tv Bloomberg Markets Asia Bloomberg August 16, 2022 10:00pm-11:00pm EDT
david: it's almost 10:00 a.m. in hong kong. welcome to "bloomberg markets: china open" i am david ingles with yvonne man. yvonne: our top stories, we are seconds away from the rbn rate call. we are seeing a 50 basis point jump. investors are waiting for signals. tencent may report its first negative revenue growth amid market fears of exiting big investments. oil holding losses of six-month lows, the prospect of rising iranian supply. weaker economic outlook. david: both negative. it not always about a textbook. but still that is what we have seen in will prices as we await the rbn rate decision and how inflation features. the slowdown here.
we are now out with a rate decision. i'm surprised -- unsurprisingly it is an interest rate hike of 50 basis points, where up to 3% from 2.5%. yvonne: you are talking about a year ago, rates were around zero. we have come a long way. this has been one of the pioneers of this rate hiking path. the rbnz has kicked off for the rest of the world. now that we have seen it, we have seen the spike in with the kiwi here, at 63, 60's sense. all economists, rbnz remains appropriate to continue tightening at pace. is want to watch. we have been looking at any signs they could slow this tiny path. core consumer price remains too high. let's bring in kathleen hays,
for any sort of reaction. your take away so far. >> hawkish. inflation remains too high. the rate is peaking at 4.1 versus 3.9, which they said -- with a projected at the last meeting. they are talking about inflation slowing to 3% by the second quarter. that might be a little helpful. remember, this is only the third quarter of 2022. they're holding out some hope for the future. so, saying it piques that 4.1 is also bad. for now, would you not agree this underscores the market sense, economists forecasted to more 50 basis point rate hikes are coming. look what they did at the beginning of next year, but more could be coming as well. clearly, any sense that they are ready to let up is not there yet. david: there giving some
guidance, you mentioned the actual figure, 4.1% average, cash rates, second quarter 2023, 4 .1%. you look at the third quarter, also for -- 4.1%. are they telling us they will stop hiking rates at that time? >> we can assume that we will hear from the press conference that this is assuming inflation starts to come down. they see it coming down. however, what will be interesting to hear from the press conference, and when you say, 4.1% in the following quarter, they are signaling also, don't expect us to stop hiking rates, inflation is under control, and start bringing rates down immediately. again, there's going to be a lot more information in about an hour from now. we will be covering a closely. as expected, pretty much but not the least it dovish yet. -- bit dovish yet.
yvonne: they will remain appropriate to continue tightening at pace for the rbnz. we are expecting these minutes. i think everyone is hoping we could be seeing some sign of a fed pivot. will we get it? >> a lot of people are saying, you can hope however you want but jay powell's main message was not a private. what people hear from him, that made them think about a pivot? for one thing he was talking about 75 basis rate hikes can be appropriate in september, but that must mean he was opening the door to 50, he was he was not going to stop hiking rates. also jay powell said the fed was neutral. many economists, especially those that follow closely, say he misspoke. the long-term ritual is 2.5%. the current neutral rate could be higher. the thing that struck me even
during the press conference was when he said, do you want to signal of where we are heading, look at the dots from the last meeting. our interest rate forecast, what you see there, is they will hide rakes to about 3.4, 3.5 this year and that probably up to 4% in the second half of next year. i don't think anyone would call that a dovish privet. investors are so eager to get the pivot, and helping they will get a sign of hope that they are looking for the pivot when it is not there yet. the fed wants to pivot but they're not go into pivot until see the doors open, that they have done enough of getting inflation under control. that will be one of the key things people will look for in the minutes when they come out and lay the u.s., -- in the u.s., in 14 hours from now. david: there we go. there about 16 hours. kathleen hays. . i would like to say our editor. the neutral rate may be higher than the fed thinks.
