>> you are watching daybreak: asia. >> we are counting down to the

major market opens. >> australia has come online. my reality check. sticky inflation, economic resilience. >> we are live we were wondering what would happen after the rally.

elevated interest rates are not good for equities. the elevation sustained rates are not as elevated as they were

tilted to the downside. chinese futures are looking for a slight drop. he mentions treasury yields you are seeing aussie bonds.

>> most economists think the bank will raise rates. >> the majority of economists a large part is we had third quarter inflation we are

resolute economists believe they will resume a tightening cycle. >> it's a game day decision. we won't know. >> it's been the past few meetings. they have been seeing reluctant so they have been more cautious because the rba has said they

want to engineer a soft landing hands they have been successful in doing that. that's one of the biggest reasons why it's hard to say they will resume tightening or not. >> how is are we starting to see that australia? >> we are. we saw a to nine months of gains including sydney. we have seen a rebound which was

weakened in the third quarter. there is strength in the labor market. definitely we are yet to see the full impact of rate hikes. >> the city is a global financial hub. what is the theme?

>> in many ways the big picture story here is you have over 300 executives we're trying to figure out, the next two hours

will be here effectively from some of the highest officials in china. deputy governor on that specific panel. we are hearing from the chief executive. 30th anniversary will give you a snapshot >> we are waiting to hear.

once interesting is you have big hedge funds and >> different this time around is some of those allocators picked up in terms of interest we are hearing from the hong kong exchange it

will tell us is something to see. >> we can't wait to see some of those conversations. >> the u.s. and israel discuss tactical pauses in gaza. the latest on the middle east conflict, ahead. this is bloomberg.

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coming through so the best gains of 2023 we can still see more uncertainty to come. piercing japan futures trading softer and u.s. pictures looking like the downside will be expended. the idea of reality check. stocks were fairly exuberant. as a good reminder the monetary policy.

>> it's not a straight line. there is so much that i would say the second world war and recent israeli hamas war which seems to be spreading then you could almost say it's complacent at this point. we are cautious. >> little bit of haven demand depending on the day. he was signing more risk. >> we are not geopolitical experts but reality is the

geopolitical outlook is far more uncertain than it has been. we have wars going on in two different areas. the problem with wars in the middle east as they affect the supply of oil. the damage to inflation is very significant. the fed has done a good job getting inflation down and we are seeing a slowdown in the economy, it's not clear when you look at the strength of the labor market and the unions and strikes from the u.s.. they reflect wage settlements in

excess of 2%. we see some idiosyncratic opportunities even though we have seen a big run up and jack woody's equities, >> definitely. it's gone up, but the japanese market is cheap by global standards. share buybacks continue. practice better corporate governance. they announced they would see strategic holdings.

the corporate governance we have seen is continuing and we are in the early stages of that particular trend. in korea, we have a copy of what has happened in japan and you have seen an aging population there is very much a desire to improve so that can benefit and capital has moved out into stocks. you're seeing changes that are very helpful to foreign investors as well. >> has heidi says, broadly

upwards. to we see that of being a problem in terms of the federal reserve? >> if inflation gets out of hand. japan has kept a zero or negative interest rate policy, a reference point or lose cap.

it has to do with the way we invest. it's not the way things work in china. if the domestic economy is languishing in china, there might be a policy to depreciate. in that case, it could be a

boost so we are looking to see what benefits the most and the stock market has gone down a lot. we are not philosophically opposed. >> thank you so much, much appreciated. looking forward to the next visit. the white house as president biden and benjamin netanyahu have discussed the possibility for what it calls a tactical cause. let's get more from bloomberg. this is a new phrase that may please constituencies but what would a tactical pause be? are we talking hours?

>> what israel does not want is any cease-fire. the u.s. has been pushing this technical pause, they want civilians to get out of harm's way in terms of fighting and the israelis, i would not say they are opposed but they don't want to be letting up in that activity. this comes against the backdrop saying the death toll is cracked 12,000 people. israel disputes those figures, they say they are overly inflated. it's really a case of wanting to minimize harm.

sure they are minimizing casualties. the u.s. has been here before. when it invaded afghanistan and iraq, and had these experiences, it knows what is talking about. the nature is there were -- there >> trip. he said this is all a work in progress. is it effective? >> very much. mission impossible, the secretary of state and u.s. is

not allowing any gap between it and israel. president biden is very close. it does not want to allow any gap. when it comes to talking to our leaders that makes room for maneuver very difficult. the human suffering. for the secretary of state to try and make progress, obviously that's what israel is doing and also with these meetings between

the secretary of state, what he said publicly is different than what is said privately. it's a difficult thing to swear a circle in terms of the closest with israel and efforts to keep the arab world on their side were neutral. >> we have more to come. this is bloomberg. at ameriprise financial, our advice is personalized, based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

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a look at the latest gauge.

