Trump says US-China relations have never been better

Trump-Xi Summit Goes Big on Ceremony But Small on Results [Native YouTube auto-generated English captions; publisher: Bloomberg Television; speaker labels reviewed separately] Reporter [00:00:00-00:00:01 (1 sec)] I'm Paul Allen. [music] This is Insight, Reporter [00:00:01-00:00:03 (2 sec)] where we dive deeper into the stories Reporter [00:00:03-00:00:05 (2 sec)] that matter with crucial context and Reporter [00:00:05-00:00:07 (2 sec)] sharp analysis for presidents Trump and Reporter [00:00:07-00:00:09 (2 sec)] she. Tech, [music] trade, Taiwan, and Reporter [00:00:09-00:00:12 (3 sec)] Tyran, all central to their highstakes Reporter [00:00:12-00:00:14 (2 sec)] talks in Washington as the two leaders Reporter [00:00:14-00:00:16 (2 sec)] try to stabilize ties, but expectations Reporter [00:00:16-00:00:18 (2 sec)] for major breakthroughs [music] remain Reporter [00:00:18-00:00:21 (3 sec)] low. The US and Iran are said to be Reporter [00:00:21-00:00:22 (1 sec)] exploring a phased agreement that could Reporter [00:00:22-00:00:24 (2 sec)] see Thran o reopen the Straight of Reporter [00:00:24-00:00:26 (2 sec)] Hormuz and Washington ease [music] Reporter [00:00:26-00:00:28 (2 sec)] pressure on Iranian ports. Qatar is Reporter [00:00:28-00:00:31 (3 sec)] mediating discussions. Oil's [music] Reporter [00:00:31-00:00:33 (2 sec)] easing, but higher prices drive a fresh Reporter [00:00:33-00:00:35 (2 sec)] sell-off in government bonds, lifting Reporter [00:00:35-00:00:38 (3 sec)] Treasury yields to multi-deade highs. Reporter [00:00:38-00:00:40 (2 sec)] Markets now fully pricing three Reporter [00:00:40-00:00:42 (2 sec)] additional Fed hikes over the next year. Reporter [00:00:42-00:00:44 (2 sec)] [music] And later on insight, the CEO of Reporter [00:00:44-00:00:47 (3 sec)] India's largest stock exchange, the NSE Reporter [00:00:47-00:00:48 (1 sec)] is joining us following its strong Reporter [00:00:48-00:00:50 (2 sec)] listing. We'll discuss how the exchange Reporter [00:00:50-00:00:52 (2 sec)] plans [music] to sustain growth as Reporter [00:00:52-00:00:54 (2 sec)] regulators tighten the oversight of the Reporter [00:00:54-00:01:12 (18 sec)] derivatives markets. Reporter [00:01:12-00:01:14 (2 sec)] We begin with the Trump Shei Summit in Reporter [00:01:14-00:01:16 (2 sec)] Washington where the leaders of the Reporter [00:01:16-00:01:17 (1 sec)] world's two biggest economies have Reporter [00:01:17-00:01:20 (3 sec)] wrapped up a state dinner. Speaking at Reporter [00:01:20-00:01:22 (2 sec)] the event, President Xi said many areas Reporter [00:01:22-00:01:24 (2 sec)] of consensus were reached and President Reporter [00:01:24-00:01:26 (2 sec)] Trump declared the two sides have never Reporter [00:01:26-00:01:29 (3 sec)] gotten along better. Among the key Reporter [00:01:29-00:01:31 (2 sec)] issues covered were Taiwan and the AI Reporter [00:01:31-00:01:33 (2 sec)] race. The state dinner also brought Reporter [00:01:33-00:01:34 (1 sec)] together some of the most influential Reporter [00:01:34-00:01:37 (3 sec)] names in the tech industry. She was Reporter [00:01:37-00:01:39 (2 sec)] seated with Trump at a table with among Reporter [00:01:39-00:01:42 (3 sec)] others Nvidia's Jensen Huang and Apple's Reporter [00:01:42-00:01:46 (4 sec)] Tim Cook. Noticeably absent though any Reporter [00:01:46-00:01:48 (2 sec)] Chinese business leaders. Our chief Reporter [00:01:48-00:01:49 (1 sec)] North Asia correspondent Steven Angel Reporter [00:01:49-00:01:52 (3 sec)] joins us now from Washington. So Steve, Reporter [00:01:52-00:01:53 (1 sec)] tell us a bit more about the dinner and Reporter [00:01:53-00:01:57 (4 sec)] what she's visit has achieved so far. Reporter [00:01:57-00:01:59 (2 sec)] >> Well, I wasn't at the dinner. Boy, I Reporter [00:01:59-00:02:01 (2 sec)] could have used the meal. Uh we've been Reporter [00:02:01-00:02:03 (2 sec)] working all day long here on the White Reporter [00:02:03-00:02:05 (2 sec)] House lawn and then up here on our perch Reporter [00:02:05-00:02:07 (2 sec)] above the White House, but I'm sure Reporter [00:02:07-00:02:08 (1 sec)] they've had a wonderful evening. It's Reporter [00:02:08-00:02:11 (3 sec)] closed doors. Uh invite only. Donald Reporter [00:02:11-00:02:13 (2 sec)] Trump says it's the hottest ticket in Reporter [00:02:13-00:02:16 (3 sec)] Washington. Uh but again the markets in Reporter [00:02:16-00:02:18 (2 sec)] in the commodity markets and some Reporter [00:02:18-00:02:20 (2 sec)] traders are sort of saying where where Reporter [00:02:20-00:02:22 (2 sec)] are the big deals that Donald Trump sort Reporter [00:02:22-00:02:24 (2 sec)] of promised beforehand. He thought there Reporter [00:02:24-00:02:26 (2 sec)] was going to be a lot of different deals Reporter [00:02:26-00:02:28 (2 sec)] coming out of this. But you alluded to Reporter [00:02:28-00:02:30 (2 sec)] the fact that there's no real business Reporter [00:02:30-00:02:33 (3 sec)] entourage from China here. Uh and Reporter [00:02:33-00:02:35 (2 sec)] there's a lot of US businesses here from Reporter [00:02:35-00:02:39 (4 sec)] banking to AI and tech. A whole who's Reporter [00:02:39-00:02:41 (2 sec)] who list of you know the the blue chip Reporter [00:02:41-00:02:43 (2 sec)] companies in the United States. So, I'm Reporter [00:02:43-00:02:45 (2 sec)] sure they're having a very nice time in Reporter [00:02:45-00:02:48 (3 sec)] the in the suare uh down below me uh Reporter [00:02:48-00:02:51 (3 sec)] eating, you know, sesamer crusted sea Reporter [00:02:51-00:02:54 (3 sec)] bass and baby bok choy, but there wasn't Reporter [00:02:54-00:02:56 (2 sec)] a lot of details and there's not a lot Reporter [00:02:56-00:02:59 (3 sec)] of room for further deal making. If you Reporter [00:02:59-00:03:02 (3 sec)] look at the agenda for Friday, Reporter [00:03:02-00:03:04 (2 sec)] essentially they're going to meet for Reporter [00:03:04-00:03:06 (2 sec)] tea at the White House. Uh Mr. and Mrs. Reporter [00:03:06-00:03:07 (1 sec)] Shei are going to come to the White Reporter [00:03:07-00:03:09 (2 sec)] House. They're going to have tea. Then Reporter [00:03:09-00:03:10 (1 sec)] they're going to go to the National Reporter [00:03:10-00:03:13 (3 sec)] Archives and tour some of the the most Reporter [00:03:13-00:03:15 (2 sec)] famous documents in US history, Reporter [00:03:15-00:03:17 (2 sec)] including uh the Declaration of Reporter [00:03:17-00:03:19 (2 sec)] Independence. And then they're going to Reporter [00:03:19-00:03:21 (2 sec)] say their goodbyes. No press conference, Reporter [00:03:21-00:03:24 (3 sec)] at least in the in the schedule right Reporter [00:03:24-00:03:26 (2 sec)] now, for either man. I'm sure there will Reporter [00:03:26-00:03:28 (2 sec)] be some readouts and there might be some Reporter [00:03:28-00:03:31 (3 sec)] uh gaggles among the the pool press if Reporter [00:03:31-00:03:34 (3 sec)] the pool press are still operating u Reporter [00:03:34-00:03:36 (2 sec)] tomorrow. We'll have to see. There's a Reporter [00:03:36-00:03:38 (2 sec)] lot of uncertainty and there's not been Reporter [00:03:38-00:03:40 (2 sec)] a lot of deal flow on agriculture. Reporter [00:03:40-00:03:42 (2 sec)] That's why we've seen Paul some dip at Reporter [00:03:42-00:03:45 (3 sec)] the open of some grains and other Reporter [00:03:45-00:03:47 (2 sec)] commodities because a lot of talk has Reporter [00:03:47-00:03:50 (3 sec)] been about, you know, this extension of Reporter [00:03:50-00:03:52 (2 sec)] the trade truce. But what about further Reporter [00:03:52-00:03:54 (2 sec)] commitments for soybean purchases from Reporter [00:03:54-00:03:57 (3 sec)] the Chinese? What about rare earths uh Reporter [00:03:57-00:04:00 (3 sec)] and the magnets commitments there and Reporter [00:04:00-00:04:02 (2 sec)] keeping those export licenses in China Reporter [00:04:02-00:04:04 (2 sec)] open? What about those other bees? Reporter [00:04:04-00:04:06 (2 sec)] Boeings. You know, there's a pending Reporter [00:04:06-00:04:09 (3 sec)] $200 billion plus deal that that we Reporter [00:04:09-00:04:11 (2 sec)] talked about a lot in May, but where are Reporter [00:04:11-00:04:13 (2 sec)] the details of that? Kelly Orberg, the Reporter [00:04:13-00:04:15 (2 sec)] CEO of Boeing, was at the dinner Reporter [00:04:15-00:04:17 (2 sec)] tonight. Still no details. So, there's Reporter [00:04:17-00:04:20 (3 sec)] been a der of details. That's how I Reporter [00:04:20-00:04:22 (2 sec)] would describe it. Reporter [00:04:22-00:04:24 (2 sec)] >> Yeah. I've got another what about for Reporter [00:04:24-00:04:27 (3 sec)] the list is Taiwan as well. I understand Reporter [00:04:27-00:04:29 (2 sec)] she pushing for some new language on Reporter [00:04:29-00:04:32 (3 sec)] that. And of course with this language Reporter [00:04:32-00:04:34 (2 sec)] uh means a lot. Is there going to be any Reporter [00:04:34-00:04:38 (4 sec)] change? Reporter [00:04:38-00:04:40 (2 sec)] >> Yeah, that's a big question whether Reporter [00:04:40-00:04:42 (2 sec)] that's going to happen. But Xiinping did Reporter [00:04:42-00:04:44 (2 sec)] not miss the opportunity to bring it up Reporter [00:04:44-00:04:47 (3 sec)] and urge uh the Trump administration uh Reporter [00:04:47-00:04:51 (4 sec)] to adopt the language that they oppose Reporter [00:04:51-00:04:53 (2 sec)] independence movements in Taiwan. The Reporter [00:04:53-00:04:55 (2 sec)] long-standing verbiage has been that Reporter [00:04:55-00:04:58 (3 sec)] they do not support independence, but Reporter [00:04:58-00:05:01 (3 sec)] opposing and not supporting are are have Reporter [00:05:01-00:05:04 (3 sec)] different weights and it's something Reporter [00:05:04-00:05:06 (2 sec)] that the Chinese have been trying to get Reporter [00:05:06-00:05:08 (2 sec)] US presidents to do for quite some time Reporter [00:05:08-00:05:11 (3 sec)] now. How that would if Donald Trump Reporter [00:05:11-00:05:13 (2 sec)] decides to do that because keep in mind Reporter [00:05:13-00:05:15 (2 sec)] I I keep on hearkening back to May and Reporter [00:05:15-00:05:17 (2 sec)] the summit in Beijing. Donald Trump said Reporter [00:05:17-00:05:22 (5 sec)] the Taiwan issue is a negotiating chip. Reporter [00:05:22-00:05:24 (2 sec)] And that didn't sit well in Taipei. Let Reporter [00:05:24-00:05:26 (2 sec)] me tell you that because they don't Reporter [00:05:26-00:05:28 (2 sec)] consider themselves a bargaining chip. Reporter [00:05:28-00:05:30 (2 sec)] But Donald Trump sees it as a Reporter [00:05:30-00:05:32 (2 sec)] transactional president sees it as a Reporter [00:05:32-00:05:35 (3 sec)] bargaining chip. So we don't know how Reporter [00:05:35-00:05:37 (2 sec)] that would affect Reporter [00:05:37-00:05:41 (4 sec)] obviously the the US Taiwan relations Reporter [00:05:41-00:05:44 (3 sec)] act and commitments to Taiwan but it is Reporter [00:05:44-00:05:47 (3 sec)] something that is paramount to Xiinping Reporter [00:05:47-00:05:50 (3 sec)] to get that clarity on Taiwan from Reporter [00:05:50-00:05:52 (2 sec)] Donald Trump that he opposes as US Reporter [00:05:52-00:05:55 (3 sec)] president opposes any independence move Reporter [00:05:55-00:05:58 (3 sec)] at a time that Xiinping is acutely aware Reporter [00:05:58-00:06:01 (3 sec)] that there's this $14 billion arms Reporter [00:06:01-00:06:04 (3 sec)] package already approved and pending Reporter [00:06:04-00:06:06 (2 sec)] just waiting clearance Reporter [00:06:06-00:06:08 (2 sec)] essentially proverbally sitting on Reporter [00:06:08-00:06:11 (3 sec)] Donald Trump's desk. Reporter [00:06:11-00:06:13 (2 sec)] All right, Bloomberg's chief North Asia Reporter [00:06:13-00:06:15 (2 sec)] correspondent Steven Angel live there in Reporter [00:06:15-00:06:17 (2 sec)] Washington. Thank you. Well, joining us Reporter [00:06:17-00:06:19 (2 sec)] now a distinguished