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tv   Bloomberg Daybreak Asia  Bloomberg  February 7, 2024 7:00pm-8:00pm EST

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>> at the start of the session, we are still focusing in on that outperformance we are continuing to see for u.s. stocks, how much that will translate, that exceptionalism, how much markets continue that wall of worry. quick speaking of wall of worry, china heading into what should be an auspicious year, the year of the dragon, big changes on the eve of the year. we get more inflation or potentially deflation numbers today. clearly, they have to try to shake things up to make any meaningful impact to the lack of
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confidence. >> that's right. take a look at how we have markets coming online in japan today. at the start, we are seeing the nikkei just under a bit of outside. you had that u.s. session where we saw the s&p 500 closing within striking distance of the 5000 mark, so investors continue to shrug off these numbers to say -- these pheasant officials -- investors continue to shrug off these fed officials saying they will not cut rates any time soon. what else we are tracking in japan is earnings. we are in the midst of the earnings season, and some pretty strong numbers coming out so far from some of the companies that have reported. softbank expected to report its first profit going back to september of 2022. what's driving that is moves we are seeing partially in arm, the
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u.k. chipmaker that listed in the u.s. last year. it has rallied 40% in that period, so something that is helping lift the value of softbank's companies overall. the huge jump we have included in arm after the bell. speaking of chips,, some very strong sales coming through for january, up nearly 8%. we just have this demand for ai chips that we are continuing to see here. chip stocks in korea, of course, a key market for chip players, going to be the ones to track, but today, you will see gains coming through. the korean won holding steady.
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>> fairly steady when it comes to what we are tracking in australia. we are setting the focus on earnings season picking up with those key themes of what the rba does, what china does with those stimulus measures, and really, the resilience we are seeing in companies over the next few weeks. we are seeing a pretty tepid session. a lot of weakness coming through from energy, down by just about 1%, but some outperformer's the likes of utilities. tech is doing well and real estate as well, putting on over 1% a piece. we are watching some specific names, in particular, agl lifting the dividend. we are also watching the likes of cochlear as well. the aussie dollar has seen some weakness, particularly when it comes to trading against the kiwi dollar. a weaker option for you on, and that familiar refrain of the
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weakness out of china continuing to wane. the aussie against the kiwi touching that two-month low, but the range-pound nature of trading we see in the greenback is keeping it from more headline losses. oil holding that three-day gain. middle east policy continuing to be in focus. that is supporting some of those prices. we are also getting support from wider financial markets as well as those lingering risks as well. we see new york crude trading just under $74 a barrel, but it's up about 2.2% over the past three sessions. some of that, of course, global u.s. rally continuing to support a broader risk appetite, though. >> yeah, you see those guilds, a bit of a retreat across the curve, but it has been a very whipsaw start to the year for treasuries thus far. our next guest says rate
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expectations will drive a good part of how 2024 shapes up. i'm curious for your views. as i said, it has been a very choppy start for the year for treasuries. what does that tell you about the outlook for bronze -- for bonds but also for equities? >> at the start of the year, like you know, there were almost six or seven rate cuts priced in for markets by the federal reserve, but we felt that was excessive. clearly, rates are likely not to go up, but at the same time, the economy is not so weak that it demands emergency action. stuff happening with regional banks, you had the new york commercial bank which suddenly came under a lot of pressure as we began the commercial real estate exposure in the u.s. the sector is something to be watched closely because the fed will react to those events, should they start to become more
