tv Bloomberg Daybreak Asia Bloomberg August 19, 2018 7:00pm-9:01pm EDT
♪ we are live from bloomberg's asian headquarters, i am yvonne man, welcome to "daybreak: asia." the u.s. and china countdown to tit-for-tat tariffs. we will see billions of dollars of goods on both sides. washington is warned against further escalation. ramy: i am ramy inocencio in new york, it is just past 7:00 p.m. on sunday. markets set forth a mixed and muted start. traders looking ahead to the meeting at jackson hole.
elon musk says this is the way im and rejects calls for him to change and the way his company operates. ♪ ramy: good morning, happy monday. looking ahead to this week, the biggest events is what will be happening with the trade tensions and negotiations happening between the u.s. and china, we have low-level ministers from both sides, as well. they are potentially paving the possibly inmmit november. yvonne: everyone expecting that maybe not so much a breakthrough, if we can get some illumination of further tariffs. the u.s. has threatened more for
later in the year. we mentioned also jackson hole, the central bankers meeting on the break. it will be interesting to see jay powell, his speech, and how he will deal with the e.m. of volatility spikes we have seen, and what it will mean for rates. ramy: a lot of people will be reading the tea leaves to see where he stands on any possible tweaks to fed rate hikes this year. quickme, let's get you a recap of where the u.s. markets ended on friday. we can see because of the hope between u.s. and china, the talks later this week, we got a risk on bid, the s&p 500 up about a third of a percent, the highest in a week, led by real estate and consumer materials. the dow also seeing its highest in six months. in terms of currencies and commodities caught
a bid in the slightly weaker dollar environment. yvonne: we ended on a pretty positive note on friday for asian stocks, we are hovering around one year lows, and it has been a tumultuous august to say the least. let's look at equities. a mixed bag across the board. 50 flat in wellington. about flat. we have seen the e.m.-fx rebound. we're talking about the dollar, given the trade tensions that have eased, we saw the dollar have the biggest drop on friday. the dollar reasserting haven status. we have 100 1054 for the trade right now, and a little on the back foot here, we talk about
whether we have reached a watershed moment, seven seems to be a distant memory. renminbithe offshore -- reminiscent b. imposehe u.s. is set to tariffs on more chinese goods on thursday. beijing has promised to respond in kind. chinese officials will also be in washington this week for further trade talks. us fromsny joins washington. safe to say, i suppose, that the optimism is muted for any quick solution. ros: there definitely is optimism, but muted for anything happening this week. i think the best we could expect what isdout on discussed and what next steps could be. maybe we could get specifics on
elements they discussed, and we think there are four or five diggs ticking points in terms of trade -- big sticking points in terms of trade. it is certainly a positive that the chinese delegation is coming to talks for the first time in two months. i think, as it your guest in the previous hour talked about, certainly in the interest of china to look for a resolution, even though president trump in washington wants to look tough, i don't think they would be averse to some kind of resolution in the cards that makes both sides look good. ramy: really, also, one other thing to take into consideration house, theywhite are going through several days of testimony from companies and groups regard to tariffs. is there any chance they might listen? most of it is pushing back
against the tariffs. ros: that's absolutely right. we have identified 360 individuals from companies or industry groups that will testify over six days. ofis a pretty big chorus people saying please don't put the tariffs on, they are hurting our industry, everybody from the u.s. chamber of commerce on down. $200nk coming into the billion of tariffs, it is an inflection point, compared with that, the tariffs put on so far and the ones that could go ahead this week and probably will go ahead this week, are relatively small. but looking at $200 billion, it is such a large percentage, perhaps the chorus will get louder and the commerce department and through that, the pipeline going into the white house will get stronger. chemical industry components,
semiconductors, consumer goods, they will all be speaking in the next few days about what tariffs would mean to them. yvonne: joining in the course sk ceo.n the most -- mer let's take a listen. increases can also be passed on to consumers. we have seen other people speculate on impact on global trade, 1.2% of impact in the next three or four months. yvonne: he was saying the potential impact was saying it could be larger in the u.s. what are we seeing reaction -- in reaction from d.c.? ros: not too much so far, but it will be interesting to see the stock markets react and if president trump pushes back about the story. he has been very bullish on the u.s. economy, as you know very
interesting -- as you know. there he interesting comments about passing cost on to consumers. there has been a close watch on inflation in the u.s., it has been creeping up to the extent that wage gain turned a little negative. those are all factors, economists keep them in mind, and so do president trump's advisers, i am sure,. once again, it suggests that if there is a time to work on a solution and pullback from the abyss, now might be the time, but we just know. -- we just do not know. yvonne: thank you. meantime, let's get caught up with first word news. >> former -- a former cricket star has been sworn in as prime minister of pakistan. he has called on workers to
invest at home. enron has named a finance minister. he has said pakistan may need to find $12 billion to plug the hole in its budget. the malaysian prime minister has told china that investment in his country can help reduce the trade deficit. he admitted malaysia had previously borrowed chinese money and not repaid, and used it on unnecessary infrastructure. a rail linknded project and started an investigation into pipeline deals linked to a unit of china national petroleum. the turkish credit rating has been cut further into junk. the s&p says it expects a recession in 2019 with inflation to hit 23% by the end of the year. the overnight rate is 150 basis
points higher at 19.25%. they are trying to counter the lyricist slump without formally opposing moves by the president. tostic measures being made rescue an economy. the official rate will leap from about 280,000 to 6 million, and the government will try to offset the shock by raising the minimum wage to the equivalent of $30 per month in venezuela. people have0,000 been displaced and least 350 killed in southern india's worst flooding in a century. triggered,has been destroying homes and bridges and roads. the nearly 10,000 people still stranded should be rescued on monday. new tremors have hit an
indonesian island, cutting power and bringing down more buildings. quakegnitude 6.9 quick -- was followed by a series of aftershocks. person reportedly died and nearly 100 houses were severely damaged. quake struck there on august 5. day onnews 24 hours a air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ramy: one of the stocks in the spotlight this week is tesla again. shares plunged almost 9% on friday after elon musk had a cheerful new york times interview where he referenced tweeting while driving and taking sleeping pills. there are questions swirling about his health. >> many view this interview is
astounding. the ceo telling the reporter that the last 12 months have been the most difficult and painful of his career, and getting into some of these behaviors that have raised questions. ,f you take a look at the stock huge drop on friday, biggest drop in almost two years for the company. that is significant even all the company has been through lately. just to review what musk said to , he is oftener tweeting while driving, spending late nights at the office, taking heavy duty sleep do aation to be able to 120 hour work week. this has created a lot of questions, and arrieta huffington, a well-known political commentary are -- ian took to twitter
early sunday saying that musk's work situation is horrifically inefficient. perhapsrred to him 120ng a different way, that hour work weeks does not leverage quality. you cannot simply power through in that is not how bodies are built. many have said this could be a way for her to promote her new book. we looked at how the tesla ceo answered the tweet, he basically said he is not going to change his lifestyle or work style. he said "ford and tesla is the car companiescan to avoid bankruptcy, i just got home from the factory at 2:30 in the morning california time. you think this is an option, it is not." a lot of this will be discussed in the monday trading day on wall street. the question being what the
board response will possibly be. yvonne: how are they going to toe the line? a lot of ford members have personal relationships with musk, but they are facing calls for oversight. su: that's the question, how do you oversee the largest shareholder? he is an iconic visionary that is still widely respected. let's take a look at the big five-year chart of the stock, you can see this has risen to be one of the biggest momentum stocks on wall street. if you look at the last month, you can see the wild gyrations that have given pause to many, look, the sec to take a the question of going private. head for the company, they are inng asked to perhaps rein the ceo.
