haidi: hello and welcome to "daybreak asia." sophie: i am sophie kamaruddin in hong kong. we are counting down to asia's major market opens. shery: i am shery ahn. our top stories this hour commission stocks set for early gains after new wall street highs, moderating u.s. inflation easing concerns about eminent fed tapering. kansas city's esther george is the latest to call for a dialing

back of stimulus. plus china signals its corporate crackdown will be deep and sustained. the next target, online insurers. we are seeing some upside for asian futures headed to the open after wall street saw those record highs with cpi starting to moderate in the month of july. we are talking about a growth of 5% from june. we have seen of course concerns about this infrastructure package here in the u.s., not to mention that on the same day of the u.s. cpi print, we had the $3.5 trillion budget package, so president biden does not seem worried. he says that will not stoke inflation. >> it is quite interesting when you take a look at the elements that have stoking that inflation n basket. it does feel like maybe there is that delta driven slowdown that is putting a bit of a stop on some of the

inflation components that we see. the other thing, we continue to monitor the latest when it comes to the china crackdown. the latest target are these online insurance companies, and they are being told by the regulator terrain and improper marketing and products, and really, this continues the theme of addressing these sectors and companies that seem to be perhaps bad for equality and targeting the chinese consumer. shery: it seems that the crackdown could be going on for a wild, at least for another five years as the state council has not released those guidelines until 2025. more oversight on all of those different sectors. stay with us. we have two big interviews coming up. an exclusive conversation with lenovo's cfo to look at the company's latest results and we will be talking to james torsten after first-half earnings. haidi: but first, let's take a look at how markets are trading up in asia. sophie: this thursday, asian

futures are pointing to a muted start at the cyclicals led a rise. how policymakers manage covid outbreaks is top of mind for outbreaks with japan expanding areas of the virus emergency. we have seen a pickup in south korea and in the philippines, the bsp is expected to stand pat on its policy with the central bank pledging to stay accommodative as necessary given the downside pressure on the philippine economy. that has spread more speculation for pboc easing. divergent views on that. recovering given the dollar weakness that we saw in the wake of the inflation data from the u.s. dollar. weakness spurring a rise for crude prices. wti extending a two day gain

above 69. haidi. haidi: let's get you to vonnie quinn with our first word headlines. vonnie: president joe biden is urging opec and its allies to unleash more oil onto global markets. stressing the importance of affordable energy even as the world pushes towards green energy and climate controls. the appeal comes to days after calling them to shift away from carbon emissions as swiftly as possible. keeping prices at the pump low is important now. >> taking action to address gas prices as well. gas prices are lower than they were early in this decade. they are high enough to create a pinch on working families. >> the taliban has seized three more potential capitals in afghanistan and local army headquarters. officials say they control two thirds of the nation as the u.s. and nato finalize there with dollars after a decades long war there.

the capital kabul has not directly been threatened. it raises questions of how long the afghan government can maintain control of it countryside. -- it's countryside. hackers returned a portion of the $610 million they stole from a decentralized finance protocol . in a message, the unidentified thieves and that they "just dumped all the assets and pulled off the heist for fun." the hackers are now asking for donations as a reward. china's central bank is facing mounting calls to cut interest rates as fresh virus outbreaks threatened to derail its recovery. government affiliated economists say there is a case for lower rates, arguing beijing's success in curbing debt growth means pboc can ease without feeling financial risk. that contrasts with global

investment banks. they mostly see the pboc keeping interest rates steady for now. 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. i am vonnie quinn. this is bloomberg. shery. shery: it was really all about that u.s. cpi print moderating in july. this is what our guests said about the data. >> it is a positive that some of the inflationary pressures are moderating. >> my biggest fear is on the labor side. >> we are in the midst of an inflation heatwave. >> inflation will prove transitory. >> i think some of this will stick around. >> pay increases are a sticky part of inflation. >> too early but a good sign, no doubt. >> it gives justification for the fed to delay tapering. >> what they should be doing is getting ready to raise interest rates. >> if these inflation numbers stay high, they will have the

flexibility to raise rate against that economy. >> let's discuss the market implications. our the markets rightly pricing in these inflationary concerns? >> there was a lot of mixed commentary in that clip you guys put on that was very interesting to listen to all that. the consensus view seems to be that inflation is transitory and that is what the fed is saying, too, but i think that is just a wild guess and a prayer from the fed. they don't know if this is transitory. if you look at the huge forces, monetary stimulus, so much money coming in from the fed as well as the fiscal stimulus. >> what does this mean for the rally we have seen on the s&p 500? this graphics chart showing how enduring it has been on the s&p

500, posting the strong year-to-date gains, marking one of the top five performances going back to 1991. >> amazing performance out of the stock market and i think it is really hard to fight the fed, which is what is propping up the market. we are seeing very good earnings out of companies. they are not positive. that is helping valuations for the s&p but we are seeing some pretty -- starting to see valuations in the stock market. we are not making the case for a big crash. a 10% correction between now and year-end is not out of the question. the biggest thing keeping me up at night is this underestimation of what could happen on the inflation side and what that means. we have slow growth combined with higher inflation than expected. that is not a great expectation. haidi: what beneficiaries do you see from the infrastructure package given how just overwhelming it is to try and

work out who the winners and losers are? terri: it is overwhelming at this point. the big winner is the u.s. and the american consumer and the stock market. the infrastructure spending will benefit that absolutely. but what does that do? it probably fans the flames a little bit on inflation. there is no question that trillions of dollars in spending that was not there before that demands when supply has been shut down in parts of the country, that will continue to be a headwind against some of the growth we can see going forward in the economy and i really think that that is something investors are not paying enough attention to. >> when you take a look at the reflation trade when it comes to the reopening trade, i found this chart really interesting pit when you take a look at the come down in info -- interesting. when you take a look at the come

down in inflationary pressures, there have been these reopening related components like rental cars, airfares. does that tell us we are on shaky ground, even if people do not expect another round of lockdowns? terri: that we are on shaky ground with some of these reopening plays? haidi: that's right. terri: absolutely. i think the reopening trade is premature at this point. we are absolutely seeing increases in the numbers across the country as well as across the globe. if anything, on the margin, things are getting more closed. in states across the country, in counties, countries around the globe, that reopening trade is something that is a kick down the road for a little bit longer in our view. haidi: terri spath, great to have you. still ahead on "daybreak asia," shares of a small biopharmaceutical firm are up 70% in the last month alone. analysts are expecting

