>> welcome to daybreak australia. i'm paul allen in sydney. counting down to the major market open. the top stories this hour. a volatile day on wall street as stocks swing away at friday's triple witching. ever grand looks to, the world's most -- for discounted

properties as part of its repayment plan. shery-ahn: facing scrutiny. the world bank because are out for applying pressure to boost the china rankings. we are seeing u.s. futures muted at the open but this after the s&p 500 lost ground in the new york session. counting down to tense of 1%. -- 0.2%. retail sales numbers coming better than expected so starting the session higher but saw the dip having the july numbers. weekly jobless numbers because we continue to see the impact of hurricane ida on the southern states. casino stocks were under pressure. chinese abr's down for seven consecutive sessions. china slowing from video games with the market. china holding $72 a barrel. it finished unchanged in the new york session. 312 million barrels.

again the u.s. retail numbers are pretty strong. unexpectedly jumping. we had internet sales, general merchandise, furniture driving the gains but of course we are headed toward a quadruple retching -- witching with more volatility. we're talking about expirations. we could see volumes coming back september. we are seeing 1% declines for the s&p 500. traditionally not a great month for equity markets. paul: we had an interesting development in hong kong deck -- equities. tencent declining .5% but that makes its microcap 556 billion dollars. that is enough to push it out. top 10 local stopped -- global stocks. tencent ranked number 11 behind

nvidia. dominated by u.s. tech stocks. that is the first time no chinese stocks in the top 10 since 2017. shery-ahn: given that alibaba fell out, is really the headlines out of china affecting everything. best scrutiny not only in the tech sector but also the prtykets. we have seen how this affected commodities. for those of you with the bloomberg glc elko is a function and you can see all in the red mostly especially when it comes to metals because you continue to seat those concerns mounting over construction in china and you have the likes of iron or continuing with seven consecutive sessions. nickel leading the declines. paul: we will talk about ever grand today as well. we had the news yesterday that bonds in the onshore real estate unit were suspended. it was unit trading today after the suspension. this was the fair disclosure

that chinese has downgraded ever grand real estate from a two aa. the situation at ever grand continues to get worse and we are more on that story in a moment. i want to get to grip -- breaking news. invesco is in talks to merge with state street asset management unit, seeing $1.5 trillion in assets. got a market value of $11 billion. we're getting news of the talks with state street on the dow jones and we will get more details as we get them but let's get sophie for a check of the markets. sophie: looking at the weekly performance, asian stocks with a regional down 2% this week. japan's rally hit the brakes and australia is seeing -- gaining ground with minors and energy having lifted. energy index in australia up

nearly 5% tracking the value of wti holdings above $72. ev markets have been resilient with 59,000 after in our b.i. official backed future monetary policy by a lower borrowing costs. in hong kong, concerns around the crackdown on private industry.city stock dragged the most in asia. bear market territory with casino stocks set for the worst week on record in the property gauge flipping to a march 2020 low with country garden leading the drop amid contagion concerns. stay makers as regulators tiding criteria. shery-ahn: retail sales defying expectations in august and hoping solid gains across most categories as the u.s. consumer caps on shopping. kathleen hays is here with a recap.

what is the message from the latest report? kathleen: stimulus checks being gone, delta variant out, people will not go out and shop. they did in august. let's take a look at this chart. i decline of -0.7 was expected. the rebound of 0.7%. you can see how they year-over-year level of retail sales has leveled out at 15% but it panels in on a decline,. it's take a look at this chart that shows the real sweet spot but when you take out week auto prices and weaker gasoline prices, what you get is a jump of 2% in retail sales for the month. remember auto sales are not weak because there is demand. there is plenty of demand but people cannot get cars. chip shortages are part of it and the prices surged so much that people moved to the severance and then hurricanes and everyone wants a car. that is why they have been week. it does not look like demand is

