>>this is the extended edition of "asia edge." stocks having a rebound today. japanese equities rallying from one-year lows. miners lifting stocks in australia. mel -- more than a thousand jobs

are said to be going at berkeley as it is set to quit some key markets. the bank planning to leave australia, malaysia and taiwan. searching now for growth and confidence since taking over last month. ♪ heidi, a bit of a sigh of a relief. -- sigh of relief. i think we are all still holding our breath after the volatility of the past few weeks. rallynly seeing a relief across the region. the sentiment seems to be that this route has gone long enough. but fundamentals haven't changed. still worried about oil and the u.s. economy as well.

around the region, china joining in on the equities rally. shanghai up by .5%. malaysian stocks and kiwi stops are the only ones in the red at the moment. session, we are off session highs by quite a bit. the last time the nikkei was in a bear market, june 2013, it fell in the space of a month. the rest of that year, toward december, it rebounded about 31%. it will be interesting to see if we see that rebound for the asian markets. in hong kong, we see the hang off off the highs of its

its highs. half of that market is in oversold territory. anyway, if you look at the technicals, unsurprising across the region. the winners across the asia-pacific, it is a broad-based rally. but in particular, basic materials. rishaad: how broadbased is this rebound? >> you can see money flowing out of save heads and into gold and the yen over the last few days. when it comes to the young, we

are seeing a weakening in the japanese currency as well after it surged off its one-year high. the other hand, risky commodities seeing a surge. we've see games for likes of copper for example in the days session, putting on 1%. we are seeing a bit of stability when it comes to offshore yen. certain lenders have been told to pull back when it comes to lending to keep that liquidity situation stable. rishaad: let's look at china's central bank. injecting the most cash and almost three years in open market operations.

when we have chinese unit -- chinese new year coming up, trying to get as much money into their pockets before making this arduous journey. stephen: yes, it pretty much closes down for a week. there is already a liquidity squeeze right now given the outflows, the record outflows we have seen in china. there is this liquidity squeeze. largesthave seen is the open market reverse repo by the central bank in three years. central bankthe buys securities from the banks. basically, without getting into the boring details of the numbers, the net cash injection into the market is 15 billion

yuan. that is going to help the liquidity crunch going into the lunar new year which starts february 8. we've got efforts to yuan.ize the stephen: nearly $4 trillion in reserve they used to have. tothe end of december, down $3 trillion. it is a rainy day/fun and they are getting a downpour right now. they spend 15 billion u.s. dollars in that is how much the stockpile of fx reserves dwindled last year. the downward amount -- they drawdown, i should say, equals

almost to the amount of the switzerland fx stockpile, which is the fourth-largest reserve pile in the world. it is a lot of money. 10 out of 10 economists expect another 300 billion. -- 300 billion drawdown in defense of the currency. rishaad: it's my going. stephen: but it's nice to have that many new back pocket. rishaad: the uncertainty surrounding the economy in china is the focused of the world economic forum taking place. >> the chinese authorities have plenty. rishaad: jp morgan chairman says

there is a disconnect between financial markets and the real economy in china. >> the financial markets in scary -- aeally a very small fraction of the chinese economy. china will continue to grow. it will continue to grow at a slower rate in more detail. and it is by design they changed their growth strategy from manufacturing and export and import services demand. >> if you look at china, they are changing the economy to a consumptionc economy.

it is part of making the global economy healthy. rishaad: that is the word on davos.n devil's -- in as 14% on as much speculation that news corp. may be keen on buying all or part of the company. that field -- that fueled rumors. twitter still ended the day 4% higher. apple entering india. india lightening

regulations. goldman shares and just down about 2%. imposed a $2.3 billion loss in its fourth quarter. said challenging market conditions also hurt revenues by $7.2 billion. it will be its first four-year losses 2008. the chief executive has been trying to restore confidence. we just looked at results from goldman and deutsche bank.

