In credit and money supply, Chinas Central Bank has given another indication that would that it will hold off on any major stimulus. Live today from beijing. Scott, what does this say about the state of chinas economy . Not going toere see any big bang in stimulus these days. We are also not going to see any major pullback just yet. The economy grew at 7. 5 in the Second Quarter. The forecasts are that it is going to stay close to that rate for the rest of the year. We have heard these kinds of warnings before, but it is interesting coming directly from the central bank, which obviously should have a handle on the situation. A secondquarter Monetary Policy report. How does this one compare with the previous statements we have from the pboc . Actually, back in november, they issued a report, another quarterly Monetary Policy report and said it is going to be a longterm deal averaging in chinas economy. Not repeatedually that phrase since then and i dont believe it was in the latest report. Even though they are warning of high debt levels and rapid Credit Credit expansion, we might not get the point where china is ready to let its economy deleverage. We certainly see that to some extent. In thes a lot of risk Property Market. Is that one of the biggest risks for china, for its Financial System . Certainly a lot of people say that it presents the biggest risks of the economy and the Financial System. We dont have the kinds of to cure these and interconnections that maybe we saw when the u. S. Had its crisis back in 2007 2008. There are signs of froth in chinas system. Andes are really slowing are coming down in some areas. Construction is dropping, developers are cutting prices and so on. There is clearly some strain in the system and the government is figuring out how things are going to work out. As theill be watching markets get underway in about 30 minutes time. Bloomberg news China Economy editor joining us live from beijing. Thank you. In chinastwist food safety scandal has seen the arrest of six executives. The company is a supplier to mcdonalds, kfc and burger king, among others. Is facing an official investigation into allegations that expired meat was sent to customers. This monday, in the latest shakeup of state run businesses in china, Everbright Group is due to become a joint stock company. It is currently wholly owned by the government. It has 420 billion dollars of assets from banking and to tourism. Goals has taken over spirito. Gling banco is it is not it is now called novo banco. We start of a fresh week. It was a rocky end to the week on wall street areas david asia getsning us as underway. David . Were basically picking up where we left off on friday. Wall street not exactly having the best session to end the week. Overall, falcons are quite thin. There are a few macro themes to follow this week. First, will be the fx markets. Will we continue to see Dollar Strength . Last week we saw the biggest currenciesan including the japanese yen in three months. We saw a 12 decline. That is a chief theme to follow. We have some data coming out on the weekend from china. We had services bmi there, we had inflation in australia. Later on today, we have other metrics coming out of indonesia. Lets go back to australia. What are we seeing their . Were down half of 1 . Is a bit mixed. Although there is a key mover there. We are up one half percent on iron. These are your iron ore places. If you think there will be a rebound of iron ore prices, the stock presents a very good opportunity. The cheapest valuation among its a verymay present attractive acquisition target. Mind, iron ore prices have fallen 30 with the diluting assets of these companies. Unchanged at this point. Myer holdings, i mentioned retail sales are coming out. Look at that, treasury wine. Were watching the update on the news that it is getting a revised bid from kkr. I think we do have more details on this. Back to you. Us take a closer look at this. Let us take a closer look. Half revisedtten bid for australias treasury wine. Paul, what is the latest on this offer . Zeb, it is take two for kkr. Five dollars 20 5. 20. Ss worth they have had a rough ride recently. Theyre facing a 260 million in impairments. A few months ago, they announced they had to dump about half a million cases of old wine in the United States due to over supply problems. Theyre been cutting back exports as well. This offer is a big improvement on the one made back in april, 11 higher than that april offer of 4. 70 a share. Interesting, why was it not back tackle why was it knocked back . Had knowledgeer of the deal, so they ended up having to go public. If you take a look at the yearly price chart of treasury winds, you can see a couple pivotal moments where things happened. ,ack in january, the impairment business was not in full flow. Things looked pretty dire. And if you look at april, theres a big jump up third shares soared 18 after that initial takeover offer was revealed. Price open up over that offer, kkr is going to get a nonexclusive of the books. That does not rule out anybody else attention to making a bid for this company. The shares have opened again. Oday, prices have spiked again already closing in on that revised 5. 20 bid. Be watching it. Paul allen, live in sydney. The chicken other stories making headlines. United nations secretarygeneral von kee moon has announced a strike on another u. N. School in and as a moral outrage criminal act. 10 people died in the attack in fah. Washington said the school was hit by shells while palestinian officials and the yuan say it was an airstrike. The locations of all of these installations have been passed to the Israeli Military multiple times. They know where the shelters are. How this continues to happen, continues to happen, i have no idea. I dont have words for it. I dont understand it. Israel has announced a seven hours humanitarian truce in gaza, except in the southern the army has also pulled out Ground Forces as Prime Minister netanyahu signals the fourweek assault may be winding down. 1800 palestinians have been killed since july 8, while israel has lost 68 for soldiers and three civilians. Another big story were following, a strong earthquake in southwestern china has killed at least 381 people and injured nearly 2000 more. The quake measured 6. 5 and struck late sunday afternoon in yunnan province. About 200 people are reported missing. Said about 1200 homes were destroyed. Power and communication lines are still shut off. To offer an paula abdul in dollars in credit to fund an infrastructure project, including hydropower plants. Modi said that they will double the amount of electricity it sends to nepal and will Start Building new power lines. The powerthat when lines are built, india will buy electricity from nepal. The plants turn the company around. He says hes aiming to restore confidence and is open to acquisitions. , thatd bloomberg tv india he plans to invest in startups. That withto augment completely new kinds of things that we will do, new kinds of innovations in new areas, bringing new software to life come together with clients and doing that in exemplary new ways. Also working with start up companies and investing in startup companies. We have a 100 million fund that are shareholders approved. Shareholders have approved. The sticker look at the numbers. Certainly, 7650. 1. 