tv Bloomberg Markets Asia Bloomberg February 7, 2022 9:00pm-11:00pm EST
investors are waiting for this on sale with nvidia set to be pulling out. hong kong speaking with us here, more virus rules on the way. >> there is the weekly one. the city is grappling with its surging covid-19 infections. this is a little bit later on here. we will be sticking to the dynamic zero covid policy. in order to achieve the best results, there is a focus on the
these special arrangements to ensure that it could remain interrupted. we made some special arrangements on imports. due to the enforcement of these measures, this will impact the supply of goods. that is why we need to fight the epidemic together. otherwise, we all have to pay the consequences. as for the use of the vaccine
pass, i am afraid -- >> we will leave that news briefing. we will be hearing about further curves later in the day and also carrie lam suggesting that china will come to hong kong as well. also, we have alibaba. nord stream 2 is likely to be canceled. there is that all-important inflation rate coming up thursday out of the u.s.. >> you are right.
as of now, not really. we are keeping our eye on the cpi data out on thursday. also, the hang seng index they were slumping almost 2% overnight. this is about the bond market. nobody is spared. not the u.k., not germany and not in asia. we are keeping our eye on the boj. this will contain rising yields for jgb 10. they are at a level where it is considered the tolerance level for the boj today. take a look at where we are.
>> the rate hike will not occur before that approach finishes. moreover, there are conditions that will have to be satisfied before the council feels confident our policy rate is appropriate. only once there are safeguards against premature interest rates. >> knowledge bring in our contributor, garfield reynolds. they have found the woken up. click i think the problem is that central banks woke up and
smell the coffee before they did. they responded in a way that the records would not say beforehand. also, how investors expected them to react. we had this environment where it seems that drives the rate hike and that drives the bond yield higher. >> how much will this move the market? they will remain elevated. >> there were concerns that the labor market conditions were slaughtered in january. although that strong data did cause a selloff on friday,
>> so far, most of the rhetoric out of boj, i have been watching the boj for many years. they have a lot of standard phrases they use. they have you moving toward acknowledgment that the states could need to move higher. in a lot of ways, it depends on how rapidly the 10 year yield gets to the point if i defend. if it gets there in a couple of weeks from now, they may will not respond. if it gets there after a fresh selloff globally, then you would think there was more chance the boj steps into intervene and says this is too far too fast.
>> good stuff. here we go. geopolitics at for the markets. let's get the first word news with vonnie quinn. biden confirmed the project would not go ahead in the event of a russian attack. moscow has repeatedly denied this. the u.s. and iran are inching toward the revival of their nuclear deal. talks will resume a week later than planned. the u.s. has restored sanctions
11 countries to cooperate on civilian nuclear projects. the u.s. and japan have announced an agreement to end tariffs imposed on japanese steel by the trump administration. anything beyond that will be subject to charges. japan has the fifth biggest steel export. those are your first word headlines. rishaad: it has been added to this u.s. unverified this. the company coming out and saying the addition to that has no impact on the business. essentially the top line is
minimal impacted imports as well. >>ightill ahead on bloomberg markets: asia. we will speak with david mitchell and why he expects explosive precious metal rallies in the coming years. but first, we will have more on the beijing winter liv-ex and how that goes into the pursuit of soft power. keep with us. this is bloomberg. ♪
opposition. there are customers such as qualcomm, microsoft and amazon, we not crazy about this. >> we have the softbank numbers coming up. we are wondering what they may be doing with that stake in alibaba. >> there is a lot going on with softbank. they are going to report earnings for the december quarter after market close in
tokyo. we expect they will talk about that arm deal. we think it will take arm public instead. people will be looking very closely at the financial numbers. the company was going through a blizzard. things really have not gotten better since then. there has been downturn in the tech market. that has hurt the valuation of some of the stocks in softbank's portfolio. most important, they will continue to be under pressure. that has hurt the valuation of softbank's holding in alibaba. >> asian tech executive peter
performance in which he fell on a second day, it was denounced as a disgrace. we have a huge national expectation and some of that is not being mentioned. fingers pointed at why they picked a foreign foreign athlete as opposed to an indigenous one. >> you are right. increasingly it is about these voices become louder and louder on social media. this is when nations with the u.s. and the rest of the western world is in question. let's bring in the next guest. she is an expert. she was a member of the academic advisory council. we have the u.s. olympic trials. she also wrote a book about the
2008 olympics. the beijing games. what the other picks means to -- olympics means to china. i am just wondering what does success look like? >> i think the significance of these games was never as clear as it was in 2008 windows games were seen as the coming out party for china on the world stage. i think this games success would be controlling covid. i think that would be a big contribution to the effort to rectify the damage done to its national image by the fact that covid started here and if they can have about organized game and make people focus on the sports rather than the politics.
