paul: welcome to daybreak australia. shery: i'm shery ahn in new york. sophie: i'm sophie kamaruddin in hong kong. we are counting down to asia's major markets open. ♪ stories we are covering in the next hour. alibaba mulls a $20 billion second listing in hong kong. a megadeal would bring the company closer to investors in its homeland. president trump says they are ready for a trade deal but china isn't. huawei's boss denies

intellectual property theft and says the company is a target. startedet's get you with a quick check of the markets trading at the moment. markets in the u.s. are closed on memorial day holiday. u.s. futures at the moment trading at 28.31 level. mixed messages coming from president trump in japan talking about progress with japan on free trade negotiations but when it comes to china, we could see u.s. tariffs on chinese goods going up very easily and substantially. we are now seeing the bloomberg dollar index gaining ground, .1% . we are seeing the euro unchanged at the moment, under a little bit of pressure after that early strength that we saw after the eu elections. when we saw mainstream parties holding their ground against

populace. at the same time, nc establishment parties performing well in italy and france. that is not leading to some downside pressure on the euro. when it comes to brent prices, at the moment, rebounding. a strong rebound after it's saw its worst week of the year last week. we are seeing some supply concerns over iran through libya. really helping those oil prices at the moment. let's see how we are setting up for the markets in asia. sophie: asian stocks are set to continue the lackluster tone after managing to eke out a modest second day of gains on monday. some tech news could drive sentiment. ipo,ba planing a major softbank sharpening its focus on ai. we have more buybacks in japan with tokyo electron joining the bandwagon. miners will be on the watch in australia. recently fueled by the drop in

mainland port holdings. the season rolls on in india. monday brought us numbers from aindigo. paul? paul: thanks very much for that. let's check on the first word news. nigel farage says his brexit party's success in the european election should spur u.k. to leave without a deal. conservativese less than 10%. outgoing prime minister theresa may called the results disappointing but likely to harden the stances of the nine candidates vying to replace her. the european commission is set to be considering disciplinary action against italy, which could pave the way for a $4 billion penalty. the step could come next week as part of the eu's regular budget monetary process. deputy prime minister matteo

savini has indicated he will push back against brussels in the next budget. and in asia's central bank -- indonesia's central bank is overhauling its system. it is a move towards efficient infrastructure. it will interlink digital open banking with financial technologies to prevent shadow banking risks. the payment system will be developed to replace the current national clearance system. told: sources have bloomberg that alibaba group is considering raising $20 billion via a second listing in hong kong. the megadeal would bring china's largest company closer to its investors in its home country. tom mackenzie joins us from beijing with the latest. what do we know? say, $20 billion is the number we are told they are looking to raise and it could happen as early as this year,

the second half of this year. they are working with their financial planners. they are working with their team to look at the potential listing in hong kong in the second half of 20 19th. we have been warned these plans are preliminary and could change. that is the information we have at this stage. you will remember they had a record licked -- listing back in 2014 when they raised about $25 billion. that was after they failed to persuade the regulators in hong kong around their management structure, allowing them to approve -- to persuade them to approve their listing in hong kong as a result of their management structure. things have changed in hong kong. that is one reason why they are looking to list in the second half of this year. as you say, and brings it closer to home, it would bring it closer to some of that -- their base in southern china, some of the domestic investors to use

the stock links as well. paul: in terms of the timing, is there anything significant about that? why is alibaba looking to do this now? tom: the regulatory changes from the hong kong regulators were a big part of that last year. they do now allow this dual share class of listing. different voting rights. you saw the likes of shall me taking advantage of that -- xiomai opening up the door for alibaba to list under those dual class shares. that is one big reason. the other is we heard they want to raise additional acquittal be -- liquidity. another reason is quite simply chinese companies are facing an increasingly hostile u.s. government. that is another reason potentially that it is playing into this decision or at least it is planned alibaba.

