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tv   Bloomberg Markets Asia  Bloomberg  December 22, 2021 10:00pm-11:00pm EST

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rishaad: india calling for better price disclosures for tech ipos amid a listing frenzy by money-losing startups. haslinda: modest gains in asia as investors mull over suggestions omicron may not be as bad as initially expected. it is unlikely to send you to hospital. and the pfizer pill approved for emergency use in the u.s.. msci asia pac index up .6%. it is about chinese tech stocks. is slumping the most since it was listed in hong kong. tencent with a special dividend using shares in options very upbeat about the outlook for oriole. $90 a barrel next year. rishaad: checking in with the
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open. .4%. up nearly .5%. all in the wake of the central bank doing as expected, nothing with interest rates. thirteenth street meeting of no changes. what they did change was the forecast for next year's growth, 3.4%. it is quite a cut they made. previously it was 3.9%. a little bit of strength in the dollar. strength against the dollar. the dollar declining. the nifty looking like it will be following upside. and the rupee at the moment has been gaining as we have seen dollar weakness. let's have a look at what is going on with new studies. they show omicron might be less likely to send patients to hospital. the previous iteration of delta.
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in china locking down the western city of two young. such moves since the pandemic began in wuhan. let's get to rachel chang, who leads bloomberg's asia health care coverage. what led to this lockdown? >> there has been a projected delta outbreak. they have caught like 50 infections a day. they found about 127 infections across 14 districts. now they have put the entire city on lockdown. the number is so small compared to what they are hearing in other countries. it speaks to china's zero-tolerance policy. the only country in the world still trying to get infections down to zero. the virus is just so infectious, to do that, they have to keep locking down places.
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locking down a city like this. it speaks to the fact china is stuck in the cycle right now. haslinda: omicron unlikely to send people to hospital, and the u.s. adding a new pfizer pill towards the growing stockpile of covid treatments. is it a game changer? >> i think the data, the studies out of the u.k. are encouraging. people with omicron, 40% less likely in hospital. it is about vaccination, not necessarily the variant itself. the wall in most cases right now, preventing illness from escalating. that is a good sign with omicron. we know there are more factors than delta. which means it will go through the population, 10 times more infectious. you will have people in that small group requiring medical care. it is a worrying situation.
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we know vaccines will help this situation. going back to china's strategy, it is even more problematic to get infections to zero. when you have a highly infectious variant and not very effective vaccines, it will be more difficult. rishaad: we were discussing the latest covid resilience rankings. we got a new number one and a new bottom one. >> indeed. number one in december is chile. a place that is highly vaccinated. over 60% of the population has a booster shot. summertime, which really helps south america. they have really turned the situation around thanks to vaccination. it was such a devastating outbreak. at the same time, we are seeing southeast asia. southeast asia really tracked in the dynamic of not enough access to vaccines, remaining sealed
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off from the world to control the outbreak. at the same time, higher levels of death because inoculation is not the levels we have seen in the richer places. that is really the urgent path in 2022. how to get the vaccination level up across the developing world and our countries, as well. haslinda: we are still grappling with vaccine equity. rachel chang, thank you so much. for more on the market reaction and the latest omicron developments and tencent's plans for holdings, let's bring in garfield reynolds. omicron variant keeping the center rally dream alive. >> it has been coming in waves, what omicron, covid in general, does and doesn't due to the markets. there was definitely a feeling -- potentially to the global
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outlook. shares came down quite strongly. part of it was also a drumbeat of minor news concerning lockdowns, potential lockdowns, stadiums closing, universities going back to online learning. all of those things created a fair bit of angst. you have to take money off of the table after all, seeing gains across equity markets and other risk assets. we have had a couple of days with fewer of those. bad news vibes coming across. the studies show omicron is far more infectious, it is less likely to send people to the hospital. and deciding it sounds like good news to them. some of those shares just got cheap, that is fine. rishaad: let's take a look at
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australia as an example. people have been looking at this surge in cases, new south wales, in particular. and looking at what the reserve bank has been saying. playing these concerns out on the bond market. >> also in the stock market, which has been soggier than elsewhere. as you say, it is a very interesting case study in that there is not a huge spike in hospitalizations. and governments have been very firm about not bringing in mandated lockdowns or other restrictions, in general. however, i can say from my own experience, most people, large numbers of people are lining up tests because they have come
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into contact with potential infections, or they want to travel and need to test before they do so. if they are not lining up for tests, they are staying at home so they won't have to line up for tests. people don't have to get up at 5:00 in the morning. so all of that acts as a potential downside for the economy. that is why you see the reaction of the bond market, yields coming down, and hesitation in equities. rishaad: always a pleasure. garfield reynolds. but trade bottlenecks, have they been averted? the white house is claiming they have. let's get the first word news with su keenan. su: president biden says his team has succeeded in averting the holiday season supply chain crisis. he made remarks ahead of the videoconference with his supply chain task force. and local business leaders, including the ceos of fedex and
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gap. his administration launched several measures to approve the flow of goods through u.s. ports, also seeing billions of funding for the infrastructure law signed last month. >> we brought together business and labor leaders to solve problems. and the much predicted crisis didn't occur. packages are moving. gifts are being delivered. shelves are not empty. su: china now. president xi jinping told carrie lam the city is developing in a good direction. it was the first face to face meeting in two years coming after an election that installed a legislature of communist party loyalists in hong kong. she praised changes made to hong kong's electoral system, but no words on opening the border, one of lam's top priorities. u.s. aviation.