substantially more. find out why when we speak with the president and ceo, robert bloom. coming up next, the ceo of hong kong stock exchange says the pipeline for ipo's is still strong despite china's regulatory clampdown. we have that conversation, just ahead. this is bloomberg. ♪

haidi: it would appear chinese officials have always to go when it comes to the multisector regulatory crackdown. there are signs that the push to regulate parts of the economy will be deep and sustained. online insurance looks to be the latest target with firms and agencies being ordered to curb improper marketing and pricing. we will be taking a look at the shares in the biggest mainland insurers including ping an

insurance. shery: hong kong exchanges new ceo has downplayed the regulatory crackdown even as it slows the pace of ipo's and sparks market volatility. the board has a record pipeline of deals waiting in the wings. >> we have seen a similar type of modifications to how big tech works all around the world. all platform businesses are being scrutinized. how they use their data and manage information. do they have too much power? how are we going to manage how they deal with the public? i don't see that that is too different from what we are seeing in other places. it may be perhaps in its own way in some sectors like education, it may be in a specific way we don't see too much in other places but if we look at big companies, it is very similar. >> how is it impacting ipo pipeline? they were down after a

blistering first quarter. >> that is correct. if we look at the first six months, 46 ipo's, that is double what it was last year. it slowed down a bit on the second quarter and the pipeline is actually a record level. if we look at how many companies have filed and being analyzed, we have around 200 companies so that is a very significant and healthy pipeline. >> have there been lots of reports that bytedance perhaps is going to go ahead despite its regulatory scrutiny? >> on the first six months of the companies that listed this 46 that i mentioned, 92% were tech companies. they are the ones that are coming. the companies will assess the market. where is it too volatile to go? there are companies listing. there is a ceremony we had tomorrow. we had one last week. the activity has slowed down because some companies are evaluating the market.

is this the best market for me to go or not? the pipeline remains very strong and we actually have more and more companies that are inquiring about doing an ipo in hong kong. possibly companies that were perhaps analyzing other markets and now they are asking a lot of questions about hong kong. shery: nicholas speaking with us. the ceo it is seeing the exchange of the ricmost richly valued exchanges around the world, this gtv chart on the bloomberg showing that really those 12 month -- it has been really accelerating, starting last year. it is also now the most valuable by market cap, at $84 billion as compared to other exchanges around the world. haidi: really interesting. if you take a look at the ipo fund flows, $35 billion.

master was 51 billion dollars, a bumper year, so we are playing catch-up. performance left to go as there are listings coming up and the regulatory uncertainty continues to be something of an overhang but seeking a big listings, in hong kong later on thursday, we will be hearing exclusively from -- as it makes its trading debut. we will be counting down to that. staying with china and beijing has -- for 11 years while leaving room for its eventual deportation. the ruling appears to try to pressure them into extradition proceedings against huawei executives. our bloomberg reporter joins us now from toronto. what has been the reaction that we are seeing from north america? >> widespread condemnation. obviously, you would expect that in canada. justin trudeau has condemned the

sentencing as have high-level politicians across the country. our foreign affairs minister said it was a sham trial, that the detention is arbitrary, that the verdict runs counter to rules based law. we had the leader of the opposition suggesting that canada boycott the olympics in beijing in 2022, the winter olympics, and obviously, there is much more cloud on the u.s. side of the border. the u.s. secretary of state, antony blinken, has also condemned the sentence, saying it is clearly politically motivated, and i gather that within beijing, there has been a fair amount of international support as well this week. on monday, there was another canadian citizen who had been convicted of drug trafficking and was appealing a death sentence -- sentencing and that was upheld by chinese courts on monday. 25 countries demonstrating or

standing in solidarity outside the embassy, i am told, as a result of that. both men are still in prison. one has been sentenced to 11 years. shery: what is next for the two of them? danielle: it is not entirely clear in either case. china said yesterday that he will be deported. but it is not clear whether or not that is going to happen before or after he served his full sentence in china. that is obviously a key question. our ambassador to china, dominic artan, said canada is interpreting it to mean that he will not be released until after he serves his prison sentence. again, obviously a key question and perhaps a bit of leverage on china's side regarding extradition and we have not heard of a sentencing date so that remains to be seen. they are coming up on close to 1000 days.

976 today. shery: danielle bochove that. coming up next, president biden stands by the callout of u.s. troops from afghanistan as the taliban continues to advance across the nation. more on that, just ahead. this is bloomberg. ♪

shery: president joe biden says he has no plans to withdrawal of troops from afghanistan despite advances by the taliban. they have taken several capitals and targeted in your government officials. pres. biden: we spent over $1 trillion over 20 years. we trained with modern equipment over 3000 -- 300,000 afghan

forces. and afghan leaders have to come together. we lost thousands to death and injury, thousands of personnel. brought to fight with themselves. >> in this 20 year war, we have seen the u.s. put off the pullout several times before. what is the latest from the biden administration? >> they are determined to go ahead with the troop withdrawal by the end of the month and they are saying that in spite of the fact that the taliban are now making gains across the country. as of the latest reports, we have captured some eight provincial capitals across the country and from what we are hearing from sources, the u.s. is also revising its

intelligence assessment for when the taliban could take over afghanistan, down to as little as weeks. that is conjecture which has a great deal to do with that, but needless to say, the administration has been pretty surprised by the speed of the taliban advance, but nonetheless, the president himself is saying, listen, this is not going to stop us. we are determined to go ahead with this. i am not going to put the lives of u.s. troops in danger any longer over this conflict. >> is the meeting in doha between the u.s. envoy and the taliban and afghan representatives expected to yield any progress? nick: i think expectations for those meetings, it is safe to say, are pretty low. the issue comes down to leverage. for the taliban, what do they have to stop the fighting if everywhere they go and all the

fighting that they carry out produces gains for them? they see no reason to stop because with every captured village, provincial center, they only gain more leverage in their push to demand more power if there is some sort of final outcome and some resolution down the road. the flip side to that is that while afghan forces are weak, it is unlikely according to u.s. officials that they would be ousted completely. in all provincial centers, you have a whole host of warlords. i think the fear is not so much that the taliban would take complete control of the country but that afghanistan would devolve into another civil war or stalemate where none of the sides are able to oust each other completely. haidi: bloomberg foreign policy reporter nick wadhams there.

