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tv   Bloomberg Markets Asia  Bloomberg  January 25, 2023 10:00pm-11:00pm EST

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>> near 11:00. let's look at top stories. markets. tech leading the way. box office numbers as well. tesla promising a 37% >> measure on asia's richest man as they are accused of stopping manipulation and accounting fraud. this is the position right now with the equities on the way up. we have not seen that. not since april or march of last year. we have the tech side of things surging. we have that added to some of
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the positivity. we have a positive picture for the futures there as well, u.s. futures as well. it is certainly a positive tone out there for risk-taking. there is the bloomberg dollar index. showing strength near nine month lows here. that is all amid hopes there could be a pause in the interest rate cycle. elsewhere, a quick check on some of the other markets and players. we have the time market coming on in bangkok. having a look at what is happening with regard to thailand. the focus very much on what happened with the back of thailand. the deli weakening against the rest. little movement there. nifty futures, not too much concern there.
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it has been all about the hong kong rally. we have a and tourism numbers. out of the gate, quiet something here but none unexpected. >> that is right. there was no bad news over the three days when hong kong was shut. traders typically fear what bad news had come through when the market was shut. this time it was completely good. positive news. all the travel data was good. movie ticket sales were good. hong kong racing track seems to have a lot of people putting in their wagers. we are also seeing a slew of positivity trickling through. they are talking about how there is a huge amount of internet consumption stocks.
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investors are just starting to reposition to add on chinese risks. >> more and more signs of the regulatory overhang disappearing. they were the odd bits like that gold and share a story. this is what the hang seng has done in the month after the lunar new year holiday. last year, down 10.9% but there was a mix of lockdown. you go back pre-pandemic and more just performance to the upside. cliques this time, there was no bad news. if you look at some technical levels, the hang seng index has gone up going to bed. 50% from late october lows. it is running through some kind of resistance level. if you have the relative strength index, it is at 76. that is pretty high. we are looking at that 50% resistance level as well.
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>> what about foreign demand? we heard a lot of the connect south bend movement of money. what about interest in the u.s. and europe? >> morgan stanley had a report out. the latest was about how u.s. investors start to actually put money into chinese stocks listed mainly in hong kong or the u.s.. we are talking about the likes of hedge funds and mutual funds. they are actually pretty powerful. if you continue to see those funds putting money into china. i think that really is next. thank you. we are looking at the hong kong reopen story. i was the managing editor for stocks. not uninspected, the first question i ask is doesn't have legs? this is the thing.
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50% of since october lows. >> that is a great point. the fact is that a lot of investors have been under waiting china for quiet sometime. they remained to do so. with the hang seng index back in october, we see opportunities right now with the domestic asian market. this is compared with the offshore china stock. it has underperformed quit a bit over the past few months. we think that with china reopening, or domestic plays now, more on the spotlight valuations they have been quiet attractive. earnings for -- and i would like a lot of asia. you are talking to me recently about the stock. we have seen what a bit of
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inflow coming through the northbound trades year to date. we think signs are pointing in the right direction for which domestic asia shares can continue on a prolonged rally. >> given what has happened in the last few years with the pandemic and coming out of it right now, we have valuations on the hang seng at a times earnings. the five-year average is down below that. is there a china discount being priced in? >> it has been priced in quit a bit. very important for investors to go back into china. physically see what has been happening underground and see what they have not been able to get exposed to over the past few years when it comes to the overall environment, overall
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investment environment within china. the fact is that earnings growth and down when earned -- downward earnings revisions, we have seen those going to bed. as a result, during the third quarter of last year we have seen a lot of that negative earnings growth sentiment had subsided. we are seeing things moving and turning in the right direction when it comes to earnings growth expectations are both onshore as well as offshore chinese companies. >> it seems that your investments have been paying off well. we are showing you some charts with performance relative to the benchmarks. a nice easy talk about one aspect of the market right now. that is perhaps the elephant in the room. property. how could that haunt us once again? >> the revival of the property sector in china will take some time. that will probably be the third or fourth quarter at the