panel of guests. Reporter [00:06:19-00:06:21 (2 sec)] We're joined from Washington by Henriet Reporter [00:06:21-00:06:23 (2 sec)] Leven, a former US State Department Reporter [00:06:23-00:06:25 (2 sec)] China coordinator and now the Freeman Reporter [00:06:25-00:06:28 (3 sec)] chair in China studies at CSIS. And in Reporter [00:06:28-00:06:30 (2 sec)] New York we have Callianne Shaw, former Reporter [00:06:30-00:06:32 (2 sec)] senior White House trade adviser and Reporter [00:06:32-00:06:35 (3 sec)] narrow partner at Aken Gump. Uh Reporter [00:06:35-00:06:37 (2 sec)] Henrietta, thank you for joining us. I'd Reporter [00:06:37-00:06:38 (1 sec)] like to start with you as well just on Reporter [00:06:38-00:06:40 (2 sec)] some of the symbolism of what we've seen Reporter [00:06:40-00:06:43 (3 sec)] during this visit. President Trump Reporter [00:06:43-00:06:45 (2 sec)] meeting Xiinping on the tarmac. I mean Reporter [00:06:45-00:06:47 (2 sec)] that is a rare honor accorded to very Reporter [00:06:47-00:06:49 (2 sec)] few hailing the great friendship even Reporter [00:06:49-00:06:52 (3 sec)] showing him a photograph that he finds Reporter [00:06:52-00:06:54 (2 sec)] amusing of the auto pen that President Reporter [00:06:54-00:06:57 (3 sec)] Biden used to use. How is this sort of Reporter [00:06:57-00:06:58 (1 sec)] thing going to be received and Reporter [00:06:58-00:07:02 (4 sec)] interpreted on the Chinese side? Unidentified speaker [00:07:02-00:07:04 (2 sec)] >> Yeah, it is very significant that Unidentified speaker [00:07:04-00:07:06 (2 sec)] President Trump even met she personally Unidentified speaker [00:07:06-00:07:08 (2 sec)] at the airport as far as I can tell in Unidentified speaker [00:07:08-00:07:10 (2 sec)] the 21st century. A privilege reserved Unidentified speaker [00:07:10-00:07:13 (3 sec)] exclusively for the Pope and now uh Unidentified speaker [00:07:13-00:07:15 (2 sec)] America's chief adversary. And one of Unidentified speaker [00:07:15-00:07:18 (3 sec)] the most important objectives China and Unidentified speaker [00:07:18-00:07:20 (2 sec)] Xiinping had going into the summit was Unidentified speaker [00:07:20-00:07:23 (3 sec)] to show that China is fully an equal Unidentified speaker [00:07:23-00:07:26 (3 sec)] power of the United States and perhaps Unidentified speaker [00:07:26-00:07:28 (2 sec)] in some situations actually is holding Unidentified speaker [00:07:28-00:07:31 (3 sec)] better cards. And so for Trump to go so Unidentified speaker [00:07:31-00:07:33 (2 sec)] far out of his way to effectively Unidentified speaker [00:07:33-00:07:36 (3 sec)] demonstrate that that he does view China Unidentified speaker [00:07:36-00:07:40 (4 sec)] as a peer power and maybe even partner Unidentified speaker [00:07:40-00:07:43 (3 sec)] of the United States really plays into Unidentified speaker [00:07:43-00:07:46 (3 sec)] what China was hoping to achieve uh in Unidentified speaker [00:07:46-00:07:48 (2 sec)] these meetings and I can only imagine Unidentified speaker [00:07:48-00:07:50 (2 sec)] Xiinping felt confident going into the Unidentified speaker [00:07:50-00:07:52 (2 sec)] summit. He feels even more confident Unidentified speaker [00:07:52-00:07:54 (2 sec)] now. Reporter [00:07:54-00:07:56 (2 sec)] Uh, Kellyanne, I'd like to get your view Reporter [00:07:56-00:07:58 (2 sec)] as well on some of the optics of this, Reporter [00:07:58-00:08:00 (2 sec)] particularly in terms of the dinner that Reporter [00:08:00-00:08:02 (2 sec)] Steve was just talking about. I mean, Reporter [00:08:02-00:08:04 (2 sec)] President Xi has not brought a business Reporter [00:08:04-00:08:06 (2 sec)] delegation. The number of government Reporter [00:08:06-00:08:09 (3 sec)] officials, fewer than 20. Does this mean Reporter [00:08:09-00:08:12 (3 sec)] anything? Unidentified speaker [00:08:12-00:08:15 (3 sec)] >> Sure. Good evening from New York. And, Unidentified speaker [00:08:15-00:08:16 (1 sec)] you know, the way that I think about Unidentified speaker [00:08:16-00:08:19 (3 sec)] this visit is really the second act of Unidentified speaker [00:08:19-00:08:21 (2 sec)] the Beijing visit. And what I mean by Unidentified speaker [00:08:21-00:08:23 (2 sec)] that is the president's effectively Unidentified speaker [00:08:23-00:08:26 (3 sec)] trying to replicate the warmth, the Unidentified speaker [00:08:26-00:08:28 (2 sec)] ceremony, the pomp and circumstance of Unidentified speaker [00:08:28-00:08:30 (2 sec)] the reception that he received in Unidentified speaker [00:08:30-00:08:34 (4 sec)] Beijing. Now, Xi Jinping didn't bring a Unidentified speaker [00:08:34-00:08:35 (1 sec)] business delegation with him for a Unidentified speaker [00:08:35-00:08:38 (3 sec)] variety of different reasons. I think Unidentified speaker [00:08:38-00:08:39 (1 sec)] what that signals is we're not expecting Unidentified speaker [00:08:39-00:08:42 (3 sec)] any sort of commercial deliverables, Unidentified speaker [00:08:42-00:08:44 (2 sec)] especially in terms of Chinese Unidentified speaker [00:08:44-00:08:45 (1 sec)] investment announcements in the United Unidentified speaker [00:08:45-00:08:47 (2 sec)] States. Rather, this is about Unidentified speaker [00:08:47-00:08:48 (1 sec)] implementing the commitments that they Unidentified speaker [00:08:48-00:08:50 (2 sec)] already agreed to in Beijing. That's Unidentified speaker [00:08:50-00:08:54 (4 sec)] that 30 for30 board of trade. It's the Unidentified speaker [00:08:54-00:08:56 (2 sec)] egg purchases. It's the Busousan deal. Unidentified speaker [00:08:56-00:08:58 (2 sec)] And again, keeping expectations Unidentified speaker [00:08:58-00:09:00 (2 sec)] relatively moderate because this is Unidentified speaker [00:09:00-00:09:01 (1 sec)] really just an extension of what we saw Unidentified speaker [00:09:01-00:09:03 (2 sec)] in May. Reporter [00:09:03-00:09:05 (2 sec)] >> Yeah. And a literal extension as well, Reporter [00:09:05-00:09:07 (2 sec)] two months on the trade truce. Was this Reporter [00:09:07-00:09:09 (2 sec)] the best case scenario under the Reporter [00:09:09-00:09:11 (2 sec)] circumstances? And can something more Reporter [00:09:11-00:09:13 (2 sec)] enduring and longer term be achieved? I Reporter [00:09:13-00:09:16 (3 sec)] mean what's the failure to extend Reporter [00:09:16-00:09:18 (2 sec)] anything beyond two months say about Reporter [00:09:18-00:09:20 (2 sec)] what's not being said about what's left Reporter [00:09:20-00:09:23 (3 sec)] unresolved Unidentified speaker [00:09:23-00:09:25 (2 sec)] >> so I think this deal was always going to Unidentified speaker [00:09:25-00:09:28 (3 sec)] get extended the question is when that Unidentified speaker [00:09:28-00:09:30 (2 sec)] extension took place and for how long I Unidentified speaker [00:09:30-00:09:33 (3 sec)] think the status quo this day taunt this Unidentified speaker [00:09:33-00:09:35 (2 sec)] commitment to not escalate trade Unidentified speaker [00:09:35-00:09:37 (2 sec)] tensions any further but to just really Unidentified speaker [00:09:37-00:09:40 (3 sec)] focus on these few issues that the two Unidentified speaker [00:09:40-00:09:42 (2 sec)] agreed to last year that seems to suit Unidentified speaker [00:09:42-00:09:44 (2 sec)] both the United States interests as well Unidentified speaker [00:09:44-00:09:47 (3 sec)] as China's. Now, it has been widely Unidentified speaker [00:09:47-00:09:48 (1 sec)] reported that China was looking for Unidentified speaker [00:09:48-00:09:50 (2 sec)] something like a two or three-year Unidentified speaker [00:09:50-00:09:51 (1 sec)] extension. Unidentified speaker [00:09:51-00:09:54 (3 sec)] The US took the view that look, China Unidentified speaker [00:09:54-00:09:56 (2 sec)] hasn't even committed and followed Unidentified speaker [00:09:56-00:09:57 (1 sec)] through with some of the things that it Unidentified speaker [00:09:57-00:09:59 (2 sec)] said it would do last November. So, why Unidentified speaker [00:09:59-00:10:01 (2 sec)] would we extend the same truce for Unidentified speaker [00:10:01-00:10:03 (2 sec)] another 2 years? So, what I think this Unidentified speaker [00:10:03-00:10:05 (2 sec)] two months actually signals quite Unidentified speaker [00:10:05-00:10:07 (2 sec)] clearly is the US is frustrated with a Unidentified speaker [00:10:07-00:10:10 (3 sec)] number of things that the Chinese have Unidentified speaker [00:10:10-00:10:12 (2 sec)] not done. We'll see if as part of this Unidentified speaker [00:10:12-00:10:15 (3 sec)] visit there is announcements of progress Unidentified speaker [00:10:15-00:10:17 (2 sec)] on some company specific issues, some Unidentified speaker [00:10:17-00:10:20 (3 sec)] export license issues and other things Unidentified speaker [00:10:20-00:10:22 (2 sec)] that would then seed a more fertile Unidentified speaker [00:10:22-00:10:24 (2 sec)] ground for a possible longer extension Unidentified speaker [00:10:24-00:10:27 (3 sec)] come January. Reporter [00:10:27-00:10:29 (2 sec)] >> Henrietta, is there perhaps something Reporter [00:10:29-00:10:32 (3 sec)] else at play here as well? I mean, this Reporter [00:10:32-00:10:33 (1 sec)] is something with well known about the Reporter [00:10:33-00:10:35 (2 sec)] China side. They do like to play the Reporter [00:10:35-00:10:37 (2 sec)] long game. President Trump's only going Reporter [00:10:37-00:10:39 (2 sec)] to be in the Oval Office for a little Reporter [00:10:39-00:10:40 (1 sec)] bit more than two years. is do you have Reporter [00:10:40-00:10:42 (2 sec)] a sense that perhaps China's holding out Reporter [00:10:42-00:10:45 (3 sec)] for a new resident in the White House Reporter [00:10:45-00:10:46 (1 sec)] before they start pushing for something Reporter [00:10:46-00:10:50 (4 sec)] longer? Unidentified speaker [00:10:50-00:10:52 (2 sec)] >> Well, I I think that China understands Unidentified speaker [00:10:52-00:10:56 (4 sec)] that President Trump can only bind US Unidentified speaker [00:10:56-00:10:58 (2 sec)] policy for the duration of his Unidentified speaker [00:10:58-00:11:01 (3 sec)] administration. uh if that um so not Unidentified speaker [00:11:01-00:11:04 (3 sec)] surprising to hear China talk about the Unidentified speaker [00:11:04-00:11:07 (3 sec)] its goals for this trade to truce in the Unidentified speaker [00:11:07-00:11:09 (2 sec)] context of you know the longevity of Unidentified speaker [00:11:09-00:11:12 (3 sec)] Trump's own presidency. Um another Unidentified speaker [00:11:12-00:11:13 (1 sec)] interesting thing about this timeline Unidentified speaker [00:11:13-00:11:15 (2 sec)] though the two-month extension. But it Unidentified speaker [00:11:15-00:11:17 (2 sec)] does make me think it's probably a Unidentified speaker [00:11:17-00:11:19 (2 sec)] little more likely that President Xi and Unidentified speaker [00:11:19-00:11:21 (2 sec)] President Trump really will be seeing Unidentified speaker [00:11:21-00:11:23 (2 sec)] each other. Maybe twice again this year Unidentified speaker [00:11:23-00:11:25 (2 sec)] cuz it's still a little unclear whether Unidentified speaker [00:11:25-00:11:27 (2 sec)] President Trump is going to APEC in Unidentified speaker [00:11:27-00:11:29 (2 sec)] China, whether she will come back to the Unidentified speaker [00:11:29-00:11:32 (3 sec)] United States for G20 here. But we Unidentified speaker [00:11:32-00:11:34 (2 sec)] should remember that President Trump Unidentified speaker [00:11:34-00:11:36 (2 sec)] always loves to have a crisis to solve. Unidentified speaker [00:11:36-00:11:39 (3 sec)] So setting up this relatively shorter Unidentified speaker [00:11:39-00:11:41 (2 sec)] period for an extension of the trade Unidentified speaker [00:11:41-00:11:44 (3 sec)] truce potentially provides the leaders Unidentified speaker [00:11:44-00:11:46 (2 sec)] with something to look like they Unidentified speaker [00:11:46-00:11:48 (2 sec)] achieved together uh if they do meet Unidentified speaker [00:11:48-00:11:50 (2 sec)] again later this year and can further Unidentified speaker [00:11:50-00:11:54 (4 sec)] extend the truce into the future. Reporter [00:11:54-00:11:57 (3 sec)] >> Henrietta also considering how Reporter [00:11:57-00:11:59 (2 sec)] intertwined these two economies remain. Reporter [00:11:59-00:12:02 (3 sec)] You know the US being so reliant on the Reporter [00:12:02-00:12:04 (2 sec)] rare earth supply and rare earth magnets Reporter [00:12:04-00:12:06 (2 sec)] from China. China wanting greater access Reporter [00:12:06-00:12:10 (4 sec)] to US tech. Can these two economies Reporter [00:12:10-00:12:12 (2 sec)] really uncouple or are they destined to Reporter [00:12:12-00:12:16 (4 sec)] to form a deeper trade relationship? Reporter [00:12:16-00:12:16 (0 sec)] I Unidentified speaker [00:12:16-00:12:18 (2 sec)] >> I imagine they're destined to have Unidentified speaker [00:12:18-00:12:20 (2 sec)] something in the middle that's horribly Unidentified speaker [00:12:20-00:12:22 (2 sec)] uncomfortable for everyone. Um the Unidentified speaker [00:12:22-00:12:24 (2 sec)] geopolitical reality is the United Unidentified speaker [00:12:24-00:12:27 (3 sec)] States and China are just not going to Unidentified speaker [00:12:27-00:12:29 (2 sec)] trust each other uh in the way that the Unidentified speaker [00:12:29-00:12:32 (3 sec)] US can trust its allies. Um, and so Unidentified speaker [00:12:32-00:12:35 (3 sec)] you'll see the US, I think, continue to Unidentified speaker [00:12:35-00:12:39 (4 sec)] try and limit its exposure uh to China, Unidentified speaker [00:12:39-00:12:41 (2 sec)] limit uh reliance on Chinese supply Unidentified speaker [00:12:41-00:12:44 (3 sec)] chains in areas that are deemed to have Unidentified speaker [00:12:44-00:12:47 (3 sec)] a national security risk. So, for Unidentified speaker [00:12:47-00:12:49 (2 sec)] example, the Trump administration Unidentified speaker [00:12:49-00:12:52 (3 sec)] continues to put a lot of effort and Unidentified speaker [00:12:52-00:12:55 (3 sec)] resources into building out new rare Unidentified speaker [00:12:55-00:12:57 (2 sec)] earth and critical mineral supply chains Unidentified speaker [00:12:57-00:13:00 (3 sec)] that rely more so on the US and its Unidentified speaker [00:13:00-00:13:04 (4 sec)] allies and lessen dependence on China. Unidentified speaker [00:13:04-00:13:07 (3 sec)] But you're never going to decouple the Unidentified speaker [00:13:07-00:13:10 (3 sec)] world's two largest uh economies. And so Unidentified speaker [00:13:10-00:13:12 (2 sec)] I think that's part of why the board of Unidentified speaker [00:13:12-00:13:15 (3 sec)] trade concept had gained purchase with Unidentified speaker [00:13:15-00:13:17 (2 sec)] the administration because this was Unidentified speaker [00:13:17-00:13:20 (3 sec)] supposed to present an opportunity to Unidentified speaker [00:13:20-00:13:23 (3 sec)] lower tariffs on uh goods that do not Unidentified speaker [00:13:23-00:13:26 (3 sec)] have a national security risk to allow Unidentified speaker [00:13:26-00:13:29 (3 sec)] the economic relationship to grow where Unidentified speaker [00:13:29-00:13:32 (3 sec)] it is deemed to be safe. Now, I don't Unidentified speaker [00:13:32-00:13:34 (2 sec)] think we're seeing a lot of concrete Unidentified speaker [00:13:34-00:13:37 (3 sec)] progress on that quite yet, but it does Unidentified speaker [00:13:37-00:13:39 (2 sec)] seem like there's an active conversation Unidentified speaker [00:13:39-00:13:42 (3 sec)] on both sides to try and land this 30 Unidentified speaker [00:13:42-00:13:44 (2 sec)] for30 deal. Maybe not now, but Unidentified speaker [00:13:44-00:13:48 (4 sec)] potentially a little later in the year. Reporter [00:13:48-00:13:50 (2 sec)] >> Kelly, is that a view that you would Reporter [00:13:50-00:13:51 (1 sec)] share that perhaps some of these Reporter [00:13:51-00:13:54 (3 sec)] nonsensitive areas offer some area for Reporter [00:13:54-00:13:56 (2 sec)] greater cooperation? And and bearing in Reporter [00:13:56-00:13:58 (2 sec)] mind there are also areas here of Reporter [00:13:58-00:14:00 (2 sec)] overlap where there is still great Reporter [00:14:00-00:14:04 (4 sec)] rivalry not the least of which is AI. Unidentified speaker [00:14:04-00:14:07 (3 sec)] >> Sure. I I think conceptually that is the Unidentified speaker [00:14:07-00:14:09 (2 sec)] direction of travel here. So for Unidentified speaker [00:14:09-00:14:11 (2 sec)] sensitive supply chains neither the Unidentified speaker [00:14:11-00:14:14 (3 sec)] United States nor China wants to be Unidentified speaker [00:14:14-00:14:16 (2 sec)] dependent on the other. when it comes to Unidentified speaker [00:14:16-00:14:18 (2 sec)] non-sensitive goods and and the Unidentified speaker [00:14:18-00:14:20 (2 sec)] administration has described this as Unidentified speaker [00:14:20-00:14:23 (3 sec)] things like uh lowv value electronics, Unidentified speaker [00:14:23-00:14:27 (4 sec)] fireworks, um PPE, medical devices, uh Unidentified speaker [00:14:27-00:14:29 (2 sec)] energy and a exports. These sorts of Unidentified speaker [00:14:29-00:14:31 (2 sec)] things are really at the heart of what's Unidentified speaker [00:14:31-00:14:33 (2 sec)] currently being negotiated in that 30 Unidentified speaker [00:14:33-00:14:35 (2 sec)] for30 package. And the way I think about Unidentified speaker [00:14:35-00:14:38 (3 sec)] this is really a a commitment to Unidentified speaker [00:14:38-00:14:39 (1 sec)] purchase each other's stuff in Unidentified speaker [00:14:39-00:14:42 (3 sec)] nonsensitive areas. And I think Unidentified speaker [00:14:42-00:14:44 (2 sec)] something like that is probably the Unidentified speaker [00:14:44-00:14:46 (2 sec)] direction of travel long term. We'll see Unidentified speaker [00:14:46-00:14:49 (3 sec)] how this whole process rolls out in the Unidentified speaker [00:14:49-00:14:51 (2 sec)] coming weeks, in the coming months. Um, Unidentified speaker [00:14:51-00:14:53 (2 sec)] but over time, I think we'll see more of Unidentified speaker [00:14:53-00:14:55 (2 sec)] this where we're really managing this Unidentified speaker [00:14:55-00:14:57 (2 sec)] trading relationship for nonsensitive Unidentified speaker [00:14:57-00:14:59 (2 sec)] goods and saying for sensitive sectors, Unidentified speaker [00:14:59-00:15:01 (2 sec)] we're just not going to do business with Unidentified speaker [00:15:01-00:15:04 (3 sec)] each other. Reporter [00:15:04-00:15:05 (1 sec)] >> Uh, Henrietta, just before we leave, I Reporter [00:15:05-00:15:08 (3 sec)] do want to ask you about Taiwan as well. Reporter [00:15:08-00:15:10 (2 sec)] Beijing seeking a language change here Reporter [00:15:10-00:15:12 (2 sec)] that the US oppose Taiwan independence. Reporter [00:15:12-00:15:15 (3 sec)] The current languages doesn't support Reporter [00:15:15-00:15:16 (1 sec)] Taiwan independence. Of course, nuance Reporter [00:15:16-00:15:19 (3 sec)] is everything in this debate. Is that a Reporter [00:15:19-00:15:21 (2 sec)] step too far for the US? We haven't had Reporter [00:15:21-00:15:23 (2 sec)] a readout from the US side of this Reporter [00:15:23-00:15:25 (2 sec)] meeting yet. And and how hard is it Reporter [00:15:25-00:15:27 (2 sec)] going to make it for the next arms deal Reporter [00:15:27-00:15:30 (3 sec)] for Taiwan? Unidentified speaker [00:15:30-00:15:32 (2 sec)] I I tend to think that we can look at Unidentified speaker [00:15:32-00:15:34 (2 sec)] the Chinese readout and see that Unidentified speaker [00:15:34-00:15:36 (2 sec)] President Trump did not accept that Unidentified speaker [00:15:36-00:15:39 (3 sec)] formulation in the meetings today. Um, Unidentified speaker [00:15:39-00:15:43 (4 sec)] China loves to uh give read out what the Unidentified speaker [00:15:43-00:15:45 (2 sec)] US president says on Taiwan, if it's Unidentified speaker [00:15:45-00:15:47 (2 sec)] even remotely helpful to them. It's Unidentified speaker [00:15:47-00:15:49 (2 sec)] actually a fight we often have behind Unidentified speaker [00:15:49-00:15:51 (2 sec)] the scenes uh in planning these summits. Unidentified speaker [00:15:51-00:15:53 (2 sec)] The US doesn't want China to speak for Unidentified speaker [00:15:53-00:15:55 (2 sec)] the US president. Of course, the Chinese Unidentified speaker [00:15:55-00:15:59 (4 sec)] readout only says what she asked for Unidentified speaker [00:15:59-00:16:02 (3 sec)] from Trump. It says she asked the US to Unidentified speaker [00:16:02-00:16:03 (1 sec)] oppose Taiwan independence. It doesn't Unidentified speaker [00:16:03-00:16:06 (3 sec)] say what Trump said in return. Um, I Unidentified speaker [00:16:06-00:16:08 (2 sec)] tend to think that means for now, US Unidentified speaker [00:16:08-00:16:11 (3 sec)] policy stays where it is. This is really Unidentified speaker [00:16:11-00:16:14 (3 sec)] important because Beijing uses those Unidentified speaker [00:16:14-00:16:17 (3 sec)] small changes in wording to effectively Unidentified speaker [00:16:17-00:16:20 (3 sec)] tell the people on Taiwan that they Unidentified speaker [00:16:20-00:16:22 (2 sec)] cannot rely on the United States and Unidentified speaker [00:16:22-00:16:25 (3 sec)] therefore their one option is to give Unidentified speaker [00:16:25-00:16:27 (2 sec)] Beijing what it what it wants. So even Unidentified speaker [00:16:27-00:16:29 (2 sec)] these small changes in wording can have Unidentified speaker [00:16:29-00:16:32 (3 sec)] huge implications for big geopolitical Unidentified speaker [00:16:32-00:16:34 (2 sec)] questions for the sustainability of Unidentified speaker [00:16:34-00:16:36 (2 sec)] deterrence in the Indoacific. You should Unidentified speaker [00:16:36-00:16:39 (3 sec)] remember though in Beijing, President Unidentified speaker [00:16:39-00:16:41 (2 sec)] Trump in the meetings themselves said Unidentified speaker [00:16:41-00:16:43 (2 sec)] almost nothing on Taiwan. But as soon as Unidentified speaker [00:16:43-00:16:45 (2 sec)] he was on the plane going home had some Unidentified speaker [00:16:45-00:16:48 (3 sec)] very controversial comments saying that Unidentified speaker [00:16:48-00:16:50 (2 sec)] Taiwan uh arm sales were actually a Unidentified speaker [00:16:50-00:16:52 (2 sec)] negotiating chip in the relationship Unidentified speaker [00:16:52-00:16:54 (2 sec)] with China, which is kind of worst case Unidentified speaker [00:16:54-00:16:56 (2 sec)] scenario stuff for Taiwan. So we'll have Unidentified speaker [00:16:56-00:16:59 (3 sec)] to stay tuned over the next few days and Unidentified speaker [00:16:59-00:17:01 (2 sec)] see how the president continues to talk Unidentified speaker [00:17:01-00:17:04 (3 sec)] about these issues going forward. Reporter [00:17:04-00:17:06 (2 sec)] All right, Henrietta, thank you so much Reporter [00:17:06-00:17:08 (2 sec)] Henrietta Lean there, former US State Reporter [00:17:08-00:17:10 (2 sec)] Department China coordinator. And thank Reporter [00:17:10-00:17:12 (2 sec)] you also to Kalian Shaw, former senior Reporter [00:17:12-00:17:16 (4 sec)] White House trade adviser. Coming up, as Reporter [00:17:16-00:17:18 (2 sec)] Treasury yields hit multi-deade highs, Reporter [00:17:18-00:17:19 (1 sec)] the effects of Fed tightening are Reporter [00:17:19-00:17:21 (2 sec)] rippling across Asia. We discuss the Reporter [00:17:21-00:17:23 (2 sec)] implications of the global bond sell-off Reporter [00:17:23-00:17:31 (8 sec)] next. This is Bloomberg. Reporter [00:17:31-00:17:33 (2 sec)] Welcome back. You're watching Insight. A Reporter [00:17:33-00:17:35 (2 sec)] global bond sell-off has extended into Reporter [00:17:35-00:17:37 (2 sec)] Asia for another session with elevated Reporter [00:17:37-00:17:40 (3 sec)] oil prices stoking inflation