moving. 10 demand categories posting gains. active school shopping for example. if kids go back to school, you have to buy more stuff. it is true the july sales figure was revised lower from -1.1% from -1.8%. most people are looking past that and looking to the fact that when you get to the main categories, there is strength there but certainly a lot of questions hangovers september and what happens next. paul: we have president biden struggling to get democrats on board with his economic agenda. what does he have to say? kathleen: he has to have the pressure. he doesn't want the debate to go on into next year. a key part of their plank looking into the midterm elections and helping the country get on a better footing economically, , it. is not republicans attacking this planet. -- plan. when he spoke to the united states today, he made a point

this is about helping middle income struggling families. pres. biden: for a long time, this economy has worked great for those at the very top. ordinary, hard-working americans, the people who built this country, have been cut out of the deal basically. i have said this from the time i announced i would run. i believe this is a moment of great change. this is our merman -- moment to deal working people into the economy. shery-ahn: democrats were wondering how it will work out for them to try to get lower drug prices renegotiated with big pharma. dear wondering about raising taxes on the wealthy. that helped with the post but here are the numbers you have to remember. president biden has to get -- three democrats in the house and he has to get all 50 democrats in the senate to get this bill passed. that is why the struggle is so

important in his pounding the table again appealing to the country is a very important step. we will see how the democrats respond. shery-ahn: kathleen hayes. the european central bank is coming out and saying the financial times article on inflation and the rates outlook is inaccurate at the financial times reported the ecb expects to hit its inflation target of 2% by 2025 in unpublished internal models that suggest it is on track to raise interest rates in just over two years. we are getting the reaction from the ecb saying the conclusion that a lift off of interest rates could, already in 2023 is not consistent with our forward guidance. he made clear in a public event on wednesday that by being persistent with a high level of monetary stimulus, the ecb can reach its 2% target over time without mentioning a specific

date those would be the comment by. the ecb refuting the ft article. let's turn to the latest on troubled developer china ever grand. it is said to be ready in a fire sale of unsold property as it seeks to eliminate a liquidity crunch. payoff angry investors and avoid an outright collapse. for the latest on the ever grand saga, chief north asia correspondent, stephen engle. one more day, one more headline, what is this about? stephen: a fire sale and what might describe as a dumpster fire for ever grand because they are having a severe crunch of setting off creditors, fending off investors in wealth management products, 70,000 of which were sold to the tune of $6.2 billion. that needs to be paid back and people are getting angry and they are going to beat -- they

have offered three options. you can get cash but only 10% of every quarter so it will take 2.5 years to get back at all because the company might collapse. their preferred option according to sources of evergrande, not necessarily those jilted, is selling off unfinished properties at a severe discount. up to 28% for residential properties. 46% for office-based and 52% off for the retail space and parking lots. it is a fire sale but this is a developer with four space unsold -- floor space unsold and halted construction to cover three quarters of all of manhattan. it is a lot of property to sell and people do not want it because there is no guarantee it will be finished ever. paul: an astonishing statistic.

next week will be critical for evergrande. key payments coming to you. stephen: bank loan interest is due monday and you also have 84 million dollars in interest due thursday as part of 665 million dollars in coupons due by the end of this year and the housing ministry authority already have been down here at southern china meeting with financial advisors and telling the banks as well not to expect the interest payment on monday. next week is going to be an absolute critical week as authorities not only at evergrande but the government and local government perhaps central government -- we have not heard much from them -- try to work out a debt restructuring as beijing clearly does not want another lehman moment on their hands. paul: north asia correspondent

stephen engle following the evergrande story. christiana georgia layout has been called out by the world bank for applying pressure for china's position in the ranking of economies while ceo of the organization. china's position in the 2018 doing business report was adjusted lower last year following -- the imf reporter eric martin joins us. what is the likely fallout going to be? erik: we are really just beginning to see the reactions from the imf membership. the imf managing director told the board, the executive director is representing all of the countries. she told us this morning in a meeting that they should expect this report would come out. the report came out around 10:30 am washington time and really everyone was quite

