>> welcome to "bloomberg daybreak australia." i'm paul allen in sydney. >> i'm annabelle droulers in hong kong. we are counting down to asia's major trading opens. the top stories this hour. mixed open in asia after wall street closed off session highs. chinese markets set for a further boost after the pboc set a surprise announcement of the reserve ratio cut. tesla shares slipping in late trade as they have notably lower sales growth this year and fourth-quarter earnings missed expectations. sk hynix propelled to the strongest quarterly in two years. paul:paul: let's get straight to breaking news out of south korea. gdp numbers for the fourth quarter, coming online, 6/10 of 1% growth on year, 2.2% growth.

south korea's gdp for the entirety of 2023 was 1.4%. that is very much in line with expectations as well. south korea of course a very important bellwether for the health of the world economy. it was last month that the u.s. overtook china as south korea's most important export partner as well. south korea having a parliamentary election in april as well. we have the one last trade of 1337. we will keep our eyes. . on that. let's look at what to expect for markets around the region. not a huge amount of change for the aussie 10 year yields, creeping up just a little bit. 4.276. the aussie dollar has been pretty stable the last few days at the $.65 level. we just open for trade here in sydney as well.

the asx right now just in the green by a few points. as we know, staggered opening here so we will get a better gauge of what's going on in a few minutes. new zealand trading for a little while. up 1/10 of 1%. nikkei futures slightly in negative territory. chinese stocks had a very good day on wednesday. we will be watching again today. the market really liking this narrative coming out of policymakers. the key question, is can this really be sustained? annabelle: that's right. we haven't really seen policy measures like this leading to substantial gains in the past. a couple movers as well because of big wall street earnings after hours. tesla you can see dropping nearly 5% at this point. we don't know how much lower, but tesla saying hello car sales could be notable -- low car

sales could be notable. ibm, quite a different story for this company. shares moving higher. good outlook for revenue, cash flow into 2024. some job cuts but only a few from the company as well. we are seeing strong ai demand growing by the day. let's look at the futures landscape. we just had those coming online for u.s. stocks. some pretty flat moves overall, but we did see stocks continuing to trade around record highs, the s&p 500 and tech stocks as well. chinese shares, the moves we saw in the csi 300 and hang seng yesterday. we saw that translating across the session, golden dragon index up 1.8%. paul: more breaking news at the moment, a bloomberg scoop. we are hearing david allison

made a preliminary offer to buy national amusements inc.. this is the holding company of the redstone family. this would be a way to take control of paramount global, the media giant that owns mtv and nickelodeon. where this to go ahead, it could have quite a complex structure. paramount share prices have been slipping a little. so we do have word that the ellison's might have secured the blessing of warren buffett according to people familiar with the matter. that's a story to watch, david allison apparently making a preliminary offer to buy national amusements inc.. a way to get control of paramount global. annabelle: the top story this of -- our and over the course of yesterday is china cutting the reserve requirement ratio for banks by half a percentage point

in early february. the pboc governor made the announcement and a press conference wednesday and it's been a rare foreshadowing of policy change. >> there is still sufficient room for china's monetary policy in the next stage and we will continue to strike a balance between short-term and long-term , stable growth and risk prevention, starting from february 5. we will lower the rr by zero point five percentage points so as to inject one trillion rnb liquidity into the markets. annabelle: our global economics correspondent and occur in joins us. perhaps out of the significance of this cut, signaling it this much in advance may be tells us there's no other effective tools that are available? >> it certainly does indicate a new sense of urgency among policymakers in beijing. he made the point of making that

move when it was already advanced. it's a larger cut than normally made. there were some other measures authorities were talking about as well, making it easier for property developers to get access through financing. trying to change the mood music. to your point, the entire world has been looking at china and wondering how they might pull the circuit breaker for the property market. i don't think this kind of move will do that. most people will say short-term interest rates are not really the problem with china's economy. global sentiment is negative, foreign investment is weak, investment is leading -- leaving china at a decent clip. it may help sentiment around the margins but i don't think it

will be much for structural problems, and that's the way analysts are buying the news out of beijing overnight. paul: and we keep cycling back to the problem, is this the right medicine for what appears to be a crisis of confidence? what would the right medicine be? >> think the pboc governor made some good points. a lot of observers are looking at the china story and would zero in on the property sector and real estate slowdown. that's really dragging on sentiment. of course, one way of fixing that is on the physical side with the central government intervening to borrow and spend more, to support projects and get activity up and running. i think the global audience are looking for solutions from the fiscal side, but authorities are being very conservative in their approach.

