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tv   Bloomberg Daybreak Asia  Bloomberg  July 22, 2021 7:00pm-9:00pm EDT

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haidi: hello and welcome to "daybreak asia." i am haidi stroud-watts in sydney. sophie: we are counting down to issues major market opens. shery: good evening. i'm shery ahn. our top stories this hour. tech drives u.s. stocks to the brink of a record. snap and twitter surging after hours on strong reports by the intel sales forecast fall short. beijing may hit didi global
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with major penalties after its u.s. ipo went ahead despite government pushback. and it is finally here, the olympic opening ceremony now just hours away, but the pandemic looms large over the world's biggest sporting event. japan away on holiday today but let's see how they are setting up for the rest of the major market opens. what are you seeing? sophie: futures are mixed. s&p e-minis gaining ground after a two day gain for the benchmark. we are keeping an eye on offshore yuan which is staying steady. check out the aussie dollar just holding below 74 as we digest the latest pmi numbers. falling to 45.2 from 56.7, now in contractionary territory. we are seeing moves lower for manufacturing pmi and services
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also coming under pressure as consuming -- consumption has been weighed by the lockdowns in australia. 44.2 in july versus 56.8 prior. we do have aussie futures settled lower after the benchmark hit a record closed thursday as miners did continue to provide support for the index , notching the biggest earnings upgrades and on that, we are keeping a close eye on unicorn zip which was upgraded to buy jeffries. that was overdone. keeping a close eye on the indian unicorn as well, it will be making is trading debut in mumbai after raising $1.3 billion. a bank in south korea is set to raise two point $2 billion in its listing and over in china, china telecom getting the regulatory approval for its with them shanghai, shery. shery: i'm watching those ipo's
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here in the u.s. south former firms. katie is one of the worst performers. we are talking about 20% plus below the ipo price. 37 chinese companies listed in new york this year. 9% below their ipo price and it does not help that didi is now seeing more regulatory pressures. haidi: about 26% below that ipo offering price and that is less than one month ago that they listed it and we have bloomberg of course first reporting news of the regulatory crackdowns starting so it does make you wonder how much further downside there is and i do also wonder at what are seeing that ms regulatory environment improve. let's get that over to our reporter who has more on this for us, our autos were order, -- autos reporter, who joins us. this is the other big story where we are hearing about
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record penalties for didi. will they be worse than what we saw for alibaba? >> yes, chinese regulators are considering a range of attentional punishments which can go as far as the worst delisting from the u.s. stock market although it is unclear how it will play out. the other ones they are considering could include a fine or suspension of certain operations or even the introduction of state owned investors. this is according to a bloomberg news report citing people familiar with the matter. they are telling bloomberg that it is still at an early stage and the options are still uncertain. shery: how will it compare with alibaba's penalties after their antitrust investigation, and what could it do its business? >> the people sharing
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information about the discussions on penalties on didi could be worse and harsher than the ones from alibaba, which as we know, swallowed a record 2.8 billion u.s. dollar fine after the antitrust investigation. we know that the context is that regulators had warned the company about their concerns with data security with the listing in the u.s. and yet the company still went ahead and proceeded with the u.s. listing. that of course is going to -- from the regulators. shery: let's talk about another ipo months after being booted from the new york stock exchange. china telecom is now -- a share sale in shanghai. brett miller joins us now. this is set to be the world's biggest listing so far in 2021 and a bumper year for ipo's in
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mainland china. brett: yes, that's right. you're looking at a share sale of $54 billion in local currency, about $8.4 billion in u.s. dollars, a big figure, and it's coming among the increased tensions between china and the u.s.. what we saw from the telecom, third earlier in the year, looking to come home. the same thing also happened with china mobile and another one of their peers amid rising tension. although it was a measure that came through from the trump administration originally on national security grounds, that tension is coming through continually for the biden administration as also there's no real change to those tensions that are bringing chinese companies home. haidi: what are the implications for other companies looking to sell stock in china? brett: well, it makes you think
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that chinese companies that need to raise more money for growth cannot really look to the u.s. anymore, not with the tensions we are seeing at the moment. the trend will be more chinese companies coming home to the mainland and we expect they will come home to open arms in china. the chinese leadership would like to see chinese markets elevated more. we are seeing tighter regulations from china on overseas listings and continued scrutiny in the u.s. of chinese companies on national security grounds so that is the trend we are hearing from analyst. they have seen about 280 billion chinese yuan of local share sales on the mainland this year already to date so we expect that to continue through the rest of the year because the broader backdrop of the tensions, nothing there is changing. shery: brett miller with the latest. let's get you to su keenan in new york with the first word headlines. su: we start with the white
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house which has accused china of being a responsible and stonewalling a phase two world health organization investigation into the origins of covid-19 including the possibility it came from a lab in wuhan. beijing says it will not participate in any inquest, saying that there is zero evidence that support the lab hypothesis. local leaders want to examine the matter further. u.s. senator amy klobuchar has introduced a bill to make online platforms, including facebook and twitter, legally liable for misinformation about health issues such as covid-19. the democrats as the pandemic has highlighted how lethal inaccurate information can be. the proposal comes less than a week after resident biotin says false -- biden says false vaccine information is killing people. nfl teams have been warned that in the event of a covert outbreak among nonvaccinated players, they could be forced to
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forfeit a game. roger goodell says in a memo obtained by the associated press that if that happens, players on both teams would not get paid that week. he says the nfl does not expect to add a next week to play games that cannot be rescheduled within the regular season. and tokyo olympics organizers have fired the director of the opening ceremony the day before it was set to take place. a say it is because of the discovery of a 1998 video that shows kobayashi joking about the holocaust as part of a skit put on by the former comedian. officials say with the director out at the last minute it is , unclear how the opening ceremony will be handled. 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. i am su keenan. this is bloomberg. shery: just ahead, we will dig into the tech earnings that drove u.s. equities higher.
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social media giants got a lackluster forecast for intel. a look at the risks ahead for the reopening trade with peter. this is bloomberg. ♪
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haidi: let's take a look at the tech earnings in the u.s. twitter's third quarter profits beat estimates. let's go through the reports with tom giles. that's start off with intel. it was the third quarter forecast that left investors wanting more. tom: that's right. what people are seeing is weakness in intel's key business of selling chips for servers.
