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tv   Bloomberg Markets Asia  Bloomberg  November 23, 2021 9:00pm-11:00pm EST

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opec-plus. samsung announces plans for a $17 billion texas chip plant in a win for u.s. supply chains. rishaad: taking a look at what else is out there, you mentioned oil prices, that's not being overwhelmed by comments coming out of the u.s. but what about further rate hikes, and what signals? certainly signaling further rate hikes will be there. david: whether they manage to get there, you're starting to see the market at least trying to price in -- price out a little bit of the hawkish news they priced in. the two-year down about 14 basis
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points right now. we are mixed across the region, which is a good thing, given the headwinds breaking for the economy and the positioning we are seeing. we talked about oil, one guest said it's not a very big deal, the reaction were tracking here, then being cornered into not being able to do anything. the reason we are doing this is, on the back of the earnings story, speaking with shao me, -- up as much as 15%. subject to the bottom, alibaba also out with earnings today. yvonne: it will be interesting to see, you mentioned the rbnz
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decision, pricing out the hawkish news. you can argue its gotten a little overdone here, you see the kiwi right now, dropping a bit, pretty much stabilizing a little bit. we dropped as much as 11 basis points, the largest fall since march, paring back of -- before paring back a little bit. you're seeing a little bit of that dial back. you have the likes of capital economics saying this is a clear signal the rbnz is far from done when it comes to hiking rates. david: over the -- the course of the next few months or even next year. the projection tells us we will get to 2%. some of the pico -- people we spoke with earlier say we could see 2%, not so much the housing
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market but the labor market tightness that we are seeing there. yvonne: let's bring in our global and can -- economics and policy editor, kathleen hays. we talk about the rbnz and it didn't opt for that rate hike, but more rate hikes, why? kathleen: 2% by the end of next year, let's look at a couple of reasons why. to put it in chart form for our viewers, if you look at inflation, inflation is already at 4.9% year-over-year. in its policy statement, the rbnz said it expects to get up to 5.7% at its peak. now we've got that other rate hike in place so you can see when you look at that inflation rate, even though they expect it to come back down into the 2% range over the next several
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months, for now it's a big gap. that's one of the reasons they are moving now and why they expect to move more into 2022. unemployment down to a record low in new zealand at 3.2%. their partition rate is 71.2 percent. it's interesting that in this statement, they note that there -- they are somewhat concerned about the impact on business sentiment, getting a little bit weaker. vaccination coverage is going very well. the lockdowns are ending. they will reopen in january. we spoke to achieve economist at rbd capital markets. she said not only do they expect that rate to get up to 2%, she said it could go higher. let's listen. >> but we've seen in the policy statement is an upward revision to the rbnz's cash rate projections. up about .5%. it's probably closer to 2.5
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percent. that does seem appropriate for an economy that is facing the kind of constraints and fairly high inflation already. rishaad: thanks, kathleen. let's get over to the royal reserve bank of new zealand. they have been saying things about a broad range of economic indicators. the new zealand economy continues to perform above its current potential. sounds like an oxymoron. >> the answer is it does not change our outlook. we had anticipated an increase, a more liberal movement of goods and services internationally and the government has stayed consistent with that framework.
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>> we will come back to you. >> first, can you tell me [indiscernible] >> thank you. we did consider a range of options. what i would consider good practice, what you see today is our best foot forward with the balance of risk as we see it, slow, steady changes in the official cash rate give us more optionality to observe how the economy is behaving and balancing the risks that are in front of us. we have upside risk given inflation pressures, given capacity restraints that are there, and likewise we have
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continued health issues globally and domestically, and also we are very aware that monetary conditions across the board have tightened, likewise we had to be very careful, there is a considerable amount of debt and interest rate sensitivity. we are in a good place to observe and take our time at this point. >> are you also -- rishaad: we're just going to leave them, saying reopening borders does not change our outlook and including a 50 basis point rate. are there market expectations? well, of course there are.
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what is your take away from all this? >> we think the big focus for next year will be one of central-bank divergence. you can see it's aimed at australia and new zealand, and domestic reasons like them labor market running very hot. also financial stability concerns. so we see the central banks moving ahead. on the other hand, the bigger ones like the fed and the ecb, holding onto a more gradual path for normalization. if you look at supply chains, there seems to be some signs it starting to ease. the global financial market is still a key assumption for us. yvonne: how would you price that, then? selling tech, that would be a
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reversal of the trend we are seeing this year. julio: in terms of interest rate volatility, in this environment, if you think of treasury yields moving higher, clearly there's something happening with market expectation. so the dollar could perform, but we think that if the fed inset being more accommodative than we expect, we think particularly for developed countries. david: whether it's a tail risk or a base case expectation if the dollar goes higher, what's behind the growth in the u.s. dollar? five year yields have also been picking up. julia: the most important thing is the u.s. economy recovering from the delta over the summer. the u.s. is still in a relatively better position than
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many other companies, with their ability to support -- reflected in the strength of the u.s. dollar. of course interest rate expectations also play a role. but i think the economic rationale is why we think we still favor a stronger dollar in the cycle. yvonne: we will have more from julia wang from jp morgan. our etf analyst hosting this webinar. let's listen into what she has to say, talking about inflation. >> $.25 per mile, think about that, from two dollars to when he five cents per mile. these are the inflationary waves -- from two dollars to $.25 per mile.
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one of the reasons is artificial intelligence. artificial intelligence is helping with this deflation. just to give you a sense of that, the cost to -- -- by 50% every nine months. think about that. 50% every nine months, so roughly 60% cost climb per year. think about that, we've never seen anything like it. this is twice as fast as -- these are the positive deflationary forces that are going to lower the price of goods and services and are going to, we believe, scale into the mass-market, to cause tremendous, exponential growth. the other side of disruptive innovation is creative destruction.
