>> you are watching "daybreak asia," coming to from seoul and sydney. we are counting down to asia's major market opens. kathleen: australia has just come online. a cautious open ahead as investors assess fed comments suggesting officials are open to slowing the pace of rate hikes. fresh turmoil for crypto. it struggles to raise fresh caps for its lending unit. calls on banks -- china calls on banks to stabilize money to the sector as they call the covid situation severe. juliette: i'm juliette saly. in kuala lumpur, a 24 hour extension to come up with the deal. >> the billionaire investor carl icahn said to be holding a large position when it comes to a short position on gamestop.

he began shorting the retailer during the meme stock boom and we are seeing that he really, after the height of that meme stock frenzy around january 2021, he still holds a large position. we are not clear about the size of that position that he holds but we do know that it began building the short when the stock was trading -- he is betting that the stock is not trading on its fundamentals and will continue to fall. that stock lost revenue 1% of its value since january 2021. that was the high. still somewhat strangely as of the end of october, we are actually still seeing a gain of 501% compared with a 3% rise in the benchmark s&p 500.

let's take a look at how we are setting up when it comes to the start of cash trading. here in australia. this is a picture as we continue to see, starting to get some of these expectations for how markets might trade going into 2023. a little bit of upside when it comes to trading in sydney but .1% higher as we get into that staggered open and we are watching the aussie dollar which has been seeing some price moves against the kiwi ahead of that expected jumbo sized 75 basis point move from the rbnz. also taking a look when it comes to u.s. futures as well as the picture when it comes to oil as these opec uncertainties continue to roll crude markets. s&p futures flat at the moment. mastec futures trading more or less the same. new york crude up by .3%. we did see a volatile session. opec headlines creating quite a

bit of uncertainty. saudi arabia denying a report that itn in oil production increase. traders are digesting the latest comments from fed officials morning of the monetary policy's effectiveness. let's get more from our mliv contributor, garfield reynolds. we continue to really grapple with the fed and i thought it was interesting. mary daly overnight talking about the need to be mindful of the lag and cumulative tightening and that gap between what the fed has done and what financial conditions are actually showing. garfield: that is one of the things that is at play and part of what makes it such a conundrum for investors, you know, on the one hand, you have got a fairly clear signal that the most likely outcome from next month's fed meeting is 50 basis points instead of 75 so that is great. relief. we are finally getting in and to

those massive hike -- end to those massive hikes. on the other hand, there is so much pain in the pipeline. this will be the seventh meeting this year, assuming they hike in december. seven out of eight where they have carried out hikes. that is the most number of hikes in any year, the most since 2005. those were all 25 basis points, not 75, 75, 75, 75, and then 50, if i managed to count on that correctly. that's a lot of tightening. that's laid down. that is coming through and which makes it, you know, the markets are switching back and forth. the rate hikes are over, slowing down. but they have already done so much and we have not felt all those effects so that adds to the volatile outlook and one of the things going on this week i we have japan's thanksgiving.

tomorrow, full thanksgiving in the u.s. on thursday, so treasuries will be shut the whole day on thursday. we have the world cup. we have got this interregnum. we had all the big data for november. so yes, no surprise at all that there are a lot of surprises out there in markets. kathleen: china continues to deliver all kinds of surprises, doesn't it, garfield? overnight, the government telling banks, -- asking them to lend to the distressed property companies. at the same time, covid cases rising again. how is that going to play out for markets in this week with so much going on? garfield: i think that as to the general air of apprehension we saw very strong currency moves overnight where all of a sudden, the dollar was what everybody wanted and this is after a couple of weeks of everybody saying the dollar has peaked.

that is it. it is all downhill for the dollar. turns out, it is not. it's very dependent on risk sentiment. and again, how do you square this? the message in many ways, both from china covid and from fed rate is that even when there is a turning point, is not a rapid turning point. it's going to be a gradual one. probably on balance, the likelihood is that going forward, covid in china becomes less dangerous and less of an impact on the economy. they have taken a different path to the rest of the world in a lot of ways but the general feeling is they are moving towards a future where they would see covid being less of an issue, but it's not going to be one where they flicked a switch and say that's it. we are not going to worry about restrictions. we are not going to worry about any efforts to actually restrain covid. we are going to let it rip.

nobody is expecting that from china and if you are not expecting that, you have to expect gradual moves. and it is the same with the properties sector. may have -- they are still very worried about the potential for major bubbles, that there's a lot of overvalued assets in that sector, overleveraged in particular. they are trying to find a way to turn that around sustainably, but that's going to be a gradual process and not the sort of thing that gives you a sustained 30% rally over the next three months. haidi: it is going to -- kathleen: it is going to take some time. that is clear. thanks to our mliv contributor, garfield reynolds. let's take a look at our crypto market. prices sliding again as -- after a digital asset brokerage,

genesis, struggles to raise fresh cash. they were sliding. now, they have bounced. that goes to show you have a crypto market is taking in the news, taking in the latest big crypto player looking to find money to avoid bankruptcy and saying is not ready to go into bankruptcy yet. perhaps that is why crypto assets are taking this positive turn. but let's get to someone who knows what is happening and why. sources telling us genesis is struggling to raise fresh cash for its lending unit, warning potential investors it may need to file for bankruptcy. at least not yet. what do you see that? annabelle: that screen of all those bitcoin prices and other crypto's shows us how much volatility there is in the industry. we are focusing on genesis here. it is a cryptocurrency business. it has several different business units. trading, derivatives, custodianship.

