slavery. rolling out new regulations, organize newo ownership. and more on this monday edition of asia edge. >> i'm tracking what is happening with your money this monday morning. . let's be honest. we saw this coming to respect. -- two weeks back. we are basically well above what we saw last week, about 113 for brent futures at this point. we are off the highs we had on friday but we are so halfway through the asian trading session. a hundred is what the average estimate from analysts.

let's look at crude. dip 15 a little bit of a to 20 minutes back. it seems we are trying to recover to the 107.30 level, the highest point of this monday. and gold, of course, the defensive play here. $.19 short here. would beounced, which basically 20 u.s. dollars. it is all about iraq. david.ks for that, oil prices with growing fears of civil war and claims of a massacre and she is heard -- and shias urged to fight back. president obama is reluctant to put troops on the ground.

effectively -- i guess it is all out war. >> it certainly is not looking very good. when you are calling up civilians to fight in malicious, it is not a good sign. the u.s. is evacuating staff from its own embassy and beefing up security. things are looking pretty grim. clerics got shia calling for people to volunteer and they have been. these are untrained soldiers. where is the iraqi army? >> we have seen a huge chunk of the iraqi army just don't away. there are reports that some of the troops that were captured, maybe 1700 people were slaughtered. the islamic state in iraq. >> they are 40 to 50 miles from baghdad at this point. the iraqis have been fighting back and pushing them back in some areas. but they still appear to be advancing. does he have,s

barack obama? >> he is not went up at troops on the ground. they may agree to some airstrikes, drone strikes. iraq did not want to sign a security agreement with the u.s. it has been largely nonsense 2010. we popped up the army, trained them come equipped of them and they would be able to hold their own. and they appeared to have just melted away. word is that leave us 10 years after the invasion of iraq? it is an absolute mess there. v.a. -- iran and the u.s. talking, which is absurd. iran has u.s.-led sanctions against it. >> obama did not like this were clearly. he voted against it when he was in the senate. he got the troops out. he wanted to declare the war over and move on but he cannot do that at this point. >> getting back to the market

action, let's find him or what is going on. >> i just -- let's find out what is going on. >> i just showed you the numbers. these companies that have substantial assets and that go outthere and find oil and dig them out of the ground, we see in the bit of an uptick continuing from friday's sharp gains. the stock getting upgraded to overweight at jpmorgan. airlines is mixed but certainly this is one sector that you want to watch her closely. when you do have sharp movements in the price of oil, it is basically an inverse relationship between the stock --ce, the airline strikes the airline stocks and oil stocks.

there is a rebound from the sharp drop on friday. chinese airlines and qantas airways were down 1.5%. and staying on the same of safe 1282 trade, we are now at in gold. >> the fighting in iraq has been an important topic for our guest on morning. new edge managing toby lawson says market reaction has been, but things can -- has been calm but things can change quickly. have reactedrkets with movements in crude and precious metals and selling at a equities and bonds. it is pretty normal when you see some sort of external geo-political shock to the markets. but right now, in terms of oil supply, the situation in iraq is very much concentrated to the north of the region. most of the oil production is in the south.

immediately, in terms of supply and impacts on actual production, think it will be minimal at this point in time. but that is not saying that the crisis could not escalate. >> he is vice president of ihs energy. if the situation worsens any further and output is disrupted, he predicts that the markets will take it. >> the spare production capacity within opec can offset all of iraqi production if it is disrupted. you can see that there isn't a spare, so iraqi disrupted, if it is the market will get uncomfortable with the limited spare capacity within opec and we could see crude prices soar. >> it is not all doom and gloom.

danielle merry said other factors are boosting investor confidence. things like the undefined number that came out recently is strong from the region and indicates pmi and conference indicators, all of these majors point to the slow and steady consistent recovery. notwithstanding some nasty shocks that you could never anticipate. i think the path is very well set. >> that as they were from asia on the latest developments from iraq. >> let's take a look at some other stories making headlines. we have protests at the world cup taking a dramatic turn. a police officer caught on camera on his motorbike. seemingly firing live rounds at demonstrators. the officer rode up on the motorbike. pulling out his pistol, firing,

as you just witnessed. showing the cameramen what appears to be a live bullet. a man in plain codes identifying himself as a policeman holding a gun. he is threatening and swearing at protesters. witnesses went on to claim that he later fired that weapon twice. maker isal equipment buying another device maker. paying nearly $43 billion in cash and stock. be the first chinese bank to get a u.k. license. the bank is still in talks with regulators but is set to get a license by years and. that -- year's end. with banks because bloomberg markets has just released its latest list of the world strong as lenders.