a question was raised in the friday interview on whether they were actively looking for a coo, our sources has said that not the case but they are looking to expand management. yvonne: thank you. still ahead, we are talking about turkey and trade tensions. whether a recovery is in sight for emerging markets. oil prices surging boost profits for australia's largest oil company. woodside petroleum's ceo joins us to stop about plans for further growth. this is bloomberg. ♪ this is bloomberg. ♪
million barrels of oil equivalent. australia's biggest oil company is pressing forward with development of two massive gas fields off of australia. joining us on the line from sydney's woodside ceo, peter cohen. -- peter coleman. great to have you here. last week, you were saying you don't see any upside just so far in terms of the u.s.-china trade tensions, but hopping quickly to the bloomberg terminal, it is interesting to see that u.s. lng exports to china have been falling ever since the start of this year. what specific developments are you looking for that will inform your energy and when this could be an opportunity for you? peter: it is a really interesting question, and i think we will see it play out. china has indicated they are considering putting tariffs on u.s. lng imports, they have not
been put in place yet. what it will do is drive buyers to look somewhere else. it is a time of uncertainty. recent times, they have been focused on the u.s. and this has changed. it is too early to tell. i think there are generally some positive things for a company like woodside, given proximity to asian markets. long-term, there may be implications on oil prices is the so-called trade were continues. in the short-term, maybe some positives for us. ramy: if i were an investor, i would love to know how well positioned woodside is, and australia is relative to competitors like qatar and russia. peter: that's a good question. often australia is talked about as a high cost area to produce. i think there is some confusion there. on the production side, we are
in one of the most competitive regions and the world, especially in western australia. on the capital side, we had the price explosion, cost explosion the last few years. to moveorking very hard these three massive projects forward that you talked about. ramy: one other thing in terms of locking in rig rates to make sure costs don't get overrun, hopping on the bloomberg terminal one more time for viewers, you can see the blue line is drillship rates that have been falling. are we at an inflection point for oil and gas prices? rigr: certainly for the oil ratio, it depends on the water depth. a lot of the rigs we use, they are what we call depth ricks, and the market will probably
remain suppressed for another 18 months. we are seeing early signs as we contract over the longer-term, five years or so, that the owners of the rigs are reluctant to lock in today's pricing. i think people are starting to see, maybe there is some horizon coming over the , which means for companies like us, which take advantage of the moment, we are well-financed, shareholders supported us at the beginning of the year with an equity rating. let's use the money we have wisely and make sure we can look in the current cost structure. yvonne: what does it all mean for lng prices? this type of lag on where lng does is run crude prices about three months or so. now that we have hit a four-month high for lng, could we see price momentum headed higher? peter: i think we are already. you are correct, the way the contracting works, typically there is a three-month lag in
pricing before we see it come through in revenue. what does that mean? investors can have some comfort as to how revenue forecasts will look like. when you look at the japan-korea market, it closed last week significantly above where it was at the same time last year for october delivery's. -- deliveries. that might be an indicator of what demand will be for the winter. we will keep our fingers crossed, it does not look like it will be any worse than luster from a pricing point of view. for the lng industry in general, for decades we have seen a lot of companies dominated with long-term contracts. lately, we have seen a series of shorter contracts of just a few years. what do you think is the rationale behind this trend and could continue? peter: i do think it will
continue. traded the average contracts or volumes you will see will be about 50% under long-term contracts and 50% under what we call short and medium-term contracts. that is changing. it used to be 80%-90% were long-term. it is changing because there is more liquidity in the marketplace. buyers are more confident they are able to get their supplies because there is more supply available and more shipping available. i think that is good, lng is becoming truly commoditized and traded. it means people can have some confidence, that they will have supply when they need it and conversely, that developers can get into the market when we need to. yvonne: do you see it as a signal that some of these buyers of lng are protecting themselves against a further rise in prices? peter: i think they are looking
at their own portfolios and the siding, particularly for our power generators. we have different options with respect to how they generate power. the terraooking at structure and deciding how much they want to look into the portfolio. to the debt side of the ledger. how much do you want and long-term bonds, how much in bilateral loans, how much in syndicated? it's not any different on the revenue side. ramy: peter, one thing also, eating back to those -- getting back to those developments offshore in western australia, to think this will drive more interest, more competition further and pushing competition--- competition prices higher? peter: you're talking about domestic gas prices in australia? ramy: yes. peter: not so much on the west coast.
at the moment,ow a fraction of the east coast, about one third. that is driven by the domestic gas policy western australia has has comeach project online, this is a plus, 50% of the project reserves coming online are designated to the domestic market. it is a little counterintuitive, au think you are developing new project, but more gas goes into the domestic market. yvonne: the second half still looking positive for you. as you invest in more growth projects, how do you feel about your dividend payout ratio at the moment? do you think it will be sustained at these levels? peter: we feel pretty good about it. we look at our capacity to pay. we pay on a ratio of underlying profit, but it is really about revenue and cashin-cash out.
