paul: good morning. i'm paul allen in sydney. we are one hour away from the market open in australia and south korea. shery: good evening from bloomberg's world headquarters in new york, i'm shery ahn. elena: i'm selina wang in beijing. welcome to "daybreak: asia." paul: our top stories this monday, the yuan climbs in the end falls as investors weigh signs of progress in the trade talks. china says negotiations have been construct of.

-- constructive. it needs funds to help reduce a crippling total debt of $130 billion. the streets of hong kong, demonstrators clashing with police for a 16th consecutive weekend. shery: let's get you started with a check of the markets. seeing u.s. futures gaining ground, .5%. this after the s&p 500 lost ground on friday. we have seen stocks higher throughout the session. the we got reports that chinese delegation in the u.s. had canceled their visit to u.s. farms. that led markets lower. we had trade sensitive stocks, like consumer stocks and tech, leading the declines. the nasdaq fell the most in over two weeks. after the close, we saw local media reports in china that the cancellation of those trips to u.s. farms had nothing to do with trade negotiations. perhaps risk on sentiment being felt across the market. treasuries rallied throughout the week. 10 year yields now at the moment

at 172 level. let's see how things are shaping up in asia. japan markets are closed on holiday, but the nikkei futures are open today. any market moves that we see may be exacerbated because of the trading. looks like futures are set up for a mix, mostly higher, when we saw the nzx 50 open 1/10 of 1%. that is after the reversal and sentiment around the recent trade headlines with the local media reports and the chinese ministry of agriculture saying that the visit to the u.s. farms was not because of the trade talks. we also had positive -- positivity from china's ministry of commerce who said talks have been constructive. if we switch boards and look at the reaction from the yen on the back of the news, we saw the offshore yuan gaining as much as 2/10 of 1%. trading around the one point -- the 7.108%. we will monitor how that moves.

switching boards one more time to look at some of the economic data on top today, we will be looking ahead to australia's pmi, singapore cpi which economists are expecting to have picked up slightly from half a percent in august from .4% in july. we will look at taiwan's industrial production data as well as south korea's trade data. paul: thanks, selena. let's check in on first word news with su keenan. su: we start with police and protesters in hong kong. they clashed again on sunday with violence in several parts of this little -- of the city is unrest continued for a 16th weekend. initial peaceful demonstrations later arrested with the subway station vandalized in shopping. hong kong is based -- bracing for a surge of protest in the 70th anniversary of the founding of the people's republic of china. iran, the country is refusing to rule out war in the middle east as u.s. ends additional military

aid to saudi arabia. foreign minister told cbs that he is not optimistic about avoiding a conflict, but added that iran would not be the one to start a fight. 's here inn president new york for the general assembly, and iran says it will lay out a peace initiative at the event. and reports from the gulf say iran is really -- has released a british tanker seized in a tit-for-tat move that has seen on iranian vessel impounded. the new says the crew has been released in what is seen as an attempt to lower tensions on the gulf. the tanker was detained near the strait of hormuz back in july, after an iranian tanker was halted after -- at the request of u.s. authorities. it is six days away, and carmakers in the u.k. and europe are warning a no deal divorce would have disastrous

consequences for the auto industry. eu companies have developed supply chains that rely on smooth movement of components across the bloc. the u.k. society of voter manufacturers and traders says no deal would cause irreversible harm to the auto sector. global news, 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. paul: thanks, su. president trump has acknowledged he did discuss former vice president joe biden and a phone call with ukraine's leader. it is at phone call that the subject of whistleblower allegations that sparked congressional investigation. bloomberg news editor steve gammon joins us from washington. what is it about what the president said? steve: the concern is that he made a some sort of deal or apply some sort of pressure on the leader of ukraine in a

congratulatory phone call after he was elected to the presidency a couple months ago. the white house has said nothing, the whistleblower complaint that has been filed with the inspector general has not yet been released. the white house is blocking the release and that has angered democrats across the spectrum including today, house speaker nancy pelosi, who in a letter to her colleagues republican and democrat, said if that whistleblower complaint is not released later this week at a congressional hearing, the u.s. will enter a grave new chapter over the call that the president had with the ukrainian leader. all day today, people in the democratic party have been reacting to what trump has said. he relayed more information than he has up until now but that has encouraged democrats and one or two republicans to suggest let's wait and see. we may have issues that require us to take further action. nancy pelosi came as close as she has so far for calling for impeachment, this grave new chapter is being interpreted by

some people as that signal. we will have to see where things happen later this week. shery: media reports are talking about multiple acts by president trump. do we know what those could be aside from the phone call? and also, given the president is expected to meet ukrainian president this week on the sidelines of the un's general assembly, what could happen to that meeting? steve: that is an interesting discussion that everybody will be watching closely. we don't have the details of exactly what was discussed. we know the president today said he did raise joe biden and his son's involvement with a company in ukraine, the way the president described it was we didn't want to have americans like abide in contributing to issues with the ukrainian economy. not a lot of detail. the president spoke to reporters as he left the white house for a trip to texas and ohio. we are waiting to get more of the details. various other media reports said there was pressure being applied

to begin an investigation into joe biden and his son. if that investigation didn't get started, there would be some sort of repercussions. none of that has been confirmed. members of the administration have said the president did nothing wrong and he himself said his conversation was above board and within -- a correct conversation. shery: steve geimann, thanks so much. here with me in the new york studer is director of domestic policy studies, lanhee chen. always great having you with us. [laughter] right. every week there seems to be something new here. how much does this hurt the president and help the democrats? steve: i think some of it -- lanhee: i think some of it is the question of what actually happened, needing to know more about that, not knowing more around that, it is difficult to a sow's who it hurts more. from the president's perspective, he could say a day when he is talking about a scandal involving joe biden is a

good day for him. you might think he actually pressed this, he actually wanted this to be part of the dialogue instead of talking about other things. we are talking about this story and people are wondering what happened with joe biden and ukraine anyway? some of this is reverse psychology. it is tough to say if it will hurt him or bite and more. the reality is it is another norm breaking piece of activity from the president. shery: what about the fact that the democrats fail to gain traction with the impeachment issue? could this snowball into something like that? lanhee: i think the democrats need to figure out what their strategy and attack will be against the president going into the election year. is it going to be looking at the ways the trump organization has benefited economically and financially from president trump being in office? is going to be this line of inquiry along ukraine and involvement in foreign governments? or is it going to be something they dig up from past lines of attack which have not been successful like the mueller report. democrats need to figure that out. there has not been a coherent

and consistent theme democrats have drawn on. that has hurt their ability to damage the president politically. paul: there is no guarantee joe biden is even going to be the candidate who ends up facing president trump in 2020. could this embolden some of joe biden's rivals within the democrat party? lanhee: it very well could. the question there is who would be the one to launch that first attack? and whoever it is does run the danger of being assaulted by his or her democratic colleagues for essentially advancing the president's rhetoric and advancing the presidents angle against the vice president. there is some risk involved. but certainly, i think democrats will begin to attack each other more, particularly as the field narrows, and the question becomes who is going to be there once we actually get to the first casting of ballots in iowa in january? paul: lanhee chen stays with us. up next, the indian prime minister touring the u.s.

how president trump may leverage his relationship with him ahead of next year's elections. shery: later, it is said to price its age ipo today. details coming up. this is bloomberg. ♪

very basic that goes far beyond donald trump.