just a tiny bit of an accelerator from real cash earnings, seeing a contraction of fall of 2.8%, slightly better , being extended from august. as expected we are seeing wage growth to accelerate modestly year on year that reflects a rebound when it comes to discretionary payments, there are a lot of distortions in these numbers because of some sampling changes.

it move the needle for the bank of japan. >> that's right. when you take a look at the projections they are saying the risks are probably tilted to the downside that will shift the thinking. we are expecting to equities to be to the downside. for a drop. u.s. futures came online at the top of the hour and equities are already trading. it's about those discussions around what the fed does. there is a raft of fed speak

around whether they are prepared to keep the door open. the change on because if you take a look, telling us foreign funds are being net buyers. the amount coming in is about 2 billion u.s. dollars. it could be a signal that the bottom for chinese stocks is falling. we're beginning in hong kong where executives including ken griffin and james gorman. david inglis is standing by with

our first guest. >> good morning. it's going to be very busy, we have done a lot of cheating on air. the senior executive management. good morning and welcome to the region. >> i feel good, it's very fuzzy. as hear your ago on the vibrancy has picked up. >> we are ready to continue the conversation. 12 months on we are trying to figure out the question. if you're asking if yields have peaked, it's hard to call. it's a very good environment.

tickly in the u.s. we saw a big switch into cash that investors maintained butter starting to

come out of it. . >> that is a bit counterintuitive. big drop in bond yields and who knows if that continues. . you still think it's an environment. our view is the earnings is not as good to justify. >> in terms of dividends, that does not seem to be the spotlight. it never does.

strong balance sheet and a more predictable manner and in this environment that's very useful. we had strategies we launched an existing suite of products and believe in asia you can find some interesting defensive companies to add to the portfolios. it's mostly asia. we asking more.

we're asking about cash, fixed income so generally less emerging markets. generally cautious on china. we have to keep in mind that china is still growing. we're looking at 45%. >> do you suspect the reason is a function of what happening inside? or is it the high rates?

>> it's a mix of things and it depends on the investors, asset allocations but it is very much a combination of the higher rates environment. >> 30% club, tell us about what you are busy with. >> plan focusing on the lack of diversity, we are thrilled that a number of our chapters have achieved 30% in the u.s., u.k., ireland, canada but also this region, malaysia joined the club. there is a lot more to do. we are not seeing many ceos that

are female. it would be nice if we see more of that. >> very quickly, why do you think that is? we are looking to address the pipeline but it is about inclusion. how do you keep women and diversity in?

>> more coverage ahead in hong kong. we are speaking with a hong kong exchange ceo. still ahead. a recovery in diplomatic ties. we get more from leaders meetings. next. this is bloomberg.

>> xi jinping met>> in beijing. >> australia has an interest in continued growth in the chinese economy. i believe the greater understanding, a strong

relationship differences arise, important that we have communication. >> with joint efforts on both sides, we are reserving various views. it's important.

>> someone said two years ago you would've thought they were joking. this is a remarkable feel. >> what about concrete outcomes from the meeting? >> he has been invited to visit australia at some point in the future.

in addition to that, he has raised the case we know that the president's question is whether or not australia would join the china bid to join. we don't have any specific outcome other than those. he will be meeting in beijing and there might be some more outcomes, however we will have to see that later today. >> what are we watching next? >> next is they will be chatting later.

i am in the pacific islands when we will see major events she will be heading to san francisco. she will be meeting with fighting. >> the u.s. ambassador says his nation has more about the expo in shanghai. it's the first with the feeling on the ground?

we may have lost sarah. if you can hear me, what is the feeling on the ground? we will get back to sarah and just a moment. be sure to tune into bloomberg radio to hear more from the daybreak team. plenty more ahead. stay with us. ♪ (adventurous music) ♪ ♪

♪ be ready for any market with a liquid etf. get in and out with dia. vonnie: u.s. futures are looking

lower. the maker of chat gpt is letting users make customized versions. su keenan joins us now. this came during a developer conference. su: it's a right of passion.

this one got a lot of attention including chatgpt four, a powerful and speedier version that underpins, it unveiled new features such as customization. it's hard to realize chatgpt kicked off a global frenzy around all things ai including a number of ai stocks including etf's which all have moved higher during the past year. a million people use chatgpt this week and more than 90 are building tools on openai platforms. they got a lot of attention. as for chatgpt, the company says

no coding is required. in the turbo version of chatgpt, it's able to assess and respond to novel-length prompts. a highly sophisticated search engine under the artificial intelligence technology they are using and they were clearly able to get out in front by rolling this out when your ago and improving on it. haidi: the biden administration is calling for more guardrails. su: elon musk was one of the first to rollout his rival

version of chatgpt. it will be made available to premium subscribers on social media. he says on -- the biden administration is taking action plan that urges a controversial aspect to submit, says the government will be assisting in developing standards for deepfake content. there is now a flurry of ar related hearings set to take place including on the task of regulating deepfakes that will take place during a hearing scheduled for wednesday. it does appeal -- appear that