models going of options overo have the next eight mounts -- eight months to two years. i think it's time we make one of those decisions, and we are able to push further out the point in time we might need to look at the dividend payout ratio. very comfortable with where we are at the moment, and with these prices, it is continuing to support what we have been doing. yvonne: peter, always great to have you. we appreciate your time. peter coleman, ceo of woodside petroleum. a quick check on the business flash headlines, plenty of all the earnings to tell you about. metals missed estimates. the average forecast of analysts was more than one billion, and billion also fell
short of the estimate of more than 7 billion. ae iron ore miner will pay dividend of 12 aussie cents per share. ramy: woolworths, a full net dollars fell u.s. short of the lowest estimate. same-store sales have slowed in the first seven weeks of the quarter. that is as consumers are adjusting to a ban on single use plastic shopping bans -- shopping bags. it expresses -- expects things to improve. yvonne: an ipo has a in applied for in new york. listed theacked firm offering of $300 million, that might he a placeholder and could change. about 17 million active daily users and 49 million use the app each month. ramy: next, malaysia's prime
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♪ yvonne: good morning. hope you enjoyed the relatively dry weekend we have seen in hong kong, we are the middle of a rainstorm this morning. looks like we could see a deal showers through the week. we are waiting on asia's first major market open. ramy: in new york, markets closed friday slightly higher, 3/10 of a percent higher. aboutwas some optimism the upcoming low level ministerial trade talks between the u.s. and china later this week. i am ramy inocencio in new york. yvonne: i am yvonne man in hong
kong. you are watching "daybreak: asia ." rosalind chin has the first word news. >> the u.s. and china are preparing for tit-for-tat tensions. an additional $16 billion will be targeted on thursday, and beijing has said it will hit back. thatina, the feeling is the tariffs are more about president trump trying to sort china's global power. separated by the war in the 1950's, hundreds of people met near the border. koreaorth korea and south bartered for the reunions. singapore's prime minister says his government will ensure the
cost of housing come health care and education remains affordable. he says that many people feel that incomes are not enough to cope with higher living costs. manynounced a new scheme, that will not happen for several years. plans to revoke the concession highwayompany that runs building in genoa, where a bridge collapsed last week. they must compensate the victims. news 24 hours a day on air and on twitter, powered by , andthan 2700 journalists analysts in more than 120 countries. this is bloomberg. yvonne: we have some major market opens, let's get to sophie real quick. beh of this week seems to friend on expectation of trade
talks and took these, -- it tariffs and jackson hole. there has been some pressure, and emerging markets might be in some pain after a rough week, s&p cut turkey deeper into junk. the e.m. index clocked its biggest drop since february. that backdropl, has pushed the indexes negative correlation with the dollar to the highest since august 2016. even after that pain, morgan stanley reckons at that price of stocks, bonds and currency have not fall enough for them to be attractive. checking in on futures, it's looking like it will be a mixed session at the start of the week that will bring earnings reports from alibaba and hp. we heard from woolworths and fortescue. china's earnings season is
kicking into high gear. china telecom. we also have taiwan export orders and the tight -- thai gdp. nudginghore yuan is higher after falling to a one year low last week. it could appear china is propping up the currency as it prepares to restart trade negotiations with the united states. ramy: it might appear so. looking at commodities, tariffs and turkey both were a double whammy in terms of demand. what is happening in the oil patch? sophie: going into this week, oil posted its biggest weekly loss in five, that's the biggest losing streak in about three years. more downside anticipated. hedge funds have cut their bets to the lowest in more than a year. crew demands from emerging economies could be dented and this year, the iea anticipated that the space would take up
three quarters of total global demand. with jitters around turkey, that is being weighed. there is a potential indicator in crude spread. check out the chart on the terminal. this is the difference between a brent, contract in positive and negative. you can see the print spread is below zero, indicating a bearish signal for the markets. ramy: ok, thank you very much. staying with china, china's financial watchdog has ordered banks and insurance companies to wrap up support for -- ramp up support for infrastructure development. this comes as concerns rise u.s. a trade were with the tom mackenzie joins us for more. china's policymakers turning to a familiar strategy to promote growth schemes. tom: certainly, this has been
building the left few weeks, the -- the last few weeks, that they are using this lever they have used before, juicing the economy by reducing ever structure spending. -- by increasing infrastructure spending. regulators saying the financial sector, banks and insurers, to make sure credit and funding is going to viable projects, infrastructure projects. if you bear in mind, for example, infrastructure spending is about a quarter of the level so far this year compared to 2017 and that the fixed asset at the slowestow pace in 2018 for almost two decades and policymakers would point to those and say there is room to maneuver. bankslso stressed that are going to export oriented
sectors and the agricultural sector. it seems the trade war is on the minds of policymakers. vice president of the national reform commission must we can he said the biggest downside risk for the second half was this trade spat with the u.s.. he said he was still confident the gdp targets they had set themselves, about 6.5% by the end of 2018, will be reached. this is the pool and arsenal to support growth. yvonne: a busy we can in china, we have the malaysian prime minister. he sat on a panel with alibaba's jack ma. has the prime minister been able to persuade chinese business executives they are still welcome in malaysia? tom: that was a big focus for the malaysian prime minister, reaching out a hand to chinese entrepreneurs and businesses after he launched reviews in malaysia into major chinese projects, a rail project and a
gas pipeline backed by one of the major oil and gas explorers and china. to say malaysia remains a positive environment for chinese investors. the fact he took to the stage with jack ma, the most high-profile chinese is misleader, was -- business leader, had some symbolism as well. take a listen to what he had to say while he was on stage on sunday in beijing. >> [indiscernible] can actually reduce the deficit through investments by chinese companies. we welcome your investment in malaysia. tom: the malaysian prime minister addressing china's deficit with malaysia. large -- theyt a
export a large amount of goods to china. they're saying of china sets up investment, they could address the deficit. the trade is worth about $92 billion and malaysia is china's in the trade partner region after vietnam. this is an important relationship and a big focus for the malaysian prime minister was to do outreach with chinese investors and say we have reviews ongoing to ensure we don't take on too much debt, but equally our doors are open to what they would describe as a rational and sustainable chinese investment. yvonne: certainly more of a welcoming tone from the prime minister given some of the criticism he has had a some china backed deals in malaysia. tom, thank you. tom mackenzie from beijing. the world's biggest shipping company says the u.s. economy will be hit many times harder than the rest of the world by an escalating global trade war.
