>> good morning. we are counting down the asian major market open. shery: welcome to daybreak asia. , a bid for emerge tiktok u.s. operations which faces a national security review and must win the blessing of trump. i'm studying the feasibility of a mega merger.

-- added to studying the feasibility of a megamerger. -- of helping understate a pay packet of carlos ghosn. we had a wave of dealmaking creating positive sentiment. we had a rebound from last week, one of the worst weeks for u.s. stocks since march. tech stocks taking a breather from the selloff. asset futures trading modestly. watchl continue to trading when it comes to japan. potential takeover for prime minister the middle of next week, futures are looking flat after the yen starts to gain in

the monday session. we will watch for details about the cabinet and what it means for policy continuity playing in two sentiment for the japanese markets. dollar-yen holding steady. modest dollar weakness overnight. that is set to continue. at $37.40.trading opec joining a chorus of voices suggesting the era of oil demand is deteriorating. demand forecast for each quarter as we continue to see shortselling in the oil market. to a series ofrn deals we have seen. oracle is bidding for tiktok u.s. operations undergoing a two track national security review this week as the september 20

deadline looms according to steve mnuchin. tom mackenzie joins us. what do we know now about the process? quicklyngs are moving as we lead up to september 20 deadline. of potentialmember pitfalls involved -- a number of potential pitfalls involved. tiktok will go through a process. the committee for foreign investments in the united states will review the proposed deal and then make their own proposals and put that on trump's desk and it will be up to him whether to give his blessing to the deal. the other player is beijing. allow biteave to darts to go ahead, that is the parent company of tiktok.

we have more details of what this might look like if a deal is signed off. talking about tiktok global being set up in the u.s., that is how it is being described with the headquarters in the united states and it could lead to the creation of 20,000 jobs. our own sources say this is less and moreright purchase of a restructuring of the business in the united states in which oracle would invest in bytedance to create more structure in the u.s.. tiktok put out a statement saying they think this will address the national security concerns raised by the trump administration on oracle befirms and says they will the trusted technology partner. a cut of the wants

deal and no one is sure how that will work and they are also concerned about who will ultimately own the algorithm because whoever controls that has the power to influence the type of content that is filters towards u.s. consumers. so that remains a big question. haidi: have we had much response from beijing on the deal? tom: no official comment yet but we had an editorial in the daily newspaper describing this as extortion of national politics and the white house was pursuing a national extortion. coerceinistration to on the claim that poses a national security threat only reveals the administration willingness to organize a

systematic economic extortion targeting any company that has tech knowledgeable supremacy over its u.s. peers. they are saying it is the abuse of state powers and reuters suggested china would prefer to see tiktok u.s. close down completely rather than for sales so that remains a question as to whether or not beijing will give the proposal to green light. haidi: far from certain. let's get to karina mitchell. tensions, the u.s. is recommending the u.s. considers -- reconsiders travel to hong kong based on the national security law. u.s. citizens in hong kong are told to avoid demonstrations. ties are strained over typeavirus and beijing's

grip over hong kong. and the new prime minister elected japan began his first full day. the vote is the first change of the prime minister for almost eight years after shinzo abe stepped down. tension now turns to the cabinet and policy. passed 29s cases have million with 925 reported -- 925,000 reported deaths. the second most affected country. 90,000 cases reported each day for the past five days. they have more than 4.8 one million infections and short of 80,000 deaths. one day after astrazeneca announced the vaccine trials have resumed in the u.k.,

reuters reports they are still halted in the u.s. and side effects are being examined. neither company nor fda will respond to requests for comments. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: still ahead, the ball is in china's court. the ease you -- the eu says beijing must prove an investment agreement would be worthwhile. a demand in bonds has pushed out yields to record lows. we will discuss that next. bloomberg. -- this is bloomberg. ♪

haidi: forecast seemed to be turning around for emerging-market. -- emerging markets.

only one is expected to lower borrowing costs. towardelds are rising the moving average after being pushed towards record lows because of the pandemic. , great to have you with us. is there he said of inflation starting to pick up -- is there a sense of inflation starting to pick up? increasingly there is a concern that debt is running on fumes. think we opinion, we are not overly concerned at this point, especially because demand globally has not fully recovered and central banks have been accommodated but we think there is need to do more.

in the emerging-market. what opportunities do you see at the moment? >> we like hard currency. debt,d currency particularly those issued by her -- high-yield countries. [indiscernible] the liquidity relief provided to select market countries with good intentions created confusion because they were unclear about the roles of perspective creditors so we there is significant opportunities in em high-yield.

the high profile cases of theseina and ecuador, are risks or could there be something more systematic? >> excellent question. you are right, they would have them regardless of what has happened this year with covid. they were specific to the credit -- i think most investors the fact of the matter is these defaults results in [indiscernible] and high recovery rates that is a testament to the fact aat these countries had willingness to negotiate with creditors and come to an

agreement. haidi: what about countries like india where growth is distant mining and the financial systems aims to be under a lot of pressure? >> that has been a major concern of ours also before this year. they had been experiencing low growth over the last few years, high fiscal deficit, the financial system has become more stressed this year, geopolitical risk has risen in india. so we think there is a high risk in the next 18 months. you are worried about sri , speaking of stability concerns. what is going on? we think the fall in

we thinkmarket -- negotiations will be key going forward. lanka needs to enact significant fiscal adjustment to stabilize debt. the government announced measures to reduce expenditures and increase hiring and they are not the type of measures we would like to see to see the sustainability in the future. we are also waiting for the imf. shery: thank you for your insight. bill gross says investors should be playing defense as stimulus ends and it becomes harder. he told tom keene which trends he sees accelerating as the

