welcome to daybreak asia. we are counting down to asia's major market opens. asian stocks set for a positive start after moderate gains on wall street. investors are recalibrating the interest rate forecast with the fed standing firm on its 2% inflation goal. adani's roadshow roles into hong kong. plus the outlook for asia-pacific air travel as though region's top aviation tech conference takes flight in singapore. this is the picture across australia as we get to the open. we are expecting to see an upside following on the back of some gains. nothing has really changed when it comes to the market narrative but we did see gains across tech names in particular, helping those indexes bounce off session lows.

we have seen passing of expectations from central banks. the early start of the trading, key starts also high. nikkei futures up .7%. we are watching tech companies in terms of these chinese names after what has been a torrid time nearing a bear market territory. china futures up by a quarter of 1%. shery: we are seeing u.s. futures coming online slightly higher, we are talking about extending those gains. we had a little bit of a hit when the fed governor phil jefferson spoke about sticking to the 2% inflation target for the central bank. we had treasuries rebounding, that 10 year falling toward the 390 level. we had data from orders of durable goods falling by the most since april 2020.

there weren't really dramatic moves in today's session. a bullish session today, a little upside for oil prices after oil has remained lackluster. $10 for the entire year, investors trying to figure out the china demand recovery. it is really investors trying to figure out where to go from here. haidi: potentially a bearish march is where we are heading. the recession risks -- let's bring in our chief correspondent for asia, garfield reynolds. obviously some highlights. the peak terminal rate from the

fed, more and more hot inflation ratings, does the picture change going into the new month? garfield: not really. what went over overnight with balance -- with bonds bouncing back smelled a lot like balancing. it has been such a brutal month. if you are april fully a manager, you are looking at the value of what is in your portfolio and seeing you need to move things around to meet your actual guidelines. hard to take too much of a positive or negative read from what went on the past couple of days. looking forward to next month, there are the big risk factors. we get powell's testimony, a chance for fresh reminders that inflation is too high. they want to get it back to 2%. they are a long way from getting there and wanted to go higher than people might think is necessary. all of that adds to a bunch of

other risks out there. one interesting point i'm looking at is the 10 year yield which has struggled to break above 4%. 4% is an area where it is probably worth buying. we are dipping our toes in. sometimes round numbers are all you've got to go on. william maloney had a nice fibonacci chart at the end of next week which pointed out the 10 year at 3.98 percent is on the retracement of the long decline from the record low in 2020. there's a lot of reasons to think 4% could be sticky. sorry for being such a geek. shery: i love that. let's turn to the value growth geeking this again because we have been talking about this

fate forever. are we seeing a rebalancing toward growth because rebalancing seems to be stalling. garfield: both sides are stalling and there's often an animus toward growth stocks, that seems to be the natural setting for the equities market over the last 20 years or so. where value outperformed, the hopes would be that's the end of the pain trade then we can get back to normal business. which of those two outperforms in the coming months could say a lot about where we are going and whether or not the current regime ends up being transitory. do we get high inflation, lower equities performance, lower bond

performance regime which would be the fear if it takes the fed longer to get the inflation under control than many have expected. if we do see growth outperform sustainably, that might be happy days are here again and might mean the u.s. dollar is going to lose momentum once more and that is something risk at sets outside of the u.s. in particular would be very much hoping for. shery: garfield reynolds, always great to have you with us. we continue to watch the fed because a top official has push back against a growing view the central bank should move away from its inflation target. kathleen hays is here with the latest. we saw the markets being hit slightly when governor phil jefferson spoke. what that he say? kathleen: i guess because they decided it was not something people are watching closely, the fact he was asked about it at a

harvard economics class got him to expound and he started by saying yes, inflation is high and it has been very hard to get it down. the big question when you look at a chart that shows you where inflation is and you see where the target is, the gap is still wide. to the extent there are many voices out there, economists and analysts are saying you can't get inflation down. it's caused by disruptions or a labor force that is just not big enough with interest rates, you are going to have to move that target up 3% or 4%. here's how he dove into that question. >> i am committed to lowering inflation to our 2% target. changing the fomc's longer run inflation objective, however, would introduce an additional risk by calling into question the fomc's commitment to stabilizing inflation at any

level because it might lead people to suspect the target could be changed opportunistically in the future. kathleen: this is the classic defense for sticking with 2%. if you start moving away, they are not serious about it, you lose credibility, maybe lose the power of that decision. that is the kind of response people give. mr. jefferson did say maybe services will start easing up and that will provide some relief. that's the big bugaboo. labor market type, they are hard to bring down. haidi: you had the top boj official in new york city insisting the central bank has not hit its 2% targets. kathleen: let's talk about who it was who spoke today at the center on japanese business and economy at the columbia business school. he was giving some reflections on various aspects of the economy, on inflation, boj

policy. he's one of the outgoing deputy governors, however, he was very focused on the 2% target. he said we haven't met yet, so i asked him if you look at the chart like this, if you look at your headline inflation, it is at 4.3%. if you take out your fresh food, it is at 4.2. if you go to taking out fresh food and energy, that is the core of core and you get to 3.2. but if you take out all food and energy which is similar to the fed's core inflation rate, you find it is only 1.9%. haven't you hit your target? aren't you afraid you're going to make the same mistake the fed did? >> we don't want to repeat the mistakes of the fed and ecb, but

also i have to say we don't want to make the past mistakes or premature tightening before the 2% target level. kathleen: fed officials have worked for the fed officials and in the past the boj tightened too quickly. the classic one is near 2000 with the majority on the boj deciding they need to hike rates even though the economy was weak. he's one of only two people who voted against it. he wanted more data. he didn't think he was ready to do it yet. that's why this argument becomes all the more pertinent and all the more interesting. haidi: indian conglomerate adani brings its roadshow to hong kong. we hear executives stress the

ability to honor debt obligations. annabelle is tracking the details for us. very close to home for us at bloomberg had course. what are we expecting? annabelle: let's set the scene for others out there. the adani roadshow is coming to hong kong. it's three days over the course of this week. today it's going to be coming to where i am now. it will be on level 41, the barclays office. they are hosting the event. the key focus is to bring adani executives together with investors. it does appear from the schedule we are seeing that it appears to be small group investors. the key faces we are going to be looking for, the adani group cfo

and the head of group corporate finance. other company executives also in attendance. shery: what did we get from day one in singapore? annabelle: this is about trying to reassure investors. for people in attendance at that event, the key message was the adani group had enough cash on hand and can pay its debt obligations. on top of that, it has a credit silty we believe they told investors is worth $800 million. in terms of the market reaction, it did not do much to stem that selling. we saw the likes of adani enterprises sliding down near 10% and you can see other stocks, adani transmission, adani green -- 5% is the limit.