says they-maersk ceo have not been heavily affected. four volumes, pretty much no impact. the tariffs on steel and aluminum is not really impacting us at all. what is important for us is what happens to consumer goods. there we have not seen anything but threats at this point. judge what the ventral impact will be because global supply chains are truly fragmented and complicated. there will be substitution effect, so that if tariffs go up from one country, the first action will probably be to source the product from another origin. of course, parts of the tariff increases can be passed on to consumers. other people we have seen speculate on at the impact on .2%, .3% impact in
the next three or four months. impact,ly quite limited but if the situation escalates and we get to $200 billion or $500 billion worth of goods impacted between the china -- between china and the u.s., it will have an impact. ramy: let's do a quick check of the latest is this flash headlines. when china resources power, they expect to resume trading later monday after agreeing to sell coal assets for repayments on those it may 2 subsidiaries. the deal for china resources coal involves a nominal one yen and $1.5 billion in paris to a third. trading was halted friday pending the announcement. shares are down 1.5% this year. yvonne: an insurance company denying it is looking to also do
string of luxury hotels. the wall street journal says they will offer a portfolio of high end properties that cost about $5.5 billion in total in 2016. a spokesman said the report is pure market speculation. chairmanan age groups has promoted to family members, tightening the families control over the embattled chinese conglomerate after the sudden death of a top executive. his son is now deputy ceo in the nephew has become the groups cio and executive chair of the investment unit. they have been selling off assets, trying to tackle a debt pile more than $85 billion at the start of this year. yvonne: just ahead on "daybreak: asia," investors may say it is too soon to get back into em, and we weigh in on the risks. this is bloomberg. ♪
,"my: this is "daybreak: asia i am ramy inocencio in new york. yvonne: i'm yvonne man in hong kong. taking a look at how futures are position this morning. look to be on the positive side, about 154% up. we have been watching some -- about 1/5 of 1% up. we have been watching this liaison office. there will be in office established in the industrial comics of north korea this month. according to u.s. officials, it might violate u.n. and u.s. sanctions. there could be growing tensions in u.s. and south korea as the two koreas try to pursue a piece treaty. -- a peace treaty. the leaders are set to meet next month. suppose weway, i
should not have expected everything to go extremely smoothly here. the south korean president, harkening back about 20 years ago to the sunshine policy. it seems to be a branch toward north korea to establish something, but it is interesting to see if this is indeed true, occlude -- according to newspaper reports, and the u.s. might need to take action. it could violate not just u.s. rules but united nations rules. this could impact south korea supply of energy, construction materials and technology equipment. yvonne: that's right. it's coming at a time when south korea, we are seeing more foreign investors getting back into the market, the year of ethics rebound helping the -- e.m. fx rebound helping the currency. what is going to happen given the geopolitical tensions simmering to the surface.
that's look at how asia futures are set up. ramy: taking a look at the board, it seems like a mixed picture. nikkei futures down a little more than 1/10 of 1%. you can see the asx looking positive. 4/10 of 1% higher for sydney. perhaps seeing an effect from the u.s. market, the s&p 500 up about one third, the highest in a week. yvonne: a lot of talk about when it comes to the u.s.-china trade talks happening this week. jackson hole this week. as we look at what jay powell inl say about this roiling emerging markets. let's look at the business flash headlines. saying he won't take a different approach despite calls for him to change the way he works. arrieta huffington wrote a letter accusing him of inefficient use of human energy, something must rejects. tesla shares climbed 9% on
friday after a new york times interview in which musk described the past 10 months as the most difficult and painful of his career. ramy: jack dorsey says while online abuse is lamentable, any attempt to block social views would block power of social media. dorsey spoke one day after president trump tweeted that social media discriminates against conservative views. yvonne: the first hollywood film and a quarter century with a largely asian cast is topping the box office. "crazy rich asians, raked in $26 billion, helped by heavy advertising, good reviews and
♪ ramy: welcome back. now for a look at some of the stories trending across the bloomberg universe. first, a story about public outrage at italy's benetton family following the genworth -- jenna what bridge collapse. genoa bridge collapse. -- check out the stories online or on the terminal. emerging-market assets fell for a third week as investors adjusted turkey's vowed to avoid capital controls
and restart trade negotiations. the lira fell to a 13 month low. we have seen currencies rebound in the last few days. cavenagh, executive director and head of the e.m. fx strategy at j.p. morgan chase joins us. can we say that ian has turned a corner? -- e.m. has turned a corner? potentially too early to say that, you have to be picking and choosing your battles in the em space at the moment. as you said, it has been quite a volatile time for emerging markets the past month. there are some tentative positive signs starting to come through. the u.s. and china are talking about trade again, which is a positive issue. we expect more china stimulus to be coming through as well. i think those are the important things investors will need to be watching from an emerging market perspective, particularly as we
tried in navigate between now and the end of the year. yvonne: what is key for you to determine whether asian currencies have seen the worst of it? you mentioned about king dollar inht now, there is a wrapup chinese stimulus to keep asian currencies supported. jonathan: that's right. i think the key now is a number of factors. we need to see the china stimulus coming through. that will put a floor under china nominal growth and in turn have a positive spillover affect for the rest of the region, particularly when we are uncertain as to what happens with the trade issue. the second thing i think needs to happen is we probably need to see a little bit of a slowdown in the u.s.. there are tentative signs that is ari starting to happen. last week's philly fed survey was showing a sharp slowdown, but probably not enough evidence
that the market is getting confidence that we have seen a peak in the dollar. that's where we are at. ramy: i'm glad you brought in the dollar. hopping on the bloomberg terminal, i want to show you the terminal library, this is called "dollar woes," the negative correlation with the dollar is at its highest since 2016. where do you think the dollar is going through the end of the year right now? we've had a lot of guests changing their minds, going from thinking it will be bearish too bullish now. jonathan: i think that is the critical issue, as you say, it has some hallmarks, where we have seen periods of dollar strength in the past. the u.s. has looked strong and the rest of the world has had a number of issues where investors have not really been comfortable, especially investing in emerging markets. fairlyisks, we have a
from dollar environment between now and the end of the year, that the case can be made -- but the case can be made that the u.s. story is not as strong, so we don't see as much u.s. exceptionalism as in q2, and investors will start feeling comfortable moving against the dollar but we are not there yet. ramy: switching from the u.s. to china, we are seeing some strengthening over the past few days, on the order of less than 2%, 6.83. or do youe of 700 us think -- the time of seven behind us what do you think this is a break? jonathan: it's difficult to see 7, theing to 6.9 5, intent from china has been that they want to see stability in the currency.
to really get a floor under the chinese currency, we need to see the fiscal stimulus coming through, but beyond that, the market focus is very much going to be on trade tensions, it certainly now we are in a fairly strong consolidation the risks we push in the short-term have diminished significantly compared to 34 weeks ago. -- three or four weeks ago. yvonne: does that mean for central banks in asia but they are done tightening for now? have we approach levels that are attractive to you? what could you be adding? added thewe recently a currency iny -- an overweight position. it has a strong structural account surplus. the domestic economy is doing better. there is a risk the bank of thailand could raise rates in the second half of the year.
