Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20150216

50s, 60s, 70s first, the positive spin is that it is out of recession. We did see some signs of life. It wasnt what economists were expecting. I think a big part of it was the big revision down, the thirdquarter gdp number. It was worse. Deeper than first thought. The initial read was negative one point nine. That brought they brought that down to 2. 3. We are looking at growth. The annualized figure is 2. 2 . The estimate was for 3. 7 . The Third Quarter revise number was down to 2. 3 . The recession was a bit deeper than expected. What was the reason for the weakness here . Lets talk about that a little bit. You had the export numbers were quite good for december. But the underlying demand spending, isnt quite where it should be. Lets listen in the hsbc japan economist was here. Listen in. Export is looking quite strong due to Strong Demand in the u. S. But Household Spending is still under pressure. I think that is going to be the case unless we get a big round of wage revisions starting in april. The boj basically has put 13 14 months to achieve that inflation target of 2 . They say in or around fiscal year 2015, which basically starts in march, and they have 12 months from then. We are about a quarter from the target of 2 . Ok. What about the yen, and how are stocks reacting . Its interesting. Before this, people were saying, some economists were saying, we dont need the boj to come up with more stimulus because it might be detrimental to the economic output. What we are seeing today, we are seeing dollaryen, 1. 1862. We are weaker for the japanese yen against the u. S. Dollar. Perhaps the markets are pricing in there may be need first and is right now. 118. 62. They are more or less aware we were where we were starting on friday. The nikkei 225 was the only market that was green. Off the high for the day. 18,052, still fairly high levels. Let me just break that down for you. Take a look at which sector groups are moving along. Industrials are doing quite well, up 1. 2 . Heavy equipment makers, engineering companies, industrial goods, capital goods, engineering. 19 out of the 23, 1, 2, 3 4, 5 6, so on and so forth. That is a sector doing well on the nikkei 225. Bond yields, higher for the 10 year 10year. There you go. The fiveyear is also up. There we go. A little bit. Overall, lets take a look at asia. I mentioned japan is leading the way. In fact, it was the only market up. There you go. Japan up 7 10 of 1 . The rest of asia australia, new zealand, and of course singapore, which is just opening up, down about 4 10 of 1 . I will be back later on. Greece and its creditors have been holding toplevel phone calls in the last few hours. This is as time ticks away on greeces debt. Creditors say this is been following a longrunning drama. There has been a phone call overnight, saying he wanted a phone call with phone call overnight, tsipras saying he wanted a phone call with jeanclaude juncker. 12 days left until the current bailout ends. They want a bridging loan until september, give them some breathing space and time to do the reforms. However greece cant say, i want, i want. 64 billion, the majority of it to germany. Overnight, peaceful protests, 20,000 people for example in the square in athens in front of the Parliament Building banners saying end of austerity. These were the scenes we saw. Also, by the way, right across greece, other protests not as big as this one, but for the last eight hours. That has eased off, if you like as people have gone to bed. On saturday, we had talks between greeces finance and Foreign Ministry and the ecb and imf, talking about areas where they disagree. Today obviously greece will be going to the eurogroup finance ministers meeting. There have been more friendly noises coming up the last several days. There have been but unfriendly, the french. Northern europe, perhaps more concerned about greeces stubbornness. Fabius, the current finance minister said in fact, we are looking to maybe extend the deal. The fins are saying, we are running out of patience with greece. Earlier on, we had a bank of singapore economist saying how worrying it is. It seems if anything the positions have hardened. You are getting comments coming out of portugal suggesting they dont want to compromise. They feel like they have gone through this pain, and politically, it might be damaging for them to give greece a deal having inflicted so much austerity on their own public. One less thing in germany, there was an election over the weekend in hamburg, regional. Angela merkel had her worst result since the war, but this is really a left area. What is interesting is that the antibailout antieuro party called alternative for germany won their first seat. 5 they had to get, and they got 5 . Antieuropean sentiment growing across the continent. That is john dawson. Lets check on other stories making headlines. Singapores Prime Minister lee hsien loong will have surgery after being diagnosed with prostate cancer. The 63 year will be on medical leave for a full week and is expected to make a full recovery. The broadest measure of new credit and china shows of new credit in china shows its second consecutive monthly rise. Shadow lending dropped in december, that as bank lending double from the month before. One of chinas biggest Investment Private Investment Funds biggest private Investment Funds is looking to invest 1. 5 billion in london. Expect it to create 20,000 jobs and generate 7 billion for the economy. Antivirus Software Maker casper ski lab calls it unprecedented cyber rubbery. A gain of sophisticated hackers have gone to another level going online to steal 1 billion over the last two years. What has happened with that money . It is still going on. This is what is kind of scary. You can track them, but you cant catch them. Let me give you the details of this. Kasperski lab, in connection with interpol, have revealed 1 billion was stolen from various Financial Institutions banks, even aim and platforms, since 2013 epayment platforms since 2013. In one, hackers sophisticated late inserted sophisticatedly inserted into the Computer Networks with a malware, which allowed them to go from the desktop on one particular employee into the network, infect the network, which allow them to control surveillance cameras, which allowed them overtime to watch and then mimic bank transactions. They transferred money out of the system upwards of 10 million per attack. There were other cases where atms at banks were programmed to dispense money at a particular our that somebody would be there paricular hour particular hour that somebody would be there at that time. These transfers are relatively large. A high level Internet Security conference taking place at Stanford University. That is why it is so amazing these kinds of things can still happen. What was interesting, it didnt matter what software or what networks the banks ran. These heisters were able to go in and penetrate them. The Cyber Security summit hosted by Stanford University is kind of trying to bring the government and the private sector together on the same page. There have been some riffs. Rifts. Tim cook was there. Other ceos of tech giants or not. President obama was there. This is what he had to say. As a nation, we do more Business Online than ever before. Trillions of dollars a year. Hightech Industries Like those across the valley support millions of american jobs. All this gives us an enormous competitive advantage in the global economy, and for that very reason, American Companies are being targeted. Their trade secrets stolen. Intellectual property, ripped off. President obama said we are in a cyber arms race, if you will. That is a threat to national security. We havent been pointing any fingers. There has been a sophisticated game that has been able to do