>> it's almost 11:00 a.m. in singapore, 2:00 p.m. here in sydney. i'm paul allen, here are the top stories. >> in my view it's appropriate to reduce the number of rate cuts or push them further into the future. paul: yields on treasuries advancing after fed governor christopher wallace said there's no rush to cut rates as inflation remains a problem. risks are piling up for japan' currency. stocks and bonds as the nation's us fist call year drews to an end. they're on watch as the deadline looms. and concern tat more of a policy driven rally will unwind. india and korea once again left on the bench by the ftse russell

as they say the two countries are not yet fit to play. >> let's look at how asia markets are faring today. we're seeing an interesting picture, it's how assets or stocks after a two-day climb are hitting a wall. japan stock, the nikkei was outperformed has become the big drag on the apeck stock change. we're seeing the yen holding fairly steady. we're keeping an eye on assets as smoftd bank's balance sheets shows how the crisis is starting to affect them. we have some developers, the more troubled ones, country garden reporting later today. sunak came in with a beat. chinese stocks, a bit of gains there. offshore-dons shore everyone though there's a gain, they're

still sitting above that despite the stronger than expected yen fix today. it's about feds coming in hawkish. we have comments from bostick coming in, and many major markets will be closed tomorrow. we have tokyo c.p.i., u.s. pce number, we're hearing from fed governor christopher waller saying there's no rush to cut rates. >> i see economic output and the labor market showing continued strength while progress in reducing inflation has slowed. because of these signs, i see no rush in taking the step of beginning to ease monetary policy. >> fed governor christopher waller laying out reasons why he doesn't see a cut. but that's what we're seeing across asia for now.

paul? paul: a bit of a down day for the nikkei, not used to seeing that at the moment. some pressure on the yen. what's the level for intervention here? >> i think the line in the sand seems to be 152. that seems to be what market traders believe. but let's recap what we're seeing on the japanese currency. somehow after the b.o.j. hike for the first time in 17 year, sent the yen weaker. in the past two days has been a pretty wild ride. we're seeing how hawk coming in doveish, that sent a trigger to 152 on the dollar yen and then the finance minister yesterday coming in to put a lid on things. we condition see signs of intervention in the new york session. but the b.o.j. summary of opinions show that the officials seem to be keeping things accommodative, they're advocating for a cautious approach. and that's what we're seeing on

the yen which is the underperformer in g-10's this quarter. if you take a look at the knee tai that's been the outperformer. today it's gone from yesterday being the boost for the apeck gauge, because it was the last trading day before stocks went x dividend, today it's the other way around. it's a big drag on the apec and you wonder how much longer can the rally keep going in how much of this is fundamentals? paul: thank yous for that averill. let's bring in ben powell, chief apec investment strat gijs at blackrock investment institute. seeing a pullback at the nikkei today. we have a chart on the bloomberg that shows how much the nikkei has outperformed petty much every other market by a really,

really wide margin. so when you see a pullback like this, this is an opportunity to get in. ben: hi, good morning, great to be with you. yes, we at the blackrock investment institute, we have been overweight japanese investments for this a few quarters, we upped that conviction because we continue to bee e combination of the if you like, the m story, the nominal g.d.th boom, versus a decade or two of deflation will continue. important that b.o.j. is not derailing that. the macro story continues. and then of course as well as that we have the bottom up corporate governance as if you like, i think we'll continue to see more and more news flow, be that on buybacks, dividends. that combination we think is constructive. we think investors done have enough exposure. we at blackrock are overweight. paul: how about the yen, though? we're hovering around 34-year

lows at the moment. we've got the usual sounds we've come to expect from the ministry of finance and f.x. currency chief about the risk of intervention. where do you see intervention potentially happening and how does that affect your case for the nikkei bullishness? ben: we would be exposed to japanese equities on an unhedged basis. we have some short-term, exciting situation with the ministry of finance potentially continuing to verbally intervene. trying to create something of a line in the sand, i guess, on almost any measure the yen looks like a very, very cheap currency. so over the six to 12 month horizon which is how we think about our allocation view we think the yen can appreciate meaning the global investors won't be kind of inconvenienced by a weak yen derailing their local equity market gains. we think this is a different yap these story. it's much more to do with japan

