paul: good morning. shery: asian stocks look to recover losses. treasury steady while the dollar jumps. trouble at the top of softbank.

the coo may be preparing to depart over a pay clash. we have breaking news out of south korea. we are getting industrial production numbers and beating expectations. the month on month number is growth of 4.3% instead of an expected contraction. also the year on your number for industrial output in december growth of 6.2%, much higher and what was expected at around 2%. also the previous month number year on year was revised higher to 6.3%. not surprising given we have seen easing in the numbers, but december lost more than 18% growth for those shipments. we are seeing double digit exports for south korea since march of last year. paul: trading is underway in australia and we are seeing a

modest jump in the asx. we saw something like this yesterday as well. we ended the day off 1.8%. the asx in correction territory off 10% from the peak in august. we are at for tens 1% higher. nikkei futures pointing to a positive open. kospi futures are off. that is now in a bear market down 21% from its july peak. shery: it is been quite a ride for global stock markets. take a look at u.s. futures. s&p off. this after in the new york trading session, we sought the u.s. stocks giving up all of the early rallies and now losing ground. giving up for the s&p 500 at 2%

gain. huge price swings and in the futures market right now, stocks remain supported. let's see if this momentum continues overnight into the morning tomorrow. let's get more on the market outlook. garfield, is this all about the rates environment? the hawkish comment? are we seeing repercussions of what is happening this week? >> yes, this is going to be the story for most of this year. how to arrange -- cope with the fed bank to deal with the amount of stimulus that was pumped into markets since march of 2020 when they stopped in -- stepped into stop meltdown. that was the backdrop for a lot of amazing moves the took place

over the 18 month or so the followed. another they're looking to remove that stimulus, it's a brave new world for a lot of assets. paul: we have seen oil paring some of its recent gains, but what is the latest on the oil rally? >> the oil rally, that's a difficult one because on the one hand, there have been strong expectations demand will stay strong. there's also a russia geopolitical tension premium. some of the headlines out earlier this morning about joe biden's concerns and his willingness to talk a tough game when it comes to what might go on in response to what russia may or may not decide to do. all of that is going to keep

some upside for the oil price. looking a little bit further there may be some start to brew when you look at the fed being aggressive and the potential when it is willing to risk a slower economy in order to bring inflation down. that is going to be potential for the oil market because the stronger demand could get pulled away from them by an activist federal reserve. paul: garfield reynolds there. let's turn back to apple earnings. profit and revenue beating analyst estimates. ed ludlow joins us with the details. the call just ending. we will have the highlights from tim cook. ed: they outperformed despite supply chain challenges.

here's what tim cook had to say. >> we set all-time records for both developed and emerging markets and saul revenue growth across all of our product categories except for ipad, which we said would because -- supply constraint. in the aggregate, we experienced supply constraints that were higher than the september quarter. ed: that's fascinating. the impact on ipad and he talked about how their supply chains held up really well. of course it has, it's $123 billion of revenue. there were some specifics and semiconductors were one of them. specific commentary, but also it is a problem area and they expected to remain but get better by march. shery: is so funny to see you excited about an earnings call. ed is now messaging us saying there is so much to unpack.

ed: sometimes, you lose sight of how global apple is. look at this geographic breakdown of revenue. this really interesting stuff here. iphone sales grew 21% in china. sales overall in japan were down by $1 billion but we didn't get any color on white. it will be interesting to see if the stream picks up on that. tim cook said i'm not going to get into the macro picture, i'm not an economist. paul: ed ludlow unpacking those impressive apple numbers. sources are telling us chinese government is weighing a proposal to break up evergrande.

what do we know about this plan? >> buckle up it's going to be a bumpy ride. if this is going to be a breakup of this huge property conglomerate with $300 billion in liability that has been the poster child of this property stress, it's going to be a rough ride. what we know from sources close to this proposal that was sent to beijing officials by other officials in the province of evergrande -- it essentially calls for evergrande to sell most of its property assets except for its listed units in property management or the more profitable right now. as well as the one that has potential and that is the new energy vehicle business also listed in hong kong. sales of those units could be done later. essentially, selling most of

these property assets to a group led by china asset management which is a state backed bad debt manager and a key creditor to evergrande. connect the dots. this would be the biggest and perhaps the boldest step by the beijing leadership to control this breakup rather than seeing a disorderly breakup of this property developer at a time that is politically sensitive in china of a slowing economy. you have the risks due to omicron as well as assault on tech. in the autumn, xi jinping will be consolidating his mandate for an unprecedented third term in office. lots of wildcards and they don't want the disorderly breakup and the expansion of that disorder into the financial markets. what does this mean for creditors? you might have to take a haircut.

that's was interesting about this. who is going to be left fighting for the scraps after the state backed bad asset manager takes those assets and does whatever they do with them? it's going to be maybe a bad sign for overseas creditors as well. there is a playbook to go by according to bloomberg intelligence. we will have this economist on a little bit later talking about that and that is, they have the parent of hainan airlines. that was broken up into four individual businesses with new owners. it was restructured. it will not be as big of a breakup is evergrande, but again there is a playbook. it's not going to deflate all of the risk just by breaking it up, there's a lot of things to do. shery: stephen engle in hong kong with all of the challenges

that evergrande faces. vonnie: president biden has spoken with volodymyr zelensky over growing tensions with russia. following the phone call, zelensky tweeted that they had a long conversation to de-escalate the situation. joe biden is planning to raise the issue with olaf scholz when he visits washington next month. hong kong is cutting quarantine for travelers by one week. the quarantine changes take effect on february 5 and will see inbound passengers stay in a hotel for 14 days with seven further days of self-monitoring at home. flights from countries remain barred until at least february 18 with hong kong citing high covid cases in those locations. the first oral treatment for the virus recommended in the eu.

pfizer says tests show the pill is effective against the omicron variant. the new president of honduras has boosted markets with talks of debt restructuring. he said government debt had reached unsustainable levels making it near impossible to meet payments. investors had been trading under sovereign bonds. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. paul: let's have a check on the big gold producer currently our west -- worst performing stock.

