said to be considering a nationwide property levy and it could be introduced as early as next year. we are going to take a look at all the implications for the sector. stock market rally leaving state-owned companies behind. we will assess the lack of investor enthusiasm. ?nd to buy or to rent we are talking about affordable luxury here. we are going to meet the hong kong company offering that in china. all that and more in this monday edition of "asia edge." >> we just have a problem with david's mic there. malaysia airlines, we are going to have a look at that while we sort things out for you. part of a massive restructuring plan. tell us what we know so far.

>> well, like you said, malaysia airlines, job cuts, reviewing its plane orders. it may cut as many as 4000 workers. it currently has 20,000 employees. it is all part of its restructuring plan. malaysia airlines is also reviewing its unprofitable routes. it is trying desperately to return to profit. what we know from people near the matter is that a major shareholder will discuss some of these proposals tomorrow. ,he restructuring measures offering to take the company private, efforts to revive malaysia airlines, especially after the back-to-back air disasters. mh370 and mh17. to be sure, the carrier was struggling with financial difficulties even before that. three years of losses.

more than 4 billion ringgit lost during that period. shares about 18% lower year to date. it will report second-quarter numbers later this week. nothing to be excited about. >> tell me something here. this is going to be a massive restructuring plan. it is likely to be very far-reaching. they are looking for a new leader to do it. are we going to name names? >> speculation that they are looking for a new ceo. going to bere considered. one is the former coo of malaysia airlines, now heading the government economic transportation program. he was the coo of malaysia airlines for four years. he has denied the rumors. of other person is the coo

the state-controlled telecoms company. whoever is chosen has an uphill task. needless to say, it needs a complete overhaul. its reputation is currently at stake. chinese travelers, for instance, boycotting malaysia airlines to a large extent. as is the case with other travelers concerned about safety. ceooes look like the next has a lot of work to do. >> thank you for that. ,ow let's get you back to david who has the markets out of the gate this week. you hear me? yes, i am back. hello? hello? as i mentioned earlier, equity markets have been mixed. we are seeing more declines than gains at this point. all of the action is in the fx market. the key take away, you look at

the dollar index at its highest level in 12 months. it is about jobs. on one hand, you have the fed. to the lesser extent, you have the boe. lot of these majors, the dollar index, as i mentioned , the highest since september of last year. down a little bit from the start of trade. 82.53 from 82.33 on friday. about .2% last night. this is the weakest level since january of this year. taking a look at the euro, we are going to see more firepower. we dipped below that at some point, 1.3119.

inflation expectations down. the bond markets have actually moved -- yields have come down, actually. what do we have as far as the pound-sterling? 59 is where we are. it has creeped up over the past few minutes. not ason quickening, but fast as economists were expecting. there you go. seven straight weeks of declines for pound-sterling. very quickly, let me end with this. crude prices, we finally have live prices. that is the story. we have a trading halt this morning for about four hours. , a whole listures of commodity futures as well.

let's get that up again. traded at about 10:00 a.m., about an hour ago. not a lot happening in equities. it is more on the forex markets this morning. >> thank you for that, david. hyundai management and unions meet today to discuss action over pay demands that have seen growing losses. take a look at how their long believe,f strikes -- i out of the 26 years, we are now in the 23rd year of strike action. >> i think so. korea is known for automotive, industrial labor action. this is really no different than a lot of the ones in the past. it is about wages. term, it is really not going to affect earnings. over the long term, if there is more action, we may see

something like last year, where the labor struck the company for three weeks and it impacted production by one billion u.s. dollars. >> if they are going to calculate what the labor unions want to the cost of production, does it balance out? >> when you look at the competitiveness of south korean auto production, it becomes less and less competitive. gm is already talking about pulling out of korea because you cost of labor and it is two times more than the rest of asia. it is substantially higher. >> do we know -- i think the cost is ever-looming. a lot of people already pricing that in. thank you for joining us. check on some of the other stories making headlines. ridemay be facing a bumpy

in india due to a tightening of credit card rules. says let theank taxi system have a simpler payment system than its rivals. if it were to comply, uber would have to change its app. working to restore the playstation network after users were denied service. it is an attempt to overload the system with artificially-high traffic. users can log onto the system after what appears to have been a hack attack. sony says no personal information was compromised. exchange seeing more than 90 participants accounting for 80% of market turnover. up starts formally and is scheduled to launch in october. >> china is said to be

considering a nationwide property tax that could be introduced as early as next year. this is interesting. >> it certainly is. another reason to bring down the concerning, very high price of property. the interest and reserve requirement ratio rates for what has been escalating price property. areas of beijing and other areas in china. member coming out with this report. trials could begin in shanghai next year and they will target land. what is the land that goes around your house? they are going to tax that as well.

