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tv   Bloomberg Markets Asia  Bloomberg  November 8, 2021 9:00pm-11:00pm EST

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discuss the banks full-year. we are taking a look at this breaking line crossing through bloomberg exclusive. talking about how they have been interviewed for the fed chair as the search heats up. as that could certainly bring a lot. rishaad: it was about the number two, which is something that elizabeth warren accused jay powell of being, i suppose, not very good at. what do you think? david: i think it was the political report this morning that came out, just in terms of the timeline. we might get more details and it could come by or before thanksgiving. and i would imagine this would be the top stories. this is in terms of the defense chair. just very briefly, we are risk
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on across the region. the futures have come up ever so slightly. can we have a look at these global macro movers. the equity future stories when you look ahead to this, for example, it will be fairly interesting. for treasury, us moving into wednesday where we have inflation numbers coming out of the west, china notwithstanding. we also get some gdp numbers out of the philippines coming in higher than expected. even the market stories continue to be in cryptocurrencies. our galaxy crypto index is at all-time high. 67 percent down from july. not completely retraced all the
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way higher. we are not flat. which shows you this recovery we have seen as far as all of these things are concerned. rishaad: let's move along and have a look at movers and the educators. we are looking at it closely we saw chinese authorities slacken restrictions put upon them. but this is only for nonprofit companies. the thing is, they will not be able to make any money when they are tutoring children in the afternoon. they will if they are tutoring adults with professional qualifications. even citigroup saying, don't get too excited. we aren't seeing that much euphoria. the u.s. is taking a big leap. yvonne: they are still up here this morning, is this still investable. it may be seen as an investable because of the stressors. they made sure to actually
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mention that in this financial stability report, not just talking about asset prices, also when it comes to evergrande, the contagion risk we are seeing in the high-yield market has spread with higher-rated names. rishaad: let's see what we are looking out. have a look at what else is going on in the markets. people -- are people in the fed trying to burst the bubble? that's your question mark. >> i think they are talking a lot, but they have no intention of bursting a bubble is the short answer. traders know that the winning bet since the global financial crisis has been to assume that central banks in general, the fed will be behind the curb when it comes to raising interest rates are tightening policy, even when they see assets in theory, or however you want to say they are in the bubble or
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too expensive, or however you want to describe people's concerns about equity, in particular, and commodities to some extent. traders have shrugged their shoulders and said the central bank won't do anything about it. i don't think they realistically expect that again. you can see that's why the s&p 500 continues to make record highs. people would assume it would be in place for a long time. even with the fed taper. they are not going to be raising interest rates for some time. plus, their balance sheet is much bigger than it was at the global financial crisis. their reinvestment alone would look like a qe in itself. they would put coupons back to work. they would buy bonds again, which already's coming up in the need to reinvest. the fed will not shrink by that much, and that keeps a lot of liquidity into financial markets. so there report may be interesting, and it might be nice to look through it and say, this could be the time when we recognize the bubble. is the fed going to do much to stop it?
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probably not. yvonne: the great markets, we have seen things ease a little bit, but how is that playing in the outlook for risk assets now? mark: they have had some success recently, you see a lot more volatility in the short term with markets, particularly in free -- and the three months future contracts. traders are taking on the data. they are saying central banks might say this is temporary, this is all transient in terms of inflation, but the data tells us oth. the are seeing a pickup in wages and wage inflation in the united states. in europe is trying to clear signs. in the traders are saying we can't wait for central banks to sort this out. you can see they have had some success. the last week the reserve bank of australia walked away from the 0.1% target on the three year bond. and you could probably put that down to the fact that the market push them so far and said there was no point in defending it any further. the have also seen some wild
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things in u.k. rates and u.s. rates, but the underlying theme is rates have not come back down to where the central banks are saying they should be. there is still a big disconnect. there is a communications issue, plus the traders fell embolden that higher data gives them a reason to push them up. yvonne: a lot of questions, can central bank alone push the rates back lower. our mliv strategists joining us with the latest on singapore and another chinese evergrande story. the dollar coupon deadline, another has passed without payment and it won't reassure any bondholders with the developers heading to default. let's get to our china credit editor rebecca wilkins. what are you watching? >> that payment is important. it is a coupon from that particular issue or that particular unit of evergrande. the big thing is, tomorrow, november 10, we had 150 million do in these overdue coupons. three different notes there.
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and if you don't, that would be evergrande's first major default on the public bond. that would potentially accelerate any restructuring, inmate allow holders to petition for a bankruptcy filing. so it would really move along that story, if we do see that happen. evergrande has been able to get the funds so far for these imminent payments. rishaad: it has been largely confined to noninvestment grade. is there any chance of this contagion spreading to that part of the market? >> it's becoming clear that evergrande is a very small part of a much bigger issue for the sector. we have seen two of china's largest developers country garden, falling under a lot of pressure. state owned links also seeing their dollar debt under pressure. i think we are seeing with things like yvonne has mentioned there, by the fed, looking at
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this, clearly this is a much bigger risk that is hitting across the sector. in there is a shifting of the fundamental view of what the outlook is going to be. not just about the financial help of these weaker barrios. we are talking about financial help with the biggest players. david: i was going to ask you if you could expand a little bit on how this is spreading. i know we talked about it already. is it spreading in the market, or is it encapsulating investment grade rates? it's a little bit of a new one. >> certainly, we are starting to see those inklings be on the market itself. and i think one thing to watch on that front really closely is what the issue will be like for investment grade issues. most high-yield indebted developers are refinancing their debt. but when it comes to investment grade, we still have been able to see some folks being able to
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refinance their issuance. the other big question is, when we think about investment opportunities, it has been a shift over the last two weeks. really weak borrowers, evergrande, they are actually seeing bonds increase. it's essentially the entire market that's going to tank, why not go for the riskiest bonds where we are seeing the best returns? rishaad: we have just lost touch for a moment. thank you so much. our china credit editor. let's have a look at the first word news headlines. china's central bank will extend funding to banks with lender companies working towards reducing carbon emission. it will offer a discount to the loan prime rates, if that money is then used to help china's energy transition. the central bank will require the use of the loans and the associated emissions and reductions. they have exposed the addresses of iran's 5 million customers,
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and the full names of the group of approximately 2 million. no social security bank account is exposed, saying that hackers demanded an extortion payment and that it's working with law enforcement and security. vice chair richard is lifting interest rates that could be met by the end of next year, speaking at the event in washington. he said the bank would still consider any hike. the president is penciling into rate increases next year, and the fed president doesn't expect any rise before tapering is complete. the fed governor will step down from the central bank in the last week of december. this as president biden adds another position to fill. he joined the board in 2017. he is four years of central vice chair. his supervision ended in october and is term runs until january 2032.