pandemic drags on. influence demographic continues, liberalization is turning into d -- globalization is turning into deglobalization. pandemic -- and the pandemic has not helped the globalization, it has accelerated deglobalization. so the virus is changing things. to your memogo today were you talk about a $6 trillion deficit. we have heard this from other sources, claudius dom has made clear we need much more deficit coverage. what does the bond the world do if we get up to $6 trillion deficit? momentbond world at the

is a melding of the fed and thinking,to my way of this sounds derogatory, but the dog and the treasury is wagging it. if they want money, the fed will repurchases, which they have done. do i endorse that? no. is it a constructive thing down the road? probably not. is it inflationary? probably yes. but it has not been in japan peered we melded fiscal and monetary and deficits can increase but we are 100% of gdp already. at some point as others point it, if the fed stays out of

inflation will come back and we have had inflation with financial assets and commodities and they come back in another form. you remember the day recommended the procter & gamble dividend and the world fell off its chair. do we have an asset bubble or bubbles because we have your financial repression? >> i think so. and we have an asset bubble because interest rates are near zero and negatives in many parts to my wayld and that of thinking has been slated anything that have profits far in the future that are growing

fast. repression ifial we want to speak to that has always been swept under the rug and it can be fixed at a later said -- said prior -- fed chairpersons have focused on reinvigorating the economy and given the extent of retirees and pension funds and savers are being hurt, that can wait. but at some point it can't and i think we are beginning to see that. we do not have to talk about prudential or insurance companies or bank, we can talk streetom-and-pop on main where they have no more savings and are not able to save money -- to earn money on what they have left. the problem year by getting

becomes ultimately, it the chink in the armor of this financial complex. gross speaking with tom keene. breaking news. we are hearing that citigroup will resume job cuts this week after a pause because of the pandemic. cuts will affect less than 1% of the bank's global work force of 204,000 people and they say with the recent hiring come the overall headcount probably will not show a job. they say they hired more than 26,000 people this year, over one third of the jobs were in group --and city a citigroup cfo says they hope to keep expenses flat to slightly up this quarter. persistently low interest rate

onconsumer spending weighing revenue. citigroup just appointed a new female ceo. they are resuming job cuts this week after a pause because of the pandemic. this is bloomberg. ♪

haidi: a quick check of the headlines. -- that the electric truck maker deceived investors about the business prospect. nicola was called an intricate force that overstated the capabilities of the trucks. alibaba is set to be in talks with a southeast asia

ride-hailing app. they would be the only investor in the world and would get stock held by uber. biggest be one of the bets in southeast asia since 2016. tencent has picked singapore as they are asian hub. tensionscal accelerated the plans to shift operations out of china. the eu has stepped up to demands on china to open its market further to foreign investors to keep the goal of ceiling the investment deal alive. done in remains to be terms of the agreement, particularly in areas. development.nable we need china to move on these issues. china has to convince us it is worth having an investment agreement. shery: let's get more from that

meeting between xi jinping and three leaders. dan is in hong kong. we have seen the eu be divided when it comes to china. have they spoken with one voice? >> as far as today, they have. the message to china is light unclear. the ball is in your court. donald trump has used the term reciprocity. they are clearly trying to get china to act and pointing out all of the areas where european companies have struggled to make inroads in the chinese economy. a pretty strong message from europe on trade and human rights. they are keen to talk about now,

especially with everything else going on with china. [indiscernible] [indiscernible] of japan scholar lays out the challenge of economic reform. that is next. this is bloomberg. ♪ look here, it's your very own all-in-one

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♪ go your own way your wireless. your rules. only with xfinity mobile. >> this is daybreak asia. ak tock oracle deal faces national security review that will need the blessing of trump. tik tock has submitted the proposal to treasuries the deal requires a signoff from china. investment make an instead of buying the business outright and at least two andeholders invite them would take stakes in the new business. boris johnson's breakfast -- the lawl has

would give johnson's government the power to override part of the brexit agreement. argues the bill is essential for the integrity of the u.k.. thate eu has not taken revival off the table. -- revolver off the table. it seems incredible that you could do this but we are not taking power in this bill to neutralize that threat, but obviously reserve the right to do so. >> the death toll in the u.s. has hit 35 in the west coast wildfires from california to washington state. thousands of homes and buildings have been destroyed. tens of thousands of people have fled their homes. firefighters could have another problem this week. the forecast is for low moisture and high wind. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

shery: an election by parliament wednesday is seen as a formality and the new prime minister of japan pledges to maintain shinzo abe's policies but our next guest says he will be more aggressive. joining us is one of the world's top experts on jimmy's just japanese politics. professor, great to have you with us. that the foreign minister will retain the post in the cabinet. we are waiting to see who he appoints to lead japan. he says he wants to appoint reform minded people.

when expected changes to use the -- what x -- what changes do you of reformsee in terms and reform oriented policies? he has said and he will have to say he continues the policy. but he is a different person than abe. goalsminister abe, his were making japan a big player on the world stage. not is the reverse, he has had much international experience. about raising living lessards, making japan

regulated and more business friendly, one way to think about was the minister in charge of internal affairs and communications. he worked closely with the economic minister at the time. is more inf thinking tune with the kind of government,, small private sector led economy kind that was pushed. underestimate how push,e is likely to especially on structural reforms but abe talked a lot about did not accomplish much.

