haidi: a very good morning. i am haidi stroud-watts in sydney. shery: i am shery ahn in new york. welcome to "daybreak asia." president trump raises the stakes with china, signing a build announcing the oppression of uyghur muslim's. threatened retaliation against potential sanctions. asian markets face an uncertain start as optimism about a post virus recovery drains away. new cases in china and parts of

the u.s. outweigh recent stimulus driven market gains. fed chairman is urging lawmakers not to lift virus aid to quickly. jay powell says the economy is recovering but support will be needed for some time. president trump raising the stakes, signing legislation to punish officials for detaining uyghur muslims. day john bolton claims the president encouraged beijing to build internment camps to house them. let's cross to selina wang. let's start with a bill. broad bipartisan support in congress and then was assigned by the president. what exactly does it say? selina: this legislation won broad bipartisan support. sanctiones trump to

repression from minority groups. it also calls for the closure of the camps where they are held. beijing threatened retaliation in response to this bill. in the past, many times. citing this bill marks a major shift for trump as he has been reluctant to act against china over human rights issues. nancy pelosi has called the legislation sending a clear message to the government of china that the u.s. is well aware of the abuse uyghurs have suffered. upwards of one million uyghurs have been detained in china and while china says it is fighting religious extremism through voluntary education centers, human rights groups have had physical, psychological abuse in the camps which they described more as prisons. yet this signing of the bill comes on the same day that an excerpt of bolton's book that trump told xi that building camps was "exactly the right thing to do."

the justice department is trying to block publication of bolton's book. so what do we know in terms of the details that we have so far? is supposed tok be nearly 600 pages. it is the most substantive -- coming from the highest-ranking former trump official. and it comes, remember, from a conservative who has worked in the republican administration for decades. the book includes numerous details of internal meetings with direct quotations even. he writes that trump had asked xi jinping to help him win his reelection by buying more u.s. farm products. there are numerous details here about how trump used china's policy entirely through this with boltonection, explaining trump is fixated on securing a trade deal at the

expense of almost everything else. u.s. trade representative robert lighthizer has denied this allegation. the book does seem to undercut the trump campaign's argument that the president is tougher on china than biden would be if -- than bidend -- -- would be if reelected. in addition to what i said earlier about trump's response to xi, bolton also writes that trump was on interested in supporting hong kong's pro-democracy protesters last year and bolton describes trump as being deferential to xi, at one point calling him the greatest leader in chinese history. bolton also argued that house democrats could have expanded their impeachment inquiry yawn ukraine to focus on what he calls a pattern of fundamentally unacceptable behavior that eroded the very legitimacy of the president.

shery:shery: all of this coming at a time when the outbreak in beijing continues to spread. what is the latest on the containment measures that we are seeing? we have seen china ramped up restrictions in beijing. the city reported 31 new cases on wednesday, bringing the total to more than 130. we have seen the cases linked to ass already spread as far china's southeast. some of the restrictions include residential compounds putting back in place temperature checks, mandatory registration to people entering and leaving cars and taxis, now unable to leave beijing although trades and other modes of transportation are still available. this is a major balancing act for beijing despite the growing severity of restrictions that you are seeing this reaction. it is still measured when you compare it to previous northeasts in the

region of china because this is the center of business and politics. china wants to maintain some reopening inmic place. i also want to point out that the head of china's center for disease control and prevention said at a government meeting that the outbreak in beijing likely did not emerge at the beginning of june or the end of may. the virus was likely out there for one month before that spending, and so, given that the thesehas to survive in dark, humid, and polluted environment, it was incubated and suddenly exposed after a certain period of time in that market. selina weighing in beijing with the latest. let's take a look at how all of this is playing out in markets with sophie. what are you watching? sophie: wait and see mode in effect after the choppy session we saw on wall street. u.s. futures trading mixed early in the asia session, edging

slightly lower. subdued start a to trade with geopolitics still simmering in the background and rate decisions due from indonesia and taiwan. kiwi stocks are nudging lower by .8%. a moment to digest the latest gdp report, showing the economy contracting more than forecast in the first quarter, entering a recession for the first time in almost a decade. futures have snapped a two-day gain. keeping an eye on aussie minors after they were given the nod to resume iron ore operations in brazil. checking in on currencies and the aussie dollar, just testing 69 ahead of jobs data. you have the yen and dollar trading study. the hong kong dollar on the long end of the trading band. it might fall to 2017 lows. elevated given the ongoing political and economic risks here in the city. the offshore yuan trading study

after trimming overnight gains but staying higher after trump signed the uyghur bill. shery: we will ask about her calls and what is driving markets. she joins us, next. this is bloomberg. ♪

karina: you are watching ."aybreak asia i am karina mitchell. the european union is moving to protect its industries from takeover by companies linked to china and other foreign powers. it could be formalized later this year. some companies making acquisitions or forcing them to divest assets or the plan would effectively extend the e.u.'s strict system of limits to businesses around the world. in other news, narendra modi says he will defend his country's sovereignty after deadly clashes in the himalayas.

soldiers died at the disputed mountain border. modi says india only wants peace but when provoked will give an appropriate answer. talks are underway. north korea released its pictures of the destruction of us jointly amazon -- joint liaison office, warning of potential action against the south. the office was open to two years ago and was not occupied at the time of the explosion. north korea says it will send troops to the border, reinstall guard posts, and reduce military exercises. the fed chairman is urging lawmakers not to pull back too quickly on relief for the coronavirus and made them debate over whether to extend programs intended to shield homes and businesses from the pandemic. he told the house financial services committee that he thinks it is a concern if they remove support too early. powell says the economy is recovering but federal aid is

still required. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi. wall street has different opinions when it comes to the feds move and whether it can continue to drive stocks higher in the following months. dani burger reports. broken inthing may be equity markets. u.s. stocks are well on their way to erase losses for the year but the pandemic rages on, job losses are steep, and the global economy is facing its worst recession since world war ii. withquity lost touch reality or perhaps the stock market never reflected reality to begin with? >> it represents the profitability prospects of particular companies that are listed, which is a very particular subset of a certain kind of company in the u.s. it is not representative of the whole economy. dani: there are signs of

strengthening. john figures are starting to improve and consumer spending has begun to rise. is ae stock market forward-looking discounting mechanism and its rise now is telling us things will be better down the line. dani: for some it is not about the economy, earnings, or civil unrest. there's only one factor right now, the fed. >> i think it is the beginning of a bull market rally. you cannot underestimate the effect of what the fed did, pouring trillions of dollars of liquidity into the financial markets. dani: there are plenty of investors who do not buy any of these arguments, but sitting on the sidelines, watching your peers make money, it is not easy. moneyre is more sitting. the market is not getting -- does not look like it is going to roll over again. i am sitting on too much cash. let me allocate that. dani: reality or not, investors are bidding up equities but with the second wave of coronavirus infections threatening more

