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haidi: welcome to daybreak australia. i'm haidi stroud-watts in sydney. markets have just come online. annabelle: i'm annabelle droulers in hong kong counting down to asia's major trading opens. haidi: asian stocks set for a mixed open as traders brace for a barrage of economic data this week with the feds favorite inflation gauge is expected to rise the most in a year. sure a new record as the conglomerate struggles to find meaningful deals and australia and the uae expect to conclude free-trade agreements by this year while talks with the eu and hold for now. this is the picture opening trading for the week across asian markets. what a week last week was. one of the highlights today will be japan coming back online after reaching the december 1989 records. we had a long weekend with the emperor's birthday holiday. perhaps a little catch up or

catch down. this is the trickling started trading here in sydney. pretty flat start at the moment. we are watching the aussie dollar at about 6563 at the moment. broadly, asian stocks set for a mixed open with traders bracing for a flood of economic data and reports this week including chinese activity gauge is that good point to the next direction of where chinese equities go from here, despite what we have seen as a flurry of more regulatory measures and policymakers trying to stem the flow of negative sentiment for chinese stocks. we are getting the fed's preferred measure of inflation, particularly key, given the tone of caution we have had from said -- fed speakers over the past few days and the fact we have had producer and consumer prices coming in hotter than expected and repricing taking place when it comes to fed cut expectations. kiwi stocks on the back foot.

.3% lower. muted chicago nikkei futures coming back into the trade. dollar-yen above the 150 level. perhaps we will see some verbal intervention, some commentary from sx regulators in tokyo today as well. taking a look at 850 china futures look modestly to the upside. let's get views from our next guest. he favors u.s. large-cap in japan for investing, a global market strategist at j.p. morgan asset management. kerry craig, always great to have you with us. the narrative has been split between watching the fed for repricing of easing expectations and wondering on the back of nvidia how much further that ai related technology rally can go. where using opportunities now? sean teare -- kerry: the market

has largely discounted the outlook for interest rates to come down over the course of this year moving in line with what central banks have largely been telling us and at the same time bond yields have moved up 45 basis points past week. equity markets continue to move higher on the outlook for greater earnings coming through and the south line -- soft landing narrative is becoming embedded. we have a base case thinking about an economy slowing around the world. you are seeing inflation flattening a little but still hitting down. it is falling like a feather rather than a stone and that should be quite positive for the equities output. we are still thinking about the quality of u.s. large-cap. we are looking at structural changes in the japanese market. there is still room for equities to perform in the environment but it is about broadening exposure in those indices into thinking about growth in other parts of the world that may create opportunities. as we look towards europe we may

see growth there and relative valuation arguments. we are thinking about the quality with u.s. large-cap being slightly more defensive with positioning there and also relative value opportunities that might present themselves as we get a clearer picture on growth and inflation. haidi: obviously japan is still a very popular play going into the new year. you also had white a turnaround for korean stocks with a lot of the same factors in the narrative for japan applying for korea. do you see better opportunities in east asia? sean teare we are looking -- kerry: we are looking around the region. markets will do well if we have a little more growth in the economy. pmi numbers coming out for quote developed markets have been improving particularly on the manufacturing side that leads into the idea we will get an inventory cycle rebound you can

look at the new orders to inventory ratio to justify that move feeding into import for those goods. we are looking at the rest of asia while there are concerns around china in terms of how to position there. it is a better growth outlook and definitely a move away from recession in the u.s.. annabelle: being cautious on china, what do you make of the recent rally? when you consider buying back in at these levels? kerry: devaluation argument is very compelling looking at the chinese market and opportunities will present themselves. for now the market is taking a few around stabilization of the outlook rather than the acceleration of the economy. we are seeing the loan prime rate for five-year get cut last week. that should feed through to thinking about mortgage pricing and hopefully stability in the property market. i think at the moment the market is coming off a very low level.

