♪ kathleen: annabelle: soul.

haidi: in australia's investors gather for another volatile week . u.s. futures higher. minneapolis fed president neel kashkari says recent bank turmoil is boosting odds of u.s. recession. plus, credit suisse facing investigation over how top managers ran the bank in the lead up to its collapse. breaking news for you. the banking crisis. it looks like citizens bank is now set to near a deal for silicon valley bank that has been going on for a couple weeks now. it is very difficult to find a fire -- was very difficult to find a buyer right for this. authorities finally nailed it down this way. there was early reports one of the big banks was ready to buy svb but regulators passed on that and it now after more than two weeks of prices turmoil

spurred by what happened to svb, it looks like another step is being taken that may be will continue to help restore investor confidence, not just in these banks, but banking more broadly. of course it was, as you know, annabelle, the financial regulators held out friday for u.s. stocks. how do you think this is failing -- fading three to asian markets now? annabelle: we saw futures for a lot of asia lower a couple hours ago. we had u.s. futures coming online i the green. then you continue to see improving sentiment. for here, anz inc. one of the biggest lenders in australia coming onto the upside. we have continued to see outperformance or underperformance of global banking stocks versus their global shares. but, this is the state of play as we open for australia now. new zealand has likewise turned positive. it earlier opened in the red. now we are seeing a move back

into those haven plays. the bond market in particular is really pricing for the risk of recession. also, the odds that the fed will be forced to cut rates. swap saying we will see a 100 basis point reduction by the end of this year. you can still see those moves really led by the front end of the curve here. kathleen: annabelle, friday the treasury bonds had a nice rally. we saw the two-year note coming down six basis points to 3.77%. and the 10 year also coming down about six basis points to 3.37%. the curve is still steep but the sense with rate hikes is the fed can't do it anymore. they will have to start cutting rates soon because the banking crisis will feed into a loss of bank lending. stocks, coming into the beginning of the trading week with green on the screen because after seeing the s&p 500 dropped

a full percentage point friday morning my regulators meeting in washington coming out saying, yes, thanks are in trouble to a certain extent. but, the system is sound. that is one thing that helped move stocks up read the s&p 500 close up about .6%. oil. also, financial regulators, it is so interesting because they are stepping in more and more backing confidence, trying to get the system back on track. oil bounced back above 69 dollars per barrel. it was down about $10 over the past couple weeks. it is amazing all of the things bank regulators can do. haidi: yes. of course, going back to relay the banking sector event that led to all this, getting details are on svb, saying it's closer to a deal with first citizens. we are hearing that first citizens bancshares i'm out of

the two bidders that submitted their bids into the friday deadline is in advanced talks to acquire silicon valley bank after the collapse earlier this month. we could see a deal as soon as sunday to acquire the bank from fdic. let's bring in bloomberg finance editor adam haigh. we know there was doubt between these two bidders and we have been waiting to see what happens for silicon valley bank. i am sure a lot of employees are waiting to see as well. adam: i think this is what investors want. they want regulators to move quick and give substantial updates on what is happening here. it is quite important here that they gave some information sunday evening. it looks like we at least have one bitter in position for this asset. which, has been at the home of the fbi see for the past two weeks. it is a huge test of confidence for investors the last few

weeks. one noticeable move for regulators has been these sunday evening developments where they are able to get information to the markets before the start of trading monday. i cannot overstate how much of an important move that is because a lot of this is about investor confidence. a lot is about the sense that regulators and authorities are not doing enough to stem problems. that is what we are seeing here. a significant of element in the fact that these svb assets will be taken over by this other lender. kathleen: the latest on another troubled regional bank, the first republic, its stock down 90% over the past couple weeks. adam: yeah. of course, this is one that has continued to play out quite significantly. not so much in the background of svb, but right to the foreground. what you had here is the

authorities are thinking of different ways they can change emergency lending facilities they are offered to the bank. that is crucial. as you pointed out, the stock has been hit materially. so, this is also about confidence, about using a few different options to shore up confidence in the lender and one of the options is it does speak to a little bit of an improvement in confidence already around the withdrawal of customer deposits that has been so crucial to all this. those assets that were bought when interest rates were very low a year or two ago and have since been caught up with a meaningful move higher in interest rates. in the corresponding selloff in bonds that has re-rated a lot of assets and put them in trouble. so, the change in thinking around how authorities will give these emergency lending facilities at first republic is quite crucial. haidi: credit suisse could be