lockdowns, how much further can stocks go from here? shery: let's look closer at those market moves with research affiliate head of equities, -- great to have you with us. we have seen this market exuberance play out for months now. this gtv chart on the bloomberg, for our viewers, showing how the nasdaq 100 is really defying gravity. we are talking about a straight line up, more than .75% of the nasdaq 100 moving above the 200 we two average, what saw shortly before the dot-com bubble. could we see potentially a burst of some sectors now that we are at these very high levels? agree with your assessment. it is a technical bull. outstanding market. very strong in the middle of a really serious economic

recession. there seems to be a disconnect between stock market optimism and economic realities and people are right. the biggest contributing factor is the fed. it is dangerous to bet against the fed. because the tech sector has been strong, holdings for the 20% for thiss now index. it does introduce other elements into the market. this market environment has to be very cautious about what to purchase, especially paying attention to the prices they are paying. >> how much riskier does it get when you have retail investors crowding the market? feifei: it is just very hard to say. the retail market has been very active recently. we have observed that speculative behaviors around

those bankruptcy stocks, trading activities, really centered those companies right after they filed their bankruptcy. that is actually really dangerous. the market rally is highly speculative and vulnerable. all things being equal, you are looking at huge retail involvement in the developed market, stock market at the moment. valuations are stretched. no certainty over what the future looks like. why wouldn't you then take all of these same risks and look at emerging-markets? feifei: it's because we are paying into the price they charge. and the u.s. market, like people mentioned, nasdaq reached a historical high, over 10,000 points. now, we are getting close to

there again, so when we look at the price for the long-term average earnings ratio for the u.s. stock market it's about 29. long-term average earnings. underlying companies have been making that. year,e remaining of this 2021, a significant part of the earnings will be reduced. or disappear. it is not cheap. on the other of the spectrum, while we talk about emerging average, theink on range is 10 to 12. it is a lot cheaper. based on the forward-looking model. those losses can deliver an average 8.5% per annum over the next few decades. relativelyremains attractive in terms of price level. haidi:

chinese stocks, particularly as you see this rejuvenation of hong kong listings. feifei: there is a very significant political risk when you get into asia's market. butonly about hong kong, the tension between china and the u.s. and the rest of the world, and the china stock market is also highly subsidized istheir central banks, so it cautionary to get in, especially -- even though in china, all the economic leading indicators seems to indicate a strong recovery, but on the other hand, when we look at the residential sector, we look at the leverage ratio applied by residential sector, it has been reducing so that is a caveat. that is a little concerning. not applying for a mortgage or borrowing money to purchase housing.

chinese market typically is always linked to the housing market. likely will be weakened in the foreseeable future. for the export sector in china o,ght now is pretty weak, to so i would caution getting into the market. shery: are there any sectors within that market that are still appealing just because of the structure of the chinese economy, whether it is demographics, the consumption story, the rising middle class? well, if we talk about which part is more attractive, i would say, you know, look at the price level. aboute have to think being a long-term investor. ,hatever price you pay today certainty will eventually dissipate so i think that is long-term investment and that

applies to the states and to china. you consider where the u.s.-china relationship is going, where do you think the yuan will be in the next year? yuan has think the weakened this year. likely, you know, with the huge uncertainty coming from typically, pandemic, that means increase the volatility in the currency markets. generally speaking, safe haven currencies such as u.s. dollars. it really spikes. fearful market was very know, swiss franc, japanese yen. those are safe haven currencies. the japanese yen had a wonderful movement. likely, they will move a little higher for the remainder of 2020, especially if the u.s. economy grows stronger than

expected and risk dissipates. commodity currencies, canadian dollars exchange will likely fall, i think for yen, because i do think likely the central bank will cut down their interest a bit further, which may weaken their currency, and also, they have the intention to make their export a little stronger and is also a contributing factor to weakened yen, so i would say the yen versus dollar is weaker for the remainder of 2020. have thoset to views. research affiliates head of equities, feifei li, speaking with us. a bloomberg exclusive on exaggerated claims about the launch of the debut truck. this as the company founder denies deceiving anyone. we have that story, next. this is bloomberg. ♪

haidi: two companies are in the spotlight after questions about the value of their stock. they suspended the share of new sales as the fcc takes a closer look and the founder denies receiving anyone over the capability over his prototype zero emission truck. su keenan is taking a look at the stories. let's start off with the latest installment. su: it really is unbelievable. they proposed to sell stock which they described as potentially worthless. that filing failed to pass muster with the fcc so shares of hertz are falling after hours while it deals with the regulatory issues. the scrutiny from the fcc comes amid what some are calling a maniac, especially among individual investors.

those retail little guys, if you orl, for shares of bankrupt near bankrupt companies we saw the big wild swings in shares of chesapeake energy as it approached bankruptcy, and we have seen wild swings into hertz recently as they prepare to make this additional sale of shares. the enthusiasm has really baffled fractional traders because as you may know, when companies go into bankruptcy, the sales typically get canceled and investors get left empty-handed. they did clearly state in their filing that the offering could indeed be worthless. this yout's turn to truck start up -- e-truck start up. it surged 500% in april but the founder is having to defend his claims about this truck. was a bigntly, there

event in december of 2016 with a prototype of this big zero emissions semitrailer. people close to the event and the truck told bloomberg they were concerned about the comments of the truck itself. for instance, it did not have a motor or anything in it at the time it was inoperable and the founder is saying on a phone call that he did not deceive anyone. parts were removed at the event for safety reasons. but my comments are getting a ni of scrutiny because kola is also preparing a share sale. it is up about 500%. that has certainly made many investors wealthy. and it has brought a lot of short-sellers and skeptics in. a lot of comparisons are made between nikola's ceo and that of tesla's ceo, who criticizes him. back to you. shery: let's get a quick check of the latest business flash

headlines. india's yes bank is said to be planning a $1 billion share sale. bloomberg understands the bank, which counts two of india's biggest lender is among its investors, will kick off the public offering soon. yes bank was rescued by the reserve bank of india in march after running into debt problems. shares have rebounded by more than 73% since that deal was announced. eliminationumed the of as many as 35,000 jobs three months after its restructuring plans were paused by the coronavirus. ceo noah quinn says parts of the overhaul have been running since february and it's now time to start long-term measures i cutting staff. had a up next, jay powell warning for congress and at least one lawmaker shot right back. details of the day to testimony, next. this is bloomberg. ♪