in terms of debt, that's a different story. these are bondholders in attendance at these meetings. the two at investor day in singapore, they are still interested in buying adani debt. this is a good buying opportunity, given the underlying fundamentals of the company they say are solid. at least two other participants said they are cautious. so we will see what comes out of the meetings taking place in hong kong today and also tomorrow. shery: annabelle with an update on the adani roadshow. let's get to vonnie quinn with the first word headlines. vonnie: the u.k. and european union have been reached a new deal on northern islands trading arrangements. it paves the way for warmer relations after voting for brexit. it streamlines northern

ireland's access to u.k. and european markets. >> for as long as the people of northern ireland continue to support their businesses, having privileged access to the eu market and if we want to avoid a hard border between northern ireland and ireland as we all do, there will be some role for eu law. vonnie: the u.s. treasury secretary says washington will support ukraine's economy for as long as it takes against russia's invasion. yellen said usaid will help sustain public services and praised the ukrainian government's efforts to fight corruption and make sure foreign funds are used responsibly. hong kong may scrap its mask mandate as early as march. both indoor and outdoor masking requirements may be removed at the same time. face coverings may still be needed at most places, including hospitals. it has lingered as the city

tries to portray itself as open for business. elon musk has regained his position as the world richest person. his wealth has been buoyed by a nearly 70% surgeon tesla stock price this year. tesla shares rose 5.5% monday, taking musk's net worth to about $187 billion. global news powered by more than 2700 journalists in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: as china opens, we will highlight key issues to watch for. but first, the association of asia-pacific airlines director general joins us for a discussion on the air travel recovery. our exclusive interview coming up from aviation festival asia in singapore. this is bloomberg. ♪

>> you can measure interest rate sensitivity for companies and companies that have large debt, be very wary. don't own them endless they are very cheap. there are a lot of companies in the means. community that have huge debt and as that gets repriced, they are likely to struggle. so the notion high interest rates are going to hurt the value of stocks is way too simplistic. haidi: some of the market heavy hitters on the impact of high interest rates. our next guest says investors have finally given up on fighting the fed. the real change has been on the back end of when the pit it will come. joining us is a senior global macro specialist. there has been this repricing underway.

when you take a look at expectations for a pivot for a cause or cut, has that meaningfully changed? >> i think it certainly has. the focus is when the fed is going to stop its hiking cycle, when it reaches terminal. but the market has been most aggressive around rate cuts. at one point, the market expected to cut upward of 200 basis points after it reached that terminal value. that has come in a lot. it is certainly making its way into the market and i would say a lot of the risk rally we have seen at the end of last year is based on the view that the fed was going to cut aggressively. with that being repriced and pulled in, you see risk assets trying to find their way in an environment where it is somewhat

volatile around that comment. haidi: what is also volatile is the china reopening. are you looking at terms to get exposure to that? what are the opportunities you are seeing given there is so much repricing? marvin: we have a team in hong kong that follows it closely. to really stay on top of what is going on, their workaround data shows it is continuing to move along. we think there is room for that trade to run but we will probably focus on it with china before seeing it move, but it is going to start in china and that's where it is easier to

focus on right now. shery: we have seen this chart on the bloomberg showing how a rising dollar has pummeled those asian stocks. it comes to the broader immersion -- emerging markets complex, given the weighting of china in part or ems, is it a positive trade? marvin: it is as we move through this opening process. a repricing of the fed is just this massive hit -- massive hammer that's going to keep em on its back foot. you have to be selective in an environment where the fed, the dollar and higher u.s. rates can reprice anything on a given week given how volatile prices are. shery: would you venture into those markets that have aggressively hiked even before the fed?

marvin: i think higher real yields are going to be an important part of the story. understanding of commodities but not necessarily brought economies but looking at the actual things coming out of the ground and whether or not you can make a case demand for that continues even under an environment of economic uncertainty. that is how you have to approach it. shery: always good to have you with us. you can get a round up of all of these stories we discussed in today's edition of daybreak. also available on mobile and the bloomberg app. customize your settings so you can get the news on the assets you care about. this is bloomberg. ♪

shery: we are counting down to the start of trade in tokyo. private equity firms bain capital and kkr are set to be among the suitors in the next round of bidding for a majority stake in fujitsu's air-conditioner manufacturing unit. numbers to around 30 minutes with economists expecting a 2.9% decline on the year. the nikkei reports nissan will invest $250 million to expand powertrain production at its plant in tennessee. in south korea, it is the deadline day to buy shares of sm entertainment at around $90 each. the industry ministry says korea will move to reduce reliance on china for key roles such as lithium, nickel and cobalt from its current 80%. defiant ministry ethics committee a set to meet later with -- here's a check of the

business flash headlines. brookfield management is seeking at least the billion dollars for a second fund to invest in energy transition. it plans to start the fundraising by midyear and may eventually raise as much as 25 billion dollars depending on investor demand. brookfield's renewable energy strategy includes investing in businesses that want to do carbonized but lack the capital or know-how. voters report tencent established a development team to work on a chat gpt-like product. it is likely to incorporate the tencent ai trading model. tencent reiterated its previous statement, saying it is conducting research on a chat gpt tool technology. chinese ev maker early auto expects first quarter to reach