gold production coming in as a miss. the broader asx better by 1.8%. still to come, we discussed renewed xenophobia in japan. nancy snow joins us for that. we also look at how markets should be concerned with sticky inflation. this is bloomberg ♪

>> who knew that global logistics were this fragile? >> we have to be careful because we all live -- uncertainty is

the word of the day. >> supply chains will be here till the end of 2023. >> we have seen shipping container prices increased by a factor of three. >> we will see price hikes from businesses to consumers. >> it's inevitable that some of that will have to be priced through toward the end markets. >> the labor market is very tight so it appears the market has less capacity than we thought that's why we are in a situation where inflation has not faded away quickly. >> the business is coming in supplies, wage inflation etc. of course, the key is to maintain pricing power and to be able to share that pain with customers. >> it will always be part of the discussion from now on.

paul: a number of executives flagging their inflation concerns during earnings calls. how do you see the inflation picture? how much of what we are seeing is pandemic inspired problems? how much of it is stimulus and the economic recovery and how many problems will stick around? >> inflation is higher and longer lasting than people expected including myself. if we look at inflation, there are some elements that may dissipate over the near future. typically we talk about the price of goods and services, it's always about supply and demand relationship. we see their strong demand partially due to a booming

economy due to stimulus. there is also some and balance in the price between services and goods. covid shifted the structure and consumer spending away from services into goods. it's easier to do online shopping rather than going to the movie theater or taking the trip. that's why u.s. consumer spending has been hundreds of billions of dollars above pre-pandemic level. spending on services is still slightly below. durable goods supply chain issues. supply was not good for those types of goods. labor shortages, all pushed the price for durable goods higher and higher.

a lot of this can be alleviated when the pandemic it's out of the picture. when investors shipped back toward services away from goods and also supply chain recovers and semiconductor manufacturers are really spiking up their capacity. paul: inflation is a key reason why central banks are beginning tightening cycles. we are seeing a lot of selloff in the equities markets connected with this. you see some opportunities among all of the selling? >> the market tends to react to short-term views a little too aggressively. under the near term, it's very hard to predict the market interaction. that's why recommend the

investor focuses on on a longer-term perspective, what ownership of stocks can bring you value over to your five-year horizon? that's where the valuation really matters. during recent selloff, value stocks take as well but with a much lesser magnitude versus growth. shery: if you look at this chart, you can see the rotation to value already happening as growth takes a hit. where would you find that value? there have been places across emerging markets that have such different backdrops. >> i think we can talk about both regions, the regional banks and sector banks. we look at sectors, you look at

the sectors such as energy or industrial. the sectors tend to have big exposure to economic expansion. financials tend to be really good inflation hedge when rates go up, when angel companies tend to do better. -- financial companies tend to do better. on the global context, the u.s. market is priced extensively even though recently -- jumped from 40 to 35 but still way above other developed countries. if we go to emerging, they offer investors higher yield. more promising income growth as well as most importantly the valuation level change comes tailwind for this regional market versus u.s.. shery: always great to talk to you. we have more to come on daybreak asia.

stay with us. this is bloomberg. ♪

shery: exclusive reporting that the coo of softbank is in talks to leave following a clash with the founder. let's bring in our tech executive editor. what are these disputes about and why is he leaving now? >> there are a couple of things at the heart of the clash between him and leadership. he had been present for more compensation. he felt like he had added a lot of value of the company. he took over the lead role at sprint to help turnaround that wireless carrier then facilitated the sale to t-mobile which was an important step for

softbank. also, he was involved in the turnaround of wework he helped bring in a new ceo and the company was able to go public. he wanted much more compensation than what he had received. in the last fiscal year, he received about $60 million. he was pushing for as $1 billion because he felt like he had added that kind of value to the company. softbank never seriously considered giving him anything close to that. paul: how much of an issue is going -- it is going to be for softbank? >> there are short-term issues they will have to sort through and longer-term issues. first of all, softbank share price has been getting hit already hard with the tech downturn. they've invested in hundreds of

startups that they hope to take public. one leads the latin american fund softbank's had so they have to figure what to do with that. longer-term, there is a big problem of succession for the leader. he is talked about retiring in his 60's or at least giving up the ceo job. he was one of those that have been considered as a possibility for that, but he is going to be gone, there is no obvious person to step into the ceo shoes at softbank. shery: we will be watching the stock as japan starts trading. thank you for that. we have breaking news, sk hynix coming up with their profit beating estimates. 4.2 2 trillion versus unexpected 965 billion you want.

we are also seeing consolidated net and growth of 88% year on year coming in at 3.32 which is also a beat of estimate sales. they said they would be investing in their china unit. we continue to see falling growth in chips. robinhood tumbled in post market trade after its revenue outlook beat -- missed estimates. it was dragged down by weaker stock trading which saw a revenue drop of 35%. the platform slashed its forecast for the third quarter. lvmh posted record sales. topping the previous record set in 2019.

companies under the group range from tiffany to sephora. coming up next, we

paul: breaking news out of japan. his tokyo's cpi for the month of january coming in weaker than expected. we are seeing the japanese yen holding steady on this news. yield on the 10 year japan 15.6

basis points. that's the highest since 2018. not a great deal of reaction on the currency on those cpi figures. a slight mess for tokyo cpi in the month of january. vonnie: chinese authorities are set to be considering a proposal to split up evergrande. the move would be china's guest step yet to prevent a disorderly collapse of the developer. taiwan's economy is set for another bump this year after growing at the fastest pace in more than a decade in 2021. the largest company planning capital expenditure of $44 billion. that equates to 5% of national gbp -- gdp.

