shery: hello and welcome to "daybreak: asia" from bloomberg world headquarters in new york. paul: our top stories this hour -- asian stocks sending wall street higher, china coming back online. the u.s. got the votes on

short-term stopgap debt deal. shery: another central bank has hydrates -- height rates. peru raising interest rate after already having raised the rate by 50 basis points in september, also by 25 basis points the previous month. they keep insisting that this does not imply the beginning of a tightening cycle, but, of course, we continue to see inflation shooting up. this is really a global story. we have seen mexico double its inflation target, and we have seen the tightening bias across the region, and now again. peru raising rates to 1.5%.

central banks struggling with rising prices. sophie: inflation worries will also be looming. repo rates -- investors are watching a sea of repo rates will be raised -- watching to see if repo rates will be raised. the u.s. indicated there are no plans to cash in reserve, and check out treasury futures and seeing them continue to take lower. inflation sent the u.s. 10-year yield about 1.57%. in sydney, we have energy and utility stocks seeing big gains while minors have been under pressure -- miners have been under pressure.

when it comes to japan, you have nikkei futures up as the benchmark snapped and eight-day drop. the boj anticipated to downgrade its growth outlook later this month. ahead of the china reopen, we also have holdings above 645. it has been trading study over the holiday. we have seen fluctuations for etf's exposed to china. the return of appetite for chinese tech names. shery: we will be watching the markets, but in the meantime, we are also focused on vc's, the short-term debt yield, but it sets up a fresh partisan battle

towards the end of the year. -- we are also focused on d.c., the short-term debt battle. >> definitively resolving the majority's excuse that they lack the time to address the debt limit through the reconciliation process. now there will be no question they will have plenty of time. shery: that's crossed to our washington correspondent. this is not necessarily a resolution to the issue. it is just delaying the crisis until december. tell us what happens then. >> that's exactly right. by the way, this has not been passed yet. we are still waiting to hear if this bill will clear and important procedural hurdle in the senate that will take place a little less than half an hour from now. the last bloomberg news heard, republicans, and by that, i mean that voice you just heard, mitch

mcconnell, the senate minority leader, are still whipping votes . they need 10 republicans to get on board with this measure. mitch mcconnell just 24 hours ago was distressing republicans would not go near the debt limit and whatnot help democrats on the issue, so the -- would not help democrats on the issue, so the rank-and-file has found this problematic. let's say they pass it tonight. that will raise the debt ceiling by 480 billion dollars. that will help pay the bills at the treasury until december 3, which is a peculiar date, because that is the same day that government funding runs out. while mitch mcconnell is in a way lending a hand to democrats, this is going to come to a big collision at the beginning of december. shery: mcconnell was talking about democrats not wanting to go through the reconciliation

process. what is the issue here? >> that's looking pretty far ahead. we've got a lot of things to tackle before then. the reason why democrats did not want to do this through reconciliation is it would take too long. this is a long process. it involves an lot of it is a chance for republicans to potentially scuttle the bill, and democrats want republicans to play a role in this and actually help pay for the billions and trillions of spending that came about during the trump administration. democrats are still determined to pass an infrastructure bill and a reconciliation bill pursuing infrastructure as we have all been reporting that can come by the end of this month. that is what republicans have been saying no to. that is what democrats would

have to handle alone. if they can deliver on that front will go a long way to determining what happens in the midterm election. paul: chinese officials doubling down on efforts to rein in the fintech sector, jeopardizing tech stocks. we speak to your -- we speak to our chief asia correspondent stephen engle. stephen: normally, you would think these kind of comments would put a dampener on the rally we are seeing, but tech stocks of chinese companies like alibaba, like tencent, jd.com,

all serving the nasdaq golden dragon index, so at least it has not quelled that rally yet. of course we are going to get the opening of china after a weeklong holiday. today we are going to get hong kong coming off a big 5% rally, so we will have to see if people take some money off the rally yesterday, but again, there's nothing necessarily new in these statements. let's hear what the pboc governor had to say to the conference. this was a conference, by the way, on regulating fintech. >> the winner takes all nature of platform companies could lead to market monopoly and

compromise innovation efficiency. some platform companies seize market share through cross subsidies and adopted empty competition policies. stephen: essentially, his message to the conference was the regulatory push is not over. it will be strengthened. also just on that statement coming from the u.k. and busy, they essentially said this crackdown on education, on tech is conducive to the healthier growth of the chinese economy and society. back to you. shery: now get to su keenan with first word headlines. su: we start with the latest from the u.s. central intelligence agency. it is creating and dedicating a china mission center aimed at tackling what bill burns calls important geopolitical to the

21st century, a "adversarial chinese government." mission centers are stand-alone facilities that utilize resources from across the agency. the cia says work will continue on other threats, including russia and iran. the imf head is accused of pressuring world bank staff. former treasury secretary steven mnuchin is warning about the risk of breaching the debt ceiling and concerns it could further fuel inflation.

>> the good news is the economy is rebounding very strong. labor prices are up, so i do worry this will be ongoing inflation, and we could easily end up with 3.5 percent 10-year treasuries, which again just increases the cost of the national debt and creates budget issues. su: to japan now, a magnitude 6.1 quake struck near turkey. it was the most powerful to be felt japan's capital since march 2011. train services were disrupted and power was briefly knocked out into parts of the city. some injuries were reported and while earthquakes are frequent in japan, those of this magnitude are rare.