also going to combine several existing taxes. taxes on arable farming land and housing transactions. every deal will be looked at again. cities.land, houses, so far, it is only a story but an interesting one. >> implement in a nationwide property tax -- and lamenting -- plementing a nationwide property tax takes away from the cooling measures of the government. areas.e are different cap isse, the wealth very much different. economies slowing in parts again. so it is a very different spectrum.

you cannot really apply it to china. the pockets do require a little bit of cooling. >> thank you for that. now let's take a look back at the markets right now. david is taking a look at what is happening so far here in hong kong. david? >> on the chinese mainland, shares are down. composite, take a look at financials there. because of this property tax that we just talked about. a good number of companies are falling. 55 out of the 70. now let's take a look at where the benchmarks are at this point. interesting note out of ubs this morning. they are saying that best case scenario, you look at the msci

china index, the best case scenario is we gain 5%-10% in the second half. you look at the preliminary hsbc , just barely above water. that is the wake-up call, they say. recover at theo 25,000 level. we were below that slightly this morning. the first half, $58 million, $70 million last year. a lot of challenges for the company backed by warren buffett. another carmaker has had its share of challenges this year. the stock is up 4%. a slight drop in earnings, yes. but citibank coming out and saying buy. price target is $37 a share.

we are at $32 right now. recalls, about 15,000 vehicles. , a you look at sinopec fairly big move in what is a fairly heavily-weighted stock. 7.86 a share is where we are trading right now for sinopec. , man's best later friend and possibly employee of the year. we report on the economic value of working dogs. next, making a good connection. kong exchange tests going well. this is "asia edge." ♪

.> turning to the markets now china has been on a bit of a rally since last month. >> the way things are heading -- link,s hong kong-shanghai what are you offering for investors? -- asm ages perspective lookingspective, we are at the long-term. right now, we are seeing economic growth. >> it is strange how the stock market did not do anything when we had the good times. great, is not looking so we get this rally. i want to look at this hong kong-shanghai link. how much of a game changer is it?

>> in terms of the quota, compared to the asian market as a whole, we do see a long-term change in investor profile. china, asia turnover is driven by -- might seeeralized way a change in the investor profile. you could regain some of the investors' interests. >> are you going to see the differential between asia's strength itself? >> particularly, yes. those things are forgotten by the domestic retailers. there is more interest by the foreigners.

course, we need 100% parity for domestic demand. we might see some potential in the area. >> let me get your opinion on what happens next when it comes to trading in china? seen shanghai markets since december -- does it really have legs? market, are people looking to speculate elsewhere? how much and on where liquidity comes from. investors are getting more excited about the domestic asian market. >> i want to get back to hong kong-shanghai connect. a lot of people are worried that institutional investors are

going to telegraph exactly what they are going to buy and trigger a lot of front running, which is illegal. are there any concerns you have about that? about the aspects of the practicalities of this coming through? >> what do you mean? >> getting ahead of orders? system,nk the financial right now, there are some technical problems that we cancel right now. we still need technical stuff to get solved. i do not see it as a big concern. early.have got to get up 13th itit is the launches?

people will be very busy trying to get the systems ready. is that a challenge for you as well? >> we have been waiting for the capital gang arrangement. gain arrangement. hopefully we can have a big plus to the old scheme. >> thank you very much. toll inxt, the death japan continues to rise. >> we will have the latest after the short break. ♪

on some of the other stories making headlines around the world. china has executed eight people for terrorism. the suspects included three man who said -- who authorities say were behind the deadly attack in tiananmen square last year. others were accused of bomb making and attacking police stations. the number of people killed by last week's landslides have risen to 50 with 38 people still unaccounted for. the hillside collapsed after days of torrential rain.