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earliest in terms of recovery. things will improve, definitely. the fact is that things are trending in the right direction when it comes to tier one, tier two, tier three cities. it will take a little bit of time. by the end of this year, we will start to see a bit more recovery. we are already starting to see a lot of the property companies having the ability to refinance some of their outstanding loans which are due shortly. there is definitely a lot of positive signs amongst property sector within china. it will take some time. investors do still need to be patient when it comes to looking at the overall chinese property sectors for the next couple of quarters. >> let's take a look at how all of this is really going to affect -- if we did get another blow up in property, do you think the authorities are doing enough to shore up this particular part of the economy
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that could be as much as 25 or 30% of gdp? it seems they are being selective. >> it will take some time. this is our basis and our thoughts. it will take a couple of quarters. you are right, the fact is that real estate companies in china are getting those opportunities to get financing while the private ones will have a bit more of a difficult time doing so. at the end of the day, it is about the sector as a whole. not only is the financing an important aspect but at the same time we want to see sales, property sales and starts to increase later on this year. it will take a couple of quarters but we still feel that overall property sales should see better signs this year as opposed to what we saw last year. claims we see the re-rating in
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that particular industry group. where else are you looking? we are looking at technology. what about discretionary and consumer staples? what is the deal? >> we think that consumer discretionary in particular. there is a lot of potential there. in addition to overall consumption, we are looking at health care. as the economy opens up and as china moves on and opens up from his belt with covid, we think that health care stocks will be very important and where there valuations are. especially across the mainland. we think that is quit a bit of an opportunity there. -- we think that is an opportunity there. as the population continues to age, as more people continue to see increase in their overall wealth, we think the overall health care spent in china will
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only continue to increase. >> thank you, ken. let's have a look at what is happening in new york. vonnie quinn is there with the first word news. >> we are keeping our eye on south korea's economy. it shrank last quarter for the first time since the pandemic began. gdp contracted 0.4% from the previous four months as consumption slowed in response to rising interest rates. the economy expanded to .6% from 2021. the be o'casey 23 growth of slightly less than 1.7%. the u.s. has confirmed it is joining germany in sending tanks to help ukraine repel russian forces in the east. president biden says the deliveries will take time although he did not say how much time. washington's decision follows a broader trend of allies giving ukraine increasingly powerful weapons to counter russia. >> the expectation on the part
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of russia is that we will not stay united but we are fully, thoroughly, totally united. >> met us it is reinstating donald trump's facebook and instagram accounts. he was bland from the platform after the company deemed some of his posts encouraged supporters to invade the u.s. capital in january of 2021. mehta says they don't want to get in the way of open debate and that trump will face tougher penalties for any repeat offenses. the bank of thailand is signaling more rate hikes. saying the economy is strong enough to absorb the blow. that is after policymakers delivered their fourth consecutive increase in borrowing house. at 12 is in recovery could fuel additional consumer spending leader to -- leading to higher prices. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg.
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>> still to come this hour, a forecast of $190 billion borrowed by bus. plus, genesis says the man known as bitcoin jesus owes almost $120 billion. this is bloomberg. ♪
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>> there we go. we have data out of south korea and also out of the philippines. a stronger growth than anticipated.
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the kospi at the moment is up about 26%. south korea showing it had a contraction in the fourth. the hang seng leading the charge as it reopens after its holiday. ken wong is still with us. people at the moment are getting more and more interested in what is happening with chinese stocks in particular. >> we think so. especially given the fact that china represents a fairly big portion of the emerging markets. we are very bullish on indian equity markets despite the fact that it has outperformed over the past couple of years. given the composition that chinese as well as india stocks have over the market, we think they should have developed markets. we are a bit less bullish and a bit more mutual toward the u.s. as well as europe. we will be a bit more bullish
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and we think the japanese markets should actually outperform. >> with that in mind, looking at the u.s., how much is this all going to be contingent on what the federal reserve does? >> that will be very important. the markets are already pricing and that the fed will definitely slow down in terms of their overall interest rate rises. if economic figures start to weaken or the fact that inflation continues to remain at fairly elevated levels, does that impact with the fed is going to do? if it does, that could have some big effects when it comes to our overall valuations and how we place the value multiple when it comes to the u.s. markets. when you look at europe and the ucb, we know they will be raising interest rates by 100 basis points over the next couple of months. that will have a very -- -- a very drastic impact.
