tv Bloomberg Markets Asia Bloomberg November 9, 2021 9:00pm-11:00pm EST
it's have a look at the price actions of the various asset classes. the inflationary from china partially responsible. highlighting inflation risks in the global economy. the csi 300 off by 9/10 of 1%. the hang seng down just a fraction. the nikkei losing 2/10 of a percent. we can see still praises again falling back five point 8%. wti and brent crude moving to the upside after a lot of speculation in the session in new york president biden would not be using the strategic reserve to produce more oil. yvonne: those yields when it comes to sovereigns are continuing to head lower today. it has been an aggressive bond
buying. we will start with treasuries. if you take a look at what you're looking at here, this is not the right chart i wanted to mention a little bit more about the chinese property prices. we will talk about that. the 10 tips now. yields are in negative territory. with the record lows. at a time when the u.s. is coming out of this pandemic and the economy is on the mend and you are seeing people price in and buying up inflation protection, that is something of concern. where tell you about inflation in china. maybe not as big of a concern but the prices looking pretty elevated. rishaad: let's get into this and have a look at these numbers. this is the inflation picture. showing the producer prices. prices moderating but it is not ideal. hot coal prices responsible for
the gate reading. let's have a look at how that is likely to weigh on the growth picture. let's get to the asian economist with bloomberg economics. let's kick things off. let's look at what was behind this reading. we were expecting 26 year highs. is it as simple as saying high commodity prices or is there more to it? >> that is our reading as well. we feel this divergence between the ppi documents and the cpi elements. ppi is in the near term to remain elevated because of the commodity prices. the continuing supply chain. coal prices and oil prices.
therefore, ppi inflation is rising even further from already quite elevated levels in the past few months. this time, inflation has increased. that is mainly food prices. vegetable prices have been affected. we have seen some increases in the cpi inflation. we don't see a massive concern for cpi. we have done some research looking at the ppi to cpi. we think -- key factors into the medium-term. from a macro perspective, consumption is not a specially strong. we identify a few structural changes that hold down cpi
prices. yvonne: we will see ppi and cpi converge. how is the picture likely to impact inflation globally? >> this is something quite interesting. we have done research recently. we think china's inflation has less impact than people think global inflation. we have done an analysis on china's ppi spillover to major economies. what we found is yes, china's ppi inflation has an independent impact on global inflation before, particularly around early to thousands when china first joined the wto and china's export share globally increased sharply. in more recent years, china's
ppi inflation in the global world has been declining. we actually see little independence impact of china's ppi on top of commodity prices and global inflation. it could well be the case that china's impact on global inflation, initially it was a level shift. after china's integration, the impact has diminished. now it is collectively, china and many other countries are affected by the global commodity upswing rather than china has dominant impact on the global inflation. yvonne: thank you. the latest on these inflation numbers. the latest when it comes to beijing's response. we were talking earlier this morning about u.s. lawmakers
visiting taiwan and further inflaming tensions with beijing. the taiwan affairs office spokesperson saying they oppose the u.s.-taiwan military contacts. we did learn they did arrive on a u.s. military plane. we are hearing that response from beijing. over surprise. -- no surprise. rishaad: the senior vice president and portfolio manager for pine ridge investments. we are going to get back to the inflation reading. give us a sense of where you are in this whole conversation. >> we think inflation will be elevated for a while. the market is getting the semantics of what is transitory and what is not. we think inflation will be elevated for this quarter. probably the next two quarters. probably supply chain. being accommodative, commodity prices and so on.
that will have an impact on monetary policy. as well as we can see in terms of the fed tapering and other central banks. we are thinking this will dissipate in the second half of this year. -- of next year. yvonne: do you think when it comes to chinese bonds traders are likely to overlook this higher inflation print because the economy is slowing down in a big way and bonds are more attractive in what we are seeing in the rest of the asset class? >> that is an interesting question. for china, we think inflation be more benign. that is for a number of factors such as the fact that the base effect that some of the cm has such as the -- the base effects are more pronounced they are because of the way the pandemic was held and the lockdowns and so on.
and the fact that china, the consumption as your previous guest was mentioning, the consumption rebound is not as strong. in a terms of china, we think inflation will be benign. a divergence with ppi and cpi. almost entirely driven by commodity prices. rishaad: looking at how -- it used to be responsible for exporting disinflation or deflation around the world. does this factory gate because concern for global inflation not just in the u.s.? >> i think what we are focusing a lot on is in particular the credit impulse of china. bloomberg does have an authenticator of the terminal on that. we think this is a key indicator to watch the credit impulse does
explain quite a bit in terms of the performance of market indicators in china. it also has a large impact in terms of economic growth, industrial output. this is what we think has -- propagates the most in terms of some em and in terms of global growth. this is what we have been focusing on. this has been negative for the past few months. we will need to see how it evolves particularly in light of the chinese real estate major turbulence we have seen in the market. yvonne: i was going to ask you, as we have seen this bond market selloff when it comes to high-yield, hitting companies that are high rated like tencent and the banks. today we are seeing some of these junk bonds set for the biggest jump in three weeks.
we are seeing a bit of reprieve. how far do you think this can go in terms of where junk bond yields can go? and at what point do we expect china to put a floor on yucca -- on it? >> the letter part of your question is key. we think turbulence can continue for a while in that market is probably scarred because of the fact we think chinese policy support for that segment and the high-yield real estate developers will be rather timid. it will not be nonexistent but it will be timid. this is probably of -- this is part of the broader theme we are seeing this year playing out. which is the list sovereign support. -- the less sovereign support.
