♪ china's official factory gauge remains at its highest in two years amid continued stabilization and reducing prospects over stimulus. >> fears grow at a property bubble. seven leading cities introduce curbs to cool the market. last chance to show that it be profitable without raising more money. >> using world war ii era

tactics. >> this is "daybreak asia," com ing to you live. in new york, just past 7:00 p.m. on sunday. >> good to see you. we aren't seeing the digestion of what happened last week in terms of deutsche bank, the ups and downs. opec said they would do a production cut. manufacturing data for the u.s. coming up monday. yvonne: we also got that china data out over the weekend and that signaled more stabilization. will see how that trickles through the asia-pacific this morning. so far, new zealand is looking like a down day to start things

off. we had a good run of asian stocks to end the quarter. two quarters of gains. japan is out in less than an hour's time. we are seeing a week and yen, five days of the -- a weakened yen. five days of weakening. no trading in australia today. south korea, china, malaysia ,lso closed for the holiday kind of closing off the golden week holiday. this morning, the chinese economy showing some stability. of course, wall street looking to start the week pretty well. futures up by just a hair right now. we have the manufacturing coming out, also the markets. the isn manufacturing index for

the last month. thate: we mentioned about eco-data coming out over the weekend showing signs of stability. the services industry, the official data, factory gauge at a two-year high. stephen engle has more on this now. i guess they can say they have definitely worked through all of that easing and .timulus that we have seen they have solidified things. now, i guess, you could start talking about, instead of easing, are we going to start tightening? they are in property. let's get to the factory gauge. it doesn't show stabilization. at 50.4.d steady it is reassuring because it is

the highest reading since october of 2014. it does show solidification, stabilization. other than july, pmi has been above 50 46 of the past seven months. july, a bit of an aberration. again, that is a nice trend. third-quarter gdp numbers out. october 19. we are not out of the woods yet because most economists expect that gdp slowed to about 6.6% after two straight quarters of 6.7%. the pace of growth is still continuing to slow. however, they have solidified things. there: some good -- ramy: are big concerns in the property market. stephen: what has really

underpinned a lot of this growth and stability has been the property market. we have seen astronomical gains. 60%zhen has seen year-over-year price gains for new homes in august. over the weekend, as we headed into the holiday, and number of cities in china tightening their home purchase rules, including beijing, increasing down payments to first-time buyers. tianjin is going to ban non-locals from buying second homes. several other cities are strengthening the property cur bs. i guess the takeaway here is, you can see property makers that are maybe more comfortable, and they can now start honing in on curbing excesses -- on curbing

excesses speculation. ramy: it also includes houses that are not just your second house but your third house. i lived there years ago and it was hard to find sushi at that time. let's give the first word news in singapore. >> pimco is warning about asia debt.asia $152 billion. buyers wanted to lock in costs tothe premium comes near 2007. it doesn't expect its leverage or rising debt to slow. farc rebels have been narrowly rejected at the ballot box. the result was far closer than expected. the accord would have seen the

rebel group relaunched as a political party. columbia's conflicts have left more than 250,000 people killed. british prime minister theresa may says that she will trigger butit by the end of march, still no clear idea over what the outcome will be. treaty 50 of the lisbon will start a two-year process of taking the u.k. out of the european union. india has ratified be paris climate records, committing the world's fastest-growing economy to limiting carbon dioxide emissions and reducing fossil fuel use. and it contributes to about 4.5% of global greenhouse gas emissions. have --62 countries

countries that produce 48% of pollution have ratified. global news powered by 2600 journalists and analysts. this is bloomberg. survey ofpan's business conditions for the third quarter is expected to hold fairly steady. we will be breaking out the figures in less than an hour's time. >> we are expecting probably some resilience for the third quarter. we can have a look at some of our bloomberg stocks, with what our predictions are. -- that will show the large money factors index for the last quarter. we are expecting it to rise to 7, up from 6.

for the first three quarters at six. it is expected to hold steady for this quarter. #btv 3940.ey, go to that will show large nonmoney index. that is expected to fall to 18, down from 19. , 22 in the quarter march quarter from 19. above zero generally indicate optimists outnumbering pessimists. they raise the plans for this but still not by as much. the expectation is that they are really -- they are raising from 6.2% up to 6.5%. last year, they had predicted

10%. companies aren't really expected to spend as much as the boj would help. in june, we saw companies with exchange rates at around ¥111. that is far weaker than what the yen is currently trading at. respondents were largely end before the breadth and vote. we will likely see an impact -- from the brexit vote. we will likely see an impact the next few months. looking ahead, if it comes out that the number 7, which is still positive, how much will that affect the boj's next policy meeting? >> it is expected to be largely steady. bet, and the boj will

introducing qqe means they are probably unlikely to do a lot on their next meeting. that is what we will be expecting come november. they have a whole month of data still to go. there was quite a large drop on friday in household spending. unlikely to see a big change in the boj's next policy meeting. ramy: we will get back to you in about 40 minutes. we're going to head over to elon musk. third quarter deliveries for tesco -- four tesla defied expectations. tell me all about what is happening here. >> it looks like tesla is putting the pedal to the metal

in terms of their shipments. he wanted to make as many shipments as possible. 24,500 vehicles in the third quarter. they are sticking with the fourth-quarter forecast of 50,000. they have encountered some headwinds in recent months. the last chance to show it is profitable before they raise money to ramp up production of the new model three. elon musk we saw stating his goals to various staffers, to deliver and build every car they possibly can. he is definitely trying to follow up with that goal. see what happens on monday trading when that comes out. looking ahead to other things, deutsche bank is on the mind of many of us. bass pro also. these are stories that will

likely play out as we see the opening bell on monday. deutsche bank was a big story friday. a story there is going to be a renegotiation of the deal. right now, it looks like the bank is on track. 1000 job cuts that were previously planned. thaty, the doj reported they were going to seek a $14 billion settlement. there are reports now that the ceo will try to negotiate a settlement of less than half of that. woes, deutscheal bank charged in an italian bank scandal over the weekend. stocks hitting an all-time low last week. in terms of deals that could lift stocks, on monday, the bass pro deal. this will be a combination of sports largest outside

