haidi: good morning and welcome to "daybreak: australia." we are counting down to asia's major market open. this hour, wall street gains again on optimism that washington will eventually agree to a virus package. are stalling, and president trump says he may take action in the coming hours.

deaths rise above 700,000. double if theld pandemic is not stopped. and tiktok continues to make news. microsoft may now be into its worldwide operations, while facebook continues to push a homegrown u.s. rival. shery: we are seeing u.s. futures coming online flat at the moment, after stocks climbed in the regular session. we had some optimism over a potential stimulus package, but investors are cautious. the s&p 500 gained for a fifth consecutive session. communication and tech stocks led the gains. apple reached a record. we did get a lift for stock markets in the afternoon after president trump said he could act unilaterally on some stimulus measures. we also have positive initial jobless claims numbers. lowestll to the since the pandemic began. there will probably be a slowdown given the rise in

infections recently. take a look at how oil is doing, just under the $42 a barrel level. in new york, it fell for the first time in about a week after wavering between gains and losses throughout the session. uncertain economic outlook overshadowing signs of recovery. let's bring in sophie in hong kong. futures are fairly positive for asian stocks. we have the offshore you and -- steady,- yuan holding and the aussie dollar staying above 72, only a three-day gain before we get the rba economic forecast. we are also awaiting japanese household spending. consumer sentiment still under pressure. shiseido protecting the biggest animal -- predicting the biggest

annual loss in two decades. with the focus on australia, we saw heightened consumer confidence in june, but the outlook is not flat. hong kong also stalled. but when it comes to potential domestic demand being revived, that is the case potentially in south korea, given the picked up demand for holiday goers who might spend cash at home. taking a look at what's going on broadly with asian stocks, we have seen korea and india lead that rise for ms eia pack stocks from the march low. --an rallies on an upswing asian equities rally on an upswing. global stocks have just about wiped out their losses for the year. the msci index passed a milestone just before the close of the markets in new york, shortgh they remain 0.7% of the open.

0.07% short of the open. is this market pre-much past perfection at this point, and if we do get positive news when it comes to his to mila still being -- when it comes to a stimulus deal out of washington, are we risking the likelihood of a fade? >> it is a good point. we are currently trading at a ratio that we last saw in 1988, 1999, so that does give a shudder. i think it is a possibility that they sell the news on fiscal policy. prices appear not to be trading based on earnings, and this is a pretty recurrence. over the last couple of weeks, we have noted that even though more than 80% of stocks are beating expectations, the price performance of those beats, the stocks that beat expectations, is really limited, about half what the average one-day axes

price return that you typically get for an earnings beat. it does seem that stocks have detached from the reality of earnings season, and this has become a momentum driven market. you have to naturally be a little bit suspicious of, particularly when it is policy related. i think tomorrow could be an interesting day on a lot of levels. we get aat happens if vaccine earlier than expected? >> i think that is part of what .as been driving stocks higher there is a lot of news flow surrounding vaccines. investors are somewhat excited about the idea of a vaccine. the one trade that has not benefited from the idea of a vaccine is a rotation into value stocks. viable vaccine

coming on the market sometime in year one and consumers are likely to get the vaccine, which is a whole other issue, if that is the likelihood, we should start to see some of the value picked up speed. we still have not seen that. it is the same leadership in growth stocks, in technology, in some of the big cap communications, even the big cap retailers such as amazon have really driven the market advance. if we get news that would suggest that the longer-term economic outcomes are likely to be material different because of the vaccine, we should see rotations start to benefit some of these laggards. conversely, does that mean that kind of rotation and an earlier, more effective and widespread than perhaps expected vaccine news, does that mean we see a backtracking when it comes to tech, or is that narratives something that began pre-pandemic that will carry