surprised by the timing and content of the report and the sources i speak to say that people are really kind of just absorbing all of this and taking all this in at this point. we saw a statement from the u.s. treasury saying these are serious findings and the treasury is analyzing the report. perhaps the most important reaction will be from the biden administration. the u.s. being the largest shareholder of the imf at 17%. three times larger than any other shareholder. shery-ahn: explain the issue because the world bank is saying you want to raise the ranking of china but this is coming at a time when they were in the middle of negotiations? erik: the report says that she pressured staff to raise the

ranking of china from --i'm consulting my notes -- 86 -- excuse me, it would have been 85th and she pressured them to keep it at 78 in this rankinig of world economies for doing business. essentially it is used as an indicator for showing how open and economy is to the private sector and so what we have seen and understand from the report is this happened at the same time xi was pursuing and the world bank was seeking the support of china for a capital increase that happened in those same years. that is what race the concern here among the people who did the report. wilmer hale, at the behest of the world bank or representing the membership, was the pressure

to raise china's rating, the result of taking the capital increase and seeking support for the important capital entries for the development lender. paul: imf and world bank reporter eric martin. let's get to vonnie quinn for a check on the first word headlines. vonnie: good morning. fed chair jerome powell has ordered -- by the central bank policy makers. it follows revelations last week over trading and investments by two regional fed presidents. their actions were widely criticized for potential conflict of interest so they said their trades were in compliance with the current roles. china has hit back at the u.s. and u.k. over its plan to help australia build a nuclear summer rain. a spokesman for the foreign ministry says the move will turn international non-prolific -- nonproliferation efforts. accused the u.s. and u.k. of

double standards. beijing has applied to join the asia-pacific trade pact once pushed by the u.s. as a way to isolate china and solidify american dominance in the region. china amended its formal application to join the ct ppp on thursday. u.s. abandoned the original deal in 2017 under president trump. beijing needs the agreement of all 11 member nations including australia. former japanese communications minister will run for the country's first female prime minister. the 61-year-old will contest a vote for the ruling liberal democratic party set for september 29. the renter of that race is assured to be, the next later. she is the second woman to contest the ruling party vote. global news, -- 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. ♪ shery-ahn: a move by the u.s. and the u.k. to help australia big -- build nuclear submarines has stirred up geopolitical tensions. up next, market insight from northern trust chief investment strategist the fed investors may need to lower their price. this is bloomberg. ♪

♪ paul: u.s. stocks close lower after swaying between gains and losses. at that added to the longest streak on the s&p without a 1% rally since covid became a pandemic. investors need to lower from the

outside gains seen during the recovery our next guest said. jia joins us from chicago. is this the idea that we have seen growth in peak earnings? jim: it is more of an intermediate term view. if you look at what is happened in the last five years, we have had a 15% annual return in global equities. your today, 16% return so we think if you look at the next three to five years, it will be toward the 5% level. to be clear, over the next we are, -- year, we are positive on risk-taking but over three to five years, you see problems with demographic growth and the potential of rising taxes and earning pressure. we think investors should be prepared for the fact that returns are much more likely to be punitive over the next five years than what we have benefited and enjoyed over the last five. shery-ahn: how much is due to the fact that we are getting

anxiety over everything that is happening in china? continue to see tech giant fall and mikal related stocks feeling the pressure. this chart shows the adrs continue to fall. jim: we have built some of that into expectations for chinese and emerging-market equities. think the increasing involvement of the government and the operation of these private companies is something that will reduce their valuations over time. we have built that into our expectations for this moderate return outlook. paul: there is very good reason that things are looking cheap in china. it remains ever present. are you not concerned about what the future holds? jim: in our tactical positioning on a 12 month -- we are overweight outside the u.s. so europe and japan and australia were overweight in the united