if you bought into their shares in 2014, you would look at a gain of 65%. year to date, alibaba shares in new york are down about 13%. we will watch this story very closely for more details. paul: china correspondent tom mackenzie in beijing. thank you for joining us. we will talk about alibaba's potential hong kong ipo with charles lee when he joins us for an exclusive interview on wednesday. president trump says the u.s. is ready to make a deal with china on trade, although he claims beijing is. he furthered his threat to increase tariffs. president trump: as far as china is concerned, i think they probably wish they made the deal that they had on the table before they tried to renegotiate it. they would like to make a deal. we are not ready to make a deal. we are taking in tens of billions of dollars of tariffs

and that number could go up substantially easily. paul: president trump was speaking in tokyo where he is on a state visit right now. let's go there and join stephen engle. what is on the agenda today for the president? stephen: he will be going and visiting some of the u.s. troops in japan as well as some japan self-defense forces. i want to pick up on the mainline that came out of that press conference yesterday that i was attending in central tokyo. that is where he'd of urged pretty quickly from talk -- he diverged pretty quickly talking about the japan-u.s. trade negotiations. shinzo abe and donald trump yesterday said all the right things. you could say from the headline from bloomberg that shinzo abe kind of dodged a protectionist bullet from donald trump. donald trump did not poke perhaps one of his biggest

allies in the world on the auto tariffs. they kind of glossed over that and said we have a rocksolid relationship, etc. when the topic came up to china, donald trump was much more pointed in his comments as you just heard. he repeatedly said have a number of companies are moving their operations out of china. they are coming to the united states or they are welcome to come to the u.s. and tariff-free countries in the region. he also said "u.s. tariffs could go up on china very substantially and very easily." not surprisingly, the chinese were not too pleased with these comments from donald trump. sort of accusing the u.s. of flip-flopping messages. ok, we are closer to do a deal. ok, we are not closer. here's what the foreign minister had to say yesterday. >> sometime, the u.s. has had various voices make comments on u.s.-china trade talks.

sometimes, it is said an agreement will be made soon. and other times it is difficult to reach an agreement. in the same period of time, china's position has always been the same. stephen: not surprisingly, much of the news conference yesterday with abe and trump focused on north korea, given the latest rattling out of pyongyang. japan has a very intense interest in the security situation on the korean peninsula. donald trump too, like what he said about the china trade deal, he said he is and basically no hurry with the north korean situation. 'm happy with the way it is going. sanctions are still in place. he cited the fact there has not been a nuclear test in about two years. he said kim jong-un has told him and he believed him that he believes in the economic potential of north korea and on the path towards denuclearization. shery: i cannot excited how

excited -- cannot believe how excited japan must've been hearing that. a potential trade agreement with japan by august. really interesting that a senior administration abe official did not agree on that. japan and the u.s. are supposed to be one of the closest allies. are they on the same page? stephen: they at least gave a unified front yesterday. there is the issue of auto tariffs which donald trump again blasted a bit of the trade deficit between japan and the u.s. he said the deficit is unbelievably high. they really did kind of glossed over those differences, but they also kind of put off to the future until august any progress to be announced on the u.s.-japan trade negotiation. they will wait until the july elections. shinzo abe wants to change the

constitution. he does not see necessarily they can give concessions to the united states during the election period. they will push that off into the future. today, donald trump is going down to a u.s. military base. he's going to address troops and self-defense forces from japan. he's likely to visit a warship. it is an aircraft carrier looking ship and has been -35b,fitted to handle f which are the aircraft carrier version of the stealth fighter. japan is likely to buy about 147 of those. that is sure to rankle of the defense officials in beijing. donald trump said he fully supports japan's increased military and defense capabilities. paul: all right, g4 -- north asia correspondent stephen engle. thank you for joining us. we will have more on the global trade war next. yuan will reach

seven to the dollar despite warnings. shery: the huawei founders says early is likeping being stripped naked. more from our exclusive interview coming up. this is bloomberg. ♪

shery: we are counting down to the citi open. futures unchanged at the moment. three sessions of losses for the asx 200. watch out for the miners. we saw the iron ore rally take futures above $100 per ton.