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their leadership roles will end. singapore is easing some tough coven measures, it will have a spike in cases starting wednesday. five people from the same residence. the same residence will be allowed to dine at restaurants, although there will be a performance that spanned. singapore is also looking to resume sports for the fully vaccinated, as well as more school activities. that's a look at your first word news headlines. yvonne: music is back. it's because of all the people shouting over that music. still ahead on bloomberg markets: asia, a look at the philippines surprise gdp that rose. it was among those expecting a sharp drop. we will get his take. up next, a stronger-than-expected recovery wave, giving the bank an earnings boost. what this seat -- we speak with the ceo in a moment. ♪
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david: higher in hong kong and lower on the mainland's. that's with the shanghai composite. would've been hired to the upside. we had the scoop earlier. perhaps you might see the fed. he also has a department to run. rishaad: you mean the interview for the top job at the fed. it's very late in the game, actually, because jay powell's term ends in february, and we have jay powell's apartment -- appointment way in time. this is one of the nearest decisions to the 10 coming to an end. also barack obama, before him. no one has gone to as close to the wire as this. yvonne: you can say it is now a
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serious travel to jay powell. even on the back of who the fed chair will be, you have a lot of open seats that could need to be filled in. the term ends on january as well. then you have the dallas fed president, robert kaplan has to step down amid the scandal. the whole fed board is going to change drastically the next year or so. certainly one to watch. the quick check of the latest headlines. local markets plunge 74 percent from september to october. to prioritize markets abroad, the company exported more than 40,000 cars at the shanghai factory, more than 10 times september's amount. tesla has its overseas shipment in the first half of the quarter before ramping up local deliveries later. tesla shares recover losses in new york following elon musk twitter poll, which endorsed him, selling 10% of his stake of the 3.5 million responded, about 58% said they support a sale.
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analysts remain split on a potential implication. bloomberg intelligence said his pledge could get him in trouble with the ftc if he does not clear it with securities counsel first. not sure whether musk will follow through. they miss the -- they may list the commercial vehicle. the carmaker is considering domestic and overseas market for the ipo, which could come as early as 2024. they said the shares sale would have its electrified product line of trailers and buses. they launched the unit in 2016. citigroup said it plans to take charge between 1.2 and $1.5 billion to wind down retail banking and south korea. the voluntary termination benefits have related cost that will weigh on city results next year. you is one of 13 markets the bank plans to leave in an effort to focus on more profitable businesses. rishaad: looking to these inflation numbers we are getting out of the u.s.. tomorrow we are looking at all these.
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and it's designed to predict investors against corrosive effects of price rises under the tips here. let's have a look at these and see what's going on here. these inflation concerns, at the moment, do they really see this move on the 30 year? is falling as much as seven basis points -.50%. yvonne: record lows. just to show the demand for inflation protection is still very much there. you do have the likes of citigroup saying, look, maybe it's time to go to the other side of trade start pricing and the fact that it could be waning early next year once you apply -- once the supply chain bottlenecks ease. david: you don't want to wait for everyone to rush through the door. of course it's on the other of china. also mirroring or city says might be time to get ahead of this. speaking of supply chains and some of the factors, they are
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coming up here for the u.s. and japan. they are joining these, calling on china to delay new food rules. yvonne: jinks. in the global supply chains. we will have more on that coming up. this is bloomberg. ♪
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>> tracking the fallout of the global supply chain. a look at the heart -- look at the top stories today. china is under pressure to pause for food importers. diplomats from the u.s., japan and elsewhere say the chain will further disrupt global supply chain. they want a delay of at least 18 months. u.s. commerce secretary wants to leverage 52 billion inch of funding. she wants up to 200 billion of
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investment for private and public partnerships, and private capital. she also wants to digitize u.s. ports. in korean chipmakers are complying with the u.s. request for information. the report both samsung and sk hynix have submitted supply chain data, with samsung saying it excluded client related information. i also want to note that this a bloomberg intelligence report about investor anxiety over supply chain stocks says energy prices could be pulled lower with demand hitting energy prices and shipping rates in recent days. as you can see on the bloomberg, the baltic index also shows that sharp drop throughout the past few weeks. bloomberg terminal users can learn more about the stories in our newsletter, supply lines on and i trade nl. thank you -- yvonne: thank you. as we look at the
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semiconductors, it's not just the supply chain issues we have to deal with, it's also the talk about a&e and investing in the metaverse, and that's just a whole new realm when it comes to some of these chipmakers out there. david: physical, metaphysical. rishaad: it has always been there. yvonne: the metaverse. david: we are just chunking more stuff in it. just going to the point of needing more technology. but when you look at the laddonia, i think it's really all perfect -- the philadelphia, it's really outperforming. rishaad: the countries biggest business vendor out what your profit forecast tonight to ride this wave of this economy that had a stronger-than-expected recovery. let's go to our melbourne ceo.
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where you are, you've had more than one block down. i think you had 12, or something ridiculous. but as the economy opens up, give us a sense of how your bank does benefit. >> we are seeing, as the economy opens up, businesses getting going, but we think we are in for a very good recovery in 2022. we had a very busy six months with the business bank in australia. we had good growth. but the fastest growth we have seen in our balance sheet is 30 billion in assets on the book in the last six months. so you are getting a sense of the australian economy bouncing back well, and we are doing particularly well in it. yvonne: you mentioned some uncertainties, can you highlight your main concerns from the year ahead? ross: the uncertainties are, we have had to of our biggest cities being melbourne and
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sydney. and as you talk, melbourne was the most lockdown city in the world. we are now starting to open up. it's was an impact on the small to medium-size businesses that have been in the city and still not open yet. the general economy has been absolute winners out of it. you are seeing an economic recovery coming through. gdp was down in the last quarter. we are expecting it now and we are open the next 12 months. so looking at it for australia, and it's across the board. the industries are getting going again, we are getting really good growth across the board. cultural sectors are peaking really well. manufacturers are doing ok. the areas that have been hit have been the ones impacted by borders close. tourism, some of the education sectors has been a big importer of students for secondary education. we need to get those industries going again.
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david: just a sense of what you talked about how many sectors are improving. what's your outlook on the housing sector? >> at housing sector has been 20 plus percent growing across the australian market. new zealand is large. i think 25, the second to largest growth in any economy in the world. turkey was the largest. and then i saw new zealand. what we need as stocks come on the market is more stock in interest rates in new zealand that are starting to climb up. fixed rates in new zealand are starting to climb up as well. the regulators are taking action. but we don't expect that growth to continue into next year. we see housing prices moving by 5% in 2022. still a good growth level, but not at the extreme that it has
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been going at the last 12 months. yvonne: in the bond market volatility has been crazy in the last week or so. i'm just wondering when it comes year fixed mortgage rates, i know that you did have to hike them before the rba's meeting last week. but now that they have dropped the yield curve target, are we likely to see rates go higher? ross: you are starting to see fixed rates are really moving. they bottomed out for two or three year rates, well under 2%. that timed out by 50 to 70 basis points over the last couple of months, most banks have moved, but interestingly, variable rates, the variable rates has actually dropped. so you are seeing long dated bond markets influencing the price of bond markets. but a very competitive market here. all banks playing it, small banks, digital banks, it's a
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very competitive market. what we have also seen is in our business market, very strong growth. we have the biggest business bank in australia. we grow the market share in the last six months. we expect to see good growth in the market without the contraction and net interest that we are seeing in the housing market. rishaad: when do you see the first big interest rate hikes coming in, and what levels are you looking at, and how will that affect the way you make money as well? because this will be good for business if we have a steepening ailed curve. ross: sometimes we see interest rates go up. the reserve bank here has been quite animate, we are unlikely to see their rates going up to the end of 2023, 2024. very interested in it. unemployment down and wage growth showing through strongly before they move interest rates.