paul: still to come, a japanese drugmaker says the covid pill is developing to be a $2 billion drug. up next, discussing the virus situation in south east asia and where to put cash. this is bloomberg. ♪

paul: chinese markets are set to open in 24 hours after the golden week holiday. for more analysis, let's bring in the director of investments group at granderson partners. we have seen the defaults of fantasia, we've seen soaring

energy prices. how do you anticipate stocks will react when we have the reopen? >> i think there might be a short-term relief rally, but the asian market, i think the key we are watching would be when pboc will increase liquidity measures to arrest the fallen growth rate. it is a prolonged gdp growth slowdown over the next one or two quarters. paul: we are seeing a few conflicting forces for tech as well. we are seeing some of the big names selling off in hong kong. what are your expectations around the tech sector. >> i think there's very little near-term substantive near -- substantive new policies to come out. i think a lot of it is fine

tuning in rhetoric. i don't expect anything substantive to happen. they look undervalued at this point. shery: you mentioned that perhaps although this could not be a systemic risk, we might see surprise to the broader chinese economy. how would that impact the market? >> i think it may be too early to tell what the earnings impact will be on construction industries, industrials, building materials, and more importantly, the banks, which are a big part of the index. i think we have seen earnings impacting those companies, and we could be in for a one or two-year prolong slowdown in the property market. i think a lot of people are focused on near-term defaults from ever grand, -- evergrande, but i think more people should be focused on the broader property market slowdown. shery: what about other tech

around the region like taiwan or south korea? these companies have really stretched valuations already. >> actually, in the case of taiwan, i think you can still find companies that are reasonably priced. some of the value we are seeing is in companies providing data center cloud solutions, vacation equipment. some of these are maybe 12 to 15 times earnings-type valuations, so not too expensive. i think these have been sold off because there was some activity from china in the last few year -- the last few days, and also recent years. south korea, a lot of concern over year and pricing, which we think in the next few months will prove the industry is more consolidated. we are not as bearish on the

sector. shery: we do have some preliminary earnings coming up, so we will be watching those closely. his south east asia a region we need to reconsider given how badly they have already been hit? >> i think so. i think there are some really exciting things happening in southeast asia. you saw a few ipo's of tech companies in indonesia, and some of the banks restructuring to become a fintech holding company. we think the digital efforts that have been underappreciated, we think the banks could be set up for a nice one or two-year time period for investment. shery: always great having you

on. thank you. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. you can customize your settings so you only get the news on the industries and assets that you care about. this is bloomberg. ♪

shery: counting down to the start of trading in tokyo and seoul. we are waiting for samsung to post third quarter preliminary earnings. strong numbers could help lift it sale price, which has been off 20% from its january peak. some analysts are predicting

weaker guidance from lg electronics. plus, we are awaiting any reaction from north korea. russia says it has spoken with the u.s. about the situation of the korean peninsula. also, local media reporting that oil giants are buying were noble energy, plus seven and i is boosting forecast -- boosting its forecast as it beat analyst estimates. paul: an earthquake rattled japan on thursday, the strongest jolt since the 2011 disaster. sophie, do we know anything about the damage or other impacts from this earthquake? >> a sharp shake last night,

certainly scary for us here in tokyo, but damage has been fairly minimal. no big power outages and no abnormalities reported at the nuclear power plants. very closely watched, of course, but you things like water mains breaking have shut down transport hubs like train stations overnight. in terms of injuries, a dozen or so light injuries including a partially derailed passenger train in the north of tokyo, but for most of us, it was a reminder to make sure we've got our emergency kits ready. very important here in the capital. shery: i checked up on my friends in japan, and they said they had not dealt this magnitude of shaking since the march 11, 2011 earthquake in -- and tsunami. i was there for that. it was really scary. this is not really common in tokyo. >> no.

in parts of tokyo, it did register upwards of five on the intensity scale. experts here in the japanese government have said this is 70% chance that some time in the next 30 years, we will get a big quake right under the capital. we could be looking at tens of thousands of deaths. of course, it is just a projection. shery: very scary situation, something the government must prepare for. our tokyo correspondent with the latest on that earthquake. japanese lawmakers save developing the covid-19 pill could be a 2 billion-dollar drug essentially used in combination with a similar offering from merck. it expects to have late stage trial data by december and will move quickly on filing for regulatory approval in japan.

the ceo says he expects the company to produce one million doses by early next year. >> i think at least the $1 billion, two billion dollars sales will be anticipated. shery: tesla ceo elon musk said the company will move its headquarters to austin, texas. he made the announcement during a tesla shareholder meeting from the austen plant site. he says tesla is not abandoning california and noted that it will expand production in the state by 50%. sources tell us apple is looking to expand its reach within cars

with technology to access functions like climate control, speedometer, radio, and seats. the new initiative would take iphone control in the car a step further. michael shapiro is apple's new corporate treasurer following the retirement of gary whistler. sources tell us the move is a part of a wave of promotions among apple executives. paul: australia has now been trading for about 30 markets. the sx currently higher by about .1%, but all sectors cannot be higher. materials leading the way at about 1.5 percent. nikkei futures currently also

flat. the nikkei begins trading at the top of the next hour. we did, of course course, see another positive session for u.s. equities after an apparent resolution or a short-term one, for the u.s. debt ceiling. still to come, as we mentioned, investors i am results from samsung. we will take a look at what's expected next. this is bloomberg. ♪

shery: breaking news out of japan. we are getting the labor cash earnings growing for the month of august, coming in higher than expectations, but still easing from the previous month. real cash earnings only rose .2% when adjusted for inflation. we have seen a little bit of easing when it comes to those earnings numbers. year on year is also a gain of .7%.

slightly lower, more than expected. also, we are getting household numbers, a much bigger contraction than was expected. spending numbers rebounded in the previous month but contracted in the month before that. now we are seeing a bigger contraction. we have seen the extended and expanded state of emergency across japan. those household spending numbers, a contraction of 3%. let's turn to su keenan with first word headlines. su: the u.k. has eased entry rules for 47 countries and territories that were previously subject to the tightest of covert rules. visitors from south africa, from mexico, brazil, and other destinations will be able to avoid quarantine.

only seven nations, all of them in latin america, are to remain on the so-called red list. the u.k. will also recognize vaccine certificates for more countries. meanwhile, former president donald trump wants stock trades to define subpoenas relating to the capital insurrection back in january -- former president donald trump wants top aides to define subpoenas -- defy subpoenas. it would set up a potential legal battle with the house committee. a top trump lawyer says the requested information is protected by executive privilege. washington wants information on supply chains, but the g s&p says it will not part with sensitive client data. south korea has also released a statement expressing concern

over the scope of the u.s. request. -- ap voc governor says china will continue to take steps to -- a pboc governor says china will continue to take steps to rein in fintech and outlined steps to clean up the sector, which mirrored action taken recently against alibaba's and group -- ant group. >> the nature of the companies could lead to market monopoly and compromise innovation efficiency. some platform companies sees market shares -- seize market shares through crowd subsidies and adopted anticompetition policies. su: global news 24 hours a day on air and on bloomberg quicktake powered by more than

