♪ >> no half measures. theresa may is said to announce will leave the single market as they brace for a hard brexit. we speak exclusively to malaysia airlines' new ceo as he seeks to move the carrier through a warningt period, and

against the risk of ballooning debt in china. this is bloomberg daybreak asia ." it is just after 7 a.m. on this tuesday morning. i'm yvonne man. we're talking about the brexit and a hard exit as we look forward to prime minister u.k.sa may's speech in the in the u.s., they had a holiday. markets were closed. european stocks were headed lower. it looks like today, they are headed that way as well. let's begin with a check on the market. dave? it is fairly ominous. we have the u.s. close and the nearest lead we have is from europe or non-europe, i guess, to really box in this caution. are is something we watching very closely. i will have more details later on. markets are bracing.

theresa may is said to be ready to signal and a fit from the single market. there is the low we hit yesterday at 4 p.m. the risk for markets right now is if the tone comes off much harder that is currently projected. i'm looking at all of these forecasts. jpmorgan lowers their forecast on the pound. citigroup, sell the pound against the ruble. nomura, hard brexit equilibrium. flash crash lows. so on and so forth. a lot of them saying we could likely see more weakness in the currency this week. on the other side of the trade, the volatility, that is where the money is to be made. that said, we will be getting more this week from theresa may. we also heard from the boe

governor a few hours ago. he was speaking at the london school of economics. he talked about the current outlook. let's listen in to mark carney here. a situation right now where, for understandable reasons, business investment has been dampened by uncertainty -- not because -- i mean there is access to finance, but there is some uncertainty about ultimately what is a relationship with our biggest trading partner and that is weighing on investment. david: right. that sets us apart today. we sue some dollar strength on the back of the weakness in pound sterling. strength some dollar on the back of the weakness in pound sterling. of this caution is pervading across markets right now. you look at crude. very quickly, you had comments out of the saudi oil energy minister. he said he did not see the need for the production cuts to

extend beyond june, given that he expects the markets to come into equilibrium, or the supply glut to disappear. and the oil rig counts in the u.s. falling for the first time in 11 months. i will change it up and have a openinghe market is in australia. keep an eye on this. iron ore prices. 84 bucks,eaking -- that is, what? double, more than double the level list time last year you will get a pickup when you get futures here. what is interesting though, when you look at iron ore price in remedy -- you do the conversion iron ore at 95in and i will talk more about that later on. we are looking at a lot of caution out here. 1%,ralia is down 2/10 of

new zealand is flat. i should mention that jpmorgan was out with a note on australia. stockse upgrading aussie -- they are calling aussie stocks overweight from neutral, due to the fact that we are getting this rally. it is a two-pronged market when you have that and the bigger harder a hider -- abe qe. flate: a little pressure, for the pound. it is anchored at that level leading up to that speech. we will have more on that speech now. what are we expecting? are we expecting she will strike we're exciting she will strike a completely new trading relationship. >> we have been getting extracts released from the prime about the office

agenda today. a few key points -- the u.k. will likely pull out of the european union single market for goods and services when it comes to its relationship with the customs union, there will likely be a complete overhaul. , would like to pull up here just one of the excerpts from her speech regarding the trading partnership. theresa may expected to say, we seek a new an equal partnership between an independent, self-governing britain and our friends and allies in the eu we do not seek to adopt a model already enjoyed by other countries. it exits that -- it indicates that hard brexit type of an interestt having in partial or associate membership in the eu. traders are bracing themselves. we see the overnight volatility gauge of the pound spike

overnight. today's speech is being billed as are completed and final land for negotiations, again, that will lead up to her own deadline for exiting the eu. we do understand she will announce 12 key objectives were the negotiation, which are likely to include gaining full ending of immigration, the jurisdiction of the european court of justice over british laws. a full exit when it comes to the single market for goods and services and an overall of that trading relationship with the eu. yvonne: let's look at the david though. says that crucial vote last year -- is this a change? markard concerns from carney as well if we do in fact get that hard brexit. sophie: government officials are expecting that that particular speech will trigger market

reaction and they will be reaching out to reassure that there will be a pathway when it comes to brexit. pastwe have heard over the year the u.k. economy has been more resilient than perhaps anticipated, but as mark carney noted, there is still uncertainty. thene: and really possibility of an early trade deal possibly soft running -- softening the blow. let's get a look at first were news with haidi lun. di: in an exclusive there are -- indicators that the vehicle means government may sell out completely from the troubled lenders. as for the overall economy, he expects there will be growth this year.

>> the economic growth of 6.7% for this year, and then even higher growth rate for the years to come, so that we would be able to achieve an average growth rate of 7% for five years. someof course we see tendencies toward protectionism around the world. however that is not the major trend word i think the main trend is still economic integration. idi: jpmorgan and has upgraded the agent stock market. jpmorgan downgraded indonesian equities to two notches following underweight after donald trump's it election win. they upgraded it to neutral saying that volatility should now subside. has raised withdrawals for atm's.

the central bank announced to the changes on monday afternoon. they are expected in mealy. pray minister modi's crackdown -- prime minister's moody's crackdown could lead to stimulus measures. donald trump has met martin to discuss what he describes as america's broken voting system. a growing number of democrats are saying that they will boycott the trump in operation after the president-elect criticized congressman and civil veteran john lewis. global news 24 hours a day powered by 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you. take a look at rio shares. pretty much flat. fourth quarter shipments beat estimates.

let's go to paul in sydney. i guess that this has all been priced and given the run we have seen on iron ore with the chinese demand. the rest of the numbers though? >> not a huge surprise here. pretty much as expected. there's about a million more tons them the same time last year and they beat estimates very, very narrowly. for the full year, up 3%. that is smacked down in the guidance downgraded rio gave in october. the stock is pretty flat at the moment, up about a 10th of 1%. yvonne: talk about those iron ore prices though. they were much stronger than expected. does anyone think that that is sustainable? l: well, probably not, but then again, not too many people would have seen the iron ore price doubling in 2016.

take a look at the numbers we got friday. china imported more than a billion tons. there is a greater emphasis on high quality products and australian iron ore is a quality product. many traders see speculation being a key driver here. i must leave the last word to barclays dan davis. he said $80 is not a new normal, but a temporary blip. yvonne: paul allen from sydney. paul, thank you. still ahead, why economic growth must be the top priority under the trump administration. we will talk to the head of the u.s. chamber of commerce. but still, the ceo of malaysia airlines joins us exclusively to discuss his turnaround plans. this is bloomberg. ♪

yvonne: good morning.

