Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20140825

We look at the dollar index. September 4, the last time this high for the dollar index, which brings us to the point. Nothing is really happening across the equity markets. We are seeing more more action than we are used to seeing. And we will get details on this trading. With the exception of malaysia equity index futures. This is what the markets, they were flat. And put everything together, were not doing much. Now, here, dollar index, big spike, 8254. Earliest. Jackson hole and the key was jobs. And on the on the other hand, and d. O. J. E. C. B. And a lot of money going into the u. S. Dollar and pushing down. Where are we now . Lowest level or weakest level since january going all the way back there. And tried to make it clear. One point this morning, 10450. And pairing back some of those gains. 10417. Euro, we are seeing a lot of moves. Trading 132. 132 for the first time and let me get you that exact figure. First time in 12 months and Inflation Expectations are down. And and stimulus, how credible it is. Given how the bond markets and dealing with the recordlow levels. And seven straight weeks. We see declines this week within eight straight weeks of decline. 155 right now for a pound of sterling. Not quite picking up as expected. Thats what is happening so far. Breaking news. Chicago mercantile exchange, technical issues. Having a look at this developing story . Halted. Only malaysia is exempt. And trading on sunday evening. And from corn to gold to silver and platinum. Look at the price of silver. And clearly a big impact. Why the reason is, because the technical issues. The contacts contracted have been halted on the platform of c. M. E. And across the industry and futures market and suspended the beginning of trading in all markets and i mentioned before corn. And equity, derivatives, all affected by this. It is a breaking story as the news passes my eyes. The exchange have 80 of market turn over did take part of this trial. Nd launching in october. And looking to raise 16 billion a denial of service, detected an attempt to overload the system with artificially high traffic. Playstation users couldnt log on to what appeared to be a hack attack. No personal information was compromised. Japan should consider more Foreign Workers. And we have a look at all this. And why is he talking about the need to use workers from overseas and what kind of pushback is he getting . And this is the greatest challenge that japan faces, how do you keep the economy growing and did he Fleet Inflation when the population is shrinking. And the game that he is going with is a longterm game. He is getting into the issue. The Prime Minister has embraced the issue but on a limited scale. Japan is looking at migration and Foreign Workers on a partial level to increase the activity of women and the elderly in the workforce. What more does the japanese government have to say about this . Well, its something that he has spoken on before. Its part of the broader economic plan. You got to remember that japans Unemployment Rate is below 4 . The labor market is as tight as it has been since 1992. The main thrust is to increase the management positions of women in the workforce rather than opening the doors to oversees workers. The whole women issue is part of our economics. What about the immigrant issues, is that playing any role here . Its still quite limited and has come up every now and then in the ruling party. Its being discussed but japan still has this consciousness of a and not opening its doors wide and taking small steps but the dilemma is how you did he Fleet Inflation. A step that is moving closer and closer towards. Thank you. What has been happening in south korea. D discussing action over pay demands. Lets have a look. Long fierce strikes. Tell us about this. I think we were talking about this week. 2226 witnessed some kind of industrial action. There is definitely going to be some risk to the stocks. The stock is down 10 . Investors are worried. Near term, partial strike on the weekend isnt going to impact earnings. The companies have prepared for that. How much is this costing . What are you hearing . It depends. If theres further action, a strike like we saw last year, which impacted the production by about 1 billion. So if we if theres more action, then there is going to be a greater impact. The remainder of the year to see if we have furtherer action . And they served notice to the company with this partial strike and now the company is back to the bargaining table. What about the impact overall on the industry there and beyond. The brighter impact on the economy even . Two things, i think in the shortterm, the company is going to have a lot of things to work with. The workers are striking. If you look at the longterm, you know, companies have been having shipping production. Doesnt cause it to have india, United States and thailand. Today, 30 of the Global Production is in korea. Five years ago was 50 . The Company Announced it will open more plants in china and will see shifting outside. Thank you very much. Lets tell you what we have on the way. Highend products with lowend zoupts, a big challenge for Luxury Brands in china. Designed on a u. S. Model instead of spending the bucks, you can have the latest and the best brands at a fraction of the price. Is the first of its kind in asian luxury sales are falling, the passion for fashion is not. And that is their gap in the market and all down to social media. Leverage to social media. I get in touch with my friends and they are like in the scene and out and about. And people are aware. Bring a lot of customer awareness through social media. Social media is a very large part of this. Indeed. And working right now in social media. Sourcing in paris. I got back from are paris a couple of weeks ago and i wanted to bring other designers to the table because people are attracted to the normal brand names and there are talented designers in europe. Manbacked. No how much does it cost to buy, pick anything. This one. Raising money in this environment will help. Raising money. If you have a good product [inaudible] we are not worried about funding but growing the product more. Luxury sales are down, are they not . [inaudible] how do you make money . [inaudible] that chinas ng appetite for luxury with stands any economic slowdown. Web next guest runs a site setting luxury goods. And thanks for joining us. What does the company do, tell us . Japan and e in china. Luxury and fashion sales. Every day at 9 00 in the morning we have events that last only a few days and we go to our products and they are genuine and authentic. 