♪ >> good morning. we are counting down to asia past major market opens. shery: welcome to daybreak asia. asian markets set for a cautious open as investors weigh a third day of gains on wall street. >> investor concerns over omicron ease as pfizer say a third vaccines -- vaccine dose

neutralizes the variant. >> kaiser enters close to bondholders with the financing deal. >> i am stephen engle live at the hong kong exchange. in hong kong, we speak with talk executives focusing on asia's transition to a cleaner economy. the head of sustainable finance during's me in a few moments. >> up next, the start of trading in sydney after markets had their biggest gain in over two months in the wednesday session. this is what we are seeing. we are seeing not any reaction when it comes to the bitcoin and crypto adjacent names after we heard from the governor for low saying there is no strong need for central-bank digital currency after the treasurers comments. new zealand seeing downside. warning of stress from new

homebuyers as we see this increasing rate environment. that was the big story this morning, potentially investors on watch for that. chicago nikkei futures looking neutral. overall, steady open to the asian session after equities extended that rally. investors feeling calmer about the impact of omicron. shery: u.s. futures pretty mute as well. travel stocks topping the s&p 500 in the new york session given a little more optimism over the pfizer booster. futures muted. treasury futures muted after we saw three sessions of gains for 10 year yields. crude continuing to gain ground. three sessions of gains as we have broader risk rally. also rebounding after falling into bear market territory. when it comes to the offshore

yuan, not doing much. this of course after hitting the three year high against the u.s. dollar. we heard from the securities journal saying analysts are expecting further yuan strength. haidi: as you touched on, early studies from pfizer and biontech showing the third dose of their vaccine could be needed to neutralize omicron. let's bring up emma o'brien who is looking at this. the implications of this study suggests we are going to see a premium when it comes to rolling up booster shots. >> this is going to accelerate booster campaigns that have been getting underway in developed countries. we've got boosters being rolled out from the u.s. to the middle east and parts of europe. also starting in asia. omicron can to be neutralized with three shots, though the

antibodies produced from the normal two shot regimen are lessened when it comes to this variant. it will supercharge booster rollouts we have been seeing getting started. shery: the who warning about omicron changing the course of the pandemic. what is the message here from the director general? haidi: it was interesting when you had quite a positive glass half-full tone to the discussion around omicron in the markets overnight. you did have this quite cautious warning time from the world health organization chief coming from a place of worrying that if you do get all of this attention on boosters and them being seen as the magic alert to move beyond the new variant, you will be prolonging the situation in the developing world where some

places have barely any access to vaccines at all. and that you will get reignition of this situation of the west dominating supplies while poor countries lose out. shery: emma o'brien there. u.k. officials tightening pandemic rules to curb the spread of omicron. bo? -- >> omicron is growing faster than delta. that is why it is the proportionate and responsible thing to move to plan b. shery: moving also, the u.k. mandating the use of vaccine passports when it comes to large venues. this is a very politically sensitive issue further prime minister, given a controversial video emerged showing staffers

joking about a christmas party they had last year when all of the very strict restrictions were being put in place in the u.k.. >> very politically risky for the prime minister. that really does not help things. this comes at the same time we are seeing this moving goalpost when it comes to covid and how firms deal with it. -- delegates staff to work from home after it saw a rise in cases. telling them to get a booster by the end of january. -- now extending their return to office plans, pushing it to 20 23. employees can work remotely for the entirety of next year. google saying it is -- going to enforce the general -- the january deadline. uber making that move too. >> that will have implications for the broader economy which

has suffered from supply chain disruptions which has led to more price pressures. getting an update on inflation pressures in china with soaring factory prices expecting to have eased from a 26 year high in november. consumer prices moving higher as food prices rise. our editor kathleen is here with a preview. what are we expecting? >> we are botching -- we are watching these closely. the -- didn't go anywhere for a long time. we have been worried about producer prices, but let's start there. the big driver of the ppi in china to a 26 year high have been all of the costs of the inputs into the things that factories make. things like coal, iron ore, energy, crude oil and gas to

fuel some of these things. iron ore prices have come down. production cuts early in the year helped create this big surge and now weaker demand as propagated developers were reined in. china consumes more iron ore than any other country in the world. it is the largest steel producer , cutting back on steel production. we go to food, this is interesting. if you are a vegetarian you are suffering more than those of us who are not because pork prices, which plunged, have started to stabilize but the year-over-year effects are going to weigh over consumer prices. vegetable prices are soaring after the floods earlier in the year wiped out crops. so, let's do this quickly. producer price index is supposed to be 12.1%.

that would be down from october upon 13.5%. the cpi up 2.5 percent, faster than 1.5% in october. haidi: kathleen hays. let's get the vonnie quinn with headlines. vonnie: a group of chrysler bondholders is close to signing nondisclosure agreements come a move that would pave the way for discussions around a financing deal. sources say an announcement could come as early as thursday. kaisa creditors have yet to receive payment on a $400 million bond. canada will join the u.s., u.k. at australia in a boycott of the beijing olympics. justin trudeau says his government is concerned by china's repeated human rights violations. athletes from the boycotting countries will compete. china denies human rights violations and has threatened retaliation.

president biden says the u.s. and four other allies planned a meeting with russia aimed at de-escalating tensions. discussions will focus on addressing putin's concerns about the alliance. biden held a two hour video call with putin the russian leader he -- [indiscernible] brazil's central bank delivers its second straight hike of over 50 basis points. another increase of the same magnitude for february as forces climb above target. the bank has raised rates by 725 basis points this year, the most among major economies. policymakers say the increase makes restrictive tightening appropriate. 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: still ahead, we ask

steven davies whether policy reactions have changed approaches for long-term investing. -- head of green and sustainable finance on strategies for green investing and achieving net zero carbon emissions. that exclusive interview. this is bloomberg.

>> hong kong exchange starts its green summit today which focuses on asia's net zero journey and brings together ceos and sustainability experts to share insights on supporting the transition to low carbon economy. let's crossover to hong kong with stephen engle.