singapore will host the formula one grand prix later this year. it signed a contract to hold it for another seven years. singapore is trying to reposition as an auto sports and tourist destination. the transport minister says the events renewal will sustain singapore's reputation as a global city. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: as part of an effort to turn the page on the carlos ghosn crisis, companies are booting -- rebooting their alliance. plans to produce 35 new models by the end of the decade. the chairman of renaud told

bloomberg about his new partnership with nissan. >> some nations of the world will be electrified and that is not to be the case with europe come up with the rest of the world will have to rely on some sort of production of power. direction, but renault will be in europe one hunter percent pure ev -- 100% pure ev by 2030. you understood that nissan would also announced 100% of their production would be electrified in 2030 which means there will be ev and hev and also mitsubishi part of the alliance announced they will have a major shift toward electrification. that means we are now having a very strong strategy toward electrification.

investing a tremendous amount of money's more than $26 billion in the coming years. we already invest more than $10 billion probably $12 billion in the past 10 years which means we have all in all a tremendous amount of resources that have been optimized between are three companies. >> in terms of the market right now, we have heard some pretty disturbing figures for production. german car production is at a 21 year low. the u.k. had its worst year since 1956. all of this has to do with the supply chain problems and shortage in chips. how are you feeling that shortage right now and what does 2020 to look to you in terms of chip delivery? >> we suffered all of us. it has been an ordeal and a real crisis to go through. i am probably a bit optimistic

toward the end of this year. we have to be careful because we all live in a very chaotic world. uncertainty is the rule of the day. the first half may be still a bit difficult and we will certainly have some crisis to manage all of us. i am honestly a bit more optimistic for the second half. >> we are also continuing to monitor geopolitical challenges and we think about the tensions at the border of russia and ukraine, tensions sanctions that could result, how do you see that impacting sales in russia and your plans there? >> so far, there is no impact of this crisis. honestly, i have to be cautious about becoming week because none of us really know the outcome of this crisis as we speak. there are some consequences on the russian currency as you know. at the same time, the price of

oil is increasing. the price of gas is increasing which increases the revenues in russia. all in all, it's impossible to have a perfect balanced view of the impact in the country. as we speak, we don't see any major impact. we are monitoring the situation very closely. i don't think that because of the nature of the product that we are bringing to the russian market, that we should suffer too much read. paul: we are tracking the fallout of the global supply chain crunch. these are the top stories today. supply chain issues dominated earnings calls but as we have been reporting, apple has beat estimates with a record $124 billion in sales. that is assigned it will navigate through the disruptions.

we will be either to see what caterpillar says about inventories and the availability of cereals and its results on friday. chinese regulators have approved one of the largest semi conductor deals ever in the $35 billion takeover. so long as the company won't scream innate against chinese clients. shery: shares of semi conductor companies fell sharply in new york after softer results from high-profile companies like intel. the philadelphia chips index saw its worst since march of last year. president biden said to deliver remarks on supply chains on friday. bloomberg terminal users can read more about those stories on our newsletter. sk hynix reported fourth quarter sales and operating profits ahead of estimates. let's bring in our asian stocks

reporter. despite the fact they provided strong numbers, they still saw supply chain issues. >> they probably also sought some supply chain issues. however, they reported record quarterly revenue that was the fastest pace since 2017. they were able to report that next to strong demand coming from data centers that probably offset a fall in the memory chip prices. paul: how is the outlook looking for sk hynix? >> yesterday, we saw the rival -- the supply chain issue gradually easing across the

technology sector in the first quarter. a lot of analysts have been expecting the memory down cycle that hurt samsung and sk hynix last year will be ending sooner than expected. the outlook would be much better than the last year as we expect the winter for the memory chip industry going to end sooner next to strong demand from pc or data center and smartphone makers. we should still watch how the rising cost of raw materials logistics and ongoing supply crunch issues going to affect bottom line. shery: are those issues why we are seeing pressure on the stock at sk hynix?

samsung had strong numbers, but at the same time the stock not doing that well this year. >> the stocks at samsung and sk hynix which was the two largest korean stock until yesterday for -- they have been coming under pressure from the selloff from the foreign investor who has been reducing risky assets. it's not just the memory industry outlook or the down cycle that is affecting the shares of sk hynix or samsung. it is also the broader macro economic conditions and the pace of the monetary tightening policy could also affect the shares. sk hynix shares have been down this year in lawn with -- in line with the broadband. it is still faring better than some of its peers. it could provide some kind of

haven for investors looking for a less severe fall in the stock market. shery: the latest on the chip sector. we have breaking news. samsung biologic will be buying biogen's -- stake for $2.3 billion. it is a joint venture focused on making low-cost wire similars. we have seen them struggling in the past few months to push its controversial alzheimer's treatment. we are hearing that samsung biologic will be buying it for $2.3 billion. paul: coming up from banning overseas businesses to resisting efforts to let foreigners vote, japan has reignited concerns about xenophobia. we will be talking with an expert on diplomacy.

that's coming up next. this is bloomberg. ♪

paul: we are counting down to the start of trading in tokyo and seoul, korea. sk hynix has posted fourth

quarter profit to beat estimates. december industrial production rose or than 6% year on year against estimates of 1.8%. shery: in japan, the nikkei is reporting the government is considering shortening the time for close contacts of people from 10 days to seven days. nissan and renault have rebooted their relationship with $26 billion plan to roll out 35 new battery-powered cars by the end of the decade. we are also watching -- after a third quarter operating profit feasted -- beat estimates. for this week's equality segment, we're looking at xenophobia in japan. from a ban on foreign arrivals to a campaign to let non-senate -- noncitizens vote.

let's bring it professor of public diplomacy. thank you so much for joining us. we have seen a level of inwardness in many different countries during the pandemic. what is so different about japan? >> right now, japan has been operating mostly under this when he 20 methodology -- the 2020 methodology. the reason why there is more scrutiny now and criticism is because it's 2022, it will be three years this april that there has been largely a foreign visitor band. i'm not talking about tourist. that's another thing altogether. this is a ban on people who want to come to japan, contribute to society, study, learn here, do research.

