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tv   Bloomberg Daybreak Asia  Bloomberg  November 24, 2021 6:00pm-8:00pm EST

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paul: welcome to "daybreak asia". investors weigh the risk of faster tapering after the latest fad minutes -- the latest fed minutes. shery: weighing a potential rate hike in south korea, with visions that the bok may turn hawkish in the year ahead.
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jp morgan goes into damage control, ceo jamie dimon saying he regrets his comments about china's communist party. paul: we just opened for trade in sydney. let's look at the asx, a couple of points higher. we have the staggered open in australia. stocks are coming off-line in alphabetical order, so we will give that a few minutes to get going for we can make a call. new zealand has been trading for a couple of hours, currently higher by 0.25%. we had some trade balance numbers for october out of new zealand earlier, $1.3 billion surplus, a bit weaker from september. take a look at the nikkei futures, currently looking kind of flat. a little later on, we will be. -- a little later on, we will be having a bank of korea meeting. we are expecting a rate hike.
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economists surveyed by bloomberg to see korea raising rates by 0.25%. the path after that gets claudia, korea dealing with -- the path after that gets cloudy. we may see some dissent, in this decision in favor of a hold. that might give us a few clues into the path forward. in this meeting, we will see some updated projections around growth. shery: especially given that cpi has been above the 2% inflation target since april, right? we are seeing many countries whose inflation rates are higher than the central bank's target. mexico's rate is coming in at the 20 year high. priscilla's central bank chief said there inflation was more persistent than initially thought -- brazil. cpi is double digits. inflation has become a concern that the european central bank's trade union is accusing the ecb of not protecting their own
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staff from inflation and is demanding higher pay. . paul: and a lot of this is not being helped by the oil price at the moment. of course, the u.s. and a number of other countries are releasing reserves from strategic petroleum reserve's. opec returned on that, concerned about a surplus in the market. seeing the surplus expanding by 1.1 million barrels per day. some delegates indicating that the planned output hikes for january might be canceled when opec+ meets next week. so a lot of interesting words are being exchanged. shery: also, interesting words from jamie dimon that clip on china. . we are watching for reaction from beijing. so far it has been really quiet, but the jp morgan ceo already walked up his comments earlier that jp morgan would outlast the china communist party. $20 billion of exposure there, is not that surprising.
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paul: yeah. let's talk more about the fed minutes. flexibility was the buzz word. officials stressing they should be able to be quick on their toes when it comes to shifting the case of tapering, as well as the timing of rate hikes. let's take a closer look with our reporter stephen matthews. reasonably hawkish seemed to be the tone here. stephen: you are exactly right. they are reasonably hawkish. the fed unveiled its tapering plans three weeks ago. at that time the idea was to reduce asset purchases and gradually that would finish properly in the middle of 2022. in these minutes, there is a lot of sentiment move that up. the minutes say that the committee wants to be flexible in response to the economic activity and inflation. importantly, the meeting happened before the latest extremely hot cpi report, and a
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very strong employment report. so you have had, since this meeting happened, a number of fed officials, including raphael bostic on this very program a couple of nights ago with kathleen hays, saying they are in favor of moving up the tapering, speeding it up. with these hawkish minutes, a number of wall street firms moved and said you could have as early as december, a speeded up tapering. shery: our fed reporter steve matthews, talking about hawkish central banks. the bank of korea is also expected to continue its pivot towards tighter monetary policy by hiking its rate again at today's meeting. our bloomberg economics and policy editor kathleen hays is here with a preview. what is driving these expectations that we will see a hike? kathleen: everything from the economic data you just
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mentioned, as well as what the governor of the back of korea said after the last meeting and october when they did not hike rates. let's remember, this is the global central bank of the world , when it comes to being on that hawkish path, being one of the first major central banks to make the first hike in augus. pausing in october. the governor said they would be watching closely how financial imbalances develop. he mentioned household debt as something that would probably be on their policy radar screen. when you look at household debt, you can see that it hit a record high in the third quarter, driven by nearly 21% in mortgage loans. let's look at the heart property market, another concern -- the hot property market, another concern not only for the back of korea, but also for korean people who want to buy new
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homes. you can see, prices doubling. the index is up 20% in the last 20 months. this is just one more thing that is reinforcing these bets on a 25 basis point hike to, 1% today. inflation is not only above 2% since april, but over 3% in the latest reading year-over-year. unemployment is down to 2.8%, the lowest in more than 20 years. so as mentioned, the growth in inflation forecast are on the table. will they be revised? will they show even stronger growth in inflation? if they are, that will be taken as a signal that the bank of korea may be more aggressive with rate hikes in 2022. we will be listening to every question asked and every answer he gives at that press conference later today. paul: our bloomberg economics and policy editor kathleen hays there. let's get to vonnie quinn with the first word headlines. vonnie: jp morgan ceo jamie
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dimon says he regrets saying that his back is likely to outlast china's communist party. in a statement, he says his comments in boston were only trying to emphasize the strength and longevity of his company. jp morgan has $20 billion of exposure in china, and a mission to expand even further. china's tech industry regular order tencent stop rolling out apps as it reviews the company's compliance with privacy laws. updates to existing apps are also on pause, although current versions can be downloaded. tencent says it is working to enhance user protection features and regularly copyrights with government entities to ensure compliance. opec says the coordinated release of oil reserves by top consuming nations could slow the surplus in global markets. the projections from the cartel's advisory body comes a week before the group meets. some have indicated they could cancel an output hike slated
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for january. european leaders are debating measures to curb covid's resurgence. they are considering bandits for people who work with vulnerable groups. denmark is considering making masks mandatory on public transport. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. sherry: vonnie, thank you. still ahead, of a gust to us about the difficulty of finding alpha the public market, space and how the pandemic has underlined the importance of diversification. and up next, a rate hike by the back of korea in the coming hours is unlikely to be a surprise. we will discuss that with dalton investments' james lim. this is bloomberg. ♪
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sherry: a hike by the bank of korea in the next hour will come as little surprise, but the path ahead for the south korean economy will be more interesting and more uncertain. for some analysis of south korea and the wider asian markets, it's bring in dalton investments' senior research analyst james lim. despite the hawkish stance from the bank of korea, you are still positive on the markets there. why? james: mainly because the export momentum hasn't really slowed down significantly. i think it is still staying strong. the valuation has come off quite nicely. so we are actually seeing a very strong earnings growth with less
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limiting multiples in some of the companies. sherry: will the chip shorted to an issue? samsung and sk are some of the biggest names there? james: yes, this is one of the biggest uncertainties. samsung and sk hynix have room to accumulate something. they would actually try to be a little bit more flexible in managing the supply. but there is a limit to that. if the chip shortages last very long, that will be a big risk. but it seems to bet right now. so i am trying to be a little more optimistic. sherry: we have seen a lot of optimism over japan because it is more cyclically tilted. what do you expect from that market, especially as we have the japanese yen weakening because of policy divergence? james: our approach on japan has
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been more on the corporate reforms continuing. we are actually seeing that accelerating. we are actually witnessing some of the hostile takeovers, bits that haven't really happened in japan for a long time. and so that is a very positive move. we are also positive on kishida's stimulus plans. so we remain positive on japan. paula: your thoughts on the news out of china today. the ministry of industry telling tencent to stop creating new apps, stop updating its existing ones. is it too soon to be investing in chinese tech again, for you? james: to be clear, we have been pretty cautious on china for a long time.
