Face a similar shock to the collapse of lehman brothers. Thinks over all risks are under control. Up by 7. 5 . Course, you can always let us having a look at the, starting to weaken after an erratic know what you think of our top stories. Follow me on twitter rishaadtv, session on those cpi numbers use trendingbusiness. That came through. The last trading day of the pretty steady, but weaker week. We are ending on a high note. Against the dollar. 109. 82. Quite a good rally a boost to Japanese Equities as coming through. Well. Rishaad a summit communique despite that unconvincing lead saying leaders are committed to a coordinated response to Global Economic conditions. We are at the summit. How has the mood been that these talks as they conclude . They have been mixed so far. You are seeing different , differentiews domestic issues and political interests involving these nations. The french president did show some sympathy on the economic abeicies that shinzo o brought forward. Germany has disagreed on the words like crisis. Combing through the policy communique, we dont see that much mention or focus on the word crisis, so maybe not going as far as what abe had mentioned about a lehmanlike crisis looming if proper measures are not taken. Is similar to the language we saw during the finance chiefs meeting, taking a choose your own path kind of response. They commit to a stronger coordinated response to economic conditions. Reaffirm the importance of not just Monetary Policy, but all policy tools, fiscal, monetary, and structural policies. We do see that they did talk saying excessively disorderly currency moves have a bad effect on the economy. This is according to angle of german chancellor Angela Merkel , there is broad agreement. Terrorism,l risks, brexit, refugee crisis. They could be a further serious risk to growth. We are seeing more of a coordinated response from g7 leaders, saying they have strengthened their Economic Resilience to avoid another crisis. They did mention and reiterate that Monetary Policy a loan cannot lead to sustainable growth. Hear a lot of Strong Language coming from Prime Minister shinzo abe. What does this mean in terms of the domestic policies in japan . Local reports are saying the delay in the sales tax could last as long as two years, and we could be expecting some kind of announcement on this next week. You have to read between the lines. You did mention maiman crisis. That is the buzzword here. He said time and time again that he would only push out and delay the sales tax hike if there is a lehman crisis or major earthquake. How itt continue to see plays out here in japan domestically. Rishaad thank you. That making headlines again with beijing saying it has plenty of making headlines again with beijing saying it has plenty of room. Who knew . Problem. Ll is a if you break it down, things like corporate debt, local Government Debt, still big issues for china, but the Central Government level with debt to gdp below 40 gives them room to borrow more and spend more on infrastructure. They do say that the local Government Debt is a problem. They flag to that as a concern, saying its becoming more difficult for local governments to pay down their debt. Then of course if you take all of that, household, corporate, and Government Debt together, 282 debt to gdp. China is also a creditor as well as as borrower, and it is one of the biggest creditors it was the secondbiggest u in terms of ranking, but it has been pushed down by germany. Than 2. 8 trillion for japan. Those nete reason why foreign assets have come off slightly and china is because they had to sell around 500 billion of their fx reserves to shore up the yuan postaugust imposed january. Capital outflows, those have destabilized to some degree, but around a trillion dollars for outflows for china towards the end of last year. Policy makers taking steps to rein those in. There is a consensus that china will overtake japan as the worlds number one creditor in the nottoodistant future, and there is a change now. The private sector and state owned enterprises are the ones snapping up foreign assets, u. K. , australia, and the u. S. Rishaad thank you very much indeed for that. Lets get to a major victory for google. Some of the other stories as well. Rosalind it has taken six years, but google has won a 9 billion court case over the use of oracle java programming language. Oracle claims google needed a license. Jurors rejected the argument and concluded that google made a fair use of java under copyright law. Oracle plans to appeal, but legal experts say overturning the decision will be difficult. Extended trading report that it rejected a takeover offer earlier this year, the wall street journal says valeant turned down an offer. It has been under scrutiny over its Business Model and drug pricing practices. The bid may not have included a firm price and the companies are not in talks. I oncepresident of 7 a Growth Strategy and plan to be announced by the end of the timeline