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and what that means is, we believe that five innovation platforms, dna sequencing, robotics, energy storage, artificial intelligence, and blockchain technology, are going to converge and disrupt the traditional world order in a massive way. we have seen nothing yet. so whether we are talking about energy or financial services, by the way, the two best performing sectors in the market, which we think they are probably most in harm's way during the next 5-10 years our traditional retail and anything in the transportation sector. we believe all of those industries, sectors are in horror -- in harm's way, and they are going to lose business. at the same time as many of them leveraged up to buy back shares
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and boost earnings-per-share, as well as pay dividends. they did not invest enough in innovation. so they are going to lose their businesses, many. and we think 50% of the broad-based indices are in harm's way. so those are the two long-term deflationary forces. the third one is the most controversial, which is what we are dealing with now, the cyclical deflation. we are seeing a lot of concerns that inflation is being embedded in the global economy, and we will not be able to get it back down again. we don't agree with that. in fact, we are getting a lot of evidence right now that the supply chain issues are unwinding, and we are seeing it in a number of areas.
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one, the baltic freight index. the baltic freight index has been cut by more than half in the last six months. maybe it's the last 3-6 months. that is an early sign that the supply chain problems, if they are not diminishing already, they will. and they may do so in quite a hurry. we are also seeing signs that china's weakness is influencing commodity prices. when china catches a cold, usually commodities catch pneumonia. and so we pay a lot of attention to iron ore. iron ore prices have dropped from roughly $240 per metric ton earlier this year to roughly $85. so they are only a third of their price at the peak. that tells us that something is
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going on in china. and of course we know that it is , because of the government's attempt to deleverage the real estate sector and introduce more common prosperity to the people at large. so that's also very interesting. we are seeing other prices like copper topping out. they haven't really cracked yet, but we are seeing the ramp prices, digital commodity down 30%. so we are saying, wait a minute, maybe already the cyclical inflation is starting to unwind. the problem is, oil prices have gone straight up. and we are learning more and more that it's not because of demand. in fact, there is probably demand destruction taking place. the oil prices going -- oil price is going up because of supply constraints. so what is happening there?
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in the u.s., and especially europe, the ust mandates are forcing pension funds to tell oil companies and other emissions reducing companies that they should not be spending any more money, no capital spending on fossil fuels. they should switch to renewables. and they are starting to do that. they are not responding to this increase in price by boosting -- by boosting reduction as much as they are shifting to renewables. we are also seeing opec being very stingy. yvonne: that was cathie wood speaking on all things ai, she said were seeing the beginning of inflation, and her call when it comes to the supply chain bottleneck. we'll take a look at the indicators she minced what -- she mentioned with copper and the like.
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there's a lot of talk about the supply chain bottlenecks that we are seeing freight rates and shipping plummeting. are we starting to see that perhaps the supply chain bottlenecks are actually more inflationary? what is your take on that? >> we certainly see some incremental signs that things are getting better. one index is down 50% from the peak in october. so it seems that some part of that global shipping is easing. other parts haven't moved all that much. broadly, if you consider the fact that what, like toyota is saying for example that they will be able to normalize production quite soon. it seems like some parts of the
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inflation are getting better. coming back to the market context, they based in a lot of inflation and of years. going to help the central banks that say inflation is temporary. so we think it helps the likes of the fed and the ecb. rishaad: still to come on the program, we are looking at samsung's plans for a semiconductor plant in texas as it seeks to boost control in the global manufacturing supply chain. yvonne: and dismantling bubble white privilege. -- global white privilege. we discuss how it has depleted vaccine access for developing countries. this is bloomberg. ♪
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pres. biden: so today i'm announcing that the largest ever release from the u.s. are reserved to help provide the supply we need as we recover from this pandemic. in addition, i brought together other nations to contribute to the solution. india, japan, republic of korea, the united kingdom have agreed to release oil from their reserves in china may be more as well. yvonne: president joe biden their speaking on the deal when it comes to releasing strategic reserves. this is a coordinated effort with some of the asian nations. the market wasn't very impressed by these numbers, given the fact that you're seeing less than 5 million barrels are less in japan, india's about five, south
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korea 3.5. china still has a question mark, they didn't mention how much they could actually release as well. so we did see that dip and a bit of a balance. rishaad: the maximum drawdown capability of 4.5 million barrels per day. don't forget the energy has mandated by law to sell 260 million barrels of oil from its reserve, by 2027. david: going to try the impossible and pivot to china. to a large extent, that's what we were talking about earlier, china was one of the first to talk about actually considering that option. this goes into the whole consumption confrontation, and
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when you have politicians chiming in talking about the need for them to bring down the cost to the consumer, what does that tell you about the health of the consumer, particularly in china? julia: that's a very good segue. i think there are two things that happened lately in china that have caught our attention. the first thing is the forward guidance that the e-commerce companies have been showing to the market. it was a surprise in the sense that the outlook has been depressed for some time. the growth rate will be a lot lower than before. that could be because they are still trying to balance short-term profit considerations and longer-term obligations to regulation. it could also spillover to impact consumption. these are two things lately that
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suggest this is what warrants attention at this point in time. i think that also means that the china market broadly -- broadly will be a little more patient. the demand from property markets could take some time or when the regulatory environment becomes clearer. rishaad: what is the feeling you get is a private banker from your clients about the china market? what are the questions they are asking about invest ability and the like? julia: the struggle has been with valuations and at one point, some clients have never seen valuations on china assets. on the other hand, the market had tried to lift regulations but after the earnings guidance,
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that uncertainty has crept back into the market. and now with the property market downturn, the assumption is that -- until there is a policy shift. that is the other side of the equation. i think for longer-term investors who have a long-term horizon, i think they can look past these impacts that the shift to prosperity would have, i think you're looking at 1-2 years and you have to look for catalyst. rishaad: thank you so much for that. we can get you back tocathie
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wood, she's being hosted by bloomberg intelligence. she was just talking about deflation a bigger risk than inflation. talking about the world becoming -- yvonne: we will be looking more at her take on chinese tech. when it comes to the tech giants in greater china, does she feel a little bit more positive with the sector, given the fact that you're seeing the likes of black rock and some of these bigger banks turning more positive when it comes to china. we will look at that and cryptocurrencies as well. david: it's all going to be part of the conversation. there might be a buffer as far as the risks are concerned. stay tuned for this, this is
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webinar for clients on live , conducted by our etf analyst with bloomberg intelligence. this is bloomberg. ♪
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rishaad: just looking at some breaking news, [indiscernible] is going to be made the permanent director of the office of management and budget. according to the washington post, that is coming through here as well. david: everyone seems to be moving to texas these days.
