Asian Stocks Rise on Optimism Over US-Iran Talks | Bloomberg Daybreak: Asia Edition

Added: 2026-05-22

[00:00:00][music] Bloomberg Audio Studios podcasts radio news.

[00:00:10]Welcome to the Daybreak Asia podcast.

[00:00:12]I'm Doug Krer. Time and again we have seen how markets are at the mercy of news headlines on the war in Iran. Now on Thursday, Therron said the latest US proposal partly bridged the gap between the waring sides. That would appear to be a positive. However, at the same time, Iran's Supreme Leader reportedly issued a directive that the country's near weaponsgrade uranium should not be sent abroad. And at the same time, Iran's president said his country will never back down and cannot be conquered with missiles, bombs, or fighter jets.

[00:00:45]Now, we also learned Iran is in talks with Oman on creating a permanent toll system for maritime traffic through the straight of Hormuz. That's according to the Iranian ambassador to France. Now, President Trump rejected the idea. You take a step back and it appeared as though the negatives outweighed the positives today. And you might suspect that crude oil would have advanced in that scenario. Well, as the saying goes, that's what makes a market. Crude oil declined in New York trading. WTI was down about 1.9%.

[00:01:16]Although now in Asian trading, WTI is higher by more than 1.7%.

[00:01:22]For a closer look at the price action, let's bring in Bloomberg's Paul Dobson.

[00:01:26]Paul is executive editor for Asia Markets and he joins from our studios in Singapore. Can you help me make sense of what's been going on in markets?

[00:01:35]>> Hello there, Doug. I'm not entirely sure that I can other than to say as you said the market is swinging backwards and forwards on the headlines and trying to read the lines just like all the rest of us are on whether you know this kind of narrowing of the differences between Iran and US is real and that there is some hope that a resolution will come or indeed you know whether whether you should fear the worst and I think that you know it's felt like we're getting closer to escalation moment from the US based on the rhetoric that we've had all of this week. Uh in some ways I don't even know whether financial markets would take that as a particular negative. I think that something that forces the issue and gets us closer to an endgame and a reopening of the straight might be more welcome than the ongoing kind of stalemate that we have at the moment. And even that being said though, yes, you know, we have worries about inflation in the economy. We have worries about food production and fertilizer, but financial markets have more or less weathered this. Okay.

[00:02:40]Despite all of that demand uh destruction and um and and the lack of supply coming into the market. So how important and significant it is for the sort of short to medium-term pricing of other assets is still, you know, kind of remains to be seen a little bit. So let's stay with this theme of surprises because Japan's core consumer price index rose just 1.4% in April from last year that I believe was lower than every estimate in the Bloomberg survey of economist. What is to explain this? I mean, you would think given everything that we're talking about as it relates to energy and things commodity-wise that flow through the straight of four moves have been pushing inflation higher and yet we get a reading like this that seems very tame.

[00:03:27]>> Again, it's difficult um to pass that one. We did have quite a big jump in the producer price indexes for Japan not too long ago as well. and the government has been trying to find ways to moderate the impact um on the consumer. Um so maybe it's slow pass through rates of those costs into the economy. Uh that doesn't mean that it won't come eventually though. And I think, you know, while this may take a little bit of the pressure off the BOJ in terms of when it needs to hike, really all the signs are there that it needs to get on and raise interest rates and get the future inflation expectations under control because what we've seen at the back end of the Japanese bond yield curve has been rising yields. uh signs of concern that if the BOJ does get behind the curve, inflation will be hard to uh inflation and inflation expectations will be hard to control.

[00:04:22]>> And right now, I'm looking at a pretty strong rally going on in the Nikkay at around the level 62,870.

[00:04:29]But let's talk a little bit about what happened in the Thursday session in Seoul where the Cosby exploded. I mean, it rallied 8.4%.

[00:04:38]I think we're trading at record levels right now if I'm not mistaken. Is that right?

[00:04:42]>> Uh the Cosby just goes from strength to strength and uh well with global markets it had a little bit of a knock in recent days. Uh we're back up there again.

