the warning lights are flashing. months g to a record 46 u. remains optimistic. another name coming up on the show. we will hear from joseph stiglitz on why he is not seeing signs of change in china. aramco controls 1/10 of the world's oil and saudi arabia may sell one stake. wars feels the force in china. their record setter has a $53 million opening. those stories and more. keeping an eye on the markets. bad are some of the numbers. the regional index excluding sinceat its lowest level

november 2011. hang seng down 2.5%. the hang seng china enterprises index at a four-year low. the australian market down 2%. hong kong is leading the region. out of the 50 stocks on the hang black.nly one is in the quite a lot of selling coming through elsewhere. shanghai market down by 1.3%. china railways have in the standout day, though. .lsewhere, widespread selling thailand is coming online down. every sector is in the red. basic materials stocks down by 2.3%. looking at some of the nature

.overs the weakest performers are on the h share market in hong kong. brokerage stocks coming under pressure today. take falls in early trade today. developers coming under pressure, now. yanke missing 7.8%. fook with disappointing sales. tencent in hong kong, one of the worst performers. emerging market currencies coming under pressure. the malaysian ringgit being sold off.

if we have a quick look at the japanese yen, we are starting to because movement everybody is selling out of equities out of the oil market back into safe havens. the japanese yen is holding at a four-month high. china getting off to a shaky start this year. close to record lows. heidi has a look at the forecast. the reference rate is pretty much unchanged. as you said, this comes on the back of that week last week. extended appreciation, a huge tumble. i don't think today gives much

confidence in terms of how investors are feeling. chinese authorities are losing control over the currency. you are seeing that in the statements and the forecasts coming down. the latest one that we had is from the london hedge fund omni. they see a decline of at least 15%. he says they could come down even further. he is making these comparisons to currencies like the turkish lira. says they can intervene all they like but they cannot fight fundamentals. intervention will continue but it will not draw a line in the stand. we will see further excessive

volatility. rishaad: what about u.s. treasuries? china's that affect purchase of them? reporter: there was a long stream of rhetoric about how china was the biggest holder of united states debt, seeking to have the position of power but that has come down so much. , that was outflows the biggest monthly decline on record. were expecting something around $23 billion. that was a massive shock. is china on a treadmill to hell? reporter: it raises the question for u.s. treasuries.

so far, it seems that analysts think that volatility in china, the concerns of for the economics put down, all of this will drive investors to united states debt, because it is seen as a safe haven. all signs pointing to a strong recovery there. money managers snapped up 42% of the u.s. debt at auction. to steml look at ways how much they are spending. rishaad: thank you. angie: let's take a look at the oil prospects with ramsey our copy. 10% -- what is the market focused on? all eyes are on china.

we saw a drop last week after the turmoil with devaluing the chinese yuan. it is the world's second largest oil consumer. it has significant impact. the data over the weekend with the 46 month slide, reinforcing this demand worry in china. that comes in the broader context of a broad global oversupply. we have had analysts from citigroup already saying tickets he prices had to work $30 per barrel. , one reason about china's demand and what that might mean for global growth. angie: we have seen pressure crew oversupply. -- pressure the crew over -- pressure accrue over supply. reporter: this is a good time to

find ways to raise money. that they confirmed that they are looking at an ipo. they were short on specifics. if it was the whole company, it would be 10% of the world's oil reserves. it would be a massive amount of oil. it would be valued at $100 trillion. it seems that they are focused on refinery aspects. they have had some experience floating these. the floated of refinery is a public company in 2008. .hat is still in the works bloomberg reported that hsbc and jpmorgan were the lead talks in terms of the banks who would work on the ipo.

slide in oil continuing to basically be oversupply, it is notable that they are coming out and saying that they want to bring in some money from outside investors. angie: thank you. let's have a look at headlines. sharp said to be considering a government-led bailout. says they may have to take a majority stake. mitsubishi among lenders involved in the talks. noble's shares tumbling to their lowest level since 2008. this is down to a ratings cut by moody's.