2700 analysts in more than 120 countries. shery: on watch to -- we are on watch for samsung to post third-quarter results. our asian stocks reported joins us now. we have seen concerns over rising inflation. perhaps a peak in dearborn prices. what are we seeing today? >> the company is expected to report market has been beating results for the third quarter. analysts -- largely thanks to its flagship semiconductor business. analysts say these were the sons

of initial sales of its galaxy fold and galaxy flip smartphones. strong sales and strong demand despite its very high price. a lot of consumers have been snapping up this foldable smartphone. the company will probably see its profit peaking a little in the third quarter, but it is going to just report its operating profit and sales today before releasing divisional breakdowns and fourth-quarter outlook later this month, when the company will also hold a conference call on earnings. paul: we have seen samsung's share price just grinding lower

throughout the year. what's the outlook? >> despite the share falling more than 20% from its peak in january, analysts expect the company to have a strong rebound going forward. more than 90% of analysts have a buy rating on samsung. also, there target price represents about 40% return for the company going forward, so after these third-quarter results, we have seen a lot of disconnection between samsung's earnings and its share price, but this time, a lot of analysts say the stock price may have reached a bottom and we might be able to see some kind of rebound, but the key question is if investors will come back to the south korean equities market because they have the keys to

make most of the share prices in south korea, and with the global selloff of the tech stock, we may have to wait for a while to see samsung shares make a rebound. shery: any signs at this point how samsung will do during the critical holiday season? >> yes, that will be very important to samsung's fourth-quarter results. we have seen some of the concerns coming from the supply chain for other smartphone makers as well. that's why a lot of analysts think third-quarter results may peak before declining for the fourth quarter. we will have to see because the latest supply crunch has been

pretty much unprecedented and will probably be the first time for samsung as well. paul: watching samsung for us. still to come, hong kong exchange seeking to end the city's single-gender boards with a three-year transition period. that in a moment. ♪

shery: we are taking a look at live pictures of the senate right now. we could be getting any moment now a short-term debt ceiling increase. what you are watching right now is the cloture vote. that means we could get nine other republicans to vote before this debt ceiling increase motion, and if you get to those 60 votes, including 50 democrats, plus the tiebreaker with vice president harris, you will get an actual bill put to the floor. if you get that passed with 51 votes, that means you are going to get the senate to agree on raising the debt ceiling by $480 billion. that really is just the beginning. we really need to see the house passing this declaration as

well. we are getting samsung third-quarter news. it is coming -- revenue coming in slightly above estimates. sales also coming in, slightly below estimates. operating profit, again, slightly above consensus. of course, these are only the preliminary third-quarter results. we are not getting divisional breakdowns. we are not getting the fourth-quarter outlook. we will get all of that later in the month, but of course, very interesting to see these numbers, given that the stock has tumbled more than 20% from its january peak, although, still, no analysts are saying sell the stock as of yet. right now, operating profit beating expectations. paul: we have the cosby opening

at the top of the hour, the market getting a chance to react to this news from samsung. what are you watching? sophie: the u.s. debt limit in focus. we have seen anxiety shift to the long end of the curve. it matures right when the agreed debt limit increase is expected to run out. inflation concerns have filled the global bond selloff, which is continuing in australia. flipping the board to check in on the price reaction, the aussie share market friday morning, extending thursday's game. futures pushing higher in

singapore. commodity markets in china reopening. we are seeing gains for new york crude higher after the backtrack on plans to tap reserves, but rbc capital facing another run-up in prices. ahead of the tokyo open, we are seeing nikkei futures point higher here ahead of the prime minister's policy speech, which may offer more details on his plan to drive recovery. shery: we will be watching those markets, but right now, all of our focus is on d.c. the senate voting on that short-term debt ceiling bill. you guys have a very long night ahead. it seems the cloture vote, the procedural motion, has passed. tell us exactly what is happening right now and what is

next. >> right now, the senate is voting on what i call the vote for the vote. they've got to get 60 votes in the next few minutes. then there will be a second vote which will take the bill and send it to the president's desk. they are voting tonight on raising the debt ceiling, so we are expecting that to pass in the next few minutes or so. paul: this gets the u.s. off the hook for the debt ceiling a couple of months, doesn't it? >> senators are kicking the can down the road by a few weeks. they will be in the same situation in early december. they will have to go through this again in december. it will give democrats time to

figure out what they want to do. it also will coincide with another deadline congress is facing on government funding, which is a completely separate issue. it is going to be a very jampacked early december, and they are really kicking the can down the road as for the act. paul: our white house reporter, another late night in d.c. for those folks. bloomberg subscribers can continue watching this. the hong kong exchange plans to end single-gender boards in order to boost female talent. that might set off a talent war. how well is hong kong positioned to its peers when it comes to women on boards? >> currently, what we are seeing

is hong kong is lending on its head. when we look at this question, we can look at it in two ways. if a company has a board that has female directors and what is the percentage of female directors currently. when we look at hong kong in the hang seng index, what we are seeing is the number of companies that have boards actually regret it, and the percentage of female directors has been stable over the past five years. this is what -- this is very different than what we have seen over the past five years. this is different from what we have seen in the global market. globally, we have seen a rise,

so we are seeing huge room for improvement for hong kong boards right now. shery: let's hone in on one sector of the hong kong economy. developers. they seem to be mostly male dominated. what is the impact of that? >> right. within the hong kong developers, we have seen 33% is the highest percentage of female on board. the upside of having more female directors in the board room would be a diverse boardroom will allow board members to better understand their number of customers, given the fact that hong kong is serving a wide base of customers.

the third thing would be companies with female directors tend to trend towards carbon reduction, which is very urgent -- very important. paul: is it difficult to find female directors, considering how underrepresented they have been for so long? >> there's a lot of board that does not have any females and a limited number of female directors. if legislation did pass through, that means there is an end to single gender, there will be a talent war for these very

experienced female directors, but at the same time, we have to acknowledge that there is a lot of female talent in the city that just does not have the opportunity to get into a board room right now. shery: do watch us live and see our past interviews on our interactive tv functions. you can also dive into any of the securities and functions we talk about, plus be part of the conversation by sending us instant messages during the show. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

paul: getting some breaking news out of japan at the moment. coming in at 1.665 billion again , better than anticipated. slight decline on the month prior, though. we are seeing the yen reasonably stable. the current account coming in better than anticipated. futures pointing to a brighter open right now. a japanese drugmaker says the covid pill it is developing could be worth $2 billion.

