haidi: hello and welcome to "daybreak asia." i am haidi stroud-watts in sydney. shery: and good evening from new york. i am shery ahn. the fed warns risky asset prices rises makes susceptible to bigger crashes. it also flags crypto and the china property sector. growing fears of evergrande

contagion as holders of -- say they have not been paid. plus, softbank plans a massive buyback after its record vision fund loss. personally taking a $1.3 billion hit. haidi: let's get you straight to the markets on the sydney open. what are you seeing? sophie: the start of cash trade in sydney, gains of about .1% after the index weighed on monday with reopening options back in the mix. improving economic picture showing up in metrics for businesses and consumers, as australia's reopening is gathering pace. after a six-day rally for us trillion bonds, yields eyes 180 again. earnings reflecting this economic recovery, james hardie to center group. when it comes to office rentals, bloomberg intelligence expects

sydney's bond market -- as a return to market picks up. australia's biggest bank delivering a solid report card. profit beating forecast as economic activity improves, so the lender is doubling its final dividend. keeping an eye on alumina shares gaining ground on the back of updates on the outlook for prices. outlook very strong for the fourth quarter. switching out the board, i want to highlight one market here on this reopening optimism. they expect markets will continue to climb the wall of worry and they see global growth running above the pre-pandemic pace next year with the bank assessing china's deceleration appears to be in the late stages. so j.p. morgan is staying positive on equities. they are also liking japanese stocks going into next year with the future recovery earnings not yet adequately priced in. today on the earnings calendar from japan we have the likes of

nissan reporting. haidi: end of course when it comes to the outlook, there are now increasing fears of asset bubbles. as we seek financial conditions, really smashing boom times. this comes as we get a flurry of dovish central banks sing even if we do get unwinding it will be a gentle one. everyone from blackrock to more, saying these risks are building. you look at the $3 trillion crypto market, you look at junk bond funds seeing the most cash since march as well. it does not really feel like this is a world that is potentially concerned about central-bank normalization. it's really still entrenched in the amount of liquidity we have had since we started the pandemic. shery: not surprising then that you have the fed's twice yearly financial stability report coming up with the same worry. with these prices of risky

assets keep rising and what challenges they could pose to the global economy, they are talking about stable: supposing an -- stable coins posing an economic threat. not to mention volatility similar to this year's meme stock frazee we saw. so w -- frenzy we saw. we have to take this report the grain of salt given they are taking into consideration the worst case scenario put you see where the narrative is heading. everyone seems to be a little concerned about this exuberance in the markets. haidi: one of the things the fed also ancient was a link to china's economic risk. the regulatory clampdown's. this is something a lot of economists and political observers are seeing as we see the expansion, the consolidation of power. we know they will potentially draft a historic resolution

which has only been done twice and that would pave the way for him to be leader for life. these top-down policy mandates, things like common prosperity, the clampdown over the various sectors, it runs a risk of potentially the bureaucracy overreacting or paralyzed by fear that they cannot take autonomous decisions. things that could potentially worsen and national energy crisis. we are starting to see some of those risks play out. shery: let's talk about those risks, starting on the fed's financial stability report. let's cross over to jesse hamilton. give us a key take away here in this report. jesse: it highlights the risky asset prices are elevated. it is a big picture report and

it sort of assumes these what if scenarios, the wares to scenarios. so in the case of asset prices, there is some risk of a plunge in the case of maybe a pandemic surprise or a reversal in the expectations for the economy. but the report was sort oftopix. interesting. this time around in naming a few novel risks to the system. those include the chinese focus on the highly leveraged real estate there and whether that could have a contagion effect in the u.s. interestingly also note, stable coins as potentially a risky

market area. and especially underlining the fact that it is sort of unknown what backs some of the most popular stable coins. haidi: jesse hamilton are u.s. banking regulation reporter. another china evergrande market deadline has passed without payment. bondholders again wondering if they are heading for default. for the latest let's bring stephen engle in from hong kong. of course they have to dollar coupons do over the weekend. also watching for the grace period from the october deadline as well. stephen: absolutely. you feel like groundhog day transpiring because it feels like every week there is new deadlines and new payments missed, then 30 day grace periods, then we get some sort of indication like we did on that dollar bond that was due at the end of september.

that was the first one that was going to default but in the 11th hour evergrande was able to pay that. however, more coupon payments are coming due. we had those two bonds issued by a unit, scenery journey. the scenery journey is a unit of china evergrande which issues two bonds. the first is issued saturday so they have a grace period until monday. two bondholders contacted by bloomberg news say as of 6:30 p.m. hong kong last night they have not received payment. but never fear, again, groundhog day. 30 day grace period. so we have to fast-forward to december for that $2.5 million payment new adjusted deadline. but you are right, there are three coupons that 30 day grace period is expiring this thursday totally $148 million u.s.

in lieu of asset sales, which china evergrande has not been able to sell a stake in their ev unit, they have not been able to sell power here, they have not been able to sell that controlling stake in its property management firm. we do not know the exact extent of the founder's wealth and whether he can sell his $45 million u.s. yacht, is $200 million u.s. villas on the peak here in hong kong, his private jet, etc., etc. so again it will be groundhog day with me sitting here telling you the updates for quite some time. haidi: and we love the updates you give us, but it does feel like groundhog day. stephen engle, who will be back with more updates as we get them on evergrande. let's now turn to softbank, because they are planning to buy back nearly $9 billion of stock after a record loss in its vision fund investment unit. let's get more from peter elstrom.

this seems like a very familiar strategy. put at the same time i have to ask how much this will help to prop up its stock when he himself is calling it, they are in the middle of a blizzard right now. peter: yeah. in one sense the quarterly earnings were a pretty negative event for the company. they reported a negative loss in the vision fund. they got hit by the china regulatory crackdown. they own a few of the chinese startups that have been caught in the crosshairs of regulators. they are including a ride-hailing company and also coupang, the south korean e-commerce company fell quite a bit and cost them substantially. but he gave investors what they have been asking for for a long time which is another buyback. they of course embarked on an a about 1.5 years ago, $23 billion. this time they said they would buy back ¥1 trillion in shares which works out to about $9

billion. that is of his act -- is exactly what investors have been looking for. since the buyback ended shares have fallen about 40% from their peak. haidi: speaking of shareholders, we are seeing potentially a split at toshiba? peter: yes. yeah. yeah. toshiba, a deeply, deeply troubled company. as you certainly recall they had a big accounting scandal, they had to take an enormous write-down because they were nuclear operations. they had to spin off their memory chip business. now they are grasping at straws as they are looking at splitting the company into three. a spokesman for the company said it is still early and there are a variety of options they are looking at. they are in fairly desperate straits to figure out a path forward after having to spin off their most important business,