concerns Reporter [00:17:40-00:17:42 (2 sec)] and that's propelling long-term yields Reporter [00:17:42-00:17:44 (2 sec)] to the highest in decades. Bloomberg's Reporter [00:17:44-00:17:46 (2 sec)] Averil Hong is in Singapore with more. Reporter [00:17:46-00:17:48 (2 sec)] April. Reporter [00:17:48-00:17:50 (2 sec)] >> Yeah, Paul. The global bond route Reporter [00:17:50-00:17:52 (2 sec)] deepening. As you say, we're seeing the Reporter [00:17:52-00:17:55 (3 sec)] global bond index yield breaching 4% for Reporter [00:17:55-00:17:57 (2 sec)] the first time in almost 20 years. the Reporter [00:17:57-00:18:00 (3 sec)] 30-year yield in Japan hovering at the Reporter [00:18:00-00:18:02 (2 sec)] highest we've seen it since the tenner Reporter [00:18:02-00:18:05 (3 sec)] was introduced way back when in 1999. So Reporter [00:18:05-00:18:08 (3 sec)] just a number of the milestones that Reporter [00:18:08-00:18:10 (2 sec)] we're seeing as bond investors are Reporter [00:18:10-00:18:12 (2 sec)] really concerned about inflation and Reporter [00:18:12-00:18:14 (2 sec)] government debt loads and of course Reporter [00:18:14-00:18:16 (2 sec)] energy is that pain point as well given Reporter [00:18:16-00:18:19 (3 sec)] how Brent remains elevated and we're Reporter [00:18:19-00:18:21 (2 sec)] hearing all this chatter as well about Reporter [00:18:21-00:18:23 (2 sec)] diesel export bans for the US. now fit Reporter [00:18:23-00:18:26 (3 sec)] the board. What we saw overnight in Reporter [00:18:26-00:18:28 (2 sec)] treasuries in terms of that selling also Reporter [00:18:28-00:18:30 (2 sec)] left the 30-year yield at the highest Reporter [00:18:30-00:18:33 (3 sec)] we've seen it since 2004. And what Reporter [00:18:33-00:18:36 (3 sec)] didn't help was the Treasury buyback Reporter [00:18:36-00:18:38 (2 sec)] because it underwhelmed investors in Reporter [00:18:38-00:18:40 (2 sec)] terms of the size. That missed the mark Reporter [00:18:40-00:18:44 (4 sec)] of the maximum $6 billion amount. So Reporter [00:18:44-00:18:46 (2 sec)] that left the long end very weak. We saw Reporter [00:18:46-00:18:48 (2 sec)] the steepening and rates volatility as Reporter [00:18:48-00:18:50 (2 sec)] well. Now flip the board again. What was Reporter [00:18:50-00:18:52 (2 sec)] also interesting given the Treasury Reporter [00:18:52-00:18:55 (3 sec)] selling is now we actually have the Reporter [00:18:55-00:18:59 (4 sec)] curve much of it sitting above the five Reporter [00:18:59-00:19:02 (3 sec)] handle and the 2-year yield is really Reporter [00:19:02-00:19:04 (2 sec)] not that far from it. Aside from that we Reporter [00:19:04-00:19:07 (3 sec)] also had some of the respondents about Reporter [00:19:07-00:19:09 (2 sec)] 170 plus of them to the markets pulse Reporter [00:19:09-00:19:12 (3 sec)] survey more than half of them actually Reporter [00:19:12-00:19:16 (4 sec)] see that uh yield on the 30-year Reporter [00:19:16-00:19:18 (2 sec)] breaching 6% before the end of the year. Reporter [00:19:18-00:19:21 (3 sec)] Now amid this there's been a lot of Reporter [00:19:21-00:19:23 (2 sec)] fingerpointing about Fed repricing Reporter [00:19:23-00:19:26 (3 sec)] inflation because of the war robust US Reporter [00:19:26-00:19:29 (3 sec)] growth AI debt and borrowing costs and Reporter [00:19:29-00:19:31 (2 sec)] of course the positioning in bond Reporter [00:19:31-00:19:34 (3 sec)] markets. But I think what the clearer Reporter [00:19:34-00:19:36 (2 sec)] signal is from market participants is Reporter [00:19:36-00:19:40 (4 sec)] that this era of low yields is in the Reporter [00:19:40-00:19:43 (3 sec)] rear view mirror. Paul. Reporter [00:19:43-00:19:45 (2 sec)] >> All right. Thanks very much Averil. Reporter [00:19:45-00:19:47 (2 sec)] Let's get some more on the turmoil in Reporter [00:19:47-00:19:48 (1 sec)] global bond markets with Bloomberg M Reporter [00:19:48-00:19:51 (3 sec)] live macro strategist Andre Dilva. So Reporter [00:19:51-00:19:54 (3 sec)] Andre just picking up on April's April's Reporter [00:19:54-00:19:56 (2 sec)] point. Is this era of low yields over? Reporter [00:19:56-00:19:59 (3 sec)] Where's the ceiling now? Reporter [00:19:59-00:20:01 (2 sec)] >> Well, as already mentioned by April, we Reporter [00:20:01-00:20:03 (2 sec)] had that latest pulse survey saying uh Reporter [00:20:03-00:20:06 (3 sec)] 6% for long bonds, but let's put it in Reporter [00:20:06-00:20:08 (2 sec)] context. Our previous survey had the 5% Reporter [00:20:08-00:20:10 (2 sec)] target. That was quite a while back for Reporter [00:20:10-00:20:12 (2 sec)] 10 year uh uh bonds. Uh that's now well Reporter [00:20:12-00:20:14 (2 sec)] above that. I don't think it's a case of Reporter [00:20:14-00:20:16 (2 sec)] looking at a cap. It's what's the key Reporter [00:20:16-00:20:17 (1 sec)] influences and those influences are Reporter [00:20:17-00:20:19 (2 sec)] continuing and it's a combination of Reporter [00:20:19-00:20:22 (3 sec)] factors whether be inflation supply Reporter [00:20:22-00:20:26 (4 sec)] uh and geopolitical uncertainty. Reporter [00:20:26-00:20:29 (3 sec)] >> So Scott Besson's assured the market Reporter [00:20:29-00:20:31 (2 sec)] previously that he is the house. Um Reporter [00:20:31-00:20:33 (2 sec)] how's the house going to handle a spike Reporter [00:20:33-00:20:36 (3 sec)] in global yields like this? Reporter [00:20:36-00:20:38 (2 sec)] >> Well, it's certainly creaking. I'm not Reporter [00:20:38-00:20:39 (1 sec)] saying it's going to crumble, but it is Reporter [00:20:39-00:20:41 (2 sec)] creaking in terms of the house and uh in Reporter [00:20:41-00:20:43 (2 sec)] particular there's a whole host of Reporter [00:20:43-00:20:45 (2 sec)] factors the markets are looking at Reporter [00:20:45-00:20:47 (2 sec)] whether the yen whether it be treasuries Reporter [00:20:47-00:20:48 (1 sec)] and as already mentioned earlier those Reporter [00:20:48-00:20:50 (2 sec)] buybacks have been very disappointing Reporter [00:20:50-00:20:52 (2 sec)] but I think the the main message at Reporter [00:20:52-00:20:54 (2 sec)] least for the bond market is fiscal Reporter [00:20:54-00:20:57 (3 sec)] regardless of whether um the Fed's going Reporter [00:20:57-00:20:59 (2 sec)] to incrementally raise rates or not Reporter [00:20:59-00:21:01 (2 sec)] fiscal needs to be in control and it Reporter [00:21:01-00:21:02 (1 sec)] doesn't seem to be the case. Just look Reporter [00:21:02-00:21:04 (2 sec)] at the 5-year auction the legacy of Reporter [00:21:04-00:21:06 (2 sec)] that. That's another indication of Reporter [00:21:06-00:21:08 (2 sec)] supply and digestion at the moment in Reporter [00:21:08-00:21:10 (2 sec)] time. Reporter [00:21:10-00:21:12 (2 sec)] >> Fiscal does sound something like that is Reporter [00:21:12-00:21:14 (2 sec)] firmly in Scott Besson's wheelhouse. Why Reporter [00:21:14-00:21:16 (2 sec)] is there no appetite among the Reporter [00:21:16-00:21:19 (3 sec)] administration to do something about it? Reporter [00:21:19-00:21:21 (2 sec)] >> Yeah, absolutely. A very good question. Reporter [00:21:21-00:21:22 (1 sec)] Uh and that could be said uh really for Reporter [00:21:22-00:21:25 (3 sec)] for the past um not just u recently but Reporter [00:21:25-00:21:28 (3 sec)] also the past few few months and even a Reporter [00:21:28-00:21:30 (2 sec)] year longer. Um I think actually the Reporter [00:21:30-00:21:32 (2 sec)] environment gets even more difficult um Reporter [00:21:32-00:21:34 (2 sec)] in particular in midterms with pro Reporter [00:21:34-00:21:36 (2 sec)] possibility that you get Democrats Reporter [00:21:36-00:21:37 (1 sec)] gaining control at least what the Reporter [00:21:37-00:21:39 (2 sec)] prediction markets suggest. Um so you're Reporter [00:21:39-00:21:42 (3 sec)] going to get gridlock uh no fiscal Reporter [00:21:42-00:21:44 (2 sec)] changes. Um so uh I don't have an answer Reporter [00:21:44-00:21:48 (4 sec)] to that but they should be doing it. Reporter [00:21:48-00:21:49 (1 sec)] >> You mentioned you know there are a Reporter [00:21:49-00:21:51 (2 sec)] number of moving parts to this story and Reporter [00:21:51-00:21:52 (1 sec)] another one is obviously what we're Reporter [00:21:52-00:21:55 (3 sec)] seeing with the oil price. uh how much Reporter [00:21:55-00:21:57 (2 sec)] of what we're seeing in the bond market Reporter [00:21:57-00:21:59 (2 sec)] at the moment can be parked at the door Reporter [00:21:59-00:22:01 (2 sec)] of the current conflict between US and Reporter [00:22:01-00:22:04 (3 sec)] Iran? Reporter [00:22:04-00:22:05 (1 sec)] >> Yes. Well, as I already mentioned, Reporter [00:22:05-00:22:06 (1 sec)] there's a confluence of factors, but one Reporter [00:22:06-00:22:09 (3 sec)] of them is clearly is oil prices, but I Reporter [00:22:09-00:22:12 (3 sec)] think that's more shortterm. Um, clearly Reporter [00:22:12-00:22:13 (1 sec)] oil prices being elevated because the Reporter [00:22:13-00:22:15 (2 sec)] geopolitical risk premium, and Reporter [00:22:15-00:22:16 (1 sec)] regardless of the ebbing and flowing on Reporter [00:22:16-00:22:18 (2 sec)] a day-to-day basis, they are much more Reporter [00:22:18-00:22:21 (3 sec)] elevated than they were uh pre-February. Reporter [00:22:21-00:22:23 (2 sec)] Um, and that raises more long-term Reporter [00:22:23-00:22:25 (2 sec)] lasting inflation. But even discounting Reporter [00:22:25-00:22:27 (2 sec)] that, inflation's now surpassed, at Reporter [00:22:27-00:22:28 (1 sec)] least in the Fed's target, for the past Reporter [00:22:28-00:22:31 (3 sec)] five years. So, it's not just short-term Reporter [00:22:31-00:22:33 (2 sec)] uh factors. It's also medium long-term Reporter [00:22:33-00:22:36 (3 sec)] concerns on inflation embedding in the Reporter [00:22:36-00:22:37 (1 sec)] markets and therefore it's more of a Reporter [00:22:37-00:22:40 (3 sec)] demand issue as well as supply issue. Reporter [00:22:40-00:22:42 (2 sec)] >> Well, let's talk about the implications Reporter [00:22:42-00:22:44 (2 sec)] for the Fed. What's the market pricing Reporter [00:22:44-00:22:48 (4 sec)] now in terms of rate increases? Reporter [00:22:48-00:22:49 (1 sec)] Yeah. So I I think this is where we're Reporter [00:22:49-00:22:52 (3 sec)] getting another uh uh issue in terms of Reporter [00:22:52-00:22:54 (2 sec)] the market repricing. So uh whilst Reporter [00:22:54-00:22:57 (3 sec)] there's a a syncing between the dot Reporter [00:22:57-00:23:00 (3 sec)] plots in terms of the FMC uh i.e. a rate Reporter [00:23:00-00:23:01 (1 sec)] hike by the end of the year that's Reporter [00:23:01-00:23:03 (2 sec)] similar to market uh tune if you look Reporter [00:23:03-00:23:05 (2 sec)] into next year there really is a Reporter [00:23:05-00:23:06 (1 sec)] disconnect suggesting there should be Reporter [00:23:06-00:23:08 (2 sec)] additionally two rate hikes above and Reporter [00:23:08-00:23:10 (2 sec)] beyond uh the end of the year and the Reporter [00:23:10-00:23:13 (3 sec)] the Fed projects is unchanged. So Reporter [00:23:13-00:23:16 (3 sec)] therefore I think that in this case that Reporter [00:23:16-00:23:17 (1 sec)] um the market will see higher yields Reporter [00:23:17-00:23:21 (4 sec)] until we get the Fed catching up. Reporter [00:23:21-00:23:23 (2 sec)] >> All right, Bloomberg MIR strategist Reporter [00:23:23-00:23:25 (2 sec)] Andre Dilva, thanks for your analysis. Reporter [00:23:25-00:23:27 (2 sec)] Still to come, India's national stock Reporter [00:23:27-00:23:29 (2 sec)] exchange begins its next chapter as a Reporter [00:23:29-00:23:31 (2 sec)] listed company amid questions over Reporter [00:23:31-00:23:34 (3 sec)] derivatives, growth and regulation. CEO Reporter [00:23:34-00:23:36 (2 sec)] Ashish Kumar Chuam joins us next on Reporter [00:23:36-00:23:54 (18 sec)] [music] Insight. This is Bloomberg. Reporter [00:23:54-00:24:01 (7 sec)] two and one. Reporter [00:24:01-00:24:03 (2 