it is not at risk for pretensions like some of the other -- trade tensions like some of the other currencies. that's why we have it dipped our toes back into that water. ramy: jonathan cavenagh, we will have to leave it there, head of fx strategy at j.p. morgan straits. we have alert across the terminal, the u.s. has rejected a turkey bid to tie the release of the pastor at the center of the saga to sanctions. are trying to tie that to a turkish bank facing billions of dollars of u.s. fines, it is also taylor until the pastor is a free, according to a senior wall street -- senior white house official, quoted by the wall street journal. yvonne: no it inside just yet to the turmoil, despite the
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show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. >> top stories this monday, twitter is looking ahead to the fed summer camp at jackson hole. tears are a concern. merits one against further escalation and says the u.s. will be the big loser in any trade war. bloomberg's headquarters it is just past 8:00 p.m. on a sunday. struggling hna shakes up management as he tie-ins his grip. his son and a nephew when rapid promotion. on bonds denials
insurance. reports of a mouse hotel sale are "pure market speculation." yvonne: looks to be a busy week here, not just when it comes to the china trade talks, but how jay powell will us -- respond or address the volatility we have seen in e.m. when it comes to turkey, china as well. a lot hanging on investors minds. as we wrap up a pretty tumultuous week. we will see how things go. ramy: we will probably start a new one, especially what this happening with trade tensions. we will see if there are any centralat he and other bankers are saying and terms of what happens with trade tensions and rate hikes. a lot of us have been talking to guests, we have come to the
conclusion that jay powell perhaps does not care what is happening in p.m.. it is definitely from the -- em, it is definitely from the outside looking in. everyone hoping he will care and terms of dollar, and em markets. yvonne: bond markets are waiting for a signal as well. the open is a mixed bag so far. sophie: we are seeing some caution at the start of the session. nikkei 225 looking changed. the yen has gotten it safe haven back. as you were just pointing out, given the concerns over the em outlook, there is a question about whether or not that might deter the fed for moving forward. this morning we got a report that the trump administration has rejected turkish efforts to tie that release of the u.s. turkish bank,ajor which is facing billions in u.s. fines. we are seeing the lira check
back six above use. eye onalso keeping an the earning space in sydney. we have a slew of reports you out. we have the asx 200 looking a little changed as we wait on those. we have tribeca investment thing aussie stocks are looking incredibly expensive. the economy is not needing the high. checking in on potential movers. we will keep an eye on this. the supermarket operator does see sales momentum improving 1.7%. this is by posting a 58% drop in profit. iron ore is putting a squeeze on prices and that has been punishing. that minor is advancing to produce a higher quality product. some optimism for 60% iron content in 2016. watching samsung slightly under pressure.
they are expecting a 16% to 25% drop compared to 2018. we are seeing samsung come under pressure given that trust we are seeing with the united states against other major chipmakers. ramy: the stocks to watch as we --k to the market open market asian open. let's get the first word news with rosalind chin. rasalind: reports from washington say the administration has rejected the attempt to tie the relief from the americans major turkish bank facing huge fines in the u.s.. ancora has been told all other issues are off the table until he is freed. financialggered a crisis in turkey with u.s. sanctions helping to push the lira to record lows. pushed ratings have been lower by s&p ratings and moody's. s&p's expect a recession in 2019 with inflation to hit 22 percent
by year end. ancora stop banks from borrowing at the repo rate, forcing them to use the overnight rate, which is 100 50 basis points higher at 19.25%. the lirachina counter slump without formally hiking. a move opposed by president erdogan. venezuela is taking drastic measures to rescue its failing economy. the official rate will leave from about 280,000 to the dollar to 6 million and the government will try to offset this by raising the minimum wage three point 5000% to the equivalent of $30 a month. inflation is already seen at 1,000,000% this year. more than 800,000 people have been displaced in at least 350 killed in southern india's worst flooding in a century. storms that began earlier this month have caused landslides and destroyed homes and bridges. officials say whether conditions have improved considerably and
the nearly 10,000 people still stranded should be rescued on monday. tremors have hit the island of lumbar, cutting power. the 6.9 quake hit sunday evening and was followed by a series of aftershocks. the disaster agency said one person died and new be hundred houses were severely damaged. a magnitude seven quakes -- struck, killing 460 people. local news, 24 hours a day on on twittertictoc powered by more than 2700 journalists and analysts in more than 120 country. further $16 billion of chinese goods will have tariffs on thursdays. beijing promises to respond. the two sides meet in washington this week for further trade talks. seniort to our bloomberg editor jodi schneider. any hopes of a breakthrough this week? di: this is the beginning
of talks. this is not cabinet ministers, it is not the top people who we have had these talks with before. we are seeing -- under the secretary treasury, we are seeing the vice congress minister from china. it is starting to talk about talking. the hope is that there will be some kind of truth and that we won't see the tariffs tightening. already seen $34 billion in tariffs from the u.s. take affect. we are expecting to see another 16 billion take affect this week. the question on the table is, what about the 200 billion more that the u.s. has threatened in retaliation from china? be the that seems to nuclear option. we have been listening to ceos who say this is a bad idea using tariffs. do you think companies do have the year of the president this time? be more seems to
political determination on president trump's part. he has heard this from members of congress and his own party that this is a bad idea. he really seems to want to stick with the political rhetoric of torica first and china needs come to me to negotiate. i think it is really more about the politics. of course the economy starts being hurt and that could have theffect because he has use fact that the economy is good under him as a talking point. we have not really started to use that -- see that yet. it looks like it will be politics that affects president trump rather than what he sees from the ceo. that chinese delegation is in washington as the new round of tariffs kick in. a little bit of stick your comment are you expecting progress to be made -- stick here, are you expecting progress to be made? jodi: if they can have a truth, they can lower the temperature and they can talk about what do we need to do to get to some kind of an agreement.
this is preliminary and it is an important signal that the chinese delegation is coming to the u.s. that is what president trump wants to see. this will set the stage for what comes next. this could well lead to further talks. schneider, our bloomberg senior international editor. more on how trade tensions will play out when it comes to markets. let's bring in the regional cio from singapore. good morning. tell us what is priced in at the moment when it comes to these trade talks. do you think the president is looking to cut a deal before midterms here and let markets surge, or is that a sense that he will not given unless republicans get the fetid? -- get defeated? kevin: there is quite a bit of politics in play. i don't think you are likely to see a major breakthrough until midterm elections. the next couple of months will be quite vital for us. if the 200 billion in extra
tariffs goes through, you will see the markets hit. i do think that the markets have totally priced in what is going to happen in september. china's reprisals are coming in as well. was a prettyweek brutal week. how should we be viewing risks at the moment. is de-risking still the strategy? kelvin: yes. probably the thing at the moment. what is happening in turkey and with the u.s. china trade tariffs. aren't think the markets likely to go on a risk trade anytime soon. given the fact that we're currencies are concerned you are still seeing a lot of volatility. has theish lira potential to actually spread some of the contagion back to the rest of the emerging markets. whether that is justified or not that is something different
altogether. i do not think likely -- markets are likely to be on a risk on trade anytime soon. notes, iting at your says don't do much of anything. you basically summed it up. see that said, you still upside looking to the second half for global markets with this great tell me more about this -- this. tell me more about this. low.n: valuations are tariffs have not really impacted the global economy on a major, major area. if the 200 billion in september actually goes through, we are likely to see big revisions to gdp growth -- growth globally for the 2019 global economy. at this point in time, the tariffs are not impacting negatively on global growth. maybe 0.05%. inrefore, at this point time, there is no need for panic. but if it goes through, we are
likely to see big revisions then. earnings will be hit where a global equity market is concerned. ramy: everyone is trying to figure out when those ripple effects will try to bite. we are not really seeing them yet, maybe a little bit in export numbers here or there. in terms of supply chain, looking at that, what are you looking at that investors should be aware of with regards to u.s./china trade tensions/trade war? kelvin: i think prior to the outbreak of the turkish lira situation there was a situation from north asia to southeast asia because of the fact that, for some of the southeast asian markets, the philippines, these are consumer-oriented economies. good havens.ty unfortunately, with the outbreak of the turkish lira situation, that is a huge threat to indonesia and the philippines.
