tv Bloomberg Daybreak Asia Bloomberg August 23, 2021 7:00pm-9:00pm EDT
haidi: hello and welcome to "daybreak asia." i am haidi stroud-watts in sydney. sophie: i am sophie kamaruddin in hong kong. shery: good evening from bloomberg's world headquarters in new york. i'm shery ahn. the u.s. gives full approval to the pfizer biontech shot. the fcc reportedly issues new disclosure requirements for
chinese companies seeking to list in new york. we look at the fallout of beijing's corporate crackdowns for global investors in an exclusive interview with the msci ceo, henry fernandez. despite the challenges, we saw chinese adrs getting ground today, broad risk-on with the nasdaq composite and nasdaq 100 surging to record highs. we had more positive economic data when it came to those july existing home sales upsetting weaker pmi numbers but of course we will be watching what happens with those headlines because they came after the market close. haidi: absolutely. we are expecting more pressure when it comes to chinese adrs given that we are now seeing the fcc leaning ever harder in the regulations on chinese ceo's, wanting more transparency on how these structural setups are being made and this ongoing conversation about requiring more transparency from these companies. it does not look like we are
going to see much respite for these listings. shery: we will see what happens when we head to jackson hole this week because the commodities space, we will be watching that very closely. last week, we saw this huge selloff in the commodities space, given speculation the fed might be tightening very soon. wti jumped in the new york session, seeing the best day in nine months but the cap yacht as well is that the u.s. is selling strategic reserves of oil, the largest sale in quite some time so we will be watching what happens to the wti and brent trading as well. haidi: certainly some positivity expected from the commodities index going into this asian session. we will be hearing from the msci chairman and ceo, henry fernandez paid lots of talk when it comes to china risks for their business. the green energy company ceo will be talking to us about decarbonization across the asian business. in the meantime, let's take a
look at the market set up with sophie kamaruddin in hong kong. sophie: early in the asia session, risk-on moves after u.s. stocks had fresh eyes on the s&p. e-minis moving higher. nikkei futures in chicago gaining ground after we saw the regional index in asia jumped the most in three weeks with tech leading all sectors higher on monday and check out what is going on with the dollar. we have it holding the overnight loss for the offshore yuan, holding below 6.48. at morgan stanley, the renminbi seeing resilience to the foreign selling of chinese equities. with that pulling up the terminal right now, i want to highlight that we are halfway there when it comes to china's earnings season. it has been underwhelming of late when it comes to the msci china index. almost all of the sectors, half of them have missed estimates when it comes to sales and profits, but jeffries says that
the market is right for patience for long-term money. pulling up the next chart, the oil rally is certainly in focus, accompanied by gains for base metals as well. just focusing on what is going on in that space with copper jumping the most in four weeks given the drawdown we are seeing in that space paid let me pull up a chart right here. little bit of trouble right there because we do have copper in focus and goldman seeing that focus on the tightening of fundamentals and markets like copper as well as aluminum given the sustained deficit for these ace metals will support higher prices so keep an eye on this space, shery. shery: let's get to vonnie quinn with the first word headlines. vonnie: thank you. president joe biden says for the approval of the pfizer biontech covid-19 jab should clear the way for more private companies
to employ vaccine requirements for its staff the fda granted approval demand older as u.s. average daily covid deaths topped 1000 for the first time since march. it is the first vaccine to be fully cleared by u.s. regulators. a surge in the number of covert cases in malaysia is threatening to have a great -- aggravate chip shortages. in recent years, the southeast asian nation emerged as a major center for semiconductor testing and packaging. malaysian authorities are racing to address the outbreak, granting exemptions to certain manufacturers as they try and ramped up vaccine uptake. ships have resumed birthing operations at a key container terminal south of shanghai after a two-week shutdown to quarantine dock word errors -- dockworkers. bloomberg data shows the container ships have left in the last few days.
a french shipper told customers that full operations should return in the coming week. china's weibo's shut down of 145 accounts on its platform, some of which were sympathetic to a popstar who was accused of rape. they said they closed the account because a published information that was harmful for maintaining social order. wu was arrested in july over several sexual assault allegations. 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'm vonnie quinn. this is bloomberg. shery: the fcc reportedly has begun issuing new requirements for companies seeking to go public in new york. chinese firms have received detailed instructions about rate or disclosure of the use of offshore vehicles for ipo's. we are joined by the regulations
reporter who has been tracking this out of washington. this does continue the theme we have been seeing of increasing pressure and the want for more transparency from these companies. >> it does. this is a little more in terms of what we have been seeing here from regulators in washington, the fcc. mastery cap bloomberg, some of our colleagues reported that the fcc had also been sending out queries specifically about the relationship between the shell companies that chinese firms often used to raise money for american investors in new york and the parent company based back in china. this is all in the context of a multiyear effort in the united states to crack down on what officials in washington say is a lack of transparency into chinese companies with trade in new york. there's a couple of issues. one being the shell companies and how they are set up and relationship with the parent company but also the ability for
american inspectors to look at chinese companies financial audits. there is a concern if you look at coffee and some of the other cases that have come out of china in recent years. about what the actual financial situation is of some of these countries. that is what american regulators seem to be concerned about. despite a multiyear requirement, beijing has refused to allow these books to be opened. shery: what is the timeline? ben: we do not have a timeline yet. we don't know how long that will last. what we see today with this report from reuters and also from bloomberg's reporting last week is that these are some pretty detailed questions. and thus far, chinese firms listing in the united states have not come forward with that type of information. what we do not know is whether chinese companies in beijing,
the government in particular, is going to allow this type of information to come forward. i think that the timeframe essentially is up in the air and it will depend on whether american regulators here in washington and chinese officials actually meet and discuss some of these issues and go forward. there has been a lot of talk about wanting to kind of reach some kind of agreement here but there is no indication also that those meetings thus far have taken place or yielded any fruit. shery: ben bain in washington. meanwhile, kamala harris is in southeast asia right now, seeking to reassure u.s. allies over its commitment to the region as she faced a volley of questions on afghanistan during her visit to singapore. vp harris: there is no question there will be and should be a robust analysis of what has happened, but right now, there