the memory chip business. haidi: are asia tech executive editor peter elstrom with the latest. let's get you a couple stocks that were moving. this is what we are seeing when it comes to newcrest. we have that news earlier they have agreed to by the canadian company for $18.50 canadian a share. they focus on gold deposits and gold mines across canada. down about 5% in the early part of the session, about 10 minutes into trading. on the other end we are seeing modest gains when it comes to the bank. they continue to ride out the wave of stronger-than-expected economic conditions when it comes to the bounceback we have seen from the multiple lockdowns we have had in australia. cash earnings climbing to 6 billion aussie dollars compared to 3.7 billion a year earlier. this is australia's biggest

business bank declaring a final dividend of aussie cents per share. d't miss out on our interview ahead just after 1:00 p.m. if you're watching here in sydney. let's get you to vonnie quinn with the first word headlines. vonnie: federal reserve vice chair says conditions to lift rates could be met by the end of next year. speaking at a virtual event in washington he said the bank was still a ways off considering any hikes. the st. louis fed president is penciling into rate increases -- in two rate increases in 2022 t hough. federal reserve governor will step down from the central bank in the last week of december. this hands president biden another vacancy to fill in addition to picking a new nominee for fed chair. he joined the board in 2017. his stint as vice chair ended in

october, though his governor terms runs until granny worry of 2032. traditionally fed officials depart once their roles and. -- end. -- five have been detained and others indicted with alleged ties to a russian-linked ransomware gang. they are accused of making several strikes against major firms and organizations. sanctions have also been issued against cryptocurrency and those enabling such attacks. >> now for the second time in five months, we announced the -- this will not be the last time. the u.s. government will continue to aggressively pursue the ransomware ecosystem. 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. i'm vonnie quinn.

this is bloomberg. shery: still ahead, softbank announces a big buyback after record loss at its vision fund. we get reaction from atul goyal. next, broader market moves with christopher smart, as investors anticipate the inflations report in the u.s. this is bloomberg. ♪ . this is bloomberg. ♪

haidi: take a look at crypto assets. shery: bitcoin hitting a record high and surpassing the mid-october high we saw, $66 ,539. above that $65,000 level. this coming at a time where we see the crypto industry hit $3 trillion in value. this, as we hear more warnings

across the board, including from the fed's financial stability report, that perhaps this industry could pose emerging threats, especially in the form of stable coins. but the rally continues. the bloomberg crypto index, around levels that could reverse all of its losses from the may to july correction, and above that $3700 level as well. of course the rally in crypto assets coming with broader u.s. market rally as well. this of course thanks to a series of positive news including the infrastructure package, strong job support, not to mention earnings results. our next guest says given all these positive development, we might see the markets also refocusing on inflationary pressures, given that of course we have wednesdays u.s. api report as well. let's discuss the risks and opportunities with christopher smart, chief global strategist

at barings. it is great to have you with us. we continue to see the rally, but also at the same time more alarm bells ringing that perhaps this exuberance will not last very long, especially as you point out that we could see more concerns about inflation. is there more room for markets to rally from here on out, given that we continue to see this longest winning streak since 2017? christopher: well, i think we are seeing a very strong economic recovery on the back of government intervention, monetary support, as you mentioned, the infrastructure package that we now know is a fact and headed for the president's desk. on top of good earnings, the economy is very strong. but as you know, the market attention shifts from concerns about growth to concerns about inflation. with the cpi number coming out wednesday, which i think surveys suggest maybe as high as 5.9% year on year, they are -- there

are obviously jitters related to that. our team looks at the tangled supply chain and pressures on commodity prices as may be lingering longer than many of us thought earlier this year. but as you look to next year, i do not think those are going to be lasting, inflationary pressures. the demand will not be as strong, a lot of supply issues may come back more imbalanced. i think there is some near-term jitters to be expected, but not something that would lead us to unravel our relatively optimistic case for next year. shery: given the supply disruptions you have mentioned, we have also seen the ongoing global energy crisis, u.n. climate talks, and the opec-plus talks as well. i know recently you have written about this dramatic reorientation of the global economy. what does that necessarily mean when it comes to asset prices and we are you see the opportunities headed forward? christopher: i think we are all learning that the climate change and climate policy are going to

lead to a dramatic repricing of assets. whether it is coastal property prices, internal combustion engines, or the price of oil versus wind. and i think that is something that markets will be pricing in really over the next decade. it is nothing that we can really kind of think about as a major driver of markets i think in the next year. what we have clearly seen is a lot of things conspiring including strong demand and limited supply coming from opec. supply is growing but not at a pace fast enough to keep up with demand, which is led up to a spike of near-term oil prices. overall, i think we are going to be looking for higher oil prices in the near term, but our team thinks the price should certainly normalize, supply should come back online near the end of next year. haidi: one of the risks you flagged going into next year is a resurgence in covid-19 and some restrictions and pullback from return to normal that could

come from that. is that every risk? we take a look at most parts of the world, it seems hard to measure coming back from the level of freedom that we see. christopher: i think it is a risk because it is so hard to imagine in some sense. i think many of us in the u.s., in europe, in parts of asia, feel it is clearly a threat in the rearview mirror and therefore markets are not pricing it in. i have tried in the past to pass myself off as an epidemiologist, but i think the range of unexpected risks on the horizon might well be a resurgence of a new strain. not that it would lead to lockdowns like we saw at the beginning of last year, but they would be further disruptions in supply chain stressor of -- potentially, further disruptions and supply -- in travel. they remain the top two risks for most people these days.

haidi: we had an optimistic three weeks in october where there seemed to be the start of a recovery. but now we have seen the broader index sink to a 20 year low compared to the performance of u.s. equities. what's going to be the catalyst to drive more optimism in e.m., particularly as we see the energy and commodity story benefit that? christopher: e.m.'s of course from strong global recovery, which i think is what we are seeing, but they are hurt by relative rise in interest rates and a stronger dollar which we have seen lately. our view is that as markets begin to become comfortable with the fact that rates are rising but are not likely to spike much higher, inflationary pressures will remain under control and as the global recovery story continues through next year, emerging markets should catch up. again, global trade, solid commodity prices should all underpin that.

