Skip to main content

tv   Bloomberg Daybreak Asia  Bloomberg  December 2, 2021 6:00pm-8:00pm EST

6:00 pm
haidi: good morning. we are counting down to asia's major market opens. shery: welcome to daybreak asia. asian stocks set to open off the back of u.s. gains. oil gains with opec-plus adding an escape because to its hikes. a tumble in a new york debut after a record-setting spac
6:01 pm
deal. the biden administration inches closer to booting a company off exchanges. plus, the former new zealand prime minister talks about the preparations for the next pandemic. haidi: the pandemic and the omicron variant is top of mind for the market. let's look at the start of trading here in sydney. we are reversing some of the losses that we saw thursday. new zealand stocks extending a second day of gains. a mixed future across the rest of asia. we saw dip buyers picking up some of those gains and driving a robust recovery on wall street. also sentiment when it comes to oil when the opec-plus agreement
6:02 pm
goes through with the supply increased also escape clause giving oil traders and energy traders -- on the session today. shery: take a look at oil prices because they are opening higher. $67 per barrel in asian session. we are seeing u.s. futures continuing to gain ground after stocks rose in new york reversing the today slide. we had risk rallying the best day since mid-october. that's what bond futures are doing at the moment. we continue to get several fed officials supporting jay powell's call to speed up tapering. omicron variant is hanging in the air. a study showing the risk of reinfection from the variate is three times higher than for any previous strain. it comes as finland and others
6:03 pm
detect their first cases of the we tatian. in the u.s., the -- new york saw the most covid cases since january. many hospitals are reaching capacity. how prepared are we for this new variant? >> the situation in the u.s. is a little troubling because in some regions, hospitals are already dealing with rising numbers of patients with covid from the delta wave. we spoke to hospitals in michigan, massachusetts, and elsewhere where there is real concern that if this variant drives a new wave, it could be a bad situation. we saw the most cases of covid in new york reported since january. the jury is still out on how much omicron may or may not drive another wave. the scientists are still trying
6:04 pm
to tangle transmissibility and how it interacts with vaccines and immunity. it made health officials wary of what might be coming. haidi: one stock we're watching csl. the australian biotech firm said to be in talks with a deal to buy a swiss drugmaker. we are seeing some downside for a second straight session for csl which is also the manufacturer of the astrazeneca vaccine here. how does this dovetail with what we hear china is trying to do which is to make their companies come home? >> it is more of a confluence of headwinds against the chinese companies that are listed in the united states.
6:05 pm
yesterday, the story was that china securities regulatory commission was looking at banning those companies that used a structure which is almost all the big tech companies like alibaba etc. the sec is saying they had cohiba their plan to put up -- hit they have come up with their plan to put into place what congress voted for. it had bipartisan support requiring for companies to open their books if they are requested to do so. it has been a requirement of the sec since 2002 and nearly all of the participants in the united states on the listed exchanges have complied according to the chairman. there are two jurisdictions have not complied. china and hong kong. we have the quote where he essentially says all of these
6:06 pm
companies must abide by these rules, but we have seen over the last few years as we requested these kinds of actions by foreign companies listed on the exchanges. chinese companies and hong kong companies have not done so. what is the latest announcement? these new rules are fulfilling the mandate coming from congress. it will layout how the regulator would justify the companies that would potentially be up for delisting as well as procedures to kick them off the exchange. another step in this wife rotation between china and the united states. shery: stephen engle in hong kong. let's get to vonnie quinn. vonnie: the white house wants to rally allied countries to crack down on technologies.
6:07 pm
during a summit next week, the by administration will announce an initiative to prevent the spread of tech used to track and control citizens. officials declined to name which countries will join initiative. kaiser group has yet to pay interest due wednesday on a bond. separately, a deadline for creditors to swap a separate note during december 7 has expired. the developer fails to meet deadlines for two other notes last month. antitrust officials have sued a proposed takeover saying the deal would harm competition in the semiconductor market. the sec says it acted to prevent a chip conglomerate. it is owned by softbank group and licenses technology hundreds of companies.
6:08 pm
singapore is facing dramatic volatility and wholesale power prices as the nation grapples with the global energy crisis. wholesale electricity prices soared for falling again. traders say a drop in indonesian gas supply has caused tipping at some singapore powerplants while others have shut for unplanned finance. -- maintenance. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead, the former minister -- prime minister of new zealand is head of a panel for pandemic print -- preparedness. opec-plus surprises traders by sticking to its plan to hike supplies and escape clause. we take a look at the price impact.
6:09 pm
this is bloomberg. ♪
6:10 pm
6:11 pm
shery: we are awaiting another spacex launch. we're taking you live to cape canaveral space force station. this will be replacing ash lysing another batch of satellites into orbit above earth. this will be the 32nd -- dedicated to taking satellites into orbit for the starling program. haidi: that site never fails to impress. they will be launching this 48 starling satellite from falcon nine rocket. it is scheduled to blast off at
6:12 pm
six: 12:00 p.m.. -- 6:12 p.m.. this comes at a pivotal time when it comes to spacex. depending on what elon musk says, it's either the most valuable private company in the u.s. or on the verge of bankruptcy. shery: we heard from him about a week ago talking about an internal engine production crisis. we are watching this latest development very carefully as we await the launch. 5, 4, 3, 2, 1, ignition. lift off.
6:13 pm
>> telemetry. >> we are about one minute into lift off. falcon nine has successfully lifted off from cape canaveral. in just a few seconds, we're expecting to call for max q when it experience is the highest amount of aerodynamic pressures. >> max q. >> there was the callout.
6:14 pm
now that we have gone past the time of highest pressures, and about a minute we have main engine cut off also referred to as meco, followed by separation then second engine start. main engine cut off is when all nine engines on the first stage was shut down to slow it down in stage four separation. then the first and second will separate from one another. the first stage to make itself back to earth for landing -- shery: you are looking at live pictures of falcon nine. a workhorse for spacex as it launches from cape canaveral. we will get back to this as we see the landing. this is a two-stage. the first is the booster, then we will see it separate and return to earth landing upright either on the landing pad or out at sea.