probably much more than -- technical then a sustained improvement in the economy and markets. we are just a little cautious in seeing how this progresses. we really want to see more return in the economy to have more faith that the outlook for the market will be supported, rather than perhaps seeing people potentially just selling these rallies at the moment. i think it is a little early for us to become overweight towards china at this moment. we want to see more on the economic outlook starting to improve in our mind before becoming more positive on the equity market. >> -- haidi: you mentioned korea. that's a bit of a cyclical story. are you still cautious there? kerry: yes. the market did really well last year and valuations have moved up. it does feedthrough until -- into a lot of secular things are rounding -- around semiconductors. across equities around the world pockets evaluation have moved up. it is more of a case of thinking

what drives markets higher from this point. it won't be a lot of valuation re-rating in most cases. it is about the earnings outlook and you are seeing some justifications for the earnings outlook in those markets. haidi: on the earnings front what do you make so far of the u.s. wrapping up, australia as well, fairly progressed? kerry: there are couple -- a couple consistent themes across those markets. first, companies have done a good job protecting those margins and controlling costs again. that has been quite positive thinking about the ability of margins to add to the earnings growth outlook last year and the continuation of that. in the u.s. case we are not thinking about a big drop in margins. we are thinking about something that could be held, if not moved up a little bit, and deliver earnings growth. i think estimates of earnings growth for the u.s. market match what we see in terms of consensus.

we have seen some consensus to earnings growth numbers come down and we are revising out upwards a little bit based on the strength of the earnings. positive to high single digit earnings growth in the u.s. does not justify being overweight towards the market. looking towards australia we see a similar story around the cost of being controlled. the resilience, the consumer playing through. again, the earnings outlook here has been relatively depressed compared to what we have seen around the world. we see potential for uplift, thinking very low single digits in earnings growth whereas consensus is closer to zero. so there is a little surprise coming through for the australian market. we remain relatively defensive looking towards health care and some of the industrials a little bit really thinking about the risks that come with pricing in terms of the financials, minors, and also, thinking about energy stocks as well. haidi: are you gaming out a scenario where there is a change in political leadership in the

u.s. next year? that leads to a broader question about how you are looking at risks and opportunities from geopolitical developments. kerry: i think over the last couple years investors had to deal with a lot on that front. when it comes to the u.s. election, the outlook does seem increasingly likely you will have a republican nominee that is donald trump facing off against joe biden. there is still a long way to go thinking about the policy implications and what might that mean for markets between now and the inauguration of a president in january of next year. there are takeaways to think of about tax changes that might come through and how that could affect corporate taxes and how companies have benefited from that. the extensions. will there be a change in leadership? there is a split congress in the white house. how might that play through in terms of what is done at a bipartisan or partisan level and through executive orders? there is a case building to

think about the ramifications of a change in leadership in the u.s. and a lot of uncertainty around how the structure of congress may actually look like to really dictate what the policy response would be. i think it is a case of watching, but not really adjusting portfolios yet to think about those implications. haidi: always greatest -- great to chat with you. ahead, we hear from the cofounder of the startup team shares a company that buys up company founders to keep business is going as they set their sights on japan. berkshire is jumping to a record $167 billion. the billionaire investors are saying they are struggling to find deals at attractive valuations. we get the details next. this is bloomberg.

annabelle: we will be watching gdp and inflation readings out of the u.s.. bloomberg economics expects headline and core pci to come in hot for the fourth quarter. japan is also releasing a core inflation 2%. against the economy sleeping deck slipping into recession and we will get fresh pmi readings out of china on friday likely to show activity pulling back due to disruptions from the lunar new year holiday. the reserve bank of new zealand is expected to keep rates on hold waiting for more evidence inflation is under control. on the earnings front we are watching baidu as china tightens a grip across tech companies and lenders could post a stronger net income following in the footsteps of some other southeast asian banks so far. that is your week ahead.

haidi: berkshire hathaway's cash bar hit a new record of $167.6 billion fourth-quarter. the conglomerate is struggling to find meaningful deals. bloomberg's editor adam haigh is with us. what is your take away other than that valuations are high from these numbers? adam: it is really intriguing that the cash file is so big now. it's more about exploring deals that they have been looking at and shied away from. there is clearly still a lot going on. we had deal activity around the world but there had been deals going through and berkshire is still spending money in certain areas. of course it speaks do not just elevated valuations in the equity market, but some other markets there are a number of areas in private markets, particularly testing. it tells us a few things, really. but one, there was a very notable comment about

