Skip to main content

tv   Bloomberg Markets Asia  Bloomberg  November 25, 2021 9:00pm-11:00pm EST

9:00 pm
in-store when you look at earnings later today. rounding out what has been a tough earnings season for big tech over in china. first and foremost, happy thanksgiving in the u.s., good from the asia-pacific. have a look at where we are market wise. the aussie dollar is taking a hit, moving back into havens over concerns of the virus and the new variant we are seeing. yields are pretty much down there across the board. tencent, softbank, the earnings story. tencent down 1.7% with some local state affiliated firms
9:01 pm
reducing reliance on shipments, down about 1%. the south african rand continuing to see some weakness in asia and we are still under pressure, a 12 month high here on the dollar. more on the markets in just a moment. let star caught -- start off with the regulators asking to come up with a plan to delist from u.s. exchanges. our asia text editor has the story for us. quite a scoop here, what do we know? >> i think there's a lot of
9:02 pm
unresolved bad blood with the central government. right now the devil is in the details. you see softbank tanking a little bit on this news. a lot depends on what price the deal itself to take it off the nyse. david: we know the intention, and i have to say it's not really a massive surprise that we are talking about this, but how do they go about this? >> the regulators have been pondering this option since at least summer. i think it's likely to be a package of penalties. bloomberg has reported that regulators are considering unprecedented penalties and what's likely to follow is anybody's guess. i think it is safe to say that
9:03 pm
didi is in for a rough ride going forward. david: opine intended. is it going to be taken private, being listed here in hong kong i would imagine would be one of the options. >> i think beijing will lead it to the didi executives to figure out what is next, what are the options, or perhaps they might float shares in hong kong first to make it perhaps easier then to withdraw from new york. david: our top story, didi being asked to get dealerships in the u.s.. the the new covid variant first
9:04 pm
detected in africa sending a wave of caution across global markets. is the fear more intense? let's bring in our managing editor, thanks for joining us. what seemingly was supposed to be a quiet day, how are you guys approaching the conversation? >> it completely ruined my friday, markets were starting to move on this. it is post-thanksgiving friday, this new variant, a bunch of emails and news stories, it feels like it was only 12 hours ago most of us had not heard of this. it's more the shock element, it's not that we have any
9:05 pm
substantial or concrete reason to know that this will be a material problem, but we also don't know enough to be complacent yet. it's a lack of knowledge making the markets very nervous. risk aversion across the board, across the board we are seeing risk aversion right now. david: do you think putting these two things together is just adding to these concerns, really? >> i think there's a couple of things. the story of the new variant kind of reached broader awareness last night but it was ignored initially. thanksgiving, u.s. investors were off. then we got the headline that u.k. was blocking travel and that panicked markets.
9:06 pm
i think it is an interesting context because europe is seeing 60% of global deaths from covid at the moment. is likely they will have to react quite harshly. airlines stocks are really suffering and i don't see that changing in the short-term until we get more clarity about where the we can be more relaxed about this. david: goldman sachs out, the latest bank to bring forward the timeline on the fed if they taper, you might get the first hike in may but definitely within the next 24 months or so. how much of this early tightening is being priced into the markets? >> in rates markets, i'm not sure other asset classes are
9:07 pm
fully registered yet. there is a lot of uncertainty. they're still the tail risk that we get a setback and don't tighten at all. it's been a struggle for asset classes. getting worried that there's a whole new variant which might mean more restriction. that is absolutely in play at the moment but if this variant doesn't develop and we turn it into a false scare, then i think the tightening into nature will stay very strong. david: mark, great stuff. it suddenly become a very busy day across these markets.
9:08 pm
a commentary and analysis on everything that's going on right now. annabelle droulers has your first word news. >> new zealand central banks has inflation expectations will be the key driver of the pace of future rate hikes. the rbnz list its cash rate 2.75%, the tightening cycle will take it to 2.5% over the next two years. the assistant governor told us he's watching inflation closely. >> the reality is that in new zealand, we've got core inflation running near the top of our target range and an employment market that is through what we think is maximum sustainable employment.
