Asian Chip Stocks Extend Losses

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Original video: Asian Chip Stocks Extend Losses · Channel: Bloomberg Television · 1:34:37 · Watch on YouTube

Topics: AI infrastructure and hardware

Summary

Asian markets open under pressure after a sharp US technology and semiconductor sell-off, with investors weighing AI valuations, returns on investment, and the outlook for hyperscaler spending. The week also brings major corporate earnings, economic data from China and Japan, and central bank decisions across Asia. Coverage examines China’s uneven recovery and limited consumer stimulus, Japan’s fiscal and monetary challenges, and political unrest in France and Ukraine-related diplomacy. Guests also discuss AI’s economic potential and risks, portfolio diversification, and the need for reliable clean energy to support future data-center growth.

Key points

• The US semiconductor index fell nearly 4% on Friday, weighing on Asian chip stocks, especially in Korea and Japan.
• Investors are looking to major technology earnings and hyperscaler guidance for evidence that AI spending is generating returns and can continue.
• Anthropic faces valuation and safety concerns ahead of a potential IPO and plans to direct 5% of its shares to a public benefit fund.
• China’s expected third-quarter growth is around 4.4% to 4.5%, but exports and production remain stronger than domestic consumption.
• A Citi economist expects Bank Indonesia to raise rates by 50 basis points, while the Bank of Korea is expected to hold rates hawkishly.
• Japan’s Prime Minister Sanae Takaichi is pursuing investment in strategic sectors while trying to balance growth ambitions with fiscal discipline.
• Protests and violence in France are raising political concerns, while a proposed Ukraine summit without Ukraine or European leaders could heighten tensions.
• Market strategists recommend considering diversification beyond AI and technology, including quality bonds, financials, health care, and commodities such as copper.
• A former World Bank chief economist argues that the US and China should coordinate on AI policy and that stimulus should also support production.
• India’s science and technology minister says nuclear power could provide reliable clean energy for data centers and other uses.

Chapters

Start	Chapter	Summary
00:16	Asian markets brace for the tech sell-off	The hosts outline the weak Wall Street lead, upcoming catalysts, and pressure on Asian chip stocks.
02:28	AI valuations and Anthropic’s IPO questions	Market guests discuss AI investment returns, Anthropic’s risks, and what hyperscaler earnings may reveal.
09:30	Geopolitics and unrest in Europe	The program reports on a proposed Ukraine summit and protests in France, alongside the week’s key economic events.
12:55	China’s growth and Asia’s central banks	Citi economist Johanna Chua discusses China’s uneven growth, limited consumer support, and expected policy decisions in Asia.
20:18	Energy markets and a proposed Ukraine summit	The show reviews oil and gas developments before examining the implications of a summit that could exclude Ukraine and Europe.
24:10	European protests and the AI investment debate	Coverage links unrest across Europe with market uncertainty and renewed questions about technology valuations and AI safety.
28:57	AI productivity and corporate news	Aberdeen CEO Jason Windsor discusses AI adoption, productivity, and business priorities, followed by reports on IPO valuation and SoftBank.
34:34	Takaichi’s first year and Japan’s policy challenges	A report and interview assess the Japanese prime minister’s economic agenda, fiscal plans, and tensions with monetary policy.
44:51	Asian market open and portfolio strategy	The program reviews Indian bank results and falling Asian markets before a UBS adviser discusses rates, diversification, and bonds.
59:58	China’s outlook and protests in France	Stephen Engle previews China’s data and Bund Summit guests, while a correspondent explains the causes and political implications of French protests.
1:08:33	Ukraine’s exclusion and pressure on Trump	Bloomberg’s John Herskovitz discusses the proposed summit, Ukraine’s position, and political pushback facing President Trump.
1:12:09	Global economic fragility and AI coordination	Kaushik Basu discusses global economic risks, US-China policy cooperation, China’s domestic economy, and the need to manage AI development.
1:24:14	China’s tech trade and AI productivity	The program examines China’s tech-market trends and revisits Aberdeen’s views on AI adoption, investment returns, and business growth.
1:32:24	India’s AI ambitions and nuclear energy	India’s science and technology minister discusses human-led AI and the role of nuclear power in providing reliable energy.

Quotes

I think the market has become increasingly nervous that the ROI is getting too far pushed out — 05:46

Those who have destroyed must pay. Those who have looted must reimburse. — 11:07

This is still exports production and really the the the the main driver that we’re seeing a bit of a turn in the cycle is really going to be investment, not consumption. — 15:03

coordination is the only way to go if we do not want a global fiasco. — 17:31

This is the chance to slow down. — 1:23:23

Concepts and entities

Anthropic, DeepSeek, CXMT, KOSPI, Sanae Takaichi, Kaushik Basu, Johanna Chua, Jason Windsor, retorno sobre o investimento em IA, energia nuclear

Full transcript (original language)

00:16 This is the Asia trade. I’m Paul Allen in Sydney. >> And I’m Heidi [music] Swartz. The top stories this hour. Asian stocks are set to face pressure after tech leader sell-off on Wall Street sending [music] the Vix index to a 4-month high. Traders bracing for a packed week of corporate earnings, economic data, and central bank decisions. [music] >> And Tropic announces plans for a so-called public benefit funds as it faces calls to delay its blockbuster IPO until safety [music] concerns are properly addressed. >> And I’m Stephen Engle in Shanghai for the annual Bund Summit where fresh economic data out of [music] China is

00:48 due today. That will put the spotlight on China’s economic challenges. [music] We’ll also speak with a number of high-profile guests including a former World Bank chief economist about chances of fresh stimulus here in China [music] plus tech and trade tensions with the United States. >> Let’s get you straight to the setup as we head into the start of trading in pretty uh pretty challenging lead I should say that we had from Wall Street uh over the past Friday session. Uh we had do see US futures at this point balancing off those uh sell-off lows. Oil though slipping as well, that’s going to uh

01:21 sort of help a little bit in terms of that broader sentiment. We’re taking a look at uh the start of trading here in Australia up about 2/10 of 1%. Chicago Nikkei futures looking like we’ll see a little bit of resilience but still quite a bit of a catch down there as we continue to see that downside pressure when it comes to Korean stocks in particular. Kospi futures down by 3 and 1/2% as I mentioned. US futures at this point about 4/10 of 1% in the early actions. We’re seeing Treasury contracts also slipping alongside oil. So chip makers though particularly in this session will still be set for those declines. We did have the semiconductor index on Friday ending just about 4%

01:56 lower going into that weekend as well. Brent crude as I mentioned a bit softer there by just about 1%. New York traded crude seeing some mild declines. And as I mentioned, the treasuries move alongside oil as well as US dollar just seeing a little bit of upside. We’re also watching in particular euro dollar pair uh trimming some of that initial sell-off as we continue uh to watch for those developments in France what has been a a really chaotic weekend of unrest, protest, violence hitting Europe. So, we’re getting more on that story throughout the course of the hour. But let’s get to our team today for more when it comes to this Asian market

02:28 setup. Our Bloomberg equity strategist Sunny Bangia joins us now in Sydney. And our markets reporter Anthony Stevens is with us in Hong Kong. So, Sunny, let’s start off with you. Uh what are you watching in terms of some of these big catalysts? Obviously, it’s been a pretty prolonged period of this this sort of question over the valuations and and how much money has gone into the AI trade and what investors are getting out of it. >> Yeah, that’s right. And um um Anthropic’s um you know, closed over investor day last week, um probably didn’t provide the catalyst that the market was hoping for. Um we might get more uh clarity on that when they come

03:02 to uh file uh and eventually go IPO. But then the chances of that are also falling. Um so so it’s got investors a little bit nervous um over the over the next few trading sessions. But really as we go into reporting season, um markets are going to sort of look at uh or look towards the large big tech stocks. Um we know that there is somewhat of a concern on the new your clouds and their funding pressures that they’re currently facing. Um so it’s going to be interesting how that contrasts against the large hyperscalers and what they’re saying what they say about the overall outlook

03:35 for demand and um you know, what our ROI they’re getting on their spend. >> Uh Anthony, um we were anticipating one of the biggest IPOs of the year if not the biggest. Not really ideal backdrop for Anthropic, is it? What’s happening? >> Yeah, no. Investors have to kind of price twin risks, right? You have the revenue risk from Anthropic. You know, you’re starting to see him markedly lower estimates of ARR and valuations for this IPO, right? So, the probability that Anthropic is the largest IPO of the year has plummeted to like 30% ish.

04:09 You’re talking about a valuation that’s dropped a half a trillion dollars in the course of a couple of weeks. And that’s just on the financial side. On the AI safety side and on the regulatory side, the company is also kind of contributing in a way to the the storm of controversy around itself. They’re in talks with, you know, the New York City controller about delaying the IPO on safety grounds. There is a Trump administration super intelligence safety study coming. And finally, they’re starting this plan around the public good kind of fund,

04:40 right? So, there’s a lot of moving parts around this company that is very central now to the AI infrastructure story. So, it’s a little bit too much noise for the average investor to be comfortable. >> Um Sunny, this is not just a discomfort for potential Anthropic investors as well. And you mentioned there a moment ago, you know, the need for the Magnificent Seven to deliver some reassuring earnings. How likely is it we’re going to get that? >> Yeah, I mean, we when we go back and it feels like you know, an eternity ago to

05:14 the last reporting season, we did see good positive signs out of companies particularly like Microsoft. Um and you know, these are ultimately the biggest spenders in the room. Amazon is, you know, and Meta with its launch of Muse. Market really wants to just see is the spend resulting in any kind of return? And what is the path forward as well? It it is going to be quite crucial to the overall semiconductor sentiment that these hyperscalers feel that they’re

05:46 actually earning a return on this so that the spenders feel justified you know in terms of in terms of their outlook for for for AI and it’s not just like we will see over the horizon when the spend comes through. I think the market has become increasingly nervous that the ROI is getting too far pushed out and as a result you know people are anchoring very heavily to any sort of misses or beats on ARR from Anthropic. So it’s ultimately these the market needs

