hello, everybody. it is nearly 10:00 a.m. in singapore. this is bloomberg markets. i am rishaad salamat. yvonne: stocks rebound but japan's 10 year bond yield hitting the highest in nine years bid china's struggling economy hit bhp's earnings, sliding on the year. we will get an interview with the ceo this hour. plus, softbank's chip unit files for what could be the biggest ipo this year. arm hoping to ride the ai boom. david: timely to talk about ahead of the nvidia earnings and that is part of the energy markets lifting everything else. we will see what it looks like for us in our conversations. where we are right now, 30 minutes into the cash market session in hong kong and shanghai.

you can see what happened when china opened. gains at the open and we have reversed every single onshore, the csi 300 flat. the story today is backing up and we will talk more bhp, the backing up of yields earnings in the asia-pacific. yvonne: the japanese jgb's has been the highest since 2014. when we look at the u.s. where real yields are now around 2%, the highest since 2009, the rest of the market is following. it is interesting that this is all happening days before jackson hole. rishaad: absolutely. this is where we get bond investors to weigh in. this is happening before jackson hole kicks off the next few days. let's look at the key tests because we look at the 20 year bond, demand focusing on any kind of hint of what we have been seeing with the unraveling of the bond markets, whether

there is any sign of alleviation coming through. ultimately we could see with a weaker demand picture that the yuan could have more runway. david: both i came out with a note that it was 5% yields. what does it mean for your hurdles. as they say, global macro movers, so we are seeing a rebound across equity markets in some parts of asia. some markets are starting to roll over a little bit right now like the philippines. we will talk more about china in a moment, but the backing up of the dollar and the extension of these losses across the bond space. really one color in the fourth column on your screen, which takes us into our next segment. yvonne: let's bring in our next

commentary on these bond markets, our chief rates correspondent for asia, garfield reynolds. first of all, it has been a ferocious selloff in the long end of the curve. what do you think is driving this right now? garfield: the biggest driver of it is the concern that we are heading back to the world that existed for yields before the global financial crisis. we have got yields back at -- the normal yields are back at that level for the 10 year yield, finally went through last year's high to the highest since 2007, and this time around, there is plenty of concern that it will go higher and stay higher for longer. why is that? that is because the economy is proving so resilient to higher yields, higher fed rates, and talk from the fed that it is biased to potentially raise rates higher and keep them therefore longer.

as we head into jackson hole in particular, that is a particular question for bond investors. a lot of them have been fairly burned this year by bets that the fed would soon stop hiking rates and would pivot towards cuts. now there is this nagging concern that starting with jackson hole and going on, when the fed meets in september and updates its dot plot, that we will get a modification to what the guidance is, essentially. if you look at the dot plot, it shows rates coming up and staying as high as they are, going a bit higher, and then heading down over the ensuing years until we get a long-term fed rate of 2.5%. that is a long way south of where we are now. does that dot plot get modified to show the higher end point? rishaad: and there is a lot of

talk now that the natural rate of interest is likely to go higher as well given the changes of the anatomy of the world's economy with less savings, arguably, because people are supporting an aging population and changes taking place with central banks, accumulating less foreign debt in this part of the world. garfield: yes, that feeds into that fed dot plot. the other thing is you have got this lessening of globalization. one of the secular drivers for the long-term decline in yields was the evermore integrated global economic system, just in time delivery points. you can assume that goods and services would be provided with marginal cost to their consumers because of that globalization. that is now getting reversed.

we have got on shoring and friend shoring, which means they are at times more important for the supply chain of what is efficient and the lowest cost method of delivering. that supports low-cost profiles. you also have the war in ukraine, a source of ongoing reflation for a lot of goods and services. and then you have climate change. that is forcing people to do in trying to replace carbon emitting methods of doing stuff, and in particular, to accelerate those changes. all of that requires money and requires you to do things in a way that does not necessarily deliver the lowest costs. david: garfield reynolds, our chief rates correspondent for asia. we get to the other story which is how china is managing to support the currency, but

expectations of lower rates ahead. you see swaps in august have fallen 10 to 15 basis points. earlier on, the strongest fix estimates, 1100 pips relative to estimates right now. joining us here on set to talk equities, herald van der linde, head of asia equity strategy at hsbc. you guys have been overweight on china and that has not worked out. what do you think now? herald: straight to the point, right. the view we have taken of china for a long time is that the last eight to 10 years or so, we were at known levels, so it is the market that you trade. it is not a market like the indian market which has gradually moved higher. if you bought 10 years ago, you would have been good. china is a different sort of markets. our playing it differently. also you can actually move the stocks easily in china, so that

is what you need to do. when internet was moving ahead a few years ago and everyone piled in, we were willing to take the opposite side and said, let's be careful because ultimately we will go back to some sort of equilibrium. that sort of happened and we were burned earlier this year. things are looking better, and that has not really worked out yet, but we need to be more patient. we have a new economics team announced in february, see if they will come through with more ideas. everyone is underweight already. yvonne: there was a china hedge fund manager and she had some interesting comments on global investors that are too peck's mystic -- pessimistic. she has taken aim at various flies be it is the foreign investment sentiment now to drag a negative force? herald: one of my team members

who went to china for holiday, and she came back and she is a credit specialist. she has always been quite careful with credit, a lot going on in the property sector, and she's came back and said, i do not feel as bad as we thought it would be, so maybe the hedge fund there has got a point to make. an interesting data point to make, we are halfway through the economic season in china, so recovery will still come out the next two weeks with numbers. but the earnings numbers have come down from 25% to 23%. 23% is not the number you would attach to the chinese market if you look at performance at the moment. we have had the large internet names coming through with better results so far. it does not mean over the next two weeks we will have fantastic results, but to assume china is not going to grow this year is probably wrong. david: do we get another round

of downward provisions? the last quarter has been bad. herald: they are mixed because the typical companies report first and there are a lot of companies that do it where the volume is high, so we might still get disappointment coming through. and we are all looking for a q2 recovery of earnings, if that materializes, they might have to downgrade. we are downgrading from 23%, so it ends the year at 15%, which is even substantially lower than we are at the moment, that is pretty good given the sentiment we have. rishaad: the lack of confidence is paramount, and that comes to the property side of things. we are waiting for stimulus, but we see in the data the budget deficit shrinking more than one third so far this year. and they are telling us the cavalry is not coming in terms of fiscal spending to get them out of the messed -- mess, so what will we get? we will not get the big bazooka.