9:09 pm
>> china and the u.s. reportedly making plans for meeting between the top defense officials. japan's nikkei says the two sides are aiming to hold talks by phone or online. the secretary offense would lead talks to the u.s. and china would be represented by the minister of defense and the senior vice chairman of the central military commission. chines -- china's foreign ministry has warned the incoming commission not to meddle in its internal affairs. the warning came after chancellor in waiting unveiled an agenda that includes surprisingly strong language on china over human rights and its grip on hong kong. the european union is set to impose a nine-month time limit for the validity of covid vaccinations for travel into and within the block. it would also recommend all the
9:10 pm
countries reopen as of january 10, giving priority to vaccinated travelers. 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. david: coming up, we discussed the evolving regulatory landscape with a chief compliance officer from the asia-pacific. also coming up, the outlook for chinese property, our guest will be joining us very shortly. this is bloomberg. ♪
9:11 pm
9:12 pm
9:13 pm
david: the dollar continuing to move up. i can even tell you that these last few minutes have seen an acceleration in the move up to the dollar, various reasons, really. notwithstanding the new virus concerns. let's talk about china because that is part and parcel to what is the growth outlook for 2022. car, home sales dropping, the crisis in the housing market continuing to pose the biggest drag to the market. the aggregate index, you can see the scorecard of early indicators for the chinese economy are pointing to mostly a trajectory headed south. let's bring in andrew collett -- -- let's start with property and
9:14 pm
of all the things i imagine beijing might look to -- it takes you into social unrest in all those things. on that premise alone, can i just sleep well at night that things are going to be ok? >> that is an interesting question, i would argue that they are probably able to sidestep that. they've engineered a drop in the property market, they started this last fall and have stuck to that pretty closely. the interesting thing is how they are handling it. of course they tighten credit but they've also forced a lot of local governments to take up the mantle of trying to deal with the strings and pain of a slowing property market. a lot of these local governments
9:15 pm
are scrambling to figure out how to get these projects built while suffering through lower credit conditions. that tug-of-war between the developers and the local government and pushing downwards is a fascinating situation. because it is a state run economy, they have a lot more control over the way capital is allocated then japan did. david: i think a good example was yesterday and the news from the first major city to come out in support of giving developers a little bit more support. talk to us about whether this means more financing and local government -- raising more local bonds is what i'm trying to get to hear with the funding gap. >> it was not clear from the
9:16 pm
reports where the money was actually coming from. they talk about the banks, but does that mean the banks from beijing? are they talking about local banks, private sources of capital or bonds? there are different ways of finding this. the whole point is beijing is desperately trying to say this is not our problem, this is your problem. this is the problem of local governments, local developers, and individuals. that was an interesting story, but we don't know how relaxed that capital will be and where it's going to come from. david: you and i know what this means, in simple english for our viewers, what does it mean? >> everybody talks about micro monetary policy. if you relax interest rates, there is no capital for
9:17 pm
everybody. in china it's a lot of conversation between the central bank and the headquarters with beijing. they can sit down with them and tell them, if you get a stressful situation and it's up to you to figure out how to negotiate all that. monetary policy is not very clear in china and lonely later do we find out where the money has been left. but they are definitely doing that, we just don't know how much money is going out the door. david: how do you think the story plays out in 2022? andrew: there will be a lot of defaults. ever grand is near default and there's going to be some smaller ones that we won't hear about. the market will have fewer players and hopefully there will be a modest decline in overall activity in the property market so they can start popping the bubble.
9:18 pm
then the real question is can they reallocate capital, and that is the scary part. china is not so good at giving money to small business, but that is what they really need to do. there is now talk about pushing that and local governments are being encouraged to lend to small business because that's where the economic growth, efficiency, and employment are. david: thank you so much for coming on the show, have a great weekend. vix futures, have a look at this move. on the back of this new covid variant that was first detected over in south africa. we will talk more about this later. germany central bank vice president tells us why the low number business failures during
9:19 pm
the pandemic should not be seen as a guide for future reference. this is bloomberg. ♪
9:20 pm
9:21 pm
david: welcome back to the show. the bundesbank has warned that the low rate of these business failures during the pandemic should not be seen as a guide for future risk. we spoke to the central banks vice president. >> what is pretty clear in all of our forecasts is that it is a strong temporary component. no one knows the long-term evolution but certainly there's higher upside risk in that something monetary policy has to take care of. that is not the issue we are
9:22 pm
discussing in this report. obviously monetary policy -- we have to make sure that the financial sector can deal with future contingencies. and one of the things with increased inflation is higher interest rates. if the increase in interest rate comes more abruptly then we have the cost of the financial sector. an abrupt increase in interest rates can also -- risk premium can change. we are making sure everybody manages interest rate risk as well. >> there's a huge debate as to whether this is a one-off or if it is permanent and how it feeds into all of this.
9:23 pm
just from a policy perspective, how are you able to -- it seems the debate is not settled. >> it is very hard for anyone to impact probability. it's a situation where there's a lot of uncertainty, from the regulatory perspective, what are the measures to take. you need higher buffers to your potential losses. that's why we are saying this is the time to take precautionary measures for a capital buffer that can fluctuate over the cycle. that is the my sugar -- the measure you have to take now. >> the president of the german central bank is going to leave, there are so much speculation about what it means, the change
9:24 pm
in the central bank. your name has even been floated. what message do you want to send about your faith in the institution to guarantee the solid nature of the institution and what it stands for? >> i think they are in good hands with the politicians. we have a very stability oriented culture. we have a very important mandate when it comes to financial stability. it is kind of the backbone for price stability and for all the policies to work as intended. >> the number one focus is inflation.
9:25 pm
this is where all the efforts go to maintain that flexibility. >> for all the climate crises to work, steer the economy to a greener production of goods and services. for that to happen you need to look at prices. >> whoever gets it, that is still very much the message. david: that was our colleague speaking with the vice president of -- this new variant was first detected in south africa. there are more than 100 cases of
9:26 pm
that variant in south africa yesterday. it has been detected in hong kong and also botswana. we're tracking the continued fallout didi said to be asking the company to come up with a plan to do list from the u.s. softbank, down about 5%. also getting earnings later today. let's look at what is happening across the broader tech space. still seeing some weakness here, 2% down for alibaba. your main underperformer so for midmorning in the asia-pacific. concerns over the variant growing, letter curves, everything else. iron or back down about 3%.
9:27 pm
coming up, the new variant sure striking fear into the asian markets. what we know and what we don't know, all ahead. 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.
