profit jumps three folders lower cost boost margins. coming up this hour, india's new central bank prepares to take the reins. >> hopefully we get a little bit of excitement when mumbai opens in about 40 minutes. i'm watching what is happening with your money today. it's not the most interesting trading session. it's very subdued. you have to kind of force -- there we go. on the downside, you have the rest just below water. down agetting sold little bit. even in china where there was a pickup in the first hour of trade, it leveled off as we

moved toward the lunch break. currencies as were most of the afternoon is. the markets may have positioned a little too much. really capping what we are seeing into this monday morning. when you talk oil and metals. precious metals in fact. is still down.on i will be back with more in currency choices. welcome back to "on the move." profitschina yuan jumped in the first half. let's bring in stephen engle.

he has been following this for us. the housing market has been tumultuous. it seems to be rebounding. >> you are one of the few people who pronounce it correctly, vanke. not vanky. 804 million u.s. dollars. revenue up 49%. that is the negative impact that has overshadowed the company for nearly a year. the end of last year is where we got a struggle that southern china, an obscure conglomerate, was revealed as being the largest shareholder. was notgement of vanke pleased with this.

you have a few key players. china resources. mount evergrand increasing their stake. competing interests. out,n't know who will win how it will play out, and what their intentions are. some wereonne: saying, is it a white knight or -- not -- stephen: this is quite an obscure story. we asked an analyst and he doesn't know. >> this mysterious takeover group is -- nobody knows what it is. as i said the source of capital is unclear so everybody is scrambling to figure out what the moving parts are and it's

unclear how it will end up. >> this morning, we had a briefing here from vanke's board secretary giving latest developments. he saying that the ownership tussle will bring a larger challenge to the company and its operations in the second half. he also says that s&p and fitch may have to adjust. goes on to say that they have been wanting to communicate with all of the involved parties and hope to reach an agreement. ever grand did not disclose their attention, he says. story becauseoing we do not know how it will play out. signeds telling us that contracts declined in july. there are all kinds of issues that could be affecting the

credit rating, credit worthiness and operations of this large developer. yvonne: interesting we are seeing a bump in shares today with china vanke. tripled.or miners have is joining us. tell us what is behind this remarkable result and is it sustainable? gains that we have ton today are largely down the work the company has done on reducing costs. they cut their cost on the year by about 43%. though iron ore prices are trading at less continuous speaks it means they continue to bolster margins. of lower costs,

stronger iron ore prices means the margin is fantastic and is continuing to improve profitability. goodutlook is particularly when you think back to a year ago. with lower oil prices, has been quite a turnaround. talk about the outlook you have laid out. do they see that there could be further gains? reporter: myself and other reporters have just been talking to management in the last hour. -- better been given steel demand in china, bettoer steel prices in china. --nsport, health, education

they also that is positive for the iron ore market. they see the market in supply-demand balance. they are not necessarily saying that they will see gains, but their expectation is pricey. if they do, that is great because it will continue to show what we have seen today. yvonne: also steel, profits jumping. could there be gains? does it have legs to keep going? similar factors. it is all about similar strength in china. strong demand. all of that has been prompted by the government stimulus. that company -- lou scope reported -- bluescope reported those numbers today. they are optimistic on their own

outlook. for the wider industry it will remain challenging. fromompany will benefit stronger steel prices but not so much for his competitors. >> this electronic company said to be purchased for $3 billion. a spokesman said no agreement has been reached. gavey's market close intersil a market value of just over $2 billion. as rising since this morning but falling by more than 4% right now. be announced as 5%.y as

pfizer has been relying on new branded treatments including cancer drugs. fisher has signaled that a 2016 rate hike is still on the table. the u.s.ays that economy is close to meeting the fed goal and he expects growth to pick up in the coming quarter. let's go back to the market now. currency is very much in focus as investors try to break down those recent hawkish comets from the fed. at thehave a look bloomberg. it's what we always used to get an idea for what the pricing is. these are fed fund futures. what that shows you is the probability of a fed rate hike

in december. that blue circle i have highlighted shows it is coming back in a strong way. we are looking at a 40% chance. you understand why we are seeing what we are seeing this morning. it started last friday where you are looking at a lot of dollar strength. especially in these companies that have been substantial. back to me. .ndonesia rupee not a relatively big surprise -- indonesian rupiah. not a relatively big surprise. that dollar strength coming through at its lowest level for the rupiah in about seven weeks at 13,200.