herald: china has a difficult position because on the one hand, a large part of the economy, which is infrastructure and properties, they do not want to go and stimulate that. that has been done in the past. they do not want to do that. what they want to stimulate is fuel, foods, ev's, renewables, but that is 8% of the economy. so that can grow, but it cannot pull the overall economy. so the growth numbers will continue to come down, as a natural consequence. they will probably have to do more but do not want to use all the stimulus in one go at the very beginning of this process. there is debt rescheduling taking place, so they will do this carefully. yvonne: what are still the bright spots in this market? herald: you come back to what are the areas where there. is potential for growth. on the policy side, there are a couple of areas where china wants to be self-sufficient or

wants to grow. high end tech and semiconductors, big on food and oil, objective for china as a total, renewables, ev's, so there is growth then there are growth areas that pop up without policy support. for example, you have this new medication that is good for diabetes and these sorts of things. that has gone from zero to 10 billion in sales and will probably triple the next couple of years. we will see this kind of growth come up. automation, ai, these sorts of things, so that is where you want to focus on. rishaad: what is going to happen to these local government finance vehicles, and bailing some of them out, which is the effect of what the policy could be? could be counterproductive. herald: that is the big debt problem, though the headline number is bigger than what the actual problem is. a lot of debt there but it is the servicing of the debt you

need to learn from. rishaad: doesn't the imf say 6.8 trillion or something? herald: it is the debt problem, but you need to service that debt, so is will be a part or -- a smaller part of that. for that, you need to go to the central government to do something, but there are different ways to address debt, and addressing debt is something they are focusing on. you do not want to shoot all of your monetary and stimulus bullets at the very beginning of the process. be careful how you go through this particular path, and that is what is unfolding at the moment. david: the transmission effect on equity market strategy, people point out how it gets to china is through the banks, and they have pointed out that those payouts were people come in with dividend yields are at risk. how are you looking at it from an equity perspective? herald: ultimately the banks were not carry all of that cost because you want to keep the banks in place. in the effect that the banks do

not work, you cannot have a salary or by groceries. so you need to make sure that all of the problems do not go to the banks. but go back over the last 10 years. the share prices have headlined, they give you reasonable dividend yields, but the share prices are flatlining because any profits generated has been used to rebuild their balance sheets to deal with this debt problem. in a sense, you can argue the debt rescheduling and resolution is already in process. but that is why these share prices have been broadly flattened. this goes back to how you approach these markets as it has not gone anywhere. so you buy when it is weak and then go out of it when it is very strong. rishaad: staying right there. herald: good. yvonne: [laughter] so much to talk about. rishaad: herald van der linde is still with us after the break.

also coming up, we will speak with bhp ceo mike henry. they are reporting a dramatic drop in their full-year profit. this is bloomberg. ♪

yvonne: all right. a decent rally underway in asia on this tuesday morning. we are watching softbank very closely, up 2.5%. the big news overnight was the semiconductor unit arm filing for an ipo, seeking to list its american depository shares on the nasdaq, under the symbol arm. putting the ipo on track to be the year's largest in the u.s., and could end up renting is one

of the biggest tech listings ever. for more, let's bring in our tech editor. we talk about the valuation. what do we know at this point? mayumi: the valuation is still to be determined. softbank still has a vote show to go through where they will try to pitch arm as an ai play, how convincing they will be will probably help. the more convincing they are, the higher the valuation will likely be. a hint we got in the filing was a disclosure that softbank bought the 25% stake in arm that the vision fund holds for $16 billion. that would indicate a roughly $64 billion valuation that softbank is looking for. yvonne: arm is interesting. a lot of investors were not too sure about what this company does. people are starting to

understand that they are providing the blueprint for technologies if they want to get into this whole ai, data center trade. i am wondering, can it actually be that ai play like the likes of nvidia? mayumi: it is a very key part in the ramp up to ai. it is not essential at this point as nvidia has been. it basically helps -- arm's architecture has helped gadget makers lower the power consumption of their gadgets, so it makes -- it is really essential to make mobile devices that are lighter and does not eat through your entire battery in an hour. that said, it is not where the generative ai that everyone is

so excited about. it is not as central to that as nvidia chips. it is not what is going to drive the massive amount of computation in that kind of power that we are also excited about. but, you know, that said, you need devices in things at the edge to make sure you can channel that ai and use it day to day. in that sense, it gets a listing. exactly. [laughter] david: you broaden out the criteria, every company will be ai at some point, right? [laughter] thank you so much. herald van der linde is still with us, head of asia strategy at hsbc. is it too late to buy the dip on ai? is there a thing as too late to get into ai? herald: there have been a lot of

things, a lot of optimism has been priced in. earlier in the year, we actually liked ai and we operated korea to be opening up extremely because of ai and we told there would be better demand for memory chips and these sorts of things. the world would be a better place, and suddenly ai came through and rallied. suddenly we see these big themes. we initially want to wait and our expectations are too high, and then we get the reality reset, and that is often when you want to buy in because they would buy into the grosse pointe. so ai will be interesting for years, if not decades, to come. rishaad: doesn't it remind you of dot-com? the point that people didn't really understand it, and people have learned the lessons from it. one of the headwinds would be that people are immediately

trying to think of regulation, which they did not do that in the day with internet stocks, and that could ultimately put some of the brakes on this. herald: that is a great comparison. a great story for a long time for the internet, and suddenly out of the blue comes regulations, and the whole story changes. it might be one case with ai. at some point, regulations will come in, but changes are dynamic in the industry. rishaad: earlier because they did not do it early. herald: exactly. one of the local universities, they have emails going around encouraging students to use ai, so in some sense, regular and is already emerging. and then you get compensation -- competition. everybody wants to become an ai company now. in the u.s., we have growth, asia that is struggling with it, and pockets doing very well.

want to be a chipmaker, make the components to it. that increases competition and changes the dynamic of once again. yvonne: we have run out of time, but talking about china ai, what about the market excites you at the moment? herald: i am going to indonesia in 10 days' time for holiday, so it is exciting. we take things from history, working out for myself, temples, but if there is one market i would like to focus on, bangladesh. nobody is looking at bangladesh, and that could be a new vietnam. vietnam is something people do not look at either. they had a bit of a property issue, and it has come off a lot. if you can go to those markets, take a look at that as well. india and indonesia are the more mainstream markets we like. there is a good longer-term good compounding story. rishaad: always a pleasure and good to see you. yvonne: enjoy indonesia. [laughter] rishaad: yes, we have jakarta.

moving on swiftly. herald van der linde, head of asia pacific strategy at hsbc. more on the way. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh let innovation refunds help with your erc tax refund so you can improve your business however you see fit. rosie used part of her refund to build an outdoor patio. clink! dr. marshall used part of his refund to give his practice a facelift. emily used part of her refund to buy... i run a wax museum. let innovation refunds help you get started on your erc tax refund. stop waiting. go to innovationrefunds.com you really got the brows.

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rishaad: overall markets on the up, and it is really that rebound on wall street. tech heavy propelling the equities. quickly checking on the individual names and looking at those that would perhaps be involved in that softbank arm's ipo, and that is something driving companies in japan. a quick look at asian chip stocks as well. not just down to the prospect of ai, but also nvidia, whose

shares were up 8% overnight. analysts are raising their price targets on those stocks, optimistic about these highly anticipated results that will come out wednesday. david: in fact, speaking of earnings, just ahead we will have conversations about earnings out of bhp. it is full year underlying profit down nearly 40%, coming in at the low end of the forecast. certainly missing the median, so we will be speaking with the boss, mike henry. he will talk us through the markets and commodities. it is about china and how he thinks the markets will do these next few months or so. that conversation is just ahead. this is bloomberg. good morning. ♪ when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working.