we've been burned by everything else. they have not really fully given up that narrative just yet. for the rest of the world looking at china saying when it will turn around, i don't think the measures so far will convince the audience that it will. a lot of focus will be on what kind of fiscal sets they take in the weeks and months ahead. annabelle:annabelle: that was all global economic correspondent enda curran. let's get to breaking news on boeing. dropping lines from the faa here. this is related to boeing's max production. we understand that is being halted by the faa and that includes for the 737 nine max aircraft that had the recent air alaska incident. the reason for the halt, the faa needs to increase oversight of boeing's production lines and

they say the quality assurance issues are so far unacceptable. we have a statement coming out from the company. the faa telling boeing that it won't grant any production expansion of the max including the 737. really one to be watching because boeing has been making a lot of efforts to emphasize that focus on safety and quality, but still clearly a long way to go. the stock you can see slipping in after hours. paul: let's get back to the story out of china, about the looming rrr cuts and whether or not these policies can make any difference. we are joined now by kerry craig, global market strategist at j.p. morgan asset management. 50 basis point rrr cut for shadowed.

is this the right medicine? does it fill you with confidence? >> good morning. i think the urgency around the move and the fact that we saw the larger move coming earlier suggests policy support for the economy and market. in our view we've thing -- we have seen incremental changes. this would give a little more boost but it's probably not the right thing to shore up confidence around the property sector as much. there's been a focus on the production side of the economy rather than thinking about consumer and consumption and that's where the focus lies to reignite consumption growth. paul: in terms of that, what sort of announcement would you be looking for to give you more confidence in the china markets? >> we want to see more action

around supporting the property sector and thinking of the balance between lifting home prices. also try to balance it out with making things relatively affordable. we want to see them remove the risk around further failure of completions of existing projects that come through and thinking about that we want to see consumption reignited to release those built-up savings consumers in china still have but have not released them. i think more focus around consumption and lifting around the property sector would be something we are looking for in the terms of more sustainable growth outlook. it seems there is more scope on the physical side and a lot of it going toward addressing issues around local government financing and thinking of that infrastructure investment more rather than thinking of the consumer. annabelle: what other sorts of fiscal policies do you want to see to lift consumption? >> we have seen quite a big move

on the fiscal policy, the out of cycle movement in terms of raising the ratio last year. i guess the market has been underwhelmed and we have not seen a huge number being announced by china. they will add up eventually leading to growth. they announced a growth figure leading higher. we want to see more around a larger number being announced to address market concerns china has two shore up the economy. evidence from the flows out of investments in china for the last few months. annabelle: china not perhaps the preferred market for investors at the moment, but is there any specific sector instead? >> for us, china is still worth

watching given the valuations that have come down so far and it could be a nearer term rally if we see announcements coming through. more broadly, we think about asset allocation. we have moderate growth when it comes to the u.s. and falling information -- falling inflation. rate cuts provides a positive outlook. . for stocks and bonds on the equity side, it is about being more measured in return assumptions so we would still favor a quality sentiment that favors toward u.s. large-cap. we would think about the valuation there and movements by the bank of japan helping financial sectors but also looking towards what could be a leader rally out of europe if we see stabilization in the economy that is lacking at the moment and thinking of the relative valuation argument. more broadly, the credit market and fixed income market is most interesting given what we have

bond yields down. paul: you mentioned u.s. large-cap. we have a shot on the bloomberg terminal that illustrates how fast prices have gone up. meanwhile earnings are going down. do you feel this pressure on these companies to justify lofty valuations and it comes to delivering earnings? >> there has been a bit of a disconnect between market cap and earnings. we look at the top 10 stocks, there could be a bit of a rebalancing across the u.s. market. we see rotation into other names in the s&p 500 and potentially smaller cap names as well very cautiously. some of the rotation in the market will keep it going from those leaders we saw in 2023.