5% gdp a year ago was around 8%. exactly, that is what it has done. it is a lot lower. maybe oil prices have been in a headwind. after demonetization. the goods and services tax, things that were not the best for the economy may happen, that this is needed. the idea that at a time when vietnam -- when people at the end of the supply chain and may be china, vietnam is the first spot. indonesia is popular. this is a way for india to get back. shery: kathleen hays, thank you so much with the latest on india. lanhee chen still with us to discuss the india-u.s. relationship. we have the event in texas. it all looked friendly,. didn't a few weeks ago, the u.s. terminate the developing nation designation for india? what is going on? lanhee: part of this is the

theater that president trump enjoys creating. he likes to demonstrate, he has close personal relationships. that is not just modi, that is xi jinping, all sorts of leaders, shinzo abe, leaders around the world. this is part of it. the interesting thing is the momentum around a u.s.-india bilateral trade agreement has picked up in the last few days. there are indications that more progress has been made then people previously expected. you could say it is a crisis of his own creation but nonetheless, there would be some boost to the u.s. economy from a bilateral trade deal, and certainly for the indian economy as well. to ask thistate question contingent -- considering the times we are in, modi endorsed president trump to a huge crowd of the indian dais for in the u.s. whatever happened to that long-standing convention of not getting involved in other countries domestic politics? lanhee: the old conventions

don't apply to the current era of u.s. politics. that's one thing we have known to be true about the trump presidency. the indian-american vote, the asian american vote more broadly in the united states is one that republicans have always felt has been up for grabs. it has not been as entrenched as the african-american vote, the latino vote. as a result, the president appearing with modi, getting support from modi, being able to influence indian-american voters, could be important on the margins in some states where there are large populations not just of indian-american voters but asian american voters. this could be part of a strategy by the president to enhance his electoral base. of his aims is to bring the entirety of casually under indian rule. could this potentially risk dragging president trump into a quagmire in kashmir? that has a long history of difficulty. lanhee: it is long and fraught and obviously, it would be one thing that usually u.s. leaders

would try to avoid or at least be delicate around. the president has not weighed in and the same way he has weighed in and other controversial issues around the world. obviously, the challenge here is how does president trump continue to remain focused on his domestic contents -- constituency? understanding u.s. foreign policy in the trump era is about understanding how the president views foreign policy as a vehicle to advance domestic political aims. if you look at it through that window, it is difficult to see how the president would be advantaged by getting involved in a fraud issue that is so far away from his sweet spot. shery: because how much do american voters really care about cashmere --kashmir, pakistan, and india? lanhee: there are probably few voters who care and the vast majority don't have any sense that it is a serious conflict and has serious issues around it. the president has to ask, what is going to work in his advantage if he thinks about reelection prospects for next year? shery: thank you so much, you are sticking around. lanhee chen stays with us.

modi will be among the global leaders gathering in new york for the annual bloomberg global business forum. we will hear from new zealand and from greece. live here on bloomberg. ♪ will discusswe beijing's rationale for canceling a tour of u.s. farms -- foreign states. plenty more ahead. this is bloomberg. ♪

paul: the offshore you on strengthening this morning on reports that china's decision to cancel a tour of u.s. farms states was not trade related. the hoover institute's lanhee chen is still with us. gentleppears to be some encouraging flickers of optimism around the trade war. don't want to get too carried away because we have seen this movie before.

lanhee: we have. i think the big question will be how much of this gets resolved or any of it get resolved as we go into the election year? i think the domestic politics in the u.s. drive a certain amount of decision-making on the u.s. side. the notion that there would be a large far-flung agreement that would include significant protections on intellectual property and things of that nature, i think hope for that has damaged a little bit. in lieu of it is optimism that there could be a limited scope, short-term agreement. which frankly i think from people's perspective in the u.s. makes a lot of sense because a bring stability to what has been a relatively tumultuous period in u.s.-china relations on having impacts on the u.s. economy. more stability would not be a bad thing. paul: yeah, in terms of the political calculation, what works best for president trump in to that style

politics? is a better to try am fully parade a deal or is it better to have made a scapegoat in the form of china? lanhee: i think having a deal is advantageous for two reasons. one, the politics of the being able to say i followed through on something which was a big campaign promise, and being able to sell something which even if it is limited in scope, president trump has an ability to market whatever it is he needs to market. that is an advantage. the second issue is just more broadly, the u.s. economy is facing serious headwinds as we go into 2020. having something that would be able to bolster the domestic economy would be a good thing for the president and a good thing for republican prospects going into 2020. shery: not getting a deal, with that hurt the president's chances? lanhee: i tend to think that would be harmful. it would be harmful for the political reasons i laid out but also the economics here are beginning to dictate some kind of agreement is important. shery: no wonder we saw this huge whipsaw and markets after we heard the chinese delegation was not going to those u.s. farms for a visit.

how concerned are farmers at this moment? they have been getting billions of dollars in aid. are they feeling the pinch and do they want to see a trade deal? if they don't, will they be upset at the president? lanhee: i think that is a big question. i think they want to see a deal. any assistance they are getting they fear could be temporary. what they want is stability and having a market to sell into, having stability around the trade of goods between the u.s. and china, and not having an agreement gets in the way of that. whatever aid they are receiving now, i'm sure they would say we would much rather have a deal that guarantees certainty for us. that is one thing they have not had. the politics of it are separate matters. whether they will leave the president and vote for someone else because there is not a deal, that is an open question. i think that constituency by a large will support president trump. paul: considering all the rhetoric over the past couple of years, is it going to be possible to separate just trade from all the other things like national security and structural

reform and the technology as well? lanhee: the national security issues are tricky. that's what is cap locating this trade conversation. two things. the national security conversation, huawei related issues, what the chinese have allegedly been doing in the u.s. to infiltrate the u.s. market and also u.s. institutions. there is this question of hong kong and how the protests in hong kong, how beijing is handling those. that has undoubtedly had a spill over into the trade conversation and made it more difficult to reach an agreement even one that is more short-term and limited in nature. shery: at the end of the day, will we see a partial deal? the president keeps insisting he wants a complete deal. then we are headed toward 2020. lanhee: i think the nature of the deal is in the eye of the beholder. the president will say, a copper hands of deal. shery: can he spin it a round? lanhee: he will try to. i tend to think the reason it will be more limited is because it is clear that chinese have serious concerns around more