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before everything happened this year, we have been staying cautious exactly because of the regulatory risk. i think right now, it is time that we have to look at some interesting opportunities. our main focus has been the alignment of interests. we are trying to align with the chinese government. so any business or sector that aligns with the interest of the chinese government will be an area of focus to look at. paula: could you be more specific? which areas of interest do you see have the alignment are looking for? james: one area would be obviously technology, trying to replace foreign technology and trying to supply internally. replacing the technology is one area. that will be in areas like semiconductors and so forth.
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another area would be export oriented companies that actually accumulate foreign reserves. paul: dalton investments'senior research analyst, james lim, thank for joining us. jp morgan's jamie dimon says he regrets saying that his bank is likely to outlast china's communist party. he says he was trying to outline the strength of his company, that it is the latest in a string of provocative remarks he has been forced to walk back. it's bring in sally bakewell. jamie dimon is keenly aware of what is at stake here. sally: i think as soon the words came out of his mouth, he knew and his staff knew that they would have to do some walking back. and as we reported earlier today, the comments set off discussions among jp morgan officials and its team on how to
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handle them. it would have to decide, do we acknowledge this or do we let it go on? on balance, they decided they had to acknowledge it, perhaps in a sign of the level of what is at stake here. how important the chinese market is, which is gradually opening up and has $854 trillion financial system -- a $54 trillion financial system. it is a huge opportunity, and the bank does not want to jeopardize any future expansion. shery: how much progress has jp morgan made in china so far? sally: a fair bit. it won approval to fully own insecurities venture there. and the bank has always said that it has a huge -- the country offers a huge opportunity for it. it is also a place with potential for huge profits for
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businesses. so generally, they don't want to say things that might antagonize the communist party, which is particularly sensitive to statements that can be taken in a way that is seen as critical of itself or its policies. so companies have to walk that line very carefully in china. we have seen that with the nba, with verse that she and coach, they all have to make statements to appease the government following similar situations where comments made might have been taken in the wrong way. sheri: it has been really interesting to me to see how all sweet banks are so optimistic about the chinese market, when at the same time we are seeing increased financial decoupling between the u.s. and china, whether it is u.s. authority scrutiny on chinese listings in the u.s. or the chinese
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scrutinizing overseas listings. why the divergence here? sally: i think in the case of jp morgan, while they do see it as such a huge opportunity, they are very cautious on the risks. dimon said in his yearly letter in april, that the country, for all the progress it has made, it would also have to confront serious issues including the lack of resources, corruption, and income inequality. there are some particulars in the market in the u.s., where lending remains sluggish, and shareholders in jp morgan and other wall street things are looking for signals of growth. perhaps china represents a place where they can do that. so they have to acknowledge these risks exist, and they have to heed the warnings that have come from the u.s. administration, but i don't think it is deterring them from doing business.
