Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20170622

After 2016s foreign takeover spree. We have the world covered on daybreak asia. We go to watch the developments out of beijing as chinese mostators watch the prolific overseas dealmakers. And we are watching the e. U. Summit in brussels throughout the morning through this is daybreak asia, coming to you sive from bloomberg asian headquarters. I am yvonne man. Betty is that the wharton global conference. A very busy friday and a happy one as well. Yvonne we are marking the oneyear anniversary of brexit. We have the stress test, keeping an eye out on china as well. First it was anbang, but regulators could be targeting other companies. A lot of big guests on our show with betty. Starting this hour, Geoffrey Garrett in 40 minutes time. On Bloomberg Markets, betty will be speaking to the incoming chief executive of hong kong. Her as have to talk to we start next week, marking the anniversary of the handover. You do not want to miss bettys chat with tom friedman at 10 40 a. M. Hongyou do not want to konn sydney. Look at markets trading in the asiapacific. It could be a slow start to this friday. We are flat on the index as well as the kiwi at 7267, taking a breather from the 6 climb we have seen in the last month for the currency. Australia, we saw some stabilization. 282 for wti. Futures heading higher for the asx 200. We did see a bump to end the day,. 7 higher on that recovery in the oil price. Japan, the yen could keep surprising us. The market starts to doubt how much the fed can tighten. Taking a look at japan futures, it could be pretty slow here as well. It is looking to be relatively mixed. They are heading higher, pointing towards a 40 point gain for the nikkei 225. Dollaryen going nowhere. 111. 29. Let us take a look at how things are going in the u. S. Session. Pretty much sideways. Stocks really paring gains. Su keenan . It looks like the selloff has been pretty much brought to if you look at the close. We have positive news on the economic front. We had home sales which were up. Let us take a look at the close. Su that would offset the initial jobless plans. There you go. The nasdaq up a flight tick. If we go into the big movers, oracle, mcleod move clearly gaining momentum. The stock up almost 9 . Carmax, which is in a very tortured space, the car dealers decline,used price analysts saying that is doing well. Deals and give on the horizon and it was up some 9 . Market snapshot shows oil spending a second day below the 43 mark. It showed a slight increase. The selloff appears to have halted for the moment. Gain. Ls pain is golds a lot more attractiveness to the attractive metal given the slide in oil. If we go into the bloomberg, ed g btv 297, to bring into the 297, there isbtv the loss of momentum we have seen as brent has joined the intermediate in a bear market. The death cross the longterm average moving. You have got the red circle. Again, that shows more the clients likely ahead. Card onthe feds report the banks, the stress test, all 34 of the largest lenders past. Give us some of the highlights. Su everyone waiting for the tests as expected. Two. The concern is step it is the one investors watch because it shows whether these banks will be having enough money to raise dividends and other buybacks. What we hear is the largest banks passing the test put in place after the financial crisis shows firms are getting the hang of these once dreaded reviews. Every bank exceeded the minimum threshold, except for Morgan Stanley. Administration, interestingly enough, would like to make this easier, and we did have the Banking Committee they are all for transparency Going Forward. Take a look at how wall street like that. I would give the fed credit that they listened to the industrys complaints, and a lot of the prior stress tests were maybe even a bit too stringent, and in some ways, were not how banks would react to a crisis, and the fed has shown a little bit of modification. And i understand from jay powell that the fed is going to be more transparent. Which is a very good move. Hill, did testify on the talk about now being a good time to reassess if needed. Goal is to be more efficient with these stress tests and to be more transparent. President trump has indicated he viceoon nominate a fed chair for banking supervision who will oversee the test. That to you. Aonne that one should be little more interesting and important for investors as well. Su keenan, thank you. First word news with Courtney Collins in new york. President trump has ended weeks of speculation triggered by himself by saying james comey at the white house. He did not make any such recordings when the two talked in the oval office. The president raised the issue went in after firing comey, he tweeted he better hope there are no tapes before he starts leaking to the press. Senate republicans issued a new Health Care Bill which was immediately attacked by senior Party Figures. The draft includes sharp cuts to medicaid, modest reductions of other obamacare subsidies, and tax cuts for the wealthy. Hospital staff led a rise in Health Care Shares. It is the biggest intraday gain for drug stocks since november. U. K. Prime minister theresa may has pledged that e. U. Citizens currently in britain can stay there after brexit. She laid out her position at a summit to e. U. Leaders in brussels, saying she does not want to deport a break up families. The e. U. Is likely to reject to her insistence that Citizen Rights be that must be numeral of the European Court of justice. North korea said to have carried out another engine test for a potential intercontinental ballistic missile. Wherepened in the city previous tests have taken place. John yang said it was pyon gyang that it was not far from the technology. The American Military has been practicing shooting down muscles in midair. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am Courtney Collins and this is bloomberg. Yvonne courtney, thank you. We finally got betty back online at the global conference. Betty, you will be thought about geopolitics with the dean of wharton, Geoffrey Garrett, in just a couple of minutes. Everyone is looking forward to carrie lam as well. Betty thats right. Willn, Geoffrey Garrett start kicking off this whole session, this twoday session at the hotel for the whartons 50th global forum. A lot of attention will be paid this morning to the keynote by carrie lam, the chief executive elect. Of peoplee gathering close to the school. Many of them are Global Investors, ceos, and on top of their mind, when they are listening to carrie lam, is going to be, what is the role of hong kong . We made it through 20 years after the handover, but what is hong kongs role going to be in the next 20 years . Will they be a premier Financial Hub . Is this greater banish it is this Greater Bay Initiative going to pump the economy even further . Know, very as you sharply is dealing with some of the issues that many of the leaders around the world are dealing with, which is this widening wage gap, and how that electeded unrest and officials into office that no one had expected, including of course, President Trump. Yvonne a position that is going to be very tough. Inis just before she comes as chief executive. We will continue to watch that one and get you in a bit. Let us take a look at china here. Some of the most inquisitive for inls makers dealmakers the spotlight. We are told the companies such are on theanbang list. Let us get to our china correspondent, Tom Mackenzie, joining us live from beijing. Tom, what do we know . Tom yvonne, we are talking about some of the Biggest Private Companies in china, sprawling ballmer it sprawling conglomerates. We have heard from the regulators at the banks that have been lending to them to help with overseas acquisitions been told to give the regulators details about that lending. It Isd Bernstein possible they are seeing red flags appeared on the back of this news, we saw some of the stocks of these companies, or linked to these companies, falling very heavily yesterday. Its also greatly. Another company as well. This is part and parcel of this crackdown ons financials by the Chinese Government that is now clearly a central priority, and it follows just one week after we had the chairman of anbang, who was detained by officials looking into potential Economic Crimes at that business. It comes of course after the msci included those ashares as part of 2018, that is. The riskshts again not just