meeting japan. a japanese economic renaissance benefiting local companies, i guess, be those bank consumption. it's not so much the weak yen helping japanese exporters. it's more with japan meeting japan and a yen moderation or even a little bit of a strengthening shouldn't derail that more, how can i say, localized japan view. paul: to whatdegree is a strong dollar story? with that in mind how effective could you see intervention being? benn: i think you're right. i think waller's comments are more hawkish though importantly it's still, i think, key to know, even waller is talking about the pace of cuts. so there's no discussion about are we going to cut or not. the answer to that seems to be yes, the fed is going to cut. the debate is when and by hutch. i think as we get to june, likely we start to see a cutting

cycle which should take some of the heat out of the dollar strength. we're seeing right now and again that should be beneficial clearly as we have the fed beginning there -- their cutting cycle as the b.o.y. very, very carefully continue their very careful hiking cycle, that interest rate differential should narrow meaning the yen should find some strength, not too much, but some strength in the months ahead. paul: we're counting down to another piece of data out of the u.n. that's going to help the asia pacific is on holiday. what are you anticipating around that? we have seen a few surprises we didn't expect and expectations for easing from the fed have gone from something like seven cuts now down to three. do you think maybe those expectations could end up getting tweaked again? ben: we were very much expecting

an inflation roller coaster. so the market is obviously come back much more in line with our view now with only three cuts, approximately three cuts priced for the year. that makes sense. because these, let's call them surprises. we don't find them that surprising. we think you'll see more and more of this kind of inflation roller coaster uncertainty and volatility. that's going to continue to create a different macroeconomic regime, a less certain one, more volatile markets, so we think this is going to continue. critically, what's been, i think, very important for markets is the fed's relative comfort with this over the last couple of months. inflation has surprised to theup side and yet powell and other senior fed members have been broadly ok with this. seems like we're getting something of a goal post glide where the fed is implicitly accepting inflation can be ok at let's say a range of 2% to 3% rather than a kind of very

clear, we must get to 2% at any cost. so this goal post glide i think has been maybe the most important thing in financial markets over the last month or two as the fed has tolerated even slightly surprisingly higher inflation for the last couple of months. paul: just before, i want to get back to japan briefly before we move on. we do have an enormous balance sheet for the bank of japan that's going to need to exit the e.t.f. market as well. what's your risk scenario around those two things? >> so i think the bank of japan is extremely conscious of this risk and i think they've gone extremely out of their way appropriately to manage this risk. this is why the b.o.j. has been, to my ears, so clear that they're going to be very, very slow, very marginal, give the market extreme guidance about what's going to happen. so as not to take anyone by

surprise. so i think the interest rate risk obviously is there. there's a lot -- interest rates went up a bit quick. i think it's important we all recognize the b.o.j. fully, fully understands that and is doing everything they can to mitigate that risk. and i think they have got the firepower. yes they kind of abandoned your curve control last week but they said very clearly if they need to bring it back, they can and will. paul: ben powell of blackrock investment institute is going to stick around. we'll be talking about china in a moment. also coming up, an outlook on ibda market. we'll discuss why they expect volatility in the rupee to increase with gains only in the longer term. first though president xi jinping meeting with u.s. business chiefs urging them to invest in beijing. we'll be live at the forum next, this is bloomberg. this is bloomberg. ♪

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>> the respective successes of china and the u.s. are opportunities for each other. as long as both sides regard each other as partners, respect each other, live in peace and cooperate for win-win result,

china-u.s. relations will become better. paul: that's chinese president xi jinping making his pitch for foreign investment in china directly to a group of u.s. c.e.o.'s. he met with executives in beijing including blackrk's c.e.o. let's get details from our chief asian correspondent, steven engel. what are your take aways from xi's comments at the meeting? steve: i think the fact that he met with u.s. business leaders who stayed on a day or two after the china development forum is a good sign. he was congenial, cordial. he was engaging, from the people i have spoken to, or at least the messages i've gotten from those who were at the meeting. it's a good step. last lot of concerns by u.s. business people and academia who participated in that meeting in the great hall of the people that lasted about an hour and a