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unveiling a project for $17 billion new chip plant in texas, expected to fortify the u.s. semiconductor industry. let's bring in our tech reporter, what is the factory and where it is it going to be, how much money are they planning to spend on this? >> about $17 billion, to build a plant in texas. [indiscernible] the new facility is expected to start production in the second half of 2024. at the same time samsung could
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receive incentives [indiscernible] yvonne: what are samsung's ambitions for the foundry business? >> [indiscernible] for iphone and ipad. the samsung share is about 17% right now. once the new cutting edge plant in texas is up and running. yvonne: thank you for the latest on that plant for samsung in the u.s. will bring you back to that
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webinar hosted by bloomberg intelligence, they were talking all things inflation, talking about china as well. cathie woods saying we don't think china is un-investable, so a double negative there. also talking about crypto's. let's listen in. >> in asia, we are predicting that australia will be the first country that will have a bitcoin and ethereum physically backed etf this year. what are your thoughts about crypto and what should investors be thinking about? >> we are very -- we are very excited about what is going on in crypto. we were the first public asset manager to gain exposure to bitcoin in our etf and it was only $250 then. today it is close to $60,000. so it has been a wild ride, and it has been wild, because as you
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know, we went up to 20,000 in 2017, and then we went all the way down to 3000 near the low. so we are dealing with quite a volatile new asset class here. and i think the reason institutions must consider it is this new asset class has a very low correlation in terms of return to other asset classes. in fact, the highest correlation in the study we did was to real estate. so that's kind of interesting. and even that was only .34. so very low correlation to everything else. occasionally when all the correlations go to one, as they did in 2018, and even in may of this year, or february through may, as innovation was getting hit, crypto will at times have a high correlation, but over time,
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very low. so we believe that institutions will allocate anywhere from 2% to 5% of their portfolios over time to bitcoin and other crypto assets. we are also very excited about, and i will tell you one thing on bitcoin that is recent and very exciting. most people think of bitcoin as just a store, like digital gold, a store of value. but we are learning from el salvador that it is a means of exchange. and might even become a unit of account. so those are the three roles of money, store of value, means of exchange, unit of account. we believe that 12% of remittances to el salvador from elsewhere in the world, 12% are now bitcoin. and that 3 million people in el salvador have a tivo wallet.
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they were given $30 in incentive. now 12% of the remittances and 2% of all gdpr taking place in bitcoin because of their new policy. and that's only three months old. so there is a real use case. transmitting bitcoin instead of playing 8% -- paying 8% to western union, pay nothing. so that is really interesting. ethereum we are excited about because of decentralized finance. although the regulators are now taking a close look at it. we think ultimately it is good that they get their arms around it and take away that uncertainty. david: cathie wood there.
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an earnings story when you look at the extremes of what we are seeing in market reaction today. rishaad: talking about the social media giant, up 9% at the moment, higher than that. this is better than expected earnings and revenue growth against the backdrop of china's tech crackdown. our chief north asia correspondent is here. >> this is a company that has lost 170 billion dollars of market value this year and it wasn't specifically in the regulatory crosshairs, but it was caught up in beijing's clampdown on livestreaming and the big ipo they had. if you bring up a year today
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chart, you are up 9%. it was up as much as 15% earlier. year to date, only down 10.5%. at the beginning of the year it was much lower and it shot up on the back of the big ipo princi. 75 percent since february 17 peak. you are right, sentiment has definitely changed. look at the brokerages. people are running from this because how long is the regulatory clampdown going to last? 10% of the revenue is from selling schlocky --that's not even a word, is it? they use celebrity to sell these goods, livestreaming.
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morgan stanley raised to equal weight from underweight, hiking the price target. already at the upgraded price target. third-quarter results were an all-around beat, according to organ. the valuation is undemanding. it sold off so much, it is a worthy bet right now to outperform, saying earnings were clean beat, revenue up 33%. jeffrey's raising the price target also. yvonne: you start to see who are the winners and losers and who can muddle through the supply chain bottlenecks. these two are going in the opposite direction. steven: that only chips and all are at the mercy of the supply chain constraints.