about 370,000 people. you are hearing cries now with xenophobia, being to japan specific. i casted this in a political light and that the ratings now as the new prime minister, they are close to 60%. the japanese people are largely in favor of controlling the borders. even though they are allowed to cross borders. the foreign pressure is building now to change the policy update you are talking about the larger public. what will be the challenges for a country that deals with demographic issues as well? >> it is already happening, because pre-covid under shinzo abe, there was an opening up and

bringing in workers. blue-collar, white-collar workers for shorter-term visits, longer-term. there was even a recent 2019 policy to allow blue-collar workers to comment, work in agriculture and a lot of jobs that japanese art really interested in doing as much. they could stay here over a longer term. they can't get these people in now because there is pressure coming from the business sector including the leading international business lobby here has come out this week to say we have to have a change. we can't continue when you have a domestic population that is over 70% vaccinated and with strict quarantine, you could allow people back in and they will follow the rules and it will help the economy. we know the demographics are bad. short-term long-term, this is

going to hurt japan. paul: what's the biggest barrier to japan changing its stance on immigration? >> we are all wondering the same, because we are not given a good rationale. you have a lot of the chambers of commerce as i mentioned earlier, international lobbies saying if you want to be for instance tokyo to be an international financial center, you can't speak out of two sides of your mouth and

limit having a global classroom. we're going to limit having global companies. a lot of that talent that would are the wise come to japan and what's to come to japan can't get into the country. over time, this is eroding the interest and the passion and that dizzy has him to work here and to contribute. we have to get beyond japan versus foreigners. this is really about sustaining the society as an international community. in principle, the government is very committed to that. practically speaking elections coming up, with the high favorability, so far she debt is staying the course. the public is supporting that. it is also a combination -- paul: can i get a little more detail on that? to what degree are some politicians using the national sentiment to keep the status quo on immigration? >> that goes on all the time. there is again a sense that if you let in too many foreigners to quickly, you will have a run on hospitals, the mortality will jump. it is a quandary for japan because the mortality numbers have been low. covid numbers are growing, but

they are also having to deal with the slow reopening because they're getting a lot of pressure. they have the most strict border control amongst the g7. it is really an effort for not only the u.s. wanting japan to do more, but also regionally and there are a lot of people who want to come in and help. with that nationalism, that's what is often used. we have to protect our population and that's what kishi to said this week. he framed it in terms of taking the elderly, not having the run on hospitals and that goes over well with the population here and politicians take advantage of that saying we need to keep the borders shut. paul: thank you so much for joining us. you can watch us live and see our past interviews on gtv .

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

shares of chinese gaming platform surged on report that is planning to go public this year. tencent wants to team up with at least one private equity firm for the deal and is talking to investment firms.

tencent is the biggest shareholder with 37% stake. apple has posted record quarterly sales and assigned that it has been able to push through the supply chain crunch. profit also talked jackson's. shortages could cost apple billions in sales were overblown. shery: these are some of the stocks we are watching. sk hynix came out with fourth-quarter earnings and they beat on operating profits coming in at 4.2 2 trillion won. also sees supply chain issues gradually resolving in the second half of the year. we are following samsung biologic. it will be buying another company. after the acquisition, they will

be wholly-owned. we are also following -- down more than 4%. also watch out for apple related stocks because we saw them smashing through their earnings estimates. really record numbers for the iphone, macintosh, wearable services revenue although they did miss on the ipad. the revenue in japan declined. take a look at the markets. we are coming off of the volatile session here in the u.s.. u.s. futures at the moment up six tents of 1%. the asx 200 is up as much and nikkei futures are pointing higher by more than 1%. do have the japanese yen much weaker given that the focus is on the fence more hawkish tone and the divergence. coming up, japanese equities and

asian high-yield bonds. more on the market outlook just ahead. the market openings in seoul, korea and tokyo are up next. this is bloomberg. ♪

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shery: welcome to daybreak asia. i'm shery ahn. paul: and i'm paul allen in sydney. asia's major markets have just opened for trade. asian stocks looked to recover losses triggered by powell's hawkish tibbett. -- pivot. the dollar jumps. apple has record sales and signals it has tamed the supply

chain crisis. china bricking up evergrande to contain the private sector crisis. shery: japan and south korea coming online. you're seeing upside for the nikkei and topix growing 1%. the nikkei taken to the lowest in november 2020. the topix in contraction territory, so we could see movement in the opposite direction. we continue to see significant weakness given the focus on the divergence between the boj and the fed. this as we are also getting core cpi numbers, missing expectations and coming in at 0.2% growth year on year for the previous month. take a look at the kospi right now, gaining 0.4%. we are also seeing one of their stocks that we have been following, sk hynix, which came

in with operating profit that beat estimates, now gaining more than 1% at the moment. this as the kospi just entered a bear market after falling for the past 15 consecutive sessions -- past five consecutive sessions. they are down from their july peak, but we will see how they close today. the korean won has also shown significant weakness in the past . it continues to weaken against the u.s. dollar. we have south korea's industrial production numbers coming in earlier and beating expectations, though, paul. paul: in australia and new zealand, we are seeing equities cut off their earlier highs. new zealand in negative territory, off by two thirds of 1%. in australia, up just a quarter of 1%. the weakest stock on the index right now, new krista, the gold miner missing gold production.

we are watching bonds for australia and new zealand as well, pulling back a little. new zealand now 2.62, but it did hit the highest level we have seen in four years yesterday. the australian 10 year coming out highs as well, at 1.962. let's have a look at what is going on in some of the energy markets. we've got oil coming back from a seven-year high. still some underlying strength. demand is intact, stockpiles pretty low. citigroup sees a risk premium of five dollars per barrel of the russia-ukraine tension. but oil getting dragged down mainly by a surging u.s. dollar and some broader risk off sentiment at the moment. 87.29 for west texas right now. s&p down as well, up a third of 1% at the moment. natural gas up 1.26, but we saw

the federal contract surging up to 72%. a short squeeze going on in the natural gas market. what to get you some breaking news out of singapore and taiwan. dbs planning to buy citigroup's consumer banking business in taiwan. we've got dbs saying this is going to have no impact on dbs's ability to pay dividends. this is expected to be completed in the middle of 2023. it will be funded by excess capital. dbs will pay citi cash for the net assets of the acquired business, including a premium of about $750 million. dbs announcing plans to buy the citigroup banking business in taiwan. asian stocks looking to pick themselves up after the worst rout we have seen this week. weeks of fretting over