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>> within your portfolios here, are you seeing a rotation by investors? how much interest are you getting from clients for china in particular and hong kong? >> we are seeing a lot more interest. the fact is that more clients have been asking us about what has been happening in china, providing more updates about the past few months. the opening of china, how that will have an implication with overall mobility within china. a lot of investors right now want to see how quickly can the chinese consumer start to go out and consume? how quickly will companies increase their capex to improve overall efficiency is? those are all important aspects. within our emerging market portfolios, there is definitely a pickup when it comes to overall client interest and
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overall the emerging-market region. >> when you look at the region, japan is moving within development markets. is that likely to be a longer-term play in the sense that we are waiting for the new governor of the bank of japan to do something such as get rid of yield curve control? would that change the game there? >> that is one part of it. there are a lot of opportunities from japanese corporations in general. with rising inflationary numbers , with growing wages and specifically, with companies potentially increasing their overall to increase hiring, we think overall efficiencies amongst japanese corporate's will only increase. they will use more of their free cash flow to really help extend their businesses to drive up earnings. we think these are all steps in the right direction. couple that with the fact that when you look at overall
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valuations, the japanese market still is very interesting. relatively speaking, when you are performances with the u.s., you can see there is still some room for further games within japan markets. we think the opportunity is definitely going to be there. >> what about euro-dollar forecast? >> for emerging markets, we are getting to the point where if the dollar is getting closer to its peak when it comes to interest rate rises, that will
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definitely have a strong implication. especially when it comes to emerging markets. right now, we are pricing in a couple more interest rate rises. getting to that point, can emerging-market currencies start to make a comeback? an overall, if these things do happen, it could pave a better about four emerging-market equities as a whole. >> always a pleasure. thank you, ken. we are talking japan now getting the reopen after the lunch break. this is bloomberg. ♪
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>> looking for equities. led by the reopen of hong kong markets 1.6 percent of for the hang seng at the moment. we could have a look at one company that is really in headlines. tesla and with better than anticipated profits even as it
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gave mixed signals on the outlook for growth and vehicle deliveries. as ed ludlow reports, the road ahead will be bumpy. >> were tesla, 20 between three is all about expanding its ev output as quickly as possible, the company came in above expectations, adjusted earnings for the final three months of 2022. there was fighting talk about what tesla will do this year. they committed or reiterated a content -- compound annual growth rate. elon musk said 2 million units would be possible without any supply chain disruption or headwinds while acknowledging there could be headwinds. here is what elon musk had to say about a possible session risk this year. >> there will be bumps along the way. we will probably have a pretty difficult recession this year.
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i hope not but probably. >> there is the demand side of the equation. must put to bed any concerns investors have about the demand issue. he said in the early part of 2023 year to date, they have seen the strongest demand yet for the electric vehicles. however they have cut prices in both china, europe and here in the united states. interesting to look at the shareholder deck and see the line that says when it comes to supply constraints and delivery problems, china took a lot of the blame. now we look forward to march the first at tesla's annual shareholder meeting where most says we will get more details about the next generation of tesla vehicle which the company says is in development. >> let's look at the latest business flash headlines. elon musk looking for a potential capital raise of up to $3 billion to pay off the twitter debt.
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the report pointed to unidentified sources saying that musk had discussed selling up to $3 billion in new twitter shares. in response to a tweet asking if the report was accurate, must simply repeat -- simple he replied no. going out with a surprise lost and 2022. a sixth straight money-losing quarter. even though a late flurry of jet deliveries drove a surge in cash. revenue was about $20 billion, roughly in line with estimates. dave calhoun told staff that more work was needed to stabilize operations and supply chains. sales of its range rover and range rover sport models most doubling. it is the midlands in the u.k. that will start making fully electric jaguar models through 2025. we are talking about tesla.
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this is the position for equities. electric vehicle stocks up nearly 11%. seeing just a widespread move to the upside. better-than-expected profits coming up for tesla. there we go. that is all off the back of what is regarded as a way better-than-expected earnings report. still ahead, languishing in financial purgatory. genesis asking bitcoin jesus to pay for his alleged sins. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to 60% a year.
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>> there is the scene in hong kong with the hang seng brought up to levels not seen since around april of last year.
