haidi: very good morning. i'm haidi stroud-watts in sydney. we are under an hour away from the market open in japan and south korea. shery: i am shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to daybreak asia. ♪ this: our top stories tuesday -- u.s. stocks fall on renewed trade fears. markets digest new tariffs for brazil and argentina. and warnings on additional duties on china. restraintts back with

from protesters in hong kong. the u.s. navy can no longer visit the city. she race to roll out 5g pit the u.s. against china. we will get telecoms' views on rivalries from huawei. shery: breaking news out of south korea. we have the final third quarter gdp numbers. year on year growth of 2%. that is in line with the advanced estimate. same thing for the quarter on quarter numbers, grown 4.4% which is the same as the advanced estimate. the year on year number is really staying steady at 2% growth for the past two quarters. we have seen a lot of negative sentiment around the korean economy. a contraction in an investment and a slight slowdown in consumption. the korea government has capex spending so government spending has been a kees source of support. pmiave seen manufacturing recovery for south korea. still in contraction, but mixed picture when it comes to those

export numbers as we continued to see double-digit declines for south korean exports. haidi: let's get a quick check of how markets are trading. australia has opened. let's turn to sophie. sophie: we are setting up for a risk off day, giving up the gains that we saw on monday. the aussie dollar just holding on to near a two-week high, while yields are rising ahead of the rba's decision. the central bank assesses the impact of the exchange of rate cuts this year. gauging australian consumer confidence, that picks up modestly before the net exports for the fourth quarter from australia due as well. also on the docket, the number from korea regarding gdp. we will be waiting for reaction later when korean markets open. we will give you a snapshot of the reaction we saw on the offshore yuan to the tariff lines we have had. we saw the australian moved to

the downside, trading about 7.0 4. this red circle indicating when china announces retaliatory tariffs, measures on back of the hong kong bill. the yellow circle indicating, wilbur ross indicated there could be increased tariffs given in this back-and-forth between the u.s. and china around trade. haidi: let's get the first word news now. ritika? we will get you some more of those headlines as soon as we can, but in the meantime, we are going to take a look at our top story. trade being what moved the market. a tweet from president trump has moved to put new tariffs on argentina and brazil, casting a shadow over whether u.s. will also slap fresh tariffs on chinese goods. levees from argentina and brazil, sending u.s. stocks, and

we are expecting asian stocks lower as well. the commerce secretary wilbur ross said new duties will be imposed if the two sides fail to reach an agreement. sec. ross: you have a logical deadline december 15. if nothing happens between now and then, the president has made quite clear he will put the tariffs in, the increased tariffs. haidi: joining us is our senior trade editor sarah mcgregor and david ingles. sarah, i will start with you. it is interesting how quickly things can turn around tweets and announcements because the brazilian and argentinian tariffs, many market participants question whether we are still pretty far off when it comes to a done deal with china. sarah: absolutely. i think the trump administration proves to us time and again that tariffs are the preferred trade tool to back countries into a corner. we studied brazilian and

argentinian tariffs today. wilbur ross running us the december 15 tariffs are coming up in the china deal. we just had an announcement on the french digital tax that the trump administration is proposing tariffs on $2.4 billion worth of french goods in retaliation for that french digital tax. really, a reminder that that hawkish trade policy of the trumpet administration that puts tariffs first is still very much in play. shery: this really plays into the china trade relationship as well, given the brazil and argentina are big suppliers to china that seems to have replaced the u.s. sarah: absolutely. this is an acknowledgment, i think, that china has looked for some of its purchases and things like soybeans from argentina, from brazil. that has been to the detriment of american farmers. they are a big support base of president trump. we are heading into the election in less than a year.

trump really needs their support. i think any show to them that the trump administration is in their corner, it is trying to fight for them and take real actions that may help them get those purchases back up will help them. of course, it is not a great moment then again for the chinese talks because it looks like the trump administration is trying to find any route towards getting around china, to be able to do trade. meantime, the political angle is complicating the growth to getting a trade deal done as well. china's retaliation which we have been bracing for over the last few days since the signing done by president trump to support the hong kong protesters is the same as being a measured reaction? steve: many people say what are china's options other than on the trade front? that is a slippery slope. if you retaliate on the economic and trade front, or what is seen

as a political impasse in hong kong and a political measure by the u.s. congress and then subsequently signed last week by president trump, where could the chinese retaliate? so far, not trade related. they have put sanctions, the ministry of foreign affairs late yesterday on a number of nongovernmental human rights groups based in the u.s., who i might add do not have operations in mainland china already. embassy international says it is a bit of an md threat, unless they start restricting or putting sanctions on representatives or staff of these human rights groups in hong kong or elsewhere. among those human rights groups that are being sanctioned are national endowment for democracy, human rights watch, and freedom house. again, there is no specifics on what kind of sanctions. global times is out -- baystate

media tied to the people's daily, a mouthpiece for the communist party -- global times is reporting they may release an unreliable entity list which could include u.s. companies and also some sort of blacklist on individual sanctions on u.s. individuals. there is rumor that perhaps could include u.s. lawmakers, preventing them from visiting china. shery: all of the issues in hong kong, we were talking about this, we were expecting the retail numbers out of the city to be pretty bad. yeah, that did not disappoint, did it? stephen: it did disappoint, but it did not disappoint of the expectations. the financial secretary alluded to it before the numbers were out yesterday in an address to the legislative council. he said retail sales drop was going to be enormous. we have seen for consecutive months of double-digit decline. not surprising since the violence really started

escalating through the summer, started in june. six months now. it is a record drop. drop. these are the most in record. shops, catering companies, hospitality, airlines, they are all getting hit right now. you.: stephen engle, thank thank you to sarah mcgregor. let's turn to sophie for a check on what is moving in the markets. sophie: falling as much as 3.6%. rejected a $5.9 billion takeover offer. saying the bid is too low. caltex says it is prepared to allow some access, with no certainty that another advised proposal will lead to a deal. caltex's network of