the intense ai interest earlier this year and recent months, you could not have an analyst conference without the mentioning ai, that has cooled a bit in the extreme burst in hiring for anyone with nai background that could advance efforts also has cooled off a bit. people are starting to get used to the fact. haidi: alibaba is earned group is the latest to rollout services to the public. products will be powered by a language model including tencent and baidu. alibaba has defined ai is one of its two core strategies as it goes through the six way spinoff. vonnie: let's get back to sarah

who was at the import-expo in shanghai. on the tech side. how has it been affecting sentiment? >> glad to be here. we're seeing that tech companies on the ground, there is a little bit of unease, people are not that willing to talk, we talked to intel and they were saying they are still optimistic about the china market.

coming, more live coverage out of the financial summit taking place in hong kong. the interview with president and ceo, the world's biggest gold producer. market opens in tokyo are next. this is bloomberg. ♪

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when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. we have been able to reach over 100 million people impacted and affected, and at risk of hiv. the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. vonnie: this is "bloomberg daybreak: asia," counting you down to asia's major market

opens. looks like we might be in a down day this tuesday. the markets trying to figure out what to do the last 10 months of the year. we see not just according to market movements but also strategists. haidi: we are coming off quite a high that underscores the amount of uncertainty we have going into the next few months. all of which feeds into things like the rba decision. let us top of mind. we could get a 5th st hold or we could get the governor's hike of 25 basis points. annabelle: certainly a decision we are looking ahead to later this morning but the outlook for today's session is also going to be guided by what we hear from fed speakers. there's a lot on the agenda over the next couple of days. one just speaking now is the fed's neel kashkari, saying the fed needs to access more data, see how the economy

evolves, not declaring a victory against inflation too soon. he says american consumers do continue to spend. kashkari is considered amongst the most hawkish, alongside the governor michelle bowman. some he headlines jumping out of the interview there. the state of play for yields -- we are seeing the 10 year coming up fairly steady though we did see them move higher in the session yesterday partly driven by supply. concerns or questions, but also the expectations for the fed. the bank of japan of course, that yield gap between the boj and also the fed has been a key watch over the course of this year. waiting to see if there's any sort of data or enough data for the bank of japan to justify a shift away from its easy policy settings. one data point to note this morning was pay growth strengthening for the first time in four months. but the real analysis coming

through on that is the gains are still likely to fall short of the pace the boj really wants to start to see before it can pare back any stimulus. stocks wise, you can see the naked coming online, .6% to the downside -- nikkei coming online, .6% to the downside. in the korean session, the equities picture, with weakness coming through, but keeping in perspective -- keep it in perspective as well, yesterday we saw a standout session for the kospi led by regulators in korea deciding to put a complete ban on short selling. we are watching some of those stocks, the most shorted stocks. otherwise, a focus on the korean won, we are trading close to the 1300 argument though some analysts -- the 1300 mark. although we have seen some analysts -- a key currency pair to be

watching throughout the day. let's take a look at the session for australia as we are one hour into the session here. it is coming down to the focus of what the rba will do. as you said the forecast is that we will see a rate hike on tuesday, that's from economists, of 25 basis points. money markets are a little bit more undecided saying perhaps we will see a pause coming through. certainly a key decision. brent crude, close to the $85 a barrel mark. we are seeing wti fairly flat in the session so far, haidi. haidi: annabelle in hong kong. staying with hong kong, the global financial leaders summit is taking place. david ingles is standing by with none other than the head of the hong kong central bank. david: absolutely. good morning. nice to see you guys. thank you for joining us today. we are joined by our host, the hkma chief executive,

as we kick off dat two -- day two. living with complexity, what does that mean? >> this is the second time that we are hosting this summit. it is awesome that we've got a who's who of the global financial institutions here in hong kong. if you look back to last year, it was a time when the pandemic was still there and we were not certain about the interest rate paths, etc. but this year, the pandemic is gone, but we still have to deal with probably high for longer interest rates, a global economic slowdown, disruptions of technology and esg, these are all complexities. geopolitics is also getting more complicated now. these are all complexities that will stay with us.

what we need to discuss of course is the risks rising from all these complexities but importantly hoping that everybody in the room can find opportunities that might emerge from some of these, especially in technology and esg areas. david: i was looking atthe list of panels , it is everything you mentioned, from opportunities, to crises. we were seated at the exact same spot almost 12 months ago. how do you think the recovery has been in hong kong? >> it's been good. last year's summit officially marked the reopening of the hong kong economy. we've got about 40 or 50 global ceo's coming in. after that, the ripple effect was good. after they all came in, they spread the good word about hong kong and then we saw senior management, others coming over to hong kong. everything is back to normal, vibrant, and energetic.