217 millimeters falling in the area in just three hours. more is forecast for today. prime minister shinzo abe is overseeing the operation. creating a navigation system to ps is beingca's g threatened by satellites being placed in the wrong orbit. they ended up in the wrong place. have thems to 30-satellite network operating by 2020. >> as we know, economics likes to assign value to everything it can. farmers might be pleased to know that an australian study has a sound -- has assigned value to working dogs. >> working dogs are a fixture of australian farm life.

it is a skill farmers find especially valuable in the weather and the cold. >> you just bring the dogs out. >> in a study, they have put a price on this work. typically $7,500 per farm dog. the value calculated at just over $37,000. >> it does save you a lot of wrangling. i work all day and they put a smile on your face. >> he is worth more than anything to us. he saves us money. we do not employ anyone for anything. >> the research team will now collect and analyze dna to find out what characteristics the best dogs share.

aeerfulness, loyalty, and willingness to work tirelessly to boot. >> let's stick in australia. right now, a live look. less cute than those puppies, but it is the sydney opera house and we are seeing some pressure on australian equities this morning. , we sawseoul fluctuations between gains and losses at the start of the session. right now, it is just fractionally higher. in hong kong, we are seeing a mix market across the region. hong kong is down .3%. we are looking forward to the afternoon business in tokyo. we will get the latest on japan reopening after the break. ♪

holeat was said at jackson , the dollar surging against its peers. doing business with zimbabwe. their leader heads to china. first, let's get the markets from david. here he is. >> first, jakarta, malaysia, national heroes day.

in thailand, we are watching to stocks. -- 2 stocks. exotic foods is an ipo. the other one is asia fiber. some 30%. they are writing off accumulated losses. there you go. a company and you factoring things like yarn, nylon, that kind of thing. shifting gears slightly to south korea. a big decline, some very heavy-weighted stocks. shares we seeing samsung at a low? sayingt this morning samsung could actually fall 14%. bhp, blue scope steel, positive

impacts but reporting a net loss. plus, you do not have a final dividend. last i checked, it was $90 per metric ton. as far as iron ore prices, a big drop. >> our next guest does run australia's biggest steelmaker. price.all in its share let's get more from the chief executive, paul o'malley. thank you for joining us. 13% fall. one, but how can you reassure investors here? >> we have delivered a $500 million turnaround in the last two years. i think we delivered the best

result we have delivered in nearly five years. having to talk three new acquisitions over the last 12 months. onths, itnext 12-24 m will start to hit the bottom line. i'm very pleased with where the company is at, with our growth projects. >> where are you seeing the prospects and looking ahead, where are you more positive? have very good exposure to building construction markets across asia, australia, and new zealand. we are seeing growth in all of those markets. gooddity grades, not such growth. imo it about our u.s. business exposure, but also australia and new zealand. both have plenty of upside. >> you told me in february that

the china building's business is a bit of a lead indicator for you. if it is doing well, we can expect better times ahead for you, right? twohere are probably businesses that are not performing where we would like to. that is indonesia, where we have some work to do with the china buildings business. we are undertaking a restructure of the china buildings business. over the next 12 months, we think we will turn that performance around. , the productide business in china has had another outstanding year. the other business that causes concern a bit is thailand. our biggest business in asia. foreign direct investment has slid down on the back of the political instability. as soon as the political situation in thailand has stabilized, i think that economy wouldgain pick up, which

say that our whole asian footprint would be firing again. we have a very good business there and it has performed very well historically. you said that it is firing. >> thailand delivered another very good year, but we have not delivered the growth in thailand we would have liked because of the political instability. but that will come back. >> let's talk about your company's outlook in the u.s. we are seeing a pickup in growth they're -- there. how are you calling that one? >> what i do is contrast australia with the united states. australia has historically had competitive energy prices. our labor flexibility is a bit constrained. you jump to the u.s., energy prices are at low levels. there is plenty of labor around. we are seeing the buildings, --

big buildings, industrial buildings that would have been built in china three years ago, now being built in the u.s. because of the competitiveness and the market opportunity. we are seeing a shifting of demand from china to the u.s. the economic fundamentals in the u.s. are good. i am really bullish on the u.s. market. >> what about steel prices right now? whatare you predicting and about the pricing power that you have? where do you have the most pricing power? tough in steel to have pricing power because there is so much competition. material costs are coming off, as we have all seen. steel prices are coming off much more slowly. margins that are

actually expanding. there are three reasons for that. one is the world can now accept record chinese exports and it does not affect price. the second one is that china produces profits and environmental performance overgrowth. they are holding their margins up. steel companies have benefited from owning their own raw materials. now they have to get more margin out of steel. i would not say any company has pricing power. what i would say is that the macro effects of general steel margins are better than they have been in years. >> can we expect a dividend next year? >> for the first time in a long specificallyrd has referenced a dividend in their release. half the board indicated that a solid turnaround revives a platform for a return to a future dividend.