6:15 pm
we will continue to keep an eye on this spacex falcon nine launch. in the meantime, take a look at oil prices gaining ground for a second session despite opec-plus deciding to stick to the output hike that was planned earlier. we did see them say they will quickly adjust output plans if needed. let's bring in the director of energy capital markets at nasdaq. great to have you with us. let's talk about what happened today with oil prices. what is going on with the volatility? >> the market is really concerned about one main thing. you have technical factors related to the dollar and the variant. the market understands fundamentally that on the one hand, you have policymakers and
6:16 pm
governments trying to -- their economies. if investors don't want to invest anymore because they are uncertain about the long-term demand. the same time, people are driving and the economy is strong. the market is likely to face volatility because it knows over time as we go through the energy transition, it's not sure how to qualify risks related to the short-term issues now with covid. shery: we are getting breaking news the new york governor saying we have identified five cases of the omicron variant in new york. the new york city merrier is also speaking -- mayor is speaking right now.
6:17 pm
he is saying we have to assume that there is community spread in new york. this as the governor is saying we have identified five omicron cases. right now, you're watching new york city mayor bill de blasio talking about potential community spread happening across new york. what does this do for the demand picture for oil if we have another variant? >> it increases the uncertainty level. we saw similar stories back in august of the delta variant. we are seeing that population around the world are resistant now to further lockdowns. as these headlines continue and they probably will, it will
6:18 pm
really be more of an impact on jet fuel. people will be reluctant to fly. people are very much wanting to get out of the house and get on with their lives. also when you look at the impact on demand, you haven't fully recovered yet from tobit anyway. a lot of the losses that we have seen from demand have now been taken over by gas to oil switching. higher natural gas prices in new york and asia and other places. have been using oil for power instead of natural gas. that upset a fair chunk of the jet fuel demand we have lost. i am in the looking for this as a jet fuel demand story.
6:19 pm
haidi: optionality seems to be the word of the week. does the escape clause give opec-plus more or less cried ability? >> i think it gives them more credibility and they handled the situation pretty well. last month and the month before, market adjustments were saying maybe opec should be adding more supply to the market and opec was the one saying we aren't out of the was yet with regards to covid. i think that it shows enhanced credibility and this gives them an optionality to say we're going to see what happens with our market participants and our buyers. if opec cuts production today, that would have the opposite effect.
6:20 pm
that would have spooked investors who might have said what does opec see on the demand side that we don't know about? i think they did the right thing and we see the market reacted well to that. haidi: given the covid containment story in china, do we see demand remaining stable and that market? >> i think so, yes. the russian prime minister was talking about the impact so there has been curtailment in europe. we expect that to continue as well. haidi: let's get you back to spacex as we see the falcon nine just about 45 seconds away from
6:21 pm
the landing of the booster. it take a look at the two-stage process, the booster as well as the separation, it really is what people have said it's an incredible feat of engineering. this is what we are watching at the moment as we continue to watch spacex falcon nine launching startling satellites. this comes at a crucial time for spacex as we continue to hear sometimes conflicting sentiment from elon musk either talking about the potential -- financial stressors that it is coming under or a potential future ipo for spacex. it is fascinating to me that we have seen so many of these that this iraqi list feat of engineering and achievement has seemed pretty normal to see these pictures.
6:22 pm
shery: we continue to watch the latest development on the landing of the falcon nine spacex. coming out of a challenging and interesting time when it comes to the elon musk empire. this is an interesting development in the space race, especially as we are now seeing spacex providing the interim internet services. to consumers who have signed up for the testing program. we will continue to watch the development on the space front. in the meantime, bondholders looked to have rejected the chinese offer to swap notes maturing next week raising more uncertainty over its future. what is the latest with kaisa regarding interest payments and coupons? >> the midnight deadline hong kong for a $400 million note
6:23 pm
that matures on tuesday to agree to a debt swap that would push back the majority -- maturity 18 months. the swap did not get the necessary 95% approval. we are waiting for official word from the company as to where that stands. haidi: what are the implications if this doesn't work out? >> kaisa was the first mainline developer to default back in 2015. the company has already not made payments on to interest coupons asked month. the 30 day grace. -- grace period ends on december 11 and 12. the bond maturity does not have a grace period so it has to have an agreement with the bondholders to extend that. this vote not go through last
6:24 pm
night. there's probably going to be some hairy and expensive negotiations into next week to see where we go from here. haidi: there seems to be a calling in the markets when it comes to expectations that the risk will be -- what is the outlook for the broader property sector customer -- ? >> to analysts are saying the sector is saying it will last until at least 2022 then we will see some easing from steps that the government is taking to provide some easing around the edges. not extensive because they still want to tamp down on speculation in the property sector. they want to have the developers deleverage. they are expecting easing and
6:25 pm
help for the sector, but it may be months ahead. shery: what form could that help take? >> as far as having the banks provide more lending to the developers, moody said yesterday that in the third quarter, inc. loan growth to developers was the lowest in a decade. there has been obvious tamp down from the banking side to provide financing to developers because their concern is to whether or not they will get paid as well. not to mention the defaults we have seen in recent months. haidi: as we continue to monitor the property sector and the fate of kaisa, we are hearing that the offer to extend 6.5% senior notes that is just crossing the bloomberg now. we will continue to watch that as the details get to us. then, we are seeing the
6:26 pm
announcement of a lapse of the exchange -- related to the outstanding 6.5% senior note due as well. our china credit editor is there with us. that's get a quick check of the latest business flash headlines. priced shares in the hong kong listing of its twitter like product. chinese regulators continue their tightening of oversight on local firms traded overseas. the u.s. is increasingly scrutinizing listing chinese companies. boeing shares rose after a civil aviation body lifted an obstacle to the 737. china was the first country to ground the aircraft in 2019 following two crashes and it has
6:27 pm
held off on improving its return. southeast asia's ride-hailing giant plunged in its debut. it has yet to prove it can provide profitability. the company says it offers a broad range of services. >> i think a critical part of the trajectory over the last two years has been strategy that has enabled us to be very resilient to the covid challenges with -- we are very confident that we will continue to serve the needs of southeast asians and our partners despite whatever challenges covid continues to throw at us. shery: we have breaking news at the moment. we are hearing from the dow jones that u.s. travel restrictions will take effect on december 6 at 12:01 a.m.