states. we are new to emerging markets and that is a reflection of the fact that while there are a lot of regulatory risks and resident china, the stocks have underperformed in the global market over the last year. this is not a time to make a big bet on china being a great by or something to be avoided so we are sitting on our long-term strategic waiting until we have more clarity. what important change we made recently was boosting our outlook for fiscal policy in china to be stimulative. we do not think the government is going to sit on its hands over the next 12 months. we think they will help support the economy in the markets. paul: another long-term trend you have identified is a push toward tech and investors put their money to take advantage of that? jim: we think the leading companies will increase -- increasingly take market share and so as we look of the outlook

for u.s. equities because you have by far the greatest component of technology in the u.s., if you had technology stocks, consumer discretionary were the amazons of the world are, and the consumer communication services group, where the internet companies are, that is 50% of the u.s. market cap. that is a nice counterbalance across the globe which europe is positioned to benefit from. paul: the chief investment strategist, jim mcdonald. thank you for joining us. you can get a roundup of the stories you need to know to get your date going in daybreak. subscribers can go to -- on the terminals. this is available on mobile in the bloomberg app. this is bloomberg. ♪ ♪

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paul: quick check of the latest headlines. taiwanese batteries dropping after a spec merger. the latest bank -- blank check firm to cut a deal with a promising company. the enterprise value at 2.35 billion dollars. the combined list on the nasdaq expecting to receive $550 million. >> specs are designed for companies like ours with solid revenue, emerging fast growth, and taking a little bit of understanding to capture. in the traditional ipo route to be 20 minutes to tell me destroy but after all, this is the thinking of electric mobility and we will start off on the right foot. paul: ck had senate and qatar have agreed to honor $6 billion deal to merge their businesses.

the company will have an annual revenue of $3 billion and remain on the indonesian stock exchange. we will hear from the ceo jack robbins on the company's post-pandemic strategy and supply chains. this is bloomberg. it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.

haidi: -- >> just getting breaking news from new zealand. the manufacturing pmi numbers for the month of august coming in substantially weaker than july at 40 .1. in july, they were 62 point six, reflecting the period in which new zealand went into lockdown. auckland still in level four lockdown. conditions in the rest of the country eased but new zealand still dealing with a small but persistent outbreak of the delta strain and that is weighing on manufacturing and likely to

persist. gdp is seen falling in the third quarter and we are seeing the kiwi dollar easing off just a little. 103 against the aussie. we have been talking about parity. the chance of that seems to have receded for august. 40.1. first word news now with vonnie quinn. vonnie: krista lena has been called out by the world bank for applying pressure while she was ceo of the organization to boost china's position in a ranking of economies. she is currently the imf managing director. china's position in the 2018 world bank doing business report should have been seven places lower according to an internal review. she said she disagrees with the findings. china reached a milestone in its covid-19 vaccination campaign, putting in the lead. the national health commission says more than one billion people or over 70% of the

population have been fully vaccinated as of september 15. china accounts for more than one third of the shots that have been administered locally. canberra is pushing forward with action. it has requested the wto set up a settlement panel as the next step. beijing slept tariffs of up to 200% on all winemakers after bilateral -- worsened last year. china was the top importer of australian wine. in is renewing its efforts to clean up one of the world's biggest piles of bad loans with a sovereign guarantee of 4.2 billion dollars. india's finance minister says 140 $7 billion of a nonperforming asset has been identified. the first phase seeing $66 billion worth, parked with the new banks which will be called

the national asset reconstruction company. an indonesian court said that -- clean air. in the rare victory for environmental activists, the court said he must to take strong action ensure healthy air it rejected allegations that human rights had been violated. indonesian ranks ninth among the world's most polluted countries according to an air quality report. 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 vonnie quinn. this is bloomberg. -- i am vonnie quinn. this is bloomberg. shery: sophie kamaruddin's stock and commodities markets. the rally in gas futures taking a breather with the supplies improving in europe. enough to cool concerns over tightening markets? sophie: we did see european gas futures fall 50% on thursday as norwegian supplies started rebounding but going into the