haidi: christopher, always great to have you with us. christopher smart from barings. you can get a round up in today's edition of daybreak. bloomberg subscribers go to dayb under terminal. this is bloomberg. ♪ ♪

haidi: a quick check of the latest headlines. mark mobius is allocating almost half of his emerging markets fund to india and taiwan. tech hardware and software are the biggest holdings. emerging-market equities are trailing developed peers, dragged down by losses in china. but mobius says there is opportunities in other areas. his view on in the is at odds with analysts from morgan stanley. >> in the and taiwan, the two --

india and taiwan, the two biggest countries waiting. india is where maybe china was 10 years ago. it's got a long way to go and it will be a long run. haidi: citigroup says it plans to take charge of $1.5 billion to wind down retail banking and south korea. the voluntary termination benefits and related costs will weigh on their results this year and next. it is one of the markets they plan to leave to focus on more profitable businesses. national australia bank beat estimates for four-year profit, riding a wave of a stronger-than-expected economic recovery. cash earnings climbed 76% from a year earlier, rising to just under $4.9 billion u.s. lots more to come here on "daybreak asia." this is bloomberg. ♪ s bloomberg. ♪

haidi: we do have some breaking data when it comes to japan crossing the bloomberg. labor cash earnings year on year for september see an increase of just .2%, missing expectations of .6% and calling for the previous gain of .7% in august. real cash earnings year on year also worst and expectations, actually a contraction of .6%, worse than expectations of a contraction of .1% and also falling into negative territory there.

we're also of course watching some of the news when it comes to toshiba. we have heard in terms of trying to rebuild shareholder value, a report they were considering splitting the company into three to boost that value. we're hearing now from toshiba, saying a split is one potential strategic option, saying they are currently formulating and midterm plan, but no definitive decisions have been made as of today. we heard earlier reporting from local news that toshiba was set to divide into three companies to focus on infrastructure devices and semiconductors as early as 2023. some of the investors involved have been calling for that is an option to strengthen shareholder value. let's stay with check, a -- with tech. softbank is plenty to repurchase nearly $9 billion of stock. it is a familiar playbook for the founder and comes after record losses at his vision fund. let's discuss all of this with

senior equity research analyst at jefferies. always great to have you with us. a problem is these buybacks, popular as they are, the effect fades quickly. we have seen that come down after it starts to fade. how many more of these can he potentially do, particularly when they are sizable like the one you announced this week? -- he announced this week? atul: yes, you're right. our analysis is the perform -- that's one. secondly, how long can it last? if it's executed cleverly, it can last a long time. you have to sell about 2% to 3% of alibaba holdings and use that to monetize. this $10 billion buyback that

has been announced, while they have talked about this to last years, they're basically saying we could take longer than one year as well. that is one part of it. also remember, berkshire hathaway, the way it operates is there's a stated level of anything below 1.2 times, and the company will buy back stock. so there are a few ways to run it for a while, but you are right, without the buyback, the stock does not work. haidi: and of course so much of the downside is just the record loss that we have seen, the dismal performances into so many of its investments. is there any optimism that that could improve? atul: those losses are entirely linked to what happened in china. so, again, this is veryt to cala bottoming, but if china assets

are bottoming or close to bottoming, then you can imagine there is less of a downside from here for softbank. the total make asset values of course around 13,000 yen per share. the stock is trading at 6000. so 13,000, there's always going to be a certain amount that will never trade, because you have to discountit for capital gains tax or for corporate holding company discount. if you would like roughly 30% discount of those levels, a share price would be around less than 9000 yen anyway, currently above where it is currently trading, so it makes sense to activate a buyback here. the last time they did it they continue to do these buybacks until it was 10,000-plus yen, not 6000. shery: let me turn to to sheba, because -- to toshiba, because

they reacted to the reports that they are set to divide into three companies. toshiba saying splitting is one potential strategic option. where do you see toshiba going from here, and what would be a good strategy for them? atul: yeah, that is very interesting, because we had only heard up until now the media reports which suggested the split three ways. this is more of an event play, toshiba. we have a buy on softbank and toshiba. because we do believe this company will be privatized, and a lot of restructuring that it needs can easily happen outside the public domain. now, if they were to go down this path, and as they say, this is one of their options, this would make it easier for them to keep businesses that have considered as national security, and others, separately. and once that separation is

there, it will be a lot easier to privatize and sell assets to investors, whether they are fell learn -- foreign investors. that will be a lot easier. currently they have quite a few businesses can be categorized as national importance, and therefore it is difficult. previously it was good. but that having been said, that would benefit a majority of companies in japan. most of them seem to be doing a lot of things. if they were to do these kind of splits, this tends to work really well. to unlock corporate value. shery: will this be enough to really a peace activist shareholder's? we know they were getting a lot of pressure. atul: yeah. they have multiple activist shareholders on the role, and others have joined recently. because most investors have invested around prices below

¥3000. the stock had close to ¥5,000. they are already in the money. any further upside from here will be good for them. so privatization is the main thing in our view that unlocks further value on where we sit. just this alone may not be that easy. plus, the company does not have a midterm plan yet. they are in the process of changing. this is likely to come out within the next week. a lot more activity on the front, but the timing, if they were to announce a split, this could be enough for the activist shareholders, because this is moving in the right direction. haidi: the company's growth other than structural issues and of course the terrible years it has had, also facing challenges, particularly when it comes to the expansion of digital. how much competition is there when it comes to the business side of things for toshiba? atul: that is a very complex question to have about a couple

dozen businesses, including nuclear energy and coal energy, building materials, elevators, air-conditioners. they have quite a few businesses in which the landscape is different. what we notice is most of the businesses within japan, they seem to have less competitive pressure. anything their operating, most of the businesses they have intense cap addition. when we did analysis we laid out a case for them to exit most of the businesses in general. 80%. most of them were overseas businesses. if they were to do that, they could salvage value, they could secure returns for those businesses, and then redeployed part of that, partly in share buybacks and partly in consolidating their position in japan where they could be number two or number three. so, consolidate and gain

market share would be the key from here on. shery: atul goyal, always great having your insights, thank you. of course we are tracking the fallout of the global supply chain crunch. let's look at the top stories. china under pressure to pause new rules for food importers. diplomats from the u.s., japan and elsewhere city changes will further disrupt global supply chains. they want the delay of at least 18 months. the u.s. commerce secretary gina raimondo once a leverage $52 billion of chip funding, wants up to $200 billion of investment through private public partnerships and private capital. she also wants to digitize u.s. ports. korean chipmakers are complying with the u.s. request for information. samsung on samsung and sk hynix have submitted data, including client-related information.