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these are these powerful machines that are populating data centers around the world that we have all been -- the demand for digital data has been surging. the problem for intel is that while for many years it was a leader in making server chips, it has got a lot of new competition from two places. one of them is amd, smaller rival, but that has been beefing up its ability to make these server chips. some of its biggest customers like google and amazon, huge data center consumers around the world. they are making their own server chips on other vendors and that is what is starting to really hit home for intel. shery: what about twitter? they have an easy comparison for the second quarter of last year but they have pretty good -- for the forecast. tom: two very similar
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businesses. these are big social media businesses, global social media businesses that rely on advertising dollars. what people sought in these numbers -- saw in these numbers was that their customers, these businesses that want to use twitter and snap to reach their audiences are spending, and they are willing to keep spending as the economy bounces back, as they need to reach the audiences that you can reach through twitter and snap. this business puts them in front of influencers and in front of politicians, consumers, and the user numbers are going in the right direction. snap, you will get a younger different graphic -- demographic. twitter and snap are relying on and benefiting from a resurgent -- a resurgence in business as the economies around the world start to come back, some of them
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more slowly than others. you are starting to see the pandemic ebb and parts of the world. not quite there. a lot of assistance to the back scene -- to the vaccine. that is filtering through to twitter and to snaps bottom line. shery: tom giles in san francisco. we will have more tech earnings in the coming week. tesla, alphabet, and microsoft are among the biggest names, plus qualcomm and facebook. on thursday, we also get amazon. we have already seen a series of strong earnings reports. total income of the 80 companies that have reported so far beating analyst forecasts by 20%. that's get some analysis from the head of macro strategies, peter tchir. always great having you with us. how much support will earnings give to the markets when you still have the delta variant spreading, not to mention that the fiscal support that was promised seemed a little bit disappointing at this moment? peter: i am really going to be fixated on the faang earnings.
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more and more, the markets are being driven by few and fewer companies so we need to see them deliver and then once we start thinking about the next subjects, it is what happened to fiscal stimulus. we were going to get a big bipartisan deal. that seems to be off the table and there is some concern whether we will be able to push through anything big to be a reconciliation as the democratic party seems to have some disagreement. fiscal stimulus is set to disappoint and we had to figure out what is going on with the delta variant. the positive news so far is although it's obviously affecting a lot of people, it seems to be, you know, less severe in those that are affected so we need to see that continue so as we get through that, maybe it spurs more vaccination, gets us where we need to become a that that is something in the back of a lot of people's minds. shery: given the uncertainty, does it make sense you can start diversifying with crypto asset
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thats are now getting another boost -- assets that are now getting another boost? peter: i like non-us stocks. there's a lot of -- foreign indices have lagged the u.s. there were some talks about this but i think we are still in the early stages of government regulations, seeing china push on it. i think you will see more on the u.s. pushing back on it. i would avoid crypto. you can look to assets at or around that. big tech is still ok, but you have to avoid crypto right now for one more big pushback from governments and regulators. shery: -- haidi: peter, speaking of pushing back and potentially avoiding, would you be avoiding some of the big chinese tech names? we have been crunching the data of ipo's and they have performed so poorly since their u.s. listings. peter: there is something going on behind the scenes that it is
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very difficult to understand what china's endgame is but from anything from watching its own digital currency, to really pushing back on crypto miners, to allowing didi to go public, and then finding them, there is something -- fining them. there is something. i would much rather be focused on energy and commodities which i think have a little bit more upside given the recent selloff than the big chinese tech. haidi: does that upside continue even with as we continue to watch the impact of the delta variant? the very patchy rollout of the vaccination process and a lot of countries, does that impact we sort of smoothness of the growth cycle for you? peter: i want to be conscious on emerging markets. i think emerging markets are little bit behind the u.s. in terms of vaccination, europe. their ability to deal with that. away from the emerging markets
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but the opportunity with the growth is still there and you are seeing some of the announcements today, whether it is twitter and snap and the outlook for the next quarter is very good but if we start returning to work a little bit, will people really be able to use these apps as much as they have been using them? this work from home shift back into a work from the office will really impact of those companies, slow down some of their revenue growth, and surprise people to the upside. i like commercial real estate a lot in the u.s., for example. haidi: peter tchir, always wonderful to have you with us. coming up next on "daybreak asia ," counting down to the long delays to the start of the olympic games and the opening ceremony just a few hours away from us today. we will be checking the mood on the ground in tokyo, next. this is bloomberg. ♪
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>> there will also be a tremendous sigh of relief, just having pulled out the olympics and paralympics successfully so i could see that being a boost for sentiment. >> the games will be memorable for the fact that they were conducted during this covert environment. >> the covid-19 might have postponed the games. it has not defeated them. >> it can serve as a beacon of hope. >> the olympics seems to add any sort of risk on top of that already very stressful situation, i think it could be a political disaster area >> we are very well aware of the skepticism. >> we are preparing, whatever the circumstances are. >> the olympic games will bring attention to japan, and it is a
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great opportunity to promote electric vehicles globally. >> the most exciting thing for me is when the olympics are over and the economy can start to roar. >> business and government leaders weighing in on the tokyo olympics on bloomberg television. while the opening ceremony is now in sight, let's get to bloomberg quick takes roomy moray -- kurumi mori. how are things on the ground in this very unusual summer olympic games? kurumi: it is actually a four-day weekend here. the government originally created this long weekend to celebrate the tokyo 2020 games with a sold-out stadium, public viewing events and so forth, and all of that has been scrapped due to covid. some locals traveling out of the city reported nearly sold out domestic flights yesterday.
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local media said there was a lot of traffic on the highways, but on the ground, there is some excitement there in tokyo. last night, fans who were standing outside the stadium where i attended the soccer game, some of those who had tickets to the match before the decision was made hold me that they are going to watch the livestream on their phones. they just want to be really close to the action, get as close as possible to the outside of the stadium. shery: as of covid was not enough, we are seeing more controversy over the opening ceremony and his director and composer being pushed aside. what happened? kurumi: yes, that is right. the creative director now has been fired just one day before the opening ceremony. we found out yesterday that tokyo 2020 has fired him over a skit, a video that went viral or a skit heated 23 years ago, and that was him joking about the holocaust. of course, it did not play out
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well in social media and it went viral. even within one day, plans changed and we will get the opening ceremony without him. shery: bloomberg's quick take reporter. we will have more insights on the olympics later. and sports capital advisors ceo joins us later on bloomberg markets. for now, here is a quick check of the latest business flash headlines. china telecom received regulatory approval for a primary share sale in shanghai. it is set to be the year's biggest china securities regulatory commissioner. it says it approves the listing, a move that comes six months after china telecom was booted off the new york stock exchange amid u.s.-china tensions. china mobile is seeking to sell stocks in shanghai.