sec)] >> Executives from the National Stock Reporter [00:24:03-00:24:04 (1 sec)] Exchange of India participating in Reporter [00:24:04-00:24:06 (2 sec)] yesterday's traditional gong ringing Reporter [00:24:06-00:24:08 (2 sec)] ceremony. The company's stock jumping Reporter [00:24:08-00:24:11 (3 sec)] nearly 2% as it made its long awaited Reporter [00:24:11-00:24:13 (2 sec)] trading debut on rival exchange PSSE. Reporter [00:24:13-00:24:16 (3 sec)] The listing came after NSE raised $2.4 Reporter [00:24:16-00:24:18 (2 sec)] billion and one of the biggest IPOs in Reporter [00:24:18-00:24:20 (2 sec)] the country's history. For more, let's Reporter [00:24:20-00:24:23 (3 sec)] get to Bloomberg senior editor Manakoshi Reporter [00:24:23-00:24:26 (3 sec)] Mumbai. Manica, Reporter [00:24:26-00:24:28 (2 sec)] >> well hi Paul. It was a landmark day for Reporter [00:24:28-00:24:30 (2 sec)] India's capital markets to watch the Reporter [00:24:30-00:24:33 (3 sec)] National Stock Exchange get listed on Reporter [00:24:33-00:24:36 (3 sec)] the Bombay Stock Exchange. And whilst Reporter [00:24:36-00:24:38 (2 sec)] you know maybe the listing day lacked a Reporter [00:24:38-00:24:40 (2 sec)] little bit of the pop and sizzle that Reporter [00:24:40-00:24:43 (3 sec)] you would expect uh for an issue of this Reporter [00:24:43-00:24:45 (2 sec)] size. This is the second largest IPO in Reporter [00:24:45-00:24:48 (3 sec)] India ever. It does mark the end of a Reporter [00:24:48-00:24:51 (3 sec)] 10-year mission to get the NSE listed. Reporter [00:24:51-00:24:54 (3 sec)] And to understand the story of the NYSE, Reporter [00:24:54-00:24:56 (2 sec)] you probably have to go back a little Reporter [00:24:56-00:24:58 (2 sec)] over 30 years. This is an exchange born Reporter [00:24:58-00:25:01 (3 sec)] in the backdrop of two very big crises. Reporter [00:25:01-00:25:03 (2 sec)] One was a national balance of payments Reporter [00:25:03-00:25:05 (2 sec)] crisis that eventually led to the Reporter [00:25:05-00:25:07 (2 sec)] economic liberalization of India. But Reporter [00:25:07-00:25:09 (2 sec)] the other was a stock market scam that Reporter [00:25:09-00:25:11 (2 sec)] exposed the need for more sophisticated Reporter [00:25:11-00:25:14 (3 sec)] market in infrastructure and the NYSE Reporter [00:25:14-00:25:16 (2 sec)] was born from that as one of the very Reporter [00:25:16-00:25:19 (3 sec)] early electronic trading platforms in Reporter [00:25:19-00:25:21 (2 sec)] the world and then you know it was in Reporter [00:25:21-00:25:25 (4 sec)] its 20s in 2016 when it sought to list. Reporter [00:25:25-00:25:27 (2 sec)] Uh but at that time it was confronted Reporter [00:25:27-00:25:29 (2 sec)] with some internal challenges, Reporter [00:25:29-00:25:32 (3 sec)] accusations of preferential access to Reporter [00:25:32-00:25:35 (3 sec)] certain brokers, a leadership crisis. It Reporter [00:25:35-00:25:37 (2 sec)] took them 10 years to put all of that Reporter [00:25:37-00:25:40 (3 sec)] behind it and to be able to receive the Reporter [00:25:40-00:25:42 (2 sec)] approval from the regulator to list. In Reporter [00:25:42-00:25:45 (3 sec)] those 10 years, we've witnessed two big Reporter [00:25:45-00:25:47 (2 sec)] trends that have impacted NSE's Reporter [00:25:47-00:25:49 (2 sec)] fortunes. One is the financialization of Reporter [00:25:49-00:25:52 (3 sec)] India's capital markets. more and more Reporter [00:25:52-00:25:54 (2 sec)] Indians seeking to invest through its Reporter [00:25:54-00:25:56 (2 sec)] equity markets and also speculating Reporter [00:25:56-00:25:58 (2 sec)] through its equity and derivative Reporter [00:25:58-00:25:59 (1 sec)] markets. But the second thing that we Reporter [00:25:59-00:26:02 (3 sec)] saw was the regulator respond to the Reporter [00:26:02-00:26:05 (3 sec)] speculative activity, tighten rules and Reporter [00:26:05-00:26:08 (3 sec)] reduce that that segment in the market Reporter [00:26:08-00:26:10 (2 sec)] which has hurt volumes to some extent on Reporter [00:26:10-00:26:13 (3 sec)] the NSE. So that's the history in a Reporter [00:26:13-00:26:15 (2 sec)] snapshot. Here we are. It's finally Reporter [00:26:15-00:26:18 (3 sec)] listed after a 10-year wait. And, you Reporter [00:26:18-00:26:20 (2 sec)] know, I think it's in the top 10 most Reporter [00:26:20-00:26:22 (2 sec)] valued exchanges in the world. So, Reporter [00:26:22-00:26:25 (3 sec)] that's not, you know, sort of a a bad uh Reporter [00:26:25-00:26:27 (2 sec)] way to start. Reporter [00:26:27-00:26:29 (2 sec)] >> All right, Manica, stick around for our Reporter [00:26:29-00:26:30 (1 sec)] next conversation because we're joined Reporter [00:26:30-00:26:34 (4 sec)] now by Ashishkuma Shawan, MD and the CEO Reporter [00:26:34-00:26:37 (3 sec)] of the National Stock Exchange of India. Reporter [00:26:37-00:26:39 (2 sec)] Ashishkuma, thank you so much for your Reporter [00:26:39-00:26:40 (1 sec)] time today. Amen. Just gave us a little Reporter [00:26:40-00:26:42 (2 sec)] bit of the history there. It's been a Reporter [00:26:42-00:26:44 (2 sec)] long time coming, but are you Reporter [00:26:44-00:26:46 (2 sec)] comfortable with the timing of this Reporter [00:26:46-00:26:48 (2 sec)] debut? Do you is there a part of you Reporter [00:26:48-00:26:50 (2 sec)] that wished maybe it had happened just a Reporter [00:26:50-00:26:52 (2 sec)] little bit earlier before the regulator Reporter [00:26:52-00:26:55 (3 sec)] changed the rules around derivatives? Unidentified speaker [00:26:55-00:26:57 (2 sec)] >> Anyway, whenever you wake up is a Unidentified speaker [00:26:57-00:27:00 (3 sec)] morning. So, there is no good time, Unidentified speaker [00:27:00-00:27:03 (3 sec)] there is no bad time for us. It had to Unidentified speaker [00:27:03-00:27:07 (4 sec)] be completed and we did it. Reporter [00:27:07-00:27:10 (3 sec)] >> So, it so it's done now. Do you think Reporter [00:27:10-00:27:11 (1 sec)] your existing shareholders are going to Reporter [00:27:11-00:27:13 (2 sec)] be satisfied with the valuation that the Reporter [00:27:13-00:27:14 (1 sec)] NSE ultimately achieved? Do you think it Reporter [00:27:14-00:27:18 (4 sec)] was a a fair pricing for the IPO? Unidentified speaker [00:27:18-00:27:21 (3 sec)] Broadly speaking uh the price uh band Unidentified speaker [00:27:21-00:27:24 (3 sec)] which we had given uh was uh rupees uh Unidentified speaker [00:27:24-00:27:27 (3 sec)] Indian rupees 1 1700 to 1785 and when Unidentified speaker [00:27:27-00:27:30 (3 sec)] the uh stock opened it opened around 1 Unidentified speaker [00:27:30-00:27:32 (2 sec)] or 2% higher and then it went up a Unidentified speaker [00:27:32-00:27:35 (3 sec)] little probably 5% and then came down a Unidentified speaker [00:27:35-00:27:37 (2 sec)] little but broadly that's where it has Unidentified speaker [00:27:37-00:27:39 (2 sec)] stabilized yesterday first day in Indian Unidentified speaker [00:27:39-00:27:42 (3 sec)] uh stock markets the stock prices move Unidentified speaker [00:27:42-00:27:44 (2 sec)] quite a lot because the company's not Unidentified speaker [00:27:44-00:27:46 (2 sec)] known uh people are uncertain but this Unidentified speaker [00:27:46-00:27:49 (3 sec)] uh nse has been in the what I call a Unidentified speaker [00:27:49-00:27:51 (2 sec)] private market, one of the largest Unidentified speaker [00:27:51-00:27:53 (2 sec)] stocks. uh it's again one of the largest Unidentified speaker [00:27:53-00:27:55 (2 sec)] stocks even otherwise although Mena said Unidentified speaker [00:27:55-00:27:58 (3 sec)] it's some of the top 10 uh exchanges in Unidentified speaker [00:27:58-00:28:00 (2 sec)] the world in terms of listed value but Unidentified speaker [00:28:00-00:28:02 (2 sec)] it's also now looks like top 10 in the Unidentified speaker [00:28:02-00:28:05 (3 sec)] country on India in terms of the listed Unidentified speaker [00:28:05-00:28:07 (2 sec)] uh corporates in India and so it's a Unidentified speaker [00:28:07-00:28:10 (3 sec)] very large uh we already had uh 200,000 Unidentified speaker [00:28:10-00:28:12 (2 sec)] investors before uh we listed so Unidentified speaker [00:28:12-00:28:14 (2 sec)] effectively in some ways it was what I Unidentified speaker [00:28:14-00:28:17 (3 sec)] call deemed public deemed listed and Unidentified speaker [00:28:17-00:28:20 (3 sec)] that's where uh there was a Unidentified speaker [00:28:20-00:28:21 (1 sec)] understanding of the price which was Unidentified speaker [00:28:21-00:28:24 (3 sec)] there in the public markets already and Unidentified speaker [00:28:24-00:28:25 (1 sec)] that's how it was priced. Unidentified speaker [00:28:25-00:28:26 (1 sec)] [clears throat] Reporter [00:28:26-00:28:29 (3 sec)] >> Your NSD was also up on the day and Reporter [00:28:29-00:28:32 (3 sec)] bucking the trend uh for the broader Reporter [00:28:32-00:28:34 (2 sec)] index on Thursday which saw some losses Reporter [00:28:34-00:28:35 (1 sec)] and you you got some pretty strong Reporter [00:28:35-00:28:37 (2 sec)] institutional demand but the retail Reporter [00:28:37-00:28:40 (3 sec)] demand was a bit on the weak side. Uh Reporter [00:28:40-00:28:42 (2 sec)] why why the divergence? Do you have any Reporter [00:28:42-00:28:44 (2 sec)] theories? Unidentified speaker [00:28:44-00:28:44 (0 sec)] No, Unidentified speaker [00:28:44-00:28:47 (3 sec)] >> in a way there has not been many large Unidentified speaker [00:28:47-00:28:49 (2 sec)] IPOs. If you look at the last large IPO Unidentified speaker [00:28:49-00:28:52 (3 sec)] or the largest IPO in India till now, it Unidentified speaker [00:28:52-00:28:54 (2 sec)] was actually a Korean uh sub company Unidentified speaker [00:28:54-00:28:56 (2 sec)] subsidiary called Hundai Motors India Unidentified speaker [00:28:56-00:28:59 (3 sec)] and it had uh the retail uh investors Unidentified speaker [00:28:59-00:29:01 (2 sec)] subscribing only half of what their Unidentified speaker [00:29:01-00:29:03 (2 sec)] portion was. We have uh different Unidentified speaker [00:29:03-00:29:05 (2 sec)] reservations, different kota for Unidentified speaker [00:29:05-00:29:08 (3 sec)] different uh types of uh uh investors. Unidentified speaker [00:29:08-00:29:13 (5 sec)] So uh in uh NS's case it went to 130% or Unidentified speaker [00:29:13-00:29:16 (3 sec)] 1.3 times. In Hyundai's case, it was.5 Unidentified speaker [00:29:16-00:29:18 (2 sec)] times or 50% only. And so this is in a Unidentified speaker [00:29:18-00:29:21 (3 sec)] way a billion dollars going to retail Unidentified speaker [00:29:21-00:29:26 (5 sec)] investors which is basically around less Unidentified speaker [00:29:26-00:29:29 (3 sec)] than $100 or close to $100 kind of a Unidentified speaker [00:29:29-00:29:31 (2 sec)] piece. Uh and that is very large number Unidentified speaker [00:29:31-00:29:35 (4 sec)] actually uh almost 3.4 million people Unidentified speaker [00:29:35-00:29:37 (2 sec)] got uh allotment uh and that tells you Unidentified speaker [00:29:37-00:29:40 (3 sec)] how uh widespread uh this is. In fact, Unidentified speaker [00:29:40-00:29:43 (3 sec)] this is pretty much the largest retail Unidentified speaker [00:29:43-00:29:47 (4 sec)] subscription uh in Indian market ever. Reporter [00:29:47-00:29:49 (2 sec)] >> Ashish, good morning. Me here from Reporter [00:29:49-00:29:51 (2 sec)] Mumbai. Are you going to list on the NSC Reporter [00:29:51-00:29:53 (2 sec)] itself? Unidentified speaker [00:29:53-00:29:55 (2 sec)] >> No, it's a uh it's a good point. Now Unidentified speaker [00:29:55-00:29:57 (2 sec)] that you have told us, we will think Unidentified speaker [00:29:57-00:29:59 (2 sec)] about it. Reporter [00:29:59-00:30:00 (1 sec)] >> Of course. Yes. You were waiting for me Reporter [00:30:00-00:30:02 (2 sec)] to tell you this. I'm sure you've made Reporter [00:30:02-00:30:04 (2 sec)] some progress in convincing