>> there are so much controversy. i am wondering if china will change the liv-ex. >> i think both. china does not get changed the way that the china critics hope. we have to consider the organization of a mega event involved a huge amount of this with international actors. the media scrutiny probably helps china better gauge the opinion of china in the outside world. on the other hand, it is pretty clear that after 2008, the international limbic midi did feel that it needed to come up with a better way of dealing with these criticisms that different countries have human rights have uses and what is the ioc doing about it?
they have adopted measures to deal with this. there was actually a human rights clause. we won't get to see how that would have affected china. >> what does it mean for athletes that are representing china? this is something that was unheard of in 2008. >> yes. this is an exciting development. in the end this is not the china of 2008. the first athletes to compete in 2008 and they did have some hong kong connection. but that was an exception because it was china's olympic games and they wanted an athlete in every event. they did not have any equestrian athlete.
except for that, tokyo was the first time that china accepted a citizenship switcher. that was in track and field. these games are a departure. there are the two high-profile women. and then beverly jue. there are about 15 men and 12 women on the ice hockey teams who are born in other countries. >> what about the tennis player that went missing for a while? is this something we should do? >> at ticket is an important issue. i think we need to keep the larger perspective and consideration. the ioc has come under criticism
for not doing enough that as someone who has been studying the ioc for a few decades, i am sort of amazed that it did what it did. except for trying to achieve a 50-50 percent representation of men and women, it is not exactly a progressive organization. members come from all over the world and i can imagine that not many of them are sympathetic to this and they wish the whole thing would go away. i think that thomas, the president has to keep this in mind and keeping that in mind, it is pretty bold of him to even get involved at all and to do what he has tried to do. >> not without drama. thank you, susan. still to come, president biden plans to stop the controversial nord stream 2 natural gas pipeline. we have the details just ahead.
the broader market is half a percent to the upside. a bit of dollar strength. the dollar depreciating one quarter. bond markets could cause some concern as the bond continues. some of these companies are on the move. that makes no material impact to its business nonetheless. alibaba was 6.1% down. they continue as we have these reports that soft bank may well be interested in, of course, that selling off part of it that's in the company alibaba which it has 25% holding of s.k. pharmaceuticals on the way up. .83 of 1%.
>> south bank is said to have collapsed the financial times said that regulators in the u.s., uk, and e.u. all raised its condition in the semiconductor industry. it would have been the largest ever in the chip sector. e.t.p. president said that the rate hike will be gradual. legarde said that the central bank would remain data dependent. they could turn out softer than expected in the short-term. china's covid zero policy is continuing to put a damper on consumption. people traveled more than last
year but spent less. around # 0 million trips was taken. that was about 1/3 of the same period last year about 70% below prepandemic level. they fell 44% from 2019. hong kong is sticking by its dynamic hong kong policies. new social distancing measures will be announce later after infections sored to more than 600 on monday. local media reports the new rules includes limiting public gatherings to two people. lamb told reporters that china is ready to help hong kong fight the virus. global news 24 hours a day on air and on bloomberg quicktake powered by 120 journalists and analysts in more than 120 countries. this is bloomberg. >> vonnie, the pipeline would be
stopped if vladimir putin ordered an invasion of ukraine. biden spoke after a meeting with can german chancellor. >> the french president emmanuel macron holding six hours of talks with putin. let's have a look at some of the highlights from the news briefings as thee tensions do continue to simmer. >> of course, there's a military threat in ukraine, against ukraine. we see the number of russian troops along the ukrainian border. and that is a serious threat to european security. >> russia makes a choice to further invade ukraine. we are jointly ready and all of nato is ready. we're ready to continue talks in good faith with russia. neither russia nor the europeans want chaos or instinct when
nations have already suffered from the pandemic we need to agree on concrete measures. >> a number of president macron's ideas proposals promised to speak of them are possible as a basis for fort worth steps. -- for further steps. >> bruce heinhorn with a look at what's going on here. brooks what happened with that biden meeting with that german chancellor shultz. given that we had a u.s. president that was fairly unequivocal of the consequence an invasion of the ukraine. a german chancellor who really just because they were at one but did not seemingly come out and wholeheartedly embrace what the president was saying. >> well, rush, you're right in that we did hear from president biden unequivocally that the west would halt the nordstream
two pipeline if russia were to invade ukraine again the germans have been a -- ambiguous with what they want to do with that pipeline three been some disagreement within the ruling coalition. but the chancellor shultz did say that there's no daylight now between germany and its allies when it comes to what would happen to this pipeline saying that no, it would not begin operating if there were to be russian incursion into ukraine again. >> and we also had that meeting between macron and putin. what happened there? how much can they achieve? >> well, as we heard president putin did speak somewhat optimismically about the possibility of there being continued dialogue continue diplomacy. we know that the french president, president macron met
with putin for six hours and certainly no breakthrough. i don't think anyone was expecting any breakthroughs that point. but the good sign is that they do intend to keep talking. we know that president macron now goes today to meet with ukrainian president to prevent escalation of this crisis continue. >> what about on the ground, here, bruce? what are we hearing about kiev and its environment? >> so the ukrainians are concerned that all the alarms that the west is sounding are hurting the ukrainian economy so the message that we're hearing from president zelensky and his officials is that the situation is not nearly as dire as what we're hearing from western
leaders. we know that the ukrainians are hoping to get approval from the europeans for a big loan package that number is $1.2 billion euros. $1.4 billion u.s. and that's what they're hoping will come through next week. so the olympics are going on in china. it's unlikely that we're going to have any further military -- any escalation until that's that finishes. so it gives an opportunity for diplomacy to continue >> thank you. bruce einhorn there. precious metals headed for a particular volatile year ahead. all this to discuss the impact of rising interest rates on the markets next. this is bloomberg.