all the talk is also about barclays. we still don't have confirmation. something like a thousand jobs set to go in corporate finance and the equities derivatives business. david: right. 10% of the investment banking staff. asia will be most affected. things like m&a, ecm and dcm, and effectively they are pulling equitiese cash business. effectively, they are pulling out of australia, korea, taiwan and malaysia. we go. the next graphic shows you the cuts that took place in japan.

was announced during a town hall meeting this morning at 7:30 by the president. 80 physicians exiting the cash -- 80es business physicians. has a mention, exiting the cash equities business. -- 80 positions. they are a sickly setting that business down. so everything from research and bond trading, effective immediately. rishaad: that's quite something. that's a big part of the bank. david: we did reach out the barclays. they may knows. rishaad: let's get away from the bad news. what is the good news? david: they are keeping the

derivatives trading. they are not pulling out of asia. they will still be here in hong kong. less manpower, obviously. hong kong, china, singapore, india. japan. the silverhaps lining. banks,all, across the 1.3 billion at most if this 10% reduction from to any 14 is correct. rishaad: thank you very much. why the indian prime minister

might not actually be the one running his country. plus, how renting a ferrari may be more expensive than a thousand [indiscernible] . after this break, we will be hearing from a company moveplaced for china's from manufacturing. ♪

>> and other stories making headlines around the world. the anon is finalizing its plans for the next five years and the communist party takes up new leadership and takes the party into challenges ahead. trade pacts and vietnam's relationship with china. it pitches conservatives against reformers. japan's economy minister has responded to allegations of financial impropriety in a tablet magazine saying his -- he will not be accused of a crime but wants more time to check the facts. he and hise claims secretary violated political funding laws by allegedly taking around $100,000 from a construction company. he says he is not sure whether

his secretary did what was alleged. u.s., british and japanese government agencies have confirmed not only that last year was the hottest on record, but the hottest by a record margin. the u.k. said 2015 was three quarters of a degree celsius warmer than the long-term average from 1961 to 1990. american climate scientists effects ofmed the global warming combined with one of the strongest el niño events ever seen. global news tweet four hours a joining more than 150 bureaus around the world. stocks on a rebound. we have oil also moving back up. what has gone wrong?

brent: i think the main driver has been the fed. we have been talking this for quite a while. i think oil was prior. i think it has been leading. the last move down was pretty impactful. it has been a consistent theme over the past year as the fed was a consistent theme as well but the actual final move in interest rates i think really ,all people, not by surprise but the impact of it and the sentiment that it is broad has really been it. not even three clicks. brand: lenders wanted the spread. works when the yield curve escaping. out, there is a whole host of problems. loyal has a gain

brought -- in a funny sort of way, benefiting the economy but people don't say that way. savings- brent: the to the consumer reaches a saturation point. rmb, m&a activity, spending, drilling, putting people to work, that is driven by high oil prices. that is not driven by the consumer saving up the pump. when you match the do, the corporate impact of high oil prices is much more positive to theglobal economy than savings is to consumers. in the piece, you mentioned a peace between iran and america.

brent: this new kind of friendship that the iranians and the americans have come to, i think what you could see out of this is maybe some of the tensions settle down a little about -- a little bit. talkingo countries are and involved together. you can see a little bit of a cooling off. oil as a weapon stops. everyone pumping to hurt each other maybe stops at this point is a moreere perceived peaceful feeling. as a weapon, it has been used on themselves. brent: it is. but you can gauge the impact on yourself. you can run models. you know what it costs. you know how to breakeven per you know what it is funding. but the perception is that you are hurting other people with higher cash costs. this is being driven out of saudi arabia. but in general, it is not being used in a very mature manner as far as politically.

i think maybe that idea starts to wane a little bit. you see some supply come off the market. twntyd: more with you in minutes from now. up, chevron poured a ton of money on to this. from sydney next. ♪

♪ rishaad: years late, nowhere near on budget, way higher than the original estimated cost. the chevron lng project is about to come online them.

