I will be back with more in just a bit to tell you what is happening with the shanghai composite. Back to you. Beijing is struggling to breathe again today. Choking smog over the weekend, pollution sword far beyond internationally accepted safety lessors safety levels. The government says clean air is a major priority and the leading source of popular distance than discontent. Steve, tell me about your trip to work this morning. Just how bad are things . Discontent, that is a good word. My morning commute was discontentful. It was pretty bad this morning. I am looking at the smartphone reading now. Times thehich is 16 World Health Organization recommended safe level. The real dangerous stuff, 350 right now which is 14 times the recommended level from the World Health Organization. It is pretty bad. The scale only goes up to 500. It is not as bad as last year well, bad is a relative term. Last year we had beyond scale. Now, believe me, this is the latest video from beijing. It is dark like that right now. It is not a volcanic ash cloud. Dust. Coal it is exhaust fumes. It is barbecue fumes. It is everything combined because weather patterns are not being very they do not facilitate the air being cleaned out. The weather experts are saying there will be a cold front coming in, but not until thursday. We have another three or four more days of this kind of weather. We have already had it since last thursday, the fifth day in a row. The director of the body that advises on Climate Change says, it is at an unbearable stage. Probably the understatement of the year. He goes onto say, it is like a smoker who needs to quit smoking at once, otherwise he risks getting lung cancer. Quite stark comments right now. Aging City Government issuing a yellow alert, basically the second highest form of alert. I guess red alert would be the worst. Morning people, especially the infirm and the youngsters out there, stay inside. Do not go outside. If you have to, definitely wear your mask. I do anyway, sometimes even in the office. Before, we used to have this discrepancy between what the official figures were and what the embassy was putting on his website. Do we have that discrepancy still . Will they have to practice tennis indoors because it is so bad . There is a reason for that. The u. S. Embassy is on the eastern part of town. It is one spot. Is kindral government of a collection of multiple readings across the city. Right now, the u. S. Embassy is 400. The official rating is 293. Still, pretty bad. 107 points below. Hazardous, 293 is considered heavily polluted. It is the middle of winter so she will probably practice indoors anyway. She made a comment about, why would i practice outdoors . She has addressed it. Many people. It is not just expats like myself. The local chinese are very concerned about the quality of air they breathe. You see in the International Schools around the outskirts of beijing, most of them have built in the last year or two, multiMillion Dollar domes, athletic domes that they have built over the athletic fields. It is something to attract parents of expat children and also wealthy children if they can play outside. They are going to play in hermetically sealed domes so they dont have to breathe this cancercausing air. Thank you very much indeed for that, stephen engle. Some other stories making headlines, problems . What problems . Chinese policy makers dont seem to be worried about a slowdown. The Central Bank Governor expressed confidence in the economy, signaling that china can sustain growth of 7 to 8 . Theyinance minister says are not a big problem. He played down the impact of they uan the yuans declined. A steelmaker is back, making a profit of nearly 3. 5 million during december. It is up from a 23 million loss in the same time period a year ago. Performance from the asian and Australian Businesses were behind the rebound. China is on hold. I think there is a pause in investment on till people understand where the chinese economy is going. So much investment has gone into Capital Infrastructure that people just want to get a better return for that before they expand again. Downturn. It is a at best, it is a pause. I will call a pause for the moment. Buzzers profiting measures are continuing to rise but at a slower pace. 18 jump in shen zhen. In 69 of the 70 cities tracked by the government last month. Lets take you back to have the markets are tracking. We have property figures out. A bit, you have all the details. A 40 point drop for the shanghai composite. This point. 73 at the is just about 1. 