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. -- 225 bursting out of the gates

over 2%. watching that market is coming on line extending gains building on the 1989 high reached in the thursday session before the emperor's birthday holiday. a little catch-up is expected with technology and also maybe catch down given the pretty tepid session we had friday. the topics is up by about .6%. we are watching the yen. the 150 zone is where we are firmly entrenched, looking for the risk of more verbal intervention from ministry of finance officials to support the yen as we have had almost every day when we have been over that level. we are looking to see when it comes to the broader trading session whether we see a pullback for the greenback. of course, it's a big week for numbers out of the u.s.. in particular the fed's preferred inflation gauge is something to watch, whether that adds to the overall narrative there will be more caution. fed speakers over the past few days certainly seemed to think so.

looking at trading in south korea, this is the picture when it comes to the kospi. this is the turnaround we have seen for south korean equities in the span of about one month or so. so much for and buying has supported what we have seen in demand for korea in risk assets. we are seeing the little downside today when it comes to the kospi down about .5%. also really watching the caused act keeping its head above water. the plan, of course, to resolve the long time korean discount in stocks by the korean government announcing that value up program referring to the law of valuation of korean companies in the market compared to global peers. we will watch the gauges of effectiveness for that program. in australia we are seeing pretty close to all-time highs when it comes to australian equities. we are within about .5% of all-time highs. we had a peak in early february, but not too much momentum when

it comes to trading on the a sx. we are up by about .4%, a pretty quiet but solid session so far. watching the aussie dollar as well, .6564. when it comes to energy markets a little downside for trading in u.s. crude. new york crude holding after a decline. prices more broadly retreating below the key moving average. crude falling below the 200 day moving average. the exacerbation of that selloff is taking hold. the biggest drop in three weeks after the breach of that average. we are still seeing prices pretty tight within the range we have had for the past few weeks. and finally looking at treasuries before we move on to getting some market analysis. this is the picture of the treasury market. this market is pricing for potential he volatility this week. it is a barrage of eco-data we

expect as well as more fed speakers, bond investors coming into the new you -- the new week with yields across the curve after your today ties with heavy treasury issuance. eco-data, pce data thursday heavily scrutinized. this is as i mentioned the fed's favorite inflation gauge. we are expecting a number of fed speakers to continue to lean into that narrative that has been building of late that they are not in any hurry or any under -- under any pressure to cut too soon. our next guest says it's a new era when it comes to asia and em equities by japan and india. jonathan gardner is a chief strategist at morgan stanley. you talk about the highly divergent start for asia entering 2024. obviously, india and japan where the market darlings last year. this -- do these structural elements tell you outperformance

will continue for those stocks? jonathan: certainly. when we look at what they have in common with japan and india it is exceptionally strong earnings growth at the moment. they diverge in sector composition in the market. but the most recent quarter for the crime section topics earnings are growing around 20% year on year the fastest of the major markets, far faster than s&p or europe. indian earnings are growing even more around 23% for coverage of the indian market. it is a confluence of factors driving this. essentially they are doing very well on the earnings front. annabelle: what about south korea? in a lot of ways that has been the surprise outperformer over the last month or so. a lot of the governance, the policy optimism falls into a similar vein that we have seen with japan. jonathan: that is what is known in the market as a value up a strategy.

there is a corporate governance theme getting going in korea. in that market you can also plays a ai theme through semiconductor stocks. overall in the korean market we are broadly neutral. you cannot be overweight everything. the core overweight for us is japan and india. haidi: that takes me to the emerging market that is perhaps the elephant in the room. how do you feel about china at the moment, particularly with the recent rebound and a lot of measures being taken by regulators and policymakers to stem the downside of sentiment. has that worked? are you seeing compelling opportunities at these levels? jonathan: no. in china we are saying the opposite of what i mentioned at the beginning of the interview. earnings are not growing. or, scarcely growing. and the return on equity for the

china market has been falling steadily for around one decade now whereas the opposite trend has taken place in japan. and india is sustaining in the mid teens. chinese r.o.e. 10% and still declining is a negative fundamental. there is a reason why this bear market has been going on in china for so long. until that is addressed, which we think requires the consumer to come to the fore, basically, through fiscal stimulus that targets the consumer, it is unlikely that the earnings profile for china will turn around. annabelle: so it is less about the property sector and structural slowdown in china and more about, say, household payments to consumers. is this something that would look like a catalyst for you to change your mind on china? jonathan: you are right to identify the property sector. that is one of the key reasons why the consumer is broadly retrenching.