this line is just coming through out of the rbnz. they just had the discussion if the neutral rate is higher than what they are currently projecting, it is hawkish. yvonne: very hawkish. they can't figure out where that neutral rate is that at the moment. have they reached it or not? we have seen sign in the property market, that things are starting to cool down. we are seeing the effects of these 300 basis points of rate hikes in the past year. it is starting to be felt in the economy. . but whether we have hit neutral, that is up for debate at this point. david: that neutral is 100 basis points from where we are now. are we thinking of were that is, it could be higher. the doves get back in bed for now. [laughter] more on this decision and a lot more context. on your terminals, get a lot
more commentary. including this top in the kiwi you are seeing on your screen. vonnie quinn is a new york. >> thank you, president biden has signed a climate health care measure into law. it is a major legislative victory for democrats. the bill changes the way medicines are priced, at a minimum of 15% tax for corporation. the inflation reduction act is the biggest committing -- commitment to mitigating climate change in u.s. history. >> we have not wavered. we have not flinched. we have not given in. we are delivering results for the american people. we didn't tear down. we built up. we didn't look back, we look forward. today offers further proof that the sole america is vibrant, the future of america is bright. the promise of america is real and just beginning. >> premier has asked officials
from six key provinces to bolster growth measures. according to cctv, a meeting with provincial officials asking how to boost consumption and how to offer more physical support via government bond issuance. pressure from covid lockdownsand he told officials to strike a balance between buyers control and economic growth. bloomberg has been told the eu seized iran's response to a planned revival of the 2015 nuclear deal as constructive. an official tells the eu is consulting with the u.s. on the next step. salvaging the landmark deal could see iranians oil exports returned to global markets. the u.s. has remained tightlipped on the draft, but a state department spokesman says the big issues have been mostly settled. ukraine says it is beginning a series of attacks against russia in late occupied crimea -- crimea. it came after an explosion tore through a russian depot in the
boxy peninsula -- plexi peninsula. moscow's calling the act and act of sabotage. russian television reporters say around 2000 people were affected from the area. -- evacuated from the area. global news 24 hours a day on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries around the world. i am vonnie quinn. this is bloomberg. yvonne: still ahead, an exclusive interview with linkedin's director on progress towards gender equality in the workplace. we have a new study coming up from them, coming up next. david: let's take a closer look at some of these issues for than the property sector in china. they are saying the homebuyers strike lay mortgage payments could increase risks. we will dig deeper into that report. you are watching bloomberg. ♪
country garden and long for, slightly lower today but a lot to talk about with s&p. david: it's going to take more than a headline, more than a few headlines. s&p joining us, they basically think property sales are down 33% this year, almost double the drop in their prior forecast. joining us now is charles chang. it's very nice to see you. hopefully under better circumstances and time. but this is an issue we are dealing with, the mortgage issue. how big of a problem is this? >> the mortgage board -- boycotts is a ways down sentiment, it has been the central problem faced by the sector. in terms of size, our bank team estimates that the total number amount of mortgage that could be affected is one trillion. that sounds like a big number. china has a big banking system. that is 2.5% of all mortgages,
0.5% of all loans. it not big enough to cast a big threat on the system. david: on the banking system but on the property side, is that a problem? all symptoms of it, are they able to ring fence that? >> as i mentioned before, the problem is the broadcast effect. they need to address this problem. they need to ease minds and make virus more comfortable. -- buyers more comfortable. this is going to take a bit of time to resolve. in the meantime, the government is looking into it and they seem to be paying attention to it. it occupies a lot of attention of the public. yvonne: do you think having state owned firms, with bond guarantees, what we have been hearing in terms of what could
happen of liquidity support, does that do enough to turnaround the story in any way? are you still looking for more, as a credit agency? >> the bottom line is these guaranteed bonds, i know it is going to be an interim measure. it is just getting started. we are not seeing that many developers benefiting from that as of yet. it news to come in to shape,, to form, probably in a much broader scale, for that to reverse the sector's problems. at the end of the day, what is really happening is, homebuyers are worried about buying homes. that needs to change. before that changes, sales continue to decline, than the sector will continue to be in trouble. the developers are getting into better shape, it will help. other measures could potentially help. but that is the core problem. yvonne: do you see any sector or
any sort of company that may be immune from this turmoil in the property sector? or is this something they think better quality names could also be impacted too? >> well, the core problem being the homebuyers are worried about buying homes that will not get delivered. there are a handful developers that those worries are less pronounced. some of the large robust, state owned firms, don't face that problem. perhaps some of the firms that are the local level that has not racked up as much leverage and did not attract as many negative headlines at still have access to funding, maybe they continue to operate. as it stands now, it is very much buyers beware. homebuyers have a cloud of worry above them. they still need to buy homes. people still need to buy
property. there is still demand for quality housing. the sector will continue, but under a much more sluggish estate. -- state. david: it's a question that bond markets have been trying to figure out. where you draw the line? country garden, for an example, who would've thought this one, since yesterday, would be in the same sort of pull as the others? the pricing in the bond market, almost everything looks distressed, is a justified, or is that also an overreaction? >> i think in large part there probably justified. there's a lot of developers that defaulted. many of them have been able to accept bank funding as well is capital markets. they will have problems, especially since their sales, the weaker ones, have dropped 60% to 70%, you're on your.