facing a possible inquiry. i have to say that the words being said by finra are scathing. negligent handing, lack of accountability, cultural problems. annabelle: indeed. the other one, from the finra president is often it was not clear who was responsible for what. that was one of the key themes that played out before ubs ended up acquiring credit suisse. that it was not clear who was running certain areas of the bank. or at least come out -- on the outside it was not clear. perhaps with a review like this, investors might it some details as to who was making the decisions and when they were making the decision. the kind of rationale and discussions going on not just in the headquarters in switzerland but different parts of the bank around the world.

clearly, investors will be interested in how the report plays out and how the level of detail we get from it. of course, for some, it will be too little too late. haidi: bloomberg finance editor covering the latest developments as we continue to see bacon turmoil globally. sticking with the theme we are watching deutsche bank as well. it kind of continues to play out in the asian session. we will be watching asian financials. but that drop in a selloff described by the logs -- likes of sidney as a rational. look at that 9.5% drop we saw saturday. cbs, the most liquid, jumping to above 200 basis points. that's dr. klein was the biggest in almost -- cost decline was the biggest in almost three years. we have seen deutsche bank stage a recovery in recent years after

a series of crises. but we can see potentially the broader contagion fear is very much alive. kathleen: i guess it has taken them a while to clean up and restructure everything they needed to do. german chancellor olaf scholz was compelled by what is going on to say what a strong bank they are. that they are basically trying to back them up. some jawboning can be very important. initial reports friday made it seem like this was hedge funds. they were taking advantage of a situation. you hate credit suisse, wouldn't deutsche bank be your next obvious target? the problem is these things gain momentum. they can get a life of their own sometimes and create problems that are not there. it is another chapter or several pages called -- in the book called the banking crisis of 2023. haidi: really it is the

fragility, not just deutsche bank, commerzbank, seeing deep drops. it led to citibank saying this is an irrational market. it's not helping risk appetite going into trading this morning in asia. we have comments from the minneapolis fed president neel kashkari about the economic outlook for the u.s.. he says banking turmoil has increased the risk of u.s. recession but it's too quick to judge what that means for the economy and monetary policy. >> what is unclear is how much of these banking stresses are leading to a widespread credit crunch. then, that credit crunch, just as you said, would then slow down the economy. this is something we are monitoring very closely. kathleen: for more on how investors are closing out a dizzying months let's bring in burke asia rates rep editor -- rates reporter matthew burgess. friday, a rebound in u.s.

stocks. now it seems like maybe, here we go again down the slippery slope. matthew: definitely markets are very jittery at the moment, jumping at any headline they can. it seems to be sell first, ask questions later, no doubt about that. over the weekend geopolitical risks are back in the four with russian president vladimir putin saying he will deploy tactical nuclear weapons in alibris, giving nato members -- in belarus, giving nato members and most of the world a little bit of concern. also neel kashkari this morning, asian time, coming out and saying that the banking stress is increasing the odds of a recession earlier than expected. now, people would remember that neel kashkari was probably one of the more hawkish members of the fed. last year. so, his change in rhetoric,

latching on to that there. given the month we have had, it has certainly been the months of the haven assets. the japanese yen and swiss franc for sure in currency land are the best performing their g10. . so far this month and i would expect that to continue through the end of the week. market jitters are around and will be around this week as well. at the moment things are quite subdued. people are just waking up and getting to their desks in asia at the moment. i would expect volatility to elevate throughout the week, especially as we come into u.s. consumer data later this week which should hopefully capture a little bit of banking stress. we are --haidi: retail sales and inflation numbers out of austria as well could potentially firm up expectations. we are already seeing expectations of a pause at the next meeting. a 50% chance if you look at swap

