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tv   Bloomberg Markets Asia  Bloomberg  December 19, 2021 9:00pm-11:00pm EST

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the global supply chain crunch and a new strategy. let's have a look at what is going on with the markets overall. we are seeing a move to the downside certainly. a sea of red. a hong kong market off by about two thirds of 1%. we've got concerns about more curbs out there to tackle this new virus variant, and on top of that, this setback from joe manchin, a setback for president biden's economic agenda. the asia-pacific index on track to drop for its 6th session in seven. same time sing bond yields dipping back. yield curve in the u.s. flattening further. what is it telling us? some would argue on the near end, looking at digesting monetary policy, perhaps some stimulus being removed. looking at a recession, or even
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to some, stagnation. a quick word as to what happened earlier on. the loan prime rate lowered by about five basis points. what kind of difference is that going to make? it is a perhaps a signal it is sending borrowing costs release for the first time in 20 months. signs of fatigue. and of course sporadic virus outbreaks as well. let's get to andrea path legend joining us now with more. it is about the signal it sends ultimately because five basis points does not send a lot. but the question is, it's the messaging. >> yeah. it's the messaging. you have to keep in mind it was really not that much of a surprise. the markets had been expecting some sort of an easing after that rrr cut earlier this month. we know the chinese government is committed to this stability.
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so to some extent it was small. it was not surprising. perhaps the timing was somewhat surprising. given that those medium-term loans were left unchanged last week. but overall, yes, not a surprise. and as we can see from the asian markets right now, everything is still pretty much in the red. rishaad: i guess it goes with the narrative that it is more about stabilization and the concentration away from regulation into perhaps supporting economic growth in china. and doing that as they play whack-a-mole with coronavirus. andreea: yeah. that's right. this new strain of omicron is the other thing that is dominating sentiment today. we are seeing some restrictions coming out in europe. so you have investors quite nervous about that. we know china is committed to
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zero covid. they do want to support the economy. but this new strain of the virus , there is so little that is known about it. we do not know how much longer the chinese can shut from the outside world given this new strain. rishaad: let's get to the question of the day. what will joe manchin's rejection of the economic package -- how will that play out? we are seeing some discomfort at least. andreea: yeah, that is another headwind for the markets as we go into the end of the year. to some extent they are still trying to gauge how this will be priced in. but at the moment it is a
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headwind. goldman sachs has come out and cut its forecast for u.s. gdp. at the same time, we have the fed getting ready for some lift off in interest rates next year. but look, this reduction in u.s. spending is definitely something that is just another worry for investors as we go into 2022. against that backdrop of potentially higher interest rates, elevated inflation. rishaad: all right, thank you so very much for that. ok, back to china. shares plunging. first day of trading in almost two weeks after the -- chinese estates, this is a key china evergrande group backer, they failed in its bid to go
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private. let's get to china credit editor rebecca choong wilkins. this is quite specific. tell us about all of this. not just financial but legal, too. rebecca: we have advisors coming in. not a huge surprise. we know that kamala harris had missed -- more broadly this is a pass from the past. kaiser that first developer to default in 2015. it is a very different situation now. now we have something like $11.6 billion. this will be a story about global investors and how offshore creditors are able to advocate for themselves. rishaad: and are they part of the pile, which it seems they are.
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rebecca: that mention of a debt restructuring plan, that will be key. so far we have not seen much progress. the bondholders that represent that 400 million note that was missed. whether or not a deal can be done with such a large cohort of bondholders remains to be seen. it is important not because necessarily kaisa will set a president further develop -- a precedent for other developers, but they have raised so much cash offshore now having to navigate with enormous groups of bondholders and all of their ad hoc committees and all those things, as well as the fact that all the developers we have seen default until now are going to have to do something similar to what kaisa did in 2015. some are going to try to come back to market and reinvent themselves in a way that is more sustainable. the question is, can they do that? rishaad: this brings me onto china estate holdings. and its plans to go private
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falling by the wayside. can you please draw the dots of it, because how does this affect china evergrande? rebecca: the story of evergrande has been coming to the brink of a crisis old days -- but always holding on. they have come in to support them financially over the years. as a part of that they have reported losses, along with other various hong kong tycoons or property groups that have invested in evergrande bonds over the years. reporting significant losses under balance sheets. the failure to go private and looking forward longer-term, what ultimately happened to china estate, it is a sign of the broader market. for many years we have seen these large property groups coming into help one another. that no longer is able to muster. and in light of that, and the light of the stress we are seeing, it remains to be seen
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what kind of future these firms have. rishaad: rebecca, thank you so much. just going to check in on u.s. futures. a moved to the downside. let's look at what is going on. right now nasdaq futures down over 1%. s&p also by the same kind of margin. just continuing the falls we saw friday. there was a return to growth with the nasdaq outperforming its two big benchmarks, two other big benchmarks as well. let's have a look at what else is going on. washington sending a message to tehran which it is not going to like very much. let's have a look at the first word news with su keenan. su: we are talking about the biden administration still seeing no pathway back to a revived nuclear deal with iran at the latest round of talks in vienna. national security advisor jake sullivan said the silver lining is that the u.s. and europe are finding rare common ground with
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russia and china in the talks. last week antony blinken suggested the u.s. could soon shift its attention away from attempting to resurrect the 2015 iran accord. to germany now, the country has given the u.k. its high-risk -- its highest risk that the nation to include a mandatory two week quarantine. the netherlands has returned to a full lockdown which will last until at least january 14. only supermarkets and essential shops can stay open. italy is trying to avoid a full shutdown by reviewing its measures to slow the virus spread. the government may make masks mandatory outdoors and step up testing. u.s. senator joe manchin meanwhile has rejected president biden's $2 trillion tax and spending bill, leaving the democrats with few options to revive his economic agenda. his announcement caught the white house offguard after weeks of negotiations between the west
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virginia democrat and president biden. the administration and senate majority leader chuck schumer will now determine whether they can salvage some of the bill. >> if i cannot go home and explain it to the people in west virginia, i cannot vote for it. and i cannot vote to continue with this piece of legislation. i just can't. this is a no on this legislation. su: chile meanwhile has elected a leftist as president after his conservative rival conceded defeat before all the votes were counted. he won 56% of the vote. the 35-year-old will take office in march, becoming one of the youngest president in the world. he vowed higher taxes, greater equality, with an end to private pensions and greener industry.
