♪ rishaad: it is monday, the 15th of august. this is "trending business". i am rishaad salamat. ♪ live in beijing, tokyo, and sydney this hour. asia-pacific shares pulling back from highs, disappointing data from japan curbing risks. gold moving to the upside. foxconnving since the completion. the cash injection has gone through.

china sees signs of stability, the pboc saying the economy is on track, while the exchange rate remains solid. follow me on twitter at @rishaadtv, and use #trendingbusiness. the session underway in 30 minutes. well,g at singapore as but so far it's all about gdp in japan. a disappointing read out of japan this morning. we are still growing, but certainly growth is narrowing. taking a look at the impact on sentiment, lower in terms of the nikkei 225, well off session lows, down a 10th of 1%. taiwan flat. singapore lower, 4/10 of 1%. were expecting sales numbers to come through as well. 1%.ysia down to 10th of

the aussie dollar weaker today, and kiwi stocks up by the same amount, call it flat. the market digesting the japanese numbers and onappointing china numbers friday, not painting a rosy picture of the regional economy. , it hasioned sharp surged 17%, the most since june 24. ministry, the chinese of commerce and saying they have given the greenlight for that cash injection. shaas now been completed, rp saying the foxconn takeover has now been completed. foxconn holds 66% of sharp. lower by 1/10 of 1%.

its parent company has seen downside on the back of lower demand for smartphones. we are looking at metals and commodities on the back of the disappointing asset numbers from china. the japanese gdp and business , sostment lower as well downside when it comes to metals producers. ssuming mot imoto down by almost 4%. z resources down by about 1%. we did start things off by looking at japan's economy, business spending contracting, second straight quarter.

the average of analyst forecast. us from tokyo to what are the standouts to you here? >> it is a gloomy, cloudy morning in tokyo. these numbers won't help. net exports were a drag on growth, capital expenditure fell for the second straight quarter. we are seeing the strong yen is hurting demand from overseas. the demographic drag from an aging and shrinking is sapping demand domestically, so getting hit on both fronts, putting the onus on shinzo abe to get his stimulus package gear to prevent a recession. rishaad: how might prime minister shinzo abe respond? i guess he could talk about nominal gdp and line.

that's true. think about japan's potential growth rate, very low, so in this day and age to have two consecutive quarters of any growth is not the worst thing. we have a couple of stories that hand that what is happening in the background. misery index in japan which combines unemployment with inflation is at the lowest in can takees, so mr. abe heart that japanese households are the least miserable they have been since 1995. he may seek to build on that and do more to boost consumer sentiment. there is some talk of mr. abe looking at some type of wage increase target. i think we will look to see if abe puts his money where

his mouth is and come up with tax incentives to motivate japanese companies to lift wages by some kind of meaningful amount. rishaad: we have to ask where this leaves the boj. it's apparent for that comprehensive policy review. they will have to look at these numbers closely, won't they? >> the boj seems to be tweaking its policies from time to time. last month, they doubled their etf purchases. we don't think the boj will back away, even know we know many of their policies are not popular. rates haveterest hurt japanese bank profits, so we would expect the boj to twe ak around the edges and inject flexibility into that inflation target. they may cite weak oil prices and flattening growth in emerging markets, forcing them to put more flexibility into that target, but we don't expect

governor kuroda-bazooka type initiatives. thank you very much indeed. just looking at that gdp number. os, and oilsant and gas producer with a billion dollar write-down. paul allen is in sydney. another victim of weak energy prices, i'm assuming that will be the case. paul: that is the size of it. we all know what has been happening with the oil price. in this case, the spot lng price down, so really feeling it. not a great time to open up a large, expensive piece of equipment and queens land. they had already taken a write-down in 2015 of $433 million, so this is an additional $1 billion charge

reflected in the full year results when delivered on friday. the chairman calling this clearly disappointing, a consequence of the environment we face. shares are off a fifth of 1%, but put that into context, just one cent lower. rishaad: i was talking about companies, but what about national australia bank out with a cash profit for the third quarter. what is the story. this is a trading update for the third quarter, some not a full set of results from national australia bank, down to $1.6 billion. debtis a bad that story -- story. net interest margins are slightly lower, though the bank will not say by how much.

ofr one capital, 9.5% as june 30. ab is dealing with regulatory changes and a clampdown on mortgage lending. they started off in the red, now up almost 1%. rishaad: thank you very much indeed for that. paul allen in sydney looking at the national restraint bank and what is going on with santos. some other stories we are following, brexit may be happening later than sooner. here is tom mackenzie in beijing. yes, the uk's with a draw from the european union could be delayed until late 2019 as new ministries for the transition may not be ready to start talks as early as expected. the sunday times says department's are still recruiting, making it unlikely article 50 will be invoked until to taket year, required

the u.k. out of the eu. reports from japan say the government is to develop ground to air missiles to defend islands also claimed by china. be a systemed to deployed by 2024. tensions have been rising over the islands ahead of next month's g-20 in china, where there is talk of a meeting between the president of china and prime minister shinzo abe. police and tylan say the suspects are probably still in the country. the devices used in popular tourist resorts were broadly similar, and one group may have carried out all the attacks. no one has admitted setting the bombs, but the prime minister said it was an attempt to destabilize the country. rishaad: thank you a lot for that. we are taking a look at the ipo

outlook. 60% of the market for public offerings. japan's latest gdp reading tells us. @rishaadtv this is bloomberg. ♪

asian shares down, disappointing economic data out of japan, the yen holding on to recent gains. likes a stronger yen in the next three months. what was your take? it wasn't wildly unexpected, was it? japan will slip into a recession anytime soon.