the focus is very much on the lending unit and what we understand is that genesis essentially has been scouting around for as much or more than $1 billion in cash from investors. this is a bloomberg exclusive. we are told by sources here that if genesis does not get this cash, it could be forced to file for bankruptcy. it is not there yet but we already of course did see its trading unit, this unit freezing because its trading unit had 170 $5 billion exposed to the ftx collapse so a sign of the liquidity crunch facing this industry. who is going to be the knight in shining armor here? finance was one of the possible contenders get the funding has not materialized so there's a lot of players in this crypto ecosystem facing sort of similar issues. we still need to understand who

owes who what, how much. these are the sorts of questions we still do not know yet. so it will continue to be an issue, haidi. haidi: we are also realizing that prosecutors, the regulatory framework really had their eyes on ftx, perhaps months before everything fell apart. what is the latest that we know there? annabelle: that's right. manhattan prosecutors up your to have had their eyes on ftx, basically part of a broader sweep of the cryptocurrency industry, looking at exchanges that have both the u.s. and an offshore arm and what they were trying to look for where any violations of the banking secrecy act that basically requires crypto exchanges and financial institutions generally to register with authorities and implement any sort of anti-money laundering, antiterrorism sorts of regulations in place so some

crypto exchanges, like ftx, which do have a u.s. and non-us -- they don't register that offshore live form with u.s. authorities because they say that it does not serve u.s. customers. so there really was the focus of the investigation from prosecutors. where u.s. customers actually using that platform? it is unclear whether they reached any sort of conclusion before ftx collapsed. haidi: annabelle droulers in hong kong. let's get you to vonnie quinn with the first word headlines. vonnie: saudi arabia denied a report that it is discussing an increase. wall street journal said the group was considering raising output by as much as 500,000 barrels a day. the saudi's say current production cuts of 2 million barrels per day will continue until the end of 2023. indonesian officials fear the number of people killed by a powerful earthquake may rise as they search the rubble of homes

and buildings. at least 162 lives have been lost with hundreds more injured. the magnitude 5.6 weight shook the west job a region. office workers fled buildings in jakarta. the pentagon says it is seeking a meeting between the defense secretary and his chinese counterpart during an asean summit this weekend in cambodia. it would be their first talks since beijing suspended dialogue over nancy pelosi's august visit to taiwan. the u.s. says it would welcome a meeting but has nothing formal to announce yet. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi. haidi: coming up next, a look at china's green tech with the breakthrough institute. why they believe the supply chain problem is getting bigger and broader. coming up next, we dive into the trading day ahead with jay

polaski. he is seeing fresh opportunities in emerging markets. this is bloomberg. ♪

>> as we worked to bring policy to what we call a sufficiently restrictive stance, which really in simple terms means the level required to bring inflation down and restore price stability, we will need to be mindful. adjusting to little will -- too little will leave inflation too high. adjusting too much can lead to an unnecessarily painful downturn. kathleen: san francisco federal reserve bank president mary daly overnight reminding or may be underscoring to investors that the fed is looking at its path and how it's going to adjust as it moves ahead into 2023.

and on that point, our next guest says slowing u.s. inflation, a brighter energy outlook for europe, and positive policy changes in china put covid zero to the side for a minute. we will make the u.s. dollar the biggest loser in a more stable environment. joining us now, jay polansky, founder and principal of ptw advisories. you summed up all the big news of the day, haven't you? i want to start with the fed, of course. is it just enough for the fed to say we think we may have gotten to the point where we don't have to do the biggest rate hikes anymore? we are probably going to be hiking rates but changing the gear just a bit, is that enough for stocks to rally going into next year? because they are not going to stop hiking rates now. jay: right, i think that's right, kathleen, and you did a great job of summarizing our main point said thank you for that. i think in fact the pipit from

frontloading 75 basis point hikes has already occurred and we don't expect the fed to trump et this change because it wants to keep investors somewhat in check so financial conditions remain somewhat tight so inflation continues to decline. we think, much as in china, we don't expect president xi to come out and announce a full-scale retreat from zero covid, but yet, that's already kind of underway. so the headwinds of 2022, we believe, become the tailwinds of 2023 in the dollar, which has been a big beneficiary of all this uncertainty, the biggest loser in a world of gradual stability. kathleen: ok, so the stock market, we see the at times are bullish and they always are

pushed back. what do you see for next year? jay: we really keyed off the dollar so that is the biggest point. we think a reversal in u.s. dollar strength is going to unleash significant asset allocation changes around the world. the u.s. equity market and u.s. growth stocks have been the biggest winners since 2009 and we think that environment is over. so the u.s., many people, morgan stanley, goldman sachs, and others are predicting basically a flat market from here through 2023. that is actually a great environment for the rest of the world to do better because we all know, when the u.s. goes down, it takes everything down with it. when the u.s. goes up, that is the only game people want to play, so a u.s. equity market that's essentially flat, a dollar that's gradually weakening, opens up opportunities and the rest of the world where valuation is very compelling, where ownership

is diminished. bank of america reports 40 weeks in a row about close. so we look at the world and we see a lot of opportunity. haidi: emerging markets. are you broadly constructive? not all ems created equally. regionally, do you have preferences? jay: yes, we are broadly constructive on em which is a change for us and something we have been implementing in our model portfolios over the last couple of months, and we are selective, as you kind of hinted at there. on the equities side, we like china. we think china is cheap versus the u.s., as it has been in the last 20 or 30 years. it's probably going to grow at 4% or more next year. very easy in the first half of the year. ownership is very low from a

foreign investor side. we also like southeast asia, where we think growth is going to be quite compelling. we look at places like indonesia. we find them quite attractive. and then elsewhere, we are keen on brazil, which will be a big beneficiary of china starting to generate some growth appetite, and again, brazil sells its forward earnings. currency is extremely cheap. they finished their rate hiking cycle. the highest real rates in the world. plenty of room for those rates to come down. again, opportunity in many places. haidi: when it comes to china, how are you timing that? if it is not a linear track to reopening, are you adding to positions now? jay: yes, we have been one of those folks who have been wrong about china for much of this year.

so we have been trading around core positions both in a-shares and in tech, namely through etf 's, as you may recall. we have also been participating in asian high-yield and emerging-market local currency debt. we think as the dollar weakens, those things should do well. particularly asian high-yield, we do believe china has put a floor under its property sector, not to play on that pun intentionally, but we do think a floor is in in the private property sector so the companies that have survived to date we think are going to be quite interesting in terms of their capital appreciation potential and the yield that's currently on offer given their prices. so we might -- in china, we are long gold debt and equity. -- long goal debt and equity. kathleen: thank you so much for

joining us, jay pelosky, for a more optimistic outlook looking ahead. there's plenty more to come on "daybreak asia." this is bloomberg. ♪