2000 sites that is part of the global expansion. shery: thank you. we have breaking news. we are now hearing that astellas will be acquiring a company for japan'sare, one of biggest farmer firms you buying a u.s. biotech company. $60 per share, that would represent a total equity value of almost $3 billion. astellas acquiring audentes therapeutics for $60 a share. let's get the first word news. ritika? ritika: thanks. more chinese companies have missed bond payments as the threat of widespread defaults rose. the latest values are bonds worth a combined half a billion u.s. dollars and includes university founder group. the accelerating pace of missed payments highlights the rising strain triggered by the trade war and china's worst domestic slowdown in three decades. new ecb chief christine lagarde

has told lawmakers that policies measures will be resolute in restoring euro zone under her watch. she stressed an upcoming review of strategy will be wide-ranging and include the effects of climate change, as well as low-inflation. lagarde will chair her first a lessee meeting on thursday next week. >> euro area growth remains weak, with gross domestic product growing by only .2% porter on quarter in the third quarter of 2019. this weakness has been mainly due to global factors. oil production amongst opec members has fallen head of the strategy meeting this week. angola says output slowed to the lowest for more than a decade after production fell further, having already been squeezed by u.s. sanctions to

its lowest since the 1980's. total opec outlook fell 110,000 barrels a day. 29.7 million a day last month. former president jimmy carter has been taken to the hospital in southern georgia. the treatment of a urinary tract infection. the 95-year-old was admitted over the weekend, adding he feels better and looks forward to going home soon. the president has had an eventful year, including hip replacement surgery and a head wound that needed 14 stitches. he also fractured his pelvis. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ahead, we will be discussing where the trade talks are heading now. ofry: plus, smp says 10%

corporate's and asia have a negative outlook bias. we will have the 2020 outlook ahead. this is bloomberg. ♪

shery: this is daybreak asia. i am shery ahn in new york. haidi: i am haidi stroud-watts. asia stocks were set to fall on tuesday with renewed concerns of global trade, disappointing factory data weighing on sentiments. joining us as a chief executive strategist for apec markets. great to have you with us. really appreciate your time. we have been looking at the trajectory of emerging markets because there was a lot of talk and even the last few weeks of perhaps not as a time we see a proper recovery and a way up fo r e.m. does that now in doubt because we now have this potential china-u.s. trade deal being some time off and now u.s. manufacturing starting to see a

sustained downturn as well? do you see any upside for e. m. while this situation is unresolved? >> we are actually remaining cautious on e.m., to be exact. we think the trade issue with the u.s. and china is in the long-term view that they have irreconcilable differences. even though we were hopeful like everyone else that in the short-term we get a stage one trade deal going, we were very much aware that in the long-term, especially in the run-up to the presidential election, there was going to be increased uncertainty in this front. over the last few days, we have seen that increased uncertainty play out again. continuedis warns the cautious attitude. indeed, but even if we get the phase one deal, do you think there is so much trade fatigue, talking about it, being

disappointed, having things change on the turn of a tweet, that markets will have a pretty tepid response if and when it is actually signed? and, that expectation for something better will be in place in order to get any sort of substantial positive reaction on markets. wouter: that is actually a very good point. as we have clearly seen, this market has been climbing a wall of worry. every time we get a little bit of a setback on trade, the market selloff a little bit but not much. as soon as we got better news, the market rallied on that part of the equation. what we think we will see no is basically the markets starting to move beyond the trade issue and focus more on global growth in general. we have seen the pmi numbers coming out yesterday and today with respect to the still somewhat uncertain or wobbly nature of the global growth picture in the manufacturing sector under some pressure. if you like a ripple effect we

see negative news to china and the euro zone in the trade sensitive regions first. the u.s. came later. now we are seeing the u.s. still in the slump while the rest of the world issuing tentative signs with pmi moving higher. we think that will be the story for the next couple of months as opposed to trade, but of course, only of the trade situation does not deteriorate from current levels. that is a risk still out there we need to monitor. shery: figure point on those pmi numbers, this chart on the bloomberg showing the chinese pmi alongside japan and south korea that seem to be rebounding. i do wonder how long these economies will be able to keep recovering when we are seeing a slowing pace of interest rate cuts as we saw and south korea where they avoided another cut last week. point. that is a good we do need continued monetary policy support. we have think we are in this global easing cycle.

a lot of central banks have gone on pause. we think that won't hold. they will restart easing pretty soon. we saw two more rate cuts, same for the bank of england. we think central banks in asia will follow suit as well with both the rba and the south korean central bank coming along once that interest rate cut cycle restarts. monetary policy is still very much needed to support this global economy and we think it will deliver, but of course because of the current circumstances with the fed going on pause, it will come with a delay that is slightly disappointing. shery: what about other factors such as the semi cycle bottoming out, not to mention the tech cycles of looking more positive? could they give a boost for the taiwanese markets as well? wouter: there is certainly potential there. this is an important point for us -- we do think the growth concerns we have had over the past couple of months have been a little overestimated.

we think growth is by and large instill a pretty good place. nothing to write home about. manufacturing and trade putting downward pressure on global growth but it is not as bad as some people were saying before with a lot of recession risk being priced in. is a littlenk there bit of an overhang from that worry. i think those very sensitive equity markets to the global growth picture with respect to cost has been sort of kept back because of that concern. we are hopeful as the growth picture starts to come back a little bit in 2020 and shows it is resilient and robust at a global level, we will see those equity markets recover a little bit. haidi: as we end up the year, it looks like political concerns loom over the market. you are looking at latin america, the trade war between the u.s. and china. on this visit to asia, i am

wondering when you look at what is going on in china -- hong kong, i'm keen to get your views on how long those capital markets can remain functional and intact, while it continues to be unrest and violence and a standoff in the streets? very tense and, uncertain situation in hong kong right now and that is the way we are looking at it. a source of uncertainty, source of a normal reaction functions from both the protesters as well as the chinese government. although it is very hard for us, as anybody else to take a firm view on what will happen next because it is so volatile and uncertain, we think the uncertainty question is basically just a headwind for economic growth. it is causing foreign direct investments to taper off and it is costing the hong kong economy itself to be hit quite hard with retail numbers. for us, it is a source of uncertainty. we are very focused on the

fallout of that uncertainty on the chinese economy and the hong kong economy in particular. shery: thank you very much for your thoughts. coming up next, cyber monday sales on track for a new high. we will assess the early winners for the holiday weekend next. this is bloomberg. ♪

haidi: this is daybreak: asia. i'm haidi stroud-watts. shery: cyber monday shopping is a spec to set a fresh spending record of more than $9 billion, according to adobe who tracks the numbers. before wall street's opening bell, sales were on track for a 19% increase over last year. su keenan is watching this. we have black friday, that was record sales again for the u.s. su: a lot of that was digital sales on iphones. this is expecting to really put

the cyber monday on first base, so to speak. what we have is data from adobe saying consumers had dropped $473 million, almost half a billion online as of 9:00 a.m., before the starting bell. that is on track for a 19% increase. the golden hour is between 10 p.m. and 2 a.m., but we know cyber monday goes through midnight. about a third of the total numbers, that is how they make their projections. we also know the extreme weather across the u.s. that started over the weekend is further aiding online sales. like about to the store when you can click and drag from home? black friday sales, include among the hottest sellers of "frozen 2" toyas. s. anything with paws patrol.