this, but kaspersky says the members of the game hail from gang hail from russia, china, ukraine, and elsewhere. Still to come, emerging from recession with more of a limp than a sprint. We are going to be discussing the latest japanese growth numbers. On the move in just a cup is back in just a couple of minutes. We are going to check out some of the stories making news. Denmark is in shock after a gunman killed two people in copenhagen. Police tracked the suspect across the city and shot him dead after he fired on them. He had a criminal record and was known for gangrelated activity. The victims were one person in a cafe holding a freespeech debate and a man at a synagogue. Islamic council has condemned the attacks. The latest ceasefire in Eastern Ukraine is threatening to unravel after one day. The government in kiev and prorussian separatists are accusing each other of violating the truce on the road between donetsk and luhansk. The fighting has subsided in most areas. More than 5000 people have died in almost a year of violence. Thousands of people rallied in the center of athens ahead of what has been described as a day of reckoning over greek debt. They are showing support for finance minister Yanis Varoufakis crew will return to brussels to try to win a bridge boat and more time to promulgate a postbailout strategy. Both sides indicated a degree of willingness to compromise. Lets have a look at another economy that has been in intensive care. We are talking japan. We had a morning gdp numbers showing a recovery, but the patient is still sick and weekly, some people would put it. Nicholas smith joins us from tokyo. What was your reaction to these figures . I dont know. I think the worst mistake you can make in japan is to make too much about quarterly gdp numbers. The slight and utilizing of potholes in the road annualizing of potholes in the road. What you have to watch is the profit growth. Nominal gdp is off 7. 9 . Herbert profits are up 106 . Im looking back over the last 12 months and saying pretax profits in japan are up 12 and you look at eps in the u. S. , and its slowing. December quarter, 6. 6. The Consensus Forecast negative 2 for the march quarter 2 for the march quarter. One of the driving factors the expectation that wages will be going up, that hiring is growing strongly, and we have a labor market that is absolutely i watering eyewateringly tight. Shinzo abe wants to lift up wages. Isnt your hypothesis that we will see some serious wage pressure . Absolutely. What i have been writing about is to say, dont sit there whining about if you understand the numbers, because the numbers actually show that wages really are going up. Dont sit there whining about wages. You should be concerned that wages are going to move up fast. In some businesses, Companies Wont be able to cope. They will have wage increases that squeeze profits or they will be lacking the people and have to close down some of the business for lack of people. I think the outlook for consumption in japan is very good indeed. Lets talk a little bit about the young. When we got these gdp numbers we saw the yen off its recent range. In which way will we break out of that range, and what would make it happen . From the point of view of japan, the yen has moved a very long way. It has come from a peek at 75, really oscillating around 120. As far as Japanese Business is concerned, the yen is no longer the most important thing. They are very comfortable with the yen at 118. The manufacturers have a breaking point at 92. They are making out like bandits. All they are asking is please, lets have the yen stay at one place, and we can make a lot of money. From the point of view of investors, if you were a u. S. Investor, dollarbased investor, as the yen has weekend, of course it has made Companies Much more profitable, so the stock market in japan has gone up and you have seen the benefits taken away from that by the weakening yen. I think we end up with the yen staying absolute constant, but the corporate profits continuing to grow further with the benefits of the week yen, the week oil price the improving consumption on the back of increasing wages and increased employment. We are going to get a stock market that goes up and a yen that is holding steady. That is absolutely excellent news for investors. Very quickly, as well, just to pick up on it, you mentioned the week oil price. That must be helping the japanese economy quite a bit. It is absolutely vast. Most economists look at this out. Nuclear power plants have been switched off, and they were replaced actually with lng. Lng is tied to the oil price. It hasnt cracked yet. Its about to come off fast. We still had a high lng price in the last quarterly gdp numbers and exports started to pick up. What we are going to get is a thump down in japans fossil fuel costs combined with recovering exports. Thank you very much indeed for that. Weve got to take a break, but coming up, making its way to mongolia. Find out why porsches parking up in the countrys capital. Investors in the goalie had little time to cheer about in mongolia had little time to cheer. Authorities have been convicted of tax evasion. Even so, porsche thinks now is the right time to enter the market. Our correspondent has been for a test drive. German engineering, leather interiors. With mongolia mired in economic woes, why is the carmaker revving up to do business just when everyone else is leaving . Please got a commitment to our customers. The decision was made to come into mongolia for those customers who werent being serviced properly. Although the economy isnt what it was in 2011, we are still committed to the longterm future. Is it a big enough number for a branch . Those 50 numbers customers need to be taken care of. The roads in mongolia, will those affect or sales . The road work in mongolia has grown massively. There are lots of new roads that have been constructed, and they are much better. We also specify our cars for the mongolian market. The cars come into mongolia are custommade for mongolians. There is actually a mongolian specification we order from porsche, which equips the cars to the usual for this market. That option is only available to us because we are here. Where did you picture porsche in mongolia in five years . We want to be the most successful luxury brand in mongolia. That is a tough target to achieve. Will you pursue your customers in mongolia to leave their other luxurious cars and buy a porsche . What would you say . Please . [laughter] porsches mongolian ambitions. Coming up, we are going to have a look at the latest scrutiny intensifying, hsbc apologizing for tax accusations. We will have the latest on that coming up. It is time for the start of the trading day in hong kong. Shanghai also Getting Started off. Look at that. The opening numbers coming up right after this. Japan emerges from recession, but with more of a whimper than a bang. Hsbc has issued an apology over tax evasion as accusations spread to the banks indian arm. Rumors that apple is to road test a new product. Lets get to the start of trading in hong kong. Lets get a flavor of the asiapacific action. Lets do that with david inglis. It took a little bit of time to warm up across most of these markets, japan as the performer has been the upper former outperformer over the last hour, hour and a half. This morning, gdp numbers weaker than expected exports helping things along but not quite as much as some economists had hoped. I mentioned we took a while to warm up. Here is how we are shaping up right now across the asiapacific. It was only japan that was green. You have other markets that have turned around very slightly fractional gains in both australia and south korea. Shanghai is going for six days of gains, and we are looking at a third day of gains for the hang seng index. Malaysia is up a fraction. You have singapore down about 0. 