♪ >> you're watching daybreak asia live from new york, sydney and hong kong. >> counting down to asia's major market opens. futures pointing to a risk off friday after wall street tumbles to a 22 month low with turmoil in europe stoking fears of global recession. treasuries under pressure too is yet another group of fed officials send a hawkish message on borrowing costs. a tough day for u.s. tech giants. apple shares buckling after a rare downgrade while medic cutting hit counts. that headcounts. shery: better news on the eco-front coming from a bellwether. we are getting industrial projections for the month of

august. steeply underperforming. already bad expectations. seasonally adjusted month on month coming in at a contraction of 1.8%. analysts had expected 0.8%. it is worsening the dip we saw in the previous month of july of 1.3% contraction. the -- number coming in at 1%, on par with expectations. slowing from the 1.5% in the previous month. cyclical reading index changing as well with the contraction of .2%. signs of stress. we saw inventories in manufacturing giants seeing a big buildup. the fastest since 2008, showing the impact of the global slowdown. the markets are expecting another jump from the bank of korea. assets are some of the biggest losers in asia. -- recession and volatility in global markets.

shery: those numbers do not bode well for the global economy given that south korea is a real glover expert -- global slowdowns at a time when the fed is doubling down on its hock inspection. jim moran saying the markets have finally understood there will be additional rate hikes in the coming months. we have the -- 100 plunging almost 4% on those comments. we are seeing a rough side and the futures space after the s&p 500 fell to that november 2020 low. we are talking about a new bear market low. we had the treasury selloff resuming that 10 year yield rising to 380. wti on the new york session falling. in asia, above $81 a barrel. this has all to do with recession fears offsetting supply concerns. >> you mentioned there that markets are getting the message

that the fed is serious about raising -- that being learned across the third quarter because it has been grisly. this chart taking a look at the index of apex stocks excluding japan. the longest streak in 21 years. investors including j.p. morgan asset management urging patients but are extremely cautious. japan is not immune. this chart looking at the foreign outflows we have seen. bonds in orange, stocks in blue. we can see we are seeing the biggest outflows last week. we got the data yesterday that $28 billion last week. that is the biggest drawdown since mid june. seven coming as investors dumping everything in that retreat. that does not set up for a great last day of the quarter. changing for a look at futures in japan as they are a little flat.

one of the most liquid contracts in chicago but other futures lower as well. new zealand online in the red. shery: for more, let's bring in garfield reynolds. starting with the stock markets and the fear we are seeing, the vix above 30 all week. what is that telling us about where we are headed? >> i think actually the equities relative -- [indiscernible] when you look at bond volatility, that has had levels -- right around the peak of the pandemic. by some measures, it has exceeded pandemic levels. equity volatility is elevated, but nowhere near as elevated as -- the pandemic. the bond market has been obviously more directly affected and also has something of a bias

-- longer-term than the stock market. [indiscernible] rate hikes take a wild to work through into the real economy. we've had a lot of rate hikes very fast. those are going to be hitting real-world conditions over the coming months. that is going to her to the earnings outlook for equities. there's a lot of concern about earnings downgrades and other uncertainties about the u.k., ukraine and china. that signals a very strong chance that it is going to get more volatile land equities are going to go significantly lower. shery: talking about bond market volatility, this chart on the bloomberg signaling stress we are already seeing on the liquidity side. were talking about dollar swap spreads rebounding after collapsing. what is this telling us about

the wild ride? >> it is telling you that traders are extremely unclear about where rates are going to go. interest rates. the bond yields and also the unblinded rates for investors looking to fix their payments. that underscores the dangers for everybody out there. you are talking about an uncertainty about the price of money, off by a range of 10. if you are uncertain about where the price is going to be, it is no wonder people are putting trillions of dollars into cash. because you are uncertain about how you should even judge the outlook. i was talking about the earnings outlook for stocks and you want to be able to discount your earnings outlook against where you would expect interest rates

will be because that is the ultimate -- for companies. traders in the market who are supposed to be the most tuned into what those costs are and what they are going to be. if they can't be sure, how can you be sure? that means you've got the demand at a near premium for putting money in there and you are more likely to be wanting to pay up to hedge against the client. that is why we are seeing the big slip now. although i suspect it should go significantly higher than it already has. shery: i want to talk about the outlook when it comes to equities. i got this great chart with a lot of zeros. $302 trillion, that is the global -- raise in values from their peak. you also make the point that this is below the average since the fed's qe program. can we extrapolate to say yes,

markets have adequately priced quantitative tightening? is this a steep enough discount in potential recession conditions to come? >> i am not sure what it does. you're talking about that discount question. after all, in 2019 before the pandemic came along and through out -- throughout -- the interest rate had been coming down and it was at a level that was lower than than we are now. or certainly it will soon be significantly above where it was back before the crisis. and we've got the fed looking to take money out. and you've got the concern that markets usually overshoot the other. you have also got a chorus of fed officials saying, determined

to quash inflation. they have signaled that they are quite happy to see demand destruction and asset prices coming lower. i think we are -- from the bottom yet. shery: garfield reynolds with our top market story. you can follow more of this story on our blog on the bloomberg. you can get a market run down in one click and there is commentary and analysis from bloomberg's expert editors. you can find out what is affecting your investments right now. haidi: we are live today at the milk institute. stay tuned for big guests. the capital, tread loca and more. >> let's get headlines. >> liz truss not backing down on

an economic policy package that forced a dramatic $72 billion extension from the bank of england. trust blaming the were in ukraine for market turmoil that pushed the pound to a record low. telling the bbc her government has done the right thing. chancellor -- has been defending the plan. >> what we are focusing on is delivering the -- and making sure -- [indiscernible] without growth, you are not going to generate the income and the tax revenue to pay for the public segment. that is why the budget was absolutely essential. >> china allowing some cities to lower their mortgage rates. the latest bid to help simulate a struggling housing market. until the end of the year, qualified cities can maintain or remove the minimum interest rate on the first home loan.

pboc and banking regulators say the new rates can be negotiated directly between banks and their customers. indian bonds declining as the country's sovereign debt enters emerging markets index. -- will continue for india to remain on watch and will be reassessed to gauge inclusion next march. the market index review from j.p. morgan in coming days. the u.s. sanctioned 10 companies accused of violating restrictions on a rainy and exports including entities from china, hong kong india and the uae. the treasury department says they -- the sale of 100 -- a rainy in petrochemicals and petroleum products. the move is part of a broader plan to sever iran's financial lifeline and force it to return to the 2016 nuclear deal. shery: still ahead, we discussed the outlook for impact investing

and esg involved global markets with a farm to coin two point $5 billion in private equity. up next, opportunities in southeast asia and south korea. remaining cautious on commodities. this is bloomberg. ♪

