markets are on break for the lunar new year. keeping track of the ones that are open. we are seeing bright spots and japanese equities are trading. annabelle: the nikkei rose by the most in three months yesterday, hitting a 24 year high. the nikkei up 10%. adding to those gains. we had the yen weakening. trade is closer to the 150 mark. we are tracking the nikkei 225 extending and dovish comments

from the boj deputy governor led to the yen weakness. we saw toyota continuing to gain the. one stock we are tracking is softbank. looking at the spread, and it is unmatched but we are seeing it swinging back into profit. taking gains from arm, the u.s. chip designer listed last year. we had a focus on general value of portfolio companies and that gained. certainly one to be tracking. haidi: take a look at training

in australia. a muted session, a tent of 1% to the upside, but not much conviction. real estate, health care, technology are stronger. we are seeing weakness very pronounced when it comes to energy. as we see the split between rise in oil prices versus energy stocks necessarily. seeing australian stocks and new zealand bonds following u.s. treasuries. a robust 30 year option. the aussie dollar is holding steady. we heard from the rba governor speaking to a parliamentary panel, saying cpi does not need to be in the target range for the rba to cut rates. that saw a move when it comes to

the move in the dollar. watching oil. doubts on the cease-fire have spurred some buying. energy stocks not finding that at all. we are seeing a coherent move across the shorter and if you will. the bond sale finding buyers. it good demand soothing nerves about demand on the long end. annabelle: we are approaching the lunar new year break, so this is taking a look at market closures. we will have the morning session , same situation in singapore,

but other markets are closed for the break. i want to bring in daniel, head of strategy. we saw the csi advancing, so will not say optimistic but i'm curious about the moves because it was up 6%, the best week since the reopening. do you see that lasting? daniel: probably not. i believe investors would be fading into the rally so the magnitude of moves is getting smaller. our view is you need to solve the demand side in order to see structural improvement in equities, the hang seng index.

annabelle: those are just not easy. it's a multi-year process. when do you expect to see a sentiment shift? would it be this year? daniel: it takes time for people to return and have confidence in chinese assets. the state is encouraging asset managers to buy chinese equities. so that can put a floor to the chinese equities for the short term. in order to have more sustained momentum, we need structural improvement, plus other markets are looking good. it is all competing for international funds and investors see a clear picture in

other markets. >> what looks good in terms of these other options? >> after the earnings season you see sub industries in the u.s. tech side or looking good. for example the ai side in the cloud side. electric vehicles are weaker because the earnings have not been as good and we have the geopolitical element if trump gets the presidency. that could be a detriment to uavs. in asia in india are expensive. the budget has been supportive, so some upside.

japan and korea are corporate governance stories. korea with a program that can narrow the korean discount. those are exciting stories. >> let me ask you about japan. we see a renewed highs being hit by the nikkei. we spooked to someone else earlier this hour that was saying they are not in a rush because these governance promises have not been delivered yet. daniel: it will take time. japanese equities have been priced low just like korean equities. it's a multiyear process and investors are willing to give them the benefit of the doubt.

the speed of the upside is getting slower but now is the time when they put reforms into play. certain sectors have a macro tailwind. semi conductors, cars, enjoying the macro benefit and the wider mix of vehicles on sale, those are looking good in japan. annabelle: where else looks good is u.s. stocks even though we've seen a narrow breath and the rally. have you changed your allocation strategy? daniel: a little bit more concerned because of the frothy level in u.s. equities but we are still overweight.

just fine-tuning exposure like i said in the tech side. differentiate within tech, right? if you want to take a barbell approach, health care stocks are doing well and displaying study earnings so we are advising clients to take excess profit in tech and rotate back into health care or put it into this sub industries that are looking good. annabelle: thanks for your time and happy. that was daniel lam. taking a look 10 minutes into the session, luxury stocks are standing out because we had l'oreal are earnings yesterday. those numbers are better than

expected, so an optimistic case around the outlook for the consumer segment. shiseido will be reporting earnings. keeping on that theme, there are a number in japan. tokyo electron, kt corp. are names we are watching closely. any indication on demand recovery, our team saying they could post higher sales. sales looking to recover on-chip tools. softbank is a firm we are watching but the spread is not matching yet. we are looking for good gains when they come online. haidi: still ahead a ceo talks

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♪ >> you are watching daybreak in asia and we said we will be watching for softbank which just came online. seeing a big spike, adding to gains. trading around 9%. wall street saw it as much as 18% so we will track the gains. we had third quarter income beating estimates, helped by its

investment in t-mobile. they're repositioning around ai and the chipmaking unit posted earnings this week. softbank sold a majority of its share in a company before it plunged. softbank has been up 25% this year. one to track. let's shift to treasury secretary janet yellen, she says regulators are monitoring risks from nonbank mortgage lenders. they rely on short-term funding and access emergency fed funds.