5 . Taiwan is already closed for the Lunar New Year holiday. A few things i want to note about china. On friday, you have the country basically releasing the latest read in credit. Once, for example, beating expectations new loans for example, beating expectations. China medical system, up 3 for that stock. Full year, gaining 60 year on year. Properties were down 2 for the stock. We are likely looking at a drop of 60 70 off 12month net income compared to the previous 15 months. Its not because of core operating issues. We are basically looking at it, based on what the company said because of right back writ ebacks. Bank of east asia, down about 3 10 of 1 . Very quickly the big three of the big four im going to give you a shares, accor bank bank of china, and construction bank. We are talking about new loans. Ive converted this to dollars for you. 236 billion in january. Aggregate financing, which puts together Everything Else social financing or whatever you want to call it, 328 billion. What that suggests is that at least for january more of the money was being poured through the Banking System on Balance Sheet loans into the economy, although the broadest measure of money supply dropping to 10. 6 if im not mistaken. Is something to watch. I will leave it there for now. Thanks very much indeed for that. Japan out of recession but still weak, the economy hobbling alo ng. James mager is in tokyo. We got a long, long way to go, havent we here . Good morning. Thats right. The growth we saw today was much lower than expected. The economy grew 2. 2 in the final quarter. Economy didnt grow at all in 2014. The real gdp growth for 2014 was zero. After a couple of years of growth in 2012 and 2013 the sales tax hike, and then falling Business Investment in japan. It meant that the economy stated still. Even though it has returned to growth in the Fourth Quarter, it is not as strong as we were expecting. Weak consumption and weak Investment Data really is not the boost that the government or the boj was really looking for from this data. Do we know what is behind it exactly . Also if we look in the rearview mirror, we have had regions in the past where the economys contraction was worse than thirst than first thought. The main reasons again for the contraction or slow growth and the economy was what we were talking about three months ago when the Previous Data came out. It is bad consumption data. It is people not willing to spend. Real wages are still falling, and that is causing consumers to hold back on making purchases. And it is very weak Investment Data. Companies increased investment 0. 1 in the Fourth Quarter. They contracted 0. 1 in the previous period. In june through december, there was no investment made by companies in japan. The economy, while its growing, its not growing strongly, and the underpinnings for strong growth are just not there at the moment. We seem to be a long, long way away from the day of having 2 inflation, arent we . Thats right. The most recent data we have is that inflation was 0. 5 in december last year. A lot of economists we are speaking to are expecting inflation to go negative this year. For the court inflation data to fall below zero sometime in the middle of this year due to falling oil prices. One thing that is interesting, nominal gdp was higher than real gdp for the First Time Since 1997. What that means in the gdp data released, there was inflation. How much of that is due to the sales tax increase, and how much of that is due to real inflation coming through in the economy . We still have to work that out, and its still unclear but while inflation is slowing and definitely not where the boj wanted to be, at 2 , at least last year we did see some inflation in the economy across the whole year. Thank you for that, james mayger. Lets get into chinese data. Investment on the way up in january, up 29. 4 from a year ago. Investments are rising by about 40. 5 year on year. Chinese money finding its home overseas. Saying sorry. Hsbc issued an apology over allegations that its swiss unit helped avoid taxes. The chief executive described describe the revelations as painful. You know, i think a lot of damage control being done by ceo gulliver right now. They said theyve made fundamental changes on how they do business, and they want to ensure customers that the private bank in the swiss arm has been completely overhauled. They say they have tightened Central Control around customers. They have boosted their compliance workforce by 7000. The Swiss Private Bank unit cut accounts by almost 70 . Since 2008, this is what they said he added that we have absolutely no appetite to do business with clients who are evading their taxes. Of course, hsbc has come under political fire since this report came out. They are highlighting how the Bank Allegedly handled accounts for tax invaders, including criminals. This also throws up a lot of other issues, as well. A lot of soulsearching going on in the u. K. What can they do about this . The relationship between Political Parties and business. The treasury has asked a lot of these hsbc executives to testify including the chairman. Prime minister David Cameron coming under fire as to why he appointed exhsbc chairman Stephen Green back in the day in 2011 as trade minister, because it was months after the treasury was handed documents about the list of individuals who were using the hsbcs swiss arm. Very quickly, allegations in india, as well. This is developing. Hsbc india. Officials in the u. S. Are accused of helping american citizens with Indian Origins to evade taxes. That is according to several reports. They assure customers that details of their accounts would not be reported to authorities in the u. S. The u. S. Department of justice issued a summons against the bank. Youre going to change tack and have a look at some of the stories that have been making corporate headlines so far today. The u. S. And ministries and has unveiled plans for new rules on drones u. S. Administration has unveiled plans for new rules on drones. Commercial drones must be flown within sight of the operator and away from crowds. The faa says there could be 100 million in economic benefits in the u. S. Two companies are joining forces to take on it over. Taxi at services app services have confirmed a merger. 10 send will be the largest shareholder in the as yet unnamed company. We are expecting more details after the Lunar New Year. Iphones, ipads, iwatches. What about an icar . Apple is working on a project something called titan. Executives are said to have met with highend carmakers. Apple already has battery and mapping software, and could support some kind of electric car. Those are the top corporate headlines this monday morning. I am john dawson. Is this just rumor, or is there any truth to this . Lets bring in Bloomberg Intelligence analyst steve mann. What do we know, if anything . Click now, the rumor says apple may be developing an electric car to compete with the likes of tesla, but as you now know apple has been in the business of creating something new, outofthebox, and an electric car is not really a new device. Something that may integrate the automobile to the rest of the world. And to the Apple Ecosystem . Just like itunes did with music just like apple pay is to pay services. Maybe another, some sort of device that integrates the automobile into the rest of the world and can next it to the ecosystem, may be in play. Why would you move into something which is totally different . Its not. As you know apple has been very good at developing smart devices. They probably are hiring all of these industry Automotive Industry experts just to understand how an automobile works, how it interacts with its surrounding and how people interact with an automobile. Apple is trying to understand how that entire