>> this is "daybreak asia." we are counting down to asia's major market opens. chief among them is u.s. retail sales. if that combines with a stronger labor market, fed staying higher for longer, something to watch very closely, especially for the japanese yen. >> the barreling ahead of the u.s. dollar has huge impact when it comes to the yen. the fed talking about the volatility. a lot of downside for asian fx at the moment. >> absolutely. as we march ahead to the open, as you said, we are hearing from tsuzuki himself this morning's saying he is watching these fx moves very closely but he's going to keep from repeating the same warnings we have heard

before. japanese government official stand prepared to take all measures needed. t. rowe price saying the yen reaching 160 is even possible so it makes that next april 26 meeting for the boj very much a live event. we did have u.s. stocks casting a bit of a shadow, the tech sector in particular, big tech the laggards in the prior session. it was the response to u.s. retail sales and also higher treasury yields. the japanese 10 year yield climbing a little bit at the start. let's change on because we are also keeping a watch on what we get for the korea session. so far, again, more pressure coming through, not just for equities, but you also see that reflected in fx at this time.

we had trade numbers from korea earlier, export prices rising 2.6% on the year. import, a contraction of 0.7%. >> take a look at how we are opening up in australia, bell. it is that staggered open. we will have to wait sort of for a few more minutes for a truer picture but looking flat to negative. we were expecting some downside judging by the futures session there. we are also watching the aussie dollar, a little bit on the back foot as we continue to see dollar strength. with really just the nature of data that we continue getting causing that reassessment of whether we will be here for even longer, higher, and certainly for even longer. we see that stubborn u.s. inflation, stubbornly good u.s. data translating here. the reaction to the continued geopolitical tensions as israel

has vowed to respond to the latest iranian retaliation seems to be adding more risk to the market. we see brent crude trading over just over $90.50 a barrel. wti rising after ending slightly lower on monday. the geopolitical risk across the middle east still at play. take a look at bonds. we had the retail sales numbers continuing to add to the picture of a more resilient economy, a hotter economy than previous expected. we see treasuries jump to year highs after the retail sales. most u.s. treasury yields, in particular, two-year nite, quickly approached 5% -- note, quickly approached 5%. bell: those moves in treasuries

really want to watch, especially for the ramification for other asset classes. let's bring in julia wang, executive director of global market strategist at j.p. morgan private bank. you sorta put a few different things in context. you got a stronger u.s. economy, the risk the fed stays on hold for higher for longer. you can add to that geopolitical fears as well. great start of the year for global equities. do you see perhaps us sitting out for a bit of a -- perhaps it setting up for a bit of a contraction? or does it hinge on earnings? julia: there are several things running through the market. i think the resilient u.s. economy is one of the biggest themes this year. we continue to think that that is the case over a longer time going to be supported for u.s. equities as an us across. we continue to be -- as an asset class. we continue to be quite positive on the asset class.

what we see is the geopolitical tensions getting a big share -- a bigger mind share of investors. after the very strong run in equities we had early in the year, and with the election coming up, it is rational for investors to think may be would take a pause this point and take some money off the table. or diversified to other regions of the world where valuations are not as high. i think diversification is another one. i do think where we are a bit contrary and at this point, we do think, look, the u.s. economy is strong but that is not what the fed is trying to fight. the fed is try to fight inflation. if you look out longer-term signals for inflation like wage pressure, if you look at the state of the labor market, it is not really clear that inflation is structurally rising again. i think we are getting some bumps in the process of disinflation.