it is a go or gone terminal. it is their world's most expensive lng venture and it couldn't come at the worst time. guest: that's right. it has been a very long road for gorgon. it is the largest resources project in australia's history. and more than six years after chevron and its partners decided to go ahead with the project, it is finally approaching the finish line and is getting ready to export the fuel to asia. changed in the world pretty dramatically since 2009. it was trading at $70 a barrel. today, the picture is very different. crude trading at around $28 a barrel. and chevron's cost now has ballooned to about $54 billion. the oil price is key in all of this because that is what

typically drives the revenue for these megaprojects. so when oil prices tumble, that means the economics or the revenue of these projects takes a hit. chevron clearly can't control the oil price and the timing in this way. they are not alone on the project. others are facing the same challenge. but clearly, not the best timing. rishaad: you mentioned oil and the sinking price. what about the price turns with liquefied natural gas in this part of the world and how does that layout with it comes to the suppliers? has long-term contracts tied to oil prices. gore again -- i think chevron has more than 80% of its volume from gorgon and whitestone locked up in contracts.

it will put a lot of pressure on the market in general. not a good time to be -- rishaad: james, thanks for that.

♪ this is "asia edge." raising after this morning's gains. stocks falling back on the return from lunch. hong kong and shanghai making gains. turkey afterin reports that foxconn made a $5.3 billion takeover available.

+++ all of sharp's debt. barclays has launched a fresh round of job cuts. we are hearing a thousand jobs will go around the world. the chief executive says he has been seeking ways to restore confidence since he took over last month. after lunch, we have -- heidi: perhaps it was too early to take that sigh of relief because we are seeing some and fall will will will

is struggling to remain flat at the moment. also giving back to gains career by just a quarter 1% now and the hang seng holding on to gains at 3/10 of a percent. 50% of stocks in hong kong are technically oversold. shanghai, we are seeing gains of half a percent as traders are away on the break. significant few movers.

we were speaking earlier about sharp. it just keeps going up and up. it has over 22% now on this report from the wall street journal and it has been reported that foxconn has offered $5.3 billion to take over sharp. it is also reviewing a competing offer. few days where this stock has spiked. a few days ago, it was up by 15% on a similar rumor. we will be watching that story still. certainly one of the upper farmers of the day. nintendo giving back some of those earlier gains. that stock was punished earlier. benefitingyen is both exporter names. oil related companies, paring gains. all minors holding up as well.

really see this slight pullback across the region coming through, reflecting a little bit more weakness in that oil price. we had a fairly solid rally. well above $28 a barrel after overnight.$27 that has come off somewhat as we speak. we are also seeing a little bit of weakness now off the aussie dollar. as a sense that things are -- as we head into the afternoon session. a thousand is the new number investors should keep an eye on, says bank of america. what does this mean?

shery: when shares approach that level, we see investment banks forced to pull back their bullish future positions -- futures positions. accelerates down and breaks through the 8000 level. according to william chan of anchor america, he explains that banks have purchased futures on the index so to hedge exposure to future projects. banks to cut futures positions to maintain the effectiveness of their hedges. if they break through 8000, then a downward spiral could accelerate. toeady yesterday, we cited break through 8000, reaching

7915. the 8000 see it around level. what that means is things could get uglier. rishaad: how did mr. chan reach this conclusion? : structure products are opaque in nature. it is difficult to pinpoint how much money is writing at a .ertain level on the hse i but he looked at south korea because they have to file the israeli tory documents. file korea is one of -- these regulatory documents. a huge market for structured products. i want to lend this in a more positive tone. .t is not all gloom and doom we are expecting a rebound. the rsi pledging to 25 yesterday, which could indicate a recovery. baidu.: let's look at

bloombergent telling the company wants a stronger foothold when it comes to the online consumer market. he also said he is not worried about a slowdown in growth in his country. guest: first of all, you have to look at the overall economy come over $10 trillion gdp. and the growth is 6.9%, which is not bad at all. obviously, it has slowdown a little bit. -- it has slowed down a little bit. you look at the consumption sector and the sector that has to do with technology, they are doing pretty well. china is in a transition to move into a new model. it does take a little bit time. >> the problem at the moment for your stocks, it is still being used as a proxy for a slowdown,

whether it is in manufacturing or not. that a reflection of what is happening in your comp me or what is happening more broadly with the data in chart -- in china? >> overall, there are two factors to look at. macroeconomics. look at the online? connectivity. technologies to this model.