i would say that it is at the top of their agenda. if we continue to grow our cash flows as we have done, i would think the board would make that decision. we are getting closer to that decision then we have been in a long time. >> thank you very much for joining us. >> stocks are rallying in vietnam. the ipo companies have not followed. what is going on here? why are we not seeing that flow through? >> that is a good question. it looks like investors are really ignoring the ipo's of state companies. for this year, state companies have held 33 ipo's and have raised only about $105 million. that is less than half of the amount that has been targeted. investors are concerned that the stocks are not liquid enough and

that they are too small for investors to have influence over how the company is run. there is usually a very long lag between when the company ipo's and when things get interesting for investors. you compare that with the overall demand for vietnamese stocks, for the most part, we have seen the benchmark index up 24% this year, the best performer in the asia-pacific. people are saying, give me some of that. but they are definitely holding off when it comes to state companies. >> the interest is there. last week, we saw investors .umping in on a vietnam etf ipo a lot of interest in vietnamese stocks overall. >> that is right. week raised about $9.4 billion. that is a small amount. but it is more than double what they had targeted coming in, the

country's first domestic etf. that is very important. that etf will start trading next month. thatosely tracks the index includes the 30 largest companies in vietnam. you have a situation where most of the sought-after companies are maxed out when it comes to foreign investment. it is smaller for banks. of the most popular companies, foreign investors cannot get into that. the etf is a way for them to get exposure. it is proof that people do want the imam -- vietnam exposure. >> thanks. >> 10:40 at the moment. let's get you these images coming through. thailand expected to approve the appointment of the prime

minister. these are the pictures coming through live at the moment out of bangkok. the approval has widely been predicted to go through without a hitch. what's -- zimbabwe's president is arriving in beijing today. our political editor is with us now. most of the world shuns him. xi jinpeng is welcoming him in beijing. china has traditionally had a politics approach to foreign policy. i do not think they are concerned with his human rights record. mugabe needs friends these days. his economy is in shambles. a lot of fears that it is

slipping back to the bad, old days of 2008. is seekingts that he a $4 billion aid package. going backnisters and forth. something certainly in the works. chinese that out of this? >> they continue to hold mugabe up as a freedom fighter. they are very close. himself has some support in southern africa. he was just elected to the south african council. the chinese have been very effectively entering into africa . it is just another investment opportunity for them. is in shambles, may be a better opportunity for them to come in and save the day. >> thanks for that. china's discussing

latest warnings to the u.s. the rest of the day's stories are coming up too after this short break. ♪

>> you are back with "asia edge ." -- we arening andrew not joining andrew, i am sorry. it is obviously angie. we are joining the head of execution and sales as well. let's start with wyoming and events in jackson hole. >> i think they have been quite encouraging. so cleare not quite cut as maybe people thought before hand. draghi is still emphasizing he is prepared to do whatever it takes. i thought janet yellen gave a very confident speech. quite technical, but she does show a move to a more neutral

position, which i think the markets will like. and the u.s. economy is changing. previous benchmarks that people have used do not necessarily hold true. a good dose of reality. >> when it comes to europe, what is draghi waiting for? >> he is in a dilemma. unlike the fed, he is not the sole report. if he eases his policy to quickly, the other countries do not have to follow suit. he needs to get some of the slower states to really commit to fall in line with the regulations before he is prepared to maybe go all out. >> he has to really convince the bundesbank. >> i do not think he is worried about convincing the bundesbank. i think he is worried about

people like france and italy not necessarily maintaining the budget limits. quite happy to go out and spend. that is his dilemma. he has the bears on one side and the bulls on the other and he is caught in the middle. , he has already expressed sentiment that austerity measures should be liberalized. >> he said he would do whatever it takes. on one side, you have this tight steering and on the other side, there is this tag of cash. >> you look at the debt yields, record low levels. i want to talk about currency markets. where do we go from here? how un-sterling getting pounded, basically. und-sterling getting