for companies that are part of these deals abroad, these international companies, but also investors looking to do to play in the Chinese Markets, because there are risks involved. And this regulatory move highlights some of that. It also is going to have a Chilling Effect on the m a picture. We have seen the buying, the spree of buying we saw last year. That is down by nearly 60 this year because of capital controls , and now, we have this Regulatory Risk as well. You will likely see more of these deals suspended or a xed completely, but it is an evolving story. Betty where does this leave the bigticket deals . Tom so, in 2016, we had a outboundar for m a, deals from china. We had companies that the hna group that spent 30 billion u. S. Dollars from 2016 on. Skyecial groups like Bridge Capital chairs at deutsche bank. You had another company spend 10 billion on legendary entertainment, the production house in hollywood. They had a deal where they wanted to buy Dick Clark Productions. That fell through because of capital controls. It seems the other deals they have in the pipeline will be in question. Whether that is hnas plans to buy cwt, a Logistics Company based in singapore, for 1 billion. Another Company Plans to buy a plot of real estate in london. You have another group who had agreed to buy a 10 stake in a russian gold producer. All of these deals, one would expect, would likely be looked at again. There are a number of questions we are hoping to get answers from, which involves the probe and the extent of this probe. Is it a firing of a warning shot to the companies, or an example of the regulators pulling out a piece of string and seeing what unravel . The other question of course, is when it comes to bank lending, many of these banks are stateowned. Where were the regulators in the first place . We are hoping to get the answer to some of the questions, Going Forward. Of questions indeed, tom. Thank you so much, Tom Mackenzie in beijing. By a ahead, takata fell record as investors see bankruptcy ahead. We will have all the applications of a takata bankruptcy. Yvonne up next, theresa may reaches out to the 3 million e. U. Citizens in the u k. The latest from the brexit summit. Coming up. This is bloomberg. Betty we are counting you down to asias first major market opens this morning. A beautiful friday morning in tokyo. Take a live look outside the imperial palace. Japan futures heading slightly higher, up 50 points at this moment. This is daybreak asia, live from hong kong. I am yvonne man. Here and i am betty liu at the Wharton Global Forum. Conranh one here at the hotel. Theresa may has outlined proposal to guarantee the residency rights of e. U. Citizens living in the u k as an e. U. Summit kicks off in brussels Kathleen Hays here with more on the e. U. Summit. Important, and what was the response so far, kathleen . Kathleen this is going to affect the lives of at least 4 Million People if you look at the numbers. Citizens from the u. K. , who are living somewhere in the e. U. , it is a very specific issue that has to be ironed out at the beginning of brexit negotiations, that is important for both sides. Both sides are kind of drawing some lines in the sand and importantly, theresa may put out a specific proposal. So far, it has got a pretty decent response, and it has got some ideas for how Citizens Rights will be maintained as they get ready to negotiate the rest of the very important issues. Here is how it works. If you have been in the u. K. At least five years, you have no problem. You have settled status. You will be treated like a u. K. Citizen. Less than five years residence before a cutoff date it cut off date between when the brexit negotiation period started in march, and when the u. K. Actually brexits that is contentious. If it is less than five years, you can apply. If it is less than that, you get a great period. The issue is, it is not resolved yet. Angela merkel said it is a good start, but there have been other responses as well. Anchor kathleen, stay with us. Other ofring in economics at the university of sydney. Professor, great to have you. We just heard from kathleen. We heard from david davis, giving and and not talking about trade talks before we get this divorce settled. Now, you are seeing theresa may giving a lighter touch when it comes to Citizens Rights. Why so nice . David firstly, thank you for having me. I guess this is just the very start of negotiations. There will be a lot of issues to discuss. I think the british Prime Minister wants to get the negotiations off on the right foot. The tone fort brexit negotiations. They have already conceded on trade talks. It looks like the cards have been dealt. Mark the interesting things issue the interesting with these brexit negotiations is that sitting here now, it is not at all clear how the negotiations will be brought to a successful conclusion or conclusion. On one side, you have the u. K. , which really does not have that many bargaining chips to play with. On the other side, you have the european union, which one would imagine would rather not see brexit go ahead, but have been forced in this position by the u. K. Referendum about a year ago. Brexit is just one of the many issues they are dealing with. Macron said we do not want to get talking hours and hours about negotiation. What is at the top of the list for you . One person says he thinks security is the number one issue. What is on your list . Well, the Citizens Rights is just the most obvious reason the most obvious issue that needed to be dealt with first, discussed first. Eventually, there is the question of what the u. K. Can do , what be trading relationship will be between the u. K. And the you Going Forward the e. U. Going forward. There are a lot of other big issues like the labor movement, the divorce bill, when the u. K. Leaves. The problem with all of these issues is that they are interconnected and it is not clear how you can deal with one without also dealing with the others simultaneously. That is the reality of the negotiations that we find ourselves in. Anchor and the question of theia and the question of u. S. Stance standing behind the as. Fully is not quite strong as it was. President trump in the white house. Is this a concern to european leaders, Something Else they want to talk about at this summit besides brexit . Mark for sure. Clear int is pretty fact that the press has reported this. Considered, i guess, brexit as a bit of a distraction from other issues which are at least as important. In fact, this is one of the largest costs perhaps of brexit. Not much attention is being paid to it. It is basically the opportunity cost of all the effort and time and resources that are going to be put into potentially the u. K. Leaving. We will not know that for a while yet, for at least two years. There are oral of these are all of these other issues to be dealt with at the same time. It is almost like a bit of a distraction and a moving of resources away from other issues. Quickly, people can talking about the norway option for brexit. What does that even mean . Is that feasible for the u. K. . Mark the no deal option . Im not really sure what this means. No deal, as i say, from the yous point of you, the e. U. s point of view, they have the potential to facilitate a successful exit. I think they will be making a series of take it or leave it offers to the u. K. The u. K. Walks away from those, and i guess we are left with the status quote, which is no exit. The status quo, which is no exit. A have a very weak start. Anchor were going to leave it there. Mark melatos. We want to thank Kathleen Hays. You can get a roundup of the stories you need to know to get your day going in todays edition of daybreak for bloomberg subscribers. Go to dayb on your terminals. It is available on your smart phone in the bloomberg anywhere app, where you can customize your settings to only get the news, industries, and assets that you care about. Dayb. This is bloomberg. Anchor a quick check of the latest business flash headlines. Qatar airways has made is applied did for a stake in American Airlines. It wants to buy 10 , which would put it on par with Berkshire Hathaway as a shareholder. It is a dramatic move. The rivals are accused of government subsidies. They comes weeks after President Trump accused bill hall of supporting terrorism. The Indian Government expected to discuss its flag carriers policy. They will decide if a stake in air india should be sold at other potential strategies for the latest airline. On wednesday, the toss of group said it may be interested the tato group said it may be interested. Coming up, investors see takata speeding towards a brick wall. The implications after the stop plunged to a record yesterday. This is bloomberg. This is bloomberg. The this is bloomberg. The so new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Tthats why at comcast,t to be connected 24 7. Were always working to make our services more reliable. With technology that can update itself. And advanced Fiber Network infrastructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. 