sk hynix also right now confirming it has provided some chip supply chain data to the u.s. and also, this bloomberg intelligence report about investor anxiety over supply chain shocks. very interesting. it says energy prices cooled -- could be pulled lower with shipping rates in recent years. the baltic dry index also shows that sharp drop throughout the past few weeks. and of course bloomberg terminal users can read more about those stories in our newsletter supply lines. nl trade nl. haidi: shares of advanced micro devices popped after the company announced they won meta, formerly facebook, as a customer. >> this has been our focus over the last four or five years, to build up the capabilities in the

data center. we see the data center as one of the most exciting, if not the most exciting market in semiconductors. there is a massive need for high-performance computing. and each one of these large hyper scalars are doing such a unique and innovative things. we are honored to be partnered with all of them. i think it says a lot about the technology that you need and the multigenerational roadmap that you need. being able to partner the best means you learn how to make your roadmap even stronger going forward. emily: i do want to talk about meta and the metaverse. a lot of people still do not know what the metaverse is. how big of an opportunity do you think the metaverse will be, and do you see -- what do you see as amd's role in it? lisa: if i just take a step back and talk about sort of, high-performance computing, and what we believe and what i believe is there is this megacycle around needing more

computing and 70 different applications. whether your talk -- in so many different applications. whether you're talking about research applications, analyzing massive amounts of data. yes, the metaverse is even the next thing on top of it. we believe it is a very large opportunity. if you look at high-performance computing in its entirety, i think the metaverse is one of those areas that many people are talking about in terms of how do you really bring together virtual reality and mixed reality together with all of the collaboration that we are doing now. i think we have new expectations of what life is like post-pandemic, so it's an exciting vision. and we view it really as an opportunity where you need high-performance cpu's or microprocessors and high-performance graphics and ppu's and artificial intelligence and machine learning and visualization, and bringing all that together. we are unique in the sense that we really do look at the end to

end use cases and work with our partners on making that happen. so, we view just tremendous opportunity in high-performance computing going forward. shery: the amd president and ceo lisa su speaking with emily chang. let's turn to sophie for what to watch. sophie: keeping an eye on the semiconductor space. the stock did rally here to a fresh record high. this on bets the sector can keep rallying. on the other hand, asian-specific stocks have lagged u.s. peers. flipping the board over to sydney, sluggish as well. keeping the kospi reined in. but a rebound is expected in the second half of 2022 on that memory cycle bouncing back. citi forecasting the kospi will range at 2900 to 3200 next year.

turning to the market action in sydney, pulling up the chart on the terminal for a breakdown of the session so far this morning. it's a mixed session but we are seeing gains today. chalice mining, the best performer so far, jumping the most in three months after their report on mineral resource estimates. check out newcrest at the bottom of the pack. it is not showing up right now, but we are seeing pressure following his deal to buy a canadian gold producer. under pressure, stock falling 2.5%, halting a four day gain, despite the dividend boost. bloomberg intelligence says it puts the bank in position for further buybacks. goldman says the result supports their buy recommendation, but that stock is under pressure. shery: next, barack obama steals the show at the cop26 climate shocks and makes a plea for bold

action. this is bloomberg. ♪ is is bloomberg. ♪

vonnie: you are watching "daybreak asia." the federal reserve is winning risky asset prices keep rising, making them more susceptible to crashes if the economy takes a turn for the worse. their reports is the change

investor sentiment or setbacks and containing the pandemic would make asset prices vulnerable to significant declines. it also sounds warning on stable coins and fragility in china's commercial real estate sector. some bondholders of an evergrande unit are yet to receive payments on dollar note. the developer scenery journey had two coupons due saturday, but that deadline was extended until the end of the next business day. as of monday evening in hong kong, they have not received funds. both have a 30 day grace period before being considered a default. robinhood has revealed a hack last week exposed the email addresses of around 5 million customers in the full names of a different group of approximately two million. they believe no social security, bank account, or card numbers were exposed. the hackers demanded extortion payment. china's central bank says it

will extend key funding to banks which lend to companies working towards reducing carbon emissions. the pboc will offer financial institutions a discount in the loan primary if that money is then used to help china's energy transition. the central bank will require puppet disclosure as the use of the loans and be -- and the associated emissions reductions. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: cop climate talks fm third -- negotiators are bracing for all night sessions. talking about how to create climate market and who will pay for the ravages of rising temptress. former u.s. president barack obama also took center stage. >> most nations have failed to be as ambitious as they need to be. the escalation, the ratcheting

up of ambition that we anticipated in paris six years ago has not been uniformly realized. i have to confess, it was particularly discouraging to see the leaders of two of the world's largest emitters, china and russia, declined to even attend the proceedings. their national plans so far reflect what appears to be a dangerous lack of urgency. shery: let's get more from the head of apac research. what were some of the key takeaways in this second week? >> so, for the last 24 hours, aside from former president obama's appearance, there was not really any new major announcements. now negotiators are mostly busy talking to each other to try to iron out some of the harder parts of the deals they are trying to achieve. for example, archibald six and the details around achieving a global carbon trading framework.

these are going to take time. so as a result of that, they did not get in much. even today we are probably not going to get a new announcements. -- any new announcements. haidi: even when we do get agreement, how binding are these deals and agreements and handshakes that are made at cop? >> a very important question. the beauty of the agreement was this concept of naturally determined contributions, which means every country gets to pick their 2030 emission reduction goal. these goals a commute to lovely should still be enough to put us on a pathway to lower two degrees. once indices are submitted it is down to the political system of this country. in the eu, these targets are enshrined in legislation which then include penalties for eu members if they are not met. other countries are a bit

different. korea is a really interesting case to look at. korea has legislated net zero by 20 2005, but its more ambitious recent 2030 pledge which president moon announced last week, that is not enshrined in law. korea has long term limits on his presidencies. so whoever becomes the ruler next march is really the one who will determine whether this target will be delivered or not. the current governing party's candidate, he probably would continue in his pathway. the main opposition party, which just last friday selected their leading candidate, that's a bit more of an unknown because he is new to the scene, so his views are not very well known. haidi: ali, it was great having you on.