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global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. rishaad: still to come, jll's apac chief is expected to stabilize further next year. he joins us later with his outlook. next, an exclusive interview with jason chen, discussing the impact of the chip crunch and acer's china expansion goals. this is bloomberg. ♪ this is bloomberg. ♪
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rishaad: having a look at the top stories we are covering, a financial times report says
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airlines may have to wait as long as 2025 for deliveries. this is down to supply constraints. nike reporting second-quarter results of the u.s. market close monday. they will be looking at any comments on inventory availability and production in southern vietnam, which has resumed production after it was halted over the summer. micron in focus out with earnings on monday. analysts optimistic the chipmaker will come in ahead of estimates. bloomberg terminal users can read more about those stories. a $7 billion chipmaking expansion plan. he also met key suppliers. he with more is jason chen.
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thank you for joining us. he comes to us exclusively from taipei. how is business? how is this whole supply situation right now affecting it? jason: hi, everyone. hello, sir. the business is doing well, and we are working hard to do the best we can. the supply chain logistics, to fulfill the market as much as we can. rishaad: of course you have to, but the point being what sort of production problems are you having at the moment? jason: there are multiple factors that compound together. namely number one the supreme -- the semi conductor number. number two is going to europe and north america. number three will be assembly facility.
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those three sectors compound together is quite complicated. rishaad: exactly. in taiwan last week we saw this big package being announced. how do you look at that? it provides competition. through which prism are you looking at it through? jason: i had a chance to talk to him personally. i heard from him on all kinds of grand plans. i also communicated to him how do we work together. we see the market is going to be dynamic. and we will work together with multiple suppliers to make sure that we manage well through a competitive situation. rishaad: absolutely but it is a
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thumbs-up for taiwan, is that not? jason: you are right. it is a great time for taiwan and great time for the industry as well. rishaad: indeed. let's also take a look at how you are repositioning your business. you are taking a multibrand strategy. give us a sense of that, because you have a presence of more than 160-around the world -- you have a presence in more than 160 countries around the world. jason: correct. our multibrand strategy, better ways -- we have a different brand for different lifestyles. general population we have acer products. and we have predator. very much it is for a particular
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lifestyle usage. we have different brands to optimize for our products. rishaad: absolutely. which ones do you prioritize in which geographies? we do not really prioritize by geography. but gaming is about 30% of our business. on the other side the biggest growth opportunity we believe will be the green pc areas. pcs like the one i hold in my hand. pc's for consumer as well as enterprise. this pc be able to reduce 21% carbon emission. we produce this one as the
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biggest opportunity in the near future. rishaad: talking of that notebook that you have there, what are the margins like compared with your other products? jason: pc compare with other products, talking about other software products. pc provides a base. however, if we compare with years ago we have improved. if you compare the significant segment we support, they do have better margin than other pc's. rishaad: ok. you have this aim to become the number one notebook maker in the world. you also want to make a drive into the mobile device market. tell us about your ambitions there. jason: what we have in mind is the target audience and model stimulates demand. the number one thing we have to
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decide is who will be our target audience. number two is what is the assignment that we believe people demand to purchase our product. a good example is e-sports. [indiscernible] rishaad: mobile is going to be very important. you talk about e-sports, this is exactly the target group that would be part of the whole n otion of the metaverse. there is a lot of talk surrounding this. does that fit in with the opportunities this all throws up, and what opportunities do you actually see? jason: yes, very well. we see two major mega trends. number one is the metaverse you're talking about. e-sports is one of them but not
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only e-sports. ntf's will be another area we pay attention to. the other area we believe will be big and with tons of opportunities will be efg-related opportunities that we are also paying a lot of tension -- a lot of attention to. rishaad: one other thing i want to get to is, with regards to the green outlook that you have and gaming as well. tell me, how doestechnology plas well? it is something you are making a big push for. jason: yes. very well. very good question. i come from a semiconductor background. i can tell you performance and thermal is a trade-off. you have better performance, the thermal is going to be hotter. we have to prepare a better system, thermal solution for our gaming pc, for the power users.
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acer has more than 300 patents of thermal solutions. we are the number one thermal solution provider in the world. that will give the power user a better, more reliable, more stable performance for the same kind of chips. rishaad: yeah, again, to the previous question and the answers you just gave me, it all just throw up a lot of opportunities for the so-called metaverse, metaverse talk, if you will. give us an idea of what specific hardware opportunities are linked to it. jason: it gives us a virtual area, virtual space that people will be able to enter themselves. there are multiple areas. it is still early, but one big example i will be able to share
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with you is 3d solutions we just launched. people will be able to have 3d effects. [indiscernible] it will give people good rotation and good 3d effect experience. rishaad: jason, thank you so much for joining us. please join us again soon. jason chen joining us exclusively from taipei. can catch up with all of our interviews by using our interactive function tv . you can send messages during our live programming. this is bloomberg. ♪ this is bloomberg. ♪
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su: this is bloomberg. we start with chinese ai firm. it's relaunching its ipo after announcing last week it would delay the listing amid tensions with the u.s. government. the company is sticking to its original offering, and aim to start trading december 30. chinese investors will take a larger percentage of the shares available in the deal. alibaba will target growth abroad as it tries to move on from a tough year. unveiling a recovery plan at its annual investor conference, alibaba says it sees overseas -- and cloud technology as keyed growth drivers. they are trying to -- rishaad: next, talking property.