is no question that our focus has to be on evacuating american citizens. afghans who worked with us, and vulnerable afghans, including women and children. shery: afghanistan overshadowing her trip to southeast asia. >> it has definitely become more difficult for the vice president to assure allies that the u.s. has their back, especially given all the images we are seeing on tv coming out of after data stand. she spoke and said the end of pacific region is a big part of what is next for the u.s. and not the war in afghanistan that echoes what the president has said about china and russia being part of the challenge in the future for the country. back here at home in terms of how the afghanistan situation has overshadowed this trip, the
white house press secretary today opened her regular briefing with information on the vice president's trip that i did not hear another reporter throughout the entire briefing ask anything about this trip to asia. it has been all about afghanistan. the national security advisor visited us today. it was all about afghanistan so this crisis has definitely changed the tone of the trip. shery: what are we watching out for in the coming days? >> she has a meeting coming up on supply chain issues. we know that there has been a semiconductor shortage. and then she is going to leave for hanoi. interesting thing. she will be the first sitting vice president that has visited vietnam since the war ended in 1975. she will arrive in hanoi and continue her trip and then she is scheduled to make a stop in hawaii on the way back to the
u.s. haidi: courtney with the latest and we will continue to monitor that trip as she heads to vietnam later on in the day but we will be getting more analysis of the vice president it's southeast asia tour. simon joining us in the next hour. still ahead, more on those gains. we saw jd.com earnings beat estimates, defying beijing's tech crackdown compared to its peers but coming up next, checking the economic outlook in the lead up to jackson hole. a chief strategist and former assistant treasury secretary, chris campbell, will be along with us, next. this is bloomberg. ♪
challenges remain to push ahead with president biden's $4.1 trillion economic agenda through congress. that vote is set for this week, suspected to move forward on the budget resolution as well as that bipartisan and infrastructure bill. that's get more analysis with the chief strategist and former u.s. assistant treasury secretary who joins us now from rome. thank you so much for joining us. always great to have you with us. how much doubt do you assign to the ability of this infrastructure bill to be pushed through as well as the political divisions not getting in the way when it comes to this as well as that debt healing debate? >> you have to bifurcate the two. the bipartisan infrastructure package has already passed the u.s. senate and speaker pelosi is trying to get it passed the house. that has wide partisan support. i think it would be great for the economy so i think that that
actually we are projecting will sail through the house should speaker pelosi allow that package. you have to bifurcate that and break it apart in the larger package, thinking about a very large, perhaps $3 trillion spending package which would also include very major -- for the economy creases could be quite chilling in the economy. the large infrastructure package is going to pass quite resoundingly. we will see how the democrats go and fare as they go alone. effectively suggesting democrats going alone, trying to pass a spend package later this year. haidi: speaking of bifurcation, is that one of the possibilities
going into jackson hole that jay powell disconnects -- if we get a dovish taper, does that push out market expectations even further? >> we expect jackson hole will be quite fruitful. i suspected that the chairman will suggest that inflation is here to stay much longer than they originally forecast and will accelerate tapering. i don't know if they will start tapering now or in the very near future. irrespective of who the chairman of the fed is, they have done a great job. that term will be -- whoever president biden chooses to nominate after chairman powell will push off rate increases for as long as they can.
tapering well before and every other tool in the arsenal within the bounds of what the federal reserve has before we see another rate increase. shery: how much more difficult does the billions of dollars and the infrastructure package, trillions, make the job for chair powell, who last year, jackson hole implemented this new policy framework where he would allow the inflation target to be overshot for a wild. there is so much money into the economy right now. will he have to do a u-turn in this ultra-loose monetary policy given the risk to the upside? >> looks, washington continues to spend -- a significant shot in the arm of the u.s. economy from washington beast the, one trillion dollars in this infrastructure package. if you look down the road, october or november, washington
spends another $1 trillion or perhaps up to $3 trillion. that is going to have another inflationary -- more inflationary pressure on the economy though it makes any federal reserve and chairman powell's job extremely difficult to find a way to recalibrate the economy. very hot, very quick. shery: let's talk about the other elephant in the room which is the u.s.-china rivalry and what this means for their economies and financial markets. it's saying the fcc has begun issuing new disclosure requirements to chinese companies seeking to ipo in the u.s. what does this do for money flowing from china into the u.s.? they have been a huge support in the last few years. >> certainly saw my time at the treasury department. the relationship we have with china, the u.s. and china
relationship, is extremely important and has been for a long time and it will remain important well in the future. what the fcc is doing on transparency and insisting upon transparency from companies -- from countries both here and abroad, effectively, looking for transparency, i cannot see anything wrong with that. it is one of the tenants of what we advise our clients. transparency is a great way of corporate governance. what the fcc and other regulators are doing is fantastic. there are other regulators in d.c. and i hope all regulators across the board in our country, the united states, are moving in a way, pushing transparent to arm people with more facts, not
>> chinese listed stocks move higher in the u.s. session spurred on by gains in asia. jd.com was in particular focus after reporting earnings beat sales and beat expectations. it gained the most in about a month. we are also hearing that dede is delaying its european expansion plans. plenty to discuss -- didi is delaying its european expansion
plans are to discuss. haidi: stephen engle, let me start off with you. jd.com, you know, despite being the little brother to alibaba and tencent, maybe that has played out better for their earnings. stephen: jd has not been specifically singled out in this regulatory scrutiny like alibaba or tencent. there is this regulatory scrutiny on anticompetitive behavior and data security and this and that. unlike alibaba and tencent, which missed forecasts for revenue, we saw them beat forecasts in their -- 39 point one billion u.s. dollars per that beat estimates. there was up to 6% year-over-year. the estimates were pretty low.