through? gina: it should be more of a catch up. without a doubt, there is a lot of hiding in tech. to the degree that capital that is already invested in the equity market wants to look for new opportunities, it will move out of tech and into other stocks, but generally on an improvement in economic conditions, on an improvement in the earnings outlook, what you see instead is low valuation stocks start to catch up with high valuation stocks. those are the areas where most of the earnings depression is taking place, areas like the consumer discretionary sector, the earnings sector, where earnings have been completely dismantled. free cash flow down 40% or 50%, some cases even more. if we get a vaccine which opens up the economy, these are the areas where we are more likely to see performance improve. it does not mean the outlook for tech materially changes. you would also say the outlook for tech improves a little bit except for maybe in a few select cases where you have some

bloated conditions. i would expect it to be more of itash -- catch up trade that is a rotation trade, but it depends on the investors. if investors are not putting more money into the equity market, it could be a rotation trade. i would expect some flow into the equity market, which means it is more of a catch up. shery: always great having her thoughts. renewedead, melbourne's lockdown and nighttime curfew are speeding up the recovery in australia. thisevans joins us later hour. he says he has never seen a more in certain time than this. but next, the u.s. is moving to tighten disclosure requirements for chinese companies as tensions continued to mount. we will get more from d.c. next. ♪

watchingou are "daybreak: australia." new research from the university of washington sees u.s. coronavirus deaths potentially doubling by the end of the year if the pace of the spread does not change. u.s. infections rose slightly higher than the daily average thursday as worldwide deaths top 707,000. the eu is raising their travel advisory. stocks rose on the news. >> we need a united world. needsnited world cooperation and solidarity among its major powers. meanwhile, people in tokyo are being asked to refrain from traveling outside the city for the upcoming holiday, although authorities are yet to declare a new virus state of emergency as cases surge.

office vacancies have jumped by the most on record as the economic impact of the pandemic weakens the economy. despite the strictest lockdown in southeast asia, coronavirus cases in the philippines are now at 120,000. indonesia is the region's hardest hit country. metro manila is back in lockdown, shrinking -- with the economy shrinking more than 16% from the quarter a year earlier. the world bank says that coronavirus is likely to spark what it calls a "pandemic recession" in many countries. the chief economist warns that we are following a similar path to the 2008 financial crisis, but even worse. in june, the world bank says covid-19 threatens to drag more than 100 million people into extreme poverty. day, onews 24 hours a

air and on bloombergquint take, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery? panel a high-powered u.s. is recommended tighter disclosure requirements for chinese companies listed on american exchanges, following mountain concerns of the potential exposure of investors to fraud. emily wilkins joins us from d.c. what does this mean? could we actually see this getting implemented, given the very broad-based antitrust -- anti-china sentiment right now in washington? it depends on the securities and exchange commission, what sort of rules they might want to come out with. they want to make sure they are strengthening the requirements that the audits from chinese listings meet all standards. this listing group is not the

only one concerned about the audits. is alsoan legislation moving through congress, so we might see action there as well. haidi: in the meantime, the u.s. has lifted the global health coronavirus travel advisory. emily: yes, they have lifted the travel advisory. there are some countries still blocked for americans, including china. --ever, americans many countries in europe, asia, and south america are still blocking u.s. citizens because of the high amount of coronavirus cases we are currently seeing. movement tosymbolic how other countries are handling the coronavirus. we have seen travel bans start to be lifted. continue to see stimulus talks on capitol hill. president trump saying he could potentially take unilateral action.

i have to wonder, though, does he actually have the authority to do that, executive orders on the payroll tax policies and so forth? emily: the power of the purse really does reside with congress. if trump wants to spend money on certain things, that is going to have to come from congress, but there are certain things, such as the moratorium on convictions, which trump could do on his own. we will see how those pieces come up what the white house can do. -- we will see how those pieces, what the white house can do. fore is a pseudo-deadline friday. we will see have talks continue after that and how much progress they will be able to make. haidi: very keen to see a resolution there. emily wilkins joining us from d.c. we are going to get more on the stimulus negotiations, the fallout from the virus on the global economy. jeanette garretty joins us with

her views cash jeanette garret joins us with her views next.