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definitely feeling the pain from the supply chain constraints and the chip shortages. the calendar third quarter, it saw double-digit shipments of its phones. last quarter, falling 4.3%. that tells you they are not selling as many phones. it has been a summer of different headwinds, not just supply chain constraints but increase competition from the offshoot of huawei. so not surprisingly xiaomi shares are down. and 24th -- 25,000,666 vehicles sold in the calendar third quarter -- 25,666, achieving
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strong road momentum despite challenges of semiconductor shortages. they did it in spite of that. the space in china is surging, the projection is for doubling of shipment of ev villain -- ev vehicles. there were hundreds of players back in the turn of the last century with the american automobile industry. rishaad: stephen engle there. looking at the turkish lira after it plunged to a low of more than 13 against the dollar. the country central banks saying unhealthy price formations are
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unrealistic and detached from fundamentals. take a look at el salvador and his plans for a billion-dollar bitcoin fine, investors are worried that the president's move to sell sovereign bitcoin bonds closes the door on a deal with the imf. criticizing the policies including the adoption of bitcoin as legal tender. china wanted to stop the malicious hype against the tennis star, an international outcry. saying the case should not be politicized. images were released over the weekend by china state media. jp morgan ceo jamie dimon says the bank is likely to outlast
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china's communist party. he made the comment during a panel discussion where he reiterated his commitment to the country, saying china -- the business community should have taken issues related to china more seriously. >> i made a joke that the common's party has celebrated its 100th year, so has jp morgan. maybe we will last longer. i cannot say that in china. yvonne: he meant it as a joke, but some of these things might not be that funny. rishaad: that he is confident enough to crack a joke like that. yvonne: you really have to be
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careful when you tread that line. we saw it with blackstone. you just have to be careful. we are talking more about this briefing we are hearing out of china, the taiwan affairs office talking more about punishment of taiwan separatists will be based on law. they also commenting on how taiwan businessmen should know how they can donate funds, according to a spokesperson on the back of what we heard about how china was targeting some of the corporate set weight -- may supporting taiwan's independence. amid some of the allegations saying china violated laws there. also talking more about the u.s. inviting taiwan to a democracy summit. saying china opposes u.s. interactions with taiwan. david: let's listen to what was
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said about the topic. >> know when i know thinks that something is going to go wrong in taiwan, some feel that president xi before he leaves will want to take over taiwan. you have to be very careful. this could be there vietnam. body bags and any country have an adverse the pack -- adverse effect at some point. i think it will be very painful for china to do it. rishaad: we will be talking about another subject from the global institute tomorrow, discussing work on dismantling global white privilege. we will look at how the pandemic
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has helped to put this issue in the spotlight. this is bloomberg. ♪
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david: welcome back to the show. just looking under the hood of these equity markets in terms of effective movers. really as expected because of
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the massive move of short end yields. multiple name seeing the downside as we speak. energy on the way up. gold and oil reserves coming to the market. looking at europe after the pole axing from the market yesterday. the latest on the u.s. and germany in terms of what those numbers are going to look at. just looking at the kiwi, new still coming through on the rbnz and what they say about the policy moving forward. rishaad: and the pandemic influencing what they do next. we started tracking how the world economies are coping with the global pandemic with the bloomberg covid resilience rankings. past performance is no guarantee
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of future success or failure. tell us about the covid resilience rankings for the whole year. what is the biggest take away that you see? >> what we have seen is that it pays to be adaptable. sticking to one strategy that may have worked for you for number of months isn't the recipe to success. we've seen that most keenly i think in asia with the so-called covid zero countries, countries that rock containment and walling out the virus, but then fell away when it came to getting first in line for vaccinations and now prioritizing reopening. you have places like china and hong kong still really shut down to the world while more consistently performing places like some of the nordic countries, even canada, are reopening with higher vaccination rates and covid relatively contained. yvonne: and there have been some
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consistent winners. who are they and what have they done to stay on top? >> i mentioned a couple of them just in. canada is among the countries that have never fallen into the bottom half. new zealand is consistently our number one whom we started out the ranking but it has fallen because it hasn't kept pace with reopening. so should have that -- today that it is planning to reopen his borders next year. south korea the only asian country to make it into that, denmark, norway, switzerland among them. places that have contained covid relatively well early on, but they kept pace with vaccinations and were able to have good
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purchasing power when it came to vaccines, and then kept pace with reopening, opening a lot of european countries to summer travel with it vaccine passports quite key to reopening their. yvonne: a lot of hard work in the past 12 months to come up with these rankings every month. we look forward to one in november as well. it has always -- vaccine access has often been the determining factor in recovering from the pandemic. we have seen for countries fall behind. our next guest says the vaccine rollout -- rollout has exposed the western privilege as poor countries get behind. he's about to release a book called -- great to have you on the program once again. what made you want to write this book? >> i think the context with all
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that focus on the george floyd murder, and the spread of that sentiment about colonization and imperialism in the west taking down the statues, etc. some people in hong kong said to me, you should write this book about how it's a much more insidious issue than simply white and black relations with the rest of the world and historical figures. having been involved in the anti-apartheid movement in southern africa, i had so much to tell, but i didn't think i would write a book. but then i wrote an article which kind of went global. i essentially try to argue that it is important that this discussion is taking place in the west, in the united states around critical race theory. it's sort of a -- the term
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itself, my intention was not to be divisive, to bring people together, to acknowledge that this exists. i've used the word dismantle in a way that's not meant to be aggressive. but to suggest that until you confront people -- rishaad: how does this manifest itself when it came to this year , because one of the arguments to making of the book is that the pandemic is actually being made worse, exacerbated by this argument that you have. >> i will answer that question by saying, what is white privilege >> it is the best way to understand how the dominance and oppression of people in
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other parts of the world by western culture is both perpetuated and reinforced with one objective. between countries and within countries, it is to essentially maintain duality. when i lived in southern africa, it wasn't a class struggle, it was an economic struggle. it manifests itself today in the vaccines issue other countries that have the technology and know-how, etc., not wanting to share the technology. that is fundamentally the issue that i found. it's not simply a race issue. racism exists in all parts of the world, but the driver throughout history is maintaining privilege and the
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vaccine issue is built into this. david: the follow-up to that is, and it's a very complex issue, how do you disentangle simply white from wealth. you do have nations, for example, part of it seems to also be the countries that do have the resources are not all white dominant, for example. i can see how that kind of argument might come up. i was just wondering if you could respond to that. >> the dominant economies of the world are essentially economies, certainly basically white settler communities that dominated the world. so right now the historical wealth that accumulated, are
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essentially maintained and austria has disproportional representation in the world because it is a white settler community that had access to this resource through a historical pathway. that is creating anxiety and the preservation of that privilege is what i call white privilege. that has to be essentially addressed. all of us who live in asia know there are some subtle ways, and i have a whole chapter on how the business world is dominated by, if you look at aid agencies, you look at investment banks, all of those. yvonne: great to have you with us. david: tesla, everyone has been
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waiting to see to what extent elon musk has gone through that. we see that as at the halfway point, with this additional selling of one billion tesla shares. we will get details on that on the other side of the break. this is bloomberg. ♪ every day in business brings something new.