if you look at the property sector, at the peak in 2021, i guess, three years ago now, it probably counted for over 20% of gdp. we know housing starts and sales and activity level in that sector is down materially anywhere between 50%-70% from the peak. that has permeated the economy and effective consumer sentiment in china. and the complete opposite is happening in india and japan. if you zoom in to the property sector in both those geographies, the overall reflationary environment and positive domestic growth environment is producing a very different dynamic as it affects household sectors. in japan and in india the household sector is broadly in good shape and feeling happy about their balance sheets but in china the opposite is taking place. haidi: does that change if you see sudden moves in the yen? if the boj finally comes through with timing for policy normalization? or if you see an even wider

policy to virgins with the u.s.? jonathan: i do not think that the level of the current to the is that important for the household sector. it matters for corporate profit margins for exporting parts of japan. we think the yen is moderately undervalued and will strengthen somewhat through the year. but that is second-order compared to all the other factors driving the bow market in japan. in particular, we date this back to 2012, the launch of aben omics, and a slew of third arrow reforms on the trade side, on the corporate side such as at the corporate governance code or institutional code for institutional investors. all those are what has delivered the better underlying environment for corporate earnings in japan. it is not a dollar-yen phenomenon.

haidi: what is the next big driver for the japan rally? is it on foreign buyers now? jonathan: japan is our biggest overweight morgan stanley. if you are diversifying outside the u.s. market, which is obviously also doing well, it is the first point we would go to in terms of adding to portfolio risk. fortunately, that's working so far this year. our fair value for topics is round about 2800. a bull case of 3100. but the earnings season i just mentioned has actually beaten expectations in aggregate. it is 6 -- essentially a secular bull market that we advise clients to be a part of. haidi: we saw a record japan profits in the quarter and more broadly around the region. what was your assessment of the reporting season? there is a sense, even globally, that perhaps the outperformance of japanese companies, u.s. companies, might be hiding under

performance other markets. jonathan: while earnings season in asia and em always proceeds more slowly than in the u.s., japan tends to finish first. that has not taken place. so i can tell you what has happened there. india kind of second. we are starting to get some technology numbers that are broadly as strong as what we are seeing in the hardware space in the u.s.. for example a name like tokyo electron is very strong. but it is too soon to say when we get to smaller markets, or indeed, for china itself just how this quarter has gone. haidi: i will ask you about technology. the nvidia forever of last week -- fervor of last week has a lot of people asking whether this is the peak. do you continue to see a strong narrative when it comes to some of the adjacent beneficiaries in markets like japan, taiwan,

south korea? jonathan: yes, we do. through names like samsung electronics, tsmc, sk hynix. i would contrast that with euphoria in early 2021 around the metaverse. working with tech colleagues then we were not enthusiastic about that broadly speaking. but, we are about the ai somatic. just the quantum of the spending that is ongoing now and the use case and applications people are developing, what has been highlighted around data centers. all of this is kind of the sort of phenomenon that comes around only every couple decades. so, it is quite transformational and we remain overweight the sector in asia haidi: jonathan, always great to have your insights. jonathan gardner chief asia and em strategist at morgan stanley. coming up deep dive into tray ties between china and australia

as their trade achieves prepared to meet on the sidelines of the wto ministerial meeting. we get analysis from the heimlich foundation ahead. ukraine ramps up calls for usaid as casualties polyp amid russia's years long invasion. the details next. this is bloomberg.