ecosystem works and probably developing a smart device that integrates itself into the automobile. Thank you very much indeed for that. The latest on apples automotive ambitions. Chinas deflation turnaround. The official cost of living target will be firmly positive when released in a few weeks. We will ask why. Are going to check on some of the stories making headlines around the world. Delhis new finance minister starts his job today after being sworn in. He won 67 of the 70 assembly seats. It is his second time in charge of the indian capital. He has promised to serve a full term. North korea is celebrating the 73rd anniversary of the birth of former leader kim jongil. He was born at february 16, 1941 and ruled the country for 17 years, a time that included the devastating famine in the 1990s that is said to have killed hundreds of thousands of people. He died in december of 2011 and was succeeded by his son kim jongun. Now its all about the remote heist. Security firm kaspersky says a cyber game has gone 2 billion around the world in the last year alone. Kaspersky says the gang members come from china, russia, ukraine, and parts of europe. Lets have a look at what has been going on in china. The broadest measure of new credit showing a third consecutive monthly rise. Does that mean that stimulus is cushioning the slowdown . Here to discuss this is a gem chang. Tell us about this. We have the credit data that actually beat expectations, but overall if you look at the money data at the total financing growth, it shows that the monetary and financial conditions continue to be tight despite the policy easing. Ok. Do you think they are going to continue in this vein . What about liquidity . Talk to me about that. We can see the global environment. The u. S. Economic recovery remains on track, and i think the fed tightening its likely to happen mid this year, and that means the capital flow conditions will remain quite challenging for china. The chinese actually posted an increase in capital outflow in the Fourth Quarter of last year, and we see intensifying capital outflow, which is tightening the domestic liquidity conditions and that is going to force the pboc to cut. Do they cut Interest Rates proper in your view . Well, if we look at the rising real Interest Rate over the past four years and thats about 300 basis points so in a way, the pboc is certainly behind the curve, purely judged by the rising incomes of the real Interest Rate. Even though chinas Interest Rate has liberalized and cutting the lending rates will not effectively transmit into the economy, the pboc has to look at the combination of injecting more liquidity and lowering the banks Interest Rate to lower financing costs. Talk to me about deflation. How much of a concern is it . Indeed. We have china january inflation falling to a fiveyear low below 1 for the first time, and the reality of falling ppi for three years, and also the following raw material price has been delaying firms re stocking activity. Fundamentally in our view chinas deflationary pressures are rooted in large excess capacity and housing oversupplied, and also the pboc holding a hawkish bias and fallen behind the curve in terms of this easing. I think you did say it. The ppi 35 months of contraction taking place there. Everyone talks about that representing underutilization and perhaps also inventory overhang. You are absolutely right. What is worse is that the ppi deflation actually adds to the costs that and leading to lowering the corporate profits for the firms. The output price continues to fall. When is it going to stop . It is in a vicious cycle, it would seem. In a way, chinas economy faces many structural challenges. The factors behind the deflation are structural in nature. We just have to prepare for more difficult times ahead in the next two years with growth falling below 7 . It is bound to happen though. Weve mentioned it sometimes we talked about this over the years. People shouldnt be surprised by a slowdown. It is a managed a slowdown. The government has been trying to guide the Market Expectations by promoting this concept of new normal. They are preparing for the fiveyear plan at the moment and i think they already have in mind that the growth target will be set sometimes at 6 to 7 . Hopefully higherquality growth and more sustainable growth. Thank you so much for joining us. Up next, hong kong turning up the lights with dazzling displays for the Lunar New Year. Here, the man helping to illuminate the city. On the move returns in a couple of minutes. You are watching on the move coming to live from hong kong and streaming live on bloomberg. Com as well as your mobile device. Lets have a look at some of the stories we are watching out for. Tuesday having a look at the First Official reading on the Property Market in china. There were signs of a rebound late last year median prices falling in fewer chinese cities spurred by a cut in rates and a relaxation in property rules. Wednesday brings us the latest act in the great tony turnaround story. The chief executive supports his Business Plan to a briefing in tokyo. He has nurtured sons recovery, but last years hack attack may have already enjoyed good news reviews. [no audio] people decided to put up Christmas Lights to attract visitors. Initially, the idea was greeted with skepticism. No one else had such bright displays lighting up the streets. My first job involved suspending stars from the top of buildings. It was quite dangerous. Going up on the gondola isnt for the faint hearted. It can be cold and windy up there. Several years ago, i nearly burnt down a building. The bulbs burst into flames one by one. [no audio] we dont have that problem anymore because led bulbs are wind and rainproof. In the old days, there were only five colors. Now we have many more, so the effect is very dramatic. The cheapest display costs about 13,000. It depends on the size of the building. It can be much as a quarter of a million if its a really big one. We submit three ideas for each job, and we do about two dozen buildings every year. The number one rule is we dont use the same image twice which ive never done, and ive been in the business for 39 years. The holiday decorations last about three months. Illuminations start going up in late november, ready for christmas and the western new year, and then the displays change their focus to Lunar New Year in january and february. By the time we take them down, i am already thinking about next year, so it feels like its always a festive period for me. Coming up, a gauge on growth. Japan coming in below estimates. How will the thai economy perform . You will find out in less than a half an hour when the country comes out with its latest gdp figures. This is on the move. Intensive care, but still weak, japan climb slowly out of recession. Hsbcs indian on arm allegedly helped u. S. Citizens even a tax and the hackers have stolen 1 billion from the banks. Well it is a recession, and it is still weak japan with growth still below estimates, and james, as we were discussing earlier, there is still a long way to go. That is right. The Fourth Quarter data out shows the economy grew 2. 2 . What that means is that the economy actually did not grow at all in the Fourth Quarter. That is basically japan returning to growth, but that makes up for the second or Third Quarter contractions where consumption crashed after the sales tax increase, so the economy is still not in a great vision, and one economist i was speaking to was saying that for the japanese economy to reach the boj target for this fiscal year, it is going to need to grow 8. 