once again, an asian bank is on top. bank is more or less majority with hsbc. assets have risen since 2007 by 53%. it really has grown. it is risk free compared to other banks. its capital base is very strong. it has weathered against any sort of risk thrown at it. the tier one capital ratios are very good. that matches the crucial capital base. 30.8%. coming very soon are the basel three requirements. it's quite similar to basel three. the limit is 8.5%. already, hensing bank is almost double that. it is a strong, safe capital base. it was ranked number 10 back in 2013.

now it is ranked number one. that shows you the top of the tree and for very good reasons. this ranking was raised on five different requirements, one of which is capital ratio against risk assets. the second is efficiency, which is cost against revenue. really strong areas to look at again. we are looking deep into the bowels of the bank. british banks and american banks clearly have risks. they've basel three requirements, they have not met those. concern.at is a the hang seng is pretty much in charge for the third euro -- third year in a row. there are three singapore banks on that list. have japanese banks

among top performance on that list. >> what about the other groups of banks that did well as well? >> canadian banks are very strong indeed. among the top performers. three of the banks in the top 10 are canadian banks. that is quite encouraging as well. the middle east, qatar national rank fell to fifth strongest bank. , and asianada, qatar banks, singapore and hong kong really stand out of the crowd with regards to good, strong capital base. that is what we want to see again. rising, we need to have a strong retail base as opposed to an investor banking based business model. >> all right, thank you so much for that. had humbleer

beginnings. we take a look at the humble beginnings of & bank and how it made it to where it is today.

you can read about the world strongest banks in the july edition of bloomberg rising. up next, -- bloomberg magazine. a special report into claims of modern-day slavery. >> their critical crisis in thailand has caused investors to stairway. how long will that last?

>> let's look at some of the stories we've been talking about the strict. a big day for south korea. opening the world cup

campaign against russia. the julie reported wednesday -- the jeweler reporting weston saiwednesday. we saw tumbling gold prices and a big jump in sales. met in a blanket things on hold after he cut the april and keptin things on hold after a cut the previous month. three of them do foresee a cut. orour next guest is a senior photo manager joining us live in our hong kong studio. let's talk about thailand. this week, they are expected to

do what? >> it's an interesting situation. thailand has been very strong. it has rallied since the coup. party members disbursing from their duties. situation strange where the market has rallied despite the fact that the political situation is still unclear and economic situation is quite poor. thailand --ank of you saw the bank of thailand cut its expectations. next year, they might rally. essentially, we have the green shirts and power at the moment. that is better than having the old status quo. >> as you say, the status quo is still in flux because we don't know what the status quo is

going to look like and people are still willing to put skin in the game. >> yeah. >> are they just planting the seeds for you cheer -- itself is no longer expensive, more cheap. following 130 thereabouts at the moment. -- falling 130 thereabouts at the moment. we put our toe in. is the chief of the asian number five. it is the -- asian 5. it is the best exposure you can get. stillou saw the general pay farmers, i think that was a signal as well that the current political instability, at least you will have a little more -- less protests going forward because at least they still paid the farmers who were heavily indebted. >> we are also hearing an

economic plan coming from the general, including trying to unclog the backlog of fbi investments. alleviate some infrastructure dollars and speed up -- >> the infrastructure field had a bit of a stalemate. a lot of those projects have already begun. so if you look at the nci or the high-speed rail, you look at things like the red line or the can go toe, you bangkok and see that money is still being spent. >> why are you still avoiding it? >> the earnings outlook is unclear. what we like or the retailers. they haven't fallen. robinson, home pro, the way we played it is that we have jasmine, an internet play, and we just started buying citrus foods.

offound a more stable way in -- way of playing. how are things? the provinces or at least the tourism areas are still very robust? . i was in thailand two weeks ago. i ran a marathon, of all things. [laughter] i'm still recovering. but we are a very large shareholder of the airport. their numbers are robust and i think people are staying out of bangkok. the curfew was lifted on friday. so it will be interesting to see what happens, especially the real spring factories, the main chinese tourism. we need to see that come back to the market. >> good transition to sticking around after the break. i want to ask you more about

china, the economic slowdown, and what interesting yields you are finding when it comes to shares.