♪ haidi: look at the stocks we are watching when it comes to korea, the trading we are seeing getting news when it comes to a potential development when it comes to the labor action we have seen from south korean doctors. the doctor walk out is nearing its second week with both sides

becoming quite entrenched in their positions. now we are hearing from the interior and safety minister in a meeting saying they asked trainee doctors to return to work by february 29. this is a widespread walkout by south korean trainee doctors heading into its second week. there has been no sign so far the government, that says the country urgently needs to boost the number of physicians or back down from its plan to add an additional 2000 slots for medical schools had been seen as a necessity when it comes to policymakers in south korea as part of effort to alleviate what is a broader dr. shortage. this puts south korea near the bottom of oec nations when it comes to that part of its health care system operating. but labor groups have really supported the doctors saying the plan ultimately will not fix the fundamental problems in the health care system, the lack of specialists, working conditions, and the geography of where the doctors are being allocated as

well. we have seen an attempt at resignation by trainee doctors not being accepted. last week the health minister ordered over 6000 trainee doctors to go back to work. we are seeing that deadline being set now. we will continue to monitor that story as the developments play out. the other south korean story we are watching, look at financial stocks. all jumping by aboutz 5%-6% as we hear more details about the corporate value up program. the compulsory nature will be key for its success according to a number of analysts we have spoken to. these comments we are hearing from south korea at the moment on the value up program are causing a number of these financial stocks to drop at the moment. these comments, of course, are coming as part of a longer term plan to try to bruised

valuations for some of the korean stocks. a guideline was planned to issue the expansion of these listed companies and their voluntary participation according to the finance minister in a meeting aiming to minimize the burden on the companies. not a great reaction so far from south korean financials. let's turn to geopolitics. the ukrainian president volodymyr zelenskyy says the country has lost 31,000 soldiers since russia's invasion and he says the u.s. congress decision on $60 billion of aid will be needed in one month. bloomberg's managing editor for breaking news derek wallbank joins us. this as prospects for further aid remain entrenched in the realm of u.s. politics. it has been a big difference in terms of how the outlook is looking for ukrainian fighters versus where we were just one year ago. derek: exactly right.

we have a situation here where the u.s. has been trying to figure out -- the u.s. congress particularly -- has been trying to figure out how to get aid across the line, and aid package that would also include money for israel and may be money for taiwan, for the better part of months now, and they have not been able to do that yet. this past weekend marked the two year anniversary of the start of russia's all out invasion of ukraine. and it was a somber moment marked by a lot of officials, top officials from countries in the european alliance going to ukraine. senator chuck schumer of new york went to ukraine as well. there is a big effort at showing solidarity, but there has been a difficulty figuring out a path forward. part of that difficulty is house republicans that are very allied with donald trump trying to

navigate this and really impeding on the idea that they do not want to send anymore. is this going in the right direction? things of that nature. there has been some question that may be there could be a deal worked out between president joe biden and house speaker mike johnson. biden has called all four top congressional leaders to a meeting at the white house on tuesday u.s. time to try to hash this out as well as try to figure out a way to prevent a partial government shutdown at the end of the week. there is certainly a lot to do and not that much time in which to do it. haidi: we saw overwhelming support for donald trump in the south carolina primary. almost no hometown advantage for nikki haley there. if we are wargaming scenarios where trump becomes the republican presidential

candidate and is potentially successful in the election, how does this play out for aid, for the war in gaza, for the war between ukraine and russia? derek: the south carolina primary was nikki haley's last and best shot at dethroning donald trump. that's her home state. she was governor there and lost by 20 plus points. that's pretty much the math. nikki haley has said she will continue to super tuesday at the start of march. but, we have already seen at least one major donor group, the charles koch backed americans for prosperity action, a group that spent some $32 million in support of nikki haley saying they would cut that off. she still has money to continue here. but it looks like donald trump will be the republican presidential nominee. now, trump has, as i said, been skeptical about sending

