♪ >> good morning and welcome to daybreak australia. we are counting down to asia's major market open. >> good evening, i am shery ahn. u.s. stocks set new records on solid corporate earnings. more than 80% of companies have topped wall street estimates. >> the -- focus of tuesday's

meetings with bets it may be scrapped. >> the summit with a pledge to hit net zero emissions by 2070. across wall street, u.s. futures muted. the s&p 500 finished again at an all-time high, third consecutive session of gains. we have solid corporate earnings offsetting the disappointing manufacturing data we got earlier today. the dow up one point, touching the 36,000 level for the first time ever. oil at the moment under pressure but still $83 a barrel. we had it rising in the new york session, but paring back earlier gains given that we continue to see rising u.s. stockpiles. take a look at november. this is the fourth day of november in -- first day of november in the u.s. and is

historically the second-best performing month for the s&p 500. just trailing april, which would be your month of tax returns. more than 80% of s&p 500 companies have topped estimates, despite the fact be continue to see supply chain disruptions. we continue to see record margin expansion. the s&p 500 rising 6% since earnings season began october 13. that would be the highest for the third quarter season of earnings since 2014. haidi: the other big preoccupation for investors, a number of major central bank decisions. this is an interesting one. after the amount of price action we have seen, the selloff in aussie bonds, this credibility test will be a test of communication. they haven't stepped in to defend the yield target.

the april 2020 four target was eight times the rba target. we will be looking for whether there is a policy shift and how they feel about that inflation number. poor headline inflation jumping back in for the first time since 2015. shery: isn't this exciting when we have central bank decisions? in the past year, nothing has changed. all of a sudden, all of these decisions are market moving. that is what we saw in singapore as well. last month they surprisingly tightened policy and we are hearing from the managing director, the chief central bank, that he is ready to act on inflation. >> we know it can't last forever. there will be adjustments needed. how long they last is hard to say. the longer they last, you have risk that some inflation becomes entrenched and expectations

build. that is a big unknown and it is a risk factor. shery: we had inflation coming in above the central bank's target of 2.5%. we will have more from that conversation with the monetary authority of singapore later this hour. hear what he says about the cities ambitions to become a global hub. >> speaking event missions -- ambitions, this comes on the back of what many see as disappointing results from g20 leaders. president biden saying the u.s. is willing to become a global leader when it comes to clean energy, leading the fight taken's climate change. he says now is not the time to waste time. we know this comes as he is politically hamstrung at home, having faced criticism for the billions of dollars he wants to spend in promoting green energy. the other surprise coming from

narendra modi, india committing to a 2070 zero emissions target, decades after some other major economies. a lot of scientists saying it is still in line with what is needed to be committed to save the planet from catastrophic global warming. that was, for a lot of people, significant, coming from both -- the world's third biggest emitter. shery: heavy burden on their shoulders. maria tadeo has all of the details from glasgow. >> cop 26, the biggest climate conference in the world underway. we heard from leaders including president biden, prime minister boris johnson acting as host nation, and emmanuel macron calling for immediate action on climate change. two big themes coming out of

this conference, a call on the big polluters to be more ambitious when it comes to their targets to get the net zero. the other is the emerging economies of the world asking rich nations to provide financial support. a conversation at -- a transition can be expensive. the highlight is indian prime minister narendra modi detailing a five-point plan to take his economy to net zero by 2070. this is something india is putting on paper. modi insisting this plan would see india becoming a more sustainable economy and that should help the global effort to keep temperatures in check. haidi: australian prep minister scott morrison has announced an extra $2 billion to impact climate change. it was the only new commitment

from australia and morrison's speech. paul allen joins us now for more. this really is commitment, or lack of commitment to reducing emissions has been criticized going into these meetings. . are these negative perceptions being reinforced? we have seen indications of perceptions prime minister has received. >> that was pretty much hit, $2 billion going to a global fund. to help developing nations cope with the transition. also, 500 million dollars to help pacific island countries mitigate the effects of climate change. the midst of the speech was pretty much a reiteration on what australia is already doing, 35% reductions by 2030. other commitments to achieve that, such as mostly relying on unproven technologies such as green hydrogen.