7 00 ont is half past friday. Almost to the weekend. 30 minutes away from asias first major market opens. Not as rainy as it has been over the past week or so, yvonne. Hopefully clear skies for the weekend. Yvonne we finally got some sun for you in hong kong. Take a look at the weather in new york, looking quite nice with s p futures upset overnight. Did not do much. It was flat. Seeing the market sideways, pressure when it comes to oil. Also, tech was unfocused. Beforeks headed lower the fed stress test came out. I am yvonne man. Betty i am betty liu. Youre watching daybreak asia. Lets get the first word news with Courtney Collins in new york. Courtney the biggest angst in the u. S. Have cleared the first hurdle in the feds latest stress test, indicating there more able to withstand future stocks. All 34 beat the minimum threshold. Morgan stanley brought up the rear for the second year in a row. Dealest assesses how banks with hypothetical turmoil such as an extended stocks slump or housing crash. Central bank has raised costs for a second straight time. The most hawkish authority in g20 extended its hiking cycle, from gasoline to farm products. The decision is congruent with convergence of influent inflation 23 target. Analysts say that means at the hiking cycle is over. Indian Prime Minister Narendra Modi heads to new york to convince donald trump to allow skilled workers in america. He will attempt to explain how the schemas benefited host countries, boosting u. S. Innovation and competitiveness. The indian i. T. Trade body says 75 of u. S. Tech Companies Use indian services. Tesla is working with the Shanghai City government to make cars in china, which will avoid import taxes. Must production will remain in the u. S. Tesla hopes manufacturing in china will boost its presence in the rapidly growing electric car market. Deal would allow them to avoid import tariffs that make their cars more expensive than local rivals. It helps to have a deal by the year end. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am Courtney Collins. This is bloomberg. Betty thank you so much, courtney. Lets get more and what we should be watching in the asian trade this friday. Adam haigh has more. Now we have blackrock and pimco, two of the big names warning about shocks from the fed and their tightening. What do they say, exactly . I think this is one of the investors dominating at the moment. Any Global Investor is exposed to u. S. Interest rates at some degree. It is really important. The sense from bigger Asset Managers is that the fed may be walking into some foreignpolicy mistake. This terminal bloomberg chart we shows the markets expectations for fed hikes. This is the eurodollar market, shows it picking up during june and shows investors expecting we may skip through the september hike and get a hike later in december. Although chances of that in the iowas market show less than 50 . Historically, the fed has not been more hawkish. They have not been, over the years, making policy tightening too quickly. Historically, it has been about not tightening quick enough over the last 40 or 50 years. It would be rare. Pimco still has that as their base case. They say investors should pay more attention to that. We have short memories. If we go back to five you worry february, few were pricing in for a march hike. They prepared everyone for what was a hike in the march meeting. Investors are very wary of any change we might have. A big week we had with a few more u. S. Policymakers speaking friday. You have to Pay Attention to every word they are saying at the moment. Yvonne it seems to be like that. We need to hear from them to get in line with the thinking. What does it say for the dollar . Barclays said the u. S. Dollar super cycle was over and the near term for the greenback looks lackluster. They are talking about more of the longterm story and in the near term for the u. S. Dollar to trade fairly flat for the for seeable future. It is encompassed in this terminal chart here. What this shows is, the dollar index in the white line has come up this year, 5 or so weaker. Those green bars of the increasing european recovery story we are seeing in that part of the world, which is increasing on investors radar. It is more about the relative trade of europe continuing to grow, or the recovery to cement itself at a time where the u. S. Recovery is just going over a few potholes. Some people are worried about the inflationary environment. You see theext, dollar relatively flat on a relative basis. May, they are advising carry trades to be useful in portfolios. Emerging market, debt and carry trades could do well for the u. S. Dollar. From sydney,haigh thank you. Lets look at one stock that had a tough day yesterday. Takata shares in during a brutal session thursday, closing a record 55 lower. Investors see the Company Heading for a bankruptcy brick wall. What does that mean for automakers and suppliers . Lets bring up our auto analyst from tokyo this morning. Steve, good to see you. Sharesue of takata happened in one day. Why was the market so surprised by the thought of takata filing for bankruptcy . Steve i am a little surprised that the market is surprised. They have been talking about this for a while. Liability,th all the the 1 billion liability reported, there is concern about the ongoing entity of takata. It is not a surprise if you look at what they reported in the last at the end of last fiscal year, which ended in march. They were in a net debt position. Their debt has gone below investment grade. Because of that, it is hard for them to raise any funds to support those liabilities, to pay for those liabilities. Yvonne some were saying this bankruptcy would pave the way for takatas sale, overall. What does that mean for takata . Are they off the hook when it comes to replacing airbags . Steve absolutely not. This is a negative for investors. Allou step back and look at the millions of airbags that still need to be replaced, it allows them to focus on that. It puts a lot of the Management Team it will be a different atity, of course, potentially different Management Team, focused on building airbags and replacing airbags that are sasically like bonds. Bomb in the steering column. It will be positive for the consumer. But for obvious reasons, it is negative for the investors. Yvonne what is a mean for the carmakers . Will this disrupt auto production globally . So, for ao not think couple reasons. This takata airbag recall has been ongoing for the better part of two years. The automakers have already made plans to switch out of takata. Seatbelts. L makes but in terms of airbags, i am sure automakers have found other sources. What the automakers typically do when they source any supplier, they not only look at the technical aspects of the company, the technical capabilities of the company, but the financial capability. Will the company be an ongoing concern for a long period of time . They do not want potential disruption on their supply chain. Automakers have already looked into this and i am sure they have switched out of takata and are going with other suppliers in the industry. I do not see any disruption in the industry. Nothing to worry about for the automakers. Yvonne steve, thank you, appreciate your insight. Coming up, navigating geopolitical risks. We are live and exclusive at the Wharton Global Forum in hong kong. This is bloomberg. Yvonne happy friday at of tokyo this morning. Nikkei futures slightly firmer, indicating we could see a 10 or 20 point gain at the open on the nikkei 225. Dollaryen not doing well the. 47 theur sessions, 111 last sessions. This is daybreak asia, i am yvonne man. Betty i am betty lou at the conrad hotel, kicking off the Wharton Global Forum. Who better to kick off our set of interviews then with the dean of the Wharton School, Geoffrey Garrett. He has been at the school for three years . Apropos you have this forum in hong kong. We are a week away from the big anniversary, the 20th anniversary in hong kong. What you think are the big takeaways you want to get out of this forum today and the next few days . Cite three could topics. The first is, the incredible success of the 20 years since the handover of china to china, and the next 20 years, well things stay the same or change . Second, i do not think we in the the appreciate enough dynamism of the innovation economy. We are across the street from shenzhen. We think about tencent, and Amazing Things happening on wechat. Betty are you on wechat . Geoffrey of course. Someone was giving me a red envelope the other day, a very chinese gift. The third thing is, the asiapacific, what is the balance . The success of hong kong, the future dynamism of the innovation economy, and u. S. And china in this century. Betty you know the region well. When you look at hong kong in the next 20 years, what do you see . Geoffrey we see a lot of stuff in the media about Housing Affordability and other issues. Obviously, there is the status of the relationship with beijing. It seems to me that having a financial rule of law center is so advantageous to china as a country that i would actually expect some kind of navigation through the smaller political province. Longterm strategic, the way hong kongs position today, works in the global economy. Look at the relations we have seen between the u. S. And china, asia and the u. S. Lets take u. S. China first. This has really blown over in the last few days, regarding north korea. Geoffrey i think north korea is an incredibly difficult issue. If it was easy to solve, they would have solved it. In the longer term, i think reunification of the Korean Peninsula would not only be in koreas interest, but the regions interests. It is incredibly difficult to do. Reunification of germany 25 years ago took nearly a decade. For north korea the cost and timeline would be even higher. Other thingswo about u. S. China. Despite the tough talk trump had him the campaign trail, regarding china, none of the china bashing has turned into policy. The second thing, there is a winwin pathway for u. S. China, which is about mutual investment. Nationals and. The china market, now that china is more developed. And more acceptance in the u. S. Of Chinese Investment. I do not think a trade deal could be done, but something on investments is very possible under President Trump and president xi. Betty the people that are gathered here for your forum, what iss of wharton, top of mind with regards to u. S. China relations . What do they want to hear from speakers at the forum . Geoffrey there is a real difference between the politics of u. S. China, the way it plays in domestic politics and underlying economic realities. The economic realities are really winwin, not the win lose winlose we might see in politics. A win for the u. S. Is multinational firms. Take general motors. Outwhen in bankruptcy, came as a comfortable company. They sell more vehicles in china than in the u. S. You would think that is a story they would talk about in the u. S. , but they dont. But it is because they make more vehicles in china than in detroit. A more sophisticated understanding of Global Production networks and distribution is something people of this forum understand. We need to get that more into the public debate to understand china is now a market that is not just a worldclass assembler. Betty are you seeing more Chinese Students going to wharton . They want to get a western education is that increasing . Geoffrey no question, yes. At the moment, more than 1500 chinese nationals. If you included people who spent some time in the u. S. That were born in china, that number would be much higher. Not only in china, but for the rest of the world, the u. S. Has been a real magnet for talented and ambitious people, and that immigration nexus has been great for the u. S. We are seeing more people want to come back to emerging markets and take the western experience and leverage it at home. Betty how does that change the way you run the Business School or does it . Geoffrey it is a fantastic question. I think the u. S. Will continue to be magnetic for talented people. We should focus on that on campus. In the 21st century and u. S. As a whole, they will have to go to the world more. We have a center in beijing, i spoke their last saturday night. We have a foreign here, and one in sydney in march of next year. Being in the world is so important because you cannot just read about it. You have to experience it. Getting a balance between, yes, we want our on Campus Experience to be precious and special, but also being in the world, is the way we have to go. Betty you teach management, as well. What do you think of trump as a leader . Geoffrey i am also a political scientist by training. The thing that is clear about President Trump is, he gets politics a very innately. His political messages are always noise symbolism. They do not necessarily translate into policy, so much. If i was grading trump right now, i would say the fact he dominates the media cycle with tweets is unprecedented. Betty management . Geoffrey the management side is different. You think about the trump companies. It was a relatively small family business. Now he has an enormous and complex government, and of course, separation of powers in the u. S. To deal with. The symbolism take the immigration ban. It has subsequently been hung up in the courts for six months. The trump electric gives them credit for saying, i am tough on immigration. It sends signals to the world that sometimes has damaging consequences. But the reality is, the immigration policy has not changed, because you have to grind your way through the system. That is a metaphor for trump in general. Health care is now on the table. Who knows whether the repeal and replace will happen. The President Trump can say to his constituency, i made that promise and delivered on it. Maybe if it does not happen he blames congress. In politics it is very smart. The translation and the policy is more questionable. Is he creating tensions or divisiveness on campus, particularly when you look at leadership . How does he resonate among the student body . About whoif you think votes democrat in the u. S. , it tends to be people on both coasts of the country and across university campuses. Even a President Trump is a wharton alum, i do not think it would be majority votes among our students, for example. The troubling thing in the u. S. Right now, the Election Campaign was very divisive and we felt the country was divided. With things like the russian investigation, james comey, insider washington stuff the divisions are bigger than they have been before. The people who really support President Trump think the media and the leakers in washington just do not expect respect him. Anocrats are saying, this is a legitimate government, or maybe the president obstructed justice. That makes the wedge even bigger in u. S. Politics. Betty no lack of theater for the media. Thank you so much for joining us, appreciate it. We are at the Wharton School at the university of pennsylvania. Yvonne . Yvonne great conversation, betty. We will be looking for dear next big interview out of the Wharton Global Forum drop a day on bloomberg television. At the 9 00 hour, carrie lam joins betty at 9 10 hong kong time. Lots to talk about. A week and a day before she is sworn in at the chief as the chief executive. And tom friedman will be along with betty at 10 40 to talk china, north korea. You can get those interviews live our catch us on our interactive tv function at tv. You can watch us live, dive into topics,ws, securities, charts and functions we talk about. Also, become part of the conversation. Send us an instant message during the show. That is for bloomberg subscribers only. This is bloomberg. Yvonne a quick check of the latest business flash headlines. Nomura takes frankfurt as its European Headquarters after brexit. They will transfer about 100 people from london. Currently employs more than 3000 people in europe, most of them in london. Dialogues is ready to set up a base in frankfurt as the u. K. Leaves the european union. Bed bath beyond tumbled after hours, following a decline in sales. Sales fell 2 in the first quarter. Analysts predicted a small gain. It fell short of projections. Brickandmortar transactions have stalled, the company has been spending more on shipping, coupons, and