and enduring the longer range. We are going to need to see higher yield, but we will compress of those differentials of australia and the United States in particular. A guest suggested he is predicting yen. End of the 108 by the the year. And there is contention if we will get easing as well. That is right. If you go back to the beginning of the year, there was an expectation come the second quarter, the bank of japan would its program. At the moment, the bank of japan seems to be sinking the economy has weathered sufficiently well. They are not minded to do that at the moment. That is why it is such a narrow range over the past six months or so. Ultimately, the weaker yen will step up capital outflows from japan and that will probably be the key driver. We know there are asset relocations and benchmarks coming from the gsfi, the biggest pension in the world. I think that is one of the things that could drive the yen a little weaker. And more people are more enamored over foreign currencies or to have a foreign currency denomination. It might be that rather than what the bank of japan does. Will we get to the 105 or 110 levels we hold to a sixmonth forecast. Ray, i want to get onto stirling. Highs. F its do we see further weakness . If you look at the fundamentals, the fastestgrowing economy among just several. G7. We have the Scottish Referendum coming up and does it play into it in any meaningful way . Potentially it does. Is inside. Ndum with the opinion polls would have you believe it is a foregone conclusion. Lind will permit escala will remain a part of the will and in scotland remain a part of the eu and that is not to be the case. The number of u. K. Companies showing the strength of sterling. We are getting policy messages from the bank of england of will they or wont they raise currency rates. A bit of uncertainty. Think it will probably continue to depreciate against the euro. Particularly if the euro remains under pressure from developers and the ukraine and russia for example. It looks as those the nonpositions. A little bit of underperforms and uncertainty. It could bring us lower in the short term. Looking at in the state of labor. Coming up, the holiday. The leading cities attracting tourists. You are watching on the move. A look at some of the stories making headlines. Apple is being consumed. Facing infringements. Apple is being sued. Rival filed suits against phones maker. Is having talks with mitsubishi. Of japansbetween 2 biggest developers. For teamed up to bid another division as a well. Relationship where we can talk to them frankly. I would not deny that a top merger could come up in a discussion. Is looking to raise a 13 billion. Bank of china also announcing massive shares. Under new rules, the biggest lenders might face the battle for at travelers is heating up. They will start flights of by september. Asia launched base fares as low as 2 u. S. Cents. Summer andiddle of its time to plan your holiday. Well take a look at top cities in terms of international tourism. Right. The trading day. Have in the moving higher across the asiapacific. On the currency, we have fairly unchanged picture when it comes to the yen. Just under 101. We had a guest that is suggesting that it could depreciate. Ands talking to ray attrill he is predicting we could save the Australian Dollar drop back to 85 u. S. Cents and that will be a target towards the end of the year. So, it is looking like this. Pretty much unchanged. Up next, japanese automakers looking to release results. Aprils sales tax rise. But that and more when on the move returns after this short break total recall. The common he at the center of the widening the company at the center of the widening meat scandal is recalling. Trade talks could collapse. Break upon us in tokyo. Oft is happening in terms the asiapacific. A lot of markets are closed. It is. The map tells of the picture. , and indonesia, malaysia singapore are all closed. Indonesia will be closed all week. Do not expect any action. We had some action today with Economic Data out of hong kong. China over the weekend. Impress investors, 17. 9 again. Shares our best performers and now. Advanced,ng, shares these chinese shares traded for a bull market. We will be covering this more indepth over the next hour. Stay tuned. Has ccording to waters reuters has applied for a mixeduse permit. Governmentnas authorizing the development to the first timeor in five years and that is given a lift to stocks. Take a look at china. We continue to follow this food safety issue. Let us check in with the japanese market. The nikkei 225. Up 0. 5 . The stock in focus on the latest share plan, the buyback share. Check out mitsubishi chemical. Doing verymical is well today. Watch a that chemical. The most in five years. Pharma stocks. Its stop is very active and is active again today. Look at pharmaceutical companies. Thank you for that. A look of what is happening. A busy day. Hunt of reporting today and tomorrow. Bloombergs analyst is here. Honda is reporting today and tomorrow. What do we have . Earnings will be a mixed bag for the japanese auto industry. If you look at last week, korean automakers had a currency headwind. Japanese earnings coming through tomorrow. You would not see the tailwind. Is, we had to be 18 and say we cannot make things so they shifted abroad . The yen basically depreciated about 25 two years ago. When in the earnings were brought back