i think the fed framework. stands. there guidance overall for us to raise a little bit lower stance from here. treasury yields have risen to a level and fed expectations have repriced efficiently that there are now opportunities. i don't think we are terribly concerned about, you know, yields going back to 5% if that ever happens, it would be a great entry opportunity because we do think that the broader macro regime for the u.s. is still a soft landing at this point. >> you mentioned diversification. where are you sort of looking at this point in particular? julia: i would say a crossed developed markets, japan is still our top pick just because there are regime shifts happening in japan. the economy does stand to

benefit from those technology shifts, such as artificial intelligence. they have an aging population. hopefully, these are things hopefully these technologies can come into help japan solve these structural challenges. of course, we think inflation is real, it will help to lift asset valuation in japan market. even though japan has had a really good run last two years, we still think it is in a ball market, it has room to catch up -- bull market, it has room to catch up. i think china still looks a little more interesting now, even though the macroeconomy still looks pessimistic, the market seems to be bottoming. there are all these opportunities we are looking at the moment in terms of diversification we from the u.s. equity market. >> when it comes to japan in particular, a weak yen has been one of the big factors behind the rise of stock markets, the support of a lot of exporters. the question is that level we

see today around 154 against the dollar. we have a question of the day. relating to the currency japan intervening at 160 or before that point? do you have any views on yen intervention? julia: i do think it depends on the manner in which we get to 160. if it happens in a very rapid and somewhat disorderly way, then i think fx intervention certainly is a risk. we have to go back to the overall framework for the japanese yen. it is facing those structural depreciation pressures because of things that are, you know, more global in nature. for example, the interest rate differential between japan and the u.s. don't forget that japan runs a trade deficit now. for all these structural reasons, and of course, we have the uncertainty in the global economy at this point,

geopolitics, all these things could exacerbate weakness. i think these are the reasons why yen is at the level that it is. that is why i think fx intervention should not be rolled out. but i think policymakers -- not be ruled out. but i think policymakers should not try to reverse the trend. their goal is to smooth the process by which we get to these levels. >> julia, when you take a look at korea and how it is in a lot of was trying to replicate the governance success we have seen or reforms in japan, do think that is potentially a good longer-term play? julia: so, there are opportunities that would like in the korean market. i think we like the semi conductor supply chain story. we think korea is a bit of a laggard in that regard, partly because it's a more cyclical aspect of the semi conductor supply chain. but we do think it is bottoming out if you look at some of the

leading indicators so we do like the korean market. i do think japan is somewhat different in the sense it is seeing a structural shift from deflation to reflation so it probably has a little more evaluation, re-rating potential compared with korea, which is in a macro regime -- is in the same macro regime as they were a couple years ago. we have been more positive on korea as well lately just because of the semi conductor story. >> in terms of structural shifts, perhaps less in the direction china is heading in, but do you see any selective opportunities as we see potentially a stabilization, at least from these latest numbers? julia: yeah, i think china market is quite interesting. you know, the macroeconomy continues to face challenges. you know, the housing market you don't have to look very far, sales are still falling. there's no stimulus.

but it looks like the market has found a bottom. i think partly because valuation looks like it's quite cheap and it's a good level of support. if we look further out, if the housing market does not become a big drag on the economy for financial stability reasons, the in overtime, the manufacturing sector could overtake it as a bigger driver of growth. and that is, of course, what policymakers are saying at the moment. but we are also seeing some of that play out in the data when it comes to infrastructure investment, they do seem to be resilient, may be more so than the market expected. so that's a theme. to watch for the medium-term. . at this level, it seems like there are themes that you can pick in the china market. we do prefer to -- a little bit. we like technology. we like some of the selected names in the manufacturing sector, be it ev or battery.

not all of them, but select names, and high dividend for more defensive posture. that is the strategy we have at the moment. >> thanks so much for your time this morning. that was julia wang there, global market strategist at j.p. morgan private bank. and coming up, we will have more on israel down to respond to iran's missile and drone attack, even as allies won against an escalation. details ahead. this is bloomberg. ♪

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♪ >> is a real's top military -- israel's top military officials are reasserting that their country has no choice but to respond to iran's drone and military attack. president biden seeking to return the focus to a proposed cease-fire deal over gaza. some of our previous guests saying, what's the definition of restraint? this does detract from the fact that they are still trying to push for a cease-fire for gaza. what are the options available to benjamin netanyahu given the domestic pressure to do something and the international pressure to not? >> david cameron put it really well, he said israel has a struggle between the head and the heart. the heart says a sovereign nation must respond. if you leave that unchallenged, what does that say?