9:28 pm
9:29 pm
david: not looking good out there. markets very risk off right now, when you get to the in and sovereign bonds you know what the sentiment really is. the stories were tracking from southeast asia, economist think when you look at consumer prices
9:30 pm
over in malaysia, 2.8% is the estimate for the year. as far as the air channels are concerned, and over in singapore, reporting the lowest number of immunity transmitted covid cases at just under 1300. that segues nicely into our top story today, the pandemic certainly back in focus. look at the mess the markets are in, the deal to open the border between mainland china and hong kong looking closer. and closely monitoring what is described as very different from anything we've seen before. we're joined by our senior medical reporter. let's start with what we know or
9:31 pm
what little we know about this new variant. >> there are cases being detected in southern africa. we are seeing an exponential increase in these cases. yesterday we had 10, today we heard about 100. now we are hearing up to 90% in some cities are seeing this new variant. but it is so new it does not yet have a name. it does not have detail on how much damage it is causing. we know that it is outperforming some of the variance that were there previously but we don't of that will make the virus worse and land more people in the icu and in morgues or if it might be a little less dangerous. it's something we will have to continue to watch. david: it doesn't even have a greek letter, let's put it that way. tell us more about what they're doing to close >> doors >> to other countries. the u.k. has said were going to
9:32 pm
close our borders, if you're coming in, you will have to quarantine in hotel for 14 days, which is not something that is widely done in the u.k. they don't know exactly how devastating it's going to be, so in terms of precaution, we know that the viruses circulating around the world and as you mentioned, we are seeing in here in hong kong. we've all learned whether you open or close borders, the virus is going to get worse. and they just need to figure out right away how bad this could be. david: we've had those conversations take place. >> there was great news over the last couple of days, melenchon officials came in and kicked the tires on hong kong's operations today and said it looks good, we can reopen the border. it was believed spread through the hotel to someone else.
9:33 pm
the good news is we are not have any transmission of that in the community. you could argue that it speaks to the processes in place here in hong kong. as long as we don't know how bad it's going to be, there's going to be a lot of hesitancy, i think. david: probably the busiest person in the newsroom today. >> china is said to have asked didi global to delist over security fears. also sing the countries tech retailer wants a company to come off the new york stock exchange because of the concerns about leaking sensitive data. options are under consideration. china said it violates a rule
9:34 pm
between president biden and president she last week. china's commerce ministry said the move hurts both countries and the global supply chain. australia has sent troops to the solomon islands to help curb violent protests there. local reports say a 36 hour curfew has been imposed, centered around the city's chinatown. one province has refused to recognize china, causing friction with the national government. britain and france have swapped recriminations over the deaths of at least 27 migrants after their boat capsized on wednesday
9:35 pm
in the english channel. prime minister boris johnson accused france of not doing enough to stop migrants trying to get to the u.k. from northern france. in reply, the french interior minister said britain's use of clandestine workers access an incentive to migrants. 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. david: annabelle is one of those 2700. let's talk about cryptocurrencies now. you have your crypto galaxy index slightly on the upside which i imagine it's doing most of the lifting as we speak. it is a long chart that dials down the visual extremes, and even in new york also seeing a
9:36 pm
trend line all the way back to 2016. perhaps shorter-term. reputation and trust is becoming increasingly important for cryptocurrency firms trying to win over skeptics, when over clients and traders. trading platform gemini said the industry is still on the fringe of the wild west, but in the absence of regulation, it needs to step up and be part of the conversation. this tweet a couple of days back, essentially saying is a core pillar of the company, they've always build -- believed in the importance of thoughtful and constructive dialogue. rejoined by the chief compliance officer for asia pacific.
9:37 pm
good morning, how are you? >> good morning, david, thank you for having me. david: what are you busy with recently? >> most recently we are busy with making sure that we get the licenses we are seeking in the various jurisdictions in which we operate. i am based here in singapore. i think we are seeing similar dialogues taking place in our offices in europe. we are always looking for opportunities to become regulated in the jurisdictions in which we like to do business because we think that is one of the core competencies both at gemini and that crypto exchanges ought to seek to provide, to give comfort to the users that
9:38 pm
this really is an industry that is trustworthy and that is here for the long haul. david: what rules are needed? if we turn the tables, how do you want to be regulated? >> i think users of crypto exchanges and the regulators are effectively looking for the same kind of core components of an exchange. they want an exchange that is going to allow them to trade cryptocurrencies at a fair price and at the time in which they need to trade, to make sure the cryptocurrencies are secure from hacking, from theft and other kinds of malfeasance. and they want to make sure that the personal data provided by users to make them safe and secure, i think regulators and users are all on the same page as far as that goes. i think what we are seeing is negotiation around the edges.
9:39 pm
often they are holdovers from the way traditional finances regulated. it could be things like the travel move or how a certain fee is adopted. these are all things that do have some impact on users but they are more important for the holistic regulation of the industry as a whole. david: i imagine in the same way that we've seen, for example, in your role. compliance comes at a cost for a lot of the banks. do you see that becoming a big portion of the cost base for a lot of the exchanges? >> that's a great question. the more you are required to put in controls and have the people that wrote -- that one owes
9:40 pm
controls and put money into the system set operate them. so it is a cost. our view would be that that is a cost that ought to be associated with running an exchange. i think that whether you are saying that it gets passed on to the users, i would not look at providing a secure exchange as a cost -- i would see it as that circus. david: and that is fair. let me talk more about the conversations you are directly having with regulators. the issue seems to be that innovation -- got -- guys like yourself at the front of the innovation, and regulators through no fault of their own don't really understand technology is much as you guys.