5 move. That is what we saw on friday. We are watching it very closely. Next, investors seeing negatives in the u. S. Jobs report. It did come in less than expected in terms of the number of jobs added in the u. S. We will be talking about that after the break to get their perspective about what it means to the u. S. And how asia will be trading. When we return. Lets take a look at some of the stories we are watching this week. Toyota out with earnings on tuesday. This last of the big japanese automakers to report results. While toyota has kept his lead in global sales, it may see lower profits. Atlysts expect net income 17 last quarter. Raised nearlyup 2 billion from its ipo. Macau,slowdown in Analysts Expect moffat at the casino which runs the city of dreams up 15 quarter on quarter. Big numbers from china. The latest trade figures. These are for july. Surplus probably got smaller for one Third Straight month. Check in the global state of play. It has been a rocky few days in the markets, not only in asia but certainly in the United States and europe. My next guest is head of. Inancial markets Research Good morning to you. Lets start off with the information that was released. The Monetary Policy report on china. Basically, it is saying to the market, dont expect any major stimulus anytime soon. Is that likely to happen . Think that is a 64 Million Dollar question, because we have seen similar messages from both the Chinese Government and from the pboc before. When they have attempted to try to scale back monetary easing on credit growth, we have seen a very Rapid Response and the chinese economy. Growth slows down very fast. At which point, they do a uturn and decide to start allowing credit to grow very strongly again. If the pboc really do stick to their guns on this, then obviously there will be a dramatic impact on the economy and on Financial Markets. In that respect, given that they are an arm of the government, i wonder if theyre willing to see growth slowdown as a consequence whether they will change their mind again. They speak quite candidly about the growth and credit and money supply. They say it has risen sharply and actually quiddity is not necessarily the solution or the prescription to fix the structural problems. Does that appear to be levelheaded response . At least to me it does. We dont throw more cash at a situation where yard he have a significant amount of credit out there. I would agree. I think it is an accurate assessment of chinas problems. They cans a platform build on to move forward. Unfortunately, this is the same pboc that over the last few months has introduced a relenting program with one point or 5 trillion to push into the economy in terms of new infrastructure and new social housing building. You could say that is a countercyclical type of demand boost. As executor china said it wants to move away from. I am not sure if the left hand knows with the right hand is doing. Very interesting. Much of this focuses on the Property Market. We have the imf warning last week that the Property Market in china, the biggest risk, would you agree . Absolutely. He look at the data, which are not the most accurate coming out of the chinese sector, they are extremely worrying. We saw a mini crash back in 2012 when they tried to cool down the market. I think the outlook Going Forward is extremely negative. Do think they will be able to pull it through or pull it out, if you will . I think they can prop up demand to a certain extent, but when you have massive oversupply combined with a very high with very high prices, it is a toxic cocktail. Im not sure how much downside they can limit. The mediator sense of Monetary Policy globally. We are payroll numbers out of washington not as strong as expected. China services, cmi not as strong as expected. Together, you think Monetary Policy is appropriately dealing with the current economic reality . Not really. Have a twotier global economy, both between countries and within countries. Monetary policy really makes that worse rather than helping when you have ultra low rates. We raisetely, if rates, which many respects would like to do, that wont help the situation, either. These problems move above and beyond Monetary Policy. Structural policy indeed problems indeed. Time, michael. Thank you for joining us. He is head of Financial Markets research for asia at probably at rabobank. Stay tuned for that when on the move returns. Shanghai and Hong Kong Exchanges tie up with the aim of craving new opportunities for mainland and international investors. Lets get more from Tim Craighead who is director of Asian Research for bloomberg intelligence. Good morning to you. Lets talk about this, give us some context. This comes up october 13. It is a fascinating thing to be looking at and exploring now. All the more timely it would and hong kongobal investor perspective to the degree that the market is rallying at a time when every thing else seems to have faded into the end of july. There are large flows that will go in both directions. 40 billion can flow into china, 50 billion can flow on the southbound train, as they call it, coming this direction. There are a number of different elements to think about. Theres a group of dualistic stocks that are already training third we can think about the premium and discounts. There are a lot of stocks that are opening up now newly on both sides of the investment. The second look at this. Some of the stocks are following our sect theres. This table lays out a couple of interesting elements. You can see right smack in the middle, energy and financials make up the core of both the hong kong and shanghai relevant groups of stocks that will be opened up to crossborder trading. If you look at the Hong Kong Chinese will be able to invest in here, you have got some very interesting differences. Theres a big swath of communications and consumer stocks that they have not had access to before. Some of these are chinese stocks. China mobile and china unicom and china telecom, big names that have been listed here and not there. At the same time there are also gambling stocks, luxury goods and stocks that clearly they have an affinity toward. On the other side of the equation, you have got 120 stocks that are in the industrial heartland, sort of small, midand largecap industrials that Global Investors will be able to get their hands on in china, very interesting. Lots of opportunities as you point out, what have we seen anticipation of this and how can investors start exploring. Have they already . A number of elements. If you think im going back to that dual listed aspect, there are 70 stocks that are listed both in shanghai and hong kong. Certainly, there is a comparability if not an arbitrage opportunity straight up. Premiums group, the basis is dropped to an alltime low. This is being driven right now by hong kong financials and Energy Stocks having been taken up. You can see the premium on this chart here, where the a share premium has historically been above 100 is now gone to discount. It is mostly financial and energy related. You lookng though, if at the average age share , you getnot market cap a heavy dose of consumer and industrial and material stocks with the premium is still very significant on the a share side. You will beopen up, able to start looking more closely at some of these arbitrage type of virginitys if you want to buy the as were the hs. Or the it becomes more compelling ween the ishares and the between the a shares and the h shares. Looks like an opportunity for investors to get into the market. I think it is particularly timely to the degree we are starting to see a little bit of a pickup in economic statistics, the pmi for example. The appetite for what went on moremay be all the enticing. All right, tim, great to see you. For that. Interesting research. Coming up next, man in a suitcase. While japans jet setting p. M. Seems to be on a mrs. The right back. Mission. To be on a be right back. A message in a bottle. Treasury wine jumps on a revised bid from kkr. Formeros formers advisor said the insured have been negative rates years ago. A man on a mission. Shinzo abe is the most traveled leader in japanese history. Much more on those stores in a moment. China and hong kong about to open up for the trading days. Youre watching several important names after important announcements late on friday. David inglis joins us with a