annabelle: that was kerry craig, global market strategist at j.p. morgan asset management. coming up, tesla sees a slower growth rate for 2024 as the fourth quarter profit mrs. estimates. we are seeing the stock falling nearly 5% in after-hours trade. morehead, this is bloomberg. ♪

annabelle: we are on the countdown to sk hynix set to report data any minute now, expected to post the strongest quarterly revenue growth since 2022 as the global trip demand returns. let's get more with our senior reporter you lindley in seoul -- yoolim lee in seoul. actually, i will say they just came out. we are seeing the net loss coming in at one point net --

1.6 3,000,000,000,001. operating profit rising. the estimate had been for a loss that had nearly 170 billion one. sales coming in at 11.3 trillion one. with you -- with that in mind, it seems the numbers are better than what was expected. >> that's right. thanks for telling me the numbers, i've been eagerly awaiting them. basically what this is showing us is that it's a surprise. they were expecting to post operating loss of about 170 billion juan -- won for the december quarter and that would be the fifth consecutive quarterly losses for the company. what the numbers are telling us

is that they actually posted operating profit for the quarter, which is a surprise. i think it indicates that the recovery in the memory chip market, that prolonged slump is starting to take place. obviously, the sk hynix has benefited from a boom in demand for high-end memory chips that power ai applications. it is a leader in hbm which is high-bandwidth memory chips. the leadership has helped the country -- company boosted shares. i became the second-most valuable stock in korea after samsung. it remains to be seen whether we will find out more details during a conference call soon,

but it is really coming at a background of some positive numbers. tsmc has reported last week giving a positive outlook for 2024. asml which is a major bellwether for the semiconductor industry just reported bullish orders for the courtroom which sent their shares to a record high. so it could potentially move the stock. paul: potentially, that is a staggering difference. in terms of stock movement today, we are up 60% on year. what kind of movement can we expect to see at the open? >> i think given the asml's performance overnight, it surged to a record high and that is a really big move in the semiconductor industry. so i think the setting is really

positive and they just reported earnings that beat expectations in a big way. it could potentially move the korean stock market as well. paul: your technology senior reporter yoolim lee in seoul on the sk hynix numbers. we will discuss boeing a little more and the breaking news. we will have a little more of what to expect from markets on daybreak australia. this is bloomberg. ♪

paul: let's take a look at how boeing is doing with shares falling 3% after the news that the faa has halted max production. a big story out of boeing today with shares falling after hours

including the 7379. so the boeing mass production expansion halted by the faa. a big movement in shares. we are also watching tesla, shares falling in extended trading and fourth-quarter earnings short of expectations. david welch joins us for more. why is tesla's growth rate slowing? >> demand has soft and a bit but there is still growth. there's been a narrative that nobody wants them or uses them anymore. that is not really true. but there's a lot more competition. china, byd now, surpassed china as the number one seller of ev's. tesla is growing in the market and others are taking that growth. even though they lowered prices, the revenue is affected.

in the u.s., ev demand is slowing because there are not enough vehicles that are cheap and not enough charging stations. in europe, good growth for everybody, but if you don't have enough, you start to get past the early adopters and luxury markets. you boil all that together, tesla's automotive revenue only grew 1% in the fourth quarter. looks like vehicle sales will grow 20% a year. it was not that long ago they talked about 50% a year. investors are looking at this as a company that's growing but it's not a hot growth story anymore. annabelle: tesla did not give a forecast for sales this year which is pretty atypical for the company. what is the significance of that do you think? >> the company doesn't really know how fast they will grow anymore. they were adamant it was 50% a year and a couple quarters ago, elon musk said they could not

grow at 50% forever. it's not possible. now they are looking at 20%. if they grew 20% last year in vehicle sales, they won't give us a number this year, that tells us it could be even lower. it will still be a growing company but if they are not growing at 20%, it's a come down from where it was and investors want a better handle on things and that's where you are seeing some people move the stock. paul: tesla and other ev makers aggressively reducing prices. how will the price war affect earnings? >> they missed on earnings-per-share by a small amount. they did slightly beat on gross margins, which is a watched metric for tesla. it's with the street had. they used to be over 20%. so we start cutting prices.