biggerre some of the negatively impacted currencies in this part of the world. at this point in time there is no shelter for anywhere for asia concerns. you have exposure to the global trade situation. in southeast asia you have the situation of the current account deficit currencies. unfortunately we can't the straight away from this. japan is good bargains right now. this is actually cheap relative to its historical valuations. yvonne: given what we have been seeing with divergence between what china is doing and the u.s. is doing, u.s. stocks are relatively unfazed by the trade rhetoric trade china going the opposite way. the you think this route is overdone, and at what point will we see an inflection point? overdone, is clearly that is because of the fact that in the u.s. we are looking at earnings growth of 20%. it is also by the fact that you
had the reforms coming through. next year is a different story altogether. next year you will see growth coming down from 22% to six percent to 8%. you're talking about potential rotation out of the u.s.. next year is likely to be the year that that actually happens. you are looking at asia growth anywhere between 10% to 12% on a conservative side. that will be a lot more attractive than u.s. equities in that sense. ramy: hold on there. we will continue our chat and nymex block. in that block we will be talking more about how turkey tensions, as well as emerging-market woes could play out for global central banks. that as we look ahead to leaders gathering in jackson -- jackson hole, wyoming. yvonne: later on after $.10 disappointing quarter with alibaba -- would alibaba fare better? more on china's tech sector woes ahead. this is bloomberg. ♪
ramy: this is "daybreak asia." i am remy innocence you in new -- i am ramy in new york. yvonne: the july meeting will be released this wednesday as central bankers gather in wyoming. -- will this be a game changer for the fed? >> it will be a key talking point. it is the official end of december for bankers. typically what we have big announcements in the past. certainly on fed policy. what jay around it is powell is thinking about the em terminal. is he concerned that our effects for fed policy. does he think the trade disputes will have affect on policy. fed broadly projected in
november. much less certain will they go ahead in december. a lot of question marks and interest on jay powell's speech. ramy: the ecb is particularly worried about global growth. is there a chance we measure anything at all that changes the very clear policy path we have. the drug is already laid out the next -- that he has laid out over the next year and a half? mike you mentioned, keeping interest rates at their record low until mid-2019. at least it is an opportune time to hear from him on just how he thinks the situation in turkey, the situation in italy is interacting -- impacting the ecb. trade disputes between u.s. and many key trading partners around the world, and the broader em volatility. china's slowdown, how all of
that is playing into the ecb thinking. certainly potential for him to flip the script, but there has been a lot of thoughts. there could be new crown coming from that front. ramy: bloomberg chief asia economic correspondent enda. still with us in singapore is kelvin. he is global wealth management regional cio. let's talk central banks looking at of jackson hole. jay powell said he does not care about what happens to em. when should he start? kelvin: i think the recent volatility, he needs to be looking at things closely. because of the potential for whatever is happening in turkey right now is actually impacting the european union itself. with the ecb is concerned, they are in a dilemma. this point inat time trading the way it is against the u.s. dollar, it is a great opportunity to come out with a solid policy and stop qe
by the end of the year. that will not hurt them with regards to the currency. with regards to exposure to turkey, you have to take a second look at that because of the fact that, if there is impact within the european banks, and there is a potential that lending could be affected, therefore potentially slow down the economy in 2019. there are some decisions ecb will have to come up with by the end of this year. they will give an inkling of that at jackson hole. already thatoo bad something needs to be changed in terms of what is happening with turkey, or is this still a wait and see mode? how bad does it need to get before folks at the fed and ecb says, listen, we have to do something now? dovin: i think they need to something right now. i do not think they can afford to wait due to the fact that this is an opportune time for turkey and the u.s. does not seem to be ending. therefore, were monetary policy is concerned, they need to
articulate policy and they need to be able to be flexible, giving themselves room to maneuver. if this escalates and prolongs time, and itof seems to me it has. yvonne: what do i to hear most from jay powell on friday? kelvin: i think in regards to where he thinks. think if you have this escalation of the tariff disputes between the u.s. and china, there is a really risk -- a real risk that it will come off. the u.s. economy is very dependent. how it will -- how will impact the u.s. economy going ahead? give clear escalation on where he thinks the u.s. economy will be infected were headed for if this dispute goes on. you have seen and heard from many ceos and economists that the u.s. economy is likely to be worst hit if the trick is to
actually escalate. we have seen it actually happening. powell needs to be very clear on how he wants to articulate that at jackson hole. how the u.s. economy is going to be ambiguous about it. yvonne: when it comes to the bond market, we are looking for clarity in this tight range for a couple of months. given trade tensions of geopolitics, yield is taken lower from here. is the yield curve debate still going to be further flattening, or do you think we could see any kind of breakout. ? kelvin: i think that is going to be disputed by what people think will happen to the global economy in the future. we have our 10 year yields impacted at 3% for next year. then you see the rates actually being volatile, ranging from 3.1 to 2.8. that is likely to be the range for the treasury yields to be trading at.
it is not going to deviate very much from that. i do not think you can use the views as an indication of how the economy will be functioning next year. if there is further risk aversion, you are likely to see yields come back a lot more. this will not be an inkling of how the u.s. economy is going to do in 2019. ramy: moving along back to your region. in terms of central banks, who is doing get best in terms of what is happening with global trade tensions? who do you say, those guys in that country are on top of things? kelvin: i don't think anyone has reacted to the trade deficit at this point in time. i think we will all be watching what the central bank does in october. clearly in singapore you have a unique situation going on. backave inflation coming up. at the same time you have the economy slowing down in the second quarter. how is central going to position the currency?