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kathleen: this is "daybreak asia ." now for a quick check of the latest business flash headlines. elon musk has laid off from twitter workers, further trimming his staff. last week, the billionaire asked workers to commit to his more "hard-core" version of the company or leaves. twitter lost more than 4000 employees since the mosque take over -- musk takeover. disney going to pay bob iger $27 million annually for returning as chief executive officer under a new two-year deal. he will get $1 million base

salary, a similar sized bonus, plus stock awards with a yearly target value of $25 million. shares surged on the news of his return to the home of the world's largest entertaining company. -- entertainment company. a philippines fast food company is planning to expand in china as it aims to increase sales from abroad. the president and ceo told us they want to open at least 100 stores in china, hong kong, and macau in 2023. he also says earnings this year are on track to top three covid levels. >> it has impacted our sales but we see this as a temporary setback. we experienced the same in the philippines and now the philippines is enjoying -- we remain committed to further growing in china. haidi: take a look at how we are setting up for the broader rest

of trading particularly when it comes to u.s. futures looking pretty tepid. we have asian markets looking like we will start the day on a cautious note as we have more fed speak as well as all of that uncertainty over covid zero and potentially further restrictions coming out of china as well as we get this intensifying of covid cases and potentially more deaths from the mainland. s&p futures and nasdaq futures trading pretty flat at the moment. dow futures, much of the same. we are seeing gains when it comes to the dollar, really supported by investment flows, corporate hedging ahead of the u.s. thanksgiving holiday. we did see flushing out of speculative shorts from those positioning as well. take a look at how we are trading in the first half an hour or so of the cash session in australia, seeing some strong leadership from oil and energy in particular. energy up .7%. we had quite a bit of volatility when it comes to the oil markets overnight with saudi arabia refuting that report about discussions being held about oil

production increases for the opec-plus meeting. that is scheduled for next month. we are continuing to see some of those haven demand flows for the u.s. dollar as well. kiwi stocks on the back foot ahead of expected, that 75 basis point hike from the rbnz tomorrow. nikkei futures pretty unchanged at the moment. coming up, we get an update on how malaysia's political factions are maneuvering out of a hung parliament. that extra 24 hours given with that new deadline of tuesday afternoon by the king. we are in kuala lumpur, next. this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network.

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haidi: you are watching daybreak asia. uncertainty is dragging on as -- we have the latest live from kuala lumpur. we've got this new deadline taking us to this afternoon on tuesday. what is the latest? >> it seems neither i nor abraham and his reformist party nor the former premier and his p.m. party which is pro-malay islamists have won enough votes to form a coalition and you can imagine there's been a lot of dealmaking going on. the kingmaker coming down to the former ruling coalition as to who they are going to give their seats to to form this coalition. as of that initial 2 p.m. deadline set by the king, we heard the p.m. say they had 112 seats and were able to form a coalition but and are abraham is

claiming the same. you could imagine there would be a lot of dealmaking happening before the deadline set by the monarch for both parties to come to him and say they have formed this alliance. we have heard the former defense minister said he would rather be sacked than form an alliance, so either way the political instability continues in malaysia. kathleen: how are investors viewing the political deadlock? juliet: -- juliette: what you could see if he comes to power is there could be a hit to some of the consumer related stocks. think of gaming at tobacco stocks because it ties in with a pro-islamist party which has called for the implementation of hardline sharia law.

but you should be looking at the bigger macro picture which will depend on the china reopening story. look for tourism and travel stocks as beneficiaries in malaysia. it has weighed on the overall benchmark index which is down 24% from its april 2018 peak. kathleen: commenting not only on the politics of this election but how investors look at it. still had, we continue the coverage of malaysian elections and speak about how the election will impact businesses and markets. don't miss those interviews later. here's annabelle with the latest on the markets. annabelle: taking a look at how investors are reacting to the malaysian outcome.

the deadline set for 2 p.m. local time for the candidates to declare who is the next prime minister. citibank, what they are saying is this new p.m. government is going to be the consensus view shaping up. that's a bit of a surprise to investors and it means we could see a continuation of a populist slant here. it does seem to contain the most funding commitments, so in terms of what that means, they are looking at the pressure on the fiscal deficit and concerns around inflation from the demand side. also what that means for the central bank, that it's likely to keep its hawkish five for the month ahead. let's look at the broader markets -- we are half an hour away from the opens for japan and korea. taking a look at the fx space this morning, given we are seeing a bit more strength coming back into the dollar as fed officials continue to debate

what is the best course ahead in terms of the size and scope of rate hikes in the months following. in terms of what we are watching in particular, a little weakness creeping back into the aussie dollar and a reflection around china, given we have concerns forming about a possible retreat . also the yen has been strengthening with a lot of investors saying the worst of the selloff could be over. haidi: let's get to vonnie quinn in new york with the first word -- first word headlines. vonnie: south koreans government says it's monitoring the short-term money market and is ready to take action if needed. a senior financial official said discussions on stabilizing credit markets are happening daily. but authorities are not considering further steps following last month's $36 billion support package. >> we have ensured a lot of

measures but most of the measures are to purposefully circulate in the markets. vonnie: sources say the u.s. had been working on a sweeping examination of crypto and was looking into ft ex-pence before it's collapsed. the law requires financial institutions to take steps to prevent money laundering and terrorism financing. china's financial regulators have asked banks to stabilize lending to property developers and construction firms. it's china's latest bid to bolster economic growth.

it may signal a willingness to shift away from the government's previous tightening stance on the sector. seven european football teams have decided against wearing rainbow armbands at the world cup to show solidarity with lgbtq rights. the decision follows pressure from fifa which suggested referees would yellow card players for the show of support. the england captain wore a fifa approved armband saying no discrimination, homosexuality is not a crime. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: the philippines are planning to pursue expansion in china. they told bloomberg china is still one of the key markets and lockdowns are just a temporary setback.

>> we have set the focus is on our larger businesses in china. today we have 486 stores in china so we see china remains one of our bigger markets and we are committed to continue to grow in china. for this year, we are targeting to open at least 100 new stores in china. >> 100 new stores in mainland china, hong kong and macau by the end of 2023? >> this year, we are adding an additional 100 stores. and we continue to expand the same number of stores next year.