australia is one of the world's largest exporters of coal and gas. this is something of a domestic political -- for scott morrison. the climate issue has brought down four prime ministers in the past 10 years. shery: other geopolitical's -- geopolitical issues have been discussed, scott morrison pending his handling of -- >> yesterday we had emmanuel macron accusing scott morrison of lying to him about the simmering deal. morrison gave his side of the story, pointing to a text exchange he had with macron in the lead up. -- missed a number of key deadlines and scott morrison indicated australia was looking at alternatives. on september 13, macron sent morrison a text saying, can i expect good news? scott morrison texted back,

trying to arrange a phone call as a phone call and the phone call was never scheduled. the conversation never happened. two days later, there deal got canceled. the rest is history. shery: paul allen with the latest. stay with us, -- on the hot seat as investors bet on the reserve bank about straley a dropping its ultra dovish policy. kathleen hays is here with a preview. what are we expecting? >> as you are just saying, three big central bank meetings this week. the reserve bank of australia, looking at inflation and how to respond. the drama started when the reserve bank of australia last week, there key inflation gauge popped into their 2% target at 2.1% year-over-year. traders saw the three year yield

target, they were surpassing it, pushing it higher. the reserve bank of australia did not push back to buy more bonds. that is why it spiked to well over 1%. it has come back down, but the bet is that today, still low. -- will say look, we are dropping the yield curve control target. we are seeing inflation rise. they are also betting there may be a signal of a pledge to not hike rates until 2024 when inflation is in the sustainable target. phil has been insisting he wants sustainability and he wants to see regis -- who wages rising because wages need to rise to keep inflation in the band where he wants it. haidi: our economics team is arguing the rba is going to look past this recent spike and figures this is going to come

down. one thing they are looking at is the fact that the international border reopening is going to allow an influx of foreign workers. that is going to a wage momentum. that is going to put downward pressure on wages along with the fact that energy prices are higher. they are taking this opposite bet from many people in the markets, a lot of the economists are agreeing maybe you get some shifts on the 0.1 percent three year yield target, but as far as a shift on rate hikes they will not be signaling 2022. ab 2023 as possible. -- maybe 2023 as possible. haidi: australians love to travel, so we may be spending more dollars overseas now that we can. kathleen hays, global economics and policy editor. ahead, a busy second half of the week with all of these policy

meetings starting with the rba. this is where futures are trading at the moment, indicators up .2%. australian stock has been overshadowed by the tumultuous action we have seen in the bond market. we are looking at potentially a boost in equities from the rba policy meeting, if the governor can provide clarity when it comes to the yielding of the target. and a path forward for rate hikes. looking forward to what these financials, as well as resource stocks as well which are about half of the overall market. in japan, futures up 2%. we could see a little bit of a pop there. corporate earnings really helping that u.s. trade overnight. we could see a -- for the japanese session. new zealand lackluster. vonnie co. -- >> -- has resigned amid an

investigation into his ties with jeffrey epstein. [indiscernible]maira: >> -- will contest the finding. he will be replaced by the head of the banks marketing division. treasury secretary janet yellen says fed chair jerome powell has taken significant action after revelations over the personal investments of u.s. central bank policymakers. -- tightening up rules on active trading -- individual stocks and bonds per the controversy has complicated powell's chance of -- joe manchin slammed. -- quick hope for president biden's plan. he says congress needs more time to assess the impact of the

spending package on the economy and national debt. -- to unite the progressive and conservative wings of the party. >> i will not support the reconciliation legislation without knowing how the bill will impact our debt, our economy and our country. vonnie: global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: still ahead, more on the rba meeting and the debate on scrapping key yield target. joel masters joins us for a preview. next, insights on the markets from -- who sees strong corporate earnings continuing to support stocks into 2022. this is bloomberg. ♪

haidi: earnings coming in fast and furious with almost 170 s&p 500 companies due to report. our next guest expects rising capital expenditures to support the markets into 2022. anastasia tomorrow so -- it is great to have you with us. we are also continuing to see record margin expansion as well. i have to ask how long this is expected to last given we continue to see surging input costs. >> morning. i think it is interesting that we are seeing these near record margins. that suggests that corporate's are able to -- price increases to make up for some of the surge in costs.