goods retailers. it is a deal that could be announced as soon as monday. partners, a large private equity firm, was said to be be out in the bidding. yvonne: there is don't focus on the fed and jobs data. the survey shows that the u.s. likely added 175,000 jobs in september. at 17.6 sales reports million. looking ahead on the show, troubled waters. a new morning from singapore of tensions in the south china sea. banksnext, should central

all be on the same page? ♪

." -- you are watching- are watching "daybreak asia." offered between $1 billion and $2 billion between each of its sooners. rival rival die spell -- dystel, another by kdr. delayedpan's much domestic airliner could go further. they announced delivery of the first airline could be late. they say it was worth the

possible delay at the end of last month. mitsubishi ordered 25 of the jets. yvonne: 6 million chinese travel are expected to outside of the country during the weeklong national holiday. it is estimated that 589 million trips both at home and abroad between october 1 and october 7, which is up 12% from a year ago. tourist revenue is expected to rise 13% during golden week. let's take a look at some events we are watching. australia's big four banks make her as the country begins review of its financial system. the banks will all appear at the public hearings to answer questions on the costs of funds, interest rate pricing decisions,

and risks to the economy. wednesday, chicago fed president charles evans will be assessing economic events and talking with a group of new zealand economic professionals. hints ofook for any whether he is in a hawkish or dovish move. yvonne: friday march the 100th day president's in mind -- 100 day in office. let's bring in carlos casanova, economists, joining us live in the hong kong studios. what will you be focusing the most on this week? >> we have some data for china coming in over the weekend. also, some fx reserves. we will be looking at whether those stabilizers continue to fall. havee: capital outflows

bumped up in the last month or so. the currencyure on has prompted authorities to intervene. overnight's spike in hibor rates in hong kong. they are keen to keep the currency stable. intervention will of course decrease some of the pressure on capital outflows. seen than that, as we have , the rebound in the housing has helped to prop up growth in the second and third quarter. pressures to diminish to implement aggressive physical aggressive-- monetary easing. the third thing is that the

markets are now pricing in a fed rate hike in december. a lot of the outflows that we saw could have been a response to renminbi devaluation and dollar depreciation expectations. the corporate's were really addressing and restructuring. have twoe also central-bank meetings. new governors in both the rba and r.b.i. do you expect a shakeup? carlos: we are not seeing any shakeup in policies at the time being. for australia, there would be some potential to cut rates. they are also at a historical year.ter two cuts this we also advocated for flexible

inflation rates. -- they also advocated for flexible inflation rates. yvonne: what about the rbi? everything seems to be in line with the criteria on rate cuts. we see slower growth in the second quarter and we also have a new policy meeting committee now. carlos: the policy stance remains progrowth. we are expecting one more rate cut in the remainder of the year. likely, they will keep rates constant this time around. yvonne: stick around. ramy: lots more coming up. i will be asking carlos about what will be out in december when the fed and hikes interest rates, and of course, what might asian central banks do in the process? ♪

yvonne: you are watching "daybreak asia." ramy: let's get back to our discussion with carlos casanova, economist at pva. vonneere talking with y about asian markets. bank with a deal of $5.4 billion in settlements. looking ahead, do you think we are out of the woods 40's and we will have to hold onto our hats for the next week? carlos: i think we are on track to achieving a solution. however, it is perhaps a bit too early to say that we can relax. ramy: looking at oil, we were talking about the algiers

supplies. about --i crude rising rising there. what do you look for in terms of indicators here? the meeting was definitely a surprise. most were not expecting a potential deal. if they do now agreed to go create upwardd pressure on prices. we could see a moderate recovery and the remainder of the year. ramy: looking ahead to december, we are looking at a potential fed rate hike. i want to show you what has been happening in terms of the chances here. 2864.s #btv -- what datang at are you watching the most and what you are -- and what are you expecting will dictate the movement?

carlos: the fed, during the last meeting, decided to keep rates unchanged. that will have implications on central-bank policies and other areas. if the fed raises rates in december, what is the first ripple effect that might happen over in asia? carlos: asian emerging markets have benefited from liquidity and low interest rates overseas. that is what makes it into search for yield strategies and spurs capital inflows into most asian emerging markets. we could see a reversal of that from december into next year. some central banks will then have to change their stances on monetary policy. ramy: we really do that.

carlos casanova, economist at bva. up next, three sooners leading the race.

yvonne: it is; 30 a.m. in hong kong and we are minutes away from the first major market open in asia. up by aboutw was 9/10 of a percent. yvonne: you are watching "daybreak asia." now to first word news spewed >> -- factories came in --

while it rose to 53.7. while this indicates improving conditions, policymakers are under pressure. haveal chinese cities increased rules for factories. they raised down payment requirements. home prices rose the most in six years in august despite official attempt to rein in speculation. tesla be estimate in -- beat estimates in the last quarter. it will be ramping up production of the new model three. they reiterated their ambition -- hope to make

global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 160 countries. this is bloomberg. yvonne: let's look at how the asian markets are shaping up. how are things looking? >> it looks like we are trending down in new zealand. australia should be open at this hour. they are on holiday. we also have china, malaysia and korea on holiday today. we will see for the rest of the day. friday ast search on investors became less concerned over what would happen with deutsche bank. it was better than expected.

for new zealand, we are seeing them in the red. the only thing in the green is it utilities. industrials are leading the decline there. we're expecting japan to open later on, they close to the negative last week. it is the first trading day of a new week, how are major asian currencies doing? >> you want to take a look at the offshore yuan. it is officially part of the ims reserve, that happened on saturday and is expected to bring influence -- inflows of more than $1 trillion to the chinese economy. at japanese yen, it

lasteekend -- weakened the several sessions. this was after it saw its biggest quarterly jump since -- in a you -- eight years. that is not surprising because i want you to take a look at this chart. it shows that the central banks have been loading up on the japanese yen. you can see here that according to the ims, the central banks holdings were at 4.5% in the second quarter. not surprising we are seeing this huge strength for the yen as a central bank loaded up on the japanese currency going right out there in the end part of the line chart. thatecurities is saying

this week we could see the -- up toyen range from 102. 50. they still have a ways to go. meantime, a steady stream of high profile that officials will speak this week. kathleen hays looks at what is coming up this week, including her exclusive interview. reporter: since the fed september meeting, one thing is becoming clear. there is a split in the federal reserve, one is saying hiked the key rate now, and another camp seems to think there is no rush. people are asking about the consensus about the interest rate and if it is starting to fray.