in 100 days. It comes after his appointment was improved by shareholders. They have several underperforming businesses and are key to expand in the u. S. Once less profitable units restructured or sold off. Rishaad still to come, battle lines drawn in the race for ride sharing supremacy. The main players in this burgeoning industry with their bigname backers as well. Our next guest says chinas mounting debt problem does pose a threat to the countrys social stability. This is trending business. Right, asian Equities Trading to the upside. Investors are waiting for comments from janet yellen to see the timing of the nats rate hike the next rate hike. Great to see you. Tell me something. What is occupying your time right now . Is that this constant talk about june in the u. S. . It is the subject of discussion has our geopolitical issues generally. Clients here are quite encouraged by the movement of equity markets around the world and the removal of some uncertainty about what is happening politically in the ,. S. , but being in australia there is constantly and i on china, the debt situation there and where china is going to go. We are asiapacific focus. Focused. It was a bit bazaar of china sending out the message that that is not really an issue. To beses some eyebrows raise, doesnt it . We talked about the Portfolio Position we have taken, and while we are invested in chinese and hong kong equities, we have decided to take no position in chinese rank debt. It is an opportunity, but one we prefer to forgo. One of the chinese banks is raising money in australia. The market,ally tap but we are going to stand back a bit, because it some stage it will be a debt blowout. How they respond to it politically and socially is very important. Reading your research, it was quite interesting that because you do mention the prospect of the spec or or tor of social discontent, what would be the capitalist catalyst for that . I dont know what the catalyst would be. S. Dont think anybody know is very for power interesting. It was a different cocktail in the 1960s. The power was being passed to the people and not the military, relying on the populist to deal with cultural and internal issues. This is the opposite. This is not analogous to that at all. But he is the next most powerful leader after mao, and we have to watch his every action. Hasaad one of the actions been the statement saying that japan has been acting in a petty manner to paraphrase what they have been saying. To japan, they seem to be, well, unable to get there in economy going at all. Tell me what is going on there. We have this possible delay in the sales tax hike, something most economists say should happen. Where does this leave abenomics . Very difficult questions, but i will make two points. And its growth will actually contribute or detract from what happens in japan. If china Growth Continues to improve, that is a big positive for japanese exports. We have to hope that occurs. Hand, we have to watch the japanese debt situation, but mustnt confuse their large debt problem with that of china or the United States. The japanese one is unique, one third of the National Debt is owned by the bank of japan. Yes, that could be monetized. There are a lot of things the japanese can do because the debt is there owning contained within japan, so we cant just look at statistics and say their jet to high, debt to gdp is too but there are Many Possible Solutions to that that countries like the United States and the dont have. Rishaad moving the yen weaker is not going to solve it, is it . No, its not. I wouldnt hope to predict movements in the, because it is bizarre. Rates in japan are going to be low for many years, so putting money into japan for any sort of interestrate pickup is not on the cards, not an option for investors. Our investors have no interest because japanese security yield nothing. About Japanese Equities . Japanese equities or another story. If wemart kleins ask us should invest on a hedge basis, should we buy the index, futures on the index, and not have the exposure. That is the way to play it if you want to be there. I do not want to be there, because it is to hard to predict what the nikkei is going to do because it moves and direct office a correlation to currency, and i dont know where the currency is going. We dont need to play there and tell we get a better read on the chinese growth outlook. Is, whereasy question is the money going then . What are you advising clients . Here in australia, we are spending more time looking at japanese capital flows into australia. Investingjapanese are equity capital, not in japan, in the asiapacific region, and more and more transactions are starting to point to greater flows from japan into australia, because we have enormous opportunities here and we are in their time zone, so we have to continue to watch that. That will be the flow of interest to us. Its not just the commodity flows that have affected chinese trade flows with australia. There are