2.9%. you know what, there's no stopping it. he's not seen anything like this before. >> yeah, he said, you know, take your pick. you know what we're seeing in some cases extreme cases, super backwardation. i'm getting confused to we were trying to figure out how to fit in one single tv graphic the list of commodities an backwardation. we're going to put them all into one. so most energy commodities we're looking at two or three month spreads, by the way. you're looking at several base metals and in particular you're looking at copper and some of the contracts in shanghai. and when you look at the food inflation part of the conversation which we really need to start talk about a little bit more, you're getting a list there.
we talked about grape oil yesterday. and to jeff curry's point is that buyers are willing to pay premiums just to get the stuff earlier. that tease condition of most of these markets. precious medal -- metals are still ok. >> that's what we're going to be talking. jeff curry said he's never seen the market in the shortages that they currently are. we discuss the recent surge in those prices. >> right now, the upside risk in this market is exceptionally high. one of the reasons why is as you alluded to are the markets are tight from a physical perspective. whether you see it on the refining margins or in crude oil itself, the entire complex is extraordinary reflected in that
super backwardation. is that this market is very vulnerable very much of what we saw in european gas and power let's say late last year. oil has teed itself up to what gas and oil looked like. that's what we highlighted in risk back in october of last year. we're at that point right now. the question is can you come up with any supply or reduction in demand as you move into the spring to be able to eat the situation? in 2008 was a financial crisis. s that molecule crisis. we're out of everything. i don't care if it's oil, gas, coal, copper, you name it we're out of it. and the backwardation in this market is an indication of how different this market structure is from 2008. 2008, the curve was going up by the back end dragging it up. it tells you that it was paper
financial buying on the back end as opposed to out right shortages. this curve it's super backwardated, which is textbook shortages. in fact, when kane's created the idea of backwardation in the 1930's, this is what he had in mind. we have not seen such types of backwardation. i've been doing this 30 years and i've never seen markets like this. this is textbook shortages. >> there you go. jeff currie there. rising interest rates is bullish for precious me -- metals. david, thank you for joining us. it would seem as jeff currie that he was suggesting that we're out of everything. gold is doing nothing. isn't going to do anything in the future. and why has it not been seen as
a haven in times as what we're witnessing right now with all these various wars of worry? >> it's a bit of a complex situation. obviously in 2001, it was led by huge monetarily expansion. this of course, i will curtailed in investment flows into gold. why would you bother? remember gold is not an inflation hedge. it's much more of a crisis hedge. it's a form of money. and you've seen this lackluster performance between the precious medal sector. and then we've been curtailed of economic activity through micro ship shortages and hence car production numbers have fallen off the cliff. silver has a very close price correlation gold. and hence that's been affected by the head winds of gold. been affected by the overall huge demand for the financial
zation of asset markets, you know, stock markets, property markets, etc. and also the commodity sector. this is built within the commodity sector. we've been watching that a couple of years and that we were going to be moving into a major commodity super cycle. and that reece we find ourselves today. now, moving forward -- >> david? david: yes, sorry. >> yeah, yeah, david, you said moving forward. i want to know what happened with the likes of platinum, gold and silver looking ahead in the next -- in the medium term, let's put it that way? >> the first thing to really focus on is where we find ourselves really western centric with the raising of interest rates, you know, we saw lagarde and the fact that they're going to be slow in raising interest rates. the u.s. was forced politically
to rise interest rates. we've never seen some extreme nominal yields in over 70 years since the second world war so we are effectively in extreme financial repression monetarily debasement and the reason why we are in this crisis mode is effectively the extreatment balanceness, extreme nervousness of central planners on the states of the global economy. they can't effectively control this inflation jeannie that has been pulled out of the bottle. they raised interest rates into positive territory. the economy would have collapsed. so that's where we find ourselves today. based on the foundation of severe debt crisis. now, moving -- >> david, i'm just wondering, how do you position to maximum returns from precious me metals.