let's look at a very interesting chart that shows the numbers at the center of that meeting. in september, a vote to leave the key rate unchanged for a sixth straight meeting. there were the most of the ters in sixdissen years. i will be sitting down with president mester for an exclusive interview later today. also kicking of the week in the index.he manufacturing rebound or relapse? a single look at our chart. manufacturing index is supposed to rise to 55.2 in december. that would be up from 49.4 in august. send, most important to

the federal reserve in terms of its next rate hike, the september jobs are -- report. in september. also kicking off the week, here is what is on our global macro watch list. the euro area and the u.k. october 4, the reserve bank of australia meet and will make a decision on interest rates and we are wondering if they will be cutting rates again. back to the federal reserve. several fed speakers this week, including my interview. we learn that takata has received investment officers -- offers.

craig list from tokyo. how are these investments in relation to the company? we know this is a years long crisis that has been detrimental to their market capitalization, to the extent that it has been detrimental, we can look at the last time that the market valued them at more than $1 billion, that was october of last year. in terms of the last year that takata was valued at more than $2 million was way back in april 2014, that was before they started to take it on the chin as a result of all of the airbag recalls. you have a situation where bidders are willing to put enough money into the company to buy it for what it was valued over the last few years, but the problem is resolving this deal

and taking into account the cost of the recalls. you have a market estimate out there that this may cost upwards almost aillion yen, trillion dollars. you also have legal costs as well that are difficult to estimate. situation where you have some companies willing to step in, but to what extent they are willing to foot the bill for the airbag repair costs and legal costs is a big question. proposingl groups are a great see -- bankruptcy. how are some more favorable? particularbidders in

really are insistent that there is no way around the need to file for bankruptcy. there is some indication that if you are a shareholder of takata, you would not want bankruptcy, and the majority shareholder is the tajatakata family. hitequity holders would get hardest and the family would get hit hardest, they would prefer to stay out of a glitzy court -- bankruptcy court. it is a very complicated deal. ramy: aside from the did and the bankruptcy, what are the steps for the industry itself in order to resolve the crisis? guest: we had a series of and morebetween takata

than a dozen automakers, so the take away from those meetings was not necessarily that any breakthrough had been achieved. it looks like the automakers will go back to their of whatters, take stock they have been told over the last week and reconvene in the coming week. on to whatdepending extent the automakers are willing to step in and help out to get the deal done. ramy: thanks very much. coming up, enough for sounds a warning about tensions in the south china sea. this is bloomberg. ♪

♪ yvonne: we are counting down to the boj's latest survey. some strong bids right now on

1%.res, up 7/10 of you are watching "daybreak asia ," i and in hong kong. ramy: and i'm in new york. let's check on the latest business flash headlines right now. ages business -- asset one open for business on friday. they are one of asia's biggest asset management companies. they also asked the boj's current policy direction. yvonne: if you are watching japan's largest retailer in tokyo. income is falling through a six-year low of about $790 million. they have been struggling to revive the company after a power

struggle after a recovery strategy. resorts are scheduled to be built in china. in an interview with bloomberg, the company's ceo said club med would target multigenerational families. a limited number of secondary polls, and the cities or even bigger. outside andto go escape, and activities with nature, you embrace it. yvonne: singapore says the greatest risk of a clash in the south china sea comes from nonmilitary shipping. they are relying on the coast guard and fishing boats to

assert themselves. concern foractical singapore. guest: singapore is not making any claims to the south china sea. the south china sea is a shipping laying with $5 trillion of shape -- freight passing through every year. it is concern that china is deploying more heavily armed coast guard vessels, and it is also chasing fishing boats away. has sounded a note of caution, it wants tensions to be addressed and wants a more united approach. the south china sea has become a flashpoint between china and the u.s.

it is no secret that china wants to be a regional power. been a lot of people have talking about counterweights -- counter ways china can tackle this. but what can be done? >> off dion has failed to do anything. if you refer to statement made by the organization on the south china sea, you will see no reference to china by name. several member states have called for greater unity. singapore's defense minister says you have to understand what it is you're really fighting for. ramy: thanks very much. next, the latest reading on the japanese economy.

this is bloomberg. ♪

♪ ramy: you're watching "daybreak asia." yvonne: we are seconds away from the boj latest gears -- figures. like at least the large manufacturers numbers were not as good as the economist expected. they came in at six, which is the same as the last quarter. the economists had expected that to uptick to seven. in the non-money factoring index, it has slipped to 18 from

19 as had been predicted. we are seeing spending not as good as expected, 6.3%. companies have raised their 6.2%, but notom as much as the 6.5% as expected. overall the results are holding steady, but a little bit of a slip both in the large money factors index and the expectations for spending. yvonne: thank you. look at some immediate reaction now here it -- now. it is really great to have you, what is your initial take on these figures? is this a sign of resilience among japanese companies despite the stronger yen? i think it shows some

resilience in japan. a higher yen, almost 20% higher over the year is weighing on their probability and inflation way -- rate. meansthink stable di japanese manufacturers are's showing -- are showing resilience. yvonne: second quarter was probably the worst we've seen in four years for japanese corporate. will the squeeze continue? mainly due to the impact of the higher yen. it is leading to a large decline in sales. cost underr side, good control, including lower prices imported into japan.

