hour, india is top of the pile in asia. di honeymoon last? dilbert will explain how the office cubicle went so wrong. >> the monarchy is sailing home. the union flag is coming down. it could be at its worst yet with tens of thousands of people set to march on central, the central business district here in hong kong tomorrow. tell us what is going on. this is about that white paper that beijing proposed a couple weeks ago. >> this has hung over the territory since 1997. will beijing allow hong kong to become fully democratic? it appears the hong kong public and leaders in beijing have a very different view of what universal suffrage means.

in person, one vote? aging says it can vet candidates for the chief executive posts, op leadership jobs in hong kong. this public referendum, this unofficial referendum wrapped up last night. 780,000 registered voters took part, rishaad. say that they would be anti-beijing, anyway. >> that is what the other side would say. certainly, the beijing authorities in central government have blasted this as an affront to their power. it all comes after that white paper was released on june 10. his white paper is important because it is a bold move by to say that hong kong's autonomy is not inherent and not

guaranteed. be patriot.ust has caused-- that protests by lawyers on friday, as well. let's put this into context. the newspapers this time? rights for and free each and every one of hong kong's citizens. the white paper intensified a movement that was already underway by occupies central and other pro-democracy groups that galvanized supporters here in hong kong to push back against the central government. at an opportune timing because tomorrow, july 1, is the anniversary of the handover. it is a day, traditionally, when people march in the streets in hong kong. each year we see a peaceful protest march. tomorrow could be different. for occupys test

central and others threatening to lock business and the central business district. not clear if that starts tomorrow or another date. tomorrow also marks the start of a new financial quarter. as we look back on the one just passed, it has been quite a ride for asian markets. we will find out what has been happening in southeast asia. but first, i will check the broader picture in asia with john dawson. let's start with you first. >> the rest has to cover. --china, this is the year second quarter as well. technical trading going on. it is down 2.2%. clearly their concerns about whether it will be a hard or soft landing. they talked about seven percent

growth. also wage pressure. we need to see an increase in real wage income, that is a concern. robert c -- property prices are falling. there is a concern about that. credit squeeze, credit bubble issues. the second half of this year concerns facing china. ..5% weakness japan is quite different. abenomics at play. the prime minister talking about he promises to stick with this plan. a 30 point plank coming out last week. we want to see-- is evidence of it working out. a nymexd've thought of would help the stock market, but it is not.

see $1.2 trillion in action. the nikkei is a worst-performing developed market so far this year. last year it was a best performer and this year it is the opposite. compared to the yuan which is the weakest currency. the yen is 4% stronger. you would've thought that it butd weaken the yen, overall, 101.29 is the price of the yen. and aand japan in one half minutes. >> we think about asia and the outlook, we can't dismiss india. when you take a look at how india has performed, especially modi's election, how does is play out as we look at the rest of the year?

>> india has been such a star. you won't find any other benchmark in the region with double-digit gains. this is all thanks to prime minister modi. business leaders like him for what he has done in the state of gujarat. investments he helped to bring in helped quadruple income. but, there is a but. immediate concern is something beyond his control, the monsoon, a 10% drop. he added 1% going to inflation which is already surging. according to hsbc, a full-blown drought could shave as much as half a percentage point off economic growth. in the short term, all modi can do is hope for rain. would you suggest a rain dance?

>> a lot of people hoping for that, especially as india looks to achieve that growth as modi has said there as well. collections also play an important part in indonesia, as -- as you're been taking a look at southeast asia. >> you're right, when presidential front-runner said he was running for the top job, stocks got a huge boost, but all the gains are now gone. downhe quarter, the gti is . another man has narrowed the gap. the next president will be nationalist, in favor of policies safeguarding national interests. member the dbs bid that fell through. before i go, let me quickly touch on thailand. never mind martial law, junta government, some

investors see a possible resolution to the political divine which saw six months of antigovernment protests. it is holding up pretty well. >> all right, thanks for that wrapup out of singapore. >> let's look at the second half of the year. risks inthe biggest china for that. market is a key risk for chinese growth. among this year, but also in the coming years. we see that the central government does not want to do or much, either to support to cool the property market. on the local level, there are a lot more local governments announcing home purchases. the difficult part is with house prices continuing to fall, it is

hard to force people to buy into . falling market are >> the reserve bank may be forced into taking further action. >> was coming next through the summer and early are -- and early summer is a degradation of the economy through labor market , and a fall in inflation in the next few quarters. this would probably lead australia or rba to cut again or mode in a more lenient the next few months. >> moving across the pacific to dbs bank says brace shift in wall street. >> it is simply a restatement of the price to earnings ratio.