the air is leaking out of the tire slowly. the car is having problems moving forward. the air ultimately if keeps coming out, the cart won't move it all properly. >> we have been through this a half a dozen times or more in the last 20 years, so the market is used to seeing japan falter. the question is whether they have any new ideas to get the economy moving forward, and right now and looks like they are going back to the old ideas. rishaad: we have this comp review, but japan needs a new motor of growth, or at least a call brands of oil change. -- or at least a comprehensive oil change. >> i think there are some dissenters who need to be convinced, so the comprehensive

review will go in any new direction. rishaad: what does it mean for the yen? we have seen recent moves, but it is seen as a haven currency. as i keep saying, the yen is a countercyclical currency. when the economy gets week, they yen get stronger. the yen get stronger because the wealth of japan tends to get risk-averse. what you saw in the gdp number is not tokyo. when you go to tokyo, things always look pretty good. what is happening is that all the small towns that serve the big companies, they are starting to falter again. they are starting to drag the rest of the economy down.

my bank, we are not seeing a lot of demand, certainly not at negative rates of interest. that is not stimulating anything. it has forping, as two decades now, the best it can. they are going abroad and trying to find businesses. there are always pockets of the economy doing well, but whether there is enough to get the entire economy moving forward again is doubtful right now. bank has aguess your presence in the region, and that's what you're seeing, but is it on the ground? yes, simple ideas. when you go to negative interest rates, you hurt ranks. where you are in an economy where the banks are in port and hurt the economy. it is as simple as that. on the ground and my bank, we are trying to cope the best we can, but things are not easier. it has gone so

topsy-turvy, the world, hasn't it? it seems skewed, doesn't it? bank islobal central telling us they know what they are doing. telling usey are now that what they have done is all they can do. >> it is going to be hard for them to extricate themselves. promising thatf we can get you out of this, and now the market is going to test them a little bit. i am very uncomfortable with negative interest rates. negative interest rates don't make any sense from an economic. point of view. , why should i

invest? why should i spend right now? i will be able to purchase more with my wealth tomorrow. ofhink the configuration yield curves around the world is very strange. this, i is hard to time would not be too surprised if we have another negative, unexpected reaction like we saw und market. scratch oru must heads to come up with ideas as to what to do? >> i don't like government yields that are negative, so i'm thinking about buying put spreads to hedge, and also waiting for volatility to pick up. the one area i do like is the tech rally. it may go a bit longer. i see tech companies producing profit, and profits are a premium right now. so that's why longtime

one -- long taiwan. question of buying on the rumor and selling on the fact? nearwan is a narrowly focus part of tech. nvidia has been doing very well because of certain graphic chips. it is a broader story than taiwan. in asia, if you're thinking about tech, tie one looks like part of that story. -- tie one looks like part of that story. rishaad: that should bring more , which into the market

might give us a true reflection of what is happening on the ground. >> i think the market, normally when people come back, they continue on with the present trend, but some of the present trends are dangerous. this fixed income rally is very a three monther horizon, i may not get what i'm looking for, but the pricing does not make any sense to me. sales number in the u.s. affecting fed sentiment as well. yes, we are still in the one hike in december camp. thank you very much indeed. always a pleasure. a quick check of business flash headlines. china state grid trying to gain control of a brazil energy company. they have agreed to sell the 25% stake, the deal to be announced

in a few weeks. chinese companies buying foreign utilities at a fast pace. last week, australia rejected a bid on ausgrid. indonesia considering setting up tax havens to keep aliens of investment dollars in the country. the government said a tax amnesty program could attract money overseas, which could fund infrastructure projects and finance a widening budget deficit. repatriated funds can now be invested in assets such as gold and property. concerns rising about pay and consumerity, the confidence index plunged to a seven-year low after singapore lowered its annual growth forecast and the economy expanded less than anticipated. hong kong had the lowest due to

poor employment outlook. china money supply data giving concerns. we will hear how central banks in beijing are trying to soothe those worries. this is bloomberg. ♪

rishaad: i am rishaad salamat. this is "trending business". the slowdown in money supply has had no real effect on the fundamental support of an exchange rate, according to the pboc economist. what else is the pboc saying? they made this announcement that asunder. a typical of the pboc to do this.

comments published on saturday came after those weaker than expected data points on friday. what he was referencing worthy at $3.2 trillion, roughly in line with june. he said that showed the exchange rate was near equilibrium. he also spent time talking about and commenting on the credit supply numbers we got through friday afternoon. surprise most analysts, coming in lower than expected. the broadest measure of credit supply growing at its slowest rate in two years. if you look at aggregate financing, we have a chart that shows this, in july, up 487 billion yuan, about $73 billion. that was compared to forecast of one trillion yuan, so well short

of that. up 10.2%,upply was the slowest increase since 2015. the other component is it scum a coming in at about half of what was forecast. quitezbank said it is likely this is down two top leaders, central policymakers, in beijing concerned about credit, asset bubbles forming, and that's the reason why some of this credit has been pulled back. commerzbank also says fewer new home loans made have fed into those numbers. if we see a is material decline in the economy or a worsening of the economy, whether the pboc reverses course and ups that credit in the future, someone to keep an eye on. rishaad: thank you for that. tom mackenzie in beijing. ,nother energy expose company

could this be the start of a bigger crisis? the market open in hong kong and shanghai. we have the opening numbers coming your way it right after this. ♪

♪ rishaad: asian shares on the way down from one year highs, disappointing economic from japan and the u.s. curbing risk appetite as oil is on the way up. prices, goldickel snapping a two day trop, crude oil climbing for a third session. markets and south korea and india shut today. 2/10's gdp expanded just of 1% as business pending contract in.

