in the attacks, critics say it shows north korea's growing threat. plus, this 1960's building is making headlines in hong kong by defying the wrecking ball. we meet a developer with deciding the unfashionable ideas. 2014 has been a good year for some. we will go through the billionaires list on this monday addition -- edition of asia edge. >> asian stocks are rising today for a third day as crude futures rebound. rising 1.5% led by energy and mining shares. after the finance ministry released a report on economic policy direction for next year. the shanghai composite rising 2%.

at one point, the highest since april 2010. in japan, oil refiners rising because a possible tie up between the two biggest companies. stay with us. i will bring you more on that later. sony is getting pressure from hollywood and the white house due to a movie and a hack attack. whichseen as a trigger washington blames on north korea. but looks on how the movie can still be released -- what are their options? >> streaming or video-on-demand. that is after four of the largest cinema chains decided to cancel the release of the film on christmas day. the company still needs a reader -- redistribution partner. mazon havegle and a declined to offer now.

the company is not given in. the sony ceo says he has no regrets and making this movie. he says it is a funny comedy about an assassinating plot against kim jong-un and it served as a political satire. north korea was not laughing at that at all. they say these allegations are groundless and propose a joint investigation and threatening harsh action if the u.s. does not take that offer. say -- 1000 times what is already be inflicted. --king of the white house barack obama has been in the mix as well talking about this. told sony this was a mistake what you did in terms of bowing down to these hackers. he spoke to cnn over the weekend sony approached

him before they made that decision. >> i don't think it was an act of war. i think it was an act of cyber vandalism that was very expensive. we take it very seriously. we will respond proportionally. the studio head so they reached out to the white house about a week before they made the decision. overall, the talk was not about whether to withhold the movie but the threat of the sony hacks. >> north korea has this special unit apparently. the question is what can and promised -- an impoverished country have such a reach? >> they recruited about 3000 hackers that were essentially kids that just graduated from school. they said this was a very cost-effective way. >> low cost, high impact. >> you don't have to build

offensive weapons like the u.s. and south korea. this is like the modern warfare -- modern electronic warfare. as a dictatorship goes -- if you want it, you will get it. they will recruit the best of the best of the country and give their family better living conditions. >> let's move it along and talk about asia's largest casino operator. >> it is hoping to let travelers into career gamble on the go -- korea gamble on the go. they've been asked to run a casino in the seoul airport. they would join forces with the paradise company. it would be sjm first time in korea. more than $1 about million and will open in the first half of 2017. 2015 is looking like it is being tougher for south korea than

previously thought. they lowered their phocas -- there forecast. government's market volatility and increased competition from japan will be the biggest risk to the economy year. -- next year. china is using the rules on foreign banks. next month, it'll be easier to open branches and make transactions in yen. they are boosting competition and giving the overseas access to the market. you can get rest of the day's news on bloomberg.com. you can watch some of the interviews you may have missed on bloomberg today. some relief for investors. shares have resumed trading with a rally now that a corruption case focusing on the controlling family has come to a close. we have been following this story from the very start. one brother guilty, and the other not. >> of the two brothers -- we are

talking about the kowwok brothes -- billionaires. sun hung use the run kai properties, hong kong's biggest property company by sales. the second-most valuable in the world. they were on trial with another man -- rafael hui. he was the chief secretary of hong kong in 2005 between 2007. you can see some high-profile characters here. kwokwo brothers -- thomas was convicted of conspiring to commit misconduct in public office. that was related to payments, a series of payments amounting to about $1.1 million to rafael hui. that is the second-highest position in hong kong's government. raymond kwok is walking free. raymond kwok is basically the man who was running sun hung kai.

he is the chairman and managing director of the company. thomas kwok stepped down. there is a third brother who actually is no longer part of the company. he stepped away in 2008. is a biguption case case in hong kong. the corruption agency was chasing it and brought the case forward. thee men are now facing -- charge thomas kwok faces could carry penalties up to seven years. rafael hui is facing five charges. the sentencing hearing is scheduled for today and we will see what they decide after. thomas kwok will appeal. >> thomas kwok appealing the charges. brother raymond found not guilty. for some hung kai -- sun hung kai investors, it was a roller coaster. where are we now? plunged 13% after

the men were arrested back in march 2012. you will see the share prices have recovered since then and the company has worked very hard to make it business as usual. it continues putting properties and buying up land as well and land banking as well, according to an analyst. the company actually has not done too badly in the last 2.5 years or so. we can look at analyst recommendations. sell., five hold, three the company is not doing too bad. >> questionable leadership though. >> raymond got acquitted of all charges. >> thomas kwok is facing sentencing today. thank you. >> let's have a look at those chairs. -- shares. the markets in hong kong.