pounded, basically. >> that is going well because the economy is doing well. inflation data out for japan on friday. we will be watching that very carefully. over the weekend, there was a secondying that the raise in the sales tax is looking less and less -- a lot of people are questioning abenomics and when -- and how effective it is going to be. there was talk of using foreigners to address the gap in nymex,r rather than of a women -- rather than abenomics, women in the population, that whole framework. if that happens, we are seeing a breakdown of what is happening japan. the currency will probably take the brunt of the pressure. >> what was the biggest thing that led to declines this

morning? end ofre coming to the the month and people are looking at the next two quarters and to the end of the year. ofot of pm's are -- a lot pm's are going around the region at the moment. it is where it is going to be allocated. pm's are looking at companies and saying what they like. then they have to put their requests in to the investment board to make the decisions. it is a bit of a tie up. in europe, people are less confident. certainly not expecting huge allocations. then it comes down to money in asia, where you can find good companies and growth coming through. or do you put it in to the u.s., where they are doing share buybacks? it is the difference between going for growth and financial -- >> are you biased? >> i am slightly biased because i am here in asia. we are just coming through

results season here in hong kong. we have seen some good results and some poor results. i think companies have to stand by their results and that is what people should be looking at. >> who do you like in terms of earnings? the companies that have exposure to the u.s. or have that growth exposure to china? >> a little bit of both, really. we saw good results from people like tektronix. most of their exports are driving the market. the u.s. housing market seems to be recovering. there is good potential. we have good results from sinopec. better than people were expecting. the valuation is still quite expensive. they are looking at changing. going forward, we could get more industry personnel running these company's. better-run mean companies. again, there is a lot of potential in asia. if we look around the region, it

is a similar sort of thing. >> i want to get your take very quickly. a lot of interest in vietnam the state-runot ones. >> they have had a bad reputation in the past. >>do you think it is fair? you look at some of the instances we have had where companies have defaulted and i think it is fair. sometimes the appointments to run these companies are bureaucratic and not industry appointments, which is always problematic. china has hadlem and is looking to address. othernly, some of the parts of the economy, yes, there are more companies there. >> what worries you in the markets right now? what scares you? the yield curve is something that really -- is the facthe worry that people are just nervous.

people are still paying down debt. we are not seeing money allocated because people are worried about interest rates rising in the long-term. the u.s. economy is not coming out from its retail-led bounceback, which we usually see. they are worrying about interest rates rising. so that is the big worry. what we are seeing in europe, people worried about stagflation , where inflation does not rise enough. ,s janet yellen pointed out there is a risk of raising rates too early and a risk of raising rates too late. indeed. you very much andrew sullivan. >> good to see you. thanks again. labelsup next, designer at affordable prices. that sounds good. >> the hong kong startup making luxury a tad more affordable. >> always good for those

fashionistas on a budget. "asia edge" has the special report after this short break. ♪

>> this is "asia edge." if you do not want to pay up and still dazzle on the big night -- >> you still can. a new company driving the passion for fashion. john dawson met the cofounders. >> a celebrity model, an investment banker, and a mining analyst. do businesstrio to for the fashion-conscious. yet opposites attract. luxtnt.com is designed on a u.s. model. instead of spending the big the latestcan hire and the best brands at a fraction of the price.

their focus is china. while luxury sales are falling, the passion for fashion is not. it is all down to social media. we can make the most of our marketing. i get in touch with my friends and they are out and about and they go and hashtag things and people are aware. we bring a lot of awareness through social media. media is a very large part -- >> and that is great. >> so you have been sourcing in paris. >> i was there because i wanted to bring on other designers. a lot of people are not attracted by these normal brand names. there are a lot of these designers in europe that can use

us as well. bag, how much would it cost to buy/ -- to buy? about 20,000. >> raising money in this environment is hard. product --ave a good >> there is a lot of money floating around. it is an interesting idea. too worried about funding. we are more worried about growing the product. >> we are in china right now. >> how do you make money? goods butnt luxury they do not have money.

that is how we get into the market. >> a night on the town or at the races. ntxt

>> welcome to the smart medicine show. -- or have pain or no one know someone who has pain. arthritis,er from osteoarthritis,