the median estimate was for growth of .7%. people out there think there may have been a slight gain, policymakers struggling to find strategy to offer consistent growth. sharp extending gains, theleting its sale foxconn. a $3 also receiving billion commitment from lenders. flat at the moment in the taipei session, down 1/10 of 1%. let's have a look out it is all looking. pretty mixed as we get greater china markets online. 1%, hong kongof flat, looking for a reaction to money supply data, suggesting authorities are doubling down

when it comes to the amount of credit flowing in the economy and driving the recovery. suggesting that kong stockn-hong connect could be announced. a lot of people seeing that as a catalyst to drive liquidity in this part of the world. singapore stocks, southeast asian weakness, off session lows when it comes to the nikkei, and so the moment, marginal gains when it comes to australian stocks, up by 1/10 of 1%. the focus this morning has been on the japanese gdp, still growing, but at a slower pace. of 1%, missing10 expectations of .7%. business spending declined half

a percent, a concern there. private consumption increasing, but net exports subtracting from that headline number, so a miss overall. let's look at some of the movers. the commodity stocks, metals producers, doing poorly. new crest, austria's largest gold producer, came out with its results, full-year profit declining despite the rally and gold. in december, we had a six year low, so weighing on new crest. oz minerals is a copper-focused minoer. .- miner

some of the movers to the upside, sharp has completed that takeover by foxconn, the cash injection has gone through. hon hai lower in the session. krisenergy out with a loss. a warning on its debt governance. shares beaten down. let's bring our energy reporter. what are the problems they are facing where did this all start. facingproblems they are are the same problems everyone is facing.

prices are injuring the third year of a massive collapse. down, and if you are a energy producer, you take out debt upfront to do your drilling, and if the prices flip on you like that, you are trying to pay off that debt with revenue that is a fraction of what you imagined, and that is what krisenergy is dealing with. now they are looking at restructuring their capital structure, equity issuance, selling assets, or refinancing. they are trying to find some way to get out of the stress they are looking at. , ahaad: what other companies lot of other companies are in a similar boat, so who are we talking about? absolutely. my colleague in sydney reported this morning that santos, a big

liquefied natural gas producer, took a $1 billion write-down on their gladstone project. swiber has been in the news talking to a judge about restructuring there. all over the world, energy companies have been struggling the last two years, waiting for energy prices to rise back up and save them from this. rishaad: thank you very much indeed. everbright securities out with $1.1 billion raised. it represents a 38% discount on its last closing in shanghai. everyone selling shares to fund potential acquisitions. warning urgent action is

needed by china to contain growing risks in the economy. imf has been worried about the global economy and continued to be worried about what is going on about china, why? juliette: they were discussing article for on china, and the imf mission chief says the economy continues to rebalance, but broner abilities in the economy are there. the imf saying they are rising on a dangerous trajectory, and that is eroding fiscal and fx barriers in place. outlook clouded by debt. warning they could face a sharp slowdown or financial crisis. rishaad: imf also worried about ?ms shadow credit product

inthey have 19 trillion yuan shadow credit product. the imf is worried that defaults in these loans could lead to severe liquidity shocks. that could trigger risk aversion, and that is harder to unwind loan losses. say chinese banks capital ratios are sufficient and stable. rishaad: they've been worried thet the global economy, so imf is not just worried about china, are they? they are worried about japan. they want japan to introduce a policy used by the white house in the 1970's, but in reverse. on wagesed to put a cap and price pressures. ,apan has the opposite problem

-.4 percent deflation versus that 2% target, so the ims is they want japan to use moral persuasion, tax breaks, and penalties to prompt companies to push wages higher, thereby pushing inflation higher. at director of this policy the white house and the 1970's is a senior fellow at the brookings institution. he says this will not work because companies do not want to take on extra costs in a low-pressure environment. trying to push wages and inflation higher and take on this policy from the 1970's, but in reverse. rishaad: thank you for that. turn around and equities across the asia-pacific , the nikkei with again now, hang seng up .5%. this is the chinese stock where the bulls and bears seem to be .olliding, weibo

it has reported investors this , butwith shares doubling short sellers interested as well. welcome back. and am balancing jetlagged the eastern time zone. the short sellers have been licking their chops at weibo for some time. the rise so far prompting more short positions. in fact, the shorts are rising, now at a record high. has surged 119%. i want to tell you why the longs are in on this. in150 1% since the spinoff 2014. last week, second quarter , $.16.d eps revenue and user growth steady, if not stellar. third-quarter guidance also beat

expectations, upwards of $173 million, tv and video partnerships that have led to growth over the last couple of whereof 30%, so that is the longs are saying that there is still more upside. in any sane world, you would be talking about the stock is being overvalued. have you got to that point with this one yet? >> that's why the shorts are saying it is overvalued. it is trading 70 times estimated forward earnings, double of facebook, double of alibaba. historic 132 times earnings is what you are referring to. >> some investors saying the it's onlypany, sina, up 30% since the spinoff, so

maybe that's a better way to get into the weibo play. rishaad: thank you very much indeed. exchange, westock will hear from its global head of capital markets. this is bloomberg. ♪

rishaad: a quick check on the latest business flash headlines. the boe could deliver another cut this year. carney may add to stimulus announced earlier this month, to 1/10 of 1%ate in november, also the probability of britain's leading into recession in the next year, 48%. getting set to sell cheap smartphones and emerging markets