samsung widescreen tv's are always a big seller. the apple laptop and the echo alexa items. those are among the top sellers. haidi: in terms of what we have seen, a rising trend in holiday shopping. that continues to be bad news for traditional bricks and mortar department stores. su: it is a sad story. macy's appears to be the poster child. let's go to the bloomberg and you will see the trend of department stores, weekly sales have been in a long downtrend. trend thatally a started even before cyber monday was official has really kicked into high gear and that has a lot to do with the transition not only to purchase online but mobile devices that is such a big part of the online purchases. stocko know that macy's has lost about three quarters of its value over the past five

years. we were looking at some of the macy's black friday events which are still well populated, but a lot of analysts are saying macy's has been hurt not just by online strategies but amazon and target which put a lot of money in the online strategy. but by the perks by some of the other retailers like t.j. maxx which offers a lot of shoppers a scavenger hunt approach to discounts and deals. we are hearing a lot of rich people prefer to shop online, as opposed to the less fortunate. not surprised, my nieces and nephews like to go out into the throngs of crowds, not just because they like to find deals but because they cannot afford to buy big christmas present without those deals. shery: i have a busy night tonight. i have lots of shopping to do still. su keenan, thank you. trump up next, president has arrived in london for nato's 70th anniversary summit, and he

may not be the only one questioning the alliance's realistic future. this is bloomberg. ♪

ritika: the first word headlines. senior white house aides as implicated the ball is in china's court when it comes to a trade deal, suggesting tariffs set for next week will only be halted if there is real progress in talks. kellyanne conway said it is china's choice for a deal to be struck, while wilbur ross said new duties be imposed at the two sides fail to reach an agreement soon. sec. ross: you have a logical deadline december 15. if nothing happens between now and then, the president has made quite clear he will put the tariffs in, the increased tariffs. ritika: china has responded to

president trump signing a bill supporting hong kong but avoided dragging trade into the spat. china's foreign ministry will suspend port visits by the u.s. navy and sanctions are in u.s. democracy groups. it is a code -- low-key response as america already barred american warships from hong kong in august and democracy groups are already prevented from working on the mainland. hong kong retail sales had a record contracted in october as the city has six months of political unrest. value contracted to 24.3% from the year earlier, which forced months of double-digit decline by volume sales falling more than 26%. also a record. the financial secretary says he expects hong kong's budget deficit since the early 2000. global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more

than 120 countries. this is bloomberg. haidi: let's head to hong kong now with sophie for a look at the markets. sophie: i want to start with a snapshot of how yuan traders are positioning around the tariff deadline. we are seeing more caution in the picture with the two week, line in blue, running above the one and three-month measures. let's check in on how the offshore yuan is trading this morning. we are seeing a just hold onto some of the declines we saw overnight, trading above 7.04 for the moment after fluctuating on the trade lines. yen back above 109 but largely holding onto the overnight gains. the aussie dollar trading near a two-week high ahead of the rba's decision. the kiwi dollar hovering around 65, the biggest level we have seen in two weeks given the fiscal spending plan that was indicated by the new deal. let's get a quick check on

aussie shares. with sharesup 1.7% in the red. 3.4%, on itsy lithium price guidance. the average seen at $5,400 in december. aussie bonds continuing to climb. we are seeing -- to fall, rather. we are seeing the 10 year yield back above 1.1%. shery: a celebration for nato is fast becoming a show of -- word leaders gathering in london for the alliance's 70th anniversary amid a public spat between the french president and turkey's president. erdogan heading out after the french leader calling nato brain dead. >> mr. macron, i call on you from turkey and i will say it at the nato summit, you should get checked whether you are brain dead.

kicking turkey out of data or not, i was that up to you? do you have the authority to make a decision? shery: let's bring it joe. we know president trump is not really a fan of nato so this could be a pretty difficult meeting. not the once, he is center of the conflicts heading into the meetings. handve macron on one raising questions about nato's goals and future and how the alliance operates. on the other, the spat between him and erdogan. erdogan has also raised some issues. he wants nato members to accept his actions in syria, which they have so far not been willing to do. puttingo been -- began into operation a russian-made air defense system. something that has rankled all other members of nato, including the u.s.. then, we have president trump

going in there. there are a number of issues that the leaders will have to sort out or at least taper over of what should be a fairly short meeting. trump does gont into the meeting with his own agenda. what is he looking for from the other nato governments in terms of a commitment number? joe: he's before -- before heading over, he announced the u.s. will be cutting its support for nato headquarters and he's continuing to press members to raise their defense spending to 2% of gdp or higher. this has been something that has been ongoing for the u.s. for quite a while. the obama administration first got the european nations to pledge to do this within 10 years. trump wants them to speed it up. he's questioned some of the basis of nato and its relevance to the modern world.

then, he wants also the nato countries to turn their attention to combating china, both economically and areas where there might be military challenges as well. this is a pretty full agenda with him. he's also got to deal with erdogan as well, although he has been fairly sympathetic to the turkish leader. members of congress including members of his own party have been pushing ahead with possibly sanctioning turkey for both the purchase of the russian-made system, as well as for its actions in syria. sobcyzk, our congress editor. we saw earlier images of the president and first lady disembarking in london. the u.s. is heading back on france with proposed tariffs on roughly $2.4 billion on french products. france taxed some

of the biggest american companies with the digital tax. laura davison joins us with more. we knew that the u.s. is preparing a response. how does this stack up in terms of expectations? laura: this really hits a lot of the things trump said he wanted to hit in response to this digital tax. it goes after amazon and google. wine is on the mix, cheeses, handbags, china, porcelain dishes. it is going after the quintessentially french products. there is all not that much the u.s. is able to import from france but a lot of really iconic products and goods that trump said he would want to hit as a way to response to france. shery: does this mean we will get the tariffs in place or do we have to go through another process as well? laura: there's another process yet to come. there is a comment period where stakeholders can weigh in and a

final decision will be made. that is in early 2020. that process will move forward quickly. dear the thing too is the u.s. is looking to make other probes with austria, italy and turkey, which has also passed laws, having a similar tax to the french tax. we could see several more rounds of this, several more reports and tariffs in those countries as well. shery: laura davison, thank you. coming up next, qualcomm is facing off with huawei in the race to roll out 5g. the ceo tells us how he plans to win. this is bloomberg. ♪

haidi: this is daybreak asia. china are u.s. and jostling for the top spot in the race to roll out 5g amid looming regulatory hurdles and mounting competition.

