Speaker 1: Good morning.
Speaker 2: I'm Richard Salama and I'm Brian Curtiz.
Speaker 3: Here are the stories we're following today.
Speaker 2: All right, we are looking now at Vietnam as if
Speaker 2: it's formally upgraded ties with the US on Sunday, shifting
Speaker 2: the relationship to the highest level of comprehensive strategic partnership.
Speaker 2: President Biden said the US had an enormous economic opportunity
Speaker 2: with Vietnam, making the comments during his first visit to
Speaker 2: the country. Now, this does come as the US seeks
Speaker 2: to make deeper inroads in the APAC region by offering
Speaker 2: nations an alternative superpower to China. Speaking Hanoi, Biden denied
Speaker 2: the United States is trying to contain China.
Speaker 4: I just want to make sure that you have a
Speaker 4: relationship with China that is on the up and up.
Speaker 4: Squared away, everybody knows lives all about and one of the.
Speaker 5: Ways to do that is to make sure that we
Speaker 5: are talking about the same things. And I think that
Speaker 5: one of the things we've done, I've tried into a
Speaker 5: talk lestat about this from the last this six months
Speaker 5: has been.
Speaker 4: An opportunity to streathan alliances around the world, to maintain stoy.
Speaker 2: Biden also told reporters that China's real estate industry is
Speaker 2: facing problems, saying that President and Shijingping's plans for the
Speaker 2: Chinese economy are not working.
Speaker 3: Meantimes, sources say that Vietnam Airlines is entering an initial
Speaker 3: agreement to buy about fifty Boeing seven thirty seven Max jets.
Speaker 3: The deal could have a list price value of about
Speaker 3: ten billion dollars. The actual amount after discounts is unknown.
Speaker 3: In the deal, Vietnam's money losing national carrier would replace
Speaker 3: more than forty older generation Airbus A three twenty one planes. Now,
Speaker 3: this order is seen as something of a breakthrough for Boeing,
Speaker 3: as Vietnam Airlines is currently an all Airbus single aisle
Speaker 3: jet operator. We had reported back in June that the
Speaker 3: airline was weighing in order for as many as fifty
Speaker 3: Airbus A three twenty one Neo jets, and we haven't
Speaker 3: been able to get in touch with Vietnam Airlines for
Speaker 3: details on this. Whether or not that means that that
Speaker 3: early report is no more.
Speaker 2: Okay, let's move now to the sidelines of the Group
Speaker 2: of twenty meeting, where Italy's Prime Minister Georgia Maloney told
Speaker 2: China that Italy is planning to withdraw from the Belton
Speaker 2: Road initiative. The most Joanna Won has more from Hong Kong.
Speaker 6: Sources say Maloney spoke to Chinese President Chi Jinping about
Speaker 6: Italy's withdrawal plan. Baloney also says she spoke to Chinese
Speaker 6: Premier Lichang about the initiative, but a decision had yet
Speaker 6: to be made. She's been taking her time before deciding
Speaker 6: how to communicate her government's decision to exit from the plan.
Speaker 6: Maloney fears trade retaliation after China's ambassador to Italy warned
Speaker 6: of possible consequences. Baloney said the issue is sensitive and
Speaker 6: she'll visit China in the coming months. In Hong Kong,
Speaker 6: joined one Bloomberg Radio.
Speaker 3: In other news, Ali Baba's former chief, Daniel Jong, has
Speaker 3: decided to quit just months after agreeing to lead the
Speaker 3: company's cloud division. Bloomberg's Bonnie Au has the story from
Speaker 3: Hong Kong.
Speaker 7: Jiang has taken on the role after giving up his
Speaker 7: due duties as CEO and chairman of the group. The
Speaker 7: latest move adds another layer of uncertainty to Ali Baba
Speaker 7: as it navigates a complicated breakup. Ali Baba has said
Speaker 7: it wants to operate as a true investment holding company
Speaker 7: that means individual units can seek funding and list separately.
Speaker 7: With John's departure, Eddie will will serve as acting chairman
Speaker 7: and CEO of the cloud business. As to John's future,
Speaker 7: he'll now steer a one billion dollar investment fund on
Speaker 7: Ali Baba's behalf in Hong Kong. I'm Bonnie Al Bloomberg Radio.