>> thank you sherry. our guest is the one who is hosting this forum, grace hui, head of green and sustainable finance. thanks for having here on your inaugural. what would you say is your biggest challenge that hong kong has in making hong kong a green finance hub? >> thank you for having us. i think we have, actually, lots of challenges, but also opportunities. let's start with opportunities. being the super connector to china, we are able to get all of the offshore fundraising here. look at our green bond fund raising the last year. in 2020, we had 18 esg at bonds, a record high. just off november 30, we already

have 91, raising more than 270 billion hong kong dollars. the flow of coming out from china are opportunities. challenges, we are dealing with it. disclosures. the common ground taxonomy we are working on. as part of the -- group we are working together with other finance regulators in hong kong making sure we have a standard set of disclosures. >> have you seen change in the types of corporate's issuing green bonds? >> we have seen softened, we have seen property developers. but we have seen more of other types of issuers including power companies. >> of course. that leads me to the next question about carbon trading. i know there were feasibility studies launched in july. can you give us an update on how

and where are we in the process of making hong kong and the hong kong exchange a carbon trading hub tied to cap and trade in china? >> as the green finance center of the greater area we are keeping close to the development of carbon trading in china. in july, china launched a national scheme. there are also regional etf's in the greater bay area. in july, the cross agency group headed a study looking to capitalize on the carbon market opportunities in china as well as internationally. in china, you have cap and trade. internationally, you are looking at the cap market. we are looking at both markets and outside china and in china. >> how do you see hong kong evolving as far as its role in pricing? we had the big market in cap and

trade with factory polluters, how can hong kong play a role in financing? >> we are a risk management center. we are also an international finance center. with our expertise in setting standards, being number one and a number of years of ipo fundraising, we are actually very good with finance infrastructure. we are also obviously close to -- futures exchange because we invest 7%. we signed a -- with them in august. to do more collaboration. overall, with china backing as well as our skill set in hong kong risk management professionals, we are confident in hong kong. >> to that point, tell us about

how your new role here -- because you are actually the new head of green finance, a role created very recently. tell us about how this compares to what you were doing before, being part of the listing division and how much resources you have? how many people? has it been easy to hire people in the sustainability side? >> thank you for the question. the work is very different. we are focusing more about regulations. and we have published esg requirements for listed companies. i want to move the dial more. that is why i moved to the market division to set up this new green finance department. within the market position we have a lot of resources. all of the product development are there. in terms of hiring people, we

are getting more young graduates wants to get into this area and we have been fortunate to have a few of those joining me. >> with some of the difficulties hong kong continues to face and it comes to the openness of its borders and covid controls, it is that -- is that an element of difficulty when it comes to recruiting talent with that sustainability expertise? >> there are lots of esg talents in hong kong. there are also a lot of upcoming programs. for us, we just set up a co-curated program with hong kong in technology with a view of building more pipeline of talent in terms of sustainable finance. we are not seeing challenges in terms of needing to bring people over from across the border.

>> does there need to be more enforcement of listed companies here and there disclosures of their esg goals and their material aspects to those goals? in 2015, it became a requirement for companies to at least disclose what the boardrooms are doing on the esg front. is that enough to get to where you think hong kong needs to be? >> good point. in our listing position, they do a regular review of our esg reports and they publish the results. over here, i launched a sustainable and green exchange stage in december of last year. the purpose is to alleviate concerns about -- washing. for companies that have issued bonds, we invite them.

their commitment is to -- as to the use of -- as well as the environmental impact if any. over the last 12 months, we have increased the number of products from 29 to now 86. we are seeing issuers provide more information. last week, we also launched a new segment which is covering the esg ratings of more than 600 companies listed on our exchange. >> are hong kong companies doing enough? this is not the greenest city in the world. >> hong kong is doing more than most other companies in other regions. our listing rule requirements on esg disclosure is probably one of the more stringent in the world of exchanges.

we keep on issuing more guidance. last week, we published a net zero guide to have companies start thinking partway rated net zero. it is a step-by-step guide to help them start looking at the baseline and looking at the low hanging fruits, the medium and long-term goals. we have to start somewhere. our exchange help other companies. >> things for having us here at your inaugural summit. we will be back. haidi: more to get from steve with more exclusive interviews from the summit ahead and possibly meet -- and the next hour and hearing from international finance corporation and hong kong securities and futures commission ceo ashley alder.

>> a group of kaisa potholders are close to signing a nondisclosure agreement that would pave the way for discussions of a financing deal. let's get details from john mu. how significant is the signing of these nda? >> this would give bondholders access to data information they do not have access to now. what that would potentially pave the way for is some resolution to this bond that was due tuesday, four hundred million dollars u.s. bondholders have not gotten payment. this could help kaisa avoid technical default, which would have legal implications, and potentially also include a new cash injection from bondholders. given kaisa's current situation,

that would be a substantial help. >> when it comes to evergrande, the default at this point looks inevitable. do we know what the road forward looks like? >> right now, they have payments due this week that, as we understand, have not been made. the provincial government has set -- sent a team to ensure the stability of operations and the company has set up a new risk management committee. the chairman is on that committee, but also are a number of executives from state enterprises from the province. it does look like the problems in guangdong are taking a much more influential role in decision-making in that company. the central bank has said what is happening at evergrande is not going to be affecting the broader market. there is an effort by the governments to make sense of

what is happening. the market seems to be reacting in a fairly benign way. so far, so good. when a default potentially will happen i think is unclear but it does look like that is down the road given the fact the cash it has on hand does not look like it is enough to pay off liabilities. >> [indiscernible] let's get youtube business headlines. -- farms could raise as much as have a billion dollars. bloomberg has learned the chinese -- and plans to list in the second half of 2022. [indiscernible] >> lego will invest $1 billion

in a new factory in vietnam their sixth reduction site. the new factory is aiming to be carbon neutral and create 4000 jobs over 15 years. lego is also working on using alternatives to oil-based products in building its blocks.

haidi: we are tracking the fallout of the global supply chain crunch. school advocates are pushing the agriculture department use its authority to help. janet yellen is calling for the u.s. to reduce its reliance on foreign supply chains. she says the country needs to produce more critical groups domestically. delivery times have lengthened again in november.