♪ haidi: markets pessimistic. investors sidelined. other than the dollar, there's not a lot of assets that are trading constructively. >> i am not sure the -- [indiscernible] >> [indiscernible] >> the asia summit, talking currency volatility. our next guest is still overweight on southeast asia currency risks may be -- lewis lau joins us now. it is very complex across emerging markets at the moment given the resilience of dollar strength. is that changing your view when it comes to markets south korea? >> i think emerging markets as a whole are still going to have a

difficult six months. in korea, i think we are starting to see some of the -- stocks have a massive correction. some of the hardest are having a difficult time as well. i think we want to be looking at defensive sectors like tobacco. maybe some of the crayon banks -- korean banks. it may be too early for korean tech to take a big overweight. we should start to look but i think more of the value is in banks and consumers and curry up. haidi: you -- in korea. haidi: we heard from micron overnight, that forecast suggesting the slump will continue to deepen. do you see what the capitalist will be in terms of a turnaround for this sector? >> there may be still -- to go in terms of fundamentals.

recession is not get up on us and develop markets. the markets are looking forward because typically -- stocks with approach -- value or maybe -- [indiscernible]>> also the geopolitical discount because of north korea. they fired a couple of missiles because of kamala harris' visit. southeast asia least geopolitical risk? >> if you look at asia, the areas that have the least geopolitical risk would be southeast asia and india. those are countries that depend on china for trade but also depend on the u.s. want to have a good relationship the u.s., for security reasons.

these are markets that are small enough that are not going to threaten anyone also -- anyone. also, indonesia is in the middle of a big covid reopening. we expect reopening to have a positive impact. >> what about covid reopening in china? how much our markets really pricing this in? >> why would say there's very little pricing for a covid reopening. if you look at the prices of travel, tourism, these companies are still pricing in a continuation of zero covid policy. signs to look for would be the rollout of the domestic mrna vaccine poster to november. -- closer to november. and then maybe in march after the national people's congress, the government might take tentative steps to remove restrictions related to covid. that is something we are watching for.

haidi: is china tech something interesting? valuations? >> they are very interesting. you could argue that a lot of the negative catalysts in terms of regulation, in terms of earnings and downward momentum, could have already played out. what we are watching for is sometime in november or december when officials from the -- in hong kong right now looking at the books and records, gets a thumbs from these companies to continue. there will be a big signal for more positive sentiment towards chinese developed stocks. haidi: lewis lau, director of investments at brandis. -- randy's. softbank said to have laid off employees and it is not making vision funds. how the company is navigating the long tech downturn next. this is bloomberg. ♪

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♪ >> tokyo and seoul, some stories we are watching. south korea, the u.s. and japan will be holding trilateral anti-submarine drills in korea for the first time since 2017. we will be getting second-quarter affects intervention data from bank of korea at 4:00 p.m. we will be watching the debut of -- korea after it set its ipo price at 60,000 yuan. in japan, we are about to get august unemployment retail sales and industrial production numbers. all of which are expected to decline. the prime minister he wants an economic stimulus package to help mitigate the impact of

inflation. softbank to start laying off employees with at least 30% of staff to go. right. let's talk about tech. meta and facebook planning to cut headcounts for the first time in 18 years. su keenan joins me. tell us more about this. >> it is a big deal. the first time that facebook cost parent is cutting its budget, reducing headcounts. since it was founded 18 years ago. it came out at a meeting that mark zuckerberg had. the announcement, a sweeping plan to reorganize and reduce. it went beyond the hiring freeze which meant leaving positions unfilled and managing some

employees deemed to be less successful. low performers. it is aimed at cutting costs and we understand zuckerberg warned the team that facebook, meta, would be a smaller organization at the end of 2023. that is a quote. we did obtain some of the -- in the meeting. zuckerberg told the staff he hope to the economy would have become more stabilized by now. addressing some macro issues. however, he doesn't see that as the case and now the company planning more conservatively. amid the budget cut and change is coming he talked about shrinking. some teams are going to transfer members to other growing teams. and obviously he indicated that some people who leave the company, their roles will not be replaced. cuts and headcount reductions are meta's starkest admission

yet that revenue is flowing. we know that alphabet and snapchat have made similar moves. their stock down more than 5% at one point, managed to reduce that loss by the end of the day. still, a big hit for the stock. zuckerberg said he promised he would do his best to guide the company forward, but they are reining in costs and trying to reduce loss. >> we did here in august, -- was planning cost cuts. now we are seeing this make its way through staff reductions. >> the founder foreshadowing these cuts which according to people close to the matter are taking place as we speak. thursday, the first people were told they were going to be reduced from the company. more than 30% from the vision fund, the heart of the tech investments and the heart of the losses.

we understand this will be more than 150 individuals impacted. the london unit had 500 employees and it all had to do with that a record $23 million loss. most of it coming from the plunge in valuations of the tech portfolios. i mean, this was the company until it was not. sign of the times. not surprising when you talk to analysts. this was anticipating, but the size of the cuts, more than 30% of the staff, rather stunning. haidi: let's take a look at u.s. futures, given we had another -- losses overnight with volatility running high. we heard from jim bullard reiterating the idea the market

resuscitation of the fed messaging is probably correct. he thinks the market is finally getting the picture. -- futures up by .3%. maybe a little recovery for the nasdaq 100. it was a tough session. the analyst downgrade for apple and the news from meta. a top accurate -- the top apple executive seeing the downside when it comes to chipmakers. .25% higher at the moment. they are heading for the third straight quarterly drop as we round out -- to remember given the volatility. shery: i have to say, of every analyst we talk to, the first thing out of their mouth is a huge side. everybody is busy. coming up, korean battery maker making its market debut.

this is bloomberg. ♪ haidi: breaking news out of japan. jobless rates coming in at 2.5% for the month of august. just as economists had expected. also down from 2.6% the previous month. the job to applicant ratio coming in at 1.32. slightly higher than economists expected. also an improvement from the previous month. we were expecting better numbers this month, given the summer travel season probably supported some hiring. we are seeing -- conditions for august. jobless rate again, 2.5%. >> we also could see perhaps further improvement as we head into the fourth quarter. you mentioned summer travel season, also the border policies are about to take effect.