that was the slowest pace of revenue growth since china first emerged from the pandemic last year. you have to look at the bottom line as well. net income tumbled 793 point -- 16.4 billion yuan. there are some uncertainties going forward as alibaba spends more big competitors -- they could cloud the recovery as well. shery: the chinese countdown has also hurt didi and we are also hearing that it is impacting its european plans. >> the ripple effects keep continuing from chinese action against some of its big companies. the latest one we saw today, we spoke to people familiar with the subject to told us that didi is thinking about putting its expansion plans in europe on hold. that comes after a lot over these last several weeks. the actions from the chinese government against companies like didi, putting
restrictions on their ability to collect data over passengers, restrictions on the way they treat their drivers. even going to the extent of putting restrictions on their pricing. analysts estimated that could shave as much as 1.7 billion u.s. dollars after their earnings. they were just planning to expand in the u.k., germany, france. we talked to people familiar with the matter earlier in this year. we describe those expansion plans. shery: this could hasten the exit or probably have a complete rethink about what the international strategy would be, right? tom: when you are a company like didi, can we saw it with
ridesharing companies here in the u.s., when you start a new market, there's a lot of costs associated with that. it costs you to market yourself and get new users out there. you subsidize the amount -- they do not spend as much so they need to cut elsewhere. shery: earnings out later. what are we expect in question marked stephen: we are going to be -- what are we expecting? stephen: they are still getting some boost from their grocery, the community group buying service that has had incremental three straight quarters of revenue growth contributing to what is expected to be a boost in revenue. we go back to the alibaba analogy. that is forcing companies to spend even more. haidi: stock down almost 60% here. stephen engle and tom giles with
vonnie: this is "daybreak asia." i am vonnie quinn. the taliban say there will be consequences if the u.s. delays it true withdrawal from afghanistan past and august 31 deadline. boris johnson is said to be pushing president biden to delay the pullout to allow more and saved her evacuations of foreigners at the pentagon says u.s. military officials are in contact with the taliban several times a day to coordinate evacuation efforts at kabul
airport. the u.s. has reportedly pressured israel not to allow a group that includes china's crc see to win a tender to build two light rail lines in the tel aviv area. the topic is likely to come up on thursday when the israeli prime minister talks with president biden. five groups are said to have submitted bids for the project. three of them, chinese businesses. china's weibo shutdown 145 accounts on its platform, some of which have been sympathetic to pop star kris wu, who is accused of rape. they shut down the accounts because they published information that was harmful. el salvador is installing bitcoin atm's, allowing citizens to convert the cryptocurrency into u.s. dollars and with draw it in cash. the move comes as part of the
government's plan to make the token legal tender. it will install 200 regime to accompany its digital wallet. he says transactions will be commission free. 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'm vonnie quinn. this is bloomberg. haidi: let's get you to sophie kamaruddin, who is taking a look at the market set up tuesday. sophie: asian stock futures pointed gains after the biggest jump for the regional index. s&p e-minis are gaining ground. the reflation trade coming back into vogue a little bit here. andrew simmons saying to not give up on the reopening trade. commodities very much in focus. oil jumping the most in nine months on that rally in commodities. we have new york crude holding steady at the 65 zone right now. little bit of ground after a two
day advance. indicative of the demand we are seeing for commodities. shipping rates are going through the roof with overall tariffs jumping sevenfold since may 2020 bottom. disruptions have been aggravated. pulling up the board, abm amro says even as services fade over time, and the path towards normalization is looking longer and there is a rising risk of stronger pass-throughs to consumer prices. switching out the board, that said, abm amro's macro research team knows the commodities will have a bigger impact on cost push inflation here given that using inflation in the commodities space we have seen for prices. shery: hong kong exchange rallying the most in seven months after receiving a long-awaited clearance to offer h-share index future contracts,
giving global investors a new tool to hedge china risk. it will track the performance of stocks that are traded via link between the mainland and hong kong. it comes at a time when chinese stocks have been roiled by a broader crackdown on the private sector. let's bring in the chairman the eom msci who joins us in sadly from new york. always great having you on the show. thank you so much for your time. let's talk about the tone of discussions with your clients. and it came to launching this, congratulations on the launch. what was the tone given the broader chinese crackdown? >> a futures contract like the msci index futures is even more important in times of high volatility. divergence of views as to the value of securities. there is always an opportune
time and not an opportune time. i think that this is the right moment. we have been waiting for this for quite a number of years in our partnership and i think the futures contract is going to serve investors well and it has been a key missing link in the ecosystem of china exposures that have been built in hong kong. haidi: that took two years to get approval. what role do they have been actually making this happen? did it accelerate the pace of approval? henry: over the last few years, there has been quite a lot of discussion between the regulators and mainland china about the best way to collaborate the flow of information to ensure that index futures will be properly
structured, properly trading, so that took a little bit of time to get done. we patiently waited. the time has arrived that the futures contract can come and this is one of the big demands that institutional investors around the world have had in terms of their exposure management and risk management and the h-share market. it will be very beneficial for investors. >> there are a lot of investors that say chinese assets are un- investable for them because they cannot work out how to discount for regulatory risk and volatility. do you get that feedback and what would you say to that criticism? henry: there has been a lot of talk about that for sure.
there has always been a lot of talk about that with every emerging-market in the world. there has been a time in which indian shares have been investable. there was a time in my recent past in which mexican shares were called on investable -- un-investable because of actions by the central government in those countries. we have seen the regulatory compliance happen every three or five years. obviously, the market selloff. very quickly afterwards, the market can recover and go to new heights. i think we got to look at this process that the chinese regulators are going through in the prism of the last few years and also cross on the markets in the world -- across other markets in the world. there has been a lot of criticism about china in terms of lack of regulatory oversight.
we criticize them on the other as well. clearly, we have to see how it all shakes out but i think it is important to keep in mind that there is no country that is exempt about this including western countries. haidi: does the nature of the radio tory crackdown, what authorities are trying to do, does it change the tone and also the timing of discussions and approvals? i'm wondering if they get a lot quicker. is there is this regulatory attention being paid? henry: there has to be some affective that. in times of volatility, for example, like this one. it is even more important to have the right exposure, tools, and risk management calls but the market. i think that this whole process about approving the launch of
futures in hong kong has been long, long in coming. it was about secular perspective than the moment in time we have been working on it for the better part of four years. and obviously, it comes down to the two regulators, making sure that this was appropriately structured for the community. there has been a missing link here in hong kong. hong kong has developed a great ecosystem of etf's and the cash market through the connect program and into shanghai and shenzhen. it is the strongest market in the world including exposure to china. obviously, a great center for the yuan. the big missing link was that we have been, you know, working
with the regulators to get to that point in building this ecosystem. all of it together is greater than the sum of its parts. we are very happy that that is taking place now. haidi: let me turn to crypto. you said in the past that you're talking to focusing on? henry: we are exploring a variety of options and talking to a variety of earners but we are bullish on digital assets and chain technology associated with it. obviously including cryptocurrencies. they have a role to play in the world. and we are looking at that from the point of view of direct exposure to the various types of cryptocurrencies. that will be one example. we are also looking at the climate change aspect of mining.