>> how have the lockdowns we have seen affected your business? >> the covid lockdown has impacted our sales but we see this as a justified setback. we experienced the same thing in the philippines. in china, we, with the restrictions being slowly lifted, we saw the market recover fast and we are happy the market has an appetite for our brand which provides significant growth for the company. >> could you give us a sense of where you are on the recovery in mainland china? are you halfway there or close to recovering fully? >> we are recovering around 70% to 80% versus the pre-covid

level. so as china opens up the economy, we expect next year to go back to pre-covid levels. >> i would like to take this opportunity to ask where you think health of the chinese consumer is because the economy is in a very weak spot right now. some of the ceos we talked to say the consumer needs a little more time to recover. what do you see as far as fnb are concerned in china? what is your sense? >> we see the qs our industry as well as the dining industry are quite resilient during the crisis. we have seen this in the past 40 years in the philippines and in

china. we think consumers will go back and there will be what they call revenge spending. but in china, what we noticed as before pre-covid level, the sales are higher than all the other markets in the world. that will continue as well as the people's target as well as going into the stores to dine in. >> i think our international audience will be interested -- in your stores, does anyone still use cash in mainland china? >> in china, mostly e-commerce is the preference in china. very few use cash anymore in china. kathleen: up next on the show,

we will have the breakthrough institutes codirector share their report on human rights violations in solar manufacturing. this is bloomberg. ♪

kathleen: bloomberg nef has ranked countries on the lithium battery supply chain based on their activities in 2000 282. it spends -- it expends a category to include social and governance factors. china has top the charge and still diamond it -- still dominates. north american countries have improved while south american countries saw the worst declines. let's get more. it's great to have you on this topic. canada rising to number two from missing out on the top five last year. what have they done? >> very much across the board, a solid performance from canada this year. they have a strong raw materials sector and they have been continuing investments and

expanding that industry with a focus on critical mineral sectors. as manufacturers for autos and batteries continue to look for more sustainable supplies entering their manufacturing value chains, canada is offering that with their access to cleaner power sector grids and low in missions manufacturing and the holistic performance insured canada's rise to the second spot of the standings this year. haidi: china still maintains control of battery manufacturing capacity. it has been at the top for three straight years but do you see geopolitics as well as the u.s. inflation reduction act changing this? allan: the u.s. inflation reduction act is one of the key policies that impacted some of the outlook for clean energy sectors, including the

electrification of transport. that translated into increased battery demand which is one of the five key categories we have in the ranking for the top countries in the battery supply chain. while it has helped the u.s. move up in terms of demand, canada is in the number two spot, it helped other countries in the region as well as the countries the u.s. will incentivize in providing the supplies for their supply chain goals. china still maintains massive control with 39% of the manufacturing capacity in terms of battery cells located within china. china is very much expanding its opacity domestically as well as overseas with investments in countries such as indonesia. factoring that in, it's unlikely china will be toppled in the standings even at the end of the decade. haidi: our next guest is the

author of a study highlighting the human rights crisis in the korean energy sector. he is urging the climate community to rethink its approach to solar energy. he's a codirector of the climate and energy program at the breakthrough institute. we appreciate your time. talk us through the key findings from this report. seaver: thank you for having me. our main focus of this report is to urge the global solar sector to take aggressive efforts to diversify manufacturing beyond china. currently the solar industry has been trying to address the ethical sourcing issues through half measures by trying to trace individual shipments and determine whether or not they may have been unethically produced. this relies on accurate

information from within china that it may be difficult for auditors to get. we are saying the easiest way to do this and ensure a more rapid global solar buildout is for the industry supported by government policy to establish more large-scale manufacturing outside of china. haidi: one of the biggest challenges at the moment is the fact this issue is being ignored or is it procrastination when it comes to the complexities of reorganizing the supply chain? seaver: part of it is an economic incentive. these are large producers of solar commodities currently in short supply, so any reorganization of the supply chain is quite the headache and would threaten to cause a spike temporarily in solar costs while supply chains are realigned. at another obstacle is there hasn't been enough of a global effort among policymakers of

countries to restrict imports of these unethically produced goods while the u.s. has taken some strong measures. other areas like australia or the european union or japan have yet to take strong measures on this front. kathleen: maybe it would help if you could tell us more specifically what it means about morally unconscious labor. what is going on? seaver: we know from these companies from themselves, from social media accounts, from reporting from state media that they participate in state-sponsored labor programs. these programs have been identified by the united nations, human rights groups and uighur activist groups as coercive and abusive. they take people and separate them from their families, send them hundreds if not thousands of kilometers away from their homes, work them very long hours for very low wages and this is

not voluntary employment. we know from other industries like the agriculture industry and garment industry, there's testimony from people who have survived working in these labor programs that testify to how extreme the working conditions are. no company that believes in socially or ethically responsible commodity sourcing should be doing business with any of the suppliers. kathleen: i thought it was interesting when you said what needs to be done is take more of this manufacturing out of china. i recall very well when the u.s. solar panel manufacturers just got their lunch eaten by china. very competitive. how much of a role has forced labor played in the ability to do that and what needs to be done to make countries like the u.s. and others start doing this again?

tax incentives, government support, what? seaver: on the first part of this question, it's important to step back and look at the larger picture. it's not just the forced labor but the entire system of industrial resource extraction. you have vast coal mines hooked up immediately to coal plants that are right next to these large scale solar factories, so it is cheap land, cheap energy, cheap labor. all of this wrapped together in this system that creates environmental pollution for communities and enforces hardship on workers. as far as what i think needs to be done for other countries to step into the game, the u.s. inflation reduction act is a great example of policies that incentivize re-shoring these solar manufacturing industries and jobs by providing

large-scale manufacturing tax credits that mean it is much more economical to set up a solar factory in the united states and more constituencies, whether the european union or canada or japan need to consider similar policies. haidi: we appreciate your time. the codirector of climate and energy, the program at breakthrough institute. two and into bloomberg radio to hear more from the big newsmakers and get in-depth analysis from our daybreak team. you can listen via the app on bloomberg radio.com. more ahead. this is bloomberg. ♪

haidi: a quick check of the latest bigness flash headlines. a texas regulator is investigating sports celebrities over potentially securities law violations tied to their promotions of crypto exchange ftx. the state securities board says it is looking at payments they received to endorse ftx u.s. they were named as defendants in a separate plot -- separate class-action lawsuit. china's bond plan is set to be facing resistance.