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china's troubles in property curbs put a damper on sentiment. that is just ahead. this is bloomberg. every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.
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rishaad: we are 10:29 a.m. in hong kong and shanghai. 9:29 in new york city. asia-pacific benchmark downside by about 1.1%. seeing a lot of pressure coming from the property side of things in china. tech in focus as ever. authorities in the philippine province scrambling to secure food and water for residents after the strongest typhoon to see her landslides and flooding, leaving at least 140 people that. -- dead.
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what's the latest from the typhoon? it is very late in the season for this, is it not? >> yes, it is. hi. the strongest typhoon to hit the philippines this year killed at least 140 people, and we expect that to rise as more reports come in. half of that early tally is from a province in central philippines. victims were hidden by fallen trees are buried in landslides or have drowned. people are in need of food or water blanket. there were reports of long lines at gas and water stations. groceries and supermarkets running out of supplies. also more than 200 cities and towns are without electricity. and full lines are down in many areas. and while power and telecom companies are rushing to bring services back, this may take
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time to restore. several airports were damaged, including the nation's second-biggest. and hundreds of flights were canceled. rishaad: so where is the typhoon now, and how much of the damage you have talked about is being dealt with on the spot by the government? cecilia: the government has committed to released 2 billion pesos or $40 million in aid. for those along the storm's path, this is reminiscent of a typhoon in 2013, which left more than 6000 dead and damaged $4.58 billion -- damanged more than $5.8 billion.
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on an island where the typhoon made first landfall, a local official said it may reach $400 million, and that is just for one area. this typhoon will certainly have an impact on fourth-quarter economic growth. the government can tap $500 million credit line from the world bank for disaster response and reconstruction. that is according to the finance secretary. rishaad: thank you so much for joining us. going to have a look at a patriot poll. here is su keenan in new york. su: we start with hong kong which held its first major elections since the electoral system was overhauled by beijing last year. the turnout rate was just over 30% before the polls closed, compared to a record turnout of 58% in 2016.
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results are expected later monday. china dictated a revamp of hong kong's electoral system last year, ensuring only patriots could run for office in a move that wiped out the city's pro-democracy camp. to the u.k. where the foreign secretary will handle the country's post-brexit negotiations with the eu, after david frost quit sunday. he implied he was unhappy with conservative policy. he's one of the favorites to secede boris johnson. president erdogan as -- he also said turkey will not back down from its new economic model which relies on slower borrowing costs and a cheaper currency.
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the leader is the world's worst-performing currency over the last three months. in new york, judges ruled the jury in ghislaine maxwell's sex trafficking trial can consider whether she intentionally avoided knowing the ages of her four underage accusers or deliberately ignored jeffrey epstein's behavior with them. the ruling for the prosecution came saturday in a rare weekend hearing. closing arguments for the case will come later monday. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. rishaad: let's check in with the markets. taking a look at what is a down story. concerns about the virus variant. we also have property concerns playing out in china. they hire a financial advisor
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after being suspended on the exchange for about two weeks. also concerns about china evergrande with a key backer of that failing in his bid to go private. evergrande, 2.5% down. let's move to what else is happening, because it is a day where we are seeing unloading of assets. this is a look at the shanghai property index. a lot of stocks moving to the upside on this particular board. led by reality development group, up 9.8%. the real estate index in china itself doing well on the shanghai comp, but not so much in hong kong. ages commercial real estate market stabilizing. could be stabilizing for the next year as an investment and leasing activities are poised to accelerate. at least that is the exit to from jll. -- the expectation from jll.
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let's bring in anthony couse, ceo of jll asia-pacific. anthony: 2021, we saw 15% rises. 2022, we're certainly seeing investors increasing. 15% increase in 2022 would take us to record volumes in the asia-pacific region. the reason is the significant liquidity in the system. there is a real focus on tech, but also emerging asset classes like data centers, a real focus on data centers. i think a lot of investors have looked to diversify both geographically and by asset class in 2021, which is set to continue into 2022. rishaad: you cannot really talk -- i cannot really talk to you without bringing up what is going on in china. is this an opportunity for you in any way? anthony: absolutely it throws
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opportunities for all of our investor based clients, both offshore and onshore. i can certainly see the headlines of what is happening in china. ultimately i still believe a strong view on china, the macro market in china, the fundamentals are still strong. i spent a lot of time working in china markets since the late 1990's and i have been living there for 10 years. every time you see something like that, you see the chinese government stepping in with a controlling hand, driving that stability of the economy. i think this time around the chinese government will look with that control to support some of those developers as they divert assets to meet payments and look at corporate restructuring. and as you said, there will be a lot of developers who are highly leveraged looking to dispose of assets, and that will present opportunities for a lot of onshore capital, the insurance
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sector, pensions, fund managers. rishaad: absolutely. i guess when you look at the residential versus the commercial or retail side in china, you have to say it is the residential one most precarious. but i suppose commercial -- and this is where you concentrate -- is going to be the way forward. anthony: yeah, let me touch on the residential sector. the chinese government the last five years has been very focused on ensuring developers deleverage. some have deal leveraged well -- that deleveraging is taking place today. in 2021, the market has been very strong. we have seen good absorption of office space. we see that continuing into 2022. so we do see the commercial side by offshore investors into china. rishaad: ok. i'm going to talk residential. i know it is not really your business, but that gives you
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perhaps the ability to look at it as a neutral but very informed observer. the steps taken by the singapore government to curb leveraging, etc. with house prices up 9% since the first quarter of last year, it is hardly what you would call a frenzy. why have they instituted it? anthony: firstly you have to look at what they did. it is not good for first-time buyers and not good for permanent residents. the duty is preventing secondary by third time round of buyers and they are putting big levies on that. they want speculation in the market. it is also heavily geared towards foreigners because it has gone up from 20% to 30% as a
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foreigner. it is keeping away foreign buyers. that is a big hike, 20% to 30%. i would agree with you. from a jail out perspective i was surprised to see that. given the market has really not moved in 2021 like it moved in 2020. it seems premature but i think singapore is very much into -- rishaad: going to that point that you said premature, there's a small part of your business which is high-end residential. how much is it that they see price inflation for homes in the future, or how much is it they have to pay down a lot of debt incurred the last couple years? anthony: i think it is really good to stop speculation in the real estate sector. in singapore they want these first-time homebuyers to get into the market.
