Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20140929

Protesters remain on the streets this morning. Hundreds of bus routes were diverted or suspended and schools have closed. Last night, the police did indeed roam the streets. A different scene a few hours ago. Tear gase were firing and pepper spray into the crowds. The biggest clashes in hong kong for years. Minutes we will look at the implications of the market and the reaction from beijing. And what we can expect over the next few days. David, the in biggest protest since hong kong was handed back to china. What are we looking for . Web and talking about this with angie for all morning. We are expecting a fall. Extent, investors havent registered yet. You look at the hong kong dollar, the first indication of how investors will be treating this as far as risks, already reflecting signs of concern. A big spike up in the hong kong dollar at the Exchange Rate, meaning we are seeing a weakness in the hong kong dollar. It is a very narrow band, though. In the broader scheme of things. Relatively speaking, we do not see this often. We are poised for the biggest threeday drop in the hong kong dollar since 2011. Also seeing it in the offshore market. Similar moves. Minutes, hang seng index, 36 is financials. 12 consumer stocks. We will be getting further evidence later on, is on top of this, the fundamentals have not really clicked in hong kong. Slowing chinese economy, less buyers, retail sales have fallen. Not have an independent Monetary Policy to shore up confidence. When analysts have been pointing out what analysts have been senging out is the hang volatility index. More than what happens to equities this will show you whether stocks are starting to buy insurance over the days to come. , where the closures Hong Kong Market is, it is hard to get to. The thing is, will the markets open . They will open. Their said last night that there is no reason to shut down trade today. They did reiterate that they would offer the usual financial markets. Equities and bonds and futures will be trading as usual. The only thing is that it is hard to get to central right now. Of a lot ofents roads leading into the Central Business district are shut. It is difficult to get to work this morning. I was out there 10 minutes ago and they ran into people who undergo 30 or 40 minutes to go into central, because very few taxes wanted to come here who had to go 30 or 40 minutes to get into central, because very few taxis wanted to come here. Inconvenience and it shows you how difficult it is for business to remain normal. These are the images coming through. It is rather peaceful, obviously. For those watching us outside of hong kong, that is the main store. This is the main shopping district. To the north goes into the financial district. These are the government buildings on the righthand side. It is actually completely different than the scenes last night. Which were clashes with the police. Tear gas. To the left, what youre looking at, several banks. Shift tment park is part is shifting. Branches are shutting because of the peaceful protest. Thank you david. Meanwhile,jing, having a little to say about the escalating protests. Steve with the latest. Little comment, but i am sure there is a lot behind the scenes. Surely they are watching what is happening in hong kong, and it is troubling to the chinese leadership. Is it trying their patients . That is the dangerous question. When you are the streets of admiralty, you get the rumormongering. Will be troops be unleashed from the tla will the troops the unleashed from the pla . Speculation runs. The chairman has dismissed rumors that the government plans to call in the Peoples Liberation army. The State Government says that it is confident that the Hong Kong Government can handle the movement lawfully. That he Central Government uses often, that things must be done according to the law. Whose law is the question. They oppose illegal activities that could undermine jeopardize social tranquility. Undermine a law and jeopardize social tranquility. This is as close as we are going to get to an official statement from china. It says, the risks are temporary in the big picture of stability. Stabilityrisks but hong kong stability doesnt face risks does base risks. Are confident that hong kong will not face a situation similar to those in the ukraine or thailand. There is no doubt that hong kong will push forward political reforms. The people that break the laws will have to bear legal liability. Last week the president met behind closed doors with hong ings biggest tycoons here beijing, where he stressed that any political change must be in strict accordance with the basic law. Ruling out demands by prodemocracy activists to have a nomination system for the chief executive opened up. Down theh beijing may law, saying that only candidates acceptable to the Central Government would be allowed to run. That is basically the position from beijing. Regardlessagree that of what happens in hong kong, beijing will not allow hong kong to choose anybody to be the chief executive. Generally, what is actually being said in the media . Not much. Thate getting reports other social Media Services like instagram have been blocked here along with facebook and twitter, which have been blocked for some time. Of thisnot want word and photos sparking similar protest on the mainland. Not much in the state media other than what i just mentioned from global times. Oneliner, calling on experts to Deepen Research on hong kong issues and promote the interval of one country into systems. And to systems. I asked someone on the way to work what they thought about what is happening in hong kong, and he said that, what is happening in hong kong . He said he had not heard anything. China our china correspondent. Numbers declining for the first time in two years. Slowdowns, production, we and, and factory prices weak demand, and factory prices. The Exchange Link is taking steps to prevent people from grabbing too much. After the move does, after the Hong Kong Exchange has received feedback about what it calls mischievous behavior. They think is scheduled to start next month the link is scheduled to start next month. Softbank is trying to buy Dreamworks Animation. Softbank, which controls a sprint, has been looking for more Media Investment in the u. S. Treasury wise there is talk of a takeover. This has been since may the 20th. Shares are taking a pounding and they rejected a bid. There was a revised offer from kkr. Later they were said to match the offer. Shares are down about 14 . Kong. Otests in hong that is the question will ask coming back from the break. We can bring you live images of the calm after the storm after last nights protest. The prodemocracy protests shut down much of Central Hong Kong. The situation remains fairly similar. If we can get over to roslyn chen, she is in Central Hong Kong. Give us an idea of what is going on. Now, there are still thousands of protesters out here on the streets of admiralty, on the edge of the financial district, and outside of the government complex. It is very calm right now. People are sitting, quietly resting. Occasionally there is a rallying cry. They are asking for chief executives to step down. People are seeking shade because it is getting hot out here. What is very effective is that they are just occupying this whole eight or nine lane set of