7 in this current quarter, which is obviously not going to happen, so the economy is much weaker than all of the economists we speak to forecast, and it is also weaker than the boj forecast in january. Unexpectedly bad results today. Well absolutely, and also coming on top of the likelihood of that inflation target to completely even them over the next couple of years, at least. That is right. Inflation has been slowing since the middle of last year. It was at 0. 5 in december, and some of the economists we speak to see it going negative in the middle of the year as the crash in oil prices basically drags down the cost of things in japan, but the bank of japan still says they are very confident that once the prices change, it will steadily be economy, and that will stimulate inflation in the second half of this year and going into next year, but the majority at the bank of japan, they are to have to increase stimulus again, to push higher and faster growth and to pass higher inflation. Thanks, james our economy editor there in the japanese capital. Right lets find out what is going on elsewhere market wise in reaction to that gdp figure. David inglis. Yes we did have a move up when it came to the dollar and the euro yen, and i will get to that in a moment. 118. 77. There you go. Lets get red in there. That is better. Taking a look at our survey back on friday we talked to economists in japan, and what seven of them said, the boj does not have to do anything more or less. But the majority of them say the boj will have to move this year and, of course, this comes on the backdrop of the japanese yen. Are consumers feeling more confident in japan to spend their money . Because, yes, exports have picked up. Industrial production. But hasnt actually factored into domestic demand . Oil prices have come down. And there is the dollar yen. Get a check of what is happening there. 135. 27. 1. 35. 29 is the level. Were getting a better idea of what is happening. And lets take a look at the trading session in japan. We are 30 minutes before we hit that lunch break. Seven or 8 10 of 1 , and health care is down and utilities a fraction, nothing really, mostly higher at this point. Now, i want to change gears and take a look at shanghai. Things have turned over the past 15 minutes or so. We are down. Let me break that down for you. We had the latest credit data out of china on friday after the markets closed. A massive jump when it came to new lungs, new currency loans. 236. Let me just get the number for you. 236 billion u. S. In new loans. The take away here is that there is a bigger portion of credit that is going through the Banking System. We are getting liquidity into the market right now. And the money supply, the broadest measure m2 that is a broad look at what is happening. Shanghai financials, something to watch. The hang seng, a third day up gains, and that is with the regional benchmark. By the way we talk about the japan gdp, and taiwan gb comes out in minutes, and we are expecting growth there. Gdp comes out in minutes. And then the Financial Complex in the city, teaming up to build a bigness ports. Looking to create some 20,000 jobs and generating about 10 billion for the economy. Now gone are the days of bank robbers breaking into vaults. And a high Security Firm says cyber gangs have stolen as much as 1 billion around the world in the last two years a loan and now they are using malware to get to atms and cash, and it is china, russia, ukraine, and parts of europe. Hsbc, an apology that its Swiss Division has helped people evade taxes. It has been called painful. They have an advertisement in several british newspapers. What are they saying . There is an apology addressed to the customers as well as the staff but, again, he did seem a little bit on defense, because he said this was data stolen eight years ago by an employee at the swiss arm, and they were focusing on the 140 names, and those names are not even our clients anymore, so he wanted to do some damage control. They have done fundamental changes with how they do business they have increased their workforce by 7000 they have tighter Central Control, and as i mentioned, they cut the accounts by about 70 in the Swiss Banking unit overall, in this is what he also added. Quote, we have absolutely no appetite to do business with clients who are evading their taxes. Of course, they have been under fire since the report came out this month. They were looking at how they handle the accounts and ebay taxes for criminal as well as other clients. Ok, a fresh clinical outcry about the relationship between business and politics. Exactly. Also among swiss lenders, under this u. S. Program on on the uks site, they went to meet with several agencies to testify in front of the Treasury Committee there. Prime minister David Cameron also coming under fire on the decision to appoint the x chairman of hsbc, Stephen Green as trade minister in 2011. This was months after they were handed documents on identifying individuals and businesses using the hsbc swiss army and some believe the treasury had turned a blind eye to what was happening at hsbc. These allegations of tax evasion at hsbc india. Yes, individuals in the u. S. That helping american citizens with Indian Origins to evade taxes there. There are several reports, some saying they promoted services on the basis of keeping their information secret from tax authorities. The u. S. Department of justice issued a summons back in 2011. Right. The start of the trading day over in mumbai. About 50 minutes ago or 1. 5 hours, i should say. Before things get started in mumbai. The nifty closing out the friday session with a gain of 1 looking like a flat start to the trading day there. The futures contract there in singapore. And at the moment it is crunch time for grief, with crucial talks later today in brussels, and the great debt debate when on the move returns. Ok, some other headlines around the world, people in shock after a gunman shot some dead in copenhagen. They say he was born in denmark, had a criminal record, and was part of criminal activity. He killed a man in a synagogue and the Islamic Council has condemned the attacks. And the ceasefire in ukraine is threatening to unravel after just one day, with rebels and others accusing themselves of violating the ceasefire. Fighting has subsided in most areas after a deal brokered with the help of france and germany. More than 5000 people have died in almost a year of violence there. And people rallying in athens about what is considered to be a day of reckoning. This is due show support for the finance minister who will return to brussels to try to win a bridge loan and to have more time to create a bailout strategy. They could be indicating a willingness to compromise, and some believe that compromise is possible. We are joined by a guest who works in wealth management. We had positive noises certainly, on friday, didnt we . Certainly but i think we still have a long way to go before we can actually reach a compromise in a sense of what the greeks are looking for, especially reducing their rate, and what the eu is looking for to stick to the rate in order for them to reduce the debt to gdp ratio effectively, so there is quite a fair way to go for compromise to be met, but things are looking a little better with both sides agreeing there are more advantages to reaching a compromise than disadvantages. Absolutely and looking at that, it is against the backdrop of a quantitative easing row graham from mario draghi. How much can grief benefit from it, if at all . Well, there is a potential that in the future greek bonds could be included in qe by the ecb, so that is one of the things they will likely dangle in front of the greek government, but you need to understand that there cannot be a hombre mise without new conditions. Additions being met, and i think that is what the greeks are actually looking to do, because i think the new government put into power just a few weeks ago some of these conditions are more onerous. If you have austerity, you cannot really grow, and if you