to japan, recently, the last six months, they yen has stabilized. Between 101 and 102. Earnings will be very muted and this past quarter. What will affect the japanese earnings is basically the sales in major markets like the u. S. The u. S. Auto sales a relatively mixed depending on the automakers. Japan, you have the april 1 tax hike going up. How has that played out . They are all screaming foul. It will take a big hit. Shift in demand story. You had demand shifted forward. You have is solid afterwards and we will look at Forward Guidance here. If you listen to some other observers, we think the japanese automakers will remain soft and maybe even decline further. Some of thek at most important markets and that is in china, the biggest car market. The spat between beijing and tokyo hit sales. Have we seen that or is it still there . For the most part, it has recovered. We had a plunge in japanese sales in china and now it is relatively stable. It has exposed some of the weaknesses. Nissan has done fairly well. It has regained most of its market share. They were very aggressive with new products that consumers are lining up to buy. Thank you for that. Honda reporting today and tomorrow. We are talking about japan and exports are not quite where they used to be. Is it as bad a picture as it used to be . Has some interesting numbers. Thanks. We all know this. Had beenfor a decade known to sell some the best things. Not quiteers now are the case. The value of exports from japan 2008. Below policy makers in japan put the government and central bank have been pointed to what they call to explainas demand the sluggishness. A question is if that is the case, why then our rivals, other countries doing well . Take a look at the other chart. It shows the recovery in exports from south korea to the u. S. And germany. You see japan is really lagging behind. Why does it look so bad . Why the big discrepancy . If you look at the advantage of japan and how the yen has moved across, it has weakened substantially. 31 of this the u. S. The dollar. 23 against the euro at 35 w eaker to the south korean won. It cannot be much cheaper. That is the point. Consider exports. Not ase electronics, popular as they used to be. You have the apple and samsung for example. Products overseas are not made in japan anymore. Howou take a look of valiant has a moose, it has strengthened substantially. The 10 year chart. If you look at how it has moved, it has strengthened substantially. The bottom line against what you can see here. This is exactly what markets economists have had to say. Japan is being left behind. Companies have accelerated the shift when the yen depreciated after lehman. A good example is japanese cars. Japanese brands in the u. S. The First Six Months of the year is up 6. 2 . The u. S. Rom japan into is down 8. 5 . Breaking production records. Honda, that company exports out of the u. S. Lookottom line is if you at the numbers, the japanese may not be doing as bad as the export picture thinks. Earning season this week. To you. K a look at some of corporate stories making headlines. The reports from the government is considering a new name for the struggling national carrier. Malaysian airlines was losing 70 and the flight of mh 3 the shooting down of flight 17. Other options are being considered. The food supplier at the chain of the latest food scare has ordered a recall of all factories. The supplier, authorities said almost 70 of the repackaged meat has been sold. The plant has been shut down and five people have been detained. Looking to raise nearly 13 billion and a professor shares. The bank of china has the cleared massive lenders might face a shortfall by 2019. Those are company headlines. A little bit of news out of the middle east. Attacks. F rockets into israel. Dead. Aeli soldiers are the United Nations Security Council is calling for an unconditional humanitarian ceasefire between israel and hamas. Place ateeting taking midnight in new york. Some of the other stories making headlines globally. Two u. S. Citizen have contracted ebola. Doctor. On the left is a worksher infected person for the hospital manager. Africa haveeople in died of ebola. It kills about 90 of sufferers and has no known cure or treatment. The surge in fighting in libya has prompted the u. S. And u k and others to advise residentss to leave the country immediately. It spread to tripoli. The United States a vacuum waiting its embassy even after wedding evacuating its embassy. Buis businesses have also been attacked. Costaof accordion concordia has completed its final trip. People. D 32 body has not been found, the body of an indian waiter. Next, more than 800 million in losses in sony. What is the turnaround plan . We will talk about that after the break. Us keep you occupied in japan. Earnings from the automakers and technology companies. We have sony out on thursday. Ch analyst. Sony has had a rough past 12 months. That had a rust and that had a rough half a decade. What will we look at . We have seen a couple of downgrades. They have not been able to adequately perform. On thef folks will be bottom line. How are they doing on restructuring . Dos subsidy rate the subsidiary plan. They will sell off television. And plan to separate out make a automated so you can manage profitability over there. That will be the big focus. Focusing on 60 million units. It is very aggressive in general. This quarter will be key. There are marketing push was in the midst was immense. Maniacal performance. Tell me about 4k and how it relates to tv. How many tv sets were sold during the world cup . 