9:41 pm
what do you want regulators to keep an open mind over? >> i think that's a great point. i myself am learning new things about this industry every day. the speed of adaptation is so quick, it is difficult for anybody to keep up with it, let alone regulators who are trying to monitor hundreds of other things going on. the biggest thing to keep in mind is to keep an open dialogue with the exchanges they are regulating. i think most of the exchanges out there are trying to do the right thing. i think we are learning at the same time as the regulators, maybe we are a couple of steps ahead, but there are lots of things we can work together on. one of the challenges is trying to break away from a closed mindset that all the regulations are out there, we just need to
9:42 pm
fit crypto into the right box. i'm not sure that is the case. this really is a new technology and a new industry think we have to be open-minded about the best way to regulate it. it just means that there may be better ways of going about that that would not necessarily apply to the financial products and businesses that we already have. david: just an educated guess, in what form do you think regulation and compliance will? ? come in >> i think we will see more and more regulation on cryptocurrency. one of the big roadblocks is the fact that many regulators are treating cryptocurrencies in divergent manners and i think it will be a benefit to the
9:43 pm
industry and users themselves if these regulators can find some common ground and regulate this in a consistent manner across countries. think that will give a much more certainty to the industry moving forward. that will help with this volatility and that's what i would look forward to in 2022. david: thanks so much for coming on the show, i know you are a busy man. please send my guards to the rest of your team over in singapore. coming up, it's been a tough earnings season for big tech in china. we have some big ones coming up later today. this is bloomberg. ♪
9:44 pm
9:45 pm
david: let's look at the big movers, not all moving to the downside.
9:46 pm
6200 is the level right now. we are previewing more big earnings out of china. more likely contributing to want the losses of two of china's biggest tech companies. let's get a preview, stephen engle is here. stephen: there are some headwinds in the market today with the story ondidi and the covid variant. all these headwinds have affected the big platforms in addition to the regulatory issues. they've also had to pay a million you on to its competitor for anticompetitive behaviors. the market had kind of decided that meituan had moved beyond
9:47 pm
that because it had fallen from its peak, down to 57%. since then it is up 40%. so it has been a bit of a relief rally. wider losses are expected when they report after the markets closed today. in addition to that fine, which i've seen various reports, some say it will be booked in this completed third-quarter or in the current fourth quarter. is not going to move the dial necessarily on profitability. but the loss will widen because of the extra spending they are doing. more than doubling from the previous quarters. they are not out of the woods on regulatory issues either. they are still spending.
9:48 pm
bloomberg intelligence thinks it could incur losses through out all of next year. they initiated a 10 billion you want spending spree to modernize farm operations around china. also subsidizing some of the poor performers. they are going to be spending a lot more. they are getting -- beginning to see revenue boosts, definitely. there are number of active buyers at surpassed alibaba. an increase expected in buyers. so they are growing their business but again the costs are incurring and they have to fulfill those pledges to build out a more modern agricultural
9:49 pm
infrastructure. david: we are talking inflation here, talking about price pressures and how they could be affecting your prices. that is next. this is bloomberg. ♪
9:50 pm
9:51 pm
david: welcome back. you are watching "bloomberg markets: asia." some of your top stories today, the dutch government reporting the volume of world trade fell by .8% in september. a reversal from the pickup we saw back in august. the bloomberg trade tracker is showing trade volumes in october at the world's busiest ports all declining, signaling continued snags for global trade and when you look at the latest, the company considered to be raising
9:52 pm
funds for private investors ahead of a potential ipo. embarq has learned the company will use it for expansion amid a boom in the logistic services. terminal users can read more all about this in our newsletter on your bloomberg terminal. we're talking about food inflation, no better way to illustrate what is happening then by looking at the cost when you're putting together a thanksgiving dinner. the average meal is 14% more expensive compared to 2020. the turkey itself up 24%.
9:53 pm
cranberries, 11% more. rising prices are affecting your meals. inflation is going to remain fairly high in the coming months , you have supply chain companies -- this exclusive interview with our tom mackenzie. have a look. >> neutral alcohol is plateauing today but we've seen price increases earlier than this. i think it's going to last for the coming year for sure. david: if you're having one
9:54 pm
right now, have another one, that is if you are not driving. annabelle is here. >> chipmakers macron and united electronics have several -- settled a lawsuit over intellectual property. an undisclosed amount to settle all claims between the companies globally. one was accused of stealing and liking -- and leaking to a chinese partner. micron said it will continue to seek full restitution in a separate civil lawsuit. blackstone has reportedly begun direct discussions over its crown resorts bid with its largest shareholder. the australian newspaper says he is late to make any public commentary about the -- has yet to make any public commentary about the offer. amazon is trying to delay a takeover with a fresh legal challenge.
9:55 pm
amazon alleges 1.5 billion dollars was diverted away from -- including to a company owned by one of its founders. it has written to india's finance minister and regulators demanding an investigation. that issue bloomberg business flash. david: the markets don't seem to have a base, we are looking at 1.3 dispense -- 1.3% as we speak. very red across these screens. when you get a day when the dollar is up and the yen is up against the dollar, it is a risk off session. the excuse or's pointing up so probably when you get markets like thailand up and running in a couple of minutes and india in the next hour, don't be surprised if you see red across the screen. more about that in the next
9:56 pm
hour, with earnings over what has been a roller coaster of a week. there is plenty more ahead. ♪
9:57 pm
every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.
9:58 pm
9:59 pm
david: just under a minute until 11:00 in the morning here in hong kong. here are the top stories this hour. investors flocking to safe havens right now among growing concern over the new variant detected in south africa. travel stocks taking a massive hit across the region. chinese tech coming under pressure after didi urged to
10:00 pm
delist from the u.s. and we speak exclusively about prices and what they're saying about the supply and demand situation. that conversation will come up and about 40 minutes from now. 1.3% is the damage across the equity market. commodities taking quite a big hit, led by iron ore, 4%. green on your screen, airlines down across the board, this is the bloomberg index and the moves were seeing today. down by about 10% on china airlines.