6:28 pm
eastern. we were expecting to see vaccination and testing rules implemented given the
6:29 pm
6:30 pm
>>kaisa investors have rejected a swap for bonds. they have already flagged that if this is rejected, there is no guarantee it will be able to meet repayment obligations and that is what they are reiterating now. they're exploring feasible options. there have been solutions including asset disposal but that can't happen quickly enough. it says the exchange offer will
6:31 pm
not proceed. much hope was hinging on the offer to exchange. we have seen the warning that if they are potentially not able to get that done, that it would not be able to repay bonds and would consider intentionally going forward a debt restructuring. kaisa is china's third-largest issuer of dollar bonds. it is saying that that lifeline has been rejected with swap offer $400 million of bonds that were due december rejected by investors. we are also tracking the fallout when it comes to the global supply chain crunch. these are our top stories. kirkland shares tumbled after they missed estimates due to supply chain issues.
6:32 pm
on the other side of the coin, a company is giving each of its employees a $1000 bonus on the back of the shipping giants record-breaking performance after supply chain's ructions freight rates several times over. tesla said to be having trouble securing solar panels. the company is not expecting to get more solar panels until next month. shery: speaking of shortages, if it's any indication of supply chain worries, the fed's mention of the word shortages edged lower for a second report. the fed notes that distribution systems are strained and demand in the coming months will remain stronger than the supply chain strus ability to meet. bloomberg terminal users can read more about the stories in our newsletter. talking about the fed, the vice
6:33 pm
chair has joined the chorus of top officials opening the door to fester bond purchase taper and accelerated rate hikes. kathleen hays is here with more on this. what did the vice chair have to say? >> he is definitely worried about inflation. it's interesting talking about the number of shortages mentioned in the beige book coming down because that's one of the things he thinks about inflation now that you could say inflation was all about the pandemic driven supply shortages but now maybe it's demand. that's what is driving him and others to say we should speed up the taper. he is a fed governor. this is his final month in the job. it is very important to listen to what he said because it gives us a sense of another official saying the winds have changed. we have to change also.
6:34 pm
very explicitly saying if it doesn't start looking better fast, they're going to have to raise rates sooner to balance supply and demand and get it back the way it needs to be. let's listen. >> i would be supportive of a committee decision to move the end of the taper forward from where people had been expecting in june. >> investors are looking at fed fund futures and can about how many rate hikes are going to happen next year. the bottom line on this chart shows you that for a rate hike in june, there is a move toward that but not enough to say the market is convinced it will speed up. more convinced that by september, there will be one rate hike. we have to more further out to
6:35 pm
see signs that yes if the fed moves ahead, investors expect rates to move higher. strong labor market also justifies the removal of fed accommodation. we will get a very strong indicator for the strength of the job market in the u.s. friday market -- friday morning the november jobs report is expected to show a gain of about 550,000 in november. those are strong numbers. these numbers suggest more people are coming back to work. the demand is there as time wears on and on up limit rate is down to 4.5%. still above the all-time low, but way down from 5% a few months ago. this is what is expected, another strong jobs report. we heard from others yesterday and we heard jay powell this week. want to see signs that things
6:36 pm
continue to be strong, they are watching omicron expecting it not to be necessarily disruptive as it was last year and we may get the speed up the taper signal on december 15. >> just in time for christmas. let's take a look at markets. we do see a collective sigh of relief across asian markets as was see that debt buyers -- dip buyers join the market. we are watching out for erratic trading as we get into the weekend. sidney stocks are looking relatively positive. upsides to kiwi stocks as well. auckland emerges from its latest lockdown. omicron is infiltrating more economies and countries. korea gets trading in about 25
6:37 pm
minutes time. they have reported six cases of omicron variant but also the country will pursue new covid settings including social distancing measures for the next four weeks as well as reducing the number of people allowed in private gathering. they will be allowing six people and gathering in seoul, korea prior to omicron taking hold we sell reports of record daily new covid 19 cases in south korea. over 5000 new cases and a record number of critical cases above 700 this week in south korea. that is a market that we will be watching as we get into the open at the top of our. let's get you to vonnie quinn. vonnie: the u.s. is reporting more cases of the omicron variant. five cases have been confirmed in new york city and mayor bill de blasio says people should assume the strain is spreading their. new york state reporting more
6:38 pm
than 11,000 new infections, the most since january. some hospitals are reporting bed capacity of 10% or less. germany is imposing nationwide restrictions on people who are not vaccinated against covid-19. in one of her final act as chancellor, angela merkel agreed on the curves. the u.s. is moving ahead with efforts to remove chinese companies from american stock exchange is for not complying with washington's disclosure requirement. a law mandating foreign companies open their books to u.s. scrutiny. china and hong kong are the only two left to not -- not allow the required inspections. one group agreed to add 400,000 barrels per day of crude in
6:39 pm
january. that should please nations including the u.s. worried about high prices. the cartel left the door open to change the plan on short notice. that step underscores risks from the pandemic and relief from emergency stockpiles. singapore is facing dramatic volatility as the nation grapples with global energy crisis. wholesale electricity prices soared almost 1300% before falling again. traders say it has caused tripping at some singapore power plants. others have shut for unplanned maintenance. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: coming up next, the former new zealand prime minister is now the co-chair of the world health organization's panel for pandemic preparedness. we will talk to her about
6:40 pm
preparedness to make sure countries are not left behind. this is bloomberg. ♪
6:41 pm
haidi: the omicron variant is threatening to widen an already large gap in vaccinations. our next guest examined the
6:42 pm
response to covid-19 and she is concerned that this lacks the urgency required. she joins us now. this is a wake-up call. we should have been awake for this. this has been a risk both ethical and medical that was well flagged. >> we should have been awake a long time ago. in the early stage of the pandemic, we were told that vaccines were highly likely to come through. they came through last december. there was never a strategy about how you would get that out to everyone equitably. one of the key recommendations that our panel made was that
6:43 pm
there needs to be pre-negotiated platform for universal access. it needs to have into and solutions. -- and to end solutions. that it is designed for availability and access and that was never done. we grabbed what we could, sat on it, hoarded it, in the meantime in africa it is struggling to reach 6% vaccination levels. all the signs are there that we could have done this better. haidi: why has progress been so slow on the recommendations of the panel? >> some things have moved. we did approve a new legal
6:44 pm
instrument being initiated. we agreed to begin negotiations. they haven't agreed on anything about content nor the form of what the legal instrument would be. they want to bring a new legal instrument may 2024 which would be more than four years after the pandemic was declared. we could have another pandemic, and we still don't have the right instruments to deal with it. as the world health or -- assembly next may will look at the who strengthening recommendations that we and other bodies have made, there is talk of a special session that would aim to negotiate a political declaration around
6:45 pm
whole reform package. governments, finance, support for a treaty, and so on. that is not so discouraging. what has been discouraging is the immediate recommendations that others have made to get the vaccines out there equitably to redistribute the stocks to scale up the manufacturing especially at the global scale, that is not happening fast enough. shery: do you feel when speaking to the policymakers and experts around the world the same sense of urgency that we had at the beginning of the pandemic? years later. there is a concern that the crisis mentality may fade. >> it comes in waves. one of the disappointing things has been to see a number of high income countries, europe among them and to some extent the u.s.