stringent requirements on industrial policy, more requirements on ip theft and protection, and the imposition of tariffs and the timing of snapback of tariffs all remain significant issues. in the absence of ability to reach agreement, what we are left with is a limited scope agreement that may include a some protections but something that would address the deficit issue the president has been concerned about. shery: we have heard from chinese minister, gearing up for a long struggle until 2049 or so. lanhee chen, thank you so much for joining us. hoover institution director of domestic policy studies, lanhee chen in new york with us. let's get a check of the business flash headlines. it may be second time lucky for them as they price shares of its asian unit on monday. budweiser hopes to raise $4.8 billion in the share sale, as the parent tries to reduce the debt burden of $100 billion. the company has 11 -- $11.5

billion of debt due in the next two years compared to $2.5 billion at heineken. paul: the issues are piling about office sharing wework. bloomberg has told members of the board that they want to stand down. after the delay of an anticipated ipo. offices tried -- tied it to top investors softbank wants an out. the board has reported to be meeting later on monday. wework's evaluation has slumped from $47 billion in january 2 less and $15 billion today. shery: aramco oil facilities hit by drones last week may take longer than thought and cause -- cost hundreds of millions of dollars. the output was quickly returned to normal. dow jones is reporting that aramco fears full production could be many months away, and is offering to pay contractors extra to speed up the repair work. coming up next, more violence in hong kong in the 16th straight weekend of protests.

the latest on the unrest next. this is bloomberg. ♪

asia.is is daybreak we start with president trump and climate change. he is giving this week's climate change debate at the united nations but insists his action is not meant as a snub. flying to events in texas and .hio, he said he is very busy the debate features youth leaders like greta finberg -- thunberg calling on leaders to do more to stop climate change. bridges in data privacy have surged this year. said penalties have

risen to $937 million u.s. with most of it handed out to two entities in singapore, involved in a massive breach last year. 29 have been targeted compared with 28 in 2018. in australia the company is losing its appeal for chinese tourists. -- country is losing its appeal for chinese tourists. the number of china visitors through july,cent matching the we just -- the weakest in nine years. students doing south also slowed rapidly. slowedg south also rapidly. the rugby world cup is underway in japan with the host and defending champions both recording wins. we have japan beating russia in the tournament's opening match

while new zealand overcame south africa saturday. then there is winners australia which beat fiji while england defeated tonga. other games, ireland beat scotland and france hanging on to defeat argentina. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. ♪ paul: thank you. hong kong police clashed with protesters in various parts of the city in the 16th week of pro-democracy demonstrations. sophie kamaruddin is on the ground. there is no let up as we approach the october 1 anniversary of the people's republic of china. protesters are unrelenting although they are fewer in number compared to past

weekend with activity focused in the new territory across the victoria harbor behind me. thousands took part in saturday's protest that dissolved into the use of tear gas and petrol bombs. hundreds rallied sunday at a shopping mall with it perceived --be pro-china targeted for a shopping center, one of the city's big developers. shopping centers could close early, adding to the pressure. tourist arrivals continue to decline and shop vacancies are on the rise. to deal with this outlook, one of the landlords have --porarily cut the upscale protesters will have little economic concerns as they are pushing for democratic reforms. what does this mean for upcoming community dialogues?

frustration was government in action, casting doubt with progress that could be made at the upcoming community government dialogues. the first of three to be held this thursday and a little concession is seen from the government when it comes to protesters remaining demands. also up for discussion is long-standing issues on housing of portability and the rise in income. all of the factors allow the -- along with political unrest, that is driving the increase we are seeing in businesses seeking opportunities. if you flip through the local papers you will see ads for property seminars overseas including for places like malaysia and at the trading status, it may also be at risk with the u.s. congress pushing for the hong kong human rights and democracy -- that could be put to a vote in the foreign affairs committee this wednesday. a lot of pressure on carrie lam

and her government going in to the upcoming milestones as well as the october 1 national date. coming up next, the world's largest brewer is set to price its much anticipated $4.8 billion asia ipo today with signs pointing to another move in -- we will see how that takes off a packed week. this is bloomberg. ♪ ♪

asia. this is daybreak i am shery ahn. paul: i am paul allen. let's get a quick check of his newsflash headlines. deutsche bank is said to be close to a deal to try to sell its prime brokerage business to bnp paribas and an announcement could come monday. terms have not been made clear. it is not known how many assets will ultimately make the switch.

sources tell us a final agreement is yet to be made and a deal could fall apart. deutsche's and bnp have declined to comment. isry: china's tesla outpacing its american rival in its ability to lose money. they took tesla -- it took tesla this cans to lose -- be has done it in four years. the shanghai-based carmaker reports tuesday and is expected to have lost another $300 million in the first quarter. they have plunged 74% since the market value hit $12 billion last year. china's tech stock board is no longer the talk of the town. share trading activity has slowed since july's launch and the pace of ipo's has been lackluster. a looking at the stocks that have listed so far, they ended friday 30% below close and --

recent closing highs. the market is down 2% from a high on august 15. of's asian ab inbev snit will price -- ab inbev' asian unit will price in -- joins us with more. what are you looking ahead of the ipo? selina: i want to look at charts to outline the issues ab inbev is facing. this is the debt level. it shows why it needs to raise money to rationalize the debt. in 2016 cap are -- after the purchase of sabmiller, its debt doubled and now it is $100 billion. ab inbev is hoping to use proceeds to pay down the debt as well as fund the asia expansion.

if it goes successfully will not make a huge dent in the debt level. another chart shows on top of this debt challenge ahead of the ipo it is facing a tough environment for newly minted public companies. this chart shows every initial public offering raised $1 billion in 2019 has underperformed since the end of august. uber, lyft, trade web, she week, wy.y -- che the ipo's have been underperforming. these stocks have fallen 3.4% while smaller debuts jumped by an average of 19%. thank you very much. joining us now is morningstar director of equity research for the -- i want to get your opinion of

was explaining. if this goes successfully ab inbev is still's kerry -- is still carrying a huge amount of debt. it has been an issue for investors that what you have to do now is -- but what you have ebidanow is get even. -- going again. they need to reduce the financial risk. quitethe timing is interesting. the files are coming earlier than expected after it was pulled. are you surprised ab inbev is trying again so soon? phillip: some of the valuation we have seen, that they are

trying to achieve with this ipo and the multiple when they sold the australian asset to the saudi a couple of months ago are pretty attractive and they are trying to exploit that and trying to get this ipo down ebie hyde team multiples of da are achieved. shery: given they offload their assets, whyccess -- are investors thinking they will not price in the higher range of what they want? they say it will be in the lower range of its ipo. phillip: i think that is probably as i said to do with valuation. i don't think pricing at these levels, this much upside [indiscernible]

i think investors are probably and saying ats this late stage in the cycle there are many exogenous risks facing these companies now. perhaps now is not the time to be paying a rich multiple. shery: especially that china seems to account for most of its growth driver. to --es ab inbev compared compare to heineken or others in asia where there could be growth? phillip: it is under indexed in southeast asian markets, growing 5% a year, places like myanmar, thailand. these are markets with a very long-term growth opportunity done, immunization to be the big brands don't really play

there as much. multi-growth opportunity, and maybe i -- and abi is under indexed compared to hannah can. -- heineken. paul: how do you expect ab inbev of two perform when -- ab inbev to perform when trading does get underway? be much moreill defensive i think, if in fact we pointose to an inflection in the global economy. i think we can expect companies . to maybe i -- like a.b.i outperform. i don't think there is a great upside in the long-term value investments. from the function that is being indicated.