yesterday he was elected and out the the ldp formality will take place tomorrow to make him prime minister but in the comments after he was elected to the members he said, these are some of the things i want to do and he listed them. overcome the system of bureaucracy were each minister itsn't something -- does own thing and has politicians in charge. he would push it hard as prime minister. regulations, change to encourage small and medium enterprises to become more .nternational

pandemic, ite became obvious that japan's judo -- digital economy is well behind where it needs to be. he is calling he says he will establish a digital technology agency. achieve. has a lot to will he need to do it all in one year? for five yearsn and saw five different prime minister's. what is the risk of the revolving door? >> if he doesn't do two things in the next 12 months, you will have a repeat of what you experienced during those five years. he has to call an election and

when it. -- when -- win it. and he has to pass legislation that will make the public believe that he knows how to get things done and will get things done. if they are consumer friendly policies, he has been a big advocate in his argument years about the need to reduce, the -- to lower the fees charged by companies, he has profit margin 20% are ripping off consumers. if he can do things like reduce mobile phone charges and make possible online medical consultations, another thing has somed for, if he can do

major policies adopted that the public likes that abe talked about i did not do, he will stand a good chance of going on as prime minister for another three years. and failure is, an option because there will be pushed back and we do not know how capable he is of running the government, he has been a very effective number two, if he fails, you can expect revolving .oor prime minister haidi: we know political favor can turn on a dime. we have seen cabinet approval ratings high in the past couple weeks and given you have referred to the handling of coronavirus in japan as playing a game of relay. how much -- a game of russian roulette. i think the chances of there

being an election in this calendar year are very high. to take advantage of this honeymoon, he is coming into office, right now the public seems to be welcoming him. if the numbers in the opinion respectable,rly with the opposition party being in total disarray, it is to losele for his party the majority, so my guess is he to call the election in november and december, get it over with and get on with the business of passing, getting legislation passed that will set him up to be a contender for office. minister, thee

defense minister in the last thele days have said possibility of having an election varies, october or november, is very high and i think that is right. i think that is what we will probably see. haidi: get the mandate. we appreciate your time, professor. we will have more perspective on japanese policies straight ahead. suga might be better than abe with fostering a relationship with joe biden. details, next. this is bloomberg. ♪

>> let's go to sophie for a check of the markets in hong kong. we are only 20 minutes away from open. waiting on chinese activity data and meeting unit from the rba and bank of south korea. in sydney, futures lower. weping an eye on vhb after saw a race to buy stock.

in japan could be looking at a muted start with nikkei futures little changed the yen below 106. selling put weight on the yen. asia snapped a two week drop on monday. bergen stanley warns we are seeing momentum exhaustion. -- morgan stanley warns we are seeing momentum in question. a wall street correspondent joins us. how jarring are the citigroup cuts when it comes to investors

and employees? >> it is definitely something that scares a lot of people, when you hear job cuts. but this has been telegraphed for many months across wall bankt that even though big pledged they will hold off on job codes, they would at some point resume. , they would at some point resume. they are taking losses elsewhere. it is back to business as usual. it might not be when it comes to federal regulators taking action against citigroup. citigroup is facing a possible action by the fed that is looking at the bank risking control section. this could lead to the bank really facing a consent order in

which they would have to set specific goals in terms of how they will improve their technology, something that according to bloomberg sources say is something that help speeds up the stepping down of the current ceo. he was planning on retiring next it has been looming in the background as these changes have been happening. you have two of the nation's biggest banks potentially discussing a merger. are there some regulatory issues with this that should be writing it off completely? these are exploratory discussions. a question i used to ask sources all the time, when it comes to the banking system, it will hit

some significant regulatory hurdles when it comes to merging but it is some thing investors need to think about as a possibility. can they make the case for it? the shares of both firms rose after the news came out. one must ask or whether there are other possible combinations that make sense for these banks. lord: ubs briefly asked the idea of a merger last year weird what with this merger bring to these firms? merger last year. but what would this merger bring to these firms? bank hadeutsche wavering progress when it came to treating an investment making functions. the hope is if they combined they would be able to compete with the u.s. and asian counterparts and that run.

-- on that front. shery: earlier we spoke with mark mage and and they joined other policy makers and activists as the first ever bloomberg green festival to discuss bringing change to energy investments and omissions. engagement doesn't lead to an of change but it is bringing about change. zeronies committing to net and 2050, it's too long but they are starting. we are making a difference in the companies we meet and talk with. they are waking up and getting it. they want to be sustainable in the future and so they have to adjust and adapt to what they are doing. tos hard for a company

adapt, to shift the product line and change the way they do things but they are waking up and realizing they cannot just rely on the past, they have to change for the future and engagement is an effective tool. not as fast as others want but the best tool out there. other specific dialogues you could point to on how you are creating change among the companies you invest in? >> there are many. related.ve one in the last six months of this year we engaged with 26 onferent companies and voted 26 different related proposals at shareholder meetings. on cobalt mining, we have been been engaged in a number of years, cobalt was a source of

thebattery technology and mining has had human rights issues. we have engaged with companies and investors to try to make sure the major supplies of cobalt are doing it in a way that does not range on human s and best quality practices. >> how are you grappling with the mission of domestic sure? every meetingh it because we get protest and public commented every meeting and it comes down to a decision about whether you think investment will bring about social change. for us, divestment has to be an investment decision. oil companies are looking to the future. some are waking up and realizing they want to be energy companies. others are still saying they want to state will companies. those are the ones we are

engaging with aggressively to get them to pay attention to that. and then it is a buy and sell decision. that is what activists have to realize. they are hoping divestment will bring about social change as companies little in points. the reality is if we sell our shares, someone else will buy them. an investor who does not quite -- does not care about climate change. the vast majority of oil companies the world are not publicly held. so change has to come at the government level. portfolioell to our in certain areas that it will not change the area. that comes from 25 years of experience, it has not brought about social change. the question of whether you should own oil or not in the future is an active investment decision. be an activeo