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home yvonne: almost 11:00 a.m. in hong kong and singapore. rishaad: let's have a look at our top stories, inflation pressures, the u.s. economic recovery in the latest minutes from the federal reserve. yvonne: rbnz signals faster tightening the calm. rishaad: plus plans to tap reserves from the u.s. to china, the underwhelming oil market and
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watching for reaction from opec-plus. yvonne: are they going to have to reverse course and counter but the u.s.-china is doing to alleviate some of the pressures? it will be interesting to see who muscles in that market share and power when it comes to controlling the oil markets as well. talked about how the asia contribution hasn't done enough for the market this morning. here's how the market play out is doing so far mostly lower here in asia when it comes to equities, making it down to 1% in the lunch break right now. focusing more on the dollar moves as well, bond markets continue to head lower. the rbnz after that 25 basis point hike, yes it was expected, but when it comes to 2%, by the end of 2022 years starting to
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see the market price out some of the hawkish in his we've seen. the two-year new zealand they 14 basis points lower. you're seeing that across most of the bond markets here today and were watching the oil markets here, pretty steady after that little spike that we saw. rishaad: just moving to the upside .3%. the thai baht a tad weaker. the stable rupee but looking in more detail, the economic recovery remains fragile. the economy is looking like it has some legs given the ports are reopening and we've got return of foreigners and the
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tourist industry. that's a look at the open in thailand and india as well. yvonne: let's get more on the big stories from the markets today. kathleen, let's start with you. the rbnz, that briefing just ended there. what was the message from governor orr? kathleen: i think there is still a certain amount of hawkish and us that he is sending tonight -- hawkish nests that he is sending -- hawkishness that he is sending in his message. concluding that steady steps of 25 basis point hikes the most since for now, emphasis on for now. in other words, this could be speeded up, probably inking about inflation and unemployment that is so low.
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they expect the cash rate to get to 2% by the end of 2022, but adrian orr said he sees it up to 2.5% by the end of 2023. so he does see the rate hike continuing for some time. inflation is something that was talk a lot about at the press conference in answer to all those questions. he said that he does see the cpi moving higher right now, continuing to move higher from where it already is. driven by supply shock price pressures that you see every day and that has continued for a while. he is determined not to let inflation get out of control. he was asked about wage pressures and he said so far basically it's something the rbnz is watching very closely. the hot housing market, the
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increase in home prices, and he did say again that the house -- he expects house price -- prices to ease. rishaad: is inflation being influenced by the high oil prices? could you summit up as essentially these guys turning up with a knife at a gun fight? >> that's right. the total release looks like it's going to be about the 70-80,000,000,000 barrel range. world consumption runs at about 100 million barrels a day. about 32 million barrels is essentially a loan program that
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will need to be given back over the next two or three years. and the contributions from asian countries to the u.k. had been smaller than people were expecting. goldman looked at the numbers and based on their analysis they reckoned it equated to about a two dollars a barrel drop in the price. but because we've had prices move down a lot the last few weeks, that's probably the reason we've seen prices go back up. yvonne: thank you so much, andrew jane's. trying to unpack the latest on what we gone through when it comes to oil and central banks. local media in taiwan saying taiwan is considering an entry ban on senior china officials. if this were true, i think this would definitely be making waves
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in beijing and riling up tensions even further here. the timing was interesting coming on the back of this press briefing. rishaad: and don't forget the u.s. invited taiwan to that democracy summit, geopolitics one thing they are looking at closely. let's bring in our guest. what are you making of the environment we are in right now? we've got so much stuff going on, it becomes quite difficult to see the wood for the trees, in many ways. >> from our perspective, if we look at 2022, we do think that china remains attractive, especially given the valuations moved into the easing environment. you have the potential impetus of going to china where we do
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see a correction and develop market. yvonne: earnings downgrade, how will that impact things for next year? what do you say to those on the other side of this? >> it is still very much a stock pickers market in china. from our perspective, it's about earnings visibility. if these companies can monetize, there are still a lot of banks trading at incredibly attractive valuations. when we look at valuations, you will probably further downgrade in the second half but we still think china will ask for more next year. rishaad: is it because
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essentially we are seeing better prospects in developed markets, particularly the u.s. right now? after two stellar earnings seasons, can it go on? >> we are seeing huge amounts of stimulus being poured into the economy over the past two years. what happens when that free money essentially stops? there is still a debate very much about whether it's transitory or more permanent. because valuations are so stretched, it is about your margin of safety. you are seeing some attractive opportunities. yvonne: how do you trade around the volatility of the bond market right now. >> another big risk is if it is energy related. we do have to keep our eye on the covid situation. the lockdowns we do see in china
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can have an impact on pmi, for example. yvonne: here is vonnie quinn in new york with the first word news. >> some some electronics is set to build a semiconductor -- samsung is building a plant in texas. the factory will create or than 2000 jobs. construction is set to begin next year with chip production starting in 2024. the plant will be built-in taylor, about 50 kilometers from austin. the turkish lira has steadied after plunging to a low of more than 13 against the dollar. coming after president erdogan defended his demands for lower interest rates. it's called unrealistic and
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apart from fundamentals. chinese authorities have ordered alibaba and baidu to strengthen their services over telecom scams. managers from both companies were summoned to meet officials in hopes to address the problems. the european parliament committee writing new tech rules that could affect users in u.s. and u.k. companies. companies would have to stop targeting soda adds that children. the new rules are expected to come forth next year. a climate pattern reddens to
