♪ yvonne: a mixed outlook for asian sharemarket has abe unveils massive stimulus. samsung and a 1.6 billion dollars buyback. nintendo post a worse than expected loss. disasterl mine expected to book a charge of more than $1 billion.

welcome to "daybreak asia" coming live in hong kong and streaming on bloomberg.com. investors in asia reacting to investors inver the region. >> we are looking at the nikkei in particular abe's marker of stimulus money. we are seeing some downward pressure on the nikkei 225 down one third of 1%. korea looking a little bit better. it is the best in the region up 2/10 of 1%. australia still opening up pretty flat, i.t. markets with a 4/10 of 1% gain on the nikkei 225. we will keep an eye on that throughout the course of the day. the oil market still weakening down 1/10 of 1%.

having a look at the yen because we did see the japanese yen of course having a very big fall on the surprise $265 billion announcement. it is higher today, of half of 1%, the u.s. dollar weakening. that 105 handle, says hasthe imf brought it closer to fair value and that is very much contrasted from what we are syrian -- hearing from boj officials. looking at the early session, it is stronger with the second quarter bpi a little bit on the upside of four tens of 1%. thank you so much. taking a look at samsung rising 4/10 of 1%. that is after it announced buyback and canceling $1.6 billion worth of shares after

the strong earnings report. we are tracking all of the developments. what were some of the bright spots? >> let's talk about the buyback first. yvonne: yes. >> it is basically returning money to shareholders. you also have an interrupt dividend of 1001 a share. this is a drop in the ocean. and buyback, 1.8 trillion $1.6 billion, most of it in common share, the 1.5 trillion in common share. yes, it is basically getting money back to shareholders through the buyback. yvonne: talk us through the different businesses, because we have been focusing on the smartphone business which was a big hit. david: it is the sexiest business because you have a comparable with apple. when you look at what they

reported actually for the mobile phone business and what is surprising is not taking up the mantle is the biggest profit driver for samsung. we were talking about the semiconductors a couple quarters are, --re the marchers margins are, but when you compare the mobile phone business to apple, it is typically now when you get a earnings peaking because they tend to launch at the start of the year and once the product is mature six months down the road, that is when it starts to reflect. apple just launched back in march so you wait for that. it is almost an inverse relation. that being said, having a look at the breakdown, $3.8 billion for the global phones, so that is the galaxy, the tablet, the hybrids, what have you. semiconductors, that is where the margins are. they are headed and shoulders above everyone else. technology, pricing power, prices have come down through

memory chips. they have pricing power there. what is also surprising is when you look at consumer electronics, everything from tv, kitchen appliances beating expectations, $1.1 trillion. that is four times the level, still a very small part of the business but four times the level of this very last year. yvonne: you talk about the outlook, the inverse relationship with apple when they do launch new products. for the rest of the second half, what is that going to look like? david: that is a big factor. they took a fairly substantial hit. you can play around with semantics there. 300,000,000,000.1 was a hit, a drop in the ocean, gary good company. if you look into how they treated throughout the quarter, it is basically flat, but in between, united weakening as they started -- you happy

weakening as they started to rub or. port. the component business, they expect that to maintain a solid performance into the second half. they will also be increasing their displays memory size of business. also, one thing before i go, the mobile market and expenditure, they are expecting that to come up. in the first half of this year, especially the early part when they launched the s7 they competed with the apple iphone. ofecom shouldered the burden pushing the marketing cost instead of samsung taking the cost themselves. now that you have the product maturity, they will have to keep up the marketing. yvonne: thank you so much. now to the first world news. >> facebook jumped in extended

trade after beating second quarter forecasted sales and totagram revenue climbed 65% $6.5 billion. profits exceeding estimates on facebook now making 84% of its app revenue from mobile. it increase traffic with 1.1 billion people using the social network everyday. japan's biggest mobile messaging service has posted a profit in the first earning report since raising $1.3 billion in its ipo. net income rose just over $24 million after a loss almost double that a year earlier. meanwhile, profit at her company jumped to $239 million in the second quarter beating estimates. shares are trading slightly lower down .56%. nintendo reported it did not expect a quarterly loss.