welcome back to "asia edge." to talk about the reform

we heard earlier this year. it was a little bit of a surprise. not really, it had been in the works for a while. but when it was announced, it was a positive affirmation of the reform we saw from china. the shanghai-hang seng through trade. what kind of actions are you taking? >> we have obviously seen some strong and close and we are now in a position where we are probably going to launch a new china neustar's fund. it will be toward the more may cap flavor and we will look at a shares for the first time. i think what people have got wrong is the quota system. they are in the aggregate. they are a net aggregate. one is not more, the

buying or the selling is not greater. we are optimistic in terms of the mid-caps. there are 266 stocks in the a chair. 100 in an account, you can buy these 266 stocks for the first time ever. set up as many calls as we can to go through those companies, value them. there is a lot in there. there are gray consumer names. eagle,ve and time, golden ichiro ,ome industrials, great staples the list goes on and on and on. and there are 266 which is like having 266 iphones all at once. then it comes down to what is the valuation discount.

i don't think a lot of people would have thought that would happen. is not fun -- people have been playing that. we are looking at the fundamental value and saying a great time to be buying the stocks at really attractive valuations. >> all right. i want to get your thoughts on china and the broader macro picture in the backup of all of this. we will be back with you in a moment. coming up next, we hear from a man and modern-day slavery.

thailandt workers flee but they deny ordering a crackdown. an energy production under threat in iraq and oil prices are rising once again. first, let's get the latest from the markets now. >> how do we describe what is happening right now? overall benchmark, still lower a third straight session.

we have erased some of those losses at this time. you look at volumes, very thin today. major markets like japan and australia come about 25% to 30% thinner. so not a lot of conviction out there. japan is down .7%. china is the only market that is above water and now. the mostly flat, five-to-negative -- five-to-negative. -to-negative. you know straley up, we are watching to sectors. australia, we are watching the sectors.

analysts are thinking that we may actually cia and or prices continue to drop in to wendy 17 -- into 2017. it is not good for these aussie mining stocks longer-term. 2020, china iron ore imports, the australia share of that, will rise to 60% from the current level. something to watch very closely. the steel industry in china is thinning out. reports in australia this morning that they may be cutting as much as 35 jobs here in the asia-pacific. that is what we have for the moment, slightly negative data across the region. military rulers denying that they are sending migrant workers home.

what is the military government saying? >> the junta leaders say there is no truth in the accusations that there was no order to expel cambodians or other laborers from neighboring countries. say the workers leaving thailand are returning home for the harvesting season. essentially, what they are saying is that they are rumors. still, we have seen panic among cambodian rulers. human rights groups say that bar than 100,000 cambodians have fled thailand on crackdown fears. they have been crossing the border since the army seized power in late may. in recent days, the numbers have increased. kyoto reported that seven were killed over the weekend. a truck crashed near a -- near bangkok.

the glittery took over the government after months of unrest -- the military took over the government after months of unrest. reports of congestion, indeed -cambodian at the thai border. >> chaotic, congestion, dramatic on the border. rights workers say the tens of thousands of undocumented cambodian migrants were trying to flee over the weekend. points were described as being overwhelmed. there can be as many as 4 million migrant workers in the country. iny work in legally industries like agriculture, fishing, holding jobs not wanted by the thais themselves. >> thank you.

the latest out of thailand. >> when it comes to thailand, the united states has warned it may take an says that unspecified action -- unspecified action after allegations of modern-day slavery. international agencies are investigating what are claimed to be severe violations of human rights. he wields his bag through jakarta national airport. he considers himself lucky not only to have his freedom but lucky to be alive. in 2006, he left myanmar for thailand looking for work. he claims his employment agent tricked him and he was hold onto a thai fishing boat for $600. >> i asked where are you taking us? the captain answered, your agent to get to this vote to work on this boat. it will be for six months. you can go home when you have worked for six months. it's ok to come back if you want

to work for one year but you have to work at least ticks months on this boat. >> after one year of hard labor, he had tuberculosis and no pay. a dawn on him that he was a slave miles from land with little hope of escape. >> i thought it was better to die by jumping into the water than to die by being tortured by these people. when i was about to jump, my friend grabbed me from the back and save me. >> he finally made a risky break for freedom during a rare visit to port. while there is no official figure on how many workers have been trafficked, it is estimated there are 200,000 migrants laboring on thai fishing boats. the united nations survey last year 600 workers found almost none had a contract and 40% had suffered unexplained a cuts. >> -- pay cuts. >> in the last two years, we have been working so hard, to combat these trafficking issues. the police, the si have been