qualcomm is among the firms vying for a piece of a pipe in a face-off with huawei and others despite that, ceo steve mollenkopf told us both sides need to work together for 5g to take off. steve: the red blue world people talk about, i don't think that is actually going to happen. i think you will see really the continuation of international standards. for example, if you go back 10 years, 15 years, there was not really an attempt to create a chinese standard and american standard or western standard. it really failed. neither one have the scale that was really helpful for the industry. i think you will continue to see international standards bodies become, continue to become very important in the cellular world. the battle is who is going to be, who is going to have influence in the international standards body? you see a lot of that, but that has been happening. that is a 30-year-old issue for everybody. different players are being strong. to back 20 years, the europeans

would have been stronger. today, a lot of the asian companies. not just china but south korea and japan. for us, i don't see kind of this general decoupling that people talk about. it is actually quite dangerous for both sides if that were to happen. for qualcomm, the interesting thing from my perspective is people say it is qualcomm versus huawei. qualcomm and huawei, if they don't cooperate, you will not have 5g as an international standard. it is not in the interest of both companies to create the separation. we do compete with each other for ip and market space in certain areas, although we are in different market segments. really, both of us need to cooperate in order to have 5g grow, and we do. you can see that. caroline: how do you keep those lines of cumin occasion open, when seemingly from a government

perspective, lines of communication are pretty tought? steve: it is a different conversation. it is about we need to get 5g for both our businesses and really for the ecosystem. it just happens. there is a lot of, i would say it is not as complicated as people make it out to be. the standards bodies and technology -- not just the two companies, but in general, there is a lot of activity at the technical level and it dominates the discussion. there is not a lot of geopolitical discussion, when you are really talking about driving technology which is good. experte: political element to it. what about competition as you see it? because you have to be so-called frienemies. how do you do that? steve: it is part of a skill, but also requirements of being

in a similar seat to mind. there are people in similar seats. you have to be able to navigate those things. haidi: that was steve mollenkopf. with slowing global growth and the trade war presents the biggest threats the credit markets and the growing months. the environment leaves 10% of negative outlook, this key science of the s&p global global credit conditions. the asia-pacific head of credit research for s&p global ratings and the author of the just completed report joins us now. what changed over the last six months going into 2020? are there any new risks or looking at the same themes, building on given we have a return for central banks to adding in more quantitative easing, to more expensive monetary policy? is it the same themes, the risks have heightened? >> very much so. 2020 is the year of good news,

bad news. there is good news and lower a dangerous rates -- in lower interest rates. the bad news is the month of of economic slowing and companies going to default. china manufacturing numbers are up, but at the same time you hear about two major default. that is why you are going to see in 2020, good news and bad news. haidi: you are perhaps not hearing or seeing as many defaults as you would see in this environment out of china. terry: that is correct. what weowing down, but are concerned about his market reaction. sometimes the market overshoot in terms of news about default despite the fact that his general knowledge that will increase intent 2019 and 2020. shery: what about some of those background transactions, restructuring of the debt which does not allow us to perfectly gauge what is happening behind closed doors.

the corporate debt as a percentage of gdp. a lot of debt in the chinese economy. we putthat's why when our papers, it is usually the , two to three times where we find semi performing of loans. that is pretty much describing the situation in china. shery: zooming out of china, when we take a look at the broader asian market. we seem to be sending the easing cycle for many asian economies, including the vok, despite the fact we have very low cpi and export numbers looking great. what will that mean for credit conditions in 2020? expectationeneral

is observing what is happening in japan and europe in terms of negative yields. i think economies call it pushing on a string, you can only go so far. increasingly, we hear from governments on the physical option. some infrastructure is already aging. that can be a direction which commerce can be going in 2020. haidi: in terms of the sectors and industries most at risk, do you see a sudden or unexpected tightening of conditions that monetary policy continues to peter out or if trade and macro economic conditions worsen, what would they be? terry: the sectors, the cyclical ones are under pressure like auto, consumer-products. consumer production is quite interesting. the general report is there has been good retail sales in the u.s. for example, the last few days. the competition is putting

pressure both on retail and producing consumer product companies. haidi: we just heard japan extraordinaryetty amount when it comes to fiscal stimulus to help support reconstruction and following the olympic games. fiscalthink that more needs to be done elsewhere in the region? terry: we will expect that is the path they are going. what we need to look for is fiscal headroom for the governments, in particular sovereign rating. you can see many developed countries, some of the infrastructure is deteriorating. you fixed it, that is positive. if you build a bridge to nowhere, then we have problems. really, how much you will use it for. shery: what does it mean for china because fiscal expansion does not necessarily mean good things for the local government positions? terry: china is still an

emerging market and this is the paradox of china. we hear about ghost cities and bridges to nowhere. that said, it is not a fully developed market yet so there is still opportunity for good infrastructure projects. this is the classic paradox when it comes to china, it is where you put your money. shery: what potentially new tariffs on chinese products, especially when it comes to ip exports, mean for china's credit situation? find thethink we tariff impact affects two levels. one is business sentiment, investment. second is consumer confidence. exports are a part of china but not as large as some make it up to be. that is what you can see manufacturing in china coming back because they have their own domestic economy growing. that said, a lot of

businesspeople people have indicated they are holding the positions until things become more clear. haidi: what is the level of risk you find at the moment as we find six-month a protest in hong kong? we are seeing pressure when it comes to retail sales, tourist numbers, the big banks there as well. are you seeing heightened risk for some of the corporate's there? terry: certainly, those involved. the obvious, hospitality, retail, transport. we have seen hong kong and recession, -1.4% is the estimate. hopefully there will be a bounce back next year. the political uncertainty is quite distinct in hong kong. obviously because the protesters have the five demands. there has been no concession so where do we go from here? that is notuestion, seem to be room for compromise. thank you so much for joining us. s&p global ratings asia-pacific

head of credit research terry chan. you can always find in-depth analysis over on bloomberg radio. we are now broadcasting live from the brand-new hong kong studio. new can listen -- you can listen on bloombergradio.com. this is bloomberg. ♪

shery: this is daybreak: asia. haidi: i'm shery ahn. haidi: a quick check of the latest business flash headlines. a launch of the review with allianz, saying the partnership has the benefit both sides. over a year after the fall of carlos ghosn and held his first media conference. however, he said the three-way alliance is critical if it decides to achieve its goals. >> i think we are in a position

to have to really evaluate the results that have delivered. then, distinguish what went well and what needs to be changed. analyzethree of us must those advantages and disadvantages, and come up with a stronger structure in terms of alliance. nomura is next ceo of pledging urgency pushing through the turnaround. he's currently chief operating officer and has been at the brokerage for 30 years. he hopes he can sweep the overhaul of the global operations and revert the slump in japan. he takes over in october and replacing the ceo who has led the company for seven years and now will become chairman. >> a sense of urgency is even stronger now than when he became ceo. there will be no big shift in management direction, but i think speeding up the decision-making process is the

most important thing to focus on going forward. million high-yield bond, the first of its kind for the company which previously relied on convertible notes. the initial plan is to sell 18 bonds and the deal may happen as soon as thursday. twitter says it is using proceeds for general corporate purposes. shery: the markets open in tokyo and seoul at the top of the hour. let's turn to sophie. sophie: the return is looming over markets with a risk on settling in. future sliding in tokyo with the yen holding gains with the biggest jump since october. treasury futures have open slightly higher, five to six tics after a three-day drop that pushes the yield, before studying on latest manufacturing data from the united states. when it comes to stocks to watch, we are keeping an eye on astellas'latest deal.