the singapore economy is not managed by interest rates, but by the economy itself. it will be interesting to see how the central bank in china goes forward. that has the ability to lead the market on to what these other central banks are likely to do. in this region we are seeing a slowdown of economies going forward. the lesions numbers last week were off the mark were the market exhibitions were so-so. ramy: we will have to leave it there. ubs global wealth management regional cio. thecan get a roundup of stories you need to know to get your day going in today's edition of daybreak. toomberg subscribers can go their terminals. this is margaret. ♪ -- this is bloomberg. ♪
79 million u.s. dollars. the average forecast was more just onebillion you billion. if fell short of the average estimate of more than seven. the iron or will pay a final dividend of 12 aussie cents per share. yvonne: a for your net income of 1.27 u.s. billion dollars fell short of the lowest estimate. shares were down the most since august of last year. going into the first seven weeks of this quarter as consumers abandon plastic you shopping bags. expect sales momentum's to improved through the second half. ramy: china resources expect to resume training -- trading after paying call asked minutes -- call aspects. the deal for: three of its units end plus moreinal them $1.5 billion in payments to a third dollars -- third party. shares are down 1.5% this year. coming up in just a moment, it
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yvonne: 8:30 in singapore. the opening of trading. i am in hong kong. ramy: i am in new york and you are watching "daybreak asia." let's get the first word news with rosalind chin. rosalind: the prime minister malcolm turnbull is under pressure to keep his job after his government slump in a new opinion poll. he could face a challenge from peter. they trail the labor opposition 45% to 55% in the first poll released on monday. he is facing a lawmakers were of
old array key energy policy. the u.s. and china are preparing for new tit-for-tat tariffs with trade tensions escalating rapidly. washington will target an additional $15 billion of goods on thursday. beijing has already said it will hit back. the ceiling is growing and china and tariffs have less to do with a trade deficit and more with president trump's desire to -- a blip -- a big global power. hasysian prime minister told china that investment in its country can help reduce the trade deficit. haddmitted malaysia previously proud chinese money that it could not repay and used it on unnecessary infrastructure. they have suspended the $20 billion east coast project and investigation into pipeline deals link to the unit of china national petroleum. >> when the malaysian government borrows money to build infrastructure that it cannot afford, that is not going to give any returns, then of course
that is not good. we are not against chinese companies, but we are against andowing money from outside having projects that are not necessary and are very costly. rosalind: the two koreas are holding a rare week of reunions for family separated by the war in the 1950's. hundreds of people have signed up near the border. some having had no contact at all since the fighting ended in 1953. they have visiting residents or contacting them without permission. this weeks or reunions comes after a three-year halt caused by the north loop miller -- north nuclear tests. the prime minister of pakistan vows to stamp out corruption. he also called on workers to invest at home and send remittances to help boost fallen reserves.
already said pakistan may need to find $12 billion to plug the hole in its budget. global news 24 hours a day on oc on twitter,t powered by more than 27 hundred journalists and analysts in more than 120 countries, this is bloomberg. yvonne: let's look at your markets. looks to be a little more green on the screen with the exception of japan. what's look at stock movers. sophie: look at japan. they are sliding by 10% and set to snap they today rise falling below ¥11,000. that was the offer price to take majority control of the company. been's trading company has boosting their holdings in the country's biggest convenience store to diversify away from their struggling commodity businesses. over in sydney woolworths has fallen the most since february after sales slowed from 1.2% compared to a 4.9% rise in the previous year. the stock is let for that -- set
for the lowest slow. we are boosting it, the health care player is charging acquisitions this year as it attempts to navigate trade concerns that will see if the costs continue to rise. last thing i want to highlight, one investor in seoul, that is green across cell building with a 30% jump. this after a brain tumor treatment received orphan drug, that is from u.s. fda. the recent date have pushed green cross sell that to able highs/ . ramy: meantime, the chairman of group hasbt laden hna promoted family members to keep positions tightening his own families control over the conglomerates. let's discuss this move with bloomberg conglomerates -- conglomerates editor. is this a sign from hna's leadership? david: it is certainly a more transparent move them we more --
family sometimes he from hna. it is almost a sliding scale of judgment how we look at these things. to family members might raise some concerns, but in this case it does show that the company is moving into a place a very important role of the executive untimely death them it's all these negotiations to sell off their assets. i think it does show that the company is in control and that these are executives in the company. they had significant roles already. by giving in this -- giving him this formal title, they are taking active steps to help the ceo adam take care of all these asset sales. investor should there be concerns about the corporate governance of that perspective? there should be objectively. again, this is hna. this is a company that has a
long history of obscure ownership. the question of who is actually running the company has never been really clear. it has never been crystal clear. are appointingou family members to high-level positions and consolidating family control, one thing to keep in mind is that daniel chen was a vice general secretary of the charity that owns the largest stake in the company now , including the stake that was transferred from the executive that had the untimely death. this is a case where a company is being controlled from the small locust of power. that is always a corporate governance concerned. especially after this company emerges from all the asset sales and if and when it does complete its restructuring, that will certainly be a question that investors will be looking at. yvonne: h&h sold off its stake in hilton hotel, what about its
other profited -- properties? dave: it is getting out of the hotel business rather quickly. iny still have a small stake the spanish chain hotels. radisson, carlson, they have sold all those off so they are getting out of that business rather quickly and they have managed a successful exit. yvonne: our bloomberg conglomerate editor dave mccombs joining us from tokyo. following hna's announcement selling off radisson hotels, china also looking to unload its portfolio of luxury hotels. let's bring in bloomberg news editor who joins us here from beijing. that's -- this looks like the trouble insurers latest attempt to raise some much-needed cash. that has mentioned hna relinquished and sold off all of its hotel assets rather quickly to feel -- to fill that debt
hole. they have proceeded a little bit more slowly with its selloff, seizedy because it was by the chinese government, which injected $10 billion into the company earlier this year. it seems a little bit less imperative. they have been taking their time. this would be the biggest international deal or selloff that they would have done so far. mostly it is been focusing on offloading some of the more local in terms of chinese assets, so this would be a change of pace. yvonne: we're talking about an entire portfolio of 15 hotels worth 5.5 billion according to the wall street journal. what hotels are included, does that include the waldorf as well? .mma: that is right five and at -- 5.5 billion when they brought the -- bought the portfolio.
it does include that iconic property that is often with waldorf-astoria, but also overlooking central park and the essex hotel in manhattan and. we have intercontinental in chicago and other u.s. cities hotel in jackson hole. a number of quite significant luxury properties that could be out there being shopped around. of -- aport for the oil portfolio of this size, who would be able to buy? a very chunky portfolio. provided they wanted to keep it relatively intact, you rules out a lot of much smaller buyers. analysts at the journal said that it would only be sovereign wealth funds, or really being private equity firms. i guess big hotel chains like marriott could potentially be interested, but that could raise competition issues. maybe they would like to pick
ramy: this is "daybreak asia." i am in new york. yvonne: i am in hong kong. a quick check of the business headlines. elon musk said he will not take a different approach despite the morning to change the way he works. arianna huffington accused him of out dating inefficient use of human energy. some say they must reject.