i'm shery ahn in new york. paul: i'm paul allen in sydney and you are watching daybreak australia. over the weekend, china warned traders against shorting the yuan after a recent spike brought the currency to the seven per dollar level. our next guest says the line will be crossed and it will be an anticlimax. amy is portfolio manager and joins us now. thank you for joining us. i do have a chart on the bloomberg that illustrates what the pboc is talking about. there seems to be a line in the sand around the 6.9 level. as mentioned, you think that will be breached. why is it so hard to defend the yuan? amy: it is actually not that hard at the moment. quite frankly, all they have been doing so far is largely verbal intervention and using the fixing. defending the seven level has

been tough in the past because 2016, into 2015 and particularly in 2015 when there was large valuation, there was a lot more foreign currency exposure from chinese domestics. regardme around, i would seven as more of a psychological level than one that carries as much economic pain for the chinese. which is why i think seven will eventually breach. right now, because that seven is such a strong psychological level, they want to both defend it, but at the same time, desensitize it. they will continue to talk a strong talk to try to keep the seven level for now. eventually, the speculators will give up. natural market forces take the level of dollar china above seven, so be it. if they exist in the current evaluation touan

offset, you would look around 7.25. paul: we had some of that strong talk this week from the head of china's banking and insurance regulator. he said it would result in a huge loss. is shorting the yuan a good trait? amy: it is probably a good trait in the medium term, but it is about how long do you hold on. at what level do you start shorting it? because the pboc has over $3 trillion in reserves and a lot of credibility, chasing momentum as the yuan weakens is probably not the right strategy. however, when you see bouts of strength for various reasons, and it may be because of dollar weakness, they may provide you an opportunity to get into those shorts. shery: a weaker yuan has helped china whether some of the u.s. tariffs so far. with the recent increase, how

much weaker will the yuan have to get in order to offset the impact of this and will we get there? amy: so, you are right. last year, the depreciation you saw in the yuan helped offset a lot of the pain that was contributed by not only the tariffs themselves but also the weakness in sentiment. chinese growth continues to slide towards the end of last year. in q1, you saw some stabilization of the chinese economy. as i mentioned earlier, for the tariffs in their current form, if they were to persist, i see the value on the yuan at 7.25 to the dollar. let's say in the worst-case scenario, all chinese imports to the u.s. would be 25% across-the-board, assuming no other measures come into place, it should be around 7.5 to 8 and potentially north of 8.

that would be the very extreme scenario. shery: affecting the yuan could be the stimulus measures coming from chinese policymakers. i do wonder how broad has the stabilization of the chinese economy been so far, because this chart on the bloomberg showing the discrepancy between how well these large corporations are doing against how small and medium-sized companies, the pmi still in contraction territory. so far, policymakers have been very targeted in the stimulus measure. how difficult has it been to channel these funds into private firms? incredible been an dilemma for the chinese policymakers. target the larger corporations, earned enterprises. they are easier to pull the lever on with the purview of the regulators and policymakers.

private sentiment has been damaged not because of the trade war so much, but because of china's own self-inflicted policies that were introduced in 2017 onward. they were aimed at deleveraging the system and controlling shadow banking. even today, that is what still hurts the small enterprises and the private sector of the economy. yesterday, you saw industrial profits and china sank into negative territory again. i think private sector sentiment is very difficult to address, but they want to continue to channel the credit towards the private sector without overstimulating the older parts of the economy, the more capital-intensive an investment intensive part of the economy because china is trying to strive towards a more sustainable model of growth. paul: i want to get your thoughts on monetary policy in australia, because the drumbeat was growing louder. saying three cuts in 2019.