management? we have had al gore speak to our board. not believe in active answer alone, passive management has a role to play in the portfolio. that was mark and chris speaking at the bloomberg green festival. includes lineups investors from phillips. this is bloomberg. ♪

drugmakerth korean yearisen over 1900% this as the nation's retail investors -- hoardd -- florida beds. verizon has agreed to by forfone from america mobile $6.9 billion. they are the largest u.s. prepaid service with 21 million subscribers. verizon will pay over $6 billion

with an additional $650 million to performance goals. thanank will raise more $10 billion from selling one third of the domestic wireless arm, marking japan's biggest share sale in a decade. sellale and agreement to --ped the criminal trial against greg kelly begins today in tokyo two years after he and carlos ghosn were first arrested. kelly faces a decade behind bars. given carlos ghosn is no longer standing trial come what lens should we look at greg kelly's trial? >> in many ways he is serving as a proxy for carlos ghosn.

the trial continued even after he fled japan in 2019. kelly tried to sell -- separate his trial for nissan but was unsuccessful. there is an incentive by the prosecutors to see this through. what revelations could we find and how long will it last? >> trial is scheduled to last , sough july of next year really we are looking at three years since their arrest. they will be testimony by himself,eople, kelly and one omission, carlos ghosn himself.

shery: tell us about the challenges kelly faces. carlos ghosn is not around. there are two other defendant, nissan as a operation and a strange situation is that nissan self is looking to be found guilty, has essentially pled no contest to the charges that nissan and kelly are accused of, understanding -- understating $9 million worth of company station to carlos ghosn. therefore, you have a situation where one defendant is essentially is trying to be found guilty and the other is not and that is odd. it probably harms kelly's chances a little.

stevens with the latest. we are watching for the potential numbers coming out of japan.

♪ to "daybreak asia." from bloomberg's headquarters in new york, i am shery ahn. >> our top stories this hour. asian stocks look set to drift after i u.s. shares climbed made a flurry of takeover activity with billions of dollars in deals done in just a few days.

tiktok must win the blessing of president trump. and as japan's next president prepares his next cabinet takes come that we are seeing signs that his payment of stock market gains -- his period of stock market gains is said to be a strong one. let's get the latest with sophie kamaruddin. sophie: in tokyo, we are seeing losses for the nikkei and the topix this morning. but one analyst expects. strong growth and profits to keep japanese stocks looking good. we are keeping an eye on this one company as well. we are seeing kddi lose ground this morning as suga is a parliamentary vote away from being named prime minister in japan. checking on the open in south korea, we are seeing the kospi 0.2%.round, up we are keeping an eye on this company, which is rising a

mid-local media reporting that it is to buy batteries that supply batteries fall amazon's warehouse robots in 2023. and the korean won is gaining ground. edging towards 11.81. on the front, we are digesting the upfront prices from south korea. we are waiting on that be ok's meeting -- we are waiting on the bank of korea's meeting minutes. the aussie dollar is holding a two-day gain ahead of the release of the rba. also awaiting chinese activity data. the aussie dollar is slightly under pressure because of that. thatrgan is forecasting cnh and the yuan has more room to run. momentum is running into some strong resistance. we want to highlight iron or prices. in singapore, they are stalled somewhat. oldman had boosted its iron ore

price forecast to 2022. we are seeing bhp gain ground in sydney so far this morning. sydney stocks are up 0.2%. also keeping an eye on contest airlines as the cap -- on qantas airlines. shery: let's get more perspective with mliv strategist, mark cranfield. mark come that we have seen with shoes are of these eight-year tenure, japan's benchmark doubling. today, we're seeing pressure. what are we expecting from suga office.in mark: on balance, investors like the continuity of a man who has been on top of the japanese leadership for some time and is familiar with everything they was doing and will not really divert too much from the future, it should give confidence to international investors. we are seeing a bit of a wobble at the opening of japanese

stocks, mostly to do with the fact that the yen is stronger overnight. if you look at the topics in particular the last couple of months, it has managed to shrug off pretty well, it has got itself into the general trend of asia and global equities. it probably will not stay down for too long. japanese equities are relatively underpriced. evil will be looking at that come back at the fact that the new prime minister will probably try to make some key appointments quickly, which shows that he's not one of those people than certainly believes that factions in japan should dominate the thinking which has partly been the way of the past. break to make a clean about and show that he has good ideas for the economy area bearing that in mind and the fact that the yen is stronger, it is not really moving too much in either direction. that should give japanese equities a chance on a relative racist. they are not too expensive.

mr. suga will probably be out to show people that there will be a honeymoon period that lasts a few weeks, maybe into the u.s. election. the rush on japanese stocks just yet is probably immature. haidi: we are getting minutes inm the rba's meeting september. what country does look towards? mark: there has been an assumption for some time that unlike a new leader hinting they would go to subzero rates, the rba has been adamant that that in the plans in the foreseeable future. they need change in their thinking in that direction. the lockdown in melbourne and the hit to the economy, does that change their thinking they may need to do something more dramatic to help bolster an economy? it is really all about whether or not there will be more easing from the rba, and how significant with that easing be?