also the disruption that this could cause in other parts of the simtech world. we are looking at all of that. it is too early to tell what the direct approach will be but obviously, we will be announcing something in due course. haidi: he spoke about environmental implications. are there plans to add more tools and platforms where investors can get that est exposure? henry: overall, climate change is one of the biggest focuses and the largest area of investment in our firm. what needs to happen in the next few years, the total reconstruction of the economy. in reliance on renewable energy. that will create in norma's -- enormous winners and losers. having the right tools to
understand what parts of the portfolio will be benefited from this, for example decarbonizing companies and technology for renewable energy, means and what parts of your portfolio will be bearing the brunt of all of these issues. that those are coming very soon. people think we have 20 to 30 years to adjust to this new reality. that is already happening and taking place. haidi: always great to have you assets. henry fernandez, msci chairman and ceo, speaking to us exclusively. coming up next, a chinese ev battery maker is joining us as kamala harris makes a supply chain push into southeast asia. we will be speaking to the ceo in just a few moments time. this is bloomberg. ♪
shery: kamala harris has made supply chain resilience a focal point of her trip to southeast asia. vp harris: tomorrow, i will be meeting with key business leaders here in singapore to discuss what more we can do together in this region of the world with private and public sectors including our own in the united states to shore up supply lines and supply chains.
and that is why the prime minister and i agreed to launch a dialogue on how our two countries can better work together to strengthen supply chain resilience. shery: that meeting is set to take place within the next few hours as china has moved to dominate tech supply chains, particularly within the green space. let's bring our head of asia research. tell us about how much more dominant china is in the cleantech supply chain? >> thank you very much for having me. today, china is the largest manufacturing base for solar panels, wind turbines, and electric vehicles. china has achieved access in becoming the largest manufacturing base by consistent long-term focus on the supply side as well as the demands died. -- demand-side.
haidi: how can these countries help with the development of u.s. cleantech supply chain? ali: so it depends on the specific sector. for lithium-ion batteries, countries such as indonesia and the philippines are very notable sources of class one nickel, the type of nickel required for manufacturing high energy this -- energy density lithium-ion batteries. as the region itself is accelerating it transition to adopting cleantech, than there's opportunities for u.s. companies to set up manufacturing base is but also to sell technology to the region. u.s. companies such as general electric, southeast asia is an important market for wind turbines. you are also looking at trying to ensure that countries adopt u.s. standard as opposed to
chinese or european standards for things like electric vehicle charging. shery: what changes are you expecting in the collaboration front with kamala harris in the region? ali: this is a very challenging question. it depends on how consistent will the usb in the future on its relationship with southeast asia but also on a own policies around cleantech. i want to remind our audience that china's success is because it has had long-term focus on both supply-side and demand-side. the challenge in the u.s. is that of ultimately, climate change has been overly politicized, which means that u.s. government policy has not always been very consistent when it comes to tech. as a result of that, there are questions around, even though
the current administration is important, questions about long-term policy stability in the u.s. haidi: our bloomberg head of asia research, ali izadi-najafabadi, joining us. our next guest is from a green tech company and the second largest turbine manufacturer, planning to become the first chinese company to commit to carbon neutrality across the entire value chain as early as 2028. joining us from shanghai is the ceo. great to have you with us. talk to us about how you plan to achieve this level of decarbonization across your entire supply chain? >> the decarbonization brings quite an opportunity for the entire energy industry and we see the wind turbines and solar -- and the battery is becoming new.
and it becomes the new grid. it is going to affirm the new energy system which is going to be a pure and natural energy system the future. and then upon such a new system, the industrial revolution will happen. there is a kind of change which has to happen on the energy sector. it will be across all of the industries. also on the other sectors. >> i'm curious about how you think net zero goals can be balanced against stability because that is obviously -- that is often a trade-off that is made as a political talking point here in australia. do you see it as a trade-off? lei: i am looking at the
trade-off. that zero is the largest opportunity we are facing. you know, today, if we are embracing the net zero economy, renewable energy has been lower than the fossil fuel already without carbon tax. you can also enjoy much cheaper energy costs. if you develop your new energy supply chain, you will crave the economic system not only under the energy sector -- it will also happen in other sectors like the fuel sectors, chemical sectors. is it going to be experiencing the fundamental change of the next 10 years to 20 years?
it is the greatest opportunity for any country, once you move early, you will have the opportunity. shery: you have business dealings in britain, northern france, to make ev's, ev hubs as well. how much of the opportunities are within china and abroad? lei: the global challenge is facing all the countries so not only china but also the u.s., u.k., and europe. we are committed to bring the net zero energy system to all countries. we have it in the u.s., u.k., and japan already. we are committed to build a factory in france. at the same time, we are going to serve the chinese customer as
haidi: a quick check of the latest business flash headlines. two of the world's biggest bond breaking firms reached opposite conclusions on the state led bailout. moody's downgraded them two notches above the speculative grade level. meanwhile, fitch revised his rating watch to positive and said the bailout signals extraordinary support from authorities. the chinese company behind e-cigarettes is said to be considering a hong kong ipo. they could raise between 500 million dollars and $1 billion and it comes as china considers rules for the industry including new regulations for product marketing.
