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tv   Bloomberg Markets Asia  Bloomberg  January 20, 2022 9:00pm-11:00pm EST

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governments. plus we speak to the ceo of just the second blank-check company to list here in the lion city. pegasus asia's neil parek joins us live this hour. rishaad: technology at the moment is at the forefront. we had the nasdaq 100 down 10% from it peak. the specific story, netflix and peloton taking and after-houirs hammering. perhaps one or two punches coming from the fed in the pie plate the -- from the pipeline, sending yields down. while on the way down. stockpiles in the u.s. more than expected. haslinda. haslinda: and you talk about how treasury yields are slightly lower, despite that, stocks continue to trend lower. you talk about the nasdaq,
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technical correction. traders saying perhaps the s&p will go that way as well. and keep an eye on the t opix, also heading for correction. it is far from over. where we are in terms of the benchmarks, losses across the board. nikkei 225 leading the pipe lower. and it is a tech story in china, the government saying we are putting a lid on our influence on government. it is targeting not just the party itself, but state-owned enterprises and financial institutions. in terms of risk-off, where do you put your money? the yen is the only currency right now in asia that is trending upwards. we talk about the nasdaq. expectations are that yields are going higher, so expect greater pressure for tech.
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haslinda: absolutely, and when looking at what is going on with the hang seng or asia tech index, let's look at the moving parts. the golden dragon index in the u.s., chinese companies listed over there are heading lower. that's what we have at the moment. we have beijing tightening regulations on areas from digital finance to internet security, online games, doubling down upon that. let's look at the renewed pledge to a crackdown on corruption. we have an added emphasis that perhaps will likely target other aspects here, as well. let's find out what is going on in aggregate as we get over to over chief north asia correspondent, stephen engle. steve, let's get the latest, what is the chinese government actually doing, what do we know? stephen: we kind of had to dig
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into this and see how much weight this has and see if it is actually new. we know that the corruption campaign that was launched in 2012 when xi jinping came to power, he saw it through two terms and potentially a third term. how is that evolving? we know from this communique coming from the watchdog plenary session, they put out a statement that they will continue with the anticorruption campaign, if you will, against all aspects of the economy. if there is corruption, they will read it out. but what is interesting is where they singled out big tech. not necessarily by name, but by the euphemisms they have used. when they did the antimonopoly crackdown. they essentially are calling it a crackdown on a reckless expansion of capital, a disorderly expansion of capital,
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which has been the euphemism for fintech, whether it is alibaba or tencent or others' expansion into fintech -- their data collection and overreaching, according to the government. their influence on the society and economy. so this could potentially be read as an increased regulatory crackdown on big tech. that is why alibaba shares are sinking, about 4% in hong kong, in addition to the headwinds coming from the tech selloff in the u.s. there is also this financial times report about a cctv documentary that kind of implied that ant financial is caught up in some shenanigans with a brother of a former communist party official in hangzhou. that said, that is nothing new, bloomberg news reported pieces of that story back in august. so it is just adding to the angst and the concerns that
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regulatory crackdowns are not going to ease on big tech. haslinda: sheikh stephen engle, our chief north asia correspondent in hong kong. thank you for that. now to the chinese property sector. we know the property sector has been beat up this week, especially on the back of expectations that the government will continue to support property plays. we saw the lpr getting cut. today those property plays are giving up gains. country garden has just sold nearly $4 billion in convertible bonds. and evergrande says it will engage advisers to help with its debt issues. the distressed developer is said to be failing to engage on its restructuring plan. . for more, let's bring in our bloomberg china credit editor, rebecca choong wilkins. what is the latest with evergrande? rebecca: we have seen this group
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of ad hoc committee of offshore bondholders essentially criticizing evergrande for its own take restructuring procedure, a lack of engagement, actually threatening enforcement action. we know there have been tensions between creditors and borrower, they are not unusual, but it is important to note that this is the first public sign we have seen in time of rising tensions between these two stakeholders. and it does flag the broader risk for global investors involved in any restructuring in china that relies heavily on state involvement. and relies heavily on such a complex set of companies. a complex corporate structure. we already know that the holders on the offshore market or at the back of the queue. but it will be interesting to see whether we have losses in the notes of late will hold. some funds cited potential interest in the notes.
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since then it has come down to tencent on the dollar. that reflects dwindling optimism about the hopes of recovery. rishaad: tell me about country garden. they are selling half $1 billion of convertible bonds. what do we know about this and how does it affect their balance sheet? rebecca: quite a significant sale, and larger than the other reported 300 million-dollar convertible deal that ifr reported sort of failed to win enough investor support to go through. that report really did way on the bonds. there were concerns that country garden didn't have the funding everyone assumed. so this is a show of strength, coming out and proving to the market that they can sell a deal . and we are seeing some optimism around that. country garden dollar bonds are
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up today on that conviction of optimism. and i think that, plus the news of the presale escrow and the loosening of the funding conditions will be held -- helping other friends closer to country garden. because concerns are whether or not those companies have the opportunity to move around their cash rather than the fundamental worry about the basics of their balance sheet. we will continue watching that today, but it looks like china high-yield property firms raising a little bit as we head into the morning. haslinda: bloomberg china credit editor, rebecca choong wilkins a look at the white house now. geopolitical damage limitation. let's find out what is going on. here is the first word news with su keenan in new york. su: let's get right to it. president biden has again warned russia of a severe response if it's forces move into the
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ukraine. he continued efforts to clarify his response to a question at a news conference earlier, that suggested western allies didn't agree on how to react to a small-scale attack. u.s. secretary of state antony blinken will meet russian foreign minister sergey lavrov in geneva later on friday. >> if any assembled russian units move across the ukrainian border, that is an invasion, but it will be met with severe, and coordinated response that i will discuss in detail with our allies. but there is no doubt -- lead let there be no doubt at all -- russia will pay a heavy price. su: separately, the biden administration is -- real-time data from businesses operating in china to determine whether omicron outbreaks pose a risk to the u.s. supply chain.
