we go to jakarta later. >> i am watching the market on this tuesday, and the big news we are waiting for is coming from japan. traders are on the lunch break going into that session. we are up about 9/10 of one percent. i bet those traders are not far from their desks because they are toning down the bank of japan these vision. theough surveyed expect bank will hold. later incted to expand the year. the other impact has been news from china. at the lowest are in two months. repurchase contracts for the first time in eight months after data showed yesterday new credit was expanded in january. i am going to have all the movers and shakers impacted by

that in just a few minutes. rate growing faster than expected in january. let's bring stephen engle to flesh out the numbers. better here. >> a little better is right. 16.1 increase in foreign direct investment into china in january after a 3.3% increase in december. we were expecting about a two and a half percent increase, so it was a sizable jump on word -- upwards in investment. if you are looking at the number $206 billion.s we are getting numbers from a press conference saying this jump in january was in line with their expectations, even though it didn't match the median expectation by economists. also they are saying this 15% rise was due largely to growth

in services industry investment, and the spokesperson goes on to say this momentum will continue throughout the year. this is the 12th straight month of fdi increases into china following eight straight month of declines during 2012, so there is increasing optimism the sustainability of the chinese economy is going to reap rewards for foreign investors. top five sources into china, number one is right here in hong kong, but singapore was number two followed by japan, taiwan, and the united states rounding out the top five investors into china. odi, tell me about the money leaving china and how that has been going. >> outbound investment has been a key trend as chinese companies

are investing more overseas. also overseas are increasing. we are seeing outbound investment in january up 47% to 7.2 3 billion u.s. dollars. if you extrapolate that over the full year, that would be pretty much in line with the final figure we got for outbound investment of last year of 90 billion, which was up 16.8%. january of last year outbound was not as high as this year. still out on investment $7.3 billion, up 47% year-over-year. this is going to be an increasing trend. >> also we have the foreign investment number coming in stronger than expected. confidence ining the chinese economy. it's not something investors have had confidence in today. >> that's right. the shanghai composite is off half of one percent. when you see a number like

16.1%, that tends to help some consumer related companies, said think about agricultural stocks, health-care stocks, tech stocks, consumer services. those green areas are the ones that tend to benefit from something like an outstanding see which is what you would month to month. we will show you consumer services, some of the best performing services are travel and leisure. eight rising, 21 following. we will give you a sense of some of the best performers on the shanghai composite this morning. take a look at these stories. shanghai oriental pearl close to six percent. if you take a look at the fact , thethe shanghai composite chinese government had to step in with selling repose for the sincetime in eight months june. that shows me they are taking a

precautionary measure to make sure they are in charge of what is happening in terms of the economy. that is not really translating to the way the financials are trading. the top financial stocks are falling. you can see china civic off by one and a half percent. of oneina off 9/10 percent. i will draw your attention to shanghai pharmaceuticals. they teamed up with a private dealy firm to acquire a close to half $1 billion, so that is gaining ahead of that. let's talk about korea. off three percent. this company owns a 50% stake in the resort in korea were you have had eight people die as the result of a roof collapsing. this company owns a 50% stake in one ocean resort. the chairman has apologized. investors are not giving the stock any love.

marine is off. hyundai heavy off by about one and a half percent. january were down about 20% last year, stock also falling as well. i will rounded out with what is happening in australia. qantas is off because australia is considering a two-stage interference to help the form ofng airline in a debt guarantee according to people familiar with the matter. a little overby four and a half percent. they confirmed investors worst fears by pretty much depressed earnings. they also said they would write on the value of one of the underperforming cannery businesses. also pacific brands is off 10 and a half percent. bhp.lk about