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bloomberg learned that the carlyle group is seeking to raise as much as $27 billion for its latest flagship fund in what could be the industry's largest ever private equity pool. discussions are ongoing on the total size of the fund could change. carlisle's fund would be 46% larger than it 2018 pool and break the $26 billion record held by blackstone from 2019. singapore's sovereign wealth fund posted its biggest gain since 2015 on the back of an equities rally. it warned returns will be significantly lower over the next decade due to lost evaluations and rising bond yields. the fund reduced its bond and cash holdings 45% and plans to reduce them further given the prospects for higher yields and lower prices for fixed income. haidi: let's get an fx check focusing on the yen as this is a
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momentum day for japan. we are counting down just hours away to the official start of the tokyo summer olympics for the opening ceremony. not much of a move when it comes to dollar-yen but we did have a very strong session the greenback against the yen in particular in the overnight session. we are also taking a look at the korean won, seeing softness to the downside when it comes to trading in the dollar. the aussie holding pretty strong, and the kiwi dollar trading just under 70 u.s. cents. coming up next, we will be hearing from the australian trade mr. about plans for a regional trade deal. -- the australian trade minister about plans for a regional trade deal. this is bloomberg. ♪
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haidi: australia believes washington's plans for an asian digital deal maybe a step towards the u.s. rejoining a regional trade pact that president trump had exited in 2017. the australian trade minister spoke with annmarie hordern about the deal at his meeting with the u.s. trade representative, katherine tai, as katherine tai has been offering support in dealing with china's economic coercion. >> u.s. administration has been very clear that they will not leave us on the playing field alone so we are looking and
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examining ways that they can help and support us. obviously, no country wants to beyond the end or the receiving end of economic coercion. it is in no one's interest, no country's interest that we don't have trading place in all countries adhering to those trade rules. that is how the global economy has benefited so much since the second world war so we are going to work together and putting new trade rules together and making sure that we are encouraging all countries to adhere to trading rules in a regional digital trade agreement which has been one of those priorities on my agenda you're in washington over the last two days. >> do you find the biden administration us to sign up for that? dan: we had some very positive talks. we discussed it again over dinner last night and i have had very good meetings on the hill both with senators and house
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members about this and it seems to be a positive approach to bipartisanship when it comes to a digital regional trade agreement and i think that is what we need so i have been very encouraged. >> will this digital trade agreement be a precursor to the united states rejoining tpp? dan: in the end i think there , are a lot of countries in the region that would hope that that would be the case. our view is let's take one step at a time, create that bipartisanship for a digital trade agreement in the indo pacific region and if we can take that first step, hopefully we could look at a second step. which would be cp tpp membership with the united states, but we understand the important first step potentially would be taken through a regional digital trade agreement. >> when it comes to china, they don't want to leave you on the playing field alone. specifically, what are you asking the united states to do?
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dan: be part of setting new rules in new areas, like when it comes to digital trade. look at what we can cooperate in the wto to deal with economic coercion. there's just a couple of ways that we can work together. also, making sure that in the committees of the wto that we call out economic coercion when we see it. we are not the only country that has been on the receiving end of economic coercion so we want to make sure that it is made clear to all countries that this is not the way to proceed, that we need to make sure we are working together. >> during this, especially your exports on coal, the united states has rendered exports to beijing. the u.s. is in essence being advanced by this tension between you and beijing. did you discuss that? dan: it is one of the difficulties of dealing with
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economic coercion. when one country is penalized from another country will benefit from that. we very much need to take a collective approach in calling it out, make sure that we have reputational issues at stake when countries use economic coercion. these are the types of things we have to work together on. individual countries targeted, it makes it very difficult for collective action. >> php says it will be years. i'm very rushed on time. years on the stand for china? dan: that depends on the message that we could collectively send to say this is not the type of behavior that will ultimately be rewarded and it is not the way that the world economy will benefit. it benefits from setting the rules and everyone adhering to the rules. shery: the trade minister there. he was talking about the collapse of the country's trade
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ties with china. we are talking about tensions on hong kong. the trade, human rights, covid-19. when it comes to trade volume, it really has not taken that much of a hit. chinese data showing the trade has rebounded over the past year to new records and really, even the purpose of that trade deal for the u.s. trade deficit to shrink, well, you can see right on that chart that the trade surplus with the u.s. is in fact growing again this year. haidi: the question for me, because we see things like china buying agricultural products like corn, the consumer staying home with consumer demand for chinese imports, also strong as well, is this an unstoppable post-pandemic related recovery or is this a fundamental dynamic in the market? we have not heard confirmation from the biden administration as
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to whether the trade deal will continue. we know janet yellen thinks that it is not very productive. we know that katherine tai has said it is unbalanced. in the meantime, the trade flows continue. we also see a pretty steady yuan as well. investors are continually assessing the u.s.-china relationship and the outlook. that's get it over to sophie kamaruddin, who is taking a look. what are we getting in terms of what investors feel about the near and midterm outlook for the yuan now? sophie: a lot of investors keeping to the sidelines with the vol on cny trading at 2020 loads. this is anticipated for the renminbi through year-end and beyond with your to date highs around 635 as the caps on gains and downside risks being tempered even if the fed begins tapering. the policy divergence persisting and strategists opined that it would lead to --
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morgan stanley is likely going long the dollar against the rupee while closing out there seeing dollar -- their singh dollar. it is trading around 136 this morning, after hitting an eight month low this week to hold in singapore. the aussie dollar a two day gain , set for a fourth weekly drop as they assess the weekly pmi data that fell into contractionary territory. check out the kiwi dollar staying below that 70 mark as the euro is holding below 1.18 after reports that the belgian governor opposed the ecb's policy guidance. shery: giving up all of those gains we saw after the ecb meeting. the european central bank committing to alternate dovish monetary policy and saying it
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will maintain its 2% inflation target until the pandemic ends. bloomberg's economics and policy editor, kathleen hays, is here with more on this. christine lagarde trying to explain the framework. what were your takeaways? kathleen: 1.5 years to set up this framework. it was their old inflation target. they are saying we will now have a 2% on average target, symmetric, so this policy meeting and press conference were all about explaining it because it's pretty clear to a lot of people that this is going to mean keeping rates pretty low for a long time. let's look at what they stressed in this regard. no rate hike until inflation reaches 2%. in fact, it has to hit 2% before the end of the three-year projected period, it has to be well on its way in this 2021 to 2023 period. the council members must judge that inflation is rising durably, not just shooting up
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and down, and it has to stabilize at 2% over the medium term. christine lagarde also stressed that they will allow inflation to exceed the 2% target for a transitory period. so hearing all this, reporters really pushed her on does this mean lower for longer on rates? let's listen to what she said. >> it is not intended to keep interest rates low for longer. it is intended to deliver on our objective, intended to reach the target of 2%. this is what we want to be. and frankly, the quicker we can do that, the quicker we can use those other tools that we have not used a lot in the last few quarters, which is the interest rate, but we are not there. kathleen: so another couple of reasons to think it's going to be a while until they hike rates. they see inflation falling back to one point percent in 2023.