check on the market. Thanks, zed. Youre basically opening up to a slightly better picture compared to an hour back when you did see basically broad lines across the early markets. At the open we are basically in china you have several things out on the weekend. From a policy perspective fairly important. Services pmi coming out with a sixmonth low. The continuing slump in the housing sector is having an impact on sentiment across other related industries. It makes up a big part of final demand in the economy. What else do we have . The pboc coming out with a secondquarter policy report. A key take away there is that they did acknowledge that there was relatively quicker growth as far as the debt levels were concerned, money supplies, for example. Credit also saw a huge increase. Her haps targeted support ahead, yes, maybe not. So much broad. There are some youre also able to bring down things like borrowing costs. The rate fell down about 22 basis points for the one week. It is the biggest drop in borrowing costs at least for july. We are watching stocks that we pointed out in hong kong and shanghai. A few names i want to mention very quickly. Resource stocks. That is one. We are talking about hong kong. Jpmorgan coming out with revised forecast in metals prices. Theyre basically saying things , theyreinum, copper forecasting higher prices for the two. Echo veryry watching heavily weighted stock here in hong kong. Two names up. In shanghai. Energy industrials in that space. Last friday, we have been following the stock since then. Money to aunits owes bank. They basically confirmed that the bank is not urging that unit. It went over do you like 29. Were talking 21 or 22 22 million. The court and china has ruled that its Logistics Unit has actually gone bankrupt. They put out a statement to the exchange late on friday. Theyre down about 6 10 of 1 . This is what we have, zed. It is a little better compared to when we started out this morning. Will it continue . Only time will tell. To you. Good to see the hang seng up at the open. A japanese lawmaker who is a former advisor to george soros says the country should have introduced negative Interest Rates like the ecb. Europes policy of charging 1 10 of 1 for holding cash in excess of minimum reserves is a significant step. He says his own country should have done the same decades ago. Aojs using policy is mistake. What japan needs is negative Interest Rates. They shouldve done it 20 years ago, but it is too late to take such policy as it is a totally opposite policy as doj has taken. Ecbs introduction of negative Interest Rate i think is a very wise and significant move. Hasrime minister shinzo abe wrapped up his tour of latin america and the caribbean. He is now visited 47 nations since taking office in 2012. He is not remotely finished yet. Theres a trip to south asia on the horizon. We are joined for a look at all of this. Ross, why is the Prime Minister living out of a suitcase . He is traveling the globe in hesld where increasingly trying to balance japan. Japan is really one of the worlds major economies, the thirdlargest in the world. A big trading partner. It is really trying to build International Support and international ties, both economically and politically with other nations as chinas power bills around the region and around the world. He made keynote speeches at some avos. Vents including di thereve been talks that the ecb and he is visited obama. Lookurging companies to for business outside of japans borders and reestablished japans Foreign Policy and its presence on the world stage. For all his efforts in all his travels and all this energy to rebuild relationships, he has not been successful in some notable cases, has he . His immediate neighbors south heea and japan, both of whom has a frosty relationship with. Both south korea and china say untilait to hold summits he has apologized for the wartime past. Has been improving its relationship with other countries in the region including Southeast Asian theresas well as also the issue of territorial dispute. Of the Southeast Asian countries also have territorial disputes with china, as well. Chinas big issue and the big reason why some of these nations are coming together, of course, shinzo abe has not been helping visiting the shrine which he visited recently. That created anger. In the background of this, south korea and china are meeting closer together as xi jinping and the south korean Prime Minister having a better relationship. It is interesting to see that relationship with some very cordial meetings in recent months. Rosalynn, thank you for that. Breaking news has to do with mcdonalds and the food scare were been reporting on extensively. Mcdonalds says it will resume its full menu and some chinese cities this week. Last week, mcdonalds physically stripped its menu significantly, eating only fish salvages, among other items, as it dealt with osi branded meats producers. We will continue to follow that as the story develops. Lets take a look at some other stories making headlines this monday. The world court dustin Worlds Largest producer has pulled out its ipo. This is chinas wh group. Onmakes us trading debut tuesday. Lexis is easing ahead of dimer in the u. S. , topping Monthly Sales for the first time. Buyers are attracted by finance offers. Lexis beat out rivals bmw and mercedes as sales rose 10 and 15 percent respectively. Partly due to rising sales of lcds for smart phones and tablets. The company has kept its current forecast intact for the fiscal year. Retailers in singapore are being hurt by the downturn in visitors from china. Business is arty facing rising competition in the region and are now under the greatest pressure since the Asian Financial crisis. Our Southeast Asian is standing by. What is the latest on this . Not to be melodramatic, but this mecca we call singapore seems to be losing its edge. Several things at play here and all pretty negative. First of all, we have the singh dollar, second strongest in asia over the past year. Tax. Ales the tie youre wearing is more expensive in singapore than in hong kong. Especially since there is no sales tax whatever where you are. Theres no Surprise Retail sales have been falling. Industry in singapore is going to paint. Sales are down as much as 4 . Dropped from china have. A whopping 30 fewer of Chinese Tourists over the five month. From may a year ago. The chinese account for half of the spending by all tourists. Some say that the chinese are not spending because of that clamp down on corruption. Suffice it to say, retailers are bleeding. Is he the outlook is grim. There is tremendous competition for the shopping dollar from the likes of malaysia, thailand, indonesia, hong kong pretty much all of our neighbors. All shopping looking pretty attractive in those destinations. Unlike five or 10 years ago, theres nothing you can get in singapore that you cant get elsewhere. You will probably pay less for them if you are buying elsewhere. Tourists and singaporeans are not shopping anymore in the lion city, are not spending as much. Leads one to imagine that stores are packing up, brands are leaving. Is that the case . Theyre no longer choosing to business and singer to do business in singapore . In a way, yes. It is expensive, not just for shoppers but retailers. Is costing a lot more to do business here. Some brands are coming, but others are leaving, they are closing shop. You generally pay 3 more for retail employees now than before. It is getting harder to employ. In a poor recently announced tighter measures on the hiring of former daschle foreign workers. All that means higher expenses, lower profit. We saw the Manufacturing Sector was hurt i it. It looks like retail may be hurt pretty soon as well. Shopping gone wrong, at least that is the story for singapore right now. , haslinda. Im not wearing hermes. Thank you. Coming up next on the program, well be talking linkedin. It is 300 million members, but only 20 of them are in asia. Well be speaking to the companys regional managing director on how he is going to increase that number in asia after blockbuster profit Third Military all about it when on the move returns. Lets do a quick check of currency markets and play across the region. Your looking at a live view of the sydney opera house. The aussie dollar looks like this. 0. 