he -- a saw he -- asahi officials prepares for a merger with anheuser-busch. coming up later, china had to wait longer to feel the force but now fans are helping star wars continue its record run at the box office. ♪

angie: we have been talking

about china's outlook all morning. joseph stiglitz says do not expect a miracle recovery. guest: people are saying 2016 would be better. when in the fundamentals, i didn't see anything changing. no reason to believe in 2016 would be better. given arst 11 days have little support to my perspective. brown northern trusts bob says get ready for a soft landing. china equityars, markets with a worst-performing markets despite robust growth. investors have to be aware of that potential dislocation. on simplyat focusing on the chinese equity markets and not what is happening in the

economy is going to be a mistake unless you are a chinese equity investor. we are more concerned about the contribution to global economic growth to china. we are not forecasting a hard landing. u remains optimistic. remains optimistic. guest: china is not on his own with those challenges. .e have to expect adjustments the server loss of the good times to for the future and that is the reason why we are starting to implement our strategy plan. we think we are going to double our account in this region. we are going to grow all of our businesses in equity. we also plan to expand our givings that are

outsource functions to our groups. i think china is a great opportunity like it has been for 20 years. angie: that is the word on china's economy. rishaad: more on all of this. said china is to blame for everything. how bad are things there? this is now almost making its own story. guest: that is right. there is much more to the perception game then there is to the reality. that is a strange situation. it conveniently diverts from the united states economy, which is a miserable shape. the fed at the wisdom of tightening monetary policy. is a self fulfilling prophecy. the fundamentals of china have not changed.

what changed? we knew that the manufacturing picture is not robust in china. we also know there has been close to a six-year run on the s&p 500. perhaps that is triggering concern? point,we expect at this fourth-quarter profits to the negative here that is also the bloomberg consensus. that situation will not change for the rest of the year. thisutlook for the u.s. year's 25% chance of recession. and -10% on the s&p. sensing that't you the music is changing considerably in china? guest: i hate to quote the 's daily, but they did publish an interesting

commentary by an unnamed member of the financial work group which said, we are going to significant supply-side structural reforms. that is going to cause turbulence. people have to get used to that. that is what is happening at the moment. it is interesting to see that the leadership in china is aware of the fact that this kind of dramatic transformation of an economy does not go over without some turbulence, or critical moments. angie: the last time we heard about supply-side reform was ronald reagan, that trickle-down benefit. in china, a different animal? guest: it is and it is not. they want to reduce corporate cost. there will be significant de-leveraging.

de-leveraging on the part of the local governments with the debt swaps. there is a lot of that. the same kind of thing that had to be done in the 1980's in the u.s. as well, there is necessarily a very significantly -- significant need for investment in upgrading productivity. what tends to stand in the way are the giants. .hey need to reform but that is part of structural reform. rishaad: nothing grows in a straight line. you have to have some ruptures there. he will take time. guest: it was a bubble. when you look at the way things worked from the middle of 2014 to the middle of 2015, some of that had to come out. that was necessary. at the moment, there are opportunities in china. more so than anywhere else i can think of. angie: where?

guest: opportunities are largely in the service sector. smokestack industries are having a heck of a time. there is a lot of problems with anything based on commodities, and energy. maybe you can answer this. why are people selling off alibaba? maybe opportunities when i hear your answer back in 20 minutes? [laughter] rishaad: let's have a look at stories making headlines. jong-un has told his scientists to work order to boost the country's arsenal of weapons. he said it was his expectation that they would advance their research. north korea claims attested a hydrogen bomb last week. washington wants china to

support sanctions. in beijing says it had not been informed of the test. rishaad: the u.s. gave something of a response to the test. it flew a b-52 over the southern peninsula. seoul'swed solvan -- decision -- they have also strengthened its forces at the north korean border. thousands march to china's liaison office in hong kong demanding answers to the mystery of the missing bookseller. others associated with publications critical of beijing are thought to be taken to the mainland. -- rally went ahead despite embattledext, the

president of syria turns to asia to boost his standing. ♪

breaking news that will have a ripple effect across the city in hong kong. the hong kong yuan overnight recordight has jumped a 13.4%. we are going to discuss the implications of all of that on the real estate market with our bloomberg news colleague later. the embattled syrian president bashar al-assad is seeking support from asia. last month, an official visited beijing. today, the minister will visit new delhi.