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that will be a while away. and christine lagarde mentioned a couple of times in the policy statement that the pandemic continues to cast a dark shadow over the euro area economy and in fact that there is a great and growing source of uncertainty so i think lower for longer is probably a fair assessment. christine lagarde probably did not want to phrase it that way. haidi: taking a look at this chart that shows the 10 year bond yield cratering, did we hear anything about the bond purchase program? kathleen: not that much. people are waiting for them to reveal all sorts of details about how they might make technical changes but yields across europe really did fall again today because in their long-standing regular asset purchase program, no changes. they will keep buying the same amount until the economy does not need it, until they no longer need accommodative monetary policy. really interesting to me is christine lagarde said they did
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not talk about the emergency bond purchases because they will not do anything like that while the pandemic is still threatening the economy. you mentioned the two dissenters and the majority are really on board with this new policy, but the majority also apparently agreed on the new guidance only if it applies to interest rate changes, not to bond purchases so it seems like maybe that door is still open to tapering before they get ready to hike rates. it is not all based on inflation. shery: kathleen hays with the latest from the ecb. bloomberg equality. the center for american progress. she will talk about hardships faced by lgbtq americans. this is bloomberg. ♪
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su: this is "daybreak asia." i am su keenan with the first word headlines. we are told that chinese regulators are considering serious, possibly unprecedented, penalties for didi after his controversial initial offering last month. sources say regulators see the ridehailing giant's decision to go public despite pushback from the government as a challenge to beijing's authority. berg was told that punishments could include possible fines of
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forced delisting or -- u.s. shares. president biden hosted business and labor leaders at the white house as a bipartisan group of senators mirrored agreement on advancing senate debate on infrastructure legislation. this comes one day after senate republicans locked debate on a $579 billion plan. gop centrists say they will consider an amended bill. the recent spike in u.s. covert cases shows no sign of letting up at the delta variant continues to spread. the cdc says national cases are likely to rise to nearly 300-7000 for the week ending august 14 and -- 307,000 for the week ending august 14. nationally, those infected are skewing younger. 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. i am su keenan. this is bloomberg.
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haidi: the biden administration is calling on the senate to pass the equality act, which seeks to provide civil rights protections to lgbtq plus americans and their families. it also aims to provide civil rights protections to people of color, women, people with disabilities, and people of faith. it amends the civil rights act of 1964 and is awaiting action in the senate. joining us now is a vp at the center for american progress. wonderful to have you with us. what is the holdup? it went through the house in february. there were hopes that by likely, it could be passed during pride month. we have not seen real movement. do we know what the path is ahead? sharita: we have come for that than we ever have come before. this is the first time we have ever had a senate majority leader who has indicated a willingness to bring it to the floor for a vote and a president
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who was willing to sign it. it is extremely popular among american people across political ideologies and across the country, so it is just a matter of making sure that we have enough support in the senate for this to pass. haidi: how badly is this needed? this may seem like a very naive question but when you take a look at the landscape of how protective laws, state-by-state, federally, in the u.s. are for vulnerable people, is this kind of codified approach really needed? sharita: extremely. in over half of the country, lgbtq plus americans do not have basic protections from discrimination and the effects of this impact every aspect of life. we did a nationally representative study with the university of chicago last summer and found that more than one in three lgbtq people had
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experienced discrimination in the year prior and when you're talking about transgender people, those numbers were 60% and lgbtq people of color, over 40%, and this had disastrous negative impacts on mental health, physical health, and financial well-being. shery: you mentioned president biden being willing to sign the bill. how does this administration's approach differ to the previous administration when it comes to lgbtq rights? sharita: it is a sea change. the trump administration very early on launched an all-out attack on the likes of lgbtq americans and transgender people in particular, saying that transgender people could not openly serve in the military and repealing protections for trans students and lgbtq patients seeking medical attention. on day one of the biden administration, he issued an executive order protecting lgbtq people from discrimination across governments, but you
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know, these are rights that could be lost under a future administration so we desperately need congress to act and codify these protections. shery: sharita gruberg, it was great having you on from the center for american progress. coming up next, south korea's to towne bank is set to raise more than $2 billion after setting its ipo price at the top of its range. we will get you the details. this is bloomberg. ♪
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>> we are counting down to the start of trading in seoul. some of the stories we are watching in korea, south korea is moving and opposition parties aim to hold a national assembly plenary session to vote on a proposal for a second extra budget. the government is likely to extend its toughest social distancing rule in the greater seoul area for another two weeks, after the country reported another record in daily infections on thursday, and haidi, of course, another one that we are watching. two. haidi: the ipa -- the bank. haidi: the ipo boom, the bank is set to raise money after the lender priced its ipo at the tops of the marketed range. the bank operates no brick-and-mortar branches and it will be valued at over 16
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billion, and it will make it south korea's third most valuable retail lender. joining us for more is our asia stocks are order. great to have you with us. when you take a look at the amount of enthusiasm, what are we seeing here for the bank? >> good, haidi. so it is the first ever mobile only two to be listed in south korea. it has been seeing huge demand for its ipo, stocks, and sharers. 1700 times oversubscribed and a record amount of money from institutional investors so they are seeing that this is going to make 2021 another record year for the south korean ipo, and it is going to be one of the second-largest ipo shares this year just after crackdowns on
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the mobile game developer. sharita gruberg has been -- kakaobank was set up in 2016 but it was able to garner more than 13 million users, monthly active users, which is more than any other traditional financial bank has been able to, so once we get it listed, the third-largest in market value, but it might be able to -- other larger financial companies. shery: what about the regulation side of things? we have seen korean regulators become a little bit more active recently. >> the financial watchdog, financial services commission has been intervening in some of the ipo processes this there. kakaobank was lucky not to get such an intervention this year. but the affiliate -- they were asked to revise their prospectus
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. they had to lower their ipo size by more than one trillion won, close to one billion won, and that reflects ongoing concerns about some of these companies might be able to value themselves to high-end for youkyung lee -- for kakaobank, it has not compared itself to retail lenders and instead, it picked companies like rocket companies or other overseas mobile based banks and their peer groups. shery: asia stocks reporter youkyung lee there. it is a busy day in korea. let's turn to sophie for what to watch. sophie: here's a look at some of the earnings for south korea. keeping a close eye on companies with more earnings due from the conglomerates units. we are keeping a close eye on a retail company in seoul as
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regulators extend the deadline until january 2. it is part of a consortium seeking to buy it for 800 billion won. we are watching australian casino operators scrapping its $9 billion merger plan after allegations of tax evasion and lax money laundering controls. haidi: let's get a quick check of the latest business flash headlines. -- second-quarter numbers went beyond estimates. it is now expecting revenue to be up to $1.3 billion as global events like the olympics a drive up advertising. twitter added 7 million users in the second quarter and saw sales jumped 74% to $1.2 billion. snap's sales more than doubled to $918 million in the second quarter, way past estimates. daily active snapchat users exceeded expectations at $293
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million. the company found users are agreeing to iphone tracking more than its peers. intel gave a lackluster sales forecast for the third quarter, indicating it data center chip business is continuing to lose market share in the face of stiffer competition. sales in the current period will be 18 billion, slightly below analyst projections. the new ceo says that growth will resume in the second half when he expects the global chip shortage to bottom out, shery. shery: perhaps not bottoming out fast enough. the lead times for these semiconductors, which is when you order a chip and then you get it delivered, that has really increased to 19.3 weeks in june, 1.5 weeks longer than in may so no wonder you have trade group asking congress to bolster chipmaking in the u.s. and really put forth the chips act, which became law earlier this year but has not been funded. haidi: it is interesting because