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officials said it was too early to determine the impact to the economy from the variant or to lockdowns. we are told information is being shared with companies in the supply chain to alert them to potential delays. the speaker of the u.s. house, nancy pelosi, says the house is close to finalizing legislation to bolster america's competition with china, and to aid the domestic chip sector. the bill has bipartisan support, and is a major priority for the biden administration. progress on the package had stalled since the senate, passed its version last june. two house committees approved bills with similar elements, they were not packaged together. 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. haslinda: still ahead on
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"bloomberg markets: asia," we speak to the manner leading singapore's first spac listing as the company makes its debut. pegasus asia's ceo will tell us about potential acquisition targets. rishaad: that is coming up later this hour. but next, we will be talking strategy with the chief investment officer of dbs group, to find out why he is betting on the u.s. and european equities. what is ahead. this is bloomberg. ♪
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>> a lot of people were talking about inflation, but their portfolios don't reflect it. the portfolios are looking at the old regime. i think that is the uncertainty you are seeing now. >> we also believe that we are going to have good corporate and economic growth, and we think that that is going to be a balancing effect. >> markets are struggling really
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hard this week, in particular the last couple of weeks, trying to recalibrate and change expectations to the federal reserve. >> the expectation is what does it mean for stocks, bonds, your portfolio? we can talk about where we think portfolios should be positioned in the face of higher inflation. haslinda: some of our guests, reacting to the inflation story. we have seen it lay out in the markets rish, today in particular, it is a sea of red. rishaad: it is. let's get to that dbs group chief investment officer, hou wey fook. thank you for joining us. what is going on, exactly? guest: whenever the fed changes policy, in this case it made a u-turn, removing excess liquidity and possibly raising rates three times this year,
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obviously you would get volatility in the markets. and you can see a lot of bifurcation in the markets, and therefore we have been advocating for portfolios to be buying quality. a great example is, if you look at nasdaq, you have got the big-tech companies, small tech, some call it speculative tech. that has been hit really hard because they trade on the price point and earnings. and that has dragged the big-tech companies' shares down as well. we think it is a great opportunity. but really the central focus is to buy quality. rishaad: regulatory overhang is certainly the case we have seen in china a few months ago. now that has reared its ugly head as well. does that make life more difficult as an investor? how worried should you be of that, and i suppose this is a
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discount for chinese equities as a consequence. wey: china's big-tech companies used to trade as a valuation premium over u.s. attack. it was justified because we only have a handful of online payments, middle-class growing population of 1.4 billion. with the policy reset, it has become cheap. but we all know that cheap can stay cheap if regulatory headwinds are not cleared. i think we need to look at catalysts. one possibly could be the government coming out and saying , these companies can continue to operate commercially. obviously not in the same configuration as the past where they dominated across the ecosystem. this is not dissimilar to the u.s.. the u.s. has problems as well with the dominance of big-tech companies. we need to see that catalyst. evaluation ways, it is very
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attractive at this -- valuation-wise, it is very attractive at this time. rishaad: we have heard. rishaad: people say volatility will define a 2022. volatility for the russell 2000 is close to 37. how do you hedge against volatility? how do you play this? hou: ok. so we think volatility will be here for a while longer, because of this uncertainty over the fed and its pivot toward tighter policy. the way to do it is really what we have been advocating, which is a barbell approach. on one hand income generators, buying into dividend-yield ing stocks and credit. and also buying into growth companies. if a portfolio would like to have more income, what you can
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also do is to sell call options against equities. given the higher volatility, that is a great, i would say, source of income in addition to dividend yields and in addition to bond components. haslinda: you are still liking u.s. stocks. we have the likes of jeremy grantham saying that we are in a super bubble. why stay there when you can get value elsewhere, especially in asia? hou: so, our bible approach would be, like i said -- our bible approach would be a long -- our barbell approach would be on the secular growth companies. there are pockets of asia which are good for dividend yields. china large banks. in europe, we like the european
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integrated oil companies. so the portfolio income generators would give you about 5% yield. that construct, to us, is optimal, superior in this situation. whenever the fed raises rates, normally, the u.s. /european developed markets will do better than emerging markets, and that includes asia, as well. rishaad: very quickly, with that in mind, what does better in 2020 emerging markets or developed? hou: clearly, some part of asia, in particular china, is trading very attractively. we are awaiting catalysts. clients are really exposed to china internet stocks. what we are seeing here is -- what we're seeing here is, wait for the catalyst before you average down your existing holdings. if you are not fully exposed,
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you could start going in and kind of building a portfolio on these reasonable valuations going forward. haslinda: thank you. you can follow more on this story on bloomberg at mliv . get a market rundown in one click and commentary and analysis from bloomberg's expert editors. keep it here with us. this is bloomberg. ♪
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haslinda: welcome back. automakers under pressure. shares down almost 3%. omicron holding up operations in even more plants, amid closing
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operations. river, what led toyota to cut production by 47,000 vehicles this month? river: so this all started on wednesday here in tokyo. toyota discovered about a dozen of its lane workers at a factory had tested positive for covid, and that led to initial shifts being canceled at that factory. then again yesterday, thursday here in tokyo, more cases were discovered at that one factory and that led to further shifts being canceled there. that distraction, in addition to toyota suppliers also being impacted by spreading covid cases led toyota to say yesterday that it will produce almost 50,000 fewer cars for the month of january. rishaad: what does this mean for toyota and for its
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production abroad, how is it doing? river: i think that is kind of why these domestic disruptions have been really hard for toyota, because it has already been struggling to produce abroad as well. asia, in general, is a big production hub for toyota and other japanese automakers as well. one of the factories we have been keeping a close watch on is one of toyota's largest factories in china. they have halted for heading into two weeks now, because the city of tianjin had basically shut down following the discovery of some covid cases there. so toyota is not see a clear end in when it will be able to restart its factory. toyota going forward will face wider disruptions as omicron
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beginning to spread here, and will be a big risk, going forward. haslinda: river, thank you. here are the latest business flash headlines -- peloton has dismissed reports it is closing production of its products, however the company's ceo says he is considering layoffs, and taking steps to improve profitability. peloton missed estimates in the second quarter. the stock has lost about 85% over the past year. netflix fell in extended trade after forecasting weaker subscriber growth than expected. the giant is said to add just 2.5 million customers in the second quarter, blaming lingering followed from the pandemic and a tough economy. rish.