, planning to sell devices for $99. panasonic running to sell the phones initially in several countries, also expanding to 10 markets next year. squad bros. film suicide is still at the top of the north american box office despite the panning from critics and competition from three new releases. the movie collected 43.8 million dollars over the weekend, down 67% from its debut. it broke the august record when it opened the previous weekend. exchange is stock leading the ipo race this year, raising more than $5 billion, 22 of the biggest share offerings since 2014, including line. that it guest overseas

feel business and expects the second half to be stronger. he is the global head of capital markets. what you are trying to do is say we are beating you, more technology ipos, but they would beg to differ. specifics big for themselves. since 2012, 14 of the top tech ipos have been on the nyse. thee have been a lot in past few years, but you only need to look at this year to see cracks in the armor with the window opening up. to high-profile tech ipos performing well. the numberey look at of ipos, and you look at the value of them. >> that is correct. metrics, thet both number of tech ipos and value created, we have been leading that race and have been very

happy. it is due to a unique market model. we not only have great technology, but the human beings in the middle of that, making a big difference in terms of the volatility. rishaad: nice advertising there. about why it's different in terms of the technology? >> equity markets are quite fragmented. .e do have a different model we are the only one with human beings on the floor, and that makes a difference in terms of demand. rishaad: everybody else has gotten rid of it. >> it is a hybrid model. important, markets getting faster and faster, but there are certain times when you want to slow things down and

insert human judgment. we value that piece of it. rishaad: when you come to this part of the world, what do you with usple to pitch rather than singapore, hong kong, or london? what separates you? is up to the it companies. a u.s. listing is not for everybody. we talked to them about the benefits of listing in the u.s., the deepest, most liquid pool of assets in the world, more than twice the total of the rest of the world combined, $2.2 ,rillion worth of technology assets managed in the u.s., a very sophisticated investor, so we think that makes a big difference. nyse, you are getting a large, well-known brand.

we have been around for 225 years for a reason, and we are proud of the track record. i try to stay well tuned in on what is going on around the world in different exchanges. there's a lot with the brexit vote and trying to understand how everything will play out. i do think we are in the early days. rishaad: does it impact your business? >> not directly. what you do see is people tend to look to the new york stock at largeand the u.s. as a safe haven. u.s. as ak at the potential alternative with uncertainty in the world. rishaad: what are you looking for in the second half? what do you anticipate a particular and who do you think will be the highlight? >> it will be stronger than it

has been. we are coming off a historically weak ipo market due to concerns around the fed, global economic issues, and volatility. alatility has moderated quite bit, and we have a pipeline of companies who have filed and continued to file, looking to go public in the second half of this year, so i'm looking for a stronger second half. rishaad: is there a name that you are particular excited about? >> not a particular name. a ton of companies that wanted to ipo last you, but were not able to, so there are exciting companies out there. rishaad: is there a believe the economy is getting better and they can get a better valuation? >> really what were talking about is volatility. the enemy of healthy ipo windows when you have healthy volatility. it becomes more unpredictable

for the companies themselves. companies have been staying private a lot longer, so when you have that dynamic, it slows down the market, but i see it moderating quite a bit going forward. rishaad: does a fed rate hike make a material difference to the way you look at it? i think what ipo markets care about is the relative level of interest rates, still quite low historically. we've been talking about fed potential hikes for a number of years. investors are figuring out a way to factor that into their models. rishaad: thank you very much for joining us today. , nowtruggle for ipos looking forward to a number second half of this year. tycoon up trump, the seems to have the is of one of america's biggest enemies, next. ♪

rishaad: looking at what is going on in tokyo, market flat at the moment, economic growth slowing down, business spending slumping, shares of shrugging off the start of the session, the nikkei trading marginally .2%,r, gdp expanding by less than the .7% increase expected. some were even predicting we would have the economy contracting. sydney, this is the picture of the opera house. we are shrugging off earlier losses, the market moving to the upside. some mining stocks weighing, even gold going up at the moment

, other basic resource stocks moving to the downside, adding drag to the market there as well. index, adding to that now. this is the situation in singapore, straight times index igher, the hang seng as well. moving higher, .6%. of the on the back shenzhen and shanghai markets moving to the upside. donald trump has been supported by an unlikely source, one of america's foreign enemies. repeated the claimsit

that president obama founded isis. >> voters are having difficulty parsing the comments made by donald trump. we are have had so much back and forth about the contrast between the two. most american leaders are not as in tune with the international politics of the middle east. him, doesashpoint for he have the temperament and what is right from a national security standpoint. say what dominated the headlines was the issue of tax returns, right? it has come back to haunt donald trump because clinton and tim kaine both released their tax returns. will that affect the poll numbers? did release of her

2015 tax return, shows are making with her husband $10.6 million for 2015, paying a hefty tax of $3 million plus. it draws a contrast with donald , unwilling to release his tax returns. 10.6 millionying dollars for a democratic candidate for president, and the question of raises about the amount of money she and her husband are making, the foundation, and how much that makes as well. people will go back to her comments about how they were dead broke when they left the white house and people will look at the numbers. >> they are certainly not dead broke. world's biggest container shipping company is going full steam ahead with cost cuts. we will be asking the asia chief on the future of the industry. this is bloomberg. ♪

♪ rishaad: it is monday, august 15. you are watching "trending business." ♪ rishaad: this is a look at what we are watching. about $47idating after the biggest weekly event since april. there are hints opec will discuss an output freeze. sharp's moved to foxconn has been completed with new management on the board. more disappointing data from japan with the business spending

effectively drying up. follow me on twitter. give us an idea what you think of our top stories. the session in jakarta is underway. haidi is having a look at what is going on. it seems we have turned a corner at least. haidi: we have had a lack of direction all morning in the session, given that we had a fairly disappointing japan gdp number. we were looking for 0.7%. spending falling, of course, drag from exports falling. with worse than expected figures. this has been playing out all morning. we are seeing a little more of a pickup. we are seeing energy names

coming back a bit. this resurgence across oil prices has not happened in the session. it is getting dragged down by commodities and mining names. ansel is the top gainer in the session, up 15% at one stage. the company declared a dividend cents. u.s. they are considering divesting non-core assets. crestf the decliners, new mining, announcing net profit fell 24% for the full year. -up ine had this ramp terms of price, but we have had a six-year low when it comes to the price of bullion.