000 00 brands in the sale of beauty, luxury and lifestyle and expending our awareness as we have customers over 1,000 cities in china. For our members, the main reason to buy is that trust into our platforms but the fact that we are launching a convenient and new products on a daily basis and as a matter of fact, we had , e launch of a luxury car luxury masser ratty. Tell me something, we are hearing a lot about the government in china cracking down on graft, cracking down on excessive spending, lavish spending, does that affect your business . Well, not at all, the luxury is changing in china. First, lets keep in mind that chinese are the number one luxury consumers. But their behaviors are changing. First of all, the pace of the the tastes of the consumer are changing from show to in the know and looking for new brands, brands that have entered the chinese markets. And especially in the fields of accessories and fashion. And secondly, its true that they are looking at becoming more aware at price gaps, when the trouble abroad and see the price gaps between china and the markets and this is pushing them to purchase more when they are traveling abroad as well as purchasing online. The online opportunity is very big. As you may already know, there 10 of chinese resale transactions that are online in china and reason for this growth is the underdevelopment of the brick and mortar reselling structure and while it continues to grow. And this is driving more and more online consumption. The key point remains with authenticity because a lot of products that are sold in china are fakes and this is one of the you have to have your checks in place to have that authenticity check. I want to have that sense how does the market differ to the one in europe. Very quickly, please. First of all, europe, the markets are direct consumer. So consumers in china, the online markets is a platformdriven market. Secondly as i mentioned before, in europe, first you had mortar nd in china it is the reverse. To convince them to make a urchasing. Reached 40 of sales through mobile and why we are expecting to reach 50 by the end of the year and the other main difference i think is the impact of social media. Chinese consumers are hyper nnected to w inch iboard and wii chat. Great talking to you. Have a great one. He is from china. Going to take a break. Election count downin knew zeal and. When on the move continues in a few minutes. What looked like easy for the Prime Minister is more unpredictable. And lets go over to paul who is rom knew zeal and. New zealand. Thats right. No fan of the Prime Minister and vice versa ever since the dramatic raid on his mansion outside and the attempt to extradite him to the ubse to face copyright charges. And now he has launched his own political party. He is not allowed to stand because he is not a citizen but a resident but has been paying its bills and campaigning for the candidates and he has formed alliance or marriage of convenience with the party. Now if he holds his seat and is come fortune. They are a very great man and he has a taste of one of their rallies. Are you ready for a revolution . Are you ready to take down the government . Are you ready . And as you see, i can assure you political rallies generally dont look like that. Well, you know, it hasnt een all smooth sailing for kim dotcom . He has been accused of hacking a rightwing blogger and he dean eyes it and damaging material on the governments internet. But havent seen to damage the government. If we look at one of the most recent polls, the governing National Party sitting at 48 . The likely coalition between the labor party and the greens is some distance off cracking that and internet is still barely above the margin of era. Kim dotco mmp. And so at least to the casual observer, we have an interesting show to watch. Thank you. Four weeks away now. Two satellites were aunched from French Guiana and unknown whether it can be rectified. Just to tell you what we have coming up next. China warning the United States falling a Close Encounter off an island. We are heading live to beijing. Hong kong and shanghai and a quick look. Three minutes to go before the session starts off. If you look at what is happening, its is a mixed bag and we are waiting for the opening numbers. Indications one quarter for hong kong. Markets should be opening right now. And ma nila and the trading is shut in the phillipines for National Heroes day. Flat earnings focused here in hong kong. We have a long list of these companies coming through later on today with their report cards and that seems to be driving trade. We will get more details from the movers. I want to show you what is happening in australia. Two things, iron ore. First the overall picture look at the prices, big, big drop. We are looking at the benchmark, n ore out of china falling 90 bucks. About 90 bucks according to the index. Nd there you go. Down, now switching gears and ooking at japan. Big one is down about 9 for today. Considering a bid to take up 40 . And right now those talks have fallen through and we have fallen back. More back to levels before news came in. More breaking news. Lectric car makers buffett shoing a warning. Since midmarch. Profits down between 12 and 22 . Down at the moment at 7 . Lets talk about another breaking story. Burger king and tim horton, they are in talks to combine, to reduce Tax Liability to moving chains. E and doughnut and more breaking news after trading, futures, c. M. E. Little under half an hour away. Vast stretch of market. The market yet to open. And benchmarks for certain stocks as well. Beijing has warned that the United States to halt surveillance flights. David has more on this. It does appear that the chinese are not happy campers over this one. U. S. Is not happy either. They are claiming this Close Encounter was 20 feet away. I will get to the details in a second. If it is just 20 feet away, it one bad maneuver away from escalating into an international incident. I will get to that in a minute. China is urging the United States to stop these reconnissance flights close to its airspace after the jet had an encounter with two planes within the island over the South China Sea last week. N antisubmarine plane and the p8 patrol aircraft conducted the flight august 19 and china sent a fighter jet to carry out at it is a routine identification. China says the fighter maintained a safe distance from the american planes and that the actions of its pilots were professional. Thats chinas side of the story. Thats not the story we are getting from the pentagon. Washington saying the fighter did a move by flying within 20 feet of this p8 Surveillance Aircraft and doing a barrel roll over it. The chinese jet flew past at a 90degree angle to show its weaponry in the belly of the aircraft. Commine dismissed these accusations as being totally groupedless. He saidshe said battle that could isk are a bigger incident if one side does something stupid if i may be so blunt. Tell me something. Put