shery: applications for u.s. unemployment benefits fell to the lowest since march, offering a way of hope for the economy still battered by the pandemic. joining us is jeanette garretty. great to have you with us. it is a real hope, but you have to wonder how long this will last, and given the surging infections we have seen starting last month. jeanette: that's right. it has really been a tumultuous month, this month of july in the united states, with regards to employment numbers. happy to see jobless claims go down. very happy to see the initial claims for unemployment go down. that was noteworthy. but at the same time earlier

this morning, there was also an announcement of an increase in job cuts. the challenger data, which showed a substantial increase for what was expected. we have moved forward, but there are other things that are happening as well. shery: so the enhanced unemployment benefits have run out. how much pressure does it put on the economy if the next round of stimulus measures gets delayed? jeanette: a significant amount, but the first level of pressure is on the people talking about this tomorrow. i have seldom seen what is going to be a more significant number than the nonfarm payrolls tomorrow, no matter what the number is. it is going to have immediate residence in washington, d.c. resonance in washington, d.c.

it is hard to say how that is going to play out, but this is an economy which is not healed and probably needs a little bit more help to move forward. haidi: given how crucial the broadersumer is to the economy, clearly there is a bridge to take us through -- clearly a bridge to take us through the next phase of the economy is crucial, but how will that encourage the return of the u.s. consumer? jeanette: i think it would sustain the return of the u.s. consumer. in all of these recoveries, the earliertates, the u.k. today talking about its numbers, as we look around, we tend to see a big pickup in consumer demand initially. the idea is to keep that going. i think it will be very it isant, and i think very important for people to remember that one of the reasons we are doing this extra federal

stimulus is not only on a microlevel to make it possible for people to live their lives and go forward, but on a macro level to have those people spend money and support businesses that in this environment have been hit so hard. so, from a company level, it is going to be good news that we are seeing more expectations of even a v-shaped recovery out of china, and also increased recovery prospects for europe as well. does that create a more opportunistic environment for u.s. companies that deal in trade or exports, or is the bigger threat the trade tensions that we see and the political tensions going into november? the trade tensions are still there. it is something of a threat. but without a doubt, when you look at companies in the united

states that are trading around the world, they are encouraged by what they are seeing in europe in terms of the recovery and what they are seeing in china. the recovery in china also is meaningful for companies to do supply-chain relationships with china. it is very good for them to see that going forward. particularly the manufacturing sector, in all sorts of little in small ways, is improving, but it is very soft right now because trade has still not recovered. whether it is supply-chain readjustments or the pandemic related extra costs and loss of productivity, how much pressure will that put on companies' bottom lines? jeanette: it is there. that pressure is definitely there. the pressure is twofold. the cost pressure, certainly,

and the initial pressure, which is to rethink supply-chain and to bring a number of things back on shore or have multiple locations, all with the idea of providing more supply-chain stability than what they have seen. that has a cost. in the long run, perhaps a benefit, the companies bringing manufacturing on shore and building a new facility, building a new modern facility that will ultimately lead to productivity improvements. but in the near term, there is cost. haidi: jeanette, always appreciate your time. wealthn stevenson management. policymakers are ready to support the u.k. economy through recovery as they seek to reinsure investors there are no

plans to tighten monetary policy anytime soon. the bank's are in toolbox, but there are no current plans to use them. potentially the use of negative rates and forward guidance. so eurocontrol has not been discussed? >> it is something we have discussed, and we do discuss it. preferred to look at constant easing in that respect. but i would make the point that we will go on looking at the toolbox. nothing is fixed forever, but it is not in our planning at the moment. francine: what would it take for you to go into negative rates? >> we have talked a lot to central banks who have done them, ghanaian, come out, those who have not yet gone in and

come out, very helpful in fascinating conversations. i draw two points. one, as you get into this territory, there is a much bigger interaction with the structure of your financial system, in particular the structure of your banking system. no one is sending retail deposit rates negative, but i can understand why. it means the bigger the share of retail deposits in your banking system funding, the more attenuated the effect of negative rates will be. share of quite a retail funding and the banking system. the second thing, i would conclude that the effects of negative rates depend upon what point in the cycle you are using them at, and that is an interaction with the financial system as well. yourself do you see using negative rates, post covid? will it help the economy then?