very weak, as expected. coming from the pboc. this is roughly where the fix in was to begin with. the year to date chart. some strain coming through for that currency. you can see a pop. 1127. just some lines coming out of manila. i don't know how they are doing this. they are extrapolating the exchange rate. you can do that into 2022. we are talking six years down the road. they are looking at a range of thought -- that is a five. to the u.s. dollar. that is a projection. that is the assumption of the government.

there is this report that the presentation is doing. yvonne: you can get more on the markets and the rest of today's other new set bloomberg.com. you will find in-depth reports, market data, and you can watch some of the interviews you may have missed today. hasng up later this hour, gdp gone out of fashion? why some economists think it is an outdated measure. and further speculation that all signs are pointing to a hike this year. ♪

yvonne: a quick check on the latest business flash headlines. brink to investigate a described as a hollow shell. the bank is called mega international commercial. it was fined for evaluating

money -- major league baseball has approved the sale of its majority -- nintendo's sale of its majority stake in the seattle mariners. resident holdings have been sold to other members of the current ownership group. the financial track of the sale will be included in nintendo's next quarterly financial report. no terms have been disclosed so far. one partner plans to sell a 60% stake of its joint venture to the parent happening. company will make -- they are trying to sell it as part of a company restructure due to be completed by 2018.

the dollar strengthened as hawkish comments from a fed official boosted the likelihood of a rate hike this year. fisher says that the u.s. economy is close to meeting the central bank's goals. let's bring in our chief agent economist -- asia economist. fisher joining in the hawkish talk. did he take away the attention from jackson hole and janet yellen? reporter: --guest: possibly. has been a lot of disagreement over the last three or four mon ths. fisher is leading the way for the hawks. janet yellen has been clear that she does not see the need for raising rates anytime soon. there is a power struggle between the hawks and to the doves at the moment. yvonne: our markets pricing and that yellen will echo what fisher has said?

guest: the markets have priced in one fed hike by the end of this year, one or two next year. that is where we would see things moving. the real key element is what would happen to global growth. that is a key driver for the decisions. if you have the s&p will require, -- moving higher,, the likelihood is that the fed -- anna: -- yvonne: are the feds too hawk ish? in the market too dovish? guest: i think that is about right. think the markets are overly confident that interest rates won't go up. if you look at the difference between five year, five year inflation forwards -- there is a lot of things not being discounted in the market. there is probably a reason to be more hawkish in terms of futures

markets. yvonne: you mentioned global growth. has there been anything that changes your outlook for the second half? guest: not really. brexit has been an interesting experiment. you had this massive listening by the bank of england. a lot of stimulatory talk. we haven't seen anything from the feds yet except concerns about the impact of global growth. the numbers are suggesting the u.s. is in for a good second half. or in the japan region -- do you think the fed could disrupt the momentum we see in asia? guest: a lot of what is happening in asia is flow-driven rather than growth-driven. if you look at post brexit, the u.k. cut interest rates, a decline of growth in europe.

and it flowed into emerging markets. vote, butd the brexit a lot of it flows into asia being strong. could the fed disrupt that? it would if they raised interest rates quickly, but we don't think they will. yvonne: you mentioned japan as the one victim of all this. we just heard from kuroda over the weekend that we could see easing. is there a surprise out of that? most people are expecting something. guest: people have been expect something for quite a long period of time. yvonne: i feel like september 20 is so far away. guest: the bank of japan is clear on what they need to do. something big. if you look at with the imf said in its article in july, it said that policy has to be really robust and has to try to make a difference, otherwise there isn't much point.

the japanese have been making little changes. something,ants to do he has to do it big. yvonne: big in terms of unconventional >? guest: that is not kuroda's part of the policymaking framework. it needs to be a two-pronged approach. bealso needs to monetary-driven. yvonne: do you see that shift toward fiscal? i was speaking to someone earlier, saying it is not so much a shift -- it is a shift to the government. it does not bolster much confidence. guest: i would agree to some degree. has lost credibility. its negative interest rate move

earlier was a disaster. certainly the way in which it vacillated between making a big move and not has not done credibility any good. it is up to the fiscal, micro-side of policymaking to make a difference. yvonne: coming up, the show must go on. minister's prime resumed his siege after a health care issue, but what is behind the stumble?