shery: so given how fast they have come to refile this, there has been speculation this could m&a motive behind it. if that is the case, what would be a good acquisition for them? phillip: i think that is probably the case. there is to acquire and cut costs and rollout the global brands into new markets. that would make a lot of sense in asia. that is the thinking behind this. and the target would be fairly and marketsbrands in southeast asia. is this a good time to be

doing an ipo? when ab inbev was going to list, the risk had not kicked off. now hong kong is in a dark place. is this ideal timing? has --: i am not sure it how much impact to be honest. hong kong is a market that makes sense. i think the risk and concern is more about the global macro, what happens. , thank youp gorham for joining us. s asia share sale will kick off a week of action with a string of companies going to debut shares. shanghai biotech will make its way after raising $410 million last week.

it will be a test of investor sentiment as the first hong kong listing since july. u.s. fitness and balaton -- balaton -- shery: the elephant in the room is wework. some directors seeking to push adam newman out. masayoshi son favors his removal. let's bring in ed hammond. what do we know at this point and if in fact adam newman is removed as ceo, would this help? would.hink it he has become toxic to the investment community in being a figurehead for much that is wrong with this company. they have to ipo if they are going to keep the $6 billion

credit line. the pressure is on to do fairly quick. doesng rid of adam newman ease several things but it will be interesting if investors treat this company as having prospects at all. shery: we were talking about governance changes within we work. would that have helped and will we see those efforts play out even if adam newman is removed? ed: within reason, yes. the governance changes are not something you can just do unilaterally. there needs to be approval from the board and the shareholders. have a lot of shares. take companies coming to market, they have dual class shares. it is not as easy as saying the right thing is to remove him and make government changes. the need to get approval from him and he will have backers that remain on the board.

coup, it is not in anyone's interest. ed: this company is such a mess already it is hard to see it getting worse. they need to make changes and show the market, softbank particularly, the biggest investor, they are seeing their their ownors -- reputation suffer. they need to be leading a charge. somethingson, he did not dissimilar when they were investing in uber and travis kalanick was removed. this is aggressive. it is more drastic how much the value of this company has decreased in the past week or so. how critical is it for softbank to get resolution and to what degree has its reputation been tarnished? ed: it is critical to get a

resolution and this company to market in a sort of reasonable and timely way. the evaluation i think will be less of an issue because softbank needs to realize its valuation. in terms of the reputational damage, a lot has been done. we have seen saudi arabia's sovereign wealth fund to do something slightly different. they will convert funds into the second vision fund. other investors are looking at this and thinking the halo softbank has had is starting to fade. shery: how much of this is to do with co-working faces? weighing in on how these could be threats to financial stability. ed: it is a great question. more generally it has to do with credulity in the investment

space. everything gets treated as a tech company. --ple treat it as something it is not this sort of tech connoisseur. it is in the real estate market. it is a volatile space. the valuations it was being pitched at have nothing to do with real estate but technology. reporteromberg still ed hammond joining us on the wework story. forget tv . you can watch us live -- don't forget tv . you can watch us live and dive into securities and functions we talk about. you can become part of the conversation sending us messages during shows. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

shery: breaking news out of south korea, export numbers for the first 20 days of september coming in, a drop of 22% year on year when it comes to chip exports, a follow 40%. endboards down in the first 20 days, down 11% year on year. this is on the back of nine consecutive months of export drops in south korea. this number was not as significant for the month of august with a drop of 13% but for the first 20 days of september, export plunge of 22% year on year. we are looking forward to september numbers as we continue to see this fallout from the u.s. trade war and not to mention the japan trade spat

south korea has going on. we have heard from officials japan is delaying the shipment of hydrogen fluoride used in the production of memory chips. look at the south korean won. we are seeing strength in the past two days against the u.s. dollar after the first weekly drop in three weeks for the south korean won ahead of data, which as you can see, drop of 22% year on year for september. korea futures dropping .3%, paul. paul: iran is refusing to all out war as the u.s. sends additional aid to saudi arabia and odds of a face-to-face summit in new york with her -- new york wither. this man is not optimistic about avoiding conflict but added iran will not be the one to start a fight. the state department the unitedn said

states is in favor of a peaceful diplomatic solution. >> we are pushing a diplomatic solution, peaceful solution. you will see at the u.n. general assembly secretary of pompeo -- secretary pompeo continuing to try to stop and prevent iran from continuing to terrorize the region. aramco has allowed bloomberg and other media to look at its facilities. use of community -- yousef gamal el-din has a look. yousef: a swarm of drones dissented here at four: a.m. -- 4:30 a.m. local time. this is the crude oil processing facility, the largest in the world and a jewel in the crown of infrastructure. as going from

boston to new york from riyadh. columns, thezation ones at the end of this have survived. devastated.e is there is a lot of debates where the attack was launched from. iran denies having played a role but the u.s. and saudi governments believe it could have been launched from iranian or iraqi soil. outhis have claimed this possibility. this is where crude is pumped out and gone to refineries. several missiles hit here. three of them missed but the damage, very extensive. the attack caused the biggest one-day price hike since the gulf war in 1991. while restoring physical capacity back to 12 million barrels at the end of the year is achievable, the real risk is endangering the country's reputation as a reliable energy

supplier. hour, we willnext break down south korea's trade numbers after exports plunged 20% in the first 20 days of september. this is bloomberg. ♪ this is bloomberg. ♪ here, it all starts with a simple...