if we take the ratio between the sales and cost, it is still staying a very high. higher yen weighing on the profitability, but at this moment cost is being covered very well. it is a combination of higher yen, and the yen will continue to stabilize. will fade away as time goes by, the impact from the higher yen. the yen has been stabilizing, so i think it will stop soon. yvonne: still trending higher, we have negative rates. these are some of the trends that have slammed profit. it has not exactly changed. thet: in terms of yen-dollar, it is structuring --

fluctuating. it is not a favorite for japan, but it could be managed by the japanese corporations. than -- itrises more could be manageable. ramy: i want to go through these numbers with the difference between large manufacturers and small manufacturers. small manufacturers, there is pessimism but it came in better than expected. i would love for you to parse this out. what does it mean? exposed toanies less external situations, it is understandable that the di shows them that are -- better. the outlook, smaller companies

are always more cautious. outlook di at the index every time, you can always find that they expect 3%-4%. it is not surprising. ramy: looking at the optimism, since came up as a six versus seventh, what is the reason to be positive? zero is the brake line. first of all, as i said, , anden be stabilizing recently fiscal policies have stabilize the economy. one of the problems in the recent years in japan was the fiscal policy, including a higher tax rate. our administration decided to

postpone the higher tax rate, and also they were wanting to introduce a larger budget. it was expansionary and that should be one of the reasons behind the optimism. ramy: i am taking a look at the yen, is weakening a little bit against the dollar, up by a quarter of a percent. there are still pessimists out there. on friday, we got some interesting household members. japanese households spent was then in august. what are your thoughts on that? guest: first of all, let me say index,e consumer price usually the foreign exchange rate affects tpi inflation -- cpi inflation on a 12 month

timeline. the japanese inflation began last summer, now we are feeling the full impact of the higher and the inflation will remain until the first quarter of next year. regarding inflation, we will continue to see a week number four tpi inflation coming -- inflation. on the a hand, consumption, it is puzzling. we are seeing a very good labor market performance, including an increase in employ people, but they're still -- there is still data showing the consumption is fluctuating. it is not growing very fast. we have to think about the household sector, mainly because of the long-term situation. ramy: we will leave it there. thank you.

come with still to the japanese open just minutes away. yvonne: stocks, we could see s

yvonne: more disappointing data from japan. the latest rating comes below expectations, and the outlook is gloomy. ramy: the tax gaze remains at a time in two years, suggesting continued stabilization and reducing the prospect of more stimulus. yvonne: has less mass sales estimates in its third quarter, its last chance to show it could be profitable before raising more money. ramy: troubled waters, the shipping industry is approaching a crisis point. we are live aboard one of the giants of the field.

yvonne: this is the second hour of "daybreak asia," live from bloomberg's europe -- asia and new york headquarters. i am yvonne man in hong kong. ramy: and i am ramy inocencio. we are in our second hour of daybreak asia, and we just got the latest survey numbers coming just a little bit lower than expected. it matches the earlier two quarters of this year. we will see how the markets react. yvonne: three straight quarters with no change when it comes to sentiment among the large manufacturers. let's go straight to the market open with shery ahn. reporter: we will see if that positive sentiment remains from last quarter. at least for the start of the quarter, it is pretty quiet. we have many markets in asia on holiday, including china on golden week, also korea and

malaysia. markets open, nikkei, which has gained .6%, reversing last week's losses. we also have new zealand and negative territory, down 2/10 of 1%. marcht comes to japan, many factories were disappointed. securities now saying for japan at least, an idea is forming among investors that what the boj did in terms of policy framework is just tampering with bonds. said now that a cut in interest rates will be limited, which will be hard for the japanese yen, which they expected to have a hard time staying week. with utilities7% and materials leading the games there. take a look at these stocks right now at the open, because these are the stocks you have to watch for in japan.

for example, this one slashed a forecast because of some department store, a giant in the retail sector. sakirs hockey at -- kawa operating profits are unchanged at the moment. the contest has received offers for their initial investment. yvonne: several markets in asia close relative, including australia and korea. --er their currencies doing? how are their currencies doing? shery: the aussie dollar is trading and reversing some gains we saw last week and is falling u.s. cents. at 7643 holiday right now, but they are weakening again for a third consecutive session, down .1%. is also losing ground, .3%.

-- down to 63 u.s. cents. japan largely held up in the last three months, even with a stronger yen, according to the latest tom cotton -- tankan survey. tankan cayman at six, which held steady for the last three quarters of the year. expectations were for that number to us by the rise to seven, but it has held despite a much stronger yen this year. this is, some economists and analysts are saying, a sign of resilience. the manufacturing indexes fell to 18, in line with economists estimates, but that had been falling from 22 in the first quarter to 19 the second quarter, now 18. you have to remember that getting above zero shows an optimist.

spending is expected to increase 6.3% against estimates of 6.5%, so there was a miss there, but it has risen in the previous quarter. this is amongst all large manufacturers. the yen, which is a key figure here, companies have adjusted their exchange rate forecast stronger against the u.s. dollar. they have been adjusting their figures to reflect what the yen has been doing this year. saying it is are resilient because a stronger yen has been grading headwind, and yes manufacturer sentiment more or less the same. yvonne: managing expectations when it comes to how strong the thecan be -- and the yen -- yen can be.

to our guest, i thought it was very interesting how much japanese companies can tolerate a stronger yen. do you think this tankan is really going to change things on what the boj can do moving forward, or are they just going to keep some time to assess the targeting of the yield curve? i think -- at least today's survey was not shopping, in my view -- shocking in my view. probably the boj could wait a little bit think about the next action. course, manufacturers are still expecting -- i think if the companies revise up their exchange rates forecast, that could lead to another round of the --

also the higher yen should mean continuation of lower inflation, so i still think the boj will continue to face pressure on the market to consider further easing probably within six to nine months. ramy: on the topic of lower inflation, you just said some people are talking about how it might fall to zero. your thoughts on that? the core cpi in japan at this moment is around 0.4%. analysts,ccording to it takes about one year for the impacts of higher yen inflation to play out completely. impact on the inflation from the foreign exchange rate side would continue for the coming six to nine months. i think at least temporarily, even cpi could show negative

change for some months. after that, if the yen continues to stabilize, cpi inflation would come back most substantially but i very low levels. ramy: on the topic of a yield curve control, some folks have been saying that the boj doing this is little bit of an act of desperation or maybe something very unorthodox. what are your thoughts on this? yeah, many people are saying that probably within one to two years it will become --ficult for boj to continue now toy boj should react improve the sustainability of the monetary framework.