we are counting down to asia's first major market opening this morning. good morning. you look ahead to british air -- british prime minister theresa may's speech on tuesday. we are expecting she could take a pretty hardline my comes to brexit. -- a pretty hardline when it comes to brexit. welcome back. bloombergatching " daybreak asia." the jet engine maker will settle prices with the u.k. fraud office and justice department all over claims its representatives bribed foreign officials to win business. producer mobile is buying clayton williams energy for $2.7 billion in stock and cash.

the merger will create the in thelargest operation southern delaware basin of the shale formation. drillingbe 200 locations. to see whenng trading kicks off in mumbai beat estimates. they jumped 10% to $1.2 billion. companyes as the india's richest man has invested billions in new areas like 4g mobile services and retail. malaysia airlines have had a difficult few years after losing two aircraft in fatal crashes in 2014. ehe airline was forced to ax scrap routes,obs,

and lower fares. the company expects a good return to profit next year. we are joined by ceo peter difficulto has the task of restoring confidence in the airline. it are, a pleasure to have you here in hong kong. is the worst behind us, safe to say right now? mr. bellew: yes. improvement year on year. our bookings for the next six months are up. on some routes, we are struggling to have seats now. we really have seen a huge change. the biggest change, the business customers traveling with us. our business a kings are 100% up on last year. double the number have booked. yeah, things are going very well. yvonne: what do you see as the inflection point for you, peter, to change this restructuring, to start adding more routes to your

fleet, to try to continue the expansion now? six months ago, we decided we would stick with the current trends that we have. obviously, the brand is fine. it is worthy of continued backing. we see constant faith in the marketplace and our brand. will have new aircraft for long-haul use in october. yvonne: will this speedup your plans? mr. bellew: a little bit. we have taken existing seats and we have nine new routes to china starting over the next two years. the advanced bookings are really superb on that. i looking for more aircraft on the hong kong route. our bookings have gone through the roof on that straight away. i need to get four or five wide-body aircraft. we are talking to boeing and airbus. we hope to have something

included on that by the middle of the year. course, i do want to ask you about the search for nh 370. the search is due to wrap up this month. mr. bellew: yes. yvonne: what goes on from this point? you talk about china, malaysia, australia -- they can't really do anything further unless there is hard evidence. mr. bellew: i think it depends on advances in technology. you are constantly seeing advances in geotech -- geolocation technology. think the search will continue in a different way, maybe more desk-based and mining around a very, very tragic accident. i think that will happen. i don't think it will stop. it will take a different format. yvonne: will it moved to a different location? mr. bellew: our scientists will determine that.

the universities are working on it. hopefully they will come to a conclusion on that. for us as a company, i think what happened, the tragedies, what staff have been through, has given an amazing determination and energy amongst the people i work with to prove people wrong and show we can come back from this, as we are at the moment, to make a great success out of the business and make it the pride of the nation again. yvonne: you mentioned technology and data, because there have been proposed new arrows -- areas at the edge of the search zone. it is 10,000 square miles. it could take months, tens of millions of dollars to really scanned. if you get to that point where you do have the hard evidence, g you think malaysia could fund such a move? mr. bellew: i think it's not about funding. i think it's about technology and innovation. often to get the results to these things, it's going to take

a technological breakthrough. it probably has to come from somewhere unexpected. peter, stay with us here. we will continue our conversation after the break. of malaysia, ceo airlines. stay with us. this is bloomberg. ♪

yvonne: welcome back. you are watching "daybreak asia." much more from our conversation with malaysia airlines ceo peter bellew. peter, thank you for sticking around. i want to look at the macro outlook and the headwinds you could be facing for 2017. do you have any concerns when it comes to fuel prices? we've seen prices rise recently and does malaysia airlines have countermeasures? mr. bellew: we are hedging around that. we are pretty conservative. we are hedging around the quarter. so, you just roll with that. i think for us, the massive

opportunity is china. the government has targeted 150 million more people in china with a passport. , 20%losest country to them of the population, speaks chinese. there is chinese food on every street corner in malaysia. i think we have a massive opportunity to get another 400 million, five hundred people in the next five or six years traveling to malaysia from china. think the fuel't prices could undermine your earnings, slow down the recovery? mr. bellew: no, we are found the target over the next 12 months. we are quite confident we can deliver that. in a good position to break even in the last quarter of this calendar year and next year to make a profit. our plans are currently two we asia.n -- to relist in

yvonne: this year in the country -- talking about lion air, the plans to double operations, air asia, plans to react to that, too -- how likely is it we could see a price war? mr. bellew: i think there will be an amazing price war the second half of the year running right through 2018. we are fixing very heavily on our business cabin, on inclusive fares. it seems as though the market is really favoring us right now. we are getting a tremendous reaction. advanced things are way ahead of where they were. -- advanced bookings are way ahead of where they were. yvonne: how much pressure could you see on yields or profits? in thelew: i think low-cost sector, you are going to see very, very low fares. history shows us your malay only one of the other companies will survive that.

i think it will continue over about 18 months. i do not think it will slow down anything. you could be talking up to 35 from the malan group, but we are keeping the price group. we have good fares. we have inclusive fares. i am not going to get involved in a fair war. i will let the other companies battle it out. yvonne: hmm. we last talked to you about indwinds -- we were honing on brexit this week as well, currency volatility of course. -- continue to see the framework here? mr. bellew: it's going to be quite chaotic. i am irish. i talked to people in ireland. they are extremely concerned. also at the border in the north of ireland. our bookings for london are up nearly 100% year on year.