we have breaking news out of japan. shery: we are getting the current account surplus right now coming in at 1.033 trillion yen. this would be the trade surplus narrowing from the previous month. we're talking about the adjusted number also coming in at 762.7 billion yen, which is a narrowing surplus than in the previous months. this of course as we are sued in the numbers reflecting a widening trade deficit, a weaker yen and higher commodity prices. also being felt across the board. so the current account surplus again narrowing to 1.033 trillion yen. haidi, this of course following the japan labor cash earnings as well, rising less than expected. we're watching all those data points coming out of japan. haidi: we are also watching hertz, just announcing it is

pricing its upsize offering of stock by selling certain stockholders of hertz at a price of $29 u.s. a share. they are expected to have an aggregate purchase price of $300 million at the price at that offering. hertz, the rental company that managed to exit bankruptcy in june has been trading over the counter, also planning that listing to list on the nasdaq. that filing had listed the size of the offering at $100 million on friday. it has of sized that offering now. we will continue to monitor that as details get to us. but we have lots more to come. this is bloomberg. ♪ is bloomberg. ♪

haidi: a quick check of the latest headlines. tesla shares recovered losses in new york following elon musk's twitter poll which endorsed him selling 10% of his stake. up to 3.5 million respondents -- analysts remain split on the implications. bloomberg intelligence points out this could get him in trouble with the sec if he did not clear it with the council first. it is not clear if he will follow through. tesla's shipments in china --

plunged 74% as it prioritize the markets abroad. the company exported more than 40,000 cars from its shanghai factory, that is more than 10 times a september's amount. tesla typically ramps up local deliveries later. they say the carmakers considering domestic and overseas markets for the ipo, which could come as early as 2024. they also said the share sale would fund efforts to electrify a product line of semi trailers, trucks, and buses. they launched the unit in 2016. shery: coming up, more markets analysis. plus, don't miss a big interview with an e-commerce financing platform using big data, machine learning, for credit

decision-making. the cofounder is with us at the bottom of the hour. this is bloomberg. ♪

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shery: hello and welcome to daybreak: asia. sophie: and in hong kong. haidi: taking a major look at the markets in australia. the longest winning streak since 2017. the dollar in treasuries declined. bitcoin hitting an all-time high. we are watching softbank on plans for a massive share

buyback after record losses. the fed warns on rising risky asset prices will also sacking concerns over crypto pit shery: japan and south korea coming online. let's turn to sophie for what to watch. sophie: little change for the nikkei 225 after a two day drive. as we digest the trade balance data from japan, the yen trading near a four week high ahead of a 30 week debt auction. we are keeping an eye on some earnings. we have nissan and next on among those due to report from japan. keeping an eye on softbank shares on the back of the result that was a record loss for the vision fund. it did announce a one trillion buyback. keeping an eye on toshiba as well. this as it confirms splitting up its companies could be considered to switching out the

-- could be considered. switching out the board. the kospi gaining ground by a third of 1%. dim sum shares looking to see a little bit of pressure. the company seeing -- the company think it has provided data but did withhold customer data. the kospi looking to gain ground after two data climb. and it comes to the outlook for the index, citi saying it is likely to keep the move unexciting until the second half of next year. samsung gaining a 10th of a percent. switching out a board for the performance in sydney, we are seeing minors lift the -- seeing miners left the asx 200. -- literally asx 200. this is the economic recovery is -- the 10 year yield pushing back

toward the 180 handle. when it comes to treasuries, cash yield staying below 149 as we count down to the cpa data. -- the cpi data. jp morgan singh the expect global inflation will stay above pre-pandemic levels going into next year. at citi, they are at team transitory. expanding a peak of inflation. haidi: our next guest staying overweight when it comes to asia. let's bring in the head of asia pacific microstrategy at state street global markets. it is the gap that we continue to see after a brief period of optimism in october. we continue to see this huge underperformance. why is that happening despite the commodities and oil story

and does that create more opportunity? >> it is happening i think because people are looking at growth outlook. when you think about emerging markets, historically, they have been vehicles that reflect underlying growth conditions. i think the concern for many emerging markets -- let's leave aside the idiosyncratic factors. the concern is they are on the cusp of an inflationary spiral. they are also subject to potential revisions to the downside. we have seen that from developed markets. it is having an impact on emerging markets. there is a growth angle. there is an oversight with this inflation story and the fact emerging markets are aggressively tightening monetary conditions at this point. in its entirety, that is having an impact on emerging markets. the other part of your question is an important one.

we are overweight in emerging markets excluding asia. we are overweight the rest of the emerging markets and that is a reflection of the fact emerging market indices outside of asia are heavily weighted toward the commodity exporters. that is one area of the emerging markets universe getting a lot of support simply because of high commodity prices. we need to look at emerging markets in a differentiated way. its vulnerability to growth and connection to the commodity cycle. haidi: a lot of the vulnerability comes from exposure to china. does china and the yuan remain an anchor when it comes to and influence? which markets have the least vulnerability to that? >> if i flip that question around in terms of most vulnerability, it is going to be the regional markets. asia gets dragged along. that is fine.

i was doing some work looking at currency correlations between the yuan and the rest of asia. it is very high. correlations of 70 to 80%. the yuan leads, the currencies tend to follow. we are not negative on the yuan. which ones are the least correlated are those markets outside of asia. with many of them, brazil and turkey, you have to deal with idiosyncratic risk. there are stories out there, and with the likes of russia, mexico where you have quantity stories and low correlation with the china story. the trick for investors is to find not the idiosyncratic stories to avoid but find a lot of stories, which are writing the wave of the commodity cycle and or divorced from the

downside risk we see in markets. shery: you mention brazil because we continue to see the political uncertainty pressuring the brazilian we are, which leads to inflationary pressures. in economies like chile, that have copper and have been a beacon of stability across south america, they are feeling the pressure down about 14% the past six months or so. how can the commodity story offset the big idiosyncratic risk. -- the bigot using credit risk? -- the big idiosyncratic risk? >> both subject to what we regard as abnormal political risks. this is going to be a year-long process in brazil. elections in chile have been the weight of the chilean peso. look elsewhere and you see the south african rand or the russian ruble.

some of these commodity currencies are outperforming what we see in the rest of the world. this is something we have looked at recently, which is does politics trump fundamentals or is it the other way around? in latin america, it looks as if the politics are a real headwind. in other markets with the political risk seemed more priced in, more embedded but less of a factor dragging the currencies down. like russia and south africa, commodities are a headwind. not only do we need to split up emerging markets, we need to split up the commodity exporters as well because there are other factors influencing the returns we have seen. shery: what about the very aggressive central bank tightening we have seen in some of the emerging markets including russia? >> that is going to be ongoing. two ways of looking at this. the first is that you gain from the resilience of your rate differentials.

one of the negative potentials for emerging markets is when they cut rates and you can lose the rate differential. you have lost the premium of holding emerging markets. has the markets tighten policy, they regain some of the interest rate premium. russia is a case in point. not for someone like brazil because even though brazil has tightened aggressively, you are still seeing negative real rates. that is a problem for brazil to that is even a problem for south korea, which is why we expect the bank of korea to keep on tightening. where you have a positive real rate environment is where you then have or currency support. if you have high commodity prices to hang onto that, then that is quite a strong story. the real rate story is important . for most of these emerging markets, tightening is going to continue because inflation is problematic for emerging markets. shery: it was great having your

insight. his views on emerging markets. take a look at what toshiba is doing in japan because we are seeing at rise 2.2%. this after we confirmed we are considering splitting up the company or one picture -- as one strategic option chair this afternoons that the conglomerate was set to divide itself into three different companies. toshiba has faced a lot of turmoil in the past few years. let's discuss these latest developments with bloomberg's asia check -- asia tech editor. what do we know about this potential split and what would it do for the company? >> toshiba is a shadow of itself . the company has been through repeated scandals and losses in the past. they had the biggest accounting scandal ever a few years back.