so that market is yet to find a floor. and is entering a rather alarming stage, which is when bond prices in the high-yield segment trade where they are, the willingness might start to wobble because certain chinese developers or chinese companies will wonder why they need to repay if there bonds are trading where they are. the impact even though it has radiated a little bit to the butter segment, a little bit is the operating word. it has remain localized. in terms of the risk or systemic risk to the chinese financial system, as we have learned from analysis, we think it is rather limited. rishaad: talking about risk
reward, where do you find safety and where you find juice? >> the short answer to the juice is you find a lot of juice in terms of the high-yield segment. and the issue is to be able to withstand turbulence. we think there will be winners including in the chinese real estate segment. fundamental research is important and we think on the others this, there will be significant winners and we think if we can stand the turbulence, it could -- in that market. in terms of -- yvonne: go ahead. finish your thought. >> in terms of safety, we think that broadly, the market on the investment-grade segment has
remained relatively spared. to markets, that is very well anchored. and it provides differential. the age i.t. market does continue to be interesting in our view. in terms of the high-yield segment, there is a lot of opportunity. yvonne: this bond buying fury we sell overnight. maybe you can give us a little more on whether this is a short covering we are seeing given how underweight the market has been or is there some kind of fundamental move? when it comes to tips, the fence -- the 10 year yields are heading lows. what does that'll spell to you? >> on the move we have seen in the past few days, it is related to the chair selection.
i think there is a bit of talk as to whether it could be powell or brainard. there is perception brainard might more dovish death the end of the day, monetary policy regardless of who is picked, there could be some nuances here and there but broadly it will be relatively the same. on the regulation side, it is quite different. the focus is the monetary policy. in terms of the broader market, in terms of the dominating theme in terms of the treasury, it is that tug-of-war between whether inflation will be persistent or not. and where the terminal rate will be looking through what will happen in terms of the fed is anchoring the overall yield
curve and that is having an impact. rishaad: thank you so much for joining us. moving along, having a look at some of the first word news. let's get to vonnie quinn. vonnie: we do know there is going to be a virtual meeting next week. sources say president biden and xi jinping are scheduled to hold one next week. it comes as the two nations spar over taiwan and alarm grows in washington over beijing's expanding nuclear arsenal. we are told the session will not address the issues -- a group is likely to further inflame tensions over the status of the self-governing island of taiwan to the government confirmed the delegation arrived via military aircraft.
bloomberg has learned a court in myanmar will deliver a verdict against a detained civilian leader. it will be the first ruling on charges leveled against her in the aftermath of a belt -- of a military coup. she was detained as the armed forces seized control of the government. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. rishaad: tencent earnings preview. sales of china's regulatory crackdown clouds in the tech giant. yvonne: a look at same-sex relationship rights in japan. our guest helped found the organization that promotes lgbtq
>> i think that regulation and a lot of the things that are bad for the economy, need to be solved. for tencent, there is some internal issues. for example, the lack of data integration and the low converging of the traffic. the lack of the video app. internal issues are more difficult to be solved. >> short-term, there many regulations to work through. impact will take some time to get digested. we have to see estimates and expectations. longer-term, i think the structural demographic growth of china, the world's largest digital economy,.
-- digital economy. rishaad: giving their views on tencent. yvonne: tencent said to report slowing sales growth for the sixth straight quarter. results will shed light on how china's tech crackdown has had the country's biggest company. rishaad: our bloomberg intelligence analyst joins us. it is going to be all about the regulatory situation and how it is impacting tencent. no doubt we will see them in the numbers. yvonne: one of your prior guests was talking about the lack of game approvals. we have seen league of legends come out recently. that was already approved. having no new games take some of the growth off the next couple quarters. couple that with other regulations. things are slowing down. longer-term, tencent is in the best position to benefit domestically from keeping not just gaming entertainment but the meta-verse.
abroad, they are strongly positioned to gain a much bigger foothold. if you're looking beyond the next four quarters, there is a lot to be encouraged about. yvonne: the economy is showing some signs of a slowdown. how is that likely to have any knock on effects? >> we think advertising spending is going to see a big pullback from traditional businesses. tencent is better positioned than some of the peers because they have many programs inside of we chat that are growing so fast more and more volume will flock to that even as competition in the broader macro factors are affected. some of the livestreaming sites are going to see a big head to advertising revenue. rishaad: they always tried to fit a strange relationship. they could have advertised a lot more in they could've had more on their platform. that is sometimes reflected in the valuation. is there something here which could change all of that?
>> i think when we start to get new games approved, that will be a big catalyst. that was the catalyst in 2018 when things bought of no to drive -- when things bottomed out. we think that is something we are watching for. it has been four months we have not seen new games approved. when we do start to see that, that is the signal for regulators there is light at the end of the tunnel. it is branded content and the meta-verse. rishaad: thank you. you can tap into your bloomberg for more on tencent's earnings . yvonne: tliv is where you get commentary and analysis from our expert editors. this is bloomberg. ♪
yvonne: this is your latest business flash headlines. nissan shares jumped after it raised its profit outlook to $1.6 billion. the carmaker had already cut ed's low global sales target by 13% to 3.8 million vehicles. the chip shortage has delayed the rollout of new models but resilient demands are helping boost profits for jetta pennies automakers. -- for japanese automakers. a fabrication plant in the japan without beauvais sony subsidiary, which will be a minority shareholder. tsmc's energy investment will be around $2.1 billion while sony will invest 500 million for less than 20% stake. the deal has the support of the japanese government. rishaad: president biden and xi jinping are said to have a
virtual summit next week. there is a lot to resolve between the two sides. not least what has been going on in terms of here in hong kong and the criticisms coming from washington. but also, what about things such as the reopening's? they are not on the agenda. yvonne: it is interesting they have said that is something they are not going to touch right now. when it comes to taiwan, we have seen lawmakers make this trip to taiwan on the military plane. is that going to be brought up? we don't have a date yet but people said at least they are talking because the low level negotiations we have had before have in disappointing. rishaad: we have had a couple phone calls between the two. this would be coming after the sixth --
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yvonne: the last few days have been a rough ride if you are a tesla investor. this dog was nearly $200 billion at a market value after its biggest back-to-back selloff in 14 months. it happened amid a flurry of negative news including elon musk's twitter poll about selling 10% of his stake. michael burry saying maybe he is selling his stake. rishaad: all the swirling
around. su keenan is here. a lot of factors at play. competitive pressure and that is preying on the share price. su: 199 billion. let's talk about this world that brought this dog down in that -- of the stock down to you mentioned michael burry. there was a business insider report the investor made famous by the movie the big short. tweeted that he may want to sell stocks to cover his personal debts. we are seeing tesla bounce back but the shares tumbled 12% after closing down 5% in the u.s. monday session. musk's weekend pole on twitter asking whether he should sell a 10% stake in his stock extensively for tax purposes resulted in a thumbs up from the
many millions that follow him. michael burry saying it may be because he wants to cover debts. layer on the fact has brother sold stock before that and now there is a lot of competitive pressure including a very and focus ipo by the ev maker. priced above the highest range and they expanded the offering. yvonne: let's put things into perspective. when it comes to his wealth, despite the past few days of losses, he holds the number of the world's richest individual. su: you lose 50 billion in two days and you're are still the richest man. the biggest two day decline in the history of the bloomberg billionaire index. the biggest one-day fall after the $36 billion one-day plunge. jeff bezos followed his divorce from mckenzie skype.