the net loss for the three-month through june was $332 million. the result do not reflect the success of pokemon go which is where we saw the company's share price. the hp bulletin says it expects to take a charge of $1.13 billion on its joint venture in brazil. nine monthsidle after tailing down collapse pollution in dozens of waters in waterways. global news, 24 hours a day powered by more than 2600 journalists in more than 120 countries. this is bloomberg. yvonne: tom, thank you.

we will be watching lenders in singapore when trading kicks off in an hour and that is after oh cdc reported a slump in quarterly profit as insurance income fell. let's bring in our correspondent that has what is going on. >> prospects are not looking good. weak loan growth resting in the banks. taking a look at the numbers, second quarter, profit down 15%. we are looking at $654 million. margins underst pressure. a strong dollar waiting on bank rates. they already downgraded their outlook for lenders. it is concerned about a couple things, weaker economies, weaker trade growth and also concerned about the worth and polity of loans to it energy companies, in

particular is singapore banks are exposed. having said that, they still managed to be out demands. it said second-quarter income rising by 5%. the question is whether the pace of growth is sustainable. yvonne: that is true. giclso have another firm, that also was out with its report this morning and they have seen quite a bit of the drop in market return. why is that? >> that is right. busy, busy morning. return fell to 4% in a 20 year period. i want to show you this graph that shows how gic's return has been under a lot of pressure. looking ahead winding up with lower returns. gic not alone in predicting lower returns. a state owned investment company

found the dialogue earlier this of mutedcombination global growth, inflated evaluations, returns expected to be muted for us long as 10 years. take a look at the holdings, one third of assets in the u.s., 20% in asia, 12% in the eurozone. if we take a look at asset allocation, it has 34% in cash, of from 32%. what does that mean? it is higher than they talk about vacation that shows gic is more cautious about its investment position, more cautious, unusual situation right now. yvonne: prospects still looking gloomy. thank you so much. up next, one of the largest insurers reports first half earnings. that is next. this is bloomberg. ♪

♪ yvonne: a quick check of the

latest business headlines. donald trump says he hopes russian hackers can find e-mails deleted from hillary clinton's private server. donald trump use a news conference denied having any ties to russia after a week of hacked e-mails were linked to russian cyber spies. the clinton campaign says this is a national security issue. listening,if you are i hope you are able to find the 30,000 e-mails that are missing. i think you will probably be rewarded vitally by the press. yvonne: mcdonald's ll create more than 5000 new jobs in the u.k. by the end of 2017. boosting employment after the brexit vote. the new rules as the festive group will take its british workforce to 110,000. the burger chain shows its

commitment to the u.k.. doing business in tokyo after first-quarter profit fell 45%, shares down two thirds of 1% right now. japan was the stock market slumped lead to a drop in demand for services. to 233ome dropped million. the vote to leave the eu led to less individual training and declining banking investment deals. the third-largest asian-based insurer is how the first half recordings. 9% with ang profit of new business value jumping. figureseak down the with the ceo, mark zuckerberg joining us live -- mark zucker. reallysee the new value

help you for the first half. what markets of the strongest for you? >> i think when you look at the markets, clearly the numbers you see for hong kong at 60%, malaysia, based on numbers, but i think what is more appropriate to ask is the fact that this is over six years and we have seen growth of 400%. we have double dividends. it is the progress over the six years rather than focusing on the six months. yvonne: you have seen growth in china and hong kong when it comes to value growth as well as margin expansion. what was the driver? >> i think again, tremendous opportunity. you look at the gap in both places, hong kong about 600

billion in china, 200 children u.s. dollars. 200 trillion u.s. dollars. the rising incomes, the saving gas, all of these factors clearly are very appropriate to both hong kong and particularly china. yvonne: you have been able to weather this storm we have seen coming out of china when it comes to the tightening roles in terms of curbing the capital with insurance policies, first, stricter enforcement in one month later they flat out band the purchase of electronic transfers. can you flush out the new policies for us when it came to the mainland chinese visitors coming to hong kong? >> the outlook continues to be

what we have seen over the last 10 to 15 years, an increase amount of people buying insurance. if you look at the numbers today, it is something like 250,000 buy out of 46 million visitors in less than half of 1%. the percentage is tiny. the opportunity remains significant. some people believe the first number was boosted because we saw a lot of chinese tourist coming into hong kong to buy some of these policies ahead of the restrictions. the report says they are selecting these credit cards hundreds of times just to buy these products, not a legal and hong kong but do you see that as valid sales and revenue? >> we are a medium to long-term business and this is still high quality business. the payment is one part of it.