blackrock bought a stake in the jolt as it bets the sluggish ev take-up will not last. it provides more than $72 million in funding. the investment in the asia-pacific region, 2021 figures already facing the 2020 total, shery. haidi: we are counting down to -- shery: we are counting down to the start of trade in seoul ps softbank betting $400 million on a simtech start, making the first bet in africa. the mobile payments platform has been valued at $2 billion. mizuho said the systems outage has been fixed with services restored to atm's and alumina miners are facing another surge in prices on top supplies. they are the biggest importer of the metal. in south korea, the finance minister is holding a meeting with ruling party officials to discuss the 2020 two budget.
a proposal is expected by the end of the month. president moon is set to what i cabinet meeting in just over one hour's time and the bank of korea released second-quarter household credit data. as we head towards bok rate decision on thursday, high household debt has been a key concern. haidi: we have been hearing of another opera budget for south korea, weighing on concerns about the debt burden. this is what we are looking for when it comes to the setup of trading, four minutes away from the start of trading in major markets including sydney, seoul, and tokyo. we are seeing outside of .6% as the finance minister, graham robinson, saying they come from fiscally and economically strong position with lots of headroom. the prime minister continuing to say elimination is the right strategy for covid management in new zealand. the new futures up by .2 5%.
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promises to chinese companies seeking to listen new york. plus, a rally that -- let's get straight to the market with sophie kamaruddin in hong kong. >> the nikkei and the topix rose more than 1% on monday. softbank is helping boost the session. traders will be waiting on a five-year option. switching out the board, turning to south korea, we are awaiting details of the government meeting on the 2022 budget which local media estimates will top this year's spending plan. the korean won, we are seeing again and ground -- we are seeing it gain inground. we are seeing korean stocks rise more than 1%. this after the benchmark snapped a two day drug. we are keeping an eye on vaccine makers.
amid the vaccine optimism that has parked up this week. and said, we have -- in said nick, you have the aussie dollar holding the biggest gain since april. cb a questioning we could see a drop below 74, given the prospect of rba delaying the taper plans alongside slowing chinese growth, which has a citigroup bidding against the yuan. you have the offshore remnant beholding below 68 this tuesday. there are signs of rebounding demand which has goldman bullish on micro factors like deficits which should trump headwinds. little change here after the best session this november for crude prices. they are seeing the underlying fundamentals --
the demand for commodities is being reflected in shipping rates, jump into an 11 year high. it's likely to keep -- it's the demand for a material car goes, outpacing capacity, also being kept high by covert disruptions. >> our next guest is maintaining his preference for japan. he joins us from singapore. if you are liking the cyclical flame, what is the risk of the numerous states of emergency that we have seen in japan actually pressuring that? >> it is true. it is testing our patients to some degree. we are heading towards 50%. the reopening might be later
than we initially thought. the other interesting driver for the japanese market is we analyze which of the markets globally are most sensitive to the 10 year, which we expect to move up. perhaps not surprisingly, it is probably the financials, etc. a couple of drivers for the rest of the year to come back and start to outperform at least from here. >> with jackson hall knowing play, what are your expectations in the short-term and japan, as you mentioned, the 10 year? >> they are very linked. many financials are on the road. having so much fireworks out of jackson hall, everyone remembers to thousand three, that was of course fireworks, but we think much more likely that the
prospect is to talk about this a little bit more. nonetheless it is happening. in terms of steepness of the yield curve, it would be the first time the curve is this flat. another reason to believe that we could see a bit of upset on the 10 year. if that happens, of course that is bullish for banks in particular. >> how much more upside is there when it comes to the recovery and tech? -- in tech? are there better opportunities given the valuations that we continue to see in tech? >> we think to some extent, technically, they sort of had their day in the sun. we certainly encourage our investors to be braver and do
not see the reflation. it is only a trade that can only last a few months. we may have already seen it but we do think there is another leg. also as we speak, for the big tech, they come high on earnings now. not that they are collapsing or going to negative, but the growth rate is slowing. you have a good mix to really broaden out the portfolio beyond what many investors have done in the last couple of years. >> will materials and energy companies continue to outperform as we see the sustained demand for commodities? >> on the commodities side, especially energy could be an interesting trade. the one thing i think about often that doesn't get widely
discussed usually is the capitalism, especially the oil natures have shown since 2014 basically. the capex has halved. shareholders don't want them to go back. oil prices to go back. investors in fossil fuel anymore. you have a bit of a sub structural game changer in terms of the capacity that is available. counting these two together, energy should be another trade that should work well. >> ahead of a pick equities, always appreciate your time. let's get you to vonnie quinn with the first word headlines. >> joe biden says full approval of the pfizer biontech covid-19 jab should clear the way for more private companies to impose vaccine requirements for staff. the fda granted approval for the shot to people 16 and older. average daily u.s. covid debts
topped 1000 for the first time since march. it's the first vaccine to be fully cured by u.s. regulators. -- fully approved by u.s. regulators. vice present harris said the u.s. is focused on successfully completing the evacuation plan from the country over the comments came as a vp six to reassure u.s. allies in asia over the commitment to the region. she is in vietnam later on tuesday. governor hokah will be stepping in for new york governor andrew cuomo, who has delivered a defiant farewell to the estate he governed for a decade. following a damming report that found he sexually harassed 11 women. her term as new york's first female governor begins tuesday. cuomo maintains he is not guilty, saying the attorney general report was political motivated. >> the attorney general's report
was designed to be a political firecracker on an explosive topic. and it worked. there was a political and media stampede. but the truth will be out in time. of that, i am confident. >> from minister justin trudeau has snapped out of the canada campaign. the prospect for a majority is weakening. most surveys still give trudeau's liberals an edge over the conservative buddy. the advantage have dwindled. canada votes on some timber 20. 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 vonnie quinn. this is bloomberg. >> still ahead, more on vice president harris' trip to southeast asia.