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meaningful from a down side perspective, but until then, the economy is rock solid. and the job supports were strong just in and of itself right across the board. the headline numbers, the numbers underlined, the strength underlying those numbers were just tremendous, so we don't see rates coming off as much as the market expects. to look at the equity markets, again, the strength in the economy is something to consider. the remaining sectors will keep powering ahead. >> we can get to the leading sectors in a moment, but you did mention the stresses we are seeing in terms of commercial real estate. do you think that will be perhaps the next domino to fall here? you think back to around march last year, we had the regional banking crisis that kicked off. will we see that being sparked again, but this time by those
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property stressors? >> i think one of the key factors to look at in the u.s., especially, is the sheer number of banks. like we said, last year around march, everyone was taking a close look at -- i don't even know what the number is, but it is in the many thousands. that clearly is not sustainable. there has to be consolidation. clearly the fed is going to push for that. as you see tighter control and a more balanced number of players, larger players as a result of the consolidation, you will see a lot of the issues get sorted out. important to look at the larger banks because the larger banks. showing signs of stress. that will be cause for concern. -- larger banks have started showing signs of six stress. clearly, that will be cause for
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concern. >> let's shift to where we are also seeing stresses, and that is in china, of course. the valuations we see, it is incredibly cheap, but is not enough to bring it back in, do you think? >> we have been long-term china bowls, but over the last 12 months, we have had to reconsider that -- we have been long-term china bowls -- we have been long-term china bulls. you are not seeing any kind of let up in terms of confidence coming back in. not just retail investors but also international investors. they have alternatives and over the last 12 months, we have started making use of those alternatives, too. india is a growth market which will see political stability over the next five years. you also have a situation where the rest of asia is also going well.
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regulators are changing the playing field on an ongoing basis. international investors are sitting on the sidelines. we are looking at china very tactically. if we see some kind of modern coming through, we are happy to trade that the futures markets, but clearly not looking at major allocations on a long-term basis at this point in time. >> if you see china as a tactical player, i wonder how you think it ties in with the rest of emerging market opportunities, particularly india, which idiosyncratically has also been a market darling, which we have also seen as a beneficiary of these market flows which have also gone to china. >> absolutely. the thing to realize about china is business confidence is pretty weak, but at the same time, there is still some kind of growth coming through.
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the silver bullet for china effectively is realizing when they can signal to the broader world that the regulatory actions they are taking are behind them, but the rest of asia is growing pretty well. from the broad geographic span one can look at, indonesia is doing well. the philippines is doing well. vietnam is doing well, and lots of other countries are piggybacking off a lot of the growth in here. india, of course, is a secular story, which coming off a small base, you cannot compare the base india has two china, but the potential and share makes india one of our largest conviction markets globally. >> great to chat with you. take a look at some of the stocks we are watching at the moment, and chips very much in
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focus ahead of softbank's numbers. arm soaring after that expansion into new markets really supporting that forecast. let's look at some of the adjacent names that we are seeing. the likes of samsung electronics trading pretty much unchanged at the moment. in fact, a lot of these looking pretty flat as well. big week for samsung with jay wiley acquitted in that succession case. we are also watching tokyo electron seeing gains of about .7%. >> we are waiting on softbank to start trading. you can see unchanged at this point in time.