."ery: this is "daybreak asia let's get to the first word headlines. more than 1200 flights in and out of beijing have been canceled as the city wrestles with a fresh coronavirus outbreak that has infected at least 130 people. the people's daily twitter account shows a 70% of flights were halted at the capital's two main airports. schools are shut across the city and travel curbs have been imposed on people living in markets where the cluster began. president trump is turning up the heat on china, signing a bill accusing beijing of interning muslims in camps. the legislation has --

republicans and democrats and requires the president to sanction any chinese official uyghurssponsible for -- and other muslim minority groups. the bill prompted threats of italian from china. the group of seven countries are calling on china to reconsider its planned security law for hong kong, saying it will jeopardize what has been -- what has allowed the city to flourish over many years. a statement says it is essential to have open debates, consultation, and respect for rights and freedom. of unity overw strains over president trump's plan to hold the next g7 meeting face-to-face. iran says it will send the flight recorder from the plane shut down in january 2 key have as long as flight restrictions so the islamic report -- from the islamic republic are lifted. military shutdown

flight 752 on january 8 after mistaking it for a crews muscle. all 176 people on board died. jay powell pledges again to keep his foot on the stimulus pedal and urges congress to do the same. central banks and the emerging markets are doing the same two. indonesia expected to cut later again today as well. athleen hays is here with recap. let's start off with what jay semiannuald for his testimony to congress. it was really to stay the course. kathleen: he was speaking to the house financial services that this and he said is not time to pull back on stimulus. networkers, businesses, are going to need to keep the money coming because, yes, the economy is recovering, but it is not roaring ahead and it will not

for a while. do not pull back on stimulus too fast. he said we at the fed need to keep our foot on the gas, too. let's listen. >> we at the fed need to keep our foot on the gas until we are sure we are through this. that is certainly our intention. i think you may find that there is more for you to do as well. kathleen: in the afternoon, loretta mester spoke. she is a voter on the federal open market committee. she is known as a hawk. everybody is a major doves. she said a question that has been indeed about in congress -- bandied about in congress, she said that the states, municipalities, people hit hardest by the virus, are going to need more fiscal support again. that comes from the government. she favors keeping key rates near zero until 2023. she may have been a hawk, but right now, everybody says it will be at least 2.5 years -- that is how long it will take

before they even think about hiking rates. shery: let's talk about brazil because they have cut for a record-breaking eighth consecutive time in a row. what is happening here and how much will it help given how devastated they have been by this pandemic? kathleen: that is always the question. central banks do whatever it takes. central banks cut the key rate for the eighth time. 75 basis points. record low. 2.25%. pointthe second 75 basis cut in a row, but yes, they are looking at the pandemic, reducing inflation expectations. that is something ever central-bank -- every central bank wants to avoid. they may lay off workers and more. in fact, they say that they are looking for second quarter drop that is even bigger than the first quarter drop. they are also saying that right where they are in policy now is the correct stance for the virus. they kept the door open to

another small rate cut. here is what the committee of monetary policy said. they understand that the economic situation continues to prescribe extraordinarily high monetary stimulus but recognizes the remaining space for the use of monetary policies is uncertain. they certainly kept the door open to another rate cut. i think it is interesting to the statement was also said that slowing global growth from covid-19 is something that makes the emerging-market environment challenging, and this is something again all emerging markets are facing. thank indonesia meeting today, they are expecting to cut its key rate again. they have a bit less pressure when it comes to the rupiah. feifei: -- kathleen: that is the main thing that permits them to do it. it may not be the main reason they are doing it. they have lots of reason to do it stemming from the pandemic but we are looking for a cut of 25 basis points to 4.25%.

the rupiah now holding around 14,000 to the u.s. dollar. according to bloomberg news, reporting that net foreign inflows have been 1.2 billion since mid april. this is a very encouraging sign and it gives them room to act. bloomberg news also points out that the fed keeping rates lower for longer, which was made perfectly clear the last couple of weeks, the rupiah now is the best carry trade in the world, so that is another thing. these higher-yielding emerging market economies are starting to take in some interest. indonesian virus cases exceed singapore's. the most in southeast asia. there's more kinds of stat's. indonesian government is urging its people to tamp down the virus. do not let it get worse. indonesia's finance minister saying today the nation could see zero economic growth. asked about the virus, what can you do, she said you just have to hope and pray that it does not get worse.

shery: that was our global economics and policy editor, kathleen hays. turning now to greece, which has managed to maintain one of the lowest cobit infection rates in the world, greek prime minister -- plans to continue economic reforms even in the wake of the coronavirus outbreak. he spoke exclusively to bloomberg. >> if things go according to plan and by the fall or winter, we have a vaccine or drug, and that removes the uncertainty regarding consumer spending, because a lot of people right now are hesitant. they do not know what will happen. i do think we will see an abrupt recovery. increase in particular, because we have laid the foundations for rapid growth, i think the recovery is going to be very strong. we have the potential of making 2021, which is an important year for greece, because we are celebrating our bicentennial from the greek war of independence in 1821. it could be a bumper year for greece. so far, if i look at the market reaction, people feel

comfortable with greece in the sense that we spend enough money to soften the blow but not enough money for public finances. i was looking at the bond yields for a 10 year bond. with 21 basis points under italy , i wonder how many people who are sitting in on this call -- expecting this to happen a year ago. it's clear that people will look into the future and look at what will happen after the pandemic. we have an interesting growth story to tell post covid. >> prime minister, i have a lot of questions from people listen again, saying greek yields are so low. how do you take advantage of that? have a lot of we that. we did it recently. we will probably do it again.

have -- we want to make sure we have study access to the markets. gradually reduced borrowing costs. this is our strategy. this is what we will do. we want to make sure that we the steak replenish offer with enough money to make sure that we address all our liquidity needs. i should remind you that we have set aside around $16 billion for debt repayment just so that we can access these funds. debtiven that the greek has peculiarities, relatively low debt repayment obligations until 2032, i do not think that the numbers you need to look out are starkly the debt to gdp ratio. but look at the peculiarities of greek debt and the fact that the markets feel comfortable lending money to greece under these circumstances.

obviously, it is a vote of confidence for what we do. we are not going to go overboard. we have a very good public debt management authority. and they advise us on when and how to access the markets and we follow their advice. if our borrowing costs continue to go down, there is no particular reason to access the esm. the advantage of the esm is that you bar at a low cost. right now, there is no need to access it. it is available until 2022. if things go according to plan, i do not see a need to access it. but it is sort of a safety net that is there. it gives us comfort that should we need it, should something go against what we have planned, there's always the element of unpredictability. it is there to be available if we need it. right now, we do not.