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and it is very geared to stop foreign investors investing in singapore and driving prices to protect the singapore permanent citizens. rishaad: anthony, always a pleasure. thank you so much for joining us. just got a bit of movement on the treasury. three basis point to the downside for 10 year notes. down 1.36%. a decline of about 2.4%. perhaps this is down to goldman sachs cutting its u.s. gdp forecast after joe manchin said he would not support joe biden's $2 trillion tax-and-spend and plan. it is of course part of the president's centerpiece of his economic agenda. coming up we have the ceo of one of vietnam's biggest conglomerate telling us how to eat -- that is on the way. this is bloomberg.
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♪ this is bloomberg. ♪
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rishaad: we have one of vietnam's biggest conglomerates embarking on a major truck drive for his grocery business and
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remains a nascent e-commerce business. alibaba and sk group investing hundreds of millions of dollars this year. doing so with this project called crownx. we spoke with him about the opportunities he sees ahead for the company and for southeast asia. >> i think vietnam right now is 2% e-commerce. we want that to double or triple over the next couple years. i think it will be a key area of focus, particularly in the grocery pillar of vietnam. >> we know that vietnam is still very much a cash-based society, so what challenges do you see being posed to e-commerce growth and how do you hope to get around that and boost growth in that area? danny: the key focus is logistic
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supply chain. we work with a number of partners to solve that riddle, which i think efficiencies allow e-commerce to explode. and secondly a great point you brought up, we are working with our banks on how to push financial inclusion and also looking at fintech opportunities to ensure the cash society becomes as cashless as possible. >> when we look at opportunities and working with other companies, we did see alibaba have a $400 million take in masan in may. how are you working together with alibaba's southeast asian group and what kind of further cohesion do you see here? danny: i think the genesis of that partnership has obviously become e-commerce today. 2% of e-commerce is online grocery. for us, offering our products and goods, focused on the daily
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category is where the -- [indiscernible] >> look at the big cities like, ho chi minh city's 32111 e.m. danny: it comes down to logistics. a population density. that is number one. trying to leverage our off-line stores to act as a segue. when everything is cash-based, we are trying to develop a solution to offer solutions to drive online.
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the biggest issue will be logistics and supply chain, which we are trying to work on. >> the supply chain crunch we certainly foresee for six to 12 months. tell us how much is impacting you. danny: luckily we are integrated from the production side to the retail side. covid, we had some opportunities. we're a nationwide company. we have been able to work through the supply chain quite efficiently. we are back up to 100% pre-covid levels. but our ambitions, that will be a focus on how we have many logistic hubs across the nation so we can weather any further supply chain disruptions. >> what kind of further innovation, business development are you seeing not only at masan group, but across
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vietnam? danny: there is a huge tech focus in vietnam right now. a lot of real tail -- a lot of retail solutions using analytics. you have a lot of companies that are now building ai capabilities to understand consumers and have personalized use cases. so -- [indiscernible] that will be a key area of focus the next couple years. we're focused on how we work with startup technology companies so we can bring their offerings to millions of consumers. >> what further growth are you looking at? are you looking for more mergers and acquisitions? would you be looking at becoming a super app as well? danny: we have always had a two pronged strategy, organic and inorganic. you can look to build and
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acquire companies that fit our consumer ecosystem. our mission is to build off -- similar to what you see in india and china. that is our endgame. >> finally, your overview of what asean looks like in 10 to 15 years. danny: it will be i think a hotbed of technology companies, growth companies. i expect a lot of companies within vietnam or taiwan or indonesia to be pan-regional. i think you will see a lot of regional unicorns that emerge from asean. this is basically maybe china 510 years ago. -- five, 10 years ago. a tremendous opportunity the next five, 10 years to develop
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regional unicorns. rishaad: masan group ceo there. let's have a look at some key stories we are following. data we're also looking for out of the region. indonesia looking to attract $348 million in direct investment next year to micro, small, and medium-sized enterprises designed to boost competitiveness. pledging to invest $200 million in renewable energy to add to existing portfolios. the philippine airlines winning court approval for its reorganization plan, paving the way to exit bankruptcy. right. coming up, hsbc private bank southeast cio discussing -- discussing what he is bullish and bearish --
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this is bloomberg. ♪ bloomberg. ♪
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rishaad: this is a look at the hang seng. it is on track to fall around about 1%, 1.1%. on track for its lowest close
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since march of 2020. these are some of the companies which at the moment are active. at the moment we have glass, solar, and also property firms adding to the malaise we are currently witnessing on the benchmark. let's have a look at what is making headlines in the sense of business flash. let's get over to su keenan in new york. su: we are going to start with rio tinto, which has appointed dominic as its next chair. he will officially become chair after rio's agm -- he was most recently ambassador to canada -- china, saying he would step down at the end of the year. the firm is nearing a deal to acquire luxury apartment rentals in downtown manhattan.
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their latest wager on new york real estate. they are in advanced talks to acquire residential power for $930 million. it's the latest in a series of recent bets on the staying power of high new york buildings. rishaad: let's check in with markets as we have course have another half an hour of trade for the mainland. china going off of its lunch break before the hang seng does so. looking at the hang seng, we have a big down drop taking place as kaisa group returns to the market. shares plunging there. the developer has appointed financial advisors to help manage debt. a key evergrande group backer down about 30%. commodities, it's iron ore making headlines. demand improving from china.