she said the oversight council is paying attention. >> we're focused on that because nonbank mortgage companies lack assess -- access to deposits that banks have. in stressful market conditions we could see failure. haidi: south korea's shin han financials says they have a buffer against risky property bets. in his first interview, the ceo said the lender can stay resilient amid credit concerns in real estate. >> our exposure to u.s. real estate is 2.4 trillion and the risk amounts to 1.4 trillion.

we built up 20 billion in provisions and for though 1.4 trillion, we've built up 20 billion in provisions. i'm thinking that will be managed within them. haidi: jin said they are considering canceling their own shares in addition to buybacks. he said the government is taking a page out of japan's playbook to tackle the korea discounts. >> korea has a lot of industries that are leading but the valuation of stocks is low. the government is concerned about that. in japan they implemented a value program that was effective. we saw money going to japan and we think authorities are coming around. we are trying to analyze why the korean discount is severe.

i think if the return policy is established we can repeat what japan has done and japan as a good mix of policies. the shareholder return policy was implemented in the buyback along with cancellation. then the government increased the taxation. the combination resulted in enrichment funds through share buybacks. that became a plus and is attracted other markets, so i have hope that korea could witness the market that japan saw. it should. >> do you know when the program begins? >> the government will announce the program in february so there is anticipation about what will

be in there. some things talked about in newspapers are to bundle blue chips and put that into an etf. i think that could be a huge catalyst. >> do you think your stock is undervalued and by how much? >> it is true we are undervalued because our pvr is 0.41. hard to put a number on it but i think it should go to a point where it is recognized by the market. hard to put a number on it. >> what plans do you have to give money back to investors? >> our strategy is to increase total return from 2023 onwards. we did a buyback every quarter and if you look at our total return including the buyback,

there was 36%. this year we will continue our commitment that we made last year. we are going to buy back shares and cancel shares regardless of the economy. if we can do that our goal, i do not know if we will achieve it, aiming to clear 40%. >> in order to restore shareprice resiliency we will need to reduce the share flow. we need to continue the treasury stock cancellation so we can take back outstanding shares. then we can boost the price and r.o.e. will increase. our first target is reducing share flow to below 500 million to about 450 million shares. that is 20% cancellation of the

current level. it would take several years but that is a plan. regulators are taking a stance to not be involved with shareholder returns as long as there is sufficient capital. i do not think our plan would be hard. the move is favorable. haidi: that was the ceos speaking to our coanchor david. i want to draw your attention to some movers so far 20 minutes into trading. we are getting big moves. softbank extending gains nearly 12%. we saw a return to profit helped by a focus on arm as the designer was listed in the u.s. and has gained after results this week. so the focus on arm in the shift around ai is something investors

really like. nissan we are seeing it plunging the most since may of 2021. third-quarter numbers missed estimates and that is important when you consider better numbers from toyota. what some analysts are highlighting is operating profit is deteriorating in north america and they are saying sales could recover. the sustainability of recovery is going to be crucial. nissan dropping after its third quarter profit missed. the tory holdings is one to mention. they had better-than-expected numbers. get around up of stories in daybreak. bloomberg subscribers can go on their terminals and it is available on mobile in the bloomberg anywhere app.

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♪ >> i view markets as broken. value is not a consideration for most investment money. money does not have an opinion about value, only price. what will the price be in 15 minutes, i want to be ahead of that. haidi: david einhorn speaking on the masters of business podcast. this is the picture, mixed downside.

we saw a repeat of the previous cash session, wall street struggling. we see s&p futures and nasdaq futures looking flat. the dow is to the downside. russell futures flat. we have the bond market digesting a big treasuries sale with stocks hovering near records. we've seen a prevailing narrative and a recalibration of expectations. we are seeing the bond market struggling to find direction. that is the case for equities. tom barker says policymakers have time to be patient, pointing to continue disinflation. he's looking at dater around this time of the world with a cautious approach. >> it has been remarkable.

fourth quarter gdp and jobs numbers. all of them talk about an economy that is fundamentally healthy. i'm always cautious about numbers. a great example would be jobs numbers last month. the actual jobs were down because a lot of retail folks hired for christmas got laid off but the seasonal adjustments bring it up. that's a pretty big seasonal adjustment. i am glad to see it coming in. thus the best data we have but i'm not going to take too much out of one month. >> markets are interesting when the fed is going to cut and you have said we do not have to be in a rush but with data like this, are you telling people we are doing fine with rates where

they are? >> you've got a dual mandate with employment and inflation and employment is operating at historic levels. we talked about initial claims, job openings, it is a strong market. hoping inflation continues to calm down. >> you said you don't have a roadmap. chief executive harvey shorts said investors should not be thinking the fed would cut rates five times. i assume you agree? >> hard for me to get into the forecast because there are two elements. one is rate normalization and inflation coming down but the other is the economy takes a wrong turn. those things are a weighted

average. there is a model that we take rates down quickly. that is one thing that could happen. then there is the model where you toggle rates down. >> how do you judge when it is appropriate to cut? what are you looking for? the phrase is measurable progress. i would you define it? >> if i could get these numbers sustained an even better that's what ♪ ♪ ♪ ♪ ♪ ♪