research shows that the gap between increased to more than 22 weeks. shery: supply chain woes will be a key focus when broadcom posts earnings thursday. analysts expect a solid report and outlook to offset any hits from the disruptions. third-quarter numbers are also do. while straight -- wall street will be listening. bloomberg terminal users can read more about those stories in our newsletter. haidi: the former new york fed president says the federal reserve is admitting to a policy mistake with its shift to speed up the tapering process. he expects to see more rate hikes earlier. >> it's the magnitude of the

move rather than the percentage that is important. the fed will raise the short-term rates. inflation is running above 2%. >> help us out with the playbook for next week. the additional surprise this morning, do you expect to see a summary of economic projections? what are you looking for? >> the fed is changing their view on the appropriate monetary policy. this is remarkable, after announcing the taper. that's an admission that the fed reserve was wrong. they will have to revise their economic forecast. what you will see is a higher inflation for 2022, tighter labor market, and much more tightening from the fed in the forecast. last time, 2024 was 1.8%.

that's below what the fed views as neutral. this time, they will get to neutral by the end of 2024. you will get earlier rate hikes and more rate hikes. >> what's the significance of that? how short might it be? >> it all depends on how financial markets react. so far, people have been comfortable with the fed moving monetary policy. 10-year treasury yield's are still above 1.5%. the stock market within a whisker of its all-time high. it depends on how financial markets react to the tightening. there's a prospect for a bit of discomfort by markets. the federal reserve will do more then what is currently priced in. look at the futures market. people are saying that the peak in the cycle will be about 1.5%. that's well below what the fed themselves deem as neutral and

what they are likely to write down next week. >> when you talk about the financial markets reaction, i think of the yield curve and how it has been flattening. a market expectation for a policy error should the fed hike rates as much as three times next year, which you think should seek -- should be a base case scenario. what is your read? >> i'm not sure why it is doing what it's doing. the qualitative easing is pushing down long-term yields. people don't want to hold deposits in commercial banks with higher-yielding assets. there's a bit of a bond bubble caused by quantitative easing. i imagine bond yields will retreat to a more normal level. i think the 10-year treasury yield at 1.5%, where inflation is running five or 6%, is very hard to explain in the current circumstances. >> a bond bubble from quantitative easing.

what does that mean in terms of the threshold of win wheat -- people reprice bond yields? >> it could take a while for the supply. the fed is still adding to the balance even as we speak. the taper won't be finished until march. even after that, it will be time before the federal reserve begins to shrink their balance sheet. the effects of quantitative easing could linger for quite some time. i think the bond market is going to be disturbed by the fact that the peak in the federal funds rate will be higher than what is priced in. that will weigh on bond years -- yields. shery: bill dudley speaking to bloomberg. we have more now on gamestop which tumbled in extended trading after reporting disappointing earnings. the retailer sword this year as part of the meme stock frenzy.

investors were anxiously awaiting the details on the strategy. su keenan joins us with the latest. it appears investors will have to wait a little bit longer. su: how does this brick-and-mortar videogame retailer transform itself in an era of digital downloads for games? that put the focus on the cofounder of chewy who joined gamestop earlier in the air as chairman with a bold vision. he was expected to provide details but the call was short and there was no outlook. he did not allow q&a. that likely added to the disappointment. we saw the stock down for the lack of details. the earnings release only had a handful of bullet points. gamestop beat on the top line, sales up 29%. the third quarter fiscal loss is

wider than expected. it was more than double. estimates of $.52 per share lost. no question that the stock has been on fire. you can't ignore that it was up better than 800% going into the earnings. this is a once o middle sized company that has seen better days. at the beginning of the year, it was touted as a rockstar stock on reddit. the stock up more than 800%. where it goes from here, to what extent it uses nft's to advance its digital presence, that was not really addressed. the call did address that the company has made some 200 senior hires from other tech companies. that has already created a lot of excitement for game stock prior to the call. haidi: there are some other issues in that call.

su: one of the things that was addressed was the fcc for subpoena. the company has received a follow-up to an earlier subpoena where the s&p is asking for more documents and information. they previously disclosed it but they give more information. seeking relation -- information around gamestop stocks back during that huge run-up in its price. there were other companies that were also being looked at by the fcc. they say it won't have any adverse impact on the company. it's important to note that three year chart really shows how the stock just blew up out of nowhere. the question now for investors is, how do you sustain those gains? he remains optimistic on the companies transition. cohen has said it plans to compete with amazon for

instance. he also admits the company strategy right now has been hazy. the call did little to change that. shery: su keenan there with the latest on gamestop. bought -- vonnie quinn has our first run -- first word headlines. vonnie: two shots may not be sufficient to protect against omicron. a third dose boost antibodies that fight new strains 25 fold. the new vaccine that targets omicron should be ready by march. >> basically, three doses of the fire -- pfizer biotech vaccine would provide the same protection for over -- omicron. >> boris johnson curbing the

spread of the omicron variant. these advising people to work from home if they can. mandating the use of vaccine passports in large venues. he rolled out making coronavirus vaccinations mandatory but warned that a national conversation may be needed to avoid restrictions in the future. >> we don't know omicron's severity, its rate of transmission, nor the full effectiveness of our vaccines against it. since i last spoke to you, it has but -- become increasingly clear that omicron is growing much faster than the previous delta variant and it is spreading rapidly all around the world. vonnie: a downward surge year on year even as auto sales troubled. the chinese carmaker backed by warren buffett had sales about

equal to tesla. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. shery: take a look at how markets across asia are trading early in the session. downside pressure for the asx 200 which has been lowered. this after we saw that big jump earlier this week, given the rba holding its cash rates steady. really looking at omicron as an uncertainty. kiwi stocks also reversing some of those gains that we saw in the previous session. we have seen the best session since january. the kiwi dollar is under pressure right now after significant strength in the past week. nikkei futures unchanged after gaining for the last two sessions. we've seen asian stocks seeing their biggest gains in more than three months. we will see how the session plays out for the rest of the

day-to-day. u.s. features not doing much after edging higher in the new york session for the biggest three-day rally in a year. coming up next, a ceo joins us to discuss the pandemics impact on wall street and the changes in the way they're investing to secure the next generation. this is bloomberg.

shery: volatility has returned to the market, including a 36% drop over the past five days. let's discuss how a long-term investor look through that noise. joining us now is steve davies. always great to have you with us. with the swings we've seen in markets recently and expecting more volatility going into next year with the backdrop of central bank tightening and inflation and omicron fears as well, what is your balanced strategy? steve: yeah. the cool thing is that, when we move into next year, inflation and interest rate policies will be the key things. most important lay, we have to worry about those two things from more than a decade.