93 u. S. Ng at dollars. We have retail sales figures factoring into the markets. Checking out the japanese yen in tokyo, that is a live view of a sunny day in tokyo, the imperial palace there. A modest week versus the u. S. Dollar. Perhaps a modest uptick for those japanese exporters as well. Tilly and the japanese yen dropped this year to the lowest level since 1971. In other words, not a lot has happened. Things appear to be picking up. As the topic of todays global outlook. Thes going to be all about japanese yen today for the global outlook. Saw thisc move that we week is weakening of the currency last year, which took therom 86 to 105 against dollar. But that against the back of what were seeing now, less exciting, really. Look at the dollar yen. As we have seen, it is been caught in quite a trance, really. Were looking at a trading range 4. 68 yen, which is the most uneventful year so far for the currency in 43 years. The me illustrate that for you. Lets get a chart up here which tracks dollar yen since the start of 2013. Theres a huge move of almost ¥20, which took it to 105 at the start of the year. From january this year, it has been really a very tight trading range. It went from a full sprint to a leisurely stroll if you want to describe it that way. Toe traders are expecting regard this. We have two lines. We have historical volatility in yellow and implied volatility or expectations of future movement, that is what we have and white. As early as september of last this little point, the Options Market was already pricing in a quiet. , in other words, the white line coming in below the yellow line. What we saw lately, theres been a breakout, for the First Time Since september, implied volatility has on an spiked above what weve seen historically for the japanese yen. Missouri securities are saying t fighting times lie ahead securities are saying that fighting times lie ahead. Now, i doubt we will need to wait until next year to see a widening of this extremely tight range. Weakeris building for a yen. Obviously, this boils down to what the fed and the boj will do. We know that diversions will happen. Right now, it is looking like we may not need to wait a little longer. There you go with an amusing take of where we are as follows as far as policy goes. Futures pricing in 55 chance that well see a rate hike by this 65 chance that we see a rate hike by next summer. 19 out of 34 economists think the boj will go the other way, expanding stimulus as early as march 2015, with another six of those thinking it may come in april or later. That is the difference in policy direction. I guess a widening of the trading band for the dollar yen. I am david here in hong kong. In on theake a check markets and see how their trading this monday. On the regional benchmark, the msci asia, we are coming off our first weekly drop in three weeks. It looks like some downward pressure on the nikkei 225. Issouth korea, the kospi pretty much flat. Declinesre significant , 4 10 of 1 in that new Zealand Exchange 50. As that newrop zealand trading day continues. Lets talk careers now. Technology, my next guess runs linkedins asianpacific operation, which posted a 64 rise in secondquarter revenue. He joins us first on bloomberg, live from singapore. You took the street surprise. Linkedin was up 12 at the close, roughly. This companys strong results here . Thanks for having us. We continue to be really happy with how we are going about servicing our members, the free consumers. Really, the story here is as long as we continue to drive value, we continue to see growth and engagement. We are very happy about the fact that we are able to service that. The membership in asia has grown roughly 10 quarter on quarter to slightly over 56 million members in the region. That is really the foundation on which all our growth is based. Investors like to hear that strong Current Quarter outlook. Can you give us a sense of what the Current Quarter will hold for your business in the asiapacific and certainly in japan as well . Is hard to make a statement. We look at our Current Quarter, one thing we are bullish on is our mobile strategy, or q2 results show that a global basis 45 of our visitors over a mobile platform. We continue to invest in our mobile platform and mobile investments. This region,t asiapacific, there are a variety of companies in singapore and also hong kong over 50 of our visits come from mobile platforms. Those investments really show well for our growth in the rest of the year. Mobile is an explosive growth area. Where else in asia are you seeing mobile strength really going off the charts . , as i mentioned, singapore, hong kong, malaysia and these markets have over 50 mobile utilization. We have strong growth in some of our earliest markets. India has over 27 million members now. Australia has over 6 million members, which represents nine out of every 10 australian professionals having a linkedin profile. We are seeing a lot of growth across the region. Moving forward, i think the thing were most excited about is our investment in the social selling and link in sales navigation, in particular. Will talk about that after a short break. Any place for you like to see faster growth that hasnt performed as well as he wouldve liked in asia . In asia foreen about four point five years. We tend to be pretty patient about our service market. We continue to grow well across the region. If you look at southeast asia, we are roughly 11 million members. We see a lot of headroom for growth. When you look at our total universe, about 40 of all professionals reside in the asiapacific region. With 56 million members theres is plenty of headroom left for growth. Ambridge ask you to stand were going to a commercial break. Well talk about those new products, sales navigator among them. We are sticking with asiapacific navigate director for linkedin. Krishnan. Well be right back with on the move. Lets resume our conversation. Were speaking with asiapacific and japan managing director of linkedin. He is first on bloomberg in singapore today. Stock about this notion of social selling. Everything today is social, mobile, of the moment. How do you plan to harness this concept to introduce some new products for linkedin . Give us a sense of how all of this works. I think we are in the social age and the reality of this much data and as much access between people has fundamentally changed the buying and selling nature. Buyers are spending more time researching their potential things that they want to buy. For salespeople, for the first time, using sales navigator, they have a tool which can unlock that potential. We have data that suggests that buyers are five times more be positively inclined to someone who is introduced to them through mutual connection rather than someone who cold calls them. There is really the essence of sales navigator, to illuminate the cold call. This is for the sales vertical. Is this an attempt to push beyond your core base of customers . To really extend the business into new areas . If you look at linkedin, from the very beginning, salespeople have used us for Business Development and to reach out to folks. The sales navigator, what youre beginning to see is that for the first time, oh we have built a software with Service Application within a social network. With linkedin sales navigator, youre going to have salespeople able to find the right people, get information about those