the question is if these bottlenecks persist, that will keep raising prices. however, several sources of these bottlenecks will start to ease in the coming months. a couple of things i am looking for, first, we know there is a record number of ships docked outside the port of l.a. because of that, you see for container ship rates sky high. i am encouraged to see that those numbers, the pricing has actually started to come down and i think we will see the bottlenecks begin to ease. one of the reasons for that is in the u.s., but globally there has been a shortage of transportation and logistics workers. if i look to the u.s., i see a lot of truck drivers starting to come back to work and they are not coming back to work for any wage, they are coming back for wages that are 6% higher this year than they were last year. i think that's what it is

ultimately going to take, more wage increases to get workers back to work and to ease bottlenecks. i do think that the bottlenecks have been a q3 story. they are about to peak, if they have not already. things should be getting easier. shery: if you have to raise wages to get people back, that means there will be more pressure on these companies, right? >> definitely. the key offsetting factor -- part of it is pricing, but the other part is record demand. to continue with a transportation will vector, we are seeing demand for those services well over where we have seen pre-pandemic. i think it is pricing, but also the quantity of services provided that is helping absorb costs. haidi: would you take a look at the companies that have further

runway, what are they? >> there's a few categories that stand out. i would point to semiconductors. that is something we have liked and if you look at semiconductors, talk about a sector that is shipping below demand, but demand from a cyclical perspective is picking up. for example, auto production will likely pick up next year. we are going to see smartphone shipments pick up, we are going to see cloud cap from facebook alone as they build out the meta-verse. that is all likely to vote positively. when i look at the semiconductor space, you're starting to see average sales prices that have been trending down starting to pick up.

that is a sector that is going to continue to have pricing power. the other thing i would talk about, financials, that's one of those sectors. i would shy away from some of the consumer sectors like discretionary and staples. for those it will be harder to keep hiking consumer prices and their revenue per employee, speaking of higher wages, revenue per employee tends to be low. i would shy away from those sectors and focus on semi's. haidi: when it comes to watching the outcomes, does it mean if -- meaningfully change your -- when it comes to the mix you have between fossil fuels renewables? >> no. it does not change the investment trajectory because we have already liked both a tactical opportunity in traditional energy and a secular opportunity in clean energy.

i will say that the clean energy space this year has lacked a catalyst. the next few weeks is that catalyst muted. first, the outcome of cop 26 will likely result in stronger commitments to do something on climate. if we look at the current economic transition scenario, it is not going to get us to ned zero by 2050 and governments know it. cop 26 can be the forum where they add additional commitments. that is one big catalyst. the other one in the u.s., the build back better plan, does account for 550 5 billion dollars in various clean energy investments and credits. between those two things and the outcomes they produce, that can be a significant catalyst. haidi: great to have you with us.

chief investment strategist at knight capital network. big announcements coming up. we will be speaking with peking university professor and credit suisse chief china economist as well. more on cop 26, what can really be achieved. this is bloomberg.

haidi: softbank said to be considering selling fortress investment group. it acquire the asset manager for $3 billion to help manage its vision fund, but sources tell us softbank was not able to mesh fortress' operations with its own due to u.s. revelatory hurdles. bank of america to apply to set up a securities firm in china.

sources say the bank aims for regulatory approval early next year. it is applying for licenses to trade under stocks, bonds and hedge risks. tiktok's parent has become one of the first tech companies in china to mandate shorter working hours. an internal document says employees should only work from 10:00 until 7:00 monday through friday and advanced permission will be needed to stay longer. china's 996 work ethic has come under renewed scrutiny this year. taking a look at the day a head for australia, the rba still top of the agenda. we've got potential -- decisions. we are awaiting any updates on growth and inflation assumptions. the nation's climate targets also in focus. scott larson confirming australia will not implement new

short-term emissions targets. taking a look at the aussie --, $8.4 billion investment in green hydrogen in argentina. also watching bhp, their planned exit from coal is looking less likely as dirty fuel hits record high. we have lots more ahead on daybreak australia and we are counting down to one of the richest horse races in the world. it is cap day. that take place is at 3:00 p.m. if you are watching in sydney and melbourne where the race is run. when it comes to equity markets, we expect to see much lower trading volumes. on this day historically. it has been 30% lower when it comes to shares being traded on this day versus the average for the rest of november. more to come. this is bloomberg. ♪

vonnie: rba bond yield target in the spotlight as it hold a meeting tuesday after it allowed a market selloff last week without taking action. economists expect australia's central bank to abandon the percentage target for the april 2024 bonds. bloomberg economics thinks the rba is likely to keep the policy unchanged. narendra modi has surprised the cop 26 climate summit with a pledge of net zero emissions by