10:01 pm
taiwan, 9.8% on that one. we talked about the rand, in a couple of hours we will get a further kick here. when london wakes up that's when you will likely see more of the action come into play here. as you pointed out, a quick look at the havens, vix futures up, and gold .5%. let's talk about this new variant that was first spotted in south africa to be the world health organization is closely monitoring it saying it is different to anything they've actually seen before. it was first detected in south africa but a couple of cases have been found in people in quarantine here in hong kong.
10:02 pm
let's start with that, we have seen these important cases here in hong kong. >> it has been found in south africa in they are testing for it in hong kong as well. one person was a traveler from south africa who was carrying the virus and they believe that person actually infected another person who was staying in the same hotel quarantine facility somehow through the air venting system, open doors, and so there are currently two cases in hong kong, both detected at this point. david: let's talk about b11529. >> we know it doesn't have a formal name yet so keep that number in your mind. we know it is spreading at an exponential rate in south africa. yesterday we knew about 10 cases, today 100 cases. there are reports that in some areas up to 90% of cases in some
10:03 pm
regions in the south of africa are seeing this particular variant. what we don't know is exactly how dangerous this particular variant is going to be. we know the really terrible viruses, ebola, for example, they clear -- kill their host so quickly that the virus actually cannot last. so there is speculation virus is not out there trying to kill all of its hosts. we do know this particular variant is out competing the other variant so we need to figure out just how dangerous it is. david: when you say out competing, in what sense? >> because in some areas we are seeing more cases of it taking over. that means perhaps if you're going to be infected in south africa, perhaps you're going to get this new variant and that will win out over delta, for example. we know how dangerous delta is, it's pretty bad. what we don't know is how
10:04 pm
dangerous the new variant is. david: we do have to emphasize it is early days and the sample size we are working with this tiny. there are travel restrictions in place already. >> they are closing down travel or regions from south africa. people after quarantine in a hotel which is not something that is always done in the u.k.. they are taking it very seriously. europe is in the middle of a pretty severe outbreak right now. hospitals are being overwhelmed. if they start seeing more infections coming from this new variant which we have seen in vaccinated people, so we know the vaccines are not 100% effective against it. they are just being very cautious. david: let's bring in our guest to talk us through the markets.
10:05 pm
james, let's get your reaction to the news. as far as the virus is concerned in europe, we have this new one that to be honest, we really don't know a lot about at this point. how would you approach this from an equity perspective? james: thanks for having me on the program. as you indicated, there is a lot we don't know. the critical variable from an economic growth in markets perspective is the mortality rate associated with this new variant. we have several examples inclusive a delta where we have high levels of transmission. it has a significantly lower impact on lockdowns and mobility restrictions and the like then other potential alternative scenarios. that is a critical variable that we don't know and we will not know for a period of time. the key thing were watching from
10:06 pm
a macroeconomics perspective is the effect on growth and inflation. the key thing to watch is the composition of -- one of the primary drivers in whether or not it is transitory is the composition of spending. the large majority of spending has been goods related. we have seen almost no pickup in services related spending and we have seen disinflationary trends. as we start to reopen economies and normalize we would expect to see a significant shift away from goods and toward services. it results in an argument that it is transitory in nature. the new variant will very much be part of the conversation. david: where do we start for 2022? james: i think we will see a pivot in growth away from
10:07 pm
developed and toward emerging markets. we've seen effectively a complete recovery of growth across emerging markets. where incrementally getting more positive on a number of emerging markets. inclusive is above china plus riesling. that is an expectation versus reality conversation. we've seen expectations come down significantly. msci china was trading at 20 times over earnings and now it is 15. the most recent macroeconomic data coming from china points to a manufacturing space. we are seeing clear signs of the power outages and constraints that were impacting growth over the last two months are starting to abate and we think it is right to start to become more positive on china. we can talk more about the trends we are seeing in that space as well as some of the other china markets.
10:08 pm
david: talk to us about taiwan. james: we recently completed a study to look at management commentary around revenue growth, earnings growth and critical supply chain constraints. the country and sector that came out was positive off the back of that analysis was really the taiwan tech space. we do see signs of strength across the board. we are positive on positioning in the space because it will be at key source for investors going forward. we do remain positive on reopening trades. indonesia and thailand are good examples of that. david: i was going to ask about southeast asia. and if you could parse southeast asia for us. james: it's a very good
10:09 pm
question. from an index perspective, is critical to recognize that with a lot of our indexes, and is true on of global basis, it's rotational price within ashtrays within the index that we have to be most focused on. rotational trades have continue to be excited about industrials and increasingly the energy space. we published a piece of analysis indicating that for oil to just normalize from evaluation perspective relative to other asset classes, you're looking at a price per barrel of $115, higher than we are today. we do see structural upward pricing pressure after move to a green economy. is critical to recognize that as we make these transitions, we
10:10 pm
are seeing a significant reduction in supply from traditional energy sources that is occurring faster than the increases we are seeing on the back of renewables. by definition if you see significant leak greater reduction in supply, if you see structural pressures off the back of the green energy move. david: his work noted that oil related equities have really just left everything behind. perhaps we can see a little more room for upside their. transitory or not, it looks like the fed and friends are going to move rates. in the equity indices that you cover, where do i need to pay specific attention because the dollar seems to be getting the momentum. james: it's a great question.