the former u.s. ambassador to afghanistan says the biden administration is abandoning kabul in its hour of need. >> it is not a kinder and gentler taliban. remember, they chose the wilderness rather than hand over al qaeda. we gave them that ultimatum after 9/11. we will leave you alone. they would not do that. they are now vindicated and all americans should be quite concerned that as the taliban moves back in, al qaeda is going to be right there with them. >> it is clear president biden is not changing his mind. by all appearances. at the same time, if we had left in what was 2500 of our troops, would that have made the difference? that seems like too few. >> that is the irony of all of this, david. when i was ambassador, we had almost 100,000 troops. we got down to 2500, 3500, and

still, the taliban had not been able to occupy a single provincial capital. it was not so much our firepower although that was a factor. it was what we gave to afghan forces. they perceive that we have hung them out to dry, that we did a deal with their enemy and we now expect them to fight to the last soldier against that enemy. it is not going to happen. shery: ryan crocker speaking with david westin. coming, samsung has launched its lineup of new devices including the new galaxy flip model. we will get you the details. this is bloomberg. ♪

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haidi: china is signaling its push to regulate sweeping parts of the economy will be deep and sustained. online insurance is the latest sector, and the crackdown. stephen engle joins us. insurance has been a vibrant asset class in terms of mainland investors specifically. what are we seeing in terms of these latest regulations? stephen: insurance is an area they needed. they were filling a gap, if you

will, and other regulators are also trying to fill the gaps in this booming part of the economy. fulfilling a need, that's basic. it became a big part of their offerings across the platforms and there have been crackdowns of course on simtech offerings so these latest pronouncements, if you will, are in addition to what we have already seen, the regulatory action against some of these players, whether it is water drop or other offerings from ant. the banking and insurance regulatory commission stepping up its scrutiny of its insurance tech platforms, ordering them to curb improper marketing and pricing practices and to step up privacy protection. and what is interesting here is in this statement bloomberg news has obtained, they are asking these companies and platforms to do these rectification's, if you

will, voluntarily. when it comes down from the banking and insurance regulator, nothing is voluntary. it is urging them to do it because they said that those who fail to comply with that will face severe punishment and we have already seen what kind of punishment can be had, whether it is folding into the banks -- with ant being folded into a holding company by the pboc or other rectification's that could mean a significant downsizing. stay tuned to this sector. shery: not just only this sector but it seems the government scrutiny could continue for a a while. according to the latest guidelines from the state council. stephen: the state council also out with a statement yesterday, giving more clarity, if you will, on the timeline of this regulatory push. it could last another five years , the timeframe they are talking

about. they are basically saying in a statement late when they, signaling the push to regulate many parts of the economy, which has gone beyond the platform companies like alibaba and tencent, but into educational technology and tutoring companies. now, we are seeing insurance, whether it is ridesharing and the life. the state council statement said it will actively work on legislation in areas including national security, technological innovation, and anti-monopoly to improve the legal framework and the statement says the moves will ensure a healthy development of new business models. obviously, this could stoke further fears from investors that this regulatory push and crackdown is widening and will be lasting. haidi: -- shery: stephen engle joining us from hong kong. let's turn to the market implications of this tech storm with sophie kamaruddin in hong kong. investors eking shelter in

china's a-shares. sophie: there are opportunities to be had given the focus on tax. offshore listed equities. domestic equities in china could continue to see inflows given the breath of the market as investors also look for value. while we are seeing stop close slowing your today, they are holding up. amid the chinese crackdown on tax, the value -- tehc, the value space -- tech, value space outpacing growth. japan helping provide a boost given the cyclical tilt in the market and we have seen a solid earnings and from japan. when it comes to the value sector report factors, we have seen a higher property and oil prices providing, shery. shery: let's take a look at the

commodities space, especially soft commodities. you and i love chocolate and coffee. when it comes to coco, prices could be rising because inventories have been declining for three consecutive weeks and really falling from those four-year highs apparently, there was a drop off of chocolate eating during the pandemic. i do not understand why because i would have really had more chocolate during the lockdowns at home but it seems that demand seems to be coming back. haidi: that seems to be counterintuitive but we are looking at these updated numbers when it comes to brazilian coffee as well. in terms of the damage caused by france, raised the 19% of crop attentional, 13% when it comes to sao paulo, so we are getting some worrying forward indicators in terms of how these natural elements and environmental events are affecting coffee prices as well.

i cannot reiterate how important coffee is to sustaining us through our days and certainly a little bit of chocolate does not go astray. shery: until you put into context where your coffee and chocolate could get more expensive, i don't think it really hits you. let's turn to vonnie quinn with the first word headlines. vonnie: i think is called breakfast. there may be more covid-19 vaccines to choose from. global health officials will begin assessing five other candidates this month including novavax shot and the sinopharm vaccine being made in wuhan, china. the sputnik vaccine is undergoing assessment by the world health organization. the who has already approved vaccines made by pfizer, moderna, astrazeneca, and johnson & johnson. moderna plans -- in a trial of its covid-19 vaccine in children aged 12. this follows a request from u.s. regulators to collect an safety data. drugmakers study will register

and mated 13,275 participants aged six months to 12 years old according to a government website. in a post from late july, mentor said it would seek to enroll about 7000. they have updated messaging to recommend pregnant women get vaccinated against covid-19. new research shows women who receive messenger rna covid vaccine before 20 weeks of pregnancy had no increased risk of miscarriage or other safety concerns. the fda will amend the emergency use of pfizer and moderna vaccine to allow those with compromised immune systems to get a third dose. the u.s. has won a bid to expand the scope of its appeal against a ruling that julian assange cannot be extradited from london due to his mental health. lawyers challenged the u.k. judge's decision to block the extradition of the wikileaks founder on the grounds he may kill himself if held under harsh

u.s. prison commissions. he is facing espionage charges in america. 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. i am vonnie quinn. this is bloomberg. shery: samsung launched its lineup of consumer devices for the latter half of the year with new flagship galaxy ev flip three, being commissioned as a direct rival. samsung dramatically reduced the enterprise to an end had nine dollars. let's cross to -- $999. let's cross to mark gurman. what do you think of this new galaxy? mark: i think vulnerable's are getting cooler and cooler. conceptually, they are an excellent new category. obviously, they had some durability issues early on but it seems samsung is robbing those and it is surprising to me that samsung is already on its third iteration of foldable's.