$2.7 million as a rebound product line helps to win sales from companies including tesla. the car is fitted with more compact batteries, making it more resilient to the increasing cost of lithium. the chairman claims last year's growth strategy help to cement your ship in the family suv segment. coming up next, mapping out the future of post-pandemic air travel. we get the outlook from an industry leader as aviation festival asia gets underway in singapore. this is bloomberg. ♪

annabelle: you are watching

daybreak asia. already minutes away from the opens in tokyo and seoul and half an hour into the session for the s trillion benchmark. what we are seeing so far is modest gains across the screen. we are capped with anyone percent move on either side but what is interesting is we are seeing perhaps stocks taking their cues from the moves in wall street and investors starting to take a little bit of a breather around these concerns with the fed, the inflationary backdrop as well. fed officials say that 2% target for cpi remains realistic. in terms of where we go from here, a lot of that correlation comes to what happened in the u.s. session. s&p 500 futures trading fairly flat. we can see the s&p 500 has been testing a key technical support level. it did manage to push off this which tells us -- that support

could be a line in the sand for the benchmark. shery: we are also following oil prices, a little bit of upside today after prices fell in the new york session. prices could return to triple digits later this year as consumption climbs and the market tightens. the ceo told us demand is expected to hit record levels in the second half of the year. >> the policies are he well set. transportation, we are on a rapid past to decriminalize a and electric vehicles. manufacturing of cars has to catch up with demand. as i said earlier on, there are about 6 million electric vehicles registered in those three centers last year. that is going to grow and slowly

impact oil demand. one of the points to take away is most people want to move in that direction. most people are putting investment plans into that but it takes time. it takes time to build a fleet of electric vehicles and factories behind that. it will be progress but we will have to measure it year by year. >> give a sense of where you expect the price of oil going. we are trying to figure out how much russia is selling oil to asia. >> the logistic cost of getting russian oil all the way to asia is high. the asian customers are demanding discounts. i think the net thanks to rush are relatively low. in terms of price direction and where we think things are going, in the very long-term,

investments -- we have decline and we are going to need new sources of reduction in the future. in the short term, we are quite comfortable at the moment. the market has got a reasonable level of stock for the next six months, but we expect things to tighten in the second half of the year. the prospect of higher prices in the second half of the year in the 90 to 100 ranges is a real possibility. haidi: let's get you to vonnie quinn with the first word headlines. vonnie: the fed governor, phil jefferson, is warning against changing the central banks 2% inflation target. he believes altering it could destabilize what he calls world anchoring expectations and called in the central bank's commitments to its goals. >> i'm committed to lowering inflation to our 2% target.

changing the fomc's longer run inflation objective, however, would introduce an additional risk calling into question the fomc's commitment to stabilize inflation at any level because it might lead people to suspect the target could be changed opportunistically in the future. vonnie: adani group executives are said to exaggerate the ability to generate cash. the group said it had enough money to repay debt issued over the next three years, it said. the events in singapore and hong kong marked the latest efforts to reassure investors following the hindenburg report fallout. the head of norfolk southern says they will start tearing up the tracks and moving contaminated soil in east palestine, ohio. that follows the drammen and toxic chemical spill which has put pressure on the railroad and

the by demonstration. trains will run at reduced speeds while the tracks are getting fixed. hong kong export plunged in january, affected by an early-morning new year and waning global chinese demand. overseas shipments fell by 37% while imports fell 37%. the finance secretary said slower economic growth will continue. though construction should each that should ease some of the pressure. i'm vonnie quinn. this is bloomberg. shery: asia's largest aviation tech event begins in a singapore today if. covid restrictions have disappeared but airlines are still struggling to find staff and travelers are facing skyhigh ticket prices. let's bring in our special

guest. >> aviation has seen better days but there are challenges ahead. nonetheless, asia is expected to lead the recovery. some data suggests for every two seats added globally, one comes from asia. let's put it all into perspective with the director general of the association of asia-pacific airlines. talk to us about the pace of recovery. we talk about how hope hinges on china's reopening. how quickly, what does that mean for the recovery in aviation? subhas: we always talked about china being the elephant in the room where the elephant that is not in the room. now that china has entered the room, it is a case of the awakening of the sleeping giant. we can look forward to the pace of recovery really picking up. last year, japan, korea, some of the big markets only opened up

in october and if you look at the recovery, the pace of recovery was three times more compared to 2021. at the second half was six or seven times more. with china being the largest market, 40% of the asia-pacific overall traffic, it will be a real booster for the recovery process. haslinda: some have suggested china could help recover to pre-pandemic levels by the end of 2023. is that optimistic? subhas: we can be optimistic but i'm not sure we can have recovery by the middle of this year. if we can get to 75% by september and then be helpful for a complete recovery. haslinda: jet fuel prices are about 100% higher than a year ago. how would that count as a recovery story?

subhas: there are quite a few headwinds. if you look at the aviation picture, it is very promising. the u.s. dollar being high and the cost for airlines denominated in u.s. dollars, that is a concern. jet fuel prices are 80% higher than the overall prices of brent crude. that is going to be a dampener for airline recovery, but also things like inflation and recession in western countries. many are expecting a deep recession and that will affect the propensity for travel. asia-pacific in the past have been over -- have been able to overcome these challenges and inbound traffic will be very strong. haslinda: do you expect to see consolidation over the course of

the three years of the pandemic? we saw about 100 new airlines coming to the floor due to consolidation. now that normalization is taking place? subhas: i think everyone wants a piece of the cake. demand is there. asia is expected to triple in terms of passenger traffic, so it might have been put back by a few years. haslinda: demand has driven prices somewhat. will that normalize or is that the new normal? subhas: i think it will normalize. in terms of pent-up demand, it is up six or seven times what it was before. in terms of the number of flights, we've seen a doubling of flights from the asia-pacific region. there is room to grow. airlines are cranking up their resources to meet the pent-up

demand. haslinda: when do you see that happening? subhas: toward the end of this year, i think airlines will be able. haslinda: quite phenomenal we are seeing record orders of airlines or jets for india. do you see india on the cusp of massive growth? what trend do you see developing? subhas: india is interesting scenario because they have revamped their whole aviation industry. it is a new, rejuvenated, privatized air india and it's driving most of the orders from india. if you look at 2022, i said china is the elephant in the room but india was the elephant in the room. if you look at some of the top tourist destinations like bali

and bangkok, india appeared in the top 10 already. together with indonesia, i think we will see the asia-pacific market recovery. haslinda: what kind of growth are you anticipating in the next two or three years? subhas: we will see india several times more than it was in 2019. haslinda: can you define that? subhas: anywhere between four to five times more. haslinda: thank you so much for your insight today. life from the aviation festival happening here in the lion city. haidi: equality is going to be one of the topics in discussion at the air show. we know on so many issues of representation and equality, particularly in the corporate sector, a lot of gains have been