more tourists coming in the country could also support the hiring picture. in terms of what this means for boj, those numbers looking insufficient to support policy change. the unemployment rate is still -- pre-covid peak at 1.64%. what that means in terms of the yen, look at the yen. it is stable. it is also reflect what we are seeing in terms of the historic move. we have seen it move fractionally weaker over the past few readings in the first half of the release. economic surprise has been to the upside. being driven by what we are seeing in the dollar. take a look at this terminal chart and you can see that is something we have seen across asia. the partial pivot to the dollar pulling capital from virtually everything else. now on track for its worst year

since the asian financial crisis. intervention has been a theme of the week across asia. direct intervention from the likes of japan, india, indonesia, pboc warnings and korea with its sovereign debt buying program. haidi: let's get more when it comes to korean markets. the battery parts maker is making its market debut in seoul today. our stock reporter -- does not envy any company coming to market under these conditions. what are the expert patient? -- what are the expectations? >> they say the sentiment is not good. who cares about --? korean yuan is weak. [indiscernible] the company really needs cash to

build a new plant. some also say it is positive for the company. let's see how it goes. haidi: they already slashed their ipo, but this still would be the largest in korean history. >> that too. when i talked to the ceo last week, he really emphasized that they need to be traded better than this. the reason why -- is the company is making double digit margins while his rival is still making a loss in the same business. she also said they have strong clients. but in terms of the outlook, i say the battery technology is evolving. we might see new batteries, solid-state batteries.

if that happens, we might not need small components. haidi: these are the stocks we are watching when trade opens in korea, japan and australia. softbank laying off 30% of staff. we will be watching chip stocks. tokyo electronics boosting its forecast. watching the impact of -- guidance overnight. global output rose for the first time since august. we saw gains and overseas markets in southeast asia. we are watching some of those automakers. planning to keep petrol cars as part of its lineup. projecting efforts by rivals to go fully electric. competitors including nissan, honda and hyundai may move on that. in australia, lithium stocks are

key. japanese battery makers owned by toyota and panasonic wanting to build a virtually integrated battery supply chain and says it will need 180,000 tons of lithium per year by 2030. shery: let's get to the first world headlines. disappointment for indian fondles -- the provider says dialogue with -- will continue with india to remain on watch and be reassessed for inclusion next march. market index review from j.p. morgan in the coming days. hurricane ian set to regain strength over the atlantic and makes out -- make landfall in south carolina friday after tearing a 240 kilometer path of destruction across central florida. the storm left ruined homes, a tattered power grid and unprecedented floods. power was knocked out two more

than 2.6 million homes and businesses. president biden says lives may have been lost. pres. biden: the numbers are still unclear, but we are hearing early reports of what may be substantial loss of life. we are going to learn more in the coming hours. but we know that many, many families are hurting. our entire country hurts with them. haidi: north korea fired two missiles hours after vice president harris went to the demilitarized zone dividing the korea's. the launch followed a single missile filed -- fired sunday. during her trip, harris stood on the south korean line while soldiers kept close tabs. opec-plus has begun discussions about cutting oil outputs.

according to delegates, the size of the potential reduction is still under consideration. the cartel made a symbolic cut earlier this month, lowering outputs by 100,000 barrels a day for october. crude prices have slumped during august, causing opec-plus to reduce supply. >> singapore set to host its first formula one race since the pandemic. we spoke to the ceo who says interest in the sport from fans, sponsors and partners has exceeded pre-pandemic levels. >> we were able to accomplish our mission. we were able to be world champions around the world despite covid. we were very strict to apply a -- approach -- [indiscernible]

>> is profitability where you want it to be? is it back to pre-covid levels? >> looking at the numbers, i would say it is better. we never had so many orders. we never had so many requests from different promoters around the world to host races around the globe. this is an intense, global sports. we have more younger generations and females looking at our sport. >> [indiscernible] >> we are not a political organization. we want to focus on the positive values the sport is bringing to society. the -- around f1 is huge.

anything can happen in the countries we are going and we will have incredible power. everyone is watching. that is why i am saying it is very relevant. read, in all of the countries around the world, but then we would see -- [indiscernible] >> what will it take for you to reverse the decision? to take their race back to russia? >> it is difficult to say. i think we are in a situation where it is pretty clear that in this moment we cannot think to come back. the sport has been -- and i hope we can come back. [indiscernible]

>> china, the other market, any indication in your conversation that it could return? >> of course, we have china back in the -- and we would like to be back as soon as possible. we need to respect the constraints the government put in place and we are looking forward to having the latest information. we want to be there. haidi: formula one ceo speaking with our colleague. we are live again today at the milken institute's summit in singapore. stay tuned for big guests. coming up, we speak to developing world markets about balancing and measuring commercial returns with social impact investments. this is bloomberg. ♪

>> we are looking at a company deploying $2.5 billion in an increasingly volatile global market. let's discuss the influence of that plan with our guest. good to have you been studio. >> thank you.

>> it is such a difficult and challenging environment. i talked to investors and analysts in the first thing they say is this sigh of volatility. you are investing in developing economies. focused on impact investing, talk about the effects. >> it has been an interesting ride. across 50 markets in which we are operating primarily erred -- emerging frontier markets. we are seeing the same headwinds that other investors are seeing we are seeing the highest inflation environment. increasing tightening stance around monetary policy. certainly we are monitoring those issues very closely but i think we are primarily in the impact space, we are seeing investors quite resilient. underlying financial institutions in which we invest are also right resilient.

i think they are ready for the overall impact. largely because of the nature of the goods and services they are providing. we are likely to see lower volatility in our portfolio or greater resilience and ability in which to handle a shock to our system. >> tell us about those factors and why lower income clientele is making this more stable. >> over our two decades, we have invested into hundred 50 what we call inclusive financial institutions. micro-finance, specialty lenders , micro and small medium enterprises which are the mainstay and many of our economies. the great economy and the most significant -- gdp. most of those financial institutions are providing essential services. right after covid where beside a

significant loss across many of the portfolio companies, anywhere from 2% to 15%. there is a strong uptick in credit demand. impact investing, as investors we want to make sure financial institutions are responsible in their provision of credit to low income clientele. we want to make sure they are transparent and they're pricing and they protect against over indebtedness and are responsible in their collection practices. >> in the social impact becomes more critical post-pandemic given we have seen the widening inequality. can you give us examples of the types of investments being made in markets where we have seen that impact socially play out? >> among the investments we have actually made, we have invested

in india, institutions in 2015 a non-by -- nonbank finance institution. over the last seven years, it has grown 10 times. 1.6 million clients, one of the first institutions in india to get a -- license. those licenses were emerged and promoted by the rbis largely because commercial banks just were not serving the needs of underserved beneficiaries. whether they were rural or -- and earlier in 2001 we exited partially from -- investments. right before doing that, we undertook a social listening survey of the client that portfolio. north of 80% suggested that loans they were able to get from