cash is not coming in, whether from sales or their funding sources. for those names, they are distressed. the prices should reflect that. there are certain developers. that can withstand this. . the prices reflect that too. in the middle, there could be a few that could make their way out of it, but we are still in the early days. we do need to income coming in. we need to see sales recover. we need to see sentiment stabilize. that has a virtuous cycle effect when it goes in that direction, a vicious cycle. but at some point that you turn. -- that should turn. yvonne: charles chang there, s&p global rating lead. i want to break some lines when it comes to pag, the asia
focused private equity firm, backed by blackstone, is considering delaying its ipo here in hong kong amid market volatility. this is according to people we have been talking to. sources say this firm, will make its debut next year in 2023. they are keen to avoid the sale taking place, with a backdrop of a stock market volatility, seeing a week trading lay the first after listing, this is according to the people we have been talking to. we heard about this application in march. it was supposed to be one of hong kong's biggest listings in your. if true it could be that is for the ipo market. here is how we are looking when it comes to new zealand assets after that hawkish hike from the rbnz. we are seeing feels higher. this is bloomberg. this is bloomberg. this... is the planning effect.
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yvonne: welcome back. you're watching bloomberg markets asia. china tech is doing ok compared to what was hardly the u.s. session on the back of this report from reuters, that says tencent may be ready to divest that stake in meituan. that is earnings as well, some of the tencent backed companies like lee billy, quite show, we are seeing read -- like bilibili and quite show --, how maybe this development of moves forward could have lots of value for the company because they could be using it to be more aggressive when it comes to share backs. david: do something else with it, right? stephen engle is here, giggling.
why? >> they have a lot of cash. they might potentially have some more. that feeds into the share buyback seen for tencent. our china figure out why meituan was up. morgan stanley report that yvonne just talked about saying, meituan's minimal impact on this leads in the short-term, given the majority of the profit is generated via its own ecosystem. there is already some contracts in place with tencent. may be divesting, if this is true, tencent is considering or possibly going to unload as much of -- morgan stanley says it, is 70% stake bloomberg data saying it is a 19% stake. reuters reporting that they are looking at divesting that either all or some of that. that has sent shivers to the
other companies that tencent backed during the heyday of the golden age of china. we are talking bilibili. we saw some weakness in the u.s. adrs. also, bilibili and kuaishou seeing weakness. david: that is the next question. do we see tencent, they proceeded with divesting part or all of the stake, to they look at the others too? can we read through what is happening now and applied elsewhere? >> we have already seen tencent talk about jd, divesting shares in that. also sea, which is the e-commerce player in southeast asia, based in singapore.
separately to this, the company had a terrible set of results, but they are -- tencent is the biggest a shareholder in sea. you connect the dots. if this is a regulatory push to unwind the spaghetti bowl of interconnectivity between sense -- tencent and these other tech companies, is it hindering competition? you can connect the dots and say the other companies will see a divestment eventually. yvonne: and i wonder what are some of the catalyst for the stock now? it is pretty limited now, what are we expecting on the earnings later on? >> earnings are going to be bad. citi, analysts saying revenue will be down to .7%, after the markets close today. limited catalyst for the stock today. jeffries, total added sales will be down 29%. ci ci seeing that profit down
20%, year-over-year. it will be the first quarter since it lifted back in 2003 of revenue declines on record. yvonne: stephen engle, our chief asian correspondent there. let's get to our business flash headlines. >> thank you. china's asset management says it expects a net loss of $28 billion in the first half, even after revamping its business, compared to the $23 billion profit last year. the state owned a manager says result the not meet expectations because of market volatility and a mark -- and real estate downturn. singapore's sea has a bigger loss than expected and withdrew its forecast as a braces for slowdown in online shopping. it posted an adjusted loss in
the june quarter. it has suffered a number of setbacks including a ban of its most popular mobile game in india. shares surpassed the profit expectations in the latest forecast. the results signals the retail giant is finding its footing after slashing its outlook three weeks ago. the ceo says walmart will be well-positioned for the holiday season after making good progress on inventory growth and supply-chain concerns. home depot's second-quarter results beat expectations even as the u.s. housing market showed signs of cooling off. sales grew 5.8%, topping the analyst estimate of 4.6%. backlogs remain healthy and strong sale trends have continued into the current order.
