>> good morning, welcome to "bloomberg daybreak: australia." i'm haidi stroud-watts in sydney. sophie: we are counting down to major market opens. >> the top stories this hour. didi tumbles as beijing cracks down on the company. it may discourage china's tech giants from listing in the u.s..

>> the s&p 500 snaps a rally with a plunge in treasury yields weighing on banks and small caps. shery: sydney's lockdown may be set to continue local reports saying covid restrictions will be extended for at least a week. this is a picture across wall street. u.s. futures are under pressure in this session. after we saw the s&p 500 snapping the longest winning streak in almost a year since august of last year. we had the 10 year yield really falling to that lowest level since february. the thirty-year yield is testing its 200 day moving average. so we saw financials leading the declines. the russell 2000 losing more than a percent. when it comes to crude prices, seeing upside towards at $74 a barrel level. this after we saw the tumble in the new york session, which has been surprising, given that we have seen a rise for the highest level in 60 years. it has been on a wild roller coaster ride given opec-plus

failure to agree on output. it has all been about didi. it has fallen below that $14 ipo price. that crackdown on didi and other tech giants really being felt across markets. we have seen that crackdown not only on didi in tech, antitrust issues, so many issues plaguing chinese adr. though this gtv chart on the bloomberg is showing the golden dragon china index, that white line that has a underperforming the broader market. the crackdown wiping out $42 billion of the market value since november when that aunt ipo was wrapped. haidi: some of those lessons learned from the aunt ipo, what happens alibaba. yearly we are seeing a rehashing of the same thing when it comes to didi. what is it mean for the future

of chinese listings in the u.s. you would imagine any company looking to go down that route would be a lot more cautious. is this a sense that beijing is trying to discourage the outside ipo and bring these companies closer to the heart of the party? shery: let's discuss all of china's regulatory action on didi and other companies. the are now joined by the ceo -- by the cio of the china focus provider that exchanged rated funds. great to have you with us. what does this really mean for those companies, when you have a regulatory crackdown? have we seen the impact and should investors be worried by now? >> that's a great point. while there is a lot of regulatory by, we have not seen it actually impact the net income statement nor the balance sheet of the companies involved. q4 own warning's in 2020 were very strong -- q4 earnings were very strong during the regulatory crackdown.

it is really more than the investment sediment, the overhang of not knowing the endgame of this regulation. shery: can we say that all of that has been priced in already, or could we see more jitters ahead? >> i think you have a lot priced in here, i think you have a u.s. regulation that is a factor. five of the 10 stocks in u.s. listed chinese companies. then we have a value growth rotation. investors balancing themselves between value and growth after very significant outputs. he much everything but the kitchen sink has been thrown at the stocks. companies are looking very inexpensive from a historical, but especially on a relative basis. >> what is this telus, this experience with dd and financial tell us about dealing with regulators? this story is to be believe that

they were approached three months prior to the ipo by regulators saying that they should delay. is the fact that they went ahead with that a misstep? >> i think the didi management -- this will be the key question, particularly those that participated in the ipo, did the company know this was coming? 48 hours after the ipo the shoe drops. it's very disconcerting if management didn't know. certainly the bankers involved will be heavily scrutinized on their level of knowledge. i like soap that management did not know this was coming, that the bankers did not know. there will be angry investors who participated in that ipo because of it. haidi: when you look at the fundamentals of these companies, once the regulatory rock -- washup is concluded from beijing, you look at something like them and you remove the app from the store, but i don't know anyone in china that does not already have it installed.

what is that mean fundamentally for their businesses going forward? are they still good companies with a lot of demographic runway? >> the companies themselves are doing very, very well. they are geared towards china's urban consumption story. 30% of all retail sales flow through the companies we have. and because of this investor sentiment, it's unknown on the regulatory situation, it has depressed the values of those coming. our china internet etf is well below our five-year historical pe. we are down to 23. we are at a peg ratio below one compared to u.s. internet, it's trading at a peg of two. so it has a really negative effect on investor sentiment and confidence around china, and i think that's where it is important that investors should know that the companies have been adhering to these rules, and it has not been negatively affecting their income. it's not affecting their balance sheet at a negative, it's a