9 , biggest drop in close to eight months. I will show you why. It is those roberti names property names that are dragging the index down. You have the banks, insurers, the brokerages and there you go, five percent drop for real estate. The markets will feel the effects. Certainly what habits in the housing sector in china will have an impact across not only financials, youre looking at more upstream businesses that provide the materials, and more downstream. The buildup of debt, whether or not banks are providing, the needed credit into that sector whether it is for building or buying. It is what you have for the shanghai composite. Lets get to the exact levels for that index. Go, 2074. Not too good. Lets hope it gets better. Afternoon sessions ahead. Back to you. We can get more on the markets, whether you want to know what is going on with ukraine or netflix, that is on our website. You can watch all the videos you may have missed on bloomberg. Com as well. Lg electronics has changed course in china. It is shifting to highend premium models. Whatever look at the reasons for the lg move. It is about margins. Whiter, so much margins, when you go up the value chain. That is why they are pushing into this space. They have competitors in the chinese market. Samsung as well as the homegrown competitors. Huawei, manolo. Absolutely. Lets not forget apple. What they are doing is focusing on this phone, their latest highend smartphone. Lg is in talks with three mobile operators in china to expand the sales of premium devices. They want to boost the number of products that run on 4g networks. A accounting this larger screen. That has proven popular in china. N the newhe g2 has a curved display. This is why they have moved on to focus on the higherend smartphones and are hoping to move into wristwatches. They are not the only ones. Huawei is also interested in this space. They certainly are. They rolled out their new device, the first smart bracelet. They say there are many more to come. They compete with samsungs smart wristwatch which it unveiled several months ago. It operates on its own system. The huawei one can do everything from monitor your heart rate, send messages according to the company. They say that wearables will be a big market in the future. In to theen executive Vice President in barcelona. We believe that wearables is an important trend in our industry. We havent really got a big master plan right now. This is our first step into it today. We are very excited just to get into the market. What is interesting here, huawei is perhaps diversifying away from its Traditional Telecom business. They have run into opposition globally. Perhaps this is an easier way to develop a new product category. Thank you very much. G 20 finance ministers say they will Work Together for global growth. The big names talk to bloomberg. We will have the word from sydney in a moment. The meetingking if has eased anxiousness and the markets on tapering. All that and more after the short break. Welcome back to asia edge. The big story this weekend was the g 20 meeting in sydney. Finance ministers have switched their focus from austerity to growth, endorsing the aim of expansion. U. S. Treasury secretary jack lew said a lot had changed. If you look at where we were a year ago, debating austerity, this was a debate about, how can we Work Together to share best practices and develop an approach where our individual economies can grow and the Global Economy can hit the objective set forth in the communique . Stimulus,ding back of that was high on the agenda at the talks. Emerging and developing economies keep an eye on the fed policy moves. Hopesalands bill english to find the benefits from a weaker currency. There is a Positive Side for us. Of theld be a rewriting u. S. Dollar against the kiwi. In the shorter term, there are some potentially negative consequences. We are selling into emerging markets in the asiapacific. If they struggle to handle volatility, that will reflect into our terms of trade. We are reasonably optimistic. Meanwhile, indonesias finance minister says he is concerned about the volatility of the rupiah. Say that our deficit is still around 3. 2 on the end of the year of 2013. I think we need to lower the current i cant deficit. Current account deficit. It should be under sort of volatility. That is the word from the media g 20 finance chiefs. Lets have a look at the asian economies in light of that g 20 meeting and bring in our next guest, Sanjay Mathur. He is a chief asia economist at rbs. Thanks for coming on. This provide for some of the countries in this part of the world, the developing world . I think, not very much. First of all, we like the communique, that that they are talking about unwinding the stimulus and trying to put growth back on the agenda. That is a good sign. In reality, would you have seen is the introduction of the kiwi, the decision to withdraw, all this has really been driven by one singular issue which is the health of the u. S. Economy. I am not convinced that this is something that can actually really come through at this point in time. That said, i think there is a couple of things we need to keep in mind. The first is that most of asia is now out of the woods. If you look at the last indonesian current account numbers or indias current account numbers, the kind of imbalance that existed last year is now behind us. What we need to look for is u. S. Growth. We need that. If we catch that