additional aid to ukraine. he did, though, float the idea of doing it as a possible loan. so, there are some potential outlets there. but look, let's be really clear. i think that the general geopolitical consensus is if donald trump wins, things will get a lot harder for ukraine. trump has said he wants people to get to the negotiating table and that's that. on israel, trump is probably a little bit closer of an ally to benjamin netanyahu there. so, you would not necessarily see, even though people in the u.s. that are more supportive of palestinians have been frustrated with biden and are not happy with what the biden administration has been doing, you would certainly think a trump administration would be a little closer to the incumbent israeli administration and a little bit may be even more forgiving of, or even celebratory towards how israel has conducted operations in gaza

so far. haidi: bloomberg's managing editor for breaking news derek wallbank there. get the stories you need in today's addition of daybreak. bloomberg subscribers can find it at dayb other terminal or on mobile in the bloomberg anywhere app. customize your settings to just get the news on the industries and assets that matter to you. this is bloomberg.

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♪ haidi: a decades-old global consensus allowed e-commerce to grow without customs charges in the spotlight as the wto gathers in abu dhabi this week. bloomberg's tom mackenzie looks at what is at stake. tom: streaming a netflix movie in south africa, assume call with a doctor in india,

downloading an e-book on a beach in bali. those are a few of the online transactions that could face new taxes. that is, if a 26-year-old e-commerce deal falls apart. the agreement blocks tariffs on digital transactions, wherever they occur in the world. it obviously benefits major u.s. tech companies like amazon, meta, and netflix and it is good news for smaller terms that collect data and do business in international markets. and it is big money. the u.s. exported more than $600 billion of digital services in 20 alone with the u.k. at over $300 billion. when the wto meets this week it will have a lot on its agenda. but, perhaps the most pressing is renewing this deal that expires march 31. they have re-upped it every two years since 1998. some countries want to make it permanent. but, experts think indonesia,

india, and south africa could oppose it entirely and it would only take one to scupper the deal. the tariff revenues government good reverend -- generate without the truth might not be massive but the move would be hugely symbolic and could represent a bid when for the global south and it could be the biggest protectionist threat the internet has ever faced. haidi: tom mackenzie their reporting. the corporate stories we are tracking this moment. disney and reliance industries said to have signed a binding pack to virgin media operations in india. the media unit of reliance and its affiliates are expected to own at least 61% of the merged entity with disney holding the rest. details are likely to be announced this week. berkshire hathaway says its cash pile dropped -- jumped to a record in the fourth quarter as the firm struggles to find meaningful deals. the chairman and ceo warren

buffett warned an eye-popping performance was unlikely as the conglomerate tries to find deals at attractive valuations for your the fourth quarter earnings came in at $8.4 billion versus $6.6 billion for the same time frame one year before. we have more to come on daybreak: asia. this is bloomberg. ♪ is it possible to count on my internet like my customers count on me? it is with comcast business. keeping you up and running with our 99.9% network reliability. and security that helps outsmart threats to your data. moaire dida twoo? - your data, too. there's even round-the-clock customer support. so you can be there for your customers. with comcast business, reliability isn't just possible.

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haidi: asia's earnings remaining in the spotlight but shifting to china's internet giants this

week. baidu and netease will be releasing their latest results. for more let's bring in rachel yo who joins us from hong kong. china will be looking into other ways to steer its mastech industries as it faces a stock ro -- how do we see them faring? rachel: beijing may introduce more moves that could potentially mean diverting more resources to priority sectors including semiconductors and ai as it also faces tensions with the u.s. this comes as beijing is facing pressure to restore confidence amid a major stock rout but the move could be dovish. as chinese stocks are still struggling to gain traction's come investors will be concerned about more control from the state itself. under this backdrop, we are

expecting to see ai development spur higher revenue. it launched new ai-style products including a chatgpt-style app earing bot last year. it also shows strength in core businesses and ad revenue. we are expecting to see strong earnings for this quarter as well but government oversight may impact earnings in the long run. the global video console market may also weigh overseas sales for netease. haidi: watching autos as well. what are we expecting from li auto's? rachel: we're expecting to see operating profit to remain sequentially steady even as they are spending more on promotions to fend off rivals. they may also reduce production cost and protect margins.