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rishaad: all right, let's have a look at what is going on with bitcoin, now falling below the $40,000 level. its performance at the moment, it has come back, but it is down 3% at the moment. it actually hit the lowest level we have seen since august 5. this is the crucial 40k level at the moment. perhaps more psychological than technical. taking a look at the tech stocks and of course, some of the stars of the years gone by, looking of course at alibaba and tencent. renewed pressure on these as the chinese government seemingly doubles down on its regulation of what is going on in the internet and technology space. tencent is managing to avoid the same fate alibaba is at the moment. this fei company is up, with three executives quitting in one day. not exactly a vote of confidence
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when your stock goes up 7.3% in light of all of that. let's have a look at what is going on with markets overall. japan following. it is a down-arrow story. at the moment the hang seng is trending positive actually.
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haslinda: it's 9:29 p.m. if you're in new york. bank of japan expected to expand its covid measures, and looking at the markets under a lot of pressure. the nikkei to 25 set to overtake the s&p is the worst performer this month. rishaad: and were approaching a
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correction for this market, off the peak, nearly down 10%. 5.4 percent to the downside since it did reset peak early last year. taking a look at what else is happening, we do have inflation numbers that came out earlier, national cpi there in japan a little bit weaker than estimates , .8% as opposed to .9% year on year. let's get away from markets and look at some of the first word news headlines. >> china's top anti-graft group said it will work to curb the influence with the new anticorruption campaign. it may be more bad news for a
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tech giant already grappling with regulations. the fed meanwhile taking steps toward potentially issuing the u.s. digital coin. it would dramatically alter the financial system. the fed does not intend to proceed without approval from the white house and congress. the u.k. top business in foreign officials will meet their top counterparts in sydney to discuss a deal allowing australia to build submarines for the first time. a plan to build them maybe
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announced on friday. and after the incursion at the capital -- the committee has requested voluntary cooperation from ivanka trump. she was a white house advisor and some say she was in the oval office on january 6 and leading up to it. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. haslinda: bank of america trimmed staff in the fourth quarter, showing a different way of managing cost in the face of robbing and -- rising inflation. the chairman and ceo spoke with bloomberg's david westin. >> it's a tale of many cities in
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the sense that there are some businesses which have not as much leverage there, overall we have about $33 billion in compensation and related expenses, benefits, compensation and bonuses etc. for our team, so it is the biggest expense by a lot. the only way to manage that is actually how many people you have going through it. you have to be competitive, you have to pay people. we don't want people who want to work for less last year. if the equity markets dropped, that changes the way the grid works and if the revenue comes down but the pay may go down. that is not something we ever hope happens. we would rather pay people more and grow the business. there are parts that move that way and parts that don't move that way as much, but it is a multifaceted, complex discussion. our job is to be a fair and
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great place to work for all our teammates and that's what we do with compensation practices. >> were looking at the tightening of monetary policy rather than loosening monetary policy. be specific, as you make projections, how many rate hikes do you expect in 2022? brian: there are two parts to that, the research team is terrific, and they have four rate hikes in next year. internally, we model our future income off the curve, but inflation is here. the economy is going to grow. six and 21, four in 2022, and think of it this year is making that adjustment. that's based on the fiscal stimulus that stopped last year and now the monetary stimulus being pulled up because the
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economy, as big as it was, growing faster, the conditions are right to go ahead and reduce the accommodation with one big caveat, does this virus go in some direction and cause damage that people don't understand? the good news is, with the war on the virus, we have the vaccines and everything we know about. the economy is slowing down and part of that is the engineering that goes on to bring it into more of a sustainable growth rate. because it was growing faster than it usually grows. will rates go up? yes. four times this year is the prediction. the real reality is, take the inflation out of the system and get it right, because the economy is growing very fast and inflation is growing very fast. as that slows down, we should get back to normal economy. think about our economy, being as big as it was in 2019.
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of course we have to worry about inflation, and that's why they have to raise rates. rishaad: brian moynihan they're speaking with our own david westin. and will speak to the man with one of singapore's spac listings. he will tell us about present jewel -- potential exposition targets. this is bloomberg. ♪
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rishaad: this is "bloomberg markets: asia." almost doubling from last year, our guest spoke exclusively with us at bloomberg. >> i always look at long-term performance and of course the technology industry has always and will continue to be a long-term performer and that is a bright spot in our economy. but in the short-term, we are dealing with a lot of very dynamic environments, both in terms of the political environment and in terms of the economic environment. in your overlay the need for central banks around the world to make some adjustments to their monetary policy and i think that is really what is creating a lot of volatility.