the lore of diminishing returns when you get towards 1% on the cash trade. you think we will see q1. amy: we do. this is a view that my team holds quite strongly. the reason being that, as you say, with a starting point of 1.5% on the cash space, you are looking at very little policy space. in terms of qe, we have had different styles of qe. you have seen the u.s. form and the european form, and even the chinese form even though they have not really described much. in australia, the problem now is about the sluggishness of the consumer and the weakness of credit growth. credit growth -- australia had a banking crisis in the 1990's. in order to get credit growth started again, not only are interest rates cuts necessary by the rba has to look seriously at

the possibility of qe. qe that particularly addresses the sluggishness of credit growth and the weaknesses of consumers in australia. shery: does that logic hold on south korea given the weakness we are seeing in that economy? this chart showing despite the weakness, policymakers could be a little hand tied. we are seeing the korean yuan be the most undersold territory. even with the fed on hold, how much does this help countries like south korea where you have this downward pressure on their currency? amy: absolutely. i think in terms of the trade cycle, we have not seen at this week since the global financial crisis. as you rightly point out, the bank of korea are extremely reluctant to move, especially before the fed moves, because they see their monetary policy is tied to what the fed does. even if the fed is on extended pause, it is not necessarily give the bank of korea the

breathing space they would need to instigate an interest rate cut. nevertheless, i think the fundamentals are ultimately overwhelmed. eventually, you will see the weakness in the korean economy force the central bank into a new platform as well. paul: amy xie patrick, thank you so much for joining us. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers can go to their terminals. it is also available on mobile on the bloomberg anywhere app, where you can customize your settings so you only getting news on the industries and assets you care about. this is bloomberg. ♪

shery: let's get you a quick check of the business flash headlines. making changes to its $56 billion battery purchasing plan over concerns the deal with

samsung might unravel. bloomberg sources say differences in production volume and schedules between negotiations in the company. cut to less than five hours. paul: sources have told bloomberg that fiat is not pushing for nissan to join is proposed merger with renault. however, it could join the expanded group in the future. fiat is proposing voting rights of 7.5% for nissan. says nissan is taking a wait and see stance. shery: deutsche bank is considering options as part of a wider overhaul they have planned in the next two months. investors for cash is the least favored action because it might trigger a backlash. the chief executive has

signaled larger cuts as it struggles to make a profit. iron ore rally burns bright as global supplies increase. we will discuss. this is bloomberg. ♪

paul: 8:30 a.m. tuesday morning on a cool winters day. the market open 90 minutes away. the futures is not pointing anywhere, kind of flat right now. shery: in new york, it is 6:30 p.m. you are watching daybreak australia. that's get to the first word news. alibaba group is considering raising $20 billion via a second listing in hong kong. the e-commerce giant is working with financial advisors on the plan offering which would bring china's largest company closer to investors in its home country. alibaba could file a confidential listing application in hong kong as early as the second half of this year.

president trump says the u.s. is not ready to make a trade deal with china, although he claims beijing is. tariffs onnt said chinese goods could continue to go up very substantially and very easily. he said beijing probably wish they had agreed to the deal that was previously on the table. the chinese foreign ministry says beijing's position has not changed. the eu signaling it would reject any white house effort to curb autos. dismissing president trump's recent warnings that he could see quotas for national security reasons. voluntarily restraining exports is illegal under wto rules. chancellorrian cance has started his campaign to

return to power. partnersnged coalition backed a vote to dismiss him. an interim administration will be named in the coming weeks before snap elections. the 32-year-old says he is confident backers will have them in september. a mixed picture when it comes to asian futures. for what to watch, here is sophie. sophie: telcos remain a focus in sydney in the wake of the bid which will face scrutiny by the foreign investment review board. shares jumped on monday, but closed about 13% below the offer price. looking cautious on the prospect of a binding offer. the stock has been upgraded to hold at morningstar. afr highlighting speculation may attractast investors. this morning's analyst call roundup, i want to highlight

goldman sachs upgrading rio tinto to buy. a 5.2% increase from the last close. trading at july 2018 highs. paul? paul: thank you very much for that. let's get more on what we should be watching as trading gets underway with andreea who joins us now. with no direction from the u.s. because of the holiday, asian investors will need to navigate trump's latest rattling on trade all by themselves. what sort of reaction can we expect? andreea: new could go either way from what we have seen in the last few weeks. the futures are fairly flat this morning. we have seen that deteriorating relationship between the u.s. and china really weigh on investors in the last three weeks. at the same time, there is a feeling that maybe they have become immune. we saw that rally in china