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rishaad: nikkei sessions having

a good session. yen has caused is donor trajectory, perhaps lifting the board. the topics is being led higher by toyota -- the topix is being led higher by toyota. that as predictions are for further weakness. the jgb market with a sense of anticipation with anything else. david: the 10 year jgb hit the highest in 2014 -- since 2014, cracked 67 basis points. we are looking at earnings, after japan earnings dominated the last few weeks or so, we are now pivoting to china and australia. beach it. -- bhp was out earlier. shares are down one .5% on that stop. the materials sector is down

0.25%. fairly pronounced market reaction following those earnings, 37% decline in the full year missing the median estimate for analysts. one of their biggest markets, if not the biggest, china, struggling as far as outlook is concerned for iron ore. income from sales from continuing operations also come in below estimates. they are still paying eight devotee back. yvonne: joining us is the ceo of mike henry of bhp. let's talk about your china outlook. in recent months you were more bullish than your peers about overall where this economy is going. i think the mood undertone you struck about china was a bit uncertain, it seems, can you tell us how you feel about china now? what did you get wrong? mike: certainly.

i think it is fair to characterize it as a bit uncertain. i would start by saying there's actually a number of sectors in china doing well and that includes green infrastructure, auto infrastructure, automobiles and so on, but the key sector everyone is focused on that is very relevant to our business is the property sector we have streaming. -- we have seen strong completions, but what is lacking is a new starts. . that has been recognized by the central government. there are obviously policies in placement estimate news starts, but they are not translating effectively interchanges on the ground that suddenly we and i think some others were anticipating as well. what will keep an eye on is how effectively that translates into practice. we think there could be growth momentum from calendar year coordinator into calendar year

2024. outside of china, was in india a month back, the energy underground and atomism is palpable. we are seeing solid momentum in india, a big market for us for commodities like coal and copper concentrate. so, overall, we are seeing india and china comprising about half of the world gdp growth in the period ahead. the other point is long-term fundamentals for this center and bhp, remain healthy. haslinda: we would like to talk more about the opportunities, because obviously that is a growing market of euros. i went to pick up on some of the point you're making about greater china. we certainly hope -- i want to ask you about what you are seeing across short-term pricing on many of your products in china, what is the outlook and pricing in these next few months? mike: it will depend a bit on what happens with the overall economy, with demand for commodities like iron ore. there are rumors of a potential

mandated production cuts in steel, but it is likely the industry starting with higher inventories and any cuts would oversee start eating into those inventories. obviously lower demand has a percussions and pricing, but one important point to note is that the marginal cost of production across the commodities that we produce is higher now than it was pre-covid, naturally, given the inflation in the external environment. we expected that will provide adult side christian on pricing at a higher point than may have been the case for-set lead. in the case of iron ore, $80 and $100 per turn. since we have done a better job of controlling costs than our competitors, we have doubled over lead as a lower-cost major supplier, and that cushioned means of a relative margins and being well-protected than might be the case for some others. yvonne: what happens if the

china property sector gets worse? what does that mean for bhp? you mentioned prospects in india. are they able to at least come up and make up that letter demand shortfall? mike: it really depends on the community in question. of course, iron ore, china is a game when it comes to iron demand globally. you wouldn't see that being made up in other markets. however, we are seeing utilization of rates in china continue at quite strong levels, about 90%. even with the weaker growth in the second quarter, still, demand remains strong and we are expecting will see it 50-year innovaro of over a billion tons in steel production in china. there could be a bit of downside if we see mandated steel cuts. but even with that, we would expect over 100 million tons in iron ore. rishaad: is there enough to

mitigate what is going on in china, is one part of my question. second, it is about your forward-facing commodities as well, as the world evolves. tell us a bit about that, and the strategy. mike: on the first question about is it enough to mitigate, we have to recognize we have been through a second quarter of slower growth in china. notwithstanding the fact that commodity prices are off, it is still a healthy environment. look at the earnings we have generated. we have just declared the third-largest final dividend ever in bhp's history, third-largest full year ordinary dividend. the business is continuing to perform strongly in spite of the slightly weaker than anticipated performance in china. now the growth in future facing commodities, we have had a very simple, clear strategy in years in improving underlying operational performance,, much more reliable and containing

costs. having a differentiate approach ders who support and depend on bhp, and increasing our portfolio with those commodities that stand to benefit the greatest from the ongoing megatrends of population growth, globalization and industrialization, rising living standards and decarbonization. commodities like copper, nickel, and potash. recently we had a condition of a company called oz minerals. bringing that into the portfolio opens up a case in australia. and a number of other efforts. the iron ore story for us and the coal story is that we are focusing those portfolios in the quality segment and the cost position that would allow us to benefits in those commodities for megatrends as well. we are pretty happy with the direction of the portfolio, certainly helping underlying

operational performance. rishaad: you talk about the impact of inflation, what part of it -- one part of it. how are interest rates eating into that? and how are you also, perhaps hedging that currency gyrations that we have been seeing? mike: i would like to start in reverse order on that. as a company, because we are exposed to commodity prices, of course, and to some extent we see currency fluctuations reflected in prices four melodies we adopt starting -- reflected in prices for commodities, we adopt a starting position. we have a very strong balance sheet. we have seen an uptick in the indebtedness period but in a nerve range compared with other industries or some other competitors. end, family, i am sorry, the

first question, the first part of the question was? rishaad: essentially in this environment of higher interest rates and debt servicing, i think you addressed part of that. mike: right. yes. david: ok. mike we, will talk about individual communities in a moment, but at the beginning of the interview, you touched on india. last year, india was 8% of your revenues, full year. what is india now, with these earnings and how big do you see india getting as a percentage of your pie in the next five years? does it become, say, 20%? mike: i think the next five years, 20% would be pushing the envelope but we do see is growing over time. it will be commodity-dependent. india is the big market for us for coke and coal.