members include an ad hoc committee holding at least 20% of the offshore debt. we are told they are seeking to swap 40% of the bonds to shares in hong kong list and sunak holdings. apollo has raised to $4 billion in a fund targeting assets including bank loans. the fund will buy new and existing secured debt with double-digit yields in a high quality stretch at a discount. deutsche bank is weighing cut suits leveraged finance unit. the ceo is reviewing underperforming businesses as restructuring concludes. sources tell bloomberg the exercises scheduled to begin next month and resources may be directed to other areas, including the deals advisory business. kathleen: these are the stocks

we are watching when trade opens in korea and japan. asian energy related stocks may be active after saudi arabia and i to report it was discussing and oil producing increase. japan petroleum exploration and sk innervation. tesla's asian suppliers and peers are in focus as returned to covid zero could impact them. coming up in the next hour, lorraine tan will tell us which eaten down sectors may rebounded we have the american chamber of commerce on their hopes the u.s. will push trade barriers. markets open in tokyo and solar next. -- tokyo and seoul are next. this is bloomberg. ♪

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kathleen: this is daybreak: asia, coming eight -- coming to you from sydney, hong kong and seoul. what are we focused on? the fed -- fed officials repeating their still hiking rates but will look at the pace. china still in focus. covid zero hanging like a dark cloud, but the government telling banks they have to help at the property sector, that could be a plus. haidi: covid zero definitely hanging over and we see beijing reporting 1426 new local covid cases. shanghai reporting 48 cases for that area. beijing city saying 316 new local covid cases for monday. in hong kong, just over 7000 new covid cases there. we continue to see the uncertainty of what this means

for an exit out of covid zero weigh on sentiment. annabelle: that is one of the big headwinds facing stocks in the asian session today. we have the open for japan and korea and the start of trade for treasuries. police did -- we did see the knee-jerk reaction the prior section with the sudden drop of the output hike there. that brought down the short-term inflation expectations. also watching what's happening in the japanese yen -- given we did see the big drop for the currency, cba saying it should recover most of that, consolidating given the move we have an treasury yields and concerns around the demand outlook from china and what that means for the global economy. stocks fries with the nikkei coming on to the upside. let's tune into what's happening in korea. the korean won seeing the

weakness coming back into the local currency here. inflation expectations starting to moderate and the outlook for consumers, their confidence is falling. something the be ok will be watching closely. -- thebok will be watching closely. the tech heavy index following the nasdaq but as you say, down to what is happening in china and the cases expanding their. certainly a pivot away from covid zero is getting tougher and what is a difficult road ahead. in australia, the asx one hour into the trading day. materials and energy stocks leading that higher. interesting moves in wti. brent crude one hour away from the trading start but a

knee-jerk reaction and volatile session with the report of an output hike. saudi arabia refuting that. haidi: quite a lot of turmoil in the crude markets. let's bring in our next guest. she says beaten-down sectors are like to outperform on the rebound. joining us is the director of asian equity research at morningstar. great to have you. how challenged is this broad rebound going to be? do you see the bear market continuing into next year? lorraine: good morning. it's going to be very volatile. there are three key issues we are looking at. one is whether china continues the positive trend in policies regarding trying to live with covid. number two, addressing the real estate issues. and the third thing is the trend

in inflation. those are the three factors. as we have seen with the covid issue in china, it's going to be stop-go news flow in terms of the lockdowns and that's going to add volatility to the markets. haidi: you talk about tech and growth being part of that recovery. does that include mainland china and hong kong? seaver: yes -- lorraine: yes. whether it's europe or asia, by most measures, they are trading at about eight when he 5% discount to our estimates. but the sectors that have fallen the most, the tech sector and consumer cyclicals have been the ones that have suffered. in terms of china, obviously

what's going on internally, anything that drives or improves consumer confidence as well as overall interest rates, some reprieve to interest rate treasury's -- interest-rate rate measures will help the consumer sectors. kathleen: the government saying it is asking banks to lend more to help with that -- in 2022, that's been the biggest headwinds for china. lorraine: that's right. i think it's a huge negative to consumer sentiment as well. what we want to see is a continuation in policies that have been announced recently. i think it was a good measure to try and extend the loans to troubled real estate developers.

it provides a floor to where the real estate market should be going but to drive buyers back into the space to get the confidence projects are going to be completed, that needs to continue. we are happy we saw the first steps and continue to see it happen but a little more needs to be done and we hope to see that develop over the next six months. whatever is going on in real estate space in china, it's going to take a few years to find footing to the sector. kathleen: as much as china watchers and investors are waiting to see how consumers come back, exports are still extremely important. what do you see for the u.s. economy? same for the european union? lorraine: with what is going on

locally, with the interest rates we are at, we are expecting recession. that u.s., probably a 50% chance of a recession. what we are hoping to see is something that's not a sharp recession in that sense. we expect the fed, the peak interest rates sort of happened in the first half of the year, by the end of march and we are expecting the hiking to diminish by then. we are expecting a reversal of that trend in the second half of 2023 and hoping we are going to avoid the worst of a steep recession. but for the most part, consumer sentiment is where we need to

see it start to recover and that would help share prices as well. kathleen: enqueue very much. let's get to vonnie quinn with the first word headlines. vonnie: sources say the u.s. had been working on a sweeping array of crypto platforms months before the collapse of ftx. we are told the investigation is on the compliance of the bank secrecy act. it requires thanks to take step to avoid money laundering. indonesian officials fear the number of people killed by a powerful earthquake may rise as they search homes and buildings. at least 162 lives have been lost with hundreds more injured. the quake took though -- shook the west java region. tremors were felt in nearby cities, including jakarta, or office workers fled buildings.

malaysia's political leaders have until tuesday at 2 p.m. to present their plans on forming a new government. they came -- the king granted a toy for our extension after the national vote produced a hung parliament. the former ruling coalition may hold the key but has yet to decide which group to back. the pentagon says it is seeking a meeting between penn secretary lloyd austin and his chinese counterpart. it would be their first talks since beijing suspended dialogue over house speaker nancy pelosi's visit to taiwan. the u.s. says it would welcome a meeting but has nothing formal to announce yet. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's take a look at crypto-linked stocks and always a lot of moving pieces.