tailwind, i think we will have moved forward and perhaps the impact of kiwi is not going to be as of of qe is not going to be as pronounced as it was last year. What about the headwinds facing these economies in this part of the world . Where are we in the Economic Cycle . What is the inflation picture looking like as well . The figures have been turning slightly higher. Yes, i think that when you look at the economies we had three years of very strong the mystic demand domestic demandled growth. We are now in a state of unwinding and that means they are going through a transition seey phase where we still slower growth. This morning, indonesia has cut its growth forecast. We are going to see that in terms of growth. Domestic demand will slow. We will see a better contribution come through the a exports. There is going to be a change in the composition of growth. As far as inflation is concerned, i am not particularly worked up about inflation. In general, inflation should have lower. There will be a few odd cases. Like malaysia. Remember, these are all economies. Wherever inflation goes up, it is going to be because of policy decisions. Either you are rationalizing subsidies or increasing introduction of [indiscernible] from a demand perspective, i do not see meter inflationary pressures. What do you explain the Interest Rate differential between bonds and malaysia and indonesia and those of the u. S. As well . They are higher levels than we have seen in 2012 or when he 13 now. 13 now. First of all, within the region they are guided by two things. One is the level of growth and stability. The other is external positioning. And malaysia, we have a high current account. Yields will be lower there. Concerned,he u. S. Is we have already adjusted a significant amount so the differentials with the u. S. Are now pretty much where they were prior to the announcement of the qe taper. Great talking to you, Sanjay Mathur from rbs in singapore. Coming up on the program, we look at luxury in china. Is it ready to compete with chanel and product . Meet with the ceo after this short break. Having long focused on western labels, china is coming back home. Consumers are favoring asian brands and fashion house Shanghai Tang wants to cash in. I look at the trend in todays out of asia report. You have 43 stores globally, 17 in greater china. What are your Global Expansion plans . The most important thing for us was to establish ourselves strongly in our motherland. Years totwo or three establish a big store like this one or the new one we have opened in shanghai, which are feet, to000 square establish our brand. We finished establishing the brand here in hong kong and asia, we go next year to the u. K. And europe. The United States is an interesting example. You opened a store there in late 1990s in new york. That shut down two years later. Currently the only store you have in the united days is miami. What are the challenges you learned from the shutdown of the store in new york . We stayed in United States 1997. A presence since truly, what we have learned from this sort of Distribution Strategy is that we have to grow market by market. We didnt have that in new york. I look around the store and see handbags, clothing, house where. Houseware. Clearly Shanghai Tang offers products that embody chinese culture. As you look to expand to the Global Consumer, those tastes are expanding. How do you look to offer them this curated product . Like thatsay, we are brand. We are in fashion. Consider hashat we the True Potential growing. We are not addressing the chinese or new yorkers. The chinese are more and more well traveled and they will merge in their tastes with the rest of the world. Currently the chinese are your number one consumers globally. When you think about the chinese attitude historically, they have preferred european and western luxury brands. Can Shanghai Tang ever be a true chinese luxury brand . They had no choice. There was no chinese luxury brand. They are evolving extremely fast. Discerning inore the way they are consuming premium products. I think the era of the bling bling is over. Another thing which has changed is we have seen the pride of being chinese growing since the olympics in 2008. It was my interview with the Shanghai Tang ceo. What you didnt see but you can find online is his view on targeting western clientele and how it is all about understanding the Global Consumer who is looking to get into that affluent category. We are getting down to the open. Futures, lets have a look at what we have got as far as that goes. Just down as fraction here. Forgetey briefly, dont that tokyo reopens as well on the other side of the break. Growth trumps austerity at the g 20 in sydney. The imf chief Christine Lagarde warns of volatility ahead. Private jets, limousines and Million Dollar loans. The array of firepower being deployed as mike al hunts chinas big amblers. Magnificent men in their flying machines. We find out what it takes to be an elite Fighter Pilot. Lets