they posted stellar numbers. they also closed minds. it is simple. fewer people buying the clothing and year the company makes. they rely on people stepping in and buying the hats, the shoes, the clothing. if they are not buying the seehing the stock doesn't an expectation of reversal. the stock off by close to 11% at one point in the trading session. >> we are going to pick up that mining story. profit soaring for the first six months of last year. paul allen is in sydney. tell us about what has been driving this. the common denominator is once again china. >> no huge surprise. january was an impressive month and crudere, copper, oil. that means good times for the wits of the hp billiton, to

their profit of $7.8 billion in the half absolutely blew analyst expectations out of the water. the median estimate had been for an net profit of 6.9 billion. 43.9s a huge revenue of billion. the mediaeo fronted after announcing these results, he made it clear he is aware this china story may not last forever. >> we remain cautious since underlying debt and economic imbalances are yet to be resolved. china remains the primary driver of demand. 2013 calendar year its rate of growth has stabilized but still remains strong. it's expected to remain about seven percent. the governor can -- government continues its reform agenda, which will move china to a

mature consumption-led the economy. >> you heard andrew mckenzie talking about cost. bhp has been actively trying to reduce it as well, down to 27 billion. they'd planned to cut that to 25 billion by year end. >> mining is still doing alright. the thing is the manufacturing side of the australian economy is in a powerless position. we had last year toyota adding gm and ford and closing down eventually in a couple years time car manufacturing. we also have our co--- alcoa closing a smelter. it's not looking good on that side of the industry either. >> it certainly isn't. there's a town in the state of victoria which is bearing the brunt of a lot of this. the carmaker is based there. that is where this smelter is as well. the port henry smelter is down

there. there are also two rolling mills in different states. they are being closed. they are unsustainable according to the ceo. he says they are no longer competitive. they are not financially stable now nor into the future. the plant is very small, very old. it doesn't offer these economies of scale. for the workers, 980 of them are going to be looking for new jobs. it is a very sad picture at the moment. for aluminum they had a 40% stake in the plant. they are an australian-based empathy. there shares are down two percent today. as for the parent company alcoa, they have a few smelters around. there is another in victoria. they have refining and western australia as well. this is going to cut their global smelting capacity. i'll co-is building a new smelter -- alcoa is building a new one in saudi arabia.

that.nks for let's take a look at some of the other stories we are tracking. staying with australia, the central bank said an interest rate is likely. the highlights were from a policy meeting. the jobless rate rising to a 10 year high. been chargede overrating libel. three are accused by u.k. prosecutors of manipulating rates. others have been charged in this rates pro. this is the first related to u.s. dollar libel. one says the client plans to fight it. years trying to grow their operations in india, investment banks are now downsizing, and recruitment companies say the number of banking jobs in india -- investment banking jobs the reductions reflect a fallout in deals and

fees by banks which further dented revenues. coming up later, stepping out in the subzero, the maker of hush puppies puts its foot down in mongolia. expecting emerging market outflows to continue. the global head of equities strategy will be along when we return.

>> emerging markets pulling back after reaching a three-week high . while, have returned to developing markets, it remained fragile according to michael global strategy director. >> if you look at current account imbalances and high domestic yield environments, which generally point to high youation or sovereign risk,

are going to find out indonesia stands out as the most fragile, and india looks fragile according to that snapshot. , high domestict yield structure, which points to underlying inflation. between those two i would argue india is more of a buyer from a medium-term perspective. >> he sees opportunities in indonesia meanwhile. >> indonesia is one of those that is sitting there cooking, and one day i think we feel it will be a market we want to return to. we are going to wait for the political outcome. we have to look at geeking and inflation and a hope for improvement in growth, and i hope those come true this year. we are looking at a buying opportunity. >> it is all about india. he is saying investors are starting to see the positive.