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investors don't like uncertainty and right now the adjustments that seem to be forthcoming or at least being predicted round policy changes. in terms of the capital markets and what that means in terms of raising capital, we continue to have an incredibly strong pipeline of companies that are seeking to tap public markets. last year we had about 133 filings at the sec for companies looking to come to market on nasdaq and when we look at that same number this time this year, it's double that, about 250. so we have a very strong pipeline of companies looking to tap those markets. the volatility of the markets might put a pause on that but at the end of the day i think we will see a very active issuance environment into 2022. >> what does it mean for volumes? do expect we will see some of
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these listings being pulled? just as we watch the dust settle, how long do you think that process will take? >> receiving periods of volatility over -- we are seeing. 's of volatility but different industries are affected by the pandemic in different ways. you overlay on top of that the global supply chain challenges we've had that i think have been exacerbated by the pandemic and you create a very dynamic environment. going into 2022 but we've seen periods of great performance and more involvement from individual investors in the markets and we've ever experienced. so you have this very dynamic economic environment and the
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potential for changes in monetary policy. that is creating more volatile environment right now. we've been managing through that since the beginning of the pandemic and we've had a record number of new rates and capital markets. almost $300 billion raised in the public markets last year, $180 billion on nasdaq. so there continues to be a very active and exciting pipeline of companies looking to come. rishaad: this is a spac making its debut there in singapore, with a month -- very muted start to the trading day. raising 170 million singapore
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dollars, that's 126 million dollars u.s. there. all this coming out of a press release earlier. haslinda: that's right, strong demand for retail as well as institutional investors. good to have you with us. you could've ipo to anywhere in the world, but you chose singapore. why? >> thanks for having me. we've had business in asia and singapore for many years. during the course of the investment proposition, we came across what we call technology enabled businesses who wanted to go public. in march 2021, stx came out with a set of regulations which allowed spac's perhaps to come
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to the singapore market. in september when the regulations finally came out, we thought they were an excellent set of regulations, well balanced, protecting retail investors, but at the same time, it would emphasize being part of the spac issuance. it was a combination seeing attractive investment opportunities that allows us to go forward. the same sponsor group has already done two spac's in europe including the largest one done in europe. the other one is pegasus entrepreneurs. experience group, and we felt that with the regulations in place and the ideas we are seeing in the market it made sense for us going forward.
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haslinda: it looks like it's not so bad considering it's a down day for markets in general. i'm just wondering why should -- what is your growth story? neil: there are a couple of things here. between investment in the ipo and the agreement which is huge, from one standpoint it increases the chance of the spac happening significantly. the second is, if you look at the experience of the sponsor group, it's already been successful in raising spac's with significant skin in the game. it's always good for an investor to see significant alignment of
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interest with the sponsor group. stx just had 3.5% -- the 70 million we are talking about was 3.5% of the deal size. i think it's about alignment of experience and a desire to put your money where your mouth is. it's an ability to coinvest with the sponsor while enjoying the upside that's not trading as a unit right now. rishaad: you mentioned technology, what are you interested in in particular? name names if you can. neil: i think the sectors we find most interesting are consumer tech, med tech, fintech of course, which is thriving in
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the region, and visions and services. that is a subset really of the overall technology in the region and we feel that there are numerous candidates we would like to go further with. in terms of market cap, we're looking at 1.6 billion post money market caps. i genuinely believe singapore will be a destination of choice for spac's. rishaad: but you must have a timeline for this special purpose acquisition company, what is the deadline for a deal to be done or deals to be done?
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neil: we have two years to do a deal by the rules. our intention, there is significant investment coming from the sponsors. so it's not about doing the first deal that hits you, it's about doing the right deal at the right valuation. as far as putting the money where the mouth is, it's clear that the money is not as significant importance as the timeline. haslinda: some say that in the u.s. we have enough spac's. what is the outlook for spac's here in asia? neil: i can speak for singapore because i've studied the regulation and study the market very closely. i'm very bullish because my view is companies should go public in the region where they are best known. and that stands them in good stead in the long run. if you are the company that is
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less than perhaps 5 million in market cap, out-of-the-box, it is probably one of the best avenues to go public if you're based in the asia-pacific region. a spac on top of that, it gives you an assured valuation but most importantly it gets you sponsor group like ours where you have the whole ecosystem assisting the company and expand. i think there are many candidates that would love to be part of this ecosystem. haslinda: neal, good luck in the coming months. staying on southeast asia, we have an exclusive interview coming up in the next hour. we discussed strategic opportunities and the economic outlook with president and ceo. rishaad: ahead of that, we've
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got hong kong's stringent quarantine measures, giving a boost to singapore's financial markets. big bang struggling to attack talent to come to the city. details are on the way. ♪
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rishaad: this is "bloomberg markets: asia." hong kong status as a magnet for international -- international financiers, with strict covid containment rules and stringent quarantine measures. if the picture wasn't bleak enough, a recent survey talks about the travel curbs. tell us in a nutshell what is happening. >> good morning. headhunters we've been speaking to our telling us they can only recruit candidates who are already in hong kong. simply because people are generally frustrated with the
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cities strict zero covid policies. low taxes are crucial to people now. given a lot of the factors, they are either looking to move or saying we are going to stay here but at some stage we will go back to wherever they came from. we are already seeing this in the data. workers in hong kong basically halved and further decline last year according to government data. haslinda: singapore will receive all these bankers with open arms. a lot of them say for hong kong in particular, it is a financial hub for the likes of goldman as
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well as hsbc. hundreds of thousands of financial jobs at stake as well. >> exactly. it is a gateway to many parts of asia, including china, a gateway to them from china. hong kong has long been the asian hub of banking giant hsbc and goldman and a whole bunch of wall street firms. many other funds and asset managers are setting up shop there. banking assets are equal to about nine times hong kong -- hong kong gross domestic product so it is a substantial amount of people and talent in hong kong. haslinda: have a great weekend.
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let's do a quick check of the latest business flash headlines. jamie dimon's compensation boosted to nearly $35 million after the most profitable year on record. an annual base our he of $1.5 million and a $5 million cash bonus. love diamond and the top deputy got special bonuses last year to entice them to stay. and already saying such an arrangement would make it more agile. rishaad: more big news coming on the show, the largest
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conglomerate in the philippines, we will talk to the chief executive, both telling us how the impact -- how the pandemic is impacting their industry and the supply chain. more coming up. this is bloomberg. ♪
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haslinda: it's almost 11:00 a.m. in singapore and shanghai. welcome to "bloomberg markets: asia." i'm haslinda amin. rishaad: let's have a look at our top stories, asian stocks falling on signs u.s. futures and cryptocurrency falling to multi-month lows. a decline from seven your highs after surprise gain in u.s.