tightening monetary policy has come to fruition. rockets tumbling, a number of them in bear markets. australia ran a correction as well. for more, let's bring in james long. james, a lot of trade. markets pricing and may be up to five -- pricing in maybe up to five rate hikes from the fed. what do you think? >> the markets are not wrong by trying to expect a more hawkish fed given the sustained price inflation's we have seen globally. but i do think in terms of pricing, markets are always overdue things. our view is that we do not expect the fed to need to hike rates so aggressively, because we are entering into a sort of slowing growth phase coming off

a very strong growth last year into this year, and supply bottlenecks, although a lot of speakers in your show are still saying supply constraints are still there, but there is certain hope that it would be mitigated coming into the second half -- going into the second half. there is a however slim chance that price would at least moderate. hiking too aggressively into slowing growth and perhaps tipping off from high inflation levels could be dangerous. personally, i think the fed will take a little bit of time and patience.

paul: we see markets selling out heavily. the csi 300 a bear market, as is the kospi. but when you look at the selling, there are parts of the market that look oversold. do you see opportunities here? james: indeed. although it may be too early to call the bottom, but on the other hand, we still think the underlying fundamentals, u.s. or closer at home in china, are actually not too bad. there are pockets of opportunities for fairly longer-term investors, although investors must accept that sort of low interest rate regime is over. so your future looking stance must incorporate that into consideration. from our side, we are definitely seeing some opportunities in some of the -- all over the

world. some small caps in the u.s. have been lagging behind tremendously, even before the selloff. shery: let's talk about china, because they were lagging behind given all the issues about regulatory crackdowns and the selloff in tech. but the bloomberg showing that value stocks within the csi 300 have been outperforming. you mentioned perhaps the time of low rates is over, but not necessarily in china, right? could you see more upside here? james: indeed, i totally agree, the policy stance in china is in contrast to the developing economies. -- developed economies. there are more market from the measures that are -- market -- the property equity market would

be sensitive to news every day. we are seeing high-yield names start to look pretty attractive in terms of yields, but risk remains. shery: tell us more about that. we continue to see talk about restructuring evergrande. when is the right time to get in ? is this already the bottom where you see opportunities, or could we see further downside and you would wait it out? james: we think in terms of the top down tightening stance of the chinese authorities, it may be behind us, and now we are entering a stage where we need to see results. as you mentioned on the definitely the restructuring of evergrande and perhaps a few other troubled property developers.

especially overseas, the creditors are left -- less impatient than the issuers themselves. we think we are entering in a state where the market is almost, in terms of finding equilibrium level of debt on yields, it is starting to look very attractive. for example, if you look at the asia high-yield index as a whole, it is giving you about 12% return in terms of the maturity, although there might be sporadic write-downs here and there. but the risk return looks favorable, if you have a long-term horizon. shery: james leung, great to catch up with you. take a look at some movers. we are seeing softbank, sk hynix, samsung electronics also

gaining ground. from softbank, bloomberg has learned its ceo is making preparations to leave softbank after clashing with the founder over his compensation and responsibilities, according to sources speaking with bloomberg. we are seeing upside in the semi conductor side of things. sk hynix in operating profit. they are also investing more than 2,000,000,000,001 -- 2 trillion won in their chinese unit. samsung, we saw their earnings come out. they had a bit of a miss given their large bonuses, but still they reported solid numbers in other parts of the country. take a look at apple suppliers, because that includes samsung as well, but apple smashed their earnings estimates, reporting record numbers for iphone, mac ware. also, revenue declining in japan. let's get to vonnie quinn with first word headlines.

bonnie: tokyo's inflation has slowed for the first time since april with moderating five gains offering support for the bank of japan's plans to maintain policy . excluding fresh food, consumer prices and japan came in below estimates. inflation slowed largely due to hotel prices, which stagnated after the end of government-sponsored discounts. president biden has spoken with the ukrainian president number growing tensions with russia. following the call, the ukrainian president tweeted that the two had had a long phone conversation following diplomatic efforts to the escalate the situation between kiev and moscow, and potential financial support. biden is planning to raise the issue with the german chancellor when he visits washington next month. pfizer is stepping out of the eu. drug regulators -- it's oral pills are the first recommended in the bloc.

trials show it reduces hospitalizations and deaths by nearly 90%. pfizer shows the drug is effective against the omicron variant. the eu is still issuing merck's covid bill, which could provide another option. taiwan's economy set for another bounce this year after growing at the fastest pace in more than a decade in 2021. the island's largest company, see smc, planning capital its miniature of 44 billion dollars, 5% of domestic gdp -- expenditure of 44 billion dollars, 5% of domestic gdp. a solid fourth quarter was fueled by strong exports. global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: hong kong extends flight bands but shortens quarantine requirements for inbound travelers. we will have more on the

territory's covid response. next, china is looking at restructuring evergrande despite repeated comments that the companies should be dealt with in a market oriented way.

shery: chinese authorities are weighing a proposal to break up developer evergrande, in an effort to prevent a disorderly collapse of the company. for more, let's bring in rebecca. what does the proposal call for? rebecca: it is a great key critical development to the evergrande saga, essentially looking to sort of dismantle the firm, sell the bulk of its assets, and then a group led by one of china's estate run bad debt managers would take on anything that wasn't left.