people are looking for opportunities. for the broader economy, hong kong is always a very small open economy. apart from domestic consumption, the domestic amount is recovering well, but we are kind of affected on the global front, trade has been coming down a bit, but it's probably more cyclical than structural, so we will wait for the cycle to turn and hong kong will be back. david: if you take the interest rate in the west, what is your guidance to people who are either sitting, on a mortgage looking to make a big purchase, what is the guidance? >> the interest rate here will be very much impacted. we are tracking the u.s. interest rates. if you look at where u.s. rates are going, i would say after rising for more than 5% the last year, it is probably near the peak of the interest rate level. but whether if there is more

room to go depends on the data, the inflation, the economy. the inflation last mile could take longer than what people thought because of service inflation, wages, it might come down more slowly. if it doesn't come down, there could be room for still summarize. but probably -- still some rise. but probably not a lot. the question is, how long will interest rates stay at this level? it is about, how long will it stay at that level, and what will the impact be on both the global economy and global markets? david: one of the domestic -- big domestic issues that we have already seen the impact is housing prices. we were talking during the break about -- you were telling me about how you are worried about negative equity, because of an increasing number of households, 11,000 was the latest data point out of hkma. you say you are not worried at all. >> where monitoring those numbers -- >> we are monitoring those

numbers but we are not really worried. the risk is imaginable. if you look at negative equity, we have got housing prices coming down by about 17% from the peak in 2021. if somebody buys a house in 2021, using a mortgage insurance that allows you to take out 90% loan-to-value ratio mortgage, then if the property market drops more than 10%, then you are technically in negative equity. but what is important is not the number of negative equity cases, it is about the repayment ability and whether they are defaulting. if you look back to two years ago, or before, we are actually very robust in asking banks to make sure the repayment ability of borrowers is there. not only that the servicing ratio cannot exceed 50%. [indiscernible]

at that time we put a 3% stress test on the borrowers. so in case interest rates rise by 3%, the servicing ratio will not exceed 50%. you can see that from the default rate, the overall default rate is very low. only 0.07%. for the 90% long borrowers, the default rate is even lower. only 0.02% because the requirement imposed on them is even more stringent. david: what is the worst case? what's the assumption you are making? not a projection, what is the assumption of how bad things can get? is that something that worries you, that scenario? >> we ask the banks to stress test the borrowers. the stress test was 3%. now because interest rates have risen quite a bit, we lowered that requirement last year into

a stress test of 2%. that state for a long while. it's not our best case scenario but it's just in case interest rates sort of rise. at least we can make sure the borrowers have the ability to repay. david: commercial real estate, is there anything we should talk about? that is an issue elsewhere in the world. >> we have been monitoring developments in commercial real estate. and has been coming down, like in other places in the world, is been coming down quite a bit in hong kong. we have already relaxed two times the measures that we imposed years earlier on commercial real estate. there's a clear change in cycle. when there's a clear change in cycle, we will relax measures. we have been monitoring the situation. the -- if there is further correction, we might want to look at our policy and see up there is room for further calibration. david: do you think there is an oversupply issue, whether it

is residential or commercial real estate? >> it is a mix of different issues and factors. supply and demand of course of the units is important. but the broader global and local economic conditions, financial conditions, and importantly covid has actually changed our working habits, more people working from home, more flexibility in work arrangements might also impact the amount of offices. you can see that globally. in midtown, new york, london, it is the same. david: nothing out of the ordinary for you or is there something structural you might need to adjust to? >> i don't think there's anything structural. it's really a global trend hong kong is just part of. if you look at office demand with hong kong, a lot of it is actually global institutions. the where they look at offices,

commercial real estate, is probably the same around the world. david: one of the panels is on technology, cbdc, give us an update. what can we expect it -- when can we expect it to go live? >> we are focusing on the home sale use case related to cross-border payments. we have this project called enbridge we do together with the central banks in thailand, uae, and china, under the coordination of the bank for international settlement, we have already completed all the pilots, is been very successful, we can cut down cross-border payments in record time, half the cost. we are looking at it with other central banks and we are ready for launching a minimal viable product in the middle of this year focusing mainly on trade settlement in the beginning so the trade settlement between these jurisdictions can be done through this new platform.

let's try it out and see where it goes. for the retail cbdc, we are partnering with 14-16 different institutions through 14 different pilot test cases. we really want to find use cases to improve the retail. david: better than the current set up. >> better than debit card, credit card. we are still working on that. there will be a new phase of pilot coming early next year. david: early next year. ok. stable coin, that is the other thing people are waiting for. you say 2024. >> we have already completed the analysis on the feedback from the first-run consultation. and we have already prepared the second consultation. it will come very soon. david: what is very soon? >> in weeks. after we issue that, we will

look at the feedback. we already started to draft the legislation. what we are aiming at is have the legislation ready sometime the first half of next year. if we are lucky, and the council is supportive, we hope the legislation can finish next year so the regulatory framework can come in 2024. david: that is a clear roadmap. final question -- what is your favorite topic? we haven't talked about the hong kong dollar peg. >> that is your favorite topic. [laughter] there a very simple message, there will not be any change. no plan, knowing change in -- no intention to change it. david: thank you so much for answering it. the chief executive, our host at the hkma event here at the four seasons in hong kong. vonnie: david, thank you.