10:11 pm
the obvious answer would be ultimately em assets trade in relation to the dollar. it would be harder to see incremental asset allocation to emerging markets. we are dealing with the dollar that is priced in a lot of gains already. up to three rate hikes already priced into yield curves in markets in the u.s.. the markets have digested a large majority of that move. david: james sullivan, have a great weekend ahead. thanks for making time for us. let's get to the first word news with annabelle. >> a group of u.s. lawmakers have arrived in taiwan for surprise one-day visit with plans to meet the islands top leaders. five members of the house of representatives, all democrats, are in taipei.
10:12 pm
the trip is expected to add to tensions between washington and beijing and comes just two weeks after group of republican lawmakers visited the island. china is said to have asked didi global to delist over security fears. our sources say tech regulators want them to take the company off the new york stock exchange because of concerns about leaking sensitive data. china has slammed the u.s. decision to sanction several firms saying the move violates an understanding between president she and biden during their meeting last week. 12 chinese companies were added on wednesday to the list over foreign policy concerns.
10:13 pm
goldman sachs economists say they expect the fed to tighten policy faster than expected next year. in a note to clients, goldman forecast the central bank will double the pace it's been drawing its asset purchase program to $30 billion a month from january. goldman expects the fed to start raising rates in june next year with more hikes in september and december. 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. i'm annabelle droulers. this is bloomberg. david: our exclusive chat later this hour, and we will talk about this bloomberg scoop, didi delisting, talk about that possibility. we will look at the potential
10:14 pm
fallout, just ahead. this is bloomberg. ♪
10:15 pm
10:16 pm
david: welcome back to the show. let's talk about this bloomberg scoop. you have chinese regulators asking, talking, guiding, suggesting, maybe. didi to devise a plan to deal list, the nature of the request likely to revive some concerns about tensions with the giant tech industry. our text editor is here with the story. for our viewers just joining us in learning about this for the first time, take us through the basics? . what do we know? >> this is something that has been percolating for a while,
10:17 pm
ever since didi went public against the wishes of beijing's regulators. they are asking is management to come up with their own plan on how to delist from the u.s. again, we don't really have a lot of details and there are still many options on the table. but it could come in the form of strata privatization or it could involve a second deal before the listing is taken up. david: do we have any idea on potential timing? >> that is still to be decided. the probe has gone on for five months now. so i'm sure that regulators are looking to hasten this plan. david: thank you so much, our
10:18 pm
asian tech editor with the little we know, but the headline speaks for itself. just ahead, we are talking inflation. rbnz telling us it will keep removing stimulus to lean against domestic price pressures. we will hear from the assistant governor, next. ♪ this is bloomberg.
10:19 pm
10:20 pm
>> nobody knows how long the temporary effect will be and certainly there is higher upside growth. that something monetary policy has to take care of. david: you just heard from the vice president of germany's central bank on monetary policy
10:21 pm
in terms of inflation. it continues to haunt mobile policymakers. the are begin d says it has been keeping -- rbnz says it has been keeping price pressures under control. the country moves out of covid with a relatively strong economy. >> we've really got to look at the different elements of inflation, certainly there are a lot of things happening at the moment. particularly the supply side disruptions, supply chain disruptions that are causing these crisis levels. these are proving more prolonged than we originally anticipated, but we do see those dissipating through time so our forecast is
10:22 pm
for a little under 6% and coming back down through the second half of next year. some of these trends are working their way up. we also see inflation pressures building as well locally. it's really those persistent inflation pressures that we really feel we need to lean against and we are in a little different position from the rest of the world because we started covid at a different starting point. we had a strong economy going into covid and we are moving out of covid with a strong economy as well. >> looking at some of the global forces here, the federal reserve has made it very clear they are starting their taper and maybe in favor of speeding up the
10:23 pm
taper. on that realization, has that sunk into? investors we've seen the dollar strength and, possibly one of the reasons why the kiwi has wreaked -- weakened recently and u.s. bond yields are rising. as that continues, maybe a more hawkish fed will speed up the rate hikes. could that impact bond yields an influence the policy steps you will take? >> absolutely, and that's the environment that we need to navigate each time to make our decisions about interest rates. absolutely, we are is smaller economy. the global environment, a number of channels and the uncertainty confidence channel. whatever the fed does will
10:24 pm
influence global yields, global interest rates. the liquidity of global markets. so we can policy -- possibly see our monetary conditions tightening through those channels. there will be impacts on the exchange rate as well. so we will just need to feed those through each time we get together and do what's right for the new zealand economy with a laser focus on what our mandate is and what we are seeking to achieve. david: the assistant governor their of the rbnz. that's get a quick check of that latest business flash headlines. >> macron and united microelectronics have settled a lawsuit over intellectual properties. that will make a one-time payment of an undisclosed amount to settle all competing claims. it was -- micron says it will continue to seek full
10:25 pm
restitution in a separate civil lawsuit. amazon is trying to delay the plan takeover of india's future retail company with a fresh legal challenge. amazon alleges $1.5 billion was diverted away from future retail including to a company owned by one of its founders. it is demanding an investigation. it says the allegations are baseless. kkr and cbc are said to be considering a joint did for telecom italia. kkr is already pursuing a solo offer that has been described as too low by shareholders. now we're hearing kkr could team up to share the burden of what would be europe's biggest ever leveraged buyout. the ceo rc company board to take action on the kkr bed, offering to resign to help get across the line. that's the latest is this flash.