06:18 to be reminded from the hyperscalers that it’s not all about Anthropic but there’s a whole ecosystem here that’s that’s trying to grow. >> Anthony in terms of that ecosystem what are the catalysts that we should be looking for in terms of what could sort of prop up this trade which which at this point it’s it’s quite interesting is hearing even conflicting voices from from a lot of these very experienced market participants right? Howard Marks one of them doesn’t think that we it looks like bubble territory yet but there’s plenty

06:48 of people that would also be disagreeing with him at the moment. >> Absolutely right that that dichotomy of you know a profit boom right now versus you know a very fast moving technological target to kind of discount future cash flows is at the center of this debate. So like what Sonny said you know you have this ROI debate and that pretty much is the determinant of how long this capex cycle continues and that debate matters because that is what determines whether the AI capex cycle is structural or cyclical. People know how

07:22 to trade cyclical semis cyclical memory and that’s the bear case right that this is all coming back down after the AI infrastructure build out is finished in 2028 2029 and we go back to just making you know commodity hardware when the likes of memory or GPUs or CPUs or you know this uh make so much money on their AI investments that the ROI is strong and they continue running into 2030, 2040, right? And the higher rates of computational pricing power at the moment continue. And then those those

07:55 very same hardware names, those very same neo cloud names become structural plays. So, that is not a debate that can be resolved by publicly available data. That is a debate that is resolved by having a high conviction view on the future of the technology. And the kind of guidance that we will get from the hyperscalers on that view forward, that is going to be the pivotal part of this earnings week. >> We saw at the end of the week that uh a little bit of a reversal in sentiment for the Kospi. That’s 7 days of selling. Some of that had to do with foreigners coming back in. Is that

08:26 likely to be something that continues? >> Yeah, I mean, with the Kospi, I think the concerns around memory are more more along the lines like where is China’s brawl in the memory ecosystem. Um and CXMT, which has made which is making inroads into into the into the Koreans uh into their space, has just got investors really nervous what the 28, 29 outlook looks like for the memory sector. Look, the Koreans are obviously still ahead when it comes to technology and the market might start, you know, over time in in the low-end commodity

08:58 DRAM space might see more Chinese competition. But really the um Korean companies need to come out and, you know, also buy back their stock to support the market and get investors a bit more comfortable in the in the outlook for uh DRAM and HBM. So, I think investors are still very much perhaps looking for the results out of US earning season for broader direction for the overall overall semi trade. >> All right. Bloomberg equity strategist

09:30 Sunny Benji then and our markets reporter Anthony Stevens, thank you. Let’s get to you some breaking news across the terminal of Vladimir Putin, Russian President has proposed a meeting with uh President Trump and China’s President Xi Jinping on Ukraine. This is according to reporting from the Wall Street Journal. It’s understood this idea came from the same October 9th meeting or phone call between uh Putin and Trump uh which resulted in this agreement on diesel. Now, if you’re wondering what’s missing from this picture, yeah, it’s uh the Ukrainian President Volodymyr Zelenskyy. So, this

10:03 idea for a summit uh featuring Putin, Xi, and Trump with Ukraine and European leaders absence uh has the potential to cause some disquiet if this meeting was to go ahead. It would happen uh according to uh Putin’s uh suggestion at the APEC conference in Shenzhen on November the 18th and the 19th. Now, geopolitics is also firmly in focus for investors. India’s Cockroach Janata Party has raised concerns over what it calls systematic delays and obstruction

10:33 in securing the release of two of its leaders who were arrested last week. The CJP founder [music] told local media it’s an attempt to intimidate the party which has been among groups protesting over issues including contentious changes to voter rolls. Delhi police haven’t publicly addressed the CJP’s allegations. President Emmanuel Macron is calling for order after weekend protests across France spiraled into looting, arson, and clashes with police. More than half a million people marched on Saturday with close to 2,400 arrests and more than a thousand police and firefighters

11:07 injured. Macron says cost of living concerns are at the root of unrest, but vandalism will not be tolerated. >> Whenever offenses are committed, they must lead to appropriate legal proceedings. Those who have destroyed must pay. Those who have looted must reimburse. Those who have sought to bring down the Republic will have to answer for it. Yesterday, several hundred thousand of our fellow citizens demonstrated with the intention of expressing legitimate demands. We must

11:38 never confuse them for those who destroyed, vandalized, and looted. >> We will be speaking exclusively with the German Chancellor Friedrich Merz later on Monday as Europe faces mounting trade, economic, and political challenges. Stay with us for that conversation at those times on your screen. Plus, we are live at the Bund Summit in Shanghai talking technology and geopolitics, the former World Bank chief economist, much more ahead. This [music] is Bloomberg.

12:24 >> November 3rd, as Americans [music] head to the polls to vote on issues including affordability, the Iran war, and [music] AI. Bloomberg brings you expert analysis of the election’s impact on markets [music] and geopolitics. >> It’s election night in America on Bloomberg TV and radio >> with up-to-the-minute [music] special coverage until the final results are in. It’s the 2026 midterms, November 3rd starting at 7:00 p.m. Eastern, only on Bloomberg.

12:55 >> [music] >> Let’s take a look at some of the key events to watch this week. Uh China releasing activity data later on Monday. Third quarter GDP growth is expected to tick up to 4.4%. Economists expect September retail sales, though, will remain weak. APEC finance ministers gather in Hong Kong on Tuesday for a meeting to be chaired by China’s Lan Fang. A media conference is scheduled for Wednesday. Bank of Indonesia and the Bank of Korea are expected to hold rates

13:27 steady this week. Economists though see the Philippines Central Bank hiking by 25 basis points on Thursday. And on Friday we might see Japan’s core inflation rate returning to the Bank of Japan’s target band supporting further rate hikes. Joining us now from Melbourne is Johanna Chua, City Group’s chief Asia economist and head of emerging market economics. Johanna, thanks as always for joining us today and I do want to start with China. Those GDP numbers is probably going to hit the year end target, but surging exports

13:58 against a backdrop of weak domestic demand. Does this suggest there’s still plenty of challenges ahead? >> No, absolutely. So we are expecting third quarter growth. We’re actually slightly above consensus at 4 and 1/2% versus consensus of 4.4%, but the narrative really is still unchanged. It’s still a very very unbalance unbalance imbalance growth growth composition. Part of the reason why we have a little bit of an uptick to 4 and 1/2% is because of the low base effect and mostly exports and new economy drivers. But I think going forward the challenge right now is really that the big driver is still mostly on the supply side. We

14:31 are expecting more investment stabilization as the government continues to push more credit kind of targeted lending to specific sectors, but right now there’s really been no material stimulus on the consumer side. So I think this imbalance story is going to go go on going into next year. >> Yeah, on the consumer side we will get retail sales numbers as well. You expecting to see any evidence of the Chinese consumer breaking out of this malaise? >> Not at all. Not at all. In fact, when we saw some of the Golden Week holiday spending data, actually spending per

15:03 trip is down to kind of a four-year low. Um, I think we’re expecting a slight uptick on a Y on Y basis. Again, it’s partly because of base effect, but really the story hasn’t changed. This is still exports production and really the the the the main driver that we’re seeing a bit of a turn in the cycle is really going to be investment, not consumption. >> How much fiscal support do we continue to see because while there has been some, the trend hasn’t been for, you know, the old playbook of stimulus at all. >> No, absolutely. Actually, there’s been a

15:36 a number of announcements even before the holidays and then post holidays. So, we’ve had things like there was a a small pledge supplemental lending facility cut about 25 basis points. There was a mortgage rate cut. There was an announcement about, you know, potentially unutilized local government bond quota of about 550 billion. There’s still unutilized pledge lending support for the policy banks. But again, I I think it’s more about the deployment of the existing facilities and stimulus, which has been a little bit delayed rather than any new stimulus at the moment. So, I have to say they still

16:08 have ammunition. I mean, for example, this 550 billion dollar announced 550 billion RMB announcement of unutilized local government bond quota. That’s about 0.4% of GDP. So, there is something, but the issue is really the composition. I think what we’re seeing really is more on the investment side. There’s really been nothing material announced on the consumer support side. And in the backdrop of kind of a weak household income formation and weak labor markets, I think that continues to be a very big challenge. >> Yeah, the criticism has really been that

16:38 some of the stimulus measures have come too late to make much of a notable impact, right? I do wonder in terms of the huge amount of AI-related investment and spend that’s happening. When do we expect to see that to materialize in in the eco indicators? >> I mean, we already expect the I mean, obviously the fixed asset investment data that we’re expecting to come out today will still be very weak. So, same negative period period from the previous month. But our expectation is we are going to see a gradual rebound going into fourth quarter. There’s already talked about the six network for seeing

17:09 our strategic initiative. These things are multi-year investment projects. And obviously, because we’re going into the next planning next year, I think maybe there was a little bit of a delay of investment spending, but that I think because we are in a strategic you know, there is some competition especially on the technology sector. This is going to be an initiative that’s going to continue to live deliver going forward. So I think that’s going to be a longer term story. It’s just that right now for this year overall our real GDP growth forecast for this year will probably still be in the low end of the government’s target. >> Joanna, we need to talk about Indonesia

17:40 as well. The right decision this week obviously. I mean previously we could have argued for a case to hold, but boy things changed, right? Not the least of which Indonesia getting losing emerging market status last week with MSCI. >> Yes, I mean it hasn’t happened yet. But obviously there’s a warning not just to go lose emerging market, but initially there was talk about losing from emerging market to frontier, but now they’re talking about moving to a standalone status which is even a notch lower. So actually we changed our call on BI policy because Bank Indonesia really when you look at the

18:13 policy framework, it’s really not just inflation. They’re also looking at FX stability. And this type of announcement is obviously quite negative on the sentiment risk sentiment and what it means for portfolio flows. So we actually changed our BI call. We’re now calling for an out of consensus 50 basis points hike on Wednesday this week. Again as an attempt to kind of kind of offset some of the pressures on capital flows and to stabilize currency. Obviously in a backdrop where globally there’s also been a lot of debate about what’s been happening globally to interest rate cycles.