17% to 16%, that's where general motors is these days. the profitability has come down as they cut prices. they are not getting the kind of growth they used to even as they slashed prices 25%. they are starting to look more and more like an ordinary car company. annabelle: thank you for your time. the detroit bureau chief david welsh -- welch. up next, more reaction to the bumper numbers from sk hynix. this is bloomberg. ♪

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sk hynix. this is the world number two maker of memory chips, reporting a surprise operating profit for the fourth quarter. what drove that was strong sales of high-end memory chips. they use those chips to help train ai tools and there's been a big demand. a profit of 340 6 billion won. that's under $260 million. that compares with the average analyst estimate for about 170 billion won loss. surprise profit here. let's get more with the sk kim executive director at guy was securities. these are incredible numbers perhaps coming through from sk hynix. >> sk hynix just announced the force -- first quarter earnings,

we think that mainly is coming from the high -- memory price high. we still believe sk hynix even has higher asb. they have premium products. annabelle: we can get more on hbm in a moment, but where does that tell you we are at in terms of the recovery of the chip sector generally? >> actually, the memory cycle is turned around. that is driven by supply cuts. memory supplies at the expanding production cuts last year,

because of -- they worried about supply shortages in 2024 this year. i think their production cut is the main driver for this recovery in the sector. annabelle: like you said, a lot of this is coming from the demand for hbm chips, high-bandwidth memory chips used for ai. do you think hynek's can continue to maintain its competitiveness in the field and continue, given the likes of macron and samsung as well are ramping up production? >> actually, we anticipate samsung electronic will start supplying hbm's for the first

quarter, but the supply has been delayed. we have some qualification related issues. they just started supply or hbm 32 nvidia but still, the majority of the hbm three product is supplied by hk hynix. nvidia is maintaining diminished produce -- in the market but hynix will continue to benefit from the market. paul: good ships business is a cyclical one, but with the amount of demand for memory chips and other trips coming

from the ai revolution, can you see longer-term, the chip cycle might get longer? is there enough demand now to go around and how does that dovetail with sk hynix's capex plans? > i think the recovery demand scale is not that meaningful you -- yet. we anticipate the demand to really recover from the second half this year. we expected meaningful rebound in demand especially the ai driven cloud. the capex cycle is expected next year. this year, sk hynix already

guided some increase in the capex plan for this year. the majority is coming from hpn and ai is -- paul:paul: in terms of this result, obviously everybody got it wrong. . i would say none of what we've just seen is priced into the market. what sort of response do you think you will see from sk hynix at the? they gained 60% last year. what does 2024 have in store? >> we can say the memory cycle of ai at the moment largely but we still see global demand from aig pew.

-- ai gpu. the price will remain uptrend until the first half this year. so not just strong price momentum, memory price momentum, and also continued demand for ai. i think that will support the share price. at the moment the turnaround is quite impressive in my view. annabelle: sk kim, ex executive director and analyst at di-was securities. of course, we will see the trading of sk hynix in a couple minutes. a stock to track closely. another share price we are looking at an after hours here is boeing. that company is down more than 3% in late trade. that is after the faa halted expansion of boeing 737 max planes including the max 9s series.

over 170 of those jets have been grounded in the u.s. let's get more with our transport reporter danny lee. i'm interested how much of this caught you by surprise given where we are at in the investigations into what went wrong in the alaska air incident as well. >> this is ultimately an escalating response by the u.s. federal as it continues the investigation into the blowout of the alaska airlines door which had a ripple effect across the scrutiny of boeing and manufacturing quality. the key thing here is the faa has decided it will not allow any expansion of its production line. what's key here is boeing's cash cow plane, it was producing 48 planes a month and would add a production line in seattle to go up to 50 planes per month. you think about the millions of

dollars it would generate over -- once it comes to fruition. at the moment this is a no from the faa and they have been very clear. in strong words, they say this will not be business as usual for boeing. as you can see, after hours the impact is produced strong. paul:paul: the boeing ceo has been summoned to capitol hill for a please explain moment. more broadly, has been -- has something been happening at boeing in the last few years? there a change that is behind this string of mishaps? > the faa has been scrutinizing boeing in the last several years. there has been greater oversight. now what we've seen in the latest fiasco is a firmer response than what we heard on capitol hill earlier today in the u.s. boeing saying they will be as transparent as they can be.