,ecause sterling is quite weak people in asia are traveling in big numbers to the u.k. we are benefiting from that. lot of our costs are in dollars, but we have hunched -- we have hedged and we have earnings that can catch on that, so that insulates us, may be somewhat more than the other airlines we are competing against. yvonne: i want to ask you this again, peter -- the biggest risk for malaysia airlines? mr. bellew: complacency, a lacked of focus -- a lack of focus. --we lose focus, get lazy irish people, i think we generally work pretty hard. i think we will turn this around. yvonne: peter, a pleasure having malaysia peter bellew, airlines ceo. thank you for joining us here.

coming up, vietnam making big moves to open up its economy. how far will the government go?

yvonne: 7:30 tuesday morning in hong kong. taking a live look out at the victoria harbor this morning a pretty chilly start to our day. asia's first major market open just minutes away. i'm yvonne and you're watching "daybreak asia." to the first word news with haidi lun. haidi: theresa may is set to announce the u.k. will pull out of the e.u. when she sets out her brexit plan on tuesday. the british prime minister will say she has no interest in a half in half out approach leaving the ngle market for services will be a disappointment for the bank which may start shifting jobs nd operations from london.

investigations are under way into the crash of a boeing 747 cargo plane which killed 37 people. most of them on the ground. from hong erated kong and was attempting to land. the cause of the crash isn't yet known. the company is 49% owned by china's group and has had the aircraft in fleets since december of 2015. the japanese prime minister shinsue abe is urging asian nations to join the partnership as early as possible. donald trump campaigned on opposition to the t.p.p. speaking in hanoi abe said it should pave the way for further regional partnerships. >> achieving the t.p.p. as a foundation going forward i should like to strike toward greater, high quality, and ambitious agreements.

japan would like to be the standard bearer for the free trade regime at all times. haidi. the chinese president is getting ready to take the spotlight in the world economic forum and will become the first chinese head of state to address the gathering in a speech expected to focus on the fight against global warming and the shift toward renewable energy. his appearance comes just days ahead of skeptic donald trump's inauguration. he is is said to have shunned the conference. we'll be getting special coverage of the annual world economic forum in davos including a panel on the future of finance. guests include the deutsche bank c.e.o. john cryan and that's coming up today. on wednesday we'll bring you a discussion on the crisis of the iddle class.

we bring you all of those live and in full on tv and bloomberg radio. bloomberg news 24 hours a day with more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne? yvonne: thank you, haidi. you mentioned davos. we have a lot of things going on in this busy week leading up to that inauguration of donald trump on friday. but of course the big focus here is on hard brexit, clean brexit, whatever you may call it. we're seeing some pressure here in the asian markets. let's go to david for an update. david: of course, yvonne, you know, while we're waiting for details of how that may look, the form in which of course they are looking to exit of course, and i'm just alluding to the speech later on today, i expect some caution m in the markets. have a look at futures in japan. down 220 points. on the nikkei. though i have to note as well when you look at dollar/yen

bouncing off about 114, heading toward lows. we're heading toward lows but getting a little bit, very, very slight tail wind on the nikkei 225. when you look at this we're still trading above yesterday's close. that said, south korea, i should mention there that we did get an outflow accelerating monday from last week and i think you saw a broad-based pullout out of electronics. when you talk about samsung that could weigh on the index. when you talk about japan let me get to this note here from u.b.s. cutting fast retailing to sell. if it does fall that could provide more than -- much more than a needed drag there. let's have a look at australia, new zealand, the mining stocks, banks there in australia, 5700 now on a.s.x. 200. session lows at the moment. i just checked the sell off we're seeing there and it is roughly about 150 stocks out of

the 200 on the way down. you are getting a decent bid when it comes to gold mining stocks. that said everything else is basically getting put aside. have a look at iron ore. miners out with production numbers. yesterday higher than expectations. a pull back there. a lot of this perhaps just comes down to the fact that this massive rally, iron ore prices has really surprised even the most bullish of analysts out there especially when you look at these stocks. i should also note that jpmorgan, i think, haidi was talking about jpmorgan upgrading indonesia. they also upgraded australian stocks from neutral to overweight. yvonne? yvonne: and we were talking to paul earlier about iron ore and the rally that we have seen. talk a little more about what the analysts are saying wh this very strong rally in prices, dave. david: right. i mean, no one is going to agree obviously, right? especially when you get moves

like this. look at that. right? yeah we have a low base but look at that. 150% from last year. there's a fundamental story that some analysts are pointing to. you have these cuts in china to capacity, output cuts, one analyst saying, let me read this quote here, he says one of the major factors driving ore prices at present is a greater emphasis by china on high end field products. does that actually increase demand? how does it actually affect the stockpiles already there at the ports? second, when you get a move like this, fundamental,s don't tell the whole story which is why when you get this comment here from an analyst in china, he is saying fundamentals do not explain this full price movement that we're seeing there. so i don't know. i'm not going to speculate further. but just leave this here. that's breakfast for you, yvonne. yvonne: all right. i'll take it. now the i.m.f. leads to

quarterly updates for its economic outlook with the cautious stance toward the policies of u.s. president-elect donald trump. we have the details on what it means for both the u.s. and global growth. it seems like a little modest boost when it comes to the u.s. growth prospects. what else does the i.m.f. say >> definitely a small boost when it comes to the u.s. and of course that has to do with some positive but cautious outlooks when it comes to his policies here. let's get to the global growth forecast though. it turns out they're just sticking to their guns when it comes to 2017 and 2018 here. 3.4% as you can see, unchanged from the last quarterly update. also for 2018. they're keeping that unchanged. 3.6% there. but we do get as you mentioned a little bit of a change when it comes to the united states. for this year, 2.3% is their new, upwardly revised forecast. just a little bit of a bump

there of 0.1 percent. 2018 a little more there, up 0.4 percentage points if mr. trump's policies do go into effect. the i.m.f. chief economist had a little bit more and was on bloomberg television talking about this. let's listen. >> we can expect that the new u.s. administration together with congress will bring in some tax reform, some lowering of tax rates. this will in part be a stimulus and some of that will flow over to the rest of the world. one risk we worry about is that the stimulus will be so great that the fed will have to raise interest rates rapidly, leading to a very, very strong dollar. >> talking about that strong dollar there of course could have negative impacts in the u.s. that could hurt u.s. manufacturing but, yvonne, when you talk about emerging markets that could of course hike borrowing costs for countries with dollar debts not to

mention trump's trade tariff threats we've been talking about which of course could start a trade war. if other countries want to get in on that game. looking ahead we'll know more after mr. trump's first 100 days in office and that roughly coincides with the i.m.f.'s next quarterly update coming out of naples. yvonne: of course the i.m.f. highlighting the diversity between the developing markets as well as e.m. we also got china and u.k. the i.m.f. for both of those countries got upgrades on their forecast. give us the details on that. >> yeah. for china it's all about the china credit growth that we've been talking about over the past several months or so. let's take a look at the numbers in terms of what they're talking about for 2017 and 2018. we see that bump for 2017 by 0.3 percentage points up from october to 6.5% in 2017. coming roughly in line with what beijing has said is its own target. look at 2018 you can see it's down just a bit to 6%.