[00:04:51]There was quite a lot of concern about this labor dispute between Samsung and its workers and the pay that they were demanding and the on sessions that the workers were able to extract seemed pretty phenomenal. And yet, you know, the Samsung agreed to pay out all of this extra money, um, diluting the stock a little bit as well because some of the payment is in shares. Uh, and nonetheless, the the the shares of the company absolutely boommed higher. So, people were much more worried that they wouldn't be a or they'd have to stop production for a short while than they were about uh wage control at this at this moment. I think that's interesting because as we know, the the memory chips are such a cyclical product. um and we're in a real boom time at the moment and it's important to cash in but then if you lock in your future costs at much higher levels and there is a downturn then maybe that uh those chickens will come home to roost at some point. So um little bit of concern there. There was some other um uh boying news for Korea right at the end of the day yesterday.

[00:05:48]One local report was talking about the idea that a domestic pension uh funds may be able to increase its allocation to the home market. Um which would obviously give another uh kind of prop there. And so we're seeing kind of uh smaller uh companies within South Korea also having a good day today kind of uh propelling uh those gains right across all all the different sectors. So, in the New York session, we had word that the Trump administration is awarding a billion dollars to IBM to build a foundry for producing quantum computer chips. IBM shares were up 12%. What's the conversation like in the Asia-Pacific when it comes to quantum computing?

[00:06:30]>> Great question. I think that a lot of excitement across the technology sector and personally, you know, I I I think that there's a lot to be excited about just in the last 24 hours. You know, we have SpaceX talking about its IPO. Uh we have uh decent news from Anthropic from Open AI which is helping SoftBank really boom higher. Um and the comments from Jensen Huang where he's talking about other uses for um uh the chips and the technology beyond simply the AI programs, talking about robotics, talking about um realw world uses and and and that kind of thing helped propel different parts of the technology sector higher as well um yesterday. So I think you know there's there's a lot of reasons to be excited. I mean, this this is a far-fetched scenario, but you saw that in part of the SpaceX uh terms and conditions, Elon Musk would get a big bonus if there were a million people living on a colony on Mars. That's a real thing that's written into the terms. You know, it's not complete fantasy. Uh or well, maybe it is depending on your view, but I think the fact that we're speculating about the possibility of those kinds of things really opens up a lot of new and exciting um avenues. And that's why I think the market is performing so strongly. Um, people that are buying into all of these narratives and excitement. Um, yeah, pushing things higher.

[00:07:54]>> I guess I'm trying to understand what's happening with the semiconductor industry locally in China. It was late last year that President Trump announced that Nvidia could sell one of its most powerful chips to China. And there doesn't seem to be any evidence that Chinese customers want these chips. Is that to say that increasingly the semiconductor industry in China has been able to meet domestic demand well enough?

[00:08:19]>> Yeah, I I I I don't think it's a case of them not wanting them. It's more a case of the government not wanting them to have them. So small nuance there, but basically um the Chinese authorities haven't licensed uh or or allowed the sales of the Nvidia chips into the mainland because as you say it's so uh keen to get its own domestic stack established right across that supply chain and the best way to do that is you know to take a little bit of pain and be a little bit of uh be a bit behind and on a lag in order to catch up and potentially move faster over time and and the Chinese technology um innovation has been there. You know, we saw with Deep Seek um feels a long time ago now, but when that came through, that was really a a big wakeup call about the idea that China is finding ways to catch up. And I think that there's a lot of excitement about um mainland companies. If you look at the China X index, which is a little bit like the equivalent of the NASDAQ for China, that's at a record high. Um, and a lot of those companies have been really booming to the point where, you know, they look like they might be overheating a little bit. Um, but that's where really that sort of domestic ball of money and enthusiasm seems to have rolled at this moment in time.

[00:09:33]>> So, let me use another old saying, necessity is the mother of invention. I mean, it's possible if you're not able to access that cutting edge technology, let's say from Nvidia, it's a way that maybe Xiinping is accelerating the domestic semiconductor industry to get its act together and to produce maybe a chip that can rival the H200.

[00:09:56]>> Yeah, that's that's the plan. That's the long-term vision to be uh domestically independent. you know this idea that um Chinese and US technology and uh in other developments as well are kind of on two parallel uh paths um but without so much crossover seems to be uh something that that the both um administrations are very aware of and you know the US is equally trying to find alternative rare earth um production in order so that it can separate itself away from the Chinese supply chains there. So, um, yeah, I think it's a top- down push for independence and for domestic innovation.