-- metals which metals will outperform? >> this is based on the opposite effect looking to take it. we've got geo political tension. but in every rate cycle hire, we've seen gold outperform especially when considering if yields were in negative territory. you saw this in 2004 to 2006. you saw this obviously in 2006 to 2019. gold literally rose in value as the rate cycle moved higher and capped out as rate cycles moved back down again. so we're talk about -- talked about it. they were talk about evaluation metrics. the likes of common factor are looking for a very bullish outlook in gold. i think this year is all about positioning yourself as far as
gold is concerned the other precious metals are being driven by other things and actually moving forward. this really covers the p.g.m.'s more than anything. so gold we're looking for any major corrections or corrections from here to diversifiable portfolios. we do expect in the next two or three years to have a significant revaluation in gold as this crisis continues to escalate. the bond markets clearly indicated that we're walking into a longer term recession indicators moving into 2003? >> david what, are the biggest risks to all your projections and estimates? >> the fed raise interest rates and we see an asset market collapse similar to -- similar to what we saw in the beginning of 2020. this will affect all classes and
will move into currency as a short-term play asset classes eagle in dust settles. this would be a short-term phenomenon during the precious metal second tonight the only men on the street at the moment seems be buying gold are global central banks buying hand over fist. for example you had gold sales by the investment classes of roughly 250 to 270 tons of gold last year. but global central banks bought 450 tons. there seems be stale great deal of interest by global central banks to diversify balance sheet. >> david? david: any moves should be tempered. can you hear me ok? >> david mitchell, from auctus
>> welcome back. and we're tracking the fallout of the global supply chain. these are the stop stories today. sources say the european union proposed chips act may mostly need to be funned by member states with less than 15% of money coming from the block's own budget. the coming chips act to rivals that of the u.s. washington is losing patience with china of its trade commitment ahead of trade data due later tuesday. source say that the u.s. has reached out to beijing after the nation filed meet the so-called phase one deal over the past few months. though no progress has been made. and as we've been reporting, the u.s. and japan have announced an agreement to end the 25% levy on incoming import up to 1.2 million metric -- tons a year.
you can read more of those stories on our newsletter that's on nitradenl. >> moving now. we've got l.d. energy solutions missing its full year sales target. this is after the e.v. battery making completed south korea's largest public offers ever. the chip shortages and raw materials have seen it as the second largest stock on the kospi index that's by max market capital lie zation. shares rising 20% on monday. this is all off of the back of reports. sources saying that the exercise economy is working within where an advise or after becoming a taker. but that doesn't mean that it will lead to transaction. peloton shares have fallen from
80%. that's as of the easing of pandemic restrictions fueled concerns about the company's grip. >> biologic suspending trading in hong kong after slurping in an access of 32%. this on the back of the u.s. adding it to the unverified list. it is currently suspended from trading after falling 32%. in other markets, here's how it's looking. china, hong kong under pressure. we saw the other night in the u.s. the nasdaq golden dragon index slumped. the index slumping lower by almost 4%. the big question is how will it look when it comes to the c.p.i. number in the u.s. on thursday. that will probably dictate what
bond sale with nvidia is pulling out and asia as well for the ranking shakeup. dolly taking the top spots from what kish. haslinda: it is about a tightening monetary policy and what central banks around the world rate hikes. we have the cpi data out of the u.s. on thursday. that could dictate what the fed does, whether that will be a 50 basis point hike for the markets. pretty flat right now. it dragged down china as well as hong kong. tech in play after the nasdaq pulled in dragon index slumped about to present. whew she biologics -- wuxi biologics not slumping as much. the ms ci is not as down.
it is flat at the moment. it is about bonds and yields. yields are higher across the board and that is the case in asia as well. it has been flat for many years for the germany tenure yield, but it is positive for now. rishaad: just getting back to the csi at 1% down, we have a situation where the raising of monday's gains post-lunar holiday rally is fizzling out after one day out. to take a look at what is going on, we have got health care on the biggest moves and we are looking at the u.s. department of commerce adding 33 entities in china to this unverified list, this includes wuxi.