on the one hand, it is good for creditors. it looks like a clearer plan is going to emerge, that there is going to be a proposal to the government. however, so far we know that the electric vehicle unit as well as the property management unit are not going to be sold. but they could be at a later time. that could be a blow to creditors, because the management segment is one of evergrande's most valuable assets. paul: how have evergrande's asset sales been going so far? rebecca: we have seen not much progress on that front, but from a sort of offshore creditor point of view, that might be positive. there were some concerns among global investors that evergrande would proceed with asset sales without can you can clearly what was going to happen -- without communicating clearly about what was going to happen. it is a positive side. however, this sort of timeframe

we have been given, evergrande is saying to investors in a call earlier this week that they were going to present a plan in six months, is quite long. we already know that investor nerves have been quite frayed when it comes to evergrande. it is reported that oaktree's are looking to seize land off the back of the loan that has been defaulted. i think we can expect to see more pushback from either the ad hoc committee or from these big offshore individual creditors while we wait these sort of six months for some kind of initial plan. paul: -- shery: what sort of precedent when for other developers if this goes through, who are in trouble as well? rebecca: that is an interesting question. on the one hand, we see authorities intimately involved trying to accelerate the situation and crucially managing the fallout from that, and that is positive.

ultimately all investors want to know how the rules of the game are going to be changed. there is a big uptick in defaults that caused another record year last year. however, evergrande is quite unique. it is very rare in china to see restructuring of this kind of complexity. it is very unusual to see the state so intimately involved in a restructuring. typically they would be more independently managed. when we look at other kinds of restructurings, particularly the record's plate of defaults at the end of last year, we should look at cases which show the cases offshore creditors might be treated, as well as showing precedence for offshore bonds that have been controversial, and guarantees that have been employed by chinese borrowers over the last five to 10 years.

paul: rebecca chin wilkins there. coming up in our next hour, we will speak on the property developer's outlook after reporting results for 2021. the results up next. apple, we passed through the earnings report that beat wall street estimates. l street estimates.

>> we have to be careful because we all live in a very chaotic world, and uncertainty is the rule of the day. >> chip shortage, while better than last year, is still an issue. and, yeah. >> we are fortunate that we have

been able to secure everything for last year. we did not lose a day or an hour because of microchips. >> we have some crisis to manage, all of us, but i am more optimistic for the second half. >> for the group and the industry, it is a real concern. shery: major automakers flagging the impact of the chip shortage in their earnings. let's turn to apple earnings, beating analyst estimates. ceo tim cook discussed apple's supply chain resilience earlier. >> i think our supply chain actually does very good considering the shortages. it is fast-moving. the cycle times are very short. shery: can't take a look at some of the apple asian suppliers getting a boost after the results. samsung electronics has seen gains of more than 0.4 percent in about two weeks or so, but even japan display having its

best day since december of last year. for more, we are joined by our west coast reporter. i would ask what drove the gains of apple, but it seems most categories were up. what were some of the misses, then? >> that is a good point. the demand is there, and talking about the shortages, chips were issued for apple, and they were able to navigate and circumvent those shortages. if you look across their product area, it is really the ipad where they had the only topline miss in terms of sales. the new products that came out in the fiscal first quarter performed really well. iphone 13 sales really strong, particularly in china, where they saw i thrown growth -- saw iphone growth at 21%. there are supply chain issues, but they are focused on stiff is if it -- they are focused on specific semi conductors, and

they seem to have gotten around that. paul: apple still sitting on a monday mental pile of cash. any plans to deploy that? >> no plans to discuss that. when activision was announced, there was a hypothesis that apple could make a similar move. they have moved into gaming and video games. they have the likes of amazon they are competing with. it is an interesting area to follow. services broadly were very strong. the thing about apple's bottom line, if you look at margins, they do not really comment on the breakdown of that. services is clearly a higher-margin business and is contributing in a positive way. it is seeing some margin pressure from increased costs and volume. paul: ed ludlow taking a look at apple earnings. let's take a look at the latest

business flash headlines. sk hynix has reported profit above analyst estimates after solid demand from data center and pc customers offset falling memory prices. output rose to $3.5 billion in the second half of december. sales grew to $10.3 billion. the apple supply also plans to -- $2 billion. chinese regulators have approved amd's $35 million purchase of xilinx. the country's antitrust watchdog approved it asking amd to not discriminate against chinese clients. the acquisition had already won the blessing of regulators in the u.s., europe, and other jurisdictions. softbank's chief operating officer is said to be in talks to leave the firm after clashing with the founder. sources tell us the pair disagreed overcompensation and

responsibilities. he was softbank's second highest paid executive last year, but he has been pushing for as much as $1 billion in compensation for his work. robinhood tumbled in trade after revenue and outlook missed estimates. fourth quarter revenue came in at $362.7 million, dragged down by weaker stock trading. the platform also slashed its forecast for the current quarter to $340 million, and that is down from $447 million. up next, visiting hong kong is going to become slightly less onerous, with a shorter quarantine but an extended flight ban means getting there remains impossible for some. ♪

every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

paul: breaking news out of australia, ppi for the fourth quarter accelerating to 1.3% on quarter, 3.7% on year, so a healthy acceleration in producer price index for australia. the asx higher by 0.5%, bouncing off some of the lows we saw a few moments ago. the aussie dollar one of the weakest in the g10 at the moment, $.70 against the u.s. dollar. ppi prices accelerating on the

third quarter, 3.7% on year. more data for the iba to consider as it heads into its first meeting of 2022, and that happens on tuesday. shery: we also have strong numbers out of taiwan and vietnam. taiwan's manufacturing pmi coming in at 55.1, which is a slight deceleration for the month of january from the previous month, when it came in at 55.5. suffice it to say, it is still pretty strongly in fashion area territory. those pmi numbers have been pretty positive for the past year, given that exports have been rising in the double digits since march. take a look at vietnam, because the numbers coming in at 53.7, which is a gain from the previous month, and it is also in expansion territory for the past four months. let's get to vonnie quinn with the first word headlines. bonnie: chinese authorities are

said to be considering a proposal to dismantle struggling property developer evergrande. bloomberg sources say the plan calls for evergrande to sell most of its assets, except for its separate property management and electric vehicle units. the move would be china's biggest yet to prevent the collapse of the world's most indebted developer. the president of honduras has boosted markets with talk of debt restructuring. in her inaugural speech, she said government debt has reached unsustainable levels, making it near impossible to make payments. investors had in trading -- the meeting pushed it down to as low as 96.4 cents on the dollar. indian prime minister nguyen ramona has vowed cooperation with five central asian nations -- prime minister modi has vowed cooperation with five central asian nations. modi highlighted the links to the region and said joint access