that portfolio company contributed to a better quality of life. over 70% suggested they had no good or better alternatives than the wrongs -- loans being provided by that institution. that is where we are seeing some of the impact around addressing some of the gender equity gaps. some of the long-term gaps -- haidi: sherry said something about the difficulties in terms of frontier markets in this type of global volatility. i am wondering if there has also been the creation of low hanging fruit for development and investment opportunities. >> that's a good question. what we are seeing as impact investors left for their own

devices, institutions may actually turn risk off. because of the losses and as a result of covid in the macro issues we started talking about at the top, there may be a natural tendency to serve the "most bankable" segment. low hanging fruit could actually go in and make sure there is alignment with the management teams and alignment across all stakeholders to make sure we are not actually retrenching on the client visa. -- historically served by commercial lenders that we are continuing to adhere and bring on clients that has been historically underserved and maybe actually finding new pockets of marginalized segments that may be adopt the same principles as two decades ago. haidi: great to have you with us. head of private equity and developing world markets. you can get a roundup of all the

stories you need to know on today's edition of daybreak. you can customize your settings so you only get the news on the assets you care about. this is bloomberg. ♪

shery: we are getting the latest

japan industrial production. this is preliminary readings from the month of august. we are seeing september output rising 2.9%. october output rising 3.2% month on month. in terms of industrial output, that's a gain of three point 7% month on month, stronger than expectations of 0.2% that were expected. we are seeing pretty decent numbers when it comes to retail sales. this is unlikely to move the dow on expectations of any serious policy change from the bank of japan given how much they really remain committed to their monetary policy before they see the type of inflation that warrants change. >> i find it surprising the beat out of japan given that korea underperformed and we saw them fall 2% month on month. more numbers out of japan. retail sales coming in better

than economists expected. 4.1 cent for the month of august. they jump from the previous month. slightly below market economist expectations but it is still a pretty strong growth. 3.8% for department store sales. 4.1% for retail sales year on year. the month on month number, 1.4%. perhaps very tight labor market numbers we got earlier our help and people spending. but, better numbers today. haidi: better numbers across retail. let's get your latest headlines. think of america and barclays to scrap roughly $4 billion debt offering on weak demand. the transaction was supposed to help a buyout of the telecom

business backed by apollo global management. the last bite out -- hsbc considering -- global headquarters in london. its lease expires in early 2027. according to a memo from john henshaw, the bank is aiming to create a more flexible workspace. options include renovating the existing building or moving to a new premises. hsbc says it will keep its global headquarters in the british capital. -- 5.2% in a trading debut before closing little changed. a volatile day for the -- index. volkswagen said porsche's up or limits raising over $9 billion as session valuation of $73 billion. in an interview, ceo oliver bloom said his portion -- >> we do not expect out -- we do

not expect a slowdown in demand because of their -- because we are well-positioned. we have a build up portfolio for the next year which is stunning. we look positive to the future. shery: equity markets across asia. asian stocks manage take out a small gain in the previous session. we are seeing kiwi stocks rebirthing. nikkei futures pointing higher. we had the nikkei gaining ground on the previous session and the japanese yen holding steady. u.s. futures gaining .4%, but this is after a very downbeat close on wall street. we are talking about a new bear market low for the s&p 500, closing out its lowest level since november 2020. we have seen more easing when it

comes to the bloomberg dollar index. down for a third consecutive session, boosting currencies on the others of the trade. 55 u.s. level. interesting with the aussie, we heard the month end dollar buying -- corporate funds hedging requirements a day earlier given recent volatility. not a lot of change when it comes to offshore yuan, but we are near the two year lows that pboc has tried to stem the weakness. the japanese yen very close to the 145 level again. haidi: coming up, you can catch our live interview with the asia infrastructure investment bank cfo and the milken institute asia summit in singapore. also, an exclusive with the capital -- cofounder. the market opens. this is bloomberg. ♪

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shery: this is "daybreak asia", we are counting down to asia's major market open after a selloff on wall street sent the s&p 500 to a new aramark at low and investors have a lot to digest in terms of eco-data. we had a bit of a mixed picture of japan and korea, factory outflow. we do have pmi numbers coming out late out of china's well. >> that mixed picture is interesting but we are looking at the economy, including that morning from overnight, really suggesting that chipmakers will continue to suffer. we continue to see these downgrades going into the next earnings season, that could be pretty bad. annabelle: last day of their quarter here for trading, and it hasn't been a great one by any

stretch of the imagination, but the open here among us for japan australia and south korea. we did see the moves in the previous session during that key 3.8 level for the 10 year yield. now looking like this is the start of trade. that has been one of the drivers of the direction of the yen retreating or flat this morning, but still near that key 145 level. this sparked intervention in the previous week. you mention those data numbers that we had, wasn't there a mixed picture because we did have the industrial output rising 2.7% and that was better than estimates, but still the unemployment rate coming in line to 2.5 percent. a likely to see the boj change anytime soon. i do want to see the sustained wage gains ahead of any sort of policy move. so the direction of stocks, we are continuing to see foreigners selling in the market, actually reaching a 28 billion dollars in terms of the size of the exodus last week in stocks as morning. the nikkei online to the downside. in korea today, also keeping an

eye on the change now. we are watching for an ipo that is starting to trade here. you can see that a huge slump for w scope, this is the korean of the japanese ev maker, it's huge, down nearly 25% at the start of trade, he had already seen that ipo priced at 60,001 below the range here for that company and we are still seeing a lot of sentiment, perhaps a reflection of the broader investor concern to the market around recession risks, inflation, rate rises among them, but across the picture for korea, also not looking that great, so we are seeing fractional strength and the korean won. of course, the be ok did intervene in the market with a massive bond buying program this week. now the open here in australia. looking at the start of the asx 200. it is modestly high, but of course a started start for the index. also just watching what we are seeing in brent crude,

reflecting a lot of these macro fears are fundamentals in the market, recession risks as well coming out line at nearly a percent lower. haidi: let's get more from our and live strategists, mark cranfield. as was alluded to, it was a quarter to forget or to remember, we have -- be hard to forget this one, how are we setting up going into this last quarter of the year? can we expect any meaningful change and sentimental market conditions? mark: apparently not. it seemed pretty determined to push the message and they seemed very sure that they have a lot more rate hiking left to do, that's not going to help equity markets, that's been the major issue for several months really, that inflation is too high, the feds got a lot of work to do, and that message appears to be just being reinforced and there's not going to have that many in the macro interview.