this can happen and there's no consequence. the head has said the narrative has changed suddenly in the middle east, gaza, the civilian deaths, horrible destruction is off the agenda for the moment. iran, which has been a centerpiece of so much violence and instability in the middle east, is back in focus. it's also been a coalition that wrapped around israel and helped it defend against these attacks. it's very difficult when you have 300 missiles and drones fired at you to allow that to happen. it changes the whole equation. the shroud has fallen away. for 45 years, it's been this quiet proxy war between israel and iran, now it is sort of out in the open. the weigh their options carefully. there is the opportunity of we will say nothing and do something. they often strike in syria, lebanon comments proxies, or

iran itself just without acknowledging it so we are just going to have to wait and see. >> y i meaneah, the tit-for-tat sort of risk is very high here. i am curious because we have spoken a lot about iran having telegraphed this attack very well. what is the risk though, of course, if you do have a tit-for-tat retaliation that the next time they don't? michael: that's a really good point. as much as iran could, you know, we are talking about missiles and drones, it's not a risk-free situation by any means. and had tv images of these things being launched, they were not the fastest. iran made it clear it did not speak directly with the u.s. or israel or anyone, but to neighbors, it made clear that this was coming, it gave every possible advance warning so that these could be intercepted and there will be minimal damage. and also targeted them at

military insertions, it did not hit civilians. and understood i think and it does not want to get into a tit-for-tat. israel is obviously more technologically advanced, it has the u.s. behind it, it can really cause damage. you have to think about the iranian domestic situation. it's not a popular regime, it has a huge amount of young people, the economy is in tatters, it's a very difficult situation. they cannot depend on people rallying around the flag and the situation either. they want it to stop. it's just a question of what israel decides to. it's a real head/heart debate. logic would suggest you don't do anything, they have won this situation. the narrative has changed, the focus is on iran, which is sort of the centerpiece of israel's opposition but the heart on the right-wing coalition that netanyahu are a part of are

going to be demanding some sort of reaction. >> thanks for your insights. that was bloomberg's michael heath. german chancellor olaf scholz has warned chinese officials to address overcapacity and treat foreign firms better. his comments made during his visit to china echoed criticisms delivered by the u.s. treasury secretary elastic. let's bring in our greater -- treasury secretary last week. let's bring in our greater china senior executive editor. how much do you think beijing is going to take this on board? >> i think it is going to have to take this very seriously. the economy here is not in a good state. as we have talked about, exports is something beijing is hoping will be a pillar that it can depend on to get the economy going again. that is not going to work if tariffs are being put in place in europe. we already have investigations by the europeans into subsidies offered by china for electric cars. there is another, as we

understand it, investigation coming into how china procures medical equipment, whether european companies have fair access to the market here. there is a lot brewing in terms of trade and that is not going to be helpful for the economy. we are expecting the chancellor to meet with xi jinping today. we believe that will be the message that he delivers when that meeting occurs. we have to think that president xi will take time to hear what the europeans and the german chancellor has to say. >> it is interesting, isn't it? because on the one hand, with the economy still quite precarious, china needs to in some sense of peas and work with trading partners. germany is obviously a long-standing one. but the issue of overcapacity, this is industrial policy that is front and center for xi jinping. john: this is what i would call iraq and a hard place because china wants to get man u -- a

rock and a hard place because china wants to get manufacturing going again. it's providing incentives in terms of lower tax subsidies -- lower taxes, subsidies, etc.. that is the catalyst causing concern in the united states and europe, that those chinese factories are going to pump out goods, their cheap goods, low cost goods that are going to flood their own markets, the american and european markets. it is indeed that effort by china to revive its economy that is causing that concern outside of china. >> all right, that was our greater china senior executive editor john liu. get a roundup of the stories you need to know to get your day going in today' edition of daybreaks. it's available on mobile in the bloomberg anywhere app. you can customize your settings so you only get news on the industries and the assets that you care about. this is bloomberg. ♪

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♪ >> all right, we are just about 20 minutes into the session so far for trading in seoul. samsung one of the stocks we are watching. shares a little bit under pressure today but it does not really come as too much of a surprise because overnight on wall street, it was that selloff in big tech led by nvidia, apple among some of the laggards, moves in treasury yields putting pressure on equities and high-growth stocks. another reason we are tracking samsung's because the company is expected to get over $6 billion in grants from the biden administration to boost ship production in texas. let's get more with our executive editor for asian technology, peter elstrom. this is part of a big u.s. effort to boost its domestic chip manufacturing sector.