but in terms of longer-term growth the automaker is susceptible to more increasing competition. haidi: breaking news rachel yeo in hong kong. let's look at the broader markets trading. the nikkei 22 five are playing catch-up after being closed friday. after the december 1989 high has been breached. 40,000 is the level we are watching next for the nikkei 225, which would be an all-time high. pretty muted session. up .4% higher. we are also watching south korea. downside of about .4%. we will get more when it comes to the value up program. australia stocks we are watching as a result of these levels.

we are .5 away from all-time highs. a lot of sideways trading but a pretty solid earnings season propelling optimism when it comes to australian equities. financials are falling at the moment, extending losses close to 7% when it comes to financial but on average about 6% losses. we had the reaction from the financial services commissions statement talking about tax incentives to push listed companies to enhance their value. the commission saying that they are planning the korea value of index in the third quarter. similar to the model of the gpx prime 150 and that stewardship will be included in these value up efforts as well. analysts we have spoken to have talked about the success depending on participation and

compulsory participation will be key to gauging success. korea has been planning support through voluntary support. taking a look at some stocks we are watching when it comes to japan as well. the auto sector has been in focus. toyota up about .8%. we are getting a little bit of weakness when it comes to toyota industries. there have been a number of scandals when it comes to its clients. we had early reporting that march 1 is when we will see potentially two of its plants in japan coming back online. there have been engine certification issues. these toyota units continuing to see that reaction. a bit of downside for honda as well amidst these demands for an auto industry investigation. let's get a preview of the market open in the mainland and hong kong. charlotte yang joins us. this stock reversal for chinese

equities is creating quite a bit of optimism among money managers when it comes to further gains. we spoke to jonathan gone earlier this hour and he is unconvinced until there is a return of the chinese consumer. i guess there are some who believe this could be the start of a meaningful turnaround and others that see this as temporary. charlotte: overall the sentiment in chinese equities market has really improved over the past week. last month if you remember we are still talking about the stock blowup and liquidity crisis. the past week when trading ended the csi 300 scored the longest winning streak since 2018. with nine consecutive sessions. the hang seng index is also up more than 10% this month. money managers we have been speaking to, they still see more upside.

given the live positioning. the big thing at play is chinese authority's strong resolve. the measures we see coming out policy-wise to support the market as well as buying etf's. there is a trait of opportunity a lot of traders feel, but we need more in terms of support for the real economy as well as some investors say they need to see more signs of earnings for a real turnaround for the battered market. at the moment it is more looking like a window for tactical trading. haidi: what are the next catalyst they are watching for when it comes to this market? charlotte: there are several things there watching. one is earnings. this week we are assigning --

seeing the auto reporting aftermarket today and also with some internet giants like baidu and netease will use earning results as guidance to assess how the broader sector is looking like. we also have factory activity data coming out friday. i think that will get a sense for how the manufacturing well and survey side of the chinese economy are looking. and more important in the coming week we have national people's congress coming out which will be a key venue for policy signals. investors are looking at what kind of budget china will set up as well as more support for the property sector which is a key for everything investors are watching now. haidi: key to everything, that sums it up pretty well. charlotte yang setting up for the start of trading in hong kong and mainland china. much more to come. this is bloomberg. ♪

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haidi: australian is seeking an end to china's tariffs which were imposed after an investigation into the origins of covid. the australian trade minister is expected to discuss the matter with his chinese counterpart at the upcoming wto meeting in abu

dhabi. paul allen explains what is at stake. paul: it has been a challenging few years for australian winemaker's. china slapped tariffs of up to 200% on aussie wins in 2020 and left of the industry scrambling to find new markets. >> we lost everything overnight. paul: when austria called for an international investigation into the origins of covid-19, china responded with a range of trade strikes against australian products. the relationship has since thought. -- thawed. australian suspended its appeal at the world trade and eight -- when china announced a five-month review. that review ends march 31. australia's trade minister will meet his chinese counterpart on the sidelines of the wto meeting in abu dhabi. >> we want the tariffs on australian wine removed and if