6:46 pm
reach a level of satisfaction -- vaccination that is not satisfactory then you don't have to do measures anymore. that creates an environment in which alta or on -- delta or omicron or whatever is going to walk through. in new zealand, we are getting comfortably to a 90% vaccination rate of all adults by christmas. even so, we are retaining public health measures around masking and physical distancing and vaccine mandates and so on because we don't want to give opportunities for those to rip through. we don't want the kiwi variant to emerge. that it's a disappointment to me that high income countries that have the capacity to do more vaccination and maintain public health measures are not showing the leadership they could.
6:47 pm
shery: how much of a global understanding is there now that key elements that keep emerging could be coming from the nations that can get there populations vaccinated? is that an indication the inequality is exacerbating the problem? >> yes it is exacerbating at the global level and also in our own societies. when you look at who has the most doubt at vaccination, we have anti-vaxxers and the hesitant, but we also have populations who are not in the broad mainstream of society. drug users, the homeless, those who are so poor they can't put their head up from day to day. i feel for the african countries which have now had the measures taken against them because of omicron emerging and south africa says we were transparent then you whack us.
6:48 pm
there's a huge feeling of injustice that they couldn't get the vaccines then when the inevitable happens and let's face it, the inevitable because if you let transmission rip, we will get more mutations and possibly more transmissible and lethal variants. then they get measures taken against them. there is a huge feeling of injustice here. haidi: so much anger and understandably when people were desperately calling for more vaccines across the continent. closer to home, one institute has said there are 19 developing nations that run the risk of seeing this pandemic for the next 10 years of not seeing fall vaccination until 2030. what should australia and new zealand both drug manufacturers and the governments be doing to ensure that doesn't happen? >> it's horrifying. it is entirely possible. i have seen the who senior
6:49 pm
people say that to equitably distribute the vaccine will attract a pandemic by at least a year. another institute is saying it's entirely within the realm of possibility that africa will not be vaccinated before 2023. we can't meet 70% by next year that we were aiming for. what we have to do is get a grip on ourselves on the high income countries. we have excess doses, get them out there. i never want to see another headline from the u.k. or wherever that says we had to trash vaccines we couldn't use. there are countries screaming out for them. your own supply chains into order. you have enough to share. you also need to put pressure on the manufacturer's to get that
6:50 pm
capacity for manufacturing out to former countries. -- far more countries. what we're going to need to do a six-month annual boosters for the foreseeable future. this is a well-off vaccination manufacturing effort, it has to go on and on. we need many more sectors of vaccine manufacture. shery: thank you so much for your time. the former prime minister and later of the panel for pandemic preparedness. coming up, a u.s. trading debut fails to deliver. we will have more on that. this is bloomberg. ♪
6:51 pm
6:52 pm
shery: grab holdings plunged after completing the largest spac deal ever. questions about profitability for the ride-hailing and delivery giant. the cofounder left off the concerns citing the resilience of the super app strategy. >> we chose the path that enabled us to get to the most important objective which is to get the best investors for our
6:53 pm
day one. based on the investors that were attracted to the long-term growth opportunities that we see and the low redemption rate that happened during the process, we are extremely happy with outcomes that we have achieved as well. >> you have turned grab into a super app. how worried are you about a resurgence of covid and omicron right now? >> a critical part of the grab -- trajectory over the last few years has been the super strategy that enabled us to be very resilient to the covid challenges. to share a bit more, we are uber, doordash, and venmo altogether. from the day it starts all the way when you get to bed, you are able to get your breakfast, pay for meals, send your friend eft's, by groceries and more.
6:54 pm
it enables us to have things like strategies with our largest driver partner network in the region which enables drivers and their app to decide if they want to deliver people or food or groceries in the app and enable us to quickly pivot from mobility to deliveries over the last two years. with this super app strategy, we are confident and we can continue to serve the needs of southeast asia and partners despite whatever challenges covid continues to throw at us. >> losses widen to 980 $8 million in november for the third quarter. revenue also declined. when do you expect grab to become profitable? a large portion of the last quarter's results were because
6:55 pm
of cash expenses. much of which will no longer be required with the spac we just went through. the other important thing is that growth and profitability are not mutually exclusive. you have seen that consistently for must or we have developed very high topline growth while making significant progress on offline profitability. our mobility segment is already in the positive with a market-leading margin. ultimately for us, what matters in our portfolio allocation strategy is that we will continue to invest into areas where we have seen tremendous opportunities and very strong momentum. >> the grab cofounder with emily
6:56 pm
chang. we will have more on that in the next hour. ♪
6:57 pm
6:58 pm
6:59 pm
7:00 pm
♪ >> welcome to daybreak asia. i am shery ahn. >> i am haidi -- top stories this hour, off the back of u.s. gains has dipped behind the merge over omicron concerns. gains of opec-plus on outward highs. chinese developer kaiser admits it may not meet applications
7:01 pm
after bondholders object an offer for $400 million in bonds. -- tumbles in its new york debut after its record-setting deal. >> a mixed picture when it comes to japan and korea. nikkei up .25%, held by real estate and industrial companies. we set the japanese yen fall for the fourth time in three days. now holding 113 against the u.s. dollar. we are seeing -- buying. we are watching jd be we have seen the benchmark 10 year yield decline after solid data auction and of its right now we are watching what is happening with the omicron variant spreading. we are seeing downside pressure, .4%. this is as we got news south korea will be putting in place more restrictions when it comes to social distancing measures for the next four weeks. allowing people together in
7:02 pm
private by only a number of six, given restrictions and the threat of omicron which has already reported a sixth case. textile skinning .25% while the korean yuan is facing pressure against the u.s. dollar. >> the sick a look at what is happening in sydney. australian boosted by miners and big banks. we have traders already preoccupied by the reserve bank of australia policy next week. rate hikes in 2022 are a real possibility. according to -- we are also watching new zealand. we did see earlier gains, auckland reopening to the 107 day lockdown for concerns over the inevitability of the new variant being found in new zealand spreading there as well. we are seeing s&p futures up by
7:03 pm
.4%. we saw -- returning to the session hoping a overgrown vaccine be too far ahead. the fed taper rhetoric is starting to build and we are seeing treasuries continue to trade heavily. we heard from a plethora of officials ramping up the narrative on a pace of rate hikes. you take a look at swaps pricing for the first quarter point rate hike for the june meeting next year. the second is already passing november. >> among other risks, the u.s. moving closer to potentially deal lifting chinese firms -- delisting chinese firms. always great having you with us, michael. we talked about this potential deal lifting, rates continuing to search for it what this this mean for tech stocks across asia? >> it is not positive.