opportunities outside the u.s. being essentially zero. really not finding much opportunity beyond the borders of the u.s.. japan, of course, has been one of the big focuses for berkshire and it has been an interesting market for the way they have been buying businesses there and also the broader impact international capital flooding into japan now has become a really huge story. of course, the nikkei taking out the historical levels last week shows you just how much of a change in sentiment there have been to japanese businesses in recent times and berkshire is obviously a huge component of that. they see and continue to see really interesting ideas there. i think japan still stays out as a key market. haidi: in japan and places like australia we have seen deal appetites picking up. what does that till you? adam: we are only almost getting

into march so just a couple months, it's still early but there have been pretty notable transactions. especially if you look here at some of the japanese mna coming into australia, organized on's, that deal -- renaissance, that deal, and indeed some businesses berkshire bought in japan, trading houses, that's an $8 billion investment now. it has been there for a far longer term turnaround story. a lot of the reasons why they are there is because of some of these long-term changes in shareholder attitude that take a few months to many years to come through. we started to see early signs of that in korea. whether that becomes another market for them in the future, we will have to wait and see but clearly some deals are coming back now. you have started to see opportunity there. haidi: get around up of some of the stories including that one in today's edition of daybreak.

terminal subscribers find that at dayb and it is available on the mobile in the bloomberg anywhere app. customize your settings so you just get news on the industries and assets that matter to you. this is bloomberg. this is bloomberg. nailed that fit. ♪ got a brand new swagger for you ♪ stitch fix, style you can feel.

♪ haidi: the latest headlines across politics. president flood him a zelenskyy says ukraine has lost 31 thousand soldiers as of the war against russia's invasion enters its third year. a decision from u.s. congress is needed in one month. a added 2024 will determine how the war will end. president biden and fellow g7 leaders assured road amid zelenskyy of his support in a video conference call saying they are stepping up security

assistance and working with kyiv to meet financing needs. michigan governor gretchen whitmer warning president biden that -- that president biden risks losing support over support for israel. democrats are worried that a biden's stance will alienate voters in michigan, home to a large arab-american population. a january poll showed biden trailing republican front-runner donald trump in this state in a hypothetical 2024 rematch. nikki haley's hopes for the 2024 republican presidential nomination took another blow as donald trump swept the primary in her home state, south carolina. nikki haley vowed to stay in the race through to super tuesday march 5. despite mounting legal issues donald trump has triumphed in all contests held to date and nikki haley is his last remaining serious challenger. i republican straw poll filled

either chris deluzio or vivek ramaswamy are seen as favorites for donald trump's potential running mate. noem is a south dakota governor and vivek ramaswamy ran unsuccessfully for the republican presidential nomination edward top picks for attendees at the conservative political action conference. trump had a 94% support level versus just 5% for nikki haley. australia and the united arab emirates are expected to conclude a free-trade agreement by the end of the year according to the australian trade minister don farrell. his remarks come as he heads to abu dhabi for this meet -- week's meeting of the world trade organization. alan joins us with more. what are we hearing? alan: both sides are motivated us troy the uae. from australia's prospective don farrell would like the process to be smooth for the way he's sovereign wealth fund to invest in australia particularly around renewables.

for the uae, the two sides are in good position to start talking about a deal. this is australia's best trading partner in the middle east and this could be a launch for the broader middle east. you are you traders are worth 6.1 billion dollars approximately. but what that involves. aluminum, meats, education. crucially the two countries aren't competitors in this area so it makes it easier to get a deal done then with the eu or india. both those deals are stalled and we probably will not see any development this week. australia will wait until elections in both those jurisdictions are over. haidi: wto reform will be one of the key items on the agenda. we expect any progress there? paul: at the risk of sounding cynical it is always on the agenda and it's pretty much always ends with a commitment to keep it on the agenda. it is not really seem to go

anywhere. one of the things all parties want to do is try to revise the appeals court, the appellate body as it is known. since 2019 there has been a hesitancy to move the ball down the field, as it were, with the possibility of another trump presidency on the horizon. that will not likely see a great deal of movement until after november. don farrell said wto reform is always difficult but it should not depend on who is or is not in the white house. but he has used the appeals body previously to get through traded difficulties with china which have been well-publicized. there has been a lot of movement on that front. don farrell will meet his chinese counterpart on the sidelines of this meeting in abu dhabi this week. most of the trade starts have been removed. there are still some of them in