half. the concern obviously is about policy opacity and they want more clarity. the arrests of some american, according the u.s. ambassador, nicolas burns who told me that raids on consult ancies and the overall climate in what is increasingly becoming a bifurcated world in technology and politically. the fact that xi jinping was open, smile, engaging, saying that they're open for business and welcome foreign participation in this economy is a good first step. there'll still be some skepticism but that's healty thing. that's also something we're seeing here at the forum. paul: also at the forum you've heard from the head of china's legislature. what's he been saying? he's echoing xi's remarks to a great degree. steve: i think anybody in power right now, especially among the seven-member standing committee, he's number three, of the

national people's congress, he's number three. he's going to comment along the same lines. they are reading from the same script no doubt. however what struck me about the speech and i did not hear it so i could not detect the tone, but from the headlines that we got just in the main hall nearby here, he's -- his tone was a bit try debit at the top. essentially talking about geopolitical issues. but he brought asia into the foasmed he wasn't saying if china's perspective. he was talking about asia's perspective. keep in mind this is the forum for asia. so they oftentimes couch their statements in that context. he said bullying acts are deeply harmful. he says china believes all countries are equal regardless of size. china is ready to intensify cooperation with all countries on technology. again he said we must prevent asia from becoming an arena of conflicts.

>> all right. chief north asia correspondent steven engel there. let's get more on the outlook for china with ben powell, chief apec investment strategist at blackrock investment institute. i want to return to some of the remarks steve was making. the two chinese officials both saying and calling for foreign investment. does china offer the transparency and regulatory clarity, the consistency, that foreign investors are looking for? ben: it's a fascinating time in chinese markets for sure. the headwinds continue, but the tailwinds are there as. we it's worth remembering the scale of this economy, roughly china is at $17.5 trillion g.d.p. economy. if they grow by 6%, 6.5%

nominal, that would be a standalone g-20 economy. those are ongoing headwinds and presenting significant challenges, particularly for western investors. that's not changed. what has also not changed is the growth of the economy, the growth of the middle class, the consumption story we've all been talking about for a long time. that's still there. i think china is a great example of where, as investor, of course we need to be careful, very selective, but there can be opportunities within this mix. paul: yeah, we can be the forget it is the world's second largest economy as you say, still a very compelling growth story as well. how do you strike the balance? where do you see opportunities in china at the moment? ben: we strike it carefully. it's the elephant in the room but it's a slightly smaller elephant. markets are extremely aware of

this as an issue. it is an elephant but somewhat been a discount. what's key going forward is a revival of spirit we was not seen yet. not so much the global investors but local investors and local consumers that are key. china is still predominantly a retail market, around 70% of equity turnover is local people. retail investors. so it's their confidence that's key to a sort of sustain red kovry in markets and frankly we just haven't seen that. so we need to see maybe a little more stimulus forth coming to galvanize domestic confidence and maybe global investors can piggyback on that. so far that's not happened. paul: i want to talk about rate marks. if we look at the market in asia these longer notes are doing

better than the notes dated three to five years. can you explain the disconnect? ben: we've actually got a preference for emerging market hard currency dollar-denominated, expressing something of a dollar view. it's more just to do with the yields which are by global standards very, very attractive. clearly we're all waiting for the starting gun to fire. we're assuming june for the fed to cut, a lot of emerging markets including in our part of the world here in asia are waiting for big brother to give permission and then we can see more of an easing cycle spread. i think naturally many central banks all over the world are waiting for the starter gun potentially june, let's see, then we can see more enthusiasm, more momentum as the dynamics play through. we can benefit from that in these marks. paul: ben powell of blackrock investment institute. thanks for your time today. we have plenty more ahead. this is bloomberg. ♪