balance sheet issue. >> what will they do to the chinese companies looking to list in the u.s. we are seeing a regulatory crackdown in china but a more hostile environment coming from u.s. regulators, despite the fact that we have seen $7.9 billion in the u.s. raised by chinese firms. >> the narrative does not fit the dialogue where you have all these companies coming, that is despite the holding companies accountable act. at the same time, there is just so much money involved. both on the china side in the u.s. side. the recently removed their heads of the pco be from the trumpet ministration. so i think under the new sec new regime change, this issue of the audit papers, i think we can find a solution there. and ultimately there's a lot of money involved. there is law of u.s. money and equity that once the u.s. exit

as part of that strategy. so i think they will find a way to come to communicate and solve this long-running issue. haidi: really great to have you with us. we have a big guest coming up amid that pressure on u.s. and chinese firms. we will hear from the ex-president in just a few hours time. take a look at how asian markets are setting up for all of this. sophie: looking at futures, and asia we are looking at a losses for the region. including in china after we sought benchmarks on the mainland trace back some of the dates. barely in the red. financials and materials offset the losses that we saw in tech and health care. pulling up the chart on the terminal. take a look at the csi 300 health sector for the health care gauge. you could see a bargain underway

given the valuations for that index have fallen to the lowest in four months. this as you see long-term gains for the industry after short-term -- short-term pace for the oncology industry in china. switching out the chart right now with the midweek check on the grr function for the msci apac index. several analysts are seeing upside risk for oil prices and we have seen energy stocks outperform this year in the region, even as inflation areas have kept a lid on gains for inflationary stocks in asia. haidi: coming up next, sydney's lockdown is expected to be extended for another week as officials signal an approach on restriction. the rba takes its first baby steps to taper its qe. joining us to discuss later this hour. this is bloomberg. ♪

>> i'm vonnie quinn with the first word headlines. the white house says it's encouraged by ongoing opec-plus talks. it's confirmed the administration has spoken with officials from saudi arabia and the united arab emirates and the hopes of reaching an agreement to send the rise of crude oil prices. u.s. briefly jumped the highest in more than six years after a bitter dispute between saudi arabia and the uae blocked the supply increase. that plunged opec-plus into crisis. bloomberg has been told russian government hackers breached the computer systems of the republican national committee last week. sources say were part of a group that has been tied to the kremlin for an intelligence service. the group has previously been accused of breaching the democratic national committee into any 16 and a cyberattack involving sober -- solarwinds.

they denied the systems were breached. chinese president xi xiping is warning against politicizing the pandemic. much of his speech was devoted to discussing china's willingness to work with other countries. the rhetoric used from addressing the nation last week, saying china cannot be coerced or bullied. president biden is appealing to americans who have not been vaccinated against covid-19 to do so. biden missed his fourth of july deadline for having 70% of american adults partially vaccinated and 160 million people fully vaccinated. speaking at the white house, he discussed the dangerous -- dangers of the delta variant. president biden: in today's briefing we discussed how it's on behalf of all cases in many parts of this country. this morning will be transmissible and potentially more dangerous. and it should be because of

pre-consideration. it seems to me at should cause everybody to think twice. >> global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts and more than 120 countries. this is bloomberg. shery: over in the u.k., new covid cases could rise 100,000 a day over the summer. as a country prepares to lift the remaining restrictions this month. u.k. health -- spoke earlier tuesday. >> we do expect that for the time being, infections to continue to rise for the reasons i set out yesterday. by the july 19, the point where we entered to set forth the advice that we receive and it could be as high as 50,000, double what they are now on a daily basis. and as the right honorable gentleman said, beyond that we believe they will continue

rising. as it goes up further, it's less certain, but they could go as high as 100,000. >> here in australia, sydney's lockdown is extended by a week as health officials struggled to bring the cities covid outbreak under control. paul allen joins us with more. what do we know about what we are expecting today? paul: the crisis in the meeting last night got advised that the lockdown should be extended until july 16. local media is reporting that we will hear more from the premier in three hours time. latest case numbers show a continued daily rise in the problem seems to be this lockdown light. we have people out and about all weekend. beaches around sydney were busy. some of the stores were open and stretching the definition of eventual service. there are similar reasons that people have been out. the lockdown is not really doing