>> that's exactly right. the biden administration has been pushing this issue quite hard. they passed the chips on science act to be able to dole out as much as $39 billion in grants. the latest in news is that samsung, as you mentioned, is going to get 6.4 billion dollars in grants roughly as it invests more than $40 billion into texas, into the u.s. economy to build up chip capabilities there. this is the third company to get this kind of award after taiwan semi conductor, and intel have gotten awards, multibillion-dollar awards. samsung is the leader in memory chips. it's trying to expand in logic chips, the processors that drive smartphones. in texas, they're going to build two fabrication plants and and advanced packaging facility. they're aiming for what's called four and two nanometer

production, very advanced production. they hope to do customize chips for apple and nvidia to compete with taiwan semi conductor. this is a big step forward for the u.s. in this drive to build up a domestic semi conductor industry along with intel and tsmc. >> what are the expectations in terms of how this could translate to the amount of production that it would actually generate? peter: well, in the previous era of globalization, really, the u.s., which had been a leader in semi conductors for so long, ceded a lot of that leadership to east asia, taiwan, south korea, in particular. after the supply shocks from the covid pandemic era and geopolitical tensions rising, there is effort to bring it back. the biden administration has pushed hard to build up those domestic capabilities so there is a guaranteed supply of these key chips for lower and

production like automobiles, but also the advanced semi conductors you need for smartphones, computers, especially ai and quantum computing. this is a big step forward for that. tsmc is going to be part of that effort. intel is trying to push into that space. samsung is trying to build up what are known as foundries, where they can custom make chips for all because of companies trying to build these applications. >> this focus on the high-bandwidth memory chips has been in competition with sk hynix, samsung in this area. do you think this helps get samsung ahead? peter: yes, that's exactly right. you are going pretty deep into the technology. in-memory chips, samsung has been the leader historically but hynek's got a bit of an advantage to provide computing power for ai applications in particular. samsung has been a bit behind

hynix, trying to play catch-up, both in the south korean production facilities and now also in the u.s. with this advanced packaging, they hope to gain some ground on hynix and makeup lost ground. everybody wants to work with nvidia these days, it's the most valuable chip company other, with their gpu's, there is almost unlimited demand for them to train these air services like chatgpt and a bunch of other ones and it looks like samsung is pushing hard to gain some ground there. >> executive editor frazier technology peter elstrom there. more to come here on "bloomberg daybreak asia" this is bloomberg. ♪

haidi: take a look at u.s. treasuries.

we are seeing a bit of a rebound among the regional bond markets as well. waiting for jay powell and other officials as well, coming off fields that had -- yields that have highs, but we are hearing from mary daly who had previously, the federal reserve bank of san francisco president mary daly, a lack of urgency when it comes to the adjustment of rates for she's now speaking in a moderated q&a at the moment and talking about the need to be confident that inflation is going to 2%. the were saying the fed can do now is to act urgently. mary daly also saying economic growth had been quite remarkable, painting a picture of no urgency to adjust rates before it is necessary.

new york fed president john williams says it will happen this year. he also discussed the resilience in consumer spending and the economy in an exclusive conversation with bloomberg tv. john: consumer spending has been strong. i think it is driven by strong fundamentals. job growth has been solid. we have seen real wage gain. we are in a good economy with good growth. yes, it is part of that story, but, you know, i think what we are realizing is we are getting a nice tailwind from the supply side of the economy, good labor force growth, strong productivity, good real wage gains, so with that, i think, you know, consumers are spending. michael: what is the thinking in your office, among your colleagues, about does this last or is it a surprise that could go away at any minute? john: one thing that makes it hard to forecast is we are still feeling the aftereffects of the