investor appetite in india has certainly improved, and we are seeing some and the two shall investors revisit -- we are seeing some investors revisit feeling more confident about the progress, feeling more confident about recent actions and filling the situation is straightening itself up and india has a lot of leverage to what is going on in the developed markets as well. >> let's get more on the market. our next guest is global head of equity strategy. he is with us in the hong kong studio. what is your view on emerging markets. there has been a bit of a sea change. people are becoming less negative as perhaps they discover the returns are not quite what they were last year in the u.s. and japan. >> they are still underperforming this year. the view we have taken is to be selective. a market like indonesia is one of the best markets in the world this year, and i think the key

is if you have a market that is under owned, relatively cheap -- >> he said it was one of the most fragile as far as he was concerned. >> the point is it is one of the most underweighted markets globally, and i think they have made some progress. beenentral bank has raising rates for months now. india by contrast you can say is the most under owned market in the emerging markets. i think the key is to buy some of them but not as an asset class emerging markets is where you want to be. >> if you were to take a look at india, we just had a look at some of these investment banks that were retrenching and pulling out here as well. is that something you are witnessing? >> i was in india last week and had a big conference. i came back a little bit irish. some of the long-term stories were not very -- i came back a little bit bearish.

an average day only 30 million people use the internet. growth in fending on drugs and medicines is only 10% a year. onlystructure loans is 10%. it is really quite worrying numbers coming out of india. >> there is always that danger of what happens with ruby at the same time, but if it eating a dressed? we have -- but is it being address? uncertain. >> there are always expectations. huge expectations. they are going to bring forward fantastic reforms. it is fair to say with the election coming up in the last two elections the stock market moved by 10% on the next day, so foreigna lot of investors neutralize.

they don't want to take a big bet until they know what it has produced. pick somewhere in the u.s.? mexico, all sorts of things going. >> we will have more later when the rest of the bloomberg team joins us. we will step out to the world's oldest capital with the maker of hush puppies. and plans elsewhere in asia coming up. ♪

>> the company behind global footwear brands is out later. in 200 countries including mongolia. we look at their strategy in a cold climate. >> mongolians choose their footwear carefully before stepping outside. it is one of the coldest capital cities. temperatures can be 40 below. that makes the needs of consumers very different from elsewhere in asia. much theians like very outdoors. we are focused on the work boots

, which is a product for the minds. -- mines. we also think there is an opportunity for a rugged product. this is a rugged terrain, and we think the rugged casual boots will also be very successful in mongolia. >> today it is 26 degrees below zero. the thought make it -- does that make it a unique market? record is unique and not completely unique. the footwear business is quite popular in russia. >> you have been here in five years. how has mongolia changed during the last five years. >> our focus has been on thattrial products, and product doesn't change. it's not so fashion forward. it's normally funny colors, brown colors, black colors. i think as we expand our scope

to lifestyle products we will see more color, more women's products, and we think that is the real growth area for mongolia. >> is the mining sectors close down as it has in the last couple years, the supply companies also feel it in their sales. have you experienced these conditions? >> we have experienced a slowdown in the mining industry, and we have a few strategies to address that. we would like to develop products more suitable for the mining industry. maybe some cold weather products , and take some shares away from our competition. we would also like to expand our offering, instead of focusing so much more on industrial, to thend that to include bigger lifestyle piece of the business. >> taking a break from the cold, our conversation turns to worldwide strategy from the asia-pacific region. >> the asian consumer is looking for pretty much what the rest of

the world is looking for. the internet is shrinking the world, so there is not a big difference between what the asian consumer is looking for and the rest of the world. >> are there any markets in the asia-pacific that you would like to get into? >> there are a couple of markets we are not into right now. one is the philippines. that is more of an intellectual property reason we are not there. another market to think the brand could do extremely well in is the indonesian market. we are looking at screening distribution partners. we are counting you down to the trading day over in india, just a mere 20 minutes to go before things get started. things were looking pretty flat, down 2/10 of one percent. we will be live in the indian

capital when things start off. of theliton wasn't one key drivers, but the us trillion arc it has run out of steam. we do have an unchanged picture. what isquick check on going on. the cost be is up. most of the markets giving up the rally we witnessed earlier and falling back. byg kong no exception, down one fifth of one percent. it is the rio open in tokyo. japanese stocks were the key driver in the region. monetary policy is expected soon. the nikkei opens in three minutes.