traits, a cut from the rba come july. matthew: definitely. shelley's data this week will be interesting, no doubt about that. rba governor philip lowe said the data, the four points of data, particularly retail sales and upcoming inflation data will help the board's view when it comes to what they do with the april meeting. the thing is, asteria does not have the same banking stress as the u.s. and europe. so, with inflation expectations to be above 7% year on year in february, you would hazard a guess that those are bets for a pause in april and a potential cut as early as july would have to be priced out. we see more volatility in australian markets this week as well. kathleen: matthew burgess our

asia rates reporter. su: ukraine is calling on the united nations to counter what it calls a provocative plan by russia to stage nuclear weapons in belarus. the foreign ministry says the decision carries criminal intent and undermines nonproliferation efforts. russian president vladimir putin defending moscow's move saying the u.s. has long kept nuclear weapons in the territory of its european allies. china's vice premier reassured global executives that the country will continue to open up to international businesses. he said at the annual china development form that opening to the outside world is a national policy. he also read a message from president xi jinping that pledges to pursue a mutually beneficial opening. taiwan and honduras ended more than eight decades of diplomatic relations as the central american countries says it now

recognizes that the island as part of china. according to the chinese foreign ministry, china and honduras were established -- will establish diplomatic ties effective immediately. taiwan said the decision was regrettable and hurtful and linked the underwritten decision to the promised -- the honduran decision to the promise of chinese financial support. in australia the centerleft labour party took power in new south wales ending 12 years of liberal national rule and ceiling a left wing sweep across the mainland. abc news reports labor leader chris minns became the 47th premier of new south wales. his party will win at least 47 seats giving it a majority in the state parliament. the final vote will be confirmed in the coming days. global news 24 hours a day on air and on bloomberg quick take powered by more than 2700 journalists and anaylsts in over 120 countries. i am su keenan. this is bloomberg. haidi: the incoming president of

japan's major shipping happening the pond calling for support amid russia's war in ukraine. with an exclusive interview later this hour. later, how china's post-covid rebound will bolster the economy. they believe it is at a low point. we get analysis on the region's economic outlook next. this is bloomberg.

>> ♪ haidi: you are watching daybreak asia. look at the week ahead watching u.s. core pce inflation data friday. the inflation indicator the fed pays the most attention to is likely to rise .4% in february. on wednesday australia's february cpi is expected to show

inflation easing and it could support case for the rba deposit hikes at its next meeting in april as well as swaps markets firming up expectations of a cut in july. chinese pmi data friday will offer a look at the countries economic comeback. consumer spending and investment rebounding the first two months of the year after covid restrictions were dropped. bloomberg is expecting a mild acceleration when it comes to manufacturing, government construction driving the recovery. we are watching industrial profits coming out in a few hours time when it comes to south korea as well as japan. other data node. fourth quarter gdp numbers out of the u.s.. the bank of thailand decision as well. kathleen: our next guest says asia-pacific economies are at a low point and set to get a boost from chinese recovery depending on what happens to global trade in the months ahead. joining us is steve cochran, apex chief economist at moody's

analytics. it's great to have you here. everybody is focused on how quick and strong the recovery in china will be. but it's a major trading nation. what is the risk here with global trade? local recession? less purchases of chinese goods? steve: well, the pace of the global economy has certainly slowed. trade has been down it really over the last six months or so and it has been factoring into what was a pretty weak fourth quarter for asia-pacific, particularly, southeast asia where exports have been quite weak. i do think that is pretty much the low point for what we might call this meeting cycle here in asia. for a couple reasons. one, domestic demand is still quite strong throughout much of asia. coming out of the post-covid time. southeast asia in particular was later to come out of it then europe or north america and

spending is still strong and labor markets are fairly strong. then the travel and tourism opening up, particularly, as travel in and out of china is getting easier and there are more and more tourists spending money throughout the asian pacific economy. china, then, is a big question, as you mentioned. numbers coming out of china for the january and february time were pretty good. retail sales, industrial production, investment, all looking pretty good. i would say that the retail sales numbers were not a homerun. but good enough. and, indicating that the chinese recovery is on its way. i think it will be an upward track that will help. kathleen: in terms of the property market a lot of people are focused there is a big question.

it is tough to bring it back. it was under pressure for a long time. how do you see its recovery? how do you see that supporting the chinese recovery and therefore, the umph for the asia-pacific? >> the