lost since the pandemic and lockdown. but in aviation in particular, we have seen women hardly make any gains when it comes to the presence on boards or leadership positions in the past four years. targets when they are voluntary in terms of advocacy don't appear to be working in this instance. it is still seen as a hard to crack men's club failing on gender progress. women typically hold 13% of executive posts. the representation at board level is 21% and only when -- only one airline, that is jetblue, has equal split among executives. shery: pilots, air traffic controllers, executives, largely male. cabin crew, predominately female. let's look at some of the companies that have done their share in getting rid of this

bias. you mentioned jetblue. there is cathay pacific, only one canadian tour operator achieved an equal split of women and men directors according to data collated by bloomberg. you can see that boardroom equality and gender parity by some of those companies but still a long way to go. one woman who has successfully made her way into the executive ranks is the ceo of hong kong express. she's among the leaders we are talking to at aviation festival asia. stay with us to hear from some of the biggest players in the region. coming up next, we update you on china's commitment to net zero as the economic recovery picks up and we count down to the national people's congress.

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demand as growth rebounds. bnef's china's head of research joins us now. how much new capacity do you expect china to add this year? >> we are expecting china to add around 162 orders of wind and solar, this is already a high number. last year, china added around 120. this year, we are even more optimistic. the wind installation will rebound. it has lagged for two years but this year we will recover to our strategic level. for solar, we see the momentum will be capped as china build more residential solar. shery: how does that compare to the target set by the five-year plan? nannan: it is still not enough.

the load program has set up very ambitious targets by the end of 2025. those wind and solar have to ramp up a little bit to reach that goal. basically, we are looking at 160, but to achieve those targets, each number has to ramp up to more than 200 for this next year. haidi: what are the main challenges when it comes to the approval and the rollout of new projects in china? nannan: there is some challenged china's renewable sector is facing. the projects built in the remote areas in china in inner mongolia, for those, they have to wait for the transmission lines to transfer the power to

coastal provinces. also when these projects were commissioned, the construction cost is rising. whether it was very competitive compared to coastal provinces is something we have to watch. for the projects in the coastal projects like the smaller scale solar and wind farms, they are facing more distribution bottleneck. a lot of these generation aspects reduce power at the same time at the same time the market has been crushed. that creates a lot more competition. shery: the latest when it comes to china's energy mix. plenty more to come. this is bloomberg. ♪

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go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. shery: we have breaking news out of japan. we are getting the industrial production numbers for the month of january. the preliminary figure is a much eager protraction than expected. that's down 4.6% for the month of january. the expectation was for contraction of around 3% and we were gaining ground in the previous month. the month-to-month figure, a bigger contraction than expected.

the year on year figure a bigger contraction than expected for the month of january. we were already expecting industrial production to take a hit given the weaker export of automobiles had seen in the previous month, but this is bigger than we had bought. retail sales numbers coming in right now. this is a beat which shows consumption is still strong. we are talking about retail sales numbers month on month, a both of 1.9%. a much faster acceleration than thought by economists. the year on year number is a jump of 6.3%. we can see the consumption side of things still remains strong. haidi: when it comes to wage hikes in japan, it is making those stocks more appealing. for more on this, let's get to our senior asian stocks reporter in tokyo. with these negotiations along

with the tight labor market, are we potentially going to see that rotation back into equities? >> i think that is possible. we just had retail sales data that was stronger than expected and i know that's not how -- what the data people look at usually. that shows the strength of consumption. the bigger point is the strength of negotiation is likely related to the highest wage increase in about three decades. that is coming with high inflation, but i'm pretty sure any of us here would feel not bad about making the highest wage increase for decades. that could have an impact on sentiment. many investors are starting to think about the possibility that

inflation could take hold in japan. shery: nobody would complain if you get more in terms of salaries but that's also because you have higher inflation and higher prices in japan. how does that complicate the outlook for the incoming boj governor and what repercussions could that have for the markets? hideyuki: it is a tough question, but one thing i can point out is japan's labor market seems to be very tight at the moment. a lot of companies talk about how hard it is to hire people and if you look, the jobless rate has come down quite a bit. there are structural reasons for this. during the last decade, japan has managed to increase the workforce by adding more female workers to the labor force. but the pool seems to be

dwindling. that seems to suggest inflationary pressure might stay here for a longer time than many think. shery: bloomberg's asia stock reporter joining us from tokyo. these are some of the stocks we will be watching when trade starts in japan and south korea. hives offer to buy shares of s&m entertainment set to expire on tuesday. private equity firms bain capital and kkr said to be among the suitors selected for the next round of bidding for the majority stake in fujitsu's air conditioner manufacturing unit. the nikkei reporting nissan will invest $250 million to expand powertrain production at its plant in tennessee. japanese stocks tied to tourism could be moving after the government said it would ease

covid testing requirements for travelers from china starting march 1. keep an eye on these airlines and stocks related to tourism. haidi: let's take a look at how the dollar has been trading. we are taking in the early session a bit of a slide when it comes to the u.s. dollar amid the environment of lower yields as well as the impact of a stronger pound trading against that. we are watching in terms of the repricing when it comes to freight expectations. the aussie inning a little traction before we get components of gdp data coming through. over the next hours, abilene shares and their consumption of volatility in the market. this is bloomberg. ♪

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haidi: we are counting down to asia's major market opens. we will see if those gains we saw on wall street or extended in the asia session. there was not a strong convictions in the moves higher after tough -- reiterated a view perceived as hawkish. we will see whether china's national people's congress can provide momentum. >> you got to wonder whether gains really came from that month end rebalancing. not much changed in terms of fresh catalyst. rate expectations. let's take a look. annabelle: that is right. no real impetus for wall street to have had those moves little higher in the prior session. the open is upon us for japan, korea and cash treasury's peer the 10 year yield looking like this.