>> japanese markets about to re-open. a decision up from the central banks. the figures don't seem to add up. we speak with the favorite to lead in indonesia. surprise out of the bank of japan retaining its plan for rise ino ¥70 trillion its monetary base. the bank of japan voting to keep monetary stimulus as it is for the time being and to keep that

monetary base target as well. this does come against a backdrop of gdp growing far less during the quarter. looking for any reaction when it comes to the again. let's have a quick look. is -- the dollar is $.81.¥101, is pretty much unchanged. japanese markets coming up. it has been in that range, so very little reaction. this was expected by 34 of the economists surveyed. think we will probably see a change in the next four months, the july timeframe. this is what the picture is looking like. this is interesting.

global stocks have a raised losses as growing confidence in emerging markets has restored 3 trillion dollars in value. that news has trickled through the way we have been trading here in asia. i want to show you that asia-pacific and smart. it is up about 1/5 of one percent. driving this benchmark higher seems to be or those material stocks. that is up 6/10 of one percent. we will double-click and give you a sense of what is happening. basic resources up one percent. no surprise after bhp billiton net income rising 31%. that was a surprise right there. for the mining stocks across the asia-pacific, driving the rally. no surprise that the best performer on the asx 200 and one isthe best on the asia index bhp billiton.

if we take a look more broadly, it has been those resources that have been seeing momentum. >> we will see if there is any reaction. there is no change. >> i talked to you a little bit about where we are because this is not new. aboutnchmark indexes up 9/10 of one percent. this has -- in focus has been the automakers. it is cold in tokyo. the country seeing some of the worst snow in 45 years. that has impacted production to it is at some of japan's top automaker's. they had to shut down some of the facilities because of supply chain issues, because of this snow. that said, toyota, honda, suzuki all seeing gains. what wem that, this is have been watching in japan. high as 11%.as

according to the nikkei newspaper they are going to mass produce nano chips that are going to go into cars this year, so that could help their top line. the company was raised to outperform, this stock seeing some of the highest levels is july 2. tonominee -- kunami up close seven percent. and i just put up one of the top nttarmers, in tt data -- dat data. nothing much movement. >> china's reported growth figures more in line with reality according to what we are hearing. they report it has narrowed for the first time in years. in hong kong.h me

>> we have all heard about this. local officials say they are doing better and beijing saying you are not. >> there is lots of over inflation of the numbers. that's not just anecdotal evidence. we see it in the figures. chinese officials are promoted within the communist party for the amount of growth they traditionally provide to the national economy. the 31add up all provinces and regions, their numbers are much more inflated national bureau of statistics numbers. for the first time we got a slower pace of growth from the of thed reporting provinces. >> they said they narrowed the pretty big.s still let's look at the comparisons. the national numbers, this is nominal gdp growth. 56.88 trillion renminbi is the national figure. let's look at the comparisons.

56 point eight 8 trillion renminbi, that is 9.4 trillion u.s. dollars nominal gdp. the provinces reported a point 9 trillion yuan. 10 point $4 trillion. a difference of $1 trillion, more than the entire economy of indonesia. the gap of growth is narrowing. the 2013 gap between the two was 10.7%. in 2012 it was 11%. it is shrinking a little bit, but the pace of growth, 9.2% compared to 9.5%. i know i probably confused you. >> we talked about it for. it's a bit of a hangover from the cultural revolution. i know what you are saying one local authorities are producing so much more when it comes to industrial goods and so much more when it comes to agriculture. 30we have seen over the last

year growth model it has been a growth trajectory or they needed that kind of growth, but now with the new leadership, they are changing the metric with which leaders are compensated or promoted. it's including things like how well they are protecting the environment, how little debt they are accruing. will clear up all whole new set of figures you are going to perhaps look at and but i'm going to say the premier himself doesn't believe these. >> a lot of economist take this with a grain of salt as well. that is why we have to talk to as many people as we can to get the true, accurate story, and we never get the true, accurate story. >> stephen engle is our beijing correspondent right here in hong kong with us. let's check some of the stories