18:44 >> The >> jobless numbers from Korea were actually a bit of a surprise in terms of that decline. Does that give the BOK this week do you think more headroom to be able to be more hawkish? >> Well, actually our expectation is BOK is going to be on a hawkish hold. And the assumption really there is that because BOK already arguably they they might make an argument they’ve already done a back-to-back rate hike in July and August. And then some of the forward guidance signaling we’re getting from BOK is they want to wait to assess the kind of the the transmission of this

19:14 monetary policy tightening. But I do think when you look at the overall fundamentals of Korea’s economy, I mean it’s still very, very strong, notwithstanding some unevenness between kind of the AI and the AI spillovers and the non-AI sectors. So we do expect they’re going to resume a rate hike in November. But for this meeting that’s expected on Wednesday, we are expecting for now it’ll be a hawkish hold with potentially kind of a minority monetary board member potentially calling for a hike. But that’s our our call for this Wednesday. >> Johanna Chua is the chief Asia economist

19:44 and head of emerging market economics at Citigroup. We will be live from tomorrow at Citi’s Australia and New Zealand investment conference. We’ll be getting those views on the global economy and markets from their Australia CEO, Mark Woodruff, and other guests including UniSuper’s CIO, John Pearce. More ahead here in the Asia trade. This is Bloomberg.

20:18 Take a look at what we’re watching when it comes to energy pricing at the moment. A bit of a tale of two stories when it comes to crude prices trending lower, falling from that 5-month high though for context. Really this market weighing the continued fighting in the Middle East, some of the proxy activity that’s happening. But there are some signs that supply from the region is holding at closer to pre-war levels. The US saying that its forces helped escort more than 100 million barrels of oil through Hormuz over the prior week. So that indicates supplies exiting at least the region. In the meantime, you’re seeing some upside for European natural gas prices. The shipping disruptions

20:51 through the strait continuing to persist when it comes to this front month futures rising as much as 2% at one point during early trading on Monday. So we are hearing some reports that an LNG tanker was fired at in Yemen or off the coast of Yemen, I should say, on Saturday. Let’s get more when it comes to the latest on Ukraine. Wall Street Journal reporting that Vladimir Putin has proposed a summit next month with President Trump and Chinese leader Xi Jinping but not including Vladimir Zelensky. Bloomberg editor John Herskovitz joins us for now. So

21:23 >> [laughter] >> very interesting that we’re hearing that the summit is being proposed in the absence of a man who’s you know business very much would be to be there, right? You’d imagine that the topic of Ukraine and these ongoing talks the energy ceasefire will be amongst what is on that agenda. >> I know exactly. The fact that Zelensky is not a part of this, the fact that it’s being proposed that Putin, Xi Jinping and Trump decide Ukraine’s fate and also the fact that Europe is not involved in this it’s just adds to the friction that’s going on

21:57 between Ukraine and the United States. It’s quite a development. The idea would be that Russia wants to take care of the better relations it has with the US now, get a settlement that’s on its terms and leave Ukraine out of the process. It’s um yeah, it would be very much to the detriment of Zelensky to the Ukrainian people and very much to Putin’s favor and to have this with Xi Jinping it’s kind of like the big powers play that we saw during World War II for the carving up of Europe after the war. So it’s

22:30 quite a development and the fact that the White House is considering this is something that it will be of great concern to Ukraine, Europe and a lot of people in Congress both Republicans and Democrats. >> The reporting John does specify that President Trump hasn’t formed a view on this idea yet and one does imagine there might be some pushback from the Republican Party as well. >> Exactly. We’ve seen some dissatisfaction and vocal yeah,

23:00 people speaking up vocally against the deal to wave sanctions on Russia from prominent Republicans including Ted Cruz. So, the idea of going ahead with this sort of summit would just add more fuel to the Republicans and the Democrats who see Trump as cozying up to Russia to make a deal on Putin’s terms that would be favorable to the Kremlin. So, you know, we haven’t heard back from the White House, but the fact that this got out that they’re considering it

23:31 indicates that it’s on the table and it’s something that’s moving that it could be moving forward. >> All right, Bloomberg editor John Herskovitz there. And we have more heads on the Asia trade. Stay with us. This is Bloomberg.

24:10 >> It’s been a a weekend of extraordinary images coming out of France, right? Where multiple cities, several cities descending into clashes between police and demonstrators. French President Emmanuel Macron saying the country felt anger and shame following the widespread violence. We saw looting, we saw landmarks being set on fire. He’s calling for order to be restored. But we are really watching what has become a thematic, right? France certainly had the broadest series of demonstrations, but we saw them across Europe. Belgium, Italy, Portugal also affected. You can see the euro uh

24:41 stabilizing somewhat, but certainly seeing that weakness against most of the G10 trading peers as these escalating tensions in Ukraine also hasn’t helped sentiment either going into these protests as well, which really continue to dent confidence across the common currency. So, watching all of this as we head into this new week, this at a time, Paul, we’re also seeing that political risk in terms of domestically in France, the far-right’s Marine Le Pen now looking like a leader in polls going to that 2027 presidential election. >> Yeah, a lot of our people in France, and I mean up up people everywhere, and I

25:13 mean not the least of which the entire AI story. You know, we’ve heard from the New York City Controller, Mark Levine, writing a letter to Anthropic saying, “Hey, hold back on that IPO.” Not for the reasons that we typically discuss on this show, but over safety and government governance concerns saying, “Take a little bit of time, get it right.” So, this is sort of another cloud in the background for this Anthropic listing. Anthropic though does say it’s planning to put 5% of its shares into a public good fund, which would mitigate the AI impact on the job market, which

25:46 depending on your point of view is either reassuring or it isn’t. Well, Asian markets are going to be bracing for follow-on selling in the tech space after extremely weak leads from the US. And dip buyers though might also step in amid a sharp increase in volatility. Anthony Stevens is back with us. How is Asia tech setting up, Anthony, after those leads from the US? >> We’re getting a little bit more optimism this morning. We’re seeing the Nasdaq trading up a little bit on the futures market. Nikkei futures have you bottomed

26:17 a little bit, but it’ll be really hard to turn the tide in terms of a pure risk management function. You do have, you know, Korea looking down around 3 and 1/2% on the futures. Similarly, Japan will be very bifurcated between the tech weakness and potentially some kind of the domestic strength. We saw defensives in the US trade really well. And that is something that Asian traders will be looking for as well. That’s going to hurt books that are very long tech and very short everything else. So, the key debate coming into Asia is how much of

26:48 the AI infrastructure trade has been damaged in the last few year few days, right? Are we looking forward through 2029 to 2029 30 into turning AI trade back into a cyclical and that can really damage the valuation case because going by the huge profits that people are making today in AI, the valuations are very cheap. But if valuations turn out to be cyclical, they’re less of a support. Last thing that I’m watching is how much local firepower is out there in Korea, Taiwan, and Japan as foreigners continue to unwind very aggressively in

27:22 all these markets. >> Anthony, what are traders here in Asia looking for in terms of a potential signs of a turn in sentiment? >> [clears throat] >> You you know, we are waiting for the US hyperscalers, right? We have a SpaceX and Meta specifically. These are two companies that are sitting on plenty of compute. What they say about going forward capex is going to be really closely watched by the market. We’re also going to be seeing you know, the reaction function to Deep Six new model, right? That’s going to be really interesting. Are investors kind of

27:53 excited that there’s new models coming out of China that potentially put upward pressure on AI capex or are these models so efficient that it kind of depresses the go forward spending? So, that’s up for grabs as well. In terms of a pure turn, we’re also getting to the point where we have some valuation support. If companies do start to do more corporate governance driven shareholder return programs, especially in Korea where we’ve reached this so materially, almost down around 40% from the highs while profitability in terms of what has been

28:26 guided continues to skyrocket. So, there is space for that market to kind of find some fundamental balance. But in terms of pure flow, the locals will have to step to the plate as foreign selling approaches $150 billion in the last 12 months. For that, they need you know, the NPS to continue to have the kind of firepower that it has shown. But NPS has also started to lose a significant amount of money here from the highs. >> Well, that markets reporter Anthony Stephens there. Well, abrdn CEO Jason

28:57 Windsor says the next test for AI investment is translating the massive spending into productivity gains and returns. Speaking exclusively to Bloomberg at IIF in Bangkok, he also laid out where he sees opportunities in the technology. >> We think AI is the most incredibly exciting thing, and it is driving all the investor debates at the moment. I think we remain pretty supportive of AI, particularly the supply chain, cuz we can see the real earnings growth. And and actually, there’s much discussion about bubbles,

29:30 but there’s been real growth in the supply chain, and they’ve materially outperformed, as everybody knows, the rest of the market. The real question for us is when do you start to see productivity benefits? When do you see a return on investment for the customers of that supply chain? And that’s what we’re really talking to people about. >> What are you seeing in your own business? >> Well, we’ve seen real excitement and adoption across the group, actually. We’ve given everybody, you know, the opportunity to think really hard about how AI can improve what they do at a personal efficiency level, and that’s been taken

30:03 up widely. And I walked around our Singapore office two or three days ago, everybody’s using Copilot. Everybody’s using it here in Thailand. You know, it’s it’s really spread. I think our challenge now as a strategic leadership team is to start to bring in, you know, the more substantive uses of AI across the group. >> expect headcount reduction as a result some of the efficiencies? >> I think there’ll be some headcount changes. I mean, broadly, you know, our strategy is to grow the organization at fixed headcount. I mean, that’s what I would like to do, but there will be

30:33 obviously changes in allocation of different resources amongst teams. >> You call yourself in some ways the Charles Schwab of Europe. You have a more than 500 billion dollars of assets under management. Uh You have three different segments. The biggest of them is the sort of, you know, do-it-yourself kind of aspect. What do you plan to do in terms of where you want to grow the most in the three units? >> So, we’re not talking about the Charles Schwab. I’m talking about our major subsidiary, Interactive Investor, which is a UK business. It’s the fastest-growing do-it-yourself platform in the UK. It has been for the last 3