2070. the announcement injects new life into talks that were -- by disappointing outcomes in rome. though india posco is two decades behind the u.s. and u.k., it is compatible for what is needed to avoid catastrophic global warming. president biden and indonesian president have expressed concern about the coup in myanmar, saying the -- must release political prisoners and provide a return to democracy. they met on the sidelines of the climate count -- climate council in glasgow where they will also discuss the climate. hong kong is set to end quarantine exemptions as it tightens some of the world's strict this policies with the aim of reopening the border with china. exemptions for senior executives and most entitled groups will end november 12. carrie lam last week said tighter curbs would create

conditions to resume two way travel with the mainland. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. shery: starting with the rally in u.s. stocks, morgan stanley says the bullish trend can continue into thanksgiving at the end of the month, but not much longer. the bank notes the fundamental picture is worsening with the fed expected to start tapering and earnings growth slowing further. haidi: we are looking at junk bonds. pension and invents -- investment growth have been flat -- plowing to junk bonds. despite a decline, barclays notes the yield index has resumed to 4.23%. they also note that hedging costs remain reasonable

throughout 2021. philip lowe faces major communications challenges today. he will scrap the bond yield target after the central bank allowed market selloff to continue without defending it. let's discuss with -- just by refraining from taking action at a point where the yield was at 1.8 times more than the rba target, it does that implicitly suggest they are comfortable? >> i am not sure they are comfortable but i think it suggests that the point where the yield curve target in april 2024 no longer fits comfortably with the narrative we expect them to announce today. it does seem inflation has recovered faster as we have seen in other economies. if you've got core inflation from here on in, it seems difficult to argue will -- you

will not increase cash rate until 2024. haidi: want to take a look at inflation, all of this starting with the core inflation jumping back into the rba target. as you can see on this bloomberg terminal chart, how transient is this? liver economics points out that as we get international borders reopening, the inward flow of labor, reducing the labor crunch, as well as australians having a duty to spend abroad, rather than domestically. does that remove some of the momentum from private pressures? >> i think the question of how much is transitory is the biggest economic debate we are having in australia at the moment. my mind, some of it is unquestionably transient. borders will open, our view is that it will not entirely resolve the issue but alleviate

it in some sectors. also, we are seeing still ongoing disruption in global shipping and global production chains. also, we are seeing already consumers pivot from buying goods which need to be shipped, to spending on services and over time that will include overseas as well. having said that, there seems to be a stronger economic recovery and fairly broad-based price pressures. i think the key factor is to be watching wage growth and see what that does over the next couple of quarters because wage growth is still the key determinant of sustained price pressures. haidi: what are you expecting out of the rba when it comes to this statement on policy? >> it seems clear that it is going to be difficult to argue. they can keep rates on hold until 2024.

that doesn't mean the reserve bank can't do that, but having seen their forecast published friday it is hard to be definitive. we are expecting them to raise their inflation forecasts friday. i believe the full guidance will be moved back to have something like an unexpected rate raise in mid-2020 three because financial markets are pricing in quite sharp rises in 2022. the fundamentals don't support that. the banks got the challenge of moving away from 2024 but not wanting to endorse 2022. if you think guidance is focused on the second half of 2023, it seems inconsistent and expensive to defend that april 24 bond so i imagine they will move away from that control as well. shery: how do you factor in the slowdown of the chinese economy given the latest data? >> obviously, a larger trading

partner, so we are seeing a slowdown but we also know that there's still a lot of pandemic noise in the data. we are not expecting any -- two improve rates as we emerge from lockdown. from the chinese perspective, growth is slowing but does not look too concerning at the moment. haidi: you can tune into bloomberg later on to get commentary and analysis from bloomberg's expert editors. -- cementing itself as cryptocurrency business and -- says the best approach is strong regulation. we spoke exclusively to the head of the central bank ahead of his appearance at next week's singapore fintech festival.