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we are outmatched by about 3 to 1 at this point in time. other names we are watching are renaissance because it is still that earnings focus. some stronger numbers coming through there. also a year-end dividend that investors are marking here. let's look ahead to what we have coming up. china has replaced it markets regulator as president xi jinping takes more steps to end of the stock route and shore up confidence. that and more next. this is bloomberg. ♪
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it's fast, easy, and affordable. gusto is payroll and benefits built for small businesses. get started for free at gusto.com >> china is making a change at the top of it -- at the top of
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its security regulator in the latest attempt to help a stock market slump that has swiped $5 trillion since 2021. for the latest, let's bring in our chief asia correspondent. is this a sign of desperation or do you think this is a prudent step? >> i think it is another step they feel they have to take heading into the lunar new year holiday where there is an lot of disgruntled and -- disgruntled domestic investors, especially holders of small-cap stocks do not feel they necessarily got the right steps, the national team perhaps supporting big caps , blue chips essentially, in china. this is a move that has been done in the past when there has been market volatility. the csrc has taken a number of steps, piecemeal approach, some would say, to stem this slide. we have seen when certain announcements are made, the market goes up and then peters
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out. of the cart, the chicken, or the egg, which is the bigger problem, the stock market or is that a proxy to the bigger problems? the property market slump, the ceiling, consumption trends, geopolitics, the regulatory crackdown on big tech companies, etc.? this at least sends a forceful message to the market and to domestic investors that we are taking this seriously, and perhaps this new guy who will be coming in, and i will talk about him in just a second, perhaps will get the political forcefulness to make some changes, and the guy who is coming in is a veteran banker, a veteran of the regulatory framework in china. his nickname colloquially in china is the broker butcher, which essentially goes back to the mid to thousands -- mid -2000's when he led a regulatory crackdown on perceived malfeasance in the brokerage industry and 21 different
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brokerages were shut down in china from his investigation and enforcement. essentially, he will bring discipline and zero tolerance for what the -- the csrc has already said they have evidence of malicious shortselling and stock market manipulation. the officeholder since 2019 is out, and the new officeholder is in. >> we are heading into the year of the dragon. it is auspicious, right? where is the state of china's economy, particularly as we get inflation or deflation today? stephen: the deflation data is going to confirm what we have seen the past 15 months, continuing weakness in pricing power in factories, and that has now translated into weak consumer prices. the cpi index, as you can see, expected to continue.
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it has fallen for a fourth consecutive month, fifth in september. deflation is a big issue, obviously. it is kind of a vicious cycle, continuing downward spiral in prices at a time when the ministry of commerce essentially wants to declare 2024 as the year of voting domestic consumption. we will have to see. maybe cheaper prices helped spur consumption, but again, it's not something the authorities in the central bank want to see. >> i want to bring your attention to a stop that has just come online this morning. this is softbank. that spread has just come online with that pop, you can see up as much as nearly 10% so far. what is driving that is the arm earnings that came out. the chip designer being a key portfolio investor from softbank, but we had a climbing as much as 42% in late trade,
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and essentially, those bumper numbers playing into that optimism for softbank's numbers as well. >> not as much optimism as we were expecting when it comes to alibaba. alibaba reporting lower than expected sales overshadowing the move to extend the buyback program. let's bring our bloomberg intelligence senior analyst. it has been a long night of looking through and parsing through the details. what was the biggest disappointment for you? >> i guess alibaba is back to square one essentially. they have highlighted that they will make a big, global e-commerce push both at home in mainland china as well as overseas, and they are going to spend, so i think this heightened concerns that it will take a hit on their profits in 2024, and the second
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disappointment really comes in as they concur that market conditions right now are making it difficult for divestments of assets, not the likely overhang on china ipo, which is subjective to market conditions. it does not look like any of the changes they wanted to put through may come true in the near term. >> there's so much focus on how much ground alibaba has lost in the e-commerce space. are we going to get any signals perhaps that alibaba can catch up again? >> if any evidence comes true, it's not going to be in the near term. we probably have to wait until 2025 to see if any gains can be sustained for the next couple of quarters. alibaba is now looking at new road and development measures, and these are markets that pdd
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is also moving into to expand outside the u.s., so it will be an interesting year for both companies. >> that was our bloomberg intelligence senior asia-pacific analyst. let's shift to another stock we are tracking after hours today. that's disney because its shares have been rising in extended trading after the company's earnings beat estimates, and he gave an upbeat profit outlook for the year as well. let's bring in for more on this our senior editor who leads our media and entertainment coverage. better than expected numbers and also pretty optimistic on the outlook, too. >> right. that was the big takeaway a year ago. they announce a bunch of changes, cost-cutting, restructuring, and now you are definitely seeing the payoff. revenue is not moving much, but profit is much higher. they are forecasting a 20% increase in earnings per share