there are also considering the possibility of going to negative in a should the need arise similar way to the way the european central bank has been doing. haidi: in china, where is the yuan rally going especially with so much data expected today? mark: some people are saying it is really overdone, around the 6 80 levels for dollar yuan. overpriced particularly when you consider the u.s. election is ready close. it has had a tremendous rise, going back since june or so. you had a fantastic rally for the yuan over the last few months. if you look at the bigger there are somegh squabbles between the u.s. and china on the geopolitical level, that has not translated into really harsh action between the two countries. so far there has been no new trade disruptions because of

that. even between china and europe, they maynuing to talk, not be the best of friends but you still see business being done. the overall trend is that the u.s. dollar is dominated by the federal reserve. the federal reserve will be softening, and that is helpful for the yuan. haidi: mliv strategist, mark grunfeld sera:. you can follow more of the story in the markets live blog, and on the bloomberg terminal at mliv . let's get to the first word headlines with karina. >> the european union has concluded is a virtual summit with xi jinping by stepping up demand for china to further open up its markets to investors. the representative said the ball is in china's court to meet the 2020 target trade for an agreement. the e.u. was china to provide more concessions. boris johnson's brexit divorce bill has survived its first

hurdle in parliament, with mps voting 342 263 to advance the legislation. it would give the government power to override parts of the agreement with the e.u.. johnson opened the first parliamentary debate on the bill by arguing it is essential to guarantee that economic and political integrity of the u.k.. e.u. additional government first full day as japan's prime minister elect after winning an overwhelming majority among his liberal democratic party. the vote marks the first change of prime minister for almost eight years, after shinzo abe stepped down because of illness. attention turns to suga's cabinet and his policy. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. mitchell.a this is bloomberg. shery: still ahead, more on the china data today -- the u.s. chief economist for this company

tells us why she thinks the economy continues. and new details emerge of oracles tiktok bid which phases -- which must win the blessing of president trump. this is bloomberg.

haidi: oracle may have sealed the deal with tiktok, but now comes the hard part, winning the deal's a approval not only with china but with president trump. what is the next step now that the tictoc's bid is in? there's still quite a ways to go? >> i think the next steps are really two hear something the us really to hear something authoritative from the white house and also to flesh out the details of the bid

and how it will work in practice. keep in mind the algorithm sale that we were hearing about as a special condition of the white house. it may not actually be part of this deal after objections from beijing. this is more of a partnership outrighthing than an sale. it remains to be seen how this will satisfy the white house's initial request. we are expecting there will be .ome favorability asian television is talking up the oracle bid. you are subtle looking for two and here and it is sounding positive. haidi: yes, he was talking about creating 20,000 jobs. shery: how does this relate to election?ential derek: i think one of the things i would to let people know

very quickly is that china is sway in thea major election. this should go to only emphasizing how big of a play china will be in the selection. remember, donald trump wants to sound tough on china going into this. so does joe biden. they are actually going back-and-forth about who would .e tougher, who will be softer at the same time, donald trump is going to try and run on the economy and he is going to do that by saying that the economy -- he is calling it the china virus. he is going to city economies doing really well, and it is on a good trend now. so look for those trends to kind of converge. shery: senior editor, derek wallbank, joining us from singapore.

citi's global cohead of mergers & acquisitions says mergers & acquisitions is back and it would seem so after an unprecedented day on monday. we have been talking about not only tiktok, but also gilead, verizon and others among the most prominent ones. in an is considered to be with correspondent, he looks at the future of dealmaking post-covid. >> in march and april, a lot of capital raising, a lot of lin dunn revolvers, all that sort of stuff. a lot of concerns about what happened last time. as that subsided and equity market started to recover, a number of ceos said, i've got a strategy. if opportunities become actionable, i will start looking out again. that has built over the last couple of months. on it inat valuations

the databases, they are running of a bit low, lowest since 2013. there is a bit of a valuation opportunity that people can take advantage of. whether that is sustainable given where the equity market is, is highly questionable. >> we have seen a return to the kinds of deals being done. one of the interesting features is we have seen a lot of government intervention, or government's role. morning,een just this the arm and citi deal, where the u.s. government looked at it, and also tiktok and oracle, where the u.s. government already has a prominent role. why are we seeing this increase of tension between state and corporate when it comes to mergers & acquisitions? mark: it is a great question. i am not sure i have a great answer for you, but it is clear that we are seeing relative regulation.

i think most of us would preclude as practitioners that the regulatory environment has gotten tougher whether it be initrust for lasciviou -- or this country with cfius. we are in an environment which is not going away. we will see more government intervention and you have to plan for it. >> what can the company due to plan around it? is it change how they look at the risks, some of the conditions of they might ask for in terms of getting something over the line a. >> little bit of all the above. you have to be smart in the planning process. you also have to look at season ability. can you really get something through in an environment like this? then again, around sustainability, i think we have seen a lot of effort by our client base whether it be on the fossil fuel side all the way

through technology. people are planning for it and they are embracing it and i think it is high time they did it. haidi: that was mark shafir year citi global cohead of m&a speaking with bloomberg's ed hammond. coming up, the spotlight is on you should he do sugar, soon to be japan's next prime minister. would look at his potential cabinet picks next. this is bloomberg.