advertising in attempts to boost online sales. Uber has admitted hiring a former engineer now accused of stealing trade secrets. They hired Anthony Levandowski last august do head self driving cars, something he did at google. Kalanick tolds him not to take sensitive material with him, and he agreed. Plenty more to come with asias first market open minutes away. Lets get the latest with sophia sophie. We could be looking at a lackluster end of the week in asia. We had banks lower in the wake of the fed stress test. A rise in Health Care Stocks after republican lawmakers revealed a draft to replace obamacare. Slight gains in tokyo and sydney. That is what we are watching when trading gets underway in australia, japan, and korea moments from now. This i tepid friday after wall street closed essentially flat. Gold up. A little less stress. Although Morgan Stanley trails once again. Theresa may avoids an early fight with europe saying e. U. Citizens are welcome to stay after brexit. The Senate Republicans launch a new Health Care Bill. The top Party Figures cry fowl. Its. Already on life support this is the second hour of daybreak asia coming live from hong kong where it is just past 8 a. M. Betty coming to you live from the morten global forum in hong kong. We just had a conversation with the dean of the Wharton School, talking about how there is much more exchange between chinese citizens going over to the u. S. And vice cversa. That, of course, major factor as we continue to look out for investment in asia. Well also be speaking in the next hour with terry lamb, the chief executive in hong kong. She is going to be speaking in a few moments. Were going to monitor that speech. I will have her sit right here to talk about the future of the city. Yvonne political tensions this antimainland sentiment in the city. The skyrocketing property prices. Those are definitely topics im sure you will be asking her. The meantime, lets take a look at how things are looking in the asia markets. Looks like a be a little bit better for this friday, given the ease and we have seen and that oil prices. A little bit better but we are looking at a lackluster end to the trading week. We have seen fluctuations all across this week. Gains and losses of over 1 in some markets. But take a look at what is happening today. We have the nikkei rising after a twoday drop, up 0. 5 ahead of up preliminary reading of japans pmi due out at the bottom of the hour. We have stocks in sydney and seoul rising for a second day. But take a look at what is going on with shares in australia. Set to drop 1 this week. A recent note by a ubs dollar earners are outperforming the asx 200. They make up 70 of that benchmark. Investors are more bearish on the domestic economy but more bullish on the u. S. Economy. Take a look elsewhere with the prices of oil. We have brent above 45. But crude still below the 43 mark. Are looking a mixture after treasury climbed. And looking at the way that yields have been moving in the genstreasury space, soft Global Income strategist says pushingrish oil is treasury yields along with pushing down the dollar. Oil is driving everything right now. It erased all its gain since opec took a deal in november as you can see from the blue lines here. Take a look at the dollar index. We do have it weaker. Losses coming from gains in the mexican peso as well as the canadian looney, gaining on the oil rebound we saw. Unicredit says theyll short the dollarlooney. On recent hawkish comments from the central bank there. Take a look at the pound. 1. 2678. Slightly weaker there. Today we are marking a one year since brexit. And the pound is still bearing the wounds of the record tumble we saw in the wake of the brexit vote. This is the blue circle on the chart. There has been little relief since. With the latest round of elections adding to that downward pressure. Analysts polled by bloomberg see an upside ahead. Sterling forecast to rise to 1. 31. Some room to go when it comes to that. Yvonne on year already sent brexit. Thank you. Now we go to the news with paul allen in sydney. Paul u. K. Prime minister theresa may has placed that e. U. Citizens in britain can stay there. She laid out her position at a summit of e. U. Leaders a saint she does not want to break up families or deport anyone. The e. U. Is likely to object to her insistence that citizens are adjudicated by british judges, saying that must be the role of the European Court of justice. I hope there might be some room to think again about the Brexit Process to prevent and over the cliff scenario, a no deal scenario, which i think will be, have a gi impact on the our big economy on economies and there is still room to discuss the situation where there is some sort of connection with the International Market in the customs union. Paul north korea is said to have carried out another engine test for potential intercontinental ballistic missile. It happened where previous test have taken place. Yangier this month, pyong said it was not far away from delivering a Nuclear Missile to the u. S. Mainland. The u. S. Said its latest real japan failed to shoot down a dummy missile. Mexicos central bank has raised borrowing costs. The most hawkish Monetary Authority extended the cycle to price shocks from gasoline to farm products. It is said the decision is close. Congruent with efficient conversions. Analysts say what that really means is the hiking cycle is over. Indian Prime Minister heads to washington next week hoping to persuade President Trump to extend a a a visa program. Hell attempt to explain how the scheme has benefited both countries, boosting u. S. Innovation and competitiveness. The i. T. Trade body says 3 4 of americas top 500 Companies Use indian services. Global news 24 hours a day powered by more than 2700 journalists and analystsin 120 countries. Im paul allen. This is bloomberg. Yvonne thank you. Agenda, theumps longawaited Health Care Bill from Senate Republicans looks unlikely to pass without amendment, after four gop lawmakers voiced opposition. Lets get more. Have her fromwe song lawmakers that says this is very similar to obamacare. Ome lawmakers. What was the biggest difference between the Senate Version and the one that passed the house . The Senate Version will take more time and more gathered more gradually phase out the medicaid subsidies. The cuts to medicaid will happen on a slower basis. It also will take more time to repeal obamacare. ,o, these senate gop leaders or the senators who oppose it, have some problems with that. They cant afford to lose that many votes. The republicans controlled the senate 5248. The Vice President , republican, would be the tiebreaking vote. They can only lose two. Right now they have four conservatives who are not happy and they have some more moderate not happy. Is this important with else that is going on in washington this summer . Jodi yeah. This is obviously, we are talking about this and we have been talking about investigations. I think the white house would be very happy to have this be the discussion. There has been a lot of legislation that has been discussed, a lot of plans the Trump Administration wanted to pass and we have not seen much of that. This would be an important win for the Republicancontrolled Congress and President Trump if they were able to get a Health Care Bill. Of course, if it passes in the senate, they have to resolve this with the house bill which is different. So, this is not something that is going to happen immediately. Yvonne talk about the implications of this does go through. How big of a win would this be for President Trump . Does this mean we can talk about tax reform . Jodi it would be very symbolic. Terms of something on his agenda through the campaign, repeal obamacare. If he was actually able to do that, that would be a big win. Then, withn is Everything Else on the table, with all the investigations and the time that congress will spend investigating the russian hacking, will they be able to get onto the other things . Even if they pass this and the senate, they hope next week, they have to resolve it with the house and that could take most of the summer. Yvonne with the latest with a comey, investigation, what are we hearing now from d. C. When it comes to that front . Are we going to be getting more details from the Robert Mueller investigation . Jodi all eyes are on Robert Mueller. Thats the big one. I think congress will have some more hearings. Investigations but everyone is waiting to see what