haidi: that was the greek prime minister speaking exclusively to bloomberg's francine lacqua. we have another big guests coming up later on daybreak. we have an exclusive interview with the hong kong secretary for justice at 8:10 hong kong time. coming up next, the economic team at westpac raised their targets for the aussie dollar. we will find out why when we are joined by the chief economist. this is bloomberg. ♪

ifdi: the aussie dollar -- the economic team at westpac is right, there could be more gains ahead. after initially questioning the aussie's momentum, westpac has significantly raised the target. chief economist joins us now. given the price action we have seen in the last few days, these? over whether the run of dollar weakness could be over, do you still expect 72 for the aussie? bill: yes. look, i think that it is around 69 at the moment. near 70 at the end of last week. in thewith the selloff u.s.. undoubtedly, the risk situation will not be a clear straight line. weakness in the risk outlook and then some more confidence coming back, so we simply general movement will be up and we are very confident

about the iron ore price holding. the australian economy looking a lot better, particularly with our consumer sentiment index back at pre-covid levels. we think the australian economy is looking better. the risk story will gradually further improve, and the underlying commodities that are important for us will continue to hold at these levels. 76 u.s. cents by the end of next year, by the end of 2021. point point -- at what did they getting comfortable -- get uncomfortable with these levels? bill: that's a good question. 6.5% unemployment for the middle of 2022. inflation rate at 1.5%. that is a long way away from their target. and that is based on the aussie dollar. when those forecasts were made

in early may. thehe aussie dollar behaves way we expect and there's clear upside risks to that forecast, the reserve bank may well have e concerned about the impact it is having on their target, particularly if they are proving to be overly optimistic on the growth and the unemployment of the inflation story. with the labor market data we are expecting, will it 10% of the gains we have seen in the aussie? bill: we are expecting the unemployment rate to go from 6.2 to 7.4% and to lose hundred 50,000 based on the definition. but really, it's almost a technical issue here. last month, we had 700,000 all,e who did not work at

that were defined as having been attached to their job. i suspect some of those will drift into the on employment pool over the last month and that is what will lead to the increase in the number of people that have lost their jobs. i do not think people will be too concerned about that. the general expectation is that by the end of june, the unemployment rate will have an age in front of it, and i think people expect that. it is really what happens in the final quarter of the year when our package expires and how many people can move back into the workforce. that will be the question mark. shery: how much will the legacies of this pandemic hurt and constrained the australian economy in the long term, especially if the government needs to keep the borders closed? border -- the international border issue is the constraint we expect will be ongoing next year.

and that will be the one that will affect certain industries. and therefore, the government will need to provide ongoing support for those industries. the rest of the economy i think will benefit from this improvement in consumer confidence. we are expecting next year gross of around 3%. we are expecting the economy to contract by 4% this year. at the end of 2021, the economy will still not be operating at the same level it was operating at at the beginning of 2020. but i think most economies will be in a similar situation. however, the market will be looking towards a gradual recovery. positive global growth next year. will benefit particularly from aggressive policy in china. we are expecting 10% growth in china next year, which will certainly help the iron ore price and base metal prices, and that will also support the australian dollar. you assume that

today's jobless numbers will be skewed and we may see a trailing off of economic activity once we get past the initial post restrictions being lifted, do you expect the rba will inevitably have to do more in terms of more bond buying being scaled up and negative rates will not be off the table? spokenes, well, i have quite a lot about the benefits of negative rates. for an economy like australia, where the banking system only -- 60% of its assets through the deposit market, it is well positioned to take advantage of negative rates in the wholesale market. and also an economy that is heavily reliant upon competitive currency, negative interest rates would certainly help the rba if they get really concerned about the strength of the aussie dollar. it is not my central forecast because we have the central bank

saying negative rates would be extraordinarily unlikely. the scenario i am looking out for the aussie dollar heading towards $.76 next year and the bank replacing current forecast -- replacing the current forecast. it is damaging for an economy as people may well have got in the past. i think it may well come back onto the agenda. my centralinly not forecast given the resistance we are seeing from the central bank at the moment. great bill evans, always having with us, westpac chief economist joining us from sydney. coming up next, we are getting ready for the hong kong debut of jd.com. what to expect, next. we will have the latest. this is bloomberg. ♪

shery: jd.com is said shery: shery: to be drawing bids at a premium in the great -- shery: jd.com is said to be drawing bids at a premium. high expectations ahead of trading. looks like jd is on track to raise 3.9 billion u.s. dollars. they are selling 133 million shares. dollars apiece, veryhis is a oversubscribed ipo at this point according to our sources, and

the theme, it ties into this theme of homecoming for chinese companies, who are looking to list in hong kong. secondary listings. jd is listed on the nasdaq but it ties into the gaming company, 2.7 billion earlier this month with its second relisting. when alibaba raised 13 billion u.s. dollars with its own secondary listing in hong kong. you have the u.s.-china ties and tensions that are playing into this. jd said that was not part of the consideration but we know that lawmakers in washington have threatened to delist chinese companies over a lack of transparency on their financials and their data so that is a concern for some companies. jd saying they want to broaden their investor base and be sued to their consumer. they are a beijing-based company. this will be the second largest ipo globally. in terms of the money they raised, they are looking to spend that on things like logistics and their offline to online parts.

this is a very competitive market. it is one of the upstarts taking market share in china. the incumbents like alibaba posing a significant challenge to jd but they are hoping this is additional injection of funds will help them remain competitive in this space. you are there at jd headquarters, the last day of the biggest online sales shopping event since the pandemic. is this a bit like singles' day early? how does the performance look so far? it is a real test of the strength of chinese consumers. retail sales collapsed in the first three months of the year. and the most recent data was disappointing as well in terms of the retail side of things, but the commentary we are hearing from members of the team is that they are relatively confident they are seeing a lot of demand for things like hp laptops, things like dice and hairdryers, so foreign brands are getting some play.

there is the pent-up demand story they are hoping will play out. we are going to get the final results in terms of this big sale at midnight tonight, but they are relatively confident at this stage. it should be pointed out they pushed through 1.5 billion dollars worth of subsidies to try and entice shoppers. alibaba, which was also involved in this sales gala, spent 2 billion u.s. dollars in terms of cutting the price of items on sale on their platforms as well. how much the margins will be squeezed is a question but they are hoping in terms of gross merchandise volumes that they will be large enough. they raised or sold total sales last year, jd, of 29 billion u.s. dollars, so we will see if they beat that number in 2020. alibaba saying the first 10 hours, they saw a 50% increase in sales from the same time last year, but again, there have been a lot of subsidies to try and entice chinese consumers to get out and spend. wages have been squeezed and job losses are a problem across this economy.