stocks late in the day yesterday rebounding from the same low for a third time. we also had hedge funds buying dips in u.s. stocks, basically increasing the speculate of long positions. that suggests that maybe investors are not as concerned anymore so they are becoming immune and brushing off these concerns about the trade dispute that is so ongoing and the rhetoric team changing pretty much from day-to-day. it will be interesting to see how the markets react today but it feels like they will be setting the tone for what the u.s. and u.k. return from their holiday. paul: one of the most exposed countries to the trade war, south korea. also home to asia's worst performing currency. it could be worse still in-store. andreea: that is right. it has declined about 6% this year. the economy has slowed.

exports have been pummeled. you have had the semiconductor market under pressure that has been weighing on companies like samsung. now you've also got korean investors looking overseas. in the first quarter, they traded more stocks and bonds than in the previous quarter. that is because of holdings of korean assets does not look that appealing. the stock market is pretty much wiped out its gains for the year, while global stocks have rallied. you have got an extra negative weighing on the south korean currency. shery: talking about currencies, the euro was also unable to really hold onto those gains after the eu elections. surprising given we have seen the anti-establishment parties in france and italy, especially italy. should we be concerned about their fiscal situation again? andreea: that is right. we do see a bit of a relief rally in european stocks last

night. french and german bonds went up. the one exception was those italian bonds with yields jumping about 12%. people familiar are telling bloomberg that the european commission could slap a $4 billion penalty on italy because it is not raining its debt. this is something that we saw last year, this escalation of tensions between rome and brussels over italy's in a --terly -- in a bitterly inability to be more fiscally prudent. shery: thank you so much for that. charts onnd andreea's the library on your bloomberg. iron ore futures surging in singapore and hitting the highest in five years. our senior energy and

commodities reporter david springer joining us. what is the outlook for further gains here? david: good morning. absolutely. futures were surging on monday. we saw the benchmark on oil price follow that trend overnight. benchmark iron ore up about 4% 107.50.ay to about that is the highest in four years. it is now at price levels that are not even the most optimistic of producers or analysts would have forecast. this latest catalyst in the gains we are seeing. yet another decline in port holdings in china. we are seeing that being drawn down. that has exacerbated some of the things we are seeing in the market. chinese production is still surging. we are seeing that lack of supply in the iron ore market. the dam disaster we saw in brazil earlier this year, but

also some problems that have been experienced by the australian producer. the outlook is probably for more gains and we will see that market tightness. in the past hour or two, we have heard from a prosecutor of brazil who said vale will probably not be able to resume full capacity on one of their key mines as fast as the company was hoping. that would add more pressure to supply and we could see that reflected in futures today. advancing,also keeping an eye on the 1300 level again. is there enough fear to push through it? david: as you say, gold had its third date of gains on monday. it continues to be the beneficiary of concerns around trade tensions. that seems to be the catalyst in that market. we are seeing -- we are continuing to see investors go back to those safe haven assets.

there is some caution. we have seen some bullish bets on gold just taper a lot of it. there are expectations that maybe the metal, although it is having gains, it could trade between a pretty narrow range. it looks like it will continue to attract positive sentiment as long as those tensions continue. shery: we are seeing oil rebounding. this coming after its worst week of the year. are we tilting back to supply concerns now? david: you are right. oil lost almost 5% last week. a really horror week for it. it looks as those concerns around iran and libya supply disruptions, they seem to be overtaking any concerns that trade tensions could hurt demand. opec to meet next month. very key decision there on the

supply outlook. certainly, it looks like people have those worries about tensions and libya and the scenario between the u.s. and iran, and the potential impact we could see on supply. lost the ground it had last week. paul: david stringer, thank you for joining us. coming up next, part two of our interview with huawei's ceo and founder ren zhengfei. you can hear what you think about the trump administration's latest sanctions on the company. this is bloomberg. ♪

shery: i am shery ahn in new york. paul: i am paul allen in sydney and you are watching daybreak australia. huawei founder and ceo ren zhengfei has denied his company ever steals intellectual property and says president