streets behind me. And they are not allowing any traffic or any transport through. Buses have be diverted and no cars can get through. Have to be diverted and no cars can get through. The police try to convince the protesters to let them through and the protester said no. The police had to leave their van behind. The same thing is happening further down the road. Calm and,h things are nothing like what we saw yesterday, the intense clashes, gas and tear pepper spray, that is not going on. But they are being effective in terms of cutting things down which is difficult for people trying to get to work. I see a few people around me trying to get to their offices. Protesters had hoisted the chinese flag upside down. For a few seconds only. And then it was lowered and we hoisted the right way up. Roslyn chen. In Central Hong Kong. Lets look at this have a look at this, the current outlook for china. With our next guest. With Central Hong Kong being closed down, tell me something. What is this doing to competence in hong kong . We will confidence in hong kong . Will have to wait and see. Reviewed ratings and reaffirmed a aaa with a stable outlook. We see an excavation escalation of disturbances to the point where growth is weakened or we have concerns about the basic stability, that could be a negative rating trigger. I was just talking to our china correspondent who quoted the vice premier. Comment saying that they should be promoting the idea of one country and to systems. And two systems. What kind of messages that . Message is that . That comes down to how the territory is governed, and it comes down to how it works in practice. I think the question for the Credit Outlook is to what extent the two sides can find common ground. Does this affect china to any major extent or can they brush this off . I think it is much more important for hong kongs economy and Credit Outlook than that of china in the first instance. Although in the interconnected world, i am sure the people in not just china but in the world as a whole will be looking at how the situation plays out in hong kong. Kong,ing away from hong looking at the chinese reform process, how are you looking at that . I think that the july and august data has come to a shock to commentators. That must play into the way that you view the rating of china. I think that the credit numbers and the production forers, the Investment Data july and august, surprised many analysts. What we have been saying to people is that there has been much talk about rebalancing away from investments towards consumption. If you want rebalancing, this is what it looks like. Although some of the activity numbers were weak, retail sales and grew retail sales grew. Speed for thatgh rebalancing to take place . Is a good enough is that good enough . We view it as a race between it reform and rebalancing. In the areas that china has been over engaged in, investments, particularly real estate, as they slow down at the governments encouragement, the question is can the other sectors expanded sufficiently quickly to pick up the slack . That is the whole question, and that is what we are looking for. It is still an economy that is being driven by infrastructure spending. If we look at the labor market data, encouragingly, it seems to indicate a tight situation. Which growth has picked up this growth haswage picked up this year in real terms. That its an interesting question for many countries in the region. They are trying to pull off the same trick. But is the emphasis on the structural fundamentals, which we look at more than some others. That is how flexible and responsive the supplyside of the economy is. How strong the institutions are. These will be important in determining whether countries can rise up. The rating remains the same, any changes there . I think if they backtrack, we will view the credit negative. We will take a break. Dollar, the hong kong down. We will look at the Foreign Exchange headlines, coming up in a few minutes. I am david inglis in hong kong. These are your headlines. The top story this morning, thousands of prodemocracy protesters have taken to the streets of hong kong, pumping the biggest crackdown in the city since it was handed to china in 1997. Analysts are expecting a selloff in a few minutes. Keep in mind that the hong kong economy has not been doing well. Later on today we will likely see further evidence of this when we see sales from august. We are respecting to see a seventh straight month of declines expecting to see a seven straight month of declines. South korea released its current account alex for august. Account balance for august. The surplus narrowed, but they were also revised the july surplus lower but they also revised the july surplus lower. Ticket look at the hong kong dollar take a look at the hong kong dollar. We saw a big spike, we will see a lot of weakness. Take a look at the offshore. This one is held its weakness over the last 30 minutes or so. Here is what we are seeing as far as the futures are concerned for the hang seng index. It is in line with what analysts are saying. They are basically saying to expect shortterm pressure. So, as expected, overall, those are the stories driving the markets this morning. We are going to take a look at what is going on in japan. Rescuers continue to search for the victims of a volcanic eruption. They are giving up hope of finding survivors. Jacob joins us from turkey. How much do we know about what happened here . , yesterday the authorities in center dot 31 people had been found that had suffered from cardiac arrest. Were flown off the mountain. Dead,they were declared and rescuers are now working to get up the mountain and bring down the other 27. Much aboutot said what happened to these people, but we do know that there was dust kicked out by the explosion saturday. By the irruption. There were earlier reports of people being buried, and that could lead to deaths. The dust could have made it difficult for people to breathe. What are the rescuers doing today and what challenges are they facing . Well, the topping for the rescuers is that this is still ongoing. The top thing up rescuers is that there are still volcanic activities happening up there. There were sulfuric gases coming out of the crater yesterday. Thank you very much, jacob. Jacob joining us out of turkey with the latest on the volcanic eruption. Up next, Hong Kong Market set before a fall at the start, but will there be longterm consequences for the region . Will put that question to arnold. We will put that question to arnold. Democracy protesters are blocking the streets of hong kong as the markets take a hit. Hollywood beckons. Masayoshi son eyes a new role in tinseltown. The xbox one lands in china as the council ban is lifted. Democracy protesters remain on the streets despite calls for them to go home. Roads have been closed and hundreds of bus routes are diverted. Some schools are shot for the day. A different scene a few hours ago as the police fired tear gas and pepper spray into the crowd. They were the biggest clashes in hong kong perhaps ever as protesters blocked roads and besieged government buildings. Will take a look at the markets. We will take a look at the markets. We are seeing a sharp decline in hong kong, perhaps not as sharp as some had pointed out. We are looking at the open. 23,400, more or less. 300 points is what we have for the opening in hong kong. That is the hang seng index. The me get rid of the and switch along. But me get rid of that and switch it a long. The component index. The shanghai composite, are we seeing a reaction . Not really, in fact it is higher. It is hong kong. The hong kong dollar is spiking up. The weakest level here. That currency does not move too much because of the high trading rate that is allowed to move within. That it is allowed to move within. The weakest level for the hong kong dollar since april of this year. Here are the opening index numbers for the three main benchmarks. These are the chinese stocks listed here in hong kong. The hang seng, the hang seng composite down by the same percentage. Lets get to the heavyweights. The three heaviest weighted stocks on this index. They declined to varying degrees. 