Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712

The u. K. Considers new curves in london. The rda prepares to meet with melbourne again in lockdown. Pam braces for more economic gloom with First Quarter growth data. We are expecting a steeper downward revision. Lets get a check of where mark were markets are setting up. Here Sophie Kamaruddin in hong kong. Here is Sophie Kamaruddin in hong kong. Sophie a cautious start to the month of august after asian stocks have a fourth monthly gain. We are seeing sp Futures Holding steady and looking like a soft start to this trading week. Gold futures testing 2000, bouillon extending its rise after the best month in four years while u. S. Real yields lingered near record lows. Money managers are shifting gears a touch, decreasing the bullish gold bets to a six week low at the end of july. In the forex space, looking steady with offshore yuan staying below seven. We have the aussie dollar easing its earlier drop as investors assess the lockdown in victoria state. With a earning stock, we have the hcb see among the highlights. Switching out the terminal just to take a look at earnings and focus, eight of asias 11 sectors expected to report a drop for 2020. Tachy Communication Services and health care are seeing forecasting some growth. These are the areas that have led to stock gains in asia since the march low. Tech, a driver in that time with the rally seeing it briefly join the world top 10 most valuable companies. When it comes to more gains for the tech sector, 42 taiwan and korea with an emphasis on the semiconductor space, which is what we saw for south korea with that pickup in chip exports for the month of july. That could be put at risk you given the resurgence in u. S. China tensions. Haidi yeah, we will stick with tech. That is our top story. The geopolitical tech threats to the tech sector. Tic toc hangs of the balance as the u. S. Prepares a ban and microsoft puts its interest on hold. The Trump Administration is expected to announce measures against a broad array of chinese owned software. Foxbusiness reporting in the last hour that a decision could come out today or tomorrow. Lets get over to our reporter in washington who has the latest. President trump was about two tic toc from the u. S. , we have heard nothing from him since. What do we know now . Ros exactly, very interesting weekend. President trump on friday night on air force one saying im going to put a band and something could happen on saturday. Nothing happened. From what we understand, this lot there are lastditch talks going on within the white house among the chinese hawkish and dovish faction, and possibly involving microsoft and tic toc owners, who are trying to get some sort of acquisition. Microsoft would like to buy tic toc. They have been in talks. It seems like President Trump may have torpedoed that action on friday night and all the parties are involved in trying to salvage that. We have heard a decision could come out monday or tuesday. Has been silence from the white house all weekend. Shery in the meantime, we have heard news of microsofts plans to buy tiktok. American operations are on hold. What do we know on this front and what are lawmakers saying about this . Saying theys like are on hold, microsoft, tiktok, or just confused or just of what is going on in washington. They are just waiting to see what the Trump Administration has to say. And then we might have a negotiation start up again. They are basically frozen out by that for a couple of days. There has been a really interesting outpouring of support for microsoft purchase operations viewers by at least four republican senators. Weve talked about that in the last hour, including some who are close to President Trump like lindsey graham, and also marco rubio who is kind of tough on china guy. But he think that would be great. He said if the company and data can be purchased and secured by a trusted u. S. Company, that would be positive and an acceptable outcome. In the last hour or so, kevin mccarthy, the Top Republican in the house of representatives, has also said it would be a great idea. These are some of the people who talk to President Trump on a regular basis. And may be offsetting the rhetoric that you are hearing from people more like mike pompeo, the secretary of state, and peter navarro, who i would think based on the comments hes made recently, he would be quite upset that tiktok would not be banned. I think we will have to wait and see what trump has in mind. And very interesting. As weve talked about so many times in recent weeks, kind of the call between the u. S. And china, whether it is coronavirus, whether it is hong itg, intellectual property, is all an ongoing rolling series of complaints about china. And, you know, tension. It is not going anywhere. See, in this case, which side of the Trump Administration wins out. Shery the escalation continues. Ros krasny with the latest from washington. We will have more perspective on the tensions over tiktok ahead with the Cyber Readiness Institutes managing director todd. N a Cyber Security expert who helped draft legislation to create the department of homeland security. She joins in a couple of hours. Coming up, centralbank meetings in australia, india, and highland this week will assess the tools policymakers possessed to deal with the pandemic. Ubs Asset Management and anderson joints next. Failed toend meetings unite democrats and republicans on a stimulus bill. Analysis ahead of what to expect from talks scheduled for monday. This is bloomberg. Karina you are watching daybreak asia. Im Karina Mitchell. Global coronavirus cases are approaching 18 million with 680,000 deaths as scientists race to find a vaccine. The u. S. Remains the epicenter. Cases in california rose by more than the 14 day average while new jerseys transmission rate climbed. Nancy pelosi exposed deepening splits in washington saying she no longer trusts pandemic information coming out of the white house. The president is spending spreading disinformation about the virus. And she is his appointee. So i dont have a confident i dont have confidence, no. Karina the u. K. Is set to be considering sealing off Greater London and ordering people to stay at home in a bid to avoid a Second National lockdown. The sunday times says the government is weighing shutting down the capital and tightening quarantine rules on people flying home. The reports come two days after the government responded to plans easing of restrictions amid a surge in infections. The u. K. Reports from london say apple wants commercial landlords to slash rents amid the coronavirus, while offering to extend store leases by several years and returns. Rents have been tumbling as the pandemic it devastates physical shopping. The deal comes after apple reports record secondquarter Quarter Sales of 60 billion. Dethroning saudi aramco as the worlds most profitable company. Casino operators in macau continue to reel from the coronavirus with gaming revenue down more than 90 for a fourth straight month. The slump comes as chinas ban on tourist visas deprives the city of its biggest source of clients. Revenue was 160 million in july, that is down 94. 5 from a year before. A fragile recovery has stalled as the pandemic leap keep supporters shut. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Karina Mitchell. This is bloomberg. Haidi we are getting latest reaction from the owner of the controversial tiktok app, which is proposed by the President Trump to be banned in the u. S. Saying it is strictly advised by local law. Preparedng it would be to 100 divest its position in itsok to try and safeguard position to head off this proposed ban on the app, and also saying that it will be safeguarding the companys legitimate rights. Earlier being reported that there they would be prepared to sell 100 of tiktoks u. S. Operations to fend this. We are hearing after the remarks from President Trump on friday saying he is going to band tiktok and the u. S. , that we could hear a decision by monday or tuesday of this week. Shery also saying it is committed to becoming a global company. They have that app, tiktok, which has been downloaded more than 2 billion times globally. They have over 165 million times downloaded in the u. S. As well. Lets turn to the economics front. There is another busy week for asia. Chinas economy likely to show further recovery with manufacturing cpi on monday. Central banks in india, australia, thailand, and the u. K. Hold policy meetings and indonesia and the philippines are set to report contractions in secondquarter gdp. We end of the week with the latest u. S. Payrolls numbers. Lets bring in ubs Asset Management head of fixed income anne anderson. Great to have you, as always. Lets talk about the Central Bank Actions we are expecting across asia over the or the lack of action. What are you expecting in terms of the latest decisions by the r. B. I. , rba, and bank of thailand as well . Say i think it is fair to that they are going to reiterate a message of where we are here to support, we are going to continue with our measures, and should we need to take further action, they will. Perhaps thet likely reserve bank of india, they cut. But the other banks, including australia, will continue to stay where they are. Given the turn of events, particularly with regards to more stringent lockdowns in victoria, that is clearly going to be weighing on the outlook. Shery we also have the bank of england announcing the Rate Decision. Really interesting that they usually unveil their new growth projections, but they are refusing to do that, insisting they will give out scenarios. How difficult has it become for policymakers to gauge where their economies are going at a time when we really dont know where the resurgence of the virus will occur . Anne that is so true. I mean, the shocking numbers that we have seen with gdp, the plunge, and then we are seeing the rebound with the reinfection rate in various economies, including potentially london. It is really very hard to forecast. And i think a scenario approach is the most credible way forward, it gives them the flexibility to adapt as things change. Haidi how strong can any recovery be . Be at your car talking about australia, other parts of asia, or the u. S. , without that thing of Consumer Confidence as well as reopening borders . Anne there is going to be recovery and we should not lose sight of that as we work through these periods. But returning to where we were before all of this started is going to be a real challenge and it is going to require ongoing monetary and fiscal support. Navigation of Business Confidence in this period now. Victoria, wein have a combination of a supplyside shock, that they are a manufacturing hub, there is lots of fixed lots of logistics that come out of victoria. It will weigh on the economy. The quicker we can work through these, getting to the third, Fourth Quarter of this year, we can be more optimistic looking into 20214 a recovery. But it is a long way out of here, unfortunately. Haidi the reason econumbers have been ghastly, particularly when you look at the gdp print last week, you have at the same time the markets pretty much shrugging off every leg lower that we see in bond yields. How much dislocation is happening in the bond market at the moment as a result of potential bank action . Been well, they have extremely successful in anchoring bond yields. And i still have the view that yields will be lower over time and curves will flatten, notwithstanding the abundance of supply. Because they have signaled very strongly the cash rates will stay close to the lower bound. And surely be required in australia. I can see the central bank the two doctors that should be required, they will reenter the market if there is some dysfunction. But it is not necessary at the moment. As we saw last week, the 15 was verylus issuance easily digested and hotly contested in the market. We saw yields over the week. Shery we are now seeing deflationary trends starting to appear, lifting real interest rates, not to mention the aussie dollar has been on a tear. Where are we in terms of monetary conditions . Extremely, they are loose in a conventional sense. I think there is a lack of demand for credit, isnt there . Notwithstanding that it is very cheap, we have got funding facilities which means australian banks dont have to enter the funding market. We are seeing it drift lower. As we dig in the housing market. There is some softening in the housing crisis, but i think there is a lack of conviction on the part of a broadbased buyer to actually gear up, given the uncertainty in the immediate months ahead. I think it is more of a demand story on credit. The price of credit is extremely low. Shery of course, a lot of what happens in australia is dependent on what happens across in china. We have seen another strong set of pmi numbers. We are expecting size shing pmi numbers, we get trade data later. Where are we in terms of the health of the chinese economy, especially when the pboc has seemed more reluctant than other Central Banks across the world to act . Anne its interesting, and when i see the pmi hovering around 50, that is a positive backdrop. The chinese authorities have been measured particularly in the Monetary Policy to avoid releveraging. And commodity pricing is extremely well supported, particularly iron ore. And volumes remain quite lofty. Tradet is a good sign for within the asian region in particular, to me. So china is very important. And a stable backdrop, at least at this time. Always appreciate your time and views. Asset management head of fixed income, anne anderson, with us here. We do have breaking news crossing the bloomberg. Microsoft announcing it will continue to hold talks about the purchase of the u. S. Tictoc operations. Of course we had heard that microsoft had been putting those discussions on hold after President Trump on friday said he would ban tiktok in the u. S. We also heard similar sentiment from secretary of state mike pompeo, fox news also reporting earlier on that we could get a decision on when the band would take effect either on monday or on tuesday. Microsoft saying now that the ceo and President Trump did discuss the matter of tiktok in a conversation and that they would be prepared to continue discussions to explore a purchase of tiktok in the united states. Saying it fully appreciates the importance of addressing the president S National Security concerns, and obviously any such purchase will undergo a National Security review. We earlier heard from the tiktok owner saying it is committed to becoming a global company, that it operates within the realms of legality, and also, this report saying, it would be willing to do a full divestment Tiktok Tiktok of in the u. S. , which would send off these concerns from the president. Microsoft also saying that they will complete the talks on tiktok no later than september 15. Lots of news coming. We will continue to monitor that quickly developing story on the future of tiktok in the u. S. As the details emerged. In the meantime, more to come on daybreak asia. This is bloomberg. This is bloomberg. Lets get a check of the latest business flash headlines. Convenience store operator seven and i back on track for major acquisition in the u. S. Then he news says it has agreed a near 19 billion deal for speedway, the gas station chain owned by Marathon Petroleum. The transaction was progressing last year about seven and i dropped out. Sources say it is back on. At the same price that was mentioned 12 months ago. Unit has agreed to buy medical systems for almost 16. 