we appreciate it. great conversation. we will be sifting through that throughout the rest of the program. still ahead, we will talk exclusively investment strategies with apollo's head of aipac, matthew michelini. we will be speaking to newmont's ceo and president, next. this is bloomberg. ♪ the chase ink business premier card is made for people like sam, who make- everyday products, designed smarter. like a smart coffee grinder, that orders fresh beans for you. oh, genius! for more breakthroughs like that- i need a breakthrough card. like ours! with 2.5% cash back on purchases of $5,000 or more. plus unlimited 2% cash back on

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vonnie: you are watching bloomberg "bloomberg daybreak: asia." it looks like we might be

reversing some of yesterday's declines. let's get to annabelle for those movers. annabelle: taking a look at some of the big names in korea here, because yesterday the big market driver for the session was korea three imposing a full ban on short selling. some of these names on the board had a huge spike intraday. these are some of the names that have the most short balance, relative to their market cap. we have seen a big spike, not really translating into the session so far today, but it is a picture really of broad weakness. just about 20 minutes into the session now. there are another couple of stocks we are also tracking this morning. hybe, don more than 4% at this point -- down more than 4% at this point. natmarble, offering around 207,000 won to 211,000 won

apiece for a blocked rate. the discount range on that is between 7% and 9% of hybe's less on monday. not trading quite at that level just yet. citi is the sole book running on this transaction -- runner on this transaction. haidi: another transaction we have been watching as a merger between eucharist and newmont. the world's top gold producer closed the largest takeover in mining this year. joining us from sydney is newmont's ceo and president, tom palmer. you said this is a tryout month because the next leg begins now. you are now the world's biggest

goldmine are by far. acquisitions are going to be hard to move the needle on. is the priority now to return capital to shareholders? how do you seek growth going forward? >> good, -- good morning, haidi, my ears are still ringing from the bells. we've got five new operations to incorporate into the newmont business. that is the work that starts today. we will make sure we do that safely. first and foremost we are going to be making sure that we can after the $500 million in synergies we have committed to over the next 24 months from those operations. really excited about the portfolio we have created and what we are going to be doing not only in the gold industry but also the role we play on the copper industry, it is a really exciting time in newmont's 102 year history. haidi: you touched on a couple

of key things, including copper. when it comes to the integration timeline i guess, being able to see the synergies, the cost benefits, the output benefits, the markets have not necessarily been that patient -- how do you expect, how long will that be before they start seeing that materialized? >> we have got the track record from our acquisition of gold crp just four years ago -- corp just four years ago and this energy badly we delivered from that transaction, 365 million dollars and we have delivered over a billion dollars. yuan has a clear track record. as we bring two australian based assets into our business, stand up a new business and bring two canadian businesses into our north american business unit, where we have a very clear pathway and how we get after delivering synergies, supply chain synergies, full potential operation synergies, we will have teams on the ground on

those operations this month starting to define the key projects and working with those new teams that join the newmont portfolio. we will start sharing information about those improvements in the weeks and months ahead, and we will be pointing to the track record that we have for having done this before. haidi: tell us about the assets shared in divestment. you've done this before, and 2019. same team in place. i believe you sold one mine and the couple of project stakes. you know what you are prioritizing this time? >> the priority this time is managing 17 operations in our global portfolio and ensuring that we safely integrated team of around 6000 new employees into the newmont business. so we will grow the workforce of 21,000 employees -- grow to a workforce of 21,000 employees. our focus is going to be ensuring that they safely integrate into than you want business.

and our focus will be on the synergies -- the newmont business. and our focus will be on the synergies. we will understand the plans and project sequences and to what we did four years ago, just very sensibly understanding the new portfolio, understanding that we can very comfortably run 17 operations in our global operating model. haidi: of course there's a couple of major things, given the unit costs sort almost 40% over the past six quarters. that's one of those major synergies as well as the guarantee of more output which is also stored over the past three years. are you comfortable that this merger removes most of that risk ? at the same time, can you give us commentary on how you see the global demand picture as well? >> sure. the portfolio we created today had at its foundation 10 gold mines. the strongest gold minds any company can have in their

portfolio. we have half of the world's top tier gold mines in our portfolio. that provides us with the strength and resilience to be able to manage our costs over the long term and is complemented by an organic project pipeline that is the envy of the mining industry, in terms of the gold and copper projects we can sensibly bring on with discipline to grow in both gold and copper. the combination means that newmont can produce and grow gold and copper for literally decades to come. haidi: let's talk more about -- please continue. [laughter] >> the gold price stubbornly held between $1900 and $2000 all of this year. that is in the context of rising interest rates, pretty solid inflation, and --