it expects to have late stage trials by december and plans to move quickly filing for rigorous approval. >> we have just initiated to phase 3 in japan. we are aiming to collect as many as 2000 patients, and if the enrollment or data collection is moving smoothly, i would anticipate to collect data by the end of november, and after that, we need to make analysis of the virus -- blood levels, side effects, and so on. that requires, we anticipate, approximately two weeks, so by mid december, we hope we are able to demonstrate how good or

bad our compound can be. >> do you have an estimate on how much in annual sales your pill could make? >> that is a very difficult question. again, virus infection is extremely hard to predict what will happen. for example, we have a very good flu compound. for the longer term really depends on which virus -- flu, sars-cov-2 or other corona or even other viruses can play a role for these respiratory

infections. if, for example, we are talking about the next two to three years, i think we want to provide potential compounds to as many people as possible, and merck is saying they aim to produce 10 million people worth by the end of this year, and probably we could do more expansion to provide products to global, and i think we are aiming to do the same thing. again, the price, which country we are going to sell, really is hard to tell, but if the merck price, which is approximately $700 per treatment, can be used for the u.s. and europe and japan, i think at least $1

billion, two billion dollars sales will be anticipated for several years. >> you have said that you need a partner company to help you with selling the drug overseas and expanding to other countries. are you speaking to companies right now, and what are you looking for in a partner? >> we are talking minimum six, seven companies parallel. of course, as our development is progressing, we want to make the decision by the november or december time frame when our data will be available. >> some analysts that cover your company have mentioned gsk oh in ovi -- or sonofi as potential partners. what you think about that?

>> i'm not interested in mentioning even one company by name. shery: here is a quick check of the latest business flash headlines. europe's biggest steelmaker is slapping a surcharge on some products due to fuel -- due to soaring power prices. laser tech is expanding its customer base to include computer memory chipmakers that produce some of the world's most powerful and efficient microprocessors. strong demand for chips has sustained through the year. the company now forecasts a sixth straight year of record

revenue and profit. we have the market opens in seoul and tokyo next. we are also watching votes on raising the debt limit ceiling. this is bloomberg. ♪

paul: hello and welcome to daybreak: asia. i'm paul allen in sydney. sophie: i'm sophie kamaruddin in hong kong. shery: i'm shery ahn in new york. we're looking at the major markets opening across asia. asian stocks look set to rise with investors watching china's market reopen after the golden week holiday add to key u.s. jobs data. samsung sees strong demand for

chips and full of phones with profit up 25% last quarter. we will be speaking with a top adviser to hong kong's chief executive. paul: we have got markets opening in seoul and tokyo. sophie is taking a look. sophie: seeing a bounce for japanese stocks. the nikkei and the topix rising. seeing some gains after the declines we saw. jeffries are moderately bullish. ahead of the publishing speech, we have some -- at of the policy speech, cutting spending in august. the boj cutting its growth outlook for five of nine regions in japan. that is ahead of the meeting later this week which is expected to show for the downside for the growth outlook.

the yen holding around the 111 zone while jgb's are under pressure. the global bond selloff continuing. checking out the open in south korea. writing 6/10 of 1%. keeping an eye on samsung. pulmonary numbers for the third quarter showing a strong climb and profit given the recovery we have seen for chip demand and the mobile unit. the korean yuan at a 90 level. australia, bhp rising with iron ore. commonwealth has downgraded the forecast. we have the a is six 600 gaining half a percent. the aussie 10 year yield testing the 160 level. the u.s. 10 year yield, moving above 158 early in the friday session. nearing the year end forecast for economists as inflation

concerns are mounting. we have oil heading for a seventh weekly gain. we have the offshore u.n. trading steady ahead of the reopening of china's onshore markets. we'll be watching if the pboc will keep the quiddity engines running. shery: we continue to see the pressure coming from the vaguely tory scrutiny in china. the latest we have heard has been from the embassy in the u.k. saying they plan to tighten supervision over tech companies. let's bring in the head of asian equities at bnp paribas asset management. thank you for your time. it is going to be an exciting reopen. markets trading for the first time in seven days. so much has happened including the default of fantasia. what will you be watching today? >> good to be on again.

i think the first thing to watch is how the chinese markets are going to react to the regulatory noise we saw yesterday. a very good rebound we saw in light of the hard-hit e-commerce sector after poor trading when china is closed. we look at the hsc i, probably flat. looks like it does depend -- it probably will trade with what we saw in the u.s.. shery: when it comes to the ongoing evergrande crisis, it seems to be that most people think this is not a systemic risk for the financial markets and china. i continue to hear that more people are worried about overall growth in china. when it comes to the market side of things, should we be more careful with the highly leveraged names? >> we are seeing a

differentiation. we are not involved. we are kind of bystanders at this point. what happened on monday where you have one of the developers choosing to default, that added to the stress in the high-yield side of the developer bonds. all investments looking at, which one we would choose. it made a good point in the sense that the market is very large and far-reaching in the chinese economy. we're also taking the view that right now it is probably controllable. the knock on impact to the growth of the real estate market and the construction sector is something we are watching carefully. it has a many full impacted consumer behavior and cost in china. paul: if the fallout from the

real estate crisis is controllable, i want to put the question of the day to you. what is the next catalyst for chinese stocks? >> i think the next catalyst is truly looking at trying to gauge where the regulatory systems and measures are peaking. should see a more stable operating environment going forward. as you mentioned, overnight we have seen some news flow that the pboc is looking to make sure there is no further into heaven apple estate behavior from some of these players. that is something the market will try to digest today. looking at how the market reacted overnight, it looks to be ok right now. paul: the other big macro event we are waiting on is the u.s. jobs report. you expect that to move the needle much in terms of equities?