we have the genesis funding affecting sentiment. annabelle: and those lines that just dropped around the bahamas, agreeing to let delaware handle the restructuring part of the case but in terms of what else we are watching, these are some of the stocks linked to crypto exchange's or are crypto exchange is themselves. genesis saying it's looking for a billion dollars or more or it could be filing for bankruptcy. court officials dropping to moving part of the restructuring case to a u.s. court in delaware. they had been asking for it to be manhattan instead. let's take a look at what else we are watching -- tesla suppliers, given there are concerns around tesla, not only around a possible recall or recall of 300 thousand vehicles, there are other factors at play,

including elon musk, who has his attention very much focused on twitter instead of tesla. then there is china, seeing we are looking at covid zero policies and what that means not only in terms of the production side but the demand when as well. let's take a look at what's happening in the energy space. eight mixed moves from some of the biggest energy names in asia. a lot of volatility in that session. there is the demand question from china playing into this. there are fed officials and adding to that, this report around a production hike that was later refuted by saudi arabia. kathleen: still ahead, malaysia split ago uncertainty drags on three days after inconclusive elections. plus what am channel malaysia

once from the government. china calls on its anchor to stabilize lending to its property sector. a look at the effort to post economic growth, next. this is bloomberg. ♪

haidi: you are watching daybreak asia. officials in beijing say they are facing their most severe and complicated covid situation since the pandemic began with new cases on the rise. we did see the latest case numbers out of beijing showing the continue to see more and more cases for beijing -- 1420

six new cases for monday and a number for shanghai as well. let's bring in our senior executive editor in. the spike in numbers, the reappearance of the tallies, which is key, where do we go from here? >> that's the big question. we started with the path of reopening, of easing covid curves. now that we have seen the spike in infections, 500 more today, we've seen three deaths reported, the question is will beijing, will other governments around the country start pulling back on the reopening, reintroducing things like lockdowns or mass testing? we've already seen that in other sitting -- in other cities. today, a little bit from now, we expect to get a national number that could be the highest on

record. if it hits 29,000 today, that would be the highest ever china has recorded on a daily basis. kathleen: a positive step to stabilize lending to the property sector. that is what they would like banks to do. how big a plus is that? john i think the government -- jon: the government is trying to do more in terms of stabilizing the property market. the pboc financial regulators overnight came out to say they want banks to stabilize lending to that sector to make sure developers have access to the funding they need. stabilize is a key term. it means providing to have enough, not providing more than is sufficient, that might reinflate a bubble. at the same time, the pboc is planning to provide 28 billion

u.s. dollars in interest free money to banks so it can be relent to investors trying to get to stalled projects. you see them try to take on to front at the same time. kathleen: that is bloomberg's greater china senior editor. let's get onto the oil market, paring losses after saudi arabia denied a report with discussing oil production increase. david stringer joins us for more. a wild ride in oil today. what's going on? david: absolutely. a really volatile session for oil. we saw crude futures swing in a range of five dollars. all of that prompted by reports and a later denial around the path ahead for the supply

outlook. the wall street journal reporting saudi arabia and others were considering potentially raising by as much as 500,000 barrels a day. that sent crude futures tumbling as much as six .1%. saudi arabia refuted that suggestion and said the plan is for opec and its allies to stick to an agreement it may just last month to cut production by around 2 million barrels a day. it is intending to stick with that strategy through the end of 2023. we did see oil recover those losses and ended up flat at the end of monday. seeing some initial gains in early trading. haidi: the demand outlook is pretty tough at the moment. we had some optimism with the china reopening, may be stabilization the property sector, but all of that is up in the air. david: absolutely. we just heard on the uncertainty

over the covid situation in china and what does that mean for demand in the top oil consumer? it's something the market will be looking at it today and there'll be acute interest in those numbers and what it means for demand destruction. i think we will see a shift of focus back from the supply equation. we are still waiting for other key elements in the market. we have eu sanction on russian flows due to kick in next month and we are do to get the group of seven price cap plan. details are expect on wednesday. quite a few factors to wait in on the market. haidi: you can get a round up on that story and other stories. bloomberg subscribers can get that.

you can always customize your settings for the news and industries and assets you care about. this is bloomberg. ♪

kathleen: this is daybreak asia coming to you live from seoul. south korea's government says it's closely monitoring the short-term money market and is ready to introduce additional measures to ease financial strange -- strains on that if necessary. i spoke to a senior financial official about a credit crisis that shows few signs of abating despite support measures totaling $37 billion. >> some economists and some analysts seem to believe the korean credit market or some financial sectors or industries

in korea still our next. seeing shock. i think it came from a misunderstanding. it is not from liquidity. the main issue with the credit event is the miscommunication between the bond issuer and bondholders and it worsened investor confidence in market sentiment. that is now why we experience credit market tumult. there is no liquidity crunch or shortage in the korean credit market. the main reason is the misunderstanding and bond issue activity. the investors are generally receptive to expectation.

kathleen: do you see any other weak links that could be affected if there were any other even small miscommunications or small shocks to the system? >> the response to the credit event -- investor confidence is somewhat developed but we have suffering in the credit market, especially in the short-term money market, the commercial paper market, and the main reason is we have difficulty in the commercial paper market is commercial paper market is aware of the asset-backed commercial paper. also it is closely linked to korea's property market or

housing price because the commercial paper market is usually the source of providers to finance their project under the name of project financing. that is the area we are closely looking to and because it is closely linked to the housing price, the government also encourages the soft landing of the korean housing market. kathleen: do you have any idea about what kind of tool you would have to come up with? with no government -- would know government money be a good first step to get this sector of the economy in the markets back on its feet? >> yes. on this stage, you'd don't think

any further measures including from the government or central bank, but most of the measures are focusing on more separation inside the financial markets. the corporate bond fund, a government corporate bond, most of the capital comes from financial companies whose liquidities are relatively abundant. haidi: south korea's deputy minister for financial affairs. let's get a quick check of the latest business flash headlines. a texas regulator is investigating sports celebrities

over potential securities laws violations over the crypto exchange ftx. they are looking at payments they receive to endorse ftx u.s. they were named as defendants in a separate class action lawsuit. elon musk has laid off more twitter workers from the sales side of the business, further trimming a staff. in the billionaire asked workers to commit to his more hard-core version of the company or leave. twitter has lost more than 4000 employees since musk's takeover. disney will pay bob iger about 27 million dollars annually for returning is the chief executive officer under a new two-year deal. he will get a million-dollar base salary, a similar in size of bonus plus a yearly stock target of around the 5 million. shares surged on bob iger's return to the world's largest entertainment company. china has signed a landmark