it is a very small margin. he surpassed the amazon founder in january. bill gates once very close to the top of the list has now drifted down to the world's fourth richest person. rishaad: thank you for that. we have this ev maker said to price its of regional offering at 78 bucks per share. a company which is backed by amazon and afford hitting the public markets to make a dent in such companies as tesla. about 150 3 million shares according to people who do not want to be identify them. yvonne: will make a dent but how big of a dent will be the key issue. how will there be a material rival when it comes to tesla? they delivered the first vehicles mostly to its own
employees. it will only produce 1200 units by year end. rishaad: look at tesla. let's move things along. let's have a look at what is going on with regards to the prospects of price rises in the u.s. the first word news coming from vonnie quinn. vonnie: eye-popping is the word is san mary daly is using pin heat -- easily virtual meeting the data is eye-popping but did not offer a specific outlook. u.s. claimant envoy john kerry says he sees the negotiations producing a deal on carbon
trading rules. an agreement would mark a turning point for climate diplomacy but a complex set of technical rules still needs to be hashed out. speaking to bloomberg in glasgow, he played down expectations for a brand-new statement and said he remains optimistic the challenge can be met. >> i am for making sure we continue here. we are pouring our efforts into research across international lines and i am confident that we can at their. human beings created this problem. human beings can solve it. vonnie: the european union is planning increased sanctions against belarus over claims the leader is stoking a humanitarian crisis. polish troops have used your guest to prevent migrants from storming a fence along the border. thousands of refugees stranded in the forest with temperatures dropping below zero. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg.
yvonne: taking a look at southeast asian markets. we are expecting the bank of thailand. going to be interesting given this economy is slowly opening up. does that change the function or the thinking from the bot? southeast asia markets, slightly lower. certainly the laggard. 4/10 of 1%. quite marginal given how this index has come back to those pre-pandemic levels as the economy comes back. rishaad: 25 minutes ago before we look at the open, it seems there is momentum. these are the rates in thailand. we will have a look at what we can expect. thomas joins us from bangkok. we have some momentum. give us a sense of the key
themes need to watch out for. >> the central bank has held a rate in the last 11 biddings. people have started focusing on the accompanying statement. our people will be watching out for the central bank prognosis on the economic recovery. it has been saying the recovery is for jail. however what the central bank proposes in terms of sustaining this recovery. opening up to foreign tours. more than 60 countries can come in without undergoing quarantine. that should provide momentum to the ongoing recovery. essential bank has been cautious in terms of say it is a sustained recovery. we would be watching out for any recovery about how soon the
economy could be turning around. any targeted measures the central bank could in addition to the key rate, to assist the recovery. yvonne: we are still waiting for how quickly tourism can bounce back. you mentioned about what the central bank could do and other things to assist other recovery. i am wondering when it comes to inflation, is that a worry for the back of thailand given how we have seen energy prices and commodity prices go up? ? the first part of your question, while the central bank has held the rate at a record low of 0.5%, it has been turning to a lot of other dues and has been turkey about more targeted missions to assist the recovery. a few weeks back, it did allow lenders to raise the long-term value ratio to 100%.
that should be a really -- recovery. there has also been a first under your of the central bank. the crimes that are faced by segments like the small borrowers. there could be more targeted measures in terms of easing the trench. as far as the inflation is concerned, we have seen inflation picking up over the last couple of months. it stayed within the central banks, targeted range of one to 3% government -- a range of one to three percept -- one to three perception yvonne: coming up, japan under pressure to do more to end discrimination
yvonne: the only g7 state without laws prohibiting discrimination. raising hopes to protect the rights of the lgbtq plus community. yvonne: let's get to our next guest who says the situation is improving. running as at the co-chief of staff for the lgbtq plus counsel for goldman sachs. he founded an ngo that promotes inclusion in japan. thank you for joining us. you came out with this new pride index. tell us more about who is part of it and what sign you are seeing of improvement right now. >> what is interesting is we started this index six years ago when japanese -- are not familiar with terms like lgbtq. we set up a benchmark for what they should do going forward. for the initial year, really had
a small number participating. to be honest with you, those companies are the many u.s. companies like goldman sachs. we implemented what they have been doing at headquarters. over the past few years, this has significantly changed. most of the participants are japanese. there implementing more policies. -- there implementing more policies. rishaad: give us a sense of how the index works. it can be argued these things are arbitrary and subjective. >> but is a very good point. we set up five benchmarks.