an agreement could come as early as march. $4 billion or more or $110 million a share. a final deal has not been sealed and would require yo the u.s. government approval if it goes through. sources say that glaxosmithkline is in conversations. internet conic to be for --alers -- conductivity internet connectivity for inhalers.

a quick look at those shares. minerals.er hand, the produces 600 tons of copper. offering aering upside. 6.3% to speaking exclusively to me, scott martinson said the government is not panicking. mr. morrison: not in australia.

that relationship with china is one with broad -- with long-standing. what we are seeing is not an anticipating. it is like forecasting sunrise and all of this. of course, we see china going through a transitioning economy. we are seeing strong in our services sector. syncronization happening. rishaad: you're moving from the my name boomers to services.

what do you do to address people in parts of queens and australia. to say it catered out is the understatement -- to say it petered out is the understatement of the year. >> what we are seeing now is stronger -- particularly new south wales. that is really offsetting what we are seeing in queensland and western australia. some stage, we would move from the construction phase to the production phase. was all part of the plan. what we are now doing is seeing growth in services. we are very well placed, particularly in terms of the growth not only in china but throughout the region and also the united states with our trade agenda. most ambitious and

successful trade agenda we have had is a country in a very long time. our trade agreement with china is first with what it willing compass. that comes of the back of strong agreements with china and japan. rishaad: scientists may have found a ninth planet. claim isrs say the based on computer simulations and they have not actually seen the planet. its existence would make up for the loss of pluto. i wasn't aware of this, but it was apparently downgraded to a mere dwarf a decade ago. commodity prices, massive swings -- what is needed to get out of this vicious cycle. ♪

rishaad: this is "asia edge." we left the conversation last time. you are predicting that oil prices could be moving to the upside. is does a rising tide lift always [indiscernible] brett: definitely. the negative impact on the oil into the current market is very dramatic. any sort of the cycle being broken to the downside would be a major set -- major change in sentiment. drives a lot of things in the market, not just the emotions of the market. that is how you look forward and had a project out and do people start to spend money or do they

become less defensive than they are being right now. that is -- very seldom do you get one thing to pin it on in this case, oil could be that trigger that starts to take the pressure off the market as it rises. david: let's go -- let's say goes from 30 to 80. won't that the rail the global recovery? brett: if it went from 30 to 90, i think the whole world would be happy. i don't think it will be that dramatic. but as we talked a little bit in the break, i think there is a really important time they goes with this oil being the driver of the nextwave's the sentiment. it is a clinical thing right now. xi jinping is there right now in the region. it is vital for there to be stability, to be a passing of the baton if you will. the u.s. relationship there has always been this middle east

looking west. there has always been this idea of a pivot coming the other way. the pivot has happened from a perspective. china is driving the world economy. augmenttical side to that is a true passing of the baton. i think there is a time right now where xi jinping could be a common force there and people in the middle east are looking for allies. there is a lot of turmoil. there is a lot of uncertainty. there is a critical time where xi jinping and the chinese can be seen as a string in this next thel, which i think ramifications of that are huge. the global stage in a looks at china's really the full solution to how you are going to move forward. and because of political and economic and then it goes from there. it is very interesting. i don't think a love people are talking about that right now. but i think it is a certainly desire for the chinese to play a bigger role in the world economy and i think this is the time. david: supply and demand doesn't solve it, does it?