they are playing a game of catch up and it is fizzling out as it were. it had plunged into a bear market just before that week on holiday. let us get straight to our china correspondent for more. the field factor was all too brief, wasn't it? reporter: exactly. i would not say it was a strong feel-good factor. you saw yesterday's gains almost erased for today and volume is not that convincing. now we are looking at the gains today and a lot of that is pressure on the biotech space. the chinese index, which had these high-growth companies entering a bear market today, joining to the csi 300. there's also this slew of
negative views. we are also hearing that the u.s. is running out of patience when it comes to china's compliance with the trade deal and also softbank's potential sale of alibaba and any other cell downs in the tech space that we can see. also another overhang for the market is china repeatedly talking about the expansion of capital. there was an article in the people's daily news today calling it barbaric expansion of capital. what does this mean? whether this is good or bad? it is not a positive market and when you see the pboc enjoying liquidity for two straight days, it is being cautious on monetary policy and not flooding the financial system with cash. haslinda: adding to the negative sentiment in the hong kong market, we also have what we heard from carrie lam earlier, the dynamic zero policy will
persist. sofia: exactly. we are bound to get more of an update later today after the executive brands -- branch in hong kong and that has an impact on the markets as well because there are inflation concerns with local prices soaring over the weekend and reports that trucks are getting stuck coming in from china, so it is not just -- sentiment in hong kong is not good for the property. the stock market is starting to slow. you have hong kong importing a hawkish fed monetary policy so the monetary authority is hiking rates into a struggling economy. sentiment here is getting worse by the day and obviously omicron , the latest virus cases show that it is something that the
government is struggling to control. more headwinds here for the local market as well. rishaad: briefly, the csi 300, they are down. we also have china disrupting 4.1% of its supply since july. the government should sure up some confidence for here. sofia: exactly and the government has not done much. it has been a lot of vocal support for the stock market. we did see before the lunar new year some mutual funds going to the by the stock products, but when we are looking at futures earlier in january, they vowed to avoid market volatility in big swings. we are not really seeing evidence on a broad-based support for chinese markets and we know that china wants to be
having the stocks and letting the market drag its course, but what will china do if swings get wilder? if this starts to impact sentiment in china where consumer sentiment is already taking a hit from the multiple lockdowns on sure as well. haslinda: sofia, thank you for that. chief china correspondent sofia horta e costa. let us bring in our chinese correspondent. traders get used to the idea of a tightening cycle, but not yet. >> it is more about how the supply will play out and what is going on with australia to what is going on where the bonds are selling off.
some of that is due to internal issues but there is also some comments from a former premier, backing the idea that we will have a fed hike rate by the end of the year and selling off the bonds. everybody's in the bond market is expecting the rva will hike at some space, but the question becomes, when will they do it, how fast will they do it, and is that in line with how they have been positioning themselves? rishaad: and nvidia in japan and the bond market, that is immune as well to these yield rises it is to the point where the bank of japan itself may have to come into the market. garfield: there has been a lot of attention on the boj and i am sure they are paying a lot of attention to the markets. the key to japan's bond market
is that it recently is on the hawkish realm coming out of the european central banks. with german bonds jumping back above zero, that is putting enormous pressure on the japanese government bonds. the question now becomes not when the boj will hit the 5% yields, it is how fast they will do it. the faster it gets there, the more clinically -- likely it is that the bank of japan will slap it down. the boj is likely to be the last cap of the rank when it comes to tightening policy. rishaad: garfield, good stuff. rml life -- our mliv contributor.
we have vaccine protests taking place and they have closed the ambassador bridge as a consequence in canada. what is happening here in hong kong is that further curbs are expected to be announced and what is going on was the first word news. reporter: hong kong is sticking by its dynamic covered policy with chief executive carrie lam announcing that h-mart measures will be announced later. local media reports that this could include limiting public gatherings to two people. they also announced that china's rate to help hong kong fight the virus. speaking at the white house after meeting german chancellor olaf scholz, biden confirmed that the gas product would go
ahead if russia attacks. they have repeatedly denied claims to invading ukraine. >> if russia crosses the border of ukraine, there will be no longer a nord stream 2. >> we are working together and are absolutely united and we are not taking different steps. we are moving through the same steps. vonnie: meanwhile optimism is building that the u.s. and iran are due for a revival of their nuclear deal. this would bring iran a return to the energy markets. since they last met, the u.s. has reported sanctions wavered, allowing countries to work with
iran on their nuclear projects. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haslinda: still had at this hour, try bondage capital cells off and we see opportunities from financials being supplied. this is the broadest move since 2020. also ahead, steve johnston walks us through the organization's have a year result. keep it with us. this is bloomberg. ♪
rishaad: this is bloomberg markets and we look at the sinking feeling towards china. the benchmark is up by 2%. we are seeing this benchmark index raising after all of its gains on monday. we have a broad selloff continuing investor caution about what is happening market wise. health care is one of the biggest losers in the broader market. the u.s. department of commerce adding some 33 entities in china. we have been hearing about wuxi biologics and that company did see its stock suspended. tech also down 2% did -- 2%. it is something that we are closely monitoring when i say tech because we are also looking at some conductors. haslinda: nvidia said to be
abandoning its projects on softbank. asia tech editor is here with us. what is the story here? >> we have seen this coming for a long time and the deal was always widely unpopular with some of the biggest names of the tech industry as well as the leaders. the reason for that is because the arms have been dying and chip architecture is at the heart of all modern electronics today so you can imagine a company like nvidia, it is rivals with -- when it has such influence and control over the global chip market. rishaad: we have the and results coming out, but they may be taking a secondary place with
people looking up the news and also what softbank is going to do with its stake in alibaba. what do we know so far? edwin: it is a good question and when they get on the stage, there is a lot to talk about prospect earnings. what we know so far is that analysts have noticed an unknown party of potentially softbank has registered for a number of alibaba shares. between that and the fact that some banks, what to call this value issue, has come down and has worsened dramatically because the global tech selloff. if you put those two factors in, that is why there is speculation that softbank is preparing to sell off a big chunk of its more since eft's will -- it's more successful industries. haslinda: as a result, what is
expected? edwin: i think we are going to see a fund loss. in particular, chinese tech shares have been slammed. alibaba for the most among them, but we do not discount companies like tiki that were cut in the middle of an intense chinese sector crackdown. that is back to the question of why softbank may be considering raising capital and lowering the ratio. rishaad: thank you, edwin. we can also return to the bloomberg terminal for more on those earnings from softbank. go to emmaline tv for more.