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we are starting to see wage growth emerging in the marketplace, like every other country, we've had supply chain issues and shortages, but we are just starting to see wage growth coming through in a more regular sense as opposed to certain sectors. the reserve bank definitely wants to see wage growth before they move interest rates, and they are still talking about 2024. but interest rates are only dictated by the reserve bank. there are other reports, and they have been increasing their bond markets. in across the funding increases, we still have 20% to 30% of funding from offshore. in the funds go up, it does impact through into the price of money in australia and new zealand, but not signs from the reserve bank today. rishaad: -- david: it looks
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like, based on what you are saying, your margins will freeze. how much do you think your cost of funding will go up two or three quarters? ross: members are getting a squeeze. probably, less impact on our bank than a couple of the other majors. mainly because we have it very strong business bank. in a slightly smaller mortgage than some of the others. but you have certainly seen our ability to reprice the deposits and they have become very limited, so there has been a contraction. for the last year, there were five basis points of contraction, that has to do with our funding and markets business . the core bank stayed flat the last six months, but the pressure is on. to what extent, i don't know. but you have limited ability to have the rates down to complement the increase on the margin. so there contraction will
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probably not be as much as the bank. yvonne: i want to talk to about the city retail assets. how are you feeling about that? do you have indications, and when do you start to make that transition work? ross: we are still in the process of the approval and the outdoor approval. we don't expect to get it this year or possibly early next year. we do hope that the transaction goes through, because it does help our unsecured business, our credit card, digital loan business. by now, it's very big in the australian marketplace. it is a good product sect for us that will double our business and give us a good scale in the marketplace. it also brings capability that we don't have in the unsecured market. and there are some very large players that facilitate through
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city that we would look forward to working with and help grow their business as well. so it's attractive in the personal bank, and it does make us one of the larger players here in this marketplace. in gives us scale, which is important. rishaad: do you plan to cut fossil fuel financing -- you plan to cut fossil fuel, i want to know if you have a zero net target and if cutting fossil fuel is enough, and we have one of the biggest industries mining in australia. will you cut financing to that as well? heading into that will cut your pay ross: we have let out today, the first large bank in australia market, to put the position on oil and gas. we will cap our leading into that market between now and 2026.
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and then in line with the net zero emissions 2050 scenario will reduce it after 2026. so we looked at the signs, we believe it's the right measures to put in place, we are capping our exposure to the oil and gas market. we have already made announcements about two years ago. we have the largest divider of funding into the renewable sector, 71% of all of our energy assets are in renewables. in the bank would be the largest player in the market for quite some time. and we think we are in the right position. so it's not just oil and gas, we all need to be cautious about the climate issue. we all need to be playing our part. australia has been hit with some horrific bushfires, storms, tornadoes. we all need to take this absolutely seriously, and we
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will play our part. but this is just the start. we need to look across. rishaad: very quickly, do you have a net zero target, and what year by? ross: we have signed up for the net zero. we've got our targets out there for 2050 and we are very much aligned. we were one of the first banks of australia to go out there in that position. yvonne: it's interesting, you said you would reduce lending for the oil and gas sector from 2026, but then if you take a look at your loan book, you actually have room to grow in that sector by 300 million aussie dollars. why still -- why not, i should say, are you capping at where levels are right now? ross: that is a good question, we have capped over a three year average. last two years under covid haven't been average, but it's
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also done in the u.s. dollars when the foreign exchange is changed dramatically. so we capped at 2.4 billion u.s. dollars for between now and 2026 as the average of those three years of our business. and we have to work with businesses to transition. we all have to transition, and that's what we will help them do. we are working with the hundred top on that very strongly on that in the moment. david: final question to that, inevitably, ross, do you see return on equity? is that going to take some sort of hit as you move away from growth that is on the table that you might not just get? ross: we see some major opportunities as all businesses go towards a more climate interested marketplace. we see there is some real
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opportunities in we are the largest funder of renewables in this marketplace. i think there is some considerable investment opportunities coming out across all sectors of the business because of the changes being made. we need to fund them. we are a bank, we need the fund -- we need to fund the businesses to make the transition and that is something we are signaling strong today. yvonne: ross schmick -- ross mcewan joining us today. we are watching the treasuries reacting to this bloomberg story as they are being interviewed is possibly the next fed chair. david: you can read about this on the bloomberg, he might be in the running in a serious rival to what the market expects to be jay powell. so, we have seen it turn lower, quite noticeably, and bond yields. yvonne: she is seen as a of. so for bond markets, that could be good, but then she is pro regulations, so maybe not so good for stocks. rishaad: that is what she said,
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vice chair, head of supervising regulation. let's talk about our first word news headlines. we do have that story in the fed awarding the risky asset prices and people rising and more susceptible as it takes its turn for the worse. and the financial stability report had setbacks containing the pandemic that would make asset prices vulnerable. they also found warnings on stable coins and fragility and china's commercial real estate sector. some bondholders, and evergrande unit has yet to receive payments on their dollar note. the developer had to prove two points due saturday. whether that deadline will extend into the next business day and it's monday evening and hong kong and to holders have not received funds are they have a 30 day grace time before any missed payment is considered a default. united states and allies have
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targeted a prolific hacking group with a string of arrests. five people have been detained and there is a russian link ransomware gang. i'm not sure if it means really people or if they are people. its members are putting several strikes against major form -- major firms and organizations. they are accused of enabling such attacks. >> today, and now for the second time in five months, we announced the seizure of digital proceeds of ransomware deployed by transnational criminal group. this will not be the last time. the u.s. government will continue to aggressively pursue the entire ransomware echo system and increase the nation's resilience to cyber threats. rishaad: the chief executive of mcdonald's is apologizing that the parents of two children killed in a chicago area shoot
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in april message to the city's mayor, he said that the victim's parents had failed their kids. it was made public by a coalition of community groups. franchisees said, those comments were wrong. and i'm sorry. that's the first word news. yvonne: take a look at the key data we are watching in southeast asia this week. malaysia posting its production later on tuesday. thailand setting interest rates on wednesday. malaysia reporting its gdp numbers on friday. rishaad: let's have a look at the southeast asian markets as we do digest all that news. we had some tremendous data out of one country earlier. we will come to that in a second. malaysia is the anomaly, down by's extensive 1%. david: quite a bit. a 3.8% from a month prior. that came in more than double. the median is almost double the highest. the curves are taking place.