it seems to be repositioning its entire line of unaffordable's while apple, google, and others are three years away from launching their first foldable devices. it's interesting to see how far ahead samsung truly is on this. haidi: we did a bit of a pole. so many people saying if apple made a foldable, they would buy it straightaway. it is the trendsetting kind of status of apple. does this really take away market share from people who might otherwise buy an iphone? mark: i don't necessarily think iphone users are going to flee apple for foldable phones. what i do think is that at the same time, apple does need one of these. these are going to be a really big deal. not yet, but a few years into the future, and when apple does it, they will pretty much knock it out of the park. there are concerns related to software, multitasking, how it fits into the overall ecosystem, so look for apple to solve those issues and look for a pretty fat

price tag. shery: thinking about it, it sounds great but do you want the extra step of having to open up your phone? i don't know. i am lazy. i just want to get to my phone, right? [laughter] haidi: i have to say, lots of kids from the 1990's are excited . mark gurman with the latest on the samsung foldable. coming up next, we speak to robert bloom. he joins us and talks about the prospects for the company's heart disease drums and the outlook when it comes to biotech. this is bloomberg. ♪ ♪

shery: we are counting down to the start of trade in tokyo and seoul. some of the stories we are watching today. in japan, a newspaper reporting that the japanese government is considering expanding the areas of its covid state of emergency and may extend the existing emergencies as well. meanwhile, japan's host bank boosted its investments in the latest quarter as it seeks higher-yielding assets. we will be breaking consumer price inflation figures for july later this hour. in south korea, we will be watching the latest daily virus figures after they exceeded 2200 on wednesday, the first time

ever and we will be watching with samsung -- we will be watching samsung at the open. some of those earnings including lg. haidi: we are watching biotech. it is a small firm. they searched 40% as a heart beat of stocks races over the potential drug. david ingles is standing by with the president and ceo. david: good morning. on top of the 40% pop, analysts, if you look at the price target, expecting a further 40% so let's bring in the president of psycho kinetics -- cytokinetics joining us. excitement is an understatement of this specific drug in the pipeline. phase two trials went great.

that is well-documented. i want to start off with the path ahead, if you could lay that out for us in layman terms, what is next. >> thank you for having me. despite the horrible statistics of the pandemic, heart disease is the number one killer in our country and worldwide and that is getting worse with the aging demographics. we have two programs that have advanced to late stage clinical trials, investigational medicines that have delivered on the promise of novel science. the most recent one is a compound which is inhibiting a hyperactive heart. your heart can either pump too forcefully or not enough. this suppresses the hyperactive heart and the phase two results

look quite promising. we expect to be able to bring that into the final pivotal stage in the clinical trials later this year and patience in two years to three years. this follows behind another investigational medicine that was the subject of very positive phase three clinical studies a few months ago. now, we have two of these new cardiovascular medicines that alter the machinery of the heart , one going to market next year, one coming into pivotal studies. it is a transformational time for our company. david: on that drug coming to market next year, that is 100% approved, and that is going to go to plan? robert: not quite yet. we hope it will be coming to market next year. we intend to be submitting a new drug application to the fda that we hope will be approved to be enabling of us to go to market next year. david: on the other, what is the timeline on that? robert: within

two years to three years. this is a somewhat unusual opportunity in the biopharmaceuticals space. we have been at this for a a while. no one will ever accuse us of being an overnight success. we have been at this for over 20 years, focusing to the mechanics of what makes your heart contract and as such, our scientists are the experts in this area. now, fast forward 20 years, and it is a transformational time for our company as we bring forward an activator and inhibitor of the -- this protein involved in cardiac muscle to patients very soon. david: i did forget to mention that the focus of your company, on muscle contraction, give us a sense of competition, competition right now in the market or competition in the pipeline. are there any drugs that aim to do the same things that years

do? -- yours do? david: -- robert: our first investigational medicine, activating the protein involved in cardiac muscle, we are the pioneer and the first in class. we do not foresee any competition, at least not anytime soon. the second compound i mentioned, the one inhibiting cardiac muscles, it is following behind a compound we licensed to another company. that company was acquired last year by a dms for over $13 billion. we now have what we believe to be a next in class compound that we are advancing now into pivotal studies so we will be hopefully second to market there for what may be a medicine that can expand the category to the benefit of patients. david: is the potential financial impact from a revenue

standpoint on your company, is that measurable at this way? how big is this market? robert: heart disease is measured in many billions of dollars. i would say each of the medicines that we are developing address markets that are measured in hundreds of millions to low billions of dollars annually and that is our opportunity set. we need to develop these medicines so that they are specifically addressing the unmet needs of patients. david: i know you are a corporate finance guy appeared all of this is considered base case. you are piling a lot of money into r&d, losing money. at some point, do you need to raise some money to get yourself through this process? robert: good question. i think cytokinetics is one of the uncommon companies that has been able to monetize our pioneering innovation so we have raised over $1 billion over the last several years in deals that

are not diluted from the standpoint of equity capital. a few weeks ago, we raised over 300 million such that we expect to end this year with over 600 million and we think that represents at least two years to three years of forward cash runway. cash is king in our business and we think we are in good shape that way. david: 57% in the stock since the start of the year. robert blum, the market is very excited. thank you so much for joining us out of the west coast. over to the east coast, shery is there and she has been waiting. shery: good conversation pit we have more big guests coming up here today, we will have interviews with executives of lenovo and others later. we hear exclusively from kevin as the ev start up makes its trading day be. first, here is a quick check of the latest business flash

headlines. a chinese electric vehicle start up is said to be exploring a u.s. ipo as soon as this year. horses say the shanghai-based company is working with underwriters ahead of a listing in which it could raise about $300 million. it has a production capacity of 150,000 cars a year. suv's are only available in germany but it plans to enter into more european markets in 2022. sources tell bloomberg that beijing enterprises is considering the sale of its european waste treatment unit for about $2 billion. sources say deliberations are at an early stage and they could decide to keep the asset. beijing enterprises brought them for about $1.6 billion in 2016. a thai energy company will spend $430 million to buy a texas