growing market in copper concentrates, as well, but that is direct demand from india. as india grows, it helps to overall global growth as well, so the full on effect is even more significant than it may appear at first in terms of direct sales. yvonne: you are also spending no growth capital on call, though, you are ramping up capex on copper and potash and nickel. is there potential in these communities to pick up on the slide that is left by coal and iron ore too? mike: i will start with iron ore. we have spoken today about the intend to get iron ore to 305 million tons per annum, and potentially even higher levels down the road -- we have studies

underway looking at the potential to get to 330 million tons per annum. across coke", we have said that with terms being impacted by higher royalties and risk having gone up, not investing in growth capital. over time if that were to change, we see opportunities ahead for coke and coal out of queensland, but not in the time being, we don't see a weakening of scenes towards india as demand picks up there. rishaad: that coal assets in queensland, how is that going? mike: the process remains underway. part of our strategy in coke" to consider the portfolio on the highest quality coke and coal because they tend to benefit from a higher decarbonize world because they decrease the steelmaking activity. blackwater assets is in line with that strategy. we cooked up the process a few

months ago and we are still in that process. rishaad: c in three months. thank you for joining us, mike henry, ceo at bhp. more earnings coming out later as well. don't miss our interview with another ceo. and breaking news. this company slipping on thai soil and then taken into custody. this was attracted, he was found guilty in absentia corruption charges. he has apparently done a deal with his former enemies but psaki could face 10 years in prison and is apparently being taken to the supreme court right now, this is directly after landing at the airport. he will then go off to prison, apparently, but unclear how much time he will be serving and when he would be let out on bail. will it be a matter of hours, minutes or years? we don't know. that is what is happening in bangkok. yvonne: the timing of this has been quite interesting, this is

just hours before the pheu thai party, which he helped establish, is set to form this new coalition government with members of the conservative military establishment that basically led him to charges. it is all very interesting. we will see if we can get an update from china. david: as a reminder, that market opens up in about 18 minutes from now. from that, will prevent back to markets and get you some pretty of earnings from big names out of china, including the maker of, what is the name of baidu's ai bot? yvonne: ernie. david: very. a preview just ahead. this is bloomberg. ♪

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david: ok. baidu reports earnings later today. let's get a preview now with our guest who helps cover tech for us in the asia-pacific. good news, bad news? brokers are a bit cautious going into the season of earnings. >> they have been lowering their estimates. but it is not only baidu

reporting, others are reporting. both of them will likely deliver their fastest revenue growth in more than a year and that will largely be driven by their advertising unit. remember we had a relatively low comparison phase compared to the second quarter of last year when china went through it too much lockdown. so the real issue will be how big of a reaction of others and of growth the two can deliver. the other thing i will be watching out for is on the bottom line. last year it was all about improving efficiency for the chinese tech sector to survive the macro uncertainty. baidu's a icloud division livered breakeven last year. we'll see if this trend can continue. yvonne: earlier expecting any updates on attorney earnie -- i ernie bot?

>> they will likely share>> rates. but ever think it will be anything crucial like a launch date because there is to waiting for beijing regulators to approve the product for a rollout. and they're also testing their large language models. in terms of generative ai, this will be the new battle for chinese firms. this is where their official growth lies. rishaad: tell us about the mixed results in china tech, alibaba, tencent and the like. every getting a sense of the tech landscape now and what it looks like? >> alibaba did pretty great after the 6-unit breakup. they have been doing innovation and trying to go after growth. tencent is a bit of a disappointment. i think in linear ways, the traders are looking at chinese

internet firms as the proxy for the broader economy which is not doing that great because consumers are downbeat. clients might put off spending in marketing and cloud computing the macro situation continues to be dicey. they our on future growth for generative ai so we will likely see a lot of spending on that front, but in the short term, it might dent their margin. rishaad: thank you very much, zheping huang, there. the tech index is up about 0.6% right now. august gaynor -- biggest gaynor percentagewise, byd. this is bloomberg. ♪♪ ) woah. ( ♪♪ ) ( ♪♪ )

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rishaad: just joining us at the moment, it is 9:49 it am in bangkok where aixa's essence of history perhaps is being made with the former prime minister stepping onto the sorry for the first time since two thousand eight. he has been in their time shuffling between hong kong, single for, -- singapore and dubai and other parts of the world. as he landed, he was taken into custody. . he will be taken into the

supreme court and then enter present. no idea how long he will be staying there, there will have been negotiations taking place before he returned. he asked for permission to return without providing any more details. he said he would go through the judicial process and this is his quote, "it is my decision for all the love i have for my family, homeland and master." yvonne: you interviewed him, didn't you? rishaad: they did. he was in tears at one point and saying he wanted to go home. 11 years since that happened. meanwhile, all the to's and fro's of the political drama that is thailand. and the ironies we were mentioning here and the timing, of course, pheu thai. yvonne: yeah, the party he helped establish now trying to set up a coalition government, during his homecoming. it is all happening at one time.

will get more from what is going on in bangkok little later on. there is lots happening on wall street today. one group is considering reshuffling it's right. goldman sachs is exploring a sale of its personal finance business it but four years ago. su keenan joining us for details. let's start with goldman. what happened? su: this is the latest in the undoing of the strategy to go in the wider massive consumer banking. it also was the first big signature deal under ceo david solomon, the deal to purchase united capital for 750 million dollars back in 2019. now here is what goldman is saying, quote, "we are currently ready to go to that is for that business as we determine where to invest our resources and where we see the biggest opportunity." where a small part of goldman's wealth offering, it symbolized an earlier effort to expand the

firm's business minds which are now being unwound. the purchase of united gave goldman an instant footprint in the so-called mass affluent market. at the time of the deal united had 220 advisors and 25 dollars in assets. it is now at $29 billion. it gives you an idea that it didn't quite grow in the manner that solomon had expected were certainly presented to the bank. you drop into the bloomberg, bergman stock has risen significantly under solomon's reighn, but there has been a lot of internal discontent. bloomberg and other financial media outlets have been reporting that senior management are not that happy with the mistaken foray into consumer banking. many said goldman should stick to what it does, handling money for the richest of the rich. the bank has also been pursuing a sale of green sky. that was over a year ago that it bought it for $2.2 billion. yet another sign of how

dramatically management has backtracked on their strategy. you can see the stock took a bit of a dip on this story. rishaad: not the only bank making headlines. potential changes at the top of citi here as well, jane fraser looking at the upcoming departure of her deputy. that is changing things. and we could see structural and executive shifts, couldn't we? su: first in the executive ranks, sources tell ex-ceo jane fraser is considering an overhaul of executives that has a lot to do with the upcoming departure of her longtime deputy, paco ibarra. he is preparing to leave after having been at citi for decades, led its biggest and vital unit, institutional clients group. it made up about 70% of citi's profit in 2022. we also hear the bank is looking to divide that particular group into three separate parts --

banking, markets, and services as a result. this is being considered as a way to streamline and simplify, which the ceo has said is a priority. david: su keenan in new york for us. a quick glance at the bond markets that is where your bond market story is today. treasuries are a bit higher on the 10 year. in our global benchmark on bonds, it has basically dropped every single day with the exception of about four or five days, for the last six weeks or so. the pain continues in this large part of the global financial market. more ahead. plus the open in thailand which is very much in focus. and india, don't forget. this is bloomberg. good morning. ♪