we are continuing regionally to see signs of economic weakness coming through. in japan, that just showed up in the last 10 minutes, we have industrial output numbers, a contraction of 4.6% on the month. the estimate was for a decline of 2.9%. quite a big miss. industrial output on the year as well down 2.3%. japan retail sales offering a brighter picture. rising 6.3% on the year. the estimate was for a gain of 4%. we heard from the boj governor, speaking before parliament in the second confirmation hearing, reiterating the need for the boj to stick with easing policy settings, that is until we see inflation come through driven by wage gains rather than cost factors. sticking with that for now. in terms of market sentiment, morgan stanley among those saying that if we do see yield

differential persisting between the boj on the fed, it opens the yen up to moving to the 142 level pair that could be a supportive factor for japanese stocks. broadly, the nikkei rising fractionally at the start of trading. let's change to see how the open is coming online in korea. one big corporate story we are watching today is the battle for control of the cape pop giant as an entertainment. a tentative offer to buy shares. that will be valid until march 1. markets will be shut tomorrow, so the market expires today on that. keeping an eye on those stocks. the korean you want is in focus. we are looking stronger in the open, putting it in context, it is trading around a three month low against the dollar. that is really with fears of recession and inflation and what it means for the fed and central banks. changing to see how australia is

going, one hour into the session for the xx -- asx 200. one higher economic data point, retail sales are expected to be indicative territory pair that is as recessionary fears build in australia. . the odds of recession coming in at 1:3. oil is looking higher, wti encore's 40 a fourth straight monthly loss. again, down to fears of a deterioration in the global backdrop. shery: let's bring in our next guest tour remains positive on domestic consumption and says visibility on the reopening trade is lower. christina woon at aberdeen. good to have you with us. not a reopening trade was supposed to be a clear-cut one. what will be the next leg up for chinese equities? >> we have seen market pricing

in reopening quite quickly since we last spoke. now we us -- we are sort of seeing investors take pause and see whether numbers actually show momentum in the reopening trade. all eyes on the march session to see if there will be progrowth policies. these are things we can watch for, but for now we have to be selective. shery: what do you like so far? christina: we are still positive on consumption being a key driver of growth for china this year. but as we have discussed, the way share prices have gone up across the market on this china reopening trade, we have to be selective within that. we have seen mobility pickup that has been ok. light consumption has been all right as well. where i think that is not really

translated into numbers so well has been in consumer durables. we do have to watch and see how that plays out. that is also where you see more caution in the market. shery: do you have a preference when it comes to onshore versus offshore? christina: so far, the trade within these two, onshore is more positive. you get access to quite a lot of domestic consumption across the entire range from the lower end of retail to the high end as well. from consumer durables to later consumption names. the onshore market gives you a rich universe to play within. offshore can be dominated by chinese internet names, which investors are starting to show caution after the big run-up since the end of the news flow.

haidi: markets were correct -- were quick to scramble across the reopening reality. what is the volatility? at which point are you expecting the in this leg up? do we expect to get a meaningful catalyst? >> you are right. while all eyes are on the march session, obvious expectation is not any big bang stimulus. the reason for that is the government has been quite clear in talking about sustainable growth. for the names that have -- on the hopes of a very strong infrastructure push, that is where we need to be careful. that could introduce volatility in the markets. if some of these expectations are disappointed. haidi: a lot of concerns always over who is going to be the next regulatory target. are there worries we could see

financial firms come next? >> there is definitely worried that could always be a target. the question of national -- among investors is always something on people's minds. i do think that is not really something the market has priced without. we do need to be careful around financial firms. there are ways to play the financial markets within china. you just have to be a bit selective with that. haidi: christina woon at aberdeen. let's get the vonnie quinn with headlines. vonnie: the u.k. and european union have reached a deal on northern ireland trade. it paves the way for warmer relations more than half a decade after britain's voted for breakfast -- brexit. the deal, known as the windsor

framework, streamlines northern ireland's access to u.k. and eu markets. >> as long as the people of northern ireland continue to support their businesses, having privileged access to the eu market, and if we want to avoid a hard border between northern ireland and ireland, there will be some role for eu law. vonnie: janet yellen says washington will support ukraine's economy for as long as it takes. speaking during a visit to kyiv, yellen said usaid will help sustain public services. she also praised the ukrainian government's efforts to fight corruption to make sure foreign funds are used responsibly. adani group -- generate cash. investors taking part told bloomberg the group said it has enough money to repay debt maturing over the next three years. with an $800 million credit line.

the events in singapore and hong kong barth their latest effort to reassure investors following the hindenburg report fallout. hong kong may scrap its mask mandate. both indoor and outdoor masking requirements may be removed at the same time. face coverings will still be needed at high risk places. compulsory masking began almost three years ago and has lingered even as the city launches a tourism campaign. global news powered by more than 2700 journalists and analysts in more than 120 countries. i am money could this is bloomberg. haidi: let's look at some of the movers. annabelle: sticking with a covid theme, given we are on a watch for hong kong to end its mask mandate imminently. in japan, we are continuing to see easing of testing requirements. this is for travelers from china and the new rules kick in tuesday. the current testing for all passengers on direct flights

from mainland china is going to be scaled back to sample testing around 20% of passengers. down from 100%. airlines will be able to increase the number of flights going between china and japan and as well the number of destinations that can be offered. the requirement of proof of a covid test within 24 hours departure will stay in place, but we are moving forward. these are the tourism stocks. 10 minutes into the session. that's move on. korea is underway and we are watching stocks in the k-pop space. the big story is around the continuing battle for control of the entertainment giant sm entertainment. as we know, it has already acquired a 15% stake from the founder of sm entertainment and has an offer in place to acquire a further 25% through a tender offer of valuing shares of sm entertainment at 120,000 yuan.

we are already there today. sm is vowing to boost shareholder return ahead of the deadline. it expires wednesday. markets are shot, so it is only valid until today. it is saying it wants to fend off what it calls a hostile takeover event. shery: the drama continues. hong kong electricity supplier missing full-year profit forecasts. the ceo richard lancaster joins us with the outlook including how they are transitioning to clean energy. next, capital a group ceo turn -- tony fernandes discusses recovery expectations. this is bloomberg. ♪ what's it mean to be ever better? it's your customers getting what they ordered when they expect it. it's having an ecommerce solution that scales with your business as you grow. it's using innovative technology

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you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh >> you can be optimistic, but i

am not sure you can have the recovery by the middle of this year. if you can get to 75% by the end of the northern summer, september, we can be hopeful of complete recovery by the first quarter of 2024. haidi: the ap director in the hopes of asia-pacific travel recovery. let's head back to the festival in singapore where bloomberg -- is standing by. >> the airline industry banking on china to drive growth to pre-pandemic levels. but for asia, that is not happening soon enough. china reopening has disappointed in terms of travel demand. 20 fernandez, ceo at capital a, of course it was rebranded and diversified beyond aviation. >> great to be here. >> this recovery, how quickly has it been? how slow? >> it has been fantastic.