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paul: hong kong officially opens its doors to the public today, painting a picture of dmapped in the market for 2024. bloomberg's lauren lau gives us a preview. >> art bazell is back, but are the buyers? exhibitors to set up shop for the five-day fair hope so. numbers of galleries showcasing work are up by a third from 2023, matching the fair's prepandemic scale. >> we're 242 galleries this year. we're up 37% year-on-year. we're seeing international audiences once again back in hong kong from all over the world. especially in asia. there have been a number of employee sales already, which is

always exciting. >> according to u.b.s., gbal art sales in 2023 eased after two years of growth, slip big 4% to around $65 billion u.s. but in china so far the appetite for luxury art has held up. it's now the second largest art market globally after the u.s. and the only major rket to show an uptick in value over the course of 2023. >> the economy is clearly softened in mainland china. there's no mistaking that. there's also tuns we feel to bring activity and to centralize and congress regate that activity at moments like art basel. >> it's more than just art for hong kong. the city is navigating a consumption and tourism slump with hopes that so-called mega-events like art basel will revive retail spending. >> the art market community has

invested here and we are as well. i think collectively we'll see benefits of that this week and in the future. paul: that's bloomberg's lauren in hong kong there. let's look at how we're tracking on market, particularly watching banks in china at the moment. icbc, bocom, agricultural bank of china and c.c.b. among those we'll hear from today. china's long-running property downturn is not doing bank taos many favors. we did hear bank of communications, bad loan ratio jumping to almost 5% at the end of last year. icbc saw a similar issue according to its wednesday filing. we'll be hearing from those banks later. china vanka also one we'll be hear frsmg sales dropped 43% in the first two months of 2024. that was dragged down by lower

exposure to low-tier and some of the weaker tier-two cities. country garden another troubled property developers we'll be hearing if today. not withstand, we are seeing the china market perform pretty well at the moment. csi300 one of the bright spots at t 340e79 hitting the lunch break. better by 1.2%. the shanghai composite up by 1.2%. hong kong stocks up by almost 1.4%. we'll take a closer look at marks in a moment. there's plenty more ahead. this is bloomberg. ♪ her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name!

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paul: welcome back. as i mentioned, we do have china markets just heading to lunch. hitting lunch in a pretty good

mood. we're seeing positivity in the markets for china. csi 300 bet bier 1.5%, same for the shanghai composite. stocks in hong kong better by 1.3%. we are keeping an eye out for the offshore yuan highball. we saw that hit highs that we haven't seen since april, 2022. 5.98%. we also, the fixed a little bit earlier, that was 7.0946 for the u.s. dollar offshore yuan reference rate. so there you see, markets performing petty strongly. 7.2255 for the offshore yuan, i beg your pardon. let's look at how we're doing on markets in japan. not so good today. avril is going to explain. might have something to do with the yen, avril. avril: might be the yen, also

bad timing. yesterday we saw the nikkei, the outperforming leading the charge. now it's the underperformer, down 1.4% for the morning session. more of that loss coming through as we start the afternoon. and we're seeing this because there was the last trading day before companies go ex-dividend yesterday. today there's a bit of unwinding. but overall the yen has been helping things. let's take a look at what's going on cross-assets in japan. there are risks. we have tokyo c.p.i. that is due tomorrow. it's coming out on a day when many major markets will be on break and tight liquidity is expected. we also are approaching the end of the fiscal year. so those are some of the things we will be watching out for. japanese stocks down today. the yen pulling away from 1152 yesterday that was the 34-year

low. we're seeing bonds holding fairly steady. paul. paul: thanks very much. let's dig in a little deep entire that yen story. the flashing signals for intervention with our m live managing editor mark in singapore. mark, we have been hearing quite a bit of jawboning today from the ministry of finance. also japan's top diplomat. mark: we did reach the 34-year high in dollar-yen. i think everyone is wondering what will be the trigger for intervention. it is not just level but pace of move. there's concern with the massive option barriers out there. 152. that if that level is taken out, we might see a very rapid move up to 153, 154 level. and that rapid move might be the catalyst for intervention. you could probably see that being a potential risk going into the kind of lolich widty,

kind of long weekend in much of the world. taken late on the thursday session when u.s. markets will be closing. there's a chance we might get that risk. that's why markets are on edge about intervention. overall though i'm not convinced by the whole intervention story apart from this kind of rapid move that we might get on the break. the fundamentals for a weaker yen remain very, very strong. i think if we do get intervention people will enthusiastically buy the dip in dollar-yen. paul: it's an interesting point you make, and we raised this with our last geas as. we it's one thing to tag a weak yen but on the other side of that there's a mighty u.s. dollar. is there anything that intervention could effectively do? mark: not much beyond the short term. i think until you get a world of lower u.s. yields, dollar-yield back the balance of my time is not going to turn around. the b.o.j. rates are not entirely irrelevant.