electricity plant, the first step of a push or expand into the u.s. power market. it says it will own closely held temple generation, whose facilities can be supplied by the thai energy company's own natural gas. the deal is expected to close in the fourth quarter. we have breaking news out of japan. we are getting the producer price inflation numbers for the month of july, coming in at 5.6%. it is an acceleration that was faster than expected and also an acceleration from the previous month when it came in at 5%. the month on month number is also faster than expected with cpi accelerating to 1.1% instead of the .5% that economists had expected. we are seeing the base effects on these numbers but not surprising given that we have had a rising commodities price

with chinese ppi also surging this week more than 9% for the month of july. plenty more to come on "daybreak asia." this is bloomberg. ♪

shery: -- shooting up the wealth

rankings in south korea. overtaking the families behind the decades-old sprawling conglomerate. joining us now to discuss is -- south korea really has been dominated for decades by all of these tables from samsung. how significant is this change? >> this is pretty significant. you know, these are ultrarich entrepreneurs shooting up the wealth rankings in south korea. they are overtaking the immensely rich family behind the conglomerate. brian kim, he will be the most prominent case this time. the reason why he replaced jay y. lee as the nation's richest person with a fortune of $12.9 billion but besides him, we are seeing more people on the list. just this week, another became a

new billionaire after he had a game developing company that went public. these self made billionaires are a positive transition. the pandemic has the adoption of digital tools, a positive sign for the korean economy that has relied on these big corporations. haidi: what are their approaches to elements of this such as governance and philanthropy? heesu: experts are saying you are more aware of the rising inequality and willing to give back to the society so some of these self made billionaires have committed to donating their fortunes to this society and that is in contrast to families

who usually are not known to make large personal donations. they give charity of your companies they control so overall, people are saying that this is a positive signal for the entire economy. haidi: our asia wealth reporter, heesu lee. coming up, we have two big interviews. we will be speaking with james after first-half profits slid. look at that path forward. we will be speaking with our guest as the pc maker tops estimates over the likes of hp and apple. we have the market opens in sydney, seoul, and tokyo, next. this is bloomberg. ♪

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shery: hello and welcome. i am shery ahn in new york. sophie: sophie kamaruddin. haidi: haidi stroud-watts. the top stories, asian stocks with gains after wall street highs, moderating inflation, easing concerns. the latest that voice calling

for a diving back of stimulus. lenovo profit as the pandemic boosts sales. we will speak to the cfo. let's get to the market open. sophie: moves to the upside for japanese stocks. some support for the outlook. strong earnings so far from japan. watching some names. we see the yen hold steady after a five-week low, after the dollar falling on the slower than expected pickup in u.s. inflation and a treasury auction. the bok is holding a meeting today. we have just a 10th of percent added this morning.

some slight gains for korean stocks with the won just about that handle, slightly firmer. checking the open and sydney. the dollar in a tight range. the index just higher. we are watching agl. that talk falling, while amp bouncing more than 1% on its report. we did see a drop in the holton dividend payouts. amid concerns around the china crackdown on tech and the delta spread concerns, those of the biggest risks to the offshore yuan. it is holding steady, relatively resilient to stocks. pulling up the chart with the crackdown on tech and china, we have seen that feed into some

sectors, keeping the trade very much alive in the region. haidi: let's get more with mark cranfield. we have seen tech a big loser globally in the past five days. with a retake market leadership? mark: not easily is the short answer. not only do you have these headwinds from china, where they are uncertain about where the next clampdown will come from. you still have the high volatility, particularly in july. you have a situation in the u.s. where there is a high reluctance to do major lockdowns. that economy will stay pretty much open, even if virus numbers rise, so there will be a natural tendency to go back to service-oriented sectors away

from technology, and you have the incoming infrastructure bill , so there is a shift in one of the most important markets in the u.s., plus china. it will be a while before tech stocks can take the lead again. >> we are seeing some take a breather on before jackson hole. what are people focused on? mark: market activity will be light. if you have to find something to do, you will look at currencies for some extra return. that probably means rupiah and ruby, -- ruby indian ruby. those two are probably at the front for traders to look at. the baht and peso have been beaten up badly, but it may be that the local situations are to

uncertain, so only the briefest of traders would look at thailand and the philippines. it depends on the won being reasonably stable. the activity in the moment is all about equities, and the won is on the sidelines. the asian high-yields do have a chance until the end of the month. haidi: mark cranfield. you can follow more on that story, markets live blog. amp posted a 20% slide in profit as a grappled with outflows. let's get some insight behind the results with the cfo of amp joining us now. let's start with the outflows, when it comes to management, 2.7 billion dollars worth of outflows. what is the plan to win back

trust and credibility? >> thanks. we did report lower levels. we are making changes, including improving platforms. we have made changes in that area, and we are also continuing to work with financial advisors. the program has a big repricing initiative in the third quarter. we are driving better investment performance over returns. there is an impact still flowing through that will continue to dissipate and there is a more positive outlook going forward. haidi: do you have any targets for inflows yet? >> we have internal targets.

the transformation strategy will take two years to three years and we are two through, so we hope we can deliver a positive cash flow outcome. haidi: that would change your stance on dividends? you did not unbalance any this time around. >> that's right. in the lead up early next year, the board is taking a prudent management of capital. so there is a lot of work over the next few months, and the board will review dividends again in the first half of next year when the merger is complaint.