yvonne: you are watching "asia edge." i am yvonne man. this airline has canceled many flights today. it was expected to make landfall in the tokyo area around noon. 25,000s more than passengers have had their flight plans disrupted by the typhoon. they've canceled 96 domestic

flights affecting 21,000 passengers. officials saying more than 730,000 flew in last month. more than 40% were women in their 20's and 30's. local businesses have seen a change in shopping patterns. chinese tourists spent a lot on cosmetics and medicine. there is less demand for electronics since the quality of chinese-made products have improved. the singapore prime minister lee hsien loong has fallen briefly ill after delivering his address. he had been speaking for more than two hours when he abruptly stopped and had to be helped by medics. certainly some scary moments we saw during the speech. what happened? reporter: it was a scary moment. the prime minister lee hsien loong became unwell because of

heat and dehydration. we have been told he was probably fatigued by his recently hectic schedule. the prolonged standing not helping. thankfully, it wasn't a stroke. his finance minister suffered a stroke in may during a cabinet meeting. the prime minister did return to the podium to finish his speech for another 15 minutes. he was in good spirits and even joked about the situation. >> i gave everybody a scare. [laughter] the last time i did this, i was -- i think square that is what happened. i've never had so many doctors look at me at once. i will have a full checkup after this. yvonne: -- reporter: he definitely has a sense of humor now.

he has been given the all clear. he looks pretty good enough. yvonne: glad he is in good spirits. what more do we know about singapore's succession plan? is notr: succession something that has been talked about much a month singaporians. it is important, because singapore is a young nation. pm lee says his successor will be taking over soon after the next general election. he said, what just happened makes it even more important for him to talk about it now. the core team and the next generation of leaders are already in cabinet. he used the last election to set up future leadership. theother country meets growing expectations of the population. yvonne: thank you so much. we are looking forward to the

afternoon's business in tokyo. we will get the latest in japan's reopening. we are dealing with the stronger dollar here in asia. as well.ped with gold this is bloomberg. ♪ . .

to increaseq's move exports despite a global supply -- endw oil run its lon its longest run of gains in four years after baghdad announced plans to boost deliveries 5%. nigeria will also boost output after militants said they will stop attacking oil installations in the niger delta. fined $180 million for violating u.s. anti-money laundering laws. mega international commercial's compliance program was a "hollow shell," regulators say. suspicious transactions between the new york and panama branches

related tontly fonseca, the law firm at the center of the panama papers scandal. bitda 50% higher. blue scope reported full-year underlying profit at 222 million dollars, below analyst estimates. they expect higher pricing for the australian stee businessl this year. global news, 24 hours a day, powered by 2600 analysts in 120 countries. this is bloomberg. the latest from the markets right now, going to david ingles for that. david: it's not very convincing. i guess, for the lack of a better word to describe it, not many clear drivers. when you look at equities it's about earnings. when you look at these macro -sensitive asset classes, we

talk about things like fixed income, currencies. apart from that, there's not much to trade on, which is what lanes are flat. china, volumes are down. other bigger markets, japan is reopening right now. taiwan getting sold down. a decline across the bank and energy stocks. taiwan has done for a well, as has south korea -- has done very sol, as has south korea, some of these markets that have outperformed are getting sold off on expectations, or bets that the fed might actually move in december. have a look at yields across the board, on the way up this morning so far. japan's 10-year is negative seven. and the u.s.1.9%, at 1.6%. let's end with this.

dollar index, another strong day after the move we saw on friday, so asian equities, asian currencies are getting sold off right now, with the biggest decliners, taiwan dollar, korean won, and the new zealand dollar. yvonne: thank you. the incoming indian central bank governor is known to be rather low-key in comparison to his predecessor. however, like his predecessor, patel is an inflation hawk. reporter joins us live from mumbai. how are investors reacting to the appointment of dr. patel? we have been waiting for a while now. >> positive is the reaction we have heard from most people, international and indian investors alike. it's about what the government has done, clearly chosen continuity over change by promoting dr. patel from deputy governor to the next governor of the bank of india.