making headlines. the united nations thing kim for-un should face trials crimes against humanity's. the abuses include torture, rape, forced abortions, and other sexual violence. the scale and nature of the abuse has no parallel in the modern world. to see the security apparatus that precludes dissent. the korean workers party, the head of the korean army, the korean people's army, the head of the korean security agency, the head of the politburo, and is named the supreme leader of the entire country. >> china's drive against the illegal sex trade has netted 500 suspect. the crackdown started

last month with a string of brothels and massage parlors raided. the campaign was expanded nationwide with a campaign that is expected to net $16 billion a year. some of the japanese divers missing off bali have been found alive. five women were picked up by fishermen off a coral reef. two others are missing. the group was last seen on friday while diving in mangroves off the southeast coast. it is thought they were swept away by strong winds and torrential rains. the race to the top job in indonesia is heating up. the former trade minister has stepped down to focus on his bid for the presidency, but a man seen as a popular favorite is keeping quiet about his intentions. haslinda amin jakarta's governor talk to haslinda amin jakarta's governor about areas hit by flooding.

>> there are 34,000 families living illegally there. >> illegal settlers? how to so the problem is wider,to make the river but the most difficult is how to move the people from the ,iverbed into the new locations to the local apartment. >> isn't it true illegal settlers don't want to be relocated? isn't that part of the problem? >> it depends. , if we have ae good approach to the people, i

am sure i can, but we must apartment. low-cost >> when you take a look at the river,s settled by the the number is much bigger than the number of apartments you are building, which is 200 a year. >> this year i build 200 local apartment. next year i will build double on this. maybe the year after we build more. >> [indiscernible] >> i want to check the river

bank because it is not far from the river. we are 50 meters from the river. >> why do you need to check the riverbank? because we will start to move to the local apartment. >> you can catch the special program right here on bloomberg. later today. the rightnow might be time to get into india. all that and the other top stories when asia edge returns.

>> we are back, joined by the gang. about china.it we were talking about india earlier. i want to get your views about japan. the bank of japan coming out with their latest decision, and they are not doing anything unexpected, but is it actually working question mark is at all smoke and your's? >> there were three. monetary policy is working fine. number three is structural reform. aboutmember talking structural reform? absolutely nothing has happened. a followthrough has not come. with the bank of japan, they think they are on track. lex what do you make of this? -- guys on the ground saying

our guys are saying the bank of japan will refrain from a monetary base forecast does the last thing they want to do is be tied to something like that. very different from what they .aid four 2013 but they have got their inflation target. i think they are on track to hit that. we don't know how much the economy slows down. i think the bank of japan's view is that growth is going to be taken out of the second quarter into this current quarter. >> do you have a forecast? >> we think first quarter is going to get four percent growth. then we are going to have a couple of negative quarters and the july quarter after that. q3,view is that maybe by august and september, the bank of japan will realize the growth has slowed more than they were expecting. staged they will do more monetary easing, but at the moment they think it is ok. i do not see what is the next

instance. >> what is the catalyst? we talk about the third arrow. what must they do to get the third arrow through? is this about regulatory reform? what's it about? -think what they need to do is clear. we have had the talk already. the question is how do you implement it? it is hard to do structural reform in the absence of a crisis. it doesn't feel like a crisis. vested interest, labor unions or employers are going to resist change that affects them. 95% of the population benefits mildly, but five percent lose out in a big way. that five percent will fight tooth and nails. >> i am a one trick pony. i like to talk about china. you are underweight chinese equities. what are your clients asking the most, and what are you telling them? >> they are not asking much. two years ago if i went to the u.s. and talk to big investors,

they would want to talk about shadow banking and the risk of a credit bubble for staying. a little bit of talk about wealth management products, but we know the story. people aren't terribly interested in china. nobody is invested there. the real question about china, everybody says chinese stocks have been a disaster. the exception is private sector companies. they are only a small slither. they are like 1/5 of the index. last year those stocks went up 30%, so when i do get people asking about china, it is can you still i internet stocks? these are great companies. >> you don't think china is that cheap, right? >> it is eight times, but financials are four and a half times. times, which is roughly in line with the long-term markets. i don't think it is particularly cheap.