perhaps even longer. that begins to call into question whether or not the traditional asset split between equities and other stuff including fixed income is still appropriate for that type of environment. you know, still something that were working our way through. they don't look particularly attractive even though yields have risen a bit. still nudging around all-time lows in terms of yields. all-time highs in terms of prices. it's a challenge. haidi: what are your favorite strategies going into next year, knowing that some of the key themes will still persist? the hunt for yields and the growing diversions between monetary settings. steve: yeah. i think in the absence of anything that is more compelling, it is still very much a story which is focused on equities.

one will have to be more selective. in the course of next year, i think we will be seeing the long-awaited switch from more growth focused equities into more value focused equities. more dividend focused equities. that tends to be from the perspective of individuals, less focused on consumer discretionary and more in favor of consumer staples, core products which are going to be benefiting from study rates of growth. therefore, that means for the first time in quite a long time, the tech side of the equation which has been driving markets for multi-years may take a bit of a breather during the course of 2022. shery: let's talk about the wealth management side of things. we continue to see this generational shift in families. are you seeing any changes in the trend on how they're planning to invest in the future?

steve: there have been but it's all been very incremental. i think as we look at families across asia, their requirements are the same but slightly different from those in the west. generally speaking, in asia, there's less of a need for wealth planning driven by tax. it's more a question of wealth planning driven by the west to ensure success and cohesive families, links being maintained after the death of the first or second generation members of the family, etc. that's more of the conversation that were having. obviously, as some governments around the region and elsewhere begin to start talking about wealth taxes and so forth, we are having more conversations with people about how trust structures work in that type of environment. it's a dynamic conversation.

obviously, it goes without saying that each family is different and has different priorities. haidi: you mentioned tax issues arising in asia. we are seeing a move towards more distribution. what's the thinking right now among asia's richest families when they see the strives and policy changes that could directly affect them? steve: i think that there's a case of watchful waiting as much as anything else. we are still fortunate in living generally in a number of asian countries and a fairly benign tax environment which benefits from simplicity and transparency. i think it would be quite a stretch for a number of governments to change that long-established tradition. nonetheless, the one thing that we have learned from covid is that it has created a big bill because of all the stimulus that

has been going on. at some point, it will have to be paid for. at the same time, we are seeing an increase in political pressures to ensure fair distribution. there is no doubting that the wealthiest have benefited most from central government and central bank largess. shery: that's also creating really heightened pricing across new asset classes like crypto. is that factoring into how long-term wealth is being managed, particularly when you talk about the younger demographic of high net worth in this part of the world? steve: yes. as you get that general erosional -- generational shift, the younger generation is taking a less traditional approach. historically, the very wealthy in asia have tended to like a -- make a lot of their money in one specific asset class, property.

that benefited significantly from very low interest rates over the class -- course of the last few years. government policy from china to singapore to other countries within the region are all looking very closely at how that is working through the system. they obviously want to make property more affordable. if they do that, more government policy to restrain property prices. that means that capital is going to start looking for better returns elsewhere. whether that's crypto is still a good question. ultimately, people are looking for the best risk-adjusted return that they can get. they are not looking to see a huge inflow of assets into very volatile assets like crypto. there will be a role for those even if it's a relatively small waiting to begin with. shery: it was great having you on. thank you.

we are counting down to the start of trading in tokyo and seoul. in japan, softbank leaving a $400 million investment in clarity to boost expansion. the cybersecurity firm has raised 635 million dollars. it year has agreed to buy a 12.5% stake in a new natural gas project in australia. the deal is valued at around $300 million. keep your eyes on the sky. one founder plans to hand out more cash from space as he heads to the international space station for a 12 day trip. south korea, the bank of korea will release its quarterly monetary policy report after a board meeting. we are watching a gopro building its first factory overseas in hungary and an $810 million

deal. watch out for more moves in the aerospace stock. there's a death cross in a sign of slowing momentum. plenty more to come on daybreak asia. this is bloomberg. ♪

♪ shery: live pictures of the

house of representatives in the u.s. capital right now. this as we have now seen the u.s. house passing the bill to punish china over oppression. we are talking about this build a punish china over human rights. this would ban the imports of certain products from china's region where the country's government is accused of holding muslims in forced labor camps. this banning goods imported from china's region under current law. it's illegal to import into the u.s. any goods made wholly or in part with forced labor. this is not going to get expanded as we continue to see u.s. china tensions building, not to mention more of a bipartisan consensus on the need to push back harder against china in congress. haidi: yeah. not just what we see in tech and

financial markets. chinese and u.s. listings. the recently announced diplomatic boycott of the china winter olympic games that the u.s. had early announced as well. we continue to monitor -- monitor that. in the meantime, let's just take a look at what we will be watching when it comes to the start of trading across other major markets. some of these asian travel and tourism stocks are in focus. we've had relative good news. if you get this booster, you have potentially more protection against omicron. shery: we have seen travel stocks rise in the new york session as well. we will be watching those counterparts across asia. keep an eye on asian machinery companies. china's demand for construction equipment could fall 30 to 40%. haidi: the market open coming up

in the next four minutes. we will get you straight to the market open action. this is bloomberg. ♪