>> i don't know because we are not facing a situation today. -- that situation today. it is true that when you look at the situation of other countries, they appear to have worked more effectively in the recovery phase. i would, however, qualify that a bit by saying i think there is a tricky identification issue at that point as to what extent it is negative rates that are driving, for instance, the recovery of the banking system, the lifting of the release of provisions, therefore the ability to lend, and to what extent would that have happened anyway? it is a rather tricky issue in that respect. the evidence is there but is a little bit hard to identify the causes. francine: in terms of sequence, it is not something you would rule out? >> definitely.

there are central banks that are not in the box because their financial systems have different properties. they are in the box. we are not considering using them at the moment. that was governor andrew bailey with bloomberg's francine lacqua. tencent will be one to watch later as regulations in china approved the mobile division of "call of duty." in this has been okayed year's list of videogames which also includes "magic awaken." tencent has been under pressure in china over the last month as regulators sought to restrict access to mobile gameplaying. facebook jumps on optimism about its tiktok challenger with isi saying the real project could be a specific catalyst for growth. eels is intended to be a direct rival to tiktok.

will have more on tiktok and negotiations on its future amid questions about microsoft's global ambitions. ♪

karina: you're watching daybreak australia. i'm karina mitchell with first word headlines. questioning the general manager of beirut court over this week's catastrophic explosion. until 2013 when a shipment of ammonium nitrate was seized and put in short -- in storage. they ignored warnings about the explosive material for years. more than 130 people died in the blast and thousands more were wounded. meanwhile in the u.s. president trump is expected to act alone on friday as stimulus relief talks appear to be headed nowhere. he says he may sign executive

orders boosting unemployment benefits due to expire as the white house and democrats wrangle over the extent of further aid. the democrats say progress is being made about the two sides have major differences as friday's deadline looms. bloomberg index sees the u.s. suffering the worst decline among global peers as the pandemic devastates the economy. america fell 25 places in a survey that tallies inflation and unemployment for 60 nations. almost all economies are projected to be more miserable this year amid covid-19, but only iceland, israel, are close to the u.s. level of deterioration in the annual ranking. -- amid concern about potential fraud. a presidential working group says the sec should strengthen rules on audits of new and existing chinese listings, although it is not clear how or when that would be enforced. the issue involves a two decade dispute over chinese refusal to let inspectors have audits of

u.s. listed companies. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. haidi: as tensions between beijing and washington continue to invest -- to intensify, microsoft says they will be focused on the u.s. operations and three other countries, canada, australia and new zealand. this report saying it was pursuing the entire global business. let's go to our tech reporter in san francisco. there were these reports that microsoft was keen on buying the global operations, not just u.s.. you would think they have enough on their plate negotiating a deal for the u.s. and some of these other peripheral operations. why did you find out on that report? kurt: our sources pushed back on that idea and we were told repeatedly that the conversation was still about what microsoft could put out in the public over the weekend, which was as you

said that they are looking to buy the u.s. version of tiktok as well as all -- as well as australia, canada and new zealand marks -- markets. i can understand why there might be some speculation as to them buying the entire global operation. i think it will be complicated to pull out tiktok just in four markets that we mentioned. it would probably be easier logistically to buy the whole thing. we are told that is not what is being discussed. and that the conversation is focused pretty exclusively on those four markets. shery: a line dropping on the bloomberg now. according to buzzfeed, mark zuckerberg was asked by employees if facebook would acquire tiktok. he did not comment on the m&a itself but he said a ban on tiktok would be a really bad long-term precedent, and he doubted it would help facebook in the long run. whether it is global operations versus u.s. operations, whether it is microsoft or facebook, what makes more sense here? i think why mark

zuckerberg is saying that is obviously, facebook is the global company. they operate in tons of countries. but they keep a lot of their data operations here in the united states. i think if you see the u.s. start to silo off services and say ok, this version of tiktok only works in the u.s., and data has to be stored in the u.s., that opens the door for other countries to perhaps do the same to american companies like a facebook. while mark zuckerberg is probably implying that a ban on tiktok in the u.s. opens up other companies to threaten the same against instagram or whatsapp or facebook, and i'm sure that would be a major headache for them. i'm -- i think he's watching this closely. i don't think facebook has any chance of getting tiktok because of antitrust. this has impacts on them nonetheless. haidi: yeah. and they have reels with instagram there as well. there are many facets of this deal that have people scratching