>> the sec has reportedly begun issuing new disclosure requirements for chinese companies that want to go public in new york receiving details from the agency. what is the sec now asking these companies to disclose? >> so now, the sec is asking for a lot more detail of various entities. the vehicles chinese companies
use, to get around china's strict rules on foreign ownership. they are asking basically to quantify the cash flows and how this may affect investors. to try to make sure that u.s. investors are fully aware that this is not [indiscernible] but enough or vehicle. the sec is asking for more disclosures on the political risk. this comes after the fallout of the didi's ipo. when china announced the security investigation just a few days before the ipo. risk and china is pretty high given all the new policy reviews out there. >> how does this impact chinese companies looking to go public in the u.s.? >> it means that it is still not
entirely clear. it's not going to be as easy as it was before. they can basically ask for more disclosures and they should be able to meet the requirements. but it's still not clear whether the sec is actually going to greenlight any proposed ipos by chinese companies. this is because the risk is still extremely high. right now we haven't seen any grain lighting. the sec has said officials will take a pause on approving chinese ipo's and the u.s. right now. it's still not clear. -- in the u.s. for now. it's still not clear. questions to answer before getting the green light. -- there are many questions to answer before getting the green light. >> reporter julie fioretti there.
to.com is defined the chinese tech crackdown. consumer spending increase. let's get over to stephen engle. what is jb doing differently than alibaba and tencent? >> they are in the same boat, under the regulatory framework, the crackdown, there are so many questions left to be insert on the regulatory front. that does affect a company like jb.com, which is smaller, still huge, but a smaller competitor to alibaba. they have not been singled out or targeted in the regular tory framework. when the net is cast wide, on issues like data security, anticompetitive behaviors and the like, they are going to be caught in that net. the stock is down about 40% from the february peak. they happened to have their big
annual shaaban festival, equivalent to a single day in november. the june 18th festival, they got a big surge in transactional volume, which saw the revenue jumped 26%, which was more than forecast by the analysts surveyed by bloomberg. it was also the slowest pace of growth we have seen from jd.com since china emerged from the pandemic lockdown last year. some good and bad, but they got a big pop up. there's going to be regulatory overhang going forward for jd and the other platform companies, obviously with the uncertainty. >> what are we expecting with earnings? >> that's going to be before the markets open in new york -- be out before the markets open in new york. we will see if they beat revenue expectations. they have some costs. a company like alibaba again is spending more. when they spend more in new
areas, other companies, in the grocery delivery area, they have to spend more, so the margins will be pressured. we have to see if they have any improvement on the market. the revenue is expected to be increased in part because of the community group buying service. we will have to drill down to see how the overall regulatory framework is either hindering pinduoduo, or they are absolutely able to mitigate some of the pressure. they are also not specifically targeted, but they are a part of the platform economy companies that are put on notice. >> stephen engle, our correspondent. users are reporting that coinbase is having some problems. this is the cryptocurrency exchange platform. the problems have been ongoing
for around 20 minutes or so since 7:52 p.m. eastern. we don't have any more details about that. we know it is not deterring the rally we have seen in bitcoin, in other crypto. bitcoin, touching the $50,000 level for the first time since march, still gaining 3/10 of one percent. really rallying about 60% from that july level. you can see they're really outperforming even gold. >> yet. look at that digital gold shining in 2021. not all investors or analysts would agree with that comparison to gold, and terms of bitcoin not being that inflation hedge or safe haven. we see investor outperformance, when it comes to the preference. the $50,000 level, lots of crypto prices and analysts saying this recovery is ongoing. >> coming up next, we have more about credit markets in china.
>> take a look at shares, now plunging after announcing a share sale. we are looking at levels not seen since january. this bucking the trend of broader gains on the topics. they will raise ¥109 billion in the domestic and overseas shares sale and will use the proceeds to boast capital spending on-chip chip materials and other projects, priced as soon as september 6. >> to over the world's biggest bond rating firms reached
opposite conclusions on the state led bailout in china. our china credit editor joins us from hong kong. this is not very helpful. >> well, fundamentally, this is a different take on what the recapitalization plan and what the state led bailout ultimately means for huarong. moody's is more cautious on what the implications mean for the firm. they are taking a more positive view that any form of state led bailout is some kind of form of extraordinary support. >> what do we know about this bailout so far? >> well, we don't have many details about the a lot itself.
investors are looking for more clarity. there are reports from earlier that the injection could be $7.7 billion. that will certainly help offset some of the $16 billion and projected losses that huarong forecasted for 2020. >> what do you see as the assessment, as to whether the potentially -- this potentially means a broad-based appetite for bailing out these similar companies? >> i think in the case of the ratings front, they recognize bailouts and china are very rare. i think investors are looking at huarong. the key thing whether or not it falls into junk territory. investors will of course have
prices in. they will be scrutinizing the firms, they have been for months now. the rating is the thing that matters. 50% of investors will have to sell their bonds if they were to get downgraded into that kind of territory. >> no wonder given these bailouts are increasingly rare and defaults are becoming more commonplace, we continue to see the risk premium on this corporate dollar bond and china rise. >> absolutely. that is a case. particularly in the high-yield market. the huarong news brought a bit of a reprieve to the market. we saw the rally spreading into asia investment as well. but china high-yield stock continues to be pressured by this real concern about what's going to happen at evergreen. when you consider ever ground in the context of a huarong bailout, they are different
firms. we have seen leverage in the property sector and clamping down on these excessive borrowing tendencies, that have allowed companies to emerge over the last decade as conglomerates. >> we have seen some lessening when it comes to the trade per would a lot of investors are piling back into growth please. due to the performance, the performance, evaluations continue to stay high. morgan stanley investment, we're hearing from andrews who says while you have the opportunity of reopening's like casino, y he thinks sentiment will turn more positive for the reopening trade. >> also coming at a time when we
continue to see dividends roaring back. janus henderson come announcing -- janus henderson, announcing they are racing to bring back dividends, payouts are expected to reach $1.4 trillion as you, the second-highest total ever. if you take a look at the chart we are showing the right now, it perhaps doesn't seem to be happening here in the u.s. more than half of the 39 members of the s&p 500 index, a suspended payout last year, has yet to restore them. there's really that discrepancy between mining companies and banks that are restoring dividends around the world, versus consumer discretionary companies that had to hold those dividends and they are still waiting. . to restore them >> very interesting, as we've had such a good story when it comes to dividends and that return to shareholders in the australian earnings season. >> going forward, bloomberg is
being told didi global has suspended plans and europe over how the chinese company handled passenger data. also plans to challenge uber and the continent and the u.k. has been shelved. and hiring for a year of dedicated team. that will provide more than $72 million in funding. it is blackrock's first ev charging investment in the asia-pacific. ev sales are slowly rising in australia. 2021 figures come already outpacing the 2020 total. and going public in a deal that values the satellite company at $3.2 billion. the merger is expected to provide the new company with $480 million in cash, bolstering
its capital until regular launch operations are expected in 2023. coming up next, it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today. (announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning.