tradingung kai started -- resumed trading and it is up 2%, unaffected by that corruption trial. some analysts saying that it was only because only one other was convicted. citic taking a look at securities. they are trying to sell about -- it is losing ground today, but it is now the world fourth largest security firm by market value. let's take a look at how the markets are doing overall this monday morning. look at this. the market here in asia in green, in positive territory. we're looking at the 200 rising 2.1%. crude has rebounded. they have gained the most in more than two years. it has been fluctuating a bit

today but it is in positive territory. lia's energy and mining shares leading gains. index of 3/10 of a percent because the south korean economy says it is expecting to have 3.8% next year. the shanghai composite up 2.4%. at one point earlier today, they had been trading in the highest level since 2010. were innese stocks between positive and negative territory all morning. we do have oil companies trading higher because oil refiners, the two biggest in japan, saying they will see a potential tie up. back to you. 2014 14 hascome, been good to asia's wealthiest. we will tally up the ritualist. -- rich list.

what opportunities are presenting themselves. we will ask that of our next guest when asia edge continues. ♪

>> let's check in on oil. west texas intermediate -- 57 .93. the biggest two-day gain in years. that is what we are seeing drive asia. given advance is small what we have been seeing in terms of the volatility deficit. >> it is significant. it may be a small move with significant in the overall context of this year. it has been challenging for the oil markets and the fact we see this modest reversal in both

crudes. the trades on the index. oil prices have tumbled by about half since june. we have seen surging supplies and slower demands, not a good commendation for sales which led to the 36% year to date drop. london benchmark is down nearly 44%. members lashing out at non-members accusing them of over supplying the market. have the energy minister saying the market is oversupplied by 2 million barrels a day. ese united arab emirat saying there is not responsible output by the non-opec members. you have the united states with the shale boom which is led to surging supplies. you also have slowing demand in places like china. it is a perfect storm but so far opec this year has been

unwilling to change its production target. they remain at 30 million barrels a day. last month, they declined to change that. it is giving a list of stock markets and rising oil prices -- helping the oil producers and signaling perhaps a tentative turnaround in this commodity market. >> opec, do as i say and not as i do. joining us now is geoff lewis. outave we seen the bottom for oil? sayhat is very difficult to because clearly there is a lot of excess supply. i think we will see a bounce. it is possible we could be seen a much more extended period of really low oil prices. and depends on what saudi arabia's strategy is. maybe they will try to put some oil back into the ground. other people think they seek

countries like iran will settle more. there is a lot of conspiracy theories. >> you just gave us some. >> it is mostly supply and weak demand. what has been surprising is the stability of the oil prices the last couple of years. we will have more volatility. my guess is summer between the $60 and $90 range for most of next year. opec isesting that putting the blame squarely on the u.s. when it is very much not only an economic decision, but a foreign policy one as well. at least, it has been helpful for them. >> i think for opec to be criticizing the u.s. for developing its own resources is quite ludicrous. it is not carry any credibility whatsoever. putink they are looking to

the blame on some of the else because they are really themselves to blame for not having a coherent strategy for some years. >> where do we go from here? does the world get used to hav ng have -- used to ing standards? saudi cut productions and high-cost countries can continue to ramp up production's? ? >> i think we are seeing the u.s. wants to develop the industry. they want to reduce its strategic reliance on things like crude imported from the middle east. it reduces the deficits. so, there is everything good coming out of the shale revolution and it is hardly really begun elsewhere. in the u.s. only holds about 17% of the reserves of shale gas. a lot of other countries could

develop their own industries in the next 15 years. i think it is a seachange, a game changer. we are fortunate now to not be held ransom by opec for at least a number of decades. >> there is really no negative impetus for u.s. to stop shale production. right now, with loyal prices, consumers which drive 70 for prince -- 70% of the economy could have a huge tax break. >> there are a lot of losers. the oil companies, the explanation companies. the marginal costs are driven by the shale fields in the u.s. i think most of them are ok about $60 per barrel. those fields that are already online will probably continue because of the costs they have already spent. >> what is your prediction?