other flows to have nothing to do with commodities, and many of these are to do with japan, and Financial Services will be one of them. At some stage, they will start to make acquisitions down here, and we need to watch that and be ready for it because it is highly predictable. Rishaad great talking to you. Have a fantastic weekend. These are the stories making headlines around the world. Upald trump has picked enough backing to clinch the republican nomination. The Associated Press that a small number of unbound delegates said they will support trump, putting him over the top. Named atw be formally the Party Convention in cleveland in july. Leaders have been mulling a potential Trump White House victory. President obama said concern was expressed if donald trump were to win in november. They are paying very close attention to this election. Say thatt is fair to they are surprised by the republican nominee. They are not sure how seriously to take some of his pronouncements, but they are rattled by him. Many of the countries in our world, beautiful world, have been absolutely abusing us and taking advantage of us, so they are rattled in a friendly way. We will have great relationships with these countries. If they are rattled in a friendly away, thats a good thing, not a bad thing. The incoming president of the philippines is set to face costlier debt next month, when the central bank will start deposit auctions to soak up excess cash from overseas workers. One key challenge will be to convince investors of his economics credentials and manage a deficit that has quadrupled. Police and demonstrators clashed in paris against new labor laws spread across france. Electricity workers walked out in support. The government vowed not to back down. The new law allows companies to negotiate for a longer work week and gives management greater freedom to reduce pay. Powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. Coming up, the probe into the biggest cyber heist in history, as many as 12 banks could of been hacked. Details coming up right after this. Rishaad you are back with trending business. I am rishaad salamat. Stole 81 million. Investigators examining possible breaches and Southeast Asia and new zealand. It does seem to be that these attempts are confined to where you are correspondent. Always interesting in my part of the world. The philippines, vietnam, and new zealand. What we know is that several eye tocontacted fire i t help investigate. We dont know if any money was taken. Its just a more serious attempt to hack into the financial system. The response says the global newent system, emergence of compromise, is not surprising as banks undertake rigorous reviews. Many may turn out to be false positives. Still, however you look at it, it gets to the heart of banking. Scary, if you ask me. How can banks ensure the safety of their networks . I guess they are asking themselves this question. Are putting a lot of pressure on swifter to prevent future incidents. Attention toss security surrounding how member banks were connecting, and that has to change. ,ach bank has its own code levels of technology and sophistication, and even banks in the u. S. And u. K. Are pushing for discussions with swift. You can totally see why. Policy, regulators, financial institutions, stepping up scrutiny of Cyber Security of the Swift Payment system. It has been quite a wakeup call. Rishaad thanks very much indeed. Just taking a look at what is going on with the Cyber Attacks on banks. Central bankhi being that number one target. Ata has become a takeover target, but will it bring an end to their troubles . The start of the trading day in hong kong, shanghai is positive. Okay, ready . Whoa [ explosion ] nothing should get in the way of the things you love. Get americas fastest internet. Only from xfinity. A look at our top stories, asian markets extending the rally, regional benchmark index for its first weekly advance this month. Apanese stocks lifted by possible delay on a sales tax hike. Also waiting for Janet Yellens speech, looking for any clues on the timing of the next fed reserve rate hike. G7 summit winding up, communicate saying leaders are committed to a coordinated response to Global Economic conditions. The group feels that Monetary Policy alone is not enough. Japan said the world is at risk of falling into crisis. Shinzo abe saying the Global Economy could face a shock similar to the collapse of lehman brothers. Saying overall risks are under control and can add leverage gradually with it debt to gdp level around 39 . More than 100 cities across the country have debt a good than the Global Economy. The shanghai open. Banging in line with what futures were suggesting, a little dip coming through and shanghai, down 2 10 of 1 . Hong kong looking flat on its open. Lenovo falling in response to its fourthquarter numbers coming through yesterday. The nikkei 225 still up 4 10 ofo gains, 1 . A similar gain in australia. Doings in Southeast Asia quite well. The philippines online with 2 10 of 1 gain. We are on track for the first weekly gain on the regional index for the month of may. It is the last full trading month of week of the month, and we are seeing every sector moving higher on the regional index. Good reports coming through from oil and gas stocks, even though we saw crude fall below that 50 a barrel mark. The oneyear chart of lenovo, down 37 year to date, and it is coming under pressure and early trade today. Fourthquarter revenue dropping by 19 . That, but 4. 