circulars break. it has been a very good week. a little bit more on the other one. they might also find themselves in the situation. have a look at the dollar-yen right now. look at the japanese currency. we knew there were hawkish but not as hawkish. >> pete frates might only come until 1% or 3.9% earlier. this is where you are seeing a lot of that movement. the kiwi is out.
especially in the short and, using the two-year and 397 further yield. we are seeing a flipped story there. very hawkish talk. inflation pressures are still going to remain high. higher peak rates, does that mean we continue to see the kiwi edging higher? >> particularly on some cross rates. it was a very interesting morning. just a half-hour before new zealand came out with a higher rate than expected, we had the australian wages report. that was slightly below expectations. you had a reason for the rba to sound a little more dovish.
traders expect there will be a divergent between the policy of the two. this has been pretty much in the trading range for three months. you can see that going down further. possibly even reasons for the rba a bit softer. it is something that the rba watches very closely. >> before we know it, we will be talking about this trait on the aussie qb. i can see it coming at some point. in terms of just the rates trait here, the two of them inverted again. could we consider this to continue and deepen? >> yes.
the economy is still trying to get out of the lockdown that they extended their own lockdown with the rest of the world. that caused a big slowdown in the economy there. it would not be a huge surprise to anybody if new zealand comes into a recession and the way that trade reflects there is by pushing the yields lower. there is no reason for the inversion to do anything but get deeper for the short-term. people will be looking at the deeper inversion as well. if you look purely at the local vectors in new zealand, it will be pretty tough. that would mean that they need
to keep this higher for longer. this is not something that will happen in the near term. >> we are expecting those fomc minutes, the fed continues to be hawkish. markets seem to be of -- seem to be ignoring all that. now we have this china slowdown story. this recovery isn't going happening in china. >> it will be very volatile. particularly on the short and. the two-year yields will be very focused on what happens with the jackson hole symposium. there is some talk that jerome powell could somebody hawkish in that speech. inflation is out of control. that is public enemy number one. the fact that he pushes harder if the feds over another 70
basis points, if they look like they have a lot more work to do, the risk recession could hit the united states some point next year. that has to be reflected in the long end of the curve. we should find that the inversion stays for a long time and gets pretty deep. because of the way the traders are set up and because they are expecting to see more fed speakers, we are going to get a lot of short-term volatility but the net result is probably the long-term yield. most of the real action will be in the two-year where the five-year part of the curve. >> this next-door we are about to talk about is this drop in energy prices and the energy crisis as well. commodity markets have been bouncing up that a little bit. the reason we are looking at that in the big surge yesterday,
this is back because of high energy costs. are we about to get flooded and see some of these pressures alleviate? let's bring in our energy reported joining us now. the direction of oil prices has generally been down. now we have the prospect of iran likely to come. >> you are certainly right. we have seen weeks of this more bearish atmosphere after months of a rally following russia's invasion of ukraine and certainly the new thing is iran. i think some analysts and traders would say this is a bit of a long shot. there is no 100% done deal yet. people who were selling off
because of a potentially rainy deal may be doing so ahead of time. they are taking advantage of the chance that could happen. as history has shown, it has been difficult for iran and the u.s. to agree on anything. i ran was to make sure the future potential trump administration won't be able to renege on the deal. they want to have insurances -- assurances about the war in ukraine. it is a difficult sort of situation to predict. iran is able to bring that hundred thousand barrels a day back to the market within three months. that is bearish for the market. it would push down prices. it is just a matter of if iran, the u.s., can they come to some sort of agreement? >> talk us through the other factor that is driving prices
lower. also, these heat waves we are seeing across china and europe as well. >> certainly. for china, the big focus has been how is the covid zero policy destroying demand from the biggest importer in the world of crude? it has been huge. while there have been some false starts of shanghai opening back up or some region is looking better, there is another bridge and that has a lockdown. it is a bit of a whack-a-mole. at the same time, you do have these heat waves which are drying up the nc river. that is causing a bit of a power crunch in sichuan.
they are very dependent on hydroelectricity. that is affecting supply genes in that region and beyond. >> this is the final question, tying everything together, is there anything that suggests these trends of higher prices, disruption to supply, whether or otherwise are about to end these next few months or will there be an extremely tight and volatile energy market? >> it will be truly tight and volatile. maybe we wont have a heat wave in a couple of months. maybe we will get some rain in the yangtze river and it will fill up and water levels will rise but we can see another issue with russia. we could see a facility in australia go off-line. there are so many factors in this market, even the smallest thing could set off. we are on such a razor type sort of situation, anything can make everything.