excuse me, my earpiece is dropping out -- in conditions where we would see gold prices come off. you've got some volatility around the world supporting gold prices and central-bank buying supporting gold prices. when i think about gold stubbornly staying there and looking at interest rates, looking into next year and they are after, it is a very positive outlook for gold going forward. haidi: what is your view of copper? you get some significant copper assets as well through this. >> we out of the gate have been producing 150,000 tons of copper a year. we are filling a gap on the asx. with those minerals coming off the asx a few months ago that is an opportunity to get exposure to the world's best mining company with great exposure to copper. we are excited about the copper we are producing from our operations in our portfolio and

then we have projects, a prefeasibility study to the latter part of this decade well into the 20 30's and 20 40's. copper is an essential metal for the energy transition. there's going to be a demand and supply shortfall and we very much look forward to being able to balance the gold and that portfolio and the copper in the portfolio and enjoy the benefit of the inevitable run-up in copper prices through the latter part of this decade and into the next. haidi: we have seen really protect and organize labor strikes across a number of industries including mining. . have experienced that in mexico -- you have experienced the and mexico. how do you deal with at risk going forward? >> we look at our balanced global portfolio and the real strength of the portfolio that we had prior to today and the even stronger portfolio that we will have going forward from today. we can balance our risk

through the operations and the strength of the operations that we have underpinning our portfolio. we were able to take a decision in mexico this year to ensure that the bargaining agreement that we had signed last year was honored and we were -- we are prepared to take the time necessary to ensure that we have an outcome that protected the long-term value of that operation, but also supported the local communities and the workforce and the provincial and national governments in mexico. we will continue to do that, as sustainable mining later, and the portfolio we have created as of today allows us even greater strength to be able to make decisions for the long-term. haidi: what's a big risk for the next year, is it inflation? the cost of labor? technology? the early transition? >> i think technology and the energy transition is one that will grow over time. there will certainly be work

done on that today. we have work ongoing in australia on that, with caterpillar, accelerating the development of battery-operated vehicles. i think it is about keeping a close eye on your costs, ensuring you are providing a workplace that ensures you've got good retention of your workforce and managing your costs, that is the most important thing right now. haidi: really great to have you with us, tom so... i know you and george were struggling with the possibility of having to move. how's that going? we found a way to make bathing safer with a kohler walk-in bath. a kohler walk-in bath provides a secure, spa-like bathing experience in the comfort of your own home. a kohler walk-in bath has one of the lowest step-ins of any walk-in bath for easy entry and exit. it features textured surfaces, convenient handrails for more stability, and a wide door for easier mobility.

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♪ haidi: this is daybreak asia. here is a check on the market. half an hour into the session for japan and korea, a lot of red on the screen behind me, so

really just eking up what we have already seen in australia and new zealand trading so far this wording. u.s. session stocks struggled to gain traction, futures as well were waiting to a weaker start his day but it is that change in expectation around what the fed, whether they will signal that the door is still open to another hike, so that is the state of a4 stocks as we get underway but let's change on and highlight a call from jeffries this morning as well. they are taking a look at japan value stocks, under pressure the past 30 days or so but if you look over a longer term basis, over this year, you're looking at gains of more than 30% for the index on a three year basis, let's change on because it has been a sustained rally over a significant amount of time but jeffries is saying the rally is

going to reverse, a range of factors including lack of earnings or and also yields as well, so certainly a group of stocks we will be tracking. vonnie: let's get back to the hk ma financial summit in hong kong. david is with our next guest. david? david: yes and it is interesting because if i heard her correctly annabel was just ending on the question of yields and how has the rise in yields changed allocations and our next guest has an unique view taking a step back, private credit is really taking off. at least among the firms that did not used to do it but joining us is matt, head of global management.

your franchise is well-known, let's start big picture, the case for alternatives has grown, the amount of money down into the general basket has picked up a lot and i'm sure that has helped you guys. >> thank you for having us back on bloomberg tv, absolutely. our ceo mark has been talking about major tailwinds likely to unwind over the course of the next investment time. monetary stimulus that you've had over 30 or 40 years which lowers rates in the printing of money which drove risk assets up, fiscal stimulus which hold forward demand, globalization pushed down the cost and then a peace dividend or a theoretical dividend and that drove a lot of returns in the public markets, the s&p and the fixed income markets but there has been significant market changing each of those equity markets and fixed income markets. a handful of stocks that trade really high in the marginal