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regulators proposed modifications to some boeing triple seven jets. the steps are to prevent debris from flying loose. earlier this year, the front of an engine on a united airlines jet broke apart and sprayed the plane with shrapnel. they would -- in the united states. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is bloomberg . rishaad: india's hdfc bank giving us their outlook on the rupee. looking to end the year as this quarter's worst-performing currency in asia. haslinda: looking ahead to 2022. the omicron variant and
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diverging central-bank policy top of the agenda. this is bloomberg. ♪
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>> maybe i'm just in the festive spirit, but i think we will be in a bit of a sweet spot. >> it might seem strange now just when inflation is really taking off as an investor risk. but we have decided to actually call time on that view and decided to move it to a more neutral view. >> no one really understands what drives cpi. >> we are very mindful of potentially fast policy mistake. so it is a bigger risk than omicron. >> i think the wall of the coronavirus and pandemic in
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these disruptions is absolutely critical, and probably not emphasized sufficiently. >> a lot of the supply chain issues beginning to resolve themselves sort of by the natural functioning of the market. >> we had 2022 as a year of volatility. >> it is always challenging, there's always uncertainty. >> i believe -- investors should really look to identify where the long-term growth areas are. >> pretty favorable environment for staying overweight equities. rishaad: just a few of our guests thinking of the key risks heading into the new year. haslinda: focusing on the growth prospects for asia. let's bring in the lead asia economist at continuum economics. good to have you with us. with omicron, what is the risk that will see supply chain disruptions again and better
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inflation? >> asia does see lockdowns again. we have already seen some scaling back in mobility, broader reopening being delayed in the region. mainly because vaccination rates are so low. and you kind of see boosters and start looking at vaccinations for children. the region is still grappling with getting those vaccinations delivered. but because of the risk of further lockdowns, if we see the kind of threat we see in europe right now, we can see another bout of supply chain disruption for the first half of next year. haslinda: we also have to look at china. most of asia depends on china for growth with china adopting zero policy two years on. what is the downside risk. >> i think we are starting to
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see more downside risk for china, which based on our outlook,, as well. in terms of our zero covid policy and higher transmissibility of the omicron variant, there is a real threat consumption recovery will be revealed in china. but also, we are quite skeptical of the property sector crisis in china. the can is being kicked down the road repeatedly. even though there have been some steps to handle the situation at evergrande, but more properties are falling into this. but restructuring is not enough to restore the broader property market confidence. and the zero covid policy and the delay in the resolution of the property are a stress to china and disruptions in the region, as well. rishaad: what type of
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disruptions are we talking about? what are the mechanisms that would cause that? and because of what we have seen in china, we have seen a lot of people rejig the supply chains, and that has contributed to some of these bottlenecks. >> absolutely. the biggest risk right now is to the trade and supply chain channels. but also, market volatility. one other factor to look at is the commodity prices and china's demand on the commodity side. if i look in the covid issues, you can go down to the region through supply chain issues. and demanding something, we saw in 2020 when there were empty shelves across the region.
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when i talk about the property development crisis, it will probably have an effect to the market channel, but also the commodities channel, in terms of lower demand from china. rishaad: give me a sense -- it also comes against the backdrop of the fed turning more hawkish. we probably get something through the build back better bill. but that is a long-term exercise. what does it mean for the dollar, inflows and outflows in this part of the world? we have to look at it as a unitary being. >> we often talked about how e.m. a-shares -- e.m. asia is better for it. we have inflation more controlled across the region. current accounts looking better. higher fx reserves. all that does mean, the region
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is less vulnerable to fed rate hikes. if they continue to be well communicated to the markets. even in november when they started to turn hawkish and gave hints about accelerated tapering, we did see bond outflows from indonesia, malaysia. that is what worked. if the pace continues to quicken, in terms of tapering. more so in terms of tightening. it is a key risk. i'm not so worried about e.m. issues, currencies in general. the key reason is the usd is relatively overvalued at this point. that is priced in an accelerated fed tapering. i think the upside to the u.s.