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♪ ♪ shery: welcome to daybreak asia. i'm shery ahn. haidi: i'm haidi stroud-watts in sydney. our top stories this hour. a cautious mood on the markets as traders way of thursday of gains. investor concerns over omicron are easing as pfizer says a third vaccine dose neutralizes the variant. a chinese developer inching

closer to talks with bondholders on the financing deal. shery: japan and south korea coming online right now. the nikkei and topics under pressure. we've seen the nikkei gain for two consecutive sessions this week. now we are seeing a little bit of pressure as the japanese yen holds steady at that 113 level. it's been range bound in terms of trading against the u.s. dollar. u.s. yields continue their march higher. we are also watching the kospi at the moment which is gaining ground for a seventh consecutive session. this will be the longest winning streak since april of the year. the korean won is now also rising against the u.s. dollar. we continue to see a risk on mood on vaccine optimism. we saw that play out during the new york session as well. haidi: when it comes to the trading action, the asx jumped the most in more than two months

yesterday, giving back some of those gains. we are seeing downside across tech and information technology. we are watching the bond market because we've seen the volatility surge in australian bonds with q. week coming into pression, especially when it comes to the three year. the central bank risks a repeat of that meltdown we had in october. we are starting to see signs of stress across the debt market from concerns about the bond purchases hampering trading there. we've seen benchmark yields claiming 10 basis points since tuesday. new zealand, downside and weakness there as well. the rbnz talking about potential stressors and pressure for new homeowners. shery: let's bring in our next guest who has reduced the global wait to value. joining us now is thomas

poullaouec. great to have you with us. our guest earlier preferred value overgrowth, given the valuations right now. why are you reducing your overweight? thomas: it depends on the starting point. we've been overweight value for more than a year now. at one stage this year, it was one of our highest goals. what we are seeing going into 2022 is that some of the catalysts for value versus growth have been reduced. we see more opportunities in other positions in the portfolio. we are still overweight value. we reduced some of the bullishness because of some of the catalysts as not pronounced as they were a year ago. shery: what about china? you are overweight in equities and credit. we've seen such volatility in the chinese markets in recent months. thomas: yeah.

that's where we like to be a bit contrarian, relative to market consensus. we have an investment that is perhaps longer than some of our competitors. what we see in china is that it's a set up that we have seen before in terms of policy makers making changes and markets being concerned about these changes and trying to digest that. it's typically an opportunity to revisit a position in china. over the past two weeks, we have seen signs from the policymakers that the chinese credit might be accelerating in 2022. we believe that liquidity is a key driver of markets. as liquidity might improve in 2022 in china, that could lead to superior performance of chinese stocks and credit. haidi: which sectors in particular? thomas: which sectors?

there are different ways to play the sectors in china. on one hand, the valuation on the chinese tech companies became more attractive after the policy changes. although you can reduce some of the earnings forecasts in terms of price-earnings, they look quite attractive for some of our investors. on the other hand, you have the chinese predinner trait where we receive signals from the policymakers telling the banks that they should be allowing the credit to flow through the companies. what we are doing our research and credit analysis, we see the benefits of investing into some credit and corporate bonds with short maturity and good quality, good balance sheets. there are different ways to play the sector. we are not shying away from even the ones that are making

headlines. haidi: when it comes to the bond market, our question of the day asks, how prolonged inflation globally will affect the market? it has mostly been a u.s. story. we are also seeing the likes of chinese cpi start to accelerate as well, raising concerns about stagflation. what's the impact in the bog -- bond market? what tweaks would you need to make to your investment thesis in that space? thomas: again, there are different dynamics when you compare developed markets and emerging markets, in terms of inflation and bonds. in emerging markets, inflation is sensitive to commodity trends. we could see inflation slowing and emerging markets, allowing banks to ease monetary conditions. that could also impact the bond markets, as you could see yields

in emerging markets stabilizing. or even slowing down. on the other hand, the pressure on inflation is perhaps stronger on rent, housing, also wages in the developed markets. what we've already seen is that investors have been resetting their expectations for inflation in the long-term. we started 2021 with a 1.8% forecast on u.s. cpi and we and the year with a 3.3% average forecast. there's been a reset of inflation. we see yields moving higher in the developed world. there would be a different dynamic between emerging markets and developed markets. we are leaning towards emerging markets in terms of position. haidi: great to have you with us and we appreciate your time. let's get you to vonnie quinn who has our first word headlines. vonnie: president biden says the

u.s. plans a meeting with russia aimed at de-escalating tensions over ukraine. he says discussions will focus on addressing vladimir putin's concerns about the alliance. biden held a two hour video call with him on tuesday. the russian leader says ukraine joining nato is a redline. canada will join the u.s. u.k. and australia in a diplomatic boycott of the beijing winter olympics. justin trudeau says his government is a truly concerned by china's repeated human rights violations. athletes from the countries will still compete. china's human rights abuses. the u.s. house has passed legislation designed to punish china for its mistreatment of muslims in the country. the bills passage is sure to anger bashing and add to tension between the two largest economies. the vote demonstrated broad

bipartisan sentiment in congress. a similar measure has already passed the senate. a group of bondholders is close to finding nondisclosure agreements with the developer. it would pave the way for discussions around the potential financing deal. our sources say an announcement around the agreement could come as early as thursday morning in hong kong. they have yet to receive payment on a $400 million bond that matured tuesday. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. shery: still ahead, we are live at the hp x summit. stephen engle is standing by. what do you have for us? stephen: this hour, we will be joined by the plant-based meet company green monday. they make that omni-pork. the founder and ceo will join us. stay tuned for that interview at

half past the hour. this is bloomberg. ♪

♪ shery: pfizer and biontech say a third dose of the covid vaccine gives effective protection against the omicron variant. the pfizer ceo spoke to bloomberg earlier. >> what the data is telling us is that basically, three doses of the pfizer biontech vaccine would provide for omicron the same protection like the first two doses provided for the original strain. this is very high. it was on the 95% effectiveness for the first two doses. this is what we know. the two doses alone for omicron provide not enough.

they having very big drops. that doesn't mean that we won't see efficacy. there are other elements of the immune system that we haven't measured. those could provide effectiveness. it is more challenging to provide against affection. the third one will do the job. this is why it is good news. we need to make sure that everybody is getting the third dose. >> to be precise, aced on preliminary data, the third dose gets you back up to the 95% number of effectiveness that you had before? >> it gets you back to the same neutralization. it's not always absolute. >> give me some sense of how much the dramatic drop in effectiveness is for the do

shots. if you start at 95%, how far down does it take you? >> we don't know in effectiveness. we will see only in real-world data. that's just for neutralization. we went down to 25 times. with the third dose, we saw it back by 25 times. >> you and pfizer have been very clear in saying that this is preliminary data. give us an understanding of the range of possible error here. how different are the final data likely to come up? >> these are data that we are doing with an estimate. it's faster but less accurate. we don't do the trials on the omicron variant. we do it in a construct. we re-created in the lab. this is a very standard process.

