1097. Down by pretty flat on the day, but down significantly today which has had a big impact on those gold players particularly a lot of the mining stocks around the region. Weve got oil and gas in china down around 2. 5 . The shanghai composite is down 1. 4 at the moment. The hang seng index down by more than 2 . Japan went on lunch break down by 0. 75 . Around the rest of the region quite a lot of selling. Have a quick look at some of the movers we are watching today. Significant weakness coming through this morning in some of the hong kong stocks. Gomei electrical down. Analysts thinking it paid too much. Hong kong exchanges having its biggest fall since july 8. Still some weakness coming through from casino stocks. Sans china down 3. 3 . A lot more weakness coming through in asia. Commodity prices really starting to impact the nation. Rishaad getting a closer look at what is going on with commodities youve been looking at youve been visiting china. Youve been looking at these metal producers. You would think it would be good news for them. The trouble is, they cant sell the stuff. Is that the deal . It is good news maybe for the large producers, but bad news for small producers. Amid the fall of commodity prices, the smallscale producers are seeing tough operating performances. Rishaad cheaper import prices in the form of the raw materials, but also the Oil Price Falling. The Oil Price Falling helps with cost cuts, but not enough. If we look at the prices of the metals, they fall even faster. That makes the large steel producers have narrowing margins and small scales one, net loss. We expect some of them will be driven out of market soon. Rishaad we were talking about this earlier. At least one guest today suggesting there is light at the end of the tunnel. You are not seeing that. Not yet. I was in china last week. From my checks with the metal producers are traitors, we expect a tough second half going forward. If we look at the supply, it is still increasing. Chinese demand has still no sign to recover soon. Rishaad the thing is, if we are to get a recovery, what have we got there . I would say, once the oversupply of the industry can get alleviated and we see some sectors support demand, that is the time when we see the metal market should improve. Rishaad thank you so much for that. Indeed, just concurring one of the people i was talking to today was talking about what happened to base metals, saying there is potential for an upswing. Dominic schnider from ubs says that many factors are driving the drop but dont panic. On the energy side, we do still have a market that is not recovered yet. I think that is one factor. On the other side some of the base metal weakness is more due to china. There is a demand story developing. Property prices are not doing well. Then we look into the precious metals. It has become very clear the fed will hike Interest Rates in the second half. There are many factors at work. Rishaad investors are being too pessimistic and the fed may need to abandon plans for a rate left off if commodities dont bottom out soon. If the u. S. Closes their eyes and just titans rates based on the Employment Data in the u. S. , ignoring global conditions, that will be a big mistake. At the same time, from a sentiment point of view, this has gone way too far. Either commodities will find the bottom soon or we are talking about a deflationary spiral. Rishaad mccarthy says the fed hike is already priced into the commodity markets. We are expecting a rate hike in september. That appears to be almost a given. Ive never heard such certain guidance from the u. S. Fed. That seems to be a done deal. That is already in the markets. We saw the dollar index rally. Since then, it has i suspect that at least one fed rate hike is in the price. That strong dollar clearly impacting commodities. If it doesnt continue to strengthen, we might see some easing of the pressure. Rishaad and that was the word from asia on commodities. Yvonne ipos are once again in the news. A fairly big offering coming to china, or more so hong kong. Bloomberg has obtained the listing for the upcoming communication core. David ingles, tell us more about the company and how big this listing is. It is one of the major listings weve seen. David it is just under 2 billion. This is based on the terms that we were able to gather. Just to avoid confusion here, it is basically the product of china cnrcs. This is another tongue twister for everyone in financial journalism. This is thats it, ok. Yvonne train Traffic Control systems. David yes, it doesnt make the actual trains. If it does price, you are looking at the range at the bottom of your screen. At the top end, eight dollars hong kong of pop. We will get more details on this. It is going to start trading based on the terms on august 7. Citi, morgan stanley, and ubs our partners here. I think this is going to be interesting to see. I think we have the volatility index in hong kong. It is going to be the first big dip into the water since the stock route. Volatility has come down since then. We are at 21. 5 now. It would really be down to how attractive this one is priced. Yvonne they talk about the massive volatility in the china market. China is still suspending ipos at this point. Theyve shifted towards hong kong. You mentioned some of these people backing the deal. Theres quite a bit of them. David half, more than half of the dealers are sold to investors here. Cornerstone investors, i think we have beijing infrastructure investment, China Shipping group, china life and i think you have 13 more mostly the state owned friends, getting into the deal. They have to market less than half of that 1. 