buyer in equities and fixed income is the open ended mutual fund or etf and so they are not fundamental driven. so what we are seeing is the average investor saying ok, tailwinds are going to be headwinds. the drivers of the public markets are not going to exist and active management has been difficult to outperform in public markets so what is my alternative? it is to redefine what alternatives used to be. used to be 60% equity, 40% bonds and then venture capital. alternatives are now everything private so when you look at a bank balance sheet that is private, it's not the investment marketplace. that would be an alternative and when we do a structured loan to at&t that is not public that is an alternative. we do private credit to large

companies, that is an alternative, so you are seeing investors looking for a way to step back from public markets across the risk and reward spectrum. david: is that a function of the reason the that banks have stepped back because equity markets have not done well? what i'm trying to get to is whether the general tailwinds that will see your business grow substantially because everyone is saying that? >> you hit on the drivers of the business, we talked about the banking which i laughed at because it implies banks are leaving, they are not leaving. what it means is regulators forced banks to push lending into the investment marketplace. the regulators are forcing homogenization, so when a client needs and loan or something interesting that cannot done with the balance sheet banks are saying let's turn to a private credit market. in the banks are now reorienting

to be advice driven, client service driven, offering functions that we will never offer so we are partnering with banks and that will increase low but the other part of your comment, for 10 or 15 years we have had equity returns that are robust at the expense of credit, cheap credit, good equity returns. with rates being higher that has reversed. credit is earning returns at expense of equity and we think that will continue so you will see lending in the investment marketplace which will be a beneficiary to us. in you looking for guaranteed outcomes with the base rates higher. so i'm a terrible predictor of returns, look, in our business we are seeing for large-cap

companies capital structure first lien cash flowing underwritten in today's environment with higher cost of capital and an uncertain macro outlook 10 to 11% structure. when you compare that to s&p returns, 13, 14% you will take private credit all day long. david: are you tempted to go down in capital structure? our deal sizes getting bigger? >> know we are not tempted to go down the capital structure and those tailwinds as they reverse it will not only cause volatility, it will cause a reset of fundamentals. so therefore we are much more focused on the capital structure, getting paid for liquidity, structure, complexity, something that cannot be provided. we are not looking to get paid for taking real credit risk. in terms of deal sizes they have

gotten bigger. look at our flagship vehicles in the average that we've been lending to of those companies is significant over the last few years and the billion-dollar commitment that we write to companies used to be a one-off four or five years ago. david: hot sectors, the risk is you get that wrong. what is your prediction on sectors that we will be busy with? mark: we will be busy with our core business which is capital structure, credit. given our risk management systems, given that we're buying everything alongside investors everything goes through a risk management article, so we will stay and earn 10 or 11 or 12% for balance sheets or clients. you will see interesting hybrid deals. hybrid is senior equity, a way to play the equity upside with the downside protection as

companies need to deleverage. they don't want to issue debt limit equity. they are willing to give downside protection if you're willing to trade off upside so we will see a lot going on and then abs, we will see the abs that used to be the bastian of the banks pushed in the marketplace is the regulatory change read look across our 16 origination platforms and the equity to own them you will see those businesses do well as regional banks have stepped back from the local marketplace. david: potential employees, are you looking to hire? what is the headcount looking like? >> we are always looking to hire good people across our big three priorities, origination, global wealth and capital solutions or capital markets we will hire across those in --

david: great to see you. back to you guys and the studios. haidi: a lot more of those conversations on bloomberg tv. the summit taking place in hong kong, speaking with industry leaders and policymakers including ceo nicholas and peter harris along as well. and we do have breaking news when it comes to the origin deal. things might be getting hostile. we are hearing that brookfield and tig are launching a hostile takeover bid for origin energy by christmas so this is what we know. we saw origins biggest shareholder, australia's pension fund boosting after declining to get involved with further talks over this 12.6 billion dollar

takeover plan. according to reporting from the australian news this will be at a lower price than nine dollars 53% on the table. shareholders will vote on the transaction for approval but under the structure they buy directly shares off the market. it is understood that the takeover will be put forward by brookfield and aig in the coming weeks so we continue to continue to watch that but things could be taking another germanic turn. they're also saying australia should either make a rival bid or back off. turning to politics, shooting things as relations with australia are on the right path he met with anthony in beijing on monday, the first visit to china by an australian leader in seven years. let's get context. economy correspondent rebecca

joins me now in singapore. great to see you. we were talking about body language and the readout which was positive, high on symbolism but there was a warmth that has not been there for a long time. rebecca: smiles from president she drinking and it sets him up well going into the conference where there will be potential confrontations and a sort of tricky line going into a pet, not just with the sit down with biden but also regional frictions. that's what anthony touched on per the readout, wanting and reaffirming the need for status quo around taiwan, another sensitive issue in both struck a positive tone. a few outstanding issues for australia, many strikes have been lifted but they are in place, 2 billion worth of goods