what is the purpose of the trip? it is interesting that he will visit india shortly after visiting china. basically what the syrian government is seeking is more support from the big asian powers as it hasn't to peace negotiations with oppositions, set to start on the 25th. he is coming to india to see if he can get india to play a more vocal role in supporting the assad regime. position?t is india's how is it likely to respond? reporter: it is a tricky position for india. india's position in the un security council has been tilted in favor of the assad regime. has not supported any moves to remove him. india has some competing interests in the middle east doesn't want to unsettle those.

it gets a lot of oil from saudi arabia. it is looking to extend transport links in huron -- in iran to get access to resources and central asia. given the tensions, that just makes the whole syria question trickier. on another level, china and india have concerns about the growing ranks of jihadi's in the syrian conflict. there are religious tensions at home that could be inflamed. in that sense, there is a level of support for the assad regime to try and keep those types of ranks of jihadi fighters in check. angie: thank you. eyes are on us in asia, but let's see what is making headlines on social media. talking about the

recapture of el chapo. dominating headlines right now. this is the second time he has escaped from prison. it was the lead up to the arrest that is really making headlines interning at to be like a real hollywood john the. penn! starring sean yvonne: he conducted an article while he was on the run, raising questions on journalistic ethics . should he has met with him in a jungle during his escape for this interview and not alert federal authorities? should he have allowed that el chapo get approval before got published? that is also an ethic in question. there was a seven hour beating before agreeing to the interview. some people say, when did sean penn start working for the dea?

that was one tweet. it seems like the fact that he wanted to make his own movie led to his undoing here. angie: wow. very interesting, thank you. we are going to get more on that hibor record jump after the break. ♪

answer: you are watching "asia edge." china stocks have extended last week's plunge. it is a story of declines across the region. investors are watching china's new foreign-exchange regime, the yuan climbed.

ubs says it plans to double its staff members in china. another 600 staff will be hired on mainland over the next five years. for what heplaced expects will be a challenging year ahead. investment banks are lining up for what could be the biggest ever ipo. if saudi arabia goes ahead with the offering. this is the world's largest crude producer. it is considering selling a stake of the business. let's get the latest. holiday,a public coming of age in tokyo. let's see what is going on with this selloff.

we have not seen the greatest start to the trading week following from those losses from last week. we have the regional benchmark excluded -- index at a four-year low. we are saying the hang seng index holding up for your lows as well. lows. -year we have seen the shanghai market close after the morning session, down by 2.4%. there has been a little bit of support for some of those state-based companies. we are seeing a lot of weakness coming through. stock in the one black on that index. this has spread across the region. singapore down by 2%. the australian asx 200 being hit

by that downturn in materials. sinces its lowest level july 2013. you can see that investors are selling out of all of the muchrs, financials very under pressure, down 2.3%. currency means having an impact as well. a lot of concerns about the cutting of the yuan, impacting a lot of those developers in china. we heard just before the break that the hong kong yuan has jumped a record 939 basis points. this is the overnight of rate of borrowing in hong kong. likely to have a little bit of an impact -- we do have to remember it is the overnight rate.