most of the external engagement like the participating or the showing of support for the policies across the government. plus actually, -- what is clear is they need to show the proof. they need to show the evidence. clear in what has been achieved. yvonne: i'm wondering when it comes to legislation in japan, it seems a lot of the efforts have been mostly in the municipal government. do you think that has paid off for japan or do we need bold removes on the national level yucca >> -- national level? >> the partnerships cover 40% of
the population. it is growing every single year. there is no national coverage yet. what is happening is when we implemented the benefits, there is no system in local government so we need to set what we can do. now what is happening is tokyo, in some cities, they don't have the partnership. there is confusion among -- and a national benchmark or policy is needed to be implemented. we have been hearing from the
japanese corporate. we have been helping. rishaad: it is regarded as being a deeply conservative country in many regards, particularly will areas versus the urban ones. give us a sense of what needs to be done next. how do you move the dial yucca doug -- the dial yucca >> the corporate are playing a big role. looking at the corporate who express their support, there are many japanese corporate there across the country. they are telling the people this is our policy. this is what we want to achieve. employees are looking at what it
stands for. they need to follow what has been achieved in other countries as well. when it comes to work with the pride and the index, other u.s. companies are leading. when we look at the participating companies, they are all japanese companies because they have business everywhere in japan and they need to -- they are following this trend to make sure across the countries, there implementing the same policy. yvonne: when it comes to any kind of corporate policy you see out of these japanese companies, it is one thing to buy rainbow colored lanyards and many things optically things -- many things
optically you can see. they get is only a fifth of people who were surveyed in a pack who are still scared to come out to their managers. how do you separate doing what looks good versus actually taking action yucca >> -- taking action? >> that is what we have been tackling today. it is not just the policy. it is about the culture. the culture can be only changed by the people. if your boss is not showing the rainbow color, you can suspect this is only for people -- the same idea of wearing pink. what is good is we have the
[indiscernible] showing their support in the cause. the senior bankers are showing their support. it is happening every day including the support as well. let's make sure we change the culture. not just the policy. that should be across all the sections. not just the executive office. rishaad: great talking to you. signs of improvement in terms of inclusiveness. the chief of staff of goldman sachs. yvonne: tsmc is set to build a semiconductor plant in japan as the biggest chipmaker makes moves to ease the supply chain pain. details ahead.
fabrication plant without love sony and it comes as governments from around the world are trying to boost manufacturing capabilities to ease persistent shortages. shifting to china where factory price are in focus. that is amid the commodity boom and energy crunch. a ppi spike will impact domestic businesses facing higher input costs and battling weaker demand. president biden spoke with the ceos of companies critical. they assured the president store shelves will be stocked for the holiday season and discussed plans to speed up deliveries. ongoing supply chain disruptions and higher food and energy prices may have contributed to the fest is u.s. inflation since december 1990 -- recruited to the fastest u.s. inflation since
talk -- since december 1990. terminal ucan read more about these stories in our newsletter. back to you. rishaad: let's check in with some of these other headlines. coinbase shares fallen in the post-market session. a big earnings miss. it is the largest u.s. digital asset exchange. it has a revenue of one quarter billion dollars compared with 1.6 billion that had been forecast by the analyst. lower point prizes. market conditions improved meaningfully late in the quarter. sales appear slow. by 5:00 p.m. tuesday, pay tm had only sold 40% of its non-institutional issue.
some analysts are raising concerns about their profitability. offering to close wednesday. shares sharply down in hong kong resuming trade after a six-week halt. refuse -- failing to meet debt alterations this month. fantasia says it is in active negotiations with creditors and working with financial and legal advisors. general electric split into three separate companies. it is a stunning breakup of the manufacturer founded by thomas edison. it will combine its three energy business into a single entity to be spun off. aviation will make up the third company. >> these businesses will be more focused. will be a greater level of
accountability. we should have more strategic flexibility and i think it is going to be good for the team as well. we will end up with investor bases focused on these pure plays. investors who are probably under invested in ge today. this is probably the best path for us to unlock and create value. yvonne: take a look at the movers. we have fantasia resuming trade. that is plummeting. also news of the evergrande unit rising some cash. you are seeing these shares still in the green after reversing earlier losses. perhaps we are going to see some of these property developers start issuing bonds, which could be a good sign. rishaad: this is a big one today
in tech. we have this company slated to have a 16% increase. that would represent the sixth straight quarter where we have seen a deceleration. it should be providing us with evidence on how this type crackdown in china is hurting the outlook for the company. this is the country's biggest company. earlier, saying it is going to be important to note how the video gaming bands have affected this and if they can get any kind of green light. yvonne: citigroup saying when it comes to consensus right now, it may be too optimistic when it comes to advertising fintech paid maybe we will see more clarity in this earnings report of how bad the damage is when it comes to the revelatory crackdown. saying we have to wait until next year before all the mightiness -- all of the cloudiness.
>> it is almost 11:00 a.m. in singapore and shanghai. welcome to bloomberg markets: asia. >> let's have a look at our top stories. most asian stocks slipping after china's factory gay prices surged to a 26 year high. >> fantasia plunges after it six-week trading halt while evergrande faces a key repayment
deadline. rishaad: materials shortages playing out in india. we speak to a ceo. haslinda: following the market inflation, we have china's ppi surging to a 26 year high. you took but still higher than expectations. talk about higher commodity price and the energy crunch. the msci index crunch extending losses for the day. under a lot of pressure. down by 1.6%. keeping a watch on fantasia. dropped as much as 15%. csx 300. failing to keep the 5000 level. investors are losing hope and easing could come. take a look at where we are in terms of chinese bonds. under a lot of pressure. we are waiting to see if
evergrande makes that payment to the bond -- that payment. the bond expires today. chinese bonds under a lot of pressure given the downward rating from ratings agencies. the banks have done well in that timeframe. rishaad: taking a look at the bangkok open briefly. having a look at the bank of thailand. at as we look at the chart, let's have a look at the nifty looking like we are going to see some losses from the indian market. the rupee giving up some gains it has made of late. turning to what is going on, the two year yield turning close to the policy rate. no expectations have any rate hikes soon. economic momentum coming back. picking up in thailand. that is since the previous meeting kid cutting the growth
forecast repeatedly this year. likely to keep the growth forecast has seven tens of 1%. a nationwide vaccination rate of 70%. there is a feeling the bot may be leaving policy rates unchanged through the course of next year. haslinda: let's get more insight with our mliv strategist. let's start off with market reaction to china's inflation data. the ppi surging to a 26 year high. it does feel investors cannot expect any easing at all. >> certainly the way chinese equities are behaving if you look at the csi 300, it is slipping down. it filled a couple times to get above 5000. it does not look very good at all. from the pboc's point of view, it is the cpi rate. although it only crept up by a
small amount come with -- amount, the fact it is going in the wrong direction signals it is going to be hard to do any kind of easing. getting pretty difficult now to ignore the ppi. people often say it does not translate into the wider economy. it is just between business companies in china. when you have it running at 13.5% and you look at the breakdown of some components, it is painful for some companies. material costs running up more than 25% should that is going to impinge on profit markets -- that is going to impinge and profit margins. whether the pboc reads more than we are reading into these numbers, whether they stay on their hands or not, it is going to be hard for them to come up they case for easing when they look at some of this data. either way, it is not good kids
equities are doing what they would normally do in such a scenario. they are drifting lower. rishaad: a quick look at the question of the day. how would u.s. cpi at 1990 highs affect assets? give us a sense -- go on. >> obviously the bond market will not be looking closely at that. we have had a lot of volatility. we had a bit of a communication issue between central bankers and traders as well. anything which stretches the imagination of bond traders is going to be reflected in some fierce trading. if we get a number as suggested in the question, you're going to get a selloff across the curve. the short end would fare even worse than the long end of the curve. the message we have had the past couple of weeks is traders are much more prepared to take on
central banks with specific data points. inflation is one of those. it is a number that has been moving a lot. it has generated a lot more action. particularly in the 30 day contracts. traders are emboldened here. when they see something out of whack, they are ready to jump on it. expect big movements in the curve later on today if we see a number that exceeds the forecast. rishaad: let's get in fred newman, the cohead of asia hsbc. it was interesting that the components of this ppi factory gates number was shown 25% gains on materials. that would suggest a lot of this is down to share demand one could argue. it lends itself to this report you have written about the electronics industry. >> i think mark is right.