they are being as transparent to lawmakers who are clearly getting a lot more concern about what's going on. but then the lawmakers are saying we fully trust what boeing is telling us. they are being honest and open in their dealings. clearly you've got to divide here that whilst there is real heat on boeing, from one sector from the customers and airlines, their sphere that washington -- there is fear washington will try to support one of its biggest exporters. paul: our asia transport reporter danny lee. let's take a look at what we are tracking on the markets at the moment. we have nikkei futures looking a little bit softer ahead of the open. of course, it's been a very good couple months for the nikkei. s&p in positive territory as well. after hours ibm shares performing pretty well.

tesla shares a bit lower, down 5.2%. coming up, our exclusive interview with the thai deputy minister of finance where he discusses the country's central bank policy and how it's weighing down the economy. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh

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paul:paul: thailand's deputy finance ministers amplifying rate cut calls is borrowing costs covering -- hover at a 10 year high. high interest rates holding back the economic recovery. >> the problem with thailand right now is that the economy grows off gdp, it's not where it should be.

>> the>> current central-bank policy rate is at 2.5%. does the government think the economic conditions are in place for two .5% to be lower? does that look too high given the reality on the ground? >> the current interest rate is quite concerning to the government. it is too high considering the spending power that the ties citizens and type people citizens and-- thai thai people can live with. >> digital handouts. the timing on when that becomes public or take effect. give us an update on when you think that might happen. >> the initial planning was in may. we announced it has to be postponed. >> is it definitely going to

pass though? >> it is in place, the proposed project should still be on for this year. >> this rift going on between the government and bank of thailand, what's going on? >> the thing is that the government and the bank of thailand is structured in thailand differently than some countries because the bank of thailand has to be independent from the government from anyone. has to be fully independent of the bank of thailand mentioned about some issue for example, the wallet project that they are concerned for the success of the project, the source of funds. which we listened to that. but we also are concerned that right now that the bank is a bit

too distanced from the people. after we announced the digital wallet project, there are so many holes -- polls in the country. there was one from a top commentator in thailand asking if people think the injection of money, the problem with the situation of the economy israel in thailand -- is real in thailand. 93% said right now the economy is in bad shape. so the government thinks and believes it is imperative that we need to inject money into the systems that people have a better life. >> the target on tourism, what happens when tourism plays a very good part on whether you achieve growth? 8 million is the target i believe from mainland chinese tourists into thailand. >> the goal for this year, the

number of tourists coming to thailand is 30 million people. chinese people accounted for 20%. we believe we can reach that number. after we announced the free visa policy last year, the beginning of this year, the number of tourists from china has doubled already. we believe we can reach that number annabelle:. that was thailand's deputy finance ministers speaking exclusively with bloomberg markets coanchor david in glass. coming up, the criminal hacking chain lock bit says it was behind the hack on stock lending company will lend -- equilend. this is bloomberg. ♪

annabelle: the criminal hacking gain lockbit says it's behind the ransomware attack that caused a wall street stop lending platform to crash. su keenan joins us. this is the latest of a series of hacks to rock the financial industry. reporter: yes, and they picked a very big target in the latest attack. at will lend, formed by a group

of big banks and broker lenders including goldman and jpmorgan chase, back into thousand one, is a key player in what's called the stock lending market through its ngt platform. it processes more than two point $4 trillion in transactions on a monthly basis. so an attack that causes some of the operations to shut down is a very big deal. lockbit, a notorious criminal hacking gang, has claimed responsibility in what is now it's latest in a series of high-profile attacks. bloomberg is reporting the spokesperson for the group says it will try to negotiate with the company for payment in exchange for unlocking the affected systems. equilend is in and interesting position. it is owned by a number of financial firms but just announced plans to send a majority stick to a new york-based private equity firm. a lot of its operations are now technically out of its control.