their heads, including how do they come to a fair price. what are the most complex aspects you have been looking at? kurt: i think we just mentioned a little bit of the technical side, the data storage, that is going to be a huge priority. bringing any of the data storage to the united states. i really think there is an operational challenge here. it was a few months ago that tiktok made a huge higher, they got kevin mayer from disney, and be the global ceo for tiktok. now suddenly tiktok is about to split. what does that mean for kevin and for the operating team? tiktok andy and run other countries or would he go with the acquisition and potentially run tiktok in the u.s. for a microsoft or someone else? i think there is a lot left to be figured out, including the operational stuff. and clearly, they are on a timer. they have a month and a half to figure something out. it is going to be a bit of a rush. shery: our tech reporter kurt wagner there with the latest on

the tiktok negotiations joining us from san francisco. next, westpac warns of victoria's latest lockdown measures have ruined hopes of an economic rebound. bill edmonds joins us next to discuss the outlook. this is bloomberg. ♪

haidi: you are watching "daybreak: australia." market open this friday, trading session of the week is under 90 minutes away in sydney.

the aussie dollar saw strength rebounding, alongside the kiwi dollar, against what was broadly what we saw the continuation of weakness. we are seeing a dip at the moment. still trading above 72 u.s. cents. we are watching when it comes to the cash session. we are looking at the market rate -- recline. expected,ly change this after u.s. stocks pushed higher on government stimulus negotiations. we also are looking ahead to the reserve bank of australia, and its quarterly statement on monetary policy later on today as well. it will be closely scrutinized in the next hour with the latest economic forecast, given we have seen changes when it comes to treasury forecast on gdp, as well as the rba own forecast. westpac economic headed, bill evans, says he has never seen an outlook.

welcome to have you here. it is the uncertainty. we have seen treasury as well as the rba, also treasury given the victoria lockdown really almost tearing up their forecast and throwing them out the window. what is your best case scenario as to where we are headed? bill: certainly very uncertain time. and of course, related to the virus. look, we think victoria will contract by 9% in the september quarter. it is 24% of the economy. so we did think that the end of the quarter the economy would grow by 1.5%. sorry, in the september quarter, 1.5%. we now have that flat. overall, we are expecting the economy to retract. the reserve bank thinking 6%. which i think is a little pessimistic. haidi: i suppose the question is

how strong can the recovery be? given we know that the control of the pandemic, at least prior to getting a widespread and effective vaccine and permanent vaccine, is going to be messy, but if we take into account that we may see more lockdowns, targeted shutdowns, one steps -- one step forward, two steps back, what implication does that have for any economic recovery and consumer sentiment recovery? bill: that is not about uncertainty. you have to take a view on the profiles of the virus. and your growth forecast will pretty much be driven by that. and we don't have any major second waves in the other states. and we have victoria reopening late september. so under that view, the key point for me was that the national economy gained considerable momentum in the month of june. up by 4%. that was double what i was expecting. that momentum has spilled into

western australia, to a lesser extent, new south wales. it spilled into the september quarter. so in getting our national growth numbers, we have looked at it from a state-by-state basis. and we think that momentum and the other states will continue through the end of the year, giving us a more balanced view than if you are looking at major disruptions across the country. and bill, how much of the fiscal transfers we've seen from the government so far are still in the financial system? bill: very good question. if we look at the fiscal cliff, the government has injected 45 billion into the economy in the june quarter. we estimate about 80 billion in the september quarter. and then of course, you have got the drawdowns that we think was 20 billion in the june quarter.