folks and then build a trusted relationship. That should really eliminate spam, limited cold calling him and allow for warmer conversation between the buyer and the salesperson. For briefly, throughout all of this, as you develop these new products and social strategies, how do you maintain it so you dont delete the product . Our consumer is paramount to us. We make sure their interests are protected at all points. We are focused on their productivity in their success for most. We appreciate your time today. Joining us live from singapore. Appreciate you being here. Mystic look at what we will be focusing on in the next hour of the show. Indonesia is will hear arguments about the president ial election. That is coming up next. My and the zeb eckert, and we are on the move in asia. Boring in, a higher offer for australias treasury wide. Ipo, and completed an in need of some retail therapy. What has gone wrong with the shopping scene in singapore. Welcome to this hour of on the move. Inm said eckert, standing for rishaad salamat. Making a debut in hong kong after raising about 2 billion in its ipo, and we have the details. It is taking a little bit longer than expected. Yes. Listare finally going to tomorrow in hong kong. Now, the Company Offered 2. 5 billion shares at 6. 20 hong kong, and that is just a fraction of what it had originally been looking for when it first wanted to ipo. It was looking for 5 billion, i time, but it was forced to scrap that. They are trying to repay part of a loan. It borrowed 4 billion when it company, the u. S. Smithfield foods, and you can see that is a smithfield factory there, and that was actually the biggest acquisition by a chinese firm. The 9. 7 billion is just a fraction, and executives at that time did not want to send at the low end of the market range, but they have come around. You have been some concerns because there has been a meat scandal going on. Some groups are under fire after a chinese tv report showed workers at a shanghai unit packaging and selling expired meat, so there was some concern that that could impact the appetite for this ipo, but, it has exceeded targets. Even though this company had no connection whatsoever to this case in shanghai, certainly it is a curious time to be listing shares as a meat producer given all of the bad press that has come out in the last week. Tell us more about the ceo. What do we know . He has become a billionaire with this listing. He owns 9. 1 , so this listing has made him a very rich man, indeed. He joined back in the 1960s, i believe, 1968, and back then, it was a state owned company in the central chinas hunan province, and that is a very long time, and he has reaped the benefits of that. Now a very rich man. Thank you for that. Turning our attention to australia, shares in the treasury winds are up following an improved offer from Investment Firm kkr. Paul allen is standing by in sydney. And, paul, ring us up to speed on this revised bid. Is seconde hoping it time lucky really after making a bid back in april. This is worth 3. 2 billion, and it is valued at 5. 20 per share. It is the worlds secondlargest listed winemaker with about 80 brands in their stable, all of the way up to one that will set you back 700 a bottle or thereabouts. They have been facing a few problems recently though, particularly in terms of payments, 260 Million Dollars worth, and, of course, there was that very famous story a few months ago where they had to dump on sold stock in the u. S. , so they have had some oversupply issues, and they have been heading back on exports, but kkr with this much improved effort offer, and it is even higher than the one they made before. That april offer is interesting in its own right. Why was it not backed initially . Until was going well treasury had to put an end to talks because it emerged that a shareholder new about the deal, so they had to go public, and it had a terminate impact on the price. If you take a look at the yearly chart, you can see that the news of that deal leaking out, shares sold 18 after that initial april offer was revealed. Iss latest offer, which substantially higher at 5. 20 per share, it gives them nonexclusive access to treasurys books, so you cannot rule out a bit from somebody else coming in towards the end of this process. Dependent onr is treasury not offering a dividend on shareholders before the deal goes ahead, and shares are up more than four percent, already closing in on that revised offer price. All right, we will continue to follow that, treasury wine, as you said. Paul allen, thank you. To some other stories we are following, a strong earthquake in southwestern china has killed at least 380 one people and injured nearly 2000 more. And wase measured 6. 5 in demand province, and about 200 people are reported missing. Xinhua news says about 12,000 homes were destroyed, and power and communications in the region are still cut off. And some other stories that we are following as well today, in the latest shakeup of state run businesses in china, Everbright Group is due to become a joint stock company. It is currently wholly owned by the government. They employ around 50,000 people and has 420 billion in assets. Unit is rising in hong kong. Ajapanese lawmaker who was former adviser to george soros says japan should have introduced negative Interest Rates like the ecb. He says europes policy of forging 1 10 of one percent holding cash in excess of minimum reserves is a significant step, and he says his own come country should have done the same decades ago. Bojs qualitative easing policy is a huge mistake. What japan needs is negative Interest Rates. They should have done it 20 years ago, but it is too late to take such policy, as it is a totally opposite policy at boj has taken. Ecbs introduction of a negative Interest Rate is, i think, a very wise and significant move. Well, it was a dismal finish to the trading week on friday. Lets look at how asian markets are trading, and the first day. David inglis, what are some of the key themes we are following . Last week, it did not exactly turn out to be the best for equities in the region. We did see a lot of money flowing back into the dollar were various reasons. There was some good data from the u. S. , and the dollar index, i want to show you, that was friday. Over the past one hour or so, we have seen a little bit of strength coming back as far as the dollar index is concerned, but there is the japanese yen that we have seen over the past hour. Theme to follow. Will we continue to see Dollar Strength . The weekly drop. Taking a look at equity markets, what are we seeing . It is a fairly mixed bag, but it is better than when we opened up. Yes, more markets are open, and there is an opening today. Jakarta. We have some key data coming out of indonesia, as well. We have trade data coming out as well as inflation about noon hong kong time. And over in china, of course, pmi falling. It is falling to about a sixmonth low, and we are continuing to see the impact. Far as the seeing as impact coming from the slowdown in the housing market, and this is beyond the property sector itself, and the pboc also coming out on the weekend with the Second Quarter Monetary Policy report. I think a key take away their is that they did give fair warning, that it adds risk relatively quickly, so perhaps shooting , andexpectations australia, retail sales slightly better. They have revised the may figure upward. This is before the rba Rate Decision tomorrow, and that is just about it at this point in time. We are seeing a mixed bag. The philippines, there we go, up, and malaysia is still leading those gaining across the region today. Keep your eye on the ring it, which is falling. All right, david, we will check in with you, and we will stick with singapore for the moment because retailers are being hurt by the downturn in visitors from china. Risings