the job, and it looks like things are soon to be expanded. >> the australian grand prix also being canceled for the seventh year in a row. paul: the government is blaming the slow vaccine rollout in a reduced on arrivals, which is kinda weird and the victorian government was one of those lobbying for the arrival. it's disappointing. the outbreak was coming under control. six days with no local cases. the victorian tourism industry has called this a fair day. but it breaks convening the roundtable with his his figures that improve the vaccine rollouts. 30 business leaders will be there, including the ceo and the commonwealth bank. the vaccination hubs and shopping centers that it manages, and the workplaces may be involved in the rollout by september. this should speed things up. 100% of the population is fully vaccinated in australia -- only

7% of the population is vaccinated here. haidi: let's look out trillion in new zealand. be on the lookout for more analysis after the first baby steps towards tapering the qe program. central banks also had reappointed the deputy governor for another five years. in new zealand, a 2021 rate hike has boosted the kiwi and yields there. there is a total unwind of pandemic rate hikes from the end of 22. in biden's asia head cocounsel has a warning for australia. settle in for a long haul fight with china. he spoke with the financial review. do have lots more ahead on daybreak australia. this is bloomberg. ♪

shery: the pentagon has scrapped

a $10 billion cloud computing contract that was controversially awarded to microsoft in 2019. the defense department indicated that microsoft and amazon, the bloomberg opinions columnist joins us now. get us started with what the decision was about, because it took years of legal infighting. >> amazon has been fighting since 2019 when the contract was originally awarded to microsoft. amazon said that the trump administration interfered in the whole political process and it was unfair when it was awarded to microsoft. haidi: what are the implications of this decision now, particularly for competitors? >> it's great for amazon because they get access to this high-profile project. it's good for the military, they accelerated the deployment of how service is. but i also want to mention it's

probably the biggest winner being jeff bezos. the network reached a record 2 billion. shery: microsoft lost out on the full deal, right? >> i argue that its net positive for microsoft overall. they got a lot of credibility when they won the deal in 2019 for their market share and corporate clients. and they also -- their data also shows that they are growing twice as fast as amazon last year. so i would say that microsoft has benefited, and they will win a big part of this deal going forward. the pentagon implied that they have been able to get the deal to amazon and microsoft as a multivendor deal. haidi: this is not a decision made just on technical merit. what's the criteria the government would be using? tae: the pentagon argues that there is technical merit. the capabilities of microsoft

and amazon, with their cyber security defenses and all the services they have. the pentagon will argue that it's based on merit. shery: bloomberg opinion columnist, thank you. this has moved to be a very good payday for jeff bezos. that 4.7 percent rally in amazon stock price, sending his wealth to a record of $211 billion after the pentagon announced it was canceling that cloud computing contract with microsoft. the rally boosted bezos fortune by a $.4 billion -- $8.4 billion. the last time anyone on our bloomberg ranking came close was elon musk back in january. that was when his wealth briefly hit $210 billion. we know tesla has had some growing pains since then. shery: not surprising, given

that we have seen those gains for tesla stock, but those growing pains are continuing now. we are seeing tesla under pressure and china. there has been a huge onslaught of negative news when it comes to tesla, software flaws, and so on. we will watch what happens to that rich go category as we continue to see those tech titans doing well. haidi: always a fun function on the bloomberg. we will stick with tech in china , and we are taking a look at the chairman planning to take this company private. we saw on the back of that speculation jumping 40% in new york. this is after reuters reported that a consortium would offer as much as $100 a share to delist and value it at as high as 20 billion. they paired their gains to close just a percent higher after saying it was not true that its chairman held discussions to go private. asking brokerage services in the

u.s. and europe as a grapples with big losses for the capital collapse. the japanese bank has already informed some regulators and clients about the decision. they lost almost $3 billion when it unraveled. the decision is a setback to the lenders u.s. expansion plan. mitsui will buy a 75% stake in indian credit for $2 billion. the move marks the first entry by a japanese bank into india's retail finance business. japan's second-largest vendor will acquire the rest of the indian credit firm as a unit in singapore says investment -- saves investment funds. blackstone president and ceo says is still a pretty good time for real estate. they have a range of topics, including the booming property market on the first episode of bloomberg wealth with david rubenstein. >> if you talk about for-sale single-family housing, there's probably more risk in the sense