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crude inventories and gasoline supplies. we have exclusive guests coming up this hour. haslinda: clearly it is a risk off day here. the s&p just able to hang onto those 2% gains. and the topix also headed that way. the msci asia pac headed down, and interesting to see how yields are doing, yields are easing and in asia it's a story about tech. the chinese government saying it will continue to contain the influence of chinese tech on the government and looking where we are in terms of the money index,
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down about 1%. oil is lower and metals continue to gain. the commodity index still putting pressure on inflation but on the year it is higher. rishaad: and the opening of the benchmark in bangkok, down .3%. meanwhile the thai baht under a bit more pressure against the dollar. that means the dollar has increased in value by about .25%. suggesting indian stocks will be seeing declines as well. one of the big stories at the moment is the bond story. india's bond market with $30 million writing on being included in global indices. a look at those markets in play
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there in bok opening down. haslinda: and what a ride it's been for the markets. let's bring in our chief rates correspondent, what are the key drivers here? how far will the declines go? >> i think declines in stocks, stocks were looking pretty nervous for a while, as have bonds. and it's the same basic reason which is that central banks globally are getting ready to pull the plug on quantitative easing and getting ready to raise rates. in various other different parts of the spectrum. with the expectation that with this month's fed meetings there will be strong confirmation that the fed is going to hike rates
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in march, which is what everybody expects. and then that will talk about when they will announce it. all this will prepare shares to explode higher in the wake of the pandemic from the last 18 months to two years. as that central-bank largess gets pulled away, stocks come down and bond yields go up. some particular drivers just recently, tech stocks have fallen on some earnings concerns and also on those higher bond yields. in the face of u.s.-russia geopolitical tension which is helping add to the volatility. all of that makes for plenty of reasons to -- for this risk off tone to extend, especially when it comes to equities. rishaad: and of course we've got hawkish central banks globally speaking.
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how much of that is engendering more defensive value stockpicking? >> it threatens at time to get overwhelmed by the general problems in shares. it's an environment where investors are needing to become a lot more discerning after months and months of it seeming like just about any dip you wanted to buy, so those value sectors are offering some potential, energy has been outperforming tech, although even that may be getting a little bit of a come down at the moment when you've got crude falling in the u.s. rishaad: garfield reynolds there.
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our senior entered -- editor join us with more of what is going on. it seems like there's doubling down on regulation of the industry group and on top of that, divestment is part and parcel of the story. >> that's right, it is another reminder to investors who have been piling into chinese stocks and other parts of the global market tumble that the regulatory risk hasn't gone away , china is not going to loosen its control over that sector. but on the other hand we have seen a great series of weeks also. haslinda: we are also tracking chinese property stocks, there
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was so much optimism and now back to thinking perhaps it's like catching a falling knife. >> volatility has really been the flavor of the week. country garden for instance, the nation's largest developer, its bonds have been falling and rising more than $.10 on the dollar on a daily basis, making it more like a penny stock in that way. but the trend this week has been , we're seeing hong kong stocks flat really for the day were other markets have more volatility. what's going to happen over the next couple of weeks is increasing the bets on whether china is -- whether some of the gains we saw this week will be
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sustained. haslinda: richard, thank you. that's get the first word news with su keenan in new york. >> we will start with japan, consumer prices excluding fresh food rose .5% in december for the full year. economist had expected a .6% gain. the numbers highlight ongoing effects in the inflation polls. in president biden has again worn russia up a severe response if it invades ukraine. one answer suggested western allies could not agree on how to react to a small-scale attack. the u.s. secretary of state antony blinken will meet with the russian foreign minister in geneva later on friday.
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>> if any troops cross the ukrainian border, that is an invasion that will be met with a severe and coordinated response. but there is no doubt, let there be no doubt at all, russia will pay a heavy price. >> britain's top foreign and defense officials will meet their australian counterparts in sydney later to discuss a security pact. the centerpiece of the so-called office partnership, they will build and operate nuclear powered submarines for the first time. australian media reports say they plan to deploy british nuclear submarines to australia, which could be announced after friday's talks. global news, 24 hours a day, on air and on quicktake by
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bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. rishaad: we've got two big exclusive interviews coming up this hour. a managing director and chief executive, but how the chip crunch may be affecting one of india's biggest carmakers. haslinda: up next, were talking about strategic opportunities and economic outlooks with the ceo. don't miss it. this is bloomberg. ♪
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haslinda: welcome back. the philippines have tighter
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restrictions, let's discuss thid ceo of the oldest and largest conglomerate in the philippines. good to have you with us. when we last spoke you said the worst was over for the philippines. are you keeping with that assessment? >> i hope so. first of all, thank you for having me on your show. omicron did come as a surprise to everyone, but fortunately, as we've seen in different parts of the world, it rises very fast and also comes down relatively fast. in the national capital region which is really the center of the economy, it is already coming down, the number of cases. the rest of the country is still climbing slightly, and we have about 70% of the eligible
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population that has already been vaccinated. so most of the cases have been relatively mild. haslinda: so what does it mean for your businesses? take us through the numbers for q4 and ahead to q1, what are your expectations? >> if we go back a little bit, last year was a tough year. were going to be announcing our results fairly soon, but in terms of the economy in general, we are starting to see some good signs in the last quarter of last year. unemployment was down 6.5%, which is probably the lowest it has been since the start of the pandemic. our remittances were up, have been very resilient. foreign inflows were increasing, and imports were increasing, which is a sign that consumption was starting to pick up. so we feel that last year year would have ended with 5.1%
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growth and we are hoping for 7.3% growth this year. i feel we are in all the right business is to be able to take advantage of that and we have some aggressive plans. last year we spent $4.5 billion overall in our businesses and this year will probably be more like $5.8 billion with the bulk of that going to ayala land. we keep expanding the infrastructure. and then there are some other investments in the group. rishaad: which are the weakest parts of the group, and in your view, when you get to
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pre-pandemic levels as well? and what about the headwinds you face, not just a virus but also you've got political uncertainty with the elections coming up. >> we are still looking at things with optimism. and feel that the prospects are going to be very good moving forward. no one quite knows how strong the recovery is going to be, clearly there has been rate deal of pain over the last couple of years, but we did see during that last quarter of last year what things could look like if we can keep the virus under control. for that period we really saw a distinct increase in activity in the country, economic activity. also people going out, going to restaurants and taking advantage of the opportunity to start living a normal life again. so so much really depends on the
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virus and if another variant comes our way, but i think with all the years that we've been watching this, we are getting much better at managing it. and because of the vaccinations, really most of the cases are very mild. like in every other part of the world, i think everyone is going to just have to live with this. rishaad: getting back to my question, the weakest and strong as parts of the country, how to the uncertainty of the elections play into this? >> we've got the listed companies, we got real estate that has suffered somewhat, although considering everything that is happening, has been quite resilient. ppi is still very strong, very solid and had decent growth last year.