way more accurate work will come in one or two weeks. what will really be the final verdict will be the real-world data. when we see what happens in the real world, when people have two doses or three doses. those are data that we are expecting to see towards the end of the year, getting enough numbers. with more numbers, you can make mistakes. it will all come together before the end of the year. we can assess the situation. we have a very high level of confidence. in our labs, what we saw yesterday was not only how the virus response to the current vaccine of two or three doses, but also to extreme mental

vaccines that we have developed in our labs. those are giving us a very good direction. if we make one that is tailored to omicron, it will be very effective. haidi: the pfizer ceo there. let's bring up the bloomberg managing editor for more details on the pfizer and beyond tech signings. the implication seems to suggest that we will see a real push to get those boosters out now. >> yeah. it's positive news. this is preliminary data. it's only one of the vaccines that is being rolled out globally. there are still questions over how non-mrna vaccines respond to the omicron variant. this is two or three weeks since it emerged. some positive news which is why we are seeing markets respond in that way. yes, this will ignite a rush for boosters.

that's already underway in the developed world before omicron emerged. yeah, we will see a lot more countries rush to accelerate those schedules when it comes to those their doses. shery: what is the who saying about omicron changing the course of the pandemic? >> it's interesting that the world health organization struck a cautious tone overnight. i think they are probably quite worried that this will ignite a rush for boosters because of what they've seen over the past year when it comes to vaccines, with richer countries dominating supply and much more able with superior logistics networks and infrastructure to rollout shots than poorer countries. they be worried that the vaccine resources be converted towards boosters, when you still have places in africa where omicron

first emerged and other parts of the developing world where people haven't even had their first shot. shery: emma o'brien there. of course, omicron threatening to worsen supply chain disruptions that have sent prices higher around the world. we will get an insight into china's inflation numbers with the factory gauges expected to have eased from a 26 year high in november while consumer prices are seen moving higher as food prices continue to rise. kathleen hays is here with the preview. what are we expecting? kathleen: inflation is starting to cool off a bit. consumer price inflation is starting to heat up from a fairly low level. let's take a look at the numbers. china cpi expected to show the consensus at 12.1% year-over-year. that's less than 13.5% in

october which was a 26 year high. 12 point one would be the second highest in 26 years. what's going on here? red hot commodity prices have started to cool off. china's manufacturing pmi, it showed that input prices in that factory gauge fell sharply in november and from october. output prices fell as well. output prices bring us to a consumer. what do you pay for things? china's consumer prices, it's not a story of what they are buying when it comes to goods. it has to do with food prices. vegetable prices are soaring. they plunged back in september, a lot of crops were destroyed.

there were high your transportation costs. it was a shortage of workers. work prices have plunged. not enough to offset what's happening with vegetable prices. china's core cpi is still pretty steady. it was supposed to come in at 1.1% over year in november. the covert outbreaks to hit services and spending from time to time. what does this mean for the people's bank of china? it seems to me that they could take a lot of comfort because so much of what is happening in these major indexes has to do with commodity prices. they were hit by a lot of pre-, during, and post-pandemic forces. maybe they can go ahead with whatever kind of further easing or fiscal stimulus they feel the economy may need, particularly in the housing sector. haidi: kathleen hays there.

coming up next, creditors yet to receive payment on a bond received earlier this week. we take a closer look at the potential for press discussions with a group of bondholders around a possible financing deal. this is bloomberg. ♪

haidi: a group of kaiser bondholders are close to signing nondisclosure agreements with the developer in a move that would pave the way for discussions around the potential financing deal. let's get the details from our china credit editor rebecca. how significant are these nda's? rebecca: they all timidly would allow that group of bondholders access to things like financing and some of the broader scales

of potential liquidity problems, ultimately to understand whether new money deals that would inject cash into the company would actually be effective. it is worth bearing in mind that this group of bondholders is mainly focused in the tranche that came due on tuesday. of course, any kind of financing plan or any kind of financing deal would have to have broader approval across all of their $11.26 billion bonds if it involved any kind of action on those bonds itself. haidi: we heard from s&p global rating saying that the fall of evergrande seems like an of -- an inevitability. what do we expect for the road ahead? >> well, as we said before, evergrande debt crisis -- s&p has been talking about a

potential default scenario for quite some time now. i think the key thing is to look out for development with restructuring itself. we know that evergrande is seeking to make a holistic approach to the restructuring. it will include all of the offshore bonds, everything from its private placement to the notes that were issued by evergrande group itself. one interesting question here is, it will be an incredibly complex restructuring across several different jurisdictions. in addition, there's a question of how you rate these bonds in terms of their value, their seniority. while lots of these notes have the same kind of security, they are issued by different units of evergrande. that makes the whole process much more complicated when it comes to evergrande and its advisors assigning a potential value when it's looking at the haircuts in the debt restructuring scenario.

haidi: we are seeing asian dollar bonds rallying the most this month. is this on account of some of the support we are seeing from the government? what is the longer-term outlook? we've spoken to investors who are actually quite constructive, saying after all of this, you might be ending up with some much stronger players from the fiscal side. rebecca: absolutely. yes, we've seen contagion really well contained despite this drama at china's largest developing -- developer borrowers there. both rallying off of the back of those signs of potential easing that you pointed to, including things like the rrr cut. longer-term, there still a question over the financial health. we will see consolidation. stronger firms are going to thrive. what happens to the weaker ones?

that's a question up for grabs with a yields above 20%. haidi: rebecca chung wilkins there. the u.s. traffic safety regulator says it's reviewing tesla's recent software update which allows drivers to play video games on a dashboard screen while the vehicle is moving. the new york times reported earlier this week on concerns raised by safety advocates about free games, including solitaire. mcdonald's is recruiting and training a more diverse set of franchisees around the world. the company will provide $250 million to help finance loans for underrepresented groups including black, hispanic, and senior restaurant owners. lego will invest $1 billion in a new factory in vietnam. the new factory is aiming to be

carbon neutral and will create 4000 jobs over the next 15 years. lego is working on using alternatives to oil-based products in its building blocks. coming up next, we hear

haidi: let's get you straight to the markets. let's see how we are tracking this thursday session as we saw a third day of gains in u.s. stocks. some concerns being alleviated over the omicron variant. we have the latest data from pfizer and beyond -- and b iontech .this is what we are seeing in asia . modest gains across korea and japan. the s&p asx 200 in australia giving back some of those hefty game -- hefty gains.