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♪ haidi: taking a look at softbank, tracking the reaction after what was a big surge, the highest finish into a half years.

upside of almost 11%. much of this is bolstered by the upward climb. softbank reported a return to profits after a languishing time for softbank and the vision funds. stock was up 11% on thursday, another gain of almost 11% and a little bit of a turnaround on fortunes on the pursuit of ai related investments. let's bring in the japan equity strategist at asymmetric advisors. what stood out and do you think there is a return to positivity that is warranted? >> is warranted because they had a big windfall from the t-mobile shares that were given, based on

the agreed numbers if the share price stays above a certain level. that was one point $8 billion they received and arm since listing sony was up over 40% since september. and of course over the last day or two, the share price has been up 50% taking its valuations from the bargain-basement level which is insane. arm, only 10% of shares are floated so everyone is clamoring for some exposure among the tech funds in you can see why they only listed such a small amount

to get the inflated valuations. then go ahead and borrow money against that. that is how they operate. the japanese brokers can be very excited about that. is it sustainable? it depends on how much valuations can get raised. not spectacular by any means, their architecture has been adopted at a higher rate so they are seeing royalties and the smartphone market is recovering as tmc was telling us. they strengthened and nvidia is

trading at five times earnings. the valuation differential is notable and that's why we love tsmc. shares are not trading because of the holidays in china but in the u.s. the price is close to its all-time high of 140. we see the share price doubling in a short space of time. that is the one we are interested in in regards to ai. softbank is sentiment driven and it is in the heart of what people want to get exposed to. haidi: sentiment driven suggests that now is a key point. how much hinges on how well they do, how quickly they deployed

cash, if they deployed cash given how valuations are deploying. how much focus on these investments when management is picky with their portfolio? >> they are terrible investors. they have had massive gains from alibaba which they are looking to reinvest. they are looking to invest in other stuff but arm holdings has fallen into the ai segment by chance and is being favored. i cannot see another big winner in ai given everyone is so

focused on ai. to be fair these things have been going on for about two years and it looks like investments have been duds. the only one that's actually good was not supposed to be in ai investment, arm is pushing itself and doing well, but is it doing well enough to be worth 100 times earnings? who knows? the markets do not look at valuations so we don't want to get too excited one way or another. haidi: i'm curious because you're talking about ai, is there anything else you're are looking at is a potential catalyst for the next expansion? is anything stand out?

>> bytedance stands out. the owners of tiktok, that's another big wound. will bytedance be listed? we don't know. tiktok has been coming into focus in america because of geopolitical and other issues. children being exposed to for content. bytedance is the big one and givhan they are dominating social media that could be another big windfall coming from the listing. otherwise, the investments have been highly unimpressive.

could have completely missed the dartboard. as i said call mobile luck, arm has fallen into the ai category in if you go back they bought arm because they wanted to get involved, you know, in things that have been completely abandoned since then. but it is intense to get lucky all the time. they drag themselves out of a big hole a few years back. the big surprise was they did not buy back shares.

>> i'm curious, do you think one mean lockup time expired, with the use that as an opportunity? >> why would that be? >> would they be looking to sell shares to raise capital? >> they have already raised capital. remember they borrowed money against the value of the state, which doubled. they do not have to wait for the lockout to end. it is not significant for softbank which owns 90% of the company anyway. may be more significant for

others, whether they want to sell after the listing. overall i think the buyback will come at some stage. maybe not straight up in the earnings. they only care about the shareholders. waiting for good timing to do a buyback to show everything is ok again. yeah, i would expect a buyback at some stage book for now with the share price going up 20% i don't think they need to worry about that. haidi: thank you. we are out of time. that was japan equity strategist at asymmetric and visors.

checking what we're saying for softbank, it continued surge and we saw adi's jumping more so we will continue tracking matt. the nissan drop, we had a third quarter profit that missed estimates. we are tracking a furniture retailer with better-than-expected numbers. exxon's first quarter operating income missed estimates with a big drop. mixed moves we are seeing so far 40 minutes into the session. watch us live and see past interviews on tv and dive into the functions we talked about. you can send us instant messages during our shows. this is for bloomberg subscribers only at tv . ♪