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it's worth noting that it's not captured in the data because things have started to reopen. let's have a look at the outlooks here. good morning from hong kong, pleasure to have you on the show. quite a surprise here out of the philippines. what didn't we see? >> good morning. it is a pleasant surprise. i was seeing a particularly strong private construction print, so there are some signs that consumer spending is coming back to life. after being a donald trump supporter for several quarters, and that's despite unemployment rates remaining high because of the partial lockdowns in place. that's a bit surprising. and there is obvious construction and investment spending that has been pretty strong. we know this because the government puts a strong priority on activity and they put them in the lockdowns.
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so things have continued to progress. i think that will be the case for the rest of the year, may be ahead of the elections as well. yvonne: the bounceback is big. asian inflation has remained low compared to the u.s. and europe. are we likely to see inflation pickup in the philippines? >> it's a mixed bag. i would say the countries that have done well on the recovery is singapore and it will be the one that is facing -- facing more inflation pressures. just buy the central bank will normalize ethics policies. but the rest is still very muted and a lot of it has to do with the fact that fiscal subsidies remain in place, so you have it in indonesia and malaysia as well. the exception here is the philippines. it has been a story of weak recovery, and even though strong gdp numbers output levels at 6%
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lower than -- 6% lower than pre-pandemic. some recovery, but not as strong as the others. it has inflation that is well above target for several months now. i think it will continue to be the case, giving -- given surging energy prices and the rest of the cpi basket. i think it's a fairly tough environment for policymakers and these things in particular. david: what can and should they do? because, consumption, we are back, but it is one off and you get the inflationary effects coming through, what does 2020 to look like for you? >> so the sustainability of the recovery in q3 still remains a big question mark for me. two things. one, we have been saying all along, the fiscal support measures, relative to what we see in other neighbors is really
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pretty low, and it will pick up, but i don't think structure is enough. and number two, the fascination, pace has been lagging. so i think early november, vaccination rates at 26% population. and i think that still makes them vulnerable for a resurgence in cases in a recurrence of further lockdowns in the months ahead. so i think that will be fairly disruptive, and it makes the outlook a little uncertain compared to the others, who have already gotten 88% of their vaccination rates. that seems to be special for them to be able to meaningfully reopen. i think that's not the case for the next three months or so. rishaad: it just takes the raw numbers and see the recovery. can you also transpose that onto other economies there as well and can they expect a decent balance here?
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>> i would be careful in extrapolating this for the rest of demand. the story is fairly different. singapore is already back to pre-covid levels, so that's pretty strong. indonesia, we dropped the number last week, quite close. 1% below pre-covid. like i said, -6%. the big laggard i think will still be thailand. because for us, it's dependent on tourism and they have started to reopen the borders, but as you take into account the restrictions of the home countries of these visitors and they return, it's pretty stringent, particularly for china. so i think the recovery would still lag far behind the rest of the region for thailand. maybe i think slightly better. yvonne: how much room is there for any kind of action, even when you have a fed and other
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developed markets that are looking at tightening now? >> i think not much more room for them to do anything. the most they can do is to give what we call an enhanced forward guidance to basically tell markets, look, we will keep the policy settings for as long as we can with the aim of trying to really make the recovery well entrenched. so even with global positioning's tightening, because the fed, rate hikes in the region is still a some way away. so we are expecting rate hikes in the central banks only in the back end of next year. rishaad: essentially they may well follow with the fed does. they have reduction of bond buying taking place, possibility that we could see yields moving to the upside. of course, the dollar is in play. how does all that play out for these various economies? >> the weakening currency in the
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region thank fully does not have too much inflationary pass-through before, so this is why the contribution on inflation in terms of overall policymaking is less of an issue may be with the exception of the philippines. but again, for example, energy prices keep going higher. i think that would be an issue for some countries, especially for the philippines and thailand, because they are very dependent on cold at -- coal and lng imports. there is no room for subsidies. they are not doing too much for subsidies as much as we are seeing in the other countries. inflation could be an issue that could be reinforced by a stronger dollar high-yield. we currencies for the country. that -- that might sort them to sound more hawkish. we don't expect it in the near term. they could probably afford to be patient. i would say.
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david: final one on those two laggards for thailand in the philippines with the gdp numbers out. given the sense of when you think the labor markets of each of those countries manage into pre-pandemic levels. >> i think it will be a wild. i think the markets in these countries are still adjusting lower in the sense jobs are being created, there are still some losses, and labor market still rebound as quickly as how you see it in the headline numbers. just because of some frictions, especially in these countries. i don't expect any employment to come back in a strong way until we see growth coming back to trend pre-pandemic, so in thailand's case, 4, 4 and a half. philippines was running 6, 6 and a half. we are still far from that.
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until that happens, labor market pressures will be on the downside. yvonne: thank you so much. the chief economist with the latest. coming up, elon musk stokes the debate. more on the story. the poll results we saw on social media. this is bloomberg. ♪
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rishaad: back with bloomberg markets. that is the big apple as expected, tesla tumbling after this weekend. with the ceo posting on twitter. he said he will sell 10% of his stake. su keenan is in the very city there. twitter followers are saying go ahead, but wall street appears to be mixed. su: there was a variety of reactions. some say, there he goes again. a high-profile billionaire ceo, only a ceo from this company could have put out the kind of highly attention-getting and unusual tweets where he asked his followers and investors, should he sell or should he not? you will notice, as predicted by these digital coins that are
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trading on crypto over the weekend, the stock did fall. i think the crypto coins were reported this time yesterday and were down to over 6%. the stock, at its lowest point, was down almost 7% and managed to pair that loss. again, a little bit of concern as to whether he crossed wires with the sec monitoring, but there is a growing view that perhaps there is a shareholder where he asks, what do i do with my stake? one analyst said a shareholder can control the ouija board, flip a coin, as twitter followers, should i sell or should i not, he's not contractually bound by this. you may call this the 2018 legal event where the sec monitors. david: how would any potential -- the assumptions he goes ahead with? how would that affect his tax situation? >> his tax bill is going to be 10 billion no matter which way