>> i think the jobs report is eagerly awaited because we have a fairly -- in the august report in line -- the august report. it would firm up expectations we would see from the factory orders we saw earlier this week. that has accumulated by it all investors around the world. the job report will indicate that taper will proceed as expected. shery: and other issue we are watching closely is what is happening with the debt ceiling in the u.s. the u.s. senate has enough votes to advance the debt limit deal. they have been voting on this procedural motion, the vote before the vote. they now have the 60 yes votes they need to advance the debt ceiling legislation to the full floor. when that happens, they were only need the 50 votes plus the tiebreaker from the vice president. that could mean they would be

able to raise the debt ceiling's by $480 billion. this of course only needs -- really means they will be able to temporarily raise it. we will again see this debate come december 3. as an investor focused on asian assets, what is the risk as we head toward the year end? >> it is an interesting issue we are seeing in the u.s. right now yearly almost, the debate on the u.s. debt ceiling. earlier in the week, there were lots of concerns. it has been percolating for a while now and you can see the markets trending down as there is concerned that the u.s. federal government might default on its debt. that is something investors are taking a closer look at.

looking at contracts to make sure they can get through the debt ceiling break. but i think t2 -- but i think for the rest of the year, the tapir and the deal on interest rates as we go into next year. paul: head of asian equities at bnp paribas asset management. thank you for joining us. we are hearing that senate majority leader chuck schumer says the senate will vote to pass the short-term debt deal. that vote requiring a simple majority of more than 50 votes. samsung operating profit net estimates any the third quarter given by strong demand for chips and photo paul house heads -- foldable handsets. telcos through these preliminary numbers. -- talk us through these preliminary numbers. >> samsung reported results in line with expectations.

the third quarterly sales are at record high, reporting more than 70 trillion yuan. operating profit showed more than 25% growth from a year ago. the company did not give any other details other than those two figures. analysts say that most of the sales and profit were coming from its flagship semi conductor division. memory chips and custom-made -- likely strong recoveries thanks to strong demand during the chip shortage. also growing demand for data center and smartphones as well. if smartphones -- also reported strong results because the initial demand for the telik cb series vulnerable

smartphone that costs nearly $2000 showing very strong sales before it goes into the holiday season. shery: let's talk about the stock right now. it is moving up 7/10 this after falling 20% from the january peak. this chart on the bloomberg showing it following to the lowest in 18 months. skewing the inquirer korean market -- the entire korean market. what are analysts saying about where we go from here? >> south korea -- the company share is rising 1% today. it has since given up half of the gains since the market opened. analysts -- despite the sharp fall from its peak. we -- they also have a 12 month

price target that represents 40% of returns from the current price. the reason behind the rating is they see that samsung will continue to see strong demand for its chips recovery and foundry business will also continue. the expensive smartphones are also seeing strong sales. the key for the samsung share is whether the foreign investors will make a comeback to south korea and given that the weakness in the local currency, we may have to wait and see until that happens. and if the long term, that is the way the analysts see the stock has reached the bottom should shery: they be the only way is up. great to have you on our ages stocks reporter with the latest on samsung.

let's get to su keenan the first word headlines. su: we start with former u.s. treasury secretary steve mnuchin. he is warning about the risk of breaching the u.s. debt ceiling overspending by the biden administration and concerns it could further fuel inflation. he told david westin the u.s. needs discussion around an appropriate level of national debt and spending. >> the economy is rebounding very strong. labor, prices are up. i do worry this will be ongoing inflation and we could end up with 3.5% 10 year treasuries, which increases the cost of the national debt and creates budget issues. su not to the pboc governor. he says china will continue: steps to curve monopolistic behavior among tech companies and to strengthen consumer data protection. the central bank will tighten

regulation of the payment sector and ask all financial services companies to be licensed. he also laid out steps to clean up the fintech sector. >> the winner takes all nature of platform companies could lead to a market monopoly and compromise innovation efficiency. some platform companies see market share through cross subsidies. adopted anti-competition policies. su: the imf managing director is preparing to fight claims of temporary with the world bank report. she has hired a white-collar defense attorney to represent her. she is accused of pressuring world bank staff to adjust data for ranking in china's favor. her attorney says there are

substantive errors in the allocation. on the topic of covid related trouble, u.k. has eased entry rules from 47 countries and territories previously subject to the tightest controls. visitors from south africa, mexico and brazil will be able to avoid a ten-day hotel quarantine. only seven nations, all in latin america, are to remain on the so-called red list beginning monday. the u.s. -- the u.k. will recognize vaccine certificates for more than -- from more countries. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. paul: still to come, the big enemy. a top adviser to the hong kong chief executive carrie lam. we will discuss the city's plans for a new development on the border, travel restrictions and more. this is bloomberg. ♪

paul: hong kong chief executive carrie lam is planning a massive urban development on the border with mainland china. it appears it is designed to ease the world's most expensive housing market and improve her own loyalty to beijing. let's cross to hong kong were stephen engle is standing by with their next guest who is a top adviser on her executive council. >> fresh off the policy address two days ago, we are honored to have one of her top advisers on her executive council. that is they convene or of xcode. thanks for joining us on a rainy day in hong kong. let's start with the housing proposal. it is quite ambitious and probably the most bold except -- bold step chief executive has

taken since the handover. property and the discrepancy in prices and the social angst that has caused has been a bugaboo for leaders for 24 years. she is tackling it in a big way. how is that big city on the border with china going to solve the housing crisis and heal the risk in society caused by property of prices you -- property prices? >> housing shortages have to do with the 2003 sars epidemic. everything was slowed down back then. we are doing catch-up. even without the new proposal the chief executive announced two days ago, we are in the pipeline, something about 300,000 public housing units coming online. it will happen only in the next 10 years time because we are doing catch-up good we have already identified the sites.

we have to go through all the lead legislation's. 300,000 coming on in the next year. something around 300 for private hosting. the metropolis that was announced two days ago, that will add an additional 200,000. that will probably be in the next 15 or 20 years. >> how is that going to be paid for? >> i'm sure we can raise financing in no time because the whole idea of the metropolis is not just about housing. it is also developing the innovation and technology hub along the border to our next-door neighbor. it will be very exciting. not just housing. it will be a lot of development happening over there. >> the entire population of that area is going to grow by about 2.5 million according to the chief executive. what is the thinking? this is going to be opened in phases as we get closer to 24/7

when handover actually expires. and maybe the border disappears. will more mainlanders come in or is the city going to grow? >> i'm not so sure if your viewers understand. we still have a border with shenzhen. even though we are one country, we still have the border. the question is why are we not taking advantage of that area especially with our next-door shenzhen? developing fast especially in the technology area. the idea is how to maximize the usage and the synergy? there is an innovation and technology hub being built along the border. we now have six border crossing points. they would be developed into seven. there are lots of exciting things happening in that area. >> how could hong kong mitigate against the property risks we are seeing in that area?