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we hear reassuring words and policies from the biden administration in terms of how they are going to beef up that homegrown chip capacity, but we know that kind of investment takes time to build out. in the meantime, it was interesting i thought hearing from him saying he is not ruling out a deal to buy the likes of global foundries but he also played down the necessity for intel to buy a business is like that, to be able to compete with psm, and it feels like these acquisitions are a pretty quick way to be able to build up that domestic availability and global capacity, right? shery: until those chips return. goldman sachs was saying perhaps that chip shortage would bottom out in the second quarter. not just intel but automakers continue to struggle. we will be watching that tory and much more as the market opens in sydney and seoul. japan away on holiday as we await the opening ceremony of the olympics. this is bloomberg. ♪
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[ "me and you" by barry louis polisar ] ♪ me and you just singing on the train ♪ ♪ me and you listening to the rain ♪ ♪ me and you we are the same ♪ ♪ me and you have all the fame we need ♪ ♪ indeed, you and me are we ♪ ♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪
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shery: hello and welcome to "daybreak asia." i am shery ahn in new york. sophie: i am sophie kamaruddin in hong kong. haidi: i am haidi stroud-watts in sydney. markets here and in seoul have just opened for trade. stocks set for a cautious start. ongoing concerns about the delta virus variant as well. beijing may hit didi global with
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record penalties after its u.s. ipo went ahead despite the government pushback. and as we count down to the opening ceremony, we will get the olympic virus outlook with our guest. shery: japanese markets away on holidays today but we do have the korea and australia opens, so let turn to sophie for what to watch. -- let's turn to sophie for what to watch. sophie: down side moves. aussie bonds gaining ground this morning, set for a fifth weekly gain on the 10-year amid lockdowns. the aussie dollar set for a fourth weekly drop, holding below 74 this morning, and we do have crown shares on watch as well after we had star entertainment scrapping its deal. shares are on traded as well. the offshore yuan keeping steady. we come down to the u.s.-china trade talks next weekend. in seoul, the class be open to
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the upside this morning, keeping a close eye on names like ts retail after regulators extended the deadline for talks -- for it to sell its korean unit. keeping an eye on the ipo pipeline as well, set to raise 2.2 billion dollars in its listing in south korea. the index getting ground .3%. the korean won on the back foot, trading above 1150. the parliament in south korea may hold a vote on the government's proposed second extra budget. switching out the board, keeping an eye on chip stocks in the region, in seoul, samsung and sk hynix under pressure after we got a lackluster third quarter sales forecast from intel, haidi. haidi: we are going to stay with tech because chinese educators are said to be weighing unprecedented penalties for didi actors controversial ipo. potential punishments include fines and potentially a forced
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delisting of its u.s. shares. chinese regulators are effectively playing catch-up with the amount of innovation that has taken place but generally remain pro-innovation. let's bring in the asian equities senior investment director at aberdeen standard investments. great to have you ssp and let me throw out this picture -- this chart that really shows the picture of how the mighty didi has fallen. it is after being a $70 billion market cap company on listing day, it is now below 50 million -- 60 billion. it has now really extended that loss to 26% and in fact, just a few months before the ipo evaluations were being talked about in the 100 billion -- valuations were being talked about in the 100 billion space. how much more downside is there for this stock and what is the ultimate best and worst case scenarios? >> thank you for having me, haidi.
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i think it is difficult to call the short-term downside and that is really because the regulations surrounding how the government in china is going to govern data and what types of changes in terms of data restrictions that will be imposed on ddr are not yet clear and that would clearly affect the ability to monetize their customers so i think so far, there is little clarity and i think it is difficult to ascertain downside in the short-term, but again, back to the stance that the government is pro-innovation generally over the long term, and should the framework be set, dd as a company should also be able to adapt to the new framework and be able to shift the business model to operate within the framework that is being set by the government, so that is where we are today but there is downside in the short-term. haidi: you talk about companies
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with strong competitive advantage is navigating the uncertainty. we don't know how long this uncertainty will be or what the new playing field will look like. what are the companies you think could potentially whether this? -- weather this? >> the ones that are having a robust competitive advantage, a strong barrier to entry, and the ones having a strong platform and ecosystem. the large internet names in our portfolios should be the ones that would be well-placed to benefit from it and i think that is really because they have also -- taking a close look at data and data security as part of their risks, that is something -- the growth of digital economy increases but also the use of data increases and that is something we touch on quite regularly with the companies we invest in in this area so those
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companies should be well-placed. we don't know how long this will last, but we think that, you know, when the frameworks are in place and as these companies become part of the conversation for the government as well, we should actually see this shift towards a longer-term sustainable growth. development for long-term investors. shery: what about long-term investors across broader asia? this gtv chart showing the msci asia-pacific index is testing that 200 day moving average. it has really come under pressure this year, lagging other major benchmarks. where can we find the opportunities, and are there opportunities across asia when you are seeing the delta variant spreading? >> yes, if you look at why asia has been under pressure this year, i think that is really because there has been a bit of a divergence across asian countries and a lot of that is
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due to the different pandemic situations and the challenging delta variant in many parts of asia today so part of that we think has sort of been priced in by the market by the countries that have been going through the challenging period as we speak, but if you look at where it is strong and continuing to be strong in more developed parts of asia, countries like taiwan, sectors like information technology, that continues to be pretty strong even though we have a very strong year last year and that is really driven by the tailwind that we are seeing in terms of the supply and demand dynamic from a cyclical perspective as well as structural perspective in the semiconductor industry so we continue to see that. shery: great having you with us from aberdeen standard investments. let's turn to su keenan with the first word headlines. su: we are going to start to the ecb and christine lagarde who says the ecb has learned from
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errors of the past and will not hinder the current economic recovery by withdrawing emergency support too early. the ecb president made the remarks as the central bank implemented new policy measures. they include time policy shifts or tightly than the bank's 2% inflation goal as well as being patient if growth exceeds that target for a transitory period. president joe biden meanwhile says sanctions leveled on the chief of cuba's military and interior ministry are just the beginning of u.s. retaliation and it comes after her venice crackdown following large antigovernment protests last month. biden says he condemns mass detentions and sham trial's which he says cubans are being subjected to. human rights groups say up to 600 people have been jailed over the latest protests. and a technologies company says it has resolved an issue that
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causes service disruption, affecting several websites including draftkings, amazon, fedex, delta, and capital one. it says the disruption, which lasted for up to an hour, was not related to a cyberattack. it says the problem was related to a software issue that translates domain names into ip addresses. 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. i am su keenan. this is bloomberg. shery: still ahead, we get more analysis on didi. chinese regulators are considering serious and perhaps unprecedented penalties on the ride-hailer. plus, the challenges in preparing for the tokyo olympics for athletes and their organizers. johns hopkins school of public health professor joins us. this is bloomberg. ♪
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shery: didi global is quickly becoming one of the worst ipo's of this year among non-us companies on news that china is mulling additional penalties for the ridehailing giant. joining us now for the latest is our asia tech executive editor, peter elstrom. peter, so how bad could the penalties be? peter: what we have heard from our sources is that this is going to be quite serious. they are looking at some unprecedented penalties for the company as they look at what to do about the companies decisions to proceed with this ipo despite some pushback from regulators includerspace administration. what we have heard is that the company could face a very high fine. perhaps the suspension of certain operations, or some stay investor that would come in and get involved in the company.