4, 5, or six as far as waiting on the hang seng. We are looking at the jewelry stocks were shopping. For shopping. We have retail coming out this afternoon. On top of the protests and the uncertainty that we saw over the weekend, the underlying economy has not done as good or is not in an ideal situation to handle all of these tensions. And of course all of this comes ahead of golden week, october 1. The holiday when we get a flood of mainland tourists coming to hong kong. Will that be impacted . We will have to wait and see. Back to you. We are with someone from asia capital holdings. Any thoughts on the impacts of these . I think the situation has gotten worse faster than people expected, but we are in control. The impact on the stock market will not be long. But on the retail market, because of golden week, i think it may affect the Retail Sector a little bit. What do we do here . In the sense that, how much are people in china aware of what is going on in hong kong . That is the point. Iti think, since there is news filtering at this point in time social media has gone nuts. People may not be aware of the situation. They come here to do the shopping and they will see the blockades and the police. People may stay in the hotel instead. Everything should get back to normal in a few days because we have a Public Holiday here as well, depending on how long they last for. The situation may not be lasting for too long. Just a couple of days. The impact will be when the days arrived. Lets take a look at what is going on anyway. What is the equity market here . I think that the equity market is very conservative at this point in time. Because we already have two Public Holidays in this week. I think that investors tend to cash out before the holidays just to avoid things getting worse. How busy are you these days with looking at this Hong Kong Shanghai stock and it stock connect . People have been busy speculating as to when the arrival they will be. So far we have seen the testing. Demand. Ing the so i think that people will be busy doing the testing and a lot of preparation work. This is the thing here as well. Who do you think will benefit more, the Hong Kong Market or the shanghai market . I think that it is obvious that the a shares will benefit more. 0. 85 of asian investors qualify. I talked to many investors were interested in investing in hong kong shares but they are very weak, and they have lost a lot of money. To begin with, it will be quite limited. It will be broadened, will it not . I think so. For the asian market, i think there is a barrier. But eventually i think they will relax the rules. Also the target of investment will be relaxed, because we can only invest in certain things for the time being. I think we are virtually flat on the hang seng now. Where do we go next . Do we continue at the flatlining level . When the government thetually announces Shanghai Hong Kong Stock Exchange of official date, i think that will be a sharp rally to the index. But the investors may not be too keen. To may drop in the forthcoming weeks as well. It may drop in the forthcoming weeks as well. What are your tips . I think that some of the shares in the mainland, some of the red chips. Also investing in good value stocks. You have to do the investment based on the valuations of what the investors can touch. They cannot touch some directly, some shares are not available. Ronald, tell me something here. The data coming out of china has been improved in them does going down again. And then it is going down again. What is your view on that . I think the chinese economy will remain flat and week in terms of domestic demand. See what will happen with the round of stimulating measures. And so if there is nothing coming up, i think that the interest in the Hong Kong Market will be weathering. Ng. Witheri ronald from asia capital. Lets take a look at stories from around the world. Britain joining the coalition against the Islamic State militants. They are based out of cyprus. They say they will be used as an when targets are identified. Thed cameron has said that involvement is critical to British Security and that the defeat is a matter of urgency. The u. S. Is releasing images of an airstrike in syria. The attack took place on saturday near the turkish border. The militant assault has sent more than 100,000 refugees seeking safety in turkey. The United States and five arab allies were launching their airstrikes. Now they are being joined by france as well as britain. North korea has taken the rare step of knowledge and that peter thegun leader rare step of acknowledging that leader kim jongil a has Health Problems kim jongun has Health Problems. He was last seen in public at a concert on the third of september. We are watching also the japanese wireless mobile phone carrier softbank. 7 . Are down that is because they might be shopping. They are in talks to buy Dreamworks Animation. What do we know about this . It looks like i might not be the only animation buff here. Miyoshi son might be too. You might like shrek. Says Hollywood Reporter that he made an offer to buy Dreamworks Animation and by ud shares at about 32, and offered to buy the shares at about 32. This could not come at a better. Of four better period for dreamworks. Has discussedberg buying with softbank and is open to other offers as well. It would be the second Japanese Technology company to buy after sony. Didnt he come up with an idea about a week ago . He has this huge vision. For him it is about buying. Investing in around 5000 companies. That is a big number right there. This purchase were not only help softbank in revenue, but an analyst in tokyo says that it would also provide softbank with content to help its mobile carrier. It already controls the thirdlargest u. S. Mobile carrier. That would be big. Quite a diverse strategy, to put it politely. Will take a break, but the bank of japan is releasing a survey later this week. We will take a look at what we can expect. Our chief japan economist joins us, next. At what is going on market wise. A day of declines. They are having a rough time of it as well. We have seen the situation in sydney. Singapore, take a look at the index after 44 minutes of trading. It is at. 2 of 1 . Was take a look at what is going on in hong kong. A data has been dominated by these protests which have been happening a day at that has been dominated by these protests. Very tight trading in respect to the u. S. Dollar. Amidst market retreat the Biggest Police crackdown on protesters since the city returned to chinese rule. That is what we have in the moment, 1. 