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and indeed, dimon, recently in hong kong, he got an exception for the quarantined requirement there as an indication, i think, of his desire to build up the presence in the country. shery: sally bakewell, great to have your insights, our finance editor. coming up next, the latest on the oil supply situation as opec forecasts the impact of a major reserve release. more on that. this is bloomberg. ♪
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♪ paula: this is "bloomberg markets: asia." we are tracking the supply chain crunch. the world's largest fan equipment maker searched the most in nine months after giving an outlook that signals global
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supply chain delays will not lead to a dent in profits. the company also seized demand for its farm and construction equipment to stay strong. amazon is prepared to sacrifice profit this quarter for logistic workarounds to get products to customers' hands on time. it favors dispatching half-empty trucks and increasing pay for seasonal workers. in china, the government's extreme zero covid policy is standing in the way of a full recovery for the shipping industry and could prolong the global crisis. it involves a six week-quarantine for seafarers and a two week wait for sea vessels that have refreshed their crews. shery: the supply crunch that has helped drive inflation to multi-decade highs shows some signs of easing in the u.s., but it is still increasing in europe. the latest readings of global
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economics indicators show shortages in the u.s. becoming less severe. the situation is worsening, though, for the euro area, with inflation rising, and other data suggesting a labor deficit. the picture is similar in the u.k., who's supply constraint indicator gauge hit a fresh high in october. the situation exacerbated by trade frictions post-brexit. bloomberg terminal users can read more about the stories in newsletter "supply lines." paula: opec expects oil stockpiles about to be released by consuming nations could massively swell the surplus in global markets. let's bring in our energy and commodities editor david stronger. tell me more about their forecast, and what response can we get from producers after next week's meeting? david: morning, paul. all eyes really are on opec and what it's responses are to the
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coordinated action we have seen from the u.s. and from a number of the consuming nations. an advisory body to opec has come out with forecasts based on a scenario where 66 million barrels of oil are released from those strategic reserves over a two-month period. they see the surplus, the excess in world markets will swell to as much as 3.7 million barrels a day by february. a significant increase. the impact we are expecting, we are already hearing noises from some opec officials that a planned increase in production scheduled in january could be deferred. of course, the opec+ nations will meet at the start of next month to discuss this. shery: is that why there are increasing doubts that the u.s. action will have the impact that the president wants to see? david: that's right. i guess what we have seen in prices is a limited reaction
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shortly after the u.s. announcement. prices rose on tuesday. we have seen them come off a touch, but nowhere near to the extent that president biden's may be expecting. he is looking to drive down prices at the pump to alleviate some political pressure. we are not seeing that response. that is because the market is weighing the potential for action from opec. but also because the actual mechanics of the releases are also complex a big chunk of the oil will have to be returned. that could tighten the market future. also, the u.s. confirmed on tuesday that the bulk of the oil it has released is sour. that will do nothing to alleviate the current shortage of sweet crude. so it is complex. we are not seeing prices come down as of yet. shery: david stringer, thank you. a quick check of the latest business flash headlines --
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singapore's central bank says it will consider supervisory actions after dbs suffered one of its worst digital disruptions in a decade. south asia's biggest lender apologized to customers after server problems prevented many from logging in on tuesday and wednesday. it has been called a serious disruption, and says it expects dbs to conduct a thorough investigation. singapore's ride-hailing and delivery giant grab could go public in the u.s. as soon as december 2. it will start trading on the nasdaq if shareholders approve a proposed merger at the end of this month. grab had postponed the merger, valued at around $40 billion, to the fourth quarter from july as it worked on an audit of the past three years. finance is -- binance is in talks over taking a stake in an exchange as it faces global big literary pressure. the ceo said investments would help improve its reputation with
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various governments. binance has not confirmed which sovereign funds it has held talks with. coming up next, this back steps back from using a poisoned pill defense against a takeover bid from 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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shery: where counting down to the start of trade in tokyo. in korea we are expecting a rate decision in the coming hours. all 19 economists hold by bloomberg forecast to be ok would raise the key rate to 1%. the energy ministry is announcing plans for winter power supply and reduction in energy generation. the korea exchange announced member changes, adding companies
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to the exchange. over in japan, we are expecting economic data including the index number for september, the preliminary figure of 99.7 marks the third straight month of declines. other data out of, october ppi services and machine-tool orders, we're also watching a bank after it canceled a shareholder vote on a poison pill defense. paul: let's get more on that story from our editor. that vote canceled. was there hand forced? adam: that was the lead up, scheduled to be happening today in tokyo. what we had was the government was effectively going to vote against this. it was already the biggest shareholder.
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in this morning, the local papers in japan are recording a shareholder was trying to prevent the vote. momentum was building and they ended up canceling the vote, changing their position. this has been running for two months in the public domain since september, but it actually stretches back a couple of years and many meetings between coming in here and changing quite significantly what is happening, this is quite a significant step .
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at least now, the sentence is -- that 2000 yen per share offer has no indication that is being changed, we're just shy of that number. there looks like there might be a little bit of a relief in the stock. i think longer-term, this tells you quite a lot about how the corporate landscape is developing in japan.
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the fact that this was a very hostile bid, rare situation in japan, not from the outset supported by the bank. it does mark change in the corporate landscape and how mergers might behave in the future. shery: wall street is staying bearish on alibaba, a cohort has cut their expectations for a record 18 straight week, citing regulatory concerns. let's bring in our equities reporter. what are they saying? reporter: according to our
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report, at least for wall street analysts cut their target on alibaba, concerned with regulatory and the overall slowdown in china's economy. some mentioned new initiatives will be a drag on business margins. if we look at the average price targets from wall street analysts, the number has been declining over the course of this year. >> interesting -- versus only
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one [indiscernible] paul: thanks for joining us. still to come, we will see how china's education is faring. a ceo joins us to discuss this and the firm's latest earnings, and what it is the winner of stay-at-home trade? that has the likes of cathie wood sweeping into by another 133 million dollars worth of the stock. the cfo told bloomberg where the company is headed next. >> just a reminder that we reported earnings of over $1 billion and gave outlook for
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over $4 billion, over 50% year on year growth. we are proud of everything we accomplish. especially about the future of hybrid work. work is transitioning. keeping them together, connected and efficient. the conference room solution is really important. then of course we have products like zoom as we look forward and
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consider events are also going to be hybrid in the future. >> i'm interested in how you continue to build a conversation with your investor base, to a large extent have they got overenthusiastic? you beat third quarter expectations, do you think investors expect too much, the inorganic growth could not come off? >> i think we experience growth that was completely unprecedented. the way we talk about it internally to our teams is we really can't control the stock price, we can control the execution. do that by innovating and
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creating the most reliable and intuitive products that support our customer needs. >> i'm interested, you look at conferences, new and different ways. what is it the most excites you going into 2022? >> i things you events -- zoom events. we are all excited to be back in person, however companies have seen a tremendous -- zoom events is going to be able to ring those two together support them, that is really exciting. shery: let's get to vonnie quinn. vonnie: fed officials stressed the need for flexibility on how quickly they will taper, as well
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as the timing for increases. minutes show agreements of maintaining flexibility should be a guiding principle. the fomc decided to begin scaling back its bond buying program in mid 2022. a federal reserve report says the collapse of rko capital management would yield vulnerability. the feds twice yearly supervision report says the event exposes weaknesses and margin practices. the family office blew up in march, contributing to billions to morgan stanley. singapore and malaysia have reopened a causeway. it allows land travel for the first time since march of last year. vaccinated passengers will be allowed to transit on buses. prior to covid, some 300,000 people streamed across each day making it one of the world's busiest land borders. germany's coalition government is promising to slash greenhouse
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gas emissions with a faster coal exit. more renewables, and a new carbon price lower. after in negotiations, the democrats secured a deal with the free democrats. it takes away for angela merkel to be replaced as chancellor. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: take a look at the markets. trading across asia, it is still early in the session but we are seeing the asx 200 under a little bit of pressure with financials leading the decline, tach and materials gaining ground. kiwi stocks are up 6/10 of 1%, remember this coming after the dovish rate by 25 basis points.