that is unchanged from october. one of the big things of course is because of the expectations for more government stimulus. of course we're looking ahead to later this fall when the communist party leadership meets for its leadership reshuffle. lots of cheap credit from state run banks. we're taking a look here at the bloomberg terminal. this is b.i. china, bloomberg intelligence china and the white line here talking about china credit. you can see that it's been growing tremendously over the past several years ever since the financial crisis in 2008. look at that. up 247%. rporate debt is up by almost 163% or so. for many countries, yvonne, this is triggering a financial crisis. that is something to look out for. let's head to the u.k. growth forecast. 2017 1.5% which is up 0.4 percentage points. i got to say, yvonne, of course

off the back of what's been happening over the past few days i am calling into question whether this growth is actually going to hold for this year as well as next year with the new news of course of prime minister theresa may going for the hard or clean brexit we've been talking about. yvonne: get a little more detail on that today, ramy. thank you. vietnam is planning to allow greater foreign ownership in banks to quicken its overhaul of the financial system. now, in our exclusive interview, prime minister nguyen phuc says the new ceiling will be introduced as early as this year and also says there are plans to open up the economy. the country still faces big hallenges. prime minister: after 30 years of reform, the vietnamese government and vietnam has achieved a lot of accomplishments. however, we still are faced with many challenges and, namely, our economy remains quite small in terms of scale,

macro economic stability, and the restructuring of the economy are still making very slow progress. that leads to low productivity, some issues with income of people, and also poverty and all of these outstanding issues lay out the goals and the mandates for the government in this term. that requires us to improve the restructuring of the economy at all segments. we need to also reduce corruption and graft and also develop a strong force of officials who are able to better integrate the vietnamese economy into the world and implement the commitments that vietnam has made in all of the agreements we have signed. reporter: as you indicated it is a challenging environment. what would you say as a prospect for growth for vietnam this year, next year, given rising antiglobalization sentiment, given the slowdown in the global economy? ime minister: the economic

growth of 6.7% for this year and then even higher growth rate for the years to come so that we would be able to achieve an average growth rate of 7% for five years. now, of course, we see some sentiment and also tendencies of protectionism around the world. however, that's not the major trend. i believe that the main trend and tendency is still economic integration especially in this region. and that also includes the united states. so that is why vietnam aims to capitalize on this tendency to ensure our economic extension. reporter: are you then saying you're not concerned about the rising antiglobalization sentiment, which, by the way, has already derailed the .p.p.? prime minister: now, the reasons why i am not too much

concerned about protectionism, because we have a growing business community that is reaching 1 million enterprises in 2020. our people are very dynamic. they love doing business. and we also have 20,000, more than 20,000 projects that are to be implemented with total capital of $300 billion u.s. those are the foundations. voting an independent economy, its general term and definition is not against global trade. yvonne: that was vietnam's prime minister nguyen xuan phuc. coming up, the e.u. brexit and trump's presidency loom large over global trade. a look at what is in store with the u.s. chamber of commerce executive vice president, next. this is bloomberg. ♪

yvonne: welcome back.

you're watching daybreak asia. a quick check of the latest business flash headlines. pacific shares rose after it announced plans to revamp its work force. the carrier says it won't hedge its fuel bets as far forward as it has in the past after losing more than a billion dollars in the last three years. cathay may also reassign staff to more digitally focused jobs. the company will announce the new strategy to stop the slide in earnings on wednesday. aim of ay there is an protecting them from takeovers. cementing control over the list of companies is said to be one of the incoming chairman's main priorities. the chairman takes office next month after heading tata consult anssi since 2009. japan's government has announced plans to sell another stake in japan post holdings a little more than completing its

$12 billion ipo. the size and timing of the share sale has yet to be decided. starting next month the ministry of finance will seek application frst brokerages that wish to lead or manage the offering. since the debut in november, 2015, japan post has climbed less than 1%. all right. just four days to go before donald trump takes office let's get more insight now into what to expect from his presidency. joining us now is the u.s. chamber of commerce executive vice president. myron, great to have you here in hong kong once again. >> thank you, yvonne. yvonne: the president-elect just this weekend alone i guess we could list some of the things he's already said so far. he has called nato obsolete. he says he thinks other e.u. members should or could follow the u.k. to leave the bloc. he's also threatened b.m.w. now another car maker on the list when it comes to a planned plant in mexico thfment doesn't sound like a president-elect that is softening his stance. >> a lot of president-elects have said a lot of things but

it isn't the first time an incoming president has talked about issues. the question is how he governs. we're very optimistic that he really wants to put forward a growth agenda for the united states. our economy is doing okay at 2.2, 2.3%, forecasted for the coming year. we can do better. so we're pretty optimistic that he really wants to move forward on tax reform, on infrastructure spending, on deregulating our economy so it's stronger, and dealing with energy issues. as part of that agenda we also want to encourage a strong trade agenda. so these are the elements that give us some optimism. i know he said a lot of things over the last few days. let's see how he governs as president. yvonne: do you think, you know, in fact he says the things that he says for protectionism, the impact of that, this retreat in trade, could it end up offsetting some of these things you seek domestically? you talk about deregulation and infrastructure spending. mr. brilliant: he talked about having a strong relationship with china. we have a $600 billion economic

relationship with china. we also have a trade deficit of over $300 billion. some things are wrong in the relationship that can be fixed and strengthened but for china's sake and for our own sake. he's also talked about the importance of trade deals around the world. what we need to do is work with him on a coherent, cohesive policy. the united states can't afford to retreat. 95% of the world market is outside the united states. we need to sell to it and we need to show leadership. we want to work with this president, president trump, in establishing how we can grow our economy, domestically, but we have to do that with the trade agenda that keeps our borders open, that ensures we're trading around the world, and that we're helping to set the rules in the 21st century. yvonne: how serious do you think he is when it comes to starting a trade war? right now it is an exchange of words between the u.s. and china but could this unravel further? mr. brilliant: think the president-elect, trump has been

pretty clear he is going to hold china accountable for unfair trade practices. the question isn't whether he holds them accountable for unfair trade practices but whether we can strengthen our economy. if we strengthen our economy that's good for the world economy and good for china. at the same time china needs to do some things. it's got excess capacity in steel and aluminum. it hasn't really moved its market reforms very rapidly. in fact, you could say it's come to a halt ahead of the party congress this fall. you can also look at other issues like regulatory issues which have become impediments for banking sector, for the insurance sector, for express services, for the i.t. sector. we have serious issues to confront in the u.s.-china relationship. what he said is he'll be very business like. he'll be very transactional. he wants to get things done. and he'll work with china, work with the europeans and others, but he wants to put america's first strategy in place which is to grow our economy. if we have a strong economy shall the world will benefit. yvonne: one of the first things he has said he is going to

eliminate is t.p.p. what do you make of some of the comments this week from some of the countries saying we can possibly even reconsider t.p.p. without the u.s. or we could look toward this deal. it looks like they're trying to plan for the plan b right now. how likely do you think --? mr. brilliant: the u.s. chamber was an advocate of t.p.p. we've said from the outset that we need to be engaged in the asia pacific. it is home of the fastest growing economies in the world. we need to be there. there is no question the united states chamber of commerce supports engagement strategies across the asia pacific region. we've also said that the president-elect deserves the right to come into office, reflect on what his policies will be, to ensure that we work with him effectively we'll talk to him about what t.p.p. means not just in economic terms but strategic terms. we don't care if it is called t.p.p. or something else. we can improve it. there are areas not covered by the previous administration.