many troubled developers are based right across the border in shenzhen whether it is evergrande, fantasia, how does hong kong mitigate the risk? that bore for -- that border served as a buffer >>. we have a real shortage. that is why we are ramping up. we have a long waiting queue. something like five to six years people try to get on public housing. the priority is to address the public needs. private sector is dependent on the market. i think there is a genuine shortage in hong kong. there is no danger of having a bubble. >> the border is a leading a lot of criticism because of carrie lam's policies. you said hong kong hands are tied on this issue because she wants to make a one priority opening the border before international travel, before the

international community is concerned. our hong kong's hands really tied and do you have a clear roadmap from beijing authorities on what hong kong needs to do to open the border? >> beijing, they do not impose anything on hong kong. >> anything? >> that anything. this is a decision on the hong kong side. where the national financial center. we have two audiences. we have the ex-pats. local who do business overseas . for that group of constituents, they want border to open so they can travel. the border is open but there is a heavy quarantine requirement from 17 fit -- from 7, 14 to 21 days. >> the most strict in the world. >> for constituents, they would went hong kong to relax the quarantine. that is still the minority of hong kong.

the great majority of hong kong people, they enjoy the covid free environment today. we have no cases for a long time. public health is a concern. they are worried if we relax the measures, there will be local outbreaks. and also there is another group who wants access to mainland china. that is where china did not impose on us but to end with china, he have to meet their requirements. >> what are their hong kong's -- their requirements for hong kong? >> going to make sure there is no leakage. if we have open borders, potentially there will be virus coming in to hong kong. they open to hong kong, they will be leakage. the virus outbreak spread to china. that is why they are worried. that is why they went hong kong to make sure we have a strict quarantine to make sure there will be no leakage. >> what is the end game?

what are the benchmarks that we have hit to be able to appease beijing's concerns you mentioned? we have had 50 consecutive days of no local cases. is there a timeframe? >> at least there is one benchmark. we have to drive up our vaccination rate. the vaccination rate is not bad but not to the level to be so-called safe. we need to drive that up especially among the elders. while we are having 60, 70% vaccination rate, for elders, vaccination array is though very low. that is one target we need to reach. >> i'm going to ask you again because we are kind of trapped in hong kong. all of hong kong. not just the foreign business community. we don't know where and how to get to the end game, which some would say is a full's air and to

put all your chips into that policy. we must open the border first. even carrie lam this week said opening the border with mainland china is more important than the needs of the international community. but we don't know the rules of the game. >> you have to understand why she has to put the border relaxation to the mainline first, a lot of her economic activity is based on that. retail, a lot of businesses based in hong kong because of china. they want access to the mainland market. you cannot forever be shut from this end. parties to open back to the mainland is the top priority. not saying that is not important to the rest of the world. so difficult to juggle. >> is there room in the next few months for we go room as far as the quarantine requirement? the international business community as you know, fred gold

complaining a lot of european businesses are thinking of moving people out because they are trapped here. we have amped chancing talking to the hong kong government about this is like talking to a wall. are you listening to them? >> of course we do. there is an external factor. one reason why we have these heavy quarantines is based on how the situations in that respective country they are coming back from. if europe, u.s. and u.k., if the situation is being contained, we can lower the quarantine requirements. our highest risk category currently is 21 days. if there cases are coming down, we can lower to 14 into seven even. >> but it is up to them. >> we have our own problem. we have to drive up our vaccination rate. we need to figure out how best we can convince beijing we are doing a good job so there is no

leakage. we make sure there is no leakage. we are not going to create an outbreak for them to returning from these countries -- it is also to do with where they're coming back from. currently we have only one country, new zealand, that falls into the low risk category. if things are far better contained now with vaccination pickup rates, i think the situation, we will find a way out. >> the olympics are coming up in china. they're going to keep their borders closed. > i wish we had the answers to the whole world needs an answer, what is the end game for everyone? >> before i move on, what risk level is the government willing to take as far as the collateral damage on business? you are a board member on cathay pacific. you got hammered. >> i know exactly what you're talking about. i just hope one way or another we will find a way out.

the whole world will find a way out. especially if we can agree with some protocol. there are countries who only accept chinese vaccine. can you imagine that? recently the u.k. would not accept a hong kong vaccination record because we don't have a birthdate on the record. when he to come to some agreement with the particle. >> can you give me some insight into the reasoning why beijing postponed the anti-sanctions law? we thought that was almost a foregone conclusion after the mainland in june passed its own law. what was the rationale for postponing? where they've fearful international capital would flee? i am not involved directly with legislation but i am pretty sure the law has been enacted so it is going to happen. we have been in ifc. to understand the potential -- i would say the impact to the

financial sector in hong kong. i understand they are talking to the government in hong kong. it is going to be local legislation. hong kong governor talking to the financial sector and how we can all make sure it will not have a direct impact to the multinational, financial companies in hong kong. i think if the law is going to be passed, it is going to take more time. we have to make sure we are taking every consideration before we enact the law. that dialogue happened between the hong kong government and mainland authorities. we had the anti-government -- anti-monopoly crackdown. we have had all the stresses coming onto hong kong. with this have been more challenging if that was the reason? >> my understanding, the hong kong government is talking to the mainland authority on this topic.

they have taken our suggestions. that is why the law has not been enacted yet. i think beijing is very understanding. they want to make sure hong kong can continue on as a financial center. that is one of the major features of hong kong. >> last question. as a top adviser to carrie lam, issue going to run again? >> it is the million-dollar question. especially after her delivery of the policy address. i have never heard from her of such intention. she made it clear she still has a couple more months before the end of her tenure chair she went to make her best effort to finish off and deliver what she promised four and a half years ago. >> your name has been bandied about. why would anyone want this job? it seems pretty thankless and

you are just a lightning of out of criticism. >> it is a very challenging job. having to interpret one country, two systems. not to mention we are just coming off a protest and no a covid situation you definitely need a person that can fully be trusted by beijing and answerable to hong kong people and understand the dynamics of what is happening in the world. >> you want the job? >> no. no thank you. >> we appreciate you coming in and illustrating the government's priorities and positions on sensitive subjects for the city and the world. we will send it back to you. shery: joining us from hong kong. thank you for that conversation. we have breaking news at the moment. we are watching live pictures of the u.s. senate. they have just extended the debt limit cap to december 3. they are sending the measure to the house.