agreement for purchases of liquefied natural gas from qatar . as the world's second-largest economy looks to bolster its energy security for decades. kathleen: coming up, a look at how malaysia's political factions are maneuvering out of a hung parliament. we are live in kuala lumpur, next. this is bloomberg. ♪

vonnie: this is daybreak asia. i'm vonnie quinn with the first word headlines. china regulators are basing lending to construction firms. is the latest to bolster economic growth. the industry is crippled for the economy, that may signal a willingness to shift away from the government's previous stamps -- stance on the sector. saudi arabia has denied a report it's discussing and oil production increased. the wall street journal said the group was considering raising output by as much as 500,000 barrels a day. the saudi's sadie cut of 2 million barrels a day will continue until the end of 2020 three. seven european football teams decided against wearing rainbow armbands at the world cup to's show solidarity with lgbtq rights. it follows pressure from the sports governing body which suggested referees would yellow card players for the support. the captain of england war and our brand -- an armband saying

notice cremation. homosexuality is a crime in qatar. the path took the spacecraft over the apollo landing site, tranquility base, where astronauts first landed on the moon in 1969. the mission launched last week, the first step toward sending people back to the moon. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's get back to the latest and malaysia. malaysia's king has granted party leaders until tuesday afternoon to decide on their choice of alliance and prime minister. this is three days after the national election produced day hung parliament. let's go to kuala lumpur. >> i have with me the ceo of am

chan malaysia. we've seen is hung parliament and now the deadline extended. how long does this political upheaval affect the business community? >> thank you for having me on the show. the ongoing upheaval is a concern to the business community. any businesses want clarity and confidence in the environment they are investing in. i think all eyes are watching what's going on, all ears on the ground, seeing how the choices are going to be made in the next 24 hours. >> one of the parties trying to form an alliance is pn and it's got support from pas who wants to implement hardliner sharia law. if we see that government form an alliance, what does that mean for malaysia's economic recovery? >> the pn government in the past has provided some level of stability with being part of

their organization. but with this new block, we are going to be watching to see how the proto-national government pulls them together if they come into power. either way, we are going to be watching to see how the conservatism lays out. but the lawmakers of malaysia have always been very pragmatic and we will rely on that level of pregnant is him to come out. >> it has been four years -- that level of pragmatism to come out. >> what are your members telling you? are you seeing people leave malaysia? >> it's actually the converse. malaysia over the last few years has received so much more new investment, record number of investments. they still see malaysia as a fertile place to put their investments and people are coming in. in fact, we have a shortage and we want to see more people being able to come into the country and meet the demand for talent

investors are looking for as they are placing their investments into the country. >> do you see an uptick in investment regardless of who forms a government? >> there has been a lot coming in the last two or three years and everyone right now is waiting to see what falls into the government, whatever the government is. we want clear business environment structures so we can put more money into the country. >> one of the things interesting about the election was the voting age was lowered from 21 to 18. that meant 6 million young people were eligible to vote, but we did not see the turnout. what do you read into that? >> i don't have the exact numbers, but it had an impact in some way. we will have to see how they shape the party going forward. it's not just one party, they are shaping the entire particle landscape. but as first-time voters, they are also learning what it means to be a voter. >> are you seeing an uptick of

youth at amcham? >> we have a very conservative environment, so we have young people as well as old and the environment. a majority of our companies are run by malaysians, so we are closer to the environment and seeing a positive attitude by the malaysians to investment. they want the investment to come in and are very supportive of the types of investments coming in. we see a great influx in industries like semiconductors and medical devices. these are flooding into the country because we have a stable environment. we are watching to make sure the government that comes into place can continue that business environment and keep it steady. >> interesting you say an influx because we have seen that something case in many other places that are popular with ex-pats. you look at intentionally an ex-pat -- an exodus in hong

kong. malaysia had a strong covid-19 vaccine. how have they handled the pandemic? >> malaysia one out in that handled it very well. it was painful and difficult, but with hindsight, we came out of it very well. kudos to the people at the helm who did make a good job of it even though it was extremely painful. >> we are talking about a pickup in foreign investment. tell us what sectors you are seeing driving this. >> i would go back to the emd sector. it strong right now. medical devices are coming in strong into the country, chemicals, aerospace, and those are the big areas malaysia can grow on. digitization of different industries is going to help malaysia grow. we have in the country a very good, solid environment, we have

talent, we just need more of them and more influx of global mobility to push malaysia forward. >> is it likely we will see a government formed by the kings deadline this afternoon? >> all malaysians are looking forward to apm and to get a government that will continue malaysia down the path of further growth. >> thank you so much. live in kuala lumpur, haidi, kathleen? kathleen: great interview. let's get to bell for a look at the markets. annabelle: just picking up on what jules was saying, we are half an hour away from open of malaysian markets and we see the malaysian ringgit just a little weaker. investors taking the political instability in their country into account in assessing the outlook for a majority that

could have more fiscal reforms in place. broadly, we are looking mixed in the session, japanese and australian shares rising but investors coming to terms with the latest fed speak, with the debate around the size and scope of rate hikes in the months ahead. that is playing out in the commodity space as well, feeling the pinch from china, given covid cases are rising there and it does appear this optimism around a pivot away from covid zero restrictions could be a little overdone. property support for the sector in china could be something that does boost demand in some sense, given we understand financial regulators are telling lenders to stabilize their loans to developers and construction firms. we are nearing the end of the chinese reporting season and it has been a disappointment.

about 30 companies left to go out of 570. but this looks at the performance so far and real estate firms are the major laggard. 80% surprising to the downside, just a few bright spots, that was in the energy sector. consumer staples as well. haidi: the philippine fast food giant says it is planning to pursue its expansion in china next year. the ceo told bloomberg china remains one of their key markets on the lockdowns are just a temporary setback. >> we tend to focus on our larger businesses in china. today, we have about 486 stores in china.