comes out of Robert Muellers query. Yvonne thank you. Ahead, the big deal makers under scrutiny as the government tries to rein in risk and pour cold water on a takeover spree that has seen tens of aliens of dollars leave the country. Betty the fed posting result of the enteral banking annual banking stress test. The best and the worst. Lenders are better than in the past. This is bloomberg. Yvonne this is daybreak asia live from hong kong. Betty im betty liu here in the global form. All 34 of the biggest banks operating the u. S. Have passed the first phase of the feds stress tests. We have a recap. Did everybody passed . It was a really good report card. First banks did pass the hurdle of the feds stress test. This is known as the dfast, for short of the dodd frank act. Why dont we pull up our full screen . Why you look at the yellow and the greens, all of them did pass. But the yellows in terms of state street and Goldman Sachs and Morgan Stanley, those are in yellow because they came within 2 Percentage Points of the minimum capital requirement. Ratio. Dio. A 3 Morgan Stanley actually came in the forced out of all of them. It did pass. For the second year in a row. With that said, one of our fed governors came out positively regarding these reports saying this years results show that even during a severe recession, how the large banks would remain wellcapitalized. So, just to recap, what does the severe recession look like . According to the fed, which a lot of people say has been stringent, it involves a couple things. One, that equity prices would fall by 50 . They would lose half their value by the end of this year. And that unemployment that stands at 4 , would double to 10 . It looks like now that if that did happen, all the banks you just saw would have suffered 383 billion. 3 but think about how much they have a mess because of what is happened ever since 2009. In keeping capital, that number stands at 790 billion, less than half of what they actually have on hand if this Great Recession were to hit us again. Yvonne so, Morgan Stanley seeing a bit, i guess, a concern, but still passing. It is the foreign banks in the u. S. That have been seeing the most concern in these previous test. But this is out of that qualitative review. Take a look at the numbers here. In the chart, you dont see any yellow. That is good for the foreign banks. You will want to look at the right hand side. In terms of the leverage ratio, the 3 , its going and almost order from smallest to biggest. I want you to take a look at the best. Deutsche bank trust coming in 13 13. 5 . Coming in at 13. 5 . This is good news for foreign banks. Santander coming in at 10. 5 . And America Holdings at 8. 2 . Again, very well above the 3 . Now, we are looking at next week, june 28, on wednesday, that is when the second hurdle, the second report card we are going to get in terms of what is called the comprehensive capital analysis review. What that is going to look at is whether after these, if these ba how much they would be able to return to investors in terms of dividends. And before the test today, analysts are saying they will be able to return something on the order of 120 billion which accounts for 85 of their profits. Good news coming out from all of the banks. Yvonne thank you. Lets get more with those stress tests with our Senior Finance writer. Great to have you. What is your first take. Is this a good set up . Does it tell us what will happen next week . For first results, these are good numbers but you have to remember that since the 2008 crisis, banks have been increasing their capital levels nonstop. For many years, they actually could not give out any dividends or buyback any shares. They kept hoarading all of their profits and turned into capital. Years this point, 89 after the crisis, they are at good capital levels. Even under a very stressed scenario, 50 , they can still whether it. This is what the numbers are showing. For next week results, there is one unknown which is the qualitative portion. Fewer banks are going to be tested this time. Left in the qualitative portion. The qualitative section has nothing to do with the numbers. It is more about the overall profit. How they manage their risk, how they collect their data. How they know their risk positions and whether they have all the right controls. So, its very subjective. There, the banks that failed in the last two years are foreign banks. Theyre exempt this year. Thus, next week we are going to see everyone pass again. The tests, are they getting easier yearbyyear . Because of President Trump . The tests have gotten a little easier this yera, especially this yera. The qualitative portion not only is like less than half the group. That is a great ease. Also, the banks have sort of gotten the hang of it. And Going Forward, already the fed has signaled they are going to be more transparent about how they are doing their capitalization. Theres been, its getting easier, and its starting before trump came in. It started last year when the governor was in charge of regulation at the fed. He even started doing some of these changes, containing under governor whos now in charge. But trump has been banging the drum to make things easier for banks. The process that started, its definitely going to get better under trump. Yvonne are we getting ahead of ourselves here when it comes to cash payout, that we are expecting when you do see that yield curve continues to flatten . What does it mean for shareholders . The pay outs have been going up slowly as well. This year they are going to increase more. With the banks having so much capital and they didnt return a lot of the extra excess capital way above the minimum requirements on the under u. S. Regulations, this year they might be able to get more. That is what analysts expect. Going forward, earnings, profits, are they going to be making wonderful money in the next two years . It depends on interest rates, those are all questions. What with trump, one of the big trades for banking stocks in the u. S. Has been there is going to be easier regulations, tax reform, tax rates being cut from 30 to 15 . Of course, those are not certain, whether they are going to happen, if trump can actually deliver. There is a lot of excess capital. Regulators appointed by trump are not going to be as harsh on the banks as regulators have been in the last nine years. So, th eres some positive room for optimism. ll check back in with you next week. We have a big guests coming up on bloomberg. Incoming hong kong chief executive carrie lam. You dont want to miss that interview. Plus, David Rubenstein will be on at 9 40 hong kong time. That will be 20 minutes to midday. You can watch those live and use tv go. You can watch some of the interviews that betty has done with the dean of the Wharton School. And you can send us an instant message or question. Some of the guests we have this morning. For bloomberg subscribers only. Check it out at tv go. This is bloomberg. It has raised 40 million in a new funding rounds what would be one of the Largest Investments and financial tech since the brexit vote. Caroline hyde asked the Ceo Peter Smith how the company was able to cash in, despite the tough political climate. The first is that we have had an incredible year on a growth perspective. Investors are willing to back companies that are doing really well. The other thing is that were pretty diversified. So, our market is in europe it. We have a huge european user. A majority outside of europe it i think investors are more comfortable. Caroline you talk about growth. Can you give us an idea of what growth you are seeing and we talked about the driver before . A a fewnk there are things. One is consistently improving your products. The other one is certainly the extreme geopolitical risk we have seen. When you see that, people want to sort of diversified. They want to find new assets. When that happens, bitcoin does really well. Caroline tell me about additional currencies that i can build from . What are you seeing in terms of the dynamics there . Just yesterday we saw some volatility and this area. It stressing . Huge runup. A i think it is probably overheated and probably a bubble. That said, i am very positive on the outlook. At the same time, i think bitcoin has come up from maybe 1000 to 2700. Much more sustainable fashion. Bitcoin is a safe haven asset. The trade is very correlated to gold. Right now bitcoins seeing a slow and persistent way up. It probably in a bubble