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we have seen a kiwi dollar, kiwi yields are falling, holding stelly. nikkei futures higher by 3/10 of 1%, we have the japanese yen recovering earlier losses. u.s. futures unchanged after they pared back some earlier losses and rose in late trading, remember it is thanksgiving week. coming up next, janet leigh talks about the long-term investment trends in an inflationary environment. this is bloomberg. ♪
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paul: today's retirees are going to face headwinds. inflation is at its highest level in more than three decades, but it is becoming a global phenomenon. janet, inflation rising everywhere, this typically erodes pension savings. how do you protect against this? guest: indeed, inflation is a
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relevant issue. therefore, it is important, looking at [indiscernible] on the pension schemes, $5.3 trillion of assets, the trend was that there have been ongoing increases in equity allocations. last year was the first time we saw equities reaping above the mid-an overall asset allocation has been relatively unchanged,
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what is remarkable is a acceleration in sustainable investments. paul: when you are talking to investors about diversification, what kind of conversations to have? -- do you have? janet: that is something many investors or asset owners would be agreeing to has a basic principle, when it comes to actual implementations, they are always roadblock. these are the things we try to coach investors not to, because
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they should be sticking with objectives when they make their overall investment allocations. shery: [indiscernible] janet: the most worrying investment is covid, some worried about the pension investment side, at the same time it's important to main growth -- maintain growth of pension investments. it's important there is a long-term vision. by virtue of reacting to short-term market movement and deviating from long-term policies, therefore, it is important sticking to the governing arrangement, investor objectives. at the same time, there is acceleration in sustainability investments. in the environment we are in,
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helping to combat systemic risk like climate change. these are the top headlines. shery: how challenging is it for wealth management? janet: exposing traditional ideas and framework to some nontraditional ideas. cryptocurrencies and other virtual currencies, which investors have been thinking whether they should -- investors should be mindful there is a risk the governments needs to cover, and also a need to create
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information efficiency across investors, therefore information asymmetry, asset owners might be buying -- however, with more digital platforms, or information online and competition from wealth managers, that will make investors make an informed decision. shery: thank you for joining us from hong kong. let's turn to japan because it plans to issue $192 billion in bonds to pay for an extra budget in the pandemic. that as the prime minister looked to shore up the recovery before next years elections. the country's debt to gdp projected to be the highest among the g7. let's get more from tokyo. this heavy debt burden by japan,
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among the highest in the developed world has been long talked about, it will not get any better. reporter: yes. a substantial chunk of extra debt that is going to be added. that is for an extra budget that is set to be announced on friday, we do not have the official details yet. according to this report, 36 trillion yen. in addition, another 6 trillion in unexpected tax revenue. this is a substantial addition to the debt. there has been a lot of reference to next year's election. he won a substantial victory, and with two houses of
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parliament, if they lose control of the upper hand, it becomes very difficult. it is important to maintain control. if you look again at public opinion polls, asking about whether we want cash handouts, a lot of people are saying it is not a good idea. it's far from clear whether this policy will actually support his approval rating. shery: isabel reynolds joining us from tokyo as we get the latest year on year growth of 1% out of japan. we are also getting a potential nominee speaking on twitter, saying she is committed to combating inflation, committed to not touch the country's reserves. we saw the replacement by the
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president and the mexican peso become the worst performer because of concerns about the central bank's independence. the new nominee speaking in a twitter video. paul: we're just getting evergrande as well. i major cell of evergrande shells. -- a major sale of evergrande shares. plenty more to come. this is bloomberg. ♪
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paul: the u.s. and china have found one issue they can cooperate on when they were together to really screwed. a bloomberg economist argues the two are playing a dangerous game. david: it's more about the level of codependency you see across the relationship, particularly in areas separate from the spr. very interesting story in the wall street journal talking about abu dhabi, and u.s. intelligence was protecting they were trying to build a military
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facility because the u.s. is traditionally the big external power in the persian gulf. this underlies an interesting fact in the great power competition of our era. the u.s. is entirely self-sufficient and oil. it does not depend -- whereas china imports about three quarters of its oil, that is the oceanborne import trade, depends on usc power to operate as bodyguards. china is not comfortable with that. shery: is that what has propelled china's moves across many different parts of asia as well, including the indian ocean and a railway across malaysia? david: absolutely. this is central for these projects in places like sri lanka, pakistan, pipelines
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across myanmar, the railway in malaysia. a lot of things are about reducing the strategic threat china faces from the chokepoints in places like singapore, where it is relatively easy for a naval power to blockade china's supply of energy. shery: david ficklin there. we are headed to the japan and korea reopening, travel plays in tokyo, the city allowing an inbound subsidy. these airlines, railway companies, some stocks we are watching. of course, we also had japan planning to issue $192 billion in bonds, so we will be watching any sector related to all of those fiscal measures. the market opens our next.