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the iron ore contract up nearly 6%. weakness elsewhere. also got omicron concerns sending brent down 2..4%. ♪
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>> it is almost 11:00 a.m. in shanghai. welcome to bloomberg markets: asia. rishaad: let's have a look at our top stories. china adding to easing measures, the banks cutting the lending rate for the first time in 20 months as the economy sounds -- has signs of strain. haslinda: goldman slashes u.s. growth after problems with
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bidens spending plan. rishaad: and we speak with the ceo of an indian company and to the ipo draws heavy demand from investors. haslinda: in asia, it is a sea of red, negative territory, losses in the u.s. on friday. the u.k. expecting omicron cases in the north and the hundred of thousands. in the u.s. it is accounting for 13% of new cases. the msci index down about 1.3%. the csi 300 index also under pressure. we have china cutting its one-year lpr for the first time in 20 months. not a game changer, it is too small to make a difference. the hang seng being dragged down by property plays, the likes of kaisa, trending for the first
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time in two weeks, down as much as 12% at one point. s&p futures down about 1% right now. we are expecting the global rout to continue. rishaad: let's see what is going on, it seems to be following the regional trend, off by about half of 1% with the minutes trade gone. the trade bought -- thai baht weaker. the indian rupee study. -- steady. let's look at china as banks load borrowing costs for the first time in something like 20 months. this is coming about as it should provide support ultimately to an economy showing signs of fatigue. a lot of this is down to sporadic virus outbreaks and a
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property slump. james, five basis points cut -- to the one year, the five-year not changed at all. is it about messaging more than anything else? james: that is correct. the best loans for the best, knees will be lowered by five basis points, it will not have a massive effect. as you said, the five-year, the basis for most mortgages, hasn't been cut at all. it will flow through to home mortgages. this is a sign from the central bank that they are making efforts to try and reverse the slump you talked about. the hits and the -- in the housing market and week consumption. the pboc is doing a number of things. i really think the expectations we are seeing is this is a start
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of something that will continue into the new year, whether it is an interest rate cut, further cuts to the opr. in and of itself, this change is not going to make a massive difference to the cost of credit across the economy. haslinda: will there be further rate cuts or monetary easing in the new year? this is so small it makes no difference? james: the implication is the pboc is going to -- there will be more easing measures from the pboc. we saw it last week as well, the government talking about increased fiscal spending, increased investment by the local government, finding vehicles and provinces as well. there seems to be an indication that not only will there be more monetary easing but more fiscal stimulus next year. the expectation is there will either be further rrr cuts, further rate cuts, or further cuts to the opr in the new year.
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the expectation is this is just the beginning of something. rishaad: ok, that is monetary. what are they doing to support things? we heard the latest reports that they will be concentrating more on economic growth on the regulatory side of things than this year. stabilization is the key word, is it not? james: that's right. you've seen more talk about fiscal stimulus, the government announced last week they are allowing local governments to start selling bonds quicker in the new year. but there hasn't been a massive change yet in the direction of policy. we are seeing some monetary policy loosening and some fiscal policy loosening but not a massive shift in the direction of the government yet. they are still running quite a tight policy. there was a statement today from the central bank and the banking regulator, encouraging stronger
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housing companies to help weaker housing companies through m&a. the markets are looking for these kind of things but there hasn't been the massive changes people were expecting that might take the heat off of the housing market slump are seeing so far. haslinda: thank you so much for that. let's bring in our guest. good to have you with us. we had james earlier talking about this is the beginning of some things. if you expect china to cut rates in 2022, is china a buy? james: it is clear they will be on the easing motor for 2022 and that will ease the slowing momentum. at this juncture, china has been neutral. we have to observe the data
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going forward. haslinda: valuations are at 20. is anything a buy at this stage? james: you want to look at long-term structural growth. you want to see where the government is looking in terms of expenditure and spending. you want to see china's energy transition, green evolution and technological upgrades. that -- those are the things to look out for in 2022. rishaad: give a sense of the private banker -- to haslinda's question, how concerned are your wealthy clients about investing in china, and are they wanting to shy away or do they see it as an opportunity? james: i think risk and
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opportunities are two sides of the same coin. clearly at this stage what we are seeing is a slowdown in global momentum. we are seeing whether in policy there is enough support to bring about a measure for economic growth in 2022. that should be the case and therefore there should be opportunities in china, especially those associated not really with the cyclical drivers but with structural growth, particularly with those with a technological upgrade. those are the teams that will have more tailwind in china in 2022 and beyond. rishaad: this goes to the overall point, with so many uncertainties at the moment and the u.s. with inflation rearing its head, how far are your clients looking at wealth preservation rather than enhancement? james: clearly at this stage,
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even valuations across the board, whether equities or bonds, are fairly stretched. we want to encourage investors to diversify across the board and to look into alternatives such as hedge funds or even private reddit or equity as a buffer and to diversify. very crucial in 2022, given where property markets are, and clearly there will be a few upsides, but the grind higher will be fraught with volatility. haslinda: ok, james cheo is sticking around. that's get the first word news with su keenan. su: we will start with germany, giving the u.k. its highest risk virus designation and tightening rules for travel from the country to include a mandatory two-week quarantine. meanwhile, the netherlands has returned to a full lockdown that
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will last at least until january 14. only supermarkets into social shops -- and central shops can stay open. italy is reviewing measures to stop virus spread. they may make masks mandatory outdoors and step up testing. u.s. senator joe manchin has rejected president biden's $2 trillion bill, leaving it democrats with few options to advance the agenda. the announcement caught the white house off after weeks of negotiations between the west virginia democrat and the president. the administration and senate majority leader chuck schumer will see if they can salvage some of the bill to meet joe manchin's demands. >> if i can't explain it to the people of west virginia, i can't move forward, and i cannot vote to continue with this piece of legislation. i just can't. this is a no on this legislation. su: in chile, they have elected
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a leftist as president after the conservative rival conceded defeat before all of the votes were counted. the leftist beat out the conservative. he will be one of the youngest presidents in the world. he has pledged an end to private pensions and greener industry. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. rishaad: all right, still ahead, we speak lucidly to -- exclusively to a ceo in india ahead of its listing in mumbai this week. this is bloomberg. ♪
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rishaad: it is nearly 13 minutes past 10:00 in the evening in new york city, we have u.s. futures and 10 year bonds, the yield sliding. u.s. futures in the -- after goldman sachs lowered its forecast for u.s. growth, on the back of senator joe manchin saying he will not support the spending plan that lies at the heart of resident bidens economic agenda. dooming perhaps that legislation. it could lead to lower yields in a flattened curve. also moderate inflation arguably too.