brad: no, it doesn't. if someone were to tell you a year ago that iranian oil would be on the market on this day, people would say that is the beginning of the next move down and oil. we did see that in the last couple of weeks. the issue is that everyone is prepared for the same thing. just as no one saw it going this deep, the fact that everyone is going in deeper is when this counterintuitive thing kicks in and the emotional side. i think we are close to an emotional bottom in the market. i can't tell you the time of the prize but the emotions are the driver. everyoneyou get this, is on one side of the trade and a has to go lower and iran starts pumping and they haven't even started yet. there's that counterintuitive thing that says that maybe the political side is more important and the idea that people think there's going to be peace, the stability i think is what allows oil to not be used country to country for other reasons.

this is an impossible question to answer. how do you know when you have actually hit the bottom? how do you know you have been through that capitulation phase as well? brett: there is always an emotional part to it. you get this washout, if you well. text by definition, what you normally get is a huge -- textbook definition, what you know only get is this huge volume, an intraday reversal that starts to trade higher. the market only functions efficiently with nobody stepping in. the fact of the matter is those days don't happen anymore. if everybody was looking for that, then it is not going to happen. i opened my bloomberg this morning and started to look at the top news, every news story was so negative. all of a got this rally. you have a big intraday move in the u.s. last night.

nasdaq to china and you look at the charts, they are very similar. nasdaq had a huge intraday move your you saw some of the stocks, biotech and energy start to lead this. you are looking for the old guard to lead us back out. sayingeard this whole thing, facebook, amazon google. this problemthat in the u.s. is not china-driven. facebook is not allowed. amazon has a small presence. neff looks is an there and google isn't there big -- isn't there. the -- these are for the top 722 bidders to the down move in the u.s. arerest of the -- these big of the top seven

companies to move to the downside in the u.s.. the future looks like you get to see coupling in the chinese market. the u.s. have problems. rishaad: great. coming up, finding out why [indiscernible] ♪

rishaad: welcome back. the dairy market had a tough time last year. there likely to be more turmoil this year. fun terror ceo said demand will remain sluggish amid the -- fontera ceo said demand will

-- in sluggish amid >> the weather is an important factor. we have seen some rain in new zealand but we still believe that it will stay behind way comes to milk production. so -6%. you see europe is slowing down because of capacity issues. is kindthe supply side of adapting to the new world of low prices. it will really depend again on demand. demand is sluggish at this point in time. it needs an uplift somewhere, somehow. if you see an up left of an importing region, then prices can pick up really quickly.

haslinda: have you underestimated the slowdown in china? are keepingtitors it on a relatively high level for a long period of time. what happened in china at the same time is that massive burned on thedity stock exchange, right? onpeople had a lot of money the stock exchange trying to make money and lost money and consumer confidence was lost as well. so that came on top of the higher prices. haslinda: in the next two years, we can expect more pain before it pick up? >> there's definitely going to be pain, more pain. this question of which supply pool or which country are farmers can adapt best to volatility and too low prices. a new zealand, we have

farming system which is based on pasteurized farming around the year. so we have a very low-cost system. so we can breathe in and out relatively easy come although there is pain. but the farmers in the countries with high cost prices are going to suffer. but the slowdown in china has caused a broader commodities route. do you see that tougher for the dairy industry to recover in the coming years? >> it puts added pressure thatse it affects -- affects the influx of hard currency. that affects the purchasing power of consumers who work in those industries. china was a very bad deal in infrastructure. the infrastructure, which china has at the moment, does not have

it utilized. everybody could see that would slow down. for the rightdown reasons. and that affects people who work in those industries. it affects the mineral industries from around the globe. south america, australia, a lot of minerals into china. balanceects the whole in the country. and in the end, it affects fast-moving consumer goods as well because the purchasing power increases or decreases and hard currency is available where it is not available and import groups has an effect. chief executive of fontera. that is what we have when it comes to the sydney session. what we have at the moment is

sydney just after 4:00 p.m. in sydney, hong kong and ♪ bend me shape me, any way you want me as long as you love me, it's alright bend me shape me, any way you want me you've got the power, to turn on the light shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store.

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