it is a cyclical high in the level of complacency in the market. we're looking at the possibility of a significant correction in the second half of the year. as long as we are still faced with the power of zero interest rates, i doubt of the equities market will terminate. >> that is the word from asia on the second half of the year. >> some other stories making headlines. asia's biggest internet company has agreed to fork out almost three quarters of a billion dollars for a stake in the website.t-like the company has racked up at inst 280 -- $258 million them and a this quarter -- in m &a this quarter.

the french bank has negotiated a six-month delay to prepare for a ban on handling certain dollar transaction. the company is to plead guilty to the criminal charges today. nationays no single should dominate international affairs. it is an approach doomed to fail and china would never seek such a role, no matter how powerful it becomes. beijing is seeking to end decades of u.s. military and economic dominance in the asian region. >> a centenary celebration. will the road ahead be a bumpy one? we will be looking in the future with goldman sachs to see what is in store for the asia-pacific in annex quarter.

-- in the next quarter. ♪

>> that is right. she's asia-pacific strategist from goldman sachs joins us. what do you mean by that? >> we have had a good second quarter. it looks as though the region will be up 5% in the second quarter. >> we're talking equities here, right? >> we're looking for 2% returns. is one ofonstruct improving global growth. -- therethat should are a number of risks on the horizon. you have been articulating some of those in your previous segment. higher potential u.s. bond yields. we have disturbances in the middle east. we have catalysts out there in terms of elections. >> we have the political issue in the china sea. a lot is going wrong. -- bond deal situation

has notituation happened. what makes you think it will happen in the second half? >> we have come through a very first-quarter in the united states. it looks like it came out -2.9%. betweenprint somewhere 3.5% and 3.9% for the quarter. though the growth retrained some traction -- retain some traction, or will be more confidence about growth and yields can move up. >> everybody is taking a look at equity returns we have seen this year. andt of people waiting wondering where we will see the contraction or the correction. &p has not seen a correction.

vixx isis fine -- the fine. we'v >> there is a lot of debate right now about what signals one should extract from the low volatility levels. .onfidence is high there are reasons to think that volatility should be structured lower than in the past. central banks are on the floating side as far as being accommodative. to squelch down volatility. it looks as though markets are one or two headlines away from some sort of hold back. back.l one of the infant -- one of the intimidation strategies we have is to go procyclical and

positive in the market. we think that because volatilities are so low in the equity markets, the best way to put in an oil hedge is in the equity markets. one of the known unknowns is oil prices. >> this is a long discussion unto itself. >> what is an unknown known? >> is one of those categories. don't know. >> to compress a long and complicated discussion which is a province of people with , ourer insight than i do composite view is that events in iraq in particular are very unlikely to stabilize in the near-term. >> there will be continuing uncertainty there.

there's clearly a source of significant topicality. the implication from that uncertainty, however it pans out , is uncertainty in the energy markets. certainly ahat is risk one wants to hedge against. if you look at that in the oil market, futures and options pricing, that is fairly expensive to put on upset hedges against oil prices. to put on downside protection against some of the more oil sensitive equity markets, and career would be one of these, it is very cheap to do so. pricing is something like 70 basis points. view, which is growth gets better, but have a hedge on the downside for these risks. >> you should always do that, but anyway.

to stick around with us. we have a group discussion coming up around 20 minutes from now. >> we would take a look at how one american businessman has big .ands for the city ♪ -- hasns for the cit big plans for the city. ♪

of thes check out some

stories making headlines. iraq's ministry of defense claims government troops are rit. the iraqiik military resting back in troll back control. the search continues for three is really teenagers who were abducted. they hitched home on the 12th of june. the disappearances prompted the army to launch its broadest in recent history. the area remains under hamas control. the building collapsed in southern india which killed at least 26 people. 90 contract workers are believed to have been in the basement of the structure when it came down. his collapses are common in regulationsrelaxed

allow people to cut corners. >> american businessman steve case has kicked off a start up to her in detroit. he hopes he can inspire entrepreneurs in the bankrupt city to look to the future and use their ideas to kickstart the economy. went takes betty liu a look. >> he walks, he runs. he even rides a bike. one time aol founder steve case is following every possible avenue to spread the word about his latest mission. -- nothing can becoming like a silicon valley. >> we just need to start rebuilding this population. the only way to do that is to innovate and the best way to innovate is to back great startups.

by many metrics, detroit has the most challenges. abandoned structures, population decline, aliens in debt. that is the point he wants to make on his tour. talent is starting to come back and investors are starting to pay attention. michigan's governor came out to welcome chase and cheer him on. -- to welcome case and cheer him on. he has bought over a billion dollars of property in downtown detroit. he is convinced its value is on the rise. can you look past the blight, the burned-out buildings?

detroit, yougle will see practically almost all the pictures that come up are of abandoned buildings. >> we have to make sure that algorithm changes. when you see a picture like that you're looking at one structure. you're not looking around at the whole city. >> as for case, it was hard to keep up with him as he bounced from business-to-business. >> it is great to meet you guys. >> at the end of the day, he did the he does best, evaluate power of businesses competing for investment. his $100,000 prize went to stick. the company actually moved from severance is go to detroit two years ago.