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bring extreme weather. the agriculture minister warnings that cold in drought could hit production of fruits and vegetables in some regions. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. rishaad: still to come in this hour, a caution that it's time to trim india stock holdings and by china. we will discuss what is ahead. this is bloomberg. ♪
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yvonne: we've got to unpack some
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of the tech earnings we got out of china. it's been a test of whether the tech rally can resume. we've seen a little bit of fits and starts today. really defying the regulatory crackdown. xiaomi on the other hand talking about chip shortages. we seem quite a rally, relief rally with some. you start to see who is performing a little better with the supply chain bottlenecks as well. let's bring in the investment director at for little -- fidelity international who is still with us. >> new china, after the frothiness we did see last year, some names are particularly attractive. you can see the earnings growth
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coming through, some in a small cap space benefiting from the competitive landscape. all china is boring and old school but there are still some names increasing market share. what is fascinating is the income angle. rewarding minority shareholders, is not too much of a surprise that were seeing an increase in terms of trading and long-term investing for domestic investors. rishaad: you look at the tech spaces and you see the stocks beat down and surely they are at the bottom now. then another story comes out and you see another lay down. i suppose if you are long-term, why not? that's the point. it dovetails with property. >> we've never been to overweight in the property area. the whole shift from e-commerce
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to almost social commerce, livestreaming is becoming very popular. some multiples do look very attractive. yvonne: there is still debate about what kind of policy response we will get. or even policy interest rate cuts that people are debating about right now. is it going to be something that could be a deterrent in the markets, or how supportive is the policy for equities to recover for next year? >> monetary-wise we are seeing signals from policy makers about the measures. traditionally when we enter this period, you usually see cyclical support. broader policy-wise, we've been
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through this period where it's almost like a wake-up call for investors. the policy does impact earnings, it does impact the market. you're going to hear more news flow about the overarching policies, whether it's a framework around fintech regulation or carbon neutral aims, it cetera it's filling in the gaps of what we've heard. rishaad: people are perhaps not paying as much attention to it. it seems as if they mean it this time. >> they definitely mean it. take health care, for example. there benefiting from policy yet conviction remains low when it comes to the pharmaceutical companies. medical treatment and pharmaceuticals should be made available for everyone. as i go back to what i said earlier, it's very much
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disrupting the market in china. we are seeing 20 two days consecutively of turnover being over one trillion. it indicates the aim of the government moving away from just investing in property are keeping your money in a bank deposit and using other allocation sources, whether fixed income or equity. we are expecting to see the household balance sheet move more toward like the u.k. developed market in terms of asset allocation. that's why the income stream remains really important. rishaad: a lot more to go as we look at these markets. some dramatic moves. this is bloomberg. ♪
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rishaad: you are back with "bloomberg markets: asia." this company develops mobile application software to -- for online payments. seeking a $4 billion valuation in a sale or an ipo. another option could include raising funds by bringing in minority investors. it's something that's being weighed out. a person familiar telling us they are looking for this $4 billion valuation. yvonne: taking a look at supply chain stories, some top stories
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where watching. samsung unveils its plan to invest $17 billion in a new advanced chip plant in texas that will make significant bump to america's domestic semiconductor capability. production should begin in the second half of 2024. gap lowered its projection as supply chain bottlenecks that to lost sales and higher expenses. bloomberg intelligence estimates the retail supply jam may stretch through 2022, especially for firms with high sourcing exposure like nike, adidas, and kohl's. and promising americans will have no trouble buying food and gifts in the holiday period this year. pres. biden: we still face challenges in our economy.
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disruptions related to the pandemic caused challenges in our supply chain which of sparked concern about shortages and contributed to higher prices. moms and dads are worried, asking will there be enough food we can afford to buy for the holidays. will we be able to get christmas presents to the kids on time? rishaad: the latest data from the busiest ports show that every link to the global supply chain is facing challenges on the ground and more containers will be left waiting. ports are experiencing severe bottlenecks and the number of chips waiting -- ships waiting to enter the port of los angeles , 80 ships are still sitting idly off coast. about 60 days since early 2020. more than five times the pre-pandemic rate.
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you can read more of those stories online. yvonne: a quick check of the latest business flash headlines. kkr boosting its offer for telecom italia. telecom italia said sunday he received a preliminary bid from kkr. kkr is said to be debating whether $.70-80 cents per share would seal the deal. jp morgan has been named the world's most systemically important bank. the only bank on the list facing an additional capital buffer of 2.5%. others were ranked in the tier just below with additional buffers of 2%. the rankings are based on data from 2020 and largely reflect
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changes in the banks underlying activity. nordstrom tumbled in late trade after third quarter earnings missed estimates. arnie's per share were $.39, well off the analyst average of $.55. it left its full-year forecast unchanged. nordstrom said it's working to improve merchandise margins and overcome global supply chain challenges. best buy shares tumbled as the company warned its property margin -- profit margin was being hit by spiking organized robbery. it has been traumatizing for workers, slowing sales and promotional discounts are weighing on the retailers bottom line. rishaad: let's check in on what's going on in hong kong. delivering growth and delivering
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an upbeat forecast and all of this against the crackdown taking place by the regulators there on tech. xiaomi at the bottom of the pile as its growth has been withering. a chip shortages responsible for that, and supply chain disruption. shares down 7%. xiaomi recorded its lowest pace of quarterly sales since early 2020. overall, the chinese market looking like this as we had to that lunch break, moving in a southerly direction even though volumes are stellar. yvonne: the pboc, we are waiting for any policy action when it comes to the fed minutes.