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for the company this fiscal year, so definitely good news from that perspective, much lower losses in the streaming service that has been such a drag on profits for a while. >> the other big takeaway is equities taken in epic games, the maker of fortnite. take a listen to what we heard from bob iger on this. >> our new relationship will create a transformational game and entertainment universe that integrates disney's world-class storytelling into epic's cultural phenomenon fortnite, enabling consumers to play, watch, create, and shop for both digital and physical goods. >> disney has had a pretty up and down history when it comes to gaming. how is this being received? >> iger has explained this essay that, as you mention, they were
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really big in games. they had a console they sold at one point. they got into some very risky business, but they have moved to a model that is more licensing, and this is sort of hybrid. epic will make these games and put the characters within the fortnite universe, but disney will also own a minority interest in epic, so they benefit two ways. >> there are a lot of other different themes to pick out from this, but there was streaming. how many subscribers they are adding. espn as well. international parks. what else stood out to you the most? >> a whole lot going on, as always, in disneyland. they announced a big new streaming service will combine the sports of disney, fox, and warner bros.. they also said they expect disney+ subscribers to rise in
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the current quarter. it has been kind of flattish. if you are a taylor swift fan, you can go to disney+ on march 15 and watch her interest -- her parents -- water er -- watch her eras tour movie. the company put out a statement saying today this is deja vu. it seems that way. a year ago, as i mentioned, disney announced they were facing a challenge. they announced all this cost-cutting. now on the eve of an annual meeting, they are announcing much stronger results and new initiatives. it has still been a choppy last year for disney, so the implication is while the news made look good today, they are
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not yet fully turned around. >> bloomberg's senior editor chris palmeri with all the details on disney. you can get that story and other stories to get your day going on today's edition of daybreak. bloomberg subscribers can get that on dayb on the terminal. you can customize those settings so you can get the news on the industries and assets that you care about. this is bloomberg. ♪ wealth plan can help get you there. ♪ j.p. morgan wealth management. you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh we're lucky to have this team working for us. our therapists give their all each day,
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♪ >> you're watching daybreak: asia. bloomberg learned citadel received morgan stanley's trade links for favored clients. prosecutors have not accused any of them of wrongdoing. morgan stanley paid 249 million dollars. new york community bancorp has been reaching out to finance a portfolio. they are said to be considering a synthetic risk transfer.
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they are under pressure over worsening credit quality. troubles in u.s. commercial market have spread to europe with bonds slumping. tesla shares jumped after a precursor to layoffs. there have been performance reviews for some employees and tesla doubled their workforce since 2020. more to
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♪ >> expecting indicators to be well aligned is too high a bar but seeing broadening signs should provide necessary
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confidence to begin a methodical adjustment to policy. >> i support being patient to get to where we need to. coming into better balance is big in favor of working on inflation. >> continued cooling of inflation and markets may make it appropriate to reduce the target range. progress on inflation stalls, then it may be appropriate to hold steady to ensure continued progress. >> that was fed officials tempering hopes of rate cuts. investors don't care about what they are saying. we have seen them shrugging off the pushback on calls for
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reductions. that helped to lift u.s. stocks to near 5000 and that is coming across into the asian session. nikkei, kospi and asi are in the green. investors are shrugging off geopolitical tensions. what will be notable are moves in china. a different story, weak start to the year for equities. choosing to her place a securities regulator tells us how serious the problem is. china is not closed but taiwan is shut for a public holiday. these are movers we are tracking given arm holdings and markets
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that are shut today. it is a countdown to the lunar new year holiday. >> circumstances are muted even with changes we are not seeing great prospects for boosting confidence into the lunar new year. let's get a preview. inflation numbers are coming out in the next hour. michelle is greater china economist. great to have you with us. the irony of the dragon being a challenging year for the economy. >> yes, indeed. i am expecting a notable drop in cpi because of the timing of the
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holiday compared to last year. i still expect momentum to be sluggish because demand is still week for consumers and if you look at the company announcements, apple are still announcing price cuts. that means consumer demand is not good. haidi: how concerned about you -- uh, are you about china and how hard will it get to lift sentiment out of that? >> so for china, there are two indicators. one is cpi -- one is cpi and ppi movement originally dictated what was going to happen.