kick things off and see how the markets are trading. David, what have you got . It takes a lot to be an elite Fighter Pilot but it takes more to become a good wingmen. What are we watching here in hong kong . Down 5 , ratings cut at s p. Hsbc comes out with earnings later on. Gears to what is happening in south korea. We thinking about airplanes here. Following reports last week come a the Company Expects to sign a four into 20 million deal a 420 million deal. Lg, the big story this morning. Theyre pulling out of lowend smartphones to concentrate on the more premium handsets. Lowend smartphones in this point are getting a bit crowded. Blue scope steel up 7 . Blackgs here, back in the for blue scope steel. Largecaperforming stock in asia so far. Here, spending. It is also reporting a loss. In bangkok, down 1. 5 . Japan, back from lunch. What are the movers there . A lot of tech stories here. Let me start off with canon. ,e have a local report reporting that canon plans to exit lowend compact cameras. If youre looking to buy something from canon, do it now. They are pulling out or at least stopping production of lowend compact cameras. Nissan here striking a deal with the government of bhutan to supply them with electric cars. We had some breaking news about a few minutes ago that this company is about it is the first foreigner that comes out according to company officials. Kirin breweries, the stories , outperformed. San rio, up 3 . Back to you. Disappointment in the u. S. Congress. Christine lagarde spoke to our very own paul allen at the g 20 talks in sydney. I think the communique represents the dialogue that took place with the parties around the table. You had 20 countries, some emerging market economies, all of them with their respective policies, situations,. Equirements and recognition has the g 20 made any progress in resolving this disagreement between emerging markets and developed markets over tapering . Tapering that we see is a result of the significant improvement of the Global Economy, but particularly the u. S. Economy. That is positive. Bey will continue to volatility on the markets as a result of this tapering. What is clearly helpful is the dialogue that was instigated by the australian presidency very efficiently for the emerging markets countries to actually express their views, share their concerns and for the advanced economies to appreciate that and be prepared to not only be mindful of the domestic consequences, but also of what happens in other economies. Some tensiontill with emerging markets. Is there anything the imf can do . The imf is here to support all its members. Advanced economies, emerging market economies, and over the course of time, we have gone around the world depending on the Economic Cycles. We will continue to do that. We will continue to adjust to improve our instruments in order to respond to the needs of the membership. The communique also noted disappointment with the United States not passing imf reforms. How crucial is it this year . It is disappointing. Stop us fromng to doing the work we have to do but it means two things. Not equip the imf with the necessary longterm resources that are needed to come and help countries. Second, it does not help the imf being appropriately represented in how the economy has of overtime. That there anything imf can do to engage with the u. S. On these issues . What matters is all u. S. Authorities be on the same page and be convinced that the imf is a necessary alltime lateral institution for the good of economic stability in the world. We noticed yesterday that you turned up to the meeting alongside janet yellen. How have you found dealing with her . She is a very talented, very womanent, very friendly that i greatly respect and admire. Do you expect a more reconciliatory approach from her on china and emerging markets . She must be competent, demanding, thorough, rigorous. She is also a very humane, very attentive person. Everything is combined into the chairman. I got contradictory statements coming from indias representatives at the g 20, leaving many people back home confused. Lets find out why. Rish, this whole debate over whether to focus on inflation or growth between the finance minister and the Central Bank Governor started with the announcement by the central bank here in india. They made a policy announcement. They said that inflation and bringing down inflation in india is going to be the key target. Saidinance minister has that growth and inflation have to go handinhand. Leadership is the speaking to bloomberg after the g 20. I am quoting here from the Central Bank Governor. He has said that the recent drop in inflation is consistent with that inflationve is going to be the primary concern. Bringing that inflation down is their biggest challenge. The finance minister has continued maintaining that the two cannot be separated. Moreys india can bear inflation than advanced economies and that the index has moderated at this point. We are looking at making the Consumer