[00:10:39]>> Well, it's interesting that you mentioned that because back in November, the Pentagon announced an agreement with a company called Reelement here in the US and the Pentagon offered a conditional loan worth about $80 million. This is part of the Trump administration's push to develop domestic production of rare earths. Uh, and it appears as though that deal is maybe a little in doubt. Officials who have vetted this company have raised doubts about Reelement's ability to scale the technology. And from what I understand, Paul, there are also questions over Reelement's long-term revenue forecast. So, this is another area kind of the flip side of the coin that we were talking about where China has a distinct advantage and it may take a while longer for the US to catch up.

[00:11:28]>> 100%. and and and I I guess the Trump administration has now made it very clear that it's fully aware of that and is searching all around the world for those viable alternatives. But China really does have an edge not in terms of just access to the resources, but it's also about those refining processes and how difficult it is to um you know isolate and the elements and put them into usable uh forms as well. And so um you know while China may be trying to catch up on the tech front, US may be trying to catch up on the rare earth front and there's other areas uh like biotechnology where there's also extreme competition. I remember three or four years ago now um maybe a bit prematurely we were writing about the idea that there was a bit of a sputnick moment. So that you know a new space race between uh the US and China for all of this sort of like technological developments. But that really does seem to be where we're at right now. And it's it's beneficial for both sides. And so, you know, in terms of uh it's spurring and fueling innovation and competition and that is really, you know, helping to propel the equity markets in both nations now higher.

[00:12:34]>> Paul, we'll leave it there. Thank you so very much. It's always a pleasure.

[00:12:37]Bloomberg's Paul Dobson. He is executive editor for Asia Markets joining from our studio in Singapore here on the Daybreak Asia podcast.

[00:12:47]>> [music] >> Welcome back to the Daybreak Asia podcast. I'm [music] Doug Krner. The Hong Kong Shanghai Hotels Limited owns and operates some of the world's finest properties under the Peninsula brand.

[00:13:03]The company has 12 properties in Asia, Europe, and the US. And we had the opportunity to catch up with the company's CEO, Benjamin Vot. He spoke with Bloomberg's Hustinda Almond from the sidelines of the JP Morgan Global China Summit.

[00:13:17]>> And these are really uncertain times as uh in the uncertainty of when the Iran war will end. We have fuel shortages. We have volatility in the forex space. I mean, how is your business being impacted by it all?

[00:13:32]>> Well, hospitality and particularly luxury. Hospitality is a very resilient business. We've been operating in luxury hotels since 160 years with the Hong Kong and Shanghai hotels and in fact the Peninsula Hotel in Hong Kong will be celebrating 100 years in 2028. Um I think the recent expansion of the Peninsula Hotels in Europe for instance with first our Paris hotel, our London hotel and our Istanul Hotel has been able to um give us different avenues to mitigate some of the geopolitical tensions that we have. So today we have 12 hotels, 12 Peninsula hotels around the world. 50% are in Asia. We're rooted in Asia uh in in Beijing, in Shanghai, in Hong Kong and in Southeast Asia or in Tokyo. And then we have um three hotels in in the United States and then now three hotels in Europe.

[00:14:19]>> So did you see a slowdown initially, you know, from the impact of the Iran war?

[00:14:23]Is it picking up now? What what what has been happening?

[00:14:27]>> There's no doubt that we we all the industry suffered some cancellations in March particularly. I think it was a result of less airlift, less ability for people to travel. So, you can't travel, you have to cancel your stays. Um, but we've seen now a ramp up particularly over the last 3 to 4 weeks um putting on on both from people being able to travel back to the original destinations that they have. Um, but also a bit of a shift of destinations. I think safety uh is very important for the leisure sector.

[00:14:56]Um, so Greater China has been a great beneficial of that. Uh we're seeing more people traveling into Hong Kong, even into Beijing and Shanghai. Uh and Tokyo has been incredibly resilient. Um and at the same time, we're seeing a bit of a sh change in the in the pattern. It's much shorter booking period, which forces uh our teams to be much more agile to be able to react to lastm minute decisions uh that impacts you know staffing, but it's also in fact pricing. But overall um I think we are able to mitigate now um the bump that we all suffered in in March, April.

[00:15:30]>> Are Asian travelers choosing to travel within the region now?