31:07 years. We’re the fastest-growing pension company in the UK. We’ve got over 110 billion of assets under administration now. And we just see the ability to give people more control over their own investing incredibly important. And that’s where we continue to see real growth. >> Do you plan to keep growing your asset management unit or spin it off? What’s the What’s the plan there? >> So, the plan for the asset management business is to continue to grow it. You know, we’ve stepped up the profitability materially in the last 3 years. We continue to focus on efficiency. We’re

31:40 also refining our product range. Emerging markets, as I say, is you know, it’s still very important to our public side of our business. So, we’re going to continue to focus really on the the areas where we can be competitively differentiated. >> One of the other big topics at the conferences this year has been the fiscal debt profile of developed markets, in particular the US and Europe, and a concern about some sort of, you know, massive rise in terms of the speed and measure of yields. What do you see in terms of investors’ appetite for

32:13 debt? Is it still kind of the ballast as it has played over the past couple of days, or do you see it actually changing in the way that people think about it? >> Obviously, the last few months have given people pause for thought. I think we we remain broadly supportive of government debt, and we think um you know, central banks will hike, but probably less than the market is expecting. And as as we look further forward, though, we are supportive of uh of of government debt, and we think the current yield, you know, is isn’t a bad entry point. >> I do want to ask, since you are in the United Kingdom, and there’s been a lot of questions about wealthy individuals

32:47 leaving the United Kingdom as a result of certain tax policies, do you see anything with respect to that trend in your business? Do you see any kind of or do you expect any changes in the composition going forward? >> I think broadly the UK has a has a sensible tax regime for the everyday saver. We have a supportive pension and individual savings system, and I think my message to the government has been, “Don’t change it.” It actually works pretty well for most people. Um so, for the for the average investor, uh that’s fine. There’s clearly some headline

33:21 movements, but they they don’t really affect our business. >> Aberdeen CEO Jason Windsor there speaking from the sidelines of the IIF. The latest from the corporate front now. Bloomberg has learned that AI cloud firm In Scale is facing opposition to its IPO valuation. Sources say the data center developer has been seeking a valuation of about $30 billion, while [music] a cohort of investors believe a $16 to $19 billion range would be more realistic. This comes after Microsoft pulled out of a UK data center

33:52 deal with the firm. Bloomberg has learned that SoftBank is [music] considering buying Allied Universal, the largest US security services company. Sources say Allied could be valued at up to $18 billion in equity, with total deal value near [music] $30 billion including debt. This comes as SoftBank founder Masayoshi Son expands his robotics push and sees security as a proving ground [music] for AI-powered robots. We’ll have more ahead on the Asia trade. This is Bloomberg.

34:34 >> [music] >> Japanese Prime Minister Sanae Takaichi has marked 1 year since taking office. She reaches the milestone with an administration defined by assertive national security posture and aggressive economic statecraft. The Asia Trade Correspondent Kशरियन reports on her inaugural year. >> Opening the new parliamentary session earlier this month, Prime Minister Sanae Takaichi laid out her vision for Japan. Countries are competing through massive,

35:06 long-term industrial policies. While competition among nations for advanced technologies, talent, and investment has grown more intense than ever. Japan must stand up now. >> Takaichi is now aiming for targeted investments into 17 strategic sectors, from semiconductors to security. At the core of her platform is strong economic growth. She set a $2.3 trillion investment target over the next 14 years

35:37 to be split between the public and private sectors. On foreign policy, Takaichi’s pushing for a stronger, more assertive Japan. She wants a major boost to national defense as she balances tensions with China alongside pressure from top ally, the United States. >> Looking at China’s recent actions, we see various areas where we are lacking when it comes to what we need to defend ourselves and deter attacks or offensive actions from neighboring countries. >> Complicating the way, Japan’s massive

36:10 debt pile, the highest in the developed world. Bond yields are surging to record levels, forcing Takaichi to repeatedly try to calm markets and insist that supporting growth and fiscal discipline can go hand in hand. She’s pursuing what she calls responsible and proactive fiscal policy. >> We will control annual debt issuance appropriately as we conduct comprehensive reviews of the economy, inflation, tax revenue, rates, interest

36:41 payments, and the situation in the market. >> As Japan’s first female leader, some say Takaichi is already shifting the narrative of what people expect from the country’s highest office. >> Times have changed. Japan should not be a nation where only men in their 60s with stay-at-home wives can lead the country. We should have a system that can properly support anyone who becomes Prime Minister regardless of their background or circumstances. >> According to a former aide to the Prime Minister, the path forward comes down to

37:13 this. >> The government has compiled its growth strategy and regional future strategy into formal policy documents. The next stage will be to allocate the necessary funding, move into the implementation phase, and deliver results. This is what this coming year will be about. >> Takaichi has until the end of the year to iron out the details of the budget and how to finance her vision. And now, a year after taking office, the big question remains, can Prime Minister Takaichi actually pull off her economic overhaul without spooking the markets?

37:50 >> Asia Desk correspondent Sherylynn Tan reporting on Japanese Prime Minister Sanae Takaichi’s first year in office. Let’s bring in Tobias Harris, founder and principal at Japan Foresight, who’s a political risk advisory firm. As we approach this 1-year date, I wanted to start by asking you your assessment of how the past year has played out in terms of achievements and milestones and performance assessment for the Prime Minister. >> Well, you realize now that we’re we’re at the 1-year mark that in some ways

38:22 she’s still getting started. You know, that she’s had in some ways a long honeymoon where you know, she inherited a budget of course that was started by her predecessor. So had to make some tinkering on the margins, but it wasn’t really the revolution in fiscal policy that she is promising and it really took Okay, in the summer she had to do her basic policies for the budget for next year. She did her growth strategy and now they’re working on translating those documents into the budget. That really is where we’re going to see, you know, if there’s a talk of revolution, that’s where it’s going to show up. And so this

38:52 is all been sort of a prelude and and it really has been a story of how does she lay out her vision and then actually start translating that into policy which as as your opener suggested I think it how to do that without spooking the markets. And so the biggest change we’ve seen over the last year I think has been in communication. But as far as substance is concerned, you can go back to the things she said during the LGP campaign last year and before that and she’s doing exactly what she’s been saying she’s going to do for a long time. So there’s not really a change in substance. Really the task is going to be going forward. >> There’s been

39:23 it’s not been without government’s concerns and scandals, right? In particular when it comes to the agriculture minister, the resignation there. Is that likely to be seen as a sort of a standalone issue that she can move beyond or is it likely to play into the spring elections as we head towards those? >> Well, I mean local elections, you know, and the role that national issues tend to play in them can vary a lot and of course, you know, different races are going to have different dynamics. So it’s it’s hard to go from a you know, one-to-one translation because those are not national

39:56 elections. But I think the the scandal that we that saw the resignation of her agricultural minister last last week only a month after he was appointed to the role, there is I think a pattern of the prime minister and her party and her basically her team I think trying to insulate themselves from external input from external pressure. And of course, some of that is because they won such a large victory in the February general election, and it has in fact given them some more space to maybe give the diet short shrift. They don’t

40:26 have to take questions. The Prime Minister hasn’t really shown up as much as a number of her predecessors because she just hasn’t the opposition has not been in a position to call her to that. And I think there is a risk, and people raised this at the time even in the LDP they raised it at the time that it was such a big victory that there was a risk that perhaps you’d have a slackness, a loss of discipline, a sense that you know no one’s really keeping the government’s feet to the fire because they have this enormous cushion in the lower house. And I think if you’re one of those people in the LDP who is worried about that, certainly I think the scandal that we saw last week and and the government’s response to it and sort of hoping they

40:59 could they could just power through and not concede early on, that there there’s probably reason for alarm from that. You know, that this is the Prime Minister’s way of leadership and she really has not changed. If anything, probably feels that she has been vindicated time and time again and therefore doesn’t need to change. >> Um Tobias, if we can just tag back to fiscal policy for a moment. Do you do you feel like fiscal policy and monetary policy in Japan is is working together as best it could?

41:30 >> I think there’s a good question about if they are in fact working in tandem in the way you know you go back to the launch of Abenomics in 2012-2013 and of course it was a story of you know the fiscal authorities and and monetary authorities working in sync. It does not seem to be I think the dominant story now where you do have a government that I think you know is really looking to expand the budget in a number of ways, has not really I think made full allowance for how it intends to pay for its expanded spending in a number of areas, and the BOJ naturally is going in a certainly it is not exactly

42:04 tightening. I mean real rates are still slightly negative it seems, but it’s certainly moving in a direction of normalization and is moving at you know we’re not at a steady pace. We know the pace obviously there’s a lot of discussion about what the pace is and how far it’s prepared to go but the government hasn’t really been in a position to stop that and so you do have a sense where you know interest rates are going in one direction and the size of the government’s deficit appears to be going the other direction and it is hard to see how that won’t cause problems down

42:34 the road. Of course this is not an overnight issue it’s a question of as bonds roll over you know what are the rates they’re rolling over at who’s buying those bonds. This is an issue that’s going to play out over time but certainly you know you do have the two institutions seemingly working somewhat across purposes and also of course with the United States in the mix and the United States adding pressure on the BOJ to continue normalizing and perhaps also pressure on the on the Japanese government to perhaps curb some of its fiscal ambitions. I mean there’s there’s a lot of of a high a high wire act

43:06 basically going on now for the Takai Ichi government between these different uh push and pull factors. >> Yeah you mentioned the US there which would also like to see a stronger yen but with rates where they are any reason to think that yen weakness isn’t going to persist? >> It’s you know it’s I mean the the question here is you know is there a point in which we start seeing you know real real repatriation of funds you know from you know interest rates reaching a certain level that it makes it more attractive to hold JGBs again but it does seem that you do have a you

43:39 know there’s certainly a feeling that the BOJ is perhaps a step behind its peers they’re still not moving at an aggressive pace of tightening and and frankly if the United States you know looking at the inflation numbers last week if the United States you know we start seeing more interest rate hikes there Japan is just going to be a step behind and that’s going to be a little more downward pressure on the yen and it’s going to put Takai Ichi I think in a tight spot in a number of different ways and and of course it’s fueled some of the inflation concerns domestically that will continue to be a factor. You know, energy prices seem to be going in one direction. That does not

44:12 help Takagi at all, as well. And that of course also puts more pressure on the budget because you have lots of talk now about extending utility subsidies and fuel subsidies. So, it’s a real problem for Takagi. >> unfortunately. But thank you so much for joining us there, Tobias Harris, founder and principal at Japan Foresight. And you can catch Japan Ahead every Monday at 8:40 a.m. if you’re watching in Tokyo. This is Bloomberg.