place against wine but we expect good news on that front and australian winemakers are quietly gearing up for a return to china. >> it has been a challenging few years for australian winemakers when china slapped tariffs of bob tutu hundred percent on aussie wines in 2020 leaving the industry scrambling to find new markets. >> we lost everything overnight. we had about a business in china. >> australia called for an international investigation into the international origins of covid-19 and china responded with a strike against a range of australian products. exports. australia suspended its appeal to the world trade organization over the wind tariffs when china announced a five-month review that ends march 31. astrology is trade minister will meet his chinese counterpart on the sidelines of the wto meeting in abu dhabi. >> we want tariffs on australian

wine removed and if we don't get that, we will resume the wto application asap. our agreement to suspend the wto presents was based on the successful removal of all of the tariffs. >> shares in australia's largest listed winemaker treasury wine estates have slowly recovered since china imposed the tariffs november 2020. in this month earnings announcement the treasury signaled it is expecting something to celebrate soon. >> the review of tariffs of us trillion wines remains ongoing. we are prepared to reestablish our australian portfolio in china should this result in the removal of tariffs. >> there is a question about what australian exporters have learned about reliance on china. take barley. china went from buying almost all of australia's barley to buying none at all during that

deep-freeze forcing ed -- exporters to diversify and find new markets. since the tariffs were listed australian barley producers have gone straight back to their most lucrative buyer with china accounting for 90% of exports in december. when wind begins to flow memories can become hazy of course. paul allen of bloomberg. haidi: look at how we are tracking the fx side of things. it is a big week of eco-, potentially. quite a lot of direction to be set when it comes to what we see for the u.s. dollar in particular given we have the first preferred gauge of inflation coming through. that would possibly add to the narrative we are seeing not just from fed speakers talking about caution when it comes to maintaining the fight against inflation, but what we have seen with inflation numbers out of the u.s. coming in hotter than expected. the dollar rally looks pretty tepid at this point.

the first weekly decline of the year last week it to matched. it was comments from fed speakers on the timing to stop reductions that weighed heavily. we sought out performers in this part of the world including the kiwi dollar and the aussie dollar at this point maintaining a little bit of resilience. dollar china looking steady. dollar-yen is the one to watch. 15051 is where we are. some of that volatility is starting to fall. we have, again, the dueling force curbing trading range we have seen. dollar-yen's tight trading range has been weighing on options volatility here. that is an expected measure of volatility and amused -- movement falling to the lowest since

>> you are watching daybreak australia.

kkr is nearing a deal with about $4 billion to buy a software business from broadcom. the deal could be closed by the start of the week. broadcom is selling it into their computer unit inherited through its acquisition of a business that provides software enabling users to access desktop and applications remotely. byd unveiled its most expensive ev supercar sunday. it costs over $233,000 and will be initially for the chinese market. but -- byd says the car get hit 100 kilometers per hour in two seconds and reach a top speed of 309 kilometers per hour. it aims to rival gas guzzling options offered by ferrari and lamborghini. disney and reliance industries are said to have signed to merge media operations in india. reliant and its affiliates are expected to own at least 61% in the merged entity with disney

holding the rest. they say details of the deal are likely to be announced this week. annabelle: standard chartered ceo bill winters said the bank took nothing from the chinese real estate market last quarter. he told bloomberg he sees a long recovery ahead for the sector. >> we have seen now several quarters of stability with a consistent level of stimulus that has kept it from falling. we have 88% coverage on our at risk chinese commercial real estate portfolio. we have written it off. i hope they get recovery one day, but i think it will be a long recovery as a fact of the matter. we are way ahead of the market in taking those provisions as we were in taking provisions relating to other businesses that were impaired. we set a target two years ago of doubling profits in china over three years and we have almost done that in two, doubled the profits. the juxtaposition of china

having a tough time was doubling profits it's a pretty good outcome because we are generating good, strong topline growth. if that is what we do. those connections are stronger than ever. >> are there major impairments coming through? >> no. we took virtually no impairments on china real estate fourth-quarter though we did in earlier quarters. we have taken impairments in earlier quarters on our stake in bowhead bank. we took a relatively small impairment fourth-quarter. this is a mechanical calculation value. we are properly provided. >> in the west, in europe, in the u.s. do you see opportunities? >> there could be. we won't be heroes in the commercial real estate market but we are relatively underweight commercial real estate. we are relatively underweight leveraged finance. two areas that have been hit quite hard on the bank -- back of higher interest rates. will there be opportunities to improve the quality of our franchise using our balance