but they're pretty much irrelevant in terms that there's just such a marginal impact. in a world where i think it's going to be a struggle for the fed to cut rates as aggressively as powell is still trying to commit to, i think, you know, i know powell is still saying there's going to be three rate cuts this year from the fed. that's maximum. i think it's unlikely we'll get that many cuts ultimately in the end. i think the only risk is top to the topside unless we get a material change in the u.s. economy which means it'll still be upward pressure and dollar-yen. in the just dollar-yen. think in the cross space, the yen still just stands out as exceptionally appealing as a funding currency given its d.p. negative real yields. paul: we also had the bank of japan summary of opinions where we saw the end of negative rates. one of the members of the bank of japan board said whatever you do, don't misinterpret the end of negative rates with tightening. so some of the bank of japan rhetoric adding to this weak yen

case? mark: it's valid to highlight that. they've kept up their persistent easing policy. they continue to kind of, it is still extraordinarily easy policy. they've been clear to make that. i think, though that the bank of japan will be encouraged by the fact that they did remove negative rate, it didn't cause a shock in markets. we're not even seeing the yen appreciate since that meeting. therefore i think that ultimately, the fact that we probably will continue to see depreciation on the yen over the coming months means we won't get more of b.o.j. tightening this year and the markets are currently pricing. simon flint, a colleague on our team has done a really, really exceptional analysis this week, kind of doing, revised tailor rule analysis saying if you assume gradual policy and take claims we might get as much as 70 basis point, 6, 070 basis points of hikes this year from

bank of japan which is double what the market is pricing. i think that's an interesting flamework to look at it. i think we might start thinking that way and bank of japan may start thinking that way if it continues to be under depreciation pressure which i expect it will be. >> we're seeing weakness for japanese equities a at the moment. is that a faction of what we're seeing with the yen? there are quite a few stocks trading ex-dif tend today. mark: i think that's the ex-dividend story tresm two big drivers for japanese stocks, very clearly are what's happening in u.s. stock marks and what's happening in the yen. and i think that the macroback op for global stocks, for u.s. stocks, is exepionally strong. we've got a ed which is sending a doveish message despite the fact that growth is still strong. they're say thairg desperate to cut even though trs no economic justification for cutting right

now. that's an extremely strong tail wind for stocks. risk sentiment will stay positive. that will drive u.s. stocks higher even though valuations seem stretched at the moment. that and the combination of higher yields means that ultimately japanese stocks keep on doing well. a little profit taking ex-dividend. i wouldn't read too much into the short-term price action. paul: thanks for joining us. still to come, our interview with standard charter banks india financial markets head. we'll discuss their outlook for indian government bonds and the rupee up next. this is bloomberg. ♪

paul: welcome back tooerg markets asia. u're watching the india focus. ftse russell holding off on adding india to its emerging market bon index while noting progress in the accessibility of the markets, ftse says it's still not satisfied about certain other criteria. let's bring in our asia fx reporter in mumbai. what are ftse's lingering

concerns here? >> hi, paul, good morning. i think there are concerns around market access. so they flagged things like foreign investor registration. tax clearance process. i have to point out india was being considered for a much smaller index. the index inclusion, a j.p. more begun inclusion is still supposed to happen starting in june this year. bonds are very valued because se mix, they're focusing one the plan that ou last night. paul: so the end -- indian government also announced their first half borrowing plan. tell us more about that. >> sure. i mean, it came lower than expectation, lower plans are always good news for the bond market like we saw the rally in

bonds tuesday morning when markets opened. it is especially important in a year where we'll have increased demand from foreigners given the index inclusion like i pointed out earlier. there is also a 15-ier bond wh new bond which is introduced last night. so it's all pointing to e here more space is being madeket for new demand fromers, from pension funds, from even foreign investors who are coming in for the bond inclusion. paul: that's our reporter there in mumbai. for more on the outlook with india, we are joined by the head of financial markets in india and head of macrotrading for south asia at standard charter bank. thanks for joining us. i want to pick up on that point about government borrowing. 7.5 trillion rupees, about one