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yvonne: almost 11 a.m. in singapore and shanghai. welcome to bloomberg markets: asia. i am yvonne man with rishaad salamat it. rishaad: asian stocks rebounding today. tech and financial leading that. the pboc ramping up support for the yuan with another record high fixed. japan's 10-year bond yield hitting the highest in nine years. thailand's former prime minister taxi and shinawatra returning after 15 years of south xo, reportedly read -- thailand's former prime minister thaksin shinawatra, returning after 15 years of self-exile, reportedly taken straight to prison. yvonne: as we count down to the india open, thailand is opening up. you mentioned thaksin , the prime minister vote, that market in thailand is still waiting for some signs of a new leader. look how it is opening up, the

trade rep. tai: is up zero point 7%. the region is still doing quite well. china, that rally, is it still in technical abounds? half of the hsi in oversold territory, maybe we are bound for a weakness. the renminbi is set for weakness despite the stronger record fix. overall it's a mixed picture across commodities. there you go, the bond market still bleeding. look at u.s. tps, hitting the 2% level. yields are getting used to the scenario hired for longer, as we count down to jackson hole -- the scenario of higher for longer, as we count down to jackson hole. rishaad: the open is just about one minute board. 0.6% higher.

the dollar has now fallen for four days, after good gains for the greenback. we have just seen a nifty futures indicating little to no change. the rupee is still near record lows against the dollar. . it's all about thaksin shinawatra as he returns to bangkok, to thailand for the first time since 2008. as we have just been saying, thai police have taken him to custody. there he was a few moments ago coming off the plane, private plane from singapore. of course, that is at the airport, he did not go into the main airport. his loyal followers. no doubt a deal was done with his former enemies, that is the thinking anyway. he says he is there to face charges from his rivals and his master, referring, of course, to the king yvonne: meantime let's get you caught up on the macro staff across markets and bring

in chief drake's correspondent for asia and mliv contributor garfield reynolds. we start with the selloff. yields are at multi-decade highs . jgb's in particular. how much longer can this rout last, do you think,? garfield: there is a decent chance at last at least until the end of this week because looming on the bond market this week is the specter of jackson hole. what is jay powell going to say and what might it tell us about not just what the fed decides at next month's meeting about the immediate situation with rates, but will it adjust the dot plot? at the moment, the federal guidance is for right to actually come down fairly rapidly next year, within six months of next year, in fact within four months to go left in the year. that being the case, are they going to raise their

expectations for where the rate will be next year? are they going to raise their expectations for the long-term rate, which, at the moment, is 2.5%. that signals a pretty strong come-down in rates once the peak has come and gone. all of that is weighing on bonds very strongly. that concern that the fed has basically sold us big of damaged goods when it comes to where rates are going to end up, and if rates are going to be higher for longer, there are no longer: assumptions about how buying into longer dated d is a no-brainer -- how buying into longer dated debt is a no-brainer. that becomes harder to stick with. rishaad: a quick word on -- the bloomberg dollar index is up 6% since mid-july.

this uptick in the yields, especially real yields,, surel it may have an impact here for the greenback? garfield: yeah. one of the surprising things about what has been going on with real yields and the with the greenback, is that real yields have kicked off since early april. and yet, the greenback has struggled to get much momentum. both real yields and the greenback came down late last year when it was obvious the fed were going to slow the pace of its rate increases. but then, as i said, real yields have turned around but the dollar hasn't. you would think when you look at, for example, the pound is very strong against the u.s. dollar this year, and get the real yield in the u.k. is under 1% for the 10 year compared to above 2% for the u.s. so on that basis, there are a lot of currencies that look

vulnerable to a comedown against the dollar. that has also been one of those assumptions underpinning markets this year, was that the greenback would wither away and be quite weak. . it hasn't withered away yet. but nobody is really counting on it moving higher, even when, as i said, real yields would be one argument to say that it can go considerably stronger than it is now. rishaad: thanks, garfield reynolds, chief rates correspondent for asia and mliv contributor. let's get more on markets, jackson hole and the like, in real yields. asia-pacific equities at m&g investment, david perrett. dave, thanks for joining us. every word will be analyzed, and what happens out of that, do you think,? david: i think the fed is still concerned about inflation, so we

think probably there will be a tougher message on that. there will also talk about the strengths of the economy. we are expecting a rate hike by the end of the year and we are not expecting rate cuts. in that sense i think it is too early, given the strength of the economy, that we will get better news on inflation, we don't think the fed will want to give any sense that they are easing off. with finger roll still be ever let -- we think there will still be a hawkish tone. yvonne: real yields are coming back in a big way. how is that going to impact equities? dave: it's a really good question. our sense is that equity markets at the margin, particularly in more developed markets and interstates, we have more of a retracement. real rates staying at this level for a longer period may reset valuations. it's an even more challenging environment. the bond markets have taken on the stronger tone u.s. economy in recent times. rishaad: but credit is an issue.

does it become a bigger issue as well, given market structures and also delays within that market structure, that you have a lagged impact their too>>? dave:? dave: one of the biggest uncertainties in markets at the moment is, we haven't gotten so used to lower rates for so long. not these prolonged rates. i think for the broader market, it's a challenging backdrop. as long as inflation canoes to drift lower, it's not a bad problem. if it gets stickier, it's a risk for major markets. yvonne: we are overweight on china. is it harder to maintain overweight in this sort of environment right now or do you think value is finally emerging in some ways? dave: we have been modestly overweight china for some time now. we have seen some volatility in the last six or nine months, but in general, valuations, certainly at the end of last

year, were very weak at the end of zero covid. but we are long-term investors. we see a lot of longer-term value in china. one of the things to bear in mind is that the property bursting as it were, that was a genuine policy decision made by. the authorities if you ask people five years ago what were your biggest concerns about china, it was the real estate sector. that has been taken on. what is important for china is that while setting policy and terms of market expectations isn't always easy, it is an economy of large flexibility both on interest rates, inflation is very low, there is a current account surplus. there are things they can do to support the economy through this painful transition. rishaad: if you are saying it was deliberate, that means getting out of hand was a part of it. the second part is do they do nothing about it? dave: no. if there's ever a policy to try to take on, we saw the three red lines in 2020.

what you're trying to do with a structural big issue like this, we can say perfectly that we know what the playbook is. zero covid made it more difficult. oversupply probably starts being very weak and that means activity is weak this year and next year, in terms of actual real estate activity. what surprised policymakers was the weaker consumer sentiment but has happened this year. i think that is where they need to focus policies to try to recover the animal spirits. yvonne: where would you allocate in china? dave: i think when you get in these environments of angst and market negativity, things tend to get sold across the board. it is no doubt that china is the new leader in energy transition globally. there are a number of stocks really interesting to us. the other thing i would highlight is the mid-cap area, where liquid gets a bit tighter. some really good companies with great moats are being sold out.