5 billion in cash. The healthcare industrys biggest deal so far this year. Siemens is offering a 24 premium over varians close. The bid financed through equity. It gilt it gives health and ears a sizable share in Cancer Treatment where it has little presence. Oldest Department Store shutting its doors for the final time. Lord taylor is seeking bankruptcy protection through a chapter 11 filing. The company was founded in manhattan in 1826. Oflists assets and liability 500 million in the petition. Fashion startup bought lord taylors stores from owner hudson bay 471 million last year. We are getting more reaction out of microsoft on its continued talks on the acquisition potentially of tiktok. Microsoft saying it will continue talks about the purchase made by other u. S. Investors for the tiktok deal, saying it respects the concerns President Trump has. And these talks will be completed no later than september 15. Interestingly saying both microsoft and bytedance have notifications about their intentions for these talks that we are hearing separately from them that bytedance prefers a spinoff rather than the sale to microsoft. Lets bring in Tom Mackenzie joining us out of beijing. What has been the reaction we have seen so far, notwithstanding the fact that we have not heard from the president since friday . The reaction so far is of course that we have been focused on the story and issue around bytedance. And trump coming out over the weekend suggesting he would ban it completely and even on air force one, talking to reporters saying he preferred a ban versus a sale. Now it seems as we have been discussing that microsoft has been in conversation with the Trump Administration. And has also been in discussion with us if he is potential purchase of tiktok. Bytedance has worked very hard to build out its operations in the u. S. Of course, the head of the tictoc operations was a former Senior Executive at disney. They have added a number of u. S. Employees in the country to build out their operations there, and tried to assuage politicians in washington on both sides of the divide, political divide, that they are a company that can be trusted. The issue really is data and the question is, can bytedance, the owner of tiktok, be trusted to ensure that data in the u. S. Is not passed to beijing . That is something that is of the concern, of the democrats and republicans and members of the Security Apparatus in the united states. And this question that bytedance has struggled to answer conclusively for money. For many. Shery that was Tom Mackenzie in beijing with the latest on bytedance, and also microsofts reaction as we continue to hear more pressure coming from the u. S. Administration. Bytedance saying they will safeguard the companys legitimate rights. Coming up next, australias second most popular city in stage four of lockdown. We will ask how long new measures in melbourne will last and whether we will see that policy replicated elsewhere. This is bloomberg. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Karina you are watching daybreak asia. Florida is bracing for Tropical Storm isaias over warnings it might strengthen their unit is expected to find a bring a sea surge and wind of up to 60 kilometers an hour. The storm crossed the bahamas as category one hurricane, killing one person in puerto rico. Florida has declared a state of emergency. Japan reported lower virus infection numbers from saturdays record, but still 292 new cases, prompting new rules on karaoke and bars. People are asked to have shorter Business Hours after restrictions were eased in june. India says a close ally of Narendra Modi has tested positive. He is in isolation. The reserve bank of australia meets this week, looking to factor in the latest antivirus impact on its economic projections. They are expected to keep rates unchanged and reiterate a readiness to buy government bonds if the situation deteriorates the worsening situation will figure largely as policymakers meet, with cba saying it will have clear negative implications. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. 671 new Coronavirus Infections were announced sunday in the torilla. Capital a curfew on the to be taken over the next six weeks. And there will be new business and industry restrictions later today. Lets talk about the implications for the university of sydney. We appreciate your time. We are hearing whispers, expecting 429 new cases for the most recent 24 hour timeframe to be announced. Over the past two to four weeks, have we got enough data to Show Community transmission, and does this model what the trajectory looks like from here . It is always hard to know how much, what is going to happen into the future. But looking at i guess what is most important in terms of Community Transmission is what is called the ministry cases, data hasases which been increasing the past few weeks and that is concerning because it means there is transmission going on from unidentified sources which is concerning. Overoking at the numbers the past three weeks, the measures that have been in place have worked to some degree because they are not getting this exponential rise in cases, but it hasnt worked in with rises of the high 600s in three daysf the past courtroom and no really clear decline even though they have been in place or three weeks. What has been behind the new measures that have been introduced yesterday and the further measures that are likely to be announced in the next couple of hours. Haidi are you optimistic these stricter measures including what we will hear later today can relieve finally get the virus numbers down, and is that a concern . Everywhere we see easing restrictions, london looking at essentially new lockdowns to deal with new flareups of cases. We have seen beijing out of the past, china having to go back into neighborhoods or suburban lockdowns. Isnt it the case this will continue to clear up because it is Human Behavior to not always adhere to mask wearing and social distancing and it will be the case until we get a widespread and effective vaccine . There is itching issues it there is two issues it raises. That theye certain will have the impact that we want, but i am hopeful that they will be effective and that is because they seem to be based on data coming out of victoria. The first having these more stricter lockdown measures is aimed at getting the immunity transmission, the mistry cases mystery cases under control. There is a lot of workplace transmission happening in victoria. The measures that are likely to be announced in the next couple of hours are around reducing industries and businesses not deemed essential and reducing the hours and the staff in other industries where that could be acceptable while maintaining supermarkets and pharmacies that are essential. I am hopeful that will work although we wont know until the next couple of weeks and we will see the numbers. Of the secondl and third waves we are seeing around the world, yes, it seems very hard and that even if you have small amounts of the virus, as you open up, that seems to result in the increasing cases. People do find it hard to maintain social distancing, in particular when you are opening up restaurant and pubs, the cases seem to increase. That weportant i think look at what is happening in other countries and try and learn from different experiences about how to get the cases down at how to open up. If we open up when we see rises in cases trying to figure out what is the best way and how quickly we need to respond to those different outbreaks, because until we get a vaccine and who knows when that happens tryf it will, we need to and prevent these outbreaks escalating in such a rapid and where it overwhelms Health Systems and gets into particular environments with vulnerable populations, h care facilities age care facilities. Shery when it comes to the vaccines, we have seen wealthy countries locking up more than one billion doses of coronavirus vaccines. We have seen agreements between the u. S. And the u. K. To get supplies from sanofi. Once a vaccine is released to the public, how big of a risk is there we could see wealthy countries monopolizing supply like we saw back in 2009 with the swine flu pandemic . I think that is a possibility, hopefully one that wont arise. The w. H. O. Is trying to make sure that doesnt happen, but i guess it is not guaranteed. , as part of that it is important for governments that are contemplating that, to understand this is a global problem and if the virus is not eliminated in one setting, there is always a challenge a chance of it being reintroduced to your country. It is to the benefit of all of us to make sure if the vaccine is developed, if it gets to everyone, particularly vulnerable populations where the impact is so much more. Shery the university of sydney clinical epidemiologist, thank you for your time. We will have more on australias efforts to contain the virus fallouts