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oil prices, coal prices, iron ore prices. if you look at the development of the prices is influenced by international developments and if you look at hard commodity, the downside is more limited compared to 2020 three because property developers are seeing a small decline compared to the last few years. pressures will be improving or stabilizing, but if you look at the labor market situation, we can monitor development but ppi and indices are not doing great.
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demand is weak. i would think that the prices are weak. so for core cpi we are looking at that stance for this year. annabelle: given we are approaching the mpc in march, can we expect anything major in the countdown from here to then? >> right now the demand expectations and the major stimulus is probably not fine. we are seeing easing moves from policy makers and surprise 50 basis point cuts.
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we did not do anything in the fourth quarter. cuts in q4 and q1. they are doing more to supply property funding but they still require collateral to these developers or projects. right now the concern of homebuyers is whether they can get the project completed. right now there is a fundamental change on consumer confidence. expectations are weak so property sales the best we can hope for is a stabilization. on the stimulus front, we do not expect much. at the march mpc we will see special jgb issuance.
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but we are not talking about big easing. one thing to watch is psl because even though fiscal support is not extremely supportive, it is more supportive compared to last year. we are really watching the monthly balance in the pboc is stepping up lending. annabelle: we did see the psl program being added. on a different note if we get the growth target at 5%, that is the expectation but do you think that is realistic? >> well, actually china misses
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its growth target. the reason is the pandemic. even though fiscal support does not look dramatic, i mentioned psl that can be stepped up over the year. in the beginning they may realize stimulus is not enough but measures could be stepped up to ensure we meet the growth target of 5% based on what governments have been announcing this year. annabelle: that was michelle, greater china economist. let's think about this in the context of equities as we head into the lunar new year break. it's a pause from mainland stocks. we will bring in john chang for more on hong kong. we were hearing about issues
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plaguing china's economy. we're heading into a break now. what is the outlook for trading this week at the last opportunity to see market moves? >> we had news about a securities head yesterday, so that will be positive. looking ahead of the lunar new year, expectations are soft this year and domestic travel look strong. and a lot of people will travel home for the holiday but outbound travel looks week even though we have visa free arrangements, flight capacities etc. but people are tightening their belt because expectation is weak. people are opting for value travel instead of the lavish style before covid. we can look at retail spending.
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in the holiday, there might be increased consumption of alcohol and consumer items. likely the boost will be temporary because after the holidays, people will tighten their belts. any boost will be temporary i believe. annabelle: usually box office takings are a key metric. >> expectations are looking soft. demand is robust for moviegoing, but the pipeline is not as strong. that might negatively affect the box office for this year during the lunar new year and macau casino gaming and related stocks will be a key sector to watch. mainland tourists will be going there to spend money.