-- is complete. haidi: tell us what you're seeing on the mortgage growth side and any impact from the recent lockdowns? >> it turned the corner in the first half of the year. we had a flat first half, and we have good growth coming through in the south. it is a competitive market. -- through this half. it is a competitive market. from the covid perspective, with the lockdown in australia, it doing this for the first time from home, we are not seeing and uplift and calls. we have seen up to 100 customers calling in needing assistance, but at this stage it is a small impact so far. haidi: no dividend. what is the outlook for that going forward? >> the board is committed to reviewing the dividend after the

merger slated for the second quarter of next year, so i think this time next year we will be looking to provide more clarity around dividends. the board and management are committed to returning dividends , which we appreciate the importance of providing those returns. haidi: this morning, there was a requirement for vaccinations entering the trading floor. you are encouraging it, but not mandating it. do you see a point where you have to mandate it? that is increasingly where wall street is headed. james: it is an interesting question. unless the government moves to mandate, we would find it challenging to mandate. we are clearly encouraging.

we are vaccinated. we are supportive of the broader rollout, but mandating staff, we would wait for a government mandate to follow suit. haidi: so you have a big job and management have a big job to turn the ship around, restoring shareholder trust and investor trust. what about internal culture, given so many issues have been due to the internal culture of amp? what changes are being made? james: good point. we have gone through tough times. we have been improving some of the culture. it is by no means finished. culture is an ongoing thing we all need to work on. some of the things we have done is based off a management framework around how do we deal with any issues and conduct in

the organization. we implemented some very important and flexible working arrangements with a much more working from home environment, and testing the pulse of our staff, doing regular surveys of sentiment on the floors, and so in the first instance, transparency and openness over communications, and striving to deliver a better financial performance as well, we think those things go together, but there is always more work to do on the culture front and it is one of the focuses for her 10 year. haidi: great to have your insight. amp cfo. let's turn the vonnie quinn. vonnie: joe is urging opec and its allies to release more oil.

he stressed the importance of affordable energy as the world pushes towards a green energy and climate control. it comes two days after calls to shift away from carbon emissions as soon as possible. president biden said keeping prices at the pump low is important now. china's central bank is facing calls to cut interest rates as a fresh virus outbreak threatens to derail recovery. there is a case for low rates, arguing beijing's success in curbing debt growth means they can ease without financial risks. this contrasts with a bank, whose economists see the pboc keeping interest rates steady for now. prime minister justin trudeau has said the jailing of a canadian citizen unacceptable

and unjust. he was sentenced to 11 years in prison. the u.s. secretary of state antony blinken called for the release of all people arbitrarily detained in china. it came as the ceo of huawei fights extradition from canada. 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. i am vonnie quinn. this is bloomberg. haidi: well, let us get to space. india's space agency is launching an earth observation satellite. we are waiting for that launch. it comes ahead of independence day, august 15. the launch has been delayed due to covid, an ongoing battle in the country, also marred with rising inflation as well. the payload for this launch is the most advanced satellite with

civilian/military use and will be monitoring several things. it will be monitoring those contested borders between pakistan and china. the last time we had a lunch from india was in february, and that payload was a brazilian satellite. let's take a listen. >> lift off normal. >> lift off. a very good lunch. it has announced it.

>> [speaking foreign language] translator: >> the program -- haidi: you can hear the excitement in the clapping and the background. a successful launch. we know that india is one of three asian nations with orbital launch capabilities, aside from china and japan. india will attempt a moon landing after a failed effort in 2019. india has the third budget for space in asia. we are now watching that launch of its latest vehicle, which will help with agricultural imaging and monitoring of the border. >> the geopolitical element is

interesting. it is curious. we are seeing the global space race lowering the costs in terms of getting these launches done. we spoke with the korean science minister saying they want to ramp up capabilities for lunch as well, so it does seem like all of a sudden after many years of preparation we have a lot more vibrancy when it comes to the space program, particularly in asia. take a look at how far ahead china's space program budget is. still ahead, that exclusive interview with the cfo of lenovo , as it widens its market lead. that is coming up. for that, chinese regulators setting their sites on insurance. people get more on the crackdown and some of the other sectors that could be in focus. this is bloomberg. ♪ his is bloomberg. ♪

haidi: china signaling its push to regulate the economy will be deep and sustained. online insurance is the latest under the crackdown. this is supposed to be an industry worth hundreds of billions of dollars in a few years. >> yes, $385 billion industry over the coming years. the regulators have the mandate. xi jinping a year ago said fulfill, and i paraphrase, the regular tory obligations and the full power of the regulatory capabilities, and they are strengthening the legal mechanisms as well. i will get to that with the declaration made overnight. the banking and insurance regulatory commission is out with the statement late

yesterday saying they will step up scrutiny of the insurance tech platforms, ordering them to curb improper practices in step up privacy protection. they ordered them with a velvet glove. it wasn't a hard and fast order, per se. they are saying it is voluntary, but nothing is voluntary when it's coming from the regulators, because they also said those who do not comply will be punished severely, will, i think the writing is on the wall. these regulations, cracking down on the improper marketing and pricing practices are in addition to the of the actions cracking down on fintech, because online insurance and the easy ability to get an insurance policy for anything, shopping online, or

whatever, it has been very easy to get it, but it is cutthroat. more than 140 insurance companies by 2020 started businesses. it looks like regulators led by beijing and the policymakers are trying to put some teeth into the regulatory laws. haidi: and then we get the state council statement. we should just sit back and settle in, right >> china loves five-year plans, do not they? they put a five-year timeframe for this regulatory push to fulfill the regulatory duties. the state council said it will actively work on legislation in areas including national security, technological innovation, and antimonopoly to improve the legal framework, law-enforcement, that statement from the state council saying it has to be strengthened in many

sectors, perhaps all sectors, from online drugs, tutoring, areas where they have increased regular tory scrutiny in addition to the platform companies, games, ridesharing, educational technology. they want help the -- healthy development of new business models. haidi: stephen engle with the latest on china's regulatory correct down. you can get more context and analysis on these measures, especially when it comes to tech giants, it is on the bloomberg channel on youtube. this is bloomberg. ♪ his is bloomberg. ♪

haidi: the philippines central-bank is expected to keep its rate at a record low. kathleen hays is here with the preview. economists are predicting no change. what are we watching?