there is an earnings season coming up pretty soon. the major banks in the states will start reporting in a couple weeks time, you could get a bit of this from that, the banks are more it optimistic on the u.s. economy. they see higher interest rates helping with the margin, loans and their balance sheet. that could be a factor that helps for a while. but overall, it is a situation in the fed is making it very attractive for you to put money in interest-bearing instruments. you have at around 4% across most of the curve. that's beginning to be a situation where long-term portfolio investors will see interest rates as being good and that's not good for the equity market when you have such higher interest rates. so even if you've got a good earnings season, it's only going to be there for a little while. you've got a very strong u.s. dollar, which will put foreigners off in the united states as well. so the headwinds aren't going to go away, and the best we could hope for is that we get a less

bad fourth quarter than we had in the second and third quarter. shery: we've seen more central-bank action to support economies, in order to right the wrongs of many of these government plans, for example, the boe buying the government, but at the same time you have the pboc allowing some mortgage rates to be cut for first-time homebuyers. we have the bank of korean buying debt in order to support the currencies. whichever the problems are out there, will we see more support coming from central banks around the world? mark: i think it's inevitable that you will see more aggressive action from central banks and governments because markets, in some respects, have started to get a little bit disorderly. the strength of the dollar has caused huge problems for emerging-market currencies, especially in asia, as you talked about korea, taiwan has a similar situation. india is at record lows on the yuan is too weak, at least

against the u.s. dollar. so the problem is already there, and we are beginning to see the responses. we could expect more of the same until the u.s. dollar begins to decline again. and then you've got the fact that the central banks also have to weigh in against trying to tame inflation as well. there are early signs that maybe that's beginning to work, but we haven't gotten through the northern hemisphere winter yet. we don't know how bad the energy crisis will be for europe and the rest of the world. so those things are still ahead of us. it's still early to declare victory on that. u.k. is a bit of a special case. they really have almost a perfect storm scenario there. it's going to take a long time to sort out the mess in the u.k. it will be a combination of work from the bank of england and from the government. other the government changes course or not, that's another message. but whatever happens in the rest of the world, the u.k. problem will go on well into next year because mortgage rates in the u.k. have to write significantly, and that's going

to put a big damper on the economy there. shery: mliv strategist mark cranfield with our top stories. you can follow more on all of these stories and all the day's trading on our markets live blog and that's on the bloomberg on mliv . you could get the rundown and one click and there's commentary and analysis from bloomberg experts. you can find out what's affecting your investments right now. haidi: let's get the first word headlines this hour. u.k. for prime minister liz truss is not backing down on economic policies that forced her dramatic 72 billion dollar market intervention from the bank of england. blaming russia's war in ukraine for market turmoil that pushed the power to a record low, telling the bbc has done the right thing. the chancellor is also defending the plan for $50 billion in tax cuts. >> what we are focusing on is delivering the plan and making sure with things like energy

intervention, that people across the country are protected. without growth, you won't get the public success. you will generate the income and tax revenue to pay for the public services we want to see. that is why it is absolutely essential. haidi: china is allowing some cities to lower their mortgage rates. it's the latest bid to help stimulate a struggling market. at the end of this year, qualified cities can maintain lower or remove the new interest rates on a first home loan. the pboc and banking regulators say the new rates can be negotiated directly between banks and their customers. opec-plus has begun discussions about cutting oil output when it meets next week. suppliers on the potential production is still under consideration. the cartel made a symbolic cut at its last meeting earlier this month, lowering output by 100,000 barrels a day for october. prices have slumped since early august, putting pressure on opec-plus to reduce supplies.

north korea had fired two short rain to -- ballistic missiles after kamala harris went to the demilitarized zone dividing the koreas. it followed a single short-range missile fired on sunday and two others on wednesday. during her trip to the dmz, harris was on the south korean side of the line while north korean soldiers kept close. those are your first word headlines. let's get you to annabel who's in hong kong with some of the movers we are watching. it is a challenging set of circumstances for the ipo today. annabelle: that's right, this is the day that korean company, you can see here, down 22% at the start of trade, just eight minutes into that trading day for the maker battery parts that it used in electric vehicles. it already had been priced below the ipo range. the shares earlier touched the lowest at 44,001 at the start of

trade, but the market was ranged around 80,000 to 100,001. a discount and a signal of the troubles plaguing the border ipo market. that is the parent company listed in japan. but in terms of another ev maker or automaker, toyota is still lower this morning, even though we did see the output they are gaining in august. production up 44% on the year. in other stuff we are watching at the side of trade, softbank, we are also hearing that cuts in the fund that staff members have already started. they are starting the account around 30%. that did come through and was announced by the founder after that big $23 billion loss in the last reporting time. but let's change on and stick with it tech sector, because we ultimately did get that warning out from micron. that is the u.s. maker of memory chips, basically giving a week forecast for the current reporting time.

that is a signal that the chip market slump is deepening, and i don't see a rebound until the next half of the fiscal year 2023. so these are some of the big suppliers to micron here in asia or companies that gain a lot of revenue from that company. but also taking a look finally at what we are seeing in the apparel market, because we got a warning out from nike. a grim report in terms of a buildup from inventory. also, some margin discounts out they were forced to push through, that really hurt their profitability. but these or other apparel makers that are based in japan and also in korea. shery: watching those things closely as we got those retail sales numbers out of japan. a little bit of a mixed picture when it comes to eco-data. still ahead, we dive into current market sentiment on dealmaking with the capital. cofounder and managing partner will tell us where he's putting some of the $6.5 billion in assets. but up next, beijing has a

multilateral of the investment bank that joins us to discuss his priorities and expansion plans. our interview with the cfo is next. this is bloomberg. ♪

shery: the final day of the annual milken institute asia summa has begun with the event in singapore where haslinda amin is standing by with our next guest. haslinda: shary, infrastructure is key when you talk about emerging from the pandemic. that speak to the cfo at the asian infrastructure investment bank. good to have you with us. good morning.