3 fall back as expected on the Hong Kong Market. Economic a slew of data. Blocking the regional trends. Bucking the regional trends. We have the latest Business Survey due later this week as well. Investors sentiment pretty positive when it comes to the nikkei 225. That is the situation. Men,f japans richest mikitani, is building a house in the center of tokyo which is facing a shortage of luxury housing. Kathleen, tell us what is happening as far as the Residential Market goes, or the luxury side of that, in tokyo. Market is doing very, very well in tokyo at the moment. The demand is very strong. Even as the supply remains the same. Brokers have told us that it is difficult to show their clients around because there are simply very few luxury apartments and houses available for them. Is that the rail that is because of the Strong Demand the chief factor driving the luxury market or are there more factors as well . Thatokers have told us buyers tend to react quickly when the stock market is doing well. And we have seen that the nikkei has gained 25 so far this year. , couple ofst week weeks, we have seen the yen weakening drastically. Which may have made the Property Market more attractive for overseas buyers. Thank you very much for joining us out of tokyo. Thank you. A huge week for the country. Jobs data, and tomorrow the latest survey. , the progress of s. A nym of abenomic thank you for joining us. What is this date that going to do . What sort of picture is it going to paint . I think that the picture is quite good. We have a weak consumption month for july and august, because of the typhoons and bad weather. But now it seems that the bad weather is behind us. And we understand that corporate japan is still keeping the aggressive stance on divestment. I think things are going to be smooth going forward. On and aour view lot of this data that we have had in japan, we keep going on about the sales tax hike in april. It has a skewed things, and there is talk about doing it again next year. Is it necessary to do it . Looking at the economy, certainly we have seen slower consumption growth after the consumption tax hike. But japans fiscal condition is dire. The need to tighten down the condition. They need to tighten down the condition. Unless Economic Growth slows down, we need to raise consumption tax in october october october of next year. If you were abe, what would you be doing next . I think he has done a good job of stability the economy. But the third arrow, the growth strategy, is a key component to move japan forward from this point. And we have seen a good proposal in june. The implementation is going ok. I think we need a further deepening of this third round of reform, the third arrow. Without it, either japan will be faced with a shortage of labor problem. Which has already resulted in higher wages. We need to do something on this front. Absolutely. Many commentators have talked about the fact that the wage growth is not really happening as it should be. And that would be key for people to get our spending and limit any chance of falling back into a deflationary environment. Well, the wages the largest indicator. The wage is the largest indicator. In july, we have seen a 2 wage increase overall. Even though that is reflecting the higher bonuses, this is quite a good phenomena. We think that wages are likely to accelerate going forward. We have given what you just said given what you a cassette overall, do you think that if there was a further stimulus, which people are predicting, would that solve the problems are masked what is going on and not deal with the maskeding issues or what is going on and not deal with the underlying issues . I think some form of the stimulus is necessary when we implemented the consumption tax hike. This time we have seen a big decline in gdp growth. 7. 1 decline in quarter two. I did we need a decent stimulus package i think we need a decent stimulus package. Around 3 trillion japanese avoid theessary to unnecessary decline in growth rate next year. Thank you very much for joining us. Break. To take a pollution in a dirty waterway has become so bad that cleaning it up as a Southeast Asian country. Cleaning it up is a priority for a Southeast Asian country. Details, coming up. One mans trash is another mans treasure. Was recalling that phrase probably did not have indonesias river in mind. Whoever coined that phrase probably did not have indonesias river in mind. It is one of the most polluted waterways in the world and people are scratching a Living Cleaning it up. They head out, onto one of the worlds dirtiest rivers to do a dirty job. Scavenge day they can 50 kilograms of plastic, earning him at six dollars. Earning him a six dollars. The income i get is enough to get food and other daily needs. The is not alone. He is not alone 4 years ago he joined a collective that has many members. Discarded waste has been a big problem in the river and the reservoir. Using a mutualism approach, i tried to turn this problem to something that is beneficial for the community. This helps to preserve the river as well as community empowerment. Decline began in the 80s when industry took off along its banks. The population grew along with it but the regulation failed to keep pace. The river performs many roles from fishery to irrigation to sewer. The effort to clean it up is attracting attention. The effort is something that we should try to replicate. There should be thousands of people following his initiative in order to protect our water sources. We need more people to turn the problem into an opportunity. Government has classified the cleanup as a national priority, and aim to rehabilitated by 2025. Pays a living wage, the mission will be complete when he is put out of business. A quick recap of our top stories. Democracy protesters on the streets right here in hong kong in the city center despite police and government calls for them to go home. The transport system is affected. Roads closed, bus routes to ever indeed suspended, and schools diverted orut indeed suspended, and schools have been shut down. These are the biggest protests since 1979. The latest for you when we are back in a few minutes. I am rishaad salamat. We are live in hong kong. This is on the move. Central hong kong democracy protests bring stocks down. Investa modi taking his in india message to the United States. Died on a0 may have volcano in japan. Moment,story at the democracy protesters on the streets of hong kong this morning despite police and government calls for them to go home. Roads closed, bus routes diverted or suspended in some schools. Very different scene a few hours ago compared to these life images. Police were firing tear grass tear gas and pepper spray into the crowd. Demonstrators blocked roads and busy just government buildings. Besieged government buildings. David is here having a look at the impact of these protests. You feel what is happening across the region. Theit does seem that mindset is very much limited to hong kong. That said, it doesnt mean we ,re not seeing a sort of damage limited damage i should say, here in the city. You look across these benchmarks, stocks, volatility, currency as well, it is a broadbased risk off the table. Hang seng index down about 1. 