doing their arrests. >> thailand is the world's third-largest seafood exporter. most is shipped to the united states. thailand towarning clean up its practices. chief technical advisor at the mekong club, he told me what really needs to be done. >> it has to be a multisectoral approach. the marine police have to check the boats to make sure the migrants are not being abused. the private sector also has to be involved because the products that are coming from the sea are used in supply chains and often make them -- make it to our place, europe, the united states and other parts of the world.

the private sector and governments have to come together and come up with a consolidated approach. >> people need to act together. we are talking consumers should also be a part of that as well. -- are not saying their suit there should be a boycott. you say there should be a buycott. say, ok,ions come and let's stop buying products from itarticular location because is tainted by slavery. the truth is 20% are and 80% are not. >> so you are punishing some of the people who perhaps have some decent ethical standards. >> exactly. you're saying let's look at the glass half-empty or half-full. companies the larger need to demonstrate what they are doing to address the problem.

have proactive activities, have codes of conduct, more third-party audits going in to identify whether or not there is slavery taking place, having a lot more aggressive approach. and those companies should be rewarded. now, that is the difficulty. nobody has asked companies to go below the top tier to look into the lower tiers of the supply chain. we are asking them to do that. it will cost money and require research, some investigation. but this is where we are now. the world knows about this issue. they wanted to be stopped. that is the direction that consumers are actually pushing. >> let's check on some of the stories making headlines around the world. shocking pictures shine islamic fighters preparing to massacre captured iraqi soldiers. militants have attacked cities around northern iraq, images that we will broadcast showing the bodies after they have been shot.

on people tocalled fight the sunnis. killed 18 people and another three were killed in a blast. the united states has sent an presenceto beef up its in the area. >> we can't do it for them. in the absence of this type of political effort, short-term military action, including any assistance we might provide, won't succeed. so this should be a wake up call. iraq's leaders have to demonstrate a willingness to make hard decisions and compromises on behalf of the iraqi people in order to bring the country together. claimna is boosting its to island disputed by vietnam.

power cells the annexed to an oil rig. hanoi says one of its fishing buoys was rammed and sunk. more than 1400 times. china is on typhoon alert after a our full storm that hit andfall overnight -- after powerful storm that hit landfall overnight. offshore workers have been taken back to the mainland. >> the world's largest steel maker says it is good news that china may lift a near decade-long ban on foreign investment in the industry. stephen, you know, china's protective ways in the steel industry, there have been notable for years. but could it be it is about to change? been talk and

speculation that the reform process underway in china will on steelnd to the ban mill or foreign investments controlling stake in steel mills. this is wishful thinking from one of the richest men in the world. the biggest steel company, lakshmi mittal is here in china and discussed with us the speculation that authorities are going to relax this ba. -- this ban. losing steel mills are money, riddled with inefficiencies. china consumes half the world's steel as it has been urbanizing, but it is also the world's biggest producer and there is a glut of unused capacity. and to curb overcapacity in the industry as well as combat pollutants, the government is squeezing credit to the industry.

about 80 of china's major steelmakers had combined losses of 370 million u.s. dollars in the first quarter alone in what many analysts are describing as the harshest operating environment in history. and billionaire lakshmi -- billionaire lakshmi mittal says china needs consolidation. he runs the world's largest till company. i would assume he would like to play a much bigger role. tried tors back, he buy a non-state-owned steel mill. but that was rejected. investment or a venture with hunan. but there is a ban on overseas control that was imposed in 2005. it has been in place for five years now and we are starting to get perhaps indication that that could be relaxed. thesee big thing is

steelmakers up in the north mostly, many of them are state-owned. but they are big employers. so those are political issues. allowing foreign industry to take control of strategic industries like steel would have to have a lot of clinical mandates. >> all right, stephen engle, our man in beijing. coming up next, the chinese president says china has to find a new way to produce and consume fuels if it wants to ensure its long-term security. we are going to discuss how this could change things for china after the break.