they had a great presentation and a great management team. they actually started and moved to detroit, it is the opposite of what normally happens. it is been a great day. the momentum of hope and possibility in detroit. >> looking forward to the afternoons business in tokyo. we have the latest on japan's reopening coming up after the break. ignoring the industrial production rebound in may. ♪

and qantasompetition seeing one of their biggest drops of the year. japanese stocks about to open for the afternoon session. let's get all the latest market action right now. >> a very good way to and the quarter. china stocks on the up.

one of the concerns about china is not how big the lending will be. concerns.king real wage increases. you see that translate to a higher yuan. you have new zealand than more on australia in the next broadcast.

gainers include the steel companies. >> qantas, one of the worst performers in australia today, the shares taking a tumble. david, what are we actually seen? seeing?lly this isn't a great birthday present. the shares are bringing in their worst performance. the main thing that it is is not just the numbers themselves but the yield forecast for the year. it is the end of the qantas

financial year. pays to fly one kilometer on your plane. first thing, it will be lower this year than last year. -- was lower lead than the year before that. the lowest year for group yields since 1999. since 1999, they have had 15 years of rising costs. at the same time, yields are not going up and that makes a big problem for profitability. >> having a fretful time of the tried to turn things around. why? >> the reason they get today and they have frequently in the past is one of -- one that if her street economic student would understand. it is supply and demand.

mystically, virgin australia -- domestically, virgin australia has been added more. thereare global factors is nothing they can do about. globally, yields as a whole were -- in calendar 2013 and will be downing calendar 2014. the problem for qantas's they are not managing. for reversingt it? >> indeed. they have been trying to reverse this for some time. there is a couple of possible benefits in the horizon. but they are difficult once.

difficult ones. qantas is not going to adding more capacity in the next three months until september. that should allow prices to increase domestically assuming that version does not increase its own capacity and pull that away. internationally is a deeper problem. qantas has been flying its international routes in a culture with emirates airline. the idea was to stop the losses. at one point, qantas was losing $450 million a year. that, bynal plan was 2015, you would see a proper international unit. said that isjoyce not what happened. it is not a great sign for how

quickly they will be able to turn that around. qantas adding a bit of a drag when it comes to the market in sydney. indexesten, that dictated to where the miners are going to. iron ore stocks, the iron ore prices below $90 for the first time since 2012. --r same for skew metals that is really dragging down the benchmarks. australian banks off by half a .ercent there i down. iron ore prices

>> let's look at some of the top corporate stories. it could be australia's biggest ipo in my than three years. health scope hopes to raise as much as two point $4 billion, selling more than a billion shares. the chief finance officer says he does not expect a turnaround anytime soon. it will take time for prices to gain. clearing the skies with drones. china is using the unmanned craft in its fight against pollution. catcheas to catch them -- companies not following government environmental standards. are gathered shows many involved in illegal practices. >> tencent has up to the anti-.

to fork out three quarters of a billion dollars for 58.com. what is going on here? >> yes, tencent looking to get bigger. it wants to go into online classifieds. it can use it by form a 400 we chat users to access merchants and services. also accessan tencent users. >> what is driving acquisitions? >> tencent and alibaba are fighting for supremacy in e-commerce. -- they arethey are

looking more and more similar. users are slowly moving to using smartphones. they are try to get all these users into using apps. >> so they are just looking to use the apps or the smartphone as a portal to 1.3 billion people. ofthe latest installment transformers, general motors is hoping for some alien robot help. figures prominently in the latest installment of the transformers franchise. hereovie's debut occurred more than two weeks ago.

it is a chance for chevrolet to telling a story. now with battling robots that convert into cars and trucks, for example, gm sees this -- sherry sees this as rash chevrolet sees this as a marketing tool. transformers could deliver a badly needed boost for chevy. 8.6% last year. but look at the famous bumblebee, made famous by the first transformers film back in 2007. that therey say bought in china and heller and they prefer the color yellow. in addition to the sauna, they will be adding an suv concept

called the track. it's all part of a new sales strategy. million units last year. it is counting on transformers to lift sales further. chevy is the focus and they hope they can go above the 11% sales figure overall in china. the automotive world, maserati is turning a hundred. the next four years my be the most challenging yet. >> a century ago, a family of italian brothers set out to build cars that were both beautiful and fast.

cars designed for motor racing as well as the road. a hundred years later, on sororities plans are even more ambitious -- maserati's plans are even more ambitious. saleslan to raise fivefold. maserati doubled sales last year and is set to do the same again. good news for their owners, the fiat group, when he to counter poor sales out of europe. growing is eyeing the asian and u.s. markets. ourhe united states is biggest market and i expect the united states to account at the end of the year or a word of our global sales during china and the asia-pacific region are the second strongest center of gravity for our business.