shares plunged 9% on friday after a new york times interviewer must describe the past 12 months of the most difficult and painful of his career. app: chinese news and video has filed for an ipo in new york said it saw a sevenfold rise in revenue. the tencent firm listed its offering size as 300 million dollars, but that may be a placeholder and could change. it means fun headlines. it has about 17 million daily active users and almost 49 million people use the app each month. bought sayster online abuse is lamentable. any attempt to block content based on political or social views would have concerns about the power of social media. he told social -- he told cnn platforms can keep changing because of being judgment till. he spoke one day after president trump tweeted that social media discriminates against conservative views. tech will be in
the spotlight with results from alibaba. after soaring from 2016 to the middle of last year, alibaba shares have been treading water for 12 months. that amid concerns about expenditure and other big picture worries. in the meantime, smart phone maker xiaomi has had a rough ride. joining us now is frost and for asia-pacific information and communication technology. good to see you here. get us up to speed with where you think chinese tech is right now, especially after we got through last week with tencent. i think chinese tech companies are facing a struggle. if you look at tencent, one of the biggest challenges was the media. the game industry is generally a hit more than miss. if i look at the other two, bigh is alibaba, the
challenge for both these companies would be how they are doing outside of china. chinare pushing outside which counts more than 30% of the revenues. looking at howy alibaba is looking at that. one of the big challenges for xiaomi has been how did they look beyond china and the emerging markets? what exactly would be -- outside of india? what of the emerging countries are the target? ramy: let's focus in more on alibaba. bloomberg intelligence is forecasting a sales growth of 60%. margins are expected to fall. a part of this because of the new retail strategy. basically going online to brick-and-mortar again. how much of an impact, how much should they really be doing this? basically, is the benefit outweighing the cost in the long run?
ajay: i would look at it the other way. ,here might be pressure especially if you look at the recent strategy expanding. looking at the converge retail, which is a mix of the only china retail which is a mix of online and off-line. you look at supermarket, what they have done is converging the e-commerce with a traditional retail. -- theyan interesting have not been able to do that relatively. on somewhere in between called converge retail. in the short-term this might include, especially if you look at the whole food investment, same for alibaba, which is a real estate investment. long-term i think retail will be a lot more in that direction.
we will see something emerging between the traditional retail and the new e-commerce. after we have had tencent and disappoint last week, it has raised concerns about a possible chinese slowdown and how just a gay could bp or we have retail sales that have slowed further last month. what does this tell us about the chinese consumer? ajay: there is a bit of concern about china. it is tencent and alibaba, a big focus to a big portion comes from china. even the pressures around u.s./china relationships, consumer spending has been a bit low. the domestic market will be a lot more stretch. it is something that they will try to see how they are in the market. what eacht, a think is looking at is an expansion outside of china. that is something to take dependency on the domestic
market. looking outs the for acquisition and expanding overseas. that is going to be the key focus for the companies. in this quarter we expect alibaba. the domestic members might be lower than what we are seeing the last quarters. overseas expansion might be more positive. even looking at some of the investments. the overseas markets are increasingly important for the likes of alibaba. what would it take for them to be successful internationally? tensions,bout trade the politics behind it and going head-to-head with someone the likes of the same size of you like amazon. think it is different than domestic markets. the overseas market will be more challenging. given the size of these markets, even if you look at -- the e-commerce, it is more than 30 billion in the market.
there is a big draw. there is a huge market potential out there with traditional layers. amazon has been slow to markets. the market opportunity is huge. there is especially partnerships. the traditional partners might not work. they will have to look at how the partner or go to market, which is different from the domestic chinese market. given the market potential to could be something with a different opportunity that it cannot overlook. thene: alibaba is one of most shorted stocks right now. what is the rationale behind it and you think it is justified? just a bit concerned about the consumer spending last week going down. again, i think 70% of alibaba is revenue driven.
that is something that investors will be a bit cautious about. ,here is a lot more positivity especially coming from overseas market and some of the new technologies they have invested in. also the new investment in some of the logistics/ai and machine learning companies. there is a lot for positivity for short-term. there is a bit of a concern around the chinese economy. over a mid-to long-term perspective the investments that they have made should span out a lot more effectively. to their strategy for google in china here, they definitely raise eyebrows in terms of privacy issues. what is your take on that moving forward? i think it is a bit too late in the game. it has become the dominated search engine. i'm not sure how much they can with their search engine right now. especially bezos and tencent. it is an internet platform for
many of the chinese for consumers. many of the people don't even go out of the platform in a sense. coming from the chinese market might be a bit too late for google. they are integrating with some of their friends. whether it is email or other. google offers these offerings. they asked how effective it might be considering they infest in the chinese tech companies for the chinese enterprises. bernstein saying that analysts are too bullish about capturing the smart phone market. they initiated coverage with the market perform. not an amazing start here. your thoughts on xiaomi? ajay: again we are one of the big challenges. 70% of revenues are still coming from china. reduce their
dependency on china more than 90%. they are well in markets like india. can we beallenge is successful outside of china. we are seeing challenges of xiaomi goes to u.s. market. , especially inet europe. --re could be a big out lash out lash from some of the existing players. xiaomi has not been open about how aggressive or what exactly is their strategy. jan india, some of them could be beyond potential. longer-term, they would have to be more aggressive in the mature markets in the u.s. and europe. ramy: the future of china -- china tech. in vice president communication technology at frost & sullivan. in a moment, a sporting chance or a cyber sellout. argumentsok at the
e-sports at the event for the first time. a lot of debate raging about giving out -- giving out gold medals for gaming. can we really call e-sports a sport? videogames are fundamentally different for athletics. that are a lot of people questioned the lack of physical activity in video games. whether that qualifies it to have gold medals. traditionally gold medals, olympics at the asian games, it was all about top athletic performance in top physical performance. being the best of the best in the world physically. games are different from that. it is more of a mental sport. there is a much bigger issue here that is not paid attention to too much. videogames are actually a product of a company. 100% of their intellectual property of videogame is owned by a company like tencent and electronic arts. very different from
bagman tin or ice-skating, which you might be using skates made by a company, or using a racket made by a company. the actual activity is not owned by anyone. video games are different. when you see e-sports athletes and e-sports players participating in games, you are actually consuming a corporate product if you think about it. we would be given gold medals for the really high quality consumption of a corporate product. that is another kind of sticking point. yvonne: certainly a fascinating topic. the game industry will be fine whether it's in the olympics are not. right. is what is at stake is for the olympics. demographics are down. viewership is down, especially among younger demographics. to attractgling viewers. it needs videogames to bring people in and keep watching.
where we have the olympics 30 years from now when no one is watching, that is the question. fine.ame industry will be the olympics, i do not know. they are looking for a way to track younger people. if theyogame publishers are able to get into the olympics it could spread the popularity of e-sports faster. it is really more on the olympics side. bloomberg's asia tech reporter in tokyo. before we hand over to bloomberg markets asia, let's look at how markets are trading in japan, south korea and australia. the nikkei down by a quarter of a percent. the asx looking the other way. yvonne: that is it for us on "daybreak asia." markets coverage continues. ♪ xfinity mobile is a new wireless network
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