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that is underpinning what is going on market wise in some senses. haslinda: that's right, joe manchin not playing ball. our guest is still with us. your thoughts on what joe manchin is doing, not supporting biden's economic plan? prior to that, the u.s. was seen economic growth. does a change the view? james: i think the fiscal policy will not be as strong as the last two years really because of the situation. with the uncertainty and transition, you will see much more volatility. what is clear is that u.s. growth is strong but probably not as strong as 2021. we are midcycle and there will be a slowdown in momentum globally. i think the u.s. is still a standout market if you compare it across the world, and that is why the federal reserve will
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tighten policy in 2022. haslinda: the policy divergence, the fed, boe have different policy responses. who is likely to be wrong? james: it is clear it is uncertain with the introduction of the omicron variant. it is dependent on different policy maker's interpretation on how the world or their countries will cope with that. the verdict is clearly still too early. policy will be tightening across the world. also what is clear is inflation will be a problem for many parts of the world, it will be high for the next few months. central banks will have to be very judicious and careful in the weeks and months ahead. rishaad: you are in southeast
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asia, but there is a way forward, even. you have a green transformation taking place and a digital transformation in the region. it is very exciting. does this in any way affect that? it feels like a bull in the china shop, you won't stop it. it could perhaps a soak up some of that inflation we are talking about too. james: you are right, we are moving into a big reset globally, especially one driven by state ability and digitization. and of course there are winners and losers. we think southeast asia could potentially be one of the winners in 2022 on the back of reopening. also on the back of how the economy is much more digital and of course the focus of the energy transition, there could be interesting opportunities for
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southeast asia in 2022. rishaad: we've got digital transformation, but you can't talk about that these days as one entity as it were into different countries will do better. they are moving at different speeds. who are you most excited about and who needs to get a move on? james: in southeast asia, there will be differences, and i think we like singapore for economic growth and recovery and the way the pandemic was handled. increasingly into 2022, indonesia has a huge consumption population plugged into the digital economy and i think that will be quite interesting. and if we get much more resumption and normalization, you could get more foreign investments into indonesia and that could be quite interesting in 2022. haslinda: you are bullish the dollar in 2022, what would it
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mean for the emerging-market currencies in this part of the world? james: in that sense, this part of the world, especially emerging markets, have had improvements in terms of economic fundamentals. and economic growth is strong, if reopening and normalizations take place, so there should not be much impact from astana dollar given our view of a stronger dollar is one of a red jewel -- gradual appreciation. we should not see a repeat of the taper tantrum from 2013 in this part of the world. haslinda: james, thank you. still to come, chinese developer kaisa sliding in hong kong. more on the latest developments, just ahead. keep it with us. this is bloomberg. ♪
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haslinda: this is bloomberg markets: asia. get the latest business flash headlines. nio has unveiled a second electric sedan with the price time -- tag just over 56 -- they have already launched a more expensive sedan with delivery expected in march. the ceo says they are focused on expanding ev capacity. >> first we want to invest in technology for the long-term, setting a high bar. second is our service.
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we want to provide all the services surrounding the vehicle. we announced our plan in 2022 for a power source network and we've already built 732 charging stations. haslinda: alibaba will target growth abroad and in china as it tries to move on from a tough year. unveiling a recovery plan at its annual investor conference, alibaba said it sees overseas business as a key growth -- growth driver. alibaba was one of the first targets of china's tech crackdown. binance did meet -- did not meet demands regarding money laundering. they withdrew their crypto application. singapore's authority allows applicants to withdraw rather
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than face an outright rejection. rishaad: we have the observatory issuing a store morning signal one. this is the state of play with property developers, we have kaisa group plunging, two weeks they've not been trading. they have been appointed a financial advisor. also, chinese estates failed in a bid to go private and the stock price crashing. he percent wiped out. rebecca, let's start with kaisa. what is the latest? they have a legal advisor as well. what are they advising them about? certainly they were in a predicament with the advisors they currently had. rebecca: here we are again, not looking good.
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i think it shows development in terms of the restructuring. kaisa progressing, they're talking about a potential debt restructuring plan that could be in the work and that could be key. we know a group is representing some bondholders, particularly on the defaulted note. and there are different options for financing plans. we haven't seen a lot of progress. the first time around, there was about 2.5 million outstanding bonds now at some thing like 11.6. rishaad: they are trading near record lows. we have maturing ones as well. rebecca: in the front in its early looks weaker when it comes to pricing. you look at that chart, it shows some amount of stress has been priced in for some time, and unlike other developers, stress
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has in some ways been absorbed by the market. the bigger impact is less about contagion when it comes to kaisa but more about how offshore creditors will advocate for themselves and what this type of restructuring means for the other many developers that are in the same situation to restructure offshore debt. haslinda: we are seeing chinese estates plunging by a record amount. collapsing. this is just adding to all of the stresses in the sector. rebecca: absolutely. this is a long time backer of china evergrande group. over the years, this is one of the firms that has helped stave off a crisis for evergrande. and evergrande has always had these dicing with risk moments. it was always able to save itself before now. chinese estates helped save
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evergrande in the past. the stress we are seeing is the broader question of how these big property developers and private firms run by these big tycoons are going to fair in the face of this sort of state crackdown on the sector itself. rishaad: rebecca, thank you. let's have a look at what is going on with chinese markets as we head toward the lunch break. we have at the moment the chinex to the downside. even though we had a primary cut of five basis points, mostly symbolic. checking in with the hang seng tech index, it's not just property feeling it, we have tech again feeling it. there we go. just four stocks to the upside and all the others lower.