90 in the early session in hong kong. Rishaad thanks. We will stay with lenovo. She interviewed the cfo after results were released. She is with me now. Tell me all about this. What did he have to say . Were predicting a tough corridor, and it was worse than they expected. That wehim for this i are in a transition phase, learning, still trying to figure things out. They admitted that they have a lot to work on in the smartphone business with the integration of lenovo and motorola not going as well as plan. Lets take a listen. The smartphone business is our core business. The smartphone business is different from the pc, and probably take longer to build a foundation. , we wouldand china deftly want to build on product brand and distribution to make the smartphone a more healthy and Sustainable Business for us. A prettythey have Strong Foundation in the core pc business, that certainly does not exist in their smartphone business. They need to work on building up. You alludedorola as to there as well. There must be some bright spots. There is a little bit. Their data server business has been growing faster than other parts, which is good, but still very small. They are also investing in emerging technology. This summer, they will be the googleompany with technology in bedded inside it. They think it will be enough to differentiate them. Stock can see from the market this morning, investors are not optimistic. They are facing a lot of headwinds. Rishaad structural problems. Theres nothing cyclical about this. Exactly. Rishaad breaking news, industrial profits in china up 4. 2 in april. We did have an estimate for this, but we saw march profits go up by a 11. 1 . 502 billion yuan, april industrial profits coming through here. 4. 2 of year on year. Takata giving back some of thursdays gains, shares soared by the limit as kkr is considering a takeover. We are live from tokyo looking at this. Is on its knees following this disaster, why would kkr be interested . If we look at the share price ta, it is trading 1 10 of its peak in 2007. Kkr. A bargain price for despite the scandals and recalls, takata has a large portion of the market share. Rishaad how tough would it need to bailout this company . It seems like the list of recalls keeps on mounting. Right. To be aninitely going uphill battle. Lets look at the numbers. As of the end of march, 54 billion in cash, 120 billion of capital, but the penalties for compensation are estimated at ¥1 trillion, so it is a huge burden. A lot of their customers have shifted away from the company and are looking for other suppliers to supply their new models. It is very difficult for them to come back to takata. It seems theishaad market would welcome a bailout, but theyre not so sure today given the drop back we are seeing. Right. It is a very common view among analysts here that the most shouldavior for takata be a manufacturer from the japanese Automotive Industry. A requirest of takat more than just cutting off assets or laying off employees. The japanese Automotive Industry has more resources to help them recover. Rishaad thank you very much indeed. Joining us there from tokyo. A quick check on some other stories. The worlds biggest solar maker reporting a sharp increase in profit, expecting shipments to increase this year. Toting estimates, doubling more than 26. 5 million on the year. States,emand any 90 japan, and emerging markets offsetting the slowdown in china. China says the government is to step up the fight against their pollution. Are says officials classifying smog as a disaster. Often blanketed in choking pollution caused by inefficient industry, heating systems, and millions of vehicles on the road. The president has described the pollution is a major threat to the communist party. The financing will help to beef up the startups were chest, 1. 