haslinda: let us get a quick check of the latest business headlines. lg missed its four-year sales target after the ev back stream maker rick ported the largest maker last month. they reported that an increase on supplies made for this result. taliban shares -- peloton shares is working white or after becoming a takeover target, but that does not mean it will lead to a transaction. they have fallen for their
stocks more than 80% over a time. rishaad: banking services provider suncorp says that it was hit by higher claims by natural disasters and the company is moving its dividends. we are here with the company's chief executive. >> thank you. . steve johnston is here with me now. i know you have had difficulties with the el niño weather events and different whether it disasters. -- different weather disasters. give us a sense of what it has been like. steve: most of the numbers were
in october and in december we were expecting more than 19 to prevent different crisis is that we have been managing over that number of time, and there restrictions around covid. the usual sentiment exceeded by -- then succeeded by $2.5 million. we also had market volatility which takes a toll on profits as well. the performance of business has been quite strong in that context. reporter: your stock rising pretty strongly right now. it appears that the performance stock is on the aas six at the moment, so the market is optimistic about this. what is the outlook? steve: we have insurance companies and with banks you have to focus on the headlines
and understand what is going on. we have been able to report strong growth and we have market-leading brands in australia. all of those brands are performing strongly to get about 7% of premium growth in the insurance company and 8% on the consumer side is a strong outcome. we are also seeing margin improvements across insurance as well. we have an underlying margin percentage of 21 42023, and we can now see this is a realistic pathway for the banking side. we also see the banks that for many years provided the earnings and revenues. this is the environment where the insurance companies are hit by a weather inclines and the bank sector delivers a very strong. you do end up with more cents per share. reporter: that means premiums
rise. is that something you are looking at and how are you going to remain competitive? steve: i think premiums have been rising for the last couple of years and that is a reflection of increased natural habits cost, frequency and severity of these events, climate change, all of that thing. for the years and beyond, we had the bush company years ago and we are seeing these claims activities this year. what that means is that reinsurance costs could go up and we have to fly that through. we are building a resilient business and we expect that over time we will be able to get on top of those issues and it will be manager bring -- managing our base for the number of years. reporter: and how have your
input cost been rising? how are you planning to tackle that because there has been local media speculation that you might be looking at job cuts. steve: input costs have been going up. billing cost, live equipment, all of those have been increasing. motor vehicles are becoming more sophisticated. it plays a significantly more sophisticated mode than they need to go. we have got different cloud based programs which is digital lodgment, the effects of all of these sources and the new ways of managing in terms of the builder operations. fantastic motor vehicle processes and what that has done is that it suppresses cost. that would reduce the cost of inflation to the motors, so we have single-digit inflation. on the high-end side we had
negative inflation. if you are running a business strongly and managing its supply chain well, using those effectively, then you do not have to see high costs and i think that is what the market will be going through in the context of margins. reporter: steve johnston, suncorp managing director and ceo, thank you for joining us. haslinda: let us take a look at the markets right now that are under pressure, given the expectations of a more aggressive fed. that could raise rates by 50 basis points by march. this is expected across the world. the central banks are getting more hawkish than ever before. we have pressure coming from china as well as hong kong is in negative territory. wuxi biologics suspended from trading after dropping as much
we have a 2.1% fall back. we are seeing a real base selloff taking place. we have investor caution going on in the market. health care is particularly in focus and that is with wuxi biologics because it has been put on the unverified list in the u.s. and it is on its way down. one of their subsidiaries have been talking about it and just mentioning what the latest lines are with that, they are seeing the measures losing some series from that list. the stock itself for wuxi biologics been suspended and is not the only one that has been added to the unverified list. the u.s. department of commerce adding some 33 companies in china to that list. haslinda: we talk about caution
and we can see the caution in the red. this is on the back of traders lasting over eight more aggressive fed and central bank across the world and waiting on the cpi print coming out of the u.s. on thursday. that could come up at 7% more than it has is in the past years. all eyes on will what the -- all eyes on what the boj does with the bond
germany, and asia as well. yields are surging and the fed is technically as well. tends at a six-year high. commodities, oil remaining elevated. it coin trading around 44,000. let us get the first word news with vonnie quinn. vonnie: the european union is considering a chip act covered by different states. at once its upcoming act to rival that of the u.s., but they are increasing how to finance the more than $15 billion measure. there will be a significant amount of -- >> we are putting twice a billion euros into just that. we have 30 billion just to --