it sets up the pboc for a tricky task ahead. you have a slowing economy and yet price pressures are elevated. what we highlight is the rise in the pot -- the ppi is hurting smaller companies because it is a supply shock. it is not just a demand shock. it slows down growth further. we would expect the pboc to look past these numbers and look ahead at the oncoming train, which is the disinflationary impact from what is transpiring in china. rishaad: the disinflationary aspects? >> in the sense of slow economic growth, you have the property market, the energy crunch. commodity prices all act as a tax on china's economy. we read a 26 year high on ppi. -- we are at a 26 are on ppi. a year from now, these numbers could reverse.
on electronics, you already see some easing of supply chain pressures coming through. the whole world is talking about how it is hard to get chips and it is still true. if you look closely, new orders are rolling down. he see delivery times starting to ease as well. the backlog of orders are declining. there are signs here of things starting to ease. the reason is demand globally for particular electronics goods is starting to fade. that will accentuate over the coming year. haslinda: when you take a look at the scale and the breadth of china's ppi, it is significant. at some point, china will be exporting that inflation. given where inflation is right now, how much more worse will it get? >> if you look at chinese export prices, they have not moved that much. certainly not more than european export prices.
we could think china for having this enormous capacity and helping to keep global export races staved at export prices relatively stable. ppi is going up but the correlation with china's ppi is not that strong. as china's economy slows, it imparts a disinflationary impulse to the rest of the world. look at iron ore prices. as the chinese economy continues to slow, we would expect some of that capacity that serves domestic demand to be reoriented to foreign demand. we could see china helping to ease global inflation pressures over the next six months rather than stoke them further. haslinda: tell about u.s. cpi? looking today at 5.9%. what are your own expectations? >> the risk is still here to the
upside because we know energy prices have increased. we have reports of ongoing supply issues within the u.s. in the near term, there must be a risk of further upside here. as we look into next year, we look at -- we think supply chain issues will begin to abate by the start of the first quarter. the fiscal stimulus is starting to wear off. we do think second half of next year, we are to see a sharp slide in inflation numbers. it is that that the fed is focused on. near term bond market volatility. near term, looking at inflation coming down sharply. haslinda: the focus is on fed policy. there is a lot of concern, scrutiny perhaps that biden spoke to brainard. what might that mean for policy? she seems to be -- it could be lower for longer.
>> at the very margin, i think there is not a big difference between these two candidates. not official but certainly rumored candidates for the job between powell and brainerd. we can estimate the difference for policy. it would be marginal. it might push a hike from one meeting to the next but i don't think it would materially impact how we think about fed policy the next two years. there is within the fed broad consensus that inflation will come off the second half of the year. individual board members have strong opinions one way or the other. when it comes to the core leadership within the fed, i don't think there is as much of a difference between the two candidates. rishaad: do you worry about what is going on? lester's favorite word was unprecedented.
you could argue you could use the same word every year. with the amount of leverage buildup with free money and on top of that a an explosion of demand, which has signs of it petering out, where does that leave people? >> it is unprecedented should we reviewed the last two years internally and it is one month filled with events that -- there are many factors that point toward an ongoing normalization. normalization of the next two years. what you have seen is a shift in demand globally toward goods, which is not sustainable. it was fueled by lockdowns, which hopefully and likely -- rishaad: let me put this to you. if we did actually have with all this leverage and inflation
rearing its ugly head in central banks raising interest rates, that would cause immense pain notches for countries but corporate and individuals. haslinda: it acts like a counterbalance -- >> it x like a counterbalance. you cannot raise interest rates as much as you would have 10 or 15 years ago because of the leverage in the system. italy takes 20 basis points to pull things down. that is why we need to be careful how many rate hikes we are pricing in. we are not going to price in 3, 4, 5 rate hikes because that would be a major damper on the world economy. haslinda: always great to have your insights. let's get the first word news with vonnie quinn in new york. bloomberg sources say president joe biden and his chinese counterpart are scheduled to hold a virtual summit next week. no specific date has been set to comes as the destination spar over taiwan and alarm grows over
beijing's expanding nuclear arsenal. the session will not address the issues of whether consulates that were closed will reopen. a visit to taiwan by u.s. lawmakers is likely to further inflame tensions between washington and beijing over the status of the self-governing ireland. the pentagon confirmed the delegation arrived via military aircraft. the defense ministry in beijing issued a statement strongly condemning the visit. u.s. climate envoy john kerry says he sees the top 26 negotiations producing a deal on carbon trading rules. it would mark a turning point for climate diplomacy. speaking to bloomberg and a glasco, he played down expectations for a grand new statement on climate ambition. he remains optimistic the climate -- the challenge can be met. >> we are pouring our efforts
into research across international lines and i am confident that we can get there. human beings created this problem. human beings can solve it. bloomberg has learned a court in myanmar will deliver a verdict to will be the first ruling on charges leveled against her on charges in the aftermath of a military coup. she was detained in february. facing charges from corruption to the possession of unlicensed two way radios. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. haslinda: exclusive interview. we will ask about the surge in commodity prices,: power shortages and plans for
haslinda: we have breaking news from ev maker revealing. pricing it's shares at $78 each. an ipo raising $11.9 billion. this would be the biggest listing in 2021. the sixth largest ever on a u.s. exchange. 78 bucks each. rishaad: watching that one. also looking at evergrande here as well. today will be a big test for
this troubled developer. we say that every day. this day is particularly troubling. another $148 million in interest payments. creditors spreading beyond it is a big day. >> there will be another big day because they have $19.2 billion overdue bonds they need addressing. 148 million dollars on three coupons of dollar bonds that had come to a month ago. today is the d-day. no indication yet from bondholders whether they have or will get the payment today. we will know more about the end of business closed today. the default is significant.