with another big guest. We will talk to the australian treasurer Josh Wright Burke 11 15 if you are watching from sydney. Expedias latest results have led their how devastating the coronavirus has been on the travel sector area the seattlebased Online Travel giants all revenue drop 82 in the last quarter after and 90 slump in customer bookings. Even as the pandemic continues to rage, the ceo peter curran says he feels good about the business. We are looking across the entire company for efficiencies. We announced earlier in the year a goal of 500 million in savings which did not even go to our variable cost buckets. We are already around 400 million in savings and expect to do better than our goal. We have taken costs out of the , the call center side, using technologies on the processing side and the advertising side where we expect being a return of business and to be more efficient in our performance marketing in the future. There is a lot of opportunity for us to take additional costs. I will say the notion of deferred bookings has settled down. It was a cute as we went into the back half of march and april it was acute when we went into the back half of march and april. It has changed in the last few months and in july with cases returning, we are seeing it is not growing at the same rate it was in june, but it has plateaued and it is in a fine place for us to sustain ourselves. We are not so concerned about that. Much of that the deferred bookings has burned away anyway and we feel good about where the business is. It is greatly reduced and you pointed out the quarter was terrible. Of course it was but not surprised to us or anybody else. What matters is how we are growing out of it, where we are now and what we will look like when the business returns. We are spending our time making sure we are efficient when it comes back. That. s talk about with what does the wrong way look like here . We have spoken to a logistics guy who talked to us about kind of ruling out the vaccines he will be responsible for, in terms of moving it. He talked to the head of glaxosmithkline, late 2021. The vaccine is going to be a major part in the way we turn around our behavior. When do you see it coming, what kind of a runway are you looking about in terms of return to normal . Not to be try to but we are planning for the worst and hoping for the best. They are much better informed in the better scientific immunity. Clearly when we have a vaccine and it is widely distributed, we have little doubt the world will travel, go back to traveling very quickly and returned to normal. What happens between here and there, whether there are therapeutics, which there is a lot of hope for, that are effective in the next, before the end of this year, whether people are comfortable with that, it will be a combination of what people are comfortable doing and how science is coming along to protect them. We are seeing more and more ways. The nba started, seeing more and more ways of people adjusting to this moment and figuring out what is possible. We are seeing that in travel. That is why the Vacation Rental business has been stronger but we will see it in other areas. The hotels are doing a great job and people have to be comfortable but i think they will. Airlines are more safe and airline that people have given them credit for. I think people will increasingly get comfortable, science will help us and give us a bumpy but positive ride over the next then we wille and get to a vaccine and things will normalize again. That was the expedia ceo. The latest on the stimulus deal, still no deal. Stephen mnuchin sounds the alarm over taking on enormous debt. This is bloomberg. We have to balance there is a need to support workers, the economy. People who, through no fault of their own, are shut down because of this terrible disease. On the other hand we have to be careful about not piling on future debt for future generations. Nerations. Haidi lets take a look at how we are setting up for treating, the start of the asian trading week. Over to Sophie Kamaruddin in hong kong. What are you watching . Futures are mixed. We are keeping an eye on earnings, hsbc and Japan Airlines under the highlights as we wrap up the gains for asian stocks, which have been powered up by tech some of sector staying in focus microsoft and doing it for tiktok. The prospects of letdowns, that is weighing on manila. Manila will return to a stricter lockdown and melbourne is under a curfew. You have the sterling leading moderates gains. The dollar taking a breather. At a march 9 high after its best month since may 2009, yields into deeper territory. The yen is holding above 105 after its biggest decline since last august, the strength could see more jawboning but doesnt look like that could be in the hopping opting today. Limited impact from seven to nine make a deal to buy the petroleum see my guess stations for 21 billion. Switching out the board, jgb futures settling lower ahead of the bond buying operation of the month. The central bank has left its Purchase Plan and changed for august after upward pressure on japanese yields subsided. Treasury futures slightly higher , our colleagues at the mliv blog pointing out bonds may benefit from the move to lower u. S. Trading outlook into Massive Central Bank bond buying. Ahead of the u. S. Treasury, announced it is borrowing. The 10year has been popular in recent options along with 20 and 30 year maturities pushing the benchmark yield to a record close. Shery lets stay on that topic. The weekend meetings failed to unite democrats and republicans on the stimulus bill as a top fed officials is more spending dontded or the down turn will get worse. Kathleen hays joins us with what that means for the treasuries massive borrowing needs. Lets start with what is the main Sticking Point in these talks. Kathleen do you ever feel like remember the movie groundhog billwith lori, every murray where he gets up every day it is a classic. That is like this because every day it seems like they are having stimulus talks, republicans, democrats. What they are hitting a wall over is the 600 a week federal Unemployment Benefits, the gop is opposed. They say that in effect it pays people to stay home. Some people are making more in the federal checks than they were in wages prior to the lockdowns and the shutdowns. That is why they think they wont go back to work. They are suggesting 200 a week to go along with the state Unemployment Benefits. And Stephen Mnuchin is blaming the democrats for not even agreeing to a oneweek law extension to have more time, to get the extension on Unemployment Benefits and to move ahead. Nancy pelosi blames President Trump for the impasse. She insists 200 a week, given the conditions in the economy, they dont meet the needs of working families. The clock is ticking because 600 a week has already expired, why mnuchin was the extension and the august recess starts at the end of the week for congress. It is hard to imagine they could leave washington without having something done. The president of the Federal Reserve bank of minneapolis saying Congress Needs to stop worrying about the tot and just spend it all help the economy, kind of whatever it takes. He works for the tarp. He did work for a Democratic Administration and this seems to go along with what democrats are urging, spend the money now and think about it later. Dosays congress can actually this because the financing is cheap. Savings are high. We would not have to borrow much from overseas. He is urging a tougher lockdown like a month or six weeks of complete the shutdowns because he says that is how you get on top of the virus and get the recovery on track. Our Global Economics and policy editor kathleen hays. Lets take a quick look at the japanese yen, which is around the 105 level. We have seen significant strength for the japanese yen last week. We saw the sixweek gain against the u. S. Dollar being halted, at the moment under pressure. This of course as we are waiting on japanese data from the First Quarter final gdp numbers, we have the amount on an annualized basis, the final number for the First Quarter down 2. 