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we've got our renewables company which is growing very rapidly, and so generally speaking, all of these businesses have stayed strong, and are continuing on their trajectory. we've got upcoming businesses we are developing that are not listed which is basically the logistics business and health care which has become so important at a time like this. the one company that did pay some difficulty last year was basically are industrials because of the supply chain disruptions around the world. but i think that applies to most companies in that business. haslinda: you talked about value, selling some assets in your portfolio which don't really extends and buying some others in investing somewhere else. where are you with that? >> the goal was to raise a
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billion dollars by next your, 2023. we are above $420 million in value realization so far. some of that has gone into our newer businesses and we've also been purchasing our own shares, given the fact that we feel they are undervalued. haslinda: we know that you swap some assets for shares in your unit. what is behind that? >> we had some real estate assets, they are significant in size, worth about 17 billion pesos which is over $300 million. and frankly they were assets that were of interest to ayala land, so by swapping them for shares, we basically were able to take on more shares of ayala
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land, which is of interest. and we can affect value to the real estate assets that are being transferred. haslinda: you talked about your energy business, it has helped to prop up the numbers. i'm just wondering are there any gaps in your renewables platform that you may want to feel? >> there on very fast growth tracks. we're in india, vietnam, indonesia, the philippines, and australia. we are still looking at additional markets but we've got strong platforms in each of those countries. the target for now was to basically hit 5000 megawatts by 2020 five. we think we are going to exceed that number much earlier, and we have a pipeline of 18,000
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megawatts. were hoping to be able to make some announcements for our 2030 aspirations hopefully in a couple of months. rishaad: how important is esg in the way you manage your various companies? put the emphasis on the g, because that leads to the other two perhaps naturally with an improvement. >> on the government side we've always given a great deal of importance in the way we run our companies, we have partnerships in all our companies and so we really operate under the highest possible standards in that regard. we also give a great deal of importance to our employees, the way they are handled. we have a reputation for being an employer of choice in the country. in terms of the others, we are
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giving them a great deal of importance. we are in the process of really developing our roadmap for our climate ambitions. we've already declared that we will be net zero with greenhouse gases by 2050. so we are using the year to really get a better sense of how our carbon footprint is right now and then mark the major milestones to make sure that we get to the target in time. as far as the s is concerned, one of the biggest things were doing as far as society is concerned is helping with financial inclusion in this country. so many filipinos have not had access to the financial systems and too many services in the past. with all the digital
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transformations taking place now of which we have a major when taking place in the philippine islands and i think we've done a lot to give good services and products for a lot of people that were not really part of that system in the past. haslinda: businesses are worrying about inflation, for a company -- a conglomerate across many sectors, how about across the other sectors? >> costs have generally been going up across the board. i know the government is doing everything it can as far as local products and the products that affect the poor the most. but yes, we have seen an increase in prices even in construction materials, even in the solar panels and the cost of those. we are hoping that as the supply
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chain to settle down, that these numbers will also come down, hopefully. rishaad: thank you so much. some breaking news coming through to do with kkr, it has a special purpose acquisition company, pet supply company. his valuation about $14 billion. apparently it could go public through this company backed by the private equity firm kkr. all this according to those familiar with the matter. it raise $1.38 billion in its initial public offering last march. that's one we are taking a look at. this one we looked at yesterday, netflix shares getting a beating. executives trying to keep
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investors looking ahead to new markets and content even as the shares reacted in late u.s. trading, dropping hugely there. a disappointing subscriber forecast responsible there. ed ludlow breaks down the numbers. ed: it was hard to pinpoint exactly what brought about this new phase of slower growth. with pain in key markets like latin america, and there is also some covid overhang, in part responsible for the delayed release of some shows it may come at the end of march at the end of the quarter. executives on the call showed frustration about the rate of growth. they cited growing competition from the likes of disney and hbo. that led to worries that this is a market in streaming that is becoming saturated. there were some bright spots. in the asia-pacific, growth in the fourth quarter was strong, largely on the back of the success of squid game, something
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that was watched all over the world. also a focus on paying down debt in the year. ultimately netflix ended the fourth quarter with 221.8 million paid global members. executives try to paint a positive picture on the content pipeline. they set a new movie will be released every week on the netflix platform which they hope to bring back that growth in new subscribers. they really focused on keeping investors, talk about new countries, new markets, new areas of business like video games for we know they've invested heavily. that's to be focus right now especially in the wake of the microsoft activision game. they said they would not do any knee-jerk reaction, they don't plan to buy a studio but they do want to see careful growth while still focusing on the content
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that will bring back new subscribers. ed ludlow, bloomberg news, san francisco. haslinda: the netflix vice president of content in asia will be joining us on tuesday. you don't want to miss that. see what's responsible for bringing squid game to netflix. taking a look at markets as china goes to lunch, it's a sea of red. the msci asia pac net -- extending to be on 1%. australia leading the pack lower with losses of more than 2%. this on the back of losses on wall street overnight. the s&p unable to keep to that 2% and the nasdaq in technical correction territory. were also keep an eye on the topics here in asia, it could be heading in the same direction. if you're looking for a place to
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find shelter, the japanese yen is up by .4% versus the usd. keep it here with us, plenty more ahead. this is bloomberg. ♪
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>> chinese markets going on a break. under pressure today. the index down 0.79%. influence of chinese tech. in particular, the party itself,
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enterprises in the financial sector, as well as property plays under pressure. the credit crisis remains the focus for the csi 300 down 0.91% . burke, chinese stocks have been -- remember, chinese stocks have been gainers, propping up property plays. there is a broad indication support for the sector with the cut. nikkei 225 negative, expanding declines. the topix set for a technical correction. 1.4%, reflection of the slump in the s&p which could not keep to the 2% gains. begin is higher.