sheet in a prudent way? getting growth back in, our prudence has kept us out of harms way and that is why we have such a low loan impairments. what's what is looking attractive to you now? website not calling the bottom of anything. i have been in the higher for longer rate category and i am no pundit when it comes to interest rates but it has felt to me the u.s. job market is strong and that means higher for longer and obviously that is what the market is saying now. annabelle: we are about half an hour into the start of the cash session in sydney. upside about .4% here. we saw a pretty flat start to trading. we are starting to incrementally see more gains. broadly across the region we expect perhaps a bit of a directional session, perhaps struggling for conviction in asia with u.s. shares closing little changed friday still close to record highs.

perhaps you can't blame a little bit of profit-taking or breather being taken just after the big rally we had a following the nvidia numbers. treasury yields are falling as well after we heard from john williams friday talking about the probability the fed will probably cut rates at some point this year. a mixed picture for the dollar. nikkei futures up .1%. looking to add more gains when it comes to demand from foreign investors in particular. on thursday we saw just before the public holiday and the long weekend in japan that the nikkei 225 managed to clinch that december 1989 record high. a big day for earnings for japan with the likes of quite a few numbers coming through, in particular, when it comes to nippon steel. tsmc is one to watch today with the japanese government announcing additional subsidies for the company.

u.s. futures are looking pretty flat at this point. annabelle: you mentioned gains in japan. where else we are seeing a lot of foreign inflows is south korea. it will unveil more details of its corporate reform plan called value up in the next hour, a program that aims to encourage listed companies to come up with measures to boost listed values. the reform bets encouraged to global investors to pile into south korean stocks and you can see the outperformance of the kospi over the broader asian benchmark. let's get more with our asian stocks reporter here in seoul. tell us about the value up program. >> yes, good morning. this program is to be announced in about an hour and it is part of the broader initiative in south korea to end the korea stock a discount that refers to persistent undervaluation of

south korean stocks compared with global peers in taiwan or japan because of poor corporate government and meeker shareholder returns. the current administration in south korea wants to change that and has been introducing steps to do that and our corporate value program is one of the most important features in then and -- of the initiative to end of the korean stock discount. since the south korean government hinted it will unveil this corporate value up program that sounds similar to what japan has done with naming and shaming companies not doing enough to return to investors, global investor has been piling into the south korean stock market. south korea's benchmark kospi, since after this value up program was hinted at by the south korean government, the kospi has become one of the best-performing indexes in the world because foreign investment

has been piling into it adding more than $10 trillion into benchmark -- 10,000,000,000,001, more than 6 trillion u.s. dollars since late january. >> what would be the criteria in the value up program being seen as successful and the korea discount? youkyung: sure. this program probably hinges on how much participation it can see from south korean companies. south korea's government has already said it will expect voluntary participation from south korean companies rather than making the shareholder improvement measures a requirement or mandatory to these south korean companies. there are a lot of south korean conglomerates controlled by the founding families still and in order to make those families act , to do more for broader shareholders rather than just

smaller controlling families, south korea's government must be given a lot of incentives if it is expecting the south korean companies to participate in this measure voluntarily. so, the key to success would be seeing broader active participation from south korean companies, which some say might not be enough if the measure is not compulsory. but we will get more details about what kind of measures this will contain in the value up program in about one hour and we will see about the market reactions to these details. haidi: are asia stocks reporter youkyung lee there in seoul. widespread walkout by south korean trainee doctors is heading into the second weekend there is no sign the government will back down from a plan to boost the number of physicians in the country. our east asian editor john herskovitz, we spoke about this with you last week. does that look like this will be

a prolonged action? john: well, we are seeing both sides really digging in. i think this week we will see a bit of intensification. graduates going into internships are saying they won't take the post, the next step. doctors are looking to do a protest, may over the weekend. the government is threatening more and more to do investigations. they have a really powerful twill. they can suspend the licenses of doctors taking part in a labor action that has seemed illegal because it is hurting the medical system. this week we will see both sides really trying to dig in more. it has potential to go on for quite a bit but i think it will be a crucial week in deciding whether it will be shorter action or prolonged. annabelle: really, as you said, this could be something that is