>> this is "bloomberg daybreak: asia." the taliban say there will be consequences if the u.s. delays its troop withdrawal from afghanistan past the august 31st deadline. boris johnson is pushing biden to delay the pullout to allow more and safer evacuations of foreigners. the pentagon says he was military officials are in contact with the taliban several times a day to coordinate evacuation efforts at kabul airport.
the u.s. is reportedly pressuring israel not to allow the group to when a tender to build two rail lines in the tel aviv area. the topic is lightly to come up on thursday when the is really pride minister talks to present biden. groups submitted bids for the project. three of them, chinese businesses. china's downed accounts, closed due to information harmful to maintain social order. the canadian was arrested in july over several sexual allegations. el salvador is installing bitcoin atm's, allowing citizens to convert the cryptocurrency into u.s. dollars and withdraw it in cash.
the country will adopt machines to accompany their digital wallet. the president says transactions will be comin -- will be commensurate. 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 vonnie quinn. this is bloomberg. ♪ >> vice president, harris is looking to reassure allies over washington's commitment to the region. she heads to vietnam a little bit later. joining us suffer analysis is the chairman at the singapore institute of international affairs. threat to have you with us, simon. -- great to have you with us, simon. a crisis developing and afghanistan is not the focus these people would've wanted
going into this trip, but clearly that's a focus. you think vice president harris is managing to reassure the commitment to the region? >> we are talking here about a relation that has gone on since the vietnam pull out, and before that. this is a long-standing relationship. there are headlines making noise. there are concerns and afghanistan. singapore's also involved with afghanistan, to help address terrorism and try to shore up the new government that will be created. so we are aware. they cannot allow this to overshadow this long-term , consistent, and dynamic relationship. as well as reassuring the constant policy that's been offered. >> the singapore model was an interesting one. that u.s.-singapore relations have been very pragmatic and strategic. is there a hope that it could be
replicated with other economies? >> let's look at how singapore has done. when others closed up to multinationals, singapore opened up. we are now the headquarters of the largest american investment, the whole of the region, that continues into the present circumstances. we see now the new tech companies. google, facebook, building sizable headquarters, and investments into singapore. this will make a strong two-way flow. there is the singapore-u.s. fta. this is long-standing. the new dimensions, then you elements -- the new elements, the
economy, climate change, and the afghanistan evacuation. >> how pragmatic is the u.s.-vietnam relationship especially at a time when we have the u.s. treasury watching vietnam very closely, because of its friend's evaluation? -- forensic valuation? >> this is going to be a typically complex relationship. vietnam used to be the enemy america withdrew from. now it is a very good friend in the political realm. on the business side, a major that if sherry of the china movement, the global supply chain.
-- beneficiary of the china movement, the google supply chain. america might do well to help vietnam and others, with the vaccine in the rollout. >> if there's one message the vice president needs to deliver and asia, what is it -- in asia, what is it? >> during the trump administration , personality was less consistent. this administration is very experienced. vice president harris is an exciting person but is new to asia. i think policies matter the most. this personal trip, this time is not easy. she should get a first-hand sense of the semi dead amid region this part of the world. >> simon tay.
thank you very much for your insights. the other major event we are watching this week is jackson hall. surging inflation, surging unemployment, and the federal reserve's tapering of bond purchases, how will powell weave all of this together in the symposium on friday? our policy editor, kathleen hays, is here with the latest. what are we expecting? >> we are expecting jay powell to take a look at the framework they adopted a year ago. officially announcing that jackson hall, they have taken it as an opportunity to send a message. that something is changing. they are not even working on the new framework. for over a year and 2019, the fed had a hard time getting inflation to move up in higher and stay there. so from now on, let's let inflation run high. let's let it get above the target and stay there for a while, let's mature we are at maximum employment
-- make sure we are at maximum employment. we are going to see because we had that good intention, but at the same time massive fiscal stimulus, the biggest piece time stimulus in u.s. history, alongside an economy that roared have the pandemic a lot faster than people thought, that white line at the bottom, inflation is measured by one of the fed's key indicators, not at 2%, but at 4%. unemployment which has been 15% is backed onto 5.4% and falling. officials including jay powell see tapering of inflation, but others are saying, look, given this new inflation framework, it's almost guaranteed that the fed is going to stay too low for too long. where is jay powell, july 28, he said we made progress on gold, inflation goal, we probably met. if they met their inflation
goes, mr. powell, are you going to go ahead and move? or does the delta variant sloughed down? they've got to get this new framework right. this is a key question when you start doing stimulus, when you start doing tapering. >> continuity is the other key question. we know janet yellen is supporting the reappointment. what are we expecting? >> for years. -- four years. people are waiting for biden's decision. it's very important janet yellen has endorsed him, after some key democrats like elizabeth warren from the senate saying he hasn't been tough enough on inflation. bill dudley, the former head of the new york fed, is on board, too. >> he's done a terrific job. i think he has articulated policy in a very clear and consistent way. i don't see any reason why he wouldn't be. >> of course, our bloomberg
economics team, our washington reporter, reporting the white house has heard people are realizing the market like certainty, jay powell said a good job. it will be interest in to see if biden announces by labor day that it could be around the corner. >> coming up next, the covert outbreak surging in malaysia. aggravating the semi conductor shortage. we will bring you the latest. this is bloomberg. ♪
♪ >> hong kong exchange received a long-awaited clearance after asia index figures contract in collaboration with msci, giving global investors a new tool to hedge china risk. we spoke exclusively to the chairman and ceo of msci. >> there's always been a lot of talk about that with every emerging market the world, there's been a time in which the shares have been investable. there was a time in the past in which mexican chairs were called uninvestible. we have seen the regulatory
compliance way for china happen every 345 years -- every 3, 4, 5 years. but quickly afterwards, the markets have recovered and dom to new heights -- gone to new heights. we got to look that this process the chinese regulators are going through in the last 10 years and also across other markets the world -- markets in the world. there's been a lot of criticism and china in terms of lack of compliance, lack of regulatory oversight. so they are now setting their regulatory oversight. clearly, we have to see how it all shakes out. it's important to keep in mind there's no country that is exempt, including western countries. >> does the nature of the regulatory crackdown, the