44:51 The latest from the corporate front, HDFC Bank has posted second-quarter profit that met estimates with growth in loans offsetting shrinking margins. India’s largest private-sector lender saw net income rise nearly 5% to more than $2 billion with loans climbing 16% year-on-year and deposits up almost [music] 19%. Incoming CEO Anup Bagchi starts his 3-year term later on this month. Yes Bank says it would have posted a second-quarter loss of $549 million had it recognized the impact of a

45:23 Supreme Court verdict overturning the write-off of its riskier bonds. The lender reported a net income of $113.74 million for July through to September. Last Thursday, [music] India’s top court overturned the bank’s 2020 write-off of the bonds worth $884 million. The bank says it is [music] examining the Supreme Court order in detail. Heidi. >> Yeah, let’s take a look in terms of still a great deal of headwinds facing Asian markets as we head into this new week. We are seeing Nasdaq futures bouncing, though,

45:56 suggesting that there’s some optimism that we see some impressive Mag 7 earnings this week. A very, very busy week. We have China growth numbers as well. There’ll be questions as to what the the stimulus has really done enough and what more we could see from Chinese policy makers given the continued softness that we see in economic indicators from China. But take a look at the picture as we head into inside of trading in the next hour, in the next few minutes, I should say. Nikkei futures down by just over 2%. Kospi futures are looking pretty soft as well. Chip makers in focus, we saw the semiconductor sales index on Friday

46:29 falling nearly 4%. That return of foreigners into buyers again into the Kospi as we ended last week could be a little bit of a boost. But we’ll be watching very clearly in terms of whether we’ll see any support. At the moment though, we are seeing a pretty decent trading session for Australia, not tech heavy of course, but the ASX [music] up by just about half a percent. The market opens in Seoul and Tokyo next. This is Bloomberg.

47:03 >> [music] >> This is the Asia trade. We’re counting down to Asia’s major market opens and there is a lot for investors to be contending with following that intensity of the AI and chip maker sell-off going into Friday. That’s still going to be the prevailing theme, particularly as questions swirl over Anthropic being the next catalyst. At the same time though, we are seeing that bounce when it comes

47:34 to Nasdaq futures clearly indicating some optimism as we get into a week that includes not just central bank decisions from the lack of Bank Indonesia and Bank of Korea, but also those key mag seven earnings as well. They could be quite good if you take a look at where Nasdaq futures are at the moment. Is this just kind of a dead cat bounce though because even those futures levels, the contracts are well below what we saw on Friday before we saw again that impact of surging oil prices. Oil prices at the moment looking a little bit more sanguine, but still at those levels, particularly if you take into account what we’re seeing with European net gas levels as well. That could feed into

48:08 that broader inflation and hawkish Fed and central bank story. Let’s get you straight to the cash open. We have the Nikkei 225 down by 8/10 of 1%. There to pop topics also off by about 6/10 of 1%. We’re watching dollar yen at the moment at that 157.79 level. We’ve got Japan uh CPI is one to watch this week in terms of giving a little bit more guidance as to where we see the Bank of Japan headed uh next. The idea that uh Japanese investors are kind of looking at some uh more corporate governance themes as well.

48:38 Listed affiliates that could become buyout targets are something that we’re watching when it comes to the TSE for a specific trading theme that’s on watch at the moment. Watching JGBs as well. That sort of uh stabilization when it comes to the Treasury story has been one that has been adding some support to the market. Treasury futures though are uh on the gain again after these protests that we see in uh Europe over the weekend, specifically most intensely felt in the likes of France. Switch out the board to take a look at Korea because that 5,000 line for the Kospi is really what we’re watching at the

49:10 moment. Looking like we’ll see a pretty uh solid start to trading. The Kospi down by 2.8%. The sell-off really intensified last week. Had 7 days of selling for the Kospi before we saw foreigners perhaps tentatively returning to this market where they had become really strong sellers. Uh the Anthropic story will be one that we’re watching lifting sentiment with plans to commit 5% of shares to new public benefit fund. Still a lot of questions um as to what we’re expecting with Anthropic and some of the fundraising themes that AI has really struggled with over the past few weeks.

49:42 The slide for the Kospi though pretty severe and putting that 5,000 level potentially to the test. One on watch as we get that Bank of Korea decision. Remember the surprising resilience of those job numbers last week? We could see perhaps a bit more action around that BOE, although many are expecting perhaps just a hawkish hold as the theme this week. Continue downside as we watch those heavyweights Hynix off by just about 4%. Switch out the board to take a look at what we’re watching. We talked about all the oil story a little bit as we continue to kind of weigh this idea that

50:13 some volumes are making its way out of the Strait of Hormuz, but we are still seeing the the continued confrontations across the Middle East. A Saudi helicopter crashing near Yemen as the proxy war with the Houthis continues to rage on. And watching the dollar as well. That euro play has been quite a weak one given the geopolitical chaos that we’ve seen over the weekend, particularly pertaining to France. The euro has been trading lower against just about every G10 peer that we’ve been seeing. Let’s bring in from San Francisco now, UBS financial advisor and managing

50:46 director Cesar. There is quite a lot going on just about every thematic that you can imagine at the moment, but let’s start off with that tech trade question mark. Are we starting to kind of get out of the depths of the AI sell-off yet, particularly if we get some good macro numbers this week, or is that fundamental question about value still going to plague some of these names? >> Yeah, that’s a a great point. Fundamental values are still going to be a concern and probably the main concern, but you know, we really remain positive

51:20 on US assets, including AI, including tech. We feel like this is really a generation a theme of a generation. And you know, of course there’s going to be some of the concerns in the near term with the AI costs, increasing spending and the debt. So, I mean this is a great time to re-evaluate maybe some of the names in your portfolio. Investors are going to probably take this opportunity to also buy into some of the better names in AI, better names in tech, uh that has a stronger balance sheets, uh that’s going to be able to withstand uh an increasing

51:53 rate environment. But, the overall theme of AI tech is still one of our favorites, and we feel like this is really really going to be a generation theme, and we we are continuing to be very positive on on tech and AI in the long term. >> Yeah, tell us about where you’re seeing perhaps some some bargains emerging, if you can say that with these valuations in the AI space? >> Absolutely. I mean, particularly last week, the semis uh hardware, a lot of the mega cap even pop a platform sold off. So, um some of the um you know, some of these some of these

52:27 particular semis names, I mean, unless the fundamentals are changing or it’s going to change how AI is going to continue to, you know, be produced, um we we foresee that this is, you know, a a pretty good time to start looking, but uh you know, but it really depends on next week. A lot of the earnings reports are going to come out on some of the mega cap names as well. So, uh maybe it’s not the cheapest at this point. It probably could get a little cheaper, but um for a longer-term investment, we we definitely think semis uh and some of the neo clouds, um

53:00 there’s definitely pockets of room to do start investing if if not invested and looking for the most quality names. >> One of the elements that adds to this is really where the Fed will go, right, and the cost of fundraising, given how many deals that we’re seeing. Is UBS sort of a little bit more on the side of the Fed is not going to be as aggressive, and what changes potentially that view given inputs from oil, for example? >> Yeah, we I mean, I I think the market is pricing in probably nearly almost 90

53:33 basis points of additional tightening, but we expect probably about two rate hikes, uh another 50-point basis points further over the 12 months. So, we think probably in December of this year and March of 2027 two rate hikes. But, you know, concerns about we’re we’re not as concerned. We feel like the market is pricing in these rate hikes. My market is also pricing in a lot of the you know, I mean I mean looking at the pullback last week on AI and tech means pricing in some of the

54:04 safety issues, some of the issues with financing, with debt. So, we’re not as concerned that the rate hikes or further rate hikes are going to derail the the economic fundamentals, which is still pretty strong in the economy. So, in terms of oil, that’s always it’s always a volatility. You know, and and things are with the Hormuz and Red Sea disruptions, that really leaves oil continuing to be vulnerable. But, this is why we want to keep the portfolio diversified. And it’s also a good time that if there’s cash on the

54:36 side to look into buying quality bonds. I mean, this is a great time for fixed income, particularly high-quality corporates, treasuries. So, if if safety is a concern, bonds is a is a good opportunity right now as well. >> So, that’s the diversifiers. Are there any other diversification themes that you would be looking at at this point? >> I think the overall market I mean the market really a lot of the trends are going to broaden, right? And then so, besides AI and tech and semis and you

55:09 know, neural clouds that we we we currently to continue to prefer, but I think looking at consumer discretionary, financials financials really had had kind of a tough week as well, but I mean some of the fundamentals are very strong with some of the bigger banks. So, healthcare, industrials, utilities, these are all necessary sectors, right? It even in terms of AI, I mean these are some of the sectors that are also important in terms of growth of AI. So, aside from that, I mean, quality bonds, I think just overall broadening of the

55:41 portfolio is very important, especially when when a lot of the market has concentrated so much on tech and AI. >> It’s interesting that you talk about the broadening. Maybe you starting to see value emerge as well. We’ve seen that with the banks in particular. Are financials something that’s compelling right now? >> Yes, absolutely. I mean, last week it’s been tough, right? Especially with rates going up. So, I think but down the line the financing and a lot of the operations of the banks, this is just this is just an area that

56:11 investors has not focused a lot on cuz a lot of money was still going to AI tech. So, not just financials, but also health care. It’s a it’s a another theme that we are very interested in. I mean, overall UBS is interested in in not just, you know, AI, but also health health care, longevity, health tech. So, these are some of the the sectors I think it’s worth to take a look at some of the bigger better names, high quality names that especially there’s volatility coming. I mean, these are these are some some of the sectors

56:42 that I mean, we’d be very interested in continue to buy into. >> Commodities is one of the other diversifiers. What are you looking at in that space? >> Uh so, yeah, commodities, I mean, I I think this is also one of our areas broadening of commodities. And then we especially like copper right now. And we think gold, you know, probably will have more potential for gold as well. But with rates going up, it’s a it’s a little tough. So, a lot of investors are choosing bonds. So, but I think if you’re just looking at commodities,

57:13 probably copper or broader commodities basket with copper is is some of our is is one of our favorite areas. >> We’ve talked about treasuries a little bit. Um is there still opportunities when it comes to the levels of yields that we’re seeing? Or do you think we’re going to be retesting those levels soon. >> I I think there’s definitely possibility. I mean, right now our latest 10-year Treasury forecast is about 4.9% almost 5% for year-end.