the main obstacle is getting warplanes back into service. bringing 204 planes back is no small feat. our engineers have done an incredible job. we now have 150 aircraft. what was initially predicted to be finished by may of next year will be may of this year. we will have all of our aircraft back by june. demand is fantastic, as you will see. i think air asia x said they were expecting greater demand, but they are doing longer hall. short-haul, demand is fantastic. we have been full every day destinations. we are opening 19 destinations. china is back. >> if china is back, are you going to ramp up capacity and other new -- >> yeah. we were the largest airline into china, apart from chinese

airlines. we are looking at five new routes. we have had tremendous support from the chinese government. what i was not sure about was when china would happen. it is happening. i think by the third quarter we will be almost back to where we were. china made a 15% of our revenue and 16% of our asked. it is a big part of our market. further moment, because we are short on aircraft, but i may all of our aircraft will be back. >> any reason to think you may ramp up fleet size? we heard earlier that recovery could happen in the first quarter of next year. >> for us, we should be, from a revenue standpoint, 20% down. even though we've still got 40% of our fleet not up. i would say by june or july, we will be back to 2019. i think really better, margins

better, cost better. obviously the environment is very good. i think airlines have always underpriced their product. people are getting a little bit of a shock because they see prices a bit higher but really we have been behind the curve on that is an industry. people are now pricing appropriately. >> high prices are here to stay? we are talking 25% from a year ago. >> in our case, it is almost 30%. it is not high prices, it is a real prices. all of the airlines are saying they have underpriced for too long. if you look at comparative products, airlines have been cheaper. the fares you are seeing now are what really we should be pricing at in 2019. >> might you have to raise prices? we heard from -- suggesting while prices could get the three to just year end. >> who knows?

i think there is plenty of supply. i think there is a lot of speculation. oil was at $160. today it is $102. i feel, of course it isn't my interest, that oil is high. certainly the demand versus supply is saying that. i am not here to predict where the price of oil is. revenue elasticity is pretty good. i think people are prepared to pay. after not having traveled for three years, people's value of travel has gone up. people value it more. when you do not have it for three years, you see how important it was. >> revenge travel will subside at some point. i want to touch on your expansion. some say it is not a great model. it still relies on the old

platform, the old configurations. are you getting great pricing? >> we are pretty much airbus. -- recorded record results last week. today -- but they need lift. we also have an order of the 330. there were engine issues, those are resolved. pound for pound, when you talk about boxing you say sugar ray leonard was the best boxer. [laughter] pound for pound, the airbus 330 is a great aircraft. a superb aircraft. we still believe in it. not everyone does. many people did not believe in the leap engine when air asia was their first customer. now it is the largest engine. malaysia airlines bought the 330 as well. >> you have gone beyond airlines

that are looking at flying taxis. >> covid was -- ok. this is stage two. i started an airline 21 years ago. it is much harder when you have 200 aircraft land two. during covid, we had to survive. our biggest asset was data. a new business that was doing a little bit here, but it was logistics. and then we had a strong aviation services company. at capital a, we have an aviation services group will be a world beater, engineering in-flight ground handling and consulting. and then the next is logistics. this time we have end to end. we have a fantastic website. so we decide to sell other airlines. ride hailing seemed a natural extension for us. most people need a taxi from the airport. so that was a natural extension.

we started at 20 rides a day and are up to 20,000 today. everything we do is payment related. so, we've got five great divisions and a few more we are working out. >> what is the timeline for expansion for flying taxis? you're looking at not just one market. >> first of all, there's land taxis. we are in three markets already, hoping for a fourth in singapore. flying taxis will come. we do not think the product is ready yet. we put in an order for some. but we think the pricing isn't quite there yet. governments have to sort out air traffic. it is a couple of years away, but it is definitely going to happen. for us right now, it seems to be more of a premium product. but it will come. i think it will be dominant. >> one more restaurant.

-- question pair the impending ipo for your digital unit. >> lots have happened. we are going to do restructuring. we hope to announce that by april. that sort of the blocks in places. we are creating a new company which will haul our assess and we are integrating them much closer. both will be profitable. the timeline is getting closer. >> within the next 12 months? >> longer. we are building scale now. >> 24 months? >> for sure. >> new york stock exchange? >> i am not the banker. i would like to. personally. america, whether it is new york or nasdaq. that will depend if there is appetite.

whether we built a business that is worth it. these last three years and covid has been hell. no two ways about it. but we are still alive. we are still relevant. [laughter] >> that is a good sign, the fact that you still want to interview me. you are rare -- you are wearing red, which i believe is in our honor. >> always the optimist, tony fernandes, a. haidi: capital a peer you can watch that interview and catch up on any past interviews on the interactive tv function. you can dive into any securities of bloomberg functions we talk about and become part of the conversation. send us instant messages during our shows. check it out. ♪

shery: we will hear from the biggest players in the region that aviation festival. first, the add-on a group brings the roadshow to hong kong, seeking to reinsure -- reassure investors there's plenty of cash. this is bloomberg. ♪

>> executives from adani preparing to meet investors in hong kong. the group is on a roadshow to try to reenter -- reassure investors it can meet obligations. what is on the agenda? what has been the messaging? annabelle: it is a three-day roadshow taking place. we had single -- singapore was the kick off. it continues tuesday and

wednesday in hong kong, in a building i am in now. the barclays offices will be hosting. they are inviting other banks like deutsche's, bnp paribas and others. they will be holding smaller investor meetings over the course of the day with an investor luncheon in between. the message so far, what we have heard, this is an event to reassure investors it has enough cash to honor its debt obligations that are maturing and also has a credit facility worth 800 million dollars. that is the focus they are pushing today and tomorrow. shery: the stock round has not eased. we are seeing ripple effects for esg investors. annabelle: that's right. we continue to see stock selloff progressing. in mumbai, $2995 closing around -- adani closing around 10%. green energy is one to note as

well, given the focus we have on the esg investment angle. jp morgan's investment arm now wiping their esg portfolios of adani stock. the reason i believe they are doing this is because these funds are registered under article 8 rules, inca eu convention that says they need to push an esg agenda. what we understand is that adani group itself has a collateral web. if you are investing in the renewables arm come you could also be investing in fossil fuel energy. jp morgan's asset management arm is heading for the exit. shery: annabelle in hong kong.