we don't get that we will resume the wto application asap. our agreement to suspend the deal wto process was based on the successful removal of all of the tariffs. paul: shares in australia's treasury wine estates has slowly recovered since china imposed the tariffs in november 2020. treasury also signaled it's expecting something to celebrate soon. >> the review of tariffs on australian wine remains ongoing. we're prepared and well flushed to reestablish ourselves in china should the review result in the removal of these tariffs. paul: but there is a question about what australia's exporters have learned from the experience and it comes to reliance on china. take bali, for example. china went from buying almost all of us really is barley to none at all, forcing exporters

to diversify. since tariffs were lifted, australia's barley producers have gone straight back to their most lucrative buyer, with china accounting for 90% of exports. and when wine begins to flow, memory becomes hazy. paul allen, bloomberg. haidi: we have some breaking news when it comes to the bid for credit suisse's china business. we have reporting that ant financial, ant group i should say, is outbidding citadel. this is coming as something of a surprise move that will be subject to close regulatory scrutiny. that is according to people familiar with the matter. this is a bid by the jack ma-backed fintech giant to build a securities business using credit suisse's operations. this will certainly face a thorough review because china is favoring a foreign buyer. the brokerage license was originally awarded to credit

suisse to help open up the financial sector to global competition. the people that we spoke to in this story asked not to be identified discussing these private matters. that preference therefore comes as a dilemma for ubs grogu, which owns credit suisse. the bank will have to choose between the high local bid coming from ant or the lower bid coming from citadel that is more likely to win government approval. these negotiations we understand are ongoing. other bidders may still join the fray, but there has been some difficulty for ubs from global firms because of geopolitical tensions, the crackdown on the banking sector flows, and of course china's flagging economy as well. speaking of china, australia's trade minister will also be meeting with his chinese counterpart on the sidelines of the event in abu dhabi that we spoke about, the wto event. let's get more analysis with deborah, head of trade policy at

heidrick foundation who joins us now from singapore. when you take a look at this relationship, which of course has been frayed recently with some more people to people issues. do you see progress being made when it comes to the trade side of diplomacy, and how sustainable is this for you? deborah: i think it is fairly sustainable. i think the chinese would argue they made their point. certainly those australian agricultural producers would agree. the point was made quite clearly and now the effort has been on trying to get back to more sustainable long-term relationships. as you just saw in your own story on barley, once the chinese market reopens, that is the most lucrative customer for most australian producers and that is likely to happen in other sectors like wine as well. haidi: when you look at the

broader wto mc 13, what are your expectations? it feels like 2024 as we head into the u.s. presidential election, as geopolitical tensions, wars continue to take place, it's a tenuous time for global trade. deborah: it's a challenging time and particularly a challenging time for the wto which has struggled to produce results. and i suspect that we will have another ministerial that goes by with the media declaring at least not great or disappointing , if not an outright failure. and the problem is it is very hard to get the members, 164, soon to become 166, to agree on much of anything. and so you get hamstrung over issues large and small. and one of the issues that is causing particular problems again this year is a small issue

that affects one member. but since one member can block consensus, you end up hamstrung over relatively small problems and you can never get to the really big challenges. haidi: one of those members that has in the past played that role has been india. is this a problem to do with how complicated domestic policies and politics need to be for every representative coming to a wto meeting? deborah: i think one of the challenges is it is a member driven organization. so every member has their own domestic politics, their own domestic constituents. and trying to get consensus across 164 members is always difficult. but there are some members more willing than others to simply block process for everyone. and india is the most notable user of the consensus objection

to stop progress in its tracks. india has a number of complaints heading into this week's meeting. and we will have to see whether or not they can once again back down at the 11th hour. but it is so challenging. and it is so challenging because many of these issues matter a lot. earlier today you were electric -- mentioning the electronic commerce moratorium, which is a very big deal for all of us being held hostage over both that issue but also other challenges. and i think it is a problem when we cannot get consensus and we have limited leadership in the wto itself among other members. and the net result is either poor, disappointing, or outright failure at these multilateral ministerial meetings. haidi: there is a real gap between, on the one hand, obviously in the wake of covid and the global supply chain breakdown, so many issues wto looks at are critical like