57:45 Uh and of course I could go higher, but I think you know, we we think the overall rates are going up pretty fast already. So, this is a good time that if there are cash on the side to start, you know, investing in some of the Treasuries and some of the higher quality bonds. >> Cecilia, financial advisor and managing director at UBS. Always great to have you with us and we appreciate your time. Uh take a look at the price action that we’re watching particularly when it comes to Korea. The moves that we’re seeing Samsung and Hynix whilst we are seeing still that broader

58:16 weakness in the Kospi certainly perhaps a little bit more alleviated compared to uh the levels and the intensity of the sell-off in the previous week right ahead 7 days of that selling when it comes to the Kospi. Foreigners returning as buyers in that most recent session and perhaps that is giving a little bit of support as well. Uh at the moment though you’re still seeing Samsung down by 8/10 of 1%. Comparatively uh a pretty meek sell-off if you will. >> [music] >> Perhaps steeper that we’re seeing in over in uh Tokyo where stocks are holdings down by just about 3%. We are

58:47 also hearing a a little bit of commentary around the Bank of Japan as well. Governor Ueda saying that it’s important for underlying inflation to stabilize near 2%, but they are getting quite close to that level. Speaking [music] in Parliament at the moment ahead of uh CPI numbers that are due out as well this week. More ahead here in the Asia trade. This [music] is Bloomberg.

59:20 >> [music] >> November 3rd, as Americans head to the polls to vote on issues including affordability, the [music] Iran war, and AI. Bloomberg brings you expert analysis of the election’s impact on markets [music] and geopolitics. >> It’s election night in America on Bloomberg TV and radio >> with up-to-the-minute special coverage until the [music] final results are in. It’s the 2026 midterms, November 3rd starting [music] at 7:00 p.m. Eastern, only on Bloomberg.

59:58 >> Which had its economy is expected to post another quarter of below target growth with GDP seen rising 4.4% from a year earlier. The data is expected today as policy makers and financial leaders gather in Shanghai for the Bund Summit. Bloomberg’s chief North Asia correspondent Stephen Engle is in Shanghai for us there and Steve, a lot of the debate will be over what next for the domestic economy. >> Absolutely, that is the big question because pretty much that target of between 4 and 1/2 to 5% is most likely achievable for the Chinese policy

1:00:32 makers. So, the big question is do they really need a lot of stimulus right now to get them over the hump. Most of the conventional wisdom is that maybe if there’s going to be a need for stimulus, it will come in the beginning part or at sometime in 2027 because right now if you saw the first quarter of GDP growth in China, it was 5%. That slowed down to 4.3% in the second quarter and then now these consensus is for 4.4%.

1:01:03 So, we’re pretty much on pace for that 4 and 1/2%. Is that going to be good enough for policy makers? We’ll have to see. We’re going to get sort of a good reading here at the Bund Summit with some people and their analysis, but also in Beijing later today will begin the four-day financial street summit where Pan Gongsheng, the Central Bank governor of China, the PBOC governor, as well as the CSRC chairman, and other financial heads will be at that conference in Beijing. Maybe we’ll be able to, you know, read

1:01:35 into some of the thinking of key policy makers on what is needed going forward. But the key here, obviously, with that growth rate really down at 4 and 1/2%, which would be at the low end of that range that they gave at the National People’s Congress earlier this year in March, is to find where they can uh build and boost domestic consumption and retail sales. The retail sales numbers are really right now wallowing in record-low territory in the modern

1:02:08 age. Uh it’s 0.5% is the consensus for retail sales growth. It was 0.4% in the previous month. So, again, things are looking bad across the board, except for exports, which rose 36%, and that brings its own risks, obviously. Just look at EU-China relations right now. Raises the specter of further protectionist measures around the world. >> There’s a lot of questions. Who are you going to be speaking to today?

1:02:42 >> Yeah, well, we have a great lineup of guests here at the Bund Summit today and also tomorrow. I’ll just concentrate today right now. Just coming up within this hour, we’re going to have Kaushik Basu, Cornell University professor and also the former World Bank chief economist. We’re going to talk everything from AI to the Chinese economy, even the Indian economy. Uh he’s on a panel today about AI. How do we avoid the AI-pocalypse, as he puts it. Also, Mary Lovely, Peterson Institute for International Economics PIIE senior fellow and also professor emeritus in economics at

1:03:14 Syracuse University. And then, the former Bank of Korea governor, uh uh Changyong Rhee, uh is going to be joining us later this morning. And then Jens Eskelund, EU Chamber of Commerce in China president. So, a good lineup. >> Bloomberg chief North Asia correspondent Stephen Engle there with us. Take a look at what we’re tracking when it comes to the start of trading on Monday for Europe after uh geopolitically, domestically, uh when it comes to French politics, it was a very hectic weekend with those uh really extraordinary protests that uh

1:03:46 turned into riots across multiple cities. And not just France, of course, we saw other cities across other cities and and and countries across Europe being affected by similar protests as well. But, uh take a look at how we’re setting up. A little bit of weakness. It’s interesting European equities largely managed to kind of avoid the uh brunt of the tech route. A little bit more of a a tilt through there. That catalyst uh was really seeing some of the banks in particular. Uh Some of the trades managed to sort of avoid what we saw in other markets, including here in Asia. German DAX futures are at the moment off by just about 3/10 of 1%. The euro,

1:04:20 though, the clearest expression of that geopolitical risk, and that had been trading lower within that G10 space. Well, French President Emmanuel Macron is calling for order after weekend protests spiraled into looting, arson, and clashes with police. >> Whenever offenses are committed, they must lead to appropriate legal proceedings. Those who have destroyed must pay. Those who have looted must reimburse. Those who have sought to bring down the Republic will have to answer for it. Yesterday, several hundred thousand of our fellow citizens

1:04:53 demonstrated with the intention of expressing legitimate demands. We must never confuse them for those who destroyed, vandalized, and looted. >> Let’s bring up Bloomberg correspondent Rosalind Mathieson there. And Roz, really extraordinary scenes in France. Also affecting other parts of Europe as well. As the theme sort of broadly the same, we did hear Macron address some of the the complaints over cost of living, over high energy costs.

1:05:23 >> Well, it’s a familiar pattern really in France. So, what you get is protests that start around a single issue. In this case, it was education and the quality of schools and teaching, and then it moves into something very big and broad and complex and much much harder as a result to bring under control. So, as you were saying, like there are now concerns around cost of living, uh petrol prices, for example. It’s all becoming a a quite complex soup and very difficult again for the government to address because it then comes into those very deep structural economic challenges that France has been

1:05:57 facing for many years alongside other countries in Europe. So, you know, budgets under strain, high debt loads, concerns around the cost of living, rising energy prices again fueled by doubt by the conflict that we’ve seen in the Middle East, you know, issues around pensions, unfunded pensions, raising the retirement age. And really, the government’s been grappling with this for years and how to address some of these concerns when budgets are already out of control. And so, you can see that these singular issues become more

1:06:27 complex. You get some elements who come in and start looting, rioting, and that makes it even more difficult again for authorities to bring it under control. We have unions calling for more protests again in a few weeks. So, this seems unlikely to go away anytime soon. >> What sort of political position is the president under at the moment, particularly as we really starting to see those gains in the polls from the far right, Marine Le Pen there?

1:06:58 >> Well, that’s right. And this is a moment when Macron is trying in a way to build his legacy because he’s not contesting the next election. He can’t. So, he’s trying to focus on other issues around the European budget, AI, defense spending, international issues, and again grappling with these domestic problems at home. And do they feed into the coming presidential election? And what do they mean again, particularly for Marine Le Pen, the far-right candidate for president? Does this help her say that, you know, she can bring

1:07:28 law and order to France. She can contain these elements. Do Do the issues around immigration come into this election? Again, you can see Donald Trump, the US president, opining from afar about what’s happening in France. And is that all going to feed into quite a feveral environment around the election? And particularly, you know, does that diminish Macron’s legacy? Is he really just essentially out of the game at this point? And does it feed in momentum towards Marine Le Pen? >> Mhm. Bloomberg Chief Asia Correspondent

1:08:00 Rosalind Mathieson there. We will be speaking exclusively with the German Chancellor Frederick Maathai’s later on Monday as Europe faces these mounting trade, economic, geopolitical challenges. Do stay with us for that conversation taking place at the times on your screen. [music] More ahead here in the Asia trade. This is Bloomberg.