the u.s. senate passing legislation to temporarily increase the u.s. debt ceiling. with enough democrats voting. they were able to get the simple majority after the closer vote to extend the debt ceiling. let's cross to our white house reporter. we have a little more to go because this has to be sent to the house. then it has to be sent to president biden. what are we expecting? .co the senate voted moments ago to send it along to the house. the house is out of town right now. what i would expect is speaker pelosi and her deputies are going to call the house back to vote. they were told earlier this week that was possible and they would get 72 hours notice. in the next couple of days we will see the house likely take a vote. after that it will go to the president's desk and we will have --

paul: are we going to be doing this all again in eight weeks or can some other arrangement be made before than yucca >> right now, is what we are going to be doing again in eight weeks and less democrats and republicans some -- come to some kind of agreement to raise the debt ceiling longer or democrats decide to go it alone and do it with just their 50 votes. that is a little more complicated and takes a little more time. this gives democrats eight weeks to get that together and go it alone, which is what republicans are demanding. paul: our white house reporter courtney rosen watching the debt ceiling vote in the senate. reserve bank of australia has released its financial stability report. a lot of focus on the housing market. housing prices have increased by a trillion dollars in the past five months.

the median auction for a price in sydney, two million dollars. the rba saying the risk of excessive borrowing due to low interest rates is very real. systemic risks are building. the rba has had a few things to say about other matters. important lending standards are maintained. it notes that cyberattacks on financial institutions do continue to rise. the financial conditions to underpin asset prices. the rba issuing some mornings and what we are seeing around the housing market. we did see this week one of the regulators tightening lending requirements. we have the aussie dollar. beg your pardon. it is $.73 at the moment. the rba stability report being released.

we are watching headlines as they continue to drop your sophie is taking a look at markets. sophie: as we digest the rba report, we have the aussie bonds sustaining the weakness. the 10 year yield at the 164 level. bond bears are pushing benchmark yields closer to 160 with the debt market deal and the job -- payroll data may develop the backup in gilts but that trend has dimmed. you have the 10 year yield at a four month high as markets assess the pace of demand -- of japan's recovery. we were looking -- will be looking to the policy speech this friday. turning to stock action this friday, in asia a mixed picture across the board should the nikkei 225 bouncing 1% or the topics said to drop a nine-day drop. you have the kospi fluctuating

this morning. heading lower for a fourth session. samsung is gaining ground after third preliminary results. switching out the board once more, taking in oil prices. higher for brent above 82. we are watching volatility. china comes back online. power shortages are seeing continuing through year end, hampering the industry. with chinese policymakers came to offset energy cost to widen the burden, the yuan strength is likely to be tolerated. shery: an exciting day coming up because we do have chinese markets trading for the first time in a week after the golden week holiday. investors raising for volatility.

bloomberg's chief china correspondent joins us. so much has happened during that time. we have had fantasias default. we have had the stock market volatility in hong kong. what is top of mind right now yucca >> -- right now? >> chinese traders are coming back to two crises. the energy crunch and the property market that has accelerated during the weeklong holiday. there is a sense that maybe that holiday provided a false sense of calm and security for onshore traders. bloomberg's credit tracks showing onshore stress in credit markets actually picked up last month and it probably only got worse in september. remember that monday crash in dollar bonds. it was one of the worst -- the worst in at least 13 years. that is -- the risks that will

spill over to onshore credit markets is picking up here. the flipside is china coming back online means the central bank is back in action. we have 53 billion u.s. dollars of 14 day loans coming due today. pboc is widely expected to roll them over. we could also get additional liquidity injections. the central bank ensures banks are ok. the financial plumbing is working and banks continue lending to each other even if credit stress picks up. we did also get data showing property sales for chinese developers were terrible in september. they fell more than 30% for the top 100 property developers and that will make it worse. paul: where are we in terms of evergrande contagion? our markets going to calm down now? >> the concern is that

fantasia's default was a surprise. a smaller developer also failing to repay its bond -- interest on a bond. how bad is the situation for developers? evergrande is one. it is the biggest concern because of the liabilities being so big. the concern is that what we know about developers may not be the true story. there might be more of these hidden bonds, see replacement bonds, the one that matured on october 3. that is hiding the true size of liabilities for the sector. contagion risk picking up. we did see chinese junk dollar bond yields yesterday rise to almost 17%. that makes it extremely hard for these companies to refinance

their debt. completely shutting them off from their most important source of funding, which is the offshore dollar bond market. how are they going to refinance the wall of maturities coming due in october and throughout the rest of the year? shery: you mentioned the pboc busy with the liquidity measures. we have been watching the governor talk about the tech crackdown. that is not going to help. >> no. there was not anything new from what he said but it is really driving home the point that this crackdown on tech is a policy priority and it is not going to slow down any soon. xi jinping's common prosperity campaign says this is a key component of that. ensuring stability at if a very important policy year next year. we did have a bunch of hedge

funds and big global money managers warning that the worst is not over for chinese stocks. this is very much the case. if you are buying the dip in these companies, valuations have come down. the ms ci china index had its worst quarter in 20 years. there is very much a key policy risk that is not going away anytime soon. that was the message from the speech last night. paul: chief of china markets correspondent. thank you for joining us. still to come, u.s. china tensions on the rise. singapore's foreign minister says there is much to be gained from working collectively. that interview is just ahead. this is bloomberg. ♪