it in the context. This seems like an isolated case, but have there been other encounters . There have been other reported encounters on the rise over the South China Sea since about march and we have had the escalation earlier last year in the East China Sea between naval vessels of japan and china as well. China, lets face it, it is asserting its claims to the energy and fishrich waters in east and South China Seas and this incident comes 13 years after the most serious encounter when the fighter collided and clipped and forced the american plane to make an Emergency Landing and that turned spoo a dim plow matic incident. It is a strategic base for the army and home to a Submarine Base and Chinese Oil Companies have directed those Oil Platforms much to the anching gngst to vietnam. And these encounters dont make things easier. Thanks, steve. Hong kong prodemocracy protestors have called on police to use force. And whats this all about . Bring it on . Occupied central has been central. This is a group that is threatening to occupy the Business District in hong kong if they dont get their way. This week. , the Standing Committee of the Chinese Government is going to announce the conditions for the 2017 election for the chief executive of hong kong when they sufferage and al does president jive with the forces, which is one manone vote. The Chinese Government is saying you can have your vote. Selection of whatever they choose at the end of the day. It does seem that a lot of people run scared. Should those fears be justified in any way . It remains to be seen. We have seen pretty large predemocracy demonstrations and the tension here, you are living here as well, is definitely on the rise. But occupy central on a certainly level is not no. They keep on threatening. And been very effective. And keeping the debate in the forefront. Protests, people are suspicious about maintaining the status quo. There are a lot of probeijing people here and there was a lot of people bused in and their lunch paid in. Well, it remains to be seen and what the decision is and how far the Chinese Government is willing to go. And if we dont get one manone age. With universal suffer thats very much indeed. Lets turn to the corporate stories. Reviews and hopes it will get its sights back to full production. Refused any of the time shift over the weekend. Management plans to review its pay proposals in meetings, the weekend strike is thought to have cut revenue by 69 million. Now ibm is tying up with chinese rival which will use ibm software and chips after the Chinese Company tried to lure away customers and satisfying allegations between washington and beijing. The deal could help turn around ales in china. And recovers rovers and ensure its debt against a default fell. Biggest prolvet jump since 2010. Sales of its unit in china, helping to offset a slump in india. And those are the headlines in this hour. We are up next, looking after the little guy. We find out how the Business Council islanding a helping hand to small and mediumsized companies. Steel, can, blue scopes the big full of that 12 down to estimates. Losses did narrow. Of 1 . Go 1 10 10s have a hang seng 4 of one . The large multinational corporations may have the muscle, yet its the smaller businesses that are driving opportunity in Southeast Asian this is the main talking point for the Business Council. What is on the agenda . First of all . It was started back in 1967 from five member countries. Half a century later, it has ubled to 10 and worth 2. 4 trillion and it is now entering a new phase buildings on new Economic Community for next year. He goal is toville small and mediumenprice which account for all enterprises and employ 97 of the domestic workforce in indonesia, thailand and vietnam. Makes up half Business Council saying onethird of g. D. P. Of the countries and exports are lower, nly 20 . Tax with regulation and incentives. Tives. And this will help offset. Two, lack of access to finance. A report claims huge 85 suffer from credit constraints. A lack of a Legal Framework to push alternative and micro finance. More perhaps innovative ways of capital are now needed. Access to technology. Thats the crucial bit. Ability to log on online marketting and infrastructure, foundation for r d are missing. These reports will be addressed this week and the question is how long will it be to take the countries up to speed. As it releases these recommendations to help those in the region compete. We are joined by the president of the u. S. Business council. Thank you for joining us. What is going to be the key message coming out of this . Thanks. We are looking at expanding and part of the Global Supply chain and in our own interest. This is a followon discussion that we had in 2011 with the ministers when they challenged the u. S. Business community to step up and find ways to engage. M. E. s making up 97 of the businesses in the region and while their share of the g. D. P. Is much lower, its one that is set to grow and the ministers and the leaders in Southeast Asia are looking forward to seeing this growth and part of their longterm plans to have their economies be one of the key destinations in the world for business. You need to get the politicians on track and there are tariff walls to be brought down which could only be helpful to these s. M. E. s . That is true. To challenge for s. M. E. s is find ways to be able to find the financing, to be able to build their businesses, expand and tap the economies of scale that the region offers, but they are small and mediumsized nature hurts them. Technology is another area that we think is a gamechanger for s. M. E. s and small organizations, small onetwomen shops in vietnam build shops and see them go global. There is a real opportunity for these businesses to leapfrog and the economy has brought tariffs down to zero. We are looking at barriers into the entry game. Lets talk about how much mericans have invested here. Thats absolutely true. It is the number one destination for investment and invested at 190 billion than we have in brazil, russia, india or china combined. It is a substantial stake in this region. Offers a regional sentralt and markets for american markets, services and products. One of the chief things you alluded to, access to finance. How can that be improved and how can they help out these s. M. E. s . Access to finance is critical to s. M. s around the world. And access to Debt Financing was really difficult and it is across the world but our major banks, venture capitalists as well as our private Equity Companies can step up and position these companies and put together Business Plans that can help their Companies Attractive to investment and working with the governments like spring singapore to really find ways to have s. M. E. s have more access to funding whether