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we are down by about 2% in the session thus far. all this against a background of issues in the u.s. for joe biden's economic plan.
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haslinda: this is bloomberg markets asia. you are looking at live pictures of the lion city this monday. the region down about 1%. speaking of the lion city, as we started 2021, we had been talking about light at the end of the tunnel. a year on, it doesn't seem like that light is very bright. we have things like omicron
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weighing on the outlook of the country like the rest of the region. despite the fact that over 95% of the population has been vaccinated, we have inflation. singapore inflation the highest in two years. that is prompting expectation that the federal bank will continue to tighten. as we want to look ahead to 2022, it doesn't look like singapore is on an easy path ahead. rishaad: i'm going to say that there is some light at the end of the tunnel, perhaps. we've got -- the economy was expected to slow down anyway and there is a sense we have idle sectors -- vital sectors that could catch up. we have pharmaceuticals and tourism could return and that could be a big boost as well. moving things along, let's get over to new york and see what's happening with the first word news as we join su keenan. su: thank you.
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we will start with china's borrowing costs, which have been cut for the first time in 20 months. the one year loan primary, which is the reference rate for bank loans to companies, which -- was reduced five points. the five-year rate was left unchanged. the move follows the pboc's action earlier this month when it cut the reserve requirement ratio by about 188 billion to hong kong, it held its first major election since the cities electoral system was overhauled by beijing last year. their turnout rate was just over 30%, compared to 58% in 2016. trying to -- china dictated a revamp of the electoral system last year, ensuring that only "patriots" could run for office,
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wiping out the pro-democracy camp. in turkey, president erdogan has pledged to continue with rate cuts. he also said turkey will not back down from its new economic model, relies on lower borrowing costs at a cheaper currency. the lira is the world's worst performing currency in the last three months, losing a must-have its value against the dollar. and spider-man: no way home posted the second-highest opening-day in north american box office history, trailing only of interest: in game. it is set to hit 400 $22 million for the weekend, that would make it best november -- december debut of all time. many theaters were sold out. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.
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i'm su keenan. this is bloomberg. haslinda: thank you so much. let's look at markets. risk off in asia. benchmarks in negative territory, under pressure on a slew of demands including the omicron viruses parking renewed restrictions, rising u.s. tensions. looking at where we are for u.s. futures, all in negative territory. we have nasdaq futures down about 1%. russell 2000 down almost 2% on the back of news to resistance to bidens economy plan. we are tracking real estate developers in china. kaisa down almost 12%. china estate plunging.
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we have evergrande currently down by 4%. a snapshot of the markets right now. rishaad: all right. a chinese ai firm has an ipo after delaying. what is the difference between the first and second round? >> this time, they have to rely more on cornerstone investors. in a previous round they were 450 u.s. dollars, now it is upside to 110 million u.s. dollars. you see a lot of state backed funds. obviously it is interesting you see capital.
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they also have the hong kong science and technology park. haslinda: you've got to worry about that appetite and interest in how it rolls into what you are hearing. pei: we've been hearing that today they will open the book and looking to debut on the 30th of december. they're looking to close the book on thursday. what we are hearing from the bank, one source is they are aiming to close the book on wednesday to send a signal to the market it is doing well. obviously they played in the prospectus that there is a lack of u.s. investors and that will probably impact the trading liquidity and future fundraising. rishaad: thank you so much. let's move quickly to another
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company feeling similar. dji, a monopoly on the global drone industry. there is a warning about sensitive information. the concerns of c2 reflect -- the concerns seem to reflect others. >> yeah, one of the concerns among many that the u.s. government has is the company's role. another concern in washington is this is a company that because of its popularity in the u.s. and they have sold so many drums across the country, they are collecting a lot of data, these drones flying all over the place collecting information about people and places. critics of the company say that is data that will be available to chinese intelligence.
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the company says that is not the case. rishaad: haslinda, go ahead. haslinda: you have to wonder how it relates to the bigger debate about data security. bruce: yes, that is a good point. as we have seen this year, the chinese governments are concerned about the collection of data inside china, who has access to it and whether it can get outside of the country. china has imposed a lot of restrictions on that and taken action against certain companies like didi, which will have to come back to hong kong rather than being in the u.s. for its listing. there are similar concerns in the u.s. about who has access to all of this data collected on americans and what it can be used for. what is likely is it will be hearing more of this sort of thing, that there's going to be growing concern about collection of data from all sorts of companies, because so many devices now collect information about people. rishaad: how is the company
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responding to all of this? bruce: they say the allegations are unfounded. the company is pushing ahead with expanding its offerings. they are going all out when it comes to offering more consumer drones. they are also expanding into new categories they launched in education last year, they are working on agricultural drones, on high-end cinematography drones. all sorts of new things. the idea is they are trying to get into every corner of the business they can get into. haslinda: bruce, thank you. bruce einhorn in hong kong. nio has struggled with supply chain constraints this year, the chinese ev maker says more chip output will be released by the third quarter of 2022 and it remains confident in delivering its new electric sedan on time.