winter season with european stockpiles staying well below the five-year average, that will remain the key factor in this equation. without this buffer, gas markets remain very exposed. switching out the board at td securities, while unlikely, there is a growing worry that u.s. markets may also need to jump intubated local -- in two bid -- to bid local prices higher. and with that, we are switching out the board and already seeing that panic to secure supplies among buyers in this part of the world with customers paying record prices for this time of year for lng as they prepare for another bad winter, paul. paul: it's not just gas and oil that's feeling the supply chain squeeze p or the semiconductors, putting much everything. bathroom supplies, bicycles,

magnets for rubik's cubes being affected and the cost of shipping spiking. a 40 foot container from asia to the u.s. used to cost about $2000 two years ago. now, it is up to $25,000 for that same container. shery: what a jump. the problem with that is that you are getting those inflationary concerns and the macro picture being affected, not to mention that people, day-to-day lives, everything getting more expensive and really interesting that given all the supply concerns, we are now seeing those top logistics positions, large global companies being very coveted. if we go to the university, take an nba, you want to be studying some of those supply chain management topics. they are earning top dollar. some of those positions are earning from $300,000 to $400,000 a year. unfilled positions reaching a 20 year high. let's turn to chuck robbins

because he actually talked about the supply issues he's facing. he thinks to ease them by the middle of next year but warns that the situation is very fluid. he told bloomberg that some price increases might be permanent. >> we have been undergoing a transformation to shift more of our business to recurring revenue and software subscriptions and we made a lot of progress. when i took over as ceo, we had the .4 billion dollars in subscription software. we exited with almost $12 billion so we have much more predict ability in our business. we have visibility to software revenue that has not been built to our customers and remaining performance obligations last quarter of 30.9 billion and you couple that with the success we are seeing in the cloud space, the 5g transition, hybrid work, hybrid cloud, there are so many tailwinds right now that we feel very good about where we are and that was reflected in our

product orders that were the highest growth in a decade at over 30%. so we wanted to express our confidence in the future and i think we did that yesterday. manus: you know what the analyst committee are talking about? how much that will fall to the bottom line. this came from jeffries. we assume there is conservatism in the guidance and they will pick up some margin improvement as it shifts towards software. can you walk me through the decision to upgrade the outlook for growth and just how much of that you can leverage, how much of it falls to the bottom line, given the transition you just described? >> we guided, over the next five years, 5% to 7% revenue growth and eps growth and there's two real factors that are influencing the eps side. number one, there are so many areas that i just described that we need to invest in. we made a decision to invest in these new platforms that allowed us to insert ourselves into the

next architectural position with cloud players. so many things i mentioned already and then the second piece is for some period in the foreseeable future, we have increased cost from a components perspective that is also negatively weighing on that, on our growth margin, so we think that over time, we will continue to see the benefit of the higher margins from the software business but right now, we felt like we needed to be prudent given the pressure from a components perspective. >> can you give me a time horizon, base case expectations, how much longer you expect in the difficulties to persist? is it through next year into 2023? what is it for you, chuck? chuck: i was listening to the prior discussion about it not just being semiconductors although that is a big issue. it is power supplies, substrates, memory, and then you have transport constraints at ports around the world, so our

current view is that it will not begin to get better until at least into the middle part of next year and it is still very fluid. we don't have a high degree of confidence on that yet but we do have our supply chain team, number one in the world across all industries paid what i do know is that our team is working hard and at the same time, we are focused on all the positive aspects of what our customers are dealing with relative to the return to office, hybrid work, 5g, all the positive tailwinds that we feel. >> they all talk about these issues fading over time. transitory is the word of the moment. do you sense a bit more permanency? you talk about supply chain, logistics, all of that. do you sense some permanency to some of this cost pressure pressure marked chuck: there's aspect --? -- to this cost pressure? chuck: i don't think there's one