and probably another 20 billion over the course of the rest of this year. billion, and, 80 we have heard this morning that there will be more money going to drop keep this quarter to support victoria. so the 80 billion could be up at 100 billion and the government's estimate is in the september quarter, down to 15 billion. that is a huge fiscal shock. as you say, a lot of that money is still in the system. we have seen a huge surge and bank deposits by household and business. so the money is available for businesses and households to use when it starts to dry up in the december quarter. that is why we have this perverse view that a growth in the december quarter will be a solid 2.8%, despite the fact that the fiscal cliff could be 100 billion in the september quarter, dropping to 20 billion in the december quarter. shery: how much has the jobs

package you mentioned help the economy? the unemployment rate right now seems to be still searching. -- surging. bill: i think the jobs package has been helping a lot of businesses. and a lot of the build and household deposits is related to the super drawdown. and a lot of the buildup and business deposits has been related to draw -- job keepers. many businesses would have kept their workers on anyway, being able to benefit from the job keeper payments. as we move through this cycle, and some of these businesses may find it more difficult to continue, and the job keeper will remain important. i think the other point is that when we talk about the government's fiscal cliff, if you remember when i originally introduced job keeper, they estimate that we have 13 million workers at full capacity in australia. they estimated 6 million, more than 6 million would meet job keeper. we thought that was way too

high. we thought around 3.5 million. since then, they have accepted it is down at that level. this time, they have underestimated how many people will be using job keeper. their estimates are about one third of the 3.4 billion. i think it will be more like half or more. i think the support from -- to the economy from job keepers will be stronger than the government is currently estimating. we are getting increased optimism over the recovery in china. a lot of people saying it will be a v-shaped recovery. how much does that give support to the australian economy in terms of that infrastructure demand and commodities demand? bill: that is important. we have about 150 billion of exports to china. 100 billion of those i think will benefit from china's ongoing strong growth. but i think the outlook for the

process itself is very much been a driven issue by strong demand, but also supply shocks. the supply shock and brazil, and supply shocks that we have seen in the australian market as well. i think next year, as brazil starts to come back fully on stream, and the australians start to boost their production, demand will still be solid in china, but i expect the iron ore process will start to drift off a bit. if you look at our current value estimates for the aussie dollar, at the moment, we have it around $.78, well above $.72 in market. i would think that by the end of the next year, the value will be lower, around $.76. it does not mean the aussie can't keep rising. those cycles we have seen in the aussie dollar over the last when he five years have all been, apart from the one when we had that sharp downswing after the

gse, they have been 2, 3, 4 years. and we have seen the turning point in the aussie in march. so we certainly expect that over the course of the rest of this year and next year, we are going to continue to see a strong aussie. haidi: where do you see the aussie ending the year, given it could continue to follow iron ore higher? and are you continuing to look at the yield different cheating? look, i think the yield differential is very minor in this story. most people's models have most of the -- they have a risk variable in their model, and that is important. but most importantly, it is commodity prices. is our view at the moment that the aussie will be 72 by the end of the year and 76 by the end of next year. that clearly has upside risk to it, given we are already at $.72. there is a lot of uncertainty in the world at the moment.

and a lot of negativity around the u.s. at the moment, which is probably rational. as you know, with -- the u.s. can surprise us. we have saw -- seen the claims were much better than expected. i think the way to look at the aussie is that yes, it is onward and upward, it is a long upswing cycle, it could last two years in march.nd it turned but the pace of that cycle will vary. -- i'm confident the aussie will be higher than it is today. shery: i was chief economist bill evans. thank you for that. we have breaking news at the moment. we are getting the earning results for capital, their first net income coming in at 96.6 millions seeing dollars when it comes to the first half revenue. coming in at 2.0 3 billion sing dollars. one of asia's largest real estate companies. their also getting limited first half impairments

coming in at 173 point 9 million sing dollars. million dollars. we will break down those numbers later on today at 8:40 a.m. hong kong time. we do have the capital group cfo, andrew lim. coming up, we will hear from exclusive -- we will hear exclusively about why the tesla battery supplier expense -- expects robust demand. this is bloomberg. ♪

shery: the coronavirus has hammered global consumer demand, but a south korean company may be bucking the trend. they supply batteries to tesla and others and expects sales to hit a record. david ingles has more on this. of all the companies and south korea, it has arguably had the best year. david: yeah. we are in the middle of earnings season. we all know a lot of companies, the vast majority of companies, not just in korea, but across the world, are likely going to miss their targets for this year, for obvious reasons. this is one company that is doing quite well. they recorded record profits for their battery business and they expected to go up 25% further in the third quarter.