the policies themselves are 10 to 15 your policies. this is high-quality business for us. is oncus across the group communities, people, customers, and if we look at the basis, we can increase the vitality with new products. we are number one in the world in terms of quality. in asia, we just won an award for best employer. yvonne: but can it be sustained? we have this concern with the weakening yen which could lead to the outflows of china once again. do you think that could end up leading to some sort of complication for you or in terms of application for aia? >> you have seen the ups and downs in the market. you have seen consistently how aia performs with annual growth time 25% over a six-year where we have seen tremendous market volatility.

there is no reason that cannot continue. we concentrate on the absolute numbers. we concentrate on optimizing the value of new business was his accommodation -- which is a combination. juliette: they are searching for deals. yields. you are up 30% since your february low. is this something you would consider? overthink you can see that the five years where we have doubled dividend. the final dividend, we declared in february was 50% up and now 17% of. these are strong dividend growth's. do we have the capacity to grow past? absolutely. yvonne: what else with that entail with the shareholder policy? would it be a buy back?

>> i think we have to look at all options. the good news, we have plenty of options and we are looking to maximize the value of our share in the best way possible. juliette: what are some of your weakest markets? >> there are many factors internal and external. think we have some challenges internally, but if you look at the potential some of these markets are not performing to their optimism. if we can get them to form, the numbers could be strong across the board. yvonne: let's talk about growth strategy for the future. are you looking at these for investors as well, a joint venture in india, indonesia and the philippines? what are the growth prospects there and how important is mma? >> when you look at india, we

have taken our stake up recently. we have a wonderful partner in the opportunity is there in the fastest-growing economy in the region. it probably will be so for the next five to 10 years of the continues on this path. indonesia has some challenges but is coming through with that. stableines has been since the elections came up. we are optimistic about the future. there is plenty of opportunity and plenty of scope to grow the business. and havery optimistic material for many years to come. juliette: one last question. what do you think is the biggest risk as we head into the second half for aia? >> our biggest risk is if we lose concentration. we have to focus on sustainable execution. yvonne: we believe that there. i appreciate your time. still ahead, the hp takes a charge of up to $1.3 billion.

details from sydney coming up next. this is bloomberg. ♪

♪ yvonne: you are watching "daybreak asia." big movers to tell you about in japan. fujifilm has fallen after the first quarter profit to miss estimates. them up 7.7%eing and raise their operating forecast by 14%, the skin care line. searching for percent in tokyo after lifting -- 14% after lifting. is sharese to watch looking like this at in early trade in aussie up 4/10 of 1% after it revealed a charge after

last year's collapse in brazil. let's bring our correspondent now in sydney. this is a share of the reparations deal, right? >> that is right. bhp soe half owned by this payment between $1.3 billion, they say that is approximately equivalent to half of the current estimate of their estimations and this is after the disaster in november where they first in 19 people were dead and extensive pollution created. they said in a statement this demonstrates our support for the long-term recovery of communities in environments affected by the tragedy. you will see this charge appear in php's earnings announcement -- bhp's earnings announcement. let's take a look the stock that is doing pretty well.

it is up almost half a percent although that probably has to do with the announcement and the price recovering overnight in oil. before the disaster, it was the world's second biggest producer of iron. they had hopes that it would reopen 20 end of 2016 but it is looking more likely it will be pushed out into 2017 and that is creating debt and cash flow products for the business. yvonne: we will continue to watch bhp up 4/10 of 1%. paul, thank you so much. let's take a look at marketing and asia-pacific as we look ahead to the boj, shinzo happy with his surprise fiscal stimulus announced yesterday, away from tokyo. we did see nikkei down three quarters of 1%, the kospi up.