>> this is daybreak asia. i'm su keenan with the first word headlines. we start with u.s. efforts to ease the global chip supply crunch. they are facing resistance from lawmakers and executives in taiwan as well as south korea. washington ones information on supply chains. tsmc says it will not part with sensitive client data. south korea says it has released a statement saying it is

concerned over the scope of the u.s. request. the u.s. central intelligence agency is creating a dedicated china mission center. it is aimed at tackling what cia director bill burns calls the most important geopolitical threat of the 21st century, and adversarial chinese government. mission centers are standalone entities that utilize resources from across the agency. the cia says work will continue on other threats including russia and iran. former president donald trump wants top aides to defy subpoenas relating to the capital insurrection that took place last january. the four personnel are requested to submit records and testified to a congressional committee. if they refuse, it would set up a potential legal battle with house committee. a letter seen by bloomberg, a trump lawyer says the information is protected by executive privilege. to vietnam, the country is

facing a worker exit is from its factory heartland. more than 2 million people want to leave ho chi minh city and nearby provinces to head home. this area is the base for suppliers for companies including nike and adidas. industry leaders say factory staff are fixated on covid and believe they are safer in raw provinces -- in real provinces where they can also -- rural provinces where they can also find work. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. shery: president biden and xi jinping plan to me virtually before the end of the year. singapore foreign minister says there is much to be gained working collectively. he spoke exclusively with haslinda amin. >> i think that tensions have escalated. i think the rhetoric has sharpened.

both at the very top. president xi jinping. president joe biden. these are experienced, seasoned statesman. i do not believe they are aiming for conflict, but there are certainly issues they will have to work through and we do need to give them some space and time to do so. what we are saying from the point of view of southeast asia and the pacific is to say, in fact, confronted by a digital revolution and an existential threat of climate change and an acute challenge from covid-19, there is so much more to be gained by working collectively, working together. i really believe this does not have to be a zero-sum game.

haslinda: we know that president biden is reviewing his u.s. policy toward china. what needs rethinking? you talked about how there needs to be a realignment, readjustment. what would it take for both sides to come to a compromise and work together? >> this is where you are asking me to venture into dangerous territory and give advice. haslinda: your thoughts. >> just bear in mind singapore is not even a midsized city in china or the united states. obviously we have skin in the game. 1.i would make is -- one point i would make is for the u.s. to understand while china certainly became part of the multilateral

system and particularly with the ascension to the wto 20 years ago and that this has been an avenue for an unprecedented historical achievement of lifting hundreds of millions of people out of abject poverty, but one caveat i would insert is that the u.s. should not expect china to become more like the u.s. china has a deep historical sense of identity. it is a civilizational state. it has absolutely no intention of becoming more like the u.s. paul: the singapore foreign ministers speaking exclusively with haslinda amin. you can watch this live and see our past interviews on our interactive tv function, tv . you can dive into any of the securities or bloomberg

functions we talk about and you can become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only. you can check it out at tv . this is bloomberg. ♪

>> there are very few jobs out there that when you're only 26

years old will put you in charge of 50 marines and millions of dollars worth of equipment. let you go out and try and change the world. i had something to prove to myself. i want it to get through that obstacle on my own. it was kind of a family tradition. i did not want to let that tradition die. shery: that was the far eastern group chief innovation officer talking about learning leadership in the military. you can hear more from his interview on generation x, which look that help prominent business leaders are adapting for the future. that airs monday on daybreak asia at 7:40 p.m. sunday in new york. let's get a trick paul: check -- a quick check of the business headlines. talking with sovereign health -- sovereign wealth funds to become anchor investors in the upcoming ipo. of would be investment of 30 and

black rock are among those winning bids to take part in the listing. sources tell us the fintech company is planning to raise as much billion. the saudi arabia republican investment fund is the new owner of the newcastle football club. the news comes a day after bloomberg reported a major stumbling block had been removed by saudi arabia agreeing to list a broadcasting been. -- a broadcasting ban. a surcharge on some products due to surging power prices. sources say some products will be subject to a 50 euros surcharge per ton. the shortage of natural gas has caused power prices to soar across europe, increasing costs for energy intensive industries like steel. it's take a look at what to watch in terms of stocks. sophie is in hong kong.

sophie: sticking with the energy seeing, keeping an eye on shares related to china suppliers of: power. i report that key does that three key provinces that produce call have pledged to boost supply. watching companies along the supply chain for cotton have neared a fresh cade hi. futures have jumps 26% in the past three weeks. we are watching chinese property stocks after we got more data showing slowing sales with 90% of china's top developers reporting an average drop of 36% on a yearly basis in september. chinese tech names in focus after the bounds we saw in hong kong. jeffrey's believing we go toward are produced in for tencent and the broker is maintaining calls on the stock with tencent expected to further unlocked potential in gaming and satisfy unmet demand.

we are keeping an eye own chinese by joe makers. shery: take a look at the broader markets. we are seeing broad upside across asian markets with the nikkei up 1.8%. we had seen household spending a while ago come in slightly better than expected when it comes to or worse than expected. fell through percent. cash earnings came in better than expected year on year. there is broad risk on sentiment across asia. we had also seen samsung earnings beating expectations and rising $.25 in the last quarter when it came to operating profits. samsung electronics think it's best day since september 17. the kospi continuing its rally and extending those gains after seeing the best day since march. we also had the passage of the

debt ceiling cap in the u.s. by the senate. that will go to the house and takes a little bit of that risk off when it comes to a potential u.s. default. getting delayed potentially until the end of the year. that is one less risk to worry about for the markets. the asx 200 up 7/10 of 1%. he restocks are also gaining ground. -- kiwi stocks are also getting ground. paul: still to come, our guest things inflation pressure will not abate quickly. an economist will explain why you have a grand crisis is the result -- why the evergrande is the result of an unsustainable model. our coverage continues as we look ahead to the start of trade in hong kong and shenzhen. china's markets returning to trade after the golden week holiday. we will have the energy crisis,

news of the biden and xi jinping summit. the china open is coming up next. stay with us for that. this is bloomberg. ♪

the comfortable way to work out. -that looks fun actually. -looks like a paisley. -hey, a paisley, we'll take it. -yeah. oh my god, i could do this and watch tv at the same time. -exactly! -fantastic. oh yeah, i can do this. this is easy. and definitely better than the floor. -it feels sexy. -it feels good. i want this in my house. (host) wondering if the aerotrainer is tough? (engine revving)

♪ avon: 9:00 a.m. in beijing and shanghai. welcome to bloomberg markets china open. david: counting down to the open, they reopen in china of course, after a week long slumber. stocks are turning.