2 , in line with the preliminary estimates. The expectation was it would be revised downwards. The quarter on quarter number, this is an again, revision of the First Quarter preliminary numbers and there is no change. When it comes to business spending, take a look, it is a gain of 1. 7 , being revised downwards. That has now fallen to the growth of only 1 that was expected. We were expecting to be a drag on those First Quarter numbers but the number did the spending for the First Quarter coming in 1. 7 growth, slight revision down but not much, which has left the final First Quarter numbers at a contraction of 2. 2 for the First Quarter, this two weeks before the far worse secondquarter figures are due out given the progression of the coronavirus pandemic. Coming up, inside the 21 billion deal to sell Marathon Petroleum to the World Largest Convenience Store owner, we will get you the details. This is bloomberg. This is bloomberg. Adam shery japans the owner of the largest has agreed to a bright to buy a marathon for 21 billion. Take a look at this with the editor dave in tokyo. Seems like the deal is finally happening. What kind of scale does this add to 7elevens chain in north america . 14,000 stores which is quite large, much larger than any rival in north america. They expand on the earlier acquisitions of this type of Convenience Store, that kind attached to a gas station. Three years ago they bought sunoco00 from seneca theory is has been a good model and they have done well incorporating it into their chain. Haidi so much uncertainty with the economy so why the timing to do this deal now . It is surprising. Normally deal like this are hashed out in board rooms and it requires a lot of meetings. I assume a lot of the details were finalized over zoom, given the pandemic. This is a deal as you have potded to have been in the for quite a while, negotiating it since last all. Fall. Marathon had been under pressure. There were a couple of other bidders bidding up the price on this but 20 billion is where they were at last fall. It is not far off from the price. Saying and of course marathon oil is in the difficult position with oil prices, it really had to try to generate some money. The pressure has only increased on them. You have the yen getting stronger against the dollar. That looks in favor of the deal foruse it makes it cheaper 7eleven to complete to this side of the deal. Our Global Business editor in tokyo. Lets get you a quick check of the latest business flash headlines. Tiktok says it rejects u. S. Criticism that shares it shares user information, insisting it adheres to the law. The Trump Administration is stepping up its attacks on the law reports from hong kong says tiktok would prepare to spin off the video sharing app rather than to sell it. Microsoft has discussed a purchase with President Trump. Apple will purge 30,000 apps from the store in china with names accounting for 90 of them. With tmobile Research Institute says most of this happened early saturday with 180 housing remains on offer. Apple reminded Game Developers apps would be removed if they did not meet regulatory payment approval. Goldman sachs and bank of america are said to have been left out from the upcoming ipo because of past work with alibaba rival jd. Com and pinduoduo. They said they should refrain from dealing with competitors if they want business from jack mas empire. Biggestld be the years ipo. Coming up on daybreak asia, the cross fires between days beijing and d. C. Hsbc earnings. This is bloomberg. Yvonne lewis good evening from bloombergs Global Headquarters in new york. Haidi asias major markets have just opened for trade. Our top stories, tiktok faces imminent ban in the u. S. But insists it breaks no local laws. Markets microsoft is interested in a deal and has discussed the idea with President Trump. The 7eleven owner revives its pursuit of the gas station chain. Aey will pay 21 million in deal set to close next year. Goldman sachs and bank of america are being shunned because they worked with alibabas rivals. Shery japan, south korea and australia coming online. Lets get to the market action. Starting with the open in japan, the First Quarter gdp contracted at a slower pace than expected. The nikkei 225 adding nearly 1. 2 after a loss that saw the first monthly drop in four. The topics had a drop. It is opening to the upside by 1. 1 and the yen marched towards 105, and jgb set to decline ahead of the bojs first bond buying of the month, kept its Purchase Plan unchanged for the First Time Since march. Lets switch it out to check in on the open, the kospi opening higher after rounding out a fourth monthly game again with pharmaceutical names among the tech performers. The korean won under pressure after climbing to a march hike and korean data to digest over the weekend showing Third Straight month of easing declines with chip shipments rising. Now looking at the open in sydney, the asx 200 opening slight flat, stabilizing after four months, stalled at the end of july. The aussie holding right is drop slightly higher as we wait on the rba policy decision tuesday and investors assess the heightened virus risk in victoria state. The s p is finally higher while the dollar is under pressure but steady after the worst month for the greenback since 2010. That is a look at how we are setting up for the start of trade in august. All right. Lets get more on the markets. Our next guest says we are in the midst of a bullish session. Singapore, m great to have you with us. When do you see this dislocation between the real economy and the data points coming in and they are pretty horrible. Yet the valuations when it comes to risk assets, surging higher and higher. How does this and what happens when we see a tapering Central Banks . That is the big question, western markets are running on fumes. If you take that stimulus away, what have you got . You have got the real economy, which is not doing very well. We can see in the data that divergence, even though stock markets are high and where they were before the crisis in a lot of markets. Traditional safe havens like treasuries, gold, the japanese yen are also up. We have got a bit of a conundrum here because normally these things are negative and now they have been positive for three or four months. It is telling us investors are not that confident about what is going on. They like the fact netflix has 10 million new users but 10 million watching tv doesnt get the economy going. We need to see more data coming out of the real economy to really believe the rest of the market can catch up with the amazon, microsoft and the world. And after last weeks earnings release, you continued to see tech dominating. Noare, whether there be alternative or fear of missing out on whatever you want to call this momentum, even if we all agree there is a bubble building in tech valuations, how do investors position themselves . You would still want to be investors. He would have to. That is your job. Definitely hedging. Where we are seeing them that on cap run for bet on crowd favorites, but they are hedging with putting more money into gold, more money into your treasuries, which are 10 year,. 