already facing competition are under the greatest pressure since the Asian Financial crisis. Lets go to haslinda on then, and she is in singapore with the story. Has . It is no secret. I love retail therapy, but it looks like i have to go overseas to do my shopping. The strong sing dollar. That means it is expensive to shop in singapore. The second strongest in asia over the past year. If that is not bad enough, then bring in the seven percent sales tax, so whatever it is you are looking at, it is more expensive in singapore than, say, in hong kong, where we do not have any sales tax, so no surprise, sales in singapore are falling. I want to show you the bar chart. Look at how the Retail Sector has been suffering, sales down as much as four percent. You talked about visitors from china. They dropped. Fewer tourists over at period of five months through may. They traditionally count for half of the spending by terrorists, and the chinese clampdown on corruption not helping. It, theever you look at outlook is grim. It is tremendous competition from its neighbors, the likes of malaysia, thailand, and singapore may have had an edge before, like five to 10 years had things not seen elsewhere, but that is no longer the case. You can get them, and you can get them cheaper. Singapore seo, isnt that what it is called . It stands to reason that some of these stores and brands are pulling out altogether. You are right. A great singapore sale is not that great anymore, and you are right, some brands are leaving. It is expensive, not just for shoppers but for retailers, as well, and it is costing more to kors,iness, and michael but there are some others that are leaving. You generally have to pay about 30 more, and it is getting harder to get employees. Singapore, recently, they put in place tighter measures. Highert means is expenses, and cutting profit. We saw how the manufacturing it,or was hit by a dashed and retail, well, needing some kind of therapy, it seems. We need you. I do not think i could do much to prop up the Retail Sector, but you are welcome in hong kong at any time. Damage. You can do some haslinda a man in singapore. Coming up next, we will talk about the us trillion dollar, coming off of the boil, and in interestrate rise, and the United States gathers strength. We will be in sydney for analysis, after the break. You are watching on the move coming to you live and streaming on bloomberg. Com. From get to the reaction the latest australia retail Sales Numbers that came out a while ago. Has overr in sydney three decades working in Financial Markets. Rick, always good to see you. Lets look at these retail Sales Numbers because they rose, what, 6 10 of one percent month on month, beating estimates . Yes. I think there are things coming into play here. We had a late start with some unseasonably warm weather, and that kept people out of the s for a while, but since then, things have shaped up. There has been a bit of relief, so there has been a bit of a bounce, but even allowing for that box, the overall future as far as retail sales goes, it is pretty modest. Are released today quarterly figures which strip out inflation and price gains, and it shows that the volume actually declined by 0. 2 , so despite todays strength, it is a long way from being a really robust part of our economy at the moment. We know if you want to go shopping, you have to have an income, of course, and a job. Lets talk about the latest job figures. What do you make of these . 0. 3 . 4. 3 the prior number. Quite a difference. There is. Like many statistics, it is quite volatile from month to month, but the overall sort of asin is modest growth, and you correctly say, you need income to spend, although the prospects for income, that is one of the things that has been holding down Consumer Spending in australia. Wage growth is very low. It is the lowest that it has been for many years, so there is not a lot of extra in peoples pockets, but, of course, as with most economies, the employment market is a key number for our central bank. Got ourstage, we have jobs numbers on thursday. Jobs growth is struggling to keep up with population growth, so we have got the Unemployment Rate creeping up a little bit. It looks like that is going to continue to be the picture, and i think it will be something that keeps the bank in neutral mode or quite some time. Well, we do have the Rate Decision, and the bank governor, glenn stevens, he must be feeling pretty good these days, given the fact that the u. S. Economy is helping him in his efforts take the currency lower. Do you think that that is going to be sustained . Look. It is a fluid situation, but i think yes. The u. S. Ones from friday, which took a bit of the immediate pressure off in terms of their jobs growth being a bit lower than expected, and probably most importantly of all, the key inflation measure still being pretty benign, but leaving that aside, the strength of the u. S. Economy looks pretty good. In fact, looking at other figures we saw on friday, not the isn manufacturing index, and a nice, solid Income Growth figure of 0. 4 for the month. Also, the risk, i think, for the of the fedn terms being likely, if anything, to start tightening sooner than the market expects, whereas the rba, in my judgment, if anything, is likely to leave it in place. Very interesting. And finally here, lets talk about the aussie forecast. The Bloomberg Survey puts it at . 88 by the Second Quarter of next year. Are you in that camp . Do you see a dramatic fall . Yes. Broadly. Of what icause described about Interest Rates or expectations of Interest Rates, which, of course, are the key driver for currencies, and the technical outlook, i think the most likely scenario technically is that we have completed and upward correction in the aussie dollar. We are now heading down. In the immediate future, in the coming weeks and months, i think we have a chance of getting back into the . 90, . 91 range, but in the longer term, i think we are heading back down to previous lows. Whether we get there by the Second Quarter of next year, i am not sure, but, certainly, i think we will see the aussie back at . 80, . 85 in the coming months or so. We have to leave it there, rick. We have to leave it there. Joining us live today from sydney. Coming up next here on on the asia starts to appreciate milk when on the move we turns. Lets take a look at some of the doors we are following this week. Toyota, the last of the big three automakers to report. And maybe lower profit. Analysts expected net income fell 17 last quarter. And on tuesday, the Worlds Largest pork producer lists in hong kong, raising nearly 2 billion from its ipo, which the company priced at this morning, and to the slowdown in the macau, and a report thursday. Analysts expect profits at the casino, which runs city of dreams. Quarter over quarter. Gary products, in general, and milk, in particular, have not been top sellers in asia, and that is changing fast, and biggest. S the we have a report now from ho chi minh city. She did not grow up drinking milk, and that changed when she had her son, and now, she is a regular customer at this store, run by their Largest Dairy company. She says when they are now thursday in her family, they reach for milk. My son finishes a glass of milk with a few gulps. I drink milk three times a day. For the kids, and keeps them healthy. It gives them a lot of energy, and for me, i get nice skin for drinking milk. The company has invested millions to develop modern farms. 