7:04 pm
that double whammy the fed is talking about. oh my goodness, we have been wrong, let's taper more aggressively. nothing to give you confidence like the guardians of global policy knowing what they are doing. in terms of lifting, it seems to be a race between the u.s. and china over who is going to blow up offshore chinese tech listings first. not sure which one is going to get there first. >> what are the broader implications of having chinese potentially coming back to hong kong? >> it is good for hong kong. bad for everone else. you have to look at it in the broader issue. above and beyond volatilities, cost individual firms and the volatility it would cost individual sectors, this is representative of the fact we are seeing a gradual stop-start
7:05 pm
decoupling of large parts of the global economy. people wanted to deny that. i understand why. it does not sell well. but, it is happening. it will accelerate. there may be a catch up effect. bang, bang and not a lot happens, then suddenly it happens at once. this is indicative of that kind of trend. anyone who is trading on the date -- trading on the basis of one world is wrong. >> is it helpful china seems to be opening a financial sector? we have seen wall street banks russian. >> [laughter] >> wall street banks would jump in the toilet. they've got absolutely no common sense. no attempt to frame these things more broadly. if you listen to wall street tanks as -- wall street banks to know what to do, you would have difficulty crossing the road. >> [indiscernible]
7:06 pm
>> i have to say, i did laugh at this dovetailing of the chinese government trying to get companies to come home and the u.s. government trying to force chinese companies out of the u.s. if the bifurcation and divergence continues, what you do as an investor? do you make a bet on the hegemonic ottomans of either side? -- hegemonic dominance of either side? >> you can say ok, we are going to choose one side or the other. on a longer run basis, it is going to be -- diverge into both camps or say we are going to specialize in one. effectively that is what it comes down to because there will be much fewer linkages economic. this will be a stop-start process. this will not be smooth.
7:07 pm
there will be periods where it seems it is swinging back the other way but the momentum in both sides is swinging in that direction. >> is the property sector the achilles' heel for president xi? this offer was rejected, nearing toward potential debt restructuring. >> it is a serious issue, as it is in every country that has overdevelopment in the property sector and too much debt associated. china is not unique. australia and new zealand, lots of other countries are in a similar boat. what is important to recognize is if china has more tools to deal with it and others. but, it is not going to be good for anyone, like wall street banks who jump in thinking there is money to be made here. there probably isn't. the balance of probabilities essays the way you resolve this is de facto default and
7:08 pm
nationalization, for the china chat -- china side of things, you keep the worker capital with the ability to reallocate those people into property nobody wants to live in. you up the financial asset was no -- whatsoever. you will not get that and is -- >> i do think it is a problem on the investor side, but not for china, inc.. >> good to have you. ahead of asia-pacific market research. thank you. we continue to see oil gaining ground. right now it is above $67 a barrel despite the fact at opec-plus it go forward with his planned output hike. it did leave an escape course, perhaps a reason why we are seeing rebound. wild swings. >> we are seeing in asia, oil
7:09 pm
getting a bounce. a bounce after -- even giving back gains already, if we look at what happened in the u.s. thursday and reaction to the opec decision, wall street again not liking surprises. it was unexpected that opec-plus would go forward with the monthly output increase of 400,000 euros. it was expected they would defer, given the uncertainty of the new variant. a circuit the seven-day. west texas intermediate seeing the big swings. ditto for -- crude. -- has also seen a big swing. not only in price, but volatility from both oil futures my has been at pretty much a high for the year. dipping into the bloomberg yield, you will see both are in western subsidiary is down 25% from the late october multiyear high. that is the key reason that both
7:10 pm
analysts and traders believed that opec-plus would put off this increase in output. to summarize, opec-plus saying they could revisit this increase by 400,000 barrels a day for january. at any time, if this new variant warrants it. there is concern on the part of the cartel at the u.s. has together with allies orchestrated this release of emergency oil reserves that has added oil to the market. the fed sounding hawkish. all of these weighing on price and on certain he. -- uncertainty. that factors into the price that we have oil continuing on a volatile path. we have invents -- we have investors looking at the nuclear talks with iran. the u.s. maintaining it could continue to release, as promised, from this to treat --
7:11 pm
from the strategic reserves. we did have the white house making this statement after the opec-plus decision, pretty much patting opec members on the back couple referring to saudi arabia and other opec-plus producers has partners. and that they have done well in working together in recent weeks to help address price pressure. >> there you have politics. >> let's get you to vonnie quinn with our first world headlines. vonnie: singapore facing dramatic volatility in wholesale power prices as the nation grapples with the global energy crisis. wholesale electricity prices surged 1300% in two days before falling. trader say a drop in indonesian gas supply has -- tripping at power plants. others have -- for on planned -- unplanned maintenance. u.s. recorded more cases of the
7:12 pm
omicron variant. high cases have been confirmed in new york city. mayor bill de blasio should assume -- new york state reported more than 11,000 new infections, the most since january. more than 56 hospitals in the state are reporting bet capacity of 10% or less. the white house wants to rally i'll add countries to crackdown on surveillance technology in china and elsewhere. during a summit, the biden administration will amount sanko initiative to prevent the spread of tech. officials declined to name which countries will join the initiative. u.s. antitrust officials have blocked though 40 billion takeover of arm, saying the deal would harm the semiconductor market or the ftc says the chip conglomerate stifling the pipeline for next duration technology.