5 . Hong kong, a separate gauge of stocks poised for its biggest drop since about 14 months. Hang seng index, not a single stock is higher. These are the three leading declines percentagewise. Down 4 . Holdings i mentioned volatility. Fix4 , 15 , that is our here in hong kong. Vix here in hong kong. How much are investors ensuring themselves against future volatility . What our expectations right now that we will see big swings ahead as far as the index is concerned . Not a single one is higher here in hong kong. That is how things look. Financials make up a very big chunk of the index. Goods,r services and that is a key thing to watch here. Hong kong is known for two things, Financial Center and shopping. Up, itlden week coming doesnt exactly bode well. You usually get tourists coming in to hong kong because of the long holiday. Will that Impact Retail sales . We have the latest gauges for august coming out later on. Just quickly, i want to show you what is happening with the hong kong dollar. 7. 76, doesnt seem like it is a big move, but the currency does not really allow it to move a lot. If you look at the yeartodate charts, it takes us back to the lowest level. Just to show you, here we are. And not a single stock is up. Hsbc, bank of china, 10cent tencent all falling today. If you have the Risk Appetite for that, maybe. Most investors are poised right volumes are not as high as you would expect them to be. A lot of people are still waiting on the sidelines at this point. Thanks, david. Lets look at what is going on in Central Hong Kong right now. Roslyn chen joins us on the line. What is the situation looking like . It is still calm. Mainly young people, but also many students here as well, still taking over all the the part of hong kong i am in, right in front of the government complex. Effectively, they have just taken over the eight or ninelane highway. Normally very busy this time of day. A main sorrow fire in hong kong. Thoroughfare in hong kong. They all are seeking shade right now because the sun is coming out and getting very warm. The heat is no deterrent. They are sitting quietly, resting here. The most effective thing they are doing is just not moving. Not lowering allowing any traffic through. Offices have been suspended because they cannot get through. The train here, some of the exits are shot, not allowing people in or out. The quiet protest is the most effective at this point. There are students, young people , who are moving in and out of this zone. They arent just staying put. They may be here for a few hours, maybe a day, then they go home and come back. The numbers are moving all the time. Theyare just here because want to fight for democracy. They want to fight for what they call justice. They want their voices heard in this upcoming vote in 2017. The proposal from the beijing that people can vote for the next leader of hong kong, people here who are protesting, they want fully free elections. They want to be able to nominate their own candidates for the next leadership elections and also be able to vote for who they want. They are worried that beijing will put forward a couple of handpicked nominees and that will restrict their ability to decide who they want in the future. That is what this whole protest is about right now. Ros, thank you very much. The other thing going on is beijing. Glaringly little to say about these escalating protests. Stephen engle joins us now with the latest. But i am sure, there is a lot going on behind the scenes. I am sure there is lots going on behind the scenes but they are not actively encouraging discussion on social media here in china or in the media, traditional media. The chinese leadership troubled by what is happening. Is it trying their patients . That is the biggest concern. It could lead to comparisons to what happened in tiananmen square. There not there yet but is speculation on the streets that perhaps the tla would be called in if things got further out of control. Hong kongs chief executive has dismissed those rumors that the government had plans to call in the Peoples Liberation army. Ll that speculation for now but it is in the back of some peoples minds. The government has said that it is confident the Hong Kong Government can handle the movement lawfully. The government here regularly uses this terminology, that things must be done according to the law. Whose law is the biggest question. They are steadfast that they oppose illegal activities that could jeopardize social tranquility. Let me read an editorial in the mouthpiece from the communist party. It says, hong kongs stability faces unprecedented risk. The risks according to the global times are temporary and the big picture of stability wont be changed. It goes on to say that hong kong should be a financial or fashion capital, not a Political Capital , and they have confidence that hong kong wont face situations similar to those in the ukraine or thailand. This is about as close as we are going to get to an official statement from the leaders. There is very little being mentioned. We were talking earlier, you were talking to somebody and they hadnt even heard about this news out of hong kong. That is absolutely true. We are getting reports of social Media Services being scrubbed. Any mention of hong kong protest , instagram reportedly has been blocked along with facebook and twitter. Tojing doesnt want this stir up similar sentiment on the mainland. And for good reason, if you will. Thanks a lot for that, stephen engle, our china correspondent. Lets get to some breaking news out of new zealand. The reserve bank of new zealand came out and said it had been intervening in the markets. 21 million new zealand dollars in august. Trying to weaken their currency. Joining us with a look at the kiwi dollar and the reaction, david ingles joins us. This is the first time we are seeing the kiwi dollar since about this time last year. August, 2013. We all know the central bank has been trying to hawk down the currency. Ll 521 million kiwi dollars in august to alleviate pressure on the currency. How much is 520 million . That is the most since 2007. He iscoming out of basically saying the Exchange Rate is too high. It is swollen on occasion but it has picked back up right after that. It is expanding its tech line. Let me show you the oneyear chart. In august, that is when they sold. This is the difference between when they did it and now, how much they actually sold. That is pushing the currency down. This is that decline that we have seen since the summer. This point. We are down 6 from this time last year. That goes all the way back. We will see if the losses hold. From experience, when they talk the currency down, it comes down and fix backup. Back to you. Cracks thank you very much, david. , the slowdown in china. What are the implications for the commodities markets . The executive of rio tinto coming up next. Lives is on the move from our hong kong studios, streaming on bloomberg. Com as well as your mobile device. Our next guest running one of the worlds biggest Natural Resource companies. The former chief executive of rio tinto. He is in singapore. Thank you very much for joining us, tom. It was a flavor of what is going on in the commodities complex with declining gold prices, oil prices, etc. Are seeingwhat we right now is a continued slowdown in china from a very strong growth a couple years ago. We have other emerging markets hoping to pick up the pace. Nowhere near the position to pick up the growth china had. I think demand is softening a bit