♪ >> china is supporting tumbling markets ahead of the lunar new year, taking aim at short-sellers. state funds have boosted stock purchases and chief markets

regulator's efforts of vaux 2015 when beijing took drastic's absence to stem a crash. this time they see the old playbook will not be enough. what's discuss with bloomberg opinion columnist shuli ren. we have seen them try to lift sentiment and it did not last. shuli chinese investors do not: buy it anymore. smaller companies are more vulnerable to downturns and borrowing costs so the government could say it is the technicals, but really investors are saying it is fundamentals. so stabilization can temporarily boost sentiment but if the

fundamentals are bad, it does not seem like it is going to work very well. haidi: what are they need to do? i mean -- annabelle: go, heidi. haidi: i was thinking monetary easing but the problem is not demand. do they need market reforms to entice investors back in? shuli: so-called market reforms are going to deter investors. shortselling is a healthy function of the market. trying to investigate bringing it hedge fund managers for a talk at the police station, these are not helpful measures for the stock market.

haidi: how much do you think xi jinping is concerned about the stock market? we are hearing about people in social media venting frustrations. at what point does it cross that threshold where they have to care more than they do? >> 15 or 20% of household stocks. xi jinping thinks it is speculators. truth be told people are superstitious going into the year of the dragon. sentiment is not very good. business people who are not affected will be like ok, my business would not be good.

at some point he has to be very concerned. fairly stabilization and then perhaps up or range bound. haidi: even the year of the dragon may not help. shuli ren is our bloomberg opinion columnist. looking at political headlines, xi jinping told vladimir putin that they need to work together to oppose foreign interference. the leaders said they would promote joint energy projects despite sanctions led by the u.s.. relations between them have grown in the two years that russia launched its invasion of ukraine. the u.s. supreme court is poised to keep donald trump on election ballots. justices have questioned whether

the colorado supreme court has the power to exclude him on the grounds of insurrection. he is seeking a ruling that would and the push to keep him off the ballot. sticking to politics, indonesians head to the polls choosing a new president and government to lead the country. investors will be watching for signs of policy continuity or change ahead of southeast asia's largest economy. haslinda has more on what is at stake. >> campaigning has been intense to win the support of more than 200 million voters with 17,000 islands. it is a fight for the top job. leading the polls is a defense

minister accused of human rights violations. now the two are teaming up. the vice presidential candidate is the elder son, prompting criticism to create a political dynasty. the former governor of central java was once supported and they have the backing of the indonesian democratic party of struggle which is also their party. finally, a neck adamic who became the governor of jakarta is the most critical and his

running mate has ties with a large mercenary organization. there is a lot at stake. during his two terms in office he helped per fell indonesia onto the -- propel indonesia onto the global stage with stronger ties to the u.s. in china. >> there will be important implications to the region. they pushed for investments. investments from china, south korea, the u.s., europe. so it will have implications on the regional economy and whether indonesia will continue with the policies of the previous administration. >> he spent billions funding infrastructure projects and green lighting policies such as moving the capital and expanding the high-speed rail prompting

debt concerns. venetia aims to become the fourth largest economy by 2020 -- 2045. whether it gets there will depend on policies and priorities to drive growth. haslinda, bloomberg news. annabelle: now to pakistan's election where the result of a return to power for the three-time premier is looking less certain. 12 hours after polls closed, result been announced but only a few of the assembly seats. the bureau chief joins us. i am interested, i know you have been awake for nearly 24 hours waiting for these results. why is there such a significant delay? >> thank you for having me. the reason for the delay is the

election commission has not been coming out with the results, so there is an issue with the election. counting officials have mentioned internet problems. pakistan switched off mobile services for security issues when the voting started. that was more than 24 hours ago. it has been 13 hours. results have come out but the counting of multiple seats have been -- early results are showing that it is going to be an upset and the former prime minister's independent candidates are leading the election, which is in upset. opinion polls were showing that

imran is seeing an upset. as i mentioned, this is very early. a handful of seeds have been officially announced, not even 5%. it is still too early to know if they are correct. party leaders are saying that they are part of the government. haidi: which is extraordinary given what we expected. how unprecedented would that be and how much uncertainty does that inject into the formation of government if it turns out to be what the results are only finally get them? >> yeah, if you speak to fund managers, they are saying this is chaotic, it is chaos and will have a negative implication on the markets because there is

confusion about what is going to happen next. it will not be straightforward. these people are contesting as independent candidates according to rules, they are supposed to join a party in three days or decide to be independent. so it is a question that even party officials don't have an answer to as to what is going to happen. they will be a confucian state for a few days and markets will react negatively. markets open in a few hours from now. haidi: our pakistan bureau chief there. i think you try to get some sleep, given that the results are incoming slowly. turn to your bloomberg for more on elections. this is bloomberg. ♪

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>> happy friday. 9:00 a.m. in hong kong. welcome to bloomberg markets china open. let's get