is necessary for security and stability. singapore -- after a two-year gap. it is under contract to hold the event for another seven years until 2028. singapore is seeking to redivision as a prime business in asia while pivoting toward a strategy of living with covid. the transport minister says the event's enable would sustain singapore's reputation as an equitable city. global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. shery: we have breaking news out of argentina and the imf. they have reached an understanding on the fiscal path for argentina for a new deal, but this is an understanding there will be a force path before they will get a full deal. argentina will be seeking fiscal balance by 2025, according to

people familiar with the matter. we have that looming deadline to make a payment of over 700 million dollars from argentina to the imf. we have seen some disagreements from the president. in all, argentina needs to repay the imf about $19 billion this year, while markets are pricing in a greater probability of argentina again falling into yet another default. paul: hong kong is reducing quarantine for inbound travelers while keeping travel bans on select countries in place. >> the shortening of the hotel quarantine period from 21 days to 14 days, plus seven days of self-monitoring, is purely based on science, because omicron's incubation period is relatively short. there is no logic, no consistency if we still impose the 21 days on arrivals.

they are not even close contacts. paul: this comes ahead of fourth-quarter gdp data from hong kong do later on friday, expected to show a rebound, that way could be short-lived. let's bring in rachel chang. rachel, what prompted this change to quarantine, and what sort of difference is it going to make? rachel: hong kong is very much at the extreme of its ability to withstand this zero covid policy. it is still incredibly aggressive at tracking down close contacts, trying to prevent infection. it has some of the most strict rules in the world, still trying to get to fewer cases in the face of omicron. it is important to realize that this shortening is not really much of a concession because it brings it down to 14 days, which is still one of the longest travel quarantines in the world. most countries do not even have them anymore.

when she talked about the incubation period for omicron being less, we have seen in the u.k. and other places isolation periods going down to as low as five days. but this is still very much a super conservative policy in line with hong kong's revolution behind getting that zero number. shery: given all the changing restrictions not only in hong kong, but around the world, what does this mean in terms of our resilience ranking that we have from bloomberg, the best and worst places to live with covid? rachel: i think we see hong kong and china over the last -- hong kong and china as the two last places trying to go for covid zero, and they are becoming an outlier on the ranking. most places in the world have aligned their strategies to living with the virus. we see lots of places that put in restrictions when omicron

emerged last year and get rid of them quickly in a matter of weeks. they are saying it is a part of life. the world is moving very much toward treating this virus as something quite normal. so in the sense that hong kong and china stand out even more. shery: coming up next, we look at why u.s. gas futures jumped an eye-popping 72%, the most on record. this is bloomberg. ♪

shery: metals have been catching a bit, oil is also higher, but natural gas futures have grabbed the spotlight. they soared a jaw-dropping 72% in u.s. trading. su keenan joins us with the latest. what is this about? su: many say it is a classic case of a short squeeze, because what we had was a shift in the weather forecast from cold weather ahead to very cold weather, from heavy snow to what they call a bomb cyclone. suddenly, a thinly traded gas contract -- nat gas contract shoveled as much as 72% intraday. one trader said it was insane to wait until the final hour before the contract expires to close

out a bearish decision. you have to buy back your short, and that is what pushes prices higher. if you look at natural gas for the past year, you can see it was already on fire. a lot of hedge funds have been that long on u.s. nat gas because it is expected higher, but there was still a large number of money managers that were short on this particular contract. a spokesperson for the cme group confirms the price jumped was the most since the contract launched in 1990. the more active contracts saw a gain of less than 10%. the way the price whips around was so rare. many traders were talking about it. one guy said this was a classic commodity short squeeze. he said there is no other good explanation, even if we had a bomb cyclone going on, we would not see prices move as much, and that is the forecast for the new york area as well as up and down the northeast coast of the u.s. and into canada.

heavy snow and cold weather ahead. paul: su, oil seems to have stopped accelerating higher for the time being anyway. tell us what is going on in the oil and metals markets at the moment. su: we saw the oil rally take a pause in the u.s. trading session. it retreated after a seven-year high. it moved a bit higher. futures rose above 87, but it has been a bit choppy. still we are looking at oil's for the week to almost 3%, and this is despite rising demand. this puts oil on track for a sixth weekly advance. they jump in the dollar after the fed signaled it was more hawkish than thought. brent crude has barreled higher in 2022 on a host of factors. a strong recovery, it looks like, from pre-pandemic levels.

the physical market has been strong. the focus shifting next week to the opec-plus meeting to decide whether to hike again in these monthly increases for oil output. meanwhile, metals, which had taken a sharp drop in the thursday session in the u.s. because of the fed's hawkish tone and the dollar moves, has been rising in early trading. metals have pulled back from their recent rallies, but it looks like gold is recovering a bit from the powell impact, powell's press conference after the big story wednesday because gold to give back all of its 22 gains -- 2022 gains so far. back to you. paul: let's get a check at the latest business flash headlines. lvmh has posted record annual sales, with revenue of more than $71 billion. that tops the previous record in 2019.