if you have a look at the malaysian ringgit, that is a sign we are seeing a lot of risk aversion today. angie: the nikkei news says sharp is considering a government led by out. let's get more with our bloomberg asia company news editor in tokyo. peter, what are the latest details? peter: sharp has been struggling for years financially and it is now talking with at least two different parties about some kind of financial support. as they invest and take control of all or part of sharp. one of these is government-backed fund that is talking with sharp about putting some money into the company and

the other is foxconn, the taiwanese supplier of components , and assembler for apple. it would allow some synergies. sharp would end up splitting into two different entities. one would be the lcd business, which makes screens for smartphones and tablets. the remainder of the business would be separate. bidders are lining up to get a piece of sharp. what are the differences? peter: foxconn was like to have control over the entity that it invests in the lcd business and that would likely mean some sort of restructuring and some layouts and some integration with the existing operations they have. of course, sharp stec knology

would end up in the hit -- sharp's technology with in-depth -- end up in the hands of another company. they are likely -- there likely would be less -- fewer la y-offs. maybe a little bit of a gentler ends upuring if incj taking control of the company. angie: are there any obstacles? peter: yes, absolutely. we checked in with our sources on this deal and they caution it is early days. sharp is still considering these alternatives. , they are ready are a

big shareholder -- they are already a big shareholder in japan display. it may raise antitrust concerns if they hold stakes in two of the country's most important lcd makers. angie: thank you for that. the microsoft boss has been given a box seat for the president's state of the union address. in the president's final year, it it it could -- it could includes those thought to represent the future. uber is lowering prices and 80 cities. -- in 80 cities. there is a 20% discount in houston. drivers will earn less, but that will be offset by greater demand.

is the fully self driving car just three years away? elon musk themes -- seems to think so. he made those comments as tesla motors released a software upgrade. musk called it a baby step. chinese economic expansion has been a driver for growth, but we are seeing new signs that the region is being hit by the slowdown taking place on the mainland. let's have look at this. they slow slowdown in china will have a ripple effect. in southeast asia, it is all about singapore. >> everybody wants to know who is going to be hit the worst. the sensitivity index shows that if the slowdown is worse than expected, singapore stands to lose the most.

it compares to other economies like vietnam, the philippines, and thailand. singapore, it is a big risk for them. a property market which is under pressure. where do they turn to next? >> there are two places to look for growth. services and the domestic economy. singapore is relying on its position as the financial hub in asia, boosting services into mastic services -- in domestic services. are there other factors at play as well? sharon: what the fed is going to do, singapore's interest rates closely follows the u.s. interest rates.

the labor crunch is part of the economic transition. that has put pressure on services. rishaad: sharon, thank you. angie: ubs is upbeat on china. the company plans to double its headcount over the next five years. this was exclusive to us. the surgery -- the ceo speaking to stephen engle about how the bank is seeing 2016. >> it is difficult to try to forecast a full year. i am pleased with our stock performance in 2013 -- 2015 and we clearly outperform all of our peers. we have to put things into context. clearly, risk aversion is still a thing.

on the other end, we are expecting higher rates. it will be a challenging year, but strategically, we are well positioned, we achieved all of our targets in terms of building theapital and restructuring firm. we are prepared to tackle those challenges and explore the that this kind of volatility creates. >> what is the key opportunity? >> our clients are looking for advice. staying close to clients and building long-term relationships is very important for us and as i mentioned before, client risk appetite is very low and what we tried to do is to stay close to our clients. >> regulation is a huge cost. regulationchunks of are still outstanding?

clearly -- the creation of the intermediate holding company. if you look at what we did in the last 24 months, the biggest milestones have been achieved uncompleted. in terms -- have been achieved and completed. we are very confident that we will execute. >> you probably have investment bankers watching this interview now. >> they will find out in a few weeks. >> is it about flat? >> i do not like to comment on compensation. our goal is to pay competitively, pay-for-performance in a balanced way between the interest of our shareholders and one of the employees for the long-term. >> room for dividend growth?