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that could be the next event when it comes to the bond market. rishaad: this is bloomberg. this is elodia. she's a recording artist. 1 of 10 million people that comcast has connected to affordable internet in the last 10 years. and this is emmanuel, a future recording artist, and one of the millions of students we're connecting throughout the next 10. through projectup, comcast is committing $1 billion so millions more students, past... and present, can continue to get the tools they need to build a future of unlimited possibilities.
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>> it's a good signal from the authorities they are concerned by high oil prices. >> this is a diplomatic choice. u.s. is not just doing it alone. >> it's a temporary move. the only thing within policy control. >> what we need his aggregate supply to rise further. >> it sets up a bit of a fight, because clearly that is not something opec-plus wanted to see happen is have this coordinated release.
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i think opec-plus still holds the upper hand especially going into next meeting. >> the reality that opec has to grapple with as we are likely to be in a surplus market next year versus the deficit we have had. i think they will calibrate their response carefully. yvonne: guests speaking about the battle for control of the global oil market. taking a look at fantasia, this line just crossing, the group will pay the year and bond coupon do on november 25. there are also local reports say bondholders have rejected the legal proceeding proposal, also reports yesterday they got the creditor not on an interest payment delay, abbvie for now we know the coupon that was due tomorrow is going to be paid for, that's according to
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fantasia group. the stocks surging close to 19%. expects her, mostly lower when it comes to equities. we are hovering around $82 per brent, we talk about the brent and wti premium continue to widen on the back of the announcement from the u.s. and asian nations. take a look at natural gas futures, thermal coal, ppi prices and commodity prices, signs of easing when it comes to coal. when you take a look at the reopen in japan, still the laggard, 1.3% lower for equities on the nikkei, hang seng is flat, talking about tech earnings, good and bad, kospi as well down 131% today.
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talking about bond markets, yields across the region. they are likely to hike once again. we have vonnie quinn in new york. vonnie: the kiwi fell after new zealand hiked its encz mark rates -- benchmark the rbn said -- the central bank's latest forecast show it expects to lift the cash trade to 2% by the end of 2022. that is one year sooner than projected. jp morgan's ceo says his bank is likely to outlast china's communist party. he made the comment during a panel in boston where he reiterated his commitment to china. he added jp morgan cannot enter and exit a country every time it has concerns about policy.
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the business community should have taken issues related to china more seriously a decade ago. >> the communist party celebrated its 100th the are, so has jp morgan. [laughter] vonnie: china has called -- curtis appearance earlier this month after alleging sexual assault caused international outcry. a spokesman told a news conference the case should not be politicized. peng seen in images over the weekend. el salvador's plans for a billion-dollar bitcoin bomb sends debt to an all-time low.
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closes the door on a deal with the imf. the fund has repeatedly criticized the policies including the adoption of legal tender. those are your first world headlines. rishaad: going to have a look at this chart. 100 day correlation of bitcoin and the s&p 500 is close to its highest this year. let's have a look at this. it means when stocks move up, pick one is likely to do the same thing. spring in our cross asset editor. why, what the significance? reporter: this is pretty interesting area.
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it means bitcoin might not be as good of a hedge when you think about broader asset allocation. that changes from time to time anyway, and it is showing that it is behaving like a risk asset again. it's up with stocks, down with stocks, we do see that a lot where if you have a stock selloff, you can have a crypto selloff. it is not too surprising that as stocks are near record highs, that bitcoin is correlated. yvonne: we have seen the u.s. and india are taking more steps on the regulation. what does this mean for the industry? joanna: the bitcoin bills like to say regulation is a positive. the u.s. is trying to outline what it's looking at in terms of regulation for the next year or so. it's looking at stable coins, how banks handle custody issues, a number of things on that front.
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that is good for people in the industry. of course, india has this interesting thing going on where it may restrict some cryptocurrencies, but also says we may have something. it's hard to tell what the law in the end will be, but it does look like they are considering some sort of restrictions on crypto. rishaad: want to get to the turkish lira. snapping 11th straight day of losses, advancing 1%. i can tell you this is a currency that has lost something like 41% of its value year to date. if we go back five years, losing
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73% of its value in that timeframe. to say it's beleaguered might be an understatement. yvonne: suspending rate cuts and why they think it might help when it comes to inflation, it's counterintuitive. rishaad: goes against economic theory. yvonne: you are seeing the market -- so that mimi had a bottom? seeing a bit of stabilization when it comes to that. let's talk a bit more about cathie wood. she is saying china is not on investable. -- uninvestible. the ark investment founder and ceo exited most of her positions in chinese stocks this year, but sees a bit of an opening and is waiting for the about -- the valuation dust to settle.
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she spoke earlier. cathie: one of the reasons we built up our position in china in 2020 is because we saw china's response to the coronavirus was much more responsible from fiscal and monetary policy. without ok, maybe china is going to become the new germany and switzerland, known for its monetary discipline. what happened in november of that year was somewhat startling. the episode with jack ma and watching how he and many executives who have created incredibly, rapidly growing and exciting companies, they basically were told and maybe there was some reason for it,
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that you are not welcome there anymore. go off and do some charitable work, whatever the message was. we became concerned about that. while that rhetoric and activity is taking place, you are right, we pulled away early out of our flagship, not out of all of our specialized portfolios, autonomous technology for example, jd logistics,, they have low margins and are helping to push new goods and services into tier three and tier four cities which is great. there was so much uncertainty created by one regulatory crackdown after another, we did not know when it was going to stop. now we are seeing a bit of an opening, even with the online education, you can tutor children after school, but you can tutor professionals.