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-- the yen is higher. on 1.2%. the commodity index -- down 1.2%. the commodity index lower. oil getting dumped. it is taking a breather. we are watching the world, bitcoin below $40,000. ethereum dropping 9%. that is a look at the markets. let's get to first word news. >> thank you. the biden administration is monitoring real-time data from businesses in china to determine whether the omicron outbreak poses a risk to the u.s. supply chain. an official says it is too early to determine any impact on the american economy.
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we are told information is being shared with companies in the supply chain for potential delays. the fed has taken a key step towards potentially issuing a u.s. digital coin. the move could alter the american financial system. thank officials are seeking feedback on a government-backed coin through may 20. the fed does not intend to proceed without support from the white house and congress and would prefer lawmakers passed legislation to authorize the currency. russia's central bank has proposed a blanket ban on the use and creation of cryptocurrencies. russia is one the biggest crypto mining nations in the world. it says digital tokens have the hallmarks of a pyramid scheme and undermined monetary policy nc crypto as damaging. -- and see crypto as damaging.
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airports across the u.s. east coast, including new york city, are under an advisory warning for possible flight delays. snow at the directions -- and other factors could lead to disruptions. the faa is minimizing impact allowing aircraft models to fly near zones near airports. it is the first major test of how the air traffic system will perform after 5g went live wednesday. 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. haslinda: as rishaad: antony blinken will be meeting in geneva friday as tensions escalate over ukraine. president biden warned any
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russian troop movement would prompt as swift, severe and united response. >> my guess is he will move in. he has to do something. >> we have to be ready for everything. >> if moscow chooses aggression, we will impose swift and massive costs. >> the russian side is aware of our determination. i hope they also realize the gains out way -- outweigh the use of confrontation. >> any use of force against ukraine will be a serious strategic mistake by russia and will have severe consequences and russia will have to pay a high price. >> it will be a disaster for russia if they invade ukraine. >> we don't threaten anybody with anything, but here the threats addressed to us. haslinda: president biden and other key officials. let's get more on the story.
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what is the latest to resolve the crisis? >> secretary of state tony blinken was in berlin yesterday. he met with the german foreign minister and counterparts from france and the u.k. they issued a warning that any russian aggression against ukraine would trigger a serious economic response. a lot of people are saying the same thing. tony blinken is scheduled to meet today in geneva with the russian foreign minister, so that could be the last big diplomatic attempt to resolve this crisis. rishaad: the thing is are the americans and europeans on the same page with regards to sanctions?
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and what of the sanctions likely to be? >> that is a major problem. it does seem like the americans and europeans are not in agreement about what the sanctions should be. we have heard them say it will be tough sanctions that are disastrous for russia, but it seems like that rhetoric is masking disagreement among americans and europeans about what should be included in the sanctions. for instance, many in the u.s. like to see the gas pipeline from russia to germany called off. that has not started operating, but it is supposed to soon, and the americans would like to see that off the table. many in germany and europe do not want that. they see themselves as quite vulnerable russian retaliation, especially since europe relied
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so much on energy supply from russia. that is a big issue that needs to be resolved. to what extent the sanctions, to what extent the americans and europeans will be imposing sanctions, what will it cover. haslinda: thank you for that update. breaking news, china regulators giving notice to four ride-hailing companies. it is telling them they have to protect drivers' interests. this will add to pressure in the regulatory crackdown in china. alibaba down by almost 5%. rishaad: right. coming up, one of the biggest automakers navigating the global semiconductor crunch. we have an exclusive interview
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on the way. that is next. this is bloomberg. ♪
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haslinda: this is "bloomberg markets: asia." a big day for ending earnings,
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several of the biggest companies that report after the close. here are some we are watching for. companies expected to report higher profits, expanding margins. shares have gained 5% this year, 20% over 12 months for reliance. rishaad: yes. looking at this persistent semiconductor shortage, posing a challenge to india's electric vehicle makers. we have a budget that may be crucial for the industry and the transition towards ev's. let's discuss that with one of the man who runs one of the biggest automotive companies in india. he is with us now.
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thank you for joining us. how bad is it? how much are you suffering from these bottlenecks globally affecting all these oems? >> good morning. it is a pleasure to be here. things are starting to improve. covid is hopefully starting to recede. we are starting to see signs of that. the supply chain issues across the industry have become better. we have seen them worse during the second wave in india. to some extent in other parts of the world as well. at started to become better today. -- that started to become better today. rishaad: what is your outlook for this year? how would it compared to last year in terms of sales? >> i will talk about the industry. we are in a silent.