15 enemies now consume about kilograms of milk and other Dairy Products annually. The regions top consumer, and a Research Firm forecasts the dairy consumption will grow the most among Southeast Asian countries in the next six years. Capitalize on that growth, the company is also made an investment to bring fresh milk from farms into the worlds most automated dairy plant. Factory is so stateoftheart that you never even see a single drop of milk. Once the trucks bring in the raw milk from the farms, machines completely take over the processing and packaging, even down to the laser guided vehicles that transport products around the factory. That ensures lower production cost and a safe product. We are the most modern dairy plant. And that is special. It is modern, but especially in vietnam. You do not expect it. Mega factory outside ho chi minh city, the company is teaming up with a Global Packaging company for growth. Lead ineady take the the milk market in vietnam, and they plan to expand their hightech factories and help it become one of the worlds 50 Biggest Dairy Companies in a few years. The Company Already exports its product to more than 30 countries, making up 15 of set onand it has targets an even larger market. The usa market. Now we are hoping to get into that market. The company has purchased a californian dairy plant, and consumers may soon be enjoying a product shipped from here, one of the worlds most innovative dairy factories. In vietnam, bloomberg. Coming up next, one month on, and still not getting in. A defeated candidate prepares a challenge, and we will take you live to jakarta after a short break here on on the move, month on, and still no results. Defeated candidates prepares his legal challenge. And a threat. Chinese central bank, and a ceasefire in gaza. Israel announces a sevenour truce and pulled out most Ground Forces. It has been one month since the indonesian election, but the fight is still going on because the candidate is challenging the results, and the Constitutional Court will hear the case this week. We are joined live now from jakarta. How long is this going to take . We actually dont know that, but the court will kick off its session on the president ial dispute on august suitd they have filed a which they allege contains errors. 22,000 pounds of documentary evidence they say that allege documented and systematic fraud on the july vote, and they are calling the vote on dac undemocratic. Iny are looking for voting as many as six provinces, and according to official results, 53. 15 of support at the july 9 and 26. 85 . Margin, the case is unlikely to succeed. They also predict the court is unlikely to overturn the results because International Scrutiny is high, but even when legal it is saidrevails, he could concede and harass the with parliamentary opposition. Back to you. Jakarta, thanks for the update. We will continue to follow those developments related to the president ial election this week. Lets take a check now of how markets are moving. Southeast asia now underway this monday, and david inglis is here. The japanese markets just closing up for the morning session, and some movers we are falling over in tokyo. Earnings. Ut with it is losing less money than expected, so that is a good thing. I think what is key, there is a reference to what they call an ongoing concern. 2000, First Time Since essentially what it means, the ongoing concern is that the companies are still there and operating, so there were some concerns, and now that they are taking them out, perhaps they can. Kikoman is out with earnings, and what do we have . It is dropping. There is the gaming console, if i ambit, remembering correctly. Net income came in much lower, down over 50 plus percent. Carmakers, what do we have . Car sales over in the u. S. For july. They are on track for perhaps the best year since 2006. About eight years there. If you take a look at the seasonally adjusted annual rate, over 16 million vehicles. There is also report this morning in the nikkei newspaper that nissan and mitsubishi are planning a joint Collector Car production, and according to the report, we could be looking at the cheapest one among major carmakers. Year 2016, fiscal , retail sales coming in better than expected and australia. They are revised up. You saw the june figure also up, and treasuries, on the revised 516 per share. And there is an Electrical Energy company that is up that after thet market close, they said one of their units does owe money. Icbc was basically saying to pay them back. And another company declared bankrupt by a chinese court. All right, david, thanks for that check. And amid a rapid increase in the money supply, another indication of holding up on any majors to me list. Reporter is live from beijing. Tom, welcome to the program. Us talk about this latest Second Quarter policy statement from the peoples bank of china and how it compares with previous statements. How does it compare . So i think the striking thing about this statement is it signals a limit on the capacity or the willingness of the Chinese Central Bank to stimulate growth. From around april this year, all of their departments, the National Development and Reform Commission and others have been in stimulus note. That has meant keeping borrowing costs for banks low say the banks can pump more money into the economy to get growth going again. What the pboc seems to be signaling is that they are worried about access in the economy, and there is fear of making structural problems worse. The problems,ing indeed create what are the biggest risks for the chinese economy and the system . Trouble fork the the central bank is that they are really facing dwi separate problems, which, in many ways, require contradictory responses. On the one hand, we have the cyclical slowdown in the economy. Slowdown inr, the the real estate sector. That brings real risks to growth, to employment. The correct response to that is to open the credit floodgates and to have monetary stimulus to prop the economy back up. On the other hand, the central bank faces a very serious structural problem, which is the inheritance of five years of very, very rapid loan growth. Chinese banks massively extended their loan books in the past five years, and that has left them looking quite fragile, and the correct response to that holding back have on stimulus and to allow the banks to regain a little bit more balance, more equilibrium. Ittime, we have to leave there. I appreciate your insights on this latest report from the peoples bank. Live from beijing. Lets take a check now of some of the other headlines making news this sunday. Six executives from a food supplier have been arrested. The Company Supplies may donald, kfc, and burger king, among others, and is accused of using meet past its sell by date. Says the full menu will return this week. Portugal central bank has taken over another Bank Amounting to 6. 6 billion, and they are using funds already set aside, and the lender is getting a new name. And lexus is easing ahead of theler, topping sales for first time in a year. Deliveries jumped 19 , with cheap leasing and finance offers that beats their rivals bmw and mercedes, whose sales rose 10 and 15 , respectively. Those are headlines. I am was lynn chen. , andillion for india they say when the new power plants are built, india will buy electricity from nate call. Seen backtoback declines. The reason . The world cup, which get gamblers away from the table. China is the biggest source of visitors to macau, and they say the anticorruption drive has cut the number of high rollers. Well, in other news, as shanghai for mainlandues and international investors. Thats get more from our director of Asian Research for bloomberg intelligence, and, tim, welcome to the program. Thank you very much. Lets get some context on what is expected. The linkage. Is 40thbound train billion of potential investment going into shanghai. The southbound, 50,000,000,000, so a good initial start through a continued process of opening up china Financial Markets. The core of what is going on, you can see here in this table, in hongajor indexes kong, two major indexes in the marketat make up cap, sizable portfolios. But the interesting thing to ,ook at, they