tom mackenzie, bloomberg markets coanchor at the jd.com headquarters in beijing ahead of a big day for jd. do not miss our interview with the jd.com head of retail. that is a business that contributes 90% of the companies whole business. the ceo is speaking to bloomberg exclusively. plus, we will be hearing from a number of analysts, including chelsea tam. they will all be joining us later. let's get you a quick check of the latest business flash headlines in the meantime. yum china jumped the most in february. it may seek a listing in hong kong. the investment bank to pitch advisory roles later this week. the potential listing could be worth $2 billion. earlier reports said that yum had been talking to cicc and goldman sachs. 10%book's deal to buy a

stake in geo platforms is under review by india's antitrust watchdog. the competition will study how companies plan to use data as part of the $6 billion deal. facebook is one of a number of international investors betting on the digital unit. at platforms has been valued 625 billion dollars. lyft is planning for all car journeys to be powered by electricity by 2030, however, it says the plan needs the support of lawmakers and companies as well as a widespread charging network and a corporation of drivers. the cofounder said the virus shutdown has given lyft the chance to reevaluate everything and he expects the company to emerge in a better position. coming up in the next hour of daybreak asia, the hong kong secretary for justice joins us for an exclusive interview. countries worn china's pressure a national security bill will not hurt the region. we have the market open in tokyo, seoul, and here in

sydney, coming up next. this is bloomberg. ♪

shery: good evening from bloomberg's world headquarters in new york. haidi: asia's major markets have just open for trade. welcome to "daybreak asia." asian stocks facing an uncertain start is optimism about virus recovery drains away. they outweigh recent stimulus-driven market gains. the g7 calls on china to reconsider, saying it will

jeopardize success. we speak with teresa cheng this hour. jd.com hopes to be a part of that success. they prepared to list in hong kong two years after the exchange relaxed rules to attract chinese homecomings. shery: japan, south korea and austria coming online. we are seeing another day of downside pressure. this, as we continue to see strength on the japanese yen, which has passed that 107 level, after the biggest jump in a week against the u.s. dollar. exports yesterday saw double digit plunges for a third month in may. take a look at the kospi at the moment. we are seeing pressure at .4%. this, as we continue to see geopolitical tensions rising in the inter-korean border. declines inuan led

the previous session against asian currency. we are now seeing it lose ground around the 12.16 level. energy, materials and industrials are leading the decline in south korea. howi: let's take a look at we are traveling here in austria. we have jobless data, that is key for the data docket in australia. worse expecting unemployment numbers as well as participation being affected by social distancing regulations. taking a look at the downside at the start of trading in sydney, the aussie dollar below the 69 sent level it went to. 10 year yield holding pretty steady at the moment. in new zealand we have first quarter gdp numbers in the previous hour, worse than expected showing a more severe contraction on year on year and quarter on quarter basis. an anomaly inte

terms of the gain in that kiwi dollar this morning. let's get more with mark crandall. of course rate cuts expected from indonesia and taiwan. from the volumes and the volatility that this is a market that is looking for the next catalyst. indeed. the narrative has been unchanged, people are concerned about a second wave of the virus so that will dominate the move for a few days. people are looking for a change from that. bank in get it from indonesia and the central bank in taiwan. they are expected to lower rates and they will probably be able room to do more should the need arise. they have not done it at the hectic pace we have seen in some of the g10 come -- countries.

really having trouble coming to grips with covid-19. they have more cases of the virus than anyone else in southeast asia. so the central bank will certainly be prepared to try and help out in that regard and to let people know it can do more if the need arises. they have 20 of room. rates are above 4% so you can take the curve down quite a ways. taiwan if they take rates down to 1% they still have room to act. so there should be relief for asian equities today when we get confirmation that the central banks in this region still are working to keep liquidity going and they have more stimulus in the pipeline should the need arise. shery: we are seeing hong kong dollar option volatility rising right now. what is happening? su:-- mark: it has become a lot more interesting in the past few days we had a report that kyle bass, someone who thinks the hong kong

dollar peg will eventually be broken up, he started a fund to -- for the effect of the hong kong dollar breaking by the option market. he has been very active, has -- in the other people, demise of the hong kong dollar. energy has been pretty subdued recently. currency markets have not been doing much. yet one year volatility in hong kong has an rising, particularly in relation to the offshore yuan . usually you see quite a wide spread between yuan option volatility and hong kong dollar, but that has been narrowing. it is mostly being driven by people bidding up volatility for the hong kong dollar. there is no sign that the hong kong dollar is under any pressure. ands trading close to 70,75 they have been intervening regularly to sell the hong kong dollar because it is too strong.

so there seems to be a divergence between what is happening in the option market and the actual foreign-exchange market. this is getting a lot of attention. volumes remained relatively high for the hong kong dollar, which is usually a pretty quiet option market. it's an interesting case that some people seem to be hedging their hong kong dollar plays against yuan options. this could be going on for a while just yet. haidi: on the other side, has the dollar showed a new period of strength? mark: we have seen a little bit of an uptick in the dollar, partly because the risk tone has become heavier in the past few days. it is also being measured by dollar-yen. as you mentioned earlier it has gone below 107, a sign people are getting more anxious, so the dollar is bound to pick up strength against the euro, the aussie, kiwi. quite possible it will be a fairly temporary move from the dollar.

the other trend is for fiscal monetary stimulus to support equity markets in particular. peoplee mood returns, will be more favorable towards the equity outlook then we will probably see the dollar dip again. it will probably not last a long time. it would need something serious, in terms of more countries going into second lockdowns. mark, thank you very much. we do have some moves when it comes to iron ore prices. we were expecting -- now dropping below hundred dollars after valet was cleared to restart its mining in southern result. inehad a number of m closures on account of cobit-related contaminations. authorities approved revised covid-19 anti-contamination protocols. we are seeing iron ore reacting in a negative.

of course it was this concern about tightened supply that drove prices to almost $130 at a five-year high and we have seen that job below $100 now as we see the prospect of increased supply as well as the downside concerns over chinese economic growth. shery: let's now get to the first word headlines. president trump is turning up the heat on china, signing a bill accusing beijing of entering -- the legislation has brought support from publicans and democrats and requires the president to sanction any chinese official found responsible for oppression -- oppressing muslim minority groups. minister saysme he will defend his country's sovereignty after deadly clashes with chinese troops in the himalayas. at least 20 indian soldiers died along with an unknowing -- unknown number of chinese troops.

he says in the only wants peace, but when provoked will give an appropriate answer. north korea has released its own pictures of the destruction of its liaison office in a border town. while warning of further potential action against the south. the office was open two years ago and was not occupied at the time of the explosion. north korea said it will also send troops to the border and resume military exercise at frontline areas. planninggovernment is on an information campaign dubbed shock and awe to prepare people for brexit, hoping to minimize disruption when the split happens. they'll explain the consequences and opportunities of brexit before focusing on potential problems if businesses are not prepared. with the u.k. battered by the coronavirus and already in

recession, the government fears a new economic shock. urging chinag7 is to reconsider its new national consider -- security law in hong kong. we will discuss with hong kong secretary for justice, teresa cheng. this is bloomberg. ♪ ♪

haidi: let's get you a check of the latest headlines. india's yes bank is set to be planning a $1 billion share sale. the bank accounts two of india's biggest lenders among investors -- they were rescued by the r.b.i. in march after running into debt problems and shares rebounded by more than 73% since the deal was announced. hsbc has resumed the elimination of as many as 35,000 jobs, three months after its restructuring plans were paused by the coronavirus.