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peer is a little bit more give there. we think the valuation of the chinese market has been hurt significantly by this, and the way the chinese market will have to grow is if the underlying companies themselves grow. from that point of view, once we have reached the right valuation structure, and perhaps we have now, i don't know, we will be listening to what the chinese government is suggesting what it wants that, and listening to what the companies are doing, and we will act accordingly. we have heard many investors say china is uninvestable. we don't think that's true, we're just waiting for the valuation dust to settle and
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make sure the incentives for growth reemerge. china is a very determined country. when it puts its mind on growth, that is what he gets. rishaad: cathie wood speaking to bloomberg. price discovery, premarket the stock is up 6/10 of 1%, looking at a company which according to economics research who described its valuation of being ridiculous, it is 30% down, perhaps a bit of stabilization.
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yvonne: what this means for the india equity market. rishaad: having a look at investors saying it's time to trim stocks. talking investment strategy. this is bloomberg. ♪
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rishaad: pretty foggy picture there. the indian economy showing signs of strengthening in october, services, manufacturing and exports. yvonne: it is looking a little bit better on the economic side. the equity market has been on fire. you're starting to see more cases of people trying to lock
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in profits, rotate out of india, head into china. that was the latest out from blackrock. valuations looking more attractive. if you take a look at the indian markets, disappointing debut seems to be looking a little bit better with the slight uptick. rishaad: yvonne: rishaad: we are moving to the upside. how long can that momentum go on for? yvonne: great to have you. everyone is talking about this india correction in equities. do you think we are close to that now? guest: thanks for having me. if i'm looking at the markets,
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there are certainly more tailwinds in terms of certain segments of the market which are starting to look better, even if we are looking at ip. i see a lot of pockets were valuations are reasonable and growth is starting to look better. i would say it's mixed, [indiscernible] rishaad: certainly tailwinds and headwinds, perhaps people getting a bit overconfident. we had economic saying they went for a ridiculous valuation. the thing is, people tend to do
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that and very bullish environments. are they getting too bulish? guest: fairpoint. looking at one stock may not give you the picture, but if i look at new ipo's, the valuations are quite frothy and certain pockets. if you look at headroom for growth, it is huge. india is starting to build tech platforms and build around that. valuations look frothy so what you are seeing is right. looking at one stock may not be the right thing. yvonne: still perhaps that is rishaad: you are talking about pockets where we see some decent valuations.
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any particular industry groups you are referring to? what is the deal? guest: if i look at valuations, there are pockets [indiscernible] what is the benchmark, what is the broader market? these are the pockets i was mentoring where there is growth and valuations. yvonne: you mentioned about the drugmakers, what is the next big trigger? guest: if you look at pharma and health care, the growth has been
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good. covid was a tailwind, but if you look at the underlying growth, that has always been steady. we have seen certain quarters, but i think that would be the next trigger. we see pressures easing, i think that's when we will see valuations higher in the space. yvonne: do you think that's
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going to be strong despite the fact there are signs growth is going down? guest: we have seen a huge jump in terms of participation in the market. it has been a global phenomenon. clearly, this is likely to remain interesting and looking at the liquidity, looking at the broader participation, although the pace at which it has increased [indiscernible] rishaad: very quickly, if india is not doing that great, china presents a lot of problems for indians given the rancor between the two nations. guest: [indiscernible]
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rishaad: if india is not going to do as well next year, do you perhaps go to china given the tensions between the two countries? guest: at least from the place i am, we're focused on india for now. we do nibble a little bit at u.s. stocks. i think for global investors, investments in india. rishaad: thanks for that. thank of indonesia -- thank of
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indonesia, growth of 4.7% to 5.5%. yvonne: for this year, growth in the range of 3.2%. that is the latest coming through from the central bank. plenty more to come. this is bloomberg. ♪
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rishaad: the head of a pharmaceutical giant says the company wants to increase vaccination rates and profit is not the immediate priority. [no audio] >> it's likely the pandemic will be anthemic. which means it will be like the flu. the question is, do you need to be vaccinated every year? we don't know. yvonne: that was the astrazeneca ceo. quick check on the latest
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headlines. sales slow. income dropped 84% on a hit from investment losses. chip shortages persisting well into 2022, still expected to ship 190 million smartphones in 2021. exports are rising in hong kong. revenue beat expectations and climbed $892 million, about 26,000 suv's and sedans were delivered, 14% from the august outlook. they debuted an suv last week and detailed plans to expand. [indiscernible] this by tech crackdown.
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sales topped $3 billion beating expectations while losses were narrower than expected. the video platform operator is on a spending spree to compare -- compete with bytedance. a chinese real estate developer is considering an ipo. it could raise as much as $1 million. sources tell us a could list in the first half of 2022. they have way to listing at a time where chinese developers are facing an unprecedented liquidity crisis. rishaad: looking at the overall, the hang seng on lunch break. generally speaking, stocks on the way down. treasury yields declining. looking forward to federal reserve minutes.
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key u.s. data in the mix. the ms ci share gauges are down for a third day, that could all change. let's end the show on a positive note. more positivity for daybreak middle east which is next. ♪
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>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology." ♪ caroline: i'm caroline hyde, in for emily chang. this is "bloomberg technology." building cutting edge chip fabrication plant in the longhorn state. travel bookings at a record.


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