it is worth bearing in mind that if things get that tough in china as some valuations might imply, and the rest of the engine will not shrug that off. so we are overweight china. rishaad: rishaad: you are here in may, you are here in august. in those months has anything changed in terms of the i suppose, the language surrounding china as uninvestable place on your visit here? dave: i think there has been concerns about, all through last year, with zero covid and geopolitics about china. a number of reports came out, about his chain no longer investable or not? i don't think that has changed. end demand in china has been weaker than the markets expected. i think that is where people have been frustrated by the lack of policy response. the politburo announcement at the end of july which is brought

forward, though there were no policies announced there is a recognition that things are weaker than expected and we need to do something about it. yvonne: are you seeing other opportunities elsewhere? the likes of india and japan benefited from the underperformance in china. . what are the markets you like no? dave: obviously you run a balanced portfolio. we are quite positive in indonesia. traditional emerging markets with demographics that are available. a lot of the banks are well managed. we have seen infrastructures and then come through from the sub administration and there are also beneficiaries from the energy transition. we like some of the stocks in indonesia as well. yvonne: dave, great to have you in the region dave perrett of m&g investment. people stick around, we will talk more about ai as well. you don't want to miss our exclusive interview with the founder and ceo of one of india's leading clean energy companies, our conversation with renew's sumant sinha, later this

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rishaad: we are back and this is bloomberg markets. having a look at softbank's semiconductor division arm filing for an ipo that is expected to be the biggest this year in the united states and could end up ranking highly in third place, among top tech listings of all time. bloomberg's tech editor joins us. the latest clues about the potential valuation here. i suppose at the end of the day, the big winner is softbank. yvonne: oh, it is actually --

ming. sorry about that. rishaad: sorry about that. there was a technical editor in my head. [laughter] tell us about the potential valuation here for arm. [laughter] min: no worries. sorry. while the document didn't clearly state the valuation for arm, there was a transaction between softbank and vision found were vision found sold 95% of its stake in arm to softbank. in the transaction, it was for 16 billion u.s. dollars. which doing the rough math, you can get a rough valuation of about 64 billion u.s. dollars. while that is not the official valuation, that is the closest indication of what softbank and arm thanks is worth -- thinks it

is worth. we'll have to see actually how much it debuts out in september. but if it does fall into that ballpark range, it will be very positive for softbank and arm. yvonne: people say the big test for this ipo is whether investors will look at this as sort of an ai rate. can it be seen that way? >> i think for now, arm is trying to position it as an ai play and because of all the hype surrounding ai and how highly valued all the technologies surrounding ai are, if it is acknowledged as an ai play and is expected to generate a lot of revenue by selling technologies related to ai, yes, it is believed to help arm get valued

at a much more bullish, and allow it to be valued at a bullish range. but it really depends on the overall chip market conditions, and also what happens with the tensions surrounding the u.s. and china, because arm generates a good portion of revenue from china, so there are a few risk factors to think about going into the ipo. yvonne: min jeong lee, thank you for joining us, our technical reporter on the latest when it comes to arm. [laughter] it is topped sometimes when you have multiple people from the team coming on. let's bring in david perrett, still with us. i want to talk about where we are on this ai trade. do you still think you can chase it? dave: the big tech heavyweights will be the big

anna: areas. it will be a huge opportunity particularly in asia. a number of names struggled beyond that. some of those probably will not necessarily pass the test of time and i think that will be more of a player but in the longer term, it will be a huge trend. rishaad: is it a case where everybody is looking at this new technology, looking at it and getting into the companies which are doing, and expecting this to arrive next week? i noticed that chatgpt requests have actually fallen in the last month, perhaps there is a pause, perhaps, in line. dave: i think what is interesting is actually a lot of companies and corporate's are trying to work out how to integrate this into their businesses. that will be the next wave. in no way, this is an iterative technology that we already had

to a certain extent, but just chatgpt made it more interruptible. that will be the next wave of investment. yvonne: will that lead to more earnings or revisions to the upside in the future for some of these tech names and overall, your take on the earnings season so far in asia? dave: the tax season so far has been premixed in the sense that there is no doubt that people were who q2 would be the bottom floor consumer demand particularly on the electronics side. that has been pushed out into q2 and q4. because of part of the ai excitement, that has helped the chip companies as well. that means that although you have had that disappointment, it hasn't been reflected that much in share prices as per a look through the weakness. rishaad: i mean, it is not different asset class ultimately. what is your comp pic right now out of the asset classes that you say you are most certainly

now that this will hit the ball out of the park? dave: certain is a good word to use. [laughter] rishaad: is that many are not going to use it? dave: one thing we feel confident about is on the ship building site. the period after the gfc 2010-2020 has been a very difficult time. shipbuilding capacities have been taken out, companies going bankrupt. ultimately because of, climate change and the need to improve energy efficiency, in the next 20 years, the global shipping fleet has to be changed and transitioned to more renewable energy efficient, and there isn't much capacity in the world. but what has been typical in this industry will start to look structural. the supply-side -- it's not about demand, it's about supply. normally in shipping, you get a huge boom followed by a huge

bust. this time it has been very different. that is what we're going to see. yvonne: thank you for that, dave perrett of m&g investment, joining us and talking to us about china, the fed, ai, and now, shipping. rishaad: varied wide-ranging for -- very wide-ranging interview. [laughter] yvonne: we have plenty more ahead. we were lucky to these markets, we will focus more on thailand later on, and also countdown to the india open, too, this is bloomberg. ♪

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actions in the last 24 hours or so raising it to a buy. that wording it to the positive cash flow -- awarding it to the positive cash flow. we are up 3.5%. gigli comes up next in terms of earnings. nio is also up and tesla did well last night. rishaad: we have the interview with the ceo of woodside coming up. let's have a look. i relatively is very much in focus. the one month rate has climbed up. the interbank offered rate. yvonne: let's bring in david ingles. what is going on? [laughter] david: just after i took off my tie. my spectacles are back on and my contacts are off. a couple of things here, bloomberg put a good story on this together. what they have done is, the

pboc's have come in with a stronger fix. they have also started to increase the cost to short the currency. they are doing that based on our understanding with sources, through the banks, or withholding some currency from the market and driving up these costs. what we're seeing is the daily fixing on hibor, which is about 11.15 every day, you are seeing the three month. the cost to short it, it is down 76 basis points. essentially are getting more signs of them coming in, raising the guardrails more. rishaad: is it really the tensions because of the situation where you have money market rates in the u.s. should be the same and equivalent to hong kong, but they are not. they are making an arbitrage here, which has all sorts of implications for liquidity. david: it certainly does. it takes us into the libor conversation and silver, for

example. it's a conundrum that the market expectations are that rates will fall in china, that is what underlies this narrative here. and how do you keep the currency from falling, but at the same time, give that signal to the market that they are there to support the economy? that is where we are right now. yvonne: that is where you are seeing 728.78 for your onshore rate this morning. important to note. that policy support is there, but they are also managing the currency in some ways, to offset the declines. rishaad: we have the economy in china coming up, of course, starting to impact the asian minors. i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move with the xfinity app.