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is really limited. another key reason is a relatively more stable yuan. even though the chinese economy is facing comparable risks, they do have certain important political events next year, which make it important to keep the yuan stable. the stability of the yuan is going to be an anchor for the regional fx, as well. rishaad: have a fabulous 2022. charu chanana, lead asia economist. tencent planning to distribute most of as a dividend to investors. shareholders wondering if they can be the next ones. details coming up. this is bloomberg. ♪
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rishaad: this is " "bloomberg markets." tencent planning to distribute shares as a one-time special dividend. it does represent a near retreat from the chinese e-commerce company. concerns it will pull away from other marquee investments it has made. our asia tech editor -- out of the blue this one. >> it was a bit of a surprise heading into the holidays. tencent has been reevaluating investments over the past year. this particular move comes as has become mature enough to finance itself. rishaad: they said -- that is not the reason why. >> obviously, it is against this
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backdrop of a year of chinese crackdowns. they have been talking about wanting to dismantle some of those dominated by the tech ecosystem, alibaba ecosystem. benefited a lot from its relationship and partnership with tencent. the company did say it will continue that business relationship. but beijing will look upon this with kinder eyes. haslinda: some say it is a preemptive move. the question is who could be next? >> that certainly is the question on the minds of traders this morning. we did see fell as much of 1%. but investors also did drop. billy billy, they were all down more than 3% at one point. but that has come back a little bit. tencent obviously hasn't made official comments on this.
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traders we have spoken to, it could be the start. it can go even beyond tencent into the alibaba ecosystem, as well. haslinda: asia tech editor shiyin chen, thank you. the latest business flash headlines. china telecom plans to continue most of its u.s. operations, despite an order to stop. the u.s. government cited espionage concerns. the company says the u.s. lacks authority to enforce the order and intends to defy it. china telecom has been targeted for u.s. sanctions as national security concerns, along with huawei and dgi. intel is facing criticism in china after it asked suppliers not to use products or labor from xinjiang. they were accused of siding with western countries, and the #on the topic generated millions of views on social media.
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governments including the u.s. have accused beijing of forced labor in xinjiang. the four-year-old venture with china's auto is heading for restructuring. they said they are unable to meet the financial obligations, citing a steep drop in commercial vehicle sales in china. the brilliant entry into restructuring last year after a series of -- rishaad: just up to four minutes away from the close of the benchmark indices. looking at the positive picture, coming off of the highs of the day. in hong kong, .10% to the upside. looking at property developers, which have been doing better. creditor talks taking place with evergrande. the light at the end of the tunnel. tech shares getting a bit of a boost. we have just been discussing
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tencent, upsetting the drop in shares. heading to lunch, looking at the shanghai composite. .10% higher. a lot more on the way. this is bloomberg.
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>> the sti is currently flat. up by 2/10 of 1%. singapore jumped 19 spots to number 18 in the covid resilience rankings in december. call it the musical chairs of the ranking. not to long ago we were at the top of the list and fell from grace. now we are back up by about 19 notches and that has to do with
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the stabilization of covid cases in the past month. cases have dropped from the thousands to the hundreds and that is helping in the ranking and helping to reopen. we took the vaccinated travel lane. that is on hold for the moment. >> let's look at these rankings. the one that is just above this country is south africa and south africa dropped seven places. that explains that one. vietnam on the other hand is near rock bottom and it replaces the philippines. there we go, that is a look at the left side. the philippines are going up three notches.
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>> agent is still under a lot of pressure to get those vaccines. for updates on the pandemic now. su keenan with the first word news. >> we have the latest on omicron. the variant may result in far fewer hospitalizations than other covid strains. that is according to studies out of south africa and scotland. the risk of hospitalization by omicron was down by about two thirds. although it is much more contagious. people are 80% less likely to be hospitalized if they catch it compared to other variants. the chinese city of xian has imposed a lockdown on its 14 million residents. this after mass testing identified 127 covid fractions. -- infections.