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paul: good morning i am paul allen in sydney. asia's major markets are about to open for trade. shery: i am shery ahn in new york. selina: i am selina wang. in beijing. welcome to "daybreak: asia" paul: our top stories this monday, the yuan climbs and the yen falls with signs of progress in the trade talks. china says negotiations have been constructive. violence returns to the streets of hong kong, demonstrators

clashing with police for a 16th consecutive weekend. tesla leads its american rival in one area. we will look at nio's remarkable ability to lose money. we got trade numbers out of south korea, huge slump in exports for the first 20 days of september. that's right we saw 22% fall in exports and 11% fall imports, not a pre-picture for south korea pair on top of that they're dealing with that trade spat with japan. if you look at the market reaction here we are seeing the kospi, pressure on the kospi down more than .1%. also pressure on the one weakening against the u.s. dollar, trading at 1192.70. the back ofng on nine-month of consecutive export drop. muted reaction from investors,

some of this likely expected. let's get some analysis with our chief asia economics correspondent and mliv strategist. your initial reaction, those numbers beyond awful. there's no other way to put them. how did we get to this point? >> indeed on face value these numbers to confirm the trade numbers are deepening as we headed to the end of the air. remember south korea this numbers are followed around the world as a trendsetter for what the rest of global trade is headed. these and occasions are pretty negative. it is not just the export slump which is sizable, but also the imports. it speaks to two things, obviously south korea's domestic economy slowing down, consumption in a slump. and it indicates weaker demand on the production and many factoring side, also on the

export side. with the u.s. china trade were slowing global economy and more recently now japan and south korea spat. altogether is a pretty negative outlook for south korea's trade story. shery: it was interesting because around the world we have seen semiconductor stocks gain ground. we continue to talk about this downturn, the cycle downturn bottoming out. yet there are chip exports of south korea, looking pretty bleak. that's right today's data is not encouraging. for those who have a buildup in positions in this, connector industry. by cepelova terry data affected -- i see preliminary data affected by things getting holidays. the last 10 days we will see how the data will come. the korean tech knology sector has suffered a long downward eps

revision for more than one year. and now analyst have started to upgrade the profit outlook. there are signs of that in dram and memory or chip prices. a lot of analysts in the forecast now, the demand prices forecast to turn higher as early as next quarter. the unit price is showing signs of stabilization. still that needs to be watched closely. the headwinds as seen last weekend in the spat between china and the u.s., the actual out come over trade talks in october will play a key role in determining the future, the next course of the semi connector industry. >> and the chip industry has

been a big part of the export slump in asia. in fact we have had some commentary from people such as bank of japan governor koroda same we might see that bottoming the i.t. slump. these numbers and south korea will not encourage that kind of news per the bigger picture remains that south korea where exports make up half its gdp, is not just facing technology-related issues or its own slowing economy, but big external factors well outside of their control. that is why so much will depend on where the trade talks between the u.s. and china go over the coming weeks. if we get a positive read on that, you will see a big lift on sentiment around the world. that does not happen, we are back to pretty negative story for the asia manufacturers. shery: not a lot of movement now when it comes to korean stocks. falling .4%an won -- of gives the u.s. dollar.

now samsung and sk hynix, regardless of the chip export numbers are facing their own issues with japan. and now potentially restricting the exports of hydrogen fluoride to the country. >> yes. we are not out of the woods. the korean exports very, very disappointing at this moment. thethe korean won and kospi has performed very well in asia's front and center in leading asia higher. september has been a strong month. investors do not want to wade in for the -- to wait for the data turnaround. they're listening to more positive soundbites from the company executives about the three-month outlook, the potential turnaround in the second half. we know that still needs to be watched. the korean won specifically remains the holman to the

movements in the chinese yuan and the dollar strength. so that is more vulnerable to other currencies movement. but the kospi has shown its strong resilience, and it has rebalance -- rebounded temper sent from august low. -- rebounded 10% from the august loper now faces technical resistance as the invest kospi approaches the 200 and moving average and the rsi seeking the index has been overbought. phase some they will correction. . but i think there will be more upside potential, depending on how the trade talks pan out in october. shery: what happened with south korea, because a few days ago, we were talking about the employment rate dropping to three .1% in august, from 4% the previous month. that record unemployment

numbers, they were starting to look better, we had industrial production month on month rebounding. there was some optimism that perhaps all of the government stimulus was starting to work. so what is the saying about the potential of external factors eating into everything the government is doing? i think that is exactly the issue. it is about the external story. we had a similar message from the bank japan last week. they were saying they're getting more downbeat on their inflation because of what is happening on the global story. remember south korea has cut its interest rates to historic lows, the feeling that the center bank cannot do much more. the government is rolling out extra spending. they have a pretty big budget in the works. there's only so much that can do for domestic demand when there facing that confluence of issues regionally, now tensions with japan is up to both countries to sort out. then they have the u.s. china trade war looming. and of course the slowing world economy pretty saw the oecd cut

their own forecast last week. so world demand is not there there something of a slump demand for new smartphones per all these issues on which south korean policymakers can only do so much on the ground. as a country where half its growth comes from experts, they will be hoping the china u.s. can at least agree on some kind of extended truce as we head into the end of the air. if not, it is going to be another story of much more downward pressure on south korea's manufacturing economy is headed to 2020. into 2020.ad paul: thanks much for joining us. you can follow more on these stories and all the day's trading in markets live blog, you can find that on the bloomberg at more to come on "daybreak: asia". this is bloomberg. mliv you can get commentary and analysis from lou burks expert editors. -- from bluebird expert editors.

trading in australia and new zealand is also underway. paul, we are seeing green across the board per we may be seeing positive sentiment after we sought reversal in some of those trade fears as we heard those trips from chinese delegates to the u.s. were canceled not because of trade talks, that talks a been constructive so far. take a look here green across the board, the asx 200 up .5% per we are seeing the aussie dollar little changed and the new zealand dollar a little bit of strength around the .6266 level. we are seeing positivity despite a slide in australia's flash manufacturing purchasing index that fell below 50 for the first time based on data going back to 26 team. but it was not all negative frost china -- going back to 2016. for us truly with other pmi services and composites gain. this may add a case for the reserve bank to cut interest rates. shery: thank you for that.

let's get the first word news with su keenan. >> we start with hong kong. police and protesters clashed again sunday with violence in several parts of the city as unrest continued for a six teeth week -- 16th weekend. demonstrations later erupted with a subway station vandalized. hong kong is bracing for a surge protest around next week's 70th anniversary of the founding of the people's republic of china. ton meanwhile is refusing rule out war in the middle east, as the u.s. sends additional military aid to saudi arabia. dropgn minister mohammed sharif told us he is not optimistic about avoiding conflict but added iran would not be the one to start conflict. presidentthe iranian sonny rouhani are in new york for the u.n. summit. >> i'm not confident that we can

abort a war. i'm confident we will not start one. -- that we can avoid a war. i'm confident we will not start one. i'm confident that whoever starts when will not be the one who finishes it. >> meanwhile reports from the gulf say iran released a british tanker seized in a tit-for-tat move that saw an iranian vessel impounded in gibraltar. china's shimbun news says the ship and its crew have been released in what is seen as an attempt to reduce tensions in the gulf. straitker was near thus of hormuz july after running taken was halted as we have to be is authority. global news 24 hours a day and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. still ahead, shanghai star board lost its shine already? will asked why china's newest stock when you seem to have gone quiet. director oft qic rates and inflation from

business and with an outlook on central bank policy. this is bloomberg. ♪

>> i do not want central banks responding to much to markets, and not enough to economies. if you look at the fundamentals of the u.s. economy, even though we are slowing down for obvious reasons having to do with global headwinds and the trade war, we do not need a big stimulus right now. so i am not a fan of this. >> monetary policy is already pretty accommodative so we are falling -- talking about a federal funds rate below are inflation target of 2% now. that is pretty unusual. that is normally a circumstance when we are really concerned about the economy. laureate michael spence and boston fed president eric rosengren giving their views on central bank policy. with fed officials divided over

the u.s. economy, their comments this week will be scrutinized closely. in australia, the serve bank governor speaks on tuesday evening -- the reserve bank governor speaks tuesday evening as market expectations for the next rate cut in australia. let's put the central bank watch in context there next guest, qic is one of australia's biggest money managers. beverly morris qic director of rates and inflation dundas from brisbane. can your members such a diverse range of use? -- views. >> yes, last week's rate decision was clearly not unanimous. we had to fed governors who did not want to see that rate cut being delivered last week. on the other end of the spectrum, we had governor bullard who actually voted for a 50 basis point rate reduction. clearly there is a range of views on the committee.