it be debt or equity funding. Thank you for that. Going to take a break. Credit card rules, another road block for the taxi maker which has been described as illegal by city authorities in sule. And whats india done to put the brakes on . Well, the one stepping on the brakes is the r. B. I. , the central bank. Its closed a loophole. All actions made on indiaissued credit cards have to go through a twostep procedure. That means one additional step to the Payment System and if they want to comply with the new rules, it would have to change its app or adopt a different model totally. The actions are free with pretty much with indian rivals have to do. This is what local Taxi Companies have been complaining about. Overpayments are collected and transferred to a dutch bank and the procedure goes against indias controlled regulations and in a way, this is what the r. B. I. Is trying to address. A more consistent Payment System. This is a company that is quite used to getting pushed back. How difficult has it been for them to penetrate markets in this part of the world . Well, its not short on challenges for sure. You talk about how its operations in korea have been touted as illegal. Its operations in jakarta are under question. The city may shut down down over violations. On top of that, authorities does ay it is confusing as both use black license plates instead of yellow which all vehicles are meant to have, yellow license plates. These are some of the issues. O be sure, they are not facing intense resistance in asia. Others, fighting for a slice for the Logistics Market and that is the case in Southeast Asia. Competition is brewing and consumers, you and i benefit. Lets see if we do. Thanks a lot. Well, one of the greatest narmse in in british cinema, he died. 90 years of age. He spent 60 years on both sides of the camera lens acting in ollywood movies, gandhi, which won eight oscars in 1983. Kigsly. Actor for ben and good delell will a. M. Bass dor for unicef. He died at the age of 90. Lets look at what we have coming up in the program. Biggest futures market to reopen. Glitch hit trading. That is when we return after this very short break. Hello, everybody. I am rishaad salamat. This is on the move. A vast stretch of the futures market about to trade for the first time today, glitches hitting the cme, and Close Encounters, the United States and china trade comments about airport maneuvers, and back to the table. Meeting striking workers today. The Chicago Mercantile Exchange expected to restart their training at any time now. And having a look at this story and its overall impact, this is a developing one. John has got the details. We are expected to be online right about now. This is the time they said. Gold, silver, platinum, corn. Right across the board, right across the spectrum. And what happened was this. They halted. Of course, sunday evening is when they open, but the futures trading did not because of a technical issue. This was right across the board. When we see what happened, this exchange has not had the same kinds of problems we have seen with other ones, have we . Say, but itas you is the Worlds Largest futures market. There is huge, very active trading, and the Global Platform of the cme, chicago mercantile the open. And again, ok, lets go to david. I think we have got gold on the move . Yes, but not really a lot of movement coming over from the close on friday. This gets you crude. That is one Major Contract the always follow. Crude prices. Here we go. Just to illustrate what happened, looking at the twoday chart, friday and this morning lets look at the oneday chart. This is the trade. That big, black spot is where we normally get support, and as john pointed out, there was a technical glitch. Crude prices. This is as far as futures are concerned. If you look at brent, yes, there you go. That one has been trading, and just to show you the brentction, of course, and to show you where crude is, we are getting those prices, which we usually should have prices right now. 9339 is what we have for crude prices, but, yes, trading is back. Trading is underway with the cme, so futures contracts, yes, go back to your desks, traders. Trade. A twoday the Hong Kong Exchange with more than 90 participants accounting for about 80 of the market turnover, taking part in the trial. And there is more scheduled to launch in october. And sony is trying to restore the Playstation Network after they were affected by a denial of service. High traffic. Playstation users can log on after what appears to be a hack attack, but sony says no personal information was compromised, and a bumpy ride and a tightening of credit card rules. They are closing a loop hole that dealt with a Payment System and local rivals. At each point of sale for more authentication. Apple adopted a different model. Story,s get to this which has been developing for the last few days. Ameeting today to discuss loss production and growing losses, and the strikes. We have got steve from bloomberg intelligence. Steve, tell us about this. 22 strikes, six years. Yes, it has been like that for a long time. This time around, it is like the other years. They talk about wages. This is about having a bonus included in your salary, isnt it . It will impact their competitiveness. Korea, it ist gm already talking about pulling out of korea, because producing a car in korea is almost two times the rest of asia, and even hyundai is looking to shift. Today, 30 . The Global Production in korea. Five years ago, it was around 50 . Steve, we are also now beginning to get the bill, arent we . The hyundai management is starting to count the cost of this. What sort of figures . Happening on a weekend, it will have a minimal impact. I think the company has prepared for that. He talked to suppliers and also had some inventory in preparation for this. Beyond that, if they do not come to an agreement, it is hard to say. If you look at last years strike, the production losses were around 1 billion. As you say, 39 of global output is out of south korea. If across the world, and they have more industrial action, such as this, it is going to be disincentive to actually manufacture at all in south korea. Absolutely. Just recently, the company has announced that they will build another plant in china, and i think the decision to do that is part of the increasing wage costs in south korea. Well, steve, thank you. Because to beijing now, it is ordering the u. S. To halt surveillance flights near its coastline, after a flight in the South China Sea last week. Steve, they are not happy, are they, theyre in china . No. It sounds like a very bad theme unm a very bad top g sequel. It is perhaps one bad maneuver away from escalating another international incident, like what we saw about 13 years ago over an island, where this incident also happened, because