we are having a bit of an off-day. southeast asia, a little weakness for retail. we are also getting indonesian trade numbers at some point today. that will give us a better picture of how the regional economy is looking. strong gains from shanghai, up 0.2%. we have the data deluge suggesting that money supply authorities are getting conservative in terms of how they manage the amount of liquidity and credit flowing through the system. in terms of the yen, we did not have much of a reaction in the bers.of the nikkei num a little bit of weakness could be underpinning the gains in tokyo. rishaad: the japanese economy grew less than expected in three months, as business spending

contracted for a second straight quarter. growth was well shy of analysts' thinking. james, what were the standouts for you in all of this? big detractor from growth was exports, taking three percentage points off of growth. if demand overseas have been better, you would have seen better gdp numbers. company investment also fell. things, athe two big lack of confidence from companies and the weak demand from overseas. most of this data does not reflect the brexit decision. whatever effect that will have will come in in the next data set. abeaad: how might shinzo

respond to these figures if at all? initialovernment, the budget for this year was a record. they have announced the fiscal stimulus package, which they have not passed through parliament. none of that has started. is theu are going to see effect that stimulus will have on the economy. discussion of no anything extra from the government. what this shows is that, even with massive spending by the government, the economy is limping along. two consecutive quarters of growth, but not really strong, not where abe would have wanted the economy to be after three and a half years. rishaad: we have the boj preparing conference of policy review. do they had ammunition, really?

>> that is a good question. the bank of japan says they have plenty of ammunition left, plenty of bonds in the market. obviously, anyone who is not in the boj looks at the numbers and says that is not the case. you see that the bank of japan is one of the biggest shareholders of japanese companies. the market. of what can they do? a lot of people say they can buy more, but the effect of that is diminishing. we have this review in september. will they increase stimulus at that time? that is the big question, obviously. has only said that if they wanted to, they could do more of the same. what effect that will have is unclear. rishaad: let's have a look at

shares really coming into focus, oil and gas. paul allen has been covering this from sydney. here, is another victim down to weak energy prices. >> very much so. they are feeling the pain. probably not a great time to be starting up a large, expensive piece of equipment in queensland. that is what they are taking the the lngn against, project up there. they took a $43 million hit in the same project in 2015. take a look at the stock price. it was down when the news broke, but up .5%. the chairman calls this decision

disappointing, a result of the challenging environment. you can expect to see the right down included in the results friday. profit: we have cash coming through with the third quarter off by about 3%. how does that fit into the rest of the story? what is the specific story for nab? >> this is a trading update. it is not a full set of results. story from what we saw with commonwealth bank's four-year results. they also had a decrease last week as well. to $1.6 billion. that is the story of bad debts, up 21% in the first quarter.

they are dealing with a tougher regulatory environment, tougher rules around mortgage lending. interest margins are off. tier 1 capital, 9.5%. they are now up .75%. rishaad: thank you, paul allen, in sydney. several companies out this morning with disappointing numbers. share prices actually getting a bit of a lift for some. beijing for a to roundup. with drawl the european union could be delayed until 2019. not be able to start talks as early as expected. it is unlikely article 50 will be invoked until late next year. that is required to initiate a two-year process taking the u.k. out of the eu.

theresa may had been expected to start the exit next year under massive political pressure to deliver. she has faced calls from the european commission to "not w time." the french government once negotiations in 2017 at the latest. reports in japan say the government has developed ground to air missiles to defend islands claimed by china. it is expected the system will be deployed by 2024. tensions have been rising over the islands. hundreds of fishing boats and coast guard vessels have been spotted in the area, encroaching at times on what japan sees as its territorial waters. in china, there is talk of a meeting between jesus and paying and -- xi jinping and shinzo abe. inicials say devices used

populist tourist resorts were broadly similar, and one group may have carried out the attacks. police are checking evidence at the site and expect results by saturday. no one has admitted setting the bonds, but the prime minister says it was an attempt to destabilize the country. tighteningent is security at major tourist sites and calls for calm. rishaad: thanks. stand to build the new silk road depends on singapore. take a look at bloomberg.com/asia. we have challenging conditions for the world container industry. a look at the world's largest shipping container company still beating expectations. we talked with the top executive in asia. we have that, we have the yen

going from strength to strength to ♪

rishaad: seeing a bit of strength when it comes to the after disappointing numbers from the japanese economy. spending falling .4%. to next guest gets the yen 1.07. shorter-term, you would not be surprised to see a getting stronger. in the short-term, we see a dropping to 100. if you look at some of the gdp numbers, some of the negative

numbers were disappointing contributions from net exports. interest isboj's stabilizing here. , after giving us more guidance with what they would do in september, more q.e. badaad: strange -- you get data in japan, and it is positive for the yen. >> the yen has not moved a lot today. people are confused with what to do with all the numbers that have come out recently. in my view, what they need is the decisive boj making sure we have a monetary policy. that is not happening. rishaad: is negative rates the right route to be going down? >> i do not think it is a way to go. i think more qe is the way to go. ut keep do more fiscal, b

in mind the gdp in japan -- rishaad: is owned by the japanese public, essentially. still, it is a very high figure. >> the issue is, at one stage, we will see a derating of japanese bonds. clearly, there is something that abe wants to do, incremental new spending. rishaad: let's broaden it to other things going on in the foreign exchange space. the retail reading in the u.s., all the merchants of doom and gloom are saying, the economy is not doing as well as reported. too concerned be about u.s. consumers. we had fantastic numbers for the second quarter. i look at payback on the

consumer side, particularly for the fed.that is a warning signal . the best of what we can get is maybe december. rishaad: the dollar -- do we see it getting weaker against other currencies? if you look at what has been going on with sterling, sterling continues to feel the effect of brexit. does that continue? >> on the pound, yeah, we think the risk is to the downside. what i look for a stronger dollar on average? yes, i would. i think the soundest story globally is in the u.s..