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that will be a boost for the sector. haidi: asia stocks reporter john chang as china prepares for the lunar new year. more to come, this is bloomberg. ♪
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>> are clear and on starters and home offices responsible -- hamas's response and we will work until we get there. haidi: antony blinken on hamas response on pausing the conflict and releasing hostages. israel rejected the terms from the group. netanyahu says israel will press on with the fight. michael heath is with us. how do we interpret this? >> it is more than gamesmanship. reports are that hamas has 345 day sections. the first would see women and elderly and ill and men under
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19. there would be a did into gaza and israel would withdraw from civilian areas. the second stage would see palestinians released in the remainder of is really hostages. israel would withdraw from the gaza strip. the third stage would see them hand over corpses from either side. the reports in love press, despite that and yahoo!, some israelis say that this is serious, there are grounds for talks as antony blinken said. by the same token there is a lot they would have to give up and a lot of politics about this. it becomes what are you prepared to give up for the hostages and that is what they will need to decide. annabelle: you've also got the
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u.s. carrying out airstrikes in iraq as retaliation for the personnel killed last week. talk us through what has happened. >> that's right. the u.s. is continuing its campaign. three personnel were killed and there have been a lot of strikes by militant groups in the region against u.s. forces. they are there to deal with the islamic state and stability issues. a senior commander was killed in a strike. not a lot of details from the u.s. release. reports say this took place in baghdad, but it is hard to tell. the u.s. has calibrated its response. it does not want to directly
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speak ill of iranian personnel. it is an effort to stop the war from widening from the gaza strip, a constant u.s. priority. this comes back to the deal that you get greater stability across the region and we are a long way from that yet. annabelle: that was bloomberg's michael heath. other news we are tracking, u.s. senate asked a bill on ukraine with republicans rejecting the measure. donald trump criticize the legislation and mike johnson said it would be dead on arrival. chuck schumer plans a separate vote on aid for ukraine without border provisions. the biden administration is planning an effort to prevent
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adversaries from accessing sensitive personal data. the president may sign an order this week but the plan focuses on preventing china from accessing data including information on finances, genetic makeup and voice patterns. pakistan will close borders with afghanistan and iran as voters go to the polls. this comes after two bomb blasts killed at least 20 people the day before national elections. the former prime minister is expected to return to office with his biggest rival in prison and disqualified from ruling. tune into bloomberg radio to hear more from big newsmakers and get analysis from the daybreak team live from hong kong. listen on the app, bloomberg
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plus or bloombergradio.com. plenty more ahead, stay with us. ♪ the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner
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we broke down the numbers with the ceo. >> 24% year on year. 2.6 billion trips so as you get larger it gets tougher to have growth, but if you look at our bookings guidance it is between 18 and 23%, so we expect to grow at strong rates while continuing to increase profitability and margins, the best of both worlds. which is what investors expect and what we know we can deliver. >> let's talk about the other half of the business, delivery. you added multi-store ordering. what more can you do? >> there is a ton in delivery. the core online food delivery
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business grew 17% and is accelerating versus q2 and q3. the first thing is customers want choice. we have almost one million restaurants on a global basis, up 10%. they want reliability, so when we measure the orders we get wrong, they are down 25% year on year. business is reliable, you get what you expect and that is resulting in our audience growing. frequency growing and as they order more the growth is broad. we are adding grocery, excitement we are excited about.
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grocery business is bigger than online food business in terms of total size. our business is young, $7 billion growing over 40% and we are excited to introduce the grocery experience to our eaters. annabelle: the ceo speaking with emily chang. we've got interesting developments when it comes to i guess the drawing of boundaries when it comes to how office workers deal with demands for mergers and from other employees. we are seeing the trend began in europe. this uh --regulatory ruling on whether employees will have the right to ignore them.
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australia may follow suit in giving workers the right to disconnect after work hours. businesses face punitive measures if the employees have clocked out. annabelle: it seems like they could have reached out on wednesday, but is this going to apply to australian citizens living abroad? it is a big step forward for australia and we've seen them in europe giving employees the opportunity to step away. the legislation has not been released, but it would mean employees have the right to refuse to monitor, read, respond to contact from an employer. something that could be good.
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something to look ahead to this week. haidi: if you ignore those emails, you know what it is like to come in after a holiday and be faced with hundreds of emails -- you know, it's -- what's the worst of the two evils? ignoring them or just taking the communication? annabelle: that's right. check whilst you go along or when you get back. in this session chip stocks, we are monitoring those. softbank standing out. 8% after we had arm in a big backer, softbank, posting a strong forecast. it's about demand for ai chips and is boosting other names in asia.
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earnings continue to track. dena is falling after its third-quarter loss was bigger than expected. they are the company that owns one of the most popular cell phone platforms in japan. suzuki, we are seeing weakness for the automaker. a prophet miss and you're seeing a form company spiking issuing a buyback. coming of ubp shares their outlook for alibaba. those earnings ahead. ♪
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