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this is bloomberg. ♪
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shery: welcome to daybreak asia. i am shery ahn. paul: i am paul allen and city. our top stories this hour. asian investors weigh the risk of faster tapering, treasury yield curve flattens and the dollar gains. rate hike and south korea. jp morgan goes into damage
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control, the ceo saying he regrets comments about china's communist party. shery: japan and south korea coming online. brought upside in japanese equities. communication stoxx leading the gains, we are seeing a little bit pressure on utilities as the japanese yen hold at the mid 115 level, still around the lows since march 2017 against the u.s. dollar. we are watching jgb, they fell ahead of a 40 year auction today, watching that very closely as we get japan issuing 192 nguyen dollars in bonds. we are also watching shinsei bank because we have heard them canceling a shareholder vote on a poison pill defense against the takeover bid. we are seeing upside of about 6/10 of 1%. the big news of the day is the bank of korea, take a look at
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the kospi. this as we already have two sessions of losses for korean stocks, energy and financials leading the declines and weighing on the index. the bank of korea expected to hike 25 basis points to 1%, given all of the inflation concerns, the korean won weakening against the u.s. dollar, 1189 level. paul: u.s. financials weighing on the index and australia, the worst-performing in the sector. bringing the broader asx benchmark down, off by 1/10 of 1%. the best-performing stock is up 20% after it was told he could sign new customers. if we take a look at the kiwi
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and aussie dollars, getting beaten up at the moment, the aussie a shade over $.72, the kiwi is off as well. a little less than what we saw in the month of september. the strong dollar weighing on the aussie and kiwi, 115 against the yen right now. >> a lot of it has to do with the fed and relative situation between the fed and major central banks, especially within the g10 context, when you have the fed which makes such a huge difference to financial markets, they are getting closer to doing some rate hiking.
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plus, comments from janet daly who is usually quite dovish, leading in the direction that interest rate rights are coming through quicker. that is a change that is very positive for the u.s. dollar and you contrasted with the bank of japan, even considering the possibility of higher interest rates. you have the contrast that plays out -- shery: we saw bombs falling -- >> the bond market will be sensitive in terms of false guidance, if the bank of korea it does talk about the bond market, particularly to moves to
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the u.s. dollar, there is a bit of a fight going on between the two. although the u.s. dollar is having a lot of strength in order other emerging-market currencies are mold vulnerable. look at the mexican peso. the korean won is influenced by the cross great with china, and for now that is relatively stable compared to some of the other crosses going on. shery: let's get more analysis on the bank of korea's rate decision, a global economics and policy editor is here with a preview. there is certainty that the be
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ok will hike. >> they are at the vanguard of the pivot to higher rates that they made back in august, the governor is the head of the bank of korea who made it pretty clear that unless something hits the economy, the next move would probably be a hike at this meeting. he said they would be watching financial imbalances to impart to what has been happening with rising household debt. if we look at household debt, it hit a new high in the third quarter. it was driven by a 21% increase in mortgage loans. then you have the property market itself, 1.5 trillion u.s. dollars in the third quarter, and then the property market -- home prices are up 20%, so just
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a concern for the be ok, actually a concern for the korean government. 25 basis points is priced in. inflation is well above the top of the 2% target, 3% year-over-year, unemployment, 2.8%. the lowest in more than two decades. as mark just mentioned, big focus on their outlook for growth and inflation, they have a chance to revise their forecast. if they move it higher and particularly if the call indicates as he did at the last meeting what his intentions are, that would possibly be a rate hike in january. that is possibly a signal they will stay on this path. removing the stimulus. it's a meeting with a bit of drama, isn't it. paul: the drama will play out in
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just a few minutes time. let's get you an update on solicitation for 6.5% notes, kaiser seeking to resume trading today. looking to raise some funds. the company within its 30 day grace periods. they don't expire until the middle of december, with a price offering to exchange before the notes are due. we will be closely watching at the open. let's get to vonnie quinn. vonnie: jamie dimon says he regrets making that with that his bank is likely to outlast china's communist party. in a statement, he said his
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comments were trying to emphasize the strength of his company. jp morgan has $21 billion of exposure in china and ambition to expand further. china's tech industry regulator has ordered tencent to stop rolling out apps. sources say updates are on hold though current versions can be downloaded. tencent says is working to enhance features and cooperates with government agencies to ensure compliance. the european government is debating new measures. germany may consider vaccine mandates. denmark is seeking to make masks mandatory on public transit. the eu has delayed new guidelines as it waits for data on efficacy of vaccines. opec says the release of oil reserves by assuming nations could massively slow the surplus
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in global markets. the protections from the advisory body come a week before the group meets to decide whether to increase production. some delegates have indicated thinking cancel and output hike if the market is overwhelmed. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, the bok rate decision expected. an immediate reaction from an economist. up next, we are speaking with the cfo of china education to get his outlook on the sector. this is bloomberg. ♪
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shery: china education group
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says strong demand has help the country in goes -- the sector has come under the spotlight. let's discuss with the chief financial officer. it is great to have you with us. tell us what drove this strong set of results, i know you do not operate in the sector seeing the regulatory crackdown, but have you felt indirect effects? >> we always focus on higher education. our strategy has been in line with government policy. you are right, the tutoring policy.
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but for the policy on official education announced recently has been a really good platform for us to grow in higher education. shery: do you see investors preferring your company over other names, that have faced the wrath of beijing? bill: we have thousands of graduates all focused on education. it has been our target to educate college graduates to help the growth of china. paul: china education recently required -- can you share with
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us m&a plans? bill: we have been consistent on m&a plans. we have indicated to the market we will do two to three acquisitions a year. the acquisition was a college which is the number one independent college in the country with a strong and reputable school. we are very happy it has come into our portfolio. for m&a, i always tell the investor buying a school i would say is not too difficult as long as you have the financial support. how do you improve?
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after the acquisition is key. so far, of all the schools we have acquired, the academic performance has been strongly -- so far, we have been doing it consistently. academic wise, we have been able to the program and make sure our graduates are well-equipped when they graduate and go into the job market. it's over 90%. paul: in terms of being well-equipped, china has been promoting vocational training and i guess this is an area where you can synergize with regulators.