there are things that can be done better. the question is what does the new president want to do in opening up markets for u.s. goods, for u.s. services, and for u.s. farmers? that will help our economy, our workers, and that is something we want to work with him on closely. yvonne: always great to have you here. myron brilliant here from the u.s. chamber of commerce, executive vice president. up next jpmorgan reverses its bearish indonesian call after jakarta threatens to cut ties. details just ahead. this is bloomberg. ♪

yvonne: welcome back. you're watching "daybreak asia." jpmorgan has upgraded its call on the indonesian stock market to neutral, reversing an earlier down grade which prompted the government to cut ties with the bank. let's get to our southeast asia correspondent who has more for us now. what led to the change in assessment? reporter: well, yvonne,

jpmorgan says circumstances have changed. volatility in market bonds prompted by trump's election win should now subside so it's reversed its call and says investors will return to the markets. jpmorgan now raised indonesian stocks neutral a move welcomed by indonesia. as you know two weeks ago jpmorgan cut indonesian stocks to two notches to underweight from overweight. it said as investors derisk indonesia would under perform asia and japan as well as its emerging market indices. worth noting here is this. i want to bring up this shot. since jpmorgan down graded indonesian stocks, which is the yellow line, they have under performed. the wider e.m. indexes. and take a look at this other chart as well. last quarter, foreign investors sold $2.8 billion of indonesian stocks and bonds. that pushed it lower prompting bank indonesia to intervene to prop up the currency so

essentially jpmorgan did make the right call. yvonne: all right. they made the right call and now they're talking about volatility has subsided here in indonesia. is there a sense, though, that jpmorgan was actually pressured to reverse that rating after that retaliation we got on indonesia from indonesia on the negative research? reporter: well, jpmorgan says it wasn't pressured in any way. the upgrade has nothing to do with the indonesian government's actions. it says it's independent and anything published as a result of extensive, objective analysis. its research indonesia is no different it says. still, one investor says it is probable aey compromise with the government -- it is probably a compromise with the vernment, upgrade to neutral and indonesia's retaliation pretty much essential. st last week it took a

negative. yvonne: has, thank you. plenty more still to come with asia first markets opening now just moments away. we're seeing

♪ >> futures signal a tepid start to asian trade, trump and brexit. theresa may said to confirm the u.k. will leave the eu single market. on foreign investment, vietnam's prime minister promises access to lenders. this is "daybreak asia." yvonne: good to see you.

hard brexit, clean brexit, that is weighing on markets. we did not get much direction from the u.s. with the market close for the holloway. let's get straight to japan and seoul, korea. we're looking at pressure for obvious reasons, the speech later on. a thirdlikely see straight day of losses if you go back to friday. u.s. markets workload, europe, re, a move back into dollar assets at the moment, except for the japanese yen. , .6% onook at the kospi

the way up, the south korean won , that is more a gauge of risk appetite. let's change the boards and look at some of these other things we are watching. it is certainly all about risk. commodities,about it is two things, what is .appening in europe that is one part of the story. , an you look at china massive decline in shenzhen yesterday, 3.5%, money trying to get out of stocks. it is making its way into iron ore. people are not talking about this. this is in renminbi.

$95 peralking roughly metric ton. is that a reflection of the risk people are willing to take to move money out of the country? there is a fundamental story to that, focusing on high quality steel. in china are saying fundamentals cannot explain everything. comments out of the energy minister and saudi about no need at the moment for these output cuts to continue well after the summer. he does expect markets to come into equilibrium. you had anote on oil, drop in the rig count in the

u.s. for the first time in 11 weeks. gold at a seven-week high. have a look at equity markets, australia .7%, the banks on the decline. one bright spot, gold-mining stocks. as promised, have a look at sterling, holding above 1.20. 1.19.l as low as where do we go from here? , a risk to the downside harder tone in that speech from theresa may later on. mark carney also weighing in. i'm looking at all these forecasts, j.p. morgan, theiroup, lowering forecast, selling the pound against the ruble. it, 1.15-1.18, which

tells me there is money to be made on the other side of that trade. the pound story, broad risk aversion. i will be talking to guys in the next few hours. yvonne: we could hit parity with the dollar and pound as well. first off, let's get to first word news. vietnam is planning to allow ownership in foreign banks. the prime minister says it will be introduced as early as this year, saying the government may sell out completely from troubled lenders come expecting higher growth this year. 6.7%e economic growth of

or this year, then higher growth rate for the years to come, so that we would be able to achieve an average growth rate of 7% for five years. andee some sentiment tendencies of protectionism around the world, however, that is not the major trend. the main trend and tendency is still economic integration. j.p. morgan has upgraded the indonesian stock market, reversing an earlier bearish call. morgan downgraded indonesian equities two notches following donald trump's election win. its view toised neutral, saying volatility following trump's victory should now subside. has written limits on with the draws from atm's, now able to take 10,000 rupees from

cash machines. the central bank announced the changes, effective immediately. prime minister modi's cash crackdown has dampened growth and inflation. the chinese president steps into the spotlight at davos when he addresses the world economic forum. of appearance comes ahead donald trump's inauguration. to shun theid conference because of the trade his populist movement. will bringelevision you speccoverage othe annual world economic forum in davos, including a panel on the future of finance. that is coming up at 3:30 p.m. this afternoon hong kong time. on wednesday, a discussion on the crisis of the middle class,

francine lacqua hosts christine lagarde and others. andill bring you those live in full on bloomberg television and on radio. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you. theresa may set to announce the u.k. will pull out of the eu single market when she sets out her brexit plans on tuesday. she will say she has no interest in a half in, half out approach. we hear hard brexit, clean brexit, but we are focusing on what it all means. sophie: there has been a lot of rhetoric, the speech was to be delivered today, so volatility in the financial markets,