that is one thing. from a different viewpoint, this final decision should be assessed from the different viewpoint. it is a mixed viewpoint. since the first half of this year, japanese fiscal policy is turning expansionary. a combination of loser fiscal policy and looser monetary policy. i think the decision boj this it will be difficult to continue to reflow to japan just by monetary policy. we need a combination of monetary and fiscal policy. given the fact that fiscal policy is expansionary, the decision by boj to keep long-term interest rates around zero means a lot, even if the government continues to expand fiscal policy, we are likely to continue to have very low long-term interest rates. in that case, boj's monetary

policy could be more effective. strategisthief macro at an asset management firm. thanks for your time and analysis. let's get the news with haslinda amin. is said: deutsche bank to be close to an agreement allowing it to cut around 1000 jobs in its home market. it goes before its work counsel before the stafford dismissed. it is part of the cost-cutting measures before deutsche a 3000 positions in june. it has lost almost half its value this year. tesla delivered 24.5 thousand cars, beating estimates. -- elon musksk wanted to show profit before it raises money to rapid production of the new model three. to delivermbitions 50,000 cars in the second half

and hope to make half a million vehicles annually by 2018. the historic peace deal between columbia and rebels has been narrowly rejected at the ballot box. voters were asked if they back to the deal and results far closer than expected said no. this would have seen the rebel group relaunch as a political party. the president said the bilateral cease-fire will remain in force and negotiators from both sides will resume talks. india has ratified the paris , meaning theds world's largest growing economy will limit omissions in fossil fuel use. india produces about 4.5% of global greenhouse gas. countries that account for about 55% of omissions have ratified so far. global news 24 hours a day, powered by more than 2600 reporters and analysts in more than 120 countries.

i am has haslinda amin. this is bloomberg. ramy: thanks very much. still ahead, to conduct is spoiled for choice when it comes to takeover offers. up next, we speak to the asia-pacific ceo of the world's biggest shipping line. this is bloomberg. ♪

ramy: you are watching "daybreak asia." i'm ramy inocencio in new york. yvonne: i'm yvonne man in hong kong. life insurance company has formed a new asset management company. a combined $.5 trillion in assets makes it asia's biggest. asset management officially open for business on saturday and the ceo says the company plans to break into the global top 15 by doubling its assets under

management. it also back to the boj's current policy direction. ramy: japan's much delays new domestic airliner maybe how that further. mitsubishi aircraft says first plane may be late because of some technical modifications required. it says it was warned of the possible delay at the end of last month, and mitsubishi has not given a new delivery date. they ordered 25 of the jets, which carry 92 passengers. yvonne: a record 6 million chinese tourists are slated to travel outside the country during the weeklong national holiday. andchina tourism academy estimates that 589 million trips will be made home and abroad between october 1 and seven. that is up 12% from a year ago. tourism revenue is expected to rise 13% during golden week. south korea, thailand, and japan the top destinations. falling freight

rate steepening company losses and mounting debt, the shipping industry is reaching a crisis point. let's see how tough it is on the high seas at the moment with the world's largest container line. we are joined by the ceo aboard one of its vessels here in hong kong. a very busy morning here on board the eleanor, which arrived from singapore last night. as you say, i'm with the ceo, robert. tengion has been in the headlines as of late, $14 billion worth of cargo stranded. how did the industry given this pigment? -- get in this predicament? guest: it has been facing an imbalance of supply and demand for some years now. we are very much trying to match our supply due to the amount available in the market.

that is the biggest investment that we have. we are standing on right now, it is a significant investment. are utilized,hose we try to fill the ship as best as possible and it is very much trying to keep the supplies as close as possible. reporter: you also launched a new tp one route. can you tell me how that is helping to pick up in the asia-pacific region? guest: we have had many requests from customers to help out in the situation that hanjin is facing. the response to that situation, we have launched a new service going from china, and that has helped alleviate some of the distress that our shippers have been facing. reporter: what have we seen in terms of shipping rates that have been declining? you see any improvement? guest: i can't comment on the future, but we have seen some stability right now.

that has been alleviated ahead of golden week, some of the distress the shippers have been facing. now china is going into the weeklong holiday, -- there has been a significant upsurge in demand right before golden week, so we see that as a positive sign. maersk says it is not going to be building any new vessels. any interest in snapping up other companies assets? hist: we can't comment on is a bit like that, but we have already said if the white partner comes around, we are open to acquisitions. -- if the right partner comes around, we are open to acquisitions. we have long said that consolidation would benefit shippers overall. overall, consolidation will help the shippers balance out the supply and demand and would help the product quality and the benefit of shippers.

we think consolidation is good for the industry. reporter: can you tell me a little bit about breaking up the band, splitting the energy assets and focusing more on shipping? how is that going to work in the aipac region? are significant relationships already between ourselves and our sister companies, so this strengthens the bond between us and help us grow. this emphasis is done simply to grow the group overall, and we think this is a golden opportunity to try to work on more synergy. reporter: i guess you are saying before, in terms of golden week and thing slowing down, that you saw some bright upsides from train -- trade in china? overall, shipping trade is not growing as much as it did over the last couple of years. that is the new normal. within the new normal, the pacific trade is in a good situation so far. in asiaseen some growth

europe, although not as fast as it did before, it is no showing some growth rest. overall, i would say there are growth opportunities that people should pay attention to. reporter: the w 20 has said it has been the worst year for global trade. they don't see things improving in 2017. are you seeing any upside? guest: we think perhaps the gdp multiplier will be better than it was, and the gdp growth over all will be better. like i said, it is not going to be as it was before the global financial crisis of 2009, but compared to 2016, we think global gdp growth will rebound somewhat. reporter: thank you for your insight. with us shortly after this to talk more about how maersk is helping to pick up the slack as we see a little bit of concern in the shipping industry. this is bloomberg. ♪

ramy: you are watching "daybreak asia."