the aussie stocks up one third of 1%. up next, investors are liking 's second quarter performance. we will talk about that next. this is bloomberg. ♪

yvonne: it is 8:30 in singapore and half an hour away from trading. it is a rise slightly to 2% for the second quarter and we also have earnings up for the bank. you are watching "daybreak asia ." ♪ yvonne: let's get to the first "world news". asia next.n the fed cap interest rates

unchanged. fomc officials say a short time risk has decided and described the latest labor market data has strong. samsung announced a one $.6 billion share buyback -- $1.6 billion buyback after aggressive cost cuts hoping it be estimates. -- beat estimates. carriers promoted the a seven. the iron ore mine remains idle mudslide killed 19 people, distorted village and polluted waterways. thesays the chart reflects

funding obligations. global news, 24 hours a day powered by more than 2600 journalists in more than 120 countries. this is bloomberg. yvonne: thank you. let's get a quick check on how asian markets are tracking in early trade. let's go to juliet. juliette: we are seeing the index a little higher in the early session, but certainly the weakness coming through with japanese equities, the nikkei down 8/10 of 1% as we continue to see the yen surge. asthma -- asset manager said there will be a tug-of-war in japan between theing on expectations that bank of japan will disappoint when it comes through with his policy decision and short covering for individual shares. we have earnings for investors to judge just -- to digest.

we have a good rally coming through in new york. you can see northern star leading the gains in the gold a little bit of we akness in commodity players. we have a lot of companies coming through in new zealand is weaker for the third session. it is down 1/10 of 1% in the early session. we are waiting earnings coming through softbank in tokyo after the bell. we have seen a recovery in sprint and analysts have said there could be some upside in these results. we see softbank shares down 1% in the early session. that japanese yen continuing to strengthen and put the downward pressure on japanese equities up half of 1%. having a look at the oil contract after it fell to a three-month low during the new

york session, we see a little bit of upside in the asian session. it is at $42. yvonne: thank you so much. , nintendosurge share has had a setback since the release of pokemon go. posted a worse than expected quarterly loss and elaine the release of a tss three for gamers. let's bring in our correspondent for more. it really went from pokemon go two pokemon no. >> it is important to remember these earnings reflect the time just before pokemon go. what we really saw their was a weaker underlying business for nintendo, because of sales of and the impact of the

stronger yen pushed nintendo to a net loss of ¥24.5 billion. that is probably going to be a trend you will see in the coming quarters. obviously because pokemon go as we heard from the company this week is not going to be that much of a driver, but still, nintendo did keeps its profit forecast intact for the current fiscal year. yvonne: this net loss was quite huge, eight times more than what they were projecting. it seems like this is a missed opportunity with the pokemon go possessory now delayed. tell us more about that. >> the thing about the pokemon go plus is it is a little bundle dollarsabout 33 u.s. that tells you when it pokemon is nearby without having to pull of your phone.

it was the one measurable thing that you could be able to see on nintendo's bottom line. obviously, those numbers will not start showing up until after september, and i think the idea of not so much the magnitude gains from the assessor he but rather how much money nintendo could potentially make from things like this and that would help people assess its value. right now it reflects its ability to earn money from mobile games and assess raise in the future. yvonne: right. it is interesting because some analysts say this is a bluetooth accessory that has already been available for preorder which was interesting to see why they delayed it. how will this affect the share prices? is, i mean,uestion there is a lot of uncertainty over what nintendo is worth.

the company, although it has disclosed all of the information and a tattoo in terms of the impact from pokemon, it is just the popularity of the game has created a lot of anticipation, a lot of hope and that is what you saw in the doubling of the share price since early july. now that is corrected with the company's results and other factors, so i think we're entering a time when the market and investors are really going to figure out what is nintendo's potential? how will they take the momentum from pokemon go and turn that into a real benefit for the business? you have to remember that super mario and donkey kong and zelda are not on your cell phones right now in windows show up, the hope is that these will usher in a new era of nintendo profits. not to mention one other thing,