equilend says it is working with professional advisors and cybersecurity firms to restore everything to normal, but it is advising clients this could take at least a few days. paul: and back in november, the u.s. unit of china's icbc was attacked in a similar manner. what have we learned since? >> at the time, it disrupted the treasury market trading here in the u.s. we've learned this criminal hacking gang is prolific. they are organized and they have been highly successful taking big financial and other firms off-line. you are looking at the headquarters of cibc. they swapped in their businesses and demanded money in return before restoring things to normal. . in november, the new york arm of the icbc was cut off from the u.s. treasury department. since 2020, lockbit has carried out more than 1700 hacks and extorted $91 million from its

victims according to the u.s. cybersecurity and infrastructure security agency. in january, it hit a major software trading firm. in november, in addition to icbc, it hit a chicago trading company and alpha dine asset management. these attacks can be highly destructive because the group breaks into computers and encrypts data on them so the companies in control of the systems cannot operate them the gang demands payment. in exchange for a key that can be used to unlock the infected machines. the excellent spokesperson did not immediately respond -- equilend spokesperson did not immediately respond on how they will handle the hacks. paul: su keenan there. the dutch chip equipment asml says they are seeing positive signs in sale growth after orders more than tripled last quarter.

the ceo told us more about the outlook for china as washington pushes for export ends to hobble beijing's tech ambitions. >> 90% of ambitions in china have to do with technology. that's the technology we need for all the major transitions. energy transition, electrical vehicle transitions, digitization, rollout of the smart grid. that's where the masses are. so what is your message to those in washington and in the hague who are pushing to expand those restrictions beyond the most cutting edge lithography machines, and expand restrictions on the sale of lithography to china? >> i have full respect for national security concerns, that's not the point. we need to take into consideration the chip industry has created an almost seamless industry across the world with massive advantages in terms of innovation and cost production.

from an economic point of view, we need to make sure the economic system we have created which has given us so much benefit, that we keep it intact. it's not about national security. it's about making sure innovation can keep going. >> you are stepping down in april. does your success or at least have to wargame the possibility where asml has to operate in a global market x china? >> i don't know if it is wargaming. we just have to deal with the reality. also i'm an optimist that worries a lot and i do believe we have created a macroeconomic system so dependent on each other that i think that's a scenario you can always put into a game but i don't think it's realistic. >> you do not have generative ai without asml. without your extreme ultraviolet lithography machines. how much demand are your clients

saying they are seeing for chipmaking equipment to generate those ai chips? >> let me say the full extent of what ai could bring is not totally clear because it's all about the applications. that still needs development. one thing is absolutely sure, it will need massive amounts of computing power and data storage . without asml and our technology, that will not happen. it is very clear it's going to be a big driver for our business and the business of our customers. annabelle: that was the asml ceo peter winick speaking to tom mackenzie. trading in korea and japan opening shortly but sk hynix and its peers could be getting a boost. we have the korean memory chipmaker with earnings out, and surprise operating profit. we know analysts had been expecting lots to be tracking.

tesla supplies will be a focus because the ev maker posted fourth-quarter earnings that missed wall street estimates so tesla is forecasting a slower pace of growth this year and working on the launch of next-generation vehicles. for the major suppliers into tesla, you can see, ibm supplies, a positive outlook for revenue and cash flow and you can see the stock tracking up nearly 8% in after-hours. coming up in the next hour, we will have blackrock investment institute telling us why they are neutral on china. plus, the latest from the region with natixis. this is bloomberg. ♪

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>> this is daybreak asia. we are coming down to asia's major market opens. what i am most excited to see as the trading for sk hynek's. we had those numbers returning to operating profit after four straight quarters of losses. it surprised a lot of people because it was well higher than what the average analyst estimate had been. paul: nobody was expecting those numbers. we got a healthy profit. it could move the cost be as a whole. sk hynek's definitely one to watch. worth watching china as well. we had somewhat of a rally yesterday on the news of the eminent rrr cut. plenty to watch. annabelle: we will turn to how sk hynek's comes online. we will wait for that to come.