i am ramy inocencio in new york. yvonne: and i'm yvonne man in hong kong. a quick check on trading in japan. the nikkei is closer to 1% on the benchmark right now. we are seeing a weaker yen this morning as well, five straight days of weakness for dollar-yen. this hongso defied kong survey, which did show disappointment when it came to the outlook. gloomy, but staying the same for three straight quarters in terms of sentiment. major markets closed, australian for labor day, china for national day, also a holiday in korea and malaysia. ship,get back to the which has boarded its docs in hong kong. we are on board with the ceo of the world's largest shipping line. with robertam back from takata here -- maersk from here in the asia-pacific.

we are on board the ship that is stopped in hong kong en route to china. you are telling me earlier that you are seeing quite a lot of demand for luxury food, meat, fruit and vegetables. tell me how that seems part of your business going forward. guest: we are the largest carrier globally and have just invested in another 14.5 thousand new containers, which are designed to carry the refrigerated cargo. we are seeing large fines of cargo, not just from latin america but also new zealand, where we are about to launch the maiden voyage of another ship. she will come from new zealand into asia. our expectation is she will carry quite a bit of cargo going into china. that is a positive story that we have. reporter: that is really the story of china wanting demand for australia and new julian -- new zealand beef and fruit and vegetables. is that where you see growth? australian beef is less than it was, about 40%, because of the drought they had.

but we see brazilian beef picking up and usb picking up to capture the demand not captured by is really a. new zealand is on the side of the lamb and the fruit, which is picking up as well. reporter: going back to container ships, we were talking about the fact that maersk is not going to be building any new ones. in terms of that consolidation in the space, do you see any progress for potentially picking up assets of other competitors? guest: if you look at the last two years, we have seen more consolidation already happening then we have seen in the 10 years prior. several mergers and acquisitions, leaving the industry. there is a lot of change in activity taking place in industry. in terms of the assets that thegen currently has, charter ships at some point we'll go back on the market and be picked up by other shipping lines. that is certain the happening. reporter: we had south korea trade released over the weekend, exports down 5.9% in september year on year, a big miss.

we are still seeing quite sluggish demand coming through in asia. moving forward, where do you see the bright spots? guest: we are certainly growing in korea today, so i think we are growing the market. we also expect the trend that we will outgrow the markets continue. like i said, the pacific trade price is a good story. we still think we will see single-digit growth there. european trade is less, but still 1% to 3%. there are bright spots in the trade, but those are not the bright spots they were 10 or 15 years ago, we are more talking about single-digit growth, maybe 3% or 4%. so that is the type of growth we are talking about nowadays. reporter: we will have to leave it there -- no, we have got time for one more question. you are in a quiet. at the moment ahead of your results. i know you can talk about those in particular. how much of a good or bad year has maersk had? guest: so far, our results have

not been as much as we wanted. they have been below expectations, or expectations have been below what we wanted them to be. we cannot make any productions for the rest of the year. reporter: i do so much for joining us here on board the ship, which is docked here in hong kong coming from singapore on its way to china later today. ramy: thanks so much. coming up, can china find success with its latest efforts to cool the property market? we will get a breakdown of the newest curbs. this is bloomberg. ♪

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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. yvonne: it is 8:30 and singapore, just half an hour away from the opening of trading. asian stocks advancing on this monday morning with japan leading the day with bank concerns easing. i am yvonne man in hong kong. ramy: and i'm ramy inocencio in newark. you are watching "daybreak asia. " the top stories this hour, japanese policymakers will take little comfort from the quarterly tankan surveys released in the last hour. the manufacturing index came in unchanged in the previous period and just below expectations. however, investment across all

large companies is expected to rise 6.3% this fiscal year. pimco is warning about asian debt after dollar bond sales ballooned to a record in the last quarter. they said 66% from a year earlier to $152 billion. in lower want to lock financing costs as the average yield premium falls near the lowest since 2007. pimco says asia's credit is rising faster than economic growth and does not expected leverage of raising debt to slow. british prime minister theresa may says she will trigger brexit by the end of march. there is still no clear idea of what the outcome will be. of will invoke article 50 the eu's lisbon treaty starting a roughly two-year process of taking the u.k. out of the european union. the confederation of british industry called for urgent guidance on how u.k. business will trade with its biggest partner. global news 24 hours a day, powered by more than 2600 reporters and analysts in more than 120 countries.

--m has haslinda amin haslinda amin. this is bloomberg. yvonne: that of a rebound in asian markets this morning. let's go to shery ahn to take a look at how things are looking so far. you are focusing on commodities. about oil,s talk because that is halting three withof gains, falling .8% a rating of $49.82 a barrel. that is surprising, given that iran is signaling its willingness to boost exports, not to mention we are seeing u.s. drillers adding those rigs. comes to -- we are seeing a huge boost, up about 20% or 30% there and just the last month. it did cap the best month of gains since april. opec was willing to reduce output. yvonne: shery, any other

commodities we should keep an eye on? shery: pigs. take a look at pigs. we are talking about ham, bacon, pork loins. take a look at this from bloomberg functions. you can see down there at the bottom of the page, the future of hogs in the bottom has been plunging 33%, the worst investment of commodities the past year. wholesale prices for pork cuts such as ham and ribs are the lowest this time of the year since 2009. hearing from international that there are so many pigs out there that slaughterhouses will have to operate on saturdays as well for november and december in order to process them all into food. , whichmention that china is also the biggest importer of