our markets, obviously they do not-they will need to discern through the signals. tokets are used to having listen to hawkish and dovish members expressing their views. markets have gotten quite used to who they need to place more weight on in terms of working out the direction of rates. perhaps for jay powell, in terms of talking to the ,verage householder in the u.s. those conflicting views getting put out there perhaps make his comedic asian job more difficult. -- is communication job or dickel. communication task more difficult. paul: rates already pretty low. >> markets believe so and you look at risky assets. we would argue that risky assets have done well this year, exactly the cause of central-bank support that they are seeing now, not just in the u.s. but globally. financial markets would see a

that support is doing something, in the fed of all the central banks globally, that they certainly have as much ammunition as anyone out there. we would say the fed is having enough ammunition to continue to support growth should they require it. shery: yet qic continues to buy treasuries. is that because of the next dictation that the growth will continue to slow down around the world? -- because of an expectation that growth will slow around the world? >> yes, you're right. at qic we have been this year gradually increasing our probability of a recession globally, over the next 12 to 18 months. we have become more cautious. global glow threats are rising. we believe. .- level in terms of our portfolio we are be more cautious. is this also in the

expectation that we will see divergence stories, with growth in the u.s. as opposed to other parts of the world? how has this scenario playing into your strategy? yes, you are right that is certainly what we have seen this year so far. we entered the year in europe has clearly been week for a while. europe is clearly already weak and potentially argued late even in recession as we speak. ,hina also has been slowing these are not new news stories per the u.s. has been a bright spot in the global growth picture. that has been true for most of the year. over the last few months, we have seen that story change. and the global trade wars that is clearly having an impact now on the u.s. manufacturing sector. we are starting to see capital expenditure forward-looking surveys tightening up as well. there some weakness start

starting to come through in some pockets of the u.s.. what is been missing so far is any sign of real weakening in the large majority of the household sector, in the consumer spending story. still looks quite solid. as you said, there has been this diverted picture globally between the rest of the world in particular through asia looking quite weak and the u.s. doing ok . as we go through the year, we think that the u.s. is going to find it more difficult to sustain that picture. while the rest of the world is still weak. we are looking for convergence here, where the u.s. probably cannot hold out with the strong numbers for much longer. yourly, we like to get view on australia. paul: we have the rba governor speaking tonight and decision it sweet pea the consensus seems to be for rates to grow lower. when does a serious conversation about unconventional policy start?

>> i would say in markets it has already started. you're right, the market is now pretty much expecting another rate cut from the rba next week, it is just over 80%. it is unusual for the rba is the central bank to want to surprise markets. so if the rba is uncomfortable with that consensus expectation heading into next week, we're going to find out about that tomorrow night, as you mentioned with the rba governor's speech. policy, yes as i said, the market is clearly already starting to speculate about what qe and australia would look like, and when it is going to be delivered. there's no question that the rba has already been having internal discussions about this. it is a matter of time before it becomes part of the normal policy toolkit for australia as it has for other central banks for a while. right, thank you for

joining us. the central bank decisions role on asia. think of thailand may mirror the federal the cut wednesday as it looks to keep a lid on the bhat. is likely to stand hold. the philippines flagged a cut that could come as early as this week. for action in the currency markets, selena? selina: despite surging oil prices, negative around the trade tension, we are see currencies holding her head above water. we saw developing nation currencies weaken recently for the first time in three weeks pretty take a look at the volatility, you see it is actually been below the average of the volatility of the past year. that volatility around 8.2%. here ismistic outlook partially driven by the fact that some investors believe the

global easing by central banks is going to offset some of that global slowdown. seeing volatility lower than expected. plenty more ahead on daybreak asia. this is bloomberg.

shery: you are watching "daybreak: asia" president trump has as lighted attacks on democratic rival joe biden. the president is facing more questions about his phone call with the leader of ukraine, during which lighting was allegedly discussed. senior international editor jody schneider joins us from hong kong. what else do we know about this july 25 phone call? after earlier president trump denied this allegations of a whistleblower that he had anything to do, or had not said former vice president or his son hunter, now says well, he might have

mentioned them. >> is not want to say that he did, but he might have. he would have been with his -- within his rights to do so within that july 20 phone call. the whistleblower has been alleging that, and this is also according to people familiar with that call, that president trump in that call asked the ukrainian later to investigate hunter biden, joe biden son, who had been on the board of one of the largest gas companies in the ukraine. president trump has also been making a lot of comments about corruption in ukraine. and also mentioning, as he does so, vice president biden, former vice president biden's name and hunter biden's name. so we have a bit of a grain game going on here. the question is -- a ukraine game. the question is work at this lead -- is where could this lead and look could this mean for the president and the 2020 campaign. paul: the president said he

would consider releasing a partial transcript of the call. does he seem likely to do this, and what are the advantages and does the bandages of doing so as a campaign start gearing up? -- advantages and this advantage is of doing so. >> he said he would consider releasing a partial transcript. he said he does not really like the idea overall because presidents and foreign leaders should be free to have candid confidential discussions. so we are unclear whether he will release it, but he said he would consider a partial transcript bring he also said he would allow, or he would not block his attorney, rudy giuliani, from testifying before the house. we will see how far this goes in terms of those calls for impeachment proceedings to begin in the house, which is where such things would begin. this may cause some house democrats to want to turn up the heat on those possible impeachment proceedings. right bloomberg senior

international editor jody schneider. thank you. up next, protest raised on in hong kong with more clashes over the weekend, will have the latest from the city next. this is bloomberg. ♪ devices are like doorways