at the moment ethereum is probably in a bubble at the moment. Yvonne lets do a quick check of the latest headlines. Planned acquisition of snap has hit a snag. The billionaires objecting to special payments to other snap deal shareholders including a companys cofounders. They are seeing as an attempt to win over larger investors who may threaten the deal or drive down snap deals 1 billion valuation. Qatar airlines wants to buy 10 of American Airlines that would put it on par with Berkshire Hathaway. A dramatic move in a longrunning dispute between u. S. Carriers and their gulf rivals. It comes weeks after President Trump accused dohas of supporting terrorism. The Indian Government is set to discuss its carriers feature next week. An official says the council of ministers should be sold in other potential strategies for the debt laden airline. The group said it would be interested. But the government was urged to write off air indias 8 million debt. Of the topext, some dealmakers are suddenly under the microscope in china. Details of some bigname stocks on the fly. Well continue to watch those stocks at the china open in the next hour, including the likes of the most Acquisitive Companies coming out of the mainland. This is bloomberg. Looking to be a right friday in the lion city. 8 30 in singapore. I am betty liu. You are watching daybreak asi. Lets get first word news with paul allen. President trump has ended weeks of speculation by saying t did not take james ape james comey at the white house. The president tweeted he better have helped there are no takes before he starts leaking to the press. Senate republicans issued a new Health Care Bill immediately attacked by senior Party Figures. Reductions ofdest subsidies and tax cuts for the wealthy. Inpital stocks led a rise Health Care Shares up to the bill was released. The farmer, biotech, and life Science Index saw its biggest gain since november. The biggest banks in the u. S. Have cleared the first hurdle in the feds latest stress test, indicating they are able to withstand future shocks. Morgan stanley brought of the year for the second year running. The test assess how banks would handle hypothetical turmoil. Outgoing bank of england official has used her final speech to urge colleagues to start tightening for the First Time Since the financial crisis. She said raising rates should not be delayed any longer given that u. K. Inflation is likely to reach 3 and forecast to stay above the 2 target for several years. Tesla is working with the Shanghai City government to make avoidn china and and voi import taxes. Inla is opening manufacturer china will help to boost its business. The deal would let tesla avoid the 25 import tariff that makes its cars more expensive than local rivals. It helps to have a deal by year end. Ud global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you so much. Time to see how asian markets are shaping up after a mixed session on wall street. A mixed picture in asia. Up. 1 . I we do have the nikkei fluctuating. They are looking to into their week slightly lower. Yen, thatk at the pair looking range bound. We do have Sumitomo Mitsui saying it is hard to envision an upside to dollaryen, likely to stay capped. The dollar could find some support from japanese cpi due out next week. Weekenchmark setter in the. 9 lower to snap a twoweek drop. Consumer staples leaving the track on the nikkei 225, down. 6 , kirin beer a leading laggard. Getting the japanese to loosen Purse Strings has been a longstanding goal for the shinzo ouabe administration. They are tying up with a chinese credit card issuer to generate that data. Lets look at some japanese ecommerce players. Yahoo japan is rising almost 2 . We had amazon japan saying they are likely to add to their independent courier network, adding pressure for rivals. Thank you. Of chinas most acquisitive foreign dealmakers are in the spotlight with regulators asking banks to report their exposure after last years takeover spree. The companies that are on that ang and wanda. Nb i think we are steering clear of what exactly regulators are looking for. That is a key question, whether this is a warning shot to these companies or whether they will be unraveling some more details, or how far they will pursue this. We are talking about some of the wealthiest,ful, best politically connected tycoons in china. Having their businesses now scrutinized by regulators, the regulators from the Banking Regulatory Authority asked the banks to provide details about loans that had been given and provided to these companies for some of their overseas acquisitions. Hna, wanda,include and anbang. Inseems like the next step the clampdown on Financial Risks and leverage. The chairman of anbang was reportedly taken away by investigators looking into potential Economic Crimes. It seems this is the next step. We have already seen Insurance Industry products masquerading that are more likely Wealth Management products. They have been clamped down on. It is likely to cool the dealmaking we have seen in 2016. That slowed by 60 so far this year because of the capital controls. This is likely to send a further chill through the dealmaking Going Forward. Also, it would not be lost on many people that this spotlight players in private industry in china is coming at a crucial time politically for china ahead of the Party Congress and the political reshuffle underway here. That Congress Happening towards the end of the year. Msci decided the to include ashares. Where does this leave the bigticket deals that these companies have been pursuing . Tom we saw record emanate last year. A last year. Capital buying stakes in deutsche bank, wanda spend 10 billion on legendary entertainment. Hope to a deal they secure for Dick Clark Productions that fell through because of capital controls. It seems a lot of the deals they had lined up for the rest of the year now are going to be in question. N looked at buying a 10 stake in a russian gold producer , and one that as well, some future deals, some real estate in london they are hoping to be aop, so it will question of more Due Diligence for some of the International Players getting involved in some of these deals. It also highlighted the riskss anthe Chinese Market and unfortunate development after the msci included does ashares. Is more details about how far this investigation will go and how far this probe will go. Is it a warning to rein in these companies or will it go much further and unravel a whole load issues . Thank you for joining us live from beijing. Coming up, japanese millennials are making governor kurodas job much harder. We will be live in tokyo to find out why. This is bloomberg. Theresa may took a big step towards brexit as she presented a plan to protect the rights of eu citizens living in the u. K. The eu leaders gave a mixed response. Lets bring in Kathleen Hays with more on the eu summit. What exactly was proposed on what has been the response . Somethingertainly that has been in question for a while, what to do with nearly 3 million europeans who live in the u. K. Million toother 1. 5 2 million brits who live in the eu. It is seen as one of the gateway issues that have to be settled before negotiations over trade began. Begin. It is not clear on the cutoff date. Whether or not you can easily remain a citizen depends on how long you have been in the eu before the cut off date. The cut off date is somewhere after march 29 this year when the official brexit period started and when ever the u. K. Manages to completed. Let me give you some specifics. K for have been in the u at least five years before the cutoff date, you will be just like a u. K. Citizen on everything from health care to pension. Than five years before the cutoff date, you can stay until you get five years residence and apply for settled status. After the cutoff eight, you get a grace period to apply for legal status. Pensions andoffer benefits and full rights, that theresa may thinks is an important concession to the eu. The eu wants their Citizens Rights protected not by the u. K. Courts, but by the European Court of justice. The u. K. Has not said they are willing to go along with that. Angela merkel says it is a good start, but many other issues remain, like the customs union. It is aes not stay, tricky issue about having to put a hard order in between the republic of ireland and northern ireland. The irish on either side dont want that. If they stay in the customs union, they dont have to deal with that. We