40? >> i think we will probably see a weeak field and then come back. unless you keep drilling shale, the level of production decays rapidly than it does for conventional offshore oil. for shale and 15% for normal ones. do you think there is a lot to be invested in the oil companies share prices we are seeing? that has often been the case that they overshot on the way down. >> the prices have come down a lot within the energy sector. also, looking at the bonds. it has put some pressure on high yields generally. whether pressure will come down too much, i would not like to be

buying them at the state. not what the development and supply and that situation. there could be some long-term opportunities there. >> stick around, geoff lewis, because oil is nothing only name of the game. we have divergence to talk about as well. we will talk to you in about 20 minutes. 1960's building in hong kong defies the wrecking ball. >> we will have a special report explain all of it, next. ♪

>> there was nothing really in the market that is comparable to it because it is very well finished interior. >> take a stroll along the waterfront and you will notice one building sticks out from the

rest. >> it is a labor of love. i am happy to see it all come together. >> the labor you can tell from these before pictures -- a 1962 lowrise in need of a good bit of work. most developers would've torn the building down and started over. victoria allan, the property veteran, loved the potential. >> i think so many developments go up in hong kong that have plenty of rooms and no place for storage. i wanted to do something that was totally different. >> she did the unthinkable 10 years ago. restore the building but expand the space like a new york city loft. >> this is the original space of the building with its curved corner so we wanted to keep that. >> she kept the original name of the building which means let's get prosperous together. the conversion came with its share of hurdles.

first, getting the approval from the buildings department and getting a bank to give her a loan which failed. she was able to complete the project thanks to private investors. >> i realized i could not get any financing from a bank. at that time, they would not lend on buildings. >> finally, how to install an elevator to the top floor. now linked to the private rooftop. >> this is the rooftop, the penthouse for the top floor apartment. it has a fantastic view. >> one unit per floor -- about 1300 square feet. rent ranges from $6,000 to $14,000 a month. keeping a bit of hong kong's heritage maybe what makes it home and unique. >> at this point, doing a conversion on something and not realizing where you are. this one has been modernized.

>> let's have a look at trading. this is the situation as far as india. we have 19 minutes to go before we get underway in mumbai. boost.equities getting a more modest gains have been of late on friday. let's take a look at what is happening in hong kong. 1.2%. we have the tokyo reopened coming up. that is next. ♪

>> extending the bull market. shanghai at its highest level in years. it is a rally that has propelled citic securities past market value. chasing the next prada, samsonite. why overseas listings slowed to a trickle in hong kong. first, let's get the news from the markets. >> strong week for markets in asia. a week were activity were supposed to be slow because of the holidays. it is a festive move across

asia. see a third consecutive winning session almost for that lifting stocks. also rebounding crude l ifting shares. energy and mining shares leading the way. the shanghai composite up 3/10 of a percent. at one point, we saw the highest gain since 2010. -- ofuth korean economy the government cut the growth forecast for next year, but next year's spending is 3.8%. the costing index is up 3/10 of a percent. the japanese stocks are coming back after that break and looking like this. they have been swinging from negative to positive territory. energy company still doing great. >> talks of a tie up between largest refiners. how are their stocks doing today? >> because of falling domestic

demand in japan, you have the population shrinking, people moving to more energy-efficient to industry leading players thinking of more consolidation. look at what we are doing now -- what is happening in the midst which is japan's third-largest refiner. they are in talks with showa shell. that was announced after they may have bid as much as $4 billion for shares of showa shell which is a 30% premium from last week's closing number. ell raising 229% at one point today. that was the most since 1974. all oil refiners in japan on a surge today. gains this day of coming even as shares will hit the market. david has the details.

>> it is not worth $3 billion. sec will be a private placement. 15. billion shares priced at a discount compared to when it closed on friday. it is also looking at a substantial premium to where the stock was a few weeks back. you see this rally we have seen across other growth securities really helping valutatations. what they will be doing with money -- it is something we've seen these big brokerages in china start to do in 2013. really expanded to other businesses like lending. they will be developing shortselling. let's look at the rally in china's shares. this brokerage having an absolute flyer this year.