1:08:33 >> Russian President Vladimir Putin has reportedly proposed a meeting next month with President Trump and Chinese leader Xi Jinping to discuss ending the war in Ukraine. According to the Wall Street Journal, the plan excludes the Ukrainian President Volodymyr Zelenskyy. Bloomberg editor John Herskovitz joins us now for more. So, if this summit goes ahead without Zelenskyy, huge repercussions for Ukraine. >> Exactly. It shows that the center of power for the um for the peace deal is shifted. It would be uh Russia, US, and China. And Ukraine

1:09:09 would be excluded, Europe would be excluded. It’s back to the model that we saw during uh World War II uh towards the latter days where it was carving up Europe among the great powers that were fighting with the US at that time. Uh for China, it’s difficult to say how what they get out of this. They have um been publicly ambivalent about the war, but of course supportive of Russia. For Ukraine, it just adds to the idea that’s been building that they are being excluded, coerced, and not a part of the process that determines the fate of

1:09:44 their nation. So, we you know, Trump hasn’t responded to this. There’s pressure internationally, pressure domestically, but if this goes forward, it’d be a significant blow to Ukraine and to Europe for the prospects for peace along the lines that they want to see it. >> Uh how bad currently is the relationship between Trump and Zelenskyy? And is there a way out of this? >> Yeah, I mean, what we’ve seen now is at it’s at one of its lowest points. It’s moving beyond coercion in the eyes um

1:10:16 in the eyes of Zelenskyy towards diminishing Ukraine’s ability to fight the war against Russia. Um there is a way out of it. Um the door is open is open still with talks with uh with Kushner and Kushner with Ukraine. Um we could see some sort of deal where Ukraine diminishes its strikes on Russian energy facilities in return for the intelligence about warnings of a Russian missile strikes, a return of the um satellite GPS that has helped Ukraine fight the war. So, you know, there could

1:10:51 be some give and take, but you know, it’s um the pressure is there. It’s at a low point. Where we move forward this week will determine quite a bit of that. >> What sort of political pressure is Trump facing right now as we head ever closer to those midterms? >> Yeah, no, he’s seeing some pushback from Republicans and Democrats. About 10 Republican senators were angry about the deal that Trump that Trump is pushing forward to remove

1:11:22 waivers to remove restrictions on the export of Russian energy products such as diesel. Ted Cruz has warned specifically about dealing with Ukraine dealing with Putin. You know, there are worries there. The diesel deal itself probably won’t do much to >> [music] >> end price increases. So, the pressure Trump is facing pressure at home. >> Bloomberg editor John Herskovitz there. [music] More ahead here on the Asia trade. This is Bloomberg.

1:12:09 Take a look at how we’re faring half an hour into the start [music] of trading. We are seeing some downside as expected given the pressures that we’re continuously carry through from that Wall Street session. Remember the Philadelphia semiconductor index was down by another almost 4% in the previous session. That’s putting pressure on the chip makers. Although I will say when it comes to both Korean and Japanese equities at the moment the sessions are perhaps not as bad as initially feared in terms of the magnitude of these losses. We’re seeing the Nikkei 225 down by just over 2% the Kospi off by shy of 2% comparatively to what we’ve seen in the previous session.

1:12:42 This is you know almost almost an okay session, right? And we’re seeing sort of lesser losses for the likes of Samsung and Hynix today as well. The advance that we’re seeing when it comes to Nasdaq futures is helping moderate losses and perhaps some expectations of some decent numbers from mag seven companies as we get into earnings this week. Also watching China in terms of the growth outlook there and the annual Bund Summit starts today in Shanghai. Policy makers academic gathering to discuss the global economy geopolitical risk. Let’s get back to Bloomberg’s chief North Asia

1:13:13 correspondent Stephen Engle who’s in Shanghai with our first guest. Steve. >> Yeah, that’s right. I mean there’s so much to talk about. We only have 7 minutes so we’re going to cover a lot of ground here. Our guest is Kaushik Basu Cornell University economics professor and the former World Bank chief economist. Thanks so much for joining us and kicking off our coverage of the annual Bund Summit here in Shanghai. >> My pleasure of being with you. >> So you’re going to be on a panel later about AI but I want to start about the you know the the fragility if you will of the global macro environment. You

1:13:45 have obviously cracks forming in the whole AI trade. You have rising bond yields. You have sluggish persistently sluggish growth here in China. How do you read the fragility of the global economy right now? >> The fragility is great and very worrying because it’s happened relatively quickly. If the cracks begin to appear over 5 years you know what to do. In this case you can’t quite pin it down. It’s true that there’s war. There’s disruptions in supply chains.

1:14:16 And AI is progressing at a very very rapid rate. And you can see the strains every country trying to put in a little bit more money into the system to keep it going old Keynesian policy which is beginning to backfire. So something very deep is going on and it is really a worrying moment of a kind that we’ve rarely seen. Especially the big players and I’m talking of USA and China. >> Yeah. >> Those who are in this >> Right. >> are feeling the biggest pressure that is coming from the changing global scenario. >> Well I was there in Washington D.C. for the latest summit between Xi Jinping and

1:14:49 Donald Trump. They’re going to be meeting again next month likely here in China in Shenzhen. Did you come away from that summit reassured that the two sides can together tackle their strategic differences and kind of mend them or is this going to be a widening rift? And I allude to the AI issue which you in a recent op-ed a couple of days ago likened the AI race to the Cold War. >> Yeah. Uh there’s a difference between can and will over here which I have to

1:15:19 emphasize. I feel they can USA and China. Whether they will whether they will manage to, I don’t know. And the can is because really the big powers if they begin to coordinate on policy and I feel today in the world we see a need for inter-country coordination of policy of a kind that we have not seen before. I mean we’ve done it in several fields, on trade, on labor conventions, but I feel now you

1:15:50 need fiscal policy coordination, taxation coordination. If these big ideas can they can be an agreement between the United States and China and they begin to implement it, we will see a big change in the world. So, it’s possible for them to do it and I will make no guess as to whether that will happen. >> Is it wishful to wishful thinking to think the two nations in such a highly competitive and strategic industry as AI, still in its infancy but exponential potential obviously, you liken the to

1:16:25 the the race for the the nuclear bomb >> Yes. >> back in the Cold War, uh that when there’s discrepancy between the bigger powers, there’s much higher risk. You think the two nations need to coordinate more. >> I feel critically that the two nations need to come together on this and one nation taking a lead which you do here in the US occasionally that if the US takes a very big lead the worry melts away. That is not the case at all. And you’re right that I have written about nuclear strategy where we have to remember whether one likes it or not the

1:16:59 appearance of the second bomb fused the possibility of the use of the first bomb. >> Yeah. >> I mean the only time we’ve seen the use is when it was one country the United States had it. After that we’ve been through very tricky situations like the Cuban Missile Crisis and a critical role was played which people very often overlook that there were two powers who were balancing each other out. I feel something similar is going on here and countries ought to realize that and realize that coordination is the only way to go if we

1:17:31 do not want a global fiasco. >> wants to give up their competitive advantage. >> Yeah. So that’s why I said that they can do it whether they will do it is that additional sagacity, depth of understanding whether they will show I don’t know. My fingers crossed on that. >> The Chinese economy we’re going to be getting a lot of data for September and also third quarter GDP. Um how important is it at this time of fragility that you have a domestic economy here in China humming along

1:18:04 instead of sputtering? >> Extremely important because you know if you look at a couple of fundamentals of China China’s doing very well. Intellectual property China’s now way ahead of all other countries the amount it’s being generated. The university system is catching up but all this will take 5 years, 10 years for the good effect to come. The critical point right now is balanced macroeconomic policy to go through this period because China’s deep investments which are very good to see the benefits you need action now and that’s what what

1:18:37 one is hoping for. >> Does that mean stimulus or just you know, you don’t want to stoke debt fueled growth? Even that’s the problem right now. >> The trouble is stimulus of a conventional kind could spark inflation. United States is already very worried about that. So, it’s got to be stimulus with a lot of action to get production also boosted because if it is just the buying power going up without a production boost, prices will go up and neither country

1:19:08 will be able to take that. >> Well, so far China’s been leaning heavily on the main pillar and that is exports. 36% in September. How much of a risk as well as we’re talking about the macro conditions is the rising protectionism? We’ve had US-China really hash it out with tariffs and all that and export controls, but now the European Union is kind of getting a collective voice as well. They’re they’re concerned heavily. There could be a trade war a larger one, Brian. >> That would be devastating. Protectionism with the US using the

1:19:40 tariff as a wall triggered off a game which is being played worldwide and we have to remember that it is not even consistently high tariffs. Raising and lowering once you begin to use that as an instrument, you don’t even encourage investment in your own country. So, I feel that the global economic warfare is being fought very poorly, completely in self-interest and at times not even in a country’s self-interest. The US tariff policy is backfiring on United States more than on any other country. >> Let’s talk about India real quick. We

1:20:12 just had Bloomberg just had the new economy forum there, a big high-profile gathering. I mean, Indian economy is the fastest growing major economy right now, but there are some stresses going on not to mention, of course, the protests. There are challenges to Narendra Modi. You were obviously a chief economic adviser to Manmohan Singh, the previous Prime Minister. So, the rupee is weak, outflows foreign outflows have increased. What does India what does Modi need to do? >> You know, India the GDP is fastest

1:20:43 growing, no doubt about that. But, the distribution of the GDP has gone worse. And the lot of attention has to be in India on microeconomic policy. India it’s not macro policy, it’s micro policy where India’s not doing well enough which is leading to the protest and the welfare of a greater GDP is not getting distributed at all across the population with a real bulge in youth unemployment. So, India needs micro action. >> So, what specifically? >> Job creation of a certain kind in the

1:21:15 manufacturing sector, for instance. China’s vacating a space which India could occupy. But, for that from labor law correction to a variety of little things, India stands on the brink of a great advantage for 5 10 years. It won’t be endless because as wages rise, that opportunity will go. But, India has that opportunity, but a lot of micro management including on the laws of the nation labor laws need to be corrected and attention needs to be directed there. >> I want to come back to AI because you are going to be on a panel today,

1:21:47 essentially AI and the productivity revolution. How can AI be that productive productivity panacea, if you will, when it’s largely being developed in isolation by two of the world’s biggest powers? >> That is the problem and also it has the problem of a runaway force, the potential that it could become a force which is beyond the control of the creators. So, both these the fact that

1:22:17 it’s really concentrated in two countries primarily and the fact that it has a risk and from Sam Altman to whole lot of corporates now are out that it could go beyond the control of the people who created it. So, AI is a sector which needs a lot of action and there will be discussions here. >> Well, that was one of the main concerns is that it seems as though from that summit in Washington, D.C., Donald Trump and Xi Jinping have a little different views on how to regulate even though the leaders of Anthropic and others have talked about we might need to slow the pace of this development down.