trillion less than the market was expecting. what's your take on that? >> hi, paul, thanks for having me. the borrowing was less than the previous year's first half borrowing by 15%. market was expecting lower by around 5% to 7%. that's a definite surprise. even looking at the composition of the plan, the weight of the longer end bonds was at the lower end bonds largely in line with how it was the previous year. increasing the weight in the initial amount of borrowing which will happen in 15-year and longer bonds, that's in line with increased demand we see from insurance and pension investors in india where they demand is growing at a good clip of 10% to 12%.

paul: there's plenty of dhand, i think there's 10 billion in government bonds since j.p. morgan announced the inclusion of ippeda in its emerging market index. is that a trend you expect to see continuing? >> absolutely. ever since the inclusion in j.p. morgan's bond index was announced last year in september, we've seen a steady inflow of $1.5 million to $2 million into the market. on top of this there's been almost a $4 billion of investment in the rupee denew mexico nateed dollar settled supra national agency bond. that's an additional demand haas not hit the indian market but represents increased interest in the india exposure. from here on, if i look at how the demand supply is panning out, how we are at the peak of the interest rate hike in india and also globally, the positive sentiment of investors toward

india remains intact. we think it's close, money will continue. the bulk of these investors are really fast money investors and some of the real money names who have been familiar with the india story, whr familiar with the india markets. we think there's a large chunk of investors who will be new to india, who will be followers of the index. who will come in as the index rates start freezing in june. we're expecting flir $25 billion to $30 billion inflows to come in and the indian markets are excited for that. paul: i want to talk about policy in a moment and also the direction of the rupee. in terms of the enthusiasm, this investment coming into india at the moment. how are standard charter approaching this? what's your strategy? >> india is a good market for us, we have strong domestic

presence across the entire product suite. we are looking forward to helping along the entire inclusion base, familiarize them with the indian markets. the access routes they have. we have been onboarding a lot of new names. we have interest in instruments like total return swap. the instruments that give clients exposure to india. we are looking forward to helping them do the conversion of their investments in india. we are uniquely placed to enable and facilitate our clines and give them access to india markets. we are one of the largest international banks and we are working closely with that client base. paul: just as you were speaking we were seeing a chart of the r.b.i.'s current rates. how is the market, how are uh you positioned for the r.b.i.

policy decision next week? is there anything specific you're looking out for? anything you're listening for? >> the policy next week, we are not expecting any changes on that front. they will continue to remain on hold on the rate which is at 6.5%. what market will -- what we'll look out for is how beyond liquidity evolves. in the last policy they went from being hawkish in the market from a deficit mode to a more neutral mode, we think they just continue on the same. at the point that market participants will look out for is the stance, r.b.i. maintained their stance on liquidity, whether they change it to a neutral stance from growth of liquidity that would be a big mover. currently it's giving 15% to 20% chance of something like that

happening. that is something which would be exciting if it comes through. in terms of rate expectations, market is not pricing in any rate cut over the next 10 to 12 months. what we think is to follow the fed psych. only if fed delivers a rate cut will r.b.i. follow. otherwise given the growth dynamics, we are going to go ahead and deliver the rate cut. paul: i want to get your thoughts on the rupee as. we we saw sharp movements last week. do you take this as a sign that the r.b.i. is prepared to be a bit more amenable to allowing some volatility in the currency? >> absolutely. last week the dollar-rupee moved, it's been trading with a level of less than 2% and we saw 1% move higher than dollar-rupee in three days. so that set a lot of excitement in the market with clients

looking at hedging. a lot of long rupee positions have been built in ahead of the conclusion and we are -- they are behaving very 23450eusly. we saw some options go through. what it does tell us is our tolerance for a bit more volatility in rupee, we think this continues. what we're looking out for is whether this is more toward rupee than letting rupee appreciate. they have continued to amass reserves. their reserve now stands at $650 billion. we think that may continue. so yeah, stable rupee. stable dollar-rupee is the way to go. we don't expect rupee to appreciate materially but yes, definitely more roll tillty in the dollar-rupee. paul: all right. thanks so much for joining us. let's check those indian markets. we're watching particularly closely icici securities and

bank, it was showing a little weakness earlier. but of course the brokerage arm, icici getting .8% of public shareholder votes in favor of delisting those shares, ccording to an exchange filing. we're seeing hairser -- seeing shares intlipg about 3.5%. icici bank is performing reasonably well by about .6%. still to come, the smart phone giant xiaome unveiling its first electric vehicle. details on that next. this is bloomberg. ♪