10:26 pm
david: it's the lunch break on mainland china. materials a little underweight, down to several other factors. pretty much read across most of these sector groups. the 50 day moving average, we didn't close above that twice. we are a little above that. shanghai is canceling some flights amid the covid impact. we did see three cases in shanghai and neighboring cities,
10:27 pm
so we will keep on top of this story. keep it here. this is bloomberg. ♪
10:28 pm
10:29 pm
>> it is 11:29 in hong kong and singapore. 10: between 9:00 p.m. in new york. i have your first word headlines. a new covid-19 variant first discovered in southern africa is raising fears about mutations with u.k., adding six average and -- african countries to its resume. meanwhile, hong kong is concerned that it has found two cases of the new variants.
10:30 pm
the european union is set to oppose -- impose a nine-month timeline for travelers in the block. it will recommend all member countries reopen as of january 10, giving priority to vaccinated travelers. eu governors are pushing for the block to smooth out internal differences. china and the u.s. are reported the making plans for a meeting between the top defense officials. the two sides are aiming to hold talks by phone or online by december 25. if the meeting happens, the secretary of defense will lead talks in the u.s. while china will be represented by the minister of defense and the senior vice chairman of the central military commission. china's foreign ministry has warned germany's foreign minister not to meddle in its internal affairs. it is going for them to respect the one china policy with regards to taiwan.
10:31 pm
it came after the chancellor in waiting unveiled an agenda that includes surprise only strong language on china over human rights. 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. this is bloomberg. david: thank you, welcome back to the show. these markets are not in good form. you can see the nikkei 225 coming out of the lunch break here. 2.7%. let's have a look at the airlines. the sector taking the brunt of the hit on the back of this new variant that was first discovered in south africa. you're getting two important cases here inching -- in hong kong.
10:32 pm
although they did to some clusters over on the mainland here. we are also looking at dede and the latest, softbank being one of them. china is asking the country to do list or come up with a plan that would eventually see them delist out of the u.s.. we don't know the timetable. all right. let's turn our attention to what is happening right now. you have australian troops reportedly firing warning shots in the capital to disperse protesters, targeting the city's chinatown. this is after anti-china protests escalated. there is a 36 hour lockdown in the city. paul has the details for us. let's take a half a step back. what caused the riots to begin with?
10:33 pm
>> if you listen to the prime minister, he says this is all about this decision back in 2019 to switch official recognition from taiwan to china. this is all being stoked and encouraged by what he calls foreign powers. it is a bit more nuanced than that. there are too many islands in the solomon islands. then there is the island where most of the population lives. they have complained for many years about being unfairly deprived of government funding to the point that there was a five-year conflict between the two islands. between 98 and 2003. this has been bubbling for a long time. they have that decision to switch recognition from taiwan to china because they are benefiting all from tight -- from chinese support.
10:34 pm
you're seeing a lot of smoke rising, chinatown is a very visible target. now we have a lockdown declared. >> as far as any diplomatic risk for australia in terms of them sending troops, where are we in that conversation? >> this is very loaded. there has been an agreement in place between the solomon islands and australia since 2017. here we are. we saw it coming. there is this undercurrent of china and taiwan. this is why scott morrison explicitly stated that it is not australia's intention to be interfering in the internal affairs in any way. that is for them to resolve. even though australia and china are having their own disagreements.
10:35 pm
we have had some reaction from china as well. china condemning this virus and saying it is futile for anyone to disrupt relations between china. >> thank you, paul. just ahead, we are speaking with india eggs aluminum reduce or. we are going to hear from ago. if you have any questions for him, you send me an idea. that is coming up next, this is bloomberg. ♪
10:36 pm
10:37 pm
>> look back to the show. blackstone is reportedly beginning direct discussions here. the australian newspaper says james packard has yet to make any, to about the $6 billion offer. they have also not responded to the bid which is blackstone's third. the north east asia chief says chinese demand will be very positive next year but there is
10:38 pm
demand for premium luxury cars that remained very high and robust in china. strong buying interest for models including a mercedes sg -- as just -- as class g class. some of the biggest investors have added two of the sticks. shares plunged by as much as 41%. they bought more shares on tuesday and wednesday. it is still below its issue price of 2100 rupees. a statement on atm now. the company is set for another bout of scrutiny.
10:39 pm
this report comes in the wake of this record-breaking ipo and the tumultuous week. let's bring in our eckley -- equities reporter to take us through that preview in terms of that earnings report. what can we glean at this point? >> expectations are not here upon the debut. the key event will be this saturday. the key focus would be what segments are making money for the company.
10:40 pm
they are smaller compared to all of this. they would want to know how these segments are performing and how many new customers they have over the last six months. >> all right. i guess the hope in terms of that valuation -- is there anything from this specific report if you will that might be able to come close to justifying that initial valuation mark quick the valuation is a big question. -- >> the valuation is the big
10:41 pm
question. concern is high. you hear about the path to profitability. you have a lot of players. unless they have come out with something to leverage their large customer base, -- david: yes. they took whatever money they didn't leave on the table. let's have a look at where you are in terms of the equity store
10:42 pm
today. we are looking at either your macro picture or the sorry state of these risk assets given this new variant. the knee-jerk reaction is we basically have to see. on a day when you get the yen against the dollar and against everything else in the red, you really get a sense of risk sentiment. on the virus front, the shanghai airport canceling 30% of flights amid a covid flare. hong kong listed stocks of chinese airlines down. 18 minutes to the lunch break here in hong kong. on that note, there is putty more ahead. keep it here, you are watching bloomberg. ♪
10:43 pm
10:44 pm
>> welcome back to the show. let's focus on this global supply chain crisis. the ceo says the dragon terms of raw materials and the congestion we are seeing at these ports is liquid to resolve by mid-2022. we spoke with the ceo and we were told the technology is working to make logistics more efficient. have a look. >> there is attention on raw materials, on congestion, the
10:45 pm
logistics. there is clearly an inflationary trend. this is not the first time in this business -- the solar business in particular that we have had this phenomenon. we have had it in the past. it will resolve in about 12 months. this will probably drag until mid 2022 but we don't expect anymore tensions. technology is actually working the other way around so it is pushing down costs and making technologies more and more efficient. the plan is to continue probably for the next 10 years. it is not the reversing of a trend. >> it means there will probably be people suffering for the next 12 months but large companies like us, we just push.