the ceo says parts of the overhaul been running since february and it is time now to start long-term measures by cutting staff. they join rivals deutsche in resuming job cuts that were put on hold at the start of the pandemic. hertz has suspended plans to raise cash by selling new shares. the carpenter described as potentially worthless. they are hoping to raise half $1 billion but said they halted the sale pending further regulatory reviews. they jumped more than 20% on the news before falling back below its opening price. buyers will get nothing until senior creditors are paid. shery: a group of seven foreign ministers are urging china to reconsider its planned security law for hong kong, saying it will jeopardize what will -- has allowed the city to flourish. let's get to stephen engle who is with a special guest this hour. stephen: you are on me, right?

yes, hi. stephen engle here. we are speaking exclusively with the hong kong judicial secretary, teresa cheng. think you very much for your time and having us here, madam secretary. so of course much of this concern in society right now is over this national security law that will soon come down from beijing. can you say matter-of-factly and without reservation that this is good for hong kong? a lot of people are very concerned. teresa: i can say categorically it will be very good for hong kong. national security is fundamental to any sovereign state. so therefore by enacting national security legislation, then to bring about stability to hong kong, and bringing stability to hong kong will create predictability and prosperity. so it is good to be some --

going to be something hong kong will need and will benefit from. stephen: many people in carrie lam's administration including yourself have been appealing to the people of hong kong to trust us, that it will be good for hong kong. however, there are not a lot of details, which has led to much speculation on what will be in this security law and whether it will supersede local laws drafted by the legislation of -- legislative council as described by basic law. how can you convince the people that it is going to be ok, if you yourself did not have the details? teresa: yes, you are right, we do not have the details yet, but we have the national people's congress position. and if you look at the position, they lay down three fundamental points that are very relevant to the question that you raised. it states, and i am not trying to recite it, but in safeguarding national security,

the one country, two systems, hong kong's stability is preserved, and legitimate rights of people in hong kong will be safeguarded. thehose are actually in national people's congress -- and when they are going to do the legislation, they will have those three fundamental principles. we are all very concerned with it. stephen: will the hong kong people get adequate chance to debate this meaningfully? or will it some plea be imposed? teresa: i will not be able to say because the national , they havengress their own legislation laws, i think in china that is called, they have to comply with in order to deal with the enactment exercise. when the national security law is to be put into the basic law

under article 18, the basic law and the hong kong government will be consulted. so at that stage we will do the best we can to convey the concerns. we must not assume they have not heard from the media the concerns and request of the people. so i am sure they are well aware of it, but of course the government will continue to do just that. stephen: why did we have to go through all this turmoil over the last year? the initial extradition deal was reviled by millions of people here, let's not mince words. when beijing and the standing committee and the national people's congress committee could simply add this bill to article three of article 18, as you just suggested? they could have avoided this if this was going to be the end goal anyway. teresa: one has to make an important decision. when we talk about national security, like any other country in the world, national security

is within the purview of central authority. then within the purview of central authority, then of course the central authority can provide for legislation and other policy matters. so that is quite different from what you were just discussing. let me finish. why do we need it? because of exactly what has happened in particular in the last six month of 2019. and of course the social unrest and a lot of people chanting slogans of independence, etc. there is also the problem that hong kong has faced in the past 23 years. they were not able to, for one reason or another, pass any legislation that would safeguard national security in any shape or form. seehe central authorities the need to provide for that. of course in light of the circumstances that are prevailing in hong kong. jacob: so frustration boiled over, i guess, because article

23 is what you're talking about -- it was scrapped in 2003 when half a million people turned up and protested. then there is the extradition bill as well which was pretty much tabled because of the unrest. we're hearingthen from not only the deputy head of hong kong macau traders office, as well as hong kong's office on the standing committee the last couple days saying extraditions could be allowed under special circumstances? is that your understanding? and what is a special circumstance under mainland law? teresa: first of all, i have to separate a number of points you have bundled together. i do not want to obvious keep the issues. withle 23 provides us being able to safeguard national security. arrangement,

fugitive offenders ordinance that was proposed last year was something that originated from hong kong entirely as a matter of come ok, we have gone through that. those are two quite separate matters. then you talk about the third thing, which is what about the situation related to what has just been said about the hong kong macau affairs office. as far as that is concerned, at the moment we do not see any specific legislation as to how that would be done. it would be difficult to speculate as to what might or might not be special circumstances that give rise. but again, the important thing is the autonomy of hong kong is still going to be exactly preserved as days right now. -- as it is now. we still have a separate customs territory, we control the hong kong dollar, etc. as far as business is concerned, it would not be infected.

but would national security legislation, it will bring about predictability, which i think business is most concerned with. that is the way i would like to talk about it. stephen: what are you hearing about the issue of whether it will be retrospective or not? there have been protests for the last year, often violent. thousand seven arrested. their fates could potentially hang in the balance. teresa: i think you should separate that. first of all, let me deal with those who were arrested last year in relation to the offenses that are going to be charged or not charged, as the case may be, because some of them are still under review by our department. under the current law those will be done, etc. you then mentioned the retrospective buddy point. as far as that is concerned, we do not know. we are commenting on rumors or commenting on speculation is meaningless.

however, hong kong of course has a very important principle that we often mention, that there is no retrospectivity. withsome exception international law. that sort of concept is not unique to hong kong. it is more or less universal. in mainland china they had exactly the same kind of principle. there is no retrospectivity and exemptions are the same. how that will turn out, we have to wait and see, but the principles are the same. stephen: as justice secretary here, what would you most like to push back on? against some of the fears that we are hearing, that could be in his national security law. what are you standing up for the hong kong people and their rights? teresa: insofar as that is concerned, i am definitely standing up for the rule of law

and hong kong. it is very important that hong kong person committing a crime goe, arrested here, should through the prosecutorial process with the department of justice taking control under the basic law and before our judiciary in hong kong, which whose independence is preserved in the basic law and we will do everything we can to uphold that. stephen: the hong kong law society and aunt association have voiced their obvious concerns, that the new law must conform to the existing hong kong legal structure. but i have seen recently from impractical that is and unreasonable to expect it to apply to everything in the new law. why? teresa: i am so pleased you asked that question. because i think the reactions on the media have been quote unquote, misplaced and out of context.

if you read the whole of my blog, i was pointing out there are two systems. when it comes to terminology, you mentioned the word retrospectivity. how we described it in hong kong, we might describe it differently, the terminology of life imprisonment, for example, could be in different terminology in hong kong. so those terminologies will be different. so to expect, it arose because there was a call that everything, everything should be in exactly the same way as the common law system would expect. to me, that is a little bit difficult to completely comply with. because after all, this law is enacted and drafted by the national people's conference, and the relevant legislative drafters. so when they are drafting it, they could have different styles. but the important thing, which i think those in hong kong and the mainland would be looking to, is

the laws have to be clear so people know when they are overstepping the limit and the support, and our department will know when and how to apply the law in making prosecutorial decisions before the court. stephen: you also said there was no need for a sunset clause, which would basically mean you could do away with a national security law if article 23 of the basic law was eventually passed. so you are saying these two laws could and will presumably be in lockstep together? teresa: again, a little bit conflating the two. what i think i understood from the article that was written, was there should be a sunset clause for what bill -- what will be next three, the national 3,urity law -- will be annex the national security law. what i am trying to highlight is this.