expected to quit the eu single market for goods and services and a new trading relationship with the bloc. release, to extracts i'd like to share one of them, the u.k. is to seek a new an equal partnership between an independent self-governing and our friends and allies in the you. we do not seek to adopt a model enjoyed by other countries, hold onto bits of membership, so certainly rhetoric around what it means for britain to exit the eu. today speech is billed as her complete planned. her office said she one ounce 12 key objectives for those talks, likely to include gaining full control of immigration, restoring power over lawmaking, and ending the jurisdiction of

the european court of justice over british laws. immigration was a critical issue for u.k. voters. yvonne: a clean break presumably on the horizon right now, but we are still seeing uncertainty when it comes to longer-term. scant: details are still 'sth three months before may own deadline. we did see volatility in the pound as a drop below 1.20. for banks, that would be a big disappointment, and we may see a shift of operations out of london. businessomes to investment, mark carney address this. have a listen. >> we are in a situation right now where for understandable reasons business investment has been dampened by uncertainty, not because of, there is access

to finance, but there is uncertainty about ultimately what our relationship will be , andour largest partner this is weighing on business investment. of the speechming has not been specified. she is not delivering it in parliament, so theresa may and one of the ministers may have comments to explain the plan. yvonne: we will look ahead to that. sophie kamaruddin, thank you. tinto, one point 3% up in early australian trade after the country's second-largest iron ore exporters said quarter shipments beat estimates. run us through some of the numbers. is 87the headline number point 7 million tons, that is what rio tinto shipped, one million tons more than the same

time last year and beat as to men's, so for the year, 327.6 million tons shipped, up 3%, exactly in the middle of the indance that rio tinto gave october. 2017, even more iron or on the way, 330-340 million tons is the estimate. the stock price after a slow start, the market responding well. yvonne: we've been talking about iron ore prices, gains over the past year of 150% plus, so stronger than expected for 2016, but does it mean the same 42017? surface, one would tend to say no. not many analysts think it is sustainable, but 2016 made fools of us all.

here we are back above $80 per time again. if we look at some of the factors at play, china has been buying iron ore hand over fist, on quality,emium and china imported 1,000,000,020 million tons of iron ore in 2016, 32 tons per second, so a lot of analyst seeing speculation is the key driver. there is more iron or on the way in 2017 as we have seen with rio tinto's guidance, so it would be difficult to see those prices stay where they are. yvonne: thank you. still ahead, the man with the midas touch, one of the most respected investors in the chinese tech scene joins us. he is here a little later on. first, my next guest says it's time to pivot when it comes to

investing in 2017. we will find out how. this is bloomberg. ♪

a live look at tokyo early in tuesday's trading, the nikkei looking like this, down , a, dollar-yen strengthening safety play ahead of theresa may's brexit strategy plan to thish, set to happen afternoon. a quick check of the latest business flash headlines, cathay pacific shares rose after announcing plans to shorten its fuel hedging program and revamp its workforce. fuel betst hedge after losing $1 billion in the last three years. cathay pacific may read a sign staff to digitally-focus jobs

and has not ruled out redundancies. s once tot ata boost its stake to prevent companies from takeovers. a former chairman was ousted in a boardroom coup in october. be watching reliance and mumbai this morning after earnings beat estimates, third quarter profits jumped 10% to $1.2 billion thanks to higher petrochemical earnings and investment gains. invests billions in new areas like 4g mobile services and retail.

let's return to the markets ahead of theresa may's brexit speech confirming the u.k. will leave the single market. let's bring in state street global advisors, great to see you. this is not the first time theresa may has caused volatility and sterling. the far left, that is brexit, but the other times we have seen significant downside for the pound. atstabilized on sterling 120, but what you expecting to hear from her? can she cause more damage? week, sos a difficult we have theresa may coming in this afternoon, but also donald inaugurated at the end of this week, so what we see in the first half of this some policy uncertainty, and today's volatility has been

seen mainly in the currency market. but wek about the pound, are also seeing it on the japanese yen, and to some degree on gold, rising since the start of the year, so those are the things where we expect to see resolution in the first quarter. are pivoting and changing some of our trades. yvonne: have the fears been overdone? economic side the of the u.k., 2% real gdp, hardly translates to the pound being so weak. are we overblown when it comes to concerns of a disorderly crash landing for the u.k.? >> we are certainly not in that camp. we see growth rebounding in europe, and not only in europe,

but also the u.k., and confidence has been stronger than what we would have expected after the brexit vote, so we are not in that crash-type of scenario as you alluded to. rampe certainly more in a up of global growth, which we note exceeds a long-term average, but slightly better than last year and should benefit other countries. the u.k. specifically, of course they will have to negotiate the deals with different partners, and the eu remains our biggest partner. yvonne: you mentioned the pivot in 2017, since the election, u.s. equities is where the pivot was. in january, it seems like asia has more flows heading into the region. do you think this reflation story and the u.s. is still in tact?

what will be the inflection point when we see funds go back to the u.s.? >> that will not be a straight line. we still have a preference to the u.s. markets relative to other developed markets. what we see with the u.s. is that you have stronger growth, also the chance of fiscal bemulus, which again would key to see what would be the priorities in terms of taxes, fiscal spending, as well as protectionism measures that trump might be focusing on. yvonne: so you steer away from asia right now? lately isry improving japan, so japan is also improving from an earnings perspective given the weakness of the yen over the past quarter. the yen is trending higher to showingt this is still

good results. , worseningna though setbacks early last year when it comes to the shenzhen market and whatnot. do you see that kind of pressure continuing? >> china will be interesting to watch. in terms of growth take sure, a downside trend, but not too much, around 6.4% gdp growth and some areas of growth in technology. yvonne: sorry, we have to go. thank you. more to come on bloomberg. stay with us. ♪

yvonne: vietnam allowing more foreign ownership and banks to quicken its overhaul of the financial system. in an exclusivity interview, the prime minister says it will be introduced as early as this year.