they do have a new console in the works that is coming out roughly in march of next year, so that is another point that is adding uncertainty but also going to be factored into how the share prices perform. yvonne: we will have a look ahead to those. shares down one third of 1%. thank you so much. facebook extended trade after beating second-quarter forecast. sales of video in instagram as an cory johnson reports more on this, talking about the social network with one of the best ever quarters. >> facebook reporting second-quarter earnings that were simply astounding, fantastic growth over 50%. revenue $6.44 billion. whented earnings per share you take out noncash percentage. the analysts got these numbers wrong. there were much better than expected. results fromweak

twitter, we saw terrific user growth in facebook. with users grew over 5% engagement level, the comparison between, users are on facebook everyday compared to every month. 66% of the users are on facebook every single day. they are bringing in a lot of revenues for advertisers. $5.80 for every one of those daily active users over the quarter. that is a very high number and it is growing at an increasing rate, 37% on a year-to-year basis. the ad rate that facebook is able to charge and what they are willing to pay to see facebook users are growing at a fast rate, faster than what we have seen in two years from facebook. day facebook users on every only on mobile devices and advertisers are paying a lot of money to see those users.

one of the best quarters company has ever reported. nissan in other news, has reported an 11% drop due to the stronger yen. net income came at $1.3 billion in line with estimates but it is the first of the japanese automakers to report. nissan down 1.5%. japan posing monetary policy taking a toll on the country's second-biggest lender. they fell over 30% with negative interest rates eroding lending income. this comes under more pressure if the boj lowers rates again this week. employer net incomes were unchanged despite that. it has only been one week since regulators approved the

acquisition but now that deal has been halted with the target company itself. we have been following this out of new york. this megadeal.in what is going on? there miller saying should be no contact with ab in immediate effect because of what you see on your screen, a plunge in the pound which is what we have talked about since the u.k. brexit czar. let's look specifically what has happened with the town. -- pound. it has fallen by 11%. some sab miller investors say they are getting a bum deal out of what is happening and they just want more money.

basically this is ab for sab miller and you take a look at the left-hand side of your screen back in october of 2013 when the deal was announced it billionve been worth 97 but as he had to the right of the screen, the blue line trends downward because of some variations with the british pound in you see on the right side of your screen, june 24, that is when the brexit vote happened and we saw that fall. now the price for ab taking over sab miller is offered at 87 billion which is a discount of 10% and for investors, it is not making them happy at all. yvonne: that is quite a discount. we did see that they tried to address this issue, raising cash to 45 pounds a share but that did not seem like it was enough for investors. >> did really is not enough for

many if not all or most investors. 2.25%nds, 45 pounds only but based on the discount, that is about a 10% difference. it also depends if you are a big institutional investor or a small investor and also if you are in investor that is going to use cash in stock options or just cash options. they have the option to seek cash and stock in the u.s. and their value has jumped from 39 pounds when the deal was first announced to about 50 pounds right now. in fact, they say they are going to get $500 million extra in terms of revenue by taking these cash and stock option according to the wall street journal. says the proposal still

under valves -- undervalues sab miller. impasse and we are waiting to see if as a be miller will take that new deal -- sab miller will take that new deal or not. know, imagine after the past several months of these two huge brewers trying to come to a deal, after all of this time, a lot of people might be needing a drink if this deal does not happen. yvonne: yes. thank you so much. we may all need a drink when we see how things go with that. we speak to one of asia's eirs who hotel h has spent much of her life in

hotels. she is leading the rosewood brand which appears to be a challenge. >> i grew up around hotels. my family has been developing hotels for a long time but actually running a business it was definitely my first time. to convince professionals in the industry to come over was a very challenging task. i think it was very exciting for them to be part of a young company where they can really roll up their sleeves and create a culture. yvonne: you can catch more of our interview with rosewood ceo at 6:00 p.m. tonight in hong kong in a call for you folks in sydney. plenty more to come on bloomberg tree. tv. ♪