that you are building something and you are selling it and it's a function of the market. if you are talking about rental housing, think about apartment complex, that tends to be less risky because it's less difficult. people don't give up their apartments when there is some volatility, but nothing like office buildings or hotels. i would say residential rental real estate is safer, less volatile. in commercial real estate involves office buildings, warehouses, which has been the biggest thing for us over the last 10 years, hotels, shopping centers, senior living facilities, and all of them have different risk returns depending on geography. david: another way of looking at real estate is things that are already built. is it risky and higher reward to build something, or are you in the category of buying things that exist? >> we are in the business of buying existing real estate at a discount.

we bought the cosmopolitan hotel and casino in las vegas. we bought it for less than half of what it had been built for because it was built during the financial crisis. that to me is ideal. occasionally we will build things. but in general, we like to try to get into real estate at a lower basis when it's producing income. the problem with development is it's like saying, i'm going to ipo years from now. when you show up to lease your building, you could be in a different economic environment. you may not have tenants or revenue. we go towards existing real estate. david: when we were growing up, i'm older than you, people wanted to own their own house. but you have been buying a lot of rental housing. is that because you think young adults are not as interested in buying their own home and they want to rent now? >> no, i mean, there could be some of that. home ownership rates have gone down. there is the sharing economy,

airbnb, uber world we live in and young people may be more inclined. but if you look in the last 12 months during covid, there has been a surge of people wanting to own homes. i think our investment, or i know our investment in rental housing is based on the facts that they haven't built a lot of housing since 2008-2 thousand nine. we have averaged less than a million homes built in the united states during that period, versus the one million. that has created it for rental values. as the economy reopens here, i think the shortage in housing will become more acute. we continue to like it as a factor to invest in. shery: that's a president and sector john gray speaking to david rubenstein. the rba is forced to taper its qe's. our great strategist joins to discuss. this is bloomberg. ♪

>> you are watching "daybreak australia." i am vonnie quinn with the first word headlines. less than a week after debuting on the new york stock exchange, shares of didi plunged -- of didi plunged below there price. china's state council said last week it was investigating didi and ordered online stores to remove the app. page and warned it intends to tighten oversight of data security and overseas listings.

a new report from the cdc says the benefits of messenger rna covid-19 vaccines clearly outweigh the risks including among young adults and adolescents. this is despite hard complications seen in a relatively small number of mostly young men. concerns have been growing that the possible side effects could threaten vaccine uptake as the delta variant continues to spread in under vaccinated u.s. hotspots. a bipartisan group of lawmakers injected new life into president biden's infrastructure deal. the 58 member caucus is said to endorse the agreement with a group of democratic and republican senators and it called for a quick standalone vote. this is contrary to nancy pelosi, who tiny house approval of the deal to a later, more substantial tax and spending bill. bloomberg has been told russian government hackers breached the computer systems of the republican national committee last week. sources say they were part of a

group which has been tied to the kremlin's foreign intelligence service. the group has been accused of breaching the democratic national committee in 2016 and of a cyber attack involving solarwinds. an rnc spokesperson denied their systems were breached. syria may test u.s.-russia relations after the summit in geneva. an existing agreement over international aid into syria is dead to expire july 10. the u.s. and allies want to avert a shutdown of support for syrians living in rebel held areas. russia has been reducing aid, arguing it undermines the sovereignty of dr. al-assad's regime. -- of bosch are al-assad's regime -- of al-assad's regime. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> the rba has taken its first baby steps.