cannot grow, you cannot reduce the debt to gdp. So this could be reduced, so to speak. Yes, lets also take a look at the monetary policy, because on the one hand, we have got the europeans, the japanese, and then this leads with negative rates, and then on the other side with britain and the United States when it comes to monetary policy. Yes there is a tremendous amount of volatility over the next months because half the market is not expecting this by increasing Interest Rates by 25 basis points, so in that sense, the press conference it will be all like different from what is happening in the next couple of days, because i think over the next couple of days we certainly do not expect anything major to come through. We do not expect anything significant to come up from that statement itself, but i think the march 1 is the one we should be looking at. We have the rba. You have the pboc and others to bring the currencies down a little bit further. Talking about japan here, the growth number coming through, and, again, it disappointed. Yes. I think it underscores the fact that they need to do a lot more than weaken the currency. The banks have benefited thus far, but also likely due to a weaker yen. And then the banks are benefiting from the inflation again actually because of the fact that the Interest Rates are so low, there is a tremendous amount of the quiddity being pumped in by the bank of japan. But the Domestic Companies are the ones that are suffering. You look at the Sales Numbers the sales disappointed down when the market was expecting an increase, so, again, a lot more needs to be done. You need to do something to help Domestic Companies, because these are the ones actually employing people. It is not really encouraging people in japan to push up their spending. The japanese are net savers. They are not net spenders like the americans are. That has to happen before the japanese can be encouraged to spend. There could be more stimulus in the offing here, as well, but that is being discounted by son, because it could well be counterproductive. What is your view on that . Certainly. I think we need to see more reforms other than pure stimulus. For example, labor market reforms to make it easier for corporate to streamline operations. If you want to make your operations more effective, so you need to see more reforms. On top of that you need to see some sort of incentive come through because you want to encourage the japanese to start spending and to start increasing their Capital Expenditure within japan. Start bringing some investments back. You look at the figures recently. Be japanese Pension Funds have increased allocations overseas rather than invest in their own markets, so you need all of that to actually come through rather than just tried to stimulate the economy. The stimulus measures are good but the impact on the economy thus far is a little bit what about your trade of the week so far. What do you take . Well, we are telling clients at this point in time, you would still be wellpositioned if youre overweight in equities because developed Market Equities we think well see more inflation. Earnings will have to be strong and especially as far as the eurozone equities are concerned, since its peak last year, it will help push things up. But the events happening in greece and ukraine, where the situation is very fluid, they are likely to hold the market that, as well. And some of these positions some of the hedge funds in this space. We think that some of the longterm funds will likely be able to tap into the rising out of this situation there. On top of that, we think they are far more attractive than some of the other regions that we have. Thank you very much indeed. A ubs world manager joining us from singapore. We have to take a break but on the other side of it, hong kong turning into a city of lights after the Lunar New Year, and spending decades designing the displays. Again, lets have a look at some of the other stories we are watching out for you this week. An official reading of the Property Market in china, and there were signs of a rebound late last year, with prices falling spurred by a cut in Interest Rates and lacks property rules. Wednesday brings the latest act in the great sony turnaround drama with a mediumterm Business Plan briefing in tokyo. Taking the helm nearly three years ago and nurturing the sony recovery but last years hack attack, they have already enjoyed good reviews, and Lunar New Year thursday most will be closed as millions in this part of the world will be making their way home. It is the year of the goat, the ram, or sheep. And talking about chinese culture, some of the biggest and most colorful anywhere from christmas to Lunar New Year thousands of people flocked to see the festive displays, and the father of festive lights after four decades in the business. I love the job. I love everything about it, and i never want to stop. 30 years ago, there were not any festival lights at festival time. It was like a wasteland, so people decided to put up Christmas Lights to attract visitors. Initially, the idea was read with skepticism. Nowhere else had such displays lightening up the streets. My first involved suspending stars from the top of buildings. It was quite dangerous. Going up on the gondola is not for the fainthearted. It can be cold and windy up there. Several years ago, i nearly burned down a building. The rain caused a shortcircuit, and each bulb first into flames one by one. The fire was coming my way but my colleagues cut the power just in time. Around christmas i used to have to be on call in case there was an emergency, but we dont have that problem anymore because led bulbs are wind and rain proved. In the early days, there were only five colors to choose from and now we have many more, so the effect is more festive. The average display costs about 30,000, depending on the size of the building. It can be as much as 250,000. We submit three ideas for each job and do about two dozen buildings every year. The number one rule is that we dont use the same image twice, which we have never done and i have been in the business for 39 years. The holiday lights last about three months, and they start going up in november, ready for christmas and the Lunar New Year in january and february. By the time we take them down, i am already thinking about next year, so it always feels like the festive period for me. Right. You can get more on that and the days other top stories plus watch us live anywhere you want wherever you are, and just do that on the bloomberg app. Download it. If you use twitter, it is even easier. Stay in touch with us at on the move, and angie anagietvlive. You can follow everything we do. And it was a steamy valentines weekend at movie theaters in the u. S. With an erotic film taking the stop top spot, 50 shades of gray, 82 million. It is about a sadomasochistic relationship between a College Student and a seattle billionaire, based on the first of a series of novels that have sold more than 100 million copies across the world. Right. Lets have a look at what is going on across the asiapacific. What is happening in hong kong we have a gain of about a quarter of 1 . The needed to do five moving to the upside, two thirds of 1 as we head towards the lunch that the nikkei 225 moving to the upside. And this is down. Having a look at what we have next, indonesians soon banned from working overbroad . We find out. 1 billion and counting. The cyber gang online. And the indonesian president getting set to have new rules for Domestic Workers and hsbc issues an apology about tax evasion as allegations spread to their indian on, and we will head over to mumbai for the details. Spread to their indian arm. We were going for three Straight Days of gains. We know back about 60 on friday and then a move down over the past few moments or so, so we are at 61. 