answer. we see memory prices go up, come down, go up, come down, and that usually is transitory but some of these other increases we have seen our sort of new to us. we will have to wait and see but as we talked about, we have implemented price increases and we will continue to look at what we need to do in that space. all we are focused on right now is trying to do the best job we can to meet the customer demand that we are feeling. paul: chuck robbins speaking with jonathan ferro. we will have more on supply chain issues later on with christopher, chairman and ceo of a musical group which makes consumer products from youtube speakers. you can join us later on "daybreak asia." a move by the u.s. and united kingdom to help australia build nuclear submarines has stirred up geopolitical tensions. we will get analysis from expert who worked on security issues

for more than three decades. that is up next. this is bloomberg. ♪

paul: china has -- help australia build nuclear submarines. the chinese foreign ministry spokesman said the new partnership will stoke an arms

race in asia pacific waters. let's talk about the repercussions with the director of the asia program, the german marshall fund. china says this new defense pact between these countries, it greatly undermines regional peace and stability. are we looking at the risk of an arms race in the region as china wants? vonnie: china has been building up its military in the region for many years and the reality is that other powers have not been keeping up. there is growing concerns in the region about china's activities in the south china sea and the taiwan strait, east tennessee. what is significant about this deal is in building nuclear powered submarines, the australians will have the capability to operate very far from their shores, and that is evidence that they are concerned

about their strategic environment, not just immediately in their own neighborhood but far afield in these areas where china is just very active, and operating in taiwan's air defense identification zone, so i think that what this really shows us is a willingness of countries to contribute more to step up to the preservation of peace and stability in the region, and i think that is the desired outcome of an arms race. paul: china has responded with the sorts of words we might have broadly anticipated but what kind of action might we see? we have already seen some economic coercion against australia. what might be next? bonnie: i would not be surprised if china takes more actions against australia. but they are limited in what they can do.

they are dependent upon australia for iron ore. the chinese would like very much to find alternative suppliers but that is not so easy. they may double down on that effort. but they will find other ways i think to pressure australia. they already, in one of their media outlets, called australia an adversary. but i think that australia is not the only country that's going to be targeted with chinese pressure. clearly, the u.k. is going to be in the doghouse, too. the united states has a great deal of friction already with china. but what lesson i would like to see beijing draw is that its behavior is leading to growing concerns around the region and other countries are willing to forge coalitions in order to protect their own interests and preserve what they see as the rules-based order that is underpinned by their democratic

norms. china may not like it but maybe china should moderate its behavior and stop the economic and military coercion against its neighbors. shery: are you concerned about the rift with france and new zealand? bonnie: well, i do think that there's going to be a fallout with france in particular. may be some with new zealand as well, i think that these are long-standing relationships with the united states -- france has been a long-standing partner. of course, nato and new zealand -- i think that these are relationships that require some repair work. i believe that people in the biden administration and also in canberra understand that and i think that they will work very hard to find other areas to strengthen those ties.

shery: what are you expecting from the meeting next week? bonnie: i think the meeting is very important because it is the first in person summa and i think we will see some important deliverables come out of that, potentially more on covid vaccines, supply chains, on infrastructure, cooperation in the indo pacific. there's a lot of things that they are working on. paul: how about the timeline involved here? nuclear submarines take an enormous length of time to build. could the environment in the south china sea and the indo pacific have changed significantly in the 15 to 20 years in time that's going to elapse before we see the submarines put to sea? bonnie: i don't know what the timeline as with the first 18 months will essentially be a study of how to go about producing the submarines before they ever start the

manufacturing process. there are a lot of decisions yet to be made. the very announcement of this grouping i think we'll have a significant impact on indo pacific security. not immediately of course in the strategic realm, in the actual deployment, but this is a new architecture for the region. the australians and the brits and the united states working together on defense, on technology, on science as well as defense industry, and i think they are going to do more than just produce nuclear submarines. this is something to watch going forward to see what these countries are going to do together. these are new coalitions. the quad being one. perhaps we will see others and they will not all even include the united states.