maybe it takes us a little bit longer, but it is still going to be the fed. in asia, we see central banks cutting. diversion among certain policies still speaks to stable to a strong growth. rishaad: emerging markets -- do they get the same thing? is that a different story altogether? asia, i think it is a little exaggerated. some of the strengths will go away towards the end of the year when the market realizes it was just a small increase. the better story is the high-yield. the world is seeking yield. where can you find it? india. it is a good structural growth story. even though these currencies should weaken, they should still have a return. rishaad: put your hat on as a

commodity strategist. looking at gold? if you saw a hike in december, it would be difficult to see gold rally. let's just keep gold where it is. i love it from an insurance asset. holding gold as insurance, absolutely. down the road, we see more strength from asian consumers. i hope that will be helpful. in order for that to achieve, look at all the amounts of futures that we hold in gold. rishaad: final question, we have yuan as aeeing the stable currency. i guess we're looking at the inclusion of the sdr. >> i love to see the pboc

saying, we want to have a stable currency. it was really challenging. the speed of decline was around 10%. nobody really looks at it beyond the economy. i think it is helpful to come out and say, we want some stability. , i think capital outflows are stronger in nature. you have capital controls in place. that is not good enough. once the dollar goes strong, i think we're looking at seven. rishaad: dominic, thank you very much, indeed. when are you looking at seven? >> six or 12 months. rishaad: a quick check of business headlines. we were just talking about china. slowing growthd has not affected the economy and the exchange rate is stabilizing. foreign reserves were little isnged, indicating the yuan near equilibrium.

the economy stumbled slightly in ales ander weakened s investments missed estimates. boj once the abe government to use penalties to prod bigger pay rises and get inflation up, a sign of where the imf is about japan's stagnant economy. everbright security is out with a $1.1 billion hong kong offering. discount ons a 38% its last closing price in the shanghai. 's initial offer fell this year. of brazilgain control

's cbfl. shareholders are set to sell their stake in a $1.7 billion utility. week, we saw australia reject a bid from state grid on a national security grant. coming up, one more victim in the fallout from the energy price collapse. we had over to singapore for the details. this is bloomberg. ♪

energy will be a focus because of the singapore-oil listed developer selling the warning on debt recovery.

dan, what are the problems they are facing? where does this all start as well? kris is facing the same problems facing everyone in the energy sector, which is the unprecedented collapse in prices entering its third year. june 2014 was the last time prices peaked. we are almost 60% below that. the energy sector requires upfront costs. you have to write out expensive leases on mineral rights. you build up huge debts. you are expecting to earn revenue from hydrocarbon over time to pay that off. when a big energy price collapse happens, all of a sudden, all your finances get thrown out the window. upfront these big,

costs you are expecting to pay out with $100 oil that you have to pay out with $40 oil. a company like kris is caught in a bind where they have these big debts and revenue is not what they thought it was going to be. there looking at selling assets, refinancing, equity issuance. they have talked about ways to strengthen their capital structure. they had a $25 million loss in the second quarter. they are looking for ways to keep going through this energy collapse. , do other companies find themselves in the same boat? are they doing the same things? >> absolutely. in the u.s., dozens of shale companies have filed for bankruptcy. had to do asantos $1 billion writedown. singapore has been in the news because they looked at liquidation.

they are in the middle of talking with a judge about restructuring right now. all these companies are trying to find ways of making it through until maybe energy prices can rebound a little bit and toss them a life raft instead of being drowned in a glut of oil and gas around the world. rishaad: thank you very much, indeed. in singapore, there are celebrations taking place. it is the first ever olympic gold medalist, joseph schooling not only winning the men's 100 meter butterfly, but also beating the great michael phelps along the way. not surprising, singapore is going mad. joseph is being honored by parliament and comes from good olympic stock. his uncle was a first signal an to take partre

in the games in 1948. coming up, the international monetary fund telling china now is the time to act. we look at the latest warning coming up. ♪

♪ stocks in hong kong pricing for a fourth day, the highest earnings since november, oil prices extend gains since april, shares in sydney in tokyo ofing losses, the strength the yen and weak gdp weighing on tokyo. .2% as gdp expanding business spending contracted. economists were looking for growth at .7 percent, business investment declining .4% from

the previous three months, looking for a slight gain, struggling to find a strategy for consistent growth. revealingersing after a one billion dollar write-down, reflected in friday's first half results. lower lng prices, the latest sign of weakness when it comes telestrates energy industry pi. here is a look at what is moving markets. haidi: a next picture, the main undershotnese gdp, expectations, suggesting that frustrations in trying to revive growth unleashing massive monetary stimulus, but challenges still immense. nikkei 225 flat, earlier

losses, but have come off those. we will see what the afternoon session holds in store. pretty modest gains from sydney, .25 percent, kiwi stocks the same, energy names doing better on account of oil extending the best we get had since april. oil and focus given that we are looking ahead to the september opec meeting, the saudi oil minister saying that market stabilization measures might be on the table. greater china, hong kong turning .ositive, up .5% the verging fortunes when it comes to the energy space. bank of china leading gains for financials. singapore looking flat. malaysia up by .2%.