7:13 pm
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. >> tell had, -- in its public debut. we discuss with -- or say investors need to see all southeast asia back to deals too well in the month said. up next, bondholders reject a -- proposal.
7:14 pm
7:15 pm
>> chinese developers offer to swap $400 million maturing this week. this could stir contagion risks
7:16 pm
as global investors are returning to offshore property bonds. let's ring and kevin kingsbury. we were talking about the scenarios that could arise. what happens now? they have flight the higher risk of potential debt restructuring. >> kaiser has said last week the swap proposal may not make the payment due september 7. they made that announcement this morning, we will see what will happen over the weekend. blizzard, one of the major advisory firms has been -- and they were talking wednesday as various options and what may be able to do to extend this bond. we are going to have to see what this proposed deal might look like. is it going to be good for bondholders? perhaps more kicking the can down the road where we have interest payments from kaiser that are due later next week.
7:17 pm
more than $85 million. kaiser has a letter debt expecting now and they need to handle it. >> will he see a default, or will they get through the defaults quick enough? >> probably not. you would probably have to get the cash in hand within 96 hours. probably to reach it a deal and to -- we are going to have to see if there is some other work around they are going to be able to do. they can sell assets, but percy says it is going to take time to get back into the company >> -- company. >> sec is a step closer to possibly booting the chinese company's north america stock exchanges for not complying with disclosure requirements. let's bring in stephen engle.
7:18 pm
what steps are the sec taking? >> we knew this was coming because this was part of legislation that came in the waning days of the trump administration. bipartisan support, by the way, to require, to mandate that companies listed on the u.s. exchanges to open up its books to transparency, if required. the sec has had such requirement dating back to 2002. according to the sec, almost all companies from all jurisdictions have complied for the last couple of decades, with the exception of companies from china and hong kong. that is according to gary gensler, in a statement who is basically now fulfilling their obligation passed by congress to come up with these new rules. how are they going to implement? what are the criteria for
7:19 pm
companies that could be potentially put on a list pretty listing? -- for delisting? if these companies do not comply, they could potentially be delisted. you're seeing what eric kinser is saying, all companies need to be subject to inspection by a public oversight board. change the page, this is the one million-dollar quote that singles out china and hong kong as not complying with that requirement, which is now going to be mandated by law. >> with respect to michael leverett -- we spoke to michael leverett, he said you look at the u.s. moving to deal list chinese firms, china tried to close loopholes. it is a matter of who gets there first. the end goal seems to be the same. is the end results just further bifurcation of these superpowers? >> the headwinds are definitely against these companies listed in the united states, whether
7:20 pm
from rigor to look toward -- whether from rail or tory pressure in china, our efforts by the securities regulator in china. the story yesterday, they are going to banning, which they have denied, that they are going to ban the use of the ie structures for chinese companies in places like united states. that is not in delisting, but that could been a dramatic reshaping of the shareholding structure of those companies, or possibly -- [no audio] >> you are either getting pressure from the chinese regulators or the u.s. regulators, the sec. the golden dragon index, as you can see, has not kept pace. it has gone in the opposite direction of the overall nasdaq composite index of this year. that pressure accompanies -- alibaba it has -- alibaba has
7:21 pm
had so many headwinds given the antitrust probes. this kind of pressure on the structure, which it has through the cayman islands and the pressure from the sec, it has logged in more than $500 billion in the last year. that is more market value than the entire market capitalization of jp morgan. >> asia's biggest company last year has now -- is now smaller than -- stephen engle in hong kong. up next, a new voice joining us -- supporting tapering of bond purchases.
7:22 pm
7:23 pm
>> federal reserve chair
7:24 pm
supervision has joined the chorus of top officials opening the door to a asked bond purchase taper and accelerated rate hikes. our editor kathleen is here with the details. >> vice chair supervision definitely worried about inflationary. he too is very clear that he is on board with the speed of taper. he has devised that she is the vice chair until the end of the month. even so, he has been at the fed for several years on the board, right there with jay powell and the rest. what he is thinking is important to see as yet another sign of someone who has been doing this for a while, working with these issues. we probably need to pull back. he said it is not just supply chains and bottlenecks, the new story is, hey, there is strong demand. that is now pushing inflation
7:25 pm
higher. he says the fed is also going to not only start to do taper faster but probably next year start raising rates sooner so the fed can help get supply and demand back in balancing get pressure off inflation. here's a quote from earlier -- >> i would be supportive of a commutative decision to move the end of the taper forward from where people had been expecting it in june. >> let's look at what markets are expecting today so far. there has volatility. if you look at the far side of this chart, expectations of the rate hikes coming quicker were pulled back a little bit when everybody thought the omicron variant was going to prevent the fed from moving quickly, or slow. all along the bottom is the odds of what people are looking at for the rate hike in june. they are low. it is not priced in.