, is now supposed to cut buying. ramy: shery ahn on the markets, talking about pigs. switching to technology, elon musk drive to tesla sales is paying off. issued a statement that is expected to affect wall street. we have been tracking all this and more. reporter: it looks like they are on the road to delivering the ceos aggressive targets. according to the statement released today, tesla is delivering 24.5 thousand vehicles in the third quarter and they are seeking a forecast of 50,000 vehicles. that is on the aggressive side. ceo elon musk wants to boost sales so they are profitable before they raise money to ramp up production of the new model three. check out the chart. you can see the headwinds tesla has hit in the past year, a

number of different obstacles. at the end of august, and e-mail the ceo sent to the staff was to make and deliver "every car we possibly can. oh " this is clearly the priority at this point. stocks,oking at other deutsche bank as well as bass pro are something investors are looking at. what is possibly a factor on stocks is any more woes for deutsche bank that clearly was a situation late in the week. stockhe bank sock -- the came off its low on friday on news there may be a renegotiation of the jod settlement downward by as much as half. what we do know is that the ceo as indicated they are going forward with a plan to lay off about 1000 people. that is according to reports. we also know there have been headlines of the weekend that the legal hits continue for deutsche bank, that it may get drawn into the scandal with

banks in milan. that is something that is going to put deutsche bank on everyone's radar. let's look at one of the merger monday deals that could be announced after the open. that is a likely deal between bass pro and one of the biggest sports/outdoor retailers out there. this apparently according to people close to the deal is still being negotiated, or was as of today, in terms of the final deal. it could be announced as early as monday's session. isare hearing that best pro said to be doubt sycamore partners, a private equity form that was involved in the bidding war. again, any deal is always a positive. yvonne: that brings me back to my north dakota days, cabelas. what should we be looking at this week on wall street? reporter: the of got a whole new round of economic data.

also the direction question, where our stopped going? to s&p 500 it closed by the lower for the month of september, but if you look at this chart we have got for you, you are going to see that the movement for the month was just barely there. barely a negative. some strategists say it shows that september wasn't really as bad as thought. surely there was a lot of concern going into the end of the month on the banking situation. it shows that deutsche bank is not lehman. one strategist says the banks are in much better shape to withstand this. that will be a theme of this coming week. we will also be looking at some of the big reports, payroll data will be out. thervey by bloomberg saying u.s. added 175,000 workers in september, but factory activity likely stalled. yvonne: thank you so much. have's hong kong figures shown some resilience, considering the ends of strength. sentiment was partly below expectations.

joining us is: graham, the chief investment officer. what you make of this survey? was it a disappointment or pretty much in line? guest: for us, it was pretty much in line. we think of the global economy as treading water for some time now. we think this is all to do with global trade being in the doldrums. there are no clear trends in the economic growth. yvonne: the big take away in terms of capital spending is some of these large manufacturers, i think 6.3%. it is still a bit of an uptick from the previous survey, but still, this estimate from a year ago missed estimates for this latest survey as well. what can we do to get japanese companies to start investing again? guest: i think it comes down to the mixture of policy between the bank of japan and our bed -- making sure they follow through on the promises and really get the economy started.

we don't think that monetary policy alone can get growth up. it can stabilize, but it can't change the trend level of growth. that really needs fiscal stimulus, not just in japan, but other countries around the world. in terms of targeting the yield curve, we got more information about how they are going to do it on friday. if they do raise rates to zero, the boj is going to have to slow down their purchases of these bonds. with the markets view that as tampering? guest: i think you saw street after the meeting is that the yen strengthened significantly. i think that was investors taking the view that the points of easing program is not going to accelerate from here. it might actually going to reverse, as he said. ramy: it was a financial story last week, but i'm wondering if it might be an energy or commodity story this week. i am seeing branch as well as crude falling about 20% here. we were talking about opec and the production cut last week. your take on what we can expect

this week? guest: for oil, -- i think it was good that opec came to some agreement, but we have already seen fractures and agreements with iraq and iran, talking about increasing production. i think we have to watch the news there, and it is not really giving a clear look on the direction. ramy: looking also here at washington dc, fed funds futures are looking at a height of about 59% in september -- december. do you think we are on track for that? guest: we are, but a lot can happen between now and december. we have the small event of the u.s. election in that. -- in that period, plus quarterly data. there are a lot of things that can prevent the fed from raising rates. at the moment, we are on track for a rise in december. ramy: in terms of central banks in asia watching the fed, what

do you think would be the biggest and first ripple effect that would be felt over there? me thei think for transmission mechanism will be through the dollar funding in credit markets. that is one thing we are watching very closely to see if there is a translation. --raise with the rays last year, it did not have much effect. it was the slowdown in china in february and march that began to worry financial markets. termsms of -- yvonne: in of deutsche bank, they are saying possibly more job cuts, possibly the negotiation with the boj could be less than the $14 billion projected. is it still a big worry right now? what does it mean when it comes to possible risk you're in asia? could spill over to this region? guest: that is a very big question. from our perspective, -- yvonne: the banking sector in

general, i am saying. guest: it has implications within the eurozone, because if it is seen the german government is supporting deutsche bank, then some of the other economies and banks will call foul, there ishey will say, legislation that you shouldn't be helping out your domestic banks. yvonne: i know you mentioned you are still focused on the em space. tell us more about your asset allocation on that front. you think this rally could continue to your aunt? -- continue to year and? we didn't think emerging markets would be the best performing asset class, but it turns out -- if you actually look at things like the search for yield, which has been a dominant theme throughout investing over the last four or five years, if you actually look at the yields through emerging markets, equities and debt, you haven't

seen the compression and yields you have seen in the rest of the world. if you are searching for yield, for return, you've got a good chance to get a good yield, and markets are cheap. equity markets are cheap, and the currencies are cheap as well. from that perspective, you think you stand a good at risk reward for going through emerging markets. yvonne: we will leave it there. up next, five suitors lineup for takata, but three among them leave the race. details coming up. ♪

ramy: you are watching "daybreak asia." i am ramy inocencio in new york. yvonne: i'm yvonne man in hong kong. kimzey is the country's top i.t.

distribution business. myanmar is a rapidly growing market. mobile phone penetration has soared since 2013 from around 7% to nearly 90%. ramy: club med says it is planning to build as many as 15 resorts in china under its midrange brand. in interview with bloomberg television, the ceo says the company will target multigenerational families who live close to major cities. they hope the new resorts will appeal to families who want a weekend getaway. >> there is a limited number of secondary homes. at the same time, the cities are even bigger. with such a degree of pollution. , toe need to go outside escape, to activities and nature. the need is even greater than elsewhere. yvonne: the resorts gaining revenue and beat expectations.