they had to sell off their memory to business and they are left with a mishmash of different operations. toshiba did confirm they are looking at various options for increasing the value of their stock including possibly splitting up -- they said splitting up is one of several options under consideration. a relatively modest move. activist investors are unhappy with how the company has conducted itself over the past few years. they have one -- they have lost a ton of value per share holder so you are looking at some change. haidi: we are continuing to watch softbank to see how they trade after the adrs jumped the most in two months. a lot of that is the 9 billion-dollar dollar buyback. is this a stop up measure given how poorly some of the investments did? >> he is returning to a strategy he has used effectively in the

past to increase the value of the shares. it was a year ago in march when they unveiled the enormous buyback, more than $20 billion. saying they were going to buy back shares because they felt the public market was not giving them enough credit. they discontinued that program earlier this year. investors were disappointed and shares lost 40% of their value. this quarter, a heated discussion about what to do with their cash. ultimately they decided they did because the discount between softbank's own shares and assets it has in its portfolio has reached more than 50% according to their calculations. they are going to spend ¥1 trillion, roughly $9 billion on buybacks over the next year. that could be expanded and it could be extended if they feel they are not getting the kind of increase among closing at a

valuation gap they are looking for. haidi: our asia tech editor with the latest on softbank and toshiba. let's get you the first word headlines. vonnie: the federal reserve vice chair says conditions to lift rights could be met by the end of next year. speaking at a virtual event in washington, he said the bank was a ways off from considering hikes. jim bullard is penciling in rate increases for 2022. the philadelphia fed president does not expect any rise before tapering is complete. fed governor from the central bank will step down should this has left president biden another vacancy to fill. he joined the board in 2017. his governor term runs to january of 2032. traditionally fed officials

depart once their leadership roles end. china's central bank says it will provide cheap funding to banks working toward reducing carbon emissions. the pboc will offer financial institutions a discount if the money is used to help china energy transition to the central bank will require a public disclosure of the use of the loans. singapore is easing some tough covid measures put in place more than a month ago to tackle a spike in cases. stating from wednesday, five people at the same residence will be able to dine at the same restaurant live music performances are still banned. singapore is looking to resume sports for the vaccinated. 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 vonnie quinn. this is bloomberg. shery: we speak with the fintech start up about their latest fundraising and how they

leverage data scientist to provide sme financing. up next, we analyze president shooting pains standing power and the growing risks as he looks to roll -- president xi jinping's standing power and a growing risks as he looks to rule indefinitely. ♪

shery: another china evergrande coupon debt has passed without payments leaving bondholders wondering if the developer is heading for default. it's bring in our chief north asian correspondent in hong kong. what do we know? >> this was issued by a unit scenery journey. thank you in the translation to english. about 82 and a half million u.s.

dollars it was on the weekend so i was passed on to the first business day. as of 6:30 p.m. yesterday, two bondholders are telling us know coupon had been paid. there is a 30 day grace period built into this. we have the dollar bond that was due in late september. they used the full 30 days to pay that. perhaps that is the course they are taking as they are seeking further asset sales. the 30 day grace period is expiring this thursday on three other coupon payments coming due. 138 million u.s. dollars. i mentioned the asset sales. that has been trickling in. we have been hearing they have sold a small chunk worth about 52 million u.s. dollars in its

film production and internet media company. and also may be according to other media reported two private jets have been sold garnering another 50 million. with $2 billion in bond payments due coming shortly, it is not enough. it does leadve creditors wondering how evergrande is going to meet their liabilities. haidi: we know chinese authorities have expressed confidence that it can be contained. you start to see the bond selloff in the high quality developers. >> that is the interesting one. beijing authorities have been talking about ring fencing and expressing their confidence it can be contained and perhaps lead the pain be felt by the likes of evergrande who are overly indebted to the tune of 300 billion plus in liabilities. we have seen the pain in the

high-yield bond. we are starting to see you last week these bigger developers, these investment-grade borers like country garden. we sold one dollar bond selloff the most -- we saw one dollar bond selloff the most in a decade. you want to use the c word, contagion, to these higher investment-grade borers and their bonds. it is starting to happen. on the flipped page of that, you're stern to see the lights of -- the likes of goldman sachs seeing opportunities in the sold off junk bonds of these developers. alex bell is a portfolio manager saying the market is overestimating the contagion risk and that creates opportunities. haidi: our chief north asia correspondent with the latest on evergrande ties we continue to watch for repayments. we are watching softbank.

off the session high. at one point jumping about 10%. that is the biggest move in the stock price since december last year. almost a year. this after they announced they would do the $9 billion share buyback after some devastating portfolio losses. the decline leading to a record loss. china -- trying to make up for the sentiment side. announcing the ¥1 trillion share buyback. he also said the buyback is not completed in a year, it could be extended. we are seeing a positive reaction. let's get back to china. investors are eyeing chinese education stocks after dow jones reported beijing plans to issue a dozen licenses that would allow companies to offer afterschool tutoring. what is this all about?

given the clampdown over the sector. >> obviously the clampdown on private tutoring was one of the biggest things that happened this summer. a summary of regulatory scrutiny all around -- a summer of regulatory scrutiny all around. they asked all of the companies to become nonprofits. this dow jones report is laying out the government is planning to do that by issuing licenses to these companies allowing them to provide touring services -- provide tutoring services from grade nine and younger. they will have to do it on a nonprofit basis. those companies will be allowed to make a profit when it comes to training adults for professional licenses. but not for tutoring of kids. that will have to be nonprofit. haidi: more insight into further regulatory shery: -- more insight to further regulatory action this week? >> we should get a statement on

thursday. the number one agenda for this is a look at the history of the communist party and shooting pains role in that. never resolution comes out of it is going to portray xi jinping as playing an important role. and obviously his leadership of the country has seen the promotion of common prosperity, all of these regulatory crackdowns. if he stays in power, we expect that will continue into the future. haidi: what are the policy mistakes or risks associated with wanting to please the boss at any cost if we do see this extension of his power? >> i think one of the big changes that has happened here in the last decade is in the

past, local government officials in china have had the leeway to make decisions on their own. they could be innovative, creative with how they try and help the economy. the arching goal was to make the economy -- grow the economy. since he has come into power, he has increased his hold over power, control of the central government control over how the government executes on these policies. local government officials have been left feeling like they cannot make their own decisions. they have to make sure they are doing what the central government is telling them what to do. sometimes those orders are contradictory. when it comes to energy, local government officials are being told to reduce carbon emissions, reduce pollution. at the same time provide enough energy for local industry and continue economic growth. that is contradictory. these government officials don't know what to do and they are deciding not to act.