26 for the brent. Take a look at crude. Nymex. Where are we right now . 52. 5 two, so also down in the past minutes, but, of course, we are at a fairly limited level over the past weeks, so there is this rally we have seen in the oil prices. With brent, we are higher than compared to last wednesday. So 61. 25. And this is a clear example of that. The bestperforming lot in australia, oil and gas, up 9 10 of 1 . And in new zealand, same picture there. The brightest of the greens. In fact, i could go on and on. Lets look at japan. The naked to do five closing after the lunch break also getting a move up when it comes the nikkei 225 also going up. If the oil rigs in the u. S. Shutting down. Will that improve the supply . Will that help to narrow that gap with the supply and demand curve . We will see. Basically saying it bottomed out last week. Was that the case question mark lets wait and see. Were still seeing a move in equities. The yen is a little bit weaker compared to about 1. 5 hours back. The yield this is because of the gdp number, which is, by the way, the only one that came out earlier today. The 10 and 20 year. Back to you. Breaking news coming up. Growth. Growth numbers out of thailand now, and gdp expanding 2. 3 . That is on the year, as well. Economists were looking at a rise of 2 , so 2. 3 in thailand. Now, indonesia may ban maids from working abroad. They are said to be considering new rules that will stop Domestic Workers from leaving the country. Thats go to jakarta, where our reporter is standing by. Lets get behind this idea. Basically, the governor wants to give protection for indonesian workers, especially women working abroad. The manpower minister was sending a clear roadmap about sending Domestic Workers overseas, wanting to preserve the country dignity. They were indonesian workers in question by 2017, and they asked about the protection that the workers had. He claimed the target is achievable even though the budget is very minimum, amounting to only about 2. 5 million u. S. , and according to data, since 2013 there are roughly 6. 5 million indonesian workers working overseas with 95 thousand people in saudi alone, and many of them are unskilled or on formal informal workers. Migrant care opposes this idea, saying gender differentiation is a violation of the constitution, and some others are criticizing the plan, because working as a Domestic Worker abroad is still considered a promising job opportunity, knowing they are very limited Jobs Available in indonesia. How much does this have to do with what was put out by that Malaysian Company we were talking about just a few weeks or so ago . Well, it is somewhat related. What happened was that one particular Malaysian Company really created some pressure to increase him and protection to workers overseas. We also know two indonesian workers currently working in hong kong had suffered abuse from their employer and that employer was found guilty of multiple counts of abuse against them, and she may even face a lengthy prison term, and there are thousands of Domestic Workers in hong kong alone. About half of them are from indonesian, and nearly all of them are women. Back to you. Thank you very much, indeed our journalist there from jakarta. Right, and antivirus Software Maker calls it unprecedented cyber robbery. Sophisticated hackers taking it to another level, going online and stealing 1 billion in the last two years alone. Even angle. Have you check your bank account . I did also after the story came out. This is a wide investigation from an antivirus Software Maker but in conjunction with interpol and other agencies. Not cracking this case but finding out more details about it, because as you rightfully said, these thieves, if you will, are still out there in cyberspace. I would think the banks, if they havent already, have eased up there security. They have targeted as many as 100 banks in 30 countries around the world, stealing as much as 10 million, up to 1 billion since 2013. They were saying this is a very slick and professional cyber robbery. How does it work . They got in through various networks, through individual employees and then got into the networks and installed malware, which even allowed them to control the security cameras in the banks. They mimic the banker working day, how they transferred funds, and they ended up transferring funds to themselves. They also initiated or instigated certain viruses into the atms, and that program to them to deliver cash at a certain time, and the thieves would then in person arrived at the atms and take money out for themselves, very sophisticated, like something out of a movie. This Internet Security conference which is going on at the moment at a university there. Yes, it is interesting because this is a time when Silicon Valley and the white house are not necessarily talking off the same page right now because of the stolen revelations about privacy and the like, but anyway, tim cook was there saying there needs to be more and better cooperation between Government Agencies and the private sector, but some of the ceos from Silicon Valley did not show up. Mark zuckerberg did not show up. But obama was there, saying this is a threat to national security. Either way, they say members of this gang that rated the banks were from russia, china, and other nations. All right, thank you very much, in deep read engle on this hack attack taking place against banks around the world. Ok, lets get a look at some of the corporate stories making headlines so far today. The administration reveals plans for drones. Tough privacy rules on Government Agencies and also strict controls on his misses. Operating away from crowds. The business flights could make at least 100 million in the u. S. Taking on bloomberg. Uber. There is an intensifying rivalry. The largest shareholder in the as yet unknown company. It could be 6 billion very soon. Details after the Lunar New Year. And honda says they may be making some changes. They have scrapped their annual sales target of 6 million vehicles. There were record because last year. No word yet on cutting u. S. Production or about plans. Those were the top corporate headlines this monday morning. Ok, we are going to stay with cars, because there are rumors that apple is looking to enter this space, as well. Steve, is apple going even more mobile . It is very possible because the next frontier in Automotive Design is actually having a connected car. It is not really the ev, and there are new and outofthebox devices, so it is conceivable they are developing Something Like that, a smart device for a car. But not actually a car. The barriers to entry into the Automotive Industry are very, very high. But you need a supply chain that is really tight, really large, which takes years. And you have to have the economics of mass production dont you, to get their . Exactly. Why would apple moved into something that is entirely entirely different . Well, like i said, in the future, cars will be talking to each other. Like traffic authorities will be manning traffic based on information from these cars on the road so it is very lucrative in the future to use data from a smart device, which is a car collecting a whole host of data, not only vehicle data but data surrounding the vehicle. Well all be very useful, not only to authorities but to automakers. Steve, what about the traditional carmakers . Should they be worried . I dont think so. If apple is actually building a smart device and not a car, i dont think automakers have anything to worry about. But automakers should be working closely not just with apple but Companies Like apple, who are building these smart devices. Like i said before and automobile is becoming a smart device with a lot of data being collected, and that data can be very beneficial. Steve, thank you very