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he goes. if you go right into the bloomberg, just a reminder's stock recently went to the trillion dollar mark. tesla stocks, that is. that has made him one of the richest and the richest man in the world. so, being closely watched how he handles his tax bill. back to you. rishaad: su keenan. you have to sell the shares anyway because in august we have the massive tax bill coming out. there's a conversation about 2012 if he's going to take the salary as soon as mentioned. that tax bill could be as much as $15 billion. yvonne: but way to take it to twitter to ask his followers whether he should sell the $21 billion stake that he has. david: it's a good problem to have. i'd rather have that problem. $15 billion tax bill. rishaad: i actually have that in a different dollar. david: a different currency. yvonne: coming up, singapore and malaysia are reopening, we discuss what's next there, this
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is bloomberg. ♪
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>> as you know, it's one of our main markets, we needed to have positive and the air. so i think that it's a day where we are going to see the future
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in some way, we can fly all the aircraft back with us, and i think it's important day for us. >> should be at full capacity in terms of the number of sectors and number of seats in 2019, by april 2022. rishaad: virgin atlantic ceo as he had the department of new york, the busiest root. billion dollars of revenue one year for the likes of it. but it was after 9/11 when people said, i will never travel again. and then he saw this exponential growth, and you saw how it was. the good old days. yvonne: it still seems like a long time ago. that will be big, with the u.s. reopening this week, as the likes of europe, and they have been banning tourists there. it will be interesting how hong kong plays in all of this. we just learned from the carrie
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lam advisor that the city likely won't reopen to the world until may be mid next year because they still have to see how this whole reopening with the mainland plays out, and we have to boost vaccination rates. david: meanwhile, it's that part of the world. you mentioned hong kong, malaysia and singapore reopening that route to fully vaccinated. rishaad: in thailand. there we go. david: it has been a wild. the good old days. i have forgotten how laboratories work. we have a travel tractor here for you guys by the way. let's have a look at this. this really gives you a sense of what extent and where you are actually seeing a fair amount of this. this is actually cool. look at the graphics. yvonne: kind of what it means when it comes to public health measures. where the cities that are least accessible. hong kong was one, jakarta, sydney, most of them are asian cities to no surprise. rishaad: something like $6
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trillion during the pandemic. who knows what the damage from that has been in the world. we have seen the economic status we deal with and how much is a lack of it. yvonne: we have a big interview coming up. u.s. special envoy of climate. this is bloomberg. ♪
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♪ haslinda: it is almost 11:00 a.m. in singapore and shanghai. welcome to "bloomberg markets: asia." i am haslinda amin. rishaad: and i am rishaad salamat. there is. optimism the economic recovery can overcome inflation risks. bitcoin hitting an all-time high, making about $67,000. haslinda: growing fears of evergrande contagion as holders
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of more dollar notes say they have not been paid. rishaad: plus a bloomberg's group, president biden interviewing leonhard for -- lael brainard for fed chair, confirming she is a serious rival to jay powell. haslinda: the question is whether the gains are sustainable. we have the fed coming out and saying be careful, we could be seeing a bubble. msci asia pacific index up zero point 2%. china is under pressure. evergrande front and center. we heard about a unit not being able to pay its u.s. bondholders do yesterday. the hang seng marginally lower. 30 year yield at the lowest level ever. investors still expecting rate rises despite that pushback from the fed saying it will remain patient. nor rate rises on the back of the end of that tapering.
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take a look at where we are in terms of the crib. it is going gangbusters. the index is on the verge of recovering all the losses we saw since the correction mid-year. bitcoin surging to a new record, exceeding $67,000. solana and binance also higher by 20% in seven days. paper currencies are doing really well, rishaad. rishaad: just a check with the thai bat. unchanged broadly there. we have the bat coming back quite strongly against the american currency. the dollar is down 0.4%. the currency is at the strongest level in two months, the thai bat, optimism about the opening there. the influx of stocks and bonds, you wouldn't know it with the index pretty much unchanged. . to india we go, the nifty suggesting a flat start to the
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session. the rupee, a bit of strength for the indian currency as we see a bit of dollar weakness, 74 rupees. straight to the market action, let's have a look at what is happening here. we have mark greenfield joining up, our mliv strategist. education stocks. a bit of a u-turn, but there is a lot of, as ever, caveat emptor. mark: yes. there will be a lot of caveat emptors for some time with anything to do with china really. i don't think anybody seriously thinks chinese authorities have stopped interfering with some of the business sectors just because they are getting them -- giving more space for education sector. it is an opaque situation. i think her nervousness in the bond market, high-yielding especially, just shows that a few people can really see what is going on in terms of how the chinese authorities deal with
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various sectors of the economy which they are not entirely happy with. so just because there is a bit of a rebound with education stocks today, it doesn't mean to say that they have finished with the property sector or the tech sector or any other part of the economy which they feel needs to have some correction. the bigger issue for investors is trying to see clearly where china intends to go over the months ahead. for now, it is pretty foggy. there is not much they can really hang their hat on and say that the chinese authorities are doing this to support, or the kind of policies they are doing will end up supporting equities, especially. so it is a pretty tricky time for investors to make big commitments on chinese stocks at this time. when they can't really pin their hopes on anything too specific. haslinda: mark, the fed sounding
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all sorts of alarm bells, including china's property prices. what is going on? mark: they are very quiet alarm bells. this is because of the report that the fed have put out, saying that they see that risk assets could be imperiled because there is a bit of a bubble. i think traders know, and they have certainly shown their hand, that since the global financial crisis, the winning bet is you can expect central banks to be behind the curve it comes to taking away the punch bowl. there is not evidence to suggest that, particularly the fed, is in any rush to quell the party in equities, that is why there is a record day after day. the report might sound slightly hawkish, but it is a theoretical exercise, and traders know to look past that. they are certainly not going to be put off by that. . there is no evidence that they
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are about to raise interest rates that would cause the risk of recession in the u.s. so for now, traders have it in their own hands. the bets they have been making as equities rise and rates stay low, they are pretty comfortable. the slight complication within that is that inflation numbers have been running about forecast, and there is more volatility in short-term rates particularly the derivative sector. as long as there is a disconnect between the message the fed is signaling and what some of the big data is actually turning the traders, we are likely to see that continue. haslinda: mark greenfield, berg marketplace strategist, thank you. let -- mark cranfield, bloomberg markets life strategist, thank you. todd, what do you make of the alarm bells being rung by the fed? stacey: careful, there are bubbles -- stacey: careful. there are bubbles forming.