they did not default on the coupon payment. they paid it in the 11th hour. a default -- if a default would have been, that could trigger cross defaults. it could give creditors even more room to push for demands. it could be challenging. we had the story on ev's. evergrande is not just a developer. they are trying to raise money. they're going to rain 500 million hong kong dollars in pop-up placement at a significant discount to an already hammered stock price. two dollars 86 a share. in february, this was the a $72 a share company. they are trying to raise some money. they want to get production lines going and get their first car out there. it does not rolloff the tongue
very well. we need to get that going to get sales going and get some revenue in. we will see if the money gets earmarked to pay borrowers. haslinda: thank you for that update. still to come, time for morning call. we will look at some of the top analyst recommendations across markets. the benchmark in the lion city down seven tents 1% and a with sentiments. -- in line with sentiments. keep it with us. this is bloomberg. ♪
regulatory crackdowns, which have been taking a toll. haslinda: let's get to asia stocks reporter. give us a sense of the mood for investors for this year's singles' day. >> the mood as you mentioned is pretty muted. there are a number of factors. there is the slowdown in china. supply chain constraints. the prosperity drive, which is driving some of the big tech giants like alibaba and jd.com to make sure this event is a low-key one. tech stocks that have been battered already may take a further dive tomorrow depending on what numbers we get tomorrow. depending on what numbers we get from sales growth, which is not expected to be as fantastic as it has been over the past year. rishaad: thank you so much. our asia stocks reporter.
time for morning calls. it is time for sophie kamaruddin should having a look at goldman lowering its forecast. give us a sense of what they are looking at for the rest of asia. sophie: when it comes to china's slowdown, goldman saying they anticipate moderate spillover. when it comes to 2022, they're calling this the year of normalization. with the reopening laggards like india and aussie on -- and asean. while they see inflation moving to the upside, goldman does not expect that will dominate the policy agenda for the central banks, which does pave the way for a broad toward -- a broad turn toward policy. haslinda: the worst is over for the economy. morgan stanley, economists are bullish. sophie: morgan stanley outlining
three reasons to be bullish on indonesia. a look at those first. indonesia is a reopening domestic demand played. the country is seen as a inflation hedge. we have morgan stanley saying indonesia is one of the strongest structural growth stories in the region. the bank saying it is time to buy intonation equities going overweight and boosting asean as a whole. rishaad: our markets reporter. looking at news coming out of hong kong. a mainland chinese official talking about the border between hong kong and the may land. they may see it open by january. no word yet as to when hong kong will open up in a more meaningful way. perhaps get over some of its owners quarantine regulations. we did have advisor to carrie
lam telling us we may be seeing that in the middle part of next year. we had those have first inflation to -- we had vociferous inflation. taking a look at producer price numbers, which have not been this highs since 1996. it is a down arrow story for china. haslinda: down arrow for the rest of asia. inflation concerns. up a notch given how the ppi has surged to a 26 year high. china expanding losses for the day. south korea, singapore, hong kong under a lot of pressure. this is on the back of the s&p following for the first time -- falling for the first time in nine days. not too bad given global stocks are hovering at record highs.
one stock we are tracking is fantasia. slumping as much as 50% after resumed trade today. this is bloomberg. ♪ moving is a handful. no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at xfinity.com/moving.
rishaad: we are back. having a look at some of the key stories people will be watching for in india, we have the country's revenue secretary saying the country is taxing gains on cryptocurrencies. several earnings out. we have oil india. don't forget a big one as well, the subscriptions of an initial share offering, up at a sluggish pace amid concerns about the company's profitability.