he has been seen as an inflation hawk.- to benvestors are likely rejoicing as his focus on inflation will push rates lower. the reaction overall has been patelve, but urjit will take over in an environment where it is not just his call. soetary policy could affect, he will be part of a larger panel deciding interest rates. yvonne: he is also not really known to speak his mind. very different style from rajan. is there a chance they might be less immune to political pressure? will he play ball with the government and cut rates? >> the decision on interest rates impinges -- hinges on a couple factors. one is inflation, which has become uncomfortably high from a

bank of india standpoint, at a three-month high. and oil prices are inching up. oil prices had been at an all-time low, from january 2015 to july, and interest rates were down 150 basis points because of that. but now the environment has changed. the decision-making process has also changed. so given the track record of has been on as far as inflation, he's likely to be very conservative on monetary policy decision-making. secondly, his situation with new delhi, you said rightly, you have seen he. is not outspoken he doesn't give many media interviews. that might bode well for negotiations with new delhi. yvonne: thank you so much, joining us live from mumbai. from one central bank governor to another. the boj governor hero hugo kuroda says there is a -- kuroda says there is a

significant chance they will extend easing. andy sharp joins me now. tell me, what else to the governor say in his interview that was new here? it was theally "significant chance" that is new. he often talks about acting without visitation if needed, etc. -- without hesitation if needed, etc. but this time he went beyond his usual rhetoric. saying there was a significant chance the bank would act, so taking a step forward. speaking to analysts about this, they say that the markets are whether the bank of japan is running out of ammunition. but here, kuroda is trying to verbally say, we have still got ammunition. don't count as out yet for more easing. yvonne: sufficient chance for

easing. but what was the expectation, with the review the boj is doing right now? andy: very good question. you know, it has not been stated clearly what the review will look at. will it be looking at the last three or so years of kuroda's time as governor? or, will it be more focused on the current situation in the economy, in the markets, the japanese economy, etc. we are not quite sure. but it is definitely a point where, the boj -- kuroda only has a year-and-a-half in his five-year term left, so it's definitely an inflection point for the boj. what it means is anyone's guess. yvonne: andy sharp, we will have to continue to ask those questions. thank you so much, joining us live from tokyo. another story we are following

for you today. former executive of viacom sellingdaumont is paramount studios as his final act in the company. he was ousted that will remain executive director until september 13th, and he has suggested selling paramount. one analyst suggested they could lose another $350 million this year. dauman says a deal for a 49% stake could fetch several billion dollars. mark zuckerberg sold 760 thousand facebook shares to fund his family's philanthropic initiative. after the birth of his daughter, pledgedrg and his wife to give away 99% of their wealth during their lifetime. china says it regrets australia's decision to block the bid for its electricity

grid. the deal would be projected at the late stage. they rejected the attempts to buy ausgrid, citing national security. we are watching the u.s. second-quarter gdp number later on this week. it should give us another idea of the health of the economy. questionsome if gdp is the most reliable indicator of growth. malcom scott joins us on set. always rumblings about whether it is out of date. it, by definition, it does not capture inequality, which has been such a big political theme. the other problem, with the technological changes, the changing nature of business, online streaming, airbnb, businesses like this, it's getting increasingly difficult to capture the shift to this style of business, and the

global shift toward services. so it's increasingly wrong. we see wider and wider revisions, so the revised number might show things were not so bad in the second quarter, but who knows? yvonne: we should have started with the boj numbers a couple weeks ago. what are the consequences of these gdp problems? malcolm. : a couple we might get a feedback loop where markets don't rea -- react to the first number which is wrong, so we get a negative reaction feeding through to sentiment and the real economy, and lo and behold the revised nubbers come through, like japan in 2014, when the boj said, we did not contract, we might have been ok after all. so that's not great. second thing, the policymakers are trying to know more and more more and more growth of the economy, but the economy might be growing faster

than we thought, so these policy tools might be being used incorrectly. yvonne: what are people doing about it? malcolm: the search is on for two things. one, to close the gap, to improve the reports. the statistical authorities in many nations are trying to do that. and on the investor side, people are turning to other indicators. probably not going to replace gdp, still the broadest and the best we have, frankly, but they are trying to increase use of other tools. satellite imagery to show what's happening on the factory level. things like that. yvonne: interesting. you talked about how there could be this feedback loop, if we continue on with this old model. so what are the arguments for keeping this type of gdp model? malcolm: the main one is no one has really come up with anything much better. yvonne: everyone has one. malcolm: and, as much as anything is comparable across nations, gdp is, so that's in its favor. yvonne: interesting discussion there on the gdp metrics.