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go before the lunch break there. still a bit of pessimism still for equities there on the mainland, to seeing a bit of weakness although we haven't had any real moves with regard to the stimulus. more loan rate moves. some banks are holding that mortgage rate the same as it was before. the yuan also, what a fix today. yvonne: yeah, a record one. as dave mentioned, you are seeing more guardrails being put in terms of if they are going to implement these cuts. obviously that will mean more pressure on the currency. they will do more teetering to offset some of the weakness in the drops we are seeing when it comes to the renminbi. over there is a rally in hong kong. taking a look at japan as they enter into that lunch break, there was a big momentum. still up 0.7% in tokyo. softbank it has been a big driver on the announcement of the arm initial public offering,

we are up 2% heading into the break. the topix is also 0.8% up. the currency is also strong, 145.88. treasury yields, 66 basis points up, the highest on those 10-year yields since 2014. and we are talking thailand now. certainly the rishaad: big story, a political one that could have political and financial implications. former prime minister thaksin shinawatra reportedly taken into police custody after returning from 15 years of exile. 's arrival coming just ahead of the parliamentary vote for a prime minister. our guest joins us from bangkok. tells us -- tell us what is the deal here. he is meant to go to the supreme court and could end up in jail later today. what has been going on in the background? >> hi. it is a very historic moment.

that's what they are saying here at the airport. the former prime minister step foot in china for the first -- in thailand for the first time in 15 years after leaving in 2008 after corruption charges. since the early hours of tuesday, hundreds if not thousands of supporters traveled far and wild from all corners of thailand to give him a warm welcome. there were seen dancing in the streets, inside the airport and near the airport, as you might hear from my background noise. the mood is very celebratory. supporters were very emotional to see their beloved former leader back home, safe and sound. thaksin appeared before the media with his children, he stood before a portrait of the king and waved to supporters.

as you said, who was withdrawn and really afterwards by police and will appear before the supreme court today and most likely be in jail by the end of the day. yvonne: you talk about the excitement. this is a long time coming. i am just wondering how big a deal it is that he has returned. >> it's a very big deal. his return comes at a very critical time in the middle of thailand's post-election turmoil. we don't have the government more than three months after the election, but that could change today. in a few hours, there will be a fresh vote for prime minister after delays for leaks. and a former property tycoon from the pheu thai party that is linked to thaksin is expected to become the prime minister. we may well see the end of the political deadlock that has been putting investors on edge in the

past month. as for thaksin, it likely will not be roses as he still faces 10 years in prison after being found guilty while he was away for corruption cases. it is still unclear if he will be receiving a royal pardon and how soon that happens. for now, jail is where he would be. rishaad: you touched on this, we could get a new prime minister today, what will be on the bucket list of things to do? patpicha: if he wins today, the government led by pheu thai party has promised to make thailand's economic recovery the top of the agenda. the gdp grew below expectations and pheu thai is planning cash handouts and physical measures to stimulate the economy which include 70% minimum wage hike,

and also debt suspension plan that they have in the pipeline. so, the focus will definitely be on the economy. thaksin's supporters are betting that the government knows what it is doing and the economy will get back on track the same way it was when thaksin was in power. rishaad: there we go. and we just got that news thank you, patpicha tanakasempipat joining us out of bangkok. just getting a headline at the moment a projected move forwards motion on the prime minister re- nomination. not sure exactly what that means. more political stuff going on in this part of the world. yvonne: we are forming the politics around the region here. live pictures in taiwan.

there you go. you see the former foxconn head making a speech to his supporters there. our very own stephen engle is underground and we will get to him. there has been a lot of speculation and whether he will run for president. what that means for this election that is a few months away. we will bring you the latest once we hear the official confirmation, if it is happening or not. there you go. he is in taiwan. rishaad: there week. we don't know about his political ambitions. let's tell you about australian earnings. dhp with a 37% decline in its full-year profit, a miss -- bhp. lack of iron ore demand. sales in continuing operations also missing. but it is pain a final dividend of $.80 a share, down from $1.75 a year ago.

yvonne: the ceo telling us the outlook for china remains uncertain and that the firm is closely watching the country's flailing property sector. >> it is fair to characterize it as a bit uncertain. i would say that there is actually a number of sectors internet that are doing quite well. that includes green infrastructure, auto infrastructure, automobiles and so on, but he said to everyone is focused on and which is very relevant to our business, is the property sector. we have seen strong completions, completions of 19% year on year, but what is lacking is new starts. that has been recognized that the central government level. there are obviously policies meant to stimulate new starts, but they are not translating effectively interchanges on as its attorney we were anticipating as well. that is what we are keeping an eye on in the next three to six months is hot, effective is the transition -- is how effective is the transition from policy into practice.

we think there could be good momentum flowing from calendar year 2023 intercountry or 2024. outside of china, i was in india a month back. the energy underground there, the optimism is palpable. we are seeing solid momentum in india, a big market for us for commodities like metallurgical coal and copper concentrate. overall, we are seeing india and china comprising about half of the world gdp growth in the period ahead. the other point is long-term fundamentals for this sector and for bhp remain really healthy. david: we would like to talk more about the opportunities in india, because certainly that is a growing market. i want to pick up on some of the points you are making about china. almost every ceo we speak with is uncertain of the environment there. they certainly hope, let's put it that way. what are you seeing on short-term pricing on many of your products in china, what is the outlook on pricing in these next six months? mike: of course it is going to depend on bit on what happens

with the overall economy, with demand for commodities like iron ore. there are rumors about potential mandated production cuts in a steel, but it is not like the industry there it started with high inventories of iron ore or steel so any cuts that occur would quickly start eating into those inventories. obviously, lower demand has implications for pricing, but one very important point to note is that the marginal cost of production across commodities we produce is higher now than it was pre-covid, naturally, given the inflation in the external environment. we expect that will provide a downside cushion on pricing at a higher point than we have been the case previously. in the case of iron ore, the case of $80 or $100 per turn is likely where the cushion kicks in. from the bhp perspective, because we have done a better job of controlling costs than our competitors, we have doubled our lead at the lowest cost major iron ore supplier

globally, that christian means our margins end up being more protective than might be the case for some others. yvonne: bhp ceo of mike henry. more to come on australian earnings. woodside is reporting a slight rise in first-half profit. we will speak to the ceo meg o 'neill, in the next half incoming up next,, will speak to a clean energy ceo about india's transition. that is next. ♪