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they have been told to avoid non-essential travel out of the city. the outbreak was triggered by imported infections. and pfizer bill has gained clearance for emergency use in the united states. this delivers a more convenient treatment option for at-risk patients. this is the first at home medication authorized for covid-19 and in a large clinical trial, it was shown to reduce hospitalizations by 89% when given a high risk after three days of the onset of symptoms. there are new concerns for anyone flying this holiday season and you probably guessed it, it has to do with covid. the top medical advisor to the world airlines says aircraft passengers are twice or even three times more likely to catch covid-19 during a flight after the emergence of the omicron variant.
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the international air transport association says business class may be safer then more densely packed economy cabins. 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 su keenan, this is bloomberg. >> thank you. let's do a market check as japan comes back from a lunch break. we have impact among the biggest gainers and oil prices. shares have tumbled to the lowest levels in 22 years. failing to win backing from japan as well as the eu. the yen is flat at 114. some stocks we're watching, chinese tech stocks are trading in hong kong. a lot of this pressure is something the most since its listing on the back of tencent, planning to give away all of its shares. evergrande is up by 3.5%.
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rishaad: let's look at the japanese vaccines. the government should speed up its rollout of booster shots. it has been criticizing the pace set by the health ministry. this was after the country found its first case of community omicron transmission in osaka. let's go to isabel reynolds. how is japan actually faring with this new variant? >> it is hard to know at the moment. what we are seeing is the overall numbers of cases in japan are creeping up. the numbers yesterday were higher than we saw for the whole country since the end of october. that said, it was only something around 268. really relatively low compared to the u.s. or lots of parts of europe. we are seeing deaths have been
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1, 2, even zero some days over the past few weeks. but as you mentioned, we saw at least three community transmissions in osaka announced yesterday. that means there are probably a lot of cases out there we don't know about yet. therefore i think we can expect that this is the calm before the storm and we are going to see a big rise in cases in the coming weeks. >> why is the former vaccine minister so dissatisfied with a booster rollout? >> the key is the timing. the plan is for the population to have to wait eight months in between there second is of the vaccine and the third dose. he is saying there is really no need to be waiting that long. there are 56 million doses already in the country according to them.
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why don't we roll them out a lot faster given that omicron is already here in the country? there are already another 70 million doses due to arise in japan in the first quarter of next year. they will have enough to cover the whole population much faster than he is exley saying. he is saying the health ministry will actually have to get on with it. >> they are planning a more equal society. but this gauges of the plans to reinvigorate tokyo as a global financial center. >> yes. if we look back over here, tokyo thought they had a golden opportunity to pick up the people who were a little concerned about the situation in hong kong. this could shift to tokyo instead. what we are seeing is a very different outlook from what we saw.
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this is much more about rectifying the inequalities in our society and bolstering the middle class, raising wages for people on low incomes so these are not really seen as the welcoming tactics that the financial community would like to see. there have been contradictory statements on tax. we have seen some benefits but then we are seeing other taxes, that capital gains tax which is not welcome by many in the financial community. >> thank you, isabel. stay with japan, they are set to unveil another record annual budget this week as they add to the world pause heaviest debt load with more spending of -- the head of an election.
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it is to support these ambitions for the spending plan ahead of this election. this is an economy that has been struggling to get inflation up to speed, that 2% target is nowhere in sight at all. >> absently. the combined spending is aimed at what isabel is talking about. the foundations they want to lay for a new form of capitalism. the one that distributes income more evenly and a long-term perspective here. the thing about this debt load, you can have the spending plans change at any time because this allows for extra budgets which are not scrutinized. at the moment, we are looking at a record budget and we also have to jump in to tax income as well. there is also that bond issuance
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around 36 or ¥37 trillion. next, we will be speaking to india's leading private lender. talking about how foreign investors have been driving the rupee. this is bloomberg. ♪
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>> let's look ahead to key stories. what investors are watching in india. the tycoon looking to raise as much as $1 billion through bond sales in january. and the combined entity of sony pictures and india entertainment will be able to challenge netflix and amazon's a stranglehold on the market. you can see nifty futures to the upside even though we are coming off the highs of the day right now. >> four minutes to the india open.