quite a prolonged strike. public sentiment really seems to favor the government on this issue. john: exactly. south korea is one of the fastest aging countries in the world and the government plans to add 2000 seats into medical schools to bring more doctors in to alleviate the shortage. about 70% of the public supports that plan. the government has seen its approval rating go up because of this. doctors are complaining this will -- this plan does not address some of their working conditions. it does not correct fundamental problems. the public have seen wait times grow longer because of this. surgeries have been canceled. the emergency medical care system is in a high state of crisis and the public is seeing health care that's not being delivered. that's not helping the doctors. especially when 70 for private -- 75% of the public sides with

the government in the plan to increase medical enrollment haidi: you talk about one of the bugbears being the doctors saying just adding more doctors won't fix the structural problems with the health care system. the labor conditions, so one and so forth. does the government have a plan to actually address these issues? john: well, the government's thinking is that if there are more doctors, there are more people that can go into specialty fields that have not been able to attract a lot of people. if there are more doctors they can go to rural areas that are sometimes underserved. the doctors are arguing we will just see an intensification of the urban concentration of doctors. that pay needs to be increased in some specialties that aren't seen as higher-paying, that the government's plan want to address these problems. we are seeing different sides. the idea is now south korea has about 3000 people per year admitted to medical school.

with this plan there would be 5000. over time there will be more and more doctors and they hope that supply will help meet demand and fill the slots that are not being filled now. annabelle: that was our east asian government editor john herskovitz next our interview with the cofounder of u.s. startup team shares about bringing their employee ownership succession model to japan. this is bloomberg. this is bloomberg. and it was easy, with a partner that puts you first. godaddy.

haidi: it's time for japan ahead watching january ppi data due out in the next few minutes. economists forecasting business survey price growth holds steady at a three decade high and we are watching chip shares. the government announcing an additional 4.8 $6 billion in subsidies for tsmc to expand its plant in the country. toyota the and other auto stocks on the radar with japan's transport ministry as ring automakers to conduct internal probes for scandals racking toyota's units. japanese markets come back online after a long weekend at the top of the next hour. a little catch up and potential catch down given very muted

moves in the u.s. session friday. a lot of that is the huge ai tech related rally we saw after nvidia numbers came out. japanese equity markets coming back with investors looking for the nikkei to 25 to breach the 40,000 level for the first time. they reached the japan 18 -- 1989 high. dollar-yen firmly above 150 flagging a risk of more verbal intervention at least from the ministry of finance officials to try to support the yen. that tug-of-war within the drivers of where we see going for the yen really playing out at the moment. this is the picture as we get to the start of trading in about 15 minutes or so in japan. annabelle: yes. it's a big rally in the large caps. where we have seen challenges in japan is for smaller firms that have struggled for years to hand

businesses off to a buyer or successor. our next guest is the cofounder of u.s. startup team shares that buys out company founders and owners to keep their businesses going. backed by mitsubishi u.s. j the firm is bringing its motto to japan in its first overseas foray. joining us from tokyo is kevin rikio shiiba the cofounder and head of japan at team shares. i gave a few details there. perhaps it was difficult to your me with my voice today. kick us off by telling us more about what team shares does and why you are choosing to enter the japanese market. kevin: thank you for having me. it is great to be here. team shares is an entirely new ownership employee succession model for small businesses. we work with retiring business owners of traditional successful small businesses and help them retire by purchasing the business, installing employee ownership and gradually transitioning the business to

majority employee ownership within 20 years, 80% employee ownership. we do this because we are trying to end at the succession problem for good. so these businesses end up being permanently co-owned by team shares and employee owners meeting the business never has to face a succession challenge again. at the business never needs to sell again in the future. as of today, team shares over the past four years acquired 90 small businesses in the u.s. across a 31 the 50 united states. 42 different industries and over 42,500 new employee shareholders at all of the other businesses, many of whom are becoming shareholders in their businesses for the very first time. we know that this works. employee ownership, employee owned companies in the u.s. have been shown to grow 2%-3% faster than peers, be more resilient during downturns, and our overall happier places to work. team shares is really excited to

be bringing the employee ownership succession model to japan, specifically because japan, arguably, is in the middle of an even more severe succession problem than the u.s.. so, in the u.s. 70% of small business owners at that look to sell end up failing to sell, a huge loss to the community because the businesses often end up shutting down. in japan by 2025 2.4 5 million small business owners will end up having to be 70 years or older the average age of retirement. that means about 50% of the business owners -- yes, sorry. annabelle: you mentioned various industries for the u.s., 90 plus acquisitions. are there key sectors or business models you are looking for in japan? would they be the same as what you have done in the u.s. so far? kevin: yes.