54. It was that. 9 at the end of march when they thought the crisis was over. They had been hedging their bets, that is for sure. Shery when can we expect investors to more solidly and firmly turn into cyclical and value stocks. It will take time because geopolitics is not playing along , growing tensions between u. S. And china, got people worried , the the trade war president ial election is definitely very hard to call. Dont think anybody can name the next president of the united states, and that is an important piece of the puzzle for a lot of bigs, whether they make investment plans. It will take time before clarity comes back. Shery where regionally do you see investing . We have seen the massive rally almost everywhere in the world including chinese mainland stocks. We have. Even though when you look at the timent, chinese are the even though they dont have the same second wave as other places, the pmi data is expected to continue to improve. They are not that positive. They are definitely affected by the geopolitical situation. Wondering how that is going to play out, whether it is going to someother four years or warming of the relation. Here is definitely that there is the hong kong situation which is unnerving some people. Its owngion has domestic issues. Brexit is still not settled. There are clouds on the horizon keeping people nervous and at bank. Bay mr. Confidence is not where it should be. Haidi in terms of emerging emerging markets, there is still catch up to do when it comes to how much progress we could see. Do you see value especially in the asian region . Are you looking at recoveries or economic stories where you see more consumer led recovery . There is a great recovery story for emerging markets, the fact supply chains have been disrupted, but the problem is emerging markets cant avoid the course Health Crisis themselves. Until that is under control, you cant really get emergingmarket factories back online. You cant get supply chains back online. A lot of us when you go to stores, we find our favorite products are out of stock. There is a long way to go before we can get back even before emerging markets. Very much forou joining us. The head of applied research from aipac. Japan trading ice at the moment, this one all in the most since march. This is the news they will acquire maritime speedway destinations for 21 billion in cash, now the stock falling for a third consecutive session, the lowest level since 2013, despite the fact the company said the deal wont have a major impact on the full year results. This is a map on speedway destinations for 21 billion in cash. Still ahead we will get a preview of hsbc earnings, in a couple of hours and then raising the task of delivering on a sweeping overhaul as it remains caught in the crossfire between washington and beijing. But first we will have the latest on another Company Getting squeezed between the two superpowers. Microsoft says the september deadline for talks on a purchase of tiktok as the threat of President Trumps ban looms. This is bloomberg. [no audio] [no audio] [no audio] karina i am Karina Mitchell with first alert headlines, global coronavirus cases are shy of 18 million with 680,000 race tos scientists find a vaccine. Cases in california rose more than the 14 day average while new jerseys transmission rate also climbed. If the policy exposed deepening splits in washington saying she no longer trusts pandemic information coming from the white house. The president is spreading disinformation about the virus, and she is his appointee. I dont have confidence in her, no. Karina the u. K. Is said to be considering sealing off london and ordering people to stay at home to avoid a Second National lockdown. They are weighing shutting down the capital and tightening quarantine capitals on people flying home. This is two days after the government postponed a planned easing of restrictions amid a surge in infections. Macau is opening with gaming revenue down 90 for a fourth straight month. This comes as chinas ban on tourist visas deprives the city of its biggest source of clients. 94. 5 from a year earlier. A fragile recovery has stalled as the pandemic exporters shut. Rot brought to astronauts back to earth. The splashdown was the first since the 1970s. Since then nasa has relied on russian rockets with hard landings. This is a high point for nasa and spacex, 18 years after elon musk founded the company. Global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Mitchell. A this is bloomberg. Tiktokas the fate of hangs in the balance, microsoft is continuing and persuasions conversations to buy it. Talks will move quickly, in a matter of weeks. They are expected to be finished by no later than 7 september 15. What are we expecting to hear from President Trump . Secretary of state pompeo says they will announce measures against not only tiktok but more chinese owned software. This is because of National Security risks. These suggest possibly widening the measures beyond tiktok, but we dont know what they would be. An pompeo says there is announcement coming shortly. This comes at an interesting time because microsoft has been exploring this acquisition from the chinese company. Talks are in limbo over the weekend. First it was, microsoft will not go after it. Now with tiktok being barred in the u. S. Everybody is awaiting news. There is some support for this, from senators on capitol hill but nobody knows what is next with the app and it will be barred at least initially. Shery we got some reaction from the Chinese Companies saying it is committed to being a global company. What can we expect for titfortat measures . Reporter the chinese officials have come out against this action, the auctions against the u. S. Actions against the u. S. , limiting stuff like this, and Chinese Software companies are seeking feeding data directly to chinese authorities, what pompeo is saying. Isnese Officials Say this not the case. They have come out against any action. What they will do, we dont know. Chinese state media continue to talkingiktok, kerry about antagonism towards the company in a similar fashion to u. S. Companies given huawei technology. China daily wrote an article that although the oval office claims to oppose authoritarianism, it has a penchant for demonstrating its authority. We dont know what they will do in response, but this is another escalation obviously. We are hearing now some reporting from writers President Trump is giving microsoft reuters President Trump is giving microsoft 25 days to reach a deal. That could be another wrinkle in this whole episode. Shery jodi schneider, our Senior International editor. More perspective on the tensions, with cyber readiness, a security expert who will help draft the deflation to create the department of homeland security. She joins us. This is bloomberg. Omberg. Shery hong kong will have to wait another year to vote for the legislative council. They have delay the election citing health and Public Safety concerns as virus cases rise. Joining us to discuss the implications is eliza lee, professor at hong kong university. Great to have it with us. First of all, can they even do this, because it was my understanding under the basic law, and the legislators lose the legal right to hold office past september . Completely correct. According to the basic law, the term of the legislature is four years. His fouryear term has ended then another thing about the basic law, the election, the legislature in hong kong has to be turned by elections. Returned by elections. With an election has to be hold before you can have a new legislature. The post running the postponing means there will be constitutional issues. Shery what does that mean for this provincial there are sitting legislators that have been disqualified as candidates. Do we have any idea right now how this body will function . Idea at this point, because the chief executive has Just Announced that it will be in the hands of the National Peoples, the Standing Committee of the National Peoples congress. Under the one country, two systems, has the title authority to interpret the basic law. What it essentially means is it sc to make a the np decision on the interim legislature. Professor candidateser that that were just as qualified earlier this week might actually be barred from, you know, assuming office, or to serve in the legislature. Haidi right. , way forward is there for the prodemocracy camp . We have seen as you point out a high number of registered voters going up. We also saw in the last round of defective local elections, bigger turnout than expected. If there is pentup dissatisfaction or a need to have this say, what is the way forward when these avenues are being closed to other candidates . I think you are absolutely right, that there was a primary in july. Lier there was a huge show of support of the prodemocracy primaries. The fact that now, so in other words the upcoming election has a high chance to be a critical elections whereby people would want, there would be significant sway in the composition of the legislature. In terms of the prodemocracy camp. The proasia now these sentiments, hands up over the past years in reaction to multiple key issues from the social upheaval, last year, to the National Security