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this is the capital market regulator as our bankers review their due diligence standards. what is really the main concern here? >> a warning was issued yesterday. the need to do more compliance especially in the new age of technology company's, india is ready for these ipos. the last leg of israeli -- concerns are emerging that some of the company, especially the technology backed startups, some of which are still reporting losses but are looking to review
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that on the exchanges sure that the issues are hiring. we saw india's largest ipo having a rough debut. following that ipo, we are seeing a collection of indian stocks that have prompted the regulator to raise concern about how companies are valuing the ipos and now they are insisting that investment bankers should take a lead and as company is to be more compliant -- more clear about the way they are valuing the ipos. >> retail investors this year have become a huge force in india. according to some measures, they make up more than half of cash trading volume but a lot of these retail investors don't
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have the knowledge. they tend to bear the biggest brunt of stock crashes. i believe this concern is whether the regulator is interested. >> absolutely. it makes the fundamental impact. as you mentioned, the retail investors have emerged as a stronger force in the indian market. the biggest ipo tanked almost 50% from the issuance price. it makes a bigger impact in terms of sentiment and also it asks questions about the regulatory approach. it once -- wants technology companies to make pricing more
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clear in terms of how they are valuing ipos. at the same time, they are looking to make the companies get longer-term investors. chris india has just joined the trading day. -- >> india has just joined the training day. -- trading day. the nifty thank index is up by 7/10 of 1%. indian stocks have been on a tear this year on the back of the ibi -- our b.i. slashing rates -- the rbi slashing
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rates. rishaad: coming up, we have a crypto entrepreneur speaking about whether cryptocurrencies can shoot for the moon next year. this is bloomberg. ♪
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>> let's take you to space.
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the new seats on jeff bezos's blue origin market have been awarded. one went to justin son. why he -- justin sun. why he became part of jeff bezos' s space efforts rather than elon musk. >> i wanted to do this as soon as i got a chance. this is a very good initiative. this benefits space to inspire the future generation to go to
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space as well. i believe that entering space may become a dream that everybody can achieve, meaning our generation. >> justin, tell us some names. who are you taking with you? >> i have not decided. correct i bet you're getting a lot of interested phone calls from friends. he will also be taking the flag of granada. how did that appointment come about? justin: first of all, i think i will be representing grenada and to represent grenada but most
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importantly, i think i want to promote a digital economy and blockchain economy in the vcl and grenada. i want to -- i believe that this will be good for the caribbean islands. rishaad: let's take a look at india with the rupee having its most swiss year, ending this quarter as the worst emerging-market currency. declining about 2% so far this quarter. thank you for joining us. what has been going on? >> many things. not one thing. many things are happening. the one on the upper part of
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everybody's mind is the omicron variant. the second thing is as far as the dollar rupee is concerned, you can see that the growth is back on the agenda. that is the reason why the deficit has gone up. oil prices have been stubbornly high. as you know, india is a big important -- importer of oil. that is the largest egg in our basket. third, you said it rightly, we have seen some sort of profit from india. there have been a lot of new ipos hitting the market in the last couple of months. but to be honest, the last move
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has taken us by surprise. rishaad: valuations have been looking tougher for equities. what do you see next year for the currency and we could have more of the same, high oil prices and valuations where they are. >> if you ask me, for the next year, my production will be we are doing 74-77. >> i am just wondering how appealing the rupee is as a carry trade. we know that the rba has been dovish when you compare to other central banks. is that hurting the rupee as the carry trade? >> yes, you're right. it is hurting.
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fundamentally, if you look at this, unless we get capital inflows, a rupee will have a significant deficit. that is the fundamental thing. obviously, all of the things will either help or go against. >> what assumptions are you making about how the rba -- what kind of strategy it will take in terms of its interventions? correct that is difficult to guess but what i have seen in my long career is that if the rupee appreciates too much, i see things intervening and when it starts -- i don't see them intervening too much.
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there is no specific point at which they would hold it that is the stated policy. we have seen that happening in the market. we have seen that if that is accessible, i think the same change will follow. rishaad: all right, we have indian bonds likely to be included in global bond indices sometime next year. there are two parts to this question. that would surely require a lot of funds to actually invest and by rupees. that could be a support. but what about you as a bank? how are you gearing up to handle all of this? >> what we are expecting when india is included in the bond index, we are talking about maybe $20 billion of inflows into the country. they will be positive for the
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rupee. for the banking side, there is nothing specific we need to do. >> thank you for joining us. let's take a look at markets. we have markets pretty lackluster. reports are suggesting that omicron is not as bad as first thought. yes, more infections. also, the hang seng technology stuff on the back of planning to sell its shares or give special dividends to its shareholders. i think that i meant to say tencent. rishaad: absolutely. tencent.
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all right. that is it for this eve of christmas eve bloomberg markets. next, we are all set for daybreak middle east. ♪
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>> from the heart of where innovation, money and power collide. in silicon valley and beyond, as is -- this is bloomberg technology with emily chang. carolyn: welcome to bloomberg technology. i am caroline hyde. i have absolutely no script some on the television prompter so i will be ad-libbing as we move toward the marquis technology headlines. i'm looking at the movement in shares as the fdli


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