>> the crypto phenomena and, or the phenomena in of crypto tokens is much broader. we have seen a lot of progress there. it is too far out still, too nascent. it could lead to nowhere, or it could lead to a lot of risk. and turmoil. or, it could lead to a very good outcome for the economy and society. we have to look at it in terms of scenarios and prepare ourselves for any of the upcoming -- what i think the crypto phenomenon, which rings efficiency gains, hopefully better security with the encryption, which is a very high standard, and -- that is self-executing. that brings about a decentralization away from intermediaries, which means lower cost, higher efficiency and more market participation. disruptive? yes.

those financial intermediaries are key and will face some challenge. that is the future on a positive note. not without disruption, but overall beneficial. we are interested in developing crypto technology and defend -- understanding blockchain and preparing ourselves because 20 30's going to be a tokenized economy. we want to make sure we are well-positioned. that is not without risk. money laundering, terrorist financing of the obvious ones because we know a lot of illicit financing takes place through bitcoin. no ransomware proceeds intermediated through -- ransomware proceeds are intermediated through the bitcoin market. investing in cryptocurrency is not something for retail investors. >> do you think singapore is preoccupied with those risks? here you have a central bank that is providing licenses to

some crypto companies, but banks are unwilling to service these crypto companies. why do you think that is? what would it take for us to legitimize crypto assets before they jump onto the bandwagon? ravi: we try to bring the parties together and explain to them, look, you've got to behave more like a normal customer of the bank. the bank does have requirements that upon's to know, and you need to be able to provide. if they can provide that information and be transparent, you should treat them like other customers. we are brokering some of these conversations but really a willing buyer-willing seller type situation. it is too early to say those situations have improved, so i agree, i find it hard to have a banking relationship but that's see how it goes. >> what is your comfort level when it comes to acknowledging

bitcoin as legal tender? what would it take? ravi: that is a different proposition. we have been supportive and promotional of crypto -- security. to facilitate meaningful economic transactions. they have their benefits over fiat currencies in some regards. that is the extent to which we lean in. whether to accept them as legal tender is a different proposition. cryptocurrencies are not money. do not have the status of money. with cryptocurrencies you have none of those safeguards which is why we say it is not money. if you want to treat it as an investment asset, you had better know what you are doing. it is not for the fainthearted. >> would you say yes if a buyer

is wanting to pay for his purchase of a house with bitcoin? and both parties are agreeable. ravi: i do not think we regulate that space. today, if you want to buy a house, and you pay in-kind, i do not think there are laws against it. it does not have to be cash. although, i think you would need to add cash value of whatever it is you have bartered to purchase the house. haidi: ravi menon speaking exclusively with bloomberg. take a look at the crypto space right now. bitcoin gaining ground, reversing three sessions of losses. volatility for bitcoin is down after reaching the 67,000 level. volatility measured over a 260 day period dropping to around

levels we have said -- we have not seen since may. not all cryptocurrencies are created equal, especially when it comes to squid, the latest sensation inspired by the netflix head. it serves more than 230,000 in the past week, according to coin market cap, only to plunge about 100% to less than half a cent this week. ethereum still up about 400% year-to-date. it was fluctuating between 4100 to 4300 in the session. it is a top level already. our bloomberg index under a little pressure, but after gaining more than 200% year-to-date already. haidi: up next, claimant pledges made by global leaders at cop 26 for -- cop 26. what is needed to achieve de-carbonization. this is bloomberg. ♪

haidi: for later speaking at cop 26 climate talks. -- laid out its plan to send -- spend $7.5 billion in the next decade and help drive every dish -- a reduction in emissions. in glasgow, -- told our

colleague francine lacqua that the company's 20 year project to decarbonizing aluminum is finally seeing promise. >> we were lucky at the beginning of the year. we had our best half-year ever. the economy was growing a lot. right now, the economy is slowing and that problem is -- move things were around -- ultimately i think it is a shorter-term impact. [indiscernible] francine: how much inflationary pressure are you seeing? >> there was inflation in the first half when the world was going on a high pace, but it is one of the challenges. francine: do you hedge? do your clients ask for time? it must be something to deal with. >> it has not been that bad. -- are benefiting from part of the -- [indiscernible]

francine: what is it mean for china? does there continue to be zero could -- zero covid tolerance policy, it is -- is it difficult to shift from china? >> the whole logistics swell. personally, i haven't been able to travel to china. where our biggest customers are. it is a difficult world for all of us. francine: what is your relationship with steelmakers? is there an agreement you would give them monetized, or trying to help fund efforts to become green? >> ultimately -- first of all, we have very long-term relationships with our customers. that is -- very aligned. we always think long term and therefore it is natural for us to fund research and develop incorporations and soon we will have with chinese universities. the problem with r&d is that the