china.s start off with

anything of particular interest? >> the steel industry, we still can't see why we would want to invest. >> maybe it's consolidation time and he would come in and help clean things up a bit. >> we have avoided the sector for six years and we will continue to do that. it is just such an overcapacity industry. i just can't see that that will benefit for the long-term. >> one thing they are key on is energy independence? china continues to consume energy?

with the backdrop of a rack come a how does china create itself into an energy-independent state? >> energy, whether or not you are using -- thermal coal, the windtional energy sectors, , for us, again, it is still functional. where do you see the biggest growth going forward? we see the consumer with the retail sales -- retail space. industrial production numbers were better than expected. the long growth as well i think will improve. they total financing numbers were 1.4 trillion. again, it is those sectors that are retail-focused, demand focused that are much more attractive than energy. >> you have been living in europe for ages.

you've only been here three or four months now. you are in europe, you don't appreciate the full scale of what is going on in china. whenah, it is remarkable you think about 6 million people being lifted out of poverty. it is just incredible. i was living in italy. the italian luxury companies are just nuts for china. europe is not growing. italy is a mess. the china for them is just meta-. that -- is just mecca. that many people with disposable income, 20% of that population has money to spend. that is bigger than the united states. the numbers and the scale are just incredible. >> the per capita gdp is still very low. so many countries still beats it. >> yes, but given the size of the population, if a fraction has disposable income, it is just -- >> but it can get two more equal

weight dispersion of wealth. then we can be talking about incredible growth. >> we are early days. when we look at china, it is a very big economy. it will add $1.7 trillion. phenomenal numbers. there are times when we look at the pmi are the gdp number and the quarterly basis or a monthly basis. essentially, what we are seeing is structural reforms here apply and when it -- and we need to look at china and lots of five years. from will wean us off being an investment-led economy and the current administration -- thee it clear that things that they will do to make it more robust.

it has a long way to go to get to the developed nations. i am very bullish towards china. when you look at the equity now.tions, it is higher it is attractive because of what we see in equity markets. >> all bets are off if the oil 116, 120 or 125. right now, all bets are off. >> yes and no. seen inwhat we have china the moment is it will still meet its growth target. it's got a lot of legions to get there as well -- a lot of lead ins. to get there as well. rrr -- points >> 120 is quite extreme.

if you factor that income under the change of growth, how does that change your -- h of the economies would be different? of it is just a function will it stay there for the long term will it stay at that price thisive to 10 years quarter i think we'll be fine with gdp growth in china. but we will see a lot of levers being pulled. if there is another roadblock that is hit, that hits china's economy, you will see a change in the classification of deposits as well. so there is lots of room as we put more liquidity into the market. we won't be worried about shadow banking or the property market. i think there are a lot of different levers the chinese government can pull to hit its growth target and that has been set on a very long-term basis. >> you say you look at five-year

periods, but should china achieve that goal and become consumer-led economy, what does that mean for the rest of the world? is that the sweet spot if the chinese are buying? >> yeah, i think they will hit their targets and the retail sales numbers will be above the gdp numbers with inflation benign. so we will see strong consumer growth. >> thanks a lot. ofcoming up next, the return a big smoke. can london's air be worse than beijing?

fair share ofts polluted cities but it is not the only place. >> london is also one of the main [indiscernible] >> the west end in central

london, a constant flow of buses and taxis ferry shoppers to the retail heartland. but this part of town has a dirty secret. it is the busiest shopping street in europe. in a cruel twist, it has the highest nitrogen dioxide levels. it is coughed up by diesel engines. the uk's says a limit of 40 micrograms. we went there when a bus was idly by us and we had a reading of 3700 particles. this year, this monitoring station had a recording of three times a limit. these levels are the highest in europe and greater than even beijing. the u.k. government estimated there are funny 9000 premature deaths in 2010 as a result -- deaths in printer

2010 as a result. eu efforts to fight climate change favor diesel over gasoline because inmates less of another pollutant, carbon dioxide. in london, the majority of us and taxi fleets run on diesel. but just two-minutes walk from oxford street, it is not all doom and gloom. levels here of about 5000 to 6000 of particles per cubic centimeter where we were getting levels of about 73,000 on oxford street. for those of us without air-quality monitors, and are developed an app designed to show areas of contamination. commuting, if you are traveling a today, one of the ways you can really reduce your exposure to pollution is by taking back streets, try to come through parks. that is one of the things that the app tries to do.

>> while the u.k. struggles, apps like this could be the best way to dodge the smog. >> i am still not convinced. >>

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