trump is targeting his company because of their success. ren spoke exclusively with bloomberg and huawei's headquarters. likely the u.s. steals our technology. whether we have a government background, american auditors audit us, right? this unfounded conclusion may not be right. we're leading the u.s. now. if we were lagging behind, trump would not need to make so many efforts to attack us. he attacks us because we are now more advanced than them. >> if at a moment of national crisis, the government came to you and said we need your help, we need your cyber skills, we need access to your network because it is for the good of the country, the good of the government, the chinese people, how would you respond? ren: we absolutely would never

install never -- any backdoors. we would never do that. we serve human beings, we don't serve intelligence services. why should we install backdoors? >> what are the practical steps for denying a request like that in china? ren: we have never done that. a german newspaper listed articles saying they cannot find any backdoors. in the u.k., huawei was under the world's strictest scrutiny so we can earn the world's trust. under such strict scrutiny, it was as if we took up all of our clothes to prove we had nothing to hide until the u.k. agreed to use our equipment. ceoy: huawei founder and ren zhengfei speaking exclusively to tom mackenzie. much more of his exclusive interview with the huawei ceo this weekend. huawei connected and contested saturday at 12 p.m. sydney time

and friday 9:00 p.m. in new york . our next guest says huawei is troubled because their phones will not be able to recover from restrictions. joining us is alex. great to have you with us. saying huawei has they give ability to come up with their own solution, whether it is software for devising their own chips. do you believe it? alex: he can say whatever he wants. the problem is that for them to create their own ecosystem of third-party developers and something that could replace android, it is a gargantuan effort. microsoft has fat -- tried it and failed. amazon has tried it and failed. facebook kind of tried it and also failed. there is no way they can overcome the blow. shery: we know that china is such a state directed economy. if we are really headed for strategic technological rivalry

against the u.s., wouldn't beijing just step in, save huawei? what is the potential of all of these efforts of the u.s. backfiring given this would enhance china's drive to be a key player in those strategic industries? alex: the problem with -- the technology is not really the competitive advantage. the technology is really commoditized these days. with companies like google and android, the power they have is in the ecosystem and network. even if the chinese government were to subsidize the creation of the technology, the point is they cannot go convinced millions of third-party app developers to make apps that work on a third operating system that can come from huawei. it is almost near impossible for them to try to replace the role of an android, even if they have all of the technology. paul: what does huawei do here? how can it recover?

how can you become more self-sufficient or completely reliable on some kind of resolution with the u.s.? alex: i would say the handset business outside of china, particularly europe, asia effectively -- there's almost nothing they can do to come back from this. the majority of their business outside of smartphones is a different matter. when it comes to android, google has taken a relatively easy stance on what services they are going to allow to continue working with huawei devices. if the trumpet minute ration wants to press harder -- trump administration wants to press harder, there is more google could do to completely disconnect huawei phones. there is android or ios. if you are on one of these dominant platform operating systems and the mobile phone world outside of china, that is all there is. right now, huawei is basically

blacklisted from that entire ecosystem. business is running a new etf which collects revenue from platform businesses. we do talk a lot about how take has taken a it of a beating during the trade war. if we take a look at this chart, long contracts on the nasdaq up to the highest in a year. so, how do you see the temperature of the tech industry right now? is there hope? alex: there is basically two types of tech companies. platform tech companies and non-platform linear tech companies. platform businesses are basically the dominant business model of the 21st century economy. these businesses do not own the means of production, they own the means of connection. that is where they are having network effects, winner take all dynamic. google and android have an

ecosystem which enables them to have such a dominant role in the industry where it is just ios or android. there are about 50 u.s. tech platform companies that we identified. plat is wisdom tree's etf. they just licensed a data product from us that helps identify which public of a nice have revenue or not. shery: are you concerned whether these platform companies or other types of tech companies, we are now seeing this environment where these trade tensions over tech has moved to the national security arena, not to mention we continue to see the spotlight on these tech companies as well over privacy issues. we are headed towards a 2020 presidential election. so, there seems to be a lot of risks these companies out there. about 70 global platform companies that we identified.