we are looking across a broad base of u.s. small businesses with a mission to create employee ownership in as many small businesses as possible. we are focused on very narrow sectors like other firms. in the u.s. we have six core sectors, business services, consumer services, distribution, light manufacturing, restaurants, and retail. we will look across a wide breadth of japanese small businesses to make sure we can help and impact as many small businesses as possible. for japanese small business owners, they are seeing a very a similar trend, like in the u.s., which is, business owners, their children have gone on to have other careers. they do not necessarily want to take over the family business in the same way. increasingly business owners are looking to find a successor. half of those 2.4 5 million small business owners in japan have yet to identify a successor yet and if they can't find a

successor it can be a huge impact for the japanese economy that could result in potentially 6.5 million jobs lost, over ¥22 trillion of gdp could be potentially lost. so we believe our employee ownership succession model in japan is a really great fit in between traditional employee succession and m&a. traditional employee succession ends to be one to two managers buying out the business and they often have trouble coming up with the capital. team shares, the reason we started was really to help the employees inherit a majority of the business. by cofounders alex and michael worked in small business for many many years. they owned eight of them because -- before we started team shares together and they deeply understand the challenges a small business owners face while looking for a successor. when we started team shares we wanted to create a model that allows businesses to be more durable and allows us also to

make a small dent in wealth inequality by expanding access to small business, for employees to own shares in the business that many of them have not had an opportunity to do before. haidi: this is a big play on the inevitable demographics of japan. are you looking at other markets as well be on the u.s. and japan now? kevin: our mission has always been to create employee owned businesses and help a generation of small business owners transition those businesses to the next generation and their employees become shareholders in the business. when we started in the u.s. we truly believed this is a global problem. when we looked at japan, the third largest economy with even a more severe accession crisis so in japan we were really excited to buy that response of when we started to actually announce what we were doing in

the u.s.. over 50% of the discourse online was in japan and people reached out saying you need to bring the model to japan. we had already been researching entering the market does this was confirmation we could really make an impact here. to answer your question we are focused on the u.s. and japan now and we are looking for other financial parties and people that really share our mission and passion for helping this generation of small businesses transition and change hands and the employees ultimately, you know, receiving shares in the businesses they work in. haidi: great to have you with us kevin rikio shiiba cofounder of team shares. catch japan ahead every monday at 8:40 am in tokyo, 7:40 p.m. on sunday watching in new york. bloomberg subscribers can watch live on the terminal too at the tv function. this is bloomberg.

haidi: these are the stocks we are watching as trade opens in korea and japan shortly. japan announcing an extra $4.8 billion in subsidies for tsmc for plant expansion and we are watching trading in europe with auto peers. japan's transport industry ordering an industry

investigation amid safety scandals at two toyota units and samsung lg integral on watch. the news that jeff bezos and nvidia are investing in the startup figure ai developing humanlike robots. samsung invested $5 million while lg invested $8.5 million. coming up in the next hour of daybreak morgan stanley says asia and em equity markets had a highly divergent start to 2024. we look at their market strategy next and we speak with the hybrid foundation about what to expect from the world trade ministration conference in abu dhabi. the markets open in seoul and tokyo next. this is bloomberg.

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haidi: this is daybreak asia counting down to asia's major market opens with japanese markets rejoining after a long weekend. investors after clinching the december 18 -- 1989 high will look at the 40,000 level for the nikkei 225 as the next level, the next milestone, the first time ever it surpasses the 40,000 level. a pretty muted session across asia. expecting conflicting leads. u.s. stocks, not much progress in the final friday session of the week after a massive week for tech large caps and ai and tech names after the nvidia fervor. we are seeing south korean stocks with the value up program. a big day for south korean stocks after quite the turnaround in the underperformers to the outperformance we have seen for that market in particular. let's get to the open. the nikkei to do five bursting out of the gates over twos percent. --25