8 billion. Yvonne that price offering coming up this week. David ingles, thanks for that. Rishaad some of the stories making headlines now. Dbs profit was up 15 , 816 million. That is due to higher interest and fees. They have allowed singapore in lenders increase charges tomorrow. They are facing weaker loan growth this year. The singaporean economy contracts. Dbs shares under a bit of pressure, down over 1 in a declining market overall. Mitsubishi shares jumping in tokyo. Its decision to stop making cars in the u. S. Responsible for that. It is shutting down its only plant in illinois. Mitsubishi only makes one model in the u. S. , the outlander sport. The weaker yen makes it more viable to produce cars in japan for export. No plans to reduce production in china. Vw responded after der spiegel said the company was considering cutting output numbers and workers hours. In june, passenger vehicle sales fell year on year. Growth slowing down. The stock market route putting some buyers off. Yvonne coming up later on unwanted headlines. Problems for Kuala Lumpurs new terminal. A sea of red across asian markets this morning. Is there an end in sight . We will discuss the outlook when asia edge continues. Rishaad checking some of the stories making headlines around the world. Yvonne joint development over oil and gas reserves in the east china sea. Beijings offer comes just days after tokyo released pictures of what it says are platforms close to median lines separating the two countries. China and japan agreed 10 years ago to jointly develop reserves and held official talks to years later. The discussions broke down. Rishaad the president of syria has admitted that after more than four years of civil war, hes running out of soldiers. Bashar alassad said the army no longer has the manpower to defend the entire country. He issued amnesty for deserters and called on people to sign up. Assad denied the army collapsing but his remarks are a rare public comment. Yvonne torrential rain in pakistan causing flash flooding and threatening to drive up food prices. At least 42 deaths have been reported since the monsoon began, with thousands of people forced from their homes. 173,000 acres of farmland have been inundated. The downpours could continue through most of this week. Rishaad the director of asiapacific fixed income, this could be arguably part of el nino, but that is one of the things you would have thought would have the reverse effect when it comes to agricultural commodities. This has been a gradual and sustained decline across the commodities complex. What is going on exactly . I think the el nino effect really kicks in next month. As you know, thats probably about half the cpi basket across asia. It is important for Bond Investors to get a handle on that. Rishaad how do Bond Investors get a handle around that . In the 1990s, it was coming and everybody went, it happened. While it was going on, you didnt know it was going on. Bond investors arent great predictors of rainfall. We want to see real evidence. We know that is going to roll in at some stage. We are watching monsoon trackers in india. At the end of the day, the cpi basket is predominantly made up of food and energy. You are getting the reverse on the energy side. It is all chinarelated at the moment. One of the interesting things we think right now, our property analyst is saying that of the top 30 cities in china, there are running out of properties. They need to kickstart, otherwise the prices are going up. Yvonne hasnt that already been baked into the china story . In the u. S. , we have seen rigs, fields, going down, but quite a bit of inventory still. They are still playing on whether this could delay the fed Interest Rate hikes this year. Do you think that could happen . The commodities front was around china taking on way too much this year with new budgetary laws. The municipal market, thats the only legal way now that the local government financing vehicles can get access to capital. So if thats just happened money is just starting to flow in. We think the tap is going to really get turned down this year. Rishaad meanwhile, we continue with people looking at the glass being half empty. Thats always the approach from Global Investors on china. We start with a negative bias. We try to look at it in a more balanced fashion. We are watching cement prices. No matter what is announced, cement prices will go up. Yvonne this equity boom seemed to mask the weakness we saw in the chinese economy. Weve been talking about this for quite a bit now. Everyone is peeking through the weeds on the gdp numbers. There was a huge kick up in the gdp numbers to hit that 7 roughly from the Financial Sector. Rishaad it was too good to be true, wasnt it . Yvonne even the Financial Sector output seemed to outweigh the strengths. This is a natural part of the rebalancing. Moving away from the heavy industrial economy, more to a domestica services economy. Rishaad which is why we always look at pmi manufacturing when we should be looking at pmi services. And focusing on the jobs numbers. Rishaad are they reliable . We tend not to focus on the jobs number, which has been around that same level for the last decade. What we are focusing on more is the survey data. That is saying it is hard to find solid employment now. A lot of people are labor hoarding. Yvonne we talked about all these government interventions. We are seeing possibly, it seems like things are stabilizing a little bit. In the Bigger Picture here, could chinas reputation be on the line . For me, china always plays the long game. I dont think the stock market is going to upset the fiveyear plan. The thing we are focused on is septembers meeting with xi jinping and obama. For us, that is the most important event this year. That will kick off how china gets back into the game. They want to focus on exports and imports, making sure they are not locked out of the protocols. If thats the case, xi jinping trying to negotiate that with obama, hes going to have a very steady currency, potentially a stronger currency going into that meeting. The band shouldnt be a band anymore. It should just be highly managed currency. Some big events coming up in the next couple months. Rishaad well [indiscernible] yvonne coming up next, it has been plagued i criticism, but is the tpb about to pass . Rishaad more right after this short break. Yvonne trade ministers from 12 pacific countries get together in hawaii this week to push for agreement on the tpp. The deal aims to create a broad pact accounting for 40 of world