still an interesting one to look at, of course. thank you so much. coming up, staying on the sidelines. why some investors are holding onto their cash. more on that, in our group discussion. this is bloomberg. ♪

yvonne: a quick look at the latest headlines. uber told investors it will not pay more than two billion dollars for its main u.s. rival, lyft. said to oppose an acquisition at any price due to the regulatory scrutiny such a merger would face. lyft tried to put yourself for sale for $9 billion. uber has not made a formal butr forlyft -- for lyft has considered it. is seeking to hire

bankers in the u.s. after cost cuts. they had been shedding jobs in the u.s. and america to stem losses abroad. nomura is reviving hiring after posting its biggest pretax profit abroad in seven years for the quarter ending june 30th. indian clothing manufacturer wellspun is reviewing practices after target severed ties. they are accused of passing of cheaper cotton sheets as egyptian cotton. their ceo says there has been a failure and they are taking it seriously. their other clients include bed bath & beyond, walmart, and macy's, and they also make towels for the wimbledon tennis championship. welspuin down 20% in premarket trading. joining me again, mark

mcfarland, chief asian economist at union bank -- ubc. boj, whatfed, dovish, else is there to watch out for? >> the main thing is the comments coming out of europe. we have the ucb board member talking publicly about monetary easing from the europeans, because we had the bank of england increasing quantitative easing not long ago. the other thing really is just the politics going on in asia, between japan and china, and a lot of the talk about capital flows into emerging markets, another thing that's really quite important at the moment. yvonne: you mentioned the outlook for the u.k. is worrying after brexit, but currently numbers look ok. >> they do. >> things are doing well in the month of july. >> i'm quite surprised at the number of people who insist on telling us the brexit is the end

of the world. >> i think we are over that, aren't we? >> what is interesting, is, there's a global trend towards lower growth at the moment outside the united states, and what you have in the u k in the weaker numbers has not been particularly different from what you get in europe, in japan, in other parts of the world. the uk has done quite well. >> you mentioned just a while ago how you like emerging markets, at least in your notes. given that we see this anti-trade rhetoric, particularly in the u.s., do you think that the interest for emerging-market assets could wane? >> there's a couple reasons why you like emerging markets at the moment. the main one, you have seen a slowing down of growth in developed countries, again, outside the united states. that differential is really an attractive reason for putting

money into emerging markets. the other thing, regardless of whether you think u.s. interest rates are going up by 25 or 50 basis points, the evaluation of emerging markets is very cheap, whether it's on a price to earnings ratio, price-to-book, whatever you want to look at. on the valuation and capital flow basis, it is quite an appealing proposition. >> how about the biggest developing market, china? they have stabilized. >> we were talking about this morning in the morning meeting. if capital is flowing into emerging markets, almost a quarter of that as china. you get quite ay substantial amount of flows into equities. >> i want you to take a look at this chart i have on the bloomberg. i know that you are not a trader. you are an economist. but look at what markets are doing right now. we are seeing the daily turnover on the hang seng china enterprise index was the highest this year. h shares, right now a lot of activity there. given that we are supposed to be

in the summer lull, what does this activity tell you about potential upside, not only in hong kong but in chinese markets? >> i will answer your question in a slightly devious way. [laughter] >> as an economist would? >> exactly. if you look at the difference between flows into emerging markets by etf's and by active managers, money managers, fund managers, etf's have gone through the roof, and that's where you see a lot of that here. active managers have not really changed their view in emerging markets yet. when everybody comes back from the summer holidays, the likelihood is active management will probably join the etf's in putting money in, so there's probably quite a good reason for expecting markets to move higher. >> you have been talking about all these em. stories most of the momentum as flows. is there one market where you see actual fundamentals right now? >> i think one of the things

that's interesting is, you can split emerging markets between the commodity producers, latin america, eastern europe, and the commodity users, and manufacturers. a lot of the upside you are seeing in growth is in the producers, which is largely because of the stabilization of commodity prices. i actually think if you look at asia-pacific, the asean countries in particular, you are seeing growth showing signs of picking up, and the situation improving. >> i just got back from indonesia. they have a target of about 7%, by the end of his term, but they are at 5.2%, 5.18%. they are having budget shortfalls right now. they are not getting enough tax collection. but do you see that they have weathered this commodity downturn fairly well, compared to others, like brazil, russia? >> yes. indonesia did not have what russia and brazil had, which was