Speaker 2: We've got Treasury Secretary Janet Yellen saying she's increasingly confident
Speaker 2: that the United States will be able to contain inflation
Speaker 2: without major damage to the job market. Also hailing read
Speaker 2: economic data showing a steady slow down in inflation and
Speaker 2: a fresh influx of job seekers now trate as we'll
Speaker 2: have We'll next have their eyes on a report coming
Speaker 2: out this week which we'll be telling us a bit
Speaker 2: more about US prices i e. US inflation. Bloom mo
Speaker 2: Ox Denise PELAGREENI has a look what to expect.
Speaker 8: Higher energy prices are expected to push up the headline
Speaker 8: inflation number for August, with the month on month inflation
Speaker 8: rate expected to rise to six tenths of a percent
Speaker 8: and the annual rate quickened to three point six percent
Speaker 8: from three point two. Take out food and energy, though,
Speaker 8: and Bloomberg Economics's core CPI likely continued at only a
Speaker 8: two tens of a percent rate in August, same as
Speaker 8: last month's rate, making it the longest stretch of subdued
Speaker 8: readings since early twenty twenty one. Now you're on year,
Speaker 8: that core rate is expected to fall to a four
Speaker 8: point three percent rate, down from four point seven. And
Speaker 8: Bloomberg Economics also says with the job market cooling and
Speaker 8: student loan repayments resuming, retrenching demand will continue exerting downward
Speaker 8: pressure on inflation, and the Fed, according to Bloomberg Economics,
Speaker 8: has probably already done hiking for the year.
Speaker 3: Bloomberg's Denise Pellegrini with that report, Sorry just here, eight
Speaker 3: minutes past the hour. It's time now for Global News.
Speaker 3: C twenty leaders reaching compromise wording in their final statement
Speaker 3: on Ukraine that gives both sides an opening to claim
Speaker 3: a diplomatic victory. And Baxter has Global News in the
Speaker 3: nine sixty news room in San Francisco.
Speaker 9: Ed, Yeah, exactly right, Brian A. G twenty leaders reaching
Speaker 9: the compromise. US allies had wanted stronger language condemning Russia
Speaker 9: for the invasion that did not happen, and Russia can
Speaker 9: claimed victory there because the US and allies also say
Speaker 9: the statement contained strong language regarding the invasion. Now, US
Speaker 9: Secretary of State Anthony Blincoln comment.
Speaker 4: The leaders here all stood up very clearly, including in
Speaker 4: the statement for Ukraine's sovereignty, for its territorial integrity.
Speaker 9: I think the statement's a very strong one. But of
Speaker 9: course there are detractors. Former UN ambassador and Republican presidential
Speaker 9: candidate Nikki Haley on'sn says it was a win.
Speaker 7: For Russia and China.
Speaker 10: They're celebrating today.
Speaker 8: I mean, what we should have had was Biden should
Speaker 8: have really pushed hard to acknowledge what he acknowledged a
Speaker 8: year ago that Russia invaded a pro American freedom loving country.
Speaker 9: As for President, Biden focused on the Indo Pacific, having.
Speaker 4: India cooperate much more of the United States, be closer
Speaker 4: to the United States, Vietnam be closer with the United States.
Speaker 4: It's not about containing China, it's about having a stable base,
Speaker 4: a stable base in Indo Pacific.
Speaker 9: And global warming. Biden saying bigger than nuclear attack.
Speaker 4: There's a lot of line dog faced poniceps out there
Speaker 4: about global warming, but not anymore.
Speaker 11: All of a sudden, Oh realize it.
Speaker 4: It's a problem, and there's nothing like seeing the light.
Speaker 9: Biden also saying he feels China is weakened enough that
Speaker 9: it won't be in a position to invade Taiwan, and
Speaker 9: US Vice President Kamala Harris as a policy to cement
Speaker 9: relationships in the endo PASIL.
Speaker 10: For example, when I was in Tokyo last year meeting
Speaker 10: with CEOs there about what we are doing to coordinate
Speaker 10: around the semiconductor industry, what we are doing with South
Speaker 10: Korea to the same extent, ensuring that with our allies,
Speaker 10: we are strengthening the relationship around our common goals.