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todd: i think mark hit the nail on the head. traders are unlikely to take them seriously when they know that this is just part of the fed macro prudential role. but on the policy front, the fed has sounded very relaxed. we heard from fed chair powell last week that he will continue to prepare to look at inflation as transitory, and authorizes recently are not going to drive an abrupt shift in policy. so he was pushing back against market expectations for title policy in the near term and that is reassuring from markets. haslinda: what are the prospects for volatility? markets are still pricing in rate rises despite the fed pushing back. could we expect a fresh round of bond volatility, especially in the wake of incoming cpi data
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out of the u.s.? todd: when you look at this at a high level, we are likely to see more relativity moving forward. it is a natural extension of the "normalization of policy from the extremely accommodative levels we have seen over the course of the pandemic." or even over the course of the post great financial crisis era. i am not sure the consumer price index itself is going to do it. i think the bar for a cpi surprise is probably higher in the wake of chairman powell's relax rhetoric, not lower at this point. rishaad: todd, give me a sense of what happens if lael brainard became the fed chair. she seems a bit of a dove. we have the bloomberg's group that she is being interviewed for the position. does it change anything in your view? todd: i don't think it is going to lead to an abrupt shift in
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policy if the market is incorrect in its assumption that chairman powell will be reappointed. the issue is somewhat nuanced in that, governor brainard is viewed as somewhat of more progressive on social issues. i think the fear in the market is that she would pursue perhaps less business-supportive policy on the regulatory and oversight capacity. that could present some drug for asset prices -- some drag for asset prices. rishaad: where does all of this leave the dollar? todd: the dollar is going to weaken. we have seen a shift. short-term investors have been buying dollars recently. they will be caught of guard if the risk environment continues to improve. if we continue to see relative strength in the data moving forward, and if we see some global central banks start to outpace the fed in terms of,
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their shift towards hawkish nice i think we are already seeing differentiation between banks like the rb and said -- the rbnz. i think the key weigh is well-positioned. haslinda: we are being told to prepare for an easing of inflation by citi. if they are right, what would you be buying, and what would you be dumping? todd: that really is an extension of the trend we have seen recently where any easing in terms of inflation being on the easing of supply constraints, or perhaps the impact of high energy prices, is that it will be supportive for asset prices. when you look at the confluence of factors in the asia region, where we are starting to see these surges in coronavirus infections, those waves start to subside, more reopening from the local economies, that
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means there is scope for catch-up from the local equity markets and currencies. the ones that stand out to me are currencies like the thai bat. rishaad: todd, good stuff, todd elmer from intouch capital markets. we will look at the lael brainard story in more detail. let's get over to new york, it is first word news time with vonnie quinn. vonnie: bloomberg has been told that fed governor lynn bernard -- lael brainard was interviewed. it is a clear signal that chair jerome powell has a serious rival. powell's current term expires in february. biden said earlier this month that he would make a decision fairly quickly. china's central bank said it will extend cheap funding to banks which planned to companies working towards reducing carbon emissions. the pboc will offer discounts to the loan rate if the money is
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used to help china's energy transition. the central bank will require public disclosure of the use of the loans. trading platform robinhood revealed that a hack last week exposed email addresses for around 5 billion customers and the full names of a different group of approximately 2 million customers. robinhood says it believes no social security, bank account, or card numbers were exposed. it says the hackers demanded an extortion payment, and it is working with a law enforcement and a security firm. singapore is easing tough covert measures put into place a month ago. starting wednesday, five people from the same resident will be allowed to dine in the same restaurant. live music is still banned. singapore is seeking to resumes parts and events for the fully vaccinated as well as school activities. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more
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than 120 countries. i am vonnie quinn. this is bloomberg. haslinda:, up, this company discusses its strategy for assets as prime minister modi bets on a fifty-year rally in the nation's stocks. rishaad: and just ahead, evergrande is back in the spotlight over a missed coupon payment as the fed flags risks in china's property market. this is bloomberg. ♪ rg. ♪
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haslinda: another day. another evergrande-related coupon deadline has passed without payment, leaving bondholders wondering whether the indented developer is heading for default.
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david: we have stephen engle with us, our chief north asia correspondent. he has been over this. it looks like a death by a thousand cuts, in slow motion. should people be worried now? stephen: about potential default? obviously, when you miss a coupon payment, you get a 30-day grace period. and they got that. this is a unit, scenery journey, of evergrande, that had two dollar bond coupons. that forwards to the first business day for him and, one day. he did not get it, according to a couple of bondholders contacted a bloomberg news. so that reverts to a 30 day period we will have to check back in on these particular dollar bonds on december 6. but keep in mind, evergrande also has a 30 day grace period expiring this thursday on three other dollar bonds totaling $148
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million on top of those two that were $82.5 million. . it goes back to the question, where is evergrande going to find the money? they have assets that they can sell. they have not sold enough projects like kaisa has done. they have not sold their tower here, they have not sold their stake in the property management unit, they have not sold a number of particular assets, like your e.v. unit. they have been able to sell two of their private jets, we understand, as well as some other assets totaling about $100 million in the last. they have more than $2 billion in principal and in coupons do between now and next year, and 3 billion dollars total. so we have these coupon dates and 30 day periods that will keep on extending.
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haslinda: chinese authorities have expressed confidence that the troubles at evergrande can be contained. but we are seeing the bond jitters spread to investment-grade developers as well. stephen: that's right. most of the focus on the contagion with evergrande has been in the junk bond market. we know that these developers are the largest issuers in china of junk bond's. now what we're seeing is -- i don't want to necessarily call it contagion, but the nervousness in the investment-grade property developers has definitely spread. last week, countrygarden, one of the bigger investment-grade developers saw the most weakness in one particular dollar bond in a decade. we saw weakness in other dollar bonds. so that -- as we were just talking about, as this gets protracted and protracted without any easing or
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resolution, if you will, continuing to slap band-aids on it as they meet their short-term liabilities, but then more liabilities keep coming up, it raises more concerned. that being said, goldman sachs, one of their portfolio managers, angus bell, says the market is overestimating the contagion risk, and that creates opportunities. goldman sachs adding, a modest amount of risk through high-yield bonds for chinese developers. so there are some buyers. if you are going to buying this sector, why not chase that higher yield? rishaad: what about the principal? anyway, if you are very brave. stephen: a cast-iron stomach, as they say. rishaad: stephen engle there. thank you. next we have the morning calls, some of the top analyst recommendations across market. that is singapore.
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the straits times index is down 0.25%. this is bloomberg. ♪ 5%. this is bloomberg. ♪
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as we approach the open in india about 25 minutes from now, we are watching a raft of earnings today, rishaad. rishaad: big names include mahendra, the power grid, looking at bosch india, and also petronel lng. foreigners are now allowed to invest in debt issued by real estate investment trusts. haslinda: for now, let's do a quick check of the headlines.
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mobius is allocating half of it emerging market find to india and taiwan. emerging-market equities are trailing, bogged down by losses in china. however, mobius says there are opportunities in other. in our portfolio, india and taiwan are the two biggest country weighting. we are excited about india. india is on the takeoff stage now. india is where may be china was 10 years ago. it has a long way to go and it will be a long run. haslinda: national australia bank beat estimates for full-year profit, riding the wave for stronger-than-expected economic recovery. cash earnings rose to under 4.9 billion u.s. dollars, 76% higher.
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there was a final dividend of 67 aussie cents a share. softbank shares soared on plans to repurchase nearly $9 billion of stock, a familiar strategy for the founder, masayoshi son. a buyback program last year helped more than triple the company's valuation from its endemic the. softbank shares have slid more than 40% from their peak in march. and toshiba may split its company as a strategy to strengthen shareholder value. the nikkei says it will divide into three businesses to focus on infrastructure, devices, and semiconductor memory. all divisions would reportedly list at some point, with the changes to start as early as 2023. toshiba has been in turmoil with investors over its strategic direction. rishaad: all right, it is the time of the day, morning calls. sophie kamaruddin. we have covid cases in china now topping 1000, a new outbreak
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that began in october. what has been the potential, or what is being seen as a potential impact on economic growth by the investment community? sophie:, over at ubs, they are accounting for those uncertainties. with authorities in the mainland pursuing their zero covid policy, that will dampen the recovery for consumption. so the bank says they see that that's a drag on investment from the property sector weighing on the outlook. ubs is forecasting 5.4% growth next year, softer than initially anticipated in their baseline scenario. and as we see the global recovery slowing, spending shifting more towards services, ubs calculates china's growth in 2023 will weaken further term 5% as export, man weakens.