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su: this is daybreak asia. i'm su keenan with the first word headlines. president trump is skipping this week's china climate change debate at the united nations. flying to events in texas and ohio, trump says he is busy but is being briefed on apart matters. the debate features used leaders such as greta thunberg who are calling on governments and world leaders to do more to rest, change. reports from singapore say fines for breaches of data privacy have surged this year, topping the total of the previous three years combined. year rose to 937

million dollars with most handed out to two entities, integrated health and sing health tour involved in a massive breach last year. 29 entities have been targeted compared with 28 in 2018. australia seems to be losing its appeal for chinese tourists. this is the trade war and the mainland economy keep travelers back at home. the number of visitors from china rose 1% in the 12 months through july. that matches the weakest growth rate in nine years. at the same time, growth in the number of students heading south also slowed rapidly. yan zi says the trade war's causing -- anz says the trade war's causing uncertainty. the rugby world cup is underway in japan the host and offending champions of both recorded wins per japan beat russia in the tournament's opening match, new zealand overcame south africa on saturday. two-time winners australia beat

champion england defeated tonga sunday. other games saw ireland beat scotland and france barely hang on to defeat argentina. global news 24 hours a day and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. for a much let's get a check on markets with selina wang in beijing. if you take a look at stocks, the asx 200 is leading we saw mixedafter economic picture we saw the manufacturing pmi below 50. but we did see the pmi services and composite index both gain. the real estate and energy sectors are leading the asx 200 higher now on its third consecutive day of gains. are seeing the biggest loser as the south korean kospi, though does little changed in

comparison to the dramatic fall we saw and export and import data export falling 22% year-over-year, and japanese markets are closed today on holiday. take a look at the won. there is pressure there on the won after the week trade data. also seeing the yen trade slightly weaker as well. switching boards, i want to take a look at a couple of stocks i'm watching. looking at seven west media as one of the stocks i'm watching because they are launching a restructuring program that is going to see job cuts, the are thatview divisions stock is down more than six he percent over the past year. we are not seeing that board-there goes. also looking at spark new zealand, which is trying to appease rugby obsessed new zealanders that were furious after technical delays during the streaming of the world cup. they're offering some extra freebies to their customers to try to appease them. that stock is up about 12% of the past year. that. thank you for

let's turn to hong kong where police again clashed with protesters in parts of the city the 16th week of pro-democracy demonstrations. still to come, sophie kamaruddin is in hong kong. the 70th as we near anniversary of china. sophie: hong kong continues to endure its own version of a tale of two cities. we saw those classes between protesters and police over the weekend, primarily in kowloon and the new territories. police used tear gas and rubber bullets. ab invev is looking to price its asian ipo this monday, set to raise $4.8 billion potential eight. as its backdrop we are still seeing a souring outlook that a seen retail sales take a hit. sunday we saw shops closed around the areas impacted by the ongoing demonstrations, with one shopping center particular being targeted, newtown plaza.

given that type of business as long with other seem to be more pro-beijing. this adds to pressure on the city's retail sector where we are seeing tourism numbers areinue to slide shopping on the rise. we heard from landlords saying they will temporarily reduce ,ent at their upscale mall specific place. economic concerns are not in focus for protesters who had the six teeth weekend of protest and are gearing up for morales temer 28, the fifth anniversary of the start of the umbrella movement and counting down to october 1 at the national day for china. what are the implications here for the upcoming community dialogues organized by the government? carrie lam's administration is attempting an outreach to citizens, the first of three community dialogues is set to take place thursday. up to 200 attendees are to participate. there is doubt as to how much

progress can be made, as the government says it will not give in-not give concessions to the protesters' demands after withdrawing the x tradition built. we also have long-standing issues as well around housing affordability, the rising income gap, all of these together really creating uncertainty, not only for residents but also businesses. towe see these parties look opportunities elsewhere. take a look at the local newspapers, you see ads for property seminars for overseas markets such as singapore and malaysia. and increasing international pressure as well. for the hong kong government on wednesday. the u.s. congress may put to a vote at the house foreign affairs committee, the hong kong human rights and democracy act, -could curbuld occur hong kong special trading status. a lot of pressure on carrie lam and the government is these protesters continue. paul: sophie kamaruddin in hong

kong. thanks for joining us. coming up next, we're marking the 70th anniversary of the founding of the people's republic of china this week. of chinacharter had strategy becky liu discusses the issue china spacing for the trade war. the next hour are economic than economist tells how economic emphasis stress from growth to productivity. this is bloomberg.

paul: this is "daybreak: asia" i am paul allen in sydney. shery: i am shery ahn in new york. october 1 sees china marking the 70th anniversary of the people's republic. but a persistent economic slowdown and rising tensions with the u.s., risk souring the mood. our next guest says china's town this require even faster reforms. becky liu is head of china strategy, standard chartered bank (hk)

at standard chartered bank (hk) happy with us. we can talk reform we want. the truth is reforms take a toll on the economy. chinese policymakers, do they have room to think about long-term reforms when they are suchg immediate challenges as the trade war and issues with hong kong and its slowing economy echo - ? >> the two biggest fund metals of china is its aging population as well as already high net pro-leverage ratio. the aging population calls for response to increase the productivity so that has to be done via a more efficient allocation of resources. moving from the low and manufacturing to high manufacturing. alreadyther hand, the high leverage ratio is limiting the room for the chinese authorities to be able to stimulate the economy and slow down the pace of slower economic

growth. policymakers now performing a delicate downs. -- a delicate dance. how would you assess what they have done so far? can you grade it as if it were a report card? how are they doing? >> we just had a trip to beijing last week. so from all of our meetings with all sorts of regulators, the tone is quite hawkish. our feeling is that china is a balanceed to strike between supporting economic growth, together with pushing forward necessary reforms. but china is facing this time is not only the domestic structural problems, but also a potentially relatively long term conflict with the u.s.. this kind of situation is not something they can grow out via short-term similar package. as such, the authorities have been using very measured way in terms of short-term support to

the economy to prevent some excessive slowdown of the economy in the short term. but the key priority in our view -theins to be the regulatory structural reforms. in short, they are still having quite a number of tools to support the economy if they want to come but they are externally reluctant to use those tools very easily. and they would like to wait until the most necessary moment to roll out or stim list measures. -- roll out more stimulus measures. paul: in terms of stimulus measures in a practical sense, we did see the opi reduced by five basis points friday. that is not seem like very much to move the needle for markets. is more easy going to be needed, and what would that look like? >> we believe so. the lpr will likely continue to grind lower by about five basis points each month.