-- would like to be resolved quickly but r&d has stick -- for longer. [indiscernible] this project has been going on for 20 years. we might be able to change a 100-year-old manufacturing -- but it takes time. in order to achieve 2050, the world needs to put in a lot of seeds of research and development to have the tools necessary. shery: we have loads more on action -- climate action coming up with reema bhattacharya. this is bloomberg. ♪

♪ haidi: shares of zillow plunging 8% in the latest session as details emerge on the extent to which its home flipping operation backfired. shery: we have more on this. zillow is now stuck with the

backlog of around 7000 homes that needs to offload? >> we knew they were working to recover from this miscalculation , but news of the exact size of the backlog of homes they have. been able to -- have not been able to offload, almost 9% in the last session. people close to the matter telling bloomberg the company is seeking 2.8 billion dollars for the houses which are now being pitched to institutional investors. we are told zillow will likely sell the properties to a multitude of buyers, rather than packaging them in a single transaction. there have been no comments from zillow. if successful, zillow would make a significant dent in the losses they have taken on these homes. the company did acquire approximately 8000 homes in the third quarter.

this is coming from real estate strategists. it's stock shared taking a big dip since hitting a high in february. zillow recently said it would stop making new offers for the rest of the year until it gets the backlog offloaded. a big misstep here for the company, which has done well in many of its main areas, which is real estate listing. haidi: how did they get it so wrong? >> according to one analyst, they decided to lean into the trend at the worst possible time. just as the market was trying -- starting to soften. this is a crowded trade for real estate entities to get in to the market and flip them. the high-tech approach zillow took was they had an algorithm and they treated so that was almost too successful.

at one point, it got all the winning bids so they ended up with too many homes and it also overestimated what those prices would be. they ended up with so many winning bids they needed to stop making new offers. after buying more homes than it ever had, it is working through the backlog with a very unpleasant reality. it means it is selling these homes at a loss. atlanta and phoenix are two cities that had been on fire with housing price appreciation and have really cooled. zillow put a record number of homes on the market in september. they were listing these properties at the lowest markup since november, then it cut prices on nearly half of its listings in the third quarter. that has been a signal to wall street and others that its inventory is commanding prices lower than expected. haidi: it has been a feeding frenzy. su keenan there with the

laded's. -- the latest. shery: hi waves plans to raise up to 1.5 billion dollars in new capital to keep flying as thailand reopens its borders. it is seeking about half of that from existing creditors and financial institutions, and have from the government. thai air is under a mandated restructuring program to pay down met -- in -- after record losses. indonesian flag carrier -- needs $1 billion of additional funds to cut debt and keep flying. the government says it is opening to -- open to giving up majority control to raise funds. according to a senior administrator, they are in talks with creditors to restructure about $6 billion worth of debt, and expects to reach an agreement in the second quarter of 2022. haidi: a double whammy of events to look out for, not just the

rba decision expecting potentially a policy tweak when it comes to bond markets and inflation coming back into range, and so much could change. this is one of the richest races in the world, usually a huge amount of interest and fashion and glamour as well as controversy when it comes to the animal treatment side of things. last year we saw it go ahead with no in person attendees. this year, a much smaller scale, 10,000 people will be allowed to attend the race in person. it will be interesting to see whether the last couple years have really made a change because we are seeing across social media that maybe people are not so keen on horseracing anymore. shery: this was supposed to be the race that stops a nation. traders and investors just stopped trading, or trade less

because they are so focused on these races. we will watch what happens this year. perhaps more normalcy is coming back. that is it for daybreak australia. daybreak: asia is next. this is bloomberg. ♪

shery: welcome to daybreak asia. haidi: we are counting down to asia's major market opens. agent traders have new records ahead of key banking decisions by the rba. singapore's monetary authority will act on inflation. we hear from the chief. india's surprises