shery: how is great having your insights into china. the greater china editor joining us from beijing. play more to come. this is bloomberg. -- plenty more to come. this is bloomberg. ♪

shery: here's a quick check of the latest headlines. national australia bank beat estimates, riding the wave of a stronger-than-expected economic recovery. cash earnings climbed to 76% rising to under 4.9 billion u.s. dollars. to announce the final dividend of 67 aussie cents per share as it winds back provisions made for the pandemic. citigroup says it plans to make charges of 1.2 and $1.5 billion to wind down banking in south korea.

the costs will weigh on results this year and next. korea is one of 13 markets the bank plans to leave in an effort to focus on more profitable businesses. up next, we hear from the cofounder of a moving is a handful. no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at xfinity.com/moving. so many people are overweight now, and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now there's release from golo.

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vonnie: you're watching daybreak: asia. the federal reserve is warning risky asset prices keep rising making them more susceptible to crashes if the economy takes a return from the worst -- a return for the worst. it also sounded warnings on stable coins and on fertility in china as a commercial real estate sector. some bondholders from an evergrande have yet -- an

evergrande unit have yet to receive payments. as of monday evening in hong kong, we understand two holders had not received funds. both bonds have a 30 day grace period. the u.s. and allies have targeted a prolific hacking group with a string of arrests. five people have been detained and others indicted for alleged ties to a russia linked ransomware gang. sanctions have been issued against cryptocurrency and those accused of enabling such an attack. >> today and for the second time in five months, we announced to the seizure of digital proceeds of ransomware deployed by a transnational criminal group. this will not be the last time. the u.s. government will continue to aggressively pursue the entire ransomware ecosystem and increase our nation's

resilience to cyber threats. vonnie: trading platform robinhood has unveiled a hack last week revealing email dresses. -- email addresses. robinhood believes no social security, bank account or card numbers were exposed. it says the hackers demanded extortion payments and is working with law enforcement and a security firm. 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 vonnie quinn. this is bloomberg. sophie: the s&p futures down by 2/10 of a percent to gains for apex stock. the kospi halting a two day decline but still below the 3000 level. helping boost the index.

offsetting the decline seeing in banks. in japan, softbank helping drive gains for the nikkei 225. this as softbank jumps 12% on the back of its buyback plan. switching out the board, i want to highlight tokyo electron, which has had a fresh record high rallying with other chip stocks in tokyo. check out qantas shares. seeing some pressure to the downside. the carrier this morning announcing plans to bring forward the return of its a380 jets. has results do later this tuesday. have seen stock -- stuck had diversified into cryptocurrency. a lot of focus on the crypto space pubic bitcoin jumped 57,000 dollars helping lift the

total crypto market above the $3 trillion market. ethereum flirting with a price record. shery: let's turn to a fintech firm to a hong kong-based start up. it has raised $150 million. this coming amid numerous platforms seeking to cash in on sme financing. the main clients are based in china. joining us is the cofounder and president. it is great to have you with us. first of all, explain to us your company's performance. your business. where you operate and where you see the opportunities with this $150 million of capital raised. >> it stands for quantitative capital. we are a data-driven merchant lending platform. use data provided by leading

e-commerce platform such as amazon, ebay and lozada. we use that to underwrite credit decisions for smes and e-commerce brands looking to sell on these platforms. we use that data and give a credit limit and terms between one to six months for the smes. we have been growing well over the last two years. over 700% growth. with the $150 million in new funding, we can accelerate our growth and start expanding not only within mainland china where we have five cities already but internationally as well. shery: you are not profitable as of yet but what are your expectations on this front and where do you see the biggest growth coming from? >> we see the growth coming from a lot of growth in e-commerce in

asia with platforms like lozada. we aim to be profitable within the next quarter. q1, 2022. haidi: talk to us about some of your backers and how important it has been to have these supports. >> it is great. our series b round was led by home area investments. they are a almost $13 billion u.s. private equity fund founded in 2018 by leading investors. their lps include some of the largest chinese conglomerates. they provide a lot of support in the greater bay area. we believe we share the same mission and vision to enable businesses in the high-tech industries to be able to grow

and sell their products across the world without wearing about short-term capital working constraints. haidi: have you fill any change in the liquidity situation when it comes to funding out of china? >> the deleveraging in china is causing a lot of smes to have difficulty finding barring opportunities -- finding barring opportunities. we are also enclosing a securitized ocean operation. this will give us the funding required as we fund in u.s. dollars to allow us to scale rapidly and the same time it will allow funding.

haidi: do you plan to expand in currencies in terms of what you currently offer and what you could offer in the future? >> internationally come over looking to expand into two countries. in 2022, which is the usa and japan. japanese yen would be an attractive currency that local brands and borrowers would be looking to tap into. japanese yen would be the next currency outside of the u.s. dollar. haidi: cofounder and president of qupital. the cryptocurrency market is worth more than $3 trillion. the by finance founder -- the binance spoke about the future of the market. >> organizations should be

looking at crypto. it is going to be the future of money. anybody who does not understand money is going to be at a significant disadvantage. etf's can typically reach customers we were not able to reach. they would only have been able to penetrate a small percentage of the global population. having those guys ring these people into crypto is a huge win for the industry. right now the crypto industry is only about 5% penetration globally. at of 8 billion people, only 400 million people have crypto. it is only 5% adoption. when we get to 95%, we may view the market as being saturated. there may be some competition. we are --

the more people we can bring into the industry, the better it is. even when the market which is 5%, there are new applications that can be built. i never had the final mindset of where is the market. more applications we can build, the more products we can offer to people. >> the other things we have been trying to figure out is the initiative to support some of the cryptocurrencies in france and europe in general and this is through money. what is europe stand on the crypto universe compared to asia and the u.s.? ? the u.s. is a separate entity for us. we do view europe as a large market. we view france as a strategic

position for us. the regulatory czar pro-innovation. -- the regulatory's are pro-intervention -- france typically had strong mathematics and engineering background. we want to help to grow the community in france and europe. i think anyone who is not interested in new technology who is not following is going to be at a disadvantage. he is extremely smart. new york has always been the financial leader globally. it is great to see that. shery: the binance ceo speaking with francine lacqua. as we continue to see this crypto revolution, we not only talking about it coin reaching