trade. As paul allen explains it is attracting plenty of criticism. Paul the setting looks idyllic the negotiations probably wont be. After five years of talks, the United States hopes a breakthrough will come this week in hawaii. Representative michael from an says the countries involved are keenly focused on reaching an agreement on the transpacific partnership. It is a crucial part of the u. S. Pivot to asia, a broad trade deal accounting for 40 of the worlds economic output. The deal does not include china. It is going to open markets that currently are not fully open to u. S. Businesses. Paul there are sticking points many of which have been causing concern for a long time. The United States is pressuring japan to open its heavily protected agriculture market. The u. S. Has long protected its Auto Industry with tariffs on Japanese Cars and trucks. Public opposition to the tpp is rooted mainly in suspicion. The whole deal is being done in secret. One leaked chapter suggests pharmaceutical payments may be lengthened. Copyright provisions are likely to be tightened, though details on that are secret too. Defenders of the negotiations say the text isnt available because nothing has been agreed yet. Once it is settled, it will be presented to each of the 12 countries. It is at that moment public opposition is likely to reach its peak. Paul allen, bloomberg. Yvonne in other news first the financial times, now pearson is selling the economist. The magazine was not included in last weeks sale of the ft. It appears it is now disposing of its holdings. It continues its transformation into an education company. The company is valued at about 620 million. Pearsons stake in book Publisher Penguin random house may also be up for sale. The chrysler is to buy back about 300,000 ram pickups as part of a deal with u. S. Regulators on recalls. It is paying 105 million in what is the largest penalty ever imposed by the agency, topping hondas 70 million fine last year. The at chrysler recalled 1. 7 million before a steering and airbag problem. Documents show a litany of recall problems dating back to 2011. Real madrid is the latest soccer club hoping to raise its game in asia. It is opening an online store on alibaba selling Club Merchandise including official uniforms and memory billion. It is the first deal of its kind. It gives real madrid access to 600 million customers. Rishaad europe and the u. S. On friday having big losses. Lets see what it looks like at the moment. We are off the lows of the day. A bit of a recovery taking place. We have asia pacific stocks down. The worst week for Global Equities this year. The selloff in commodities has been deepening. Industrial profits in china also responsible for what is going on, and those Industrial Company profits decreased in june from the year before. Quickly moving to what is going on in tokyo, where we are about to get the reopen, declining day of fortunes there as well. Will it continue . The reopen in tokyo is three minutes away. Yvonne . Stories this hour asian stocks have had a global commoditiesb selloff, and hedge funds are taking a net short position on gold for the first time, as expectation grows that the fed will raise rates this year. They show Chinese Industrial profits fell in june, the latest sign of a lowdown, also weighing on commodity prices. The worlds biggest provider of train Traffic Control them getting as much as one point billion dollars from an ipo in hong kong, becoming the first Major Chinese lifting since what wiped off money. Shares have already raised more than 2 billion this year. Cbs is up with profit, higher interest and fees and this has allowed singaporean lenders to raise charges to borrowers. The singapore economy contracts amid an asian wife slowdown, led by china. Lets get the latest on the markets, and not looking like a particularly good monday, julia. Julia no. Losses, as you mentioned, asian stocks down for a fourth session, and we have got the became in japan coming back online and falling even earlier, down by about 1 mining stocks down by about 1 . Energy stocks off following a fall in oil prices. And the shanghai composite is down, oil and gas docs down by about 3. 5 . A lot of selling by the banks in china. In south korea, a big fall in health care stocks, and we have got oil and gas docs and also basic materials, the weakest it has been, off by about 4 . Interestingly, australia, they are doing ok. Gold having a bit of a rebound, but i want to go back to the oil price. Of course, it has been really furthering the their markets, down about 10 , and the oil price is holding its losses in the bear markets. That five point 4 fall in oil last week, there has been a rebound in u. S. Drilling producers obviously continuing to collect the market with oil despite the fact we are seeing this significant fall, so as i mentioned, the big drop in oil prices weighing heavily on mining stocks and others leading to the weakness we are around the asia region. Yvonne thank you, julia and leading shipbuilders just one group of many to feel the pain of cheap oil. They have turned to offshore oil rigs in about five years ago in what turned out to be a bad that, and michael is in the studio. Really good to see you. Oil was back at 100 a barrel. Is this just a tough market we are seeing, or was this just a that . Michael you had a glut of ships. Orders for new ships were falling, and the price of oil was high. They said lets leave the cheap ships to the chinese. They said there would be a lot of exploration. As it turned out, the price of oil fell, which discouraged exploration. At the same time, it was much more complicated to real these than expected, and they take about 40 months as opposed to 18 months for a ship, paid at the end, and now they can deliver these rigs. Yvonne we had headlines from the second largest ship elder in the world, saying how they were trying to get help from some of the largest stakeholders. Earnings wise, what should we expect . Michael we are going to have at least two or three reporting including they will daiwu and they are talking about a loss for them, as much as o