pandemic, pressures with ukraine at all the things in between. we are still in the adjustment process. the consumer and economy overall. but overall, i think the economy will continue to grow at a solid rate this year, probably not as high as the 3.1% we saw last year, but something around 2% or around that. so i feel like we are still in a good place, probably not as rapid a growth as we saw last year. michael: you have the strong growth, you have very low unemployment. why cut rates if the economy is doing fine at this level? john: first of all, monetary policy is working at the rate we have now. i think monetary policy is in a good place over the past 12 18 months, we have seen pretty much all the measures of the imbalances of the labor market and our economy. we see many of them back to levels we saw in 2018, 2019. so we see, you know, restoring balance in the economy. we are seeing a slow decline in inflation. so i do think monetary policy

right now is in a good place. i'm not fixated on where the rates need to go over the next year. what i'm focused on is, how do we best achieve our price stability goals? today, the data is showing that the economy is strong, the labor market is strong, at the same time we are getting better balance, and we are seeing some decline overall in inflation. so, for me, it is really about getting that right, and then whatever we need to do to adjust monetary policy, we can do, you know, to continue the progress toward our goals. that is how i am thinking about it. we will have to keep watching the data and make the decision based on those goals. michael: is your base case that you will cut rates this year? john: my own view is that with inflation continuing to gradually come down, gradually is the operative word here, and with the economy remaining strong, i do think given where the level of rates are, real interest rates are considerably higher than they were before, because inflation has come down quite a bit.

we will need to start a process at some point to bring interest rates back to more normal levels. my own view is, you know, that process will likely start this year, but, again, driven by the data and achieving our goals. annabelle: that was the new york fed president john williams speaking exclusively with our colleague mike mckee. certainly the fed is casting a bit of a shadow on the expectations, we will state higher for longer. on the equity market today, a pretty pronounced selloff, particularly in japan, just under 1.7 percent. tokyo, seoul, also sydney. among the big lockouts we are tracking, it comes down to the tech sector in particular, a track we had on wall street overnight where we saw the likes of nvidia, apple declining, given that focus on high-quality growth stocks and whether that momentum can be sustained, particularly with earnings very

much a focus. by materials, industrial, some of the other ones under pressure so far. what else we are tracking ahead of the open here is a bit of a note, the china stock market. this takes a look at the china hong kong northbound stock. actually come of this data will soon be unavailable on a real-time basis. that was a decision that was announced overnight. live trading data, hong kong, shanghai, shenzhen will no longer be available in about a month. we do understand from the bosses in china that this practice would actually align china with other global exchanges, like in europe, the u.s., other developed markets. still, that move could perhaps be interpreted by some investors who have struggled with perhaps a perceived lack of transparency from china, particularly as well around its economic indicators,

the outlook for china's economy, though, could perhaps be improving somewhat. goldman sachs has raised the outlook for growth this year with gdp likely expanding to 7.5%. the bank can see the country's 2024 growth forecast at 5%, in line with policy makers target, and up from prior. join to discuss is the chief china economist at goldman sachs. what was the reason, a small upgrade, but still what was behind it? hui shan: looking at february data, it was up in real terms, up 20% year on year. look at the other measures of industrial production, up 7%, and look at pmi, showing signs

of improvement. when we look at the complex of manufacturing, export, industrial, supplies to the upside, and that is the main driver of the upgrade. annabelle: when it comes to the consumer, though, are you seeing that resilience at all? are you seeing an improvement? that has been one of the weak spots as well. hui shan: right. on consumption, it is your perspective. if you put consumption with the high downturn, i would capitalize chinese consumption as a resilience. compared to the trend, we are still notably below trend. we talk about consumer confidence, income, the labor market, there are plenty of headwinds, but if you tell me that the housing market is down, you know, 50%, 40% sales, and 20% down prices, retail sales holding at this level, i think that is pretty resilient.