a political crisis as well as an economic downturn, and the politics of indonesia has been relatively stable. widodo has been sensible in targeting investment infrastructure as a way to build up longer-term growth, and the tax amnesty, if successful, will give them more financial stability. >> will it work, though? >> just like saying if brexit will kill u.k. growth, i have no idea. >> can you imagine the bureaucratic mess, if they start a witchhunt for money? he's going after tax collection overseas as well. >> the one example that you bring up, india toward the end of the 1990's, introducing amnesty on offshore hotel taxes, and that was relatively successful. but again, it took a few years for that to kick in and really make a difference. the best signs of momentum

-- >> they are probably in asia. probably in the asean countries at the moment. you have seen a stalling in china. korea is interesting. the restructuring of shipyards and ship building industries is an interesting example of what may happen. i think we have to really watch that one, to see how the koreans and them and their ideas -- implement their ideas, but indonesia, thailand, the asean countries are will you will see most of the action. >> we have to talk about china again, because we have not talked to much about it. >> that's why you look at me. [laughter] >> i don't know what i was -- you said maybe reforms have taken a bit of a pullback. >> they have. >> when we see the transition into the services and investment-led economy, that is slowing down a little bit. with the growth right now, is that really sustainable? >> i want to add to that.

the underemployment rate. we had news from the university, the underemployment rate was so high, despite the jobless rate not budging, so the transition into a service-led economy? >> it's actually a very good point. if you look at the rough stuff up in the northeast, s restructuring all the soe's will have a big impact on unemployment. >> like what happened in the early 1990's. >> that's quite a challenge. one of the disappointments from a policymaking perspective is the mess that was made last year, because there was a lot of goodwill towards china in the first half of the year, with the restructuring in the pipeline. devaluation scare we had in august, and the boom in the equity markets, did not do china's policymaking reputation any good. there's a lot of effort in

beijing, in china, to get the credit that he back, holding the currency recently -- reasonably flat. >> always good to have you. mark mcfarland joining us. a spot of explosive shopping in july. this is bloomberg. ♪

yvonne: you are watching "asia edge." chinese tourists visiting japan had a record in july, spending so much, there's actually a special word to describe what happened, "bakugai," or explosive shopping. our japan editor joins us live from tokyo. the stronger yen not really stopping chinese tourists going to japan. what's attracting them over there? >> we are seeing huge numbers of chinese tourists this year. one thing, the short flight from

places like beijing, shanghai, has made japan a popular destination for first-time trips abroad. tourism, in terms of sightseeing, is big. most travelers are coming into osaka, kyoto, traveling between the two, taking in the sights like mount fuji and other attractions in toto. but what we really see standing at is the shopping boom, where the biggest economic opportunities are for japan. yvonne: interesting. what sectors have benefited from this boom? >> well, clearly hotels, restaurants, transportation, and of course retailing. retailing in particular, where we see companies that have adapted to the chinese, they are doing the best. those who have trained chinese speaking staff, who have a particular product range appealing most the chinese tourists coming, they are the

ones doing best. yvonne: even when i visited japan, i saw that. what are they buying? before it was always rice cookers, toilet seat covers. have shopping trends changed over the years? >> they have changed quite a lot. what we see is a relative decline in the attraction of things like electronic products, and that has a lot to do with the improvement in electronic products produced in china, and chinese brands that now have a lot more appeal to chinese tourists. what they are looking for when they come to japan appears to be, cosmetics, health-related products, and part of that is the demographic change. we are seeing a lot more women in their 20's and 30's coming to japan, hence the demand for cosmetics. yvonne: thank you so much. markets middle east is coming up at the top of the hour. what do you have going on today? >> we will pick up where you left off, with a conversation

about the latest signals we are getting from the federal reserve, specifically from stanley fischer. our guest will join us from credit suisse.

yousef: oil and its longest winning streak in four years. iraq decides to raise exports. crude has climbed 16% in seven sessions. new central bank governor will pull up the reins. will endran signals it its control of its currency.