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another more extreme option would be a forced delisting of its shares in the u.s. and perhaps some sort of withdrawal. it's not clear how something that extreme would work in particular because they went public on a u.s. exchange so it is not your what authority beijing would have over that, but this pushback is coming because beijing views didi's position to proceed as a challenge to its authority so they are looking at penalties more serious than what they hit alibaba with, which was a fine of 2.8 billion dollars and a forced change to some of its practices to improve the treatment of merchants and some of their customers, so it is very serious. haidi: that was already a record fine for alibaba. on the upside, is it almost better that they are slapped with a big fine, they show contrition, and then the business can be allowed to move on? peter: it's a big question. if they could just pay fine at this point, maybe that would be the simplest way forward. it is to remember that the fine
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is now approaching the amount of money that the company itself was able to raise in the ipo's so it kind of undercuts their efforts to fill their coffers and gain some capital for the business and it could be more than a fine. that is the key thing, too. we would need to see what the other implications are. the other deliberations are quite early at this point. many things could change so it is not exactly clear what is going to happen but at this point, it looks pretty serious for the company. haidi: peter elstrom with the latest on didi. months after being booted from the new york stock exchange, charted telecom is being greenlight for a share sale in shanghai. our bloomberg intelligence senior analyst is now with the latest. what do we know and what are the expectations for this mastic listing? anthea: domestic investors should be quite excited about it because this is the first telecom company to be listed on the mainland china.
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and you know, china telecom has promised to raise their dividend payout and this is also exciting news. they have not done it ever so they are going to raise that ratio to 60% this year, more than enough to absolving any earnings transition impact from this additional new share sale and at the same time, they say that they will increase the payout ratio gradually over the years and that is going to be china's dividend payout ratio and it is clear that china telecom is trying their best to please shareholders, their new shareholder base. they are going to partner and they understand the need for investors. they want stable dividends and this is what they are trying to do. shery: how are they performing in terms of their businesses, and how much of the proceeds from these listings will china telecom reinvest in some of their projects? anthea: they are going to invest
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all the proceeds on industrial july station projects. at the same time, i believe that they will put extra capital. the free cash flow has been pretty strong as well so they will put in extra cash flow to invest in cloud infrastructure, iot, b2b applications, regarding 5g applications, so -- china telecom already has the largest data center in china so they will definitely try and explore more monetization opportunities for existing infrastructure as well. shery: anthea lai with the latest on china telecom. coming up next, we take a look at evergrande. with pressure mounting on its founder to restore investor confidence as its bonds continue to sink. this is bloomberg. ♪
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>> we can see that the doors are closing one by one, but i cannot see any new windows. >> if any credit event to a broad-based shut down of a fund being channeled or for all the other developers -- >> it is huge but it is scattered among many financial institutions and investors. >> we are in a tightening cycle, which is per se a kind of confidence. >> people are talking about actually doing something to enter market expectations on liquidity and credit. >> the market is treating the bond as an idiosyncratic event. cripes it tends to react to more trivial headlines and noises. >> some of our guests on bloomberg tv speaking about the mounting pressures for evergrande. let's discuss with sofia horta e
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costa -- with sophia in hong kong. that pressure on the billionaire founder mounting right now. what does he need to do? >> exactly. he really needs to find funds, to find cash. it does have non-property assets that it can sell or ipo for liquidity, some 80 billion worth of assets as estimated by an analyst in june. we are hearing that the company is considering an ipo of its bottled water business and its tourism business as well, but you know, this is not really the right time to come to the market if you are trying to sell shares in hong kong. first of all, sentiment is not great. and if you are related to evergrande and evergrande class business, if you look at what the stock has done, down 50% this year, you would be really brave as an investor to be buying that dock. remember, evergrande did sell
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shares last year at the end of last year and investors who bought into that bought it at around 16 hong kong dollars. you see where the stock is trading. that was not a good call. it will struggle to access the public market to pay down debt. there is a discussion at a board meeting next week on tuesday around a special dividend also that will be closely watched. how does the company plan to reward shareholders when it does not have the cash? will bondholders be pleased with that plan? remember, in the of cash that does not go towards paying down debt will not be well received by bondholders. haidi: and this sort of bias, we have seen it before with and bang insurance and hna as well. what does history tell us about how effective this is? sofia: history, when we look at those companies, it was kind of a different environment now.
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in china, xi jinping is really trying to reign in moral hazard and markets, getting rid of that implicit government support for these giants and evergrande is a giant, not only in the property market, but also the bond market, one of the biggest high-yield issuers, chinese high-yield issuers, and you saw the contagion effect yesterday with asian high-yield dollar bond index down the most in a year, down the most since the pandemic prices early last year so financial crisis could be quite painful broadly, but when you look at the history of the playbooks, that might not work for evergrande. we are looking at what happened recently. the founder was essentially bought out by a consortium of investors that included a local government fund so that could be something that we could see for evergrande. one thing to note is that the founder, the billionaire founder
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was invited to the 100 year anniversary of the communist party on july 1, so that was seen then as a sign that he still has government support, still has strength in high places so it will be interesting to see how it plays out in the high market. haidi: our chief china markets correspondent sofia horta e costa in hong kong. some of the big news that we have been covering over the past few weeks has been american billionaires, global billionaires shooting themselves into space. extensive coverage of jeff bezos and his successful mention. -- mission. richard branson before that. it kind of desire is for the government to be able to get credit to some of the space progress being made and for the billionaires to play a complementary role. it is very hard given some of the pressures we are seeing on the likes of alibaba, on the
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likes of didi to see some of these billionaires taking such a front and center role in a story like this, right? shery: it is not surprising we are getting chinese billionaires investing into some things you would consider sort of boring if you compare them to american billionaires, as you said. we are talking about infrastructure, satellites, companies that make satellite, so the head of xiaomi investing in satellite makers when it comes to geely, the billionaire also investing in satellite as well. they really do not want all of the flair that comes with the spotlight given that, as you mentioned, what we have seen, haidi, with jack ma. haidi: some of those ceo's coming under regulatory pressure probably wish they had a rocket to launch themselves into outer space. and so many these days, right? [laughter] let's get you caught up to date
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with the latest business flash headlines in the meantime. intel gave a lackluster sales forecast, indicating it data center to business is continuing to lose market share in the face of stiffer competition. sales in the current period will be 18 billion dollars, slightly below analyst projections. the new ceo, petco sumer -- pat gelsinger expects the global tip shortage to bottom out. it boosted its sales forecast after second-quarter numbers went beyond estimates. it is expecting revenue to be up to $1.3 billion as global events like the olympics drive up advertising. twitter added 7 million users in the second quarter as gold sales jumped 74% to $1.2 billion. it is a long way from the crisis a year ago when many brands pulled out at the head of the pandemic. snap sales more than doubled to $918 million in the second quarter, way past estimates. -- $982 million in the second
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quarter, way past estimates. users were agreeing to tracking more than its peers and that benefited from a digital advertising and e-commerce boom during the pandemic. bloomberg learned the carlyle group is seeking to raise as much as $27 billion for its latest flagship fund in what would be the industry's largest ever private equity poll. discussions are ongoing and the total size of the fund could change. it would be 46% larger than its 2018 flagship and break the $26 billion record held by blackstone from 20, shery. shery: take a look at the markets -- from 2019, shery. shery: take a look at the markets. the kospi gaining ground. we have communication and materials stocks leading the gains. we have foreign investors buying into local shares again despite the fact that of course we continue to see worsening cases of coronavirus already reporting record infections this week. we have seen that korea will
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extend the current distancing steps for two weeks. we are also watching the asx 200 under pressure. sydney's daily covid cases climbing to the highest since the current outbreak began. kiwi stocks down .2%. we are watching the kiwi dollar also closely given it weakened on reports that the government will be assessing whether to close all quarantine free travel from australia, haidi. haidi: let's take a look at the fx side of things as we continue to count down to the opening ceremony in japan. it is a holiday for most parts of the market, but we are seeing dollar yen holding pretty steady. it was a strong session for the dollar index so overnight against the likes of the yen and the loonie, we saw the dollar index giving up most of those gains, the same kind of dynamic we saw from the euro after the ecb decision. dollar korea also a little bit softer as well and we are seeing
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some gains when it comes to the aussie and the kiwi. coming up next my we are outside the national stadium in tokyo ahead of the olympics opening ceremony and we will be talking through what to expect, risks from holding a global sports event during a pandemic. this is bloomberg. in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.