haslinda: the central bank would remain data-dependent while assessing the medium-term outlook for inflation and can only make rigel policy changes. she ones that price growth could turn out more than expected in the short term. china's zero covid policy is continuing to put a dampening on consumption. people traveled more last year but spent less. more than 130 million trips were taken for the holiday, but about 70 percent below levels. at fell 44% from 2019. clearly's -- police in canada is
trying to cut off the fuel supply to ottawa from protesters that have occupied audio offer more than a week. lines of big rigs remain part -- parked on major thoroughfares. organizers say they will not leave until all covid mandates are lifted. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. rishaad: let us look at what is going on in the commodities complex. we have oil hitting the pause barton -- button. seven consecutive weeks of gains for oil and what is next in these iran nuclear talks. let us get to the market moves and bring in bloomberg markets reporter. a breather today but it has been frenetic as of late.
reporter: when you look at the fundamentals oil is going higher and they are within striking business of $100 per barrel. today we are having a bit of a breather. we are at $91 for brent. the reason for that is that the market is closely watching discussions between the united states and iran. those discussions are resuming today and any outcome, there have been some compromises on both sides. if the u.s. were to make a nuclear deal with iran and remove sanctions, that means that iran could add oil back to the market. that would be quite a bearish development. that could help with what we are seeing right now, which is a large supply crunch that has been formed over the last few weeks. haslinda: let us take a look at gold hovering above 1800, which is a psychological level. the question is, cannot be sustained?
-- can that be sustained? reporter: for gold, that is one of the more unpredictable ones. if you look at what the central banks are doing and what we are seeing on that front in terms of monetary policy, that could provide a different kind of downward pressure on gold as we move into these next few weeks. instead of gold, one thing that is showing a lot of ulla schmidt's and pressure moving up is industrial metals. you're seeing copper and aluminum rise higher because of supply chain constraints. there are some bullish factors, but there are a lot of things to look at. haslinda: we know that risch likes to see gold is going nowhere. thank you for that. still to come, we will speak with trivantage investment specialist monalisa shilov about
consistent with its asset liquidity in the system and the start of a cycle of interest rate hikes. we get the main policy rate and the reversal goes unchanged. let us look at what is in the prospects for the reserve bank of india. the bank is very cognizant of the imagination. haslinda: that is right. let us stay with india. we are seeking opportunity in the financial sector. let us bring in monalisa shilov, investment specialist at trivantage. why the expectation of a reversal is important for financials this year? monalisa: you're probably aware of this since march 2020. we have seen financials severely underperform on the nifty 50 in
a significant manner. this has been art of the covid concerns. now that the covid concerns are more behind us, we have seen along with these covid concerns the readings. we have also seen that the policy has bottomed and more investors are likely to under shoot in the near term. but that along with an environment as risha justad mentioned, and this is reallocation within sectors. with the economy showing strong pickup, we believe that financials will have the year that belongs to the financial sector. within that is that the last few years have belonged to nonbanks
who have short and sustainable ambitions. going ahead, that ambition will have more importance in the market. this will be because markets will be looking at those market issues combined with earnings estimates. haslinda: for those earnings, how much clarity do you have on those earnings going forward for financial companies? monalisa: a fair amount of clarity because we have seen that the credit has a bottomed down and it is likely to under shoot in the near term, but we also see equities to come back to its cyclical high. with credit growth coming back, and also you must remember that in this cycle, as ranks -- rates go up, bank lending rates are
going to be repriced much faster compared to the previous cycles. this will help them if they want to keep margins healthy. we believe we will have a fairly decent set of reversal earnings for the near term for the financials. rishaad: give me a sense of what the banks will do. in this sort of environment you should probably stay with some of those which you do have brokerage of securities on given what has happened with the explosion of retail customers. how does that play into your thinking? monalisa: that is not the mainstay for banks in india because some of this do have securities on, but we are looking at estimates to come and we are looking at banks which will have -- and we like large
banks who have diversified asset space and the ability to reinvest its capital. even in this liquid environment, there's a lot of liquidity in the system and capital is not so much of an advantage. but going ahead for the next years, that is going to be an inclusion. some of the banks that we like, which is the large private sector banks, we think that the earnings combination will be very attractive. rishaad: absolutely. you are looking at reasonable valuations and earnings because there are some private sector
banks which would perhaps fit what you are suggesting. monalisa: today we see spi, i think earnings from this quarter are done and all of the earnings are done. if you look at the strength in earnings, we have looked at the asset quality and the revival of growth, it is an important thing to work -- watch out for. it gives us confidence for the next one to two years that the banks trust at the beginning of a new cycle and they are all factoring the shift of the retail banks. and mind you that banks are also -- these are large markets caps