total revenue rose 7.4% last month, well above the 4% anticipated by analysts. they say the recovery could be discovered by a possible -- could be scuppered by a possible visit this month. the chinese economy is showing further signs of stability as the services industry expanded and the factory gauge steady at a two-year high. let's get more on this right now. china heading into this long week of holidays on a good note. reporter: yes and no. yes, there has been a gauge of the economy. there has been a studying of the economy, but that means this stimulus that we have had good start to peter out, and we could actually move into more tightening, especially a property. that could actually see

fourth-quarter growth slowing even further if authorities allow that. let's bring up the factory gauge, the official pmi, the same reading as august. two months in a row above 50 after july's aberration. you have had now six of the last seven months of 54 or above, meaning conditions are improving on the factory floor. nonmanufacturing services industry is picking up a much greater percentage of the economy now. this is banking, telecoms, construction, and also the new economy. 53.7 better than august, so services continue to be quite robust. ramy: what is happening with the property market here as well? . hearing about more cooling measures, right? is what i alluded to when i was talking to yvonne. we are seeing more tightening because a lot of that easy credit and cash that was in the chinese economy from the loosening went into property

because of the quick returns. i think government wants to kind of cool down that speculation of property markets. tonzhen new-home prices jump 60% year-over-year in august, beijing up 23.5%. a number of cities in the last three days introducing new curbs on the property markets. this is how they control these bubbles. they loosen the spigot and then tighten it up really quickly. home prices, up 23.5% in august year-over-year. they have increased down payment requirements for first-time homebuyers to 35%. that is the highest among the year one cities. also tianjin is going to eliminate the non-locals from buying second homes there. and a number of cities, among other cities introduced over the weekend, new property curbs. it looks as though they are switching -- authorities in

china switching into more of a tightening bias. not yet on monetary policy or rates, but trying to keep down the bubble inflation and property. ramy: definitely looking like a white blanket, at least for the real estate sector. thanks for a much. struggling airbag maker takata is said to have received investment offers of up to $2 billion from five suitors. three of them are said to be leading the race. let's bring in the asia cars editor. how big with these investments be in relation to the size of the company? reporter: these investments would be roughly two to three times the market value of takata right now. this is a company valued just north of $600 million. the last time it was valued more than $1 billion was october of last year. for some time now, you have had a situation where these airbag recalls have just grown into

massive proportions of cars that need to be fixed, have really drags down this company's value. it has seen a valuation of north of $2 billion really just a little over two and a half years ago. it is a company that needs a sizable investment, but when we are talking about the size of the cost that has been brought on by these airbag recalls, $1 billion to $2 billion is not enough to cover it. you have an estimate by jefferies that the cost of doing these recalls may exceed $1 trillion -- excuse me, ¥1 trillion, which would be nearly $10 billion. that is before legal costs, so a lot of cost that still needs to be worked out here. yvonne: greg, you have had some time to take a look at these bids. have they differ? why are some more favorable than others? reporter: there are five bidders

, six companies in total. one of these bids is a combination of two companies here in japan. and a private equity firm. so you have different amounts of initial investment that are being played here, but you also have varying views as to what extent of bankruptcy is either an option for takata were being insisted on by some of these bidders. we are told that two of these bidders actually have a greater insistence that the company has no option but to file for bankruptcy. those two are key safety systems and autoliv, two other airbag makers. that is why they are being viewed as slightly less favorable. however, none of these bids have been ruled out at this point. still a lot to be decided here. yvonne: we are seeing takata down about 2.25% this morning. thanks so much.

up next, phyllis smarting. we take a look at the outlook for the smartphone market. this is bloomberg. ♪

ramy: this is "daybreak asia." yvonne: let's take a look at what is coming up for the next few hours on bloomberg. what are you watching? lotrter: we have got a

coming up, despite china being on a holiday. we are going to get a reaction to the japanese tankan survey as the sentiment continues to decline. we are going to take a look at what we can expect in terms of further policy measures. we are going to be speaking to a chief economist at credit suisse for a reaction and further --lysis about how the boj has been boj run out of moves when it comes to monetary policy. we are also going to take a look at the week ahead. even though china is on holiday, we have a big week you're in asia. to rate decisions from australia and india. we have u.s. jobs numbers and said to speak as well. we will also be looking at this amazon story, doubling down on india. they are investing big ahead of the the wally -- diwali shopping season. taking a look at the challenges for amazon and that emerging market. smartphones are still the

hottest topic as investors play the guessing game on what the tech world has in store. the exploding battery from samsung and a mixed response for the latest iphone, some are concerned the industry may be facing the same fate as -- tim joins us for more analysis. you talk about major advances in smartphone technology that have come to an end. walk us through this. reporter: basically, if we look at the last 10 years of smartphone technology, processing speed just like in pcs is a big deal. one family -- one company made our processes quicker and quicker, but we are at a point where kind of doesn't matter anymore. just like pcs, processing speed is not the big thing it used to be. we are only seeing small, incremental changes, and that gives people less incentive to

upgrade. the other one is display technology. it is about resolution. if you look at something like the iphone 7, we are seeing the screens are getting better in terms of resolution. it is getting to a point where your own human eye really can't discern the difference, so we will probably see in the next few years screen resolution being less of an issue. ramy: we will have to leave it there. looking ahead to what might be in store for all of us and our smartphones. that is it for us, but plenty more still to come. "trending business" is up next, and we are counting down to the hong kong open. yvonne: with china" we are focusing on the hang seng. hoping to see a rebound after falling close to 2% on friday. morning come here on "trending business." ♪

>> -- heidi: it is monday the third of october. this is "trending business." we will be live in tokyo and singapore, but first, this is what we are watching this morning. slightly depressing start out of japan, the latest survey coming below expectations, and the outlook for businesses is subdued. it is a different story when it comes to china, with further signs of stability on the factories or -- on the factory floor. the airba