china is urging the United States to stop these reconnaissance flights close to its airspace after this chinese fighter jet had an encounter with a american surveillance plane about 220 kilometers off of the island in the South China Sea last week. China said an antisubmarine plane and one of its newest surveillance planes, the p8 control aircraft, conducted the flights, and they said they were carrying out what was a routine identification and verification. China says the fighter maintained a safe distance from those american planes and that the actions of this pilot were professional, but, you know, it is a he saidshe said case, and that is not the story were getting from the pentagon. Washington said the chinese jets did a provocative move by flying within 20 feet of this p8 Surveillance Aircraft, reportedly, again, according to the United States, doing a barrel roll over the surveillance plane, and they said that the fighter jet passed at a 90 degree angle to show off its weaponry on the belly of the aircraft, which the pentagon said was a provocative move. Now, it china dismissed of accusation coming from the United States as being totally groundless. Said, the rhetoric is being amped up in a highstakes he saidshe said game, and it could be a bigger incident if, perhaps, one side does something stupid in this case. This is an isolated case, or have there been other encounters . We know we have had encounters with neighboring countries, but the United States . States, the united china would look at the United States as being the backer of japan, and we have definitely seen some escalation in the East China Sea regarding those territorial claims with japanese ships, but encounters in the South China Sea have been on the rise. China is asserting its claim to the energy and fishrich waters there, and this comes 13 years after that most serious encounter, which i mentioned, where a fighter jet and a u. S. Plane collided, and that forced the american plane to make an Emergency Landing on the island and sparked a climatic row, one of the first blue medic incidents in 2000 one under the george w. Bush administration with china. You know, this is a strategic base for the pla, and they also have the oilrich waters, setting up oil rigs, much to the chagrin of the vietnamese, though there is some regional tension, as well, not just with the United States. Thanks for that. That is Stephen Engle joining us. Becauseking at china, we have reports they have executed eight people for terrorism in one province, and the suspects include some behind the deadly attack in Tiananmen Square last year. The others were convicted of murder, arson, bomb making, and attacking police stations, and they are cracking down hard on suspected terrorists. There are separatists. And the number of People Killed by last years landslide in hiroshima has gone up, with some people still unaccounted for. It was after days of torrential rain. Prime minister shinzo abe is overseeing the operation. Northern california has been hit by the strongest earthquake and a quarter of a century, the 6. 0magnitude earthquake hitting in the napa valley. They say 120 people were injured, three critically, and power was cut in some areas, and gas leaks caused several fires, and trains have been suspended until tracks and bridges can be examined. And in the Northern City of the murder ofas the journalist james foley last week, and Memorial Services were held for him in the kurdish capital. Have ader appears to british accent, and Security Officials say they are close to identifying him. Next, the dollar rise and the jackson hole symposium, discussing stimulus. We have a summary of the talks, and market reaction. That is coming up. We are coming to you live from our studios in hong kong, on bloomberg. Com, and your mobile device. You are watching on the move. If there was one key theme of the central bankers in jackson hole, wyoming, it was certainly jobs. They had views on policy, but the labor market was central to the decisionmaking. Mike mckee was there. Bankers with their economies going in Different Directions with different messages for their colleagues and the market. For janet yellen, an acknowledgment the u. S. Economy is picking up faster than she expected. On thets Interest Rates table, even if the timing is uncertain. Soon, and risk shortcircuiting the economy, especially if investors react and push rates up too fast, too far, and a risk of accelerating inflation, which would prompt the fed to push rates up, and she said Monetary Policy must be conducted in a pragmatic matter. Any particulart indicator or model but instead reflects an assessment of a wide range of information. For mario draghi, it is not a question of when. The ecb isg delay, acting to keys Monetary Policy in the eurozone and is prepared to do more, with growth slowing and inflation going. They said they stand ready to adjust their inflation stance. He did say the bank was ready to use unconventional policies, if needed. But mario draghi also warns the ecb cannot do it alone. Sharpest attacks on eurozone policy, he called for more flexibility in eu cuts, labor, tax market liberalization, and a large Public Investment program. Bankhe third major central youre, there are no uncertainties. Is committed to policy. We q. E. And until inflation is maintained. None of the three necessarily broke new ground here, but after jackson hole, the need to start adopting strategies to deal with it. Michael mckee, bloomberg, jackson hole, wyoming. And looking at how this has been received by investors, a banker joins us now from singapore. Simon, good to see you. What was your main take away . No huge surprises. It does seem that mario draghi has his hands tied to some extent when it comes to stimulus and printing money, if you will, and janet yellen, it was all about jobs. Yes, good morning. We are quite encouraged by the overall sentiment. What we are seeing is all of the central banks, regardless of which way their policy is moving, have shown a commitment to keep their economy the way it is for as long as possible, and we think that is good for the equity markets and probably less damaging for the bond markets, so even if mario draghi is going to do that, they are going to hold off as long as they can, and we think that is a very good environment. Particularly in the likes of the u. S. Is that is coming through going to be due to economic strengths rather than inflationary concerns, and, again, we think that is a positive for equity. When we look at what is happening with the dollar, we have seen some strings coming, but have we gone past and inflection point, where he now have a momentum behind the Dollar Strength . You look onhink if the charts, the dollar is breaking out against a number of things, the monarchies included. We have to be very patient with our bullish