-- anything can make everything change. >> i love that. let's get to the first word news. we have vonnie quinn in new york. >> thank you. liz cheney has suffered a crushing defeat in her bid for reelection by a primary challenger back by donald trump. she was the third ranking house republican for leading an investigation into overturn the 2020 election laws. the ambassador says house speaker nancy pelosi visited and their trips by u.s. lawmakers pilot agreements between the u.s. and china.
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. >> up next, there is any report talking about the data. more women are creating their own opportunities -- opportunities. this exclusive interview is just ahead. this is bloomberg. ♪
>> before we get to the next segment, currency markets are doing nothing. we can leave that there. linkedin recently released new data that looks at gender gaps. the report will come up here. the representation of women in leadership. globally, only three in 10 are female at the asia-pacific. australia and india have the lowest representation of women in leadership roles. >> let's get more insights from linkedin. i was crunching these numbers for us. it was quiet fascinating that the reason why leadership is so
low and as a byproduct of that, you are seeing entrepreneurs and say i am just going to do this myself and forge my own path. tell us what the core of the problem is here and tell us what is really happening in the real world for them to do something like this? >> thank you for having me in. between 2016 and 2021, we actually saw a 99% increase of women becoming entrepreneurs. instinctively, why are women having to choose that route? she became a founder of the talent agency because she felt she had to work really hard to get recognition.
she had the same job. largely, i think women are feeling like this is getting too tough. having to justify myself all the time. maybe i should find something out there for myself. >> singapore is a little better than the global averages. are you seeing something that is very similar in all disorder countries? -- all of these sort of countries? >> we see them as being underrepresented. we have data that shows there is evidence that shows men are more
likely to be promoted. we do have a real problem there. i think it is very real. it feels like women need to take the time out for the family. they are constantly challenging women. the fact is we need to normalize some of this. taking time off is ok. career breaks are something that are very real. >> i wanted to take the premise to that. at least you have the possibility that women are leaving because of the lack of opportunities or even the lack of flexibility. has put it that way.
they are going to do their own thing. what does this say about big corporate? do they need to be more flexible and accommodating? because i try to believe that. these organizations are militaries about retaining some of this talent and women make up some of the top talent. if they are serious about retaining them, they have to do something objective. some of the common factors include being very conscious about unconscious bias. things are very intentional to help women lend their voice. i think there are so many things organizations can do to help retain women and help further
their career. >> let's look at the positives. there are places where you would have seen a lot more progress in terms of promotion. are the best practices where the laggards could take a look at it? >> different organizations and different countries that we have to acknowledge. that helps organizations to be more aware. singapore are taking more proactive steps to address this as well. i think that consciousness will help to encourage organizations
to be more aware of what they need to do to retain women in the corporation. >> thank you for bringing your insights on linkedin. they are seeking a compromise. this is banning sex between men, this law. while views of the law have evolved, there must be balanced with perceptions of traditional families and marriage. >> we know these issues are issues where different segments of society follow deep views, sometimes opposing views. our way of addressing these sorts of issues is ability to engage the different groups and see if we can work out some common understanding.
that is a process we are undertaking right now. >> you are a modern man. you're studied abroad. this must be very embarrassing having a lie like that. >> we all understand the history and the reason is that is in place. it is not something the government and singapore introduced. we know that over the years, many asian countries that have this legacy as former british colonies have repealed the law so we understand that. we also know that and singapore, there are many segments who feel that it is not just about the law but the law is a marker for other things. things that they care about about society, societal values,
>> i think we will get it over to vonnie quinn. she is in new york. she has your latest business flash headlines. >> thank you. a private equity firm backed by blackstone's considered a delay of its hong kong ipo. resources sap ag which is led by the chinese dealmaker way john chon is more likely to make his debut. they applied for the ipo in march and it is one of the biggest hub listings in a year. >> sources tell us a deal could be worth about $3 billion. the company backed by the hong kong billionaire, and region -- a sales process could begin in the coming weeks.
this will cost just under $1600. disneyland has been trying to cope with a surge in attendance. the company saw is park divisions profit sixfold to 2.7 last quarter. those are the latest bloomberg business flash headlines. >> the bond bear is steering disneyland. quick take a look, this is a mixed picture. also for high equities. we are seeing some strength of the renminbi here. this is bloomberg. ♪
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