60% of them residing in the u.s. what we have seen so far with regulation around privacy is that privacy actually helps these tech platform monopolies. google and facebook should be kissing the feet of the european legislators post gdpr. google and facebook have a more dominant control over digital advertising in europe. now that these companies are so big and dominic, it is hard for the regulation to hurt them. it kind of enables them to wipe out their smaller competitors. the u.s.-china trade war adds a new interesting dynamic to it and i think you will see the 60% of companies that are u.s. tech platforms, they will be able to gain on the chinese tech platforms and emerging markets, like southeast asia or europe, where these chinese tech left warm companies are going to be at more of a disadvantage. shery: let us talk about those chinese tech companies. alibaba, tencent, for example. these other tech giants from the

u.s. having the edge, but at the same time chinese tech companies have to compete against the likes of -- there is so much competition for them. is the pie big enough? alex: china is a massive market. i think baidu and alibaba and other tech platforms have been able to expand internationally. we have seen baidu do that before. shery: the last quarterly loss was the first since the ipo. aren't they having enough problems right now? alex: that is my point. it will be much harder for them to continue down that path with international expansion. i think they will probably have to spend more time refocusing their effort on china mainland proper and chinese really countries and the surrounding regions. there is a huge amount of growth in those markets, but very different than the international global expansion that these

companies formerly have been focused on. paul: alex, i know you mostly keep an eye on some of these larger tech platforms, but are there any smaller ones that you see having a lot of potential and growth potential? alex: there are. over half of the 70 companies we identified, a majority of them were not even around. they were not even publicly listed companies a handful of years ago. the majority of these companies are relatively young. have huge growth in front of them. in the past year alone, we have seen a number of new tech platform ipo's. uber and lyft most recently. pinterest is about to go public. farfetch out of europe. there are many more platform listings on the horizon. generally, of the 50 -- 60 u.s. tech platform companies we had edified, these companies will outperform the linear,

non-platform tech companies over the next five to 10 years. paul: just before we let you go, i want to put the ball on the tee for you. the chip industry has taken a real pounding as we take a look at this chart. we can see the chip industry gauge hitting for its worst -- on the subject of chips and moving away from platforms, don't touch it with a 10 foot pole territory right now? alex: these chipmakers are not platforms. they are very so linear. they are creating a product which inventory sits on the balance sheet. these linear tech companies, these are great examples, they have much more competition. that means when the market is in a downturn, they will be less resilient than the platform companies and the platform companies are more resilient in downturn. when the markets bounced back,

they bounce back much faster than everyone else because they have that winner take all companies -- chip companies do not have. applico ceo,azed, thank you for joining us today. you can watch us live and see our past interviews on our interactive tv function. you can also dive into any of the securities on bloomberg functions that we talk about. you can become part of the conversation as well by sending us instant messages during our shows. this is for bloombergs subscribers only. this is bloomberg. ♪

shery: i am shery ahn in new york. paul: i'm paul allen in sydney and you are watching daybreak australia. a quick check of the latest business flash headlines. operatordata center

controlled by chinese investors planning to file for hong kong ipo as soon as this week. the london-based company aims to raise more than $1 billion. it was founded in 1998. it owns and operates 12,000 networks across europe and the asia-pacific. shery: indigo says it will add 30% more capacity in the current financial year after fourth-quarter profits increased bifold to $85 million. hard not to be's bullish looking ahead with plenty of opportunities for profitable growth. he is also saying a robust theme of new aircraft. paul: one of tencent's most valuable investments as china cracks down on online content. tumbling to a new low in hong kong on monday and the mother of the sites was targeted for to

treating obscene material. 45% below itsand ipo price. coming up, we will talk to the former japanese ambassador to the u.s.. ♪

paul: good morning. we are under an hour ole from the australian market open. kamaruddin inphie hong kong. welcome to daybreak asia. paul: our top story this tuesday, alibaba with a second listing in hong kong. companyo bring the closer to the homeland. president trump the u.s. is not ready with -- for a trade