we are down one quarter of 1% there. we are seeing treasury yields continuing to hold their advanced. the global equities rally taking a pause as we continue to weigh the risks of the virus variant inflation. let's get back to hong kong, where the hxk green summit is underway. stephen engle is standing by with our guest, who runs an alternative meat company. stephen: david yeung is our guest. he is the cofounder and ceo of green monday, which makes that omnipork, and launching other products, plant-based products. thank you so much for joining us. obviously at this green asia summit, we are talking about climate change, about finance, but also the sustainability goals. how are you disrupting the food chain and how is that going to

have a lasting impact and not just a fad? david: food is often the most overlooked area when it comes to esg, or combating complainant -- or combating climate change. we look at transportation, waste management, but food is at the nexus of many environmental crises. what we have been doing in the last 10 years is from alternative protein innovation from the experienced innovation to let people understand what the future of food looks like with our new age green shopping and dining destinations, and also green monday, to shift culture and enable people to have an easy way into a new lifestyle. what we do is a multifaceted approach to try and move the needle in a big way. with asia, such a huge population residing here, there is a lot of work to be done. stephen: you are a homegrown

success story based in hong kong. i know you have r&d in vancouver, but you spread out to distant -- to different distribution channels. you had a mcdonald's offering as well. where do you see this plan based food evolution, not necessarily revolution, but evolution being as a global industry by size in, say, five years? david: right now we are in the first or second inning of this evolution. a lot of change will need to happen, especially with the context of carbon reduction, net zero that governments and corporations are pledging. ou about five or 10 years, many analysts are forecasting that the size of this industry will grow not tenfold, but maybe 50 or 100

fold. when you look at today, in asia included, most people do not have a plant-based awareness and certainly has not incorporated that into their daily diet and habits. that is the reason what we do with plant-based alternatives and many of the new offering is to let people know that shifting away, or meat reduction and dairy reduction does not mean sacrifice on taste. we need to cater to the types of meat that people consume most. that is why over the past few years, our launch of omnipork, seafood as a category is very much overlooked in the plant-based innovation arena. 73% of seafood consumption happens in asia. most people do not realize that. ocean conservation is critical

to combating climate change. with overfishing, that is truly devastating our marine ecosystem. shery: is the seafood market what you are targeting in asia? i wonder if the opportunity in asia will be as big as in the west. you alluded to the change in culture that needs to happen. some countries in asia consider it a privilege to eat beef, which can be expensive. david: yes, shifting cultures certainly is not easy, but at the same time, not just the environmental trend, but wellness and health. nowadays, particularly people in developed countries in more affluent areas, the health problems are not undernutrition but obesity, heart disease, cancer. you can name many of them. they are all linked to our diet. with health and wellness, that adoption is clearly growing.

the natural next pace of lifestyle change must be with diet. even from a cultural standpoint, indeed it used to be affluence and meat consumption was a more exotic diet. they used to be very much linked and connected. that will change. most encouraging is the fact that ultimately this change comes from the younger generations, the millennials, the gen z's, they are the ones that care a lot about these environmental issues. they know that in the future with many climate problems they are the ones that will truly suffer from it. that generational change also is something that is definitely worth looking out for. in western countries, we have already witnessed that change. haidi: some sustainability experts have criticized other players in this space, like the impossible meat, impossible

foods and beyond meat, for not being fully transparent about the climate impacts of their supply chain, from processing to packaging, etc. is that something that green monday can do differently? does that criticism fair? -- is that criticism fair? david: i cannot comment on other companies, but what we are trying to do, especially with are ramping up of volume and scale, with regional sourcing, regional production, and to look at the whole value chain and our product offering to be not just as sustainable as possible, but as healthy as possible. our products have one of the shortest ingredient lists in terms of nutritional composition. it is important for us not to just offer something that is a meat replacement, but something that is truly a category of

better protein for people. on one hand they sacrificed taste, but on the other hand it is better for the environment. we look at this as a holistically as possible. stephen: we are here at the hong kong exchange green asia summit. we are talking about finance. we are bloomberg, by all means. what are your financing needs as you take your ambitions beyond what you have already done quite well so far? you have $70 million raised in september of last year. what other financing channels do you have? is an ipo in the cards? david: with more companies that are emerging in the scene, the encouraging trend is that is where investors are looking at. with the context of bloomberg, esg investment becomes very much a big focus of any types of investors, professional and

hopefully retail individuals as well. the whole esg investment space i think is becoming a big topic for any investors. for us, the food industry -- we are talking about meat and dairy is more than $1 trillion. if you look at the multi trillion dollar industry, with that, it means a lot of investment needs to be done, from the r&d sense, and from the market penetration sense, how to reach consumers in multiple countries. as we continue to ramp up, and we are looking for long-term investors who share the same goals as we do. from a mid to long-term perspective, there should be a lot of good returns from this industry of investment. stephen: quickly, do retail

investors have an opportunity? will you have an ipo? david: i can't comment right now. we will work hard to grow the business and do what is good for growth external and internal to the business. david: david yeung, thanks so much. the cofounder and ceo of green monday, maker of omnipork. thanks for being on bloomberg television. haidi: it did not sound like a straight no to that ipo. steve will be back with more from the hkex green asia summit. plenty more. this is bloomberg. ♪

haidi: this is "bloomberg daybreak: asia." early studies from pfizer and biontech show a third dose may be needed to neutralize the omicron variant. lab findings indicate two shots may not be sufficient to protect against, crown, but a third -- against omicron. pfizer's has a new vaccine that targets omicron should be ready by march. >> what i think the data is telling us is basically three doses of the pfizer vaccine will

provide for omicron the same protection like the first two doses provided for the initial strength. vonnie: u.k. premised are boris johnson tightened rules to curb the omicron variant. johnson ruled out making coronavirus vaccinations mandatory, but warns that a national conversation may be needed to avoid restrictions in the future if people refuse to vaccinate. >> we did not get omicron severity, its rate of transmission or the effectiveness of our vaccines against it, but since i last spoke to you it has become increasingly clear that omicron is growing much faster than the previous delta variant and is spreading rapidly all around the world. vonnie: india's top defense official has been killed and a helicopter crash. the air force says he died along