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how important do you see vocational training coming to your growth model? bill: i would say our group set up in the late 1980's, we have always been into vocational. all of our programs operate to ensure our program coasts through the market and get the latest technology used by the industry. shery: let me ask you about the broader industry and culture given you are running higher education as well as vocational school. if you have this crackdown, do you feel there might be a broader change on how chinese
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people perceive education that might long-term impact to? bill: definitely, the beijing policy as well as financial pressure has been the main idea from beijing, and for our group, we are helping beijing to implement this policy given we have been providing for the student who wants to go for higher education, i would say we are the addition to the public school system. we are actually helping beijing. longer-term, for vocational, i do not think that would be
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negative. given the fact that we have seen -- making sure our students are well-equipped for the job market. i would like to emphasize, the job market is not -- i attended an education conference a couple of years ago. it's a global issue. college graduates, after they graduate, cannot find jobs. the child does not require what they have learned. it is a waste of resources. for china education group, definitely, it is not what we are doing. we are very focused on what the student learns and how prepare
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them when they graduate. paul: a number of investors we talk to our nervous about investing in the education sector in china because of the regulatory framework, but we saw your stock has 26 buys. what is your message? bill: education is an important industry. you can define it into different stages, kindergarten, primary and secondary school, then higher education. in china for compulsory education, which means from year one to year nine, is provided for free, they do not charge you anything. this is something beijing would have a lot of monitoring but for higher education, the government
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made it very clear when they established back in 2017, they want the private sector to help them to increase for higher education and recently, the policy among the focus, the leader of the industry to achieve the target. paul: thank you so much for joining us today. we have plenty more to come. this is bloomberg. ♪
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shery: here is a quick check of the latest is this flash headlines. finance is in talks as it faces global regulatory pressure. the ceo said investments would help improve its reputation. finance has not confirmed which sovereign funds it has held talks with. a singapore giant could go public in the u.s.. it will start trading on the nasdaq if shareholders approve the proposed merger. singapore's central bank says it will consider supervisory action. the biggest lender apologized to customers after server problems prevented many from logging in on tuesday and wednesday.
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paul: jamie dimon says he regrets saying his bank is likely to outlast china's communist party. in a statement, he says he was trying to emphasize the strength of longevity of the company. the latest ring of provocative remarks he has been forced to walk back. let's bring in our finance reporter. what was the risk for jamie dimon? reporter: the relative swiftness of the apology from jamie dimon really shows how much is at stake for the bank. j.p. morgan has a $20 billion exposure in the country, and you remember earlier, they are actually trying to go deeper into china. from that perspective, it was certainly ill time to read jamie dimon does not want to jeopardize any future growth ambitions in asia, particularly in china which has lots of.
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he has made rash comments in the past, perhaps given the bank's recent record of profit and share price, hitting highs, it felt nonchalant. he followed up with the swift statement the next day. shery: he does have a history of making provocative remarks. reporter: he definitely does. he has said before president trump -- he would have made a better president and he could win because he was smarter than trump, he did walk that back. when it comes to china, dimon is not the only person, jp morgan is not the only company that has had to walk back comments and actions. the nba, verse archie -- verse archie -- versace has fallen
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afoul. shery: coming up next, the latest on the oil supply situation, the impact of a major reserve release. we will have more on that. we have seen gains in oil recently, we are seeing energy sectors leading the gains on several stock exchanges with the nikkei up 6/10 of 1%. the japanese yen holds steady at the mid 115 level, talking about the weakest level in about four years against the u.s. dollar. this as we continue to wait for the government to issue $192 billion in bonds to help pay for more fiscal measures. really, the key news this hours is the bok rate decision, the kospi losing 4/10 of 1%. the korean won under pressure against the u.s. dollar, this is we are awaiting the 25 basis
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point rate hike from south korea in the next hour. plenty more to come on "dayb reak: asia". this is bloomberg. ♪ it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. only comcast business' secure network solutions give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.
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♪ paul: opec expect oil stockpiles about to be released could swell the surplus in global markets. let's bring in commodities editor david stringer. tell us more about the panel's forecast? what kind of response can we expect from producers? david: the advisory body to opec made forecasts based on releases from strategic reserves we have heard about in the past 24, 48
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hours. they are saying they expect 1.1 million barrels could be added to the excess supply, and would create a situation where we would have a bounce of 2 million barrels, 3.7 million barrels a day surplus in january and february, based on a scenario where 66 million arrows are added to the market as a result of the releases. quite a significant increase in surplus. we already hearing indications of what might happen. some opec officials and partners, suggesting the increase in production scheduled for january may now be in doubt. opec-plus meets next month to discuss this and other issues. caroline: what are we expecting about the long-term impact of the u.s. action? will we see prices fall like president biden has been seeking? david: if he was looking for an
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immediate response, we haven't seen that. prices are steady in asia this morning, down a touch in the u.s. overnight, but we haven't seen that decline he was looking for to drive down prices at the gas pumps in the u.s. he is under pressure to try and reduce cost of living expenses for consumers. the reason for that, yes, headlines out of the u.s. were large, a release of 50 million barrels, but a lot of that is borrowed intestate ultimately be put back, suggesting tighter markets in the future. and there are indications it is mainly a mix of sour crude when the problem in the market is a lack of sweet crude. we are not necessarily seeing the impact biden might have been looking for. paul: let's talk about china's plans, china more dependent on imported energy than the u.s.. what is it going to do? david cohen --