view on the dollar. Finally, the ecb is starting to take more aggressive action, which we think has been needed for some time. The bank of japan looks like it needs more stimulus, and the u. S. Still looks to be a better place for investment. We are still seeing a demand for treasuries, which could actually be described as high yield compared to the other major central banks, and the economy is recovering quite strongly. We expect that to continue over the next quarters, so the dollar looks good. We do not see it running away to the top side, but we do think the environment and sentiment for the u. S. Dollar is quite strong and likely will remain so. What i get from you is we have seen equities in the u. S. Hit record levels. To you expect a correction though before you see that leg up again . We may well have had that correction. He had about four percent or five percent of a sellout, and in some particular sectors, that were perhaps overcooked, like small companies, we have seen an overcorrection there. We know the Global Fund Managers are extremely long of cash, and they are waiting to buy in, so we tend to think any tips will be shallow. Fornything, the trade equities is still higher because these are funded managers are underinvested, and even if you look at where they are invested, they are mostly defensive, and we think they should be moving into cyclicals, where we see out performers over the coming months. When itre overweight comes to japanese equities, but what about the other way if the yen continues to weaken, right . We do expect the yen to keep weakening, absolutely. To belong Japan Equities is very much on a hedge basis against the yen. We think the boj is overconfident. They are not going to meet their inflation goals without stimulus. We think that will eventually come through, however, without that, as the yield stick hire, particularly if we get some easing on the geopolitical front, that is good for the valuation. Progress,e is making albeit extremely slowly. We are seeing a lot more invested interests to buy into japanese equities, which will be another catalyst, so we do still like the japan market to move higher, but you are right, you have to buy it on a hedge basis if you are an overseas investor. Ina look at what is going on hong kong, some of these chinese equities also. A are finally seeing turnaround take place, a turnaround in sentiment, and investors look at the chinese h shares and a shares. It does look like it. Again, from a nickel perspective, it looks like they are taking a break to the north. It is now a very bullish sign. And sentiment is looking better. From a fundamental point of view, it is still checkered, but we do still think that the chinese economy has bottomed out at around the levels of seven point four percent gdp growth, and, of course, on a relative basis, the china market is relatively quite cheap, but you very much need to go for those reform plays rather than the broader index. Great talking to you there, from lgt. Cominge breaking news through about malaysia airlines, mulling job cuts. Air indeed, the malaysian cutting routes and reviewing the orders. Shareholder is a malaysian wealth fund. This is, of course, a company that will be taken into private hands at some stage, as well. Forup next, a positive year the vietnam benchmark index. Find out why. Is back in a couple of minutes. Stocks are rallying in vietnam, but the ipos have not followed. We go to our bureau chief. Why is it the case . Well, there is lots of reasons, but overall, what we are seeing is most investors seem to be avoiding the ipo companies. So far this year, we have had 33 ipo companies, and all together they have raised only about 105 million, and that is less than half of what had been targeted. Analyst say investors are concerned that the stocks are not liquid enough and that also there is a long lag between the time of the ipl and the listing date, so it makes it not very interesting for investors. The overall vietnamese stock market, the benchmark index is doing really well, the best performer in Southeast Asia. It is up more than 20 so far this year, and investors, obviously, are very interested in getting these stocks, but definitely not jumping when it comes to the companies. We saw last week, investors jumping in on a vietnamese Exchange Traded fund. There is a lot of interest, wouldnt you say . Definitely. One company raise more than double what they expected with the ipo, the countrys first domestic etf, and they raise millions. A relatively small market like vietnam, that is proof that investors do want in on vietnamese stocks. What is interesting in vietnam, of course, you have got a situation where many of the best companies, many of the larger companies, are maxed out when it comes to foreign investment. Here, it it is a 49 , even lower for banks at 30 , so the etf is a way for investors to get some exposure to some of the most soughtafter vietnamese stocks. Thanks for joining us there. Our bureau chief joining us there from the vietnamese capital. We are going to take a break, but ahead of that, i want to tell you it is a mixed bag when it comes to equities in this part of the world. Investor action to jackson hole a bit muted. With the currency markets, we , anyseen the dollar higher elections in new zealand, and the man who is shaking the foundations. On the move returns, after this. Training again, the Chicago Mercantile Exchange was it i technical glitches. Back off. Beijing warns washington after a Close Encounter over the south r slows in and ube india as the r. B. I. Changes the rules. General few weeks, a election, but what looks like an the path back to power for Prime Minister has certainly become more unpredictable, and, in fact, one of his old foes. Headlines, throwing it in the works, isnt he . Is no love lost between the Prime Minister john key and this man, and since the raid on the mansion and the attempt to extradite him to the u. S. For copyright fraud, that is ongoing. They are fighting at every turn, and the latest trick is to found his own party, the internet resident and is a not a citizen, but he is funding it, and he is campaigning for his candidates, as well, and he has also increased his chances at the polls by forming a Strange Alliance with a led by a man who is quite popular. He has an electoral seed. Proportionale representation rules, this Internet Party could get up to five seats if they continue to pull the way they are. The party is really trying to reach out to the youth vote, which is largely untapped in new zealand. Here is a little taste of one of their rallies. Are you ready to take them on . Are you ready . In a former life, i was a political reporter in new zealand, and i can assure you, i have never seen a rally like that in the country before. It is not exactly smooth sailing for him and his new party though, is it . No. He is fighting off accusations himself that he hacked the , aputer of a blogger wellknown blogger, and that he himself had been receiving leaks from the government about their enemy, and he is denying it all. Election had been looking pretty boring up until now, if you look at one of the recent polls. The National Government is well out in front, and the potential alliance between the opposition labor and greens party really a long way off claiming power, so alliance is not on that chart, about 2. 