after 30 years of reform, the via niece government and vietnam has achieved a lot of accomplishments, however, we are still faced with many challenges , namely our economy remains small in terms of scale, macro economic stability, and the restructuring of the economy, they are still making slow progress, and that leads to low productivity, some issues with the income of the people, and all of these outstanding issues layout the goals and the mandates for the government in this term. prove theres us to in restructuring of the economy in all sectors. we need to reduce corruption and graft, and also develop a strong force of officials who are able to better integrate the vietnam ease economy into the world and

implement the commitments vietnam has made in all the free trade agreements we have signed. what would you say as a prospect for growth for vietnam this year, next year, given rising anti-globalization sentiment and a slowdown in the economy? the economic growth of 6.7% this year, then even higher growth rate for the years to come, so that we would be able to achieve an average growth rate of 7% for five years. of course, we see some sentiment and also tendencies of protectionism around the world. not the majoris trend. the main trend and tendency is to economic integration, especially in this region, and that also includes the united states, so that's why vietnam

aims to capitalize on this tendency. saying you areou not concerned about the rising anti-globalization sentiment which has already derailed the tpp? there are reasons why i am not too much concerned about , because we have a growing business community that one million enterprises in 2020. our people are dynamic and love doing business, and we also have more than 20,000 projects that are to be implemented with total capital of $300 billion. building an independent economy is not against global trade. that was vietnam's prime minister talking to haslinda auman. company calleda

baidu is respected, the state of china's startups and the future of venture capital. ♪

is 8:30 a.m. in singapore, a beautiful morning in the lion city, half an hour away from the open of trading there. i am yvonne man in hong kong. let's get the first word news from haidi lun. todi: theresa may set announce that u.k. will pull out of the eu single market when she sets out her brexit plan on tuesday. the british prime minister says she has no interest in a half in, half out approach. banks could start shifting jobs and operations from london. the pound has fallen to its lowest since the october flash

crash. japanese prime minister shinzo abe urging nations to join the tpp as soon as possible. donald trump campaigned on opposition to the tp, shinzo abe saying it should pay the way for further regional partnerships. achieving tpp as foundation going forward, i would like to strengthen towards high-quality and ambitious agreements such as rcep. japan would like to be the standard bearer for the free trade regime at all times. donald trump has met martin luther king the third to discuss america's broken voting system. a growing number of democrats say they will boycott the inauguration after the president elect criticized john lewis.

underway into are the crash of a boeing 74 seven cargo plane and kurdistan that killed 37 people on the ground. the jumbo was flying from hong kong and was attempting to land at the airport. the cost of the crash is not yet known. is 49% owned by a china aviation group and has had the aircraft in its fleet since december 2015. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: time to see how the asian markets are shaping up this morning ahead of theresa may speech. here's david ingles. we are hitting session lows, the nikkei below

19,000 at the moment. excepte go, no volumes, south korea, which is why you are seeing a pop there. 37% heavier volumes compared to this time of day, halfway in. a lot of the gains you are seeing in south korea, 10 and a half points, comes out of samsung. yeah,uth korean kospi, most stocks are up, but look at samsung. now, hitting session lows, expecting caution ahead of that speech. and lookp the boards across some of these indicators of risk. better indication of that. we will talk about gold by the way and just minute.

1.14, but notlow .t the flash crash session low that being said, some strength coming through in the japanese currency. some of these other indicators of risk, 10 year yield in the u.s. in japan, down three basis points, 2.3 7% is your yield on the u.s. 10 year. gold at a seven-week high, pound point 20,t one holding on or steady as she goes , but be prepared to dance. a out with an interesting note, the concept of hard brexit, 1.15-1.18 is your sweet

spot. sterlingolatility on or cable, there we go to this is brexit right here, 70% at the moment, there we go, 29% roughly speaking, so yeah, back to levels of last summer, but nowhere near that level. yvonne: may be some tap dancing right now. thank you. meantime, venture capital and china reached its peak last year with a report revealing $31 billion of investment for 2016. is this an opportunity for investors to hold off on some big bets? our next guest is in hong kong to speak at the 10th asian financial form. great to have you in the studio. have we reached a peak?

has slowed down a bit for 2017. what does this mean for the environment for 2017? >> like any transformation we thewith technology, we saw boom in the internet in 1999 -2000, the boom in the mobile 2013-2015, sos with any sort of dream that people have about what mobile a differentive experience for people, for of what we dolot see is the euphoria. the dream is real. it does take time to realize the to realize adoption, whether consumer or businesses. i think investors are also looking at, when this

realization comes true, how would they make money, so this transformation takes time to happen. a17-2018 will be somewhat of year where things sort itself out, some of the bad investments going away, and the better investments, the unicorns will emerge over time, and more capital will come back, so i think we always go through cycles like this with innovation. yvonne: the trend has been from onlinear, investments in to off-line, now artificial intelligence, robotics, big data. is this where you are investing right now? we aree are the trends seeing. we are seeing investing into artificial intelligence because machines will get smarter about predicting behaviors and make recommendations and push content willu, virtual reality

change the way entertainment works, games, so it will change the way you experience entertainment. autonomous driving, i think that is real. there is a lot of experiment and tests going on. obviously there is a lot of regulation around it. i think all these things are real. it will take time to come true. i don't think for the next 2-3 years that you will see huge teams emerging. it will be more realization of the themes now. what is something that is a big no-no when it comes to investing right now? >> i don't think there is any sort of big no-no. i think it is all about trying to figure out the best people, the best teams, the best entrepreneurs, working through

and navigating through all of these technology, regulation, etc. a lot of areas are being explored. now certain sectors are over invested. you mentioned off-line to online, too much capital has been brought in, so those are you have over investment. i won to get your take on some of the sectors you have invested in, the home sharing, ridesharing, to areas where you do have that's. up in china, the home sector slowing down compared to others. how you view the landscape when it comes to home sharing? is an adoption that we are seeing in china.

airbnb has gone through phenomenal growth in the u.s. and europe. we are seeing growth in japan and other parts of asia. china is the emerging-market. for the longest time, people are more used to standardized services, so hotels. sharing in the home market, it is hard to standardize that surface. it is a unique market on its own, and the service quality and service precisions -- provisions in the chinese market does take time to mature. in the last couple of beers, it has been growing -- years, it has been growing fast. a huge generation of consumers want to travel and experience the culture, the place, not just sogo there and buy and shop,

the whole travel industry is how people want to eat golf with their experiences, making the home sharing market more interesting. to ask you about the u.s.-china alliance. , theu see the donald trump incoming presidency, could affect this dynamic we see? how serious do you think he is when it comes to a u.s.-china trade war? >> i don't have a good answer to that. be just as could good as mine. we are all anticipating anxiously as to what donald trump's policy might be an terms of his trade policy, how that might affect the flow of goods, the flow of capital, so all these are questions, but i think we are seeing a certain level of de-globalization in the western economies, europe, and u.s., by