>> no doubt. you are looking at a chart on why they are expected to hold the key rate steady. in the second quarter, after three quarters of quarterly gains, the economy fell into contraction, 1.3%. you can see that smaller bar that goes down. you would have seen a gain of 12%, but momentum is being lost. why? covid in the delta variant are lingering, picking up. vaccine rollout has been slow. there are questions about how fast it can get going. the lockdowns of extended. bloomberg sees this extending into the third quarter. the inflation target is 4% to

2%. we are at 4% now. here's what we are looking for ok? will there be a signal in the policy statement about how they expect the delta variant, lack of vaccines to play out, how that will affect the outlook. because were trying to figure out the future moves. will they give us information about unwinding bond purchases. they told us they have increased their holdings of government bonds 400% during the pandemic. will they give us more details? the bsp governor has ruled out more rrr cuts to date, meaning cuts and reserve requirement ratios for banks. will he signal possible more cuts on the table if the economy does stumble again and it does not pull out of this? there is a lot of uncertainty in specific things are hoping to learn from the bsp. shery: thank you. haidi: let's check the latest

business flash headlines. tumbling in late trade after net losses wider in the quarter. it spent heavily on expansion, adding tokyo and taipei to its delivery locations. other costs came from a fulfillment center. sales were up 71%, not boston's why did the $519 million. bank of america catching up to jp morgan and asia pacific investment banking. three years into a business rebuild, now sitting even, growing revenue to $700 million. the division is 15% of bank of america's overall business in asia, doubling from three years ago. jp morgan plans to convert mutual plans into actively managed etf's next year, as investor demand increases. the bank's clients actively adopt etf.

millions of dollars are flowing into the back of etf market every week, driven by the success of other products. coming up, lenovo doubling profit unsurprising sales, widening in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.

haidi: -- >> now that the recovery is well underway, transition from that extraordinary monetary policy accommodation to more neutral settings will follow, so today's economy does not call for type monetary policy, to be clear, but does signal the time has come to dial back the setting. the expectation of continued strong demand, a recovering

labor market, and firm inflation expectations are consistent in my view that the committee's guidance regarding substantial further progress -- and i support bringing our asset purchases to an end under these conditions. vonnie: -- sophie: that -- that was esther george on potential tapering. the u.s. showing expectations are above the five-year outlook. mohamed el-erian said it is not inclusive enough to settle the debate on if price pressures are transitory or not. pulling up the price action in asia, moves higher across the board, with japanese stocks leading gains. the nikkei set for a fifth straight session higher. a five day decline on the kospi. press record highs on the asx.

with that, results in focus. dentsu jumping to a high on profit recovery. record goodman group under pressure. we are seeing a rise of more than 11% after listing full-year guidance. shery: we also have lenovo topping profit estimates, boosting sales, widening its lead over hp and apple. it is betting on fresh models to maintain momentum, as component shortages and employees returning to offices will weigh on consumer demand. joining us for an exclusive interview is the group cfo of lenovo. thank you for your time. congratulations on your results. it seems to be a strong quarter.

did the component shortage factor in at all? do expect this to be a problem in the second half? >> good morning. the strong result obviously reflects our ability to overcome what is otherwise a worldwide issue. it is not a pc issue or lenovo issue. it is a shortage driven by the increase of demand that all electronic products and not having enough supply. we have been overcoming the challenges in this quarter. the last few quarters have demonstrated a very good set of results. we have a record quarter four last year. we will have a record year. we have a record quarter one. the results speak for themselves. with our supply chain, scale, we

will continue to be able to deal with the challenge successfully and deliver, continue to deliver very strong results. shery: do expect that the man continue with more economies reopening and employees returning to the offices? >> yes, we do see that. i think the demand, most thought it would decline, but it is what i described as a sentiment change, primarily driven by will be described as a digital transformation. in fact, covid-19 accelerated that trend. for example, as a consumer, because you have the so-called hybrid model, most people apart from the office spend time at home, therefore they need a much better machine so they can

either enjoy life or work efficiently. at the same time, the covid-19 also drives the acceleration of digital transformation, and as a result, there are requirements, not only devices, but from the services the come along with it. we call it a new i.t. infrastructure or environment where lenovo is capturing the opportunity of providing the entire folio, as far as services that help customers to use those devices we provide, so they can achieve a much better operational results. so we are very positive. shery: getting back to the investment-grade, a welcome development. what is the balance sheet looking like? can that be maintained? >> we will probably continue to

improve. getting the investment-grade from the agency, we also get a revision of a positive outlook from a credit agency, demonstrating they also endorsed the business strategy we adopted. that allowed us to capture a amount of opportunity. i want to highlight that people look at lenovo as the number one pc player in the world, but apart from doing well in the pc space, we will move more towards providing services. not just providing the device, but also the services the come along with the device, and you can see that with the new business group we started operations this fiscal year. i think it shows very good success, and we definitely

continue to believe that. haidi: yes, services was a bright spot. what has been driving that business? i'm curious if you have seen much of a shift in the post-pandemic or emerging from pandemic era. >> two things. one, the pandemic accelerated the digital transformation. i think it is not just the pandemic. the pandemic creates some challenges for a lot of companies because of the economic impact, and therefore, the digital transformation is a way for many companies to improve operating efficiency, to identify more revenue opportunity at a much lower cost, therefore, they obviously need the entire portfolio of i.t. assets or devices, the new

i.t. infrastructure, which is comprising of different things. in layman terms, it is like mobile phones, mobile devices, edge, server, cloud. these are the devices which help companies be able to operate more efficient than otherwise, in terms of leveraging the data collected and using the data to analyze the business. those devices, not only do we have the ability to sell them, but we help them how to manage. i think in the past you look at one individual i.t. device, they would be able to manage it, but you come with the technology improvement and a lot of devices , so services are very important. haidi: talking about mobile

devices, what impact are you seeing from lg's exit from the market and the problems that huawei is facing? >> we see meaningful or significant improvement in markets where lg actually at a reasonable market share. for example, north america. apart from north america, there are other geographies or markets in which lg played in the past. that actually opens up the opportunity, and in fact, while we don't separately are mobile business, but it is a key part of our intelligence device group , 27%. and i can assure you that growth is definitely higher or much higher and and improvement of revenue. haidi: right. great to have you with us in the

exclusive conversation, the lenovo group cfo. staying with tech and baidu, reporting second-quarter results , concern profits will be squeezed by spending on ai. shares have fallen significantly this year. let's bring in our tech analyst. the biggest uncertainty in question will be the regulatory clampdown on tech. >> absolutely. thank you for having me. we are early in the season, and this will be the talking point for all companies yet to report. for baidu, their future is leveraged to data analytics, ai, autonomous vehicles. we have seen the regulators talking about cracking down on sectors and having greater control over data analytics. what does that mean for baidu's future? that remains to be seen. haidi: what are the bright spots we can expect going forward?