7:26 pm
a single rate hike by sit -- by december is priced in. -- told us what to four hours ago she has had one hike on the table. she will be looking at two hikes for next, that will give credence to the line along the bottom. another important thing randy said is that the labor market strength is also justification for starting to remove accommodation. in other words, tapering sit -- risk of the jobs report tomorrow, payroll is expected to rise $550,000 531,000 the month four. jobs. . . . . pepe up. >>
7:27 pm
[please stand by]
7:28 pm
7:29 pm
7:30 pm
>> we are getting services and composite pmi numbers for november. the final data for services, coming in at 53, and improvement from the previous month. it is also a second consecutive month of expansion for the services sector. the composite pmi, coming in at 53 point three, doing better than the previous month of 52.5. of course, this number, we have to take it with a caveat given that we have the omicron variant spreading. we have seen japan closing its
7:31 pm
borders to foreign travelers so we will see if the numbers hold up. haidi: we actually see a bit of improvement when it comes to the hong kong ihs market pmi for the month of november. 52 point six from 50.8 previously, this is the highest rating we have seen since august wendy 21. output rising to 54 from just over 50, the highest since august. we also see new orders rising. a bit of optimism for the hong kong economy. we have seen demand services down when it comes to the strict quarantine and entry requirements, as well as extended periods of turmoil in the city. shery: taking a look at the broader markets, we are seeing a bit of a mixed picture across asia with the nikkei up, led higher by utilities and health care. we are seeing the real estate
7:32 pm
and financial side under pressure right now as the japanese yen holds up the 113 level. the kospi under pressure but the smaller cap tech stocks are up at the moment. this as we have heard of new restrictions across south korea with more social distancing rules for the next four weeks, given the presence of the omicron variant. the asx 200 led higher by energy and industrial, not surprising considering oil is gaining ground in the asian session. we have seen opec-plus saying they will quickly adjust output plans if needed. haidi: grab holdings plunging on its first day of trading after completing the largest deal ever. investors are main uncertain about profitability for the southeast asian ride-hailing and delivery giant. the pandemic fears rise, but the cofounder laughed off those concerns, citing the resilience of grab's strategy. >> we chose the path that
7:33 pm
enabled us to get to the most important objective first, to get the best investors for our day one cap table. with that, based on investors that were attracted to the long-term growth opportunities we see, and low redemption rates that happened during the process, we are happy with the outcomes we have achieved. >> you have turned grab into a super app including delivery, payments and ride-hailing. how worried are you about a resurgence of covid and omicron? >> i think a critical part of grab's growth trajectory over the last two years has been a strategy that enabled us to be very resilient to the covid challenges. to share more about what it is, think about grab as uber, doordash and venmo in one. from the day it starts, when you
7:34 pm
wake up until you go to bed, you are able to get breakfast, pay for meals, send gifts, buy groceries and more. why that is important is because it enables us to have things like shared fleet strategies with our largest driver partner network in the region, which enables drivers to decide if they want to deliver food or groceries or people seamlessly in the app and enable us to quickly pivot from mobility to deliveries over the last two years. with the super app strategy, we are confident we can continue serve the needs of southeast asia's users and our partners despite whatever challenges covid continues to throw at us. >> still, losses widen 10 900 $88 million in november for the third quarter, revenue declined slightly. when do you expect grab to become profitable?
7:35 pm
>> a bit of context, a large portion of the last order results were because of non-cash expenses. there were more than $700 million of it, much of which were no longer be required with what we went through. for us come of the other important thing is that growth and profitability are not mutually exclusive. you have seen that consistently from us over the past few years, where we have consistently developed very high topline growth while also making significant progress on our bottom-line profitability. for example, our mobility segment has market-leading margins. our delivery business, which is a young business, only three years old, also is a segment positive for various markets that we have. ultimately for us, what matters in our portfolio is that we will
7:36 pm
continue to invest in areas that we see huge tremendous opportunities in, and strong momentum behind. shery: -- haidi: grab's cofounder. our next guest talks about spikes in southeast asia. let's bring in the investment director at cafe innovations. not a great start. >> thanks for having me. it wasn't, but you have to feel for grab. this is resiliency on their part. they are listed at one of the most volatile times in the markets. you've got the vix up at 27 points, so i think with their core business going through covid in each one of the countries they operate in, i think there is much to be expected from grab. while there wasn't -- the bumpy
7:37 pm
asked start, i think they will be resilient and they will be fine in the long term. go ahead. haidi: i was going to ask, when they talk about the dominance across various markets and businesses in terms of food delivery and ride-hailing and payments, is that a strength? >> it is a strength. if you zoom out on the aperture and think about southeast asia as a whole, the ecosystem, grab included, are building for people. they are tilting for 100 million people that -- building for 100 million people that have low penetration rates for banking and insurance. there is so much headroom to do, irrespective of grab cost dominant position. while they have really secured space on the tam, it is ever
7:38 pm
expanding in southeast asia. so we expect a lot of things from grab and from the rest of the cohort that sort of go after the fundamentals for southeast asia. shery: does that mean investors will be able to discount the other performance of grab today, given the market volatility? what are you expecting for the next lineup? >> i don't have a crystal ball but if i did i would be doing something else. but predicting, i think you will have continued sustained volatility in the markets for the next few months. that would mean a bumpier ride than we would typically like. all a lot of spacs that go public go public at valuations they need to grow into. not all, but a lot of times. i expect to see sustained
7:39 pm
performance over time that will be joined by market fundamentals and good execution as grab and the rest have proven out. in the short-term period, i expect a bit of volatility on launch day. i don't expect a ton of pops. let's put that in context. on its first day, uber didn't do so well. neither did facebook. they went public in better markets, better times. shery: what about bringing spac deals together? how challenging will that be? >> i think it will be challenging and we are already seeing that in all the markets we operated. the first set that have gone public have been put together well, but from there, raising the pipe, even if you have a sponsor, has been challenging. i think it is a little bit of wait and see to ensure that the
7:40 pm
investor and retail investor money is safe, so both from a pipe standpoint and a regulatory standpoint, i think spacs are harder to come by these days, specifically in southeast asia. haidi: thank you so much. let's now get to vonnie quinn with the first word headlines. >> thank you. opec-plus will risk -- proceed with the oil production hike. they agreed to add 400,000 barrels per day to global markets in january. nations including the united states are worried about high prices. the cartel left the door open to changing the plan on short notice. that unusual step underscores risk from the pandemic and a u.s. led release of emergency fuel stockpiles. a company failed to win approval for a debt swap to avert dip -- default. the troubled developer has bonds
7:41 pm
due next week. they are the nation's third-largest issuer of property firms. the u.s. is moving ahead with efforts to remove chinese companies from american stock exchanges for not complying with washington's disclosure requirements. the sec announced its final plan for law, mandating foreign companies open their books. china and hong kong are the only two jurisdictions that refuse to allow inspections despite washington requiring them since 2002. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: coming up, a new study shows vaccines are showing promise, raising antibodies against the coronavirus. we get the details next. this is bloomberg. ♪
7:42 pm
7:43 pm
♪ >> a new study in the u.k. has tested -- booster shots. let's get the details from michelle cortes. what are we seeing in these efficacy studies? >> the good news is all of the
7:44 pm
boosters approved, all the vaccines approved work effectively as boosters. they increase antibodies and reduce the risk of infection for people who have been exposed to the virus. of course, every one of these have generated different antibody response. not surprisingly, the mrna vaccines from biontech and returner were potent. good news, all of them do up here to offer protection. >> despite the high vaccination rate in south korea, we continue to see these infections, especially the rise in critical patients. we are seeing some new social distancing measures implemented in south korea. how much are we expecting this to help? and probably, what is going on in korea? >> what is happening in south korea is the same thing happening in many places in the world a winter wave of delta.