>> our policy is a policy of and it ise growth quite clear we say to our shareholders, we will pay at least 50% of our net profit. we have all the intentions to fulfill our commitments. rishaad: this year started off with a rocky start, to stay the least -- to say the least, when it came to the markets. we will have more on that as our group discussion is next. ♪

>> mexico is moving toward extraditing the drug king to the u.s. authorities by escaping prison a second time. penn'sports say sean

actions helped them track down the drug king. minister called for parliament to be converted into a constitutional assembly to drive those changes. rishaad: it is the worlds biggest lottery jackpot and it is still up for grabs. check this out. now $1.3 powerball billion. on winning the big one or more than 292 million to one. when $1 million was a big deal? rishaad: still is.

angie: wooden a billion dollars just fix everything -- wouldn't a billion dollars just fix everything right now? mortgagedlord and holder, a record 939 basis point jump. signals there is a liquidity squeeze. not really the rate that is going to be prevailing. it is a job for the central bank to provide the liquidity right now. angie: i know you do not want to blame china. but when offshore trading of the yuan is less than on short, of course you would sell it for a higher price over in china. >> obviously. to some extent, that is why the

gap.has tried to close the rishaad: the imf will be looking at this. will they promise more transparency? >> this kind of stuff goes on in the world of finance everywhere and it is expected and it is accepted. no significant violations involved. mainly, china has been experimenting with intervening less for the level of the yuan and that is a positive sign. as a result of the significant

capital outflows, the yuan is depreciating. >> it is a pr problem? a communication problem? -- not as the extent easy as you might think to commentatorsctual and so on in the united states who are blaming china for everything, right? they should be looking at their own central-bank once in a while. then take a look at what is happening around the world. the main dollar problems in the world right now in brazil and south africa, turkey and so on and so forth, all of been caused policy and this is something people have to take into account. for china to sit there and say, how do i counter this onslaught

of commentary from people who have been predicting a hard landing for the last five years, not all that easy. angie: we should expect the yuan to devalue. will that spark a currency war? language aalk about little bit? devaluation versus depreciation. when the japanese central bank intervened with quantitative easing, the japanese yen depreciated, ok? when the european central bank intervenes into the currency market, the euro depreciated. when china intervenes, it down values its currency -- it devalues its currency. the exchange rate of the yen, down 30% since 20's 12 -- since

2012. is it a depreciation over the last several days -- yes. >> it hinges on accelerated reform. that is a big caveat. how likely will they be able to go through with these painful reforms? especially the supply-side issues. >> i think the most important thing is to reduce corporate costs. to do that, they have to lower taxes. they have to lower corporate taxes, business costs across the board, lower electricity costs, lower any and everything that increases corporate costs. >> why do value the yuan?

>> i do not think it is a devaluation. >> depreciation. people are concerned, the pboc is widening the band weaker. >> exactly for the following reasons. if you intervene in the currency one way or another, you are distorting monetary policy. if you use monetary policy in order to ease corporate costs, what at the same time intervene in the currency to keep it at a higher level, what are you doing? you are on doing the very thing you are trying to do. youndoing the very thing are trying to do. china is on its way to taking some of the hard choices. go.ave to let the currency rishaad: is this a sign of

another recession? japan is muddling along. >> we have a 25% chance of that. the second half of 2015 was 1.4, 1.5% growth. that can really go negative very quickly. there is nothing in terms of , retail sales.

>> don't forget the jobs report that came out on friday. >> i could quote a few people here. if you -- if i was in new york on christmas day and it was 75 inrees -- what is that centigrade? said, you have to subtract 100 k from that number to get the right number. china seems star trek -- starstruck by star wars. ♪

angie: do not say may the force

be with you. -- we said itgh enough. china is for tell ground for star wars -- fertile ground for star wars. rishaad: this is number three in the all-time list of movies. angie: looking at what is an explosive debut -- have you done your homework yet? rish is also silent. i am the only one who watched it. >> lots of people in china have watched it. this is an important movie market, second-biggest in the world. hollywood increasingly focusing on china because it is where the growth will be. star wars is no different. what it suggests is that star

wars will overtake avatar. we can continue to count the numbers. angie: did you watch avatar? >> i did. she does not think i watch any movies. rishaad: the market is getting more hectic. let's take a look at what is going on at the moment. shanghai extending its losses. we have extended the loss to nearly 2.5%. the hang seng where it was before it was before. 19,000, 953. -- 19,953. angie: that is not changing the sentiment of investors across the board. australian equities down below the 5000 mark.

that is it for this edition of "asia

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