4k is the resolution of the tv. Betterresolution and picture quality. Past. R transition to the hd, so the resolution of you can see things more clearly. You can see it clearly. Tv makers want to get a way to get consumers to go into the shop and upgrade. To go in and buy a bigger tv. They want to pitch this highquality, highresolution display. There is no content. Netflix is pushing. This is ultra high def. Tv business has not been doing well. We have pierce 4. It has been a success story. So far they have been leading xbox by a good margin. If you look at the cumulative sales, xbox is still a 50 million. If you look at the last millionon of ps3, 65 people. We are far from this war being over. Thell make a difference is Pricing Strategy and that is what happened and that is n thehas helped sony i upcoming quarter. This war is far from over. In hungary. Ce it was the best race. [indiscernible] , yeah. A lot of weather changes. I loved it in the end. Exactly. Looking forward to red bull for rory ferari. Thank you for that. Questions theina economic model. He spoke to charlie rose. He remains unconvinced. The data shows the credit and mores wide open and more credit is going to support less and less of growth. The chinese economy based on is reallyon, charlie, manufactured growth. The minute you stick a shovel in the ground and put up a building a gdp. Ge and that is when you finish building, you have to go up another one. This reform that the chinese optimistic thought was coming for years ago is still elusive. Chris many of the buildings are still vacant . Will never be economic. You have seen it grown far from gdp of double digits of 10 or 11 to 7 plus . We have to color this with the concept china is the only major industrialized nation that knows its annual gdp on january 1 of the same year. [laughter] because . It is what they say it will be. What ever they say it will be is what they will report . Cartoon and our presentation of the seven them sitting around saying the growth will be several. 5 at how do we get there 7. 5 and how old we get there how do we get there . A lot going for that economy. In emerging middle class. They are making a serious effort to deal with corruption. Clearly, a serious effort to try to deal with pollution. It is a priority for them. The third priority they say is a sustainable economy. Hey are serious people they absolutely are very serious people. However, there is a saying in china. The mountains are high and the emperor is far away. All of the action happens at the local level. That is where the technocrats in beijing even though they can direct things, theres a little put in theh faith central and Committee Planning but cuts the local level is still to produce numbers. You can get the whole of the charlie rose interview with jim chanos at 11 00 p. M. Block. S threatening to we will give you the details. We will head to mumbai. The European Union and dozens of nations at the world trade and organization. The talks could fall apart. The big reason is india. Why does india want to renegotiate a deal which was reached last year . Nations have said it is at risk of falling apart. It was reached last december. The deadline is july. The Indian Government and the Prime Minister will be in process. Expectme minister can subsidies. At the heart of the issue is the ability all poorer countries, india stockpiles food for security. This is putting it at risk of breaking the rules which wto believes can destroy. 10 of theies are value. Billion. Gives 120 12are that to indias billion. The subsidies is the crisis that is over two decades old. That is something india is asking for a change. Given that, the timeline is this week. He end of india is making it clear it is an indication. Thanks for that. Joining us from mumbai. Us look at what is on our radar this week. , will find a result later. After the close in tokyo. Makingef executive dozens of executive changes. Hoping to hold steady. Analysts are looking for the first loss in 2 years. End from the middle east. Statestates secretary of john kerry the United States secretary of state john kerry in india. He will talk about bilateral els ofons on the he election of the gj bjb. We will know what casinos revenues are. A bit distracted. It was the month of the world cup. Edge. Ned for asia we will recap the biggest stories of the day. By our guestined from emerging alpha. It is the middle of the trading day. These are shots of victoria harbor in hong kong. This is asia edge. A look at our top stories. A fourmonth run in chinese shares ended in able market. The gaza cease fire was fragile. And the rising recall of the food scare that has ensnared mcdonalds and kfc. I am angie lau. Whylegendary bear tells us he is unconvinced about the economic model and claims of growth. Things are not the way they used to be in japan. What followed exports say about autonomic. Though leading travel dekes the nations the leading travel destinations. What the falling exports say about autonomics abenomics. We all love to travel. Let us take a look at the markets. In hong kong, we are seeing a very nice change for chinese shares. They were lifted. We are saying the hang seng capping is kaiser weekly rally. The bull market. First industrial