new record highs. we are also talking about implications for actual stocks in the stock market. we solve that with what happened with tesla. over the weekend with elon musk's two week, we got a sense that his selling of the 10% stake as his followers wanted would lead to his real shares tumbling this monday, which is exactly what happened. because the cryptocurrencies tied to tesla on the exchange had actually taken a hit over the weekend. the thing is that crypto trades 24/7 every single day. this looks like it is going to start ruining weekends now you have the digital tokens tied to real shares having a real impact

over the weekend by whatever happens with that company. haidi: it is exhausting. i can only imagine it is exhausting and before you get to the exhaustion of dealing with the volatility and the roller coaster ride of this market, we are at a $3 trillion market cap as you see bitcoin and ether gaining. it coin seeing highs. we have seen these times before where they reached these new levels. the pull back thousand dollars time. multiple corrections. other points even more volatile. all of this is playing into concerns about financial stability. the fed worried about the money pouring into stable coins. the impact of mime trading. the impact of social media. it feels like a point in history were never before have there been so many different types of influence on how people trade.

shery: next trading more interesting. coming up next, we have more news. music will be plenty again in singapore's restaurants as the government is easing some of its social gathering restrictions. this is bloomberg. ♪

haidi: singapore is easing some covid restrictions. the changes include allowing people from the same residence to dine at restaurants. joining us is bill the payment. the rule was pretty controversial when it comes to families being forced to dine on different tables. that is one of the things that will change? >> that is right. it has been kind of a long time coming. we have seen a rise in infections the last several months. we have been touching over 5000 a day. that has been cut. the government has decided to ease up on some of the measures that would allow people exporting events, larger gatherings and use up a little bit on traveling.

shery: how vaccinated is singapore what is the government doing to increase those shots? >> have 85% of the population that are fully vaccinated with two doses. 86% have at least one. were talking about a huge amount of the population. and has been the case for a long time. the key metric has to be critically ill people, people getting sick. those figures are looking pretty good. 98.7 percent of people mild or no symptoms. less than 1% requiring oxygen. .3% in the icu. your ceiling the health care system has scaled up on icu beds. there is a huge pr portion -- a -- a huge pr push to get the elderly who are most vulnerable vaccinated. shery: bloomberg southeast asian reporter with the latest on

singapore. we are also watching india because it has been a focal point for investors. very excited of india coming out of the pandemic and grown strongly. seeing investors adding money to etf's that by indian stocks. talking about them pouring $90 billion into india's equity tract. focused on ems last week. it is a third of the money that has gone into u.s. etf's. it shows you the optimism given there is this frenzy over ipo's in india. take a listen to what i legendary em investor had to say about india in his portfolio. >> in our portfolio, india and taiwan are the two biggest countries. we are excited about india. india is on the take off stage. india is where china was two years ago. it has a long way to go.

they're going to be corrections along the way. you have to be aware of that. india is on a run. it is going to do very well. haidi: there is no slowing down when it comes to the flurry of ipo's. we had the biggest one yet when it comes to 197 communications. receiving bids for 8.8 million shares on the first day. the aversion to risk for investors when it comes to investing in china. we see this robust recovery in india and a lot of investors who want that exposure to emerging market opportunities seeing india as a better or different option. that the stock market is hitting a sweet spot right now. you can get a roundup of the stories you need to know to get your day going as today's edition of daybreak will bring

that to you. subscribers can go to dayb on their terminals. you can customize the settings so you get the news on the industries and assets that matter to you. this is bloomberg. ♪

shery: citigroup is winding down

operations in korea with charges of up to $1.5 billion. the bank has opened a new branch in york city to focus on more profitable -- more profitable businesses. the head spoke to a new -- spoke about strategy. >> we want to connect locally with our customers. it is an expression of us wanting to win. we want to win at home and as we look at this ranch, it is an expression of us bringing together our digital first model with the personalized service and the high touch model we are trying to have in the u.s. market. >> use a digital first yet still new space. does this mean you will commit to a larger real estate foot in more cities across the u.s. as you sleep planned to do? >> we look forward to sharing our strategy coming up in the first quarter. what i can say is we are focused on doubling down in our core markets. we think -- we have seen some of

this across 17 markets in asia. we see the value of the branch is still there. see the value is still better for high value interactions. if you want to talk about your financial situation, financial planning, we want to talk to a human and we want to deliver the high touch human service coupled with the best of our capabilities. when we talk about her strategy, we talk about it being digital first. >> there has been a lot of news about your relationship with google and that having fallen apart. will citigroup look to partner with another technology giant as they think about forming the footprint? >> there is a point in that engagement. where one of the premier full-spectrum partners. we continue to partner with physical and digital companies. we continue to talk to google. a lot of learning that 70

million of our clients will benefit from as we deliver those capabilities. >> as you say, you came from asia. you also spent time in europe. i'm in the u.k.. this feels like a digitized market. asia is let years ahead. what is the gap between consumer banking in the united states and the consumer banking experience in asia? >> i think a couple of thoughts. one of the things that struck me from having had the privilege of 17 different markets, i've seen pockets of disruption in payments, pockets of disruption in credit. i bring all of that with me to the u.s. points of commonality are there is a diminishing value of the location. nobody including myself once to come into a physical location to

send a payment, to change or transcend your account. from high-value transactions, decision i may make once or twice and in my life, i want to talk to a human sometimes i want the human interaction. we don't see that diminishing certainly not in the u.s. and a few other markets across the world either. >> this is alex in washington, d.c.. let me follow along the same lines and ask about crypto. the mayor elect in new york talk that he wants to be paid in bitcoin or crypto. how do i do that if i want to bank with citigroup? >> today, we don't allow that. the reason is we like the technology but it is a nascent technology. we are trying to proceed with caution. we are trying to protect our clients. we are looking at this closely and that is where we are today.

haidi: let's take a look at some of the stocks were watching this hour. sophie: keeping an eye on chinese education stocks. beijing may provide for some licenses of classical school tutoring. listed firms may not be eligible. switching out the board, property stuck in china. best ability is a question mark. local media report cities have taken over should reopening optimism is coming to southeast asia with singapore and malaysia set to establish a quarantine free trouble lane. we have philippine gdp data due today hong kong time. economics expects gdp growth slows to 5% in the third quarter as the rebound stays constrained. haidi: that is it for daybreak asia. our markets coverage continues as we look ahead to the start of

trading in hong kong, shanghai and shenzhen. bloomberg markets china open as -- china open is just ahead. ♪

♪ yvonne: 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i am yvonne man. david: good morning, i am david ingles. let's get to your top stories. today the fed warning on risking asset prices will also concerns about crypto and singling out the china property