supply chains or fighting climate change. in a year of really difficult geopolitics, how do you address these issues if, as critics say, the wto is a broken relic of limited usefulness? deborah: i think it is still useful because it sets the benchmark or the foundation for an awful lot of trade and economic activities. so we needed to exist. needed to continue and we need it to be stronger. if it continues to be hamstrung by these issues then what happens? either you work with smaller groups within the wto which has been happening but even that is difficult. or you work outside of the wto. and that is easier and governments particularly seem to like that in asia because you can get things done very quickly. but the net result is we end up with more fragmentation. if you are a company and especially a small company, for you to deal with a patchwork of

rules is harder and harder. and the more that the wto remains stuck, the more we have limited consensus on global rules, the default becomes regional rules or bilateral rules and that gets more and more obligated for business. haidi: always great having you with us. deborah elms head of trade policy at the heinrich foundation. let's get back to that breaking news that we had a few minutes ago. bloomberg has learned jack ma's ant group has outbid citadel for credit suisse's venture in china. let's get more from lulu chen. we know that pre-everything, and wanted to build a security business. is this where it is coming from? it is quite a surprise. lulu: bloomberg has learned that jack ma-backed ant group has outbid citadel securities in bidding for the credit suisse

investment banking venture in china. this really creates a dilemma for ubs, currently the owner of that unit. because regulators are preferring a foreign buyer of that unit when that license was created for credit suisse it was intended to attract more global players. yet right now citadel securities is the only global player that has actually submitted a bid and it is in the lower range of 1.5 to 2 billion yuan, way lower than the valuation credit suisse previously put on the unit. so it is possible that their local partner, founder securities, might reject the offer, further delaying the process. haidi: ant has obviously had a really difficult few years with authorities. the penalty has been imposed but is there a sense that authorities may not be so favorable in terms of giving it approval for ant?

lulu: for ant, the approval might be challenging because you leaders do favor a foreign buyer. their own regulatory crackdown has been wrapped up. the regulators slapped a fine on the company in july last year and then the company right now is working towards reorganizing their business structure and also operations. the company previously did have an aspiration to build a securities business but that was halted when the regulatory clampdowns happened. haidi: lulu chen there with the details on that story. global technology supply chains are set to shift and diversify in response to geopolitical tensions and the pandemic. the next decade could be uncomfortable for semiconductor companies and electronics manufacturing. for more, are asia analyst

charles schumer joins us now. how do you foresee this transition impacting the global competitive landscape? charles: good morning. in the last few months we did a full study on what will launch in the u.s. and europe. in the report are conclusion is though right now taiwan has about 60% market share in terms of capacity, that is below. we believe that by the end of 2032, u.s., europe, have a good chance to catch up. they have a pretty high chance to share the market share with

taiwan. in that case we believe the u.s. and europe together will take 33% to 34% of market share, equivalent to the taiwan share. haidi: what are the biggest challenges for you when it comes to the u.s. and europe in reaching the projected market share? charles: i think most people would think -- we think it is not the whole case. [indiscernible] the payback period could be reduced. government incentive is a very

critical factor. the other thing people have to bear in mind is we are talking -- each will require about 1500. talent acquisition could be a challenge we think. haidi: some other corporate stories we're tracking, the japanese government will give an additional $4.8 billion in subsidies for tsmc to expand its plant into the country. they plan to start shipping from its facility by the end of this year. people go towards construction of a new fabrication building next to its existing one. the economy minister says tsmc is the most important partner for japan in realizing digital transformation.

>> this adjustment will, i believe, improve the resiliency of chips. for japan and for the world. haidi: kkr is set to be nearing a deal with about $4 billion to buy software business. the deal could be announced as soon as monday. broadcom is something its end-user computer unit which it inherited through its acquisition. that is it for daybreak asia. markets coverage continues looking ahead to the start of trading in hong kong, shanghai and zhis bloomberg. ♪

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david: good monday morning.