Price index the anchor for inflation going forward. Conflicting statements coming from the two. Thanks for that. Casinos and operators are going head to head in macau to get more business from chinas milliondollar gamblers. Lets look at the state of the market. Tim, good morning to you. I know you have been talking about this all morning but lets talk about the size and scope. What else can you tell us about the Gaming Market in macau . This discussion got going today interestingly with a pretty good investigative report that lindsay chan put out on bloomberg news. Andustifies calling back putting it into his perspective. What is going on with the the ip business . How big are they . In vip business had peaked 2011 at almost three quarters of overall revenue. It has now declined to 64 . That is not so much the problem with vip, but the markets growing quite smartly. Even more rapidly than the vip business. That is one of those items that takes a little bit of the emphasis on how big and how important there has to be some market influence in this as well. We have seen the overall growth in revenues with macau. They are somewhat cyclical. This its to the heart. You see the vip business in amber. Highgrowth. Actually into a contraction in the Third Quarter of last year. It is cyclical. The core aspect of that revenue is very volatile. Look at the massmarket business and white. It has been growing year on year. If we could draw this child furtheris chart out unaware with the white line go . The forecast is that the growth rate continues at a very compelling clip of 30 plus. That is pretty steep over the next decade. That is driving a significant increase in the massmarket business overtime. The vip business isnt going away. But it is more cyclical. I am curious about the other side of the equation. Is the goal from the casinos point of view to eliminate the middleman . Our viewpoint on this is, no. There is a component of the junkets becoming less important overall because of the growth in massmarket. If you look at the junket business it self, what you see here is a client relationship with the junkets who have a relationship with the casinos. Thatasinos can circumvent and go direct, that is a great thing because they are not paying commissions. The important thing is that these junket operators do provide an entree to people that can see knows people that casinos dont know. Where the casinos want to go direct is where they have relationships. Where surely you can envision a scenario where they just hire the junket or the people who have the expertise. For different casinos i can to 20 of the the ip business. That entree is still quite important. Not happening the credit risk is still quite important. Stick around. Our next guest is a city trading analyst. He is very bullish on macau. Allext, we are discussing of the days top stories including macau and the market movements. We will be asking a strategist about what is going on with macau and also what is happening in taiwan. That is coming up after this break. You are back with asia edge. Of asiame is the head strategy at citigroup. Lets talk a little bit about japan right now. Japan is back. Some thing that was greatly exaggerated . I think there is a difference between the japanese market and the japanese economy. You cant have 50 growth every year. That is for sure. I think in japan, what you have caught positioning was the wrong way around at the beginning of the year. The market was very long into the end of the year, into january. You are done for liquidity for now, no more. Markets sold off a very hard. Last week, they added more liquidity so we are back again. How are you encouraging your clients to position themselves ahead of the sales tax increase in april . We think there is probably an opportunity of a rally until the sales tax. We are talking about a relatively shortterm trade here, maybe for all sectors . I think the large cats are going to be well supported. E are talking to clients there is evidence that people are not completely convinced yet. Have lost money in january, it is difficult to reload in february. Coming into the end of the month, if the market squeezes above 15,000, i think a lot more especially u. S. Macro funds are going to come back. There is a very interesting where you can gauge foreign sentiment. If you look at when dollar yen and the nikkei moves, it reverses during the correction. See that if you want to buy dollar yen, you do it as soon as the japanese market closes and sell it again when it opens in the morning. What is your take on the actual impact of the sales tax increase . How onerous is that or not . Isi think the economy talking about a contraction in gdp growth. The market is on edge because every single time in the past they have done an increase in the consumption tax, it has derailed the rally. Remember that the government and the boj are also waiting in the sidelines. What, what ship and japan has shown is that they are still flexible. Run out of options on the