and we have new supply coming in. What this meant for most of the metals, iron ore has been very weak over the past year. It is likely to stay week for a while. Shapees are in decent because of the supply side. The markets are relatively balanced for metals like copper, zinc, which were very strong and are seeing an expected reduction in supply. Prices have moved up even though demand has been slowing. I think that is the one grabbing headlines. Are you expecting many of these Smaller Companies to close down as a consequence . Again, when prices go down for anyone, you work to keep yourself cash positive. People for a time may increase production. If you point in time, are really a high cost producer and prices are dropping, we will see some shutdowns. We will see some producers around the world begin to react by taking supply off the market. That is the thing as well, resources. Does that throw off the level of opportunities with these companies being ready and up for sale . One of the things that we is a strategy to focus on low cost producers. Most of our businesses are in that place for the first time. Our strategy will be to focus on low cost producers. Theuldnt see us finding higher cost producers as attractive in this current environment. Well, are you as thinking about increasing that at any point . India business has been the highlight of our performance over the past few years. We are now producing about 200,000 barrels of oil. A very strong low cost producer of oil. As we look ahead, we see opportunities for gas and we are focusing our efforts there. At this time, what you want to do is focus on maximizing the performance of business. Get that Oil Production going, get the Gas Production up. Earlier in the year, kane india cairn indiairn had a buyback. Cracks what about refineries . You want to lift production up to 300,000 barrels per day, how are you going to refine all that . Are right in the vicinity of some of the largest refining complexes in india. We have a good market for that material. We do hope to be able to look to other markets as we continue to increase our Oil Production. The oil has a very good quality. It is some of the lowest sulfur oil in the world. Thank you so much for joining us. Great to be here. Got to take a break but coming up next, rescue efforts continue for victims of a volcanic corruption in japan. The latest out of tokyo. Rescuers continue to search for the victims of a volcanic corruption in japan. Reporter aleman joins us now from tokyo. How much do we know about what happened here . Yesterday, authorities said victims had been found in a state of cardiac arrest. Four of those were brought back via helicopter by rescuers yesterday. This morning, those four were declared to have died. Today, rescuers are working on bringing down the remaining 27. They are not saying much about what happened to these people. We do know that the volcano released a lot of gases, a lot of dust. There were reports over the weekend that some people had been buried in volcanic dust. That could have played a role. The heavy dust clouds, the gases would have made it very difficult for people to breathe. What are rescuers doing today, jacob . Today, they are trying to continue bringing down the 27 who are still up there. They are looking for more. The problem they face is that this is an ongoing corruption. There is ongoing volcanic activity. It continues to release smoke and ash. Yesterday, the rescuers needed to expand their operation because the gases could have caused them some harm. Working inthey are very difficult conditions and meteorological experts in japan are warning thatsaturdays eruption that saturdays eruption could be the start of a series of eruptions. Challenge,the chief that these rescuers are facing. As they continue to work up there, they are working in very difficult circumstances, with dust and gases and the threat of continued eruptions. They need to look for survivors, while they ares, trying to protect themselves. Jacob, thank you very much indeed. Jacob aleman joining us from tokyo. We are going to look at the other stories making headlines. Written joining the International Coalition against the Islamic State in iraq. Defense saying they are going to be used when targets are identified. Prime minister David Cameron has said that britains involvement is critical to the countrys security. American military is releasing pictures of an airstrike against these Islamic State fighters in syria. The attack taking place on saturday near the turkish border. The assault has sent more than 100,000 refugees seeking safety in turkey. Five arab allies launched their air companion Campaign Last week. Has taken the rare step of acknowledging that its leader, kim jongun, has Health Problems. News showed him limping and seeming to have put on a bit of weight. Kim is suffering some discomfort. They declined to give any details. He failed to attend last weeks parliamentary session. Public at a concert on the third of september. One mans trash is another mans treasure, the old saying goes. Whoever coined that phrase probably didnt have indonesias citarum river in mind. It is choked with plastic and human waste, considered one of the worlds most polluted waterways. Paul allen now reports. Day, he goes to one of the worlds dirtiest rivers to do one of the worlds dirtiest jobs. On a good day, he can scavenge 50 kilograms of plastic. The income i get from collecting garbage at citarum river is more than enough to buy food and other daily needs. He is not alone. Four years ago, he joined a cooperative of scavengers. Its founder bought boats and a machine for chopping plastic which is sold to recycling factories. Discarded waste has been a big problem for said her rum river. Using mutualism approach, i tried to turn this problem to something beneficial for the community. This helped preserve citarum river. Declineitarum rivers began in the 1980s when industry took off along its banks. Population grew along with it. Regulation failed to keep pace. The river performs many roles. To cleanctives effort it up is attracting attention. The effort is something that we should try to replicate. There should be thousands of people following his initiative. We need more people to turn the waste problem into an opportunity. Indonesias government has classified the cleanup of the said her rum as a priority. Garbage pays a living wage, this collectives will be complete once it is put out of business. Still on the way, takeover ambitions. We are having a look at softbank. We are having a look at its boss, he is dreaming of hollywood. We will have the details of what he is planning in tinseltown after the short break. Protests dragging Hong Kong Markets down on the first day of the trading week. Asayoshi sons latest script is the softbank boss eyeing up a new role in hollywood . PushingPrime Minister his investment message stateside. The story dominating headlines right here, these protests taking place in Central Hong Kong. Thousands of protesters, thousands of police out there as well. Last night, using tear gas and pepper spray to disperse the crowds. Lets look at the reaction here. We have seen a selloff take place in hong kong. It did take a few minutes for the markets to slowly reduce their positions, for lack of a better way to describe it. 1. 