8 billion, as snapchat evolves into a Mainstream Media platform. Snapchat has generated 59 million in revenue, and plans to increase that four times this year. Up bullish attitude, zhang demand will increase and there will be a shortage by 2019. What makes them so optimistic here . Words, Renewable Energy. If we look at some independent numbers of bhp, investment in renewables will make up two thirds of all investment in energy within the next 25 years. Time, the share of Renewable Energy when it comes to the global Electricity Supply will double to around 43 . Things like solar, wind, and hydro generators are very copper in tencent and need 12 times more copper than Traditional Energy generating techniques, so this is the demand that bhp is talking about. We have bhp looking to raise output at its olympic dam and will make a decision on output out of chili. Plans to expand its mine in mongolia. However, one cloud hanging over this is the price, more than halved since 2011. It is that she price that makes these renewable projects economical. It will remain under pressure as the mines supply continues to expand. Rishaad thank you very much indeed for that. Paul allen in sydney. Objection overruled, google defeating oracles copyright claims. Oracle says it is not done fighting. That is coming up next on trending business. It is 941 in hong kong. These the stories making headlines. Killed, 100 injured, explosion at a chemical factory in mumbai. Investigators say the last caused by a problem with a boiler at the plant, shattering windows in nearby buildings and reduce the factory to rubble. Egypt ringing in more specialist to speed up locating the wreckage of the plane that crashed last week. A French Marine Research Specialist will scan the seabed to try to find the vital flight recorders. The data and voice transmitters are likely to run out of power within three weeks. It harder to find the plane. The u. K. Treasury says the decision to quit europe could wipe the equivalent of 440 billion off british pensions. It also said a so called could fuel inflation, cause turmoil in the markets, and sent asset prices down. The former leader of the scottish nationalist said brexit should trigger a second independence referendum. Toy will vote next month remain in the european union. If they say no, that would justify a new referendum. Powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. I am tom mackenzie. Rishaad google has won a 9 billion court case over copyright, meaning oracle can no longer lay claim to a slice of its Android Phone business. Bobbled on is with me now. Is case isat thats\ about. The big question was around these public apis. ,hese are the substructure elements that people use to create software. And most of the javascript stuff was in the public domain, so oracle had purchased java, but some of these things were being used publicly. Google chose to use these public pieces. Rishaad only these public pieces . That is with the contention is. The reason why this case has been watch so closely is because there are many other examples of these open apis that are being used in a lot of different places, so the whole Software Industry was focused around this case to say what happens if they come down, because the implications of it are going to be profound. It is a big issue for oracle and google, but the bigger issue was around this notion of what happens with apis. Rishaad oracle saying they will go on fighting here. Its going to be very difficult overcome this. It has already been through two court cases, and unless they can prove that the jury was misled, it will be difficult to take it on. Rishaad it is a big deal. It is absolutely a big deal. Rishaad another big deal is lenovo. The pc market is not going through a cyclical patch. It is a structural shift. , buthave Motorola Mobility the not making it work yet. The big challenge that lenovo and a lot of Hardware Companies face is that we are at the peak of the smartphone market. Lenovo has built his business as a major player in gaining share market,rall hardware smartphones being the last piece. Have topped out, tablets have topped out, but when do smartphones top out . I think it has happened. The novo is trying to take share. Lenovo is trying to take share. They have been good at doing that in the pc space. Leverage thatg to to generate new opportunities, new business, new hardware designs. Tohink they have potential do it, but it will be tough because of the overall macro environment of smartphones. I want to see what they would do in terms of their Data Center Business and moving into things like virtual reality, and these voicebased interfaces like amazon excellent, google home cho and google home. Rishaad that is where the money is, isnt it . The money is not there yet, but the future of potential is. Rishaad if you have 155 billion as your cash pile, which is what apple has, they need to spend it or give it back to shareholders. Had a brief they look at time warner, but nothing came of it. What does that tell us about where apple is now . With demand for smartphones falling, they have to come out with another it fits in exactly with what i was saying about lenovo. Apple is a premier Hardware Company, but if youre a premier Hardware Company and a postdevice error, you have to think about services. That is what they are thinking about with time warner. It is content and Monthly Service fees. Have to think about people are going to buy these devices and hold on to them longer and longer and longer, which means that will impact the hardware business. Orther you are at lenovo apple, it is the same challenge. Apple can do these services. They already have