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haslinda: what about the outlook for china's growth question mark what is the expectation for policy support? sophie: citi says more policy support is needed, but with the pboc not signaling big moves this quarter, they have delayed their bet for a 50 basis point cut to the rrr for next quarter, followed by a rate cat in the next three months. citi expects targeted measures around decarbonization will be in focus, case in point, the pboc is monday announcement around the green funding facility. but with significant downside risks exacerbated by the energy shortage, as also the potential evergrande effect, guys. rishaad: sophie kamaruddin there looking at the morning calls. let's have a quick check on what people are thinking or making of what is happening in china. a look at china markets. the shanghai composite is down. we are a bit lower as we just heard from sophie, telling us
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about various banks which are having a look at growth within the country and how it could be lower than what they were looking at before as a result of perhaps more risks coming in, more headwinds for the economy. not just the covid numbers, but also the energy shortage that we have been witnessing, and, on top of that, supply constraints which are currently being addressed perhaps. it is a look at china. we have more a serial matters to deal with as well. haslinda: [laughs] that's right. just ahead, more on the recent spacex landing as we await the return of the dragon spacecraft from this international space station. rishaad:. rishaad: we are looking at the crew, four of them, coming back from the international space station. looking essentially at a second fully operational mission, to an
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end. the iss should splash down at around seven minutes. the return did begin at 2:00 this morning, singapore and hong kong time, when the crew driving the spacecraft undock
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quick these are not easy landings. a freefall environment. then the thought of the sea. -- the thud of the sea. the dark can be an advantage because private boats are around. there is no functioning toilet on that crew dragon we are seeing. astronauts having to wear -- >> now let's bring in justin
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bachman in dallas to get the very latest on that. what are we expecting? >> we are seeing the second set of parachutes deploying now from over 300 miles per hour to a much more manageable level when they reach the sea just south of pensacola, florida. that is a very important aspect of this flight. you cannot hit the water to rapidly or else bad things do occur. >> this is it. once they are on the water they can be disoriented. the waves crashing around the vessel, as it were. >> it is an important part of astronaut training. you are coming through -- reentry is not a simple or pleasant procedure. you are coming through high g
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forces with a lot of dynamic movement and pressure and the temperatures outside the craft are more than 1900 degrees celsius from the heating of the atmosphere. then you are in the water, very rapidly. boats come out to get you. but this is what they train for. they know this is not going to be pleasant, but everybody is happy to be home and see their families again. >> this crew spent six months at the iss. what was achieved? how much was achieved? >> the iss missions are about science. there's a lot of research at nasa oriented toward deep space and longer-term spaceflight, figuring out how the human body can spend more time than six months and ultimately years in space, because it is a really harsh environment and it is an area where the body is just not well suited to live in microgravity. then you've got all the
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radiation concerns. a lot of nasa is about longer-term issues. >> absolutely. these things are all about science. the crew performed something like 300 or more than 300 experiments. >> right. >> let's welcome our bloomberg radio listeners now, joining us as we await the return to earth of dragon. this vessel left the international space station at 2:00 in the afternoon eastern standard time. it is making splashdown as we speak in the atlantic. joining us is justin bachman in dallas. it has landed. we can see it is back on earth. quite a journey. >> it really is. it is sort of amazing to think that -- it is rocket science, but you can get this down to a
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procedure where it happens exactly precisely every launch and every landing the way it is supposed to and people get back home safely. quite an achievement in many regards. >> justin, we know each dragon capsule can only stay in orbit for approximately 210 days in space before returning to earth. put that in context for us. >> the issue is really what nasa has certified the spacex dragon for. beyond that, the certainties diminished. the return date today was really about getting up against that window and making sure the margin -- they want to make sure they get home before the next crew was able to launch. >> let's take a listen.
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>> coming in broken, but we see stable. >> copy. >> table one is the configuration we were hoping for. stable one means it is in the ocean upright and as expected. >> the teams have been ready and waiting three nautical miles away. >> dragon, please repeat. >> we are going to raise our visors. >> you are go for visor raise. >> the returning team was designated crew two because it
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marks the second operational space shuttle team nasa has launched aboard a spacex capsule. this is after we had something like a nine year hiatus. the space shuttle of course -- that program finished. we missed the space shuttle. this is market to -- mark two, isn't it? >> it is. the space shuttle was astounding technology for the time, but it became unaffordable to the nasa budget. what you are seeing here is more of a commercial private enterprise program in which nasa has hired spacex and boeing to build and operate these spacecraft to provide transport to and from the space station. it is a much more economical path for the agency in times of constrained budgets. it also provides an avenue for commercial pursuits of space in that these companies can go and
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market these vessels to other people and spacex, just two months ago, flew a private mission, four people who flew for three days and did just what we are seeing right now. the return off the coast of florida. but it was not a nasa mission, it was one spacex conducted entirely itself. that is the goal nasa would like to see in the future, just be a customer among multiple customers for these types of vehicles. >> thank you very much indeed. all those listeners of course who have been with us on bloomberg radio as well. there you have it. the spacecraft back on earth. four diaper-wearing astronauts splashing back a few minutes ago off the coast of florida, the end of a two hundred day stay on the international space station, where they conducted over 300
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scientific experiments. >> that's right. let's get the first word news. vonnie quinn in new york. >> the federal reserve's warning that risky asset prices keep rising, making them more susceptible to crashes if the economy takes a turn for the worst. a change in investor sentiment or setbacks in containing the pandemic would make asset prices vulnerable to significant declines. it also found warnings on fragility in china's commercial real estate center. >> bondholders of an evergrande unit are yet to receive payment on dollar notes. the deadline was extended to the end of the next business day. as of monday evening, we understand two holders have not received funds. both bonds have a 30 day grace. -- grace period before any missed payment is considered default. pete buttigieg says his agency
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will remedy racial inequities in u.s. highway design. roads were built to separate predominantly minority neighborhoods from white communities. in some cases, highways and overpasses -- demolished completely. >> if an underpass was created such that a bus carrying black or puerto rican kids to a beach in new york was designed to low for it to pass by, that reflects racism. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> let's take a look at the markets. cryptocurrency in particular, bitcoin reaching a new record high in excess of 67 thousand dollars. we know the crypto market is
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worth $3 trillion. in asia, though, are crypto stocks are not doing much. they are on the downside. the monic's group in japan -- monex group in japan trading lower. china education stocks, as licenses are issued for companies to provide tutoring after school, we have new oriental rising on the back of that. >> after a brief lull at the end of october, indian equities look to resume their rally. we are going to be talking strategy with mark mobius, a long-term bet on that country's stocks. this is bloomberg. this is bloomberg. ♪
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>> three minutes to india's trading day. analysts at morgan stanley and nomura have downgraded the market after an index doubled from a march 2020 low. mark mobius feels otherwise. he is devoting almost half of his emerging-market fund to india as well as taiwan. >> list discuss that with our next guest.