the numbers exemplify the v-shaped recovery experienced by much of the luxury industry, underpinned by recovering economies and soaring asset prices. china unicom is the latest chinese telco company to be ejected from the u.s. market. the federal communications commission ruling highlights potential espionage and data theft concerns. the ftc has already barred china telecom and refused to let china mobile into the u.s. there are similar proceedings on the way against pacific networks and calmed at -- comnet. shares of a chinese gaming platform surged on reports that tencent is planning to take it public this year, following disagreements over future strategy. writers said tencent wants to team up with where at least one private equity firm for the deal and is talking to private investment funds. tencent was douyu's biggest shareholder with a 30% stake. shery: chinese authorities are

weighing a proposal to break up ever granted an effort to prevent a disorderly collapse of the country -- evergrande in an effort to prevent a disorderly collapse of the country. charles, great to have you with us. does this strategy make sense? charles: i think this is not only making sense for the government, but necessary. the chinese government has been trying to pursue and efficiency of growth strategy for some time . in order for growth to be efficient, the country has to allow them to function. most of the government action has been focused on easing the fall but allowing the markets to thrive at the same time. shery: how does this reduce broader property sector risk? charles: the issue with the sector overall is that there is concern about the headlines seen in the news, and therefore

investors are betting on the sidelines for things to stabilize. securing homebuyer sentiment is probably the first step to stabilize home sales. in terms of developers that may not be able to make it under the pressure, this is where the market functioning comes into play. development, in our view, will continue to allow developers who may not be able to survive to go , but another the less will try to ensure that the property sector -- nevertheless will try to ensure that the property sector is trying to grow in a healthy fashion for the long-term. shery: you always get cash paul: you always get questions such as this. china wanted a market oriented solution to the evergrande problem, and that we have this. does it set a dangerous precedent for other troubled

developers? charles: if you look at some of the market fears in the past, there was a perception for a very long time that the government would come in and bailout, whether it is large state own inner rises or large privately owned enterprises, because of long-term effects. the government in the past year has made it pretty clear that they believe the system can withstand the functioning of the market and allow some of these very large entities to default. as for the action they have taken so far, including this one being contemplated, it is about making sure default happens in an orderly fashion, not preventing it altogether, like some of the previous governments have believed. this is something the government

will stick to, and we will see it in this coming year. paul: what implications are there for bondholders? what sort of haircuts might they be expecting of their clients? pearls: for bondholders, i think the lesson here is that for entities that are overleveraged and overextended, that a default scenario is something that would be allowed to happen, even if it is a very large entity. in terms of the losses that are potentially coming to them on some of these situations, it is going to be on a case-by-case. these developers are coming out with different restructuring proposals, and they are going down different approaches. as far as what to expect, it is that the onshore legal system does work, that the default resolution systems do work, and they need to go through that.

the offshore investors are in a subordinate position in terms of claims, said they ought to have that -- so they ought to have that. shery: one about dollar bonds? we saw them jump last week because of optimism about the restructuring plan, but this is a very long road ahead. >> that is true. the bonds last week have taken an uptick mainly because their words -- there was news the government was considering using liquidity pressures from cash being locked up in escrow accounts. that will ease liquidity pressures, if implemented. the move is on the back of that. but we have to see the details before we understand what the implications are to each

developer. we will have to wait and see on that. well, the market has stabilized on the back of this news. nevertheless, a lot of the u.s. dollar bonds are still at very high levels, and at a level where many developers will not be able to issue. so this is not quite over yet. paul: charles chang, thanks for joining us. still to come, china's stock benchmark slides into a bear market. we will get a preview. this is bloomberg. ♪

paul: we are a little over half an hour away from the open in hong kong and the mainland. let's cross over to sophia. the csi 300 now in bear territory after the global selloff in stocks. it is today going to be a day for dip buyers, or could we see more selling? >> good morning, paul. we have seen the old playbook from beijing with state media on front pages today saying that it is a good time to buy china's onshore stocks. this is just days after they appealed. we also see mainland funds saying they will buy their own

equity linked products, at least nine funds saying that. we also have a kind of intervention if you are from china's biggest funds, to prop up the market. we will see if that works. it has not so far. yesterday we saw the biggest northbound inflows since 2020 and the fifth-largest in history, so really a capitulation before the market closes for a week, paul. shery: yeah, especially as we head towards the end lunar new year holidays, what are some of the market drivers we should be watching out for? sofia: i think the key question is, why is beijing soft on the property market? you are not given any indication that it's crackdown is easing. in some cases, it is appearing to be harder on the sector and repeating the phrase that housing is for living and not for speculation.

another concern this week was the education sector. a document circulating among traders that china will actually go harder on the industry than expected. no word on that. they concern, if your market is -- a concern if your market is closed for the whole week is that more of these concerns in the market, not just in china, but globally, will impact sentiment and you cannot get out of your position. history shows it is not a good time to be long china. the market tends to fall after the lunar new year. it did so last year and in 2020, famously falling about 9% as the pandemic worsened. i think they concern right now is if you are going to be long the market, you do not want it to be shut for a week. paul: we were just discussing the plan to break up and sell parts of china evergrande. how is that likely to be received by the market today? sofia: there was a bit of a

reaction yesterday already. i think the key thing is how long it will take, and what will those asset sales be used for? evergrande has said it will treat all creditors equally, and that includes onshore-offshore, but all signals to suggest it is not really up to evergrande. if beijing were to break up evergrande into little pieces, again, that was very much respected, it is the only way to restructure such a big company, where are those assets being sold? is there going to be a good holding company and a bad one? who gets what? there is still a lot of uncertainty about that and no clarification from beijing on its plans for the company. shery: let's turn to some of those stocks that we need to watch at the open in hong kong and mainland china. we are watching shares of hotels

and airlines to move on hong kong's latest pandemic measures. and as sofia mentioned, we have heard from state media really stepping up calls for stock confidence after the selloff we have seen in chinese markets, sending the mainland markets into a bear territory. telecommunication stocks are also in focus, as china unicom has been ejected from the u.s. with the fcc citing security concerns. we see optimism in china, especially over monetary policy being used, as opposed to what is happening in the u.s. with the federal reserve. at the same time, we continue to see the latest crackdowns and regulatory concerns, whether it is because have geopolitical tensions or domestic politics in china. take a look at softbank and sk hynix. sk hynix beat on fourth-quarter operating profit.

we are also watching softbank because bloomberg has learned the coo will be making preparations to leave the company. paul: still to come, we are going to speak exclusively with atrial chan on his property developers outlook in the hong kong and china markets.

every day in business brings something new.

so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.

♪ david: happy friday morning from the asia-pacific, 9:00 in hong kong, beijing and shanghai. welcome to the china open. i am david in glass with yvonne man. yvonne: asian equities recover and u.s. futures rise after apple's strong earnings boost investor sentiment. mutual funds to the rescue as chinese share sink it --