5 , but with it injection of the energy, has certainly enlivened what was otherwise looking like a pretty dull procession to victory for the Prime Minister, john t. Thank you for that, in sydney. Closer to us, hong kong prodemocracy protesters, saying that they would use force if china does not meet their demands. What is being decided, and is this really a moment of bravado, saying, bring it on . It has been going on for a couple of years now, and they have yet to. We are getting to the showdown, and china will decide on this for the elections to choose the hong kong chief executive. They had promised universal suffrage, but their definition of universal coverage everybody would get the vote. Who arewould, those patriots, as some chinese officials have said, and they made it very clear in the white paper that they have released that they are extending their control, and it made a lot of people get very nervous, because people want it democratic. People seem to be afraid. But they have yet to do anything. Yes, it has been a great strategy. They are really shaping the debate. Tensions are rising because people do not know what is going to happen, and people are scared , but they have not done much of anything yet, so it is hard to gauge how solid their support is for something. There were huge rallies earlier this year, and a big march to support the state, which was a bizarre thing, not many people coming out to support the status quo. 100,000 people, they say. Some of the police were as high as the organizers. Some people were busted, and they had their lunches paid for thomas but a lot of people pay for, but a lot of people took to the streets. When will we get the decision . We will get a decision later on this week tom and assuming the chinese do not permit the free choice of candidates, then it is up to occupy to decide if theyre going to occupy. Right. Lets take a look at some of the key events we are following you for you this weekend. Zimbabwes robert gabi is arriving. He will be discussing additional Infrastructure Projects Robert Mugabe is arriving. To begin a workers protest against casino operators. Better conditions and benefits, and there is the slowdown in the worlds biggest gaming hobby. Malaysia airlines reporting lastday, now one of its issues, a company proposing to take the Carrier Private after those two disasters that they have had this year, sending shares tumbling. There have now been five straight quarterly losses, and there are no estimates this time around, and icbc, secondquarter earnings expected to reach a record. Maybets are looking at it two rise to maybe 12 billion. And luxury in china is fast becoming a Hunting Ground for bargain shoppers. Heavy discounts. If you do not want to buy, you can actually rent at a fraction of the price. John dawson has the story. This retailer with a website, and actually, they are offering, as an example, right some items on 40 discount. You have had a few pressures from china. And number two, taxes. Want to bele do not seen with expensive items on them, because that leads to unrest. And there are the consumption taxes, and also, the economy is slowing down. People cannot afford to buy these things, so all of these factors are driving it lower. Was a report in 2011 that luxury spending was 30 . Year, it is slated to rise only two percent, a significant drop. Even then, it can be expensive. Is there an alternative for your fashion needs if you cannot flash the cash . Well, there is. What do you do when you cannot afford it . If you have 10 bags, or in your case, none. Or in your case. Some have very different backgrounds altogether, and really focusing on china. A celebrity model, an investment banker, and a mining analyst, an unlikely trio to forge a business focusing on the fashion conscious, yet opposite the trend, and this fashion show is doing itself. Designed on a u. S. Model, but instead of up,ding the bucks to glam you can get the baddest and best brands at a fraction of the price. It is the first of this combination to focus on this in china while luxury sales are falling. Gap in the market, and it is all done through social media. Do most ofwhere he our marketing. I get in touch with my friends, and they are out and about, and they use the hash tag, and and so we aware, spend nothing on marketing. Social media is a very large part. In deed. That is great. I was there a couple of weeks ago, and i was there because i wanted to bring things to the table, because a lot of people are attracted by the normal brand names, but there are view this as a platform to launch themselves, as well. A man bag. As an example, how much does the cost to pick anything . This bag is around 20,000. Raising money in this environment is tough. It has not been tough. Product. Ve a good there is a lot of money floating around for an interesting idea. We are not too worried about it. Luxury sales are down, are they not . How do you make money out of it . But they do not have money. That is why we are coming into the market. For the red carpet, a night on the town. They are betting that chinas appetite for luxury and withstand any market slowdown. Dawson, bloomberg, hong kong. Up next, Close Encounters of china sea south kind, rising tensions between beijing and washington. This is on the move. We are on the move. I am rishaad salamat. Lets go to some top stories we are tracking for you. I am muslim dimon. Monday, august 25. Trading as resumed after a lengthy delay after the Chicago Mercantile Exchange said it was hit by technical glitches and opened more than 3. 