and there are a couple of issues that we might see some follow-through from the meeting, a sign that this goes beyond smiles on the red carpet. vonnie: it's the first for a couple of years. will there be anything concrete? rebecca: yeah, i mean ci ie is interesting because of the focus on foreign investors and only saw the comment from an executive saying he is positive on china, we haven't seen comments from u.s. tech companies operating china because the foreign business environment is hostile with arrests across industries and we had comments from ambassador burns, saying they want to move away from decoupling. we've heard that for some time

but also he wanted to increase trade with china and with the chinese economy and that has been somewhat missing from a lot of the comments from u.s. officials so far so it does look like both u.s. and beijing are trying to strike a positive tone going into the sit down between shooting ping and joe biden. haidi: hearing from china's vice premier at the summit talking about preservation of hong kong status. so much a part of the rejuvenation of hong kong's financial hub reputation and as he speaks sees god it big set of meetings with janet yellen. rebecca: again, another positive sign that both sides are trying to get to a place where by the time they sit down there might be concrete deliverables. the big issue from beijing is

taiwan, the persistent issue that the u.s. has overstepped the line and trade. when we think about janet yellen in the sit down, really from the chinese side there will be this hope that the u.s. will pull back on some of those trade restrictions or slow momentum. a thing that has created unease in beijing has been the nasty surprise, taken by surprise by some of the curbs but there has been progress insofar as investment restrictions that we saw after the visit from u.s. officials to beijing, that was more moderate than some in beijing were anticipating so some engagement, some talking can influence the scope or scale of restrictions, that will be the focus for beijing, not some big reversal. competition is in the cards.

that is the defining quality of the relationship but competition in restrictions can be managed in select areas. haidi: a growing rivalry with guard rails. rebecca wilkins is here this week in singapore. more to come on daybreak asia. this is bloomberg. ♪ >> hong kong has an appropriate regulatory system. no. we switched to gusto, and paying my team couldn't be easier. gusto gives me unlimited payroll runs, next day direct deposits, and automatically files my taxes. ooh, taxes! sounds like you know the drill. good one! can i run payroll too? sure, after this. choose payroll without the pain. that's working with gusto. the chase ink business premier card is made for people like sam, who make-

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♪ haidi: most economists think australia's central bank will raise interest rates, ending a pause. let's get a preview from sydney. let's take a look at the hike. plenty of data potentially to support that. >> yes, there is a reasonably strong case for the reserve bank to hike after third-quarter inflation last month came out much stronger than expected. there have also been other data like retail sales which have been stronger and pointing to an underlying resilience in the broader economy and coupled with that, though recent commentary from the new governor means that the rba is likely to go for a

hike this time. vonnie: it will have to be a decision giving money markets are not pricing in a hike >> yes, the rba has surprised a lot during the tightening cycle and looting the size of their hike in the timing of their hikes. also we have been a much slower rate mover compared to other countries, so the rba raised interest rates by four percentage points compared to 5.25 by the u.s. and new zealand read there seems to be a higher bar for the reserve bank to raise interest rates. another thing michelle bullock recently said was we will not hesitate to raise interest rates if there is a material revision to the inflation outlook and economists predicting a rate hike today do not expect a material revision to inflation so that's why there is a

question around whether they will call today. haidi: are we seeing the same scenario that the fed is dealing with where there are signs of economic science? swati: yes, that is making the reserve bank decision difficult as well. there are pockets of resilience. we are seeing a strong impulse in the labor market, housing market has also rebounded surprisingly, gaining month after month. we are seeing strong population growth which is supporting economic activity and when you go out in sydney, things look busy. pubs, cafes, restaurants. people are still spending and that is one of the worries as well. also the rba spoke about how we are seeing shock aftershock aftershock in supply and while

they were able to overlook those shocks because they keep coming and they are relentless, it is hard to overlook them. vonnie: bloomberg's economics reporter joining us. and possible rate hikes, asian market currencies are attractive to those willing to bet on central banks. for more let's bring in the asia fx reports editor. what will drive asia to outperform? >> we are seeing the sentiment turning overnight. we saw korea and indonesia surging more than 1% which has to do with depreciation that we saw from the fed repricing. the other part that sets it apart from the others is there are some countries in asia that are still keeping a hawkish

policy lien and that is due to the weaker currencies but in terms of how they are managing inflation and the second part of the equation also is if you look at asia more broadly in the past, they have been struggling to kind of deal with weaker currencies and a stronger dollar but in this case they have a lot more buffers to defend currency. haidi: in terms of local currency bonds, where we seeing bullishness? >> so we did really see a lot less bearishness in china in the hong kong dollar, korea, the time one dollar. and indonesia and the philippine peso, the central banks have kept a hawkish tilt read there is bullishness that could benefit from the china slow down bottoming. and right now that stands in

contrast to the caution around latin american currencies where when the central banks which have started cutting rates could really drastically cut rates that could put downward pressure on currencies. vonnie: that is bloomberg's rates reporter in hong kong. plenty more to come here on daybreak asia. stay with us, lots of stuff to cover, this is bloomberg. ♪ the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

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