the japanese drugmaker $60 a share for a u.s. firm and a deal worth about $3 billion. we are watching japanese department store players with personal care company pigeon cutting its annual profit forecast which does not bode well for cosmetics makers. a decreased demand from inbound tourism. jp morgan raised apples price $296 on the potential of 5g phones. haidi: some of the movers we are expecting to move in the session tonight. let's take a look at markets already trading when it comes to peer in australia and new zealand. we are seeing a tepid picture for the equities session in australia, this on rba decision day. the final meeting for the central bank for the year. downside of 1.8% for aussie trading in the equity session. trading declines in the u.s. session.

clearly, investors perturbed by the idea of those december 15 tariffs maybe implement it on china after president trump reinstated steel tariffs on argentina and brazil. the aussie dollar pretty flat at the moment, although we did see earlier gains of a two-week high after the u.s. dollar slid against most of its major counterparts. we are respecting the are beginning to stay on hold, but for two more cuts to come in the following months. shery: plenty more to come on the next hour of daybreak: asia. ing's iris pang joins us for more on hong kong's deepening economic turmoil amid protests. we will speak exclusively about startup scoring a $500 million valuation. the market open is next. this is bloomberg. ♪

haidi: good morning. asia's major markets just opened for trait. shery: good evening from new york, i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to daybreak asia. top stories, asia-pacific stocks facing trade fears. 's on brazil and argentina, warnings of additional duties on china. beijing hits back at president trump's support for presidents

-- for protesters in hong kong. rba decision day. they are expected to keep rates on hold. the threats facing the australian economy are still there. markets incross the asia, let's get to the action. is off, declines of more than 1% for tokyo stocks. 1.25%.225 up -- off by latest, traders waiting for a tenure option as we keep closer to the 0% level. checking on kospi, off nearly 1%. another market moving towards the lowest since october. revised third-quarter from south korea, we saw 2% year on year growth for that timeframe.

pressure, coming under , falling the most since october 3, as much as 1.9% while bonds are extending the kleins pushing the 10 year yield above 1.1%, aussie dollar trading near a two-week high, consolidating ahead of the rba decision. stronger language around further easing. the kiwi dollar losing some momentum after breaking 65 overnight after the biggest jump in nearly two weeks on the back of a fiscal spending plan. pressure.under clinching another acquisition. agreed to drugmaker buy a seattle company. it is a 110% premium for the closing price. sophie kamaruddin in hong

kong. here is first word news. >> the new ecb chief has told eu lawmakers policymakers will be, restoringolute in eurozone price stability. an upcoming review will be wide-ranging and will include climate change as well as low inflation. will chair her first policy meeting next week. >> euro area growth remains weak productss domestic growing by only 0 -- 0.2% court run quarter in the third quarter of 2019. this weakness has been mainly due to global factors. >> oil production amongst opec members has fallen ahead of a strategy meeting with independent allies in vienna. thela says their output is

lowest in a decade while iranian production has already been squeezed to the lowest since the 1980's. to 27opec out put fell million per day last month. former malaysian leader appears in court later tuesday to defend himself against charges of corruption involving a unit of the 1mdb investment fund. he will deliver a sworn statement and face questions after a ruling last month. he is accused of accepting bribes worth $10 million for approving a state guarantee on alone. people have moved to shelters him largest island in the philippines as a powerful storm bears down on manila. the typhoon is expected to cross the coastline tuesday morning, bringing sustained winds of 155 kilometers per hour and gusts approaching 200.

the storm forced the cancellation of dozens of flights and may disrupt an athletic meeting. global news 24 hours a day, on air and on to talk on twitter, powered by more than 2700 journalists and analysts. this is bloomberg. haidi: thank you. renewed are back amid fears the u.s. will slap fresh tariffs on chinese goods after president trump reinstated levies on steel from argentina and brazil. the commerce secretary says new duties will be imposed. if the two sides fail to reach an agreement soon. >> you have a logical deadline, december 15. if nothing happens between now and then, the president made clear he will put the tariffs in. the increased tariffs. haidi: china hasn't included trade in its retaliation for president trump signing the hong

kong human rights and democracy act. joining us is stephen engle. what is china doing? >> china is countering and they threatened retaliation if trump signed the bill. that went through both sessions of the house and senate. it has been signed by president trump last wednesday. but many people are debating what ammunition, aside from trade, does china have? they don't want to jeopardize the phase one of any trade deal. they want a rollback of existing tariffs from the u.s. and they don't want the imposition of new tariffs from trump, as he threatened. the ministry of foreign affairs , but it isl sanction unspecified what that means. they will sanction nongovernmental human rights groups based in the u.s. that don't actually have a physical

presence in china anyway. that is the national endowment of democracy, human rights watch, among others. amnesty international said it is an empty threat because those organizations don't operate on the mainland. but it could get serious. amnesty international says if china somehow restricts the operations of those kinds of organizations in places like hong kong and sanctions the staff and representatives of those bodies. the ministry of foreign affairs has suspended a u.s. port visit to hong kong. that is not anything surprising. they have done that in the past, as recently as august. shery: the economy continues to suffer. we know those retail numbers would be bad. even by the low standards, they were pretty horrible. , in an address to

the legislative council, said dropping retail sales would be large. we said, quantify that. 24.3% down, a record decline in october. that is by volume. by volume it was worse, 26 point 2%, also a record. paul chan says they will have their first budget deficit in this fiscal year, the first one in 15 years. a twoear we will see percentage point contraction in gdp because of the ongoing unrest. we know shops are being hit badly, not only those targeted by the arsonists but generally speaking, foreign visitor arrivals including those who shop the most, mainland chinese, golden weekthe holiday in october. those numbers, not surprising. the question is, how long is

this going to last and how long can retailers survive this? engle with the latest developments on trade overshadowing hope the u.s. and china were edging towards the first part of a trade deal. let's talk about how this changes market sentiment. hypothetically, are the tariffs placed on china december 15, if that happens, what happens to markets? we will seethat more optimism in the markets over the course of this quarter as they look for phase one trade deals coming through, there was probably expectation that the december tariffs would be postponed or not implemented. that is the thing we should take away from this. these are tariffs that are already planned that are coming into force. they will affect the u.s. consumer more than anything else given what has been imposed

already. there would be a larger detrimental impact on the u.s. outlook and the price increases consumers may face. on both sides, china and the u.s., not a strong economic reason to see these tariffs come into play. given the mercantile nature of the u.s., we could see a change on the decision and the tariffs being postponed while negotiations go on. as trade talks ebb and flow, i think it is hard to exactly say that we will see tariffs come into play. for market sentiment, it is a case of optimism built in around a trade deal. it is something that will weigh on markets over the coming months as we move towards a phase one deal, which we believe will be achieved but it will be a narrow deal. we need to see more of a pickup in the global economy to offset some of those uncertainties around the trade deal. a sense ofas become

collateral damage on both sides, not just the well-documented slowdown of china. seeing the detriment on the u.s. side as well overnight. it wasn't just talk about tariffs in austria -- argentina the datal, it was also on manufacturing showing four straight months of construction -- contraction for u.s. market activity. are you heartened by what you see in terms of the chinese manufacturing, that purchasing globally is still a mixed picture but we are getting signs that in certain pockets, there is a bottoming happening? >> anytime you have an inflection point, perhaps that is what we are seeing. the pmi's and indices around the world have shown a turn across europe and the u.s. and globally back into the area that would suggest an expansion rather than contraction.