1 lower for the hang seng index. We have basically moved down. 6, that is 23,146 about a 400point drop. About the is just worst day here for the hang seng index. You look at the broader read here in hong kong, that is what you have. 3174. Volatility spiking up, the currency weakening as well. Where is the damage coming from . Where are investors most bearish . It does give you a better understanding which stocks to avoid over the next few days. That is your pie chart. That breaks it down, how things are affected across sector groups. The brighter the red is, the more damage perceived percentagewise. Technology stocks down 3 . Consumer service, i want to point this out. We have the golden week coming up in hong kong. That happens on wednesday, that is a long holiday on the chinese mainland where you have a lot of tourists shopping, what have you. Galaxy gaming stock, sams china sands china, another play there. And cathay pacific. Lets look at the heavyweights. Mobile, that is the level of indices. Down 2 . These are the Chinese Companies listed here in the city. The top three as far as heaviest weighted, hsbc, china mobile, tencent all down. Are the Jewelry Stores here in hong kong. , a big shopping districts lot of these areas that are usually bustling, we are seeing a sharp decline at this point. Let me leave it there. Back to you. More on these protests on the streets of hong kong. We are going to roslyn chan who is out there at the moment. What is the mood like . The mood here is pretty good. Looking a little bit lively now as more people and turkey there has been movement. Generally, things are calm. Generally, they are being very effective at occupying the traffic here and stopping traffic from getting in to the central part of hong kong. Front of thed in government complex where the government offices are located area and located. Thousands ofre are people behind me sitting or standing on the street. They are effectively blockading a lot of hong kong, stopping traffic from getting through. This morning, it has been a quiet protest. Right now, people are talking about staying here for a few days, perhaps to the end of the week. Some people only joined the crowd yesterday. Some of them are coming and going. Movement to get people are not just coming and staying here but there are hundreds of thousands of people to effectively Impact Business as usual in hong kong. It certainly is not business as usual right now. Ros, thank you very much indeed for that. Thousands of protesters still remaining there. President elect is optimistic he can reach his target of 7 growth by 2018. What do we have on this . A very good day to you. Joko widodo is still optimistic to reach his 7 growth target in 2018. Secure morening to investment in manufacturing and noncommoditybased industries. Commodities have dominated indonesias export base for over a decade but are prone to volatility. Too is also committed incentives to foreign companies. Is planning to tackle the infrastructure problem in indonesia by targeting more investment. One of the big projects on his , around 5. 8road billion u. S. Dollars. This would allow big vessels carrying goods to reach almost all parts of indonesia, including the remote areas. Are waiting for the road, hoping to cut freight costs. Joko is working on the development of ac toll road. Back to you. Thank you. Lets have a look at some of the other corporate stories we are following for you this morning. Says Investment Bankers are creating individual stocks and bonds to avoid a conflict of interest. Meant toy change is reduce potential conflict with clients. Alibabas venture into latin america, the third most popular website in brazil. 12 million attracted visitors in july, three times as many as ebay. Told investors that it will be a linchpin for international expansion. All talks about a takeover have ended. At the start of august, there was a revised 3. 8 billion offer. Later last month it was tpg. It is all off the table now. Look atoing to have a the Japanese Mobile carrier, softbank. It may be going on a shopping spree was again. Reports say chief executive Masayoshi Son is in talks to buy Dreamworks Animation. We have a lot of acquisitions in the past few years. How does this all play into the companys strategies . Another acquisition. Masayoshi son is being called japans most a quiz it of ceo. Acquisitive ceo. Control is the thirdlargest u. S. Mobile carrier, sprint. By acquiring dreamworks, it would have content to give to the mobile carrier. This is part of that bigger vision of investing in 5000 companies by 2040. He has already got a 300yearlong plan. Pretty ambitious. What do we know so far about his potential deal . Foroftbank made the offer 3. 4 billion according to the Hollywood Reporter. It is valuing shares at 32 each, which comes at a substantial premium on top of fridays closing price. Dreamworks could be seriously considering this deal. It is going through a rough patch. Hrekd big hits like s but now it is seeing uneven box office results. People with knowledge of discussions say ceo Jeffrey Katzenberg is open to other offers as well. Thank you so much indeed. Sonstest on masayoshi potential acquisitions. We have to take a break. The ex factor finally reaching china. A positive for the xbox as beijing lifts its console ban. I am rishaad salamat. It is monday and this is a look at our top stories. Central hong kong being shut down by democracy protesters. Police fired tear gas and pepper spray in failed attempts to disperse protesters. They were the biggest clashes in hong kong for years with roads blocked, public transport disrupted and government buildings under seas. Softbank said to be in talks with Dreamworks Animation. Softbank which controls americas thirdbiggest mobile operator has been looking for more Media Investment in the u. S. It is game over for chinas ban on gaming consoles. Chinese gamers get their first chance in 14 years to buy the device legally as xbox goes on sale today. Game sales expected to reach 18 billion this year. A slight which for microsoft. It cant sell its most popular games due to restrictions on violent content. Lets get you more on this. A partner and head of communications and media managementglobal consulting firm. Thank you very much for joining us. How big can this market potentially be . We just said 18 billion. It is a stab in the dark to come up with that kind of number, really. The total market for gaming in china was about 13 billion last year. About 40 year on year over the last couple years. It is dominated by social games and not console games. Consullook at globally, games have about 35 market share. Marketsimagine that the will grow and the console Gaming Market could be about 5 billion in time. Who is likely to be the winner between sony and microsoft . That is a good question. Microsoft clearly has got a head start in terms of having a first mover advantage. Having arom history, first mover advantage in the console gaming segment is an advantage that can be maintained if the titles and games are attractive to your gamers. That is going to be the big question in terms of the titles that get approved for use in the chinese market. We do think microsoft does have a head start. The thing is, a lot of the people who are not traditional gamers because many of the people have been denied these consuls, so there is not a tradition of having consoles. How do these Companies Break into that and persuade people to buy one of these rather than play it on your