♪ yvonne: a quick check of the

latest headlines. haslamia's governor sworn in. she returns to the post she held between 2005 in 2010, taking delivering $43 billion of influx. the president is betting funds from the embassy will help them improve infrastructure while keeping the deficit under control. india may be one step closer to implementing a massive overhaul of the tax system. the government has chased proposed legislation that would clear the way for a national sales tax. they say is wrapping up a clause that would allow for an additional 1% charge on interstate sales. has been solved in the upper house of parliament. china is set to be raining and shadow financial risks. a banking regulator has drafted regulations to protect market

investors indenture lenders have enough capital to cushion against losses. trillion dollar market is a particular threat to the financial system. let's get you to some live pictures out of the demographic -- democratic national convention. let's take a listen. >> with the confidence of americas who represent in with the trust of our troops that know she will always have their back. [applause] that president is hillary clinton. [applause] >> during my time as cia director and secretary of defense, hillary was a strong supporter of our efforts to

protect our homeland, to decimate al qaeda and to bring osama bin laden to justice. [applause] >> it was a tough decision to go after bin laden. in long meetings in the white house situation room we debated that fateful decision. i presented the intelligence to be president and to others, laying out the risk of the operation and when the president went around the table to our country's national security leadership, there were concerns, but hillary was clear, we have to go after bin laden. [applause] operationsial forces, god bless them, did just that and they sent a clear

message to the world that no one attacks the united states of america and gets away with it. yvonne: you were listening to leon panetta addressing the democratic convention, talking about why he ranks hillary clinton will be fit for president, saying that she was the one that set to go after osama bin laden and we would hear more from the convention later the top democrats are making their most forceful case for hillary clinton's presidency. we have a look at what president obama is likely to focus on in his speech. >> this is going to be a night in which president obama is going to try to sell hillary clinton on her for a -- foreign-policy credentials. republicans have been hammering clinton on her for an policy experience, particularly her time as secretary of state so look for tonight for president obama to really make the case

that hillary clinton is well-suited to be commander-in-chief. >> let's talk about donald trump in his call to russian hackers. that has come under scrutiny. >> definitely. at a press conference just hours ago, donald trump saying potentially to the russian hackers, issuing a very public statement, urging them to release the missing, as he calls them, hillary clinton's e-mails from her internet server. the clinton campaign is calling talkespionage, so a lot of just hours before president obama and vice president b iden will address the audience in before hillary clinton will formally address them tomorrow. yvonne: up next, baby steps closer to a hike. we would hear the views of a former governor. this is bloomberg. ♪

♪ thene: he said took a -- fed took a move toward raising rates that will could come as soon as september. we spoke to randy crossnore who says he does not think it is off the table. >> i think we will move some time in the latter half of the year, but i do not think they have said no to september

because they did say they have seen a significant reduction in the downward risk. yvonne: they did indeed. the, let's pull up part of graphic. we are looking at it in comparison to the statement. the committee continues to closely monitor inflation in global economic and financial developments. that was the key phrase people took out of that statement. >> they have been concerned about the brexit issue. basically, they are saying there are not any other major risks that would keep them from moving ahead. will they move ahead in? september maybe or maybe not, but they have left the door open. yvonne: they left the door open, which i thought was interesting. they are not expecting that many hikes coming out of the fed. does it matter if it comes out in september or 2017?

>> i think people get really in knots over a quarter of a percentage point. in terms of the overall economy, that will not make that much difference. i think you are right, ultimately it will not make that much of a difference when it comes, but i think it is likely coming. yvonne: you know, it is interesting as we talk about the outlook diminishing for the fed, we saw the chinese stocks yesterday actually saw quite a bit of a plunge. is that is what going to be driving the fed, the global context? >> they certainly take the global economy into account because it affects our global exports and dollars, so that is doingf what the fed is that i would not say that is the primary thing because the u.s. economy just is not trade as much as other economies. not total of gdp it is

much. it is a factor but not the factor. that is it for us today. "trending business" is up next. what is coming up? rmc and more on the fo more on that statement. different notch in the markets. looking at the estimates as well , samsung looking to increase with the s7 phone. taking a look at obama and the democratic convention in philadelphia.

♪ is july the 28th, thursday. this is "trending business". i am rishaad salamat. ♪ we will be visiting singapore, sydney, and philadelphia. japanese stocks on the way down, the yen strengthening, investors waiting for the boj. shinzo abe announced that massive spending plan. sale by strong's