it varies by market but i would think about this in terms of the second order. we size change -- a change in direction. the worst ine past terms of the economic downshift we encountered during 2019. to think about picking up economic growth, that is something we should think about in the letter part of 2020. we still have a drag from the slowing going on in china, a drag on the political sentiment and trade war between the china -- between china and the u.s. we will look for further signs we are past the bottom in the economic slowdown and things should gradually move towards a trend of growth around the world. not much more than that, this is not a rebound like we saw in 2016. the seat will won't be as good as the original, as often is the case. haidi: have the markets gone too far in being too optimistic, as

this chart shows? we had the best month since june for the s&p 500. >> the markets have been driven by central banks over the course of the year. in january, we were thinking andt rick -- rate hikes rate cuts by the federal reserve pushing us towards riskier assets. they want to create the wealth effect. happenedargely what across equity markets. 20 plus percent out of australian and u.s. markets and that is a record if it keeps it up, going back to 2013 or earlier in some cases. we are thinking about how strong the market is when valuations are -- and where valuations are at and the earnings outlook or next year. we look at the pressures on corporate margins, seeing wage not seeing huge expectations for businesses to really spend next year, given the uncertainty created by the

u.s. election in november, and it is perhaps the case many companies will reserve judgment on more capital spending until they have clarity about the direction of the economy and the consumer in the u.s. and australia. have noiven that we clarity when it comes to the economy or were trade negotiations are headed, how do you pick the stoxx and sectors you like? it is a case of being neutral when it comes to a stock bond view of the world. we are looking for easing by central banks and the lag effect that has on the market will be prevalent through the early part of next year. we are seeing indications trade is looking better if we look at the numbers coming out around the asian region. we are encouraged by the numbers that have come out, even if they are low. that points to growth in the coming year, even if it is a

trend at level, we have toervations when it comes the earnings expectations that have been priced in. , even though.s. valuations are higher, and we are thinking about emerging markets more given that they can be supported by the boost in trade and some of the inventory rebuilds we might see happen over the course of this year. it is a neutral view thinking on the quality bias and a pickup in the emerging world. you are sticking around. craig you staying with us. hong kong retail sales plunge again as turmoil deepens. tourist numbers won't recover for months. will we see qe in australia, and if so, when?

that is later on today. this is bloomberg. ♪

shery: this is daybreak asia. i'm shery ahn in new york. haidi: i'm haidi stroud-watts in sydney. australia will announce a policy decision. they are expected to stand pat, but the rba and the government are were -- walking a tightrope. we have been talking about this rockhard -- rock and hard place situation. when it comes to mortgages, the property market is speeding along. yesterday's numbers, taking a look, i still get the feeling that what the rba is doing is fiscal sideout the being listed. >> you have to get the balance right and the rba has been saying for quite some time, it

is a range of other policies that could be used but if they aren't, we will do what is required. last week we had a landmark speech from the governor where he told us what they would do and how much room they have before they do that. they will have 50 basis points of rate cuts which come a we don't think they will deliver on today but that remains the case that they could use them early next year. shery: we have seen three rate cuts since june. what has been the transmission into the real economy from those cuts? what is the most obvious is the one we saw yesterday with the house price indicators coming through. one of the strongest monthly rises in 16 years, and could mean a strong recovery in property prices. the rba will want to see, this is an important turn of phrase they had in their last set of about making a full assessment of the economy. we had property prices

yesterday, we had yesterday building approvals that a an jobs data, and those were indicating, those were still weak. we want to see transit mission coming through -- transmission coming through from property inces, seeing the recovery consumer spending and transferring into construction activity and building approvals, that cycle coming back. shery: james, thank you. let's bring back jpmorgan's craig. we are expecting no moves from the rba now. how challenging could it get for the equity markets? the story around the equity markets is largely global. the sector is viewed as a defensive play in the region giving -- given the higher income. also the structure of the index itself. the rest of the region, not looking good, money often flows into the australian market and

we could see the reverse if we see a pickup elsewhere in the world. the market is looking a little expensive. we haven't seen a valuation this high since 2009. i think it is about paying up in the australian equity market and may be better opportunities offshore in the year ahead. haidi: when you look at markets like australia, it is looking expensive. we have been talking over the past couple days, whether it was a false start for the recovery in emerging markets. do you think there are better opportunities out there when it particularlye, when it comes to the mature markets like the u.s. and australia still continuing to perform well? in the case of the u.s. and australia, they have seen the markets move higher in terms of valuation relative to the rest of the world. the u.s., it has been quality.

investors are prepared to pay but there is an expectation of lower return when we think about the valuation on the return. to the point about bringing forward expectations, in the case of the australian market, we have seen earnings downgraded and next year we are looking at single digits. the earnings outlook in the u.s. will be australia -- will be higher. our biggest concern is not really devaluations because they can stay high because of the low bond yields, but more about them being delivered him a corporate earnings outlook which is a little elevated given the global backdrop and some of the pressures around margins we see coming through. haidi: let me get your view when it comes to what is coming on -- going on with government bonds. bringing up this chart, looking at potentially, is the worst over when it comes to pmi readings? this shows signs of a bottom.

performoing to see this as a kind of leading indicator rest to what happens in treasury markets? will we see that balance? >> on the bond market, yields depends on inflation. we don't see central banks in -- achieving inflation targets and cash rates remain low. that caps the view for how high bond yields can rise. take the u.s. 10 year. will it move more than 2%? probably not because we don't see enough growth and inflation to drive it forward. that has been the story for the past decade and may be the story for the next decade. balance sheets expanding but banks around the world, the eurozone creates an anchor where bond deal to can go. we have a demographic shift which created demand for safer assets. in terms of bond yields steepening, thinking about value

and growth in the equity markets, bond yields can create -- creep up and that can create losses but if anything, they have been rising too far. fixed income and government bonds has that role in a portfolio given that asymmetric risk around the economy that exists. haidi: we appreciate your time. craig coming to us from melbourne. get a roundup of today's stories. go to your terminal, and on the mobile. this is bloomberg. ♪

haidi: this is daybreak asia. shery: let's get a quick check of the latest business flash headlines. isanese drugmaker astellas

buying an american company for 3 billion dollars. the deal is expected to close in the first quarter of next year and will help astellas develop genetics medicine for no rome muscular diseases. they will pay $60 per share for the company, 100% -- 100 to them percent premium -- 110% premium. shery: pledging -- thei: can tara okuda is chief operating officer. somerokerage hopes he can meant a sweeping overhaul of the global operations and reverse a slump in japan. he takes over in april, replacing the coo that will now become chairman. surgedcontinental gold in toronto after accepting a billion-dollar all-cash takeover from china's largest listed producer of mind gold. they will take control of

continental's projects in columbia. and are listed in hong kong shanghai and those stocks are up this year. this is bloomberg. ♪ [ electrical buzzing ]

[ dramatic music ] ahhhh! -ahhhh! elliott. you came back!