mobile phone . Think console makers and microsoft particularly have got their work cut out for them. People are used to the premium model. They are used to playing on their tablets, phones and on the pc. What you would expect the console makers to do is subsidize the console so that the entry point is quite low, sort of like the gillette model, keep the console cheap and charge for the games. In the chinese market, we have seen microsoft adopt a different strategy. The console is even more expensive than in the u. S. It would be around 700. But the games are expected to be cheaper because of the situation around piracy. I guess the work is cut out for the console makers to make it attractive. New titles and games and also media content could be the way to attract gamers onto the platform. I want to pick up on two things you just said. Just how key is pricing . Do you think sony will use a different methodology . Piracy rightsue is now in china . I am not one of the lower end of the economic class if i say so myself. I did buy one over the weekend in singapore. Itd about 600 for it and felt expensive. I can imagine that this will be a significant issue even in china. 700 for a console is expensive. I think nintendo will adopt a different strategy, will make an ps4 more affordable as entrylevel starting point. The games are doing very well and the gesturebased controls on the microsoft tend to be not as well appreciated. Is seeing a lot of traction worldwide. I do expect them to come in with a lower price point, especially the second mover into the market. You can imagine that over time the console prices in china will drop. On your second question on , certainly, this is going from theongterm move Chinese Ministry of culture. It will take time for it to assess what content is suitable or not. I believe steps are being taken in the right direction to screen content. The processes are in place to make sure that more titles will be released over time. I just want to have a look at nintendo here as well. You said they are designing a console especially for the chinese consumer. What would have to be different about it . I think it will probably have a lot more local content, given its restrictions around what content is acceptable in china and also given the point around piracy. I expect more local Game Developers to be involved. I think that is a key priority also for the ministry of culture and the communications and Information Ministry in china, to encourage more developers to develop local content. I think this is a good move for the chinese government, also a good move for nintendo. If it was to trigger more local developers to take a larger share of the International Software market. Thank you very much indeed for joining us. A break but coming up next, indias Prime Minister wowing the crowds. Next stop is the white house. Narendra modis u. S. Mission after this very short break. A quick market check in hong kong. Nearly 2 down at the moment as we have these protests continuing in the central part of the city. Protests that the city has encountered for years. This is what we have at the moment, with clashes also taking place between police and prodemocracy protesters. We have the hang seng nearly 2 down. Shanghai composite fairly unconcerned by that. Lets move it to tokyo. This is how the morning session closed out. Kospi also higher in seoul. Australia and new zealand look like this. Asx 200 at the 5300 level. Right now again for the top 50 in new zealand. Came out and said that it did sell new leland dollars new zealand dollars. This is the index in singapore. Lower by 0. 2 . Kuala lumpur pretty much flat. Narendra modi has taken his invest in India Campaign to new york, saying the country wont look back. The new leadership enjoyed a raucous welcome at Madison Square garden as he promised the days of indias red tape over with. Historick at modis mission. It is going to take more than just words to get rid of that red tape which is legendary in india. What are they able to achieve overall . It has been interesting the way Prime Minister modi has been pitching in the United States. Let me give you what happened over the weekend. His speech in the United Nations, he called for he said he was ready for a dialogue with pakistan to create a conducive atmosphere. He stressed on the United Nations to create a concerted campaign. You saw a very different Narendra Modi this time. This was not the Prime Minister or the politician. He was at the Madison Square garden where he got a rousing welcome. He is always a rock star. This was a large gathering of Indian Americans from all over the United States. Nearly 20,000 of them. He had them eating out of his hand. He was playing to the gallery. There was banter when he was talking. Next, he is also going to be meeting ceos of corporations like bowling, ge, pepsi and google. He is going to be making his speech for these companies to invest in india. He has claimed to ease the problem of governance and ensure that red tape but lets watch and wait. What is the general mood when you read newspaper editorials about the new Prime Minister . There has been a bit of criticism that they have not really been critical of him. What is your view on this . , there are two arguments i have heard. One is that it is too early to be sitting in judgment of his government. The other is the fact that nothing much has happened. Argument, just about four months into the government and they are in the right direction. Talks with pakistan, asking for investors to invest in india. There are two facts that you cannot disagree with. You are seeing foreign investors. You are seeing capital inflow this year. S p has reset its own forecast for india. All of this endorses modis policies so far. Great talking to you as usual. Lets tell you about our top story again. Just recapping, democracy protesters remain on the streets in the city center despite police and government calls for them to go home. Roads have been closed. Bus routes diverted or suspended. Some schools are also shutdown today. These are live images coming through of the scene near admiralty in Central Hong Kong. Hads in contrast of what we a few hours ago, a very different scene, Police Firing tear gas and pepper spray into the crowd. The biggest clashes in hong kong perhaps ever. That is it for this monday edition of on the move. Stay tuned. It is asia edge next. Angie and i will be recapping the big stories of the day. It is the middle of the trading day. These are images of hong kong. This is asia edge. Democracy protesters bring much of Central Hong Kong to a halt. Dozens arrested in the citys worst clashes for decades. The chief executive calling for thatand displacing rumors he may call in the Peoples Liberation army. Also coming up this hour, the lore of hollywood. Masayoshi son is said to be dreaming of a new script. Modi is a man on a mission and investment is the game. Headsdian Prime Minister to washington after winning over new york. Game on in china. Beijing lifts the console ban as xbox hits the stores. All of that and more in this monday edition of asia edge. I am david ingles. Watching the markets in the region, especially hong kong. Stocks poised for the worst day in months. We are seeing Downside Momentum building up. Technicallso some things here. How things are holding up in a little bit. Back to you. Just a bit of breaking also coming through. Beverage