10:46 pm
>> give us a sense of your expansion plan. how much of that is organic? how much is you going out and doing m&a? >> this money we set aside is organic growth. it is networks that are roughly 45%. the other 45% renewables. the rest are on other technologies. most of that is organic. we are talking about opportunistic deals. when i say midsize, i mean in the range of five or 10 digits, no more. david: it that sam of the day went indian markets are just coming online. what we are seeing across the board is extending losses in
10:47 pm
equity markets. let's have a look at these shares. trading like an off going. 4% yet again today. we have not had a normal day for shares today. we are down about 4% at the open. let's stay in india and talk about aluminum. as you can see, 37% up on the london price here. it is producing half of the country's aluminum. good morning, thank you for making the time for us this morning. i imagine this year has been very good for you. how is business? >> thank you.
10:48 pm
david: has these upward price pressures you are seeing in the product itself, how is that affecting your five year plan in terms of the capex that you want to put through? >> ethic we have sectors that we are concerned about.
10:49 pm
-- i think we have sectors we are concerned about. i think this is going to affect china. david: understood. >> i wanted to ask you a little bit more about that because we had a conversation with the head of strategy at ibm. it is in a structural deficit is what he is saying, that is what we are going to see in terms of the price average for 2022. do you subscribe to that view? are we in a structural deficit toward this battle? >> i would not say like that.
10:50 pm
-- say it like that. david: we can see this as a bellwether for global demand. can you tell us a little bit more about demand and where you are seeing demand come from? whether that is geography or sectors? [inaudible]
10:51 pm
this has to do with the climate. that will be a shock to the economy. from the groveport of you, we
10:52 pm
are very focused on india. david: understood, 15% growth. i hope you're all well. as we were having a conversation, the damage is at about 4%. it has really been a roller coaster of a week. there we go in terms of when they listed, we are still down about a fifth. south korea and the u.s. are vying for your hearts and while it's in terms of pop culture. think of hits like squid game or parasite. alex webb explains what is next. have a look. >> south korea is having a moment. between the netflix show squid game, bts and the oscar-winning
10:53 pm
film parasite, its culture seems to suddenly be everywhere. i am alex webb and this is where i tried to get under the skin of the way the business world is fighting for your attention. squid game is a massive hit for netflix. it got 111 million views in its first month alone. parasite one best film at the oscars. there is bts and the massively popular boy bands. we often talk about korea's soft power. hard power is where you force countries to do what you want. soft power is more subtle, a way of demonstrating the benefits of your society, your cultural values and your political values. back in 1990 when this was coined. he wrote that if a nation's
10:54 pm
culture and ideology are attractive, others will more willingly follow. it is about showing how your social and democratic values are appealing and hoping that will co-opt others into supporting the goals that you have. for example, the u.s., you have levi jeans, coca-cola, hollywood. those are all things that might make people say the u.s. is pretty good, i want to be like that but when you think about squid game or parasite, they are very bleak temperatures of society. in squid game, you have a chance to win $40 million and if you don't, you have your organs harvested. in parasite, it shows a family on the poor side of town going to do anything to clear anything
10:55 pm
out of their path. the content industry is one of the country's biggest exports. u.s. exports helped sell u.s. values. for korea, the exports themselves may be enough. the korean system of democracy is sort of modeled on the u.s. one. but if it can export samsung electronics or korean cars, that might be enough. the cultural values might lie in the economic sector. >> soft power. a market check, we are pushing closer to percent in terms of these declined. just looking at how futures are trading in europe. it looks like the gap is lower for friday. it will be larger than the one you see in my tv when i decided
10:56 pm
to change my passions and pursue my dreams. let's have a look at the havens here. the dollar-yen and then as inspected, gold is on the way up. 8/10 of 1%. a big jump in futures. let's look at the south korean won. that is where we did see the new variant. a lot of this may have to do with the fact that that is where you to get the variant. you get these travel restrictions coming into play. let's wait for london to wake up to make sense of where you are with the rand and the currency. you see red on your screen, black within that read, that means in new zealand's case that
10:57 pm
that is an outlier as far as movement is concerned. the 10 year is down 10 basis point. that is it for this edition of bloomberg markets asia. thank you for joining, i hope y'all have a good weekend, i will see you on monday. you are watching bloomberg. ♪
10:58 pm
moving is a handful. no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at
10:59 pm
11:00 pm
>> the u.s. announces plans to release 50 million barrels of crude from his reserves, and customer several other nations in an unprecedented attempt. a record shattered as a goes into freefall as they go to intensify the camping for low interest rate. and new lockdown measures in europe come into force. we look at how the economy is rebounding faster than expected.


info Stream Only

Uploaded by TV Archive on