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su: this is "daybreak: asia." we start with the latest on chinese regulators. we are told they are considering serious and possibly unprecedented penalties after a controversial offering last month. sources say the ride-hailing giant's decision to go public despite pushback from the government was a challenge to authority. bloomberg has been told
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punishments could include possible fines to forced the listings. to the white house now, which has accused china of being irresponsible and stonewalling a phase two world health organization probe into the origins of covid-19, including the possibility it came from a lab in wuhan. beijing refuses to participate in investigations, insisting there's no evidence the lab was part of it. senator amy klobuchar has introduced a bill to make online platforms including facebook and twitter, legally liable for misinformation about health issues such as covid-19. democrats highlighted how legal and accurate information can be. this comes a week after president biden said that false
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vaccine information was "killing people." nfl teams have warned that in the event of a covid outbreak among nonvaccinated football players, they could be forced to forfeit a game. if this happens, players on both teams would not get paid that week. global news 24 hour news -- 24 hours a day on air and on bloomberg quicktake powered by 2700 journalists and analysts in more than one hundred 20 countries. shery: even as the cauldron is lit, the challenges for organizers only intensify. >> a global sporting spectacle
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in the middle of the worst public health crisis in a century. the games are going ahead but have already been described as the weirdest olympics ever. given fears at global gatherings about 90,000 athletes, officials, and volunteers could become a cauldron of covid, attentions are aimed at stopping a potential super-spreader event. socializing and group meals are banned. win or lose, athletes must leave japan within 48 hours of their last event. japan one the a liv-ex to mark a turning point for humanity, a light at the end of the tunnel for a world struggling through a second year of the pandemic. after those ambitions have crumbled, tokyo is under a state of emergency through the entire games. thousands of athletes are set to compete in empty stadiums with no chants, no friends, no family
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to offer support. the games were supposed to symbolize japan's recovery from the 2011 earthquake, tsunami, and nuclear disaster, but athletes and officials have had to break a cavalcade of calamity just to get to the opening ceremony, and an uncertain ceremony awaits the finish line, which could mean a very different olympic games in paris in 2024. >> let's go outside the olympic stadium in tokyo. hours now until the big event. how are things on the ground? >> i would say we are seeing muted excitement. with the four-day weekend, some have already left tokyo, while others are looking forward to the event. this morning at 6:00, we already saw people lining up, taking
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pictures of the stadium behind me. they are also waiting for the flag to fly over tokyo. definitely a mixed mood here on the ground. >> especially given that we have seen controversy surrounding the ceremonious >> that's right. there's been a string of pr disasters in this olympics, the latest being the director of the opening ceremonies who was fired yesterday after a video from 1988 surfaced of him joking about the holocaust. it was part of a skit he did when he was a comedian, and this is just the latest blowup in the run up to the games, and this day, the opening ceremonies, which is supposed to be a celebration. >> our next guest has a pretty unique perspective on the challenges that olympic athletes and organizers have faced.
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she held both the u.s. and world records in the breaststroke and won a world metal -- medal. she says the need for these olympics has never been greater. thank you for joining us. from your experience in past games, from your competition games, what are some of the pitfalls this olympics has to avoid in order to be able to carry out the games safely? >> i think these games will be very different from past games. past games, we celebrated together. there's a lot of gathering, but these games will be very different. the testing, the empty stands -- this will be strange and eerie and jarring, but i think that is what is necessary. >> you mentioned in your notes you experienced some bottlenecks when it came to -- when it came to the athens games in 2000. what needs to be done to not see
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the same problems in this olympics? >> in those games, transportation was difficult. we were on very large buses crammed together. i was later than i wanted to be one day for my venue because i could not get a bus. that is not going to wait -- that is not going to be the way athletes are transported to the venue from the village. there will be smaller groups for transportation. we also don't want to see bottlenecks when it comes to testing results. you don't want to have someone waiting for test results and end up missing their event, so we need to see tests come back quickly. >> positive cases within the olympic bubble was almost certain to happen with so many countries being involved. how worried are you about this turning into some sort of super-spreader event? >> no one wants to see positive cases, but like you said, this is simply to be expected.
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when you have a lot of people and you are testing them all, you are going to come up with positive cases. i think the measures that are in place -- rapid testing, isolating cases very quickly so you do not have a lot of chance to spread, but also these other things like masking and distancing and the prevention of any sort of gatherings. cracks in the u.s., we have seen a surge in cases and vaccination levels -- >> in the u.s., we have seen a surge in cases and lowered demand for vaccination levels. is that a message that the world needs to get on with it, the world needs to live with covid? >> well, i think this will show two different things. one, where we are headed as we try to move out on the pandemic. the goal of getting back to normal, but also showing that we
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are not there yet. the empty stands indicate the strangeness of the games and should also emphasize we have a battle to fight still with covid, and we have to do more to prevent things like this from happening in the future. >> how do you expect this very unique covid situation to play out psychologically? >> i think some athletes may benefit from it, who may want to focus on their event, not be affected by the crowds. when i was an athlete, i competed in front of dead silent crowds occasionally, and that was fine with me, but other athletes who do feed off the crowd and get more excited, more pumped up will probably have a harder time. quirks former olympian -- >> former olympian and now public
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health expert tara kirk. private equity investor marcus john will be joining us and really looking to discuss some of the expectations for the games on bloomberg markets a little bit later on. of course, we continue to look at market performance when it comes to winter olympic games. it is pretty different this year because typically, we look at the usual players like tourism, like some of the big sponsorship plans, the s&p providers in the host city. we're not seeing a lot of external guests, and even the vip guests heading to the opening ceremonies when not actually be there. quirks perhaps one of the reasons the nikkei has not done
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that well. you can see on that graph what happened in the past few olympics, when it came to, say, rio, you saw that stock market, the benchmark gaining 16%. only one on the chart has seen negative returns for the year surprisingly, and good luck to you guys in 2032. >> 12 months after the 2000 games, we saw the market collapse there, but, yes, let's hope the brisbane games will coincide with another market boom. coming up, asia continuing to struggle to get the latest outbreaks under control. england has seen similar numbers as we see the reopening and the essentially abandonment of
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restrictions across the country. we get the outlook next. this is bloomberg. ♪
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shery: indonesia and the u.k. are both seeing around 50,000 daily new infections, but the numbers do not necessarily paint the picture of what is going on.