haidi: should we not get carried away with this quarterly number, because we know the timing, inventory accumulation, will be to the detriment of second-quarter numbers? hui shan: i think there is a concern among investors, one, as you said, a bit of inventory accumulation in the first quarter, you cannot keep accumulating inventory quarter after quarter. it can government tailwind to a headwind in the second quarter. also, expressing some concern that now that the data has deepened, with the government target, perhaps the government would not feel as much urgency to continue increasing easing measures. so there's a bit of, inventory is a one example, and policy is another example. haidi: what do you see as the endgame for the property sector?

we have not seen game changing policymakers. is it just a slow, i'll be at a slow and painful, structural -- albeit a slow and painful structural shift that we see yucca hui shan: it is a war between the property sector and everything else. historically, you look at china's property cycle versus the macro cycle versus the property cycle, they move hand in hand. it is too big, almost extracting investment from other areas. can we divorce that? household consumption, you know, manufacturing investment, the broader macro picture is stable. i think that is kind of the endgame here, how do we get there? this is a balancing act.

we want to support everything else come at the same time, we do not want to stimulate the property, because of the end of the day, you want to have the divergence between housing and everything else. annabelle: one of the household rates at the horizon is this pressure we are seeing being put on china to address the capacity issues in its factory from germany, for instance, german chancellor olaf scholz in beijing this week, but also janet yellen recently visiting the country. hui shan: right. this is getting a ton of questions, one of the topics with the most discussions. a couple things you mentioned, one is we have to recognize why china is betting on the manufacturing and expection -- expansion. you have the confidence lacking. you need to reach certain levels of the targets. you want to consolidate activity

in that regard. from a geopolitical point of view, the more inner tried -- intertwined you are with the rest of the world, the harder it is for other countries to decouple. from an economic point of view, it makes sense for china to do so. near-term, our view is that it will be hard to stop or slow china exports, because, you know, chinese goods are so competitive in many categories, not just ev. but over the medium, long-term, we do think more in balance, china's is deficit. at some point, the pushback and trade leaders we see are risky are rising, as you said, not only from the e.m. markets, tariffs on china steel are increasing. annabelle: hui shan, thank you for your time, i goldman sachs, and remember, you can

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haidi: shares of goldman sachs higher after the company posted a surprise profit jump in the first quarter, an increase in

their income even as analysts brace for a drop. david: we feel very good about the interconnected franchises and the earnings power of our fund. this performance was aided by the swift actions we took last year to narrow our strategic focus and play to our core strengths. haidi: for more, let's bring in our bloomberg intelligence senior industry analyst matt ingram. this is a good result for david solomon. matt: it is a pretty good result, haidi, as you said, back to basics, and basics at goldman sachs is clients, looking at the big plans, important clients, they also had a big focus on costs this quarter, cost ratios a lot. they had big impairments last year, but look, they hit their target come amid returns on

equities, and that was a good result, given expectations coming in. haidi: do you think then, given its focus on core businesses, is this direction going forward more of the same? matt: it is a good question. it is very hard to come as they say, one swallow does not make a summer, but q1 is traditionally a strong quarter. clearly the trend deviated from their peers. they were stronger than jp morgan. they were number two in equities and m&a, globally, which i think gives you a sign they are hitting the mark of that investment side. client transactions come and go, so while the franchis is very strong,e -- the franchise is very strong, to give you an idea, treating is about double investment banking revenues.

it is hard to draw a hockey stick on that essay it will be a bumpy year. clearly they are making a mark on clients, and clients are coming to them. in terms of market share, that will likely continue. haidi: what does the broader share look like? matt: volumes are down, but client activity is up, so i guess the fed perhaps being a little coy about where it is going might be creating a burden and clients' minds. the lay of the land for goldman-s is that they are really focusing on core business, and that focus is a standout versus its peers. bank of america is coming through, i'm sure they would say the same thing, but goldman-s has had a very strong showing. annabelle: that was our

bloomberg australian financials analyst matt ingram. growing pressure from activists investors pushing to sell the buildings has helped uncover the true value in tokyo, as much as $143 billion gaps. for more, let's bring on our asia and investor correspondent, lisa. how did they get there in the first place? lisa: good morning. i hope it is not too early to talk accounting, but this variation gap in japanese real estate essentially come from the difference in book value and market value of properties held by japanese companies, especially in unrealized gains. this gap has been around for a while but is highlighted and in the spotlight more because of these campaigns by active hedge funds at several japanese companies that owned really straight on their balance sheet. when japanese companies own real estate on their balance sheets,