5 hours late. Commodities, bonds, benchmarks, and stocks. Hyundai is to lay out a new plan that they hope will get rid of a pay dispute. Workers refused overtime shifts over the weekend, austin 17 million on saturday alone. They want bonuses included in base pay. They are trying to find a solution. The u. S. Towarned halt surveillance flights near its coastline after a Close Encounter last week. Sent a fighter to carry out routine identification and verification of two u. S. Planes and to ensure they remain at a safe distance, and the jets said it was within 20 feet of its reconnaissance plane and said its actions were provocative, and those are the top stories. I am muslim dimon in singapore. Look withave a closer our ceo about u. S. Studies, joining us live from sydney by web can. It this time, do you think . I think it may be more than saber rattling, the fact that made such atates Public Statement with regard to this encounter. It tells me that it has probably been leading up to this type of action for some time, so we know that these take place relatively often. For whatever reason, i think it , as theroximity americans said, provocative nature of this particular one that has made it such a public event in the headlines. Take washingtons word for it that it was provocative, what was beijings upside . Probably, on the one hand, they want to try to make a very, very strong statement. This come in the scents come into the public i think gives beijing an opportunity then to criticize the americans for their ongoing surveillance, which we should know immediately are entirely consistent with international practice, but it is an opportunity for beijing to highlight these actions, to give them a profile, and i suspect in so doing, they were trying to force it into a conversation whereby the americans would diminish these types of activities. In other words, not patrol andhigh seas of east china south china, correct . Certainly in the South China Seas. There, i think the interest of the americans, this particular aircraft, a submarine Surveillance Aircraft, it is a relatively new addition to the american fleet, and, of course, this is precisely the area. Chinas precisely where established a relatively new thearine base, and some of more advanced submarines are taking patrols in the South China Sea and beyond, so this is a highly sensitive, new set of developments for china, and they are not happy that the americans are watching. Is this also ant message to japan here, as well, with him of course, the backing of the United States . I am not so sure it is a message to japan. Argue, thisuld could be the beginning of a more sort of posture on the part of china to exercise what it sees to be its sovereign control and protection of areas that a claims to be chinese territory. Now, as you know, the entire South China Sea is claimed based on what china says our historical rights to be chinese territory, and so, if that is true, then these surveillance flights off the coast of the island are flying above what the chinese claim to be their territorial waters. This fromlso look at another point of view. You can read too much into what happened over the island, but to question, what was the word that president obama used . About asia . It really does not bring it into question. I think what the americans are doing is entirely consistent with International Law and international norms, for that matter, and, of course, it is also consistent with the balance with asia, in that it is demonstrative of a continued American Interest in the region helpn our ability to provide for some stability and security, so it does not really call it into question. What is really problematic here is that these types of incidents could devolve into something much more dangerous, as they did in april of 2001, after the collision between a chinese jet fighter and an american Surveillance Aircraft. The two sides need to have a continued, much deeper conversation about how to avoid miscalculation, accidents, inadvertent crises, which arent going to be in anyones interests. Thank you so much for joining , the u. S. Ydney securities studies center there at the university. All right. Ok, were going to take a break, but coming up, taxi trouble. After the break, we will be live in mumbai, as uber gets a red light. This is on the move, this is on the move, and claire were faults credit defaults. The biggest profit jump since 2010, and sales at a division in china soared, helping to offset a slump in india. And talking of india, uber is placing facing a slowdown. Some practices have been deemed already to be legal. Lets go to mumbai. Tell us the story. The indian market, they joined their exactly one year ago, and we have seen an announcement to this effect on the issuea bank, and could become larger industrywide. Weresuggest that some violating the Foreign Exchange Management Act requirements. Some do not follow the two stage authentication, which is mandated by the r. B. I. For credit card purchases. Is completedon using the Customer Credit card usedls, which were already by the database, and it is a violation of the credit card transaction guidelines. It requires tracking. After we saw that, most of these entities might have to upgrade their technologies to be able to operate in the framework. The r. B. I. Introduced the two stage authentication process a , but the ago convenience factor is the only reason why Companies Say they are not adopting it here in india. Thanks for that, joining us from mumbai. And as signing a value to everything it can. They have now assigned a value to working dogs. We explain. The working dog is a fixture of australian farm life. Once trained, they can heard sheep and cows, often unsupervised. Farmers find that especially valuable when it is wet and cold. Now, a joint study between the university of sydney and Farm Research groups have put a price on this work. For a particular outlay of seven point ive thousand dollars calculated ateen just over 37,000. That is a hell of a lot of money. That is all done. It puts a smile on your face. This is more than anything to us. The Research Team which placed a value on the work is now going to collect and analyze their dna, to find out what characteristics the best dogs share. One can only imagine a genetic forr sure full us cheerfulness, loyalty, and working hard. Follow me on twitter. Just go to my handle, and there we go. And angie lau. That does it for this monday edition of on the move. Edge is coming up next. For one company, missed estimates. We talked to the chief executive. That is coming up. Hello, everybody. This is a look at Victoria Harbour and this is asia edge. A look at our top stories. More job losses and a new leader may be in store for malaysia airlines. Back to the negotiating table. Meet with striking workers today. And the Dollar Strengthening against its peers. Have a look at what was said at jackson hole. Coming up this hour, china said to be considering a nationwide property levy and it could be introduced as early as next year. We are going to take a look at all the implications for the sector. Stock market rally leaving stateowned companies behind. We will assess the lack of investor enthusiasm. . Nd to buy or to rent we are talking about affordable luxury here. We are going to meet the Hong Kong Company offering that in china. All that and more in this monday edition of asia edge. We just have a problem with davids mic there. Malaysia airlines, we are going to have a look at that while we sort things out for you. Part of a massive restructuring plan. Tell us what we know so far