[00:15:34]>> Yes indeed. Um I think we're in China today uh in Shanghai and uh it's very interesting to see that u first of all there's a there's continued travel domestic travel within China. Our hotels in Beijing are are performing actually very well um combination of local but international. the the Chinese are traveling to start uh starting to travel again. Um Hong Kong, Korea, Bangkok are the top three destinations and we're seeing that they're traveling outside but not too far and safety is a big concern. Um so our business actually in Tokyo and our business in in um in Bangkok and Hong Kong has benefited from this uptick in uh in travel. And would you also say that luxury travel, luxury hospitality is pretty resilient despite the uncertainties and the challenges?

[00:16:21]>> Indeed. I think both from a a business travel and a leisure travel, the uh higher end segment is is more resilient.

[00:16:29]Um we're seeing in the luxury industry, I I I come from a luxury retail background. We're seeing a big shift from buying goods to buying into experiences. And luxury hospitality and the peninsula in particular is providing more than a bed. It's providing an experience. It's providing emotions.

[00:16:46]It's providing sharable experiences that uh really are are making our guests come back, can bring their families, bring their friends. And uh this segment has been much more resilient than the regular hospitality segment.

[00:16:59]>> The thing is when it comes to hospitality, men power is a huge issue especially for hotels. How are you coping with that and you know where are you seeing the biggest challenges in terms of uh the regions US, Asia, Europe?

[00:17:11]>> I think that um you know for for a company like ours um we provide careers to people. We we look after people very well and we provide a lot of of training. There's no doubt that there's a bit there will be a shortage in the hospitality world um in the long term because those careers have been suffering a little bit from a from an appeal. Um but it's for us >> 30% shortage in terms of men. I think there's a there's a statistic from the World Travel um organization that that says by 2050 there would be a there would be a significant shortage >> and AI can count for that.

[00:17:42]>> So I think it's it's there's two things that we have to do in the Hong Kong and Shanghai hotels is focusing a lot on that. First of all we have to make sure we continue providing great service to our guests. So with service you have to have the human touch. So we need to continue recruiting. We need to work with hospitality schools and create those careers for the young uh leaders of tomorrow. And secondly, how do we embark and how do we adopt AI to do some of the things that you know were done manually before but can now allocate this time to the frontline staff and create this relationship and those experiences.

[00:18:15]>> What do you see AI doing for you to to help counter the uh resources shortage?

[00:18:20]>> I think there's a there's very simple things which already are in place at the the peninsula and the group in general.

[00:18:26]um emails, email bookings, number of you know inquiries for emails. You you don't need to have someone now checking this.

[00:18:32]This can be very much automated. The response and the and the and the connection is done personally but filtering all this is a it's a huge um improvement um and pricing as well as making the experience more personal. Uh knowing better your your your guest thanks to data. Um I think is going to be a big shift. And even in luxury hospitality you can use data. You can use AI but then bring back the emotional connection, bring back the human touch and deliver exceptional service.

[00:19:02]>> And in terms of expansion, where are you looking at expanding within the next 12 24 months in in 30 seconds?

[00:19:08]>> We've we've just embarked into a strategic review. It's perform and transform. Perform is doing better with what we have and transform is how do we take the brand to the next level. Um we believe in Asia. We believe in great China and and Japan in particular, but I think Europe.

[00:19:22]>> So expansion will be Asia or So I think it's it's going to be a combination. We believe in Europe. Our guests want us to travel more to Europe and to get out of the cities. So more results, more branded residences, which is incredibly important for luxury hospitality. So more to come, but let's do better with what we have. That's a perform plan. And let's continue to transform. Let's take our guests to new destination. Let's create new experiences. And that's that's going to be something. That was Benjamin Vousad, CEO of the Hong Kong and Shanghai Hotels Limited, speaking with Bloomberg's Hust Linda Ammon from the sidelines of the JP Morgan Global China Summit, bringing you their conversation here on the Daybreak Asia podcast.

[00:20:04]Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the stories [music] shaping markets, finance, and geopolitics in the Asia-Pacific. You can find us on Apple, Spotify, the Bloomberg Podcast [music] YouTube channel, or anywhere else you listen. Join us again tomorrow for insight on the market moves from Hong Kong to Singapore and Australia. I'm Doug Krer, and this is Bloomberg.