that banks have a good amount of liquidity and support amongst distribution of investors. we will see a fair amount of inflows from the side coming into these banks. haslinda: thank you so much for that. monalisa shilov, investment specialist at trivantage capital . the indian market has just opened. we will check in on the way it is a right now given the pressure we are seeing on the rest of asia. all eyes will be on the tightening move on central banks. it is in the positive territory for the first few moments of trade, nifty banks index trending higher as well. rish. rishaad: asia has a new span
with indian daniel. he is expanding minds and he expands his net worth by $90 billion. this is a rags to riches story, but what triggered the rise for us to this space? reporter: it has been massively boosted by the kind of shares he has in companies. the month the new stocks have grown by more than 2% since 2020, and some of them have more than a thousand percent. that kind of momentum has what have brought his fortune to the levels we see today. they are relying on his bets into crude energy and it is moving towards green emerging
and lower interest around his company. this is making him growing his profit rates. haslinda: what about the underlying conglomerate? how do they perform? reporter: the past few years has been a massive diversification. the company has now bought into the airports, renewable energy, data centers, and there is a bit of these sectors which is moving through. it is these that they are finding ways around it. what importance we will see in the years to come, all of things that would determine how far adani gets there. rishaad: will he still be the
richest man in asia at this time next year? will he states in this position and will he maintain this kind of sense? reporter: adani will see whether his company will retain the kind of shares he has seen, but this will depend on a couple of factors. one is the energy and the transformation capital. walk the talk. he has come for an increase in revenues for the energy chain. and how do the renewables perform? there are also other factors that will determine whether he will contribute stocks within the shared values earnings and how that values in. rishaad: thank you.
haslinda: hong kong leader carrie lam says that the city is going forward with its zero covid policy. in a weekly press briefing given two hours ago, she urges residents to stay home, warning that the city's health system is on the brink. in the latest opinion piece, we have matthew. rishaad: absolutely. this exposes the governor's stance on the contradicted covid policies. matthew, is covid zero still a viable strategy in this territory? we have had conflicting messages before, so that is nothing unusual. it is something that is going to be dogmatically held on? reporter: that certainly seems to be the way they are
approaching it. they are doubling down. all of the signals are that we are going to see a renewed tightening on social distance regulations. they seem to be rigid and dogmatic about this. the question is if they can naturally get control of this outbreak, the way that the exponential rate at which the cases are increasing have a lot of people doubting whether they can do that. haslinda: is there a sense of what happens next? where does hong kong go from here? reporter: in the short-term, what we are going to see is more deciding. the has -- these have been the things they were talking about yesterday like reducing the number amount -- the maximum amount of people gathering from
four people to two people, further limiting the amount of people in restaurants, and finally thinking about restricting the number of people who can go into shopping malls, just something that they have not done until now. if you have never been through a hong kong shopping mall, they're usually pretty packed, they are indoors, and there are places where the virus could possibly spread. that can continue the logical and the contradictory nature of the policies we have seen over the past few years. rishaad: you have an open discussion about whether hong kong should learn to live with covid like other places are. matthew: yes, around the world there very much has been a pollution.
-- solution. they tried to keep omicron out at times, and they have to balance the reality. it is too highly transmissible for most places to be able to shut it out completely, to have this target of having no infections at all. eventually, pragmatism for this is that countries have realized that they have just got to live with it. above the silver lining of omicron is that it is not as lethal as the delta strain so if you have got adequate health systems and the population has been vaccinated, then this is an opportunity to build an within the population. the real dilemma for hong kong
is that you do not have sufficient vaccination, particularly among the elderly population. that is why they are between a rock and a hard place in hong kong. rishaad: thank you a lot for that. matthew bruker there. checking in with what is developing on the markets. we are currently, if you take a look at the asia side as we had to the lunch break, tech is one of the major culprits of the fall for the hang seng. 2.2% down with the likes of alibaba getting hit here as well. this is the real story today. it is about bond yields raising up. we are looking here essentially as people are recalibrating what would happen if we see further tightening with regards to the central bank and the normalization of monetary
>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomerg technology" with emily chang. emily: i'm emily chang in san francisco and this is "bloomerg technology." shares of peloton surging, as they explore takeover options. plus, peter thiel's plans to double down on former president trump's political agenda. and he does not want that to be a distraction from mark zuckerberg. why he's stepping