Speaker 9: Now, Harris on CBS has heard here on Bloomberg, says
Speaker 9: those relationships are very important. COVID cases on the rise
Speaker 9: in the US, and doctor Anthony Faucci back on ABC
Speaker 9: has heard on Bloomberg, says it will increase.
Speaker 1: We're having an uptick in cases, which is being reflected
Speaker 1: by an uptick about seventeen or more percent in hospitalizations.
Speaker 1: There's no doubt that that is going on, and since
Speaker 1: we're now at the end of the summer, it is
Speaker 1: likely that that will increase as we get into the fall.
Speaker 9: But says immunity is still pretty high over people who have.
Speaker 1: Been vaccinated boosted people who've been infected. The chances of
Speaker 1: this being an overwhelming rush of cases and hospitalizations is
Speaker 1: probably low.
Speaker 9: Fauci says boosters will be available hopefully before the end
Speaker 9: of September, and says it is important to get boosted.
Speaker 9: He also says despite all the debate and crying about masks,
Speaker 9: they still do deliver a line of added protection. Global
Speaker 9: News powered by more than twenty seven hundred journalists and
Speaker 9: analysts in over one hundred and twenty countries. In San Francisco,
Speaker 9: I'm Ed Baxter, and this is Bloomberg.
Speaker 3: This is Bloomberg Deabreak Asia. I'm Brian Curtis, along with
Speaker 3: Rashid Selamat, and our guest is Phil Palumbo, CEO and
Speaker 3: CIO of Colombo Wealth. Phil. As we get started this week,
Speaker 3: you just heard the news flow there from both our
Speaker 3: look at business stories and also Ed's take on the
Speaker 3: latest global news. What do you think will dominate the
Speaker 3: minds of investors as we kick off this week.
Speaker 11: I think the most important thing is investors are realizing
Speaker 11: that China's weakening as an economy, and we'd say that
Speaker 11: when we look at the property devaluation, that we're seeing
Speaker 11: the trade war with the US, the tensions with the US,
Speaker 11: which is severe supply chain changes. Now, a lot of
Speaker 11: companies now are looking to diversify out, especially as the COVID.
Speaker 11: The consumption story in China is very weak relative to
Speaker 11: what they really need to get to on a consumer basis.
Speaker 11: They are at thirty eight percent is the consumer relative
Speaker 11: to GDP. In order to get that up, they have
Speaker 11: to put money into the pockets of consumers. So I
Speaker 11: think investors are recognizing that the infrastructure build out that
Speaker 11: they did was overdone. That's not They're not going to
Speaker 11: be able to do that this time around to really
Speaker 11: jumpstart their economy. And because of that, I think investors
Speaker 11: and I think are going to move away from China
Speaker 11: and movement places like India. India is a much more
Speaker 11: attractive country to invest in than China today.
Speaker 2: Phil Okay, Sure, when we look at China itself, we've
Speaker 2: moved to India a bit later on. But the thing
Speaker 2: is that the household savings are actually up quite considerably
Speaker 2: since twenty twenty one at the point being with what's
Speaker 2: happened with property, it's taken away one of the biggest
Speaker 2: growth engines, and so what the country's thing is arguably
Speaker 2: having a structure shift. The thing is what's the new
Speaker 2: engine of growth going to be and would that become
Speaker 2: investable and that would perhaps be where you need.
Speaker 3: To be.
Speaker 11: In China. I just think that first investors have to
Speaker 11: have confidence that they can get over this real estate
Speaker 11: property issue that they're having, which is very substantial when
Speaker 11: you look at the quantity of debt that's consumed, that's
Speaker 11: that is that they have on many the properties in China.
Speaker 11: I just think that investors are going to be skittish
Speaker 11: to deploy capital there and until that's resolved, until we
Speaker 11: see Chinese consumers spending like they should be and savings
Speaker 11: not going up as you just talked about just now,
Speaker 11: I think there's a lot that we have to really
Speaker 11: think about before you see a lot of capital flowing
Speaker 11: into China and you're seeing money leaving China and going
Speaker 11: into Japan and other countries. So I think there's a
Speaker 11: lot still needs to be done and reviewed before investors
Speaker 11: state China series Again.
Speaker 3: A moment ago, you said that India looked the better
Speaker 3: option at the moment.