>> this is daybreak asia. two senior white house aides indicated the ball is in china's court when it comes to a trade deal, suggesting tariffs set for next week will only be halted if there is progress in talks. the white house counsel said it is china's choice the deal -- if the deal is struck while wilbur ross said new duties will be imposed if the sides fail to reach an agreement. more chinese companies have missed bond payment as widespread default grows. ae latest failures are worth combined half a billion u.s. dollars and it includes tong

-- it includess an chronic's company. this is triggered by the trade war and china's worst domestic slowdown in three decades. the eu is gearing up for the world's most ambitious climate change policy at a summit in brussels next week. it will require a radical overhaul of the economy and leaders will commit to cutting greenhouse gas emissions to zero by 2050. consider easing a ban on state subsidies and will tax imports from countries that fall short on the environment. global news 24 hours a day, on air and on take talk on twitter, than 2700 more journalists and analysts in 120 countries. this is bloomberg. shery: let's get a quick check of the markets. sophie: checking in on the 68sie dollar, holding around

, consolidating around 108 moving average as we get the latest data from down under. third quarter current account balance coming in higher than expected at 10.9 billion australian dollars. we saw a revision to second order numbers with the surplus revised to 4.7 billion aussie dollars. net export data for the third quarter, we saw that contributing about 0.2 percentage points to gdp, compared to the number we saw in of zero point two percentage point contribution to gdp. the aussie dollar not moving much. ,hecking in on the broader view using the gmm on the terminal, looking risk off for equities given the questions over the december 15 terrorist deadline, what that may bring for tariffs on china. we see benchmarks in seoul and tokyo losing 1%, falling back below 68 hundred points and

bonds continuing to slide amid growing prospects for a fiscal stimulus across the region. japan's spending package could top $180 billion. we are seeing benchmark deals creeping closer to 0%. in onswitch it and check a stock mover, pigeon is planned -- pledging 50% in tokyo after it cut its annual net operating profit outlook by 60%. it cut its view on sales which doesn't bode well. that is sophie kamaruddin in hong kong. sales, hong kong suffered a record contraction in october. joining us is economist iris paying. -- iris pang. the chart illustrates, we are bracing for ugly numbers to continue on the

retail sales. what we got was horrible. on the top row, retail sales, we see the plunge. on the bottom, hong kong monthly visitor arrivals from mainland china declining. the correlation is clear. i suppose the question is, it is hard to see where the bottoming out is. do you see this picking up? so long as protesters remain on the streets, how much worst is it get? first of all, i don't think the violence is going to end very soon. this is the first thing. the second thing, even the violence ends, tourists usually don't take the risk and will wait for sometime before, after the violence completely ends. the recovery of regional sales is not in this year or next

your. guess that clearly will bode ill when it comes to the broader economic situation in terms of how long hong kong remains mired in recession. are you more pessimistic now compared to a month ago? lowered actually have our forecast a month ago to a full year for quarter recession -- four quarter recession quarter on quarter. this is actually, people have andrestimated the violence the damages to hong kong. not justall, this is retail sales. it is also the trade war. two things, trade war and protests. another thing, retail sales have dropped so much, employment in

the retail and catering sectors has been really dismal. actually putrate extra pressure on the retail sales, and therefore, the retail sales, it is difficult to recover. shery: can we see a recovery without mainland chinese tourists coming back to hong kong? how diversified is the city's economy? iris: for tourists, everybody is talking like mainland china tourists are not coming to hong kong. that is one part of the picture. if you look at the tourist data, since august, literally tourists have dropped month by month when they consider whether to go to hong kong.

general picture that people want to avoid violence, and want to avoid really bad traffic. comes to property prices in hong kong, they have always been an issue because they continue to go up. this chart on the bloomberg showing the change between january and may. the property prices have started to moderate. we saw some, about half of the gains erased. -- will this give support to the retailers who have to negotiate their rent? retail shops, most of them have negotiated with the landlords and had their rent cut. but it is not just the rent. you still have to have the sales to support rent and also other expenses.

is no sales or very low level of sales, then you can't really support the business, and that is why i expect 70% of the catering business cannot sustain if the violence level, the violence at this moment level continues. you would imagine all of this is playing out when it as well as jobs stability and employment. are we getting a clear picture of what that looks like? it is ironic that one of the complaints among many for the protesters was the criticism of affordability of housing, status of living, general affordability. if unemployment rises, surely that feeds into that vicious cycle. yes, it is very sad that the protests actually don't help the economic situation of hong kong. it is up to the

protesters and also up to the government to plan how to, how this will go on. i don't see a compromise between the two. what the government is expected to do is to speed up the building of public housing. this is one thing. the other is to have the jobless , especially those affected by the protests, to return to the job market. but this is actually quite difficult. you.: iris, thank let's turn to japan because they are reportedly weighing stimulus measures worth as much as $230 billion to shore up growth and inflation, surpassing estimates. says the move was inevitable after the televised sales tax hike but given the experience from last time

around, they have put in place enough safeguards to protect the economy. what happened? tried, the extent smallerax increase was than 2014. they hung fiscal ornaments from the introduction. but it was no good. retail sales suffered a monthly record decline in october. the economy is on course for a pretty steep contraction in the fourth quarter. the only question is, how bad will it be? my other question would be, is there the fiscal space to do the stimulus package? what will it be used for? they have the space. we tend to think of japan is a a budgett has not run surplus since the bubble burst and that is basically true, but as a portion of gdp, japan's

budget deficit is not that great. what will this be used on? the great tragedy would be if the stimulus was used for the same old, same old construction stocks, engineering. we have heard this record before. the sector doesn't actually need that much help. where does this leave the bank of japan? dan: it is funny. when the major central banks began easing earlier this year, there was an expectation that the boj, which never stopped qe, would actually step up the pace. it was thought to be inevitable. here we are at year end, the most the boj has done is tweak its forward guidance. who would have thought that in hadn, the central bank that , that would be the least active