over the course of the last six years, they have committed about $36 billion to projects, has the pace slowed because of the pandemic? andrew: i think if i put the word slower, i would say our lending has adjusted. so we have 105 shareholders. during 2020, the shareholders responded positively to our initiative of setting up $20 billion for the facility. i would say that what we ended up doing was morphed towards instructors. financing health, and probably what most of you think of as the classic hardened structure. so the bank saw a very strong upsurge, but that's the nature of the aaa institution. you tend to lean and during these types of events, and you adjust to the time. haslinda: now that we emerge

from the pandemic, will it shift back to the infrastructure you were looking at in the first place? andrew: absolutely, they join the bank in the name says it really clearly, our focus is asia. 85% of our lending is intended to be asia and its infrastructure, so this shareholders essentially i think are quite pragmatic, given the institution is set up to be generational. you have to respond to the events in the crisis at the time in your overwhelming gravitational pull must always be infrastructure investing. haslinda: picking up speed from now on, give us a sense of what can be expected, growing from 36 billion. andrew: the strategy is really clear. by 2030, the shareholders want us to be doing 50% private and 50% public. that's not what we are at the moment, we are probably more

like 70% public, 30% private, and that's a consequence of the last couple of years. so the ideas to be doing more and more into the private sector. why? if you look at the infrastructure, people estimated between three and $5 trillion. all that tells you is it's just an extraordinary vast number. our shareholders gave us $100 billion of capital, but we can't do it alone. so you have to partner, so we partner with the private sector to mobilize more capital to go into infrastructure. so what you see is a steady constant growth in the bank drew to 2030. it's unique among md these, and that we are planning growth. we are sending -- funding more projects, doing more projects over the correlation between staff and projects, and we are always doing it for what you would expect from the multinational development bank. haslinda: when it comes to hiring more staff, where you doing hiring and how difficult

has up into higher within mainland china when you have covid zero policy still in place? andrew: staffing is hugely important, because it's a direct correlation between staff and projects. the fundamental difference between aiv, and the other institutions as we are in addition base institution. to staff like me, because you generally believe that infrastructure makes it different to people and to economies, and that you generally want to do something that is larger than yourself, so that is an exercise about the people that are attracted to multilateral development banks, and in particular, asian infrastructure investment banks. the other filter is that you've got to have an interest in asia, it's pretty clear that the region we will be focusing on, and you have to see a direct connection between infrastructure. the benefit it makes two

populations for the economy. but that tends to be what attracts people. yes, you have to have a sensible and mature conversation and package. but remember that any dollar of that 100 billion dollars comes from taxpayers. so i'm always going to be acutely aware that i'm a taxpayer-funded institution, and that's how we think about the policies, the fundamentals about being true to the mission, because that's the real filled her about why staff want to join the organization. haidi: curious about an expansion of the mandate through something like debt restructuring, because that something that china has indicated its interested in doing. is that a possibility for the lender to do that with some of the countries that it has lead to? andrew: china is one of 105 shareholders that we have, so i cannot talk directly to what one of our members may be feeling, but if you look at the

multilateral development, that community, we are set up to be generational. so what that means is that we lean and. so for more challenging of the environment, the expectation of 105 owners is that we would put more capital work appropriately. so you can imagine that we would collaborate with our peer md these, develop a bank, world bank, and working with someone that may have these challenges. but again, it's an engagement that the client, and engagement with our peers that's making our capital available during challenging times. haslinda: we know you're opening up an office in abu dhabi. that would be the first one outside of china that also covers ground and there could be an office in london as well. what is thinking there because when it first started, it did say it was not planning to have a network of offices? andrew: if you the cabal the point i was making about growth,

growth is driving ai. we have more demand for capital and more demand for projects. see you have to adjust institutions to growth. this concept of course correction. so you have to have an awareness of, as an institution, are you in a position for this? so abu dhabi in the consultation and discussion with united arab emirates will continue, it is perceived as an interim operational hub. so it's something that we can do that we can learn from and think about, is at the right model for the institution as it grows with more lending. so it's intensely thought of as something that's interim, so we learn from as we think about it, perhaps for us, potentially, we benefit engagement with clients, but also most importantly, the monitoring of the projects. so if you think about it, even though we haven't touched on it, but every potential project has a component.

in the importance of this isn't in the first, it's the monitoring of the standard that can form. so it could potentially give us a different way of doing this. but one of the things we've learned the last couple of years is that you can use satellite technology as part of your monitoring technology. and that is something that mdb has done the last 30 years. haslinda: yes or no, london is a possible place for location? andrew: we have a clear criteria about what we want to think of. if you think about financial global financial centers, hubs, good office transports. so you can imagine that's a small selection of countries. haslinda: andrew cross, cfo. we are coming to you live from the milken asian summit here in -- haidi: haslinda almond there and singapore. a big line-up still to come with

guests. we will discuss the return of global travel. executives from travel loco -- local will cover trade. an excuse -- exclusive the trade in industry and the european trade commissioner. you don't want to miss out on those conversations coming live from singapore over the coming hour. coming up next, meta-planning to cut for the first time. softbank to be making some staff reductions. we get the details of these jump cuts hitting tech, next. this is bloomberg. ♪

shery: growing economic pressures around the world, the tech world is seeing some changes. meta-, facebook parent is cutting its headcount for the first time in its 18 year history. bloomberg su keenan joins us

with the latest. what do we know at this point? su: one of my colleagues at bloomberg heard there was a q&a with mark zuckerberg, the ceo of meta, and staff and they have these once a month. during the q&a it came up that this would be the first ever budget cut for the company since it was founded back in 2004. sweeping changes, reorganizational, all aimed at cutting costs. the main takeaway is the hiring freeze, which involved a little bit more than not hiring, employees will unlikely be replaced. there will be some reduction in the headcount with the company calls managing out people who are not successful, translation, the lower performance have shown the door or cutting costs. the warning to employees that there would be tightening on almost every team. we got a copy of some of the message that zuckerberg gave to the team.

he said he's hoping the economy would've become more stable by now, but was given the staff and update that they are not seeing stabilization yet, so the company wants to plan more conservatively. and as he explained the actions they are taking, he did use the word shrink. that the company will be a smaller organization by 2023. there are a number of ways to reduce the size. some teams are going to transfer people to teams that are growing. and to paraphrase, he said a lot of teams will choose not to replace every person. they are saying this is fairly dramatic for facebook and the parent company meta-. they have been dramatically expanding over the past decade and a half. over the past two years they view they have over hired, so big changes. haidi: softbank's been making serious cuts as well. su: we kind of were getting a

clue of this a couple months back. the founder warned that he was aggressively navigate the new terrain as tech companies have been devalued in the company suffered a record $23 billion loss. what they are now planning to do, according to people close to the matter, is cut at least 30% of the staff from the fund, which is based out of london. people familiar with the matter say there are more than 150 individuals. staff is about 500 strong. it has very much to do with that record $23 billion loss. in most of those losses are coming from the devaluation of the tech portfolio that softbank has. back to you. shery: that stock down now about 2%. bloomberg su keenan with the latest on those tech drops. we have plenty more to come on daybreak. this is bloomberg. ♪