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with personalized insights from 23andme. rishaad: bloombergnef is set to release a new report on india's declared targets for achieving net-zero emissions by 2050. let's get a preview and bring in their head of india research. thank you for joining us. what are the broad steps needed to plan for such a transition, especially for an economy which is where it is right now in its trajectory? >> there are a few things that india could do to achieve net-zero. first of all it needs to ensure that all of its sectors achieve peak emissions in the next decade. obviously the industrial sector

will find it difficult to switch over to a cleaner alternative overnight. so they might have a longer time than they should to reach peak emissions by 1231. but there are other sectors like power and buildings where we need to see peak emissions peeking essen as the next year, 2024. this can be done a few ways. first of all, we could ramp up deployment of renewables or on the other side, we could also do away with coal plants and reduce our reliance on them. the next thing india could do is make sure their supply chain is robust. and that there are no disruptions, because india will be producing about 70% to 80% of the total world steel and cement production by 2050. it will also deploy massive amounts of renewables capacity. it cannot afford to have any

disruption in the supply chain. yvonne: -- the third thing india could do is to build grids. yvonne: india is a coal heavy power sector. what happens to coal power generation under net-zero? shantanu: great question. on the cold side, we feel that india's reliance and dependence on coal power plants will reduce overtime. what will happen is that as renewables get more competitive, they start to push coal power out of the immediate order in all generation next. you need to be aware of a couple of tipping points. first is when renewables actually outcompete new coal. we have already passed about. in the next decade, we will hit the second tipping point where it will be cheaper to actually build a new renewables

powerplant than around an existing quote powerplant. what will also happen -- build a new renewables powerplant than run an existing coal powerplant. none of the emissions that would be produced in the coal power plant be inured, that will be captured. coal as we know it ceased to exist in the future. yvonne: we have to leave it there, but thank you so much, shantanu jaiswal, joining us from our naf team. take a look at in your market, you are about to open in 10 seconds or so -- indian markets. we are seeing an overall rally in asia. we will see how that plays out in the india region. there has been talk about how the rally continues. we are in the thick of the earnings season in india as well. likely to bring a lot of support

for the market in some ways. look at the open now, decent upside in the sensex as well as the nifty. the rupee is flat, 83.07. the dollar weakness across the board in asia. we have to stick to this will green energy theme. rishaad: indeed. let's get to it. sumant sinha is chairman and ceo up of renewed energy. thank you for joining us. this is a massive, massive undertaking and it will cost a lot of money. where are you in it, and how do you actually play this, as chairman and ceo of a company which is perhaps on the forefront of this development? sumant: yeah. it's actually quite fascinating what is happening in india. we are in the midst of this energy transition. the government under prime minister modi is solidly supporting and in fact, preparing for the transition to becoming away from being a fossil fuel-dependent economy

and move towards more and more clean energy, including eventually things like green hydrogen and so on, and bringing down dependence on imports and so on. all of that is leading to a lot of opportunity and action in the indian market. as you said, it will be, as a company, we will be at the center of it and there are lots on lots of opportunities for us. yvonne: how much difference is that going to make, these improved standards on green hydrogen, for example, on the industry? are these standards compatible with other geographies where india can actually export green hydrogen to? sumant: yes, it is. i must say that the government is really trying to encourage the development of a green hydrogen economy both for domestic consumption as well as for exports. the number of states also are coming out with their own policies which are different from what the central government is coming out with.

this makes it easier to recognize within india what is green hydrogen, energy produced using clean electricity, and should have in the production of it, not more than two kilograms of co2 emitted. of course, the european union definition is more stringent, but i think the indian government is working with the european union to try to create a common taxonomy for green hydrogen so that there can be a good trade of green hydrogen globally between not just india and the e.u., but other countries as well. india wants to be an exporter, we certainly have the natural resource, both in wind and solar. we have natural coastlines, lots of ports to supply both to the parties and to the european union. the indian government has made it easier to create a transmission network to move power around so that we don't actually have to move green

hydrogen around, which is harder. that allows us to produce the solar and the wind it india, move the power, electrolyte is the water and convert it to green hydrogen and ship and set it out. that is a significant benefit we have in the country. rishaad: that is one of the big problems with hydrogen. it is seen as the holy grail for many companies. i want to talk to you about your unit of petronas. what is this important an holders it improve your bottom line? sumant: it is very simple. there is a lot of interest from overseas investors to have exposure to indian renewables. but it is not that easy because execution india does require a fairly deep set of skills , experience in the country and so on.

therefore, for a lot of companies, it is very much simpler and better and more efficient to partner people like us who already have capacity in the country. what the company is looking to do is build capacity in india. for them to purchase commission assets or assets under construction from us, makes a lot of sense for them to build up their own capacity in the country. for us, the reason it makes sense is it has allowed us to build more and hold less on our own balance sheet and monitor that execution capability that much better. yvonne: what can you tell us in terms of the timelines for building these projects, how much investment is involved, and what market is being targeted? sumant: the first project in execution right now is a 400 megawatt power project with 150 megawatt battery storage. that is in construction and should be done this year. that is the first project we are

doing with the company. as we go forward, there will be other projects that we look at which include both existing projects, we could look at new projects as we go forward. the idea is to have five gigawatts and that could happen in the next few years time. it's a fairly broad agreement with them where they want to increase capacity and we want to devote some capacity so we can build more. it's a very compatible relationship. rishaad: do you think you have the critical mass now in order to achieve your long-term objectives? if you don't, how do you grow the business is? can it be purely organic, or do you have to really get into some consolidation? there are a few companies in your space. sumant: having said that, the reality is that we are still the leading company in india, our commission capacity currently is 8.4 gigawatts which is the

largest commission capacity portfolio in the country right now. we are building another 5.7 gigawatts, that will take us close to 14 gigawatts in the next -- by the end of the next financial year. in addition, we have other options. our total portfolio from that standpoint adds up to 17.5 gigawatts, which takes our construction portfolio all the way up to fy 2026. we have a lot of visibility. in addition to that, the indian government has come out with tenders of another 43 gigawatts on top of that. as we grow our market share we should be able to build out continuously even beyond that. i think the market is not constrained for us. the corporate market is also evolving rapidly. we have 2% market share in the market as they look to decouple themselves. for us it is hard to execute this capacity on, that is where

the agreement is going to shift to and how to release capital, with partnerships like the one we have with gentari and with indian oil and energy for green hydrogen. they are very important for us to grow more and build more. that is what india needs at this point, is for people to come in and help. rishaad: great talking to you, sumant sinha, chairman and ceo of renewal. the annual bnf summit is happening this year in new delhi, august 24, this thursday. official g20 side event bringing together leaders of innovation and government to help shape a cleaner future. there is a look at the open, just taking place. seeing some minor gains for equities. there you have it. since x up -- sensex app, barely. yvonne: plenty more to come. this is bloomberg. ♪

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yvonne: as we say india is underway. overall, a pretty modest rally across the region this morning, the likes of the hang seng even. we have given up a bit of the gains, but we are still seeing green on the hang seng.

although china is reversing those earlier gains, we are in the red on the shanghai and sends them. individual movers, softbank with the arm announcement. they are up 2%. we are watching financials in japan on the back of that. we have the likes of smic, ship stoxx flashing given what we have seen with all the ai hype. nvidia reports thursday too. rishaad: woodside reported earlier. the chief executive, meg o'neill in the next half hour or thereabouts. you don't want to miss that. this is bloomberg. ♪

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