as you can see, the stock has gone completely up. it is a stock in the market. it went from the 10th biggest company in the -- in korea, now the fifth biggest. ceo, weoke with the talked business and targets. enjoy. impact,y, we saw some especially in the first half, especially in march, april timeframe, for example, the united states, china, those countries. but there was demand coming from europe and other countries. we have not seen any slowdown in european demand. some more production to pose on the second half of the year. so we do not have a complete tally yet as far as total year production is concerned. but i think it is very close to our protection that we have had.

. or if there's any impact, it will be relatively small. david: any of the things you are hearing that you mentioned there, or any other things you are seeing recently, making you rethink your targets for production capacity for the battery business? i believe the initial one was 100 gigawatt hours. this year, up to 120 by 2021. do you need to look at that and increase that or does that still make sense to you? much we arepretty sticking to our plan to continue to invest in our capacity, as you mentioned. we have 100 gigawatts capacity by the end of the year. 2022, we should have about 220 gigawatts capacity. i think the rate is still relatively low. 2.6% last year. maybe 3%.

even with the robust market growth of about 40% for the next 5, 6 years, we have to continue to invest in our capacity to secure that over 220 gigawatts by 2022. have in ordere close to 101 $5 billion. so that is a lot of batteries to be made. is it stillplans -- 5 trillion yuan? do you have a figure of what you plan to spend next year and the year after that? hak-cheol: i think in battery alone, we will spend about 3 trillion this year. that was the same or slight increase from what we had in the plan. continuehat ratio will in years to come. david: the market has taken a look at your stock and

obviously, as you would know as well, your stock has gone up substantially. i think you entered either at the top five or you are the top six largest company on the south korean exchange at some point. a lot if that had to do with speculation that the partnership with tesla in the battery business is doing quite well. can you tell us more about how this engagement is going now, what you are looking forward to, and how you plan to fend off competition? hak-cheol: we should secure a production capacity of roughly 25 gigawatts, equivalent to about 400,000 ev's by the end of this year. i think we have a very well poised to get deeper demands of including theers, customer you just mentioned. david: ok. fair enough. fair enough. what is your assumption on how quickly you think the battery business overall will grow every year, and do you expect as a

company that your sales will exceed that industry growth? $3-cheol: i think we expect trillion from our batteries this year. $30 will grow to about trillion by 2025. there is a very robust market growth driven by emission regulation and government policy. so, i think our better business will be growing at the speed of the market. our goal is to either maintain or strengthen our market position in many years to come. so we hope to grow faster than the market. david: we mentioned earlier the market loves the stock. . it closed at 680,000. the price target from analysts that, just toove show you how quickly and how far

and fast that stock has actually gone up. i'm looking at analyst ratings here before i go. buy, buy. i will see you later. bye. bye, david ingles in hong kong without great interview. let's get you a check of the latest business flash headlines. kong tycoon saw profit slumped 29% in the first half. they say the second half will be worse than last year. they have profited for decades by expanding in times of crisis but is hunkering down and putting controls on spending is geopolitics and the coronavirus that are earnings. the group has cut its plans in terms of dividends. singapore saw year on year revenue sink to the second quarter by 94%, to just 30 dollars, as the coronavirus crippled their business. the company's net loss was $170 million, the most since they

opened on the island. plenty more ahead in the next two hours of daybreak asia as we continue to the trading in asia. this is bloomberg. ♪

haidi: very good morning. i am haidi stroud-watts in sydney. shery: i'm shery ahn in new york. welcome to "daybreak asia." asian markets look to round off a winning week as investors await a stimulus package in washington. wall street ended higher. the dollar pulled back. u.s.-china tensions ratchet up further amid calls for tighter controls on mainland