governor philip lowe spoke after the banks meeting on tuesday. >> the situation today is quite different from that that we faced in march last year. we no longer are looking over a cliff but instead we are transitioning from recovery to expansion. shery: let's talk further on this. if you take a look at the market reaction we had, is there a sense that investors are perhaps getting ahead of the situation? >> good, haidi. i think so. i like your characterization a minute ago. the rba is taking its first baby steps towards pulling back a little bit. we describe it as easing across the accelerator. if you look at the guidance around the cash rate, they are suggesting it is most likely that we will not see a rate rise before 2024 and if you compare that to current market pricing, the market has three or four rate hikes unpriced by the end

of 2023 so markets are quite significantly different from the rba and it appears the market is keen to extrapolate this first little move from the rba and pricing in a number of moves so look, bottom line, gas, market pricing looks aggressive to me in the market i think is getting a little ahead of itself here. haidi: expectations are that here in sydney and broader new south wales will see an extension at least ray week of the current lockdown. obviously, this plays a part in what the rba is thinking but it does not seem to be impacting the longer-term outlook here. andrew: that's right. the governor was relatively relaxed on that front yesterday. he could have injected a little bit more angst in his comments but he basically said that we will get through this. global experience suggests economies bounceback quite well when restrictions ease and

there's still a lot of policy stimulus in the system. household savings rates are elevated so there is every reason to believe we will bounce back. i would certainly see that even being here in sydney in the middle of a lockdown, there's some unhappiness but not a level of fear that we saw last year. most of us collectively have got our heads around covid a little bit better so it is inconvenient. mobility is a little bit down but it is not something which is likely to -- shery: right. andrew, it seems we have lost the connection with andrew ticehurst, rate strategist at nomura. we were discussing what was happening with the rba after that decision yesterday. we have andrew back so andrew, do you hear us now? andrew: loud and clear. shery: let's talk a little bit about what the rba rate decision

means, especially as you said, the markets are perhaps getting ahead of themselves. given the uncertainty with the covid situation with the lockdowns, i wonder how much flexibility did the rba leave itself with the recent moves? andrew: data flexibility on the cash rate that injected a little bit more wiggle room for themselves. that said the central scenario, the rate rise before 2024. so they are implicitly suggesting that there are some other possibilities. they are giving themselves a little bit more flexibility as well with regard to quantitative easing that slowed the pace of bond buying from $5 billion a week on c2 $4 billion a week between september and november and suggested that they will review it around that time later in the year and may make further adjustments based on progress towards inflation and unemployment subject gives --

objectives. they are giving themselves more flexibility with regards to both of those things. shery: when we see the eco-data out of australia, how overheated are we when it comes to the red-hot housing market? andrew: there is strength in the partial data which has been incredibly impressive here. on the businesses with monthly data i tracks, running extremely elevated and we are also seeing strength low into housing as use of best, and dwelling prices are rising 2% per month across australia and may have been doing that for five months in a row now so there is certainly a lot of strength in the data. one of the things we are seeing associated with that strength is labor market shortages emerging already. the unemployment rate is back to pre-covid levels. we lost a number of short-term visitors to our shores.

a couple hundred thousand people have left australia and that helped to pull down the unemployment rate with the economy bouncing back, we see shortages in agriculture, hospitality, and even some concern that we may not have enough people to assist in rolling out australia's vaccination program so labor supply shortages are probably the single biggest issue down here and something which could constrain output, certainly until borders open. which is expected sometime around the middle of next year. haidi: and probably constrains wage gains as well if you think there's distortions in that unexamined rate. before i let you go, where to next for the aussie dollar, particularly taking into account expectations from the fed? andrew: yes, aussie dollar is a tricky one. there is a real tug-of-war between global and domestic factors. on the domestic front, the story

is good. the economy has good momentum, the rba is starting to ease off the accelerator. commodities prices are elevated. australia is running a current account surplus so all of those factors are positive. we like the aussie over the medium term up towards $.80 over the next six months or so. for the near term, overwhelming drivers of the aussie at the moment seem to be global brisk sentiment which seems to be wobbly at the moment and trends in the u.s. dollar, the u.s. dollar has generally balanced a little bit sick -- bounced a little bit since the fomc. her couple of headwinds in the short-term but over the longer-term, we like aussie higher. shery: andrew ticehurst, great to have you with us, rate strategist at nomura. crude prices lurch. the biden administration says they are encouraged by the

latest opec talks. the latest on oil. this is bloomberg. ♪

>>çí[l:l:ba8p5÷o!?t opec is 9℠℠f together. the market is fragile. i think that is what is reflected through and you can see in the equities. >> either an agreement will be made and they will get some type

of dispensation or in the absolute worst case scenario, people hand in their memberships to opec and it is a free-for-all. >> inflation is driving a lot of what the fed is doing as well. oil prices are that component that may not be transitory based on the issues we are seeing right now out of opec less. >> if we were shorter term traders, which we are not, we would be selling our energy positions here and focusing more on this companies in the u.s. that are dividend oriented, income oriented, and this pendant on the price of oil. shery: some of our guests weighing in on the oil volatility and global implications following the opec write-down. take a look at futures right now because that volatility is still at play. we are seeing gains of .4% but this after falling the most since late may and the new york session. we did have a stronger dollar. this after rising the most to the highest level in more than six years already.