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david: we heard of talks between president biden and president xi, china indicating it would be lockstep with the u.s. and looking for another strategic reserve release. we haven't heard that from chinese officials in recent days. the expectation is china will announce its own release from strategic reserves, but on its own terms. some people are viewing the need for china to put distance between biden's announcement and its own actions, just to sort of and sure it doesn't look coordinated. china, stressing it is what to do this for its own needs and on its own timetable, but we are expecting that release at some officials are suggesting china could release as much as 7,000,000-15,000,000 barrels. caroline: energy and commodity
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--shery called an energy and commodities editor david stringer. new cases out of north korea are about daily record cases of critical covid patients. 612 critical covid patients and 39 deaths as well-paid this would be a new record. and also, coming out of time when more than 82% of the population has their first covid vaccine. this is dampening the south korean economy as we wait a -- as we a white -- as we await a be ok decision. we expecting hike into be ok policy announcement today, and a change in the inflation outlook as well. let's get to vonnie quinn with first word headlines. vonnie: federal reserve officials at their last meeting stressed the need for flexibility on how quickly they will taper. minutes of the early november gathering show maintaining
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flexibility should be a guiding principle. the fomc decided to leave interest rates near zero and begin scaling back bond buying programs in mid-2022. a fed report says the collapse of archegos capital management receives -- reveals vulnerabilities at the bank. the report says it exposes weaknesses in margin practices and counterparty risk management. it blew up in march, contributed to billions in losses including banks credit suisse and morgan stanley. singapore and malaysia will be linking the countries, log cross-border travel for the first time since march of last year. vaccinated travelers will be allowed transit on designated buses. fire to covid, 300,000 people streamed across each day, one of the world's busiest land borders. germany's new coalition government is promising to cut greenhouse gas emissions with a
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faster coal exit and a new carbon price floor. after nearly two months of negotiations, the centerleft social democrats fielded a coalition agreement with the greens of the pro-business free democrats. the deal paves the way for hola off schultz -- hola off -- olaf scholz to replace angela merkel. i'm vonnie quinn. this is bloomberg. ♪ paul: plenty more to come on "daybreak asia." stay with us. this is bloomberg. ♪
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♪ paul: once a winner at the stay-at-home trade, a slumped after failing to address concerns about post lockdown group. that has the likes of cathie wood sweeping into by 133 million dollars of zoom stock. the zoom cfo told us where the company is headed next. >> we reported earnings for q3 of over $1 billion, 35% year-to-year growth, and gave outlook for the full year of over $4 billion, 50% year-to-year growth. we are proud of everything we accomplished and are excited about the future, especially about the future of hybrid work. work is transitioning.
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it is no longer a place, it is a space where people get work done. and zoom is at the forefront of bringing teams together and keeping them connected and efficient dent we are making this transition from being a killer meeting app to an adjudication platform with not only our meetings feature everybody knows about, but zoom phone, our cloud, zoom room, a conference room so edition, which is really important and a key marketing strategy moving forward with hybrid work. and then, we have products like zoom event, which we just launched as we consider that events are also going to be hybrid in the future. haslinda: i am interested in how you build conversation with your investor base, because they got
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overenthusiastic about where the future goes, and you beat third quarter earnings expectations. you talk about growth that is 30% or 50%, however, did investors expect too much? was it, and a -- was it m and a? >> we experienced growth last that was unprecedented. the way we talk about it internally to our teams and investors is you know, we can't control the stock price. what we can control is our contribution. we focus on delivering happiness to our customers every day. do that by innovating and creating the most reliable and intuitive products that support our customers' needs. at that is the best we can do every day. caroline: you look at offering
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conferences and different ways to promote growth. what most excites you going into 2022? >> zoom events is going to be key for conferences. we are all excited to be back in person. however, companies have seen the tremendous efficiency and reached they gained by having virtual events. so, zoom events is going to bring those two together and support that. so that is really exciting. shery: zoom's cfo. alibaba adrs snapped a slide after quarterly earnings disappointed in the company lowered guidance for next year. but near-term pressure may not be over. wall street's average price target is expected to fall for a record 18th straight week. let's bring in chief north asia correspondent stephen engle. what is the street on alibaba?
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stephen: it is not out of the woods on the regulatory front end macro economic front. a lot of headlines -- a lot of headwinds, revenue missed expectations on they lowered fiscal 2022 outlook to as low as 20% revenue growth. the street was expecting 27% for fiscal 2022. so, lots of headwinds on the regulatory front end macro economic front. it killed the rally we saw. shares, the adrs, had rallied as much as 20%, up to 180 dollars mid-october from the early october low of $139. now, they are back below that. and negative sentiment is piling up, with another four analysts lowering the price target. susquehanna was the latest. this is a short week in the u.s., but it is ending for a record 18th consecutive week of
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lower-priced targets for alibaba. and i understand we have breaking news out of korea. shery: stephen engle, thank you. we do. bank of korea raising the key interest rate 1% from .75%, a 25 basis points hike. all 19 economists surveyed by bloomberg were expecting a 25 basis point hike and we got it. the bank of korea, raising the key interest rate to 1% from 175%, not surprising given the governor signaled last month that the hike would be considered unless the recovery faltered. we have recent data shows the korean economy has weathered the rate hike was already back in august. we have consumer confidence improving, ongoing export strength, and of course covid continues to be the big uncertainty in south korea. paul: yes, that is right and is something we want does discuss
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with our next guest, the bank of america career securities economist. kathleen, i am sure you're surprised by the rate hike was up by the bank of korea, what is the path forward? kathleen: today's decision was widely expected. we were expecting this decision to come with a dissenter vote against the hike. so, we will see how that goes during the press conference and governor lee tells us how the decision was made. for us, expecting one dissenter means it is going to be a less hawkish path from here. we think the next rate hike welcome in the second quarter of next year instead of the first quarter, given that there is a high political and policy uncertainty with the presidential election and also, their economic data usually is distorted in january and february, when there is a lunar new year holiday.