1:22:50 >> I agree with this view that you need to slow it down. And that cannot be done. No country, no corporation is going to do individually and allow others to overtake. For this, you need inter-corporation coordination, but that’s also not good enough. Inter-country cooperation. I know that President Trump is not in favor of that. I don’t know Xi Jinping’s views, but I feel they ought to realize that this is something that they need to work together. >> Does the bursting of the potential AI bubble maybe accelerate more of the talk about maybe we This is This is a chance

1:23:23 to slow down. >> This is the chance to slow down. And also, once it picks up on autopilot, it goes. That’s it. We’ve lost the chance of policy makers to do anything about it. >> Professor, thanks so much for your time on Bloomberg Television kicking off our coverage here at the Bund Summit on the shores of the Huangpu River in central Shanghai. Heidi, I’m going to send it back to you. >> Stephen Engle, our chief North Asia correspondent at the Bund Summit there with Akash Bhatia, a professor at Cornell University. We do have more ahead on the Asia trade. This is Bloomberg.

1:24:14 Take a look at what we’re watching when it comes to some of the losses we’re seeing across the South Korean session in particular. It’s quite interesting at moment. What you’re seeing uh an unchanged view when it comes to Samsung. SK Hynix seeing downside of 3% but overall, the losses that we’re seeing across Korea in particular, also to an extent in Japan, perhaps less than what we might have expected given the ongoing tech and chip sell-off that we’ve seen particularly with the semiconductors index in the US session falling by another

1:24:44 almost 4% there. The fact that we are seeing that bounce from the Nasdaq maybe giving some support. We do have the mag seven earnings due out this week as well as a couple of other key central bank events. We’ve got the Bank of Korea among them, Bank Indonesia, perhaps a little less relevant to these markets but also Japan CPI will be one that we’ll be scrutinizing as well. So yes, some losses perhaps less in terms of severity than we would otherwise be bracing for. In the meantime, Chinese markets looking like a defensive safe haven as tech continues that sell-off across the region. Our markets report

1:25:16 Anthony Zeedman is back with the setup for China’s trading day and arguably the the China tech complex is one of one of the contributors to some of the concerns over Western Korea, Japan frontier. What are we seeing in terms of the opportunities within that Asia market? >> Yes, so we saw a couple of updates from that theme as you said. We had CXMT numbers they swing to a net profit so that’s interesting. You know, they did all that R&D work without making any money so it’ll be interesting to see

1:25:46 what they do when they are making money now and then we did have that new model from Deep Seek as well. So not that much detail on the technical workload that Deep Seek needs to have to run. So that will be something that the market will be processing in the Chinese session. How much new kind of capex is unlocked by this this stream of new models out of Deep Seek and how reassuring is the CXMT result for the Chinese tech trade. So the Chinese tech trade has actually led on the way down quite dramatically versus the rest of the region. Momentum

1:26:19 has completely unwound as a factor in Chinese markets. It’s almost a 30% drawdown since June and it never really bounced unlike you know Korea and Taiwan. In its place, the value sector has really taken taken leadership right and that is you know quite nicely parallel to the US session on Friday where we saw food stocks or defensive stocks or spend consumer spending plays bounce quite hard. So that will be a really interesting balance to see in the Chinese market how much optimism is there in the defensives versus the tech

1:26:52 space. >> Where do you see that that sparking of of momentum for Asia’s? >> There will be two kind of avenues markets are looking at. The first one will be you know financial stimulus right. We are we are seeing some interesting moves on on swaps ahead of kind of rate decisions coming up. We also see kind of comments from the the Chinese leadership about stimulating the tech sector in particular while containing this involution trend. But on the other hand you continue to see this policy

1:27:25 uncertainty. So China has export controls now you know that are kind of vaguely worded around AI and pharmaceuticals. Pharmaceuticals for example is one of those growth sectors that really did grow quite sharply in terms of stock price in the first half of this year. So resolving some of that policy uncertainty you know stimulating in a targeted manner the tech sector that could revive the momentum space alongside continued earnings power from the likes of CX and T and other China tech leaders.

1:28:10 >> in Bangkok. He also laid out where he sees opportunities in the tech. >> But we think AI is the most incredibly exciting thing and it is driving all the investor debates at the moment. I think we we remain pretty supportive of AI, particularly the supply chain because we can see in a real earnings growth and and actually there’s much discussion about bubbles, but there’s been real growth in the supply chain and they’ve materially outperformed as ever what he knows the rest of the market. The real question

1:28:42 for us is when do you start to see productivity benefits? When do you see a return on investment for the customers of that supply chain? And that’s what we’re really talking to people about. >> What are you seeing in your own business? >> Well, we’ve seen real excitement and adoption across the group actually. We’ve given everybody, you know, the opportunity to think really hard about how AI can improve what they do at a personal efficiency level and that’s been taken up widely. And I walked around our Singapore office two or three days ago, everybody’s using co-pilot. Everybody’s using it here in Thailand. You know,

1:29:15 it’s it’s really spread. I think our challenge now as a strategic leadership team is to start to bring in, you know, the more substantive uses of AI across the group. >> expect head count reduction as a result of some of the efficiencies? >> I think there’ll be some head count changes. I mean, broadly, you know, our strategy is to grow the organization at fixed head count. I mean, that’s what I would like to do, but there will be obviously changes in allocation of different resources amongst teams. >> You call yourself in some ways the Charles Schwab of Europe. You have uh

1:29:46 more than $500 billion of assets under management. Uh you have three different segments. The biggest of them is the sort of, you know, do-it-yourself kind of uh aspect. What do you plan to do in terms of where you want to grow the most in the three units? >> So, we’re not talking about the Charles Schwab. I’m talking about our major subsidiary Interactive Investor, which is a UK business. It’s the fastest growing do-it-yourself platform in the UK. It has been for the last 3 years. We’re the fastest growing pension company in the UK. We’ve got over 110 billion of assets under administration

1:30:19 now. And we just see the ability to give people more control over their own investing incredibly important. And that’s where we continue to see real growth. >> Do you plan to keep growing your asset management unit or spin it off? What’s the uh the plan there? >> So, the plan for the asset management is to continue to grow it. You know, we’ve stepped up the profitability materially in the last 3 years. We continue to focus on efficiency. We’re also refining our product range. Emerging markets, as I say, is you know, it’s still very important to our public

1:30:51 side of our business. So, we’re going to continue to focus really on the the areas where we can be competitively differentiated. >> One of the other big topics at the conferences this year has been the fiscal debt profile of developed markets, in particular the US and Europe, and a concern about some sort of you know, massive rise in terms of the speed and measure of yields. What do you see in terms of investors’ appetite for debt? Is it still kind of the ballast as it has played over the past couple of

1:31:22 days, or do you see it actually changing in the way that people think about it? >> Obviously, the last few months have given people pause for thought. I think we we remain broadly supportive of government debt, and we think um you know, central banks will hike, but probably less than the market is expecting. And as we look further forward, though, we are supportive of of government debt, and we think the current yield, you know, is isn’t a bad entry point. >> I do want to ask, since you are in the United Kingdom, and there’s been a lot of questions about wealthy individuals leaving the United Kingdom as a result

1:31:54 of certain tax policies, do you see anything with respect to that trend in your business? Do you see any kind of or do you expect any changes in the composition going forward? >> I think broadly the UK has a has a sensible tax regime for the everyday saver. We have a supportive pension and individual savings system and I think my message to the government has been don’t change it. It actually works pretty well for most people. Um so for the for the average investor

1:32:24 uh that’s fine. There’s clearly some headline movements but they they don’t really affect our business. >> Aberdeen CEO Jason Windsor speaking from the sidelines of the IIF. This is Bloomberg. India’s science and tech minister sees nuclear power playing a bigger role in meeting the country’s energy needs. Jitendra Singh also discussed the country’s space ambitions. >> I think artificial intelligence is more of a tool rather than domain per se. It’s going to be there and applicable in

1:32:58 every sector but what I always say is that one has to be intelligent enough to use artificial intelligence. So I would in a single sentence say human-led artificial intelligence because artificial intelligence is a great advantage not only in space sector but also in life sciences in other domains. And it’s going to be a necessary tool for use but how best to use it optimally without allowing it to be misused by us or by others. That will be a challenge. >> How are you thinking of those risks? >> I think we have some regulations in

1:33:31 place but as far as India is concerned our record has been very appreciable and I I ultimately at the end of the day what matters is the integrity integrity of the part of the individual humans, integrity of the part of the nation and I’m glad that under Prime Minister Modi we have reasonably tried to follow that course. >> The nuclear power which of course you’re also in charge of will that help really energize the next phase of artificial intelligence and just the enormous electricity >> No, absolutely. We we need to have

1:34:04 for example when we are aiming at 100 gigawatt by 2047 and aiming at net zero by 2070 which is the COP commitment made in the COP meeting. We need to have more and more sources of clean energy and therefore that is why I keep reiterating India’s nuclear program is dedicated to peaceful purposes not for warfare. Warfare if it happens it’s just incidental or accidental. It’s not by design that’s not never been India’s approach and as far as the peaceful purposes concerned of course to have larger volume of nuclear generation and

1:34:37 nuclear energy generation we need to have continuous and and for AI also to have data centers we need to have continuous reliable sources of energy which in the times to come would be clean sources. So obviously nuclear energy. So more and more of nuclear energy will be supplementing our other programs as well.