nifty futures indicating we will be seeing a decline at the start of the session. declines are what we are getting across the board, aren't we? haslinda: let's take a look at commodities, which is part of the reasons why china's ppi surged as much. oil close to $85 a barrel. there is speculation biden may back away from the emergency reserve after u.s. energy reports suggest supplies rising next year. iron ore down by almost 6%. it has been pounded by property stress in china, places is the lowest in 18 months. copper also under some pressure. the nikkei 225 back from lunch, down about 0.5%. in terms of cryptocurrencies, a benchmark low of 2%. bitcoin easing after searching -- after surging. some investors see them as a better hedge against inflation than gold, but today they are
under pressure. rishaad: we are looking at e-commerce now, as it is expected to propel asia's e-commerce. a fast-growing basis of consumers and merchants which would help the region become a trillion dollar digital hub by 2030. some say it could be sooner. haslinda: let's get more from the vice president of google southeast asia. that pace of growth isn't likely to abate. >> we do not anticipate it updating. last year -- it abating. last year, the first year of the pandemic, we described the southeast asia digital economy as resilient. it was a modest increase from growth 2019 to 2020. we held steadfast to our 2025 forecast, hence the resiliency. this year we are calling a year of resurgence. the reason for that is many
fold. we continue to see users come online at a blistering pace. 80 million have joined the internet in southeast asia since the beginning of the pandemic. approximately 40 million in 2020 and another 40 million this year. really importantly is the adoption of purchasing online, so digital consumerism has really taken hold during the pandemic. before the pandemic, we saw less than half of the connected publishing was buying online. today that is 350 million people. we see additional continue to come online. we added a total of 60 million since the pandemic, 40 million last year, 20 million in just the first half of this year. what is important is they are telling us, consumers are, that the number of categories from which they are buying has increased. they started buying from two new
digital categories in 2020 and almost another two in 2021. haslinda: talk to us about the trends. it is not just about shopping online, it is also about digital payments. stephanie: on both sides, consumers using digital payments, but also merchants telling us they adopted digital payments. we spoke to 3000 digital merchants across southeast asia. they have a portion of their sales that have to be coming from online, but 95% of them tell us they have adopted digital payments. importantly, 92% said they plan to increase their generalization of payments -- their digitalization of payments. it has come hand-in-hand with the growth of e-commerce. rishaad: if there is no doubt that covid has changed the whole landscape and made perhaps internet adoption go sky high,
do you have any numbers which would tell us how much you were looking at before the pandemic in terms of growth and what you are looking at now? stephanie: when we first started the report in 2106, we estimated -- 2016, we estimated the economy to be 200 billion in size. we upped that. it is those coming online and purchasing online. those who purchased online for the first time in 2020, well over 90% say they continue to do so in 2021. it is this type of adoption that is fueling the growth that we anticipate. again, as you called out, we are seeing a digital decade ahead of us in southeast asia, a digital decade for everyone, and a possibility of a trillion dollar economy in the digital space by 2030. rishaad: with this comes an enormous responsibility, does it
not? a lot of people are not yet internet savvy. you have different jurisdictions doing different things. indonesia doing something different than vietnam or singapore here. are the regulatory frameworks fit for purpose? what is the challenge facing them with regards to things which are in the interests of gig workers, or privacy as well? stephanie: we have made a lot of progress in terms of enablers, measuring the digital economy going back to 2015. when you look at opportunities just described, a trillion dollar digital economy by 2030, we see more jobs, stronger businesses, greater access for everyone across the region. there are a lot of things that have to happen. yes, smart regulation is one of them. we believe very much in there being data security. that needs to have some format. but we don't need fragmentation
in regulation across the region. it is so important that we have free flow of data. yes, regulated, but it won't work if we have different rules and regulations in each of the countries. a lot of this economy is based on being able to expand. we want to do so inclusively, with security top of mind, but we need smart regulation to enable that. haslinda: if you had to choose the next digital powerhouse in southeast asia, which country with that the? would it be indonesia -- would that be? would it be indonesia, vietnam? stephanie: indonesia had a good story from the get-go. it makes up 40% of the digital economy today. we expect that to remain the case. half of the investments coming in are going to indonesia now as well. so let me highlight an incredible opportunity i see in
vietnam. vietnam has slower growth here on year, but -- year on year, but that is not the story that chevy captured. keep in mind it was at 31% year on year due to the pandemic hitting vietnam harder in 2021. we expect it to be up between now and 2030. that is very entrepreneurial teams on the ground, developers, tech talent, a strong business economy and a lot of retail that is still off-line. i am backing vietnam to move quite aggressively and become the second-largest digital economy in southeast asia. rishaad: google can ride on this as well. you guys are going to capitalize on this growth, no doubt. i want to get a sense of what you think is the next big thing. we have seen all these fintech products, of not least, payment systems. what will be the next one that
will drive things, in your view? stephanie: all of those things you just mentioned are incredibly important and will continue to shine in the digital economy, but i think at the center is the mobile phone. it still is the center of computing. when we think about southeast asia has a mobile first, if not a mobile only region, and we have artificial intelligence that is providing so many opportunities for engagement through voice, through image and video, which are preferences in this region, we see that again being the brightest light. expect to see even more possibilities on our smartphones in the near future. haslinda: stephanie davis, google southeast asia, thank you for your time today. let's get the first word news with vonnie quinn. vonnie: a president expects supply chain constraints to continue into next summer.
she told a meeting that inflation data is eye-popping, but did not offer a specific outlook for rate hikes. daly voted on the policy-setting fomc. a china group is facing fines. investors are waiting to see if the amount before the 30 day grace period expires. one group had its credit rating cut further into junk territory by fitch ratings. apple ceo tim cook says the company is looking at cryptocurrency features, but has no immediate plans to enable crypto functionality in apple pay. cook told the new york times he personally owned cryptocurrency, but has no plans to invest apple's cash.
the european union is planning increased sentience against belarus over claims its leader is stoking a growing him in a terry in crisis on the eastern frontier. -- growing humanitarian crisis on the eastern frontier. thousands of refugees are stranded in forests there, with temperatures dropping below zero. global news 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. rishaad: coming up, we will be speaking exclusively to the head of endo stan inc, discussing coal and power shortages and plans for expansion. that is coming up just ahead as we focus in on india. this is bloomberg. ♪
haslinda: you are looking at the city of mumbai. we have three minutes until the trading day. futures down by 0.6%, pre-much in line with the rest of the region. rishaad: focusing on india and taking a look at the man who runs the country's biggest zinc and silver producer, as well as being the biggest zinc reducer by market value. we are getting over -- producer
by market value. we are getting over to arun misra. thank you for joining us. you must have been really, really doing well earlier this year. we saw zinc prices up at one stage nearly 40%. still up about 18% since the start of the year. you have been coining it. arun: the prices have been good. that is only one part of the story. if i put it in the proper perspective, the world is turning its focus to sustainability. i see zinc as a solution for sustainability across the globe. it helps in maintaining government made infrastructure operate for much longer time than usual. in india, 20% of the railway
line needs to be placed every year due to corrosion. we can stop that by making a galvanized. -- it galvanized. post-covid, we are experiencing new forms of different crisis. we experienced a non-april regional -- a nonoperational mine. now we are seeing problems of logistics. the prices are up, and so are commodity prices, so it is a fine balance between the rising prices and rising oil prices. rishaad: give me a sense of how these power shortages and coal shortages affected your business. though some of them have abated, how is it all playing through right now? arun: in india typically, we don't see power shortages. there have been challenges on
the coal sourcing front. at hindustan zinc, we have our own power plant. coal was a concern. we have power contracts. the last few weeks, it looks like it is pulling down again. let's hope for the best in quarter four. we think we are protected until the end of quarter four. absolutely no reasons to worry there. haslinda: let's talk about production. you select a production cut of about 25,000 tons because of shut down for repairs. can you make up for that loss in the course of the year? arun: we did cut down on production. we had an extended shut down last quarter. from this quarter onward, we are in the best of the period.