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paul: welcome back. let's take a look at chinese e.v. stocks now, including xiaomi. the smart phone giant is unveiling its first electric car today. it's going to start selling the su-7 series up against intense price cuts from existing players like tesla and others. the launch is also a key test for xiaomi's stock that's seen an $8 billion rally on the back of its ev to ray.

let's look at how some of these stocks are doing at the moment. xiaomi at the top there better by about 3%. all e.v. players in china performing pretty well at the moment. knot withstanding that very, very competitive market. now bloomberg opinion columnist david fixland says despite the gloom around china's e.v. mark it's showing that the future of the auto industry is very much electrics. david, can you walk us through your argument that electric vehicles are on the brink of victory in china? david: it's simple. 40% of the cost of the electric vehicle is the battery, 40% of the battery cost is the raw materials. nickel, lithium and cobalt. we saw in recent years, surging prices for those raw materials and they've plud -- plummeted over the last 2 months. that's wringing the price down everywhere. these vehicles were on the verge of undercutting purchase prices, internal combustion engine vehicles run on gasoline and

kiesels. these falls in p prices are pushing them distinctly underneath. we've seen a dramatic array of cost cutting over the past 12 months in china. there was some expectation that we'd see a bit of a pause in that. but this is march's peak season for the car market in china and those price cutting is coming back again. we saw results yesterday, and they are actually looking solid. there's room for further price cutting. this market has more competition and crucially the big losers will be the internal combustion engines. they've cut as long as they can, they can't cut any further. there's still room to go for the e.v.'s. paul: are those input costs for batteries likely to remain depressed? and is the chinese consumer confident enough to start buying? david: in terms of raw materials cost, if you talk to miners, they're not seeing surging

prices any time soon. you're seeing for instance nickel miners is the classic one. roughly half of the nickel industry is running at a loss at the moment. talk to people like b.h.p. and bank corps who are -- who have a lot of nickel production that's sort of overprices, they're not really seeing that coming back any time soon. in terms of the market, these are the cars people are buying. b.y.d. was saying this week that they expect e.v.'s to be over 50% of the market this year. actually this month, according to the china passenger car association, we're already at about 45.5% market share. we are very close to half the market. this is before some of these real big cost cuts come through. paul: are these the cars people are buying outside of china? you never see a b.y.d. on the streets in sydney a few years ago but now -- david: here in australia we have

a market with zero tariffs for imported vehicles. that's different than u.s. and europe. in europe some are turning up, about a quarter of their e.v.'s in europe sold this year will be chinese-made. they're rare in the u.s. you have a 27.5% tariff on cars there. and there's a great deal of trade tension between the u.s. and china. and between e.u. and china as well. but it's sharpest on the u.s. front. paul: columnist david fixland covers economy for. let's look at asian chip names. semiconductor doing extremely well up by 17%. tsm a little b weakness there. hanmi has a good story to tell.

we are on thisrig of a -- on the brink of a public holiday here in the asia pacific. let's look at what markets will be closed over the next few days. here in australia, no trade this coming friday. it's the good friday break. new zealand will be shut. hong kong, indonesia, singapore, the philippines also out. the holiday rolls on on monday for india and hong kong. on tuesday no trade in hong kong or taiwan. that's it for bloomberg markets asia. daybreak middle east an africa coming up next. this is bloomberg. ♪ okay y'all we got ten orders coming in... big orders! starting a business is never easy, but starting it eight months pregnant... that's a different story. i couldn't slow down. we were starting a business from the ground up. people were showing up left and right. and so did our business needs the chase ink card made it easy.

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