are in the Center Energy and financials, they are heavy in both, but then you start looking at investors investing in shanghai or some really interesting possibilities, and the same thing from a chinese perspective coming into hong kong, where there are some notable differences between these two groups. The age share investors have not had a huge amount of opportunity. Foreign investors very interested. Lets talk about what has happened so far with the premium between these, the difference between them. Right, exactly. There is a popular index that a lot of people track called the index, and there are 70 audit of these. A share and the subtract the h share, and this is what you get. It is traded at a premium, sometimes dipping below the 100 mark. Right now, we are at close to alltime lows. The reason for this is because of bank and Energy Stocks, which are large cap and make up a large chunk of this index, have, in fact, rallied in hong kong, possibly because the market has and this is looking at a early way to get participation in this increasingly linked opportunity. And last week, we had the Energy Shares run into that bull market. From believe the inflow china construction, looking at the ownership structure, as you look across the border ownership, what about it . There have been some interesting differences. You mentioned one. If we look at the hong kong side, they have outperformed midcaps, and part of that is just that they can energy rally that we have had here as of late. It will be interesting to see what transpires posted the linkage, because then you have tried investors who can come in and can look at for the first time casino stocks, luxury is stocks, and china has been the driving force behind those companies and their share prices , and more recently the downside. Clearly, there is an affinity for these. If you look at the opposite direction, we have had actually ,idcaps and large cap in china and there we have got a wealth of midcap and small cap industrials, and that is going to open up for hong kong and Global Investors. Potential here. Ok, thank you so much. Coming up, mark farber, who says investors simply arent paying enough attention to the dangers in the middle east. We will have that interview live after a short break. On the move welcome back toon the move. Lets check in on some other stories making headlines around the world. Surveillance cameras captured a moment of an explosion in eastern china on saturday, and the number of victims has risen to 75 with about 200 others injured. It is a Parts Company that supplies general motors. Premier li keqiang has made statements. There are more than 200 people dead or missing. And an american doctor who is suffering from ibo let is allegedly doing better after contracting the disease. And a nurse has ebola symptoms in liberia. She is expected to be flown back tomorrow. 720 ninese has killed people in sierra leone, guinea, and elsewhere. The number may be higher. Secretarygeneral has at anotherhe strike school. It is not clear exactly what happened. Washington said the school was hit by shells, while palestinian officials and the United Nations say it was an airstrike. But the locations of all of these have been dealt with multiple times. How this continues to happen continues to happen, i have no idea. I dont have words for it. I do not understand it. A israel has announced humanitarian truce except in one town, and the army also pulled forces, andund Prime Minister Benjamin Netanyahu signaled the assault may be winding down. 1800 palestinians have been july, and israel have lost soldiers and three civilians. Geopolitics have been dominating the headlines and investor decisions in recent weeks. Thistake a closer look at complicated global situation. Joining us from denying in vietnam is mark farber, the doom and gloome report. We continue to see these terrible images out of gaza as the fighting continues. It seems though that israel is trying to deescalate this without negotiating with hamas, very similar to the last gaza operation act and 2009. Now, simply from an investor standpoint, should this be taken as an encouraging sign that we may be nearing an end of this current flareup . Well, i would not call it it would beor that the end, but i dont think that hassituation in palestine much impact on global markets. I rather think that events elsewhere in middle east, in theory, in iraq are more important because the rebels may to go against saudi arabia, and if that happens, it will be a very negative development for stability in the middle east. At iraq, itwe look has fallen somewhat behind in the headlines given all that has few weeks. R the last how significant an expensive, if in iraq and isis beyond iraqs borders, how would that impact the global commodity markets, and how would you as a Global Investors see playing that situation . Recently or just recently, i think iff oil the turmoil in the middle east increases, as i believe it will eventually, then obviously they will rebound and maybe make new highs. I think that may be a very significant factor for the global economy. Now, we had gold climbing. At least at the end of last week. The safe haven, the inflation hedge of gold. Gold has been very strong , when we999 and 2011 reached 9,021 per ounce. Then, it has been drifting lower. And there is a base around the , and there are many that would like to see gold collapsed to below 1000. I am not saying it is impossible but around 100 cents per pound, it fell below 1000. To stay not like it there for a long period of time. I think eventually it will be much higher. There are other problems with the gold market. It is possible that at some change bye will be a the central bankers. Otherwise, i think it will likely be higher in a year, to, three years time. Mark farber, unfortunately, we are out of time. I would love to talk to you about currencies given the ecb decision this week, but we are out of time. We look forward to talking to you soon. Mark farber, the publisher of report,m and doom joining us from vietnam with a very tricky situation geopolitically globally. Him enough, we will take you live to mumbai as a new ceo gets ready for his first day in charge. That story in two minutes. Welcome back to on the move. Takes theo of infosys job, and we are standing by with a look at what is on his agenda. Good morning. Hi, zeb, good morning. Facing one of the worst performances. It hassistently jumped. And he has taken over officially as of august 1, which is friday, but he did not give too many specific details as to how he wants to turn the situation around. There is also new generation technology, but he has only said , and are opportunities there are different aspects with the business model. And they are watching to see. They will have time to achieve that. This is what he had to say. Completely new kinds of things, new kinds of innovations , bringing new software to live, and doing that in an exemplary new ways, but also with startup companies, we have a 100 million fund of our shareholders. Stay with us here on on the move. We will be back into double your minutes. It is the middle of the asian trading day, and this is asia edge. And going to the market, at last, completing a once shelved on thed pouring in, road, the Prime Minister u. S. Travel more than any japanese leader beforehand, and also coming up, staying on the food and drink scene, we have a special report from vietnam, which is about asia and their growing liking of milk. And i am david inglis. How do you describe what is happening . Far, we had aso weekly coming from wall street on friday. There are a few key themes. It is better than expected. Indonesia, of course, reopening after being closed for a few days, and inflation coming out at noon. Are expecting 400 million u. S. Dollars. And let me just and with a look at china
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