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haidi: data coming out of australia, critical retail sales number month on month we are seeing a gain of 1.9 percent. that is better than expected. and an acceleration from that contraction of almost 4% in december. it really had a lot of economists worried we were seeing the impact of faster inflation, high cost of living and rising interest rates squeezing australian consumers. higher than expectations. we are also getting numbers on it comes to exports of gdp, one .1%. a little lower than expectations. again, bouncing back from the contraction of .2%. the account balance of $14.1 billion bigger than expect than the $5.5 billion for the fourth quarter. we are seeing a bit more resilience when it comes to the australian consumer given these concerns about the fixed mortgage cliff cutting into retail sales and consumer can

lead to that consumer sentiment but also the potential impact of chinese reopening. haidi: -- shery: implications for the broader asia-pacific. especially when it comes to earnings season. our chief markets editor has been sifting through the data. what stands out so far? >> it has not been the best earnings season. i have to caviar that with the fact that we are just halfway through and we have major markets like hong kong, china, taiwan and southeast asia that have yet to report. a lot of what you are looking at now is down to what they are seeing in japan. we are about halfway through overall. in terms of where we have the data available to compare that to estimates, the majority have missed. about 52% of 600 companies,

roughly. one third have reported something higher than estimates. in terms of highlights, all -- well, the majority of stocks in all 11 sector groups have reported negative earnings surprises. there are bright spots across i.t., which on aggregate has been 250% higher. on aggregate, of course. in terms of where you are seeing big misses, industrials and staples. i will end on a bright spot. energy and utilities on the top line have so far been the standards as far as beating revenue concerns. haidi: we have seen a strong energy theme. a look at what earnings season starting to wind down. hong kong based energy c.o.p. missed estimates fair they fell 89% from the previous year.

the company says its performances affected by australia's operating loss and disposal loss. joining a set of hong kong is at the ceo richard lancaster. always great to catch up with you. talk us through these numbers. perhaps expectations that some of these drags were one-off factors and what can be lingering. >> if you strip out energy australia, the rest of our group held up well. that is despite a challenging time in 2020 two with an energy crisis coming on the back of the covid recovery. in our core markets of hong kong and china, we have had steady, stable earnings. energy australia was a tough year. we saw a combination of the shock of energy prices rising in the middle of the year. we had sold electricity at lower

prices, then with plant problems and a lack of coal supply to a number of plants, that meant we were having to buy expensive electricity to supply customers. energy australia tomato if year. core markets, good solid performance. for our partnership in india, there was a one-off disposal loss. haidi: breaking news at the moment, hold on a second. we are hearing that evergrande has failed to win creditor support as key dates are looming for this property developer in china that has faced many issues in the past. we knew that they made bond payments in grace periods before, eventually stopping remittances. we have learned they have failed to win creditor support as key dates are looming. the embattled developer at the heart of china's property crisis has been in talks with a

subsidiary to repay funds following a third party loan sparked top executives in the past few weeks. we continue to watch for the release of the findings of the independent probe. that could be a step forward to an eventual deal in debt restructuring. right now we are hearing they have failed to win support. this as the property sector in china continues to face challenges. haidi: we will get more when it comes to the outlook for growth in china with richard. i want to go back and talk more about the options when it comes to energy australia. are there avenues to boost profitability into the next year? you had considered options to sell. is that still on the table? >> we see australia as an important part of our portfolio. with the energy transition and the need to d carbonized, there is a lot of call on capital.

we are seeing that across our polled folio. we need to support our hong kong market. our core markets in hong kong and china will get the bulk of our investment. we are being stretched, if we are needing to support our investments in india and australia. we found a good solution in india with a strong financial partner, a joint venture that is a good platform to see the energy transition grow in india. we would be keen to find partners to work within australia. whether that is at the corporate level or a project level. this is a huge investment. working together with a strong financial partner and operationally strong companies is a good platform to see through all the change that will be needed in the electricity sector.

go you were talking about india. what is the market output there? also china? >> we have seen good prospects for both china and india. these are you nor miss markets. they are needing to see through a ambition that will require private investment. there are plenty of opportunities there. the key is to find those profitable opportunities. it is not growth for growth's sake, finding the opportunities that fit your capabilities. we have demonstrated that in china. we have a track record of investment there. we are building more wind farms and solar farms and investing in renewable energy in china. in india, we are looking not only at renewable energy but transmission lines, which are crucially needed to bring renewable energy from the

deserts and windy areas to the cities where people demand electricity. good opportunities in both markets. >> going back to energy australia, you are also looking to track partners for investments in renewable generation. it is either option still feasible? do you see challenges specifically for the clean energy transition? >> australia is a complex market. we have a strong customer base. we also have generating assets that will need to be replaced. there is a lot of investment going into renewable energy but not a lot of attention has been paid to the storage of that renewable energy. that is where we are focusing. whether does battery storage, hydroelectric storage or just fast start gas generation that can fill the gap. that is where we see good

opportunities for investment in australia. shery: is there a broader likelihood we see acceleration of other coal plants to get towards closures sooner than expected? >> that would be ideal. but the reality is that we need to keep the lights on. you cannot close a coal-fired power station until you have a replacement not just built, blood running smoothly. this system has to be ready for the closure of a coal-fired plant. what we have seen is that the energy transition that the new capacity being built is taking longer than anticipated. however, the pressure to close coal-fired power plants earlier is rising. this is the challenge we face. how quickly we can get replacement capacity in place we can accelerate. haidi: richard lancaster.

good to have you with us. let's turn to vonnie quinn. vonnie: elon musk has regained his spot is the world's richest person after briefly losing the title. his wealth has been buoyed by a surge in tesla stock price. tesla shares rose 5.5% monday, taking his net worth up. that tops his fortune of $485 million. hong kong exports plunged in january by the most in 70 years, effect by an early lunar new year. overseas shipment fell by almost 37% while imports fell by around 30%. financial secretary paul chand says slower economic growth will continue, though the end of border disruptions should ease pressure. the head of norfolk southern says the railroad will start removing contaminated soil in east palestine, ohio.