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basically a 50% increase since the october lows for the hang seng. then rally continuing. this is a lunar new year holiday that came to an end in the territory, spending numbers showing the recovery is getting traction in the territory as well as on the mainland. the tech market driving things again. even property joining in. posted nearly decent gains. traders really emboldened as the box office showed strong revival in demand. now they are above pre-pandemic others as well. that is a look at those markets. we have japan returning to the trading day. they are having a look at the nikkei 225. they are looking here at the yen
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also imply. that is a look at markets. let's have a look at the first word news. here is vonnie quinn in new york. >> china says the number of covid related deaths and severe cases in hospitals has declined by more than 70% from peak levels in early january. as of monday, official daily fatalities at hospitals slipped to 800 96 people. that is down from a high of more than 4000 people. the true number may be hundreds of thousands higher than the official figure. bloomberg sources say the fed vice chair is a top contender to become head of the white house economic national council. we are told she is one of the several candidates be considered and that president biden has yet to make a final decision on replacing brian deese who has not sent a firm date for his departure. the council's next head will
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advise biden as the economy flirts with recession and as they battle over raising the federal debt limit. the bank of canada has raised interest rates for an eight consecutive time to the highest in 15 years. in a statement, policy makers say they now expect to hold the rate at his current level. -- at the current level. they say it is too early to be talking about rate cuts despite swaps trading pricing and a reduction as soon as october. europe's largest tech company expects u.s. that export control measures against china to eventually push beijing to develop its own advantage chipmaking machines. the ceo says export control will create levels of disruption that will affect efficiency and elevation. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.
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rishaad: hindenburg research going after his biggest name yet , targeting the richest man in asia. let's have a look at the fallout from the conglomerate so far. annabelle, some pretty serious, extraordinary allegations including fraud, shell companies, siphoning cash and the like. we will not get any further reaction today, this being a public holiday book write something nonetheless. >> that is right. those key accusations of stock market manipulation, accounting fraud. hindenburg said this was the result of a two-year investigation. they won't have any stock market reaction. we have had reaction from the man himself. he has completely denied all these accusations, calling them baseless. this chart takes a look at the bon mots we saw and we did see that big drop, particularly in
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that u.s. debt, as much as $.15 on the dollar loss for some of those. various maturities had been issued. hindenburg says this alone is due for an 85% correction just based on the lofty fundamentals in the market. if you take a look at what we saw with the hindenburg, why they are targeting this company in particular, in terms of the success we have seen so far for the company, it has targeted about 30 different berms and on average, those companies have lost around 15% the next day. >> looking at this rapidly over the last 12 months. this was -- they had taken a massive hit with the wealth as well. >> yes. they lost $5.5 billion in a single day after hindenburg
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research level these accusations of stock market manipulation accounting fraud. you have to put that wealth loss into perspective because he was also someone who amassed a considerable amount of wealth over the course of 2022. looking at some of the key milestones he made, in february he became the richest man in india. over the course of the coming few months he actually managed to accumulate more than $100 billion. even managing to overtake jeff bezos by september to become the world's second richest person. putting those wealth gains into perspective on a one year basis. it was a time of rising rates, inflation concerns, marketing stability, covid lockdown still going on. it is quit amazing that he still
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managed to make as much money. you can take a look at where it is today. he is now sitting in position number four. he is actually back below jeff bezos but sitting still above some perrigo company here. bill gates and warren buffett. >> absolutely. but you, annabelle. not quiet what this next story is about. >> this is pretty interesting.
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some options trades in december. he is an early backer of bitcoin. he runs he is a big backer of bitcoin cash. he is going big in the bitcoin industry. they had a similar dispute. >> they said the genesis was in violation there. it is interesting that this is the second time this is happening. he again said he did not owe the money. that sort of thing. it is two different exchanges saying this. interesting that such a high-profile person in the crypto space is going through
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these disputes. coming up, analysts forecasting -- this is bloomberg. ♪
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>> we are continuing with the union budget announcement. thank you so much for joining us. that sort of money raised on the bond markets here. why? >> the one big thing that
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markets are looking for is the size of the issuance. the appetite for fiscal 23 apart from the small presence in the bond markets, you will have people who might in as well. given the size of the borrowings , we do things that kept away from the bond markets this year. we would like you to look into it in fiscal year 24. one of the biggest things for the financial markets and bond markets as well.
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we should remember that you have states that borrow. this might be to the tune of 23 or 24 trillion. >> what will the money be used for? this is the last budget before. this is perhaps a populist budget. in 2024, it will be the elections. ahead of this, one would expect budgets to take on a populist here.