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shery: hurricane ian is regaining strength over the atlantic and is set to make landfall in south carolina on friday. that's after leaving a 240 kilometer path of disruption across central -- destruction across florida. ruined homes, the power grid and caused unprecedented floods across the state. power was knocked out to more than two point 6 million homes and businesses and president biden says live could have been lost. president biden: this could have been the deadliest hurricane in florida's history. the numbers are still unclear, but we are hearing early reports of what may be substantial loss of life, and we will learn a lot more in the coming hours. we know many families are hurting, many. many. the entire country hurts with them. shery: japan's factory output

rose in august for a third month as the recovery from supplies starts in the spring continues. industrial production increased 2.7% from july, analysts had forecast at 2%. data shows further sign of labor market tightening while retail sales are also resilient rising 1.4% from july. international monetary fund is urging a decisive and coordinated approach to a global food crisis. it said food insecurity is as serious as that experienced more than a decade ago, which led deaths and lead to social unrest. they add 48 countries need $50 billion this year to eradicate acute food and securities this year. the u.s. has sanctioned 10 companies accused of violating restrictions on iranian oil exports, including entities from china, hong kong, india and the uae. the treasury department says

they were tied to the sales of hundreds of millions of dollars were iranian -- to end users in asia. the uses part of a broader plan to sever iran's financial lifeline and force her to return to the 2020 nuclear deal. disappointment for indian bond with ftse russell declining to add that countries sovereign debt to its emerging markets index. the provider said dialogue with the rbi will continue yet -- continue with india to remain on watch and reassess for food next march. markets await. an index review from j.p. morgan in the coming days. a full to radix source rex faso will go to auction at christie's in hong kong in november. it may fetch up to $25 million. the fossil was on shed in montana and is around 66 million years old. if you're wondering, it's about

13 meters long and five meters tall and weighs 1.4 tons. they say it's the first t-rex skeleton offered at auction and asia. those were your first word headlines. i know, who's going up by that? you have to consider these things. >> my daughter would, my three and a half year-old daughter would definitely put her life savings towards that. let's get back to our top stories. china allowing some cities to lower their mortgage rates for first-time homebuyers, the analyst say won't be enough for the country struggling home market, let's bring in our chief asia economist who joins us now, because the problem here is not a cost of money, it's not mortgage rates, it's brought pessimism and a lack of demand. >> yes. i agree with that. i think this time the latest moves include several things. from the pboc's monetary policy

and then a separate announcement later to allow lowering of mortgage rates. it's positive that the pboc is involved in that it could potentially lower a tail risk of a property crash. but in the meantime, we have seen some loosening of monetary policy -- loosening of property market measures in the past three months. the pboc has been cutting interest rates, including the longer-term rates that would translate into the mortgage rate already. and at the same time, cities have been relaxing purchasing constraint's. so some of the policies have already been in place, but the demand has picked up. there is a lack of confidence in

the market. so it is solving the property market issue that will take time and remains challenging. shery: will all of those support measures be reflected in the eco-data we are getting these days? for example, we have pmi numbers out today. >> ultimately it won't reflect. on the one hand, there could be some kick up and production figure in the manufacturing side. in september, if we think about the power shortage in the continuing strong support from the government. that should provide more support for the manufacturing sector, but on the manufacturing side it's what we continue to see decline in property purchases, and we know the consumer sentiment is pretty low due to

the covid lockdowns. so we could see a slowing expansion and services, but potentially we could see a pickup in the manufacturing sector into expansion territory. shery: our chief asia economist. good savvy with us. cofounder and managing partner at global d.c., joins us to discuss the impact of the current market sentiment. this is bloomberg. ♪

shery: asian stocks under pressure given up the small gains we had in the previous session. we had industrial consumer discretionary leading the declines. industrial material is the only one gaining ground. not surprising that we are seeing so much downside, given the wall street close. we are talking about a new berm market low. but we have seen a little bit of again when it came to oil prices , but the risk of sentiment is expanding right now. annabelle: it's pretty world based this morning, and it's not a great day if you are trying to make an ipo either. that's what we are seeing for the debut of the korea unit of w's go.

that's to japan parent. this is the career unit making its trading start today. absolutely fronting off the loads of the day, but still trading around 25,001 per share. you better put that into perspective of what the price of the shares are. that was six he thousand one, and already that was around eight wednesday 5% discount. the initial marketed range, and the number of shares that were sold were also cut. it does point to a lot of the challenges facing this company that was forced to make those after the week of one of its peers. this is sai qe technology. early percent made is trading debut last month. but this is another when we are watching. this is another ev maker. this makes use of batteries. this is an ev maker in china. and it was down around 42% at one point it does point to the broader troubles that we see in hong kong ipo market. if you change over now and take a look at some of the performers of companies this year, you can

see only really one has been in positive territory. these are companies above $250 million, but most of those, you can see in the worst performer this year, but also, broadly of what we've seen in the u.s., if you change now, certainly all the market mayhem that we see is stopping any sort of appetite for listing. you can see what we've got so far and 2022, the new issues, they raise just $2.7 billion in new york in the past three months, that's the lightest for a quarter since 2008. you can see there at the end of your screen. and it's only the third recorder here in a row. a dramatic change really to what you can see from your ipo issuance of proceeds that we had last year. and certainly another signal of all the markets at stress. haidi: let's get to the milken institute. haslinda ominous denny by with our next guest.

haslinda: we have been talking about the markets melt, markets mayhem. that is impact the -- impacting the venture capital world. let's get to the cofounder and managing partner. it has 6.5 million dollars in assets under management. good to have you with us. >> thank you for having me. haslinda: talk to us about capital flows. it's a difficult environment. king dollar. just pretty much across the asset classes. where you see capital flowing to? are they going back to the u.s., for instance? >> what a difference a year makes. last year there was a lot of capital that was floating around pretty freely. i think this year what you see is two different trends. capital going back to safe harbor, i think europe is in a more difficult position. and you are seeing funding in markets like this. india and southeast asia have really benefited from what's been happening in the global markets, and it's an exciting time to be here.