with his wife and 11 other people. one survivor is in the hospital. the general had been stealing the biggest transformation of india's military since its independence in 1947. sales of new energy vehicles in china just 18% last month, reversing a downwards -- as auto sales softened. the chinese, curb backed by warren buffett has total november sales equal to those of tesla and others combined. 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: this is a picture of trading across asia right now. a little bit next because the nikkei is holding steady at the

moment, as we have consumer discretionary stocks pulling down, while communication stocks are leading higher. this follows two sessions of gains while the japanese yen olds at the 113 level. -- holds at the 113 level. we continue to see strength for the u.s. dollar. the kospi gaining for a seventh consecutive session, the longest winning streak since april. this risk on move being translated to gains for the korean won. the asx 200 down, this is we see consumer discretionary and material stocks leading the declines, and the context would be we saw three sessions of gains for the aussie stock index after jumping the most in two months on the rba holding steady on their cash rate, but also signaling they will be watching the omicron variant very closely.

haidi: very closely watched in the u.s. as well. this as we have seen a couple days of pretty strong gains for u.s. markets. futures looking a little bit weaker, but a lot of people also pointing out ahead of friday's inflation report, that could be make or break for sentiment. it could create more volatility there. taiex futures looking pretty positive. we have seen chinese shares kind of hold up pretty well against all the global volatility we have seen. analysts are saying that recovery opportunity now that we are seeing discounting and pricing. shery: coming up next, barclays pointing a return to asia following its 2016 restructuring. we will have the details. this is bloomberg. ♪

shery: barclays is planning to make some key hires in investment banking and wealth management across asia this year. this comes with a return to some of the most fastest-growing economies following the 2016 restructuring. our asia finance reporter has the details. this is a quick turnaround. it was five years ago we saw them exiting their businesses in this part of the world what is

driving the new enthusiasm? >> it was just five years ago that it trimmed its businesses in this part of the world, but barclays is now saying the business itself is very different to what it looked like in 2016. they have been through that restructuring phase and it is now time to get back into these markets that are more profitable. you know they are following other banks into the market as well. the head of asia-pacific, who we interviewed, said the business is different now, we are profitable in the region. he expects that to continue into 2022. they are making big investments. in india for example, a $400 billion investment in hiring and wealth management and in other areas of the bank as well. they are smaller in china, but they are ramping up in some of the other countries in the region. shery: other banks are beefing up their presence. hsbc, standard charter, so

barclays will be facing some tough competition. nabila: that is absolutely right. it is not just those two banks you mentioned, standard chartered, hsbc are stepping up in the region, but you have the likes of j.p. morgan, citigroup coming into the region as well, focusing more on china as the chinese president opens up that economy, which is a multiple trillion dollar economy and business for the banks in that region. haidi: our bloomberg asia finance reporter in sydney. let's get you a check of the business headlines. morgan stanley's asset management division more than doubled the size of its japanese portfolio, aided by an increased appetite for funds strong on esg. investment management rose to $58 billion. assets worldwide are worth around $45 trillion and could grow to $50 trillion by 2025. gamestop shares fell after a

reported mixed third quarter earnings. results showed a larger than expected loss, but sales were above estimates. that rose $1.3 billion. the companies says it has tried to frontload investments in inventory to mitigate supply chain issues. apple is on the verge of reaching a $3 trillion market value in less than four years after surpassing the $1 trillion mark. shares rally to another record high, taking its valuations beyond the market cap of germany's entire stock market. activity indicated a rush from retail investors, with apple out of the four most actively traded contracts on tuesday. shery: in the u.s. on the political front mother house of representatives passing legislation designed to punish china for its treatment of muslims, a move that is sure to anger beijing. this as several countries are now planning diplomatic boycotts

of the beijing olympics over human rights concerns. let's bring in our china government reporter. the vote passed by 428 to 1, so really broad bipartisan support for this bill. what could the fallout be? >> this bill is taken up by the senate. legislation would further restrict goods coming from this region. there are restrictions already on cotton, tomatoes, and silver products, but this has a clause that puts the onus on the exporters. if this does come through, we would expect a strong reaction from china, which has of course denied the genocide and labor allegations and also says the u.s. is using this for political

purposes. haidi: canada in the meantime the latest country to say it is skipping the winter olympics. we saw beijing's reaction to australia announcing the diplomatic boycotts, saying "nobody cares." does beijing start to care with other countries doing the same? lucille: there is certainly a lot on chinese social media, state media on these topics. i think china cares to some extent. it has threatened consequences and countermeasures following the u.s. announcement. we are watching to see if that is going to extend to all these other countries. china says the olympics should not be politicized. it will be interesting to see those countermeasures, china

boycotting other olympics. that is a move we are watching for. we are getting more people from the u.s. calling out some of these sponsors for ignoring what is going on, so we are also watching to see if there will be any changes on what the sponsors will say and do in beijing. shery: athletes are free to compete, right? what does it mean for the olympics itself? lucille: that is right. in the tokyo olympics last year, we did not see a lot of heads of state or dignitaries attend, largely because of covid. so on the ground it may not actually mean huge differences in the amount of countries at the non-athlete level participating in sending a message to beijing.

haidi: our china government reporter with the latest. we are headed to the market open in hong kong and mainland china. we will be watching those stocks in asia after that down bill. we expect to move on account of the u.s. international trade commission recommending an extension of trump era tariffs on solar components. china's longi green, the biggest solar maker in the world. also watching tesla supplies in china after the company reported the second largest drop month on month when it comes to sales of its cars in china. shery: coming up, we had to the hkex summit -- head to the hkex summit. plus, new zealand's trade commissioner to singapore discusses her plans to ramp up tech exports. and later we will hear from a

ceo about his company's ipo. that is it from "bloomberg daybreak: asia." our markets coverage continues as we look ahead to the start of trading in hong kong and shenzhen. this is bloomberg. ♪

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>> 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." we are counting down to the open of trade in the chinese mainland and hong kong. stocks and yields rides on easing virus fears. pfizer and beyond tech say a booster shot of the vaccine protect against the omicron variant. china inflation data is out and a half hour time. a slowing of prices could give the pboc more room to ease policy. a group of