matthew: fortunately, the core businesses are in a strong position now. it did take a hit last year when the pandemic hit, when advertisers put back on spending, but that has bounced back to strong double-digit growth for the rest of the year. the core business is really healthy. we have the drag from the investments in autonomous vehicles, investments into their video streaming business, so that would drag on the profitability, aside from the core business being very strong. haidi: our senior and analysis from bloomberg intelligence. up next, the pboc facing calls to cut interest rates as the delta variant spreads. we will get the latest. this is bloomberg. ♪

haidi: this is daybreak: asia. vonnie: the taliban have seized three more provincial capitals and a local army headquarters. officials say they control two thirds of the nation, as the u.s. and nato finalize their withdrawal, following decades of war. it raises questions of how long the afghan government can maintain control of the country. bloomberg has learned janet

yellen is considering a trip to china. no final decision has been made. if she goes, she will be the highest ranking biden official to do so. two previous face-to-face meetings between the two were contentious. chinese diplomats warned the u.s. to stop criticizing china and dropped sanctions and tariffs. china markets next target in a broad-based regulatory crackdown, the banking and insurance watchdog stepping up scrutiny of platforms, ordering companies and agencies to curb improper practices, and step up user privacy protections. the online industry had been predicted to grow to $385 billion in a decade. 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. i am vonnie quinn. this bloomberg.

haidi: sticking with china, the central bank facing calls to cut interest rates, given fresh covid outbreaks. joining us now is our editor. james, this comes at a time when policymakers wanted to deleverage in rain and financial risk, so what can we expect? james: that's right. the pboc is stuck between a rock and a hard place. as you said, they're looking to deleverage the financial sector and don't want to cut interest rates and have that go into the housing sector. you already have a bubbly housing market. as the covid outbreak becomes more serious and parts of the country lockdown again, there are calls to do more to support

the economy. on the one hand, they don't want to ease interest rates too much, but on the other hand, there is increasing pressure to assist the economy. the first thing we are looking at is next week when they announce the august medium-term lending facility, whether they cut interest rates on that, whether they will make a big change to their current policy stance. shery: what is driving the calls for the deleveraging campaign? there is less of the connection between growth and instability? james: right, some connect to the government and others are saying they have been successful in their macro prudential efforts to keep a lid on the housing market, to deleverage in

these areas, and now they can afford to cut interest rates without causing a further increase in the housing bubble, without increasing the leverage, where they don't want money to flow to. i guess the argument is they have been successful so far, so they can out cut rates to support the broader economy. the vast majority of investment banks and market economists we speak to not see that happening, they don't see that change in interest rates, so there is a split between academics and market economists on with the pboc will do and can do. part of that is the pboc's communications have not been the clearest, so when they cut the rrr last month, a lot of people thought that was a real step towards monetary easing, and a lot of people did not think it

was, and it was unclear with the pboc was intending. the split now between academics and market economists whether they can or will is an example of where their communications are not as clear as they could be. shery: this as we see parts of china bringing back the containment playbook as delta hits. what are we expecting from the next round of domestic activity indicators, in terms of whether we will see the impact of delta party? -- already? james: we get the first data for july next week. you will see some fallback in retail sales, services economy will be hit. that data won't be so affected, but looking at the high-frequency data in the last two weeks of july in the first week of august, your starting to

see a hit. car sales and apartment sales were down. we saw the third biggest port in china is shut new shanghai. and so, activity data will be bad. it will be affected by this in august, but flow through to the industrial sector because of things like the port shutting down. i don't think the data will be great in july. shery: coming up next, there report on earnings. this is bloomberg. ♪

shery: here is a check of the business flash headlines. hong kong downplaying the regulatory crackdown by china, which dented the pace of ipos and lead to a profit drop in the second quarter. net income fell 7% to $356 million. in his earnings statement, the ceo said the backdrop will remain challenging. >> the activity has slowed down because some companies are evaluating the market.

it has slowed down. we actually have more and more companies that are inquiring about doing an ipo in hong kong, possibly companies that were perhaps analyzing other markets and now asking a lot of questions about hong kong. shery: samsung positioning its new phone is the direct rival to apple's upcoming iphone. the device is the fourth foldable smartphone below $1000. at an event, samsung launched the new galaxy, causing $1799, and a new watch and earbuds. mailchimp is exploring a sale from exploring options that might include a minority stake

sale. it is attracting interest from private equity and big tech, and saw about $300 million in pretax earnings in 2020. haidi: looking ahead to the results out of one of apple's top suppliers, joining us now is our tech reporter in taipei. what are you looking out for this afternoon? >> it will report this afternoon. it rose 20% year-over-year to $1.36 trillion, according to reported numbers. whether it is net income, or expectations, it hit a record level. in the second quarter, robust demand for smartphones and pcs boosted revenue, as covid raged and consumers stayed home and

tried to get devices to stay connected. haidi: what can we expect to hear from the management? >> the potential impact of the component shortage, and also the potential impact from the global spread of delta variant and demand in the second half. apple has warned in the current quarter that ipads and iphones will be hit by supply constraints, so analysts will want to find anything they can about demand and supply for apples gadgets. -- apple's gadgets. haidi: what are we expecting in terms of acquisitions and growth strategies?

debby: it is looking at the emerging electric vehicle sector. it has a number of deals including with fisker. it is also partnering with a smart system. hon hai has created this open ev platform for others to join its efforts. hon hai is looking for ways to amplify its business, which now depends on apple for half of its total revenue. haidi: we are headed to the china open, as we see more signs of a widening crackdown on different sectors of the economy. let's turn to sophie for what to watch. sophie: we are watching on macau gaming stocks. galaxy entertainment due thursday. looking ahead, bloomberg intelligence expects a rebound for the sector next year.

the new hotel room supply will be a key driver for revenue. where watching chinese automobile stocks. ne-yo predicting record deliveries. one chinese ev start up is said to be exploring a u.s. ipo, which could raise $300 million, according to people familiar with the matter. we are watching base metals with futures under pressure for iron ore. ubs says there is a further drop of $50 a ton for iron ore, as china enforces steel curbs. haidi: coming up, we have that big listing in hong kong. we will hear exclusively from the president, as the ev startup makes it hong kong trading debut this is that pipeline of ipo's continues for the hong kong exchange. that is it for "bloomberg

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