we see china remains to be one of our pillar markets and we are content to continue to grow in china. for this year, we are targeting to open at least 100 new stores in china. >> that is mainland china, hong kong and macau by the end of 2023? >> this year, we are adding an additional 100 stores in china and we continue to expand with the same number of stores or even more next year. >> how have these lockdowns in various laces affected your business? >> the covid lockdown has impacted our sales but we see this as a justified lockdown. we experienced the same in the philippines and now philippines is enjoying a strong recovery.

in china, we see the restrictions being slowly lifted and we are happy the china market has an appetite for our goods which provides significant growth for the company. gfci remains committed to further growing in china. >> could you give us a sense of where we are on the recovery in mainland china? are you close to recovering fully? >> we are around 70% to 80% versus the pre-covid level. so we expect as china opens the economy, we expect here to go back to pre-covid level. >> i would like to take this opportunity to ask where you think the health of the chinese consumer is because the economy

is in a very weak spot right now. some of the ceos we talked to say the consumer needs a little more time to recover. what are you seeing as far as fnb is concerned in china? once say lift come are they right restaurants? >> we see the qs our industry as well as the dining industry are quite resilient. we have seen this in the past 40 years in the philippines and the last 10 or 20 years in china. we think there will be what they call revenge spending. but in china, what we noticed before pre-covid levels is the -- it is higher than all the other markets in the world. that will continue as well as people start going back to the

mall then to the stores. >> i have a lot of friends in china. i want to get your take -- i think our international audience will be interested. in your stores, does anyone still leave -- still use cash? >> in china, mostly e-commerce is the preference in china. very few use cash anymore in china. kathleen: up next, digital asset broker genesis warns potential investors it may need to file for bankruptcy a fundraising talks fail. the latest on crypto's liquidity crunch, next. this is bloomberg. ♪

haidi: take a look at how we are tracking when it comes to cryptocurrencies. the fallout from the ftx crisis continues to play out. we are hearing the likes of tom brady and seth curry entering regulatory scrutiny in texas, among some of the celebrities being investigated for potential securities law violations due to

their promotions of ftx. ftx tokens in the agreement the moment. a bit of upside when it comes to broader crypto assets. we are also watching what is going on with the digital asset brokerage, genesis, struggling to raise fresh cash for its lending unit, warning investors it may need to file for bankruptcy. our financial reporter joins us now. every day brings something new when it comes to the contagion from ftx. >> you are right. every day, there is something new happening. this time, we understand it is genesis brokerage, a crypto brokerage which has a business that has lent to ftx and now they are getting close to bankruptcy is what we understand from our reporting.

they have been trying to raise $1 billion but are struggling. they have not been able to close the funding. though genesis have told us they are in talks with creditors, it looks like they are pushing toward another chapter 11. that is again taking a toll on the crypto markets. we are seeing bitcoin close to a two-year bottom, so that's another impact the contagion is having on the markets overall. kathleen: regulators are up in arms to a certain extent, some countries more than others. what are they doing, especially in singapore? suvashree: in singapore, yesterday, the monetary authority of singapore came out with a strong rebuttal about the ftx fallout impacting users here.

the monetary authority of singapore had blacklisted, had put finance, not just the crypto currency exchange on an investor alert list, so people were forced to move to ftx and now that ftx is not there, they are pushing tube finance and -- pushing to finance. they came out with a strong statement saying binance is under investigation for some possible contravention of the services act because they are actively soliciting singapore users. when they didn't have a license in singapore to do so last year. that's another fallout of ftx over here and of course, binance is getting larger because the closest competitor is no longer there.

kathleen: now a quick check on the latest business flash headlines. china's offshore bond restructuring program is said to be facing resistance. sources say those opposing it include members of an ad hoc committee holding at least 25% of the outstanding offshore debt. we are told sunac is seeking to swap that shares. apollo has raised $2.4 billion in a long only fund targeting assets including hung bank loans. it will buy new and existing secured debt with double-digit yields and high quality structured debt trading at a discount. banks are increasingly on the hook for billion's and debt funding leveraged buyout says buyers said on the sidelines. -- christian suing is reviewing underperforming businesses. sources tell bloomberg the

exercises scheduled to finish next month and resources may be redirected to other areas, including the deals advisory business. planning more to come on "daybreak asia." this is bloomberg. ♪

kathleen: markets in china and hong kong are said to open in just an hour.

david ingles joining us. what are your top themes going into the tuesday session? you got some big ones to choose from. david: can i go with to today? i know you talked about this already -- more signs financial authorities are looking to backstop financing. whether they are move -- able to move the needle on the property story is another thing altogether. but then coming out, saying the banks need to provide more financing, that's why we're watching property stocks and dollar bonds in particular. the other thing we are tracking is the covid situation. we are nearing the to pay 9000 level which would put us at a record high. interesting to note and i know you talked about this -- beijing reported 1400. the party chief urging both curbing covid but also meeting economic goals, this balance and

fine-tuning they are trying to hit. really how far we need to get to as far as moving this, very weak across many metrics. haidi: what about earnings? what is that looking like? david: we are almost done with earnings season. i'm talking with msci china, about 94%, 95% through. of the companies where we have information on estimates, it has been about -- has been a bad earnings season. a majority have missed estimates and those have been ratcheted down already. we have two more companies reporting today, and throwing this forward, we were speaking with bank of america securities. when you look at the earnings season, you look ahead and one important metric that is a leading indicator, he says is

this -- the credit impulse in china come our own bloomberg metric. has turned positive, so draw the lines between net. this might indicate how earnings look in six months. kathleen: an update on the economy -- everyone has become a china eco-watcher. what's on deck? david: they are all punters. lighten up. we are not getting a specific metric on the economy. we are getting an update of our own bloomberg surveys. we conduct these surveys regularly. you are looking at the latest forecast. this is the november survey and this might start to include how economists are baking in the very early pivots on both covid and property. we will see what these latest numbers look like. they should be out in just over two hours from now.

haidi: definitely a china expert in hong kong. let's look at some of the stocks we are watching ahead of hong kong's opening. tesla and focus after the ev giant extended its recent selloff over growing anxiety over china's return to lockdowns. that potentially puts production and sales at risk. that is it for "daybreak asia." our markets coverage continues as we look at the market open in hong kong and shanghai. the china open is next. this is bloomberg. ♪

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