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people are saying this rally for india, which has had a bit of a pause, has legs which could go on for a multiyear cycle. what is your take? >> so if you are a medium to long-term investor, you are investing in the markets, i think india is a great place to invest. we are seeing demand uptake happening -- uptick happening, which will factor into the investment cycle, which we saw in 2003 to 2007. >> what have you made of the latest set of earnings reports? how did they inform you about how corporate india is doing right now and whether these valuations are justified? >> earnings since quarter to have tended to be more or less in line with where some sectors we have seen downgrades, some
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sectors would have seen upgrades, but overall, we are still on track to see those 20% plus earnings growth for the end of the financial year. short-term, yes, the markets took a fall in october, but we will see these between because of what is happening in certain spaces, especially high-quality names. we have to be cognizant of in the short-term, but if you have a medium to long-term horizon, investment horizon, there is no other place to invest. >> it really is about liquidity. there is excess liquidity and the rbi is beginning to drain liquidity. is that a cause for concern over the next few months? >> the short-term yield rates are tending to normalize. they were way below the reverse. that's going back to its normal rate.
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the rbi has not made any change in stance, their accommodative stance area the yields are tending toward little bit higher , so 25 to 50 basis points across the short-term rates. the long-term yields have also gone up about 25. home loan rates are trending at 10 year indian yields. these are the lowest rates ever as far as anyone wanting to buy property in india. the most affordable time, property prices have not gone up. affordability has really become interesting at this point for anyone to do, by property. -- buy property. we are seeing different investment opportunities as well. >> like most markets, retail investors are coming in in a
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very huge way and that is driving stock prices higher, driving the ipo markets. given where valuations are for these ipos, would you be a buyer? >> selectively. we are seeing companies try to push valuations where people do see high demand for certain companies. but companies that are not seeing that demand are looking at prices to come into the ipo market, so there is a balance that is happening even though there may be around 25 to 30 companies on the street planning to launch their ipo at this point of time. the bankers do have a lot of work on their hands, and investors are being choosy in the process. rishaad: now, the demand seems very strong. we talked to the cfo last week.
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tell us about whether you would buy into funds, or would you advise others to add it to their portfolios? >> i will not take stock specific names, but in terms of evaluating businesses, we do valuation just to see the strength of the network effects. in their case, where is the strength of the network effect? it is the largest israel payments from emergence perspective. it has a long runway to capitalize on that and hopefully generate profits along the way. these are very high-risk bets. medium to long term position, nothing is really going to happen in the short-term term i would say. demand will come through, but maybe not a big listing.
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we may be seeing in other companies. >> we have a lot of positives at the moment. what do you see out there which could be a big obstacle? where could we get hit from left field on this? >> considering haslinda mentioned about liquidity, central bankers will obviously taper off that kind of liquidity push they were doing. inflation is a risk. we are still seeing sticky inflation in india, food and fuel, which will dampen some demand coming back because prices are rising across products and services. the medium and small enterprises which were hit by two covid waves are still struggling to come back.
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we can notice that in lenders providing for more. the risk is -- it is uneven recovery that is happening and we have to be cognizant that everything is not on and running. so yes. haslinda: we thank you so much for your time today. let's get back to the gulf of mexico, where spacex's dragon has made a splashdown. four astronauts back on earth after spending six months on a mission to the international space station. rishaad: this is the end of that. this was slightly delayed. it was initially set to return sunday afternoon. the weather push this back one day. we have the european space agency. japan's aerospace expiration agency.
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this spacex capital of course named and ever -- capsule of course named endeavour. they are communicating. listen to what they said about their trip. we are not hearing them communicate at the moment. no doubt they will be very shortly. we do have tweets coming through earlier with the french minister -- the frenchman saying it is a bittersweet feeling to leave the iss. a magical place in the sky where you have superpowers like floating and seeing earth at a glance. he went on to say, it gives me hope that humans can achieve anything with good intentions when we want to. haslinda: we await crew three. bloomberg subscribers can watch this video feed at live go on the bloomberg terminal. plenty more right ahead.
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keep it here with us. this is bloomberg. ♪ >> we are getting views from inside capsule endeavour. ♪
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haslinda: volatility notwithstanding, crypto's are going to the moon, i guess,
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going to space. bitcoins surging past $67,000, a new record high. ethereum also at a record high, pushing the crypto index higher as well. in asia, crypto related spaces not benefiting from the surge. nexon down by 1.7%. rishaad: a big coin has an all-time high 11 minutes ago. $68,374. this is a crypto market worth more than $3 trillion. the finance minister spoke to bloomberg about the future of the market. >> most financial institutions should be looking at crypto at this stage. crypto is going to be the future of the fintech industry. to be honest it is going to be the future of money. anybody who can understand --
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does not understand is going to be at a disadvantage. etf's can reach customers we are not able to reach. today we have only been able to penetrate very small percentage of the global population. there are many financial institutions, traditional investors, and the stock market we have not been able to reach. having those guys bring those people into crypto is a huge win for the industry. right now the industry is only about 5% penetration globally. probably only about 400 million people have crypto. a large number, but only 5% adoption. when we get to 95% adoption, we may be the market -- view the market as being saturated and there may be competition. right now there is no overlap. the more people we can bring together into the industry, the better it is for everyone. even when the markets reach 95%,
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there are always new applications that can be built. i never have the finite mindset. the more application we can build, the more products we offer to people that people are willing to use, the better. >> the other thing we have been trying to figure out, does the new initiative by finance -- there is a new initiative through binance. where does europe stand? >> the u.s. is a separate entity for us. binance is everywhere else. serving the international community. we view europe is a very large market. europe has always been an early adopter in crypto. switzerland, france, etc.. we view france as a strategic position for us. they are very tough, but they are pro-innovation.
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the local talent in france is quite strong. france typically has very strong mathematics and engineering backgrounds. we want to leverage that and help to grow the community and also -- in france and also europe. those early adopters are very knowledgeable about new technology. i think anyone who is not interested in new technology who is not following is going to be at a disadvantage. new york has always been a financial leader globally. it is just great to see that. haslinda: that was the binance ceo. we have a headline to tell you about. an education company in china has been fined one million yuan for a pricing violation. we are tracking education stocks
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trading in hong kong. new oriental up almost 3% on new suggesting perhaps a dozen licenses will be given to companies. rishaad: coming up later today, the u.s. special climate envoy john kerry speaking to bloomberg news. ♪
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>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: elon musk's followers have voted the tesla ceo should

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