indonesian shares ahead of trade numbers, trade balance, import and exports, lower by .4%. philippine stocks, remitted remittance data showing a slowdown. or is shanghai, up by 1%, off session highs at the moment. a report from domestic hong kong suggesting the exchange could be announced early as this week. we are watching for whether that could potentially lend a catalyst to sluggish boykins and liquidity we have been seeing in the chinese markets. are looking at this thailand data. as soon as we get it, we will

bring it to you. let's look at the china central bank, a leading member seeking to ease fears, saying a slowdown in money supply has had no effect and the fundamentals do support what is going on with a stable exchange rate. , kinsey is looking into all this. this is the pboc trying to strike a confident tone after that supply data, right? tom: it does seem that way. the data took most by surprise, growing at the slowest pace in two years. despite that, things are stable here. reservesok at the fx the previous weekend, they show the reserves at $3.2 trillion,

not coming off to much, capital outflows aren't bad, and the exchange rate is balanced. that money supply data, aggregate financing come , $73 487 billion yuan billion, well below the one trillion yuan target forecasters had expected for july. we also saw new loans about half of what forecasters had seen as well. 10.2% inply was up july, the lowest since april 2015. sayings at commerce bank this is because policymakers are focused on asset bubbles, so they are raining back this credit, and there will be fewer new home loans as well. on thestion is whether pboc, whether it is faced with a

deteriorating picture, does a u-turn and turns back on those credit taps. that will be something we will be watching for. rishaad: what about the comments a might of made that grabbed your attention? he also talked about the corporate debt challenges, saying corporate debt is at a higher level than most other nations. to bed there needs continued work at tackling the so-called zombie companies, and he said there needs to be more rollout, faster rollout of this debt equity swap program the central government has been pushing, where banks take a stake in companies struggling to pay off their loans. he also said there should be less focused on the gdp target and more focus on a stable job market. some data that has come out of the state information center in beijing,

saying second half gdp is likely and sixin at 6.6%, point 6% full-year gdp, which would be within the target of 6.5% to 7% gdp growth, which is the government's target. rishaad: just keeping the chinese theme going, imf warning urgent action needed by the country to contain growing risks to its economy. at what they are really worried about. the imf was discussing article for on china. said thatssion chief unless china does urgent reforms, it will face potentially a financial crisis or a risk of a sharp slowdown. the imf is confident that china's economy continues to rebalance towards a sustainable growth half that, but there are

a number of vulnerabilities putting it on an "dangerous trajectory." the median outlook clouded by the rise in corporate debt and structural excess capacity, saying they must do something soon. rishaad: the imf also worried about china's shadow credit. juliette: they have yields of 14%, a very high risk asset. ofre is 19 trillion yuan these chinese shattered credit products. an imf report released on friday, they are worried that defaults could lead to liquidity shocks and trigger a risk aversion that is harder to manage and unwind in government bonds. that chineseay banks capital ratios are sufficient and stable. right here at last one,

it's not just china, imf looking at other countries. juliette: we have -.4% inflation, so deflation in japan at the moment, versus the 2% target. the imf want japan to resurrect their radical strategy once , andyed by u.s. presidents incomes policy. great foray it is not the overall economy, but rather than trying to contain wage pressures and prices, they want to have tax breaks and penalties to have companies push up wages and push up inflation. a lot of people saying this will not work. companies will not want to take on more costs. rishaad: thank you very much. breaking news, police responding to reports of shots fired at jfk airport in new york.

there is a shooting happening in terminal eight. a local news station saying all of this without giving us an idea of where they got the information. thece are if iq waiting area while they search for a suspect. they do not have a suspect at this point, and we have no injuries reported thus far. the nypd did say sunday night that they could not confirm whether shots were actually fired. detailse very sketchy coming through from jfk airport in new york. check on some other stories. the boe could deliver another cut this year, according to a bloomberg survey which predicted may act by bringing the rate to 1/10 of 1% in november. the probability of the u.k.

sliding into recession at a record 48%. indonesia considering setting up tax haven areas to keep it billions of investment dollars in the country. a taxvernment said amnesty program could attract money stashed overseas, which could fund infrastructure projects and finance a-game -- finance a widening budget deficit. repatriated funds can now be invested in gold and property. singaporeans growing pessimistic as concerns rise about pay and job security. this is according to the mastercard consumer confidence index, now at a seven-year low. singapore lowering its annual growth forecast and economy expanding less than estimated. hong kong has their week's thanks to a poor employment outlook. let's have a look at a chinese stock, weibo.

it has reward investors with american shares doubling, but shorts are licking their lips as well. every story has two sides. let's start with the good side of it. >> the good side was second-quarter earnings beating expectations, $.16 versus $.11 expected. not growth is steady, stellar. third-quarter guidance beating expectations, revenue could be someds of $173 million, $140 million last quarter. doing tv andn video partnerships, adding to their user base. rate perge user growth and him has been 30% for the last couple of years, so the long investors see more upside , which is already up 119% year today, 151% since it was spun off from its parent

in april 2014. frothy. rishaad: it certainly is frothy. it has a pe of 132. earnings, 32 times future earnings, more than facebook and alibaba. alibaba is 63 times earnings, 30 ford, so 132 and 70 is quite frothy. the forward pe exceeds the average of 10 global peers. bearish bets at their highest level ever right now, 100 19% rise is twice as much as the second-biggest big cap chinese talk -- stock listed in the united states. some smaller stocks have seen similar gains, but it is outperforming by far in the big cap spirit some investors saying you might want to look at sina as opposed to weibo if you still

want to play it. frothy. rishaad: certainly, yeah. right. forave been waiting thailand gdp, breaking news out of bangkok, the economy grew .8%, double the expectation of .4%. that at than expected with your and your comparisons. 3.2%, andoking for the economy expanding 3.5%. that's what we have at the moment. they guess container shipping line is worried about the rising tide of protectionism. is next on bloomberg. ♪

rishaad: you are back with breaking news, details sketchy.