monetary side. We think what is going to happen is if things dont work, this program which is equivalent to some sort of japanese ltro will get expanded. Most funds that i am speaking to are convinced that if we went down another 10 or 12 , the ultimate liquidity pot is there. Seems like this casino plan for japan cant come soon enough. That is what, 10 years from now . What are they talking, 2020 . Six or seven years from now. What are we doing in the interim . It seems an increasing number of people are losing conference confidence in abenomics. I was talkingt about earlier on, the link between the market and the economy. Ofht now it is a story liquidity provisions. They pump more liquidity into the markets, dollar yen goes up and the correlation between the equity markets. G. Havent seen that decouplin thateed that to show there is some real group coming in. Have you done any work on this, tim . If you carry this forward this is really interesting to me, because all of this is now expected with this first round of legislation, to hit the tape right around the same time this consumption tax goes in. This is longterm but there is still a sentimental potential positive that might help prove some of this abenomics is working. Nonetheless, if there is a cluster of integrated resorts that is built in tokyo, potentially osaka, that could be phase one. Over time, youre talking tens of thousands of jobs potentially. They could progressively come through. Will that hurt macau at some point . Will there be a migration away . We put some analysis out on Bloomberg Industries last week, updating thoughts on the possibility for this. Sort of three pieces to the attraction. One is just the local markets. Japanese like to gamble and there are no casinos. That is pure virgin territory. Second is, just think about the possibilities in singapore of what has transpired as a model where you have a huge increase in visitation, you have a fantastic increase in revenue, jobs, etc. That model is a very applicable one for a city casino in tokyo. Oddly, there are 3 million relevant visitors in northern china that could go to tokyo as opposed to macau. That is a chunk of money, but are they really going to do that . You have had your eyes on casinos as well. You are bullish on macau. I think it is a build it and they will come sort of scenario. There is a lot of pentup demand that is there. The hongtually liking kong names better than the u. S. Names at the moment. It is just technically better to own the hong kong names because nobody wants to buy them. Great seeing you. [indiscernible] up next flying through the air with the greatest of ease. We go for a ride with singapores top guns. This is asia edge. Stay with us. More in a moment. Trading has begun in india that is right. It has not been a very good start to the day in india. Weekis a truncated trading because thursday is a holiday. Markets opened lower. The sensex and the nifty both down. At the startdown of trade. We are watching for one particular sector and that is the power sector. News has come out over the weekend that the electricity regulatory body has approved the paying back of compensation to indias largest powergenerating company. They will benefit from this ruling. Ntpc which is the government Power Generator hasnt taken the news so well. It is down over seven points. Thanks. In singapore, some higher flyers are always riskon. Haslinda amin spent the day with the citys top guns. Loop, straighte up, upside down. Highoctane aero maneuvers. F16s in unison. Heart stopping . You bet. It feels really low. You get the sense of sitting on the wing. Gs. Ople talk about theg give us a sense of what the force feels like. It is not like a roller coaster, right . Not exactly. More fun than that. Lift up your hand. This is one g. As we start to pull up or bank, the gs are increasing. That is felt throughout the body . You are like pushed into the sea . Yes. You need to be physically fit. Pilot,ke most aerobatic the black knights are not fulltime performance. Just six months ago, the pilot struggled a robotic trading with duties in the singapore airport. Midair twists and spins, but what about the risks . The risk factor is still there. We do it in a safe manner. It is risky, but not to the point of being dangerous. Haslinda amin, bloomberg, singapore. Lego movie, it continues to build success at the box office. Talk about other people having fun. The animated film has held onto the number one spot in north straightor a third weekend in a row, beating out to new releases. Taken 180 million in ticket sales. I believe you are right. I have zero desire to watch it. I think you could argue that if you watch one volcano movie, you watch them all. That is it for this edition of asia edge. We will see you tomorrow. The following is a paid istation for focus about time. The number one reason people do not work out is that they do not have time. Are you kidding me . I do not have the time. Introducing
comparemela.com © 2020. All Rights Reserved.