shery: global coronavirus cases surpass 29 million with the w.h.o. reporting more global cases in a day than ever before. meanwhile concerns mount about vaccine distribution. and asked as an echo as trial remains on hold in the u.s.. francine lacqua spoke with with a representative of johns

hopkins about whether the public will improve a vaccine is safe to use. >> right now my bigger risk is latter, that it will be so much confusion around a vaccine that by the time it is approved, people will be wondering whether it is safe or not. i have more confidence that the studies of the right ones and the regulators will be careful tojust -- in deciding what make available to people. -- enhancingcines a vaccine developed in the past come at what that reassure people that take it? joshua: these are very different vaccines than the ones in the past. it is important for the regulators and the scientists and public officials to be talking about them really on a daily basis now with the american people and people in their own country, because people have a lot of questions. they should be answering those questions. it is pretty unfortunate that so

little about the studies is officials.from instead it is like little tidbits of information coming out from investor calls and company press releases. that is contributed to the confusion about what is happening. francine: we do you expect a daily or weekly press conference to make people aware of what they are doing or whether that is even more confusing, because most of us don't understand how the vaccine is made. we are not barrel -- we are not irologists. . joshua: they could be answering people's questions. the basic concept of the vaccine, to explain to thousands of people in the studies about getting the vaccines, how methodical they are about collecting adverse effects, and how theywill no,

will check to see with of the vaccine is preventing serious cases of covid rigid other things should be explained that aren't fairly well know. clarity would help people. people would talk to their friends, they would understand more. people could follow these and understand. also, i think that every piece of news is going to be good news. some of these vaccines will not work. if you are not prepared for that, it may seem like all vaccines don't work. and that also could be pretty confusing francine: what do we know about how the government process is going ahead with this? do we need more transparency just from government to see how much pressure they are putting on companies? joshua: they should be more transparency. we should learn more about the protocols, the setups for stopping the trials. then when we are a little further along, there needs to be a lot of transparency about what

the data show, and what basis does the recommendation coming from the regulatory agencies authorized or approved the vaccine. we are past the point where people just trust a decision without any real explanation behind it. good news is in the u.s., they are definitely moving in this direction, developing an .dvisory committee it would be better in my opinion for the agencies to start showing that level of transparency now. haidi: joshua sharfstein from johns hopkins school of public health. let's get you a quick check of the latest business flash headlines this hour. citigroup will resume job cuts starting this week, ending an earlier pledge to pause reductions and made the pandemic. the bank says cuts will

affect less than 1% of its global workforce, and the overall headcount will likely not show any drop. citigroup says it has hired more year.6,000 people this federal regulators are reportedly weighing actions i guess citigroup -- i guess citigroup's control functions that persisted even after the lender spent $1 billion in that area this year. the bank remains in discussions with the fed and no imminent expected. ubs has been studying the feasibility of a megamerger with rival credit suisse. there have been no formal discussions held. talk about consolidation in the european banking space has been heating up, as the pandemic ads challenges already weighing on profitability. pop is excited

to be as the prime minister. we are joined from tokyo by our correspondent. what do we know so far? >> now that suga has been elected, he will form a new covenant and names of the likely prime -- likely ministers have been trickling out. so far, here is what we know. local media is reporting that he plans to retain the finance minister the foreign minister,, the secretary-general, and the diet a fair chair in a sign of maintaining that stability lgp.in the within the reshuffle, he also plans to name a former into the affairs and communications minister as chairman of the party general counsel. the current election strategy

committee chairman will take over the party's chairman title. and we are seeing reports that he will appoint a new chief cabinet secretary. haidi: is he likely to continue with abenomics? could he do more where the various others may not have been successful? suga has pledged to continue pushing ahead with abenomics even before the election, which means he is likely to leave monetary and fiscal policy as they are, keeping them the same while trying to make his mark on structural reform such as lowering the mobile cell phone charges. one of the first key economic decisions for him as prime minister will be the timing of us which stimulating a return to growth instead of focusing on life support aid for businesses and households hit by the pandemic.

shery: what about the possibility of a snap election? >> the general elections will have to be called by october of 2021. senior lawmakers have hinted at a snap election after the new prime minister is elected. the finance minister has said the election may come soon. the defense minister expected one possibly next month in october. at the news conference last night, suga, who typically would have the final say, said it would be difficult unless experts viewed the virus as being fully brought under control, indicating we are not sure when exactly the lower house will be dissolved. 's stressed the importance of rebuilding the economy well at the same time containing the coronavirus. correspondederg's in tokyo. we will get more perspective on japanese politics ahead. sophia university's tina barrett says he might be in a better

develop a abe to relationship with joe biden if he wins in november. we are looking forward to the monthly data dump from china. we get a preview next with ubs

>> let's get a check of the markets with sophie kamaruddin in hong kong. sophie: asia stocks are mixed, mostly lower this tuesday. up .3%.ealand, qantas losing ground as we learn the carrier is reviewing office space in review of headquarters. checking in on forex, the quibi leading losses with the aussie dollar as we wait on her eight meeting minutes and chinese activity data. the offshore yuan holding there a 2020 high and the anhelina a two-week high, while we have

japanese stocks under pressure. -- the yen holding a two-week high. japanese telcos under pressure, the three big carriers extending declines as suga calls for lower mobile fees. rakuten halting a three-day advance. with asian companies boosting cash buffers, binging on cheap financing, that is helped ramp-up m&a for this year. a week fork level deals this year. including thailand's cp foods and softbank and carlisle, also busy in india. looking ahead, tell them are predicting eight oracle tiktok deal could be a precursor to other m&a of tech players in the em space as by could go on a shopping spree. flipping the board, speculation over eight grab and object merger has surfaced as alibaba is reportedly in talks to invest in groep as tie dust china's tech kinds invest in southeast asia.