without an, left rate cut. we do expect some, left rate cut in the next year -- some mlf rate cut. the timing of the cut is likely to come lower than people sex dictation. aside from interest rate cut, we [-] cutexpecting more in the fourth quarter. china would like to support the economy but the most needed cut to support the economy is to lower the cost of loan rate in the economy. on the other hand, they are so careful about every leveraging situation, every heating of the property sector, and therefore would be reluctant to have another round of intervention liquidity conditions or cuts anytimepoar soon. paul: you mentioned the need for productivity, i want to bring up the blue bar chart. it shows in the 1990's and 2000 it was government investment,

you see the green bar some of the key growth drivers. now if you look at the blue segment of that, it is more consumption. how important is it to continue to grow that consumption sector? how will they achieve that echo -- how will they achieve that? >> the consumption sector is key. specially when the country faces aging population. and china has more people moving from the rural area to the urban area, and the urbanization ratio remains low. under this backdrop, it is almost a natural process that consumption is going to play a larger part of the economy. at the same time, we also noted the government is trying to further support the manufacturing sector. on the other hand, if we purely only look at investment, especially every single out infrastructure investment this year, despite all these measures proactive including wider budget deficit

and increase of project bond issuance by local governments and frontloading of local government bonds, the infrastructure has stayed very .ow by historical standards because of the continued cut in the shadow banking, includes borrowing, the funding availability of the chinese government is actually not as strong as the prior few years. that is why we indeed see the investment segment, slowing quite a bit further this year. according to that chart takeshowed earlier, if you a look at net exports and their contribution to gdp growth, they are taking less proportion. does that mean the ongoing u.s. china trade war perhaps will not have such long-term impact on the chinese economy? >> it is interesting to see net

exports contrition to gdp in the first half of this year was quite high at 1.3%. chineseulted from imports. this is the medium to long-term, it is likely that china's exports to the u.s. would face additional pressure. but we have been seeing since the start of this year, is that it has been a rotation going on, while china's exports to the u.s. have been declining by 9% year-to-date, china's exports to the rest of the world including e.u., africa, asean, very broad-based market, has been rising. so net-net so far this year, china was able to offset its losses to the u.s. by other markets. on the back of the recent policy in terms of moving manufacturing to the higher end of the spectrum, it is actually likely that china the next few years at least that exports would remain

competitive. though we are going to face a relatively difficult rotation, given the higher tariffs imposed by the u.s.. in 30 seconds, what do you see the biggest challenge for china in the coming decade? >> in the coming decade, it would go back to the original biggest fundamentals, the aging population. china's working age population has already peaked in 2012, and has been declining every year since. it means there's no way for china to continue the old way of driving growth. you do not have enough people. on the other hand, if you look at the number of college graduates in china, it is now around 8 million every year. very soon china will also have the world's largest college-educated labor force. is one, thephic others the macro leverage ratio which would limit how much the government would be able to do

to support the economy in the near term. paul: all right standard strategy, takeof your joining us. coming up, what is wrong with china's new tech stock venue, we take a look at the starboy. this is bloomberg. -- star board. this is bloomberg.

shery: this is daybreak asia. i'm shery ahn in new york.

paul: i am paul allen in sydney. it took tesla 15 years to rack up losses but the company known as the tesla china has managed and four. nio'sre we expecting from second quarter earnings this week. >> they really push it right to the end in terms of earnings season, which is typically not a good sign. we are expecting more losses from the company, more than equivalent yuan, to three and or $70 million in the second quarter of losses. that over a five-year. $370,000,000 for the quarter and 5 billion overall. it stocked has tanked, down more

than 70%. shery: how much is this to do with their unique problems at nio, and the overall ev market in china? >> i think is accommodation both. money,s spent a lot of targeting the high end ev market which which initiative -- traditionally be the domain of tesla, which is coming into china and providing another's threat next year to nio. you have a very competitive ev market overall here china almost 500 ev startups at last count, and not all can survive. particular in an environment we have had subsidies coming off. things generally becoming more competitive as the auto market matures. shery: thank you for the latest on a neo- -- nio. china's bonded tech stock board

is no limit the talk of the town. conversations have slowed. and the pace of ipo's have been lackluster. if you take a look at this gtv chart you can see that the daily value of the stocks traded on the start market has waned since the beginning of trading in july and wire investors losing interest? -- why are investors losing interest? herethink the main thing is that 25 stocks started trading on july 22. only four have listed on the board since then. that is like for ipos in the past two months. for investors in china, they initially expected around 100 stocks by the end of the year. that is looking far too ambitious now. there's a sense that the pace of listing has been a lot slower than expected.

also a member we have not really had an exciting industry leader company yet. the star board is mainly made up of lesser-known companies rate there's kind of a sense of disappointment in the makeup of the star board. it is only a few months old. is it too early to pass judgment on whether it is a success or failure yet? but, and be early, also the timing of it was perhaps-because the market started trading when all of the were kindland markets of the sentiment was not great. then it started improving. that meant a lot of money moved out of the star board and into china's more established markets. chinex the china -- reachable market and the shenzhen all rebounding. shore,ot huge gain on

but it is enough to pull money and liquidity out of that star board. what we need to see is, we have four companies that priced their ipo's last week. without -- they priced ipo valuations that were higher than their listed we need to see the pace of these ipo's pickup. that is key for investors. there's a well-known company that lists on shore and picks the star board rather than the shanghai, mainboard on shenzhen, that would be another good sign for investors. trading activity has slowed, and has picked up elsewhere. the first day of star or it was 2% of turnover was focused on that market. that is huge -- it was 13% of turnover focused on that market. that is huge. and there's not a lot of value there yet. too early to tell.

but interest has definitely waned. said, the as you reason there was such high interest was because it was not just about trading, and it just about any stock exchange. it was because it was a testing ground, right? for regulators, regulations what does this mean for the future of such initiatives around china, quickly if you can. >> it has gone well. volatility was expectedly high in the first week but it has been i would say pretty successful experiment for china. we will see if these measures get rolled out to the main exchanges. so far, so good. all the tests they have done have gone well. the launch was quite calm, i would say. thanks so much. let's get a quick check of the latest business flash headlines.

maybe second time lucky for viewer ab invev is it prices is asian unit on monday. it helps to raise $4.8 billion in the share sale as parents abi tries to reduce the debt burden of one hunter billion dollars the company has 11 and a half billion dollars of debt due in the next two years compared to $2.5 billion rival heineken. shery: the issues are piling up with the office start up we work. some want the ceo to stand down after the delay of a much it is baited ipo. delayed -- after a much ipo. some board members are said to want about an the board is reported to be meeting in. the valuation has slumped from $47 billion in january 2 less than $15 million today. repair work at to aramco oil facilities hit by drone strikes last week may take longer than thought and cost

hundreds of millions of dollars despite initial optimism that output would quickly return to normal. dow jones and reporting aramco fears for production could be months away. it is already offering to pay contractors extra to speed up repair work. to bloombergd over markets asia, let's look at how we are doing now. we have the kospi insole higher after disappoint export numbers. here in australia higher by .4% after the first hour of trade. the zeal and higher as well. -- new zealand is higher as well. shery: standby for bloomberg markets and china open. that is next. this is bloomberg. ♪

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>> it is not :00 a.m. -- we are counting down to the open of. trade in hong kong and mainland markets. david: let's get to your top stories beijing says negotiations had been instructive. yvonne: early indicators say exports are plunging this month heading for their worst performance since the financial crisis. down ton is counting the 70th anniversary of the people's republic. we will look at the dramatic

rise