the Reporter [00:30:04-00:30:07 (3 sec)] regulator. Tell us where you are. Unidentified speaker [00:30:07-00:30:09 (2 sec)] Uh the regulations currently are Unidentified speaker [00:30:09-00:30:12 (3 sec)] slightly uh ambiguous but naturally we Unidentified speaker [00:30:12-00:30:15 (3 sec)] being the most compliant exchange uh we Unidentified speaker [00:30:15-00:30:17 (2 sec)] must uh take uh the concurrence of Unidentified speaker [00:30:17-00:30:19 (2 sec)] regulator at every stage and whatever Unidentified speaker [00:30:19-00:30:22 (3 sec)] they want we will do. Reporter [00:30:22-00:30:23 (1 sec)] >> All right. Uh let's talk a little bit Reporter [00:30:23-00:30:25 (2 sec)] about future growth drivers. Ashish. Uh Reporter [00:30:25-00:30:28 (3 sec)] you know we've seen uh sort of the Reporter [00:30:28-00:30:30 (2 sec)] activity in the ethno market come down a Reporter [00:30:30-00:30:32 (2 sec)] wee bit ever since the new rules were Reporter [00:30:32-00:30:34 (2 sec)] tightened. Very quickly, can you list Reporter [00:30:34-00:30:37 (3 sec)] for me what you think or where you think Reporter [00:30:37-00:30:39 (2 sec)] the next phase of growth will come from? Reporter [00:30:39-00:30:41 (2 sec)] Will it be continued financialization Reporter [00:30:41-00:30:44 (3 sec)] and a widening of participation in Reporter [00:30:44-00:30:46 (2 sec)] India's equity markets? Will it be Reporter [00:30:46-00:30:48 (2 sec)] specific product segments? Will it be Reporter [00:30:48-00:30:51 (3 sec)] the commodity derivatives market? Uh Reporter [00:30:51-00:30:53 (2 sec)] that might be the next area of revenue Reporter [00:30:53-00:30:56 (3 sec)] growth for you. Unidentified speaker [00:30:56-00:30:59 (3 sec)] basically somewhere on the line if you Unidentified speaker [00:30:59-00:31:03 (4 sec)] look at the growth in terms of the uh Unidentified speaker [00:31:03-00:31:05 (2 sec)] the numbers that is the top line or Unidentified speaker [00:31:05-00:31:07 (2 sec)] bottom line it's slightly different from Unidentified speaker [00:31:07-00:31:10 (3 sec)] the growth I look at u for me the growth Unidentified speaker [00:31:10-00:31:12 (2 sec)] is how do I reach out to maximum number Unidentified speaker [00:31:12-00:31:15 (3 sec)] of people how do I uh get more companies Unidentified speaker [00:31:15-00:31:18 (3 sec)] to list uh how how do I channelize Unidentified speaker [00:31:18-00:31:21 (3 sec)] savings of India better into uh Unidentified speaker [00:31:21-00:31:23 (2 sec)] productive capital those are my uh Unidentified speaker [00:31:23-00:31:26 (3 sec)] general uh sort of guidelines but uh In Unidentified speaker [00:31:26-00:31:28 (2 sec)] short run of course if I mean you have Unidentified speaker [00:31:28-00:31:31 (3 sec)] seen Indian markets last two three years Unidentified speaker [00:31:31-00:31:32 (1 sec)] have been sideways. If they start doing Unidentified speaker [00:31:32-00:31:35 (3 sec)] well in next few months or a year, you Unidentified speaker [00:31:35-00:31:37 (2 sec)] will start seeing tremendous amount of Unidentified speaker [00:31:37-00:31:40 (3 sec)] uh volume growth which is what uh Unidentified speaker [00:31:40-00:31:42 (2 sec)] finally the markets look at because they Unidentified speaker [00:31:42-00:31:44 (2 sec)] uh contribute to uh topline, bottom line Unidentified speaker [00:31:44-00:31:46 (2 sec)] but in the background we continue to Unidentified speaker [00:31:46-00:31:48 (2 sec)] work on uh things like commodities as Unidentified speaker [00:31:48-00:31:51 (3 sec)] you said today in certain segments of Unidentified speaker [00:31:51-00:31:54 (3 sec)] commodities we are uh becoming very Unidentified speaker [00:31:54-00:31:57 (3 sec)] large and we charge again very low Unidentified speaker [00:31:57-00:31:59 (2 sec)] because it's initial pricing compared to Unidentified speaker [00:31:59-00:32:01 (2 sec)] our competition which charges like 50 Unidentified speaker [00:32:01-00:32:02 (1 sec)] times ours. Unidentified speaker [00:32:02-00:32:04 (2 sec)] uh and once we have that market uh share Unidentified speaker [00:32:04-00:32:07 (3 sec)] coming out that could be even much Unidentified speaker [00:32:07-00:32:10 (3 sec)] larger. We are also into electricity Unidentified speaker [00:32:10-00:32:12 (2 sec)] futures. Now we are setting up a coal Unidentified speaker [00:32:12-00:32:13 (1 sec)] spot exchange again we'll have Unidentified speaker [00:32:13-00:32:15 (2 sec)] derivatives on that at some point in Unidentified speaker [00:32:15-00:32:17 (2 sec)] time. Uh already honorable finance Unidentified speaker [00:32:17-00:32:19 (2 sec)] minister of India has announced in Unidentified speaker [00:32:19-00:32:22 (3 sec)] previous budget uh the index uh bond Unidentified speaker [00:32:22-00:32:24 (2 sec)] index futures and options. So uh that is Unidentified speaker [00:32:24-00:32:25 (1 sec)] also under discussion with the Unidentified speaker [00:32:25-00:32:27 (2 sec)] regulator. So if that is allowed again Unidentified speaker [00:32:27-00:32:30 (3 sec)] that will be a new uh segment uh that Unidentified speaker [00:32:30-00:32:32 (2 sec)] will come through. We are working on the Unidentified speaker [00:32:32-00:32:35 (3 sec)] electronic gold receipt which you know Unidentified speaker [00:32:35-00:32:38 (3 sec)] India has almost 30 35,000 tons of gold. Reporter [00:32:38-00:32:41 (3 sec)] >> So I don't mean to interrupt you. Sorry. Reporter [00:32:41-00:32:43 (2 sec)] >> I don't mean to interrupt you. Sorry. Reporter [00:32:43-00:32:44 (1 sec)] But I wanted to get a sense of 5 years Reporter [00:32:44-00:32:47 (3 sec)] from now what will be the approximate Reporter [00:32:47-00:32:49 (2 sec)] revenue contribution of each of these Reporter [00:32:49-00:32:51 (2 sec)] markets or segments uh you know broadly Reporter [00:32:51-00:32:53 (2 sec)] and I I understand this is just a broad Reporter [00:32:53-00:32:55 (2 sec)] target. You may or may not achieve it Reporter [00:32:55-00:32:59 (4 sec)] depending on market conditions. Unidentified speaker [00:32:59-00:33:01 (2 sec)] See we don't look at targets you know we Unidentified speaker [00:33:01-00:33:05 (4 sec)] are first in firstly we are regulators Unidentified speaker [00:33:05-00:33:08 (3 sec)] uh and so we tend to worry more about uh Unidentified speaker [00:33:08-00:33:11 (3 sec)] providing better uh market conditions Unidentified speaker [00:33:11-00:33:13 (2 sec)] and if any market picks up that ends up Unidentified speaker [00:33:13-00:33:15 (2 sec)] giving us better revenue. So our Unidentified speaker [00:33:15-00:33:18 (3 sec)] framework is about uh controlling our Unidentified speaker [00:33:18-00:33:20 (2 sec)] cost on the uh service side. we are the Unidentified speaker [00:33:20-00:33:22 (2 sec)] regulatory uh framework which is very Unidentified speaker [00:33:22-00:33:25 (3 sec)] large in NSE and then there is a service Unidentified speaker [00:33:25-00:33:27 (2 sec)] side uh which is where we uh generate Unidentified speaker [00:33:27-00:33:29 (2 sec)] the income by way of transaction charges Unidentified speaker [00:33:29-00:33:32 (3 sec)] listing fees and all and so if uh we can Unidentified speaker [00:33:32-00:33:35 (3 sec)] control our platform cost which are Unidentified speaker [00:33:35-00:33:37 (2 sec)] fixed that is the employee cost and the Unidentified speaker [00:33:37-00:33:40 (3 sec)] uh technology cost any new products or Unidentified speaker [00:33:40-00:33:42 (2 sec)] even current products becoming large G Unidentified speaker [00:33:42-00:33:44 (2 sec)] gives us uh kind of a disproportionate Unidentified speaker [00:33:44-00:33:48 (4 sec)] uh increase in um uh top line and also Unidentified speaker [00:33:48-00:33:49 (1 sec)] it straight away goes into bottom line Unidentified speaker [00:33:49-00:33:51 (2 sec)] because the marginal cost of creating Unidentified speaker [00:33:51-00:33:54 (3 sec)] new products for us is close to zero and Unidentified speaker [00:33:54-00:33:56 (2 sec)] that's what uh basically is our Unidentified speaker [00:33:56-00:33:58 (2 sec)] framework over last four four and a half Unidentified speaker [00:33:58-00:34:00 (2 sec)] years since I joined back that we focus Unidentified speaker [00:34:00-00:34:02 (2 sec)] on what uh we can do that is control our Unidentified speaker [00:34:02-00:34:05 (3 sec)] cost and the markets if they run up into Unidentified speaker [00:34:05-00:34:07 (2 sec)] a particular segment or in a particular Unidentified speaker [00:34:07-00:34:09 (2 sec)] way of course we need to diversify so Unidentified speaker [00:34:09-00:34:11 (2 sec)] that uh in case one product doesn't work Unidentified speaker [00:34:11-00:34:13 (2 sec)] out the other products do and that's Unidentified speaker [00:34:13-00:34:15 (2 sec)] where we are trying to develop newer Unidentified speaker [00:34:15-00:34:18 (3 sec)] products so today uh there are uh sort Unidentified speaker [00:34:18-00:34:19 (1 sec)] of revenue shares of different different Unidentified speaker [00:34:19-00:34:22 (3 sec)] products uh like weekly options are Unidentified speaker [00:34:22-00:34:24 (2 sec)] around 40 42% of our total revenue. Uh Unidentified speaker [00:34:24-00:34:27 (3 sec)] the monthly derivatives that is futures Unidentified speaker [00:34:27-00:34:29 (2 sec)] and options put together is another 20% Unidentified speaker [00:34:29-00:34:31 (2 sec)] uh or slightly less than that. And then Unidentified speaker [00:34:31-00:34:35 (4 sec)] we have equities u and then we also have Unidentified speaker [00:34:35-00:34:37 (2 sec)] the data side that includes our terminal Unidentified speaker [00:34:37-00:34:40 (3 sec)] business, our uh index business, our Unidentified speaker [00:34:40-00:34:42 (2 sec)] data services business, our uh Unidentified speaker [00:34:42-00:34:44 (2 sec)] collocation facilities business, Unidentified speaker [00:34:44-00:34:46 (2 sec)] communications charges and other things. Unidentified speaker [00:34:46-00:34:48 (2 sec)] And then there are listing and other Unidentified speaker [00:34:48-00:34:50 (2 sec)] charges. So effectively we are generally Unidentified speaker [00:34:50-00:34:52 (2 sec)] well diversified but we would like to Unidentified speaker [00:34:52-00:34:54 (2 sec)] get more diversified over a period and Unidentified speaker [00:34:54-00:34:55 (1 sec)] if India continues to grow as you Unidentified speaker [00:34:55-00:34:57 (2 sec)] rightly said we'll have more Unidentified speaker [00:34:57-00:35:00 (3 sec)] participants but if India does well in Unidentified speaker [00:35:00-00:35:02 (2 sec)] markets over next uh several years then Unidentified speaker [00:35:02-00:35:04 (2 sec)] probably the equities market might have Unidentified speaker [00:35:04-00:35:07 (3 sec)] a larger market share. Reporter [00:35:07-00:35:09 (2 sec)] >> Ashish where does commodities Reporter [00:35:09-00:35:11 (2 sec)] derivatives trading fit into the space Reporter [00:35:11-00:35:12 (1 sec)] as well because I know this is an area Reporter [00:35:12-00:35:14 (2 sec)] that you're looking at and it's gaining Reporter [00:35:14-00:35:16 (2 sec)] in popularity in India. What are you Reporter [00:35:16-00:35:19 (3 sec)] doing here? Unidentified speaker [00:35:19-00:35:22 (3 sec)] In commodities we uh actually have a a Unidentified speaker [00:35:22-00:35:26 (4 sec)] very nice uh product on um Unidentified speaker [00:35:26-00:35:29 (3 sec)] uh natural gas and um oil uh crude oil Unidentified speaker [00:35:29-00:35:31 (2 sec)] products. Uh we also have launched Unidentified speaker [00:35:31-00:35:34 (3 sec)] Indian prices based uh products but we Unidentified speaker [00:35:34-00:35:36 (2 sec)] have already seis based products and Unidentified speaker [00:35:36-00:35:38 (2 sec)] they are picking up quite well. Uh it's Unidentified