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we think the members will take a pause until the second quarter, and monitor the impact. paul: another thing that will have to monitor is the impact of rising covid cases. we have just seen a big spike in cases in korea today. how much of a factor is that going to be for be ok -- for bok? kathleen: certainly a very important factor, given that it may derail consumer sentiment and consumption we have been expecting from the fourth quarter of this year. consumption is the one that will be driving goods in 2022, but if that gets a hit, in case the government raises social distancing measures to a more harsh level and people again feel that they need to stay in instead of spending outside in
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the services sector, that could be a drag to the labor market, services activities overall, and that could impact the thought process of the bank members and make them stay cautious. shery: we have seen household lending growth start to peek a little bit, as this gtv chart on the bloomberg shows. how well has the august rate hike worked? kathleen: we think the spillover impact from the august rate hike was pretty visible. we have seen lending rates picking up 40 to 50 basis points since the august hike and we have seen monthly credit borrowing from households and that quarterly household debt growth picking downward as well. and we also have seen weekly housing prices and deposit for rental prices decelerating as
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well, so we do see an impact from the august rate hike and expect the november rate hike to have a further spillover effect into lending rates and household debt. shery: tell us about house prices. those gains in the property market have been hard to tame. kathleen: you are right. it has been very difficult for korea. the government has implemented over 23 measures and the bok finally made their rate hike this year. so, we expect to see more stabilization in overall nationwide housing prices, but when you look into specific areas of from apartment prices, we still see substantial pickup in both rental and sales prices. but for the box, the can -- for the bok, the consideration
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would be the macro aspect, the nationwide price trend. as long as we see that macro trend stabilizing, we think the bok would consider the effect of their rate hike in making a positive impact on housing markets. paul: we are going to get growth and inflation projections updated at this meeting as well. what are you expecting? kathleen: it has been widely anticipated the cpi inflation forecast will be revised for this year ended next year. especially for next year, the bok assumption in august was $65 a barrel, so adjusting for the current level of $80-80 five dollars per barrel, we think that would make them revise the number closer to 2% for 2022. that is closer to our forecast of 1.8%. in terms of growth though, we
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expect them to keep the numbers unchanged for this year and next year at 4.0 and 3.0%. if the governor signals any downside risk that has increased since the last forecast provision, that will be another less hawkish signal for the market, for their delay in a rate hike the next meeting. shery: we started with you mentioning political uncertainty given presidential elections next year. what about the monetary board uncertainty, given the governor's term is ending around that time? kathleen: you are right, it is the first time we have overlapping of the period of the bok governor leaving in the new president coming in. so it is a very tricky time. by the time that current government has to appoint a new governor for the bok, the new president-elect will be confirmed as well. we actually expect, our baseline
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is a smooth transition between the old government and the new government to make a certain level of discussion to appoint a new governor. but there would be the risk that there is an absence in the governorship for perhaps march and april, in case there is a little conflict in the transition period. shery: kathleen oh, thank you. you can also turn to tv on the bloomberg for analysis from bloomberg's expert editors. this is bloomberg. ♪
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♪ paul: a check of the latest business flash headlines. sources told us blackstone, kkr and digital bridge are among firms thinking of bidding for global switch. the data company controlled by a chinese steelmaker has been exploring a sale worth the most $11 billion. global switch operates 30 data centers across europe and asia pacific. shinsei bank canceled a shareholder vote thursday after the japanese government was said to with -- withdraw support for
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a poison pill defense aimed at preventing a takeover. that is a win for sbi holdings, which reiterated it won't change his offer to raise its stake to 48 percent. should say will hold an expert in air shareholder meeting in february to vote on sbi directed proposed candidates. and group repositioning its popular credit service in a move that makes it clear where borrowers are from outside lenders. it will focus on lending small to medium amounts of credit, while fully-funded firms will come under a separate unit. consumer credit contributed to 63% of and revenue for its ipo was halted. shery: kaiser group is offering to exchange at least 380 million dollars in bonds for new notes maturing in 2023, this in a bid to ease a cash crunch. joining us now for the latest is bloomberg china credit editor. rebecca, what are we expecting?
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rebecca: kaiser bonds are looking weaker this morning. effectively, kaiser is trying to push out the maturity for this note by 18 months, but it does look like there isn't a cash offer or credit enhancement. it needs to have a 95% pass rate, so it looks like a tough deal to get across the line. paul: the intention is that kaiser starts trading again, just under 30 minutes, what can we expect at the opening? rebecca: this is not good news. it does look like kaiser, it looks like it is possibly inching closer to restructuring. it says it cannot pay $400 million of notes that are owed on december 7 and may consider restructuring. we know they also hired legal and financial advisors, so it
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does look like we are getting closer to that. and kaiser is significant here because although it is not one of the largest firms or top-heavy firms by sales, it has dollar debt that is more than half that of evergrande. it is third largest by dollar debt borrowers among china property firms, so it really does have potential to weakened the broader, high-yield bond market that we have seen go weak at the past few days and we have been trying to distressed not just kaiser, but others. shery: what does that do for the property sector in general? we have seen continued pressure and perhaps more measures from individual cities to support the sector. rebecca: yes, we do. that is a good thing. they might be stepping into ease things and i think that is in line with the types of measures we have seen so far.
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policy we have seen so far focused on the onshore market, providing liquidity there and potentially supporting state firms. they might want to come in and save that private firm. and we have seen low core measures, or measures to potentially help the strongest firms, but is it really going to ease pressure on the weakest firms? is it going to ease pressure on the offshore market, where developers are not able to refinance or repay much of their dollar debt? for those kinds of borrowers, borrowers like kaiser, the issue remains it is very difficult to generate cash. paul: bloomberg's china credit editor rebecca chang wilkins, thanks. coming up, more insight into the bank of korea decision to raise rates. we discuss it with hsbc head of
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economic research frederic neumann. stay tuned. this is bloomberg. ♪
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♪ >> welcome to bloomberg markets china open. i'm yvonne man. david: counting down to the open of trade here and on the mainland. >> bank of korea hiking its rate again, investors looking for further hawkish nose, pressed rethink from the governor happening in the next hour. asian traders weigh the risk of faster tapering. the treasury yield curve


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