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we expect about 60 basis points of reduction. we do think they will consolidate finances after the pandemic is over. in terms of populace, i think it will follow-up. i think next year's focus would be much more on supporting the health programs and housing. this will remain a priority. >> will review the most crucial
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item for you coming out of this? >> one of the items would be focused on capital expenditure. the part that goes toward -- how much does it increase? also, supporting states in their own capital spending. how much is allocated, what the breakdown would be.
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>> i want to give a sense of what they might be doing when it comes to the taxes to be have in india. what about taxes for the salaried workers? >> the collections have done well. this year, we might see the momentum because you had seen prices go up and margins compressed. they had to contend with the high inflation as well.
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in terms of -- and i would not expect any tax changes that have to do with bates. there are some parts of the market that expect income tax rates to be changed. there might be some tweaks on that front. insofar as income tax is concerned, it is still narrow. broadening the tax base would be much more of interest. >> earlier on, you talked about the reserve bank and how it sets out its policy shortly after this budget. what are you looking for for them?
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>> central bank will have better takeaways from the budget among other things. anything that gives a one time demand to go against what the central bank is fighting for and the other would be the size of borrowings. i would think if there is no cute -- no clear populace measure as we expected, in that case, it would be back to what the data is suggesting. right now, it suggests inflation has peaked and it is coming off. at the same time in the global landscape, they could gradually taper.
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against this backdrop, we are looking for a 25 basis point hike. >> it could be a sharper tool. would you say they should pause now rather than wait? >> you have the monetary policy.
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views have been diverging in the past couple of meetings. this is a section that believes growth worries are the ones that will dominate. you have seen some in the recent meetings. the central bank could go along and pause. it is still at about 6%. in light of this, we have one more rate hike. at the same time, you have other rights that have come back into positive terrain. you need that deposit growth. these factors make us believe there could be one more move
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before a prolonged pause. >> thank you. let's have a look at markets as we look at the hang seng which has come out of the box. 1.8% up right now. we are looking at a broad-based move here to the upside. we have the index logging six weeks of gains so far. we can argue this is the longest winning streak we have seen since the end of 2019. some suggesting mainland consumer spending improved. we are at levels not seen in almost 10 months on the hang seng. we are looking elsewhere. looking at the singapore market, up .4%. the philippine market surprisingly where it was before despite coming out with these
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numbers, these growth numbers which showed the economy has weathered the fastest inflation and high is policy rates in 14 years to develop one of -- deliver one of asia's strongest expansions. we have seen the best growth here since 1976. there we go. a full year of 2022 gdp. they are of 7.6 percent. we will leave you with that thought. this is bloomberg. ♪
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>> it has become europe's first coming to meet -- which a market capitalization of $400 billion. at with full-year earnings after the market closed. which happens to the home of this sprawling empire. they have also been fueling speculation about this action plan. let's get this from carolyn. >> there is no better place then con on the french riviera to talk about luxury. the fashion brands are regulars on the red carpet.
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along with jewelry makers who are often flowing behind the scenes. in total, they cost 75 luxury brands. the founder and ceo became the roosevelt just man last month after the net worth tumbled. he can stay at the home of his luxury powerhouse until he is 80 after the company lifted the maximum age of its yield but he has been carefully crafting his succession plan, slowly elevating his five children to bigger roles. his only daughter delphian has just been named the ceo -- ceo. his oldest son now runs the family holding which controls lvmh. the third child has been a vice
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president which his father acquired during the pandemic for $16 billion in the most high-profile luxury m&a saga. then you have his on who runs the swish wash -- swiss watchmaker here. >> all five of the heirs are vying to take over there dad's luxury own empire. incidentally, europe's most valuable company. let's have a look at what is happening with the markets here as we go to the hong kong lunch break. hong kong is at levels we have not seen for almost 10 months for equities. this is what we have for the asia-pacific index.
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consumer discretionary there. we have finance up. we are looking at possibly why we see a bit of a shortfall there. wti group pretty much unchanged. this rally in chinese stocks extending after the lunar new year holidays came to an end in hong kong. we are seeing lots of people going to the movies. that is why we are seeing these on the way up. we are looking at the number of people going to the movies being higher than pre-pandemic levels. this is bloomberg. ♪
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