haslinda: it's about liquidity and we aren't seeing that much liquidity right now. what would it take? >> it is always about liquidity. investors want to make sure they get their money back. but i think investors in this region understand that it's coming. in india, over a dozen companies go public in the last two years. that is more than a decade before that. southeast asia is coming, it's about three to five years behind india. you had three companies that have gone public in the past year. and i think you will see a number of foreign companies go public once the ipo reopens. haslinda: you have said that before, it's coming, but it's been about three years. i'm just wondering, it is a different environment. is there a greater emphasis on scrutiny? >> it's a great point. i think we have gone from an error about talking about growth at all costs are really talking about optimization and

efficiency, you have seen words of earnings return conversations between investors and founders, that's a good thing, we want efficient growth, we want to look at metrics and how much money does it take to really build a company and build a company that's going to stand the test of time. so, some of the best companies in the history of the world started doing downturns, and we are out there looking for amazing companies. haslinda -- shery: where you looking up the companies because you mentioned the indian ipo's. we have seen them really trade much lower than their ipo price, so if investors are questioning their loss evaluation, does that give you a pause to look at different markets in different places where the scrutiny could be lessor there could be more opportunity? >> it's a great question. overall, tech ipos are generally trading below their ipo price, so i don't think it's just an

india phenomenon. indian ipo's, if you look at them, more than half of them are actually trading above their ipo price, which is, in some way better that happened at a global level. the question remains, how do you really get companies in this market to liquidity and to return money for investors? i think you saw the spac phenomenon over the last year, that helped a few companies. ultimately, we still believe that traditional ipos are delayed. you think they will return probably in the second half of 2023. in 2024 we will start to see quite a number of companies in this region hitting the ipos again. shery: are there any -- haslinda: are there any demographic or geographies that are just a straight up no at the moment because of market volatility? you remain an open mind in terms of assessing individual growth stories? >> i think it really is about

individual growth stories. ultimately for us, india, indonesia are the two biggest markets in this part of the world, and they are the markets that we are focused on today. really interested in other markets. philippines and vietnam has attracted a lot of interest. we made investment in vietnam, it's one that we hope will be the first in the tech sector, and vietnam's ipo that we are very excited about. but the market has a big gap, there are number of late stage companies in vietnam and philippines that are in the ipo window, and then there are early-stage companies. we need to close that gap and see more companies getting to the stage and getting to the pre-ipo stage. haslinda: what is in the way of those companies getting to the growth stage? >> the combination of factors that comes down to evolving their business models. some started in areas like consumer and gaming.

in the question is, do they go broad in their home country and expand into other sectors, or do they go regional and expand in the sector that they are in expand into other countries in southeast asia? companies can grow there first. southeast asia, a lot of companies start to think about growing across the region very early in their evolution. haslinda: markets are effectively shut right now. how are you helping companies navigate such an environment? >> it really is about capital efficiency. there are pockets of capital out there. probably the most exciting new flow of capital in this part of the world's family offices. you are seeing family offices really moving to singapore, you are seeing a lot of family offices interested. that's a great sort of capital for a lot of founders. but at this point you have to make your capital last. what we are telling founders across our portfolio is that you

have to make the capital last for 18 months. we see this volatility continuing through the end of 2023, and companies have to survive with the capital they have. haslinda: do you view the opportunities the way they used to? >> family offices have really long term perspectives on investing. i think they can be great partners. many family offices in this region are entrepreneurial. they understand the journey of building a company, and i think they can be great investors, but many of them are very new to investing. so i think it will take a little bit of time, but it's an exciting new pool of capital here in the region. haslinda: talk to us about the priorities for 12-24 months and adjusting to the new normal. >> we think that it's during times like this that the fact that we have the resources and scale to help our companies

through this is really important. we are looking at three things, resilience, which is areas like cybersecurity and they tend to do well during times of uncertainty. they're looking at areas where the pricing has really come down, but the fundamental technology is down, like i'll tech. and we are looking for companies that may need a little bit of help to make it through this time, and we believe we could provide that help and support. and we can get it at an advantaged price. those are the three areas we looked to invest in. haslinda: going back to the u.s. , are the days when everything at all costs, are those days over? >> when times are really good, people feel like they are going to last forever, and times are really bad, people feel like they will last forever. neither one is true. we will add some point probably be back here and talk about growth at all costs, but i really hope we learn a lesson from this in the lesson that we learn is that you have to build

models that are capital efficient. you have to have the vocabulary of earnings and optimization as part of your core. you look at companies like microsoft that were started in 1975 and it's a very similar timeframe. they are incredibly resilient companies. microsoft is one of the world's most valuable and innovative companies. part of it is because it started during a time where they had to be resilient. haslinda: it has been a pleasure. managing partner at b capital group. we are coming to you live from the milken asia summit here in the lion city. shery: great conversation there. the milken summit continues, it's the final day. we will discuss the return of global travel with the executives. we will also cover trade in an exclusive conversation with singapore's minister for trade and industry. in the former you are. -- former european trade commissioner. don't miss those conversations over the coming hour.

the latest push to avoid the listings from the u.s. stock exchange are falling short. more on that soon as we head to the china open. ♪

haidi: apple shares buckled

after rare analyst downgrade with the selling pressure. bank of america cut its ratings, warning of weaker consumer demand for disasters. the selloff erased roughly $120 billion from apple's market cap. alphabet shares also dropped nearly 3%. portions grow as much as 5.2% in trading debuts, causing little trained -- change on the index. the parent company's wagons at the push was at the upper limit, raising over $9 billion with $73 billion. an interview with ceo oliver bloom said that confidence can whether any economic downturn. quakes we don't expect a slow in demands because of the recession effect because we are well-positioned. we have the portfolio over the next years, which is very

stunning and we are looking very far up -- very positive to the future. shery: u.s. regulators say chinese companies are flailing in a fresh bid to avoid being rooted off u.s. stock exchanges. that's rain in chief china markets correspondent. what are they doing? >> good morning, this predates the agreement that the fcc and chinese regulators have to really inspect the paperwork here in hong kong. that's happening away from the chinese office that i matt. what's happening is a workaround that is really concerning for fcc regulators, that chinese companies hire u.s.-based auditors rather than use auditors and china or hong kong. this is what the company -- it's only a handful in the company so far -- the company said it would reflect their increasing global

presence and they are not trying to go around these rules, but the fcc, what they are telling us is that the concern is these companies will feel like they don't have to present as much information, and they can redact all that information in consolidated statements and not give access to the u.s. rarely has accounting been this exciting. haidi: one of the implications for valuations? we keep wondering if things are bottoming in that we might start seeing some bargain-hunting. sofia: i think it's a difficult environment for people who say by now. the market environment, globally is very difficult. obviously adrs, chinese adrs listing and trading in new york has a particularly -- has two years. but the outlook for these companies is still uncertain. if you are u.s.-based investor,

you still don't know whether you could actually still trade these companies next year in the year after. so there is still a lot of concern in the markets. haidi: let's take a look at the stocks we are looking at in the opening of hong kong and china. homebuilders and focus as they roll out support measures for homebuyers. with potentially lower mortgage rates. don't forget those apple supplies after the rare analyst downgrade that's exacerbating another wave of selling pressure on apple. that is it for daybreak asia. our markets coverage continues and we look ahead to the final trading coverage of the week with trade beginning in hong kong, shanghai and shenzhen. "bloomberg markets: china open" is next. this is bloomberg. ♪

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