speaker [00:35:38-00:35:41 (3 sec)] early days around 3 years since we Unidentified speaker [00:35:41-00:35:43 (2 sec)] launched. uh and we have gained Unidentified speaker [00:35:43-00:35:45 (2 sec)] substantial market share as of now from Unidentified speaker [00:35:45-00:35:48 (3 sec)] uh specific uh exchanges which only Unidentified speaker [00:35:48-00:35:50 (2 sec)] trade commodities and now because we Unidentified speaker [00:35:50-00:35:53 (3 sec)] service 130 million unique investors and Unidentified speaker [00:35:53-00:35:56 (3 sec)] 270 million accounts compared to uh the Unidentified speaker [00:35:56-00:35:58 (2 sec)] smaller exchanges which uh actually Unidentified speaker [00:35:58-00:36:00 (2 sec)] service only minuscule number of people. Unidentified speaker [00:36:00-00:36:03 (3 sec)] I think broadly uh we will have a a Unidentified speaker [00:36:03-00:36:05 (2 sec)] better future in that as well as the Unidentified speaker [00:36:05-00:36:07 (2 sec)] fact that the foreign portfolio Unidentified speaker [00:36:07-00:36:09 (2 sec)] investors are being allowed into the Unidentified speaker [00:36:09-00:36:11 (2 sec)] commodities markets which are already Unidentified speaker [00:36:11-00:36:14 (3 sec)] connected to NSE and NSE clearing house. Unidentified speaker [00:36:14-00:36:17 (3 sec)] I hope many of them will select NSE as a Unidentified speaker [00:36:17-00:36:19 (2 sec)] a venue of choice for trading in Unidentified speaker [00:36:19-00:36:23 (4 sec)] commerce derivatives also. Reporter [00:36:23-00:36:24 (1 sec)] >> Uh Ashish I have two very quick Reporter [00:36:24-00:36:26 (2 sec)] questions. We're a little bit short on Reporter [00:36:26-00:36:28 (2 sec)] time. So very quick questions on do you Reporter [00:36:28-00:36:30 (2 sec)] expect uh you know any kind of further Reporter [00:36:30-00:36:32 (2 sec)] tamping down by the regulator on Reporter [00:36:32-00:36:34 (2 sec)] speculative activity in the derivatives Reporter [00:36:34-00:36:36 (2 sec)] market as a result of which your volumes Reporter [00:36:36-00:36:39 (3 sec)] may shrink and connected to that is what Reporter [00:36:39-00:36:41 (2 sec)] we've seen also happen in the closing Reporter [00:36:41-00:36:44 (3 sec)] auction space very controversial hurting Reporter [00:36:44-00:36:46 (2 sec)] volumes across the board what do you Reporter [00:36:46-00:36:48 (2 sec)] make of when that gets resolved in some Reporter [00:36:48-00:36:50 (2 sec)] fashion are you working with the Reporter [00:36:50-00:36:52 (2 sec)] regulator uh I know they've put out a Reporter [00:36:52-00:36:54 (2 sec)] discussion paper but are you working to Reporter [00:36:54-00:36:56 (2 sec)] see that you know sort of that becomes Reporter [00:36:56-00:36:59 (3 sec)] more streamlined. Unidentified speaker [00:36:59-00:37:02 (3 sec)] >> Uh in terms of the derivatives, Unidentified speaker [00:37:02-00:37:04 (2 sec)] u the strengthening of regulatory Unidentified speaker [00:37:04-00:37:07 (3 sec)] measures, it started around 2023. Unidentified speaker [00:37:07-00:37:11 (4 sec)] Uh the cycle has been fully run. Uh NSE Unidentified speaker [00:37:11-00:37:14 (3 sec)] had literally uh a daily uh expiry of Unidentified speaker [00:37:14-00:37:16 (2 sec)] weekly options which has been made into Unidentified speaker [00:37:16-00:37:18 (2 sec)] once a week. Of course, uh other people Unidentified speaker [00:37:18-00:37:20 (2 sec)] also been given one another part of the Unidentified speaker [00:37:20-00:37:23 (3 sec)] week. So broadly uh for me that was the Unidentified speaker [00:37:23-00:37:26 (3 sec)] largest uh sort of issue uh in terms of Unidentified speaker [00:37:26-00:37:29 (3 sec)] uh sort of losing market share a little Unidentified speaker [00:37:29-00:37:31 (2 sec)] bit uh but it's coming back now uh over Unidentified speaker [00:37:31-00:37:35 (4 sec)] last few months uh and uh the for me the Unidentified speaker [00:37:35-00:37:37 (2 sec)] cycle of uh the derivatives tightening Unidentified speaker [00:37:37-00:37:39 (2 sec)] is broadly run. Of course there might be Unidentified speaker [00:37:39-00:37:42 (3 sec)] some minor things here and there uh that Unidentified speaker [00:37:42-00:37:43 (1 sec)] may come about. We have also been Unidentified speaker [00:37:43-00:37:45 (2 sec)] talking or the regulators have been Unidentified speaker [00:37:45-00:37:49 (4 sec)] talking about uh measures on u uh who Unidentified speaker [00:37:49-00:37:51 (2 sec)] can participate uh well in this market Unidentified speaker [00:37:51-00:37:54 (3 sec)] because there has been uh kind of Unidentified speaker [00:37:54-00:37:56 (2 sec)] concerns about people losing money Unidentified speaker [00:37:56-00:37:57 (1 sec)] especally the smaller investors and how Unidentified speaker [00:37:57-00:38:00 (3 sec)] to uh sort of create frameworks to stop Unidentified speaker [00:38:00-00:38:02 (2 sec)] them from participating or at least Unidentified speaker [00:38:02-00:38:04 (2 sec)] reduce their participation. So that Unidentified speaker [00:38:04-00:38:06 (2 sec)] those kind of things will happen. But in Unidentified speaker [00:38:06-00:38:11 (5 sec)] if you look at almost uh 95% of uh NSE's Unidentified speaker [00:38:11-00:38:12 (1 sec)] uh Unidentified speaker [00:38:12-00:38:14 (2 sec)] uh turnover in derivatives come from Unidentified speaker [00:38:14-00:38:16 (2 sec)] only 400,000 people and they are Unidentified speaker [00:38:16-00:38:18 (2 sec)] professional traders. Uh they are well Unidentified speaker [00:38:18-00:38:20 (2 sec)] equipped. They are well capitalized. Unidentified speaker [00:38:20-00:38:22 (2 sec)] They are also highly educated. And if Unidentified speaker [00:38:22-00:38:25 (3 sec)] you take around 600,000 people, it will Unidentified speaker [00:38:25-00:38:29 (4 sec)] be 98% of uh NSE's uh uh total Unidentified speaker [00:38:29-00:38:30 (1 sec)] derivatives trading volume. the the Unidentified speaker [00:38:30-00:38:33 (3 sec)] remaining around 2 million people are Unidentified speaker [00:38:33-00:38:35 (2 sec)] basically take trading only less than Unidentified speaker [00:38:35-00:38:38 (3 sec)] 2%. So effectively NSE has slowly Unidentified speaker [00:38:38-00:38:40 (2 sec)] diversified and focused on uh what I Unidentified speaker [00:38:40-00:38:42 (2 sec)] call highquality investors over last 3 Unidentified speaker [00:38:42-00:38:44 (2 sec)] years since the derivatives tightening Unidentified speaker [00:38:44-00:38:46 (2 sec)] happened and on the closing auction Unidentified speaker [00:38:46-00:38:49 (3 sec)] session I think it's available across Unidentified speaker [00:38:49-00:38:51 (2 sec)] the world. SEBI took the decisions based Unidentified speaker [00:38:51-00:38:53 (2 sec)] on the international investors and also Unidentified speaker [00:38:53-00:38:54 (1 sec)] some of the local large investors Unidentified speaker [00:38:54-00:38:57 (3 sec)] especially ETFs uh uh sort of request Unidentified speaker [00:38:57-00:38:59 (2 sec)] and now uh it is being Reporter [00:38:59-00:39:01 (2 sec)] >> so you're in favor of what has happened Reporter [00:39:01-00:39:04 (3 sec)] >> Ashish you're in favor of what has Reporter [00:39:04-00:39:04 (0 sec)] happened Unidentified speaker [00:39:04-00:39:07 (3 sec)] >> for me I'll tell you I'll tell you it's Unidentified speaker [00:39:07-00:39:10 (3 sec)] not for me to take sides it's for me to Unidentified speaker [00:39:10-00:39:12 (2 sec)] just implement what the regulators want Unidentified speaker [00:39:12-00:39:14 (2 sec)] and that would be the process you have Unidentified speaker [00:39:14-00:39:17 (3 sec)] seen me like 30 years both of us have Unidentified speaker [00:39:17-00:39:19 (2 sec)] seen each other I have always worked Unidentified speaker [00:39:19-00:39:21 (2 sec)] with regulators whatever they want we Unidentified speaker [00:39:21-00:39:24 (3 sec)] will do. If they want to change uh for Unidentified speaker [00:39:24-00:39:26 (2 sec)] increasing the participation of retail Unidentified speaker [00:39:26-00:39:29 (3 sec)] uh traders by increas sort of changing Unidentified speaker [00:39:29-00:39:32 (3 sec)] those uh closing accentation be it and Unidentified speaker [00:39:32-00:39:34 (2 sec)] we should actually support whatever the Unidentified speaker [00:39:34-00:39:37 (3 sec)] regulators want. Reporter [00:39:37-00:39:39 (2 sec)] >> All right Ashish we are out of time but Reporter [00:39:39-00:39:40 (1 sec)] thank you so much for joining us today. Reporter [00:39:40-00:39:42 (2 sec)] That is National Stock Exchange of India Reporter [00:39:42-00:39:45 (3 sec)] MD and CEO Ashish Kumar Shiaan and our Reporter [00:39:45-00:39:48 (3 sec)] very own manosi there in Mumbai. All Reporter [00:39:48-00:39:51 (3 sec)] right, we are about to have the market Reporter [00:39:51-00:39:52 (1 sec)] open in India. Let's see if we have a Reporter [00:39:52-00:39:54 (2 sec)] better day than yesterday where stocks Reporter [00:39:54-00:39:57 (3 sec)] fell the most in almost in about two Reporter [00:39:57-00:39:59 (2 sec)] months. Uh but the early going suggests Reporter [00:39:59-00:40:01 (2 sec)] the selling is continuing and that would Reporter [00:40:01-00:40:03 (2 sec)] reflect a trend that we've seen across Reporter [00:40:03-00:40:05 (2 sec)] the broader Asia Pacific today. One Reporter [00:40:05-00:40:07 (2 sec)] exception being the Nikkay which is Reporter [00:40:07-00:40:08 (1 sec)] currently up 9/10en 1% but that Reporter [00:40:08-00:40:10 (2 sec)] notwithstanding we've got the nifty IT Reporter [00:40:10-00:40:12 (2 sec)] index the most beaten up at the moment. Reporter [00:40:12-00:40:14 (2 sec)] The losses elsewhere well just turned to Reporter [00:40:14-00:40:16 (2 sec)] green on the Sensex in fact. Uh but the Reporter [00:40:16-00:40:18 (2 sec)] NSE on Thursday was one of the few Reporter [00:40:18-00:40:22 (4 sec)] outliers rising on debut. But uh things Reporter [00:40:22-00:40:24 (2 sec)] sort of flat, beg you pardon, in India Reporter [00:40:24-00:40:26 (2 sec)] at the moment. The rupee closing in on Reporter [00:40:26-00:40:30 (4 sec)] that 96 level some interesting choices Reporter [00:40:30-00:40:32 (2 sec)] for the IBI coming up in October when it Reporter [00:40:32-00:40:35 (3 sec)] comes to tightening. Now India's market Reporter [00:40:35-00:40:37 (2 sec)] regulator is allowing wealth focused Reporter [00:40:37-00:40:39 (2 sec)] funds to buy overseas securities and Reporter [00:40:39-00:40:41 (2 sec)] short equity options for the first time. Reporter [00:40:41-00:40:43 (2 sec)] It marks a major overhaul of investment Reporter [00:40:43-00:40:45 (2 sec)] rules and significantly expands the Reporter [00:40:45-00:40:48 (3 sec)] industry's investment options. Asia Reporter [00:40:48-00:40:50 (2 sec)] equities reporter Facia Mangi joins us Reporter [00:40:50-00:40:54 (4 sec)] now. So FIA um how significant are these Reporter [00:40:54-00:40:55 (1 sec)] changes? What's it going to mean in Reporter [00:40:55-00:40:58 (3 sec)] practical terms? Reporter [00:40:58-00:41:00 (2 sec)] >> Hi Paul, thanks for having me. I think Reporter [00:41:00-00:41:02 (2 sec)] um as you mentioned as well Indian Reporter [00:41:02-00:41:05 (3 sec)] regulators have been busy um this week Reporter [00:41:05-00:41:07 (2 sec)] and as we as you mentioned as well um Reporter [00:41:07-00:41:09 (2 sec)] what this does is that this opens up the Reporter [00:41:09-00:41:12 (3 sec)] avenues we're talking about a specific Reporter [00:41:12-00:41:14 (2 sec)] area of the mutual fund industry that Reporter [00:41:14-00:41:16 (2 sec)] caters to wealthy individuals and they Reporter [00:41:16-00:41:19 (3 sec)] have been asking for you know uh more Reporter [00:41:19-00:41:22 (3 sec)] investment avenues we've seen assets um Reporter [00:41:22-00:41:25 (3 sec)] have