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now. i will focus on the economy overall. the outlook for the economy is positive. targets are showing 9.5% growth, next year, 7.5%, so they could be higher than that. the auto industry is poised for a strong rebound. it has been buffeted by a number of factors over the last two or three years. we will see more demand. therefore, i am bullish on the industry. rishaad: talked about how you are optimistic about the supply chain disruptions. -- you talked about how you are optimistic about the supply chain disruptions. talk about it. >> i do not have information for the industry, so i will hold off on that information. i will be able to report more details on that after. rishaad: how about --
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haslinda: how about your ev plans? >> we will be coming out with a number of models over the next three to four years. we are one of the market leaders today 68% market share. we have a numberof electric products coming out -- we have a number of electric products coming out, enabling us to be in this position where we have been for the last 10 years. rishaad: what is -- haslinda: what is the plan to accelerate your ev plans? >> plan to accelerate ev -- the plan to accelerate ev is about three things. as we look at ev adoption in india, it will be driven by the cost of ownership, range, and infrastructure.
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three-wheelers, we see those in place today, similar for two-wheelers, which is why you're seeing the switch to electric. for four-wheelers, it would take longer, but during the next three or four years, we should be in a solid position. rishaad: only -- tell me, import duties cut for ev's from tesla, audi, and others, so what do you expect out of the budget that could help you and others to make the transition towards electric vehicles? >> there have already been a number of incentives announced for electric vehicles. the scheme is robust. a second one has been announced as well.
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that is in place. ev makers have a number of incentives in india. in terms of duties, there are various duties besides customs duties, something the government will take a look at some point in time. rishaad: what are you doing on the battery side of things? >> battery technology has been evolving. we are not certain what the end state is for that technology. solid-state is a potential. there are a few other formulations as well. are watching that closely. there are two parts, the manufacturer of the battery cell and putting it together. in terms of the manufacturer of the battery cell, it will not change. the investments automakers are
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making is how do you put the batteries together, then at some point, we will have to assess if we get into the manufacturer of battery cells. that is a decision we and others that looking at closely, but we will wait for the technology to settle down before we make that investment. haslinda: give us a sense of your assessment of the indian economy. is it going to achieve its goals this year? >> it is said to achieve its goals. one challenge is to achieve the fiscal deficit target, as the dis-investment has been lower than expected, but beyond that, taxes are higher than expected. we see the economy doing better overall. manufacturing is higher. the sector is doing well, so the economy is doing well, and
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investment targets coming up, with an ipo in the offing, with that, things should be better. haslinda: if you look at energy prices, they are surging. india imports most of its oil. might that be a risk to growth in 2022 for india? >> we have seen high energy prices in the past. that will impact government revenue. not as much growth. there is a buffer for the consumer in terms of what the government charges for petroleum. as oil prices go up, the taxes come down. what that will result in is a risk to the fiscal defi numbers, not as much the grown members -- growth numbers. we see growth not impacted by energy prices, but some risk to the fiscal deficit numbers.
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rishaad: talked to me about m&a. are you looking for acquisitions or significant mergers and the groups you have? >> that is a question i will defer until after the earnings release. i am happy to talk about other aspects of it. haslinda: biggest risk for you -- the biggest risk for you? >> continuing supply chain disruptions. our -- we are looking at a geopolitical world that has greater risk levels than before. covid, the thought is it has
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receded. if it comes back in a stronger fourth wave, that could be a risk. beyond that, we are starting to see a lot more optimism in terms of things falling into place in the economy going well, so if i were to look at the balance, i would say a lot more opportunity than risk. rishaad: thank you very much, indeed, for that. right, let us check indian markets. it is a down arrow story. there we have it, right across the board. a lot more coming up. this is "bloomberg markets: asia." this is bloomberg. ♪ ." this is bloomberg. ♪
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haslinda: this is "bloomberg markets: asia." tracking the fallout of the global supply chain crunch. -- we are tracking the fallout of the global supply chain crunch. these are the top stories. dip arrivals to shenzhen's word delayed by week.
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biden team says it is on alert for china omicron disruptions. toyota has extended production holds has rising -- as rising cases impact production in japan. it would impact production by around 47,000 vehicles. rishaad: let's look at some fresh data on cargo in the u.s. the port of los angeles moving record volumes last year amid an import surge. we saw these snarls of the supply chain brought on by the pandemic. the port saw 13% more volume in the long beach port also hit a reco erg terminal users can read more about the stories -- bloomberg
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terminal users can read more about these stories. just checking the business flash headlines. jp morgan raising jamie dimon's competent patient -- compensation of $35 million after the most profitable year on record. the package includes $28 million worth of restricted stock tied to performance, plus an annual base salary of $1.5 million in a $5 million cash bonus. he and his top executives got special bonuses last year to entice him to stay. latonya -- peloton dismissing reports after it missed estimates for the second quarter with per luminary revenue of $1.1 billion. the stock has lost 85% over the past year. american airlines forecasting
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the fourth quarter, with ticket sales starting to recover. its adjusted loss was $1.42 per share with revenue doubling from the year before. the carrier is expecting week revenue in the coming quarter, saying it would be 20% lower than 2019. let's look at hong kong developer country garden settling 500 million dollars in secured guaranteed convertible bonds do 2026. the exchange filing said net proceeds will be used to refinance offshore debt, do within a year. country garden is seen as a bellwether for contagion risk and china's troubled property markets. china evergrande hiring financial and legal advisors to respond to credit demands. the company's risk management committee has proposed external
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consultants. this comes after a bondholder group said evergrande failed to substantially engage in its restructuring efforts. haslinda: looking at the stock market in asia, not for the faint hearted. red across the board, as investors follow wall street's lead. the index expanding its decline to 2.5%. the nikkei to 25 down almost 2% -- 225 down was to percent. the topix heading towards its technical correction level. taking a look at where we are in the forex space, the yen up. investors taking shelter in the yen. rishaad: they certainly are. in hong kong, the hang seng not
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as bad as its other counterparts. in fact, there, coming up in four minutes, we are down, but not out. bloomberg daybreak: asia least is next. ♪
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announcer: from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. emily: i am emily chang in san francisco. this is "bloomberg technology." coming up, netflix shares plummeting. we break down the numbers. plus, peloton halti


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