countries are working together to protect their interests. shery: director of the asia program, bonnie glaser. thank you as always for joining us. we have an alert on a bloomberg. brazil's government has decided to raise its financial transaction tax in order to find president bolsonaro's new social program. this is according to the presidential palace. it would be attacks on credit and insurance operations as well as transactions involving bonds or other securities. we have very high hopes for the equity markets with analysts being optimistic about it. we have seen a decline of the stock market by about 4% this year already given that we continue to see the central bank battling inflation concerns and hiking rates in order to dampen those prices. we are learning the brazilian government is raising that attack on credit, fx, and

insurance operations. be sure to tune into bloomberg radio to hear more from the day's newsmakers and get in-depth analysis from the daybreak team come in now broadcasting from our studio in hong kong. listen via the app, radio plus, -- we are broadcasting live from our studio in hong kong. listen via the app, radio plus, or bloombergradio.com. plenty more ahead. stay with us. ♪

paul: taiwanese -- a time startup which specializes in battery swapping technology, announced plans to list on the nasdaq. the deal says his enterprise value at 243 $5 billion. the ceo's with us. >> expansion always takes global capital. always making sure that as we work with our partners, we operate at the highest standard with absolute transparency so that we can stand shoulder to shoulder with our partners as we commercialize into the market and there's really no better market to do that than the nasdaq where technology giants are like microsoft, google, all lifted. specs are designed for a company

like ours. solid revenue, emerging fast growth. takes a little bit of understanding to capture it. the traditional ip around, you get maybe 20 minutes to tell your story but you know, after all, this is the decade of electric mobility. we want to start off on the right foot. >> it is an interesting investment. it was a merger this year go jet, ridehailing and free delivery, and another. they have key investors themselves. everyone from alibaba to google, you name it, a long list. a whole litany of international companies that have invested in those two companies. what are they going to bring and how are you going to leverage that investment from them? i would assume southeast asia is going to be your next big push. horace: southeast asia is the third-largest market when it comes to -- the largest being in china with about 290 million

vehicles that used to be turned from the previous asset-based batteries solution to the more efficient and more powerful lithium-ion solution where we come into play. the largest two wheel electric maker in china were 23% market share and partnership with the largest -- maker. we are going to create this open network that really allows, you know, customers to go as far for as long as they want. stephen: your partnership you were announcing in the last few weeks, these are the two large two wheel makers, gas powered and electric. what are your realistic goals for the china market and are you going to bring that battery infrastructure and is it scalable in the china market that is dominated by those two players? horace: we see ourselves growing quick but also a controllable

way into china. the team's staff. it will deploy in q4. quickly going to that right after that and then expanding to half a dozen cities next year and then franchising our solution into many more after that. shery: horace luke speaking with stephen engle. here's a quick check of the latest business flash headlines. they resort company has entered into an agreement with bank of china for $1.5 billion of unsecured credit facility. the outstanding loans will mature in september 2025 as macau casino operators extended declines on thursday after recent crackdowns and jp morgan downgrading the stock. china's industrial and commercial banks have sold $6.2 billion of risky financial debt and the offshore bond market. the notes were said to be sold at 3.2%, down from initial guidance at .6%.

sources said it topped $9 billion by the end of thursday in hong kong. credit suisse has reorganized its investment banking team in the asia-pacific in an effort to build its credit in the region. joe gallagher, who headed the team in the region for 13 years, will be replaced by a 23 year credit suisse veteran. the bank has made a net 200 higher in the first half of this year. paul: coming up in the next hour, as prime ministers to go prepares to step down in japan, we will take a look at the progress he made on economics with the onward cofounder and ceo, naomi. we will get more insight on markets with the chief investment strategist, who will join us for a conversation as well. that is it for "daybreak australia." "daybreak asia" is coming up in

just a moment. do stay with us. this is bloomberg. ♪

paul: hello and welcome to "daybreak asia." i am paul allen in sydney. sophie: i am sophie kamaruddin in hong kong. shery: good evening. i am shery ahn. our top stories this hour. in addition stocks look set for a steady start after a volatile down wall street. traders are weighing risks from china to the global recovery. evergrande looks to calm