that follows the derailment and toxic chemical spill that has but growing pressure on the railroad and the biden administration. the ceo told bloomberg that trains would run at reduced speed while the tracks are getting fixed. global news powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: a boj deputy governor says the central bank needs to learn from the mistakes of the past while reiterating the 2% inflation target has not been achieved. the details from our correspondent. sort of the same rhetoric we have been hearing in the past. what can we learn? >> it seems to be a message of continuity coming out of boj at the moment. the inflation target, the governor made the point that the cost push inflation pressures do not last long. that speaks to the idea that a lot of what japan is dealing with is trey level. -- he also speaks to the

inflation target debate. all of this discussion in japan and elsewhere around whether the target should be change. no real hint of a change. the same for -- commentary yesterday, he has given two parliamentary hearings stressing his point that monetary policy at the moment is where it should be because of the economy needs support he is not a buyer of this hawkish inflation story. he thinks inflation is going to come down but he is open-minded and willing to tweak what he wants. he has not making himself a hostage to fortune. the initial messaging, the new governor coming in, certainly one of continuity. they are not trying to spook markets, but trying to send a message of one dollar at a time. shery: philip jeff isn't arguing against raising that's 2% inflation. >> this is an interesting debate.

some people are suggesting that central banks have created their own -- by forcing themselves to get inflation down to 2%. inflation targets can vary. it is 1% to 3% in new zealand. in the u.s., it is 2%. the point is, why raise rates to such an extent that you need to get inflation down to 2% when you could raise it to 3% or higher? and that takes pressure off hiking rates. and by extension, takes pressure off having to inflict pain on the economy. mohammed -- is one of those. olivia blanchard is making points around this. people are talking but as you mentioned, jefferson from the fed has made the point that there is no real need to change it for now. central banks are laser focused on getting inflation down. they made the point, it hurts income. it only at say inequality in

society and ultimately it is a long-term drag on the broader economy. that sort of textbook approach that has been around since the 1990's remains very much the focus now. they're not really willing to bend on changing the inflation target, it is more of an academic discussion. haidi: japan is looking to re-pace the benefits of cheap nuclear energy. we get our big take next. this is bloomberg. ♪

♪ haidi: 12 years after one of the worst nuclear disasters, japan is looking to reappraise the benefit of what at say is a cheap and stable energy source. it's get more with steven sund and ski. tell us about what you have learned through the course of the report. >> i think one thing to remember is that there are few countries that have experienced what japan has experienced. the fukushima disaster shut the nation's 54 operating nuclear reactors for they had the pet -- had -- there was widespread distain for nuclear energy because a chunk of the prefecture had to evacuate. through reporting from my

colleagues in tokyo, they spoke to folks who had to evacuate and have gone back since radiation levels have dropped. overall, they have found that while there still is a view that nuclear power is dangerous and should be taken seriously, there is also maybe you that in the midst of the energy crisis and rising power bills and security concerns that perhaps nuclear is one of the futures for the country. a country like japan that is very dependent on overseas energy suppliers and has no natural resources. nuclear could make sense, according to analysts, if done safely. for all intents and purposes, japan has 33 operable reactors but only one third of them have started under post fukushima safety rules. the prime minister has pushed forward able plan to not only

restart these reactors but will reactors over the plot -- over the course of the next few decades. it is a large story. it is interesting. you are already seeing this anti-new your shift in japan swing back to accept nuclear in the short-term. haidi: i was living in japan during the earthquake and tsunami and disaster. covering that story was amazing. i would not have been able to imagine the tide with turned 12 years later. tell us a little about the opposition. you are talking about domestic opposition. there has been a lot of controversy about the release of radioactive water, even now, from neighbor countries. >> absolutely. just to say there has been a swing back and the public does support nuclear, it is only by a tiny margin. before, only about 30% of the

country supported restarting nuclear reactors. now it is 50%. there is a large portion of the country that does not support restarting reactors. the fukushima disaster is producing a lot of radioactive water that is treated every day. water is streaming into the reactors. because all that water is being produced, it is being treated but they do not know what to do. one of the things the government wants to do is release it into the water. it is slightly radioactive. it is a normal released on by the rest of the world but it is raising discerns not just by neighbors but also islands across the pacific that are worried it could affect them. there's also fishing groups that want to get back to work. they do not want to be tainted. if there is this water release, they are worried that their rep tatian of fish from fukushima

will again be hit. there is still a strong anti-nuclear movement but it has faded compared -- compared to a decade ago. >> i remember how difficult it was shopping for food around the nuclear crisis because of worries of tainted produce. shery: be sure to tune into bloomberg radio to hear more, and analysis from the team broadcasting the dollar studio in hong kong. listen through the app or bloombergradio.com.

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slowing growth and customer turnover which has forced it to cut expenses and 15% of its workforce. >> sources say evergrande has yet to reach an agreement with major creditors on a debt restructuring framework crucial to avoiding potential court ordered asset liquidation. sophia costa joins us now. what do we know about creditors in this case? >> this is an ad hoc report creditors. the main areas of dispute include the equity value of not just evergrande, the stock that has been suspended for a long time, but also its two hong kong listed units. the property management unit in the ev unit which at one point was one of the most valuable ev stocks in the world. a point of contention there. another is the structural seniority of evergrande's debt. it has a complicated structure.

there is no agreement and the problem is evergrande faces a march 20 deadline to appear in court. if it does not reach an agreement before then, it will be a court mandated liquidation, which could be very complicated and not necessarily good. haidi: when it comes to what the next steps are that we are watching, what is key in the next part of the process? >> for the restructuring, we are watching whether it can reach agreements with creditors. it still has a few weeks, but remember this is a company we do not know the financial health of. it never released 2021 earnings. it is unlikely to give anymore information around that. we do not know the scale of how -- of its liabilities.

and also the amount of cash it has on hold. really, any negotiations around that and any clarity around that is next to watch. march 20 is the key deadline. evergrande first default at the end of 2021 ended has missed so many payments since and missed self-imposed deadlines for reaching an agreement with creditors. still a very difficult restructuring process. haidi: another snag in the drama. often come a b a they joins us to talk chinese commodities including their crackdown on lithium minds. goldman sachs looking to gain as well. this is bloomberg. ♪

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