we finished all of our work last month. quarter three" or four in -- thr ee or quarter four in india is the slowest. i am sure some of our capacity can be made up in two quarters. haslinda: talk to us about your production levels. what are you expecting for this financial year? what are your expansion plans? arun: in this financial year, if i look at it, we should be crossing one million tons. on the metal front, we should be anywhere close to 990,000 tons, very close to one million. next year onwards, if covid is not there, we should be at 1.2 million tons of production
capacity. we have a plan to grow in three year's time, followed by another extension to 1.5 -- expansion to 1.5 million tons. rishaad: when does this work come to an end? arun: when i look at zinc, you have to paint a picture of what it will look like going forward. we should be anywhere above 2 million ton capacity with 1.5 million in india and 1 million tons elsewhere in the globe. looking at the logistics of using europe. in india, we would have our own expansion of the mine, followed by some smelters. we are still on the ground. we are going through the process.
rishaad: thank you so much for joining us. arun misra from hindustan zinc. as we are looking in on india, let's look at the open, where we are expecting a down drop. the session started about three minutes ago. indeed we are in the red. it has been a series of losses taking place of late for these benchmarks in india. that of course after a stellar year where we have seen record high upon record high. let's not forget if you are a bloomberg subscriber, use the tv function. you can send messages to our team and our guests during our live programming. there is lots more on the way. this is bloomberg. ♪
haslinda: welcome back. let's do a quick check of the latest business headlines. sales appear slow for india's biggest ipo. it had only sold about 48% of its institutional issue. that contrasts with stronger demand from anchor investors. some analysts are raising concerns about paytm's profitability. the provider's $200 billion offering is set to close wednesday. tesla slid 12% in new york and
cutting almost $200 billion from its valuation of over two days. the selloff came as it was revealed that elon musk sold shares friday just before the tesla ceo asked twitter if he should sell a 10% stake. that was followed a report saying musk wanted to sell stocks to cover his debt. tesla has held above $1 trillion in market value. coinbase shares fell in post market trading after an earnings miss for the biggest u.s. digital asset exchange. revenue was lower compared to the forecast by analysts. coinbase blames market turbulence. it notes that market conditions improved meaningfully late in the quarter. ps mc says it will build a $7 billion fabrication plant -- tsmc says it will build a $7
billion fabrication plant in japan. the initial investment will be $2.1 billion, while sony will invest $500 million for a less than 20% stake. it has a support of the japanese government. rishaad: let's take a look at what is going on with one company, a gain maker despite some this is in terms of estimates. -- some misses in terms of estimates. we caught up with the ceo and asked why his outlook was more conservative than the street. >> we exceeded our outlook for q3 at the high-end of our guidance. we had strong performance in korea and china. we are gearing up for a big 2022. in 2022, we expect to have continued improvement in our core franchises in korea and china. we are launching several new
games, three major catalysts in the new year. everyone is focused on q1 and the rest of 2022. >> how much pressure are you seeing from the regulatory crackdown and broader economic slowdown in china, and which markets do you think could make up for some of that decline? owen: our business in south korea is very strong. we have a lot of excitement about what's going on in the west, as well as japan. as i mentioned, we've got several new products coming out for the west in the upcoming year. we think that is terrific. the regulatory situation -- the main topic is about underage people playing video games. there is a new regulation on the docket for that, but it's important to remember that less than 1% of our players worldwide for our largest game in china are under the age of 18, and
well less than 1% of our revenue comes from that age group, so it has a demented mess affect on -- de minimus effect. haslinda: tencent reports earnings that will help investors gauge the effect of china's regulatory crackdown. they are looking about a 16% increase. this really has to do with a clampdown on big tech that we are seeing in china. i guess curbs on gains weighing on products. tencent up about 2% in the lead up to these numbers. rishaad: it is this year long tech crackdown that will be taking its toll. 16% growth is not bad, but looking at what the company has delivered in the past, it represents six quarters where that number has fallen and fallen.
a lot of these tech giants which will be unveiling herling's -- be unveiling earnings will look on how beijing clamped down on things like gaming, a slow down approval of games as well. the company has to almost reinvent itself. it is losing some of its dominance as well due to competition. look at the likes of bytedance and various others in the mix. we heard from other key guests to give us their take on what is going on at 700 space hk. >> i that -- i think regulation is more easy to be solved. for tencent, there are some internal issues. for example, the lack of ai integration, the low conversion of traffic, and also lack of video app.
>> there are many regulations to work through, but the impact will take some time to get digested. we have to see estimates and expectations. longer-term, the structural demographic growth of china, the world's largest digital economy, it's all there. haslinda: you can turn to the terminal for more commentary as well as analysis during tencent's earnings call. let's look at where we are in terms of the property plays in hong
payments? i guess it is expected to make the payments for three of its usd bonds. evergrande currently down by 0.04%. rishaad: bigger than most days for tencent. they are looking to try to raise 500 billion hong kong dollars. we are waiting for this $148 million payment. hang seng down as we go into lunch, 1.2%. ♪ moving is a handful.
no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at xfinity.com/moving.
>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ caroline: i am caroline hyde in for emily chang, and this is "bloomberg technology." coming up, bitcoin soares and coinbase slumps. third-quarter results missed wall street estimates.