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what should we be watching out for in these two economies, given their different vaccination rates as well? >> what we will be looking for is where these case numbers continue to go, but more specifically, the issue is the death we are seeing. in indonesia, there's about 1000 people dying every day compared to about 50 people in the u.k.. the difference is the number of people vaccinated. we have people in the u.k., the highest risk, the health care providers, most of them have had access to vaccinations. the cases we are seeing their are among younger and healthier people, so they are less likely to be hospitalized, less likely to die. breakthrough infections do have some protection against the disease. in indonesia, there's very little vaccination. in the u.k., half the people are vaccinated. in indonesia, just 6%, so a lot
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of people who get sick do fall ill and die. haidi: are the cases all the same? >> the cases are very different here. the issue is the delta variant. that is what is making everybody so very vulnerable to this. if you have not been vaccinated and delta is circulating close to where you are, your chances of being infected are substantially greater than they would have an with the original virus that we saw a year and a half ago, but the situation is these outbreaks, the continuing circulation of the virus, that is what allows something like delta to circulate to begin with. the u.k. is the very first country that offered any vaccination, and their vaccination rates are very high. if they are being walloped once again by the virus, it is because this variant was allowed
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to emerge. the concern is that these outbreaks continue. we will see more mutation, more variants, and even if you have already been through this as a country and you are well vaccinated now, you are not out of the woods. haidi: parts of southeast asia continuing to deal and grapple with this as well. tylan reporting a record number of new cases and 114 deaths. we heard from the bank of thailand earlier this week saying that a raging covid outbreak in the country could take as much as two percentage points off the country's economic growth. there had been hopes with travel bubbles, but all of that now in doubt. sophie, which markets are expected to be able to weather
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these delta concerns? >> we are seeing defensive rotation out of stocks in thailand. singaporean stocks appear to be cushioned by optimism over an eventual reopening. city seeing opportunities to buy -- c-type -- citi seeing opportunities to buy. we are seeing growth out of securities in light of slow vaccine progress. sidney stocks up about .1%. we are seeing the aussie had for a fourth weekly drop following a soft koa reading, get korean stocks are gaining ground even if the country confirms 1630 new
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cases, but we see stocks falling in the wake of intel soft guidance. check out cookout court -- cacao corp. weekly, checking in on stuff movers of note in sydney, star scrapping its plans for a merger with crown, crown shares down more than 2%. shery: let me turn to bloomberg intelligence research. really interesting we are seeing global equity managers screening stocks through industry allocations. in fact, growth managers struggled on average this year while stuff taking added to blend manager returns. currency was the only side of this investment style that
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consistently remained supportive. when it comes to regional allocation, that was the key, especially for u.s. markets. those global managers that were overweight in u.s. markets have outperformed, regardless of what style they actually took. those that were underweight u.s. markets underperformed. we have seen the s&p 500 outperforming by about two percentage points or so, so this is a really interesting picture we are seeing in the global investment space. haidi: yeah, exceptionalism continues. let's take a look at asia, posting its biggest gain in several years on the back of a rally. david joins us now from singapore. how did they do compared to peers, and we were already seeing the peak performance
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period being passed. >> gic, unlike most of its peers, does not reveal its actual a you and -- it's actual aun or annual return. it is easy to look around at the market and look at the kuwaiti sovereign wealth fund and several others who have all reported for years the rising tide of equity markets has really helped everyone, but it also did reasonably well to cushion the pandemic last year because of its spread. >> how exposed is it to the geopolitical tensions right now between the u.s. and china? >> quite substantially if you look at its asset mix. it has asia x japan making up over a quarter of assets. a lot of that will be china.
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another third of its assets are actually in the u.s. any geopolitical tension is going to have quite a direct impact on a lot of its investment, but on top of that, a lot of its investment are specifically things like china tech. and he cracked chinese authorities on key sectors like technology could also have an impact on its portfolio. >> is that the biggest hurdle to better returns? >> potentially that is one of the key ones, but the interesting ring is it also sees the geopolitical tensions, for example, as a chance to make profit. one example they gave in an interview was that if america cannot invest in chinese tech stocks anymore, then they could
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step in by those of if prices rebalance to a point they think is fair. >> be sure to tune in to bloomberg radio to hear more from the day's newsmakers and get in-depth analysis. listen via the app or bloombergradio.com. plenty more ahead. stay with us. ♪
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sophie: keeping a close eye on china telecom shares as it got the green light from regulators, and when it comes to the ipo situation for mainland companies, this really had been a pretty could year for health care stocks for china as well as in hong kong as a surged to 1.8 trillion dollars in market care as we have seen ipo offerings sore and there could be even more room for growth. haidi: we are seeing unemployment in taiwan surging in german as companies and workers are battered by the brunt of more government measures aimed at slowing the covid-19 crisis, and it is really across the board when you see lockdowns like the services industry, the tourism industry, restaurants, bars and the like
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being hit, but i'm also hearing that there is potentially a way out and they are looking at lifting restrictions soon. shery: also given that the government is looking at potentially more relief measures, right? we have already seen subsidies given out for employees of companies that have been badly hit. we are talking $1400 or so in subsidies with perhaps more to come. we are watching that as we head towards the taiwan open with futures under pressure. haidi: at this point, we would usually be talking about how the japanese trading day would have been going for the last half hour or so, but it is a day off, so it is very simple -- very able medic we are counting down to the open. it has been a long road.
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postponements, no spectators, certainly shaping up to be an unusual olympics, but i think a lot of people will be quite emotional when that ceremony on the league gets under way. shery: there has been a lot of public skepticism over carrying on the olympics, especially with that yet again another state of emergency -- what is this, the fourth? but when we see the opening ceremonies, it is supposed to really showcase japan's culture, a beacon of hope as the tokyo governor told us before, so we will be watching closely, although it will be very different, given the pandemic. athletes will be marching from all across the world, but they will be in a very different -- a very empty venue. >> they're different, and number people declining to attend that opening ceremony. it was interesting i thought when i spoke to our last guest.
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she said it is this idea of moving ahead, living with the virus, but also the reminder that it is still in our midst. that is it your "daybreak asia." coverage continues for the start of trading in hong kong and shanghai. ♪
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♪ >> it's 9:00 a.m. in beijing and shanghai. welcome to bloomberg markets china open. david: counting down your last sessions of the week on the chinese mainland and here in hong kong. let's get to your top stories this friday. regulators in china are said to be weighing on a company for going ahead with a u.s.

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