we were talking about this all morning. citic securities. crazy valuation for brokerages. >> revenues and incomes at a fraction -- 32 times? 32 times. rally inave is 147% the stock price. 12.as trading at you do see it really reflected in this chart. you compare it to the rally which is 18%, 13% from goldman, 18% from morgan stanley. it is not bad. valuations where we now see securities coming in fourth globally just behind goldman, morgan stanley and ubs. now ahead of credit swift. i think that difference between ubs and citic is 9 billion u.s. dollars. i think it is a little narrow

right now. that is the tables as we speak. 55 more or less. i mentioned the difference in revenue. as far aschs makes, overall, $35 billion. i think that is the estimate for this year. citic, $4 billion. the latest numbers back for november was reported income 11 times. year-to-year growth is really substantial and that has to do with these new broker -- renewed brokerage accounts. it is a little bit worrying. the value of debt. it has been taken off due to equities. ofy are starting to warn risk involved investment. >> who knew? thank you, david. >> hong kong is wrapping up its

best year for initial public offerings since 2010 but there is one cloud on the horizon. overseas companies have almost dried up. we are taking a look at this. how many foreign listings did hong kong get in 2014? >> guess. one. >> one measly little idea. po. >> it is a malaysian funeral services provider. an undertaker. nirvana asia. it raised $261 million. it is quite a contrast from recent years when we were breathlessly reporting on prada, major companies to gain access to the chinese market and use it as their pathway into mainland china. the scenario is different is because china has slowed down and the concern locally is that hong kong will no longer be a destination for international ipos.

theou look at the numbers, valuations prove hong kong is not a good -- as attractive as it used to be. between theped fingers of the hong kong stock exchange, most notably alibaba. >> alibaba is listing in new york. partly, that is due to the fact the exchange here and the security regulator would not amend the rules because of the desires of jack ma and alibaba management. a dual structure that allows them to have greater control of the company which is something new york would allow. you can give them credit for sticking with their principles. >> of hong kong stock exchange sticking up for the investor. >> indeed. there are many small mom-and-pop investors here in hong kong. they are very sensitive to that. the fact remains hong kong is a

financial international center. there must be some worry on the board and elsewhere if the hong kong stock exchange is only attracting one for an idea. -- aiforeign ipo. kong-shanghaihong connect through trains. how will that play out? will that provide impetus for interest working in hong kong? >> the feeling is that it will drive more chinese investors into hong kong. the analysis suggests it'll be a lot of money -- billions of dollars. it a more closely connect hong kong with mainland china. that is the upside. what does it mean in terms of hong kong's connection to the outside world? you see that evident in some of the protests we've seen in recent months. the connect program was delayed and the concern among critics of this is that it will further retrench the exchange for making

it attractive for international companies. it may be premature to make that call right now. hong kong was a pretty global city. >> those of us who work here like to think so. thank you. >> let's take a look at the top corporate headlines so far this morning. smartphone maker has been valued at nearly $45 billion after a new investment round. the wall street journal says the company has raised more than $1 billion in funding. xiamoi's low-cost business model propels it to the top spot in china's cell phone market in the third quarter. it is number three worldwide. the final installment in the hobbit trilogy was number one at the weekend box office in north america raking in more than $56 million in ticket sales. it beat the new night at the museum installments and the sony remake of annie.

the revamped movie was brought forward after copies were early, and by hackers. sony executives don't believe sales were hit by the online release. president obama has described the hack as vandalism, not an act of war. washington is blamed north korea for the attack and the president says the u.s. is considering putting north korea back on the list of state sponsors of terrorism. north korea denies any involvement in the hack and has proposed a joint investigation. those are the latest corporate headlines. >> north korea's alleged link to the hackers shows its reach extends far beyond its borders. joining us is sam kim. sam, what do we know about north korea's hacking ability? what we have heard so far from defense officials and south korea is that north korea

operates a unit of about 3000 hackers. these hackers are basically trained in how to hack into four networks -- four networks -- foreign networks and sending out e-mail that contains malware which activates when the hackers want them to. we believe these hackers are young trained kids that are the smartest and most loyal in north korea's education system. they certainly pose a certain threat to the businesses as well as governments around the world. developed north korea a hacking team in the first place? >> well, north korea knows very well that modern workfare is all about electronic devices. it is electronic warfare. they are computer networks running behind all of those

sophisticated weapons we have seen in the united states and south korea, but it does not have the resources or money to build up those sophisticated weapons. what north korea does is develop a unit that hacks into the computers of the enemy. thereby paralyzing the computer networks that are used to attack north korean troops. this increases the chance that north korean troops will survive in any type of battle against the u.s. and south korea. >> thank you, sam. next, what is getting strategists fired up. we have predictions as our group discusses right after this break. ♪