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we spoke to the chairman, ceo and cofounder as he unveiled the new model. william: it is a key product for us as nio has long focused on suv's. we've been looking for a model with a more suitable price and larger consumer base. all of our driving technology will be available. >> global trip -- chip shortage and supply chains have been impacting a lot of industries, including ev. how has that affected your production? how will that affect the rollout next year? william: it is indeed a big challenge. our deliveries in august and october were affected by the chip shortage. in fact, our supply chain team needs to carefully communicate
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chip delivery time with partners every day. of course, we are seeing some good signs. starting next year, chip companies will increase the capacity of car tips, which i think will be released around the middle of next year or the third quarter. there's no doubt covid-19 has made production more complex. even the shortage of a single-chip may affect the production. charlie: chinese stocks listed in the u.s. have been affected by a lot of issues lately, including the delisting of didi. nio, as a u.s. listed company, do you have any plan to shift your listing to hong kong, following in the footsteps of others? william: we hope political issues will not affect our
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growth, and we for sure will abide by the local rosin right -- local laws and regulations. charlie: are you considering to list in hong kong one day? william: anything is possible. charlie: you mentioned nio would enter 25 countries by 2025. can you give more details? when you plan to sell your cars to the u.s. market? william: nio has set up a research department in san jose in 2015 with hundreds of staff to develop mobile products. we started seriously considering entering the north american market since 2017 by making our products and services more competitive. of course, we are still working on the plan. we will enter germany, sweden, denmark, and the netherlands next year. more european countries the following year. our international market entry strategy has always been aching long-term plans and staying patient. rishaad: that was the nio ceo.
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coming up, we will speak exclusively to the chairman of an indian company about its trading debut and ipo. it was oversubscribed by 119 times. this is bloomberg. ♪
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haslinda: we are counting down to the india open in about two minutes. looking ahead to key stories that investors are watching in the country. they are asking citizens to avoid nonessential channel. meanwhile, regulators have effectively reversed approval for 2019 amazon investment paving the way for reliance to buy future retail. and india looking to provide aid to afghanistan was central asian nations. rishaad: we have data patterns set to list on friday and ipo, almost 120 times oversubscribed. the chairman and managing director of the company joins us
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exclusively. thank you for joining us. must be an exciting time for you. perhaps you have a little bit of trepidation given the last couple of ipos that have taken place have not performed well. are you confident about getting this one off safely? >> quite confident. our numbers are good. so we are quite confident. rishaad: absolutely. how much are you hoping to raise and what are their priorities for that money? >> the markets are 300 gross -- [inaudible]
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haslinda: give us a sense of your expansion plans. what exactly are you trying to do? >> the indian market has been buying everything and -- [inaudible] haslinda: there is a slight
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problem here, we know the indian government has increased defense spending by just 1%, putting on hold its modernization plans. will this impact you? >> no. the market is huge. what really happens in india is suddenly the market opens up -- and if we have the indian ecosystem, it is an enormous market opening up for us. rishaad: i think 62% of your business is radar, thereabouts. do you have plans to diversify away from that, and if so, what will be the next big thing you are looking at? >> [inaudible]
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[no audio] haslinda: looks like we have lost the data patterns chairman. we are keeping an eye on the benchmark on the basque -- back of the risk off sentiment and the rest of asia. down about 1.4%. bear in mind it has risen about 120% since the low in march. taking a look at some of the movers we are keeping an eye on. we have futures retail currently searching by more than -- surging by more than 18%.
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we are also keeping an eye on sugar stocks in india after the government ruled out a price hike. plenty more ahead. keep it with us. this is bloomberg. ♪
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haslinda: let's do a quick check
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of the latest business flash headlines. jefferies ceo says he's on his 10th day of quarantine after testing positive for covid, after posting on instagram. jeffries tentatively set a mid january date to return to office. they want employees to get booster shots by the end of the month. blackstone is nearing a deal to acquire luxury apartment rentals in downtown manhattan's, their latest wager on new york real estate. we have learned they are in advanced talks to acquire of residential power for $930 million from rooks field asset management. the latest in a series of recent bets on the staying power of high-end new york buildings. and the government sees resource
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exports hitting a record 270 u.s. dollars for june 20 22, 9% higher than september estimates. they continue -- australia continues to support the: gas industries as they transition from fossil fuels. rishaad: we've getting rid of the technological problems, let's hope they don't make a reappearance. thank you for keeping patient with the technology. we were talking about your business. the supply chain problems affecting many companies right now manifest. are you seeing any impact from chip shortages and the like? >> yes. [inaudible]
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-- we expect in the next month or two months. haslinda: how about the impact, the possible impact from omicron? how might that affect you? >> honestly is low. -- is vaccinated. we are hoping it won't affect travel. rishaad: are you seeing any difference in the demand coming
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from the defense department, defense ministry, with the whole different strategic choices they are making. or a threat from china, is that changing the pattern of what they are demanding? >> -- is happening and we are gearing up. [inaudible] haslinda: a final question before we let you go. any plans to go beyond the defense industry? >> yes.
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we are looking at a service model -- [inaudible] haslinda: data patterns chairman, thank you for your time today. let's do a check on where u.s. futures all right now. all of the banks under pressure. we have s&p futures coming down about 1%, a fair amount of losses early in the day reflecting the risk off sentiment on the back of news to resistance to biden's eco plan. kaisa leading the pack lower in china. this is a broad picture of the hang seng index. breakdown not just by property but also tech stocks.
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rishaad: all right, there we go, let's have a look at the hang seng. we are heading toward the lowest close since march 2020. technology and property inflicting losses. a lot more on the way, daybreak: middle east is next. ♪
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yousef: our top stories this morning. president biden's economic agenda takes a big blow as a key senator rejects his $2 trillion spending bill. goldman sachs has already cut its u.s. growth forecast on the move. dr. fauci says he doesn't expect lockdowns in the u.s. despite a spike in covid cases. meanwhile, the uae reports the highest number of covid infections since mid-september


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