cloudbased storage services, apple music. The is the next obvious piece. It would make perfect sense for them to take that cash and start to do it. Rishaad timewarner is one thing, but Netflix Netflix is of is he the one a lot of people think about. They have that Service Model and content deals in place, and i think apple needs to do something big. Thes all finding good, investment in china was an interesting thing for them to do, but if theyre going to change things around, they are the only company in the world with that massive cash toward to do something radical, and buying netflix would be the radical move that propels them in an interesting way. Rishaad i think interesting is the operative word. Thank you. Plenty more to come on trending business. We are back in a couple of minutes. Seen a this week has number of new alliances forged between automakers and ride sharing companies. We look at which ones are leading the pack. Carmakers are choosing sides in the right hailing wars. This week, volkswagen invested 300 million in gett, and toyota committed an undisclosed amount to uber. General motors took a 500 main andars stake in lyft, apples bet on didi kuaidi. Which of the right haters are leading the pack . Fueled by mega funding, uber make it all the headlines, but lyft is taking on its rival in u. S. Cities and through international partnerships. Claims todidi kuaidi have 99 of the market, boasting close to 300 million users and over 400 cities, completing 1. 4 3 billion rights in 2015. Grab dominates in Southeast Asia, 30 cities across six countries, and a fastgrowing motorbike service. , which grew at 300 last year dominates in europe. Start of scramble for supremacy, it is too early to tell how the right hailing wars will play out. Rishaad lets have a look at that subject, grab the biggest competitor in Southeast Asia, six countries, including singapore, thailand, and vietnam, more than 300,000 drivers. Groep has picked up only 700 million from investors. Even so, the ceo says their local emphasis will keep grab ahead of its rivals. Grab is the largest mobile tech platform in Southeast Asia, look alive services, so imagine taxis, cars, and motorbikes. Thats right. Onorbikes is that you jump and it navigates you to the traffic you would imagine any big city in Southeast Asia will have. To. 5ically give back hours of commute time to many citizens in jakarta for example. Grab, didi kuaidi, and lyft, how is that partnership progressing and when will we see more integration. You will see global roaming in San Francisco can book a car in beijing, and you have access to the Worlds Largest transport fleet of cars and bikes. If i go to singapore, i can app andt out and experience the same that you have in San Francisco. When will we see it in full swing . Soon. How worried are you about ubers Global Expansion plans. Competition makes us all better. On ourand grab, we focus customers. Going back to the global roaming product, focused on the customer experience. As we continue with localized grab andservices like motorbike taxis, again, very unique for jakarta and ho chi minh, all across Southeast Asia. We will add a new payment piece in southeastink asia 95 of Southeast Asians use cash. They dont use credit cards or have credit history, so we said how do we reinforce that message. How do we make it the most relevant to customers in Southeast Asia . Ing in really reinvest this payment piece to make sure our customers enjoy that. Doeses that mean that uber not worry you . Aboutin, for us its growing market share and out serving customers, winning their hearts, and continuing to be number one. At 67 billioned. What about grab . A range of valuations out there, but how we really think about it is are we good value, yes, we bewelieve are very good value. We believe that investors believe in Southeast Asia. People in Southeast Asia, one of the fastestgrowing internet populations in the world. Google just released a report on that. People believe that grab is positioned to ride that wave. Rishaad the grab ceo, cofounder. A quick look at the trading day, hong kong and shanghai came on 26 minutes ago. This is the state of play at the moment. Looking to tokyo, possible delay and that sales tax hike. Stocks inshing up japan, nikkei up by one third of 1 . Overall equities in japan at a onemonth five. Still ahead, concerns over global growth, stopping short of calling it a crisis. We will hear which he seven leaders say about the economy in japan. From our studios in new york city, this is charlie rose. Charlie we begin with politics. The state Department Inspector general criticized Hillary Clintons email practices. The review said clinton violated Government Policies using a government account for official business. The investigation is ongoing. The news comes as clinton faces renewed personal attacks from donald trump and a primary fight with bernie sanders. Joining me is a Political Correspondent for the washington
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