i wrote it in two points. first of all, annexing as concerned, legislation is to be added and taken out. there is no need for anything to be done because they can always consult the hong kong government and decide to remove particular legislation. ofondly, your suggestions looking at whether article 23 legislation in hong kong was done, that would be taken out. we do not know because there are two different perspectives. one is from the national perspective, which is what the national security law is looking at, and of course there is constitutional duty we to have to complete article 23 legislation. but that will be more on a domestic perspective. all,se after our -- after we see it not as broad as

central authorities would be when it comes to national security. stephen: we need to wrap up, but do you expect it to be expedited? will it happen soon? teresa: your guess is as good as mine. stephen: usually it takes two to three meetings to promulgate this type of law. we do not know yet, so it is anyone's guess. teresa cheng, thank you very much for your time. teresa: thank you very much. stephen: back to you guys in the studio. that was the hong kong secretary for justice teresa cheng with our chief north asia correspondent stephen engle. we do have the latest numbers out of china when it comes to coronavirus infections. most notable is the 21 local new coronavirus cases reported from beijing. we know beijing continues to struggle with that cluster that originated from the food market in parts of the city, as well as schools closed in the capital to try and contain would could be a serious second wave of cases.

a lot more to come. this is bloomberg. ♪

let's take a look at how markets are trading this thursday session. sophie: a tepid thursday morning for asian markets. to the downside for asian stocks. shares from tokyo falling while the yen is -- softbank is planning to send -- kospi extending the client. stocks continuing to search -- surge. sydney, stocks under pressure but the aussie and bond yields. , iron ore futures have

fallen below $100 in singapore to restart. the nod the stocks, markets show economy has entered a recession. even with immersion -- emerging economies, policy stimulus has helped see an uptick in emerging asset crisis. just want to show you this playing out with a chart on the terminal showing you how we have e.m. debt outperforming. yields are proving attractive. that has sustained a rally in indian and indonesian bonds. indonesian this week saw its third dollar debt sale for the year, receiving nearly $17 billion in investor confidence. a far cry from argentina's latest episode with creditors. this week is set to be one of the busiest in asia for dollar debt offers since january.

switching out the chart right now with the ongoing policy easing we see in the e.m. space over the past 18 months, yield premium for e.m. debt has tightened by 100 basis points, and that could dampen the allure. shery: let's focus on indonesia. central bank expected to trim its interest rate by 25 basis points after signaling there is room for further support growth. let's get a preview of the upcoming meeting. will they finally be pulling the trigger now that they have a stronger rupee? guest: the bank of indonesia is honestly quite concerned about stability but we have gains of u.s. dollar.e so that should give them some comfort. improvedmfort has

considerably. resulted quite strongly this month in improving the current deficit. keep sentiment stable. it is up to them now to focus on the economic concerns. indonesia has now become the southeast asian country with the most number of coronavirus cases and the curve does not seem to be flattening anytime soon. the country is quite unstable for indonesia. at this time for the bank of indonesia to pull the trigger. shery: we have seen a carnival of vulnerability for indonesia, being the current a cart -- account deficit. with the trade surplus, what can we expect on this front?

charu: the deficit has been improving now because of the trade balance. this is already an unstable situation because the trade balance -- [indiscernible] domestica result of demand as there were restraints in the lockdown. countriesedium term, should be concerned about this. haidi: how much of a drag are we likely to see for e.m.'s like the indonesian economy from a slower than expected recovery in china? it still remains quite small and we do not expect a major outbreak. north asian countries have been quite good at managing the

coronavirus outbreak. and we continue to believe that their response will be mass tracking and testing. recovery should be quite good compared to the rest of asia, as well as the western countries. there has been coordinated shocks to the supply side, even in the financial and commodity market, which continues to be a big concern for these economies and indonesia, which is highly dependent on commodities as well. haidi: do we run the risk of further repeal weakness, particularly now talk about potentially the dollar run of weakness could be over. charu: absolutely. vulnerable currency in the region.

interest, high for an and given we are seeing second waves in many countries and the u.s. possibility that the risk sentiment is going to retreat again, which will again but the idea in the crosshairs. like i said, foreign results have shown a good pickup. indonesia does have the tools to maintain stability right now. so this is the time then. rupee seeingt the a lot of traction. they should take this moment to focus on economic issues right now. shery: before we let you go, we had an escalation of tensions between india and china at a time when we saw the lowest pmi in history for india. given that their trade and commercial ties are so important, how is this going to

affect the indian economy? yes, the clashes have escalated. because there have been casualties on both sides, we think this will bring a longer term strain in the relationships. from itmain risks icy is increasing the u.s. influence over the region through india primarily. we have to wait and see how that plays out because the situation is quite fluid at the moment. but this might be a blow to india's plan to join the whichal trade agreement, has already been skeptical of china dumping low-cost workers into the economy. these tensions could further make india defensive. so of course the outlook for the given is pretty fluid,

the geopolitical tensions. but it does not appear to be very good right now. charu joining us, thank you so much. startsup next, jd.com trading on the hong kong stock exchange later today. investors seemingly like this secondary offspring. we will ask morningstar investments how this plays into china's bigger plan to overtake the u.s. in tech. this is bloomberg. ♪

the fed chairman is urging lawmakers not to pull back too quickly on relief for the coronavirus and made increasing debate over whether to extend programs intended to shield homes and businesses from the pandemic. he told the house financial services committee he things it is a concern they remove support to early. he said the economy is recovering but federal aid is still required. new zealand has entered its first recession and almost a decade. gdp falling 1.6% in the fourth quarter through march. new zealand like other countries is expecting a much worse period after the pandemic forced it to close borders and shut down the economy. the government pledged $40 million to help the recovery. the white house is taking legal action against former national security advisor john bolton,

seeking an injunction to prevent him from publishing a new book. trump apparently sought help from china to get himself reelected. his campaign team dismissed the claim. to european union is moving protect its industries from takeover by companies linked to china and other foreign powers. the proposed curbs could be formalized in legislation later this year, mainly to a ban on some companies making acquisitions or force them to divest assets. it would send them to businesses around the globe. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. makes his trading debut in hong kong later thursday and mid tightening scrutiny of chinese companies. it is another milestone for the

city, two years after they adjusted lifting moves for chinese tech starts with more reforms expected. here's a look at how hong kong got here. theong kong missed out on world's largest ipo when alibaba picked new york in 2014. four years later the hong kong exchange ms. biggest tweak to ipo rules since 1993, paving the way for chinese secondary listings. it kick started a rush of new --ls like tencent music still, in 2019, the city welcomed alibaba's mega secondary share sale. as chinese companies face possible delisting in the u.s., it will allow secondary listings like alibaba to include in the hang seng index. so far net ease and jd.com have given hong kong two high-profile

tech offerings with more in the pipeline. let's get more on jd.com 's debut. great to have you. what are your expectations? there has been a lot of exuberance and excitement going into this. it really does feel like a revitalization when it comes to the ipo seen in hong kong. -- scene in hong kong. guest: i think with the risk of delisting in the u.s., obviously we are seeing more adf coming to hong kong. probably ones that have a dual class structure. i think the big ones are all trying to come back. i think it should be pretty good

for the hong kong ipo market. and pretty good for china tech names. i want to take a look at j.d. versus alibaba, its main rival it comes to the e-commerce sector. we have still seen much greater and faster revenue growth when it comes to baba vs. jd. do you have a preference for either stock? chelsey: i think right now for ry fairlynk jd is ve valued. using a very long-term perspective. i think it has shown a lot of strength, especially amid covid. growthst quarter revenue .as really strong i think it has largely played out. i think it is still a good stock in the long run.