it is essentially book value, developing the property posted depreciation of a fixed asset. it is unique to japan as many have held onto their properties for decades, so the value of the book is very low because of depreciation. in the meantime, prices in japan, especially tokyo, have jump in that same time period, so if the companies could sell these properties, it could realize billions in gains. by some estimates in aggregate, like the $140 billion figure you mentioned earlier. haidi: lisa, how widespread is this valuation gap for japanese companies? lisa: many japanese companies hold real estate on their books, and by one analyst was the estimate, there are 700 listed companies in japan that have real estate, so it is very widespread. but to give you an idea of kind of the scope of the gap, you are looking at some very prime tokyo skyscrapers.

with a are value for on the books, probably five times less then if they were sold on the market. annabelle: so we know that there has been a bit of pressure from activist investors, but how are they going about that? lisa: like i said earlier, the property values, that comes to unrealized gains of the values of real estate can really only be seen if the owners selloff the property. so several of these activist campaigns at the companies are basically asking them, pushing them to sell off the buildings, to use the income and the capital from the sale to invest in kind of more value-generating business lines or in more core businesses. several notable recent examples are elliott, which has a big stake, they are arguing to afford to sell off some of its

buildings and may be reinvested into developing new properties. another well noted case is singapore's 3d investment partners, which has stakes in software maker fuji soft, in that case asking to sell off a ton of real estate and reinvest that their core business. haidi: asia investing reporter lisa du there. more ahead on "daybreak asia." this is bloomberg. ♪

haidi: we want to look at the rise of bitcoin, a record high ahead of the bitcoin that should be taking place later this week, big news this year given we saw u.s. bitcoin etf's coming to market, and now we have several asset managers in hong kong who have given conditional approvals, and also ether etf's as a point of difference. let's get to our etf analyst, rebecca, some of the names that came out, perhaps one could have been expected. rebecca: in hong kong, there were two issuers, not what we

had expected, so the three that got mentioned are split across these three etf, one has the sixth etf with 40 million in assets under mandarin. china is the largest with 50 etf's, and harvest had three etf analyst, so they are not the usual suspects, but it is interesting because ultimately this is the first spot point etf to be launched in hong kong. annabelle: what is the significance of these conditional approvals? rebecca: what is interesting here, hong kong is trying to be the crypto or virtual asset hub of asia-pacific. what hong kong has done is they are allowing in-kind creations, and what this means ultimately as if you're a holder of bitcoin or ether, you can swap that into an etf.

in the u.s., they only have cash creation and production, and what this means ultimately you provide cash, and in the return you get a bitcoin etf, so hong kong is taking a bit of a different play. it will allow bitcoin or ether similar in-kind, so if you are a holder of bitcoin or ether, you can swap that into an etf. this is a really significant event, because ultimately it can attract players. people already holding these virtual assets in cryptocurrency can essentially swap etf format if they want. annabelle: a lot of? over the -- a lot of question marks over the aem'we will see here, it is there a way for chinese investors to express their interest in these products? rebecca: if we look at the hong kong market, less than 51 billion asset under management. in the u.s., less than 1% going to crypto assets, virtual assets

in the u.s. if we replicate that in hong kong, we can see as much as one billion going into these ether and bitcoin etf's. in hong kong, there are already roughly 250 million in assets, so samsung has a coin and either future space -- has a bitcoin and ether space, so each one could gather as much is 100 million. in terms of assets, one billion is the target we are expecting. there is a lot of demand from mainland china, but i don't think this product will be added on etf connect anytime soon. there are some concerns around what will happen, but i do not think you will get japan -- demand right away. annabelle: all right, rebecca sin there, thanks for your time. ♪ ♪♪

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>> good morning. we are half an hour away from the opening bell. you are watching "the china show ." i'