volatility, what authorities are trying to do, does it change the tone and also the timing of discussions and approvals? i'm wondering if approvals get a lot quicker, if they are sped up, when there is this regulatory attention being paid? >> there has to be some affective that, in times of volatility, for example, like this one, it's even more important to have the right exposure tools and management tools and hedging tools for the market. i think this whole process about approving the futures and hong kong has -- in hong kong has been long and coming. it was a more peppy secular perspective. we have been working on it for the better part of four years. it came down to the two regulators making sure that this was appropriately the structure,
and of service to the community. as i said, there's been a missing link here in hong kong. hong kong has developed a great ecosystem of etf's. and the cash market through the connect program, through shanghai and shenzhen. hong kong is the largest structural market in the world, including exposure to china. and also a great trading center for the yuan. the biggest link was a derivative market. we have been working with the regulators to get to that point, in building an ecosystem, that all of it together, is greater than the sum of its parts. we are happy that it's taking place now. >> let me turn to crypto. you have said in the past that you are talking to experts about developing cryptocurrency indices and products. do you know at this point what
crypto assets you are focusing on? >> we are still exploring a variety of options, talking to a number of partners. we are very bullish on digital assets and the technology associated with it. obviously including cryptocurrencies. think they have a role to play in the world. and we are looking at that, from the point of view of direct exposure. that would be one example. we are also looking at the climate change aspects of mining and the like, and the disruption this could cause in other parts of the fintech world. we are looking at all of that. at what the right products will be. we will be announcing something in the reports. >> henry fernandez, speaking exclusively with bloomberg, chairman and ceo of msci. bitcoin, just under the $50,000 level.
let's turn to sophie for all the action. >> we are seeing gains extent for asian stocks after the biggest jump in three weeks for the regional index. we are seeing the advance being led by tech, materials, and industrials. andras leven says, look at the cyclicals, look at the reopening trends, as the hick ups will be looked through going into the fourth quarter. switching up the element here, when it comes to asset classes, i want to focus on what's going on in the commodity space. we are seeing base metals edge higher with copper futures and shanghai gaining along with fuel rebar. oil prices, lower after the biggest jump in nine months. goldman is seeing fourth-quarter oil prices up $80 a barrel. we do have some upside scenes for copper. copper prices are a touch under pressure in the asian session. checkup was going on.
the korean won, back below 11. we have the cost become a getting a boost from autos. >> a surge in the number of covid cases in malaysia is threatening to aggravate to production and shortages and other components, with already hammered automakers. joining us for the latest is our south asia tech reporter. that is worsening the overall global situation. >> malaysia is now a key global chip center. a surge in local cases is hampering plans to restore factory production to full. carmakers like ford and toyota
are cutting production, slicing production i -- slicing production in malaysia. >> i was going to say, surprising that we are talking about malaysia, because we usually thing about taiwan, japan, when it comes to chipmakers. what producers are there? >> you would be surprised. actually, a major chipmaker is in the southeast area of the country. they expect the disruption in malaysia to have an impact on their sales and profits. one company had to shut their
plans for 11 days. they expect the incident to have diminished their ability to service customers. >> debbie wu, bloomberg news, with the latest on the chipmakers in malaysia, thank you. surging to an 11 year high as chips are tied up in ports and congestion, pushing shipping retire. -- pushing shipping rates higher. this is also feeling the rally. let's bring in our china economy editor, james maker. what are analysts saying about whether we are going to see the peak of shipping rates? >> the expectation is that this is not going to be the peak. we have seen shipping rates drive bulk goods, like coal, iron ore. we have seen container rates rising to record levels, near hundreds of percents from where
they were last year. there's no dictation these specs are going to subside anytime soon. the demand for shipping goods is still too strong. it is really overwhelming the ability of carriers to carry with the current fleets they have. >> are we seeing positive developments when it comes to the situation at the ports? >> yes. it looks like the port has had a soft open. some ships have left the port. it's not officially open yet. looking at satellite data, we have seen a few ships have left in the last 22 days. the indications out of that, it's going to come back online after being shot for two weeks. looking at the numbers, it's an indication of how much demand there is. they were still doing more containers than they had been doing on average between april and july. had been losing 25% of the capacity. they were still running higher than they had been earlier this year, which shows how much
demand there is for shipping goods out of the port to china. >> how much is it really the covid related restrictions and changes affecting the ability of these logistics and supply chains' operations to go smoothly going into such a key to him of the year? -- key time of the year? >> it's definitely having an effect. demand for exports and china are at record levels, and other countries. the demand, even without the covid restrictions, at ports, it's a difficulty companies are having. the demand for shipping goods would've still been there. these things are making it worse, like the slow down of the port earlier this year, the slow down now happening because of the surge, it is exacerbating an already difficult situation. >> our china economy editor,
other participants include sequoia capital, china, and rise and fall capital. the chinese company behind most e-cigarettes is said to be considering a hong kong ipo. shares could raise between $500 billion and $100 billion. two of the world's biggest fundraising firms reached opposite conclusions on china's state led bailouts. fitch revised the rating and said they received extraordinary support from authorities. >> we are watching jd.com after a better earnings report card. citi, downgrading the price target.
it is the worst performer on the index this year. this is one of the top performers on the benchmark. analysts expect a positive showing for the sales growth seen in the domestic sports sector. switching out the element here on the chinese earnings season, we are about halfway through. you can see for the index, less than a handful of companies. >> coming up, we get more insight on asian markets. plus, don't miss another big
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