there are several flights out of jfk in new york canceled according to the airport's website, reports of gunfire, some of which has not been confirmed. wanda commercial shareholders approve a delisting, looking like that will go through as they try to get through that proposal to it that company back held one.sely let's tell you about the business flash headlines. bulls and bears colliding for stock short sellers the has piqued after rallying 120% this year. that's at their highest ever for the bears. earnings beat estimates, jumping 19% last week, shares borrowed rose to a record 4 million. panasonic and getting to sell

cheap smartphones, according to the nikkei news. it's planning to sell devices for as low as $99, selling them initially in kenya, ghana, nigeria, bangladesh, and myanmar, expanding to another 10 markets next year. the owner of the world's biggest container shipping company voicing concerns about a shift protectionism.t is any moves that way would hurt global growth. joining me is the asia-pacific chief executive at maersk. what is going on? what do you see? better than expected numbers, but this is a tough environment. numbers wereay the not satisfactory, but in line with expectations. it is a tough market on the revenue side. trying to cut costs.

our unit cost is at the lowest in our history as a company. we are making sure our ships are as full as possible so that unit costs are lower. we spend a lot of money on ships. rishaad: you have the biggest ships in the world. that have 18,000 ships l europe trade. we model rss on the need of trade -- our assets on the need of trade. you must be a bellwether of what is happening with international global trade. how are you finding things at the moment? toanybody who expects 10% 50% growth and three times gdp, those days are over. the multiplier is much lower than it was. the other thing is that in certain parts of the world, the

services industry is a bigger part of gdp growth. china for instance, a big part is the service industry and mastech and street, so it does not necessarily translate into foreign growth anymore. rishaad: that is why you are getting out some of the ports? >> the totality of the flame from those 10 ports was 300 containers, which is nothing. they were basically served by barges, so we are still serving those markets, but using more efficient gateways. 300 containers for us is not a big one. rishaad: your average ship carries how many? >> 18,000. rishaad: you are also bringing unit cost down. our industry has passed on the oil savings to the customer,

but we will continue to be vigilant on costs, terminal costs, unit costs, keeping ships as full as possible. rishaad: what are you looking at for the rest of the year? >> our for your result will be significantly below last year. we don't have a definite proposition yet. is it again this idea that the world is not firing on all cylinders essentially and have not done so properly since 2008. >> our industry is cyclical. on the supply side, we ordered ships 3-4 years in advance, it is that is how long it takes for the order to be delivered. we are anticipating a situation with the global supply for capacity is above global demand. in this quarter, we have increased our own capacity by 2%. that's why we are getting high utilization and costs down. rishaad: we have lots more to

discuss on this. we will be back in a moment. ♪

rishaad: right. you are back with the asia pacific had for maersk. let's talk about the business of shipping. it is hugely cyclical.

it does seem the industry orders too many ships half the time and too few available a lot of the time, which makes the money i suppose. >> let's start with the philosophical perspective. container ist what a has done for global trade, it has been hugely beneficial. it has allowed players to export to other countries without take risks. you ordered the ship in the past, it was significant for a commodity. the container, we have been able to reduce that risk. rishaad: it has changed the whole game. it brought unit costs down. globalization has made it possible to have chinese manufactured clothing and the u.s. at a lower cost.

,he cyclicality of the industry the order path is to-three years in advance, and you have to protect your demand. 50% of global capacity, so we look at our growth pattern for the next couple of years, and within our fleet of 600 ships, we can accommodate those. are you scrapping many boats? >> recently, yes. rishaad: how many? >> it's about 10-15 ships. rishaad: they are too old and inefficient i am assuming. >> they are inefficient because of the cost to rise. fore are many ships built the old town mock now, narrow ships. now it is wider. rishaad: what are you going to be seeing in the next 2-3 years?

are you making any of those orders? >> we are getting delivery of the 18,000 on stream next year. have not placed any new orders recently. rishaad: that means you are not looking optimistically at what happens with global growth. what is behind that pessimism? more protectionism and there is an anti-globalization move? what we need to accommodate growth, and based on growth projections we have for the industry and ourselves, we can do with the ships we have at the moment, but that can change as growth changes. goods have% of all been shipped at some point. >> that's correct. that's why the container has made a big impact on globalization and the things we buy every day because it has

made it more cost affordable. rishaad: are you looking at any light at the end of the tunnel? what is your most popular, strongest route? with are a global player 15% share, so we have many strong routes, but the name of the game will be cost efficiency. , so as hasle game and said, it is a cost game needs to be a divesting of cost. rishaad: thank you very much indeed. the chief executive of the .sia-pacific for maersk stay with us. "asia edge" is next. ♪

angie: we are long in hong kong. the hang seng is up. stocks, a mixed picture in the asia-pacific region this morning. edge." watching "asia top stories this hour, japan casts a shadow over the region as disappointing data shows the economy grinding to a halt. oil consolidates its rise above $47.

sharp enters a new era, the management has changed and the cash injection has gone through. 119%n bears collide after surge this year. straight to the markets. asian stocks are holding gains close to a one-year high. the gdp number coming out of japan really did miss estimates. >> how frustrated would you be if you were prime minister abe right now? exports easing into that headline number, 0.2%. we were looking at growth of 0.7%.