will see how the eu responds. What is the priority for the eu at the moment . For brexit and trade talks . As we Start Talking about trade and brexit, Emmanuel Macron saying i dont want to get all down in brexit. We have eu issues to discuss. One of them is that your first trade rift emerging at the eu. I want to show you a bloomberg chart that shows Foreign Direct Investment by china in the eu and by subversive. Look at the white line, how Chinese Investment has soared the last couple of years to the extent some are getting nervous about it. They want reciprocity, and that orange line shows you that reciprocity by European Companies is not happening. , security, howy to deal with russia now that the u. S. Is not necessarily standing right behind the european union. With . Ll that be dealt here is what robert said earlier. Rob said earlier. There are issues about internal security in the eu and how to deal with United States as a potentially less reliable ally, and how to do with president putins interference in election throughout the eu and every country, trying to weaken eu governments and the cohesion of the eu, weaken nato. It is clear that there is a russian strategy. That held like to add served in many government positions over the years. He is the vice chair of kissinger associates. He really has a lot of perspective on this. The European Council president donald tusk announced at the end of the day in brussels that in fact the eu had on day one decided to extend it sanctions against russia due to the annexation of crimea. It is clear that the eu is watching and dealing with a lot of issues. It surely isnt just about , but for investors, markets, and the u. K. , maybe it is what it is all about right now. Maybe brexit is what it is all about right now. The boj having a tough time boosting wages. Lets bring in our economy reporter from tokyo. To theit comes down young japanese population because we are seeing some of the best job prospects in a generation, yet they are not taking a lot of risk and switching jobs. Thats right. Japanese in general are often more riskaverse than other countries, but the young generation especially has grown up during really lackluster growth and experiencing inflation, so there is this heightened sense of caution. There is a duality in the japanese labor market where you have regular workers who get good hey and good benefits and then you have workers who dont get the same benefits. If you change jobs, there is a falling from the regular category into the nonregular category, and there is a real sense of caution around that. Forhat does it mean governor kuroda and the boj and the macro implications on this route this. The biggest macro implications is that it makes it harder for the boj to get to this 2 inflation target and escape deflation with Wage Inflation they want. Government has exhorted companies to try to increase wages if they are profitable, but they have held back on that. This sense of caution, if people change jobs more readily and it pushes up wages as people move into more productive jobs and sectors, that is not happening as much and is keeping wage growth suppressed and inflation down. We have seen the government tried to push through efforts, trying to get women into the workforce, trying to get more efforts put forward, but we have not seen a lot of progress in that. Is there a enough being done to address the issue as well . It has been relatively slow going. Most recent assessment of japans economy called the Structural Reforms a lagging element of abenomics, but the government is trying to make some efforts. There is this a room called workstyle reforms where they are trying to get equal pay for equal work between regular and nonregular workers, so they are trying to push the reforms, but it is a slow process. Some people think the government needs to make it easier for companies to terminate nonproductive workers so they can reallocate resources to more productive roles. More than anything, the cultural attitudes need to change, and Business Attitudes need to change, and it will take time, and it will take people seeing examples of others successfully changing jobs and seeing that it can be done in society before they are willing to take that risk themselves. I appreciate your insight to joining us from tokyo, japan. You can get a roundup of the stories you need to know in todays edition of daybreak for bloombergs subscribers. Go to dayb on your terminal or smartphone in the bloomberg anywhere app. You can customize your settings to get the news, industries, and assets you care about. Dayb , make sure you check it out. This is bloomberg. Confirmationfter of theiro and two chinese internet firms have been end broadcast services. Interesting line from the broadcasting regulator. What does this all mean . It is bad news for weibo. They have seen a lot of growth coming from video. Everyone wants to look at photos and watch short clips online. If they cant broadcast movies and clips, then maybe the audience will go somewhere else. Do we know how long this will be going on . What is chinas beef with webcasting at the moment . Chinas eve with webcasting government and varies authorities dont like to have a free media running around. There are always fairly embarrassing clips floating around on the internet. So if they are critical and show negative aspects of society, they take them down, but not iten early enough online, so is an attempt to clamp down on videos on weibo. Doing know how long this andd go for, the extent where this could be heading . What companies are most affected beyond weibo . The moment, it is hard to say. Only three companies were targeted. There could be more in the works, but as is typical with the Chinese Government announcements, this came suddenly, late at night, with no explanation. Was 183re statement characters in itself. We have not heard anything more from the regulator at this point. Have you heard from the companies . The company said it was working with the government, trying to find a solution. For me is howsing much of a surprise it was for the company. They were scrambling last night trying to figure out what they should say and what is going on. Typically weibo is a company that works well and lockstep for government demands for increased regulation or censorship. Arehis stage, all they trying to do is figure out what the actual extent of the ban would be, what is affected, and for how long . The same kinds of russians you are asking now. Thank you. We will continue to watch that story. Lets do a quick check of the business flash headlines. Nomura has picked frankfurt as its headquarters, transferring people from london. Noumra employs 3000 people in europe, most of them in london. Bed bath beyond tumbled after hours following a surprise decline in sales, falling 2 in the first quarter. Analysts had predicted a small gain. It also fell short of wall street projections. The company has been spending more on shipping, coupons, and advertising to boost online sales. Labelss in talk with about creating its own music streaming service. Clear the automaker will go in that direction or continue with its current music partners. Tesla did not address talks with labels, but says it wants an exceptional in car experience so customers can hear the music it wants. Time for a quick lookup what is coming up. Rish, we have a big interview coming up. Rishaad absolutely. Is a wharton Global Congress taking place in hong kong. Of thechief executive territory, her plans for the future and what she is going to do about these voices of dissension out there. We will talk about that. Betty will do that interview. We will be joined by David Rubenstein. It is serendipitous that we do now. Carrie lam talking a long serving bureaucrat, and probably number two to cy leung. She has been a Civil Servant for some time. She will be sworn in a week from today. Rishaad correct. Carlyle group, David Rubenstein as well. Thomasman as well friedman as well, talking all things brexit to the tensions in the middle east and israelpalestine, and now. She has versus sunnis and saudi al. Ia versus qatar aet hand give what the other hand takes away. There we go. That is the International Commerce center. Haidi i am haidi lun. Rishaad i am Rishaad Salamat coming to you from bloombergs asia headquarters in hong kong. This is Bloomberg Markets asia. Haidi asia pacific markets limping towards the into the week after wall street close essentially flat, oil week, gold up. Rishaad