7:45 pm
the conserve -- the concern is whether omicron -- omicron is going to further increase rates. even if it does not, even if we get good news, the point is that we are still dealing with the delta wave and most of the world is going to have raffle -- going to have to grapple. these new restrictions, they work against any variant wearing a mask, social distancing, at this point we all know what we need to do in order to keep ourselves safe. that will protect you against almost any variant we have seen thus far. get your booster. wear your mask. that is what south korea tells us. be cautious, this pandemic is not done with us yet. >> we had news -- omicron's specific vaccine. what is the guidance we are
7:46 pm
getting more broadly in terms of what order we do these? shall we wait for the new vaccine? >> what we have learned from recent studies that have come out in the past two weeks is the most time you are exposed to this virus, the higher your protection level is going to be. if you have been infected, then you get a vaccine, you have a better result than just getting vaccinated or getting infected. if you get a poster on top, your benefit is greater. experts believe that because we all went to this as virgins to this virus, what your body needs, what your immune system needs is to see if multiple times to get a baseline protection for the more you get protected, the better off you are. with people thinking they do not want to get the booster because they want to wait for an overcurrent booster, that is not the right way to think.
7:47 pm
at this point, it is going to take 100 days before an omicron booster is available for anyone and at that, we will see that. get a booster now. the experts believe that even boosting with the existing vaccines will offer some protection for mu variants. if you need another one later, you will probably -- you will be fine. >> michelle cortes there. oil demand picture, which is also problematic for energy markets, what happens with the spread of the virus around the world? what will happen with global demand? we got opec last deciding to pick with their planned output hike, we had the initial reaction from energy prices, but just the idea that opec last has less room to quickly adjust
7:48 pm
output plans as needed, has sent oil prices higher. right now getting ground in the asian session as well. >> it is interesting some of the specs. goldman sachs, the intact -- of their -- saying it good hit $85 a barrel. this is the impact on global inflation. we saw inflation search to its highest rate in almost a worker century. energy prices powering a big part. continuing -- as you mentioned, no surprises in saying that japan was only country to not register an inflation increase. both the u.s. and u.k. saw higher spikes in price pressures. >> we are seeing that in singapore, seeing another dramatic surge in wholesale power prices.
7:49 pm
the independent nation grapples with eggroll -- with an global energy crisis. stephen, what is happening in singapore? >> what is happening in singapore is what is happening around the world. specifically, they are not getting enough natural gas. there is a global shortage. indonesia had to cut the amount of gas they were supplying to singapore. that resulted in some of the pressure in the pipelines, causing a trip to power plants. power plants came off-line. because of that, whole sale prices surge to the highest point ever. that was a surge of about $3000 per megawatt hour. to give you an idea, that is well than 10 times the price, and it caused big issues to power suppliers in singapore.
7:50 pm
>> is there any more room to deploy more capacity? >> there is. the government is looking at that. singapore retired some of their older gas plants that were less efficient last year. they are looking to deploy them this year. that shows how difficult it is in this green row, as you depend more on renewable energy, getting rid of the old stuff, sometimes you have go -- sometimes you have to go back and use the dirty stuff bq -- because you can't always depend on having newer facilities, or perhaps energy demand will fall with conservation efforts. that is something singapore is looking to ease. >> it is not even as though they need power households through a
7:51 pm
cold winter, right? as we approach winter, where else do we see the potential of these spikes? >> natural gas prices, the fuel that powers a lot of facilities around the world, our around the highest ever. it is not called yet because there is a supply crunch. the post-covid economic recovery come a large chunk of chinese, european demand, as well as south america, has resulted in balance. -- imbalance. when you produce electricity, it costs more money. we are expecting when it gets colder, you're going to see more power spikes in europe. you saw it this week in germany and france, that could continue in the u.k. as well. you can see that in japan where they have a liberalized power market highly dependent on imports of natural gas. because of that, you could see japan coming u.k., germany,
7:52 pm
france under enormous pressure as prices continue to spike. >> energy reporter stephen churches key -- you can catch us live our interactive tv function . you can also dive into the bloomberg function. join again, you can send us instant messages. this is bloomberg for subscribers only. this is bloomberg. ♪
7:53 pm
7:54 pm
>> a quick check of the latest business headlines. the exec the vax chairman of blackstone is retiring. in a statement, james said he had watched the firms grow thirtyfold and developed into one the world's finest financial institutions. occidental petroleum offering to buyback $2 billion in bonds as it continues to work on its debt. the -- 14 separate bonds with maturities ranging from 2024 to 2029 and will expire next week. -- have hong kong's second listing.
7:55 pm
raising $385 million. hong kong listing comes as chinese regulators continue their tightening of oversights on local firms traded overseas. >> we have regulatory oversights in the u.s. as well which is why we are watching tech stocks. when trading kicks off in hong kong, and the mainland, this after the sec took steps that could lead to delisting of chinese companies. we are talking about more than 200 companies being kicked off u.s. exchanges if they do not open their books. now, we are going to see more pressure for these companies to comply with washington's disclosure requirements. >> it has been a while since we have talked about evergrande. the one that started it all is back in the spotlight. kaisa will be in focus. -- rejecting chinese proposal which we should be getting used to.
7:56 pm
more swings when it comes to their maturing debt profile. a flag may have trouble paying and may look to debt restructuring. that is it for daybreak asia. our coverage continues. this is bloomberg. ♪
7:57 pm
7:58 pm
7:59 pm
8:00 pm
david: happy friday. welcome to bloomberg markets: china open. chinese -- a chinese developer warning it may not meet these repayments obligations after creditors rejecting the swap offer for $400 million in bonds. the biden white house booting companies off


info Stream Only

Uploaded by TV Archive on