turning optimistic on southeast asia stocks saying it is time to buy into these beat down equities. base case for ossian targets is 417% growth on is 70% -- asean targets growth by the end of 2020. economicsomberg expecting china's august activity data to show the recovery made progress when it is released letter. our -- later. economist -- china economist joins us now. we have seen in the chinese economic recovery emergence when it comes to manufacturing, the industrial side of things doing well. but demand-side and retail sales under pressure. shery: what we expect to see in the numbers today? ,> industrial and exports

construction, activities that require less human activity have improved faster and stronger. consumer sales for services has been lagging behind. today we expect industrial production to grow 5.2% year on year. fixed investment we are looking for 6.5%. inperty sales and investment the high single that just. four consumer cells -- single digits. we thinkumer sales, in august finally sales will come to the same level as ergo, flat rather than continued decline for the first seven months. shery: what does this mean for policymaking? we have seen china tightening rose in opposing financial demands and it comes to the financial industry but we have seen when it comes to stability the economy they have been more

prudent this time around so we have better numbers. does that mean they will start tightening on further measures perhaps? oh, so the recovery has definitely been stronger than expected in the last few months, so i think you are right, the authorities have been printed and they did not give it all out -- prudent and they did not give it all out and they have also kept an eye on the financial risk and on property bubble. because they of course remember the previous stimulus consequences. i would not say that they start to really tighten. policies,ably easing especially on the monetary side. now they are paying more attention to financial prudence he, to regulations. especially on some of the more dust smaller banks and institutions, also on developers.

them tog signal, asking lower, other they would face tightening. so it is more the margin. on the other hand credit growth should pick up further. tsf credit growth is already up 13.4% and we expected to peak at 13.8% in october, still a little bit more. but no additional policy easing coming through. haidi: to inspect to see more targeted easing aimed at shoring up as best -- domestic demand and consumption. we continue to see this being a supply-side driven recovery. bloomberg economics does not expect retail sales to be out of the trough yet. yeah, so they have focused more, when they talk about targeted easing, they have focused more on targeting's more

-- small and medium-size enterprises. and their ideas that this would also help shore up employment, which would then help to support consumption. i do not expect any additional policies to really support consumption by itself, given that they have been relatively reluctant, even during the shock of covid-19, when many people were out of work at incomes were had. so i -- were hit. so i do not really see individual measures of the moment. it is really an indirect way through employment, through social security improvement. and also this reform organization and so forth. so if the pboc does remain prudent as expectations are, does the policy diversions with the fed grow further? and do you expect out to see that continuing to sport that you on? =-- yuan.

topboc has been reluctant inject liquidity and they let rates rise in the last few months so the rate differential has widened. we expect going forward, the rates probably will state range bound, at these kind of levels, so with china's policy to try to attract foreign investment onshore, that increased inflow and so on. indeed continues to support the rmb. authoritieso think are wary of uncertainties remaining on the trade front, the economic front,. so i do not expect them to let the dollar see a wider move too much stronger, thinking that 6.8 is probably as strong as it gets. all right, ubs head of economics and chief china economist. we will get a reaction on the chinese data dump later on.

we will also be tackling the broader asia economy. adb chief economist will join us as well. next we take a look at a small business sector, how it is faring amid the pandemic with the ceo of an accounting platform software. this is bloomberg. ♪

asia.s is daybreak the first word headlines. deal faces aacle security review that will also need the blessing of president trump. any deal also requires us on our from china. oracle will make an investment in a restructured tiktok rather than buying a business outright. ,t least two shareholders sequoia capital would take stakes in the new business. meanwhile, recommending americans reconsider travel to hong kong, the state department raised its business and advisory based on application of the national security law. u.s. citizens in hong kong are strongly advised to avoid demonstrations. the move comes as u.s.-china ties remain strained over the coronavirus, the treatment of uighur nordics and beijing's increasingly tight grip over hong kong.

global coronavirus cases passed the 29 million mark was 925,000 deaths. more glue cases and one day than ever before -- more global cases in one day than ever before. a surge in india has seen 90,000 cases each day for the past five days. the country has 4.8 million known infections and short of 80,000 deaths. one day after astrazeneca announced its covered vaccine trials resumed in the of kate with oxford university, reuters is reporting remain halted in the u.s.. it says regular leaders are examining the side effects suffered by a british patient. neither the company nor the fda would immediately respond to requests for comment. global news 24 hours a day on air and at quicktake by bloomberg. powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. between march and june of

this year 56% of small businesses in australia received wage subsidy payments as compared to 76% in new zealand and 52% in the ok. these numbers -- in that u.k. reviewedbers have been from cloud accounting software firm xero. the ceo now joins us from wellington. tell me from the lens of the data you see in your business, what has been the impact of the pandemic? and how quickly is recovery going? >> thanks for having me, haidi. as the report shows of the biggest take away, is the connection and alignment between what happens on the hill front, in response to covid-19, in terms of restrictions, with the combination of that which government provide small business. then you see the flow on effect

to revenue and jobs. everything is finally balanced around those things. there is no question underlying all of that it is challenging times for a small business. that is why we are very much focused on helping and doing what we can to support them through this challenging time. so what has been the impact on your business and to what extent can you feasibly look at what the outlook is, given that in a lot of places, we are assuming a lot of small businesses that have not survived will not be coming back? at ithink you can look that way but you can also say to count ongoing the resilience of small business , for our economy, given that small business is 90% of organizations and the economy, companies in the economy. over 60% of jobs. we need a strong and resilient small business sector. we need to support them and

their many ways we can do that. certainly government assistance in supporting the adoption of technology is a key thing, and that a certain a something we are trying to do by making sure that we provide information to small business customers through the xero on air program we are running this week, a whole bunch of digital content that can help them with everything from what is happening on the economic front, threw two, how do they to advantage of -- through how did they take advantage of technology and look after their own well-being? that is one area and the other is looking -- making sure -- making sure that getting technology and has a small business is easier. there's no question adoption of technology helps in dealing with these challenges, particularly when you are restricted in how you interact with customers physically. shery: let's talk about your business. you carried out the acquisition of the lender, so how has the coronavirus impacted some of

your strategic ambitions? >> our view is very much long-term. there's no question the opportunity provides small business, which has been underserved relative to large enterprise and consumer, is a great opportunity and an important opportunity for our economies around the world. so for us, in terms of strategic intentions, covid-19 has not had an impact because ultimately all of the drivers be timed adopting new technology are heightened now, by virtue of what small businesses are experiencing. and cloud technology can help you in a sense get paid faster, manage cash flow better, access to capital more efficiently. and also to serve your customers

in new and different ways. so there are many reasons for small business to really embrace and understand the opportunities here. the thing we have to do is to encourage them to do so. shery: where is your growth going to come from for the next few months? >> we reported our performance in the first four months of the fiscal year, which covered april-july. added 90,000 subscribers and subscribers in every region around the world where we operate in that as many including asia which we entered in 2016 and we are excited about the opportunity we can see in asia to serve small business, particularly in singapore, hong kong and other markets where we are supported by local cloud accounting partners. great opportunities there to continue to support our customers and grow our business across the board.

steve, as restrictions are lifted across some parts of new zealand, borders will remain closed. what you want to see in terms of policymaking from the next new zealand government, to help the small business sector? >> i think governments have a tough job. they are managing those dynamics i touched on earlier. are alsoovernments very positive encourager's across the region, doing business digitally with small business. i would say more of that is a great thing. anything governments can do to encourage small business doing business digitally now is a powerful thing. and that is what we would encourage. vamos, thank you for your time. the pandemic is pushing more people toward digital payments and we discuss with the

senior vp of international markets of paypal. we do have breaking news at the moment. we are seeing sony erasing earlier gains and bloomberg has estimated has cut its playstation 5 production for this fiscal year by 4 million units down to 11 million because of ongoing production issues with their custom-designed console,r the new according to people familiar with the matter. sony had in july boosted orders with suppliers because of high demand for gaming they expect in the holiday season. and people are stuck at home during the pandemic. now we are hearing that sony has cut the estimated playstation 5 to around 11 million. that sony stock is giving up earlier gains.

there production yields, which have cut into their ability to bruce -- to produce as many consuls as they wanted. coming up -- asthmatic consuls -- to produce as many consoles as they wanted. coming up next, alibaba, eight bloomberg skip. -- bloomberg scoop. this is bloomberg. ♪

haidi: we are getting updates when it comes to a vaccine. times, from the global saying a vaccine could reach the general public as soon as november. as we know global powers are in the vaccine rays to get it disseminated amongst their enteral public as soon as possible. a group from china saying they could have a vaccine in the general public as soon as november. let's get you business flash headlines. shin poongugmaker pharmaceutical has risen. once knowncompany for parasitic worm remedies is conducting a trial of its malaria drug. it is jump to six billy dollars.

-- $6 million. raise $10 million in a landmark sale. two sheets sell sopping shares sales and softbank selling its chips division arm to nvidia. as they consider taking the company private. the sec is said to be examining nikola, over a short seller's accusations. the researcher said they overstated the cap abilities of their trucks. company pushback accusing that short seller of making accusations to manipulate there should the value of their shares. to invest ina southeast asia and ride-hailing grab.

to acquire some of uber's statement company. one of the e-commerce titans biggest best in the region -- bets in the region. our chief correspondent is on the line from asia. alibaba would be the sole investor in the funding round, 1/5 and it comes amid growing questions in the companies ability to live up to its lofty promises. southeast asia is a huge region, 650 million people and a lot of potential. grab will give alibaba access to data on millions of users in eight countries including indonesia, vietnam, pulsing is growth economies. access to ofven growing delivery point, digital wallet of financial services, so

let be gained by alibaba doing this. alibaba is betting big. people say the three billy dollars and may invest represents the biggest investment in the region since its first investment in an 2016.erce platform in according to bloomberg intelligence, the investment in grab could boost user growth, help play catch up after losing ground to shop the back by tencent. it is almost a double edged sword and coming at a time when it is facing mounting competition from indonesian rival go jack. relations between the two companies, as we have been reported, has been pretty hostile. this opportunity for alibaba comes at an opportune time. haidi: has tencent joining

alibaba, bytedance to choose singapore as an asian hub? haslinda: that's right and not surprising even growing hostility from the u.s., forcing tencent to look for an alternative home. tencent sent in a statement it will open a new office in singapore, to support its growing business in southeast asia and beyond. recruiting foris positions including technology, business development. it is looking for positions to fill dozens of job openings, including commerce, cloud computing, a wide range of jobs. alibaba, not alone in seeking -- tencent is not alone in seeking singapore, alibaba and bytedance also in this huge race to build up a presence close to home.

under pressure not just from the u.s. but also india. people considering a shift of business operations including international game publishing for some time now. it is looking to expand that. people may say, why singapore? singapore is pretty neutral and it has been careful not to pick sides between the u.s. and china. our chief international correspondent for southeast asia, haslinda amin. regional victoria is said to have easing covered restrictions, according to the premier speaking at the moment. anders is saying regional victoria will take a third step out other restrictions from 11:59 p.m. tomorrow, dan enters calling this a massive move -- dan enters. outdoor gatherings will be increased up to 10 people and up to five is that ours from a

nominated household in homes. general hospitality, entertainment, loosening of restrictions as we continue to see the case numbers out of tori a trending in the right direction. shery: and take a look at how sony is trading at the moment, at one point falling 2% on the news at cut its playstation 5 production by 4 million units. more to come on bloomberg china open. this is bloomberg. ♪ so you're a small business,

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>> welcome to "bloomberg daybreak: asia." are counting down to the open of trade in the chinese mainland and hong kong. tiktok's u.s.or operations awaits a national security review and president trumps blessing and we still do not know what beijing thinks about the deal. >> the au steit