law come all of these Public Sentiments would not be able to be reflected in the coming year. That is a timet bomb because what it means is you know public dissatisfaction against the government, which is already very strong, might even get worse. How do you think the emergency ordinance could be used Going Forward and and forward and is it reasonable for this to be exercised in a pandemic . First of all the pandemic situation has, even back since january, late january, when we had the first outbreak, has never been as serious as it is in many other places in the world. The government has not really been able to forr scientific reasons postponing the election for one year. Which everybody feels is unnecessary. If it is a suggestion for slight postponement of one month or two months, maybe it will be more acceptable and more justifiable. I dont think the government really has the peoples rights in their mind as they consider this. Great to have you with us. Lots more to come. This is bloomberg. This is bloomberg. You say the customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept. 5g, everybody is talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item, corner offices for everyone. We just have to make more corners in this building. Chad . Your wireless, your rules. Only with Xfinity Mobile. Now thats simple, easy, awesome. Switch to Xfinity Mobile and save up to four hundred dollars a year on your wireless bill. Plus, get two hundred dollars off when you buy an eligible phone. Japan is reporting lower virus infection numbers from saturdays record but still marked 292 new cases, prompting tighter rules on bars, restaurants and karaoke outlets. Entertainment operators are being asked to shorten Business Hours through the end of the month after restrictions were eased in june. A close friend of the pm is in isolation. After resurgent infection showed no sign of abating. Victoria had over 600 new cases in the past 24 hours with seven deaths. Could beer says there a curfew. The rules will last for at least six weeks. The reserve bank of australia meets this week, looking to factor in the latest Coronavirus Impact on its economic projections. The governor is expected to keep rates unchanged and reiterate a readiness to resume buying government bonds if conditions deteriorate viewed deteriorate. The andaman will have clear negative implications. Aorida is bracing for Tropical Storm, although warnings that it may strengthen appear unfounded. It is expected to bring a sea surge and wind of more than 60 kilometers an hour. The storm crossed the bahamas is a category one hurricane, and is blamed for the death of one person in puerto rico. Florida has to clear a state of emergency. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Shery we are getting pmi readings out of several asian economies. Taiwans manufacturing pmi rebounding into expansion territory after three months of contraction, coming in at 50. 6. Everybody else seems to be stuck in contraction territory. Malaysia holding at the threshold. We have seen a little bit of improvement for these economies, including south korea, which came in at 46. 9 after six months of contraction. Same for thailand. We have their Rate Decision expected to come this week. They in an contraction territory all year as well. Right now, there july numbers coming in at 45. 9. For more context on these figures, we are joined by our chief Asia Economic correspondent. What are the pmi numbers telling us about the supplyside rebound he could see in the second half . Taiwan pushing in a positive territory and there is some improvement as well for south korea and japan. Those are key bellwethers. But it remains in contractionary and the pmis across the region add to the narrative that the rebound across the world is in danger of stalling. The virus is flaring across asia, where it had been controlled. It is also flang in key trading partners for asia, like the u. S. Thatf it as to a narrative things are stalling. Goldman sachs has said asian economies will have a major inflection in june. It looks like exports are bottoming out but pmis are a reminder we have a long way to go. Haidi what about the china pmi . What is your key take away from that . I think the official pmi over the weekend, again, at two the idea that china is making a steady recovery, but there is a concern that perhaps china might have peaked. Theres only so much you can do domestically with the rest of the World Driving demand. We know the Manufacturing Sector in china kept up a gross expansion and official pmi rose in june. That beat expectations. Good news in terms of new export orders and better improvement. An uptick in global demand. At the same time, we know that private investment and consumption in China Remains weak. The story is one of steady recovery, but we will get another pmi reading today. Shery we are now seeing the japan manufacturing pmi numbers, the final for july, being revised upward and coming in at five 45. 2. Still an contraction territory that on the back of the First Quarter gdp numbers that came in at a contraction of two. 2 , the expectation was for it to be revised downward by a larger amount. What do we know right now about the health of the japanese economy as we head toward those secondquarter gdp numbers and a couple of weeks . In a couple of weeks . I think the fact that the revised number came in and it was not as bad as expected among perhaps adds to the idea that things are less bad than they were. The story for japans economy is gloomy. No one is calling for a quick turnaround there. We know that retail sales and Industrial Production have been improving but they still have a long way to go. We know the virus is getting worse in tokyo. There is a story there of a fragile recovery, and they rely a lot on the u. S. Pulling itself out of a hole. Dont forget that, we see the virus spreading in the u. S. And that is worse for japans economy. The First Quarter numbers came in a little butter than initially a little better than initially expected but still a weak trajectory for japan in the coming months. Haidi our chief Asia Economics correspondent with around up. We will be looking toward australias efforts to contain joined bywhen we are a guest at 11 15 hong kong time, a quarter past one in the afternoon in sydney. Lets look at the markets. Brandnew trading with a great deal of uncertainty no matter where you look. We are seeing some upside when it comes to the nikkei to do five, up close to 2 . The kospi extending its decline. The heavily weighted samsung dragging down the overall index. In australia, downside of about 3 10 of 1 . We continue to await further details as to what kind of business and industry restrictions come under victorias estate of disaster declaration. Stocks continued to dominate the friday session. Lots of interesting dynamics to watch out for when it comes to the fx market at the moment. We see the dollar climbing against peers after having pretty horrible months of decline. August as yields tend to fall this time of year. We are seeing gains elsewhere. See moren could burning this month as well. Dollartching the aussie lose some strength this morning. Shery lets get a quick check of stock movers in tokyo. One jumping the most in seven weeks after its net profit beat the drugmaker on track to deliver annual guidance. We have holdings rising the much the most since march. This is driven by ecommerce. , the speedway deal , they see overlapping u. S. Stores. Computer falling the most since 2016 after reporting a surprise loss in the First Quarter. Alpine climbing after maintaining its fullyear outlook despite a First Quarter loss. Falling on an earnings miss. We will have plenty more to come on daybreak asia. This is bloomberg. Hsbc set the report earnings on monday. Analysts expect impairment related to the pandemic. Our next guest warns the profit performance will be the least of its warnings with hsbc also trying to navigate tensions surrounding hong kong and u. S. China relations. Is our us for a preview guest. Great to have you with the spewed lets start on great to have you with us. Lets start on performance. How much underperformance are you expecting . Francis [indiscernible] profit i think, hsbc declinebably have a 50 in interim profit. Its increase in because of the pandemic and airlines and hotels. Really under pressure. Will be a lot of bankruptcies so its only natural they would have to increase their position several times. They will in turn depress their earnings. Thats why they are not paying a dividend this year. People are sympathetic to that. But that is the least of the banks worries. Shery what should be the biggest worry for hsbc . We continue to see rising tensions between the u. S. And china, not to mention the ongoing problems in hong kong. Francis that is exactly the problem. Hsbc is a product of the colonial era. It was established by a british businessman. It has had a dominant position in hong kong. Along o at onetimes largest bank in the world in terms of capitalization. Until 2008, the bank did well. After the financial tsunami, everything went wrong. The u. S. Government was major bankso fine thethem to bailout Financial Market in the u. S. Really crushed by u. S. Authorities and had to spend 5 billion a year on compliance and still the u. S. Government was not satisfied. One of the Sticking Points right huawei and canada. The chinese official media blame the bank for setting her up. Critics in china said why should a colonial era bank use the profit of hong kong to invest in u. S. And europe, which produce no profit at all . Why should the bank follow the orders of the u. K. Authorities and not pay a dividend. It is unfair to the people of hong kong. Think chairman tucker said he is considering selling out european and American Assets because they are not performing. Go muchhe should further and split the bank into rest oft asia and the hsbc. East asia should belong to hong kong and Shanghai Bank and be headquartered in hong kong. Haidi you think hsbc needs to strategically double down on is hong kong and China Business given the political uncertainties . That, theot only british management must be changed. It is a Hong Kong Based bank. It should not be determined by british people in london. I think it is political pressure that hsbc is saving. It is not correct in the postcolonial era. How you navigate is a big problem. Right, how you navigate is a big problem for all Financial Institutions in hong kong right now. What do you expect will happen . Exodus away from hong kong as they are potentially trapped by sanctions by the u. S. Or chinese side . Francis no, not yet. We havent seen any exodus of people or companies or money. Other Foreign Companies are here to make money. If there is no money to be made, they will leave immediately. The idea that people will leave hong kong and droves is not really correct. Accepts s [indiscernible] i think tucker has to decide in the future how to operate the bank, how to satisfy the chinese in thisnt and of course global environment, it is really toxic where donald trump is determined to fight china on all fronts. We appreciate your time. We have an exclusive interview after theirortly results. Next, a bloomberg scoop, Goldman Sachs and bank of america losing out. Details ahead. This is bloomberg. Is sufferingl during the pandemic. In the three 19 months through june as lockdowns and restrictions on interaction went into place globally. However, the ceo seems to believe demand will rebound in the second half. I am pretty confident with the second half because i think the appetite for beauty is strong, it is always strong. Number two, i think we will not see the same kind of lockdown, experienced. Hat we it has been proven it is devastating for the economy so i dont think we will see it again. Is third reason, important, ecommerce has really grown tremendously along this crisis. Grew 65 in the first half but in june it was growing 80 . Acommerce is more and more Good Alternative for consumption. I am working from home and i put on a little bit of makeup today but that has become the exception rather than the world the rule. Do you believe it is the end of an era and there will be a deep lasting downturn in makeup and cosmetics . No, i dont think so at all. Im happy to see you are wearing some makeup and i am pretty sure more,eople are more and even when they are more and more wearing makeup again, maybe not as much as they used to before, but consumption, and we see by the way consumption is rising again for makeup. , we would not be obliged to work from home for the rest of your life. With aill be a day where vaccine or treatment or something, where you will be and i am betting on this day you will wear a lot of makeup because you want to celebrate the return to real life. Haidi loreals ceo there. We have an alert on the bloomberg, china reporting 40 through new coronavirus 43 new coronavirus cases on august second as we see infections slowing across china after a few days last week when we had 100plus cases. Over this weekend and on august 2, china reporting 43 new coronavirus cases, a slowdown from last week. Shery lets get a quick check of the business flash headlines. Siemens has agreed to buy another company for almost 16. 5 billion in cash. It is the healthcare industrys biggest deal this year. Siemens is offering a 24 premium over the friday close. Gives a sizable share in Cancer Treatment, where it currently has little presence. Reports from london say apple wants commercial landlords to ransom on coronavirus. Rents have been tumbling as the pandemic devastates physical shopping. The appeal comes as apple reports record secondQuarter Sales of almost 60 billion. Reported to have purged more than 30,000 apps from its mesre in china, with ga accounting for 30 . This happened early saturday with about 180,000 apps remaining on offer. Developersded game early last month that apps would be removed if they did not meet regulatory payment approval. Haidi bank of america and offman sachs are being left share sales and hong kong because of their work with rivals of alibaba. Members are being told they should refrain from doing business with competitors. What is the latest on bank mandates . We are told the Goldman Sachs is trying to fight for a stronger role in the ipo, and Morgan Stanley to lead the ipo. Taking on a global coordinator role as well. There are still a lot of moving puzzles and the company has not finalized the final bank lineup yet. As we continue to see the rivalry between alibaba and tencent, how important is it for banks to know whom to stick with . It is excruciating for investment banks. You could say the duopoly issue china, itque to exists around the world and sectors, that it is rare to see the kind of that alibaba and tencent have because their businesses are so big. Companies risk being blocked out of a significant future revenue stream once they pick a team to stick with. Bankers have to be quite careful on how to navigate these gigantic empires. Shery tell us a little bit on how so much banks reap from all of this advising to not only these two giants but others have had stock deals as well. Betweene rivalry alibaba and the other camp is are and tencent competing in the ecommerce space. Goldman sachs and bank of onrica have recently worked deals worth 7. 7 billion in stock sales in the last two years. These two banks have reaped at least 70 million through advising these companies on stock deals. That is a lot of money at stake. If you think about the deals that could come from alibaba and tencent, both of them have invested in more than hundreds of companies. It is a very interesting thing they have to choose between. Shery our finance reporter with the latest on the competition in the chinese market. Coming up, the Cyber Readiness Institute weighs in on tictocs future in the u. S. As tiktoks future in the u. S. As controversies continue. That is it from daybreak asia. Market coverage continues as we look ahead to the start of trade in shanghai and shenzhen. China open is next. This is bloomberg. Tom it is 9 00 in beijing and shanghai. I am Tom Mackenzie. Ingles. Am david we are counting down to the open of trade in the chinese mainland and hong kong. The new trading week, tiktok facing an imminent ban in the united states, but insists it breaks no local laws. Microsoft remains interested in a deal