through the year would be japan? shery: dan moss there. coming to the ceo whose startup has a half billion dollar valuation. ♪

haidi: this is daybreak asia. shery: singapore-based finaccel which extends credit to customers in indonesia raised $90 million of expansion capital in a fundraising round. joining us now is the cofounder and ceo, akshay garg. tell us about the indonesia fintech space. and what you -- what made you

successful. akshay: thanks for having me. indonesia, where do i start? we are talking about one of the largest opportunities in this part of the world. 250 million individuals, 70-80,000,000 individuals in the middle class, significantly under banked. we are talking about a country where less than 10 million individuals hold credit cards, less than 2 million have life insurance, less than one million might have a stock r.o.e. ridge account. this is a country which has a very large and fast-growing middle class. most of them have bank accounts, but outside of bank accounts, other financial services haven't really made their presence felt. haven't really been able to reach out to most individuals. shery: when it comes to the global environment, we are seeing uncertainties on trade

and economic growth worldwide. have you seen any of that felt by indonesian consumers? akshay: not really. last 10, 15r the years has been growing steadily at 4%-6% per year. it is a domestically focused economy. -- constituteous not much of the gdp. i think it is fairly insulated. i think everyone felt a little give them tradewinds a global macro but i think in general, as far as indonesia's domestic consumption is concerned emma growth of the middle class, we have seen a steady and stable trend for the last few years. our growth is in some ways a testament to that. haidi: the growth in digital lending and assets, payments across the region, do you think regulators are keeping pace with that? yes, for sure.

indonesia, to its credit, is at the forefront. at least in this part of the world, as far as regulations are concerned. not many countries have specific policies around peer-to-peer lending or digital privacy. engine asia has been taking quite a few -- indonesia has been taking quite a few steps in that regard. that is not to say the regulations are finalized, but the country has been proactive thinking through, how can we use regulation is a force for good to make financial services available to under banked individuals? upgrading in the indonesia market, i'm wondering what your experience has been with relation to financial literacy and i'm wondering what kind of risks there might be with respect to that. the fact of the matter

is, we are talking about a country which is very significantly under banked. , people focus on the on banked population but this country has 70-80 million bank account holders but only a fraction of those have financial outside a bank account. what corresponds to that is a low level of financial literacy. this is something that is a work in progress. there is lots of work to be done by folks like us and other companies, the regulators in the region. we are trying. we operate as an e-commerce financing checkout product which can be used to take a personal loan, but we focus a lot on making users literate about things like interest rates. in general, few people are aware of things like the difference an annualized interest

rate versus a monthly one versus , these are technical terms but it is important for users to understand these as they access credit or other financial instruments. we do a lot on this front by educational videos, education newsletters. most importantly, trying to be very responsible at the rate we lend that. we are proud of the fact that we lend at rates that are extremely competitive. banks are lending on credit cards at 2.25% per month. percent,t 2.95 marginally higher but one of the most competitive in the market and perhaps the lowest outside a credit card. as far as literacy is concerned, user education, i think that is a joint effort that has to be taken on by the industry. just finished a

fundraising round. what has been the vc funding environment at the macro level? frankly, i don't think about funding that much. we think more about the customers and building a solid business. we have been hearing a lot about the funding environment changing a little. long asis simple, as you build an amazing business, a combination of high growth and very strong metrics, not just in terms of growth but having a very clear path to profitability with costs under control, and finally, delivering strong impact, you will always find investors to back you. we have been lucky in that regard. oversubscribed round with a massive amount of --estor interest, one of the a bunch of the top investors in

this part of the world. ,hat buttresses my view that focus on building an amazing business and good things will happen. that is my only comment on that situation. industry toe fragmented? is consolidation a way forward? is that part of your business plan? akshay: my view on that would be that, i think there is a certain amount of fragmentation, as there is in any early-stage business opportunity. at this time there are more than nearly 100 registered. digital fintech lenders in indonesia. we are all on the ground floor today. the opportunity is massive. we are talking about a country where credit and gdp as a ratio is under 10%. it is an under leveraged country. as far as fragmentation is concerned, there is a long ways

to go for folks like us and others to go build large businesses. at some point over the next five years, it is a natural evolution that the laggards will start pulling away or we will start getting consolidated. our view is, over the next five years, we want to build a business that is financially responsible and inclusive. we want to over the next few years served 10 million customers across the region, not just in indonesia, serve 5%-10% of under banked individuals in this part of the world. isng that journey, it possible we might consolidate with someone else but i think that doesn't affect our broader vision of surging -- serving a large amount of individuals and doing good. thank you so much for joining us, akshay garg, finaccel cofounder and ceo.

live pictures of the former malaysian leader set to give testimony against charges of corruption. he is walking into court, facing involving corruption a malaysian sovereign fund. he is scheduled to appear later a swornning to give statement. he will be given questioning as ruled the a judge prosecution had been successful in their case. we will get you the latest on that. live pictures of kuala lumpur right now, this is bloomberg. ♪

haidi: the former malaysian prime minister has just arrived in court in cobol alone for to defend himself against charges in: -- inion in -- mpur to defend himself against charges of corruption. >> he will have to defend himself against the charges in the current case, which is the one involving the former 1mdb unit. the judge was very strong. he worded it very strong, he the former 1mdb unit was pervasive. we have all of that to defend

himself against. throughout the hearing, his lawyers argued he was misled by others, including directors and analysts. bet is probably going to what he will say in the testimony. he had the choice not to be questioned. why did he choose to do both, to give a sworn statement and to be examined? -- eager tory good testify. in the last hearing he said he will of a sworn statement and his lawyer had to say, maybe we should discuss this first. they are wary of hibbing dashcam giving a sworn statement -- him giving a sworn statement.

this is the position he is coming from, he wants to clear his name. we will be watching that closely. that is it for daybreak asia. coverage continues as we look ahead to the start of trading hong kong, shanghai and shenzhen. markets: chinag open is almost upon us. this is bloomberg. ♪ when you move homes, you move more than just yourself.

that's why xfinity has made taking your internet and tv with you a breeze. really? yup. you can transfer your service online in about a minute. you can do that? yeah. and with two-hour service appointment windows, it's all on your schedule. awesome. so while moving may still come with its share of headaches... no kidding. we're doing all we can to make moving simple, easy, awesome. go to xfinity.com/moving to get started.

host: it is 9:00 a.m. in beijing , and shanghai. welcome to "bloomberg markets: china open." i am tom mackenzie. >> i am yvonne man. in place.id equities across the asia-pacific slide on renewed trade fears. onkets digest new tariffs brazil. and we have new warnings of additional duties on china. >> protesters in hong kong. from.s. navy is barred future visits. host: and the former