>> we got global stocks erased their losses. read trillion dollars in value has been added. number one confident from the united states. as badg markets are not as they thought. your views? >> i think we had a selloff at the beginning of the year, partly because of tapering, partly because of worries of places like argentina. my view since the end of last year is this is going to be an up-and-downveer -- year, and they mostly up. i think emerging markets there are some doing well. there are some surpluses. , korea, taiwan, philippines, places like mexico, and there are countries that have made a real effort to tackle their problems. i think you can say indonesia, maybe india. it is a bit of a mixed message.

your favorite, but see we look at all this and all these different things, normalization of monetary policy, we have had all these worries. there doesn't seem to be one at the moment. what is it going to be? >> if i knew that -- >> normally everybody has their ducks in a row. we were worried, but we don't have that just yet. >> there are a few things. u.s. growth slowing. we have had some weak numbers. there is the weather. sometimes things can become self-fulfilling. people postpone decisions until they see where the growth is coming from. i think the key is going to be earnings growth. we have had a couple years where there is almost no torpor it earnings growth. valuation is almost supercheap. the headwind of the first interest rate hike in the united states in 2015?

something.t to be >> i think it is a headwind. they will cut 10 billion off of asset purchases. says, when the market that is out of the way. when the next rate rise? the endan forecast for of 2015 is 75 basis points. at the minute they are telling us they are going to raise interest point -- interest rate three times. >> probably a little ahead to ink about. thanks for coming. we have got trading kicking off in india. we are looking at what is moving those markets and more when asia edge returns.

>> the trading day in india

started a short while ago. let's talk to the indian financial capital is. --the key to the markets has the market has opened a little lower. both trading in the red as we speak. they are managing to hold above the crucial 6000 level. the big thing we are tracking is just seenhat we have the auctions in india conclude and news has come out this morning that they will acquire the mobile company. that will give a larger presence . we understand it will acquire 7 million consumers. he also know the stock was trading down almost one percent this morning at the start of trade. it is trading down about half a percentage point. that's as far as the big breaking news we are tracking, but also yesterday we saw the

interim about this ea announced. this being announced. one of the key things is it will be maintained. the target is 4.1%. he also said the current account deficit will million -- $455 billion. the target is to take that to three percent for next fiscal. also there was no announcement on taxes, and that is not expected because this is an election year. he did announce cuts on 30% to 20%. from this year.ething it is a relief for people looking to buy two wheelers. those are some of the key announcements that came out from the account that was announced

yesterday. >> have a great day, and joining us from mumbai, we are going to take a look at starbucks. would you believe this company of had 19 straight quarters growth, but there could be trouble ahead. it is because there is only one type of coffee bean, and it has been threatened by a fungus in central and south america. how starbucks is trying to stop the rot in costa rica. ♪

>> just taking you back to the market action. we have the japanese situation. the bank of japan coming out with its latest monetary policy. stocks rally and the yen weakening on the news. they did what is expected. keeping the stimulus intact, but they have been expanding some of

their lending programs, and that has helped the nikkei 225 climbed 1.8%. we were up at the lunchtime break as well. dollar yen, 102. yen 35, one dollar. ♪ .

>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. >> the following is a paid program from starvista and time life. it was an era of incredible stars. fantastic voices. >> ♪ i know i would go for rags to riches ♪ >> beautiful harmonies. >> ♪ >> magical memories.