i think there will be margin extensions. right now i prefer alibaba which in our view is undervalued. they had somesly hiccups during covid. i think they have already recovered to the december level. and we continue to see the promotion in the 618 shopping sector. alibaba'sviously with huge ecosystem, they will definitely catch up and they are really strong in new products, like a platform for launching new products. i think it is an indispensable platform. valuationow based on we prefer alibaba. -- andjune 18 at 6:00, a 618, shopping extravaganza.

how are they expected to reform? and will we see consumer recovery reflected? chelsey: obviously i think if we look at the may retail sales number it is still down. but i think for online sales it has been up. so generally i think we continue to seek online is shrinking from online. obviously jd.com is the one that sort of initiated this festival. they really focus on this festival. this is sort of like the main shopping festival. are their own competitors. so obviously they are also trying very hard. and i do see them having subsidies. alibaba, for example, for certain stocks, infantry, if you buy $300 there will be a $40

discount. competition is intense because brands are trying to sell infantry, because the infantry got stuck amid covid, so they really need to clear inventory. so i think generally i am expecting this 618 festival should be good in terms of clearing inventory. see thee continue to outbreak spreading across beijing. if we do get a second wave, what will that mean for gaming, that has gotten a really good boost during the pandemic period when people were locked up in their houses? we have seen tencent give a little bit of a cautious guidance when it came to add revenue, -- ad revenue, at least. chelsey: honestly, the second wave depends on how large it is. basically the main thing to watch is how many people have been stuck in their home, and how long that is.

covid for the entire chinese new year, it was a pretty long period. everyone was pretty scared and there was less testing and all that. but i think right now we are seeing that in beijing, but it is not like all over china we are seeing a second wave in a very severe way. right now i would expect that the second wave impact on the online sector would be less compared to the first wave for sure. you actually see potential second wave upside when it comes to valuation gains for the kind of stay-at-home stock, particularly as we see the likes of the tendo being a big beneficiary, jump -- of nintendo being a big beneficiary, jumping today. chelsey: when a lot of people have to stay home, generally

speaking, online sectors will benefit. i just think that the impact will be comparatively less compared to the first wave. i think that is the key focus i have right now. shery: chelsey tam, great to have you with us. do not miss our interview with jd.com retail which contributes 90% of the company's whole business. the ceo speaking to bloomberg exclusively. plus, we will hear more analysis with jacob cooke and ken wong later on bloomberg markets. next, as coronavirus spreads, hsbc hits the pause button on tens of thousands of job cuts. now the bank is pressing play.

will its initial cost cutting plan b enough? this is bloomberg. ♪ bloomberg. ♪

hsbc is reviving plans to cut as many as 35,000 jobs. the bank with a heavy presence

in hong kong has put that plan on hold once the pandemic hits. to cuthsbc may need deeper than that. hsbc really seeing a lot of challenges. not only the pandemic but the ongoing protests in hong kong. so how much more do they need to do? they decidedwhen on their plan it was in february when they decided to cut -- or announced it, anyway. the world has changed so much since. the coronavirus was largely seen as a part of the world -- problem in this part of the world but now it is global. few expected them to hold it indefinitely and the more this last the more -- this is a bank with 235,000 employees across 64 countries. it is huge. and every bit of its business is being affected. haidi: you also point out the

controversy over hong kong providing an added incentive for hsbc to go ahead with the restructure. they upset the u.s. and the u.k. by supporting this national security bill. how does this play into what the bank does next? guest: by supporting the national security bill, hsbc is basically planting is flatware and makes money. flagkong -- planting its where it makes money. hong kong is 50% of the revenue. it was an awkward spot earlier in the year because it provided u.s. prosecutors with information that led to arrests 018, anduawei cfo in 2 that got in trouble with beijing. then it drew the ire of pro-democracy protesters when it shut down the account they used. it has been straddling the balance for asia's -- for ages.

then when the security bill came along, they are saying our future lies in this part of the world. and by doing that of course there are all sorts of other problems. it is a dollar clearing bank, so it does not help to get the u.s. upset. at the same time it is regulated in the u.k. and its regulator is the u.k. so it has definitely been playing geopolitical football in a way. asked -- initially they were talking about retrenching in europe a lot more. this part of their asia pivot. ton cutting back in the u.s. mainly investing -- investment banking and areas like that. but they have a retail bank presence in the u.s., and most people do not even know them in the u.s. as a retail bank. there are all parts of the business that are tiny. they have banks in the philippines. these are things they can cut back.

as covid has become a bigger global problem, obviously we can see now that will have to do a lot more than that 35,000 job cut that was announced earlier in the year. haidi: nisha there. let's get you a check of the latest headlines. facebook buying a 10% stake in reliance's platform is under review by india's antitrust watchdog. they will study how their plan to use did as part of the near $6 billion deal. facebook is one of a number of international investors. the platform has been valued at $65 billion. car is planning for all journeys to be powered by electricity by 2030. what it says the plan needs support of lawmakers and auto companies, as well as a widespread charging network and cooperation of drivers. the cofounder says the virus

shut down has given them a chance to reevaluate everything. he expect the company to emerge in a better position. yum china jumped to the most of february -- investment banks to pitch for advisory roles this week. the report also says the potential listing could be worth as much as $2 billion. early reports said they were talking to goldman sachs. will getming up, we more market analysis from jacob cooke. plus do not miss our interview with jd.com retail which makes up 90% of the company's business. exclusively to bloomberg as they make their hong kong debut. that is it for "daybreak asia." our markets coverage continues as we look forward to the opening of trading. asian stocks falling for the

fourth time in three days as we continue to see market pressure following falls here in the u.s. the china open is next. this is bloomberg. ♪

♪ tom: it is 9:00 envisioning and shanghai. -- in beijing and shanghai. i am tom mackenzie at j.d..com headquarters. the alibaba rival will list in hong kong, two years after the exchange relaxed its rules to attract big chinese homecomings. it raised 4 million u.s. dollars in its share sale. david: i am david