way of how these sentiments are, where as in the case of china, we are seeing more of the growth because of where the chinese economy is growing, so i think we are seeing the chinese investments going to central asia and maybe southeast asia and other parts of asia. yvonne: great to have you in the studio. jixun foo, thank you. coming up, the imf says donald trump will give a modest boost, but remains a big unknown to the economy. we will go over that report, next. this is bloomberg. ♪

yvonne: welcome back. you are watching "daybreak asia" . the imf has an update to its world outlook with a cautious

stance on the policies of u.s. president-elect donald trump. here is the latest from ramy inocencio. what is the imf saying? comes to global growth, they are keeping the number unchanged for 2017-2018, but some positivity for the u.s., china, and the u.k. for you can see the numbers global growth, 2017, 3.4%, 2018, 3.6%. revision, a minor uptick of one percentage point, 2018, .4 percentage points up to ..5% this is cautious optimism when it comes to the policies of donald trump. we don't know what he will be doing when it comes to china in

terms of potentially calling china a currency manipulator. he has recently come out against nato as well as the eu, so ripple effects they are, but with that said, we do have the imf's chief economist who talks about the risks as well as the reasons for their minor upgrade your take a listen. -- minor upgrade. take a listen. >> we can expect the administration will bring in tax reform, lowering of tax rates. this will and part a stimulus, and some of that will flow over to the rest of the world. one risk we worry about is the stimulus will be so great that the fed will have to raise interest rates rapidly, leading to a very strong dollar. ramy: a strong dollar could be good for some sectors, but for others, it could have negative impacts, in particular hurting u.s. manufacturing.

in emerging markets, that could hike borrowing costs for countries that have dollar-denominated debt. we will know more after trump's first 100 days in office. the next imf report comes out in april. yvonne: interesting to hear from the imf ahead of this feature from theresa may. they upgraded their forecast for the u.k. and china. with china at least, they are having a little positivity, and that is to a push in terms of credit that we have been talking about for the past several months, we can see that upgrade, six point 5%, up .3%, but in 2018, maybe that might peter out, sothat growtrate fort unchanged at 6%. thisare also talking about or credit asto gdp

a percentage of gdp, look at the white line here, 245% in terms of credit relative to gdp, that is huge. they are worried about corporate debt, 162%. in other countries, the kind of level has triggered a financial crisis. yvonne: ramy inocencio, thank you for those imf forecast. the malaysian airlines ceo sees an opportunity to break even in the fourth quarter. saysing to bloomberg, he the worst is behind the airline and expects to post profit by next year. he also explained the key role he sees china playing. i think for us there is this massive opportunity in china. targeted 150t has more million people in china in the next 10 years. 30%closest country to them,

of the population in malaysia speaks chinese. i think we have a massive opportunity to get another 4-5,000,000 people in the next six years. yvonne: rolls-royce holdings has agreed to pay $807 million to resolve investigations into bribery allegations. they will settle that charges over claims its representatives bribed foreign officials to win business. the financial impact will become clear when the company reports annual results next month. noble is buying clayton williams energy for 2.7 billion dollars in stock and cash. it will create the second-largest operation by acreage in the southern delaware basin of the permian him shale formation. the deal provides more than 4200 joint locations with resources

of more than 2 million barrels oil equivalent. its morgan has upgraded call on the indonesian stock market to neutral, reversing an earlier downgrade which prompted the government to cut ties with the bank. let's get to haslinda almond with more. what changed here? haslinda: circumstances have changed, that is what j.p. morgan said, volatility and emerging-market bonds will subside after playing out after donald trump's election win. that is the reason for its reversal call on indonesia. j.p. morgan calling it neutral. two weeks ago, it downgraded malaysian stocks to underway. indonesia to lack behind other emerging markets. did it make the right call here? take a look at this chart. since j.p. morgan made that cut, stocks have underperformed the

wider emerging markets, and this other chart shows you what happened last quarter, foreign investors sold $2.8 billion of stocks and bonds, the rupiah got smacked. the highs and lows of the indonesian market there. yvonne: they certainly called it, but is there concern that j.p. morgan was forced to reverse its rating? pressure, that is what j.p. morgan is saying, no pressure to reverse its call. action taken by the indonesian government had nothing to do with it. research, its independence, anything published is the result of extensive, objective analysis. indonesia is no different. some say it is probably a compromise with the government. as you know, indonesia

retaliated. last week, it took further action, ordering all primary theyrs in the country, have to maintain relations with the government. failure to comply, they say, may lead to their dealership license is getting terminated. indonesia making it quite clear. amine: haslinda joining us from singapore. bond out why rowboa traders are cornering the market in bitcoin. this is bloomberg. ♪

yvonne: after hitting a record high, then tumbling just as fast, bitcoin back in the headlines. traders that have grabbed 80% of trade in the crypto currency. dominant is automated trading when it comes to the world of bitcoin? fit, asin is a natural much as 80% of trading transaction volumes are done by automated trading. to spirit trying

money a cross the borders. you have an army of professional traders using strategies that are deployed by some of wall street's biggest players, and these people see bitcoin as their new playground. yvonne: what makes the automated trading so popular? >> bitcoins market structure boxes,ll the right arbitrage trading across all platforms, 24/7 trading, so when it comes to man versus machine, machines are an actual fit for this trading. yvonne: there are risks to the bitcoin market, hacking, the chinese government may want to crack down on this, so how will the pboc set up regulations? >> the aftermath of this round of inspections on the exchanges, markets have fallen, but right

now, it is at a steady level. what people are expecting going forward is whether the pboc will continue this crackdown, not just on the companies, but go after purchasing of bitcoin and usage of the crypto currency. a lot of people think that if they did so, they could crack down on the companies, bent it is hard to prohibit people from buying bitcoin. also, china risks the opportunity of the industry, the technology, and the next tech boom that might come out of this industry, so regulators have to take care of and take caution on whether they want to step into this field once they start regulating. people will expect everything that happens in the sector as their responsibility, so that is something regulators across the world have to take into consideration. thank you. talking about bitcoin here. that is it for us on "daybreak

asia". when you watching? rishaad: when you look at hedge funds, under pressure at the moment. we will be looking at them with michael price. brexitthat, how does play out with theresa may expected to speak in london about a hardg brexit and a brand-new relationship with european neighbors and out lies. -- and allies. after that, world capital s&plows out of china, global ratings will be along to discuss what that means. last but not least, kazakhstan as the buckle in the one belt, one road system, find out why. ♪

>> it is 9:00 in singapore. we are coming to you from the headquarters in hong kong. asia.s bloomberg markets >> japan and decline of the yen dragging on exporters. the leave from