more than doubled since 2020 and Reporter [00:41:25-00:41:28 (3 sec)] now they're able to invest overseas as Reporter [00:41:28-00:41:30 (2 sec)] well and they are also able to you know Reporter [00:41:30-00:41:33 (3 sec)] undertake um a specific short selling as Reporter [00:41:33-00:41:35 (2 sec)] well. Um this comes at a time you know Reporter [00:41:35-00:41:36 (1 sec)] there are two things to keep in mind Reporter [00:41:36-00:41:39 (3 sec)] over here. This comes at a time when uh Reporter [00:41:39-00:41:41 (2 sec)] we are seeing that you know global Reporter [00:41:41-00:41:43 (2 sec)] markets and global funds are a bit Reporter [00:41:43-00:41:46 (3 sec)] underweight on India. So there is and Reporter [00:41:46-00:41:48 (2 sec)] you know people are running towards the Reporter [00:41:48-00:41:50 (2 sec)] AI trade. So this will give that option Reporter [00:41:50-00:41:53 (3 sec)] and uh this does mark a significant um Reporter [00:41:53-00:41:56 (3 sec)] change for the industry. Reporter [00:41:56-00:41:57 (1 sec)] Well, yeah, as I mentioned in the market Reporter [00:41:57-00:41:59 (2 sec)] check a little bit earlier too, it was a Reporter [00:41:59-00:42:02 (3 sec)] rough day for financials in India Reporter [00:42:02-00:42:04 (2 sec)] yesterday. There's a few changes coming Reporter [00:42:04-00:42:07 (3 sec)] uh in terms of commissions, expenses as Reporter [00:42:07-00:42:09 (2 sec)] well for the insurance industry. Can you Reporter [00:42:09-00:42:11 (2 sec)] talk us through what's coming and what Reporter [00:42:11-00:42:13 (2 sec)] it's going to mean? Reporter [00:42:13-00:42:16 (3 sec)] >> Yes, absolutely. So I mean uh both SEBI Reporter [00:42:16-00:42:20 (4 sec)] and IRDA have been busy and um I'll just Reporter [00:42:20-00:42:22 (2 sec)] read a quick word that you basically Reporter [00:42:22-00:42:24 (2 sec)] sums up the thinking of you know what Reporter [00:42:24-00:42:25 (1 sec)] the regulator is doing. They said that Reporter [00:42:25-00:42:28 (3 sec)] the present distribution for the uh Reporter [00:42:28-00:42:30 (2 sec)] insurance segment has evolved in a Reporter [00:42:30-00:42:32 (2 sec)] manner that rewards premium collection Reporter [00:42:32-00:42:35 (3 sec)] more than consumer value market Reporter [00:42:35-00:42:37 (2 sec)] expansion and operating efficiency. So I Reporter [00:42:37-00:42:38 (1 sec)] think that sums up basically what Reporter [00:42:38-00:42:41 (3 sec)] they're thinking is um they want to Reporter [00:42:41-00:42:43 (2 sec)] focus more on you know the industry Reporter [00:42:43-00:42:44 (1 sec)] growing rather than you know quick Reporter [00:42:44-00:42:48 (4 sec)] premiums and um that has taken a toll on Reporter [00:42:48-00:42:50 (2 sec)] you know basically the entire financial Reporter [00:42:50-00:42:52 (2 sec)] sector. We saw yesterday we saw you know Reporter [00:42:52-00:42:57 (5 sec)] PB Finance drop the most for any stock Reporter [00:42:57-00:43:00 (3 sec)] since the pandemic and you know around Reporter [00:43:00-00:43:02 (2 sec)] $14 billion of market value was taken Reporter [00:43:02-00:43:06 (4 sec)] out from the entire financial sector. um Reporter [00:43:06-00:43:09 (3 sec)] fintech was hit, regul um lenders were Reporter [00:43:09-00:43:11 (2 sec)] hit. Um so but you know this is all to Reporter [00:43:11-00:43:14 (3 sec)] you know make the the insurance sector Reporter [00:43:14-00:43:16 (2 sec)] more robust. It's a low penetration Reporter [00:43:16-00:43:18 (2 sec)] market India so they want to grow that Reporter [00:43:18-00:43:20 (2 sec)] market. So yeah those are massive steps Reporter [00:43:20-00:43:23 (3 sec)] taken by the regulator this week. Reporter [00:43:23-00:43:25 (2 sec)] >> All right Bloomberg Asia Equities Reporter [00:43:25-00:43:28 (3 sec)] reporter and deputy team leader Fas Mi Reporter [00:43:28-00:43:30 (2 sec)] there. Thank you. Still to come, India's Reporter [00:43:30-00:43:32 (2 sec)] youth protesters turn their sights on Reporter [00:43:32-00:43:33 (1 sec)] the country's chief election Reporter [00:43:33-00:43:36 (3 sec)] commissioner, threatening fresh protests Reporter [00:43:36-00:43:38 (2 sec)] if he doesn't step down. We'll have the Reporter [00:43:38-00:43:39 (1 sec)] latest on the so-called cockroach Reporter [00:43:39-00:43:42 (3 sec)] movement's grievances next. This is Reporter [00:43:42-00:43:54 (12 sec)] Bloomberg. Reporter [00:43:54-00:43:56 (2 sec)] Welcome back. You're watching Insights. Reporter [00:43:56-00:43:58 (2 sec)] India's Cockroach Janta Party, best Reporter [00:43:58-00:44:00 (2 sec)] known for leading mass youth protests Reporter [00:44:00-00:44:02 (2 sec)] over exam irregularities, is now Reporter [00:44:02-00:44:04 (2 sec)] threatening nationwide action unless the Reporter [00:44:04-00:44:06 (2 sec)] country's chief election commissioner Reporter [00:44:06-00:44:08 (2 sec)] resigns. Pressure is mounting over Reporter [00:44:08-00:44:11 (3 sec)] changes to voter roles. For more, let's Reporter [00:44:11-00:44:13 (2 sec)] get to New Delhi and Bloomberg's Shrui Reporter [00:44:13-00:44:15 (2 sec)] Shasta there. What's the controversy Reporter [00:44:15-00:44:17 (2 sec)] about this time and what are the Reporter [00:44:17-00:44:22 (5 sec)] opposition parties demanding here? Reporter [00:44:22-00:44:24 (2 sec)] So as you said the election commission Reporter [00:44:24-00:44:26 (2 sec)] of India has come under fire from the Reporter [00:44:26-00:44:29 (3 sec)] opposition parties after a media report Reporter [00:44:29-00:44:32 (3 sec)] by and the Indian express newspaper. Uh Reporter [00:44:32-00:44:35 (3 sec)] its investigation showed that there have Reporter [00:44:35-00:44:36 (1 sec)] been internal divisions over the Reporter [00:44:36-00:44:38 (2 sec)] controversial revision of electoral Reporter [00:44:38-00:44:40 (2 sec)] roles which have been going on in the Reporter [00:44:40-00:44:42 (2 sec)] country. Now quickly let me tell you Reporter [00:44:42-00:44:43 (1 sec)] what's the process like. There are three Reporter [00:44:43-00:44:45 (2 sec)] members in the election commission of Reporter [00:44:45-00:44:49 (4 sec)] India. uh of those uh two members they Reporter [00:44:49-00:44:52 (3 sec)] objected they were kept in dark uh about Reporter [00:44:52-00:44:54 (2 sec)] the decisions taken by the election Reporter [00:44:54-00:44:56 (2 sec)] commissioner and uh the investigation Reporter [00:44:56-00:44:58 (2 sec)] report alleged that the chief election Reporter [00:44:58-00:45:00 (2 sec)] commissioner took most of the decisions Reporter [00:45:00-00:45:03 (3 sec)] on his own not informing them. Now all Reporter [00:45:03-00:45:04 (1 sec)] the decisions have of the election Reporter [00:45:04-00:45:07 (3 sec)] commission have to be taken unanimously. Reporter [00:45:07-00:45:08 (1 sec)] While the election commission has said Reporter [00:45:08-00:45:11 (3 sec)] that all the decisions were indeed taken Reporter [00:45:11-00:45:13 (2 sec)] unanimously, the opposition parties have Reporter [00:45:13-00:45:15 (2 sec)] have demanded resignation of the chief Reporter [00:45:15-00:45:17 (2 sec)] election commission. Let me also quickly Reporter [00:45:17-00:45:19 (2 sec)] tell you here that the ongoing uh Reporter [00:45:19-00:45:21 (2 sec)] electoral revision the revision of Reporter [00:45:21-00:45:24 (3 sec)] electoral roles. It has been mired into Reporter [00:45:24-00:45:26 (2 sec)] controversies ever since it started last Reporter [00:45:26-00:45:29 (3 sec)] year. Given that context, the opposition Reporter [00:45:29-00:45:31 (2 sec)] parties are saying that the chief Reporter [00:45:31-00:45:33 (2 sec)] election commissioner should step down Reporter [00:45:33-00:45:36 (3 sec)] immediately. The same demand was made by Reporter [00:45:36-00:45:38 (2 sec)] the cockroach janda party you know which Reporter [00:45:38-00:45:41 (3 sec)] in the recent years successfully led uh Reporter [00:45:41-00:45:44 (3 sec)] students protests in India. They have Reporter [00:45:44-00:45:46 (2 sec)] demanded that the chief election Reporter [00:45:46-00:45:47 (1 sec)] commissioner should step down in 48 Reporter [00:45:47-00:45:50 (3 sec)] hours and if he fails to do so the Reporter [00:45:50-00:45:52 (2 sec)] ultimatum is that they will do a Reporter [00:45:52-00:45:54 (2 sec)] nationwide agitation and also a sit in Reporter [00:45:54-00:45:57 (3 sec)] New Delhi. Reporter [00:45:57-00:46:01 (4 sec)] >> Uh so shi the uh cockroach party was Reporter [00:46:01-00:46:02 (1 sec)] successful in removing the education Reporter [00:46:02-00:46:03 (1 sec)] minister. what are the chances of Reporter [00:46:03-00:46:08 (5 sec)] success here? What happens now? Reporter [00:46:08-00:46:11 (3 sec)] >> So that is uh that's something that Reporter [00:46:11-00:46:12 (1 sec)] remains to be seen whether the chief Reporter [00:46:12-00:46:15 (3 sec)] election commission resigns. The 48 hour Reporter [00:46:15-00:46:17 (2 sec)] deadline started yesterday and it ends Reporter [00:46:17-00:46:20 (3 sec)] sometime tomorrow. Uh but what happens Reporter [00:46:20-00:46:21 (1 sec)] is now there are two things that we have Reporter [00:46:21-00:46:23 (2 sec)] to watch out for. The first thing is Reporter [00:46:23-00:46:25 (2 sec)] that you know this particular episode it Reporter [00:46:25-00:46:27 (2 sec)] comes at a time it coincides with the Reporter [00:46:27-00:46:29 (2 sec)] fact that Indian stocks have been under Reporter [00:46:29-00:46:32 (3 sec)] pressure this week uh because of rising Reporter [00:46:32-00:46:34 (2 sec)] global bond deals, higher oil prices and Reporter [00:46:34-00:46:37 (3 sec)] the ongoing uh conflict in the Middle Reporter [00:46:37-00:46:39 (2 sec)] East. Uh foreign investors have been Reporter [00:46:39-00:46:42 (3 sec)] pulling out of the Indian equities. Now Reporter [00:46:42-00:46:44 (2 sec)] this prolonged uh political unrest that Reporter [00:46:44-00:46:46 (2 sec)] has the potential to add to the concerns Reporter [00:46:46-00:46:48 (2 sec)] of foreign investors. The other thing is Reporter [00:46:48-00:46:50 (2 sec)] that you know the opposition parties in Reporter [00:46:50-00:46:52 (2 sec)] India they now it's likely to snowball Reporter [00:46:52-00:46:55 (3 sec)] into a bigger thing a bigger protest and Reporter [00:46:55-00:46:57 (2 sec)] uh probably going to be a bigger flash Reporter [00:46:57-00:46:59 (2 sec)] point a new flash point between the Reporter [00:46:59-00:47:02 (3 sec)] government and the opposition party. Reporter [00:47:02-00:47:04 (2 sec)] >> All right Bloomberg journalist Shri Reporter [00:47:04-00:47:06 (2 sec)] Shasta there. Thank you so much for Reporter [00:47:06-00:47:08 (2 sec)] joining us. Now Bloomberg has launched a Reporter [00:47:08-00:47:11 (3 sec)] dedicated digital experience for India. Reporter [00:47:11-00:47:12 (1 sec)] Subscribers can visit Reporter [00:47:12-00:47:13 (1 sec)] bloomberg.com/india Reporter [00:47:13-00:47:15 (2 sec)] for exclusive reporting and curated Reporter [00:47:15-00:47:17 (2 sec)] features, video and other content from Reporter [00:47:17-00:47:19 (2 sec)] our global newsroom. Before we go, Reporter [00:47:19-00:47:22 (3 sec)] here's a look at our show on Monday. Reporter [00:47:22-00:47:23 (1 sec)] We'll get a read on the state of private Reporter [00:47:23-00:47:25 (2 sec)] equity in an exclusive [music] Reporter [00:47:25-00:47:27 (2 sec)] conversation with Wberg Pinker CEO Reporter [00:47:27-00:47:30 (3 sec)] Jeffrey Pearlman. Also, Heineken's APAC Reporter [00:47:30-00:47:32 (2 sec)] president joins us to discuss demand Reporter [00:47:32-00:47:34 (2 sec)] trends for beer across Asia. That is it Reporter [00:47:34-00:47:36 (2 sec)] for Insight. Horizon's Middle East and Reporter [00:47:36-00:47:38 (2 sec)] Africa up next. This is Bloomberg. Reporter [00:47:38-00:47:42 (4 sec)] [music]