a couple of years, we sold 800 cars in these markets in a year. right now, we are selling this amount of cars in a month. winning american and asian hearts won't be easy or cheap. this year, the company pay top dollar for an advert during the super bowl. but the ceo is confident. >> we are competing with outstanding products and its element is an important value in our product in the global luxury market. the italians see this as a perfect opportunity to seduce new markets.

edge folksh "asia edge" now.- "asia

let's talk about china. when the premier says they will hit 7.5% growth this year, they will hit 7.5% growth this year, are they not? >> more or less. they have already been signaling there is some plug -- some folks ability around the number. we think the second quarter is basically 6.9 and the third quarter maybe poster two 8%. that is basically why we are positive. are we going to see basically a return to all of the policies we have seen coming out of china in the past year? >> i think you are right. it isn't to the old-style stimulus come open the credit

spigots and construction. it is targeted and reform-oriented. if there is a certain degree of reform-oriented stimulus, like investment in railroads, it is hard to say it is not a good thing to do. they will try to accelerate the timing of that. so it can have a fiscal boost from it. >> we have been talking about tencent today. m&a deals on the increase, especially in asia. >> this is something we are seeing on a global basis. this is a mimetic of the fact that -- is emblematic of the fact that corporate is having risk appetite.

offensive ones are for equipment, capital expenditure. the defense of are paying more dividend and buyback stock. in the united states, the folks have been on defensive. now we see more investment cap x. there has been a general compression of risk. volatility is low and credit spreads have declined. concern.ies the we are only ahat couple of headlines away from a spike in volatility. back to your initial conversation on the stimulus efforts, if you take the

optimistic view, it would seem china may be getting it right this time. the targeted stimulus it is off during is getting smart about cities that would sit empty. >> we think it makes sense. this is why we think china equities will be in a broad range. there is still a lot of accumulated problems to surmount. credith discussed concerns. there may be some bad news or disconcerting news with regards to a trust or two. our bottom line on this is that there's about a two-year property downcycle that looms in order to absorb the excess inventory. short-term tactically, we are oz and a because we think there is an increase in momentum in the

third quarter and we think the market is il at the lower end of its trading range. you touched on this a little bit. in this kind of current environment, where the volatility index is pretty much a stable right now, there is always a lot a chance for you political or outside events to come up. tomorrow is a perfect example of it. here in hong kong, july 1, there is supposed to be a huge demonstration dust -- >> this is is from the hong kong economic journal. this was an ad put in the paper by the four big accounting firms. essentially say that they oppose the occupy central movement. they say it is that for business

and will affect hong kong's competitiveness. and they say what the white paper is doing is eroding the territory's autonomous nature, etc., etc. >> this is the second piece to this story. this is an ad that was put in or anwspaper by employees employee of these big four 'irms that says your boss statement does not represent our views. >> at the end of the day, it is about people vying for democracy. and we have big business and firms wondering about how it is going to impact their business. make hong kong less or

more of a is this investment environment? >> i think you are already underweight irrespective of what is going on. >> we have held for some time an underweight view on hong kong. the reason for that is straightforward, which is that the two main forces that had propelled a very strong improvement in hong kong have been number one china growth and number two u.s. rates. those headmans still remain in force. anything -- those headwinds still remain in force. thank you so much for joining us today. , do you feelt boxed in network? [laughter] love-hateat the

relationship of the cube.

>> the office cubicle was first designed to create a better work face by providing some privacy without the constraints of full-length walls. but how did it become the symbol of every we hate about work? cubicle is one of the most ironic creations in the american office. the inventor wanted to save people from the anonymous spaces that they were confined to. i think everyone knows the images of what offices were like in the early 20th century. people who have seen the show "mad men" know the steno pool. for the movie "the apartment,"

desk is a roomful of surrounded by core doors and offices. said the office today is a wasteland. the solution he came up with was called the action office. space.-wall the idea was to give workers a space of their own, something they could personalize. you could can stuff to the walls. you can shape it the we needed. it was meant to be autonomous. was debuted, it was a success. it started to become this tool for companies to cram in as many people as they could into a little space as possible. the cubicle occupies a strange place in contemporary culture. it is definitely one of the most

reviled objects in the work base. there -- though work place. we have sort of a problem here. >> the fact that people have come to hate to the cubicle so much lead to designs to get rid of pupils -- of cubicles and this is seen as a kind of liberation. openoffice plans have a lot to offer in the sense that they do offer a direction. studies -- offer interaction. studies show that people prefer door spaces.ose to so it is another twist in the history of the office. else, you and everyone the world cup. >> the dutch beating mexico in the quarterfinals. the july 5h will go

quarterfinals. >>

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