much. Steve there. And lets look at investors in mongolia who had little to cheer about looking to help fix the economy and foreign executives have been accused of tax evasion. Bloomberg tv mongolia. We have been for a test drive. German engineering. Mongolia traditionally conjures up the images of war says rather than porsche. Images of horses rather than porsches. There are a number of cars already in the market. This was for those customers that want to be in service. Even though the economy isnt what it was in 2011 2012, we are still committed to the longterm future in mongolia. Is that a big enough number for a branch . We think so. Those 50 customers need to be taken care of. The road network in mongolia has grown massively in the last three or after your years. There are lots of new roads being constructed, and they are much, much better. We are supplying cars up for the mongolian market for those conditions. So those coming to mongolia are custommade. Yes, there is actually a mongolian specification that we order from porsche which makes them usable for this market, and that option is only available to us because we are here. Where do you ensure porsche mongolia in five years . We want to be the best luxury brand in mongolia, and that is tough to achieve. You will push them to leave their other luxury car and buy a porsche. What would you say . Bloomberg, mongolia. Right. Up next analysis of thailands latest growth numbers, and nine months after the military coup. This is on the move. Thousands of people rallied in the center of athens after what is being described as a day of reckoning over the greek that, and it was a sure of support show of support for the finance minister who is looking for a bridge loan and more time to formulate a strategy. And a willingness to compromise. And car recalls have spread to korea. About 60,000 cars for a variety of potential problems. It includes a hybrid produced from 2013 until last year that may have a faulty brake light system. There were trucks built between 2013 there is an issue when a driver steps on the brakes. And not ready to come off of the medicine just yet, but the patient is healthy, growth of two point 2 , with inflation below estimates. The weakness of the currency and japan continues to boost consumption i should say is struggling to boost consumption at home. And gdp numbers from thailand growth coming in ahead of estimates. There was the military backed government nine months after the coup. A head of Research Asia joins us. Thank you very much for joining us. Lets start off with the 2. 3 better than expected. What do you think . Yes, better than expected. I need to see the details. It didnt look to me as if there was much momentum in the Fourth Quarter in growth of private consumption or private investment. Hopefully the government kicked in here, and has kick started some of that infrastructure spending. That would be a helpful development, and it would boost sentiment in the private sector, which up until now looks like it has been flagging, and actually i think the private sector in thailand seems to be finding a Better Climate outside of thailand for their investment prospects. Tim, how would you rate the Economic Management of thailand since the military coup . Well, we have been waiting. It was expected for there to be considerable damage to the economy, to sentiment and private spending. In 2014 as a consequence of the coup, and we were hoping that that would go away, dissipate quickly, as the government implemented some of these spending plans. This has not materialized, at least not through the Third Quarter. We will see what the Fourth Quarter numbers tell us, but i think it has been a slow process, painfully slow for the economy in terms of getting public spending on Infrastructure Projects online and that being a catalyst for the private sector. How would thailand benefit from a lower oil price, as well . Well, thailand is, just in terms of its net oil imports it is the largest in asia. It is about 10 , 11 of gdp in 2013, and thailands just Net Crude Oil import was about 10 of gdp, so obviously, it should be a huge beneficiary from lower oil prices, but that requires people spending, people having a willingness to spend, and we really have not seen that in thailand. Well, yes, lets have a look at china, the data on friday showing looking at the Current Situation there, what do you make of that, because that does ultimately also suggest we are having a managed slow down and, perhaps, some of the medicine that the chinese authorities have been prescribing may be working. Indeed. That was my take away. They are back to controlling the shadow Banking System. We saw this big increases in trust funds and trusted loans from december scaled way back in january, but bank lending continues that pays. A hopeful sign i think, was the increase in mortgage lending, longterm household loans, a big jump there, doubling the lungs, those new loans in january and another solid increase in corporate lending. My inference was from december that that was kind of infrastructurerelated lending, direct lending for Infrastructure Projects, and it seems to me that has continued, and that is a good thing, but youre going to have to have the private sector in china kick in and i think that requires housing to be a stronger housing demand, and that hopefully will be solved on the january numbers. I do think we will need a rate cut in china, and maybe more than one. We are in a cycle of easing in china. It is going to be a good year for bank loans, a bad year for the shadow eggs, but i think the Housing Market and the banks are the big beneficiaries here. Tim, great talking to you there from ing. And as far as chinese Economic Data goes. Well, apologizing about alleged tax evasion in switzerland, and being accused about india. We will go to mumbai after a short break. Right, you are watching on the move, coming to you. Streaming online and on your mobile device. Accusations about tax evasion swirling around hsbc, and they have already said side for their actions at their swiss unit, but they may have to apologize again. How much do we actually know here . Well hsbcs indian banking there are fresh allegations of tax evasion coming days after there were accusations of tax dodging in the british media, the Swiss Banking unit. Representatives of hsbc india, assuring customers details of their accounts would not be reported to tax officials, the latest revelations coming after there were fullpage advertisements in british newspapers with an apology after reports that the Swiss Banking arm was helping the wealthy class avoid tax and also suggesting that employees, for example, in one case advised in Indian Origin businessman to transfer funds to help him stay below the radar. India has been accused of helping american citizens of Indian Origin of void tax in the u. S. , and the Justice Department has issued items pertaining to the bank since 2011. Thank you very much for that. That is it for this monday edition of on the move and stay tuned, asia edge is on the way, and we will also be speaking to the chief executive of a large company, and over 180 . Our first on bloomberg chat, coming up in about 12 minutes from now, thereabouts. It is the middle of the trading day at the imperial palace. The economy is out of recession and remains sickly. The debate. Google greece prepares for talks. Hackers who have stolen billions of dollars from banks. Hsbc says sorry over tax evasion and a second apology may be needed. We will have the latest. Is apple going mobile . They are road testing a new idea with tesla in the firing line. Shedding light on the Lunar New Year. We will illuminate the skyline in asia edge. We are looking at smog. I am watching the markets for you. It is a short week and they are closed for the new year. Asia will be closed. It is still