fromoining me now is david jpmorgan asset management. what will be the killer theme next year? >> i think it'll be more of the same. 2015 will be fairly similar. >> exactly the same. >> the silver lining might be the u.s. continues to normalize and get back on a stronger track. by the time we get to the end of problems, the u.s.'s are behind it. it may actually start to pull a few other economies in the right direction, too. >> you are not going to bet on it? >> no. are things happening right now that could suggest that if things get even worse, i

don't want to say north korea did. hack, but -- ok, i di that could be one. russia, oil. the falling ruble. what happens to putin? is there a regime change there? >> a lot of geopolitical issues. many of them will be the same issues we grappled with this year. one that can come to a boil is some of the last unified parties within the eurozone and what happens to them. there is a lot of exhaustion with austerity in high unemployment. ukraine, that is still unpredictable. nobody knows what is in the mind of putin. the russian economy is going into deep recession. we know that. not added much to

world growth for quite some time like brazil. as long as china holds up and india continues to do well, i think we will still see some growth, but probably much like 2014. what would be a nice thing to see would be to start seeing commodities prices starting to pick up because that would be a sure indicated that global demand is starting to improve. >> you are not going to see that really. >> i am talking about commodities in general. china, will be down to isn't it? >> china is important. it was one large building site. i think commodity value in europe, u.s. will pick up a

little bit. it is an early indicator. ok, if the u.s. there canto progress, be inflation issues. china, slowing this year and next year, who knows? these are the world's biggest economies. we don't know? >> no. i'm saying the u.s. is normalizing, getting back on a more noble path -- normal path. if you look at the indicators of activity in the u.s., they are looking pretty strong at the moment. if you look at global gross model, the probability of recession is as low as 7%. if you look at the national activity index which is on

trend or a bit of both. the u.s. economy is pretty healthy across the board. inflation has come down a bit but it is still positive. >> it is a six-year bull run. the last longest bull run was four years. we are two years overdone for something. we keep talking about something happening. maybe we saw a capitulation earlier this year but back to normal, back to records. what does 2015 look like for this will run? >> in terms of cycles, people say it is going to the surface. it is at risk of ending. cycles, to me, is a big dispersion of the averages. we're only now just exceeding the average in terms of lengths. what are the imbalances that will cause the u.s. to go back into recession? there are no indications of that. wageventory problem, no

or labor market problems. i think markets could take a slice of we see wages pick up a little bit and surely they will at some time. >> we need to get that going. will yo-- >> they have more time to do it now. japan is not going completely badly. it looks like a few things are recovering in terms of the real economy. they had a very weak patch which seemse hike to take longer than people think. it is looking interesting that things like surveys are looking real incomesly -- will show a better trend once it drops off the cpa. >> we hope so for their sake and the global economy.

geoff lewis, thank you so much. santa's list, we have the bloomberg billionaires list. >> 2014 in review for asia's wealthiest. >> watch for it. ♪

>> asia's richest outperform the world in terms of the rise of the net worth. reporter joins us right now. it has been good year for the lucky few. >> it has. it has been a good year especially for chinese billionaires. the top 10 chinese billionaires are up a combined $50 billion in

2014. compare that to the world's richest 200 people. they have had only a net gain of $40 billion so that is impressive. china's gain has come in large part from jack ma. 6%.baba's shares up increasedwealth has $26 billion to $29 billion. he is the 17th richest man in the world. up 26% as well. pretty impressive. >> jack ma was a poor teacher, an english teacher years and years ago. his fortune and a story of his ascent has been legendary. what else caught your eye? >> something related to china. we know the chinese anticorruption drive has been

going on for two years and showing no signs of letting up. that is hurting a lot of casino related stocks. it is down over $70 billion. that is but people like cho -- he started the year in the tope 25. he has dropped to 80th. 34%.ealth is down >> is he the biggest loser here? >> he is actually not amazingly enough. the biggest loser comes from japan. son losts masayoshi $6.6 billion, 35% of his wealth. softbank is pretty interesting. it is a large investor in alibaba. theoretically, it should be having a good year. deal that wasad a

pursuing of treatment -- of t-mobile. investors were wondering what is left for softbank so that hurt the shares and hurt the wealth of masayoshi son. >> thank you so much for that. for more on the world's wealthiest, had to bloomberg.com/billionaires. a rich trove of content. a few more millionaires will be minted in spain this year due $3the largest lottery worth billion in what is called "el go rdo." ♪

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go to you. >> right. busy day today. equities are on the way up.

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