Speaker 11: Why so, India has the first and most important thing
Speaker 11: for countries go from developing into developed. It all comes
Speaker 11: down to leadership and good policy making. And Prime Minister
Speaker 11: Modi has done a phenomenal job since he's been in
Speaker 11: office in attracting foreign investment into his country. The demographics
Speaker 11: in India is much more attractive than China. They are
Speaker 11: one point four billion people and the average age is
Speaker 11: twenty nine years old. The average per capita income is
Speaker 11: only twenty four hundred dollars, so there's plenty of room
Speaker 11: to grow. And I would suggest that India is the
Speaker 11: new China. So what China was thirty forty years ago,
Speaker 11: India is today. And Mody is going all around the world.
Speaker 11: He's doing a great job politically. Just at the G
Speaker 11: twenty meeting, they put together this real important deals with
Speaker 11: the Saudis, the US and the EU, which is going
Speaker 11: to be tremendous for their country. So he's really doing
Speaker 11: a great job that's going to attract money into his liney.
Speaker 3: Yeah, Phil, I have to follow up on that because
Speaker 3: obviously Mody is known as a nationalist, not so much
Speaker 3: as a globalist. Are you saying that he can wear
Speaker 3: both hats at the same time.
Speaker 11: I think it is wearing both at the same time.
Speaker 11: I mean, he is a nationalist, but he's definitely you know,
Speaker 11: creating great, strong relations with many leaders around the country,
Speaker 11: and you're seeing direct investments into the country. You're seeing
Speaker 11: direct investments in infrastructure and renewable energy, and so you're
Speaker 11: seeing a lot of things that are going on with
Speaker 11: in India and his policies that are improving the growth
Speaker 11: in You could see it in the growth of the GDP.
Speaker 11: You could see it in where the market's trading relative
Speaker 11: to other emerging market countries. Right, it's trading or it's
Speaker 11: training at a higher valuation because investors are recognizing that
Speaker 11: investing in India is a good investment in the long term.
Speaker 2: The thing is phil it's very expensive. There's it's I mean,
Speaker 2: that's what puts a lot of people off here. And
Speaker 2: is that huge premium that India has enjoyed. If you
Speaker 2: can argue that something which is likely to put people off.
Speaker 11: It sure is right. So a couple of things we
Speaker 11: have to think about. Number one is, you know, the
Speaker 11: strong dollar relative to other currencies, right, So when you
Speaker 11: look at the performance of the Indian market versus the
Speaker 11: S and P five hundred, there is on the performance there.
Speaker 11: So there are things that have to unravel before you
Speaker 11: can make a direct investment in India from a public
Speaker 11: stock market standpoints. I don't think you need to necessarily
Speaker 11: jump in today because of overvaluation, but I do think
Speaker 11: you're going to get opportunities where the Indian stock market
Speaker 11: will retrace because of some currency risk perhaps or higher
Speaker 11: interest rates all around the world. That's putting pressure on
Speaker 11: emerging markets. So that pressure is going to create a
Speaker 11: cheaper stock market overorld for India, and that's going to
Speaker 11: be the opportunity for investors to jump in.
Speaker 3: And you mentioned Japan, they've had a good run there too. Obviously,
Speaker 3: the NYK one of the better performing major benchmarks in Asia.
Speaker 3: A lot of investors cite some changes in the structural
Speaker 3: nature of corporate culture. Are you in that camp?
Speaker 11: Absolutely? So the corporate culture. The three major things that's
Speaker 11: attracting investors is there increase in buybacks, dividends and selling
Speaker 11: off non core assets. Those are three key areas that
Speaker 11: will that there are tracking investors into their market that
Speaker 11: I think is sustainable and you've see in supply supply
Speaker 11: chain shifts into Japan as well. You're starting to see
Speaker 11: real rates rise for the first time in a very
Speaker 11: very long time. You yeld curve control, you know that,
Speaker 11: I think they're going to start to remove that or
Speaker 11: start a subside on that, and you start to see
Speaker 11: rates move up higher, which will attrack capital to their
Speaker 11: market overall. So these are the benefits that you've seen
Speaker 11: with in Japan, which is a game change which we
Speaker 11: haven't seen in a very long time.
Speaker 3: This is Bloomberg Daybreak Asia, your morning brief on this
Speaker 3: story is making news from Hong Kong to Singapore and
Speaker 3: Wall Street.
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