this of course with the opec-plus failure on an agreement on output as the white house says it also spoke to officials in saudi arabia and the uae and it is encouraged by the ongoing opec talks. that get the details from sheila. what is going on with -- let's get the details from sheila. what is going on with prices here? sheila: we are seeing a lot of uncertainty and that is why the market is so volatile for nymex crude, brent crude. we are seeing a lot of, you know, basically, it is not clear what the opec alliance is going to do. they have a series of talks which ended up with no agreement , and then now, they have gone ahead and canceled a meeting and we are still waiting to see what they will do as far as the supply situation goes. they have to bear in mind, there is a recovery in demand with all the economy and thew&w

back on full track. there's all this consumption they are looking to satisfy. opec and allies have not yet decided what to do next. haidi: why is the u.s. government making their view known? how does that impact prices as we are in the middle of peak demand season right now? >> that's right. basically, you hit it right on the head. it is the highest demand season for all of the u.s. there is plenty of driving, a lot of flying, and plenty of interest for consumption. basically, we have the white house weighing in because they need to get the price down. the price of gasoline has been moving up. they are trying to see how opec and its allies can step in.

shery: sheila, hold on a second. we have breaking news out of new york city right now. we are getting the latest on the democratic primary ballots. the absentee ballots are now being countered and wee hours -- we are hearing that eric adams is leaving for new york city mayor after the absentee votes were counted. he was leading the race, eric adams, with 31% of first choice votes released on election day and after counting both 125,794 absentee ballots which represent around 14% of democratic primary ballots. he is leaving for nyc mayor after those votes were counted. we will have more on the ongoing vote count going on right now. let's return to sheila because she left, what is happening with shale? what do we know about -- because, sheila, what do we know

about what is happening with shale? sheila: they are trying to figure out how opec and the alliance as a whole is going to kind of come to an agreement or not on what to do for supply and whether or not shale is going to respond with production that we have been talking to you, saying basically that they don't think so because a lot of the companies are actually trying to adhere to the promises. any of them wants to enhance cash flow, bring down debt, be able to return dividends as high as possible to the shareholders. for that reason, they are going to keep expanding their production so as a result, they are in general not really responding.

haidi: sheila, our energy reporter with the latest on oil backlit the morning because. we are going to stick with crude. what is the outlook we are hearing? sophie: over at ubs, they posted their oil price forecast by two dollars per barrel, to pti at dollars. i saying we -- city saying we could -- over at j.p. morgan, they maintained their target for brent at $83 a barrel and they expect that opec will eventually agreed to initial plan to cover the rest of the year. the chairman expects that opec-plus will probably come back together in the next one week to three weeks but he sees trouble brewing for opec ahead given that he'd expect more u.s. shale production will come online given that the price above $70 is too attractive.

dan saying u.s. shale will not save the world from the shortage in oil, expecting a modest boost u.s. production as long as prices stay above $65 a barrel. shery. shery: let's turn to nomura. it is no longer offering cash prime brokerage services in the u.s. and europe, largely as a result of the deep losses resulting from the collapse of archegos earlier this year. nabila ahmed has more. the rumors have been broiling for weeks now so what are they doing? nabila: as you said, nomura has been trying to iranian risk and figure out the best way forward since losing almost $3 billion in that rk goes saga -- trying to reign in risk and figure out the best way forward since losing almost $3 billion in that saga. now, we have confirmation that

they are definitely pulling the plug on a large chunk of their business in the u.s. and europe. they will no longer offer cash prime brokerage services, a service which allows hedge funds to borrow against their stock holdings. haidi: how does this play into the earnings outlook? nabila: numerous prime brokerage -- nomura's prime brokerage revenues are small compared to earnings from its other markets businesses, and overall, the pain finance business makes host of its money in asia so the impact on earnings at this stage is likely to be muted that obviously, damaging for relationships going forward. shery: what does this mean for nomura's future in the u.s.? nabila: the story goes that the nomura founder has been wanting to break into the big leagues of wall street since he first visited new york back in 19 08. cracking the u.s. is critical because it has the world's

biggest pool of banking fees and the ceo at the moment, who was appointed last year, has been trying to expand business in the u.s. and appointed a wall street veteran to cohead the america unit and promised to add non-japanese outside directors. the key plank was to earn more money from prime brokerage. financing was supposed to be a big piece of earning money in the prime brokerage unit. they will need to find other ways to fulfill u.s. ambitions. haidi: nabila ahmed. we do have lots more to come on daybreak. this is bloomberg. ♪

haidi: the global tip shortage and a surge in memory prices will boost electronics sales and profit numbers as it reports pulmonary second-quarter results later on wednesday. our chief north asian correspondent is taking a look at that. he joins us from hong kong. are there still some concerns for samsung? stephen: investors will always have concerns even when it is going well because samsung has been riding its memory chip boom. my climb was reporting that chip price -- micron was reporting to price gains -- chip price gains.

there is a chip shortage globally so there are concerns with the foundry business because there were those power shortages, and you know, the plant in austin, texasb>b the foundry business did not do as well as many analysts have wanted it to or expected it to given the shortage and given the demand that is coming for chips. the foundry business might have been weaker even though it was still pretty strong so there are some concerns but we are expecting the average consensus operating profit for the second quarter for a gain of 30%. sales will also likely be very strong but again, we want to get some guidance on the outlook for the chip shortage globally and how long that will last and what the outlook is for the foundry business. shery: what is going on with samsung shares? going nowhere this year. stephen: really going nowhere. look at the kospi touching new

highs, up 15% this year. samsung is by far the biggest can that you went in the kospi, so usually, where samsung goes, the kospi goes. not so in 2021 because look at the chart for samsung electronics. bring it up. it started at 81,000 on january fourth. yesterday, it closed at 81,200, a 200 won profit for the year, nothing. convert your won the dollar and it's really nothing. samsung, they have been downgraded by a number of analysts, including eugene investments. this is a great quote on samsung electronics. samsung may have been one of the most boring stocks of 2021. the expectations were high. they did not meet certain expectations on the foundry business because of external factors, but a lot of people thought they should have been

doing better given the chip shortage, but we will get some guidance today coming up on those numbers. shery: analysts seem to like it. stephen engle with the latest on samsung with that preview of the preliminary numbers. here is a quick check of the that is business flash headlines. the pentagon has scrapped a $10 billion cloud computing deal with microsoft after several years of wrangling with plans to divide the work between microsoft and amazon. instead, amazon jumped 4.7 percent on the news while microsoft was little changed. the parties were involved in litigation, claiming that former president trump influence the original deal. container ship operator c-span is looking to raise $500 million to reduce its environmental impact. the hong kong based company selling so-called blue transition bonds for projects that may include building ships powered by low carbon sources. it says it has reduced its vessels carbonate munitions by

25% since 2012. investors will get the chance to take cory bank to court again in germany over 35 million dollars in losses linked to the scandal. an appeals court in munich overturned an earlier ruling which told investors they have to file their case in london. investors allege that the macquarie fund traded in assets related to the controversial tax scheme without their knowledge. haidi: coming up in the next hour of daybreak, more markets insight. jp morgan's chair is with us. taking a look at the fall and aussie 10 year bond yields. of course, this after a day after the rba began just taking those baby steps to gently raining back its emergency stimulus qe program. we had a pretty outsized reaction in the bond markets and the trading in the aussie and kiwi dollars in previous sessions as well. that is it for "daybreak australia." we do have "daybreak asia" up

next. this is bloomberg. ♪

haidi: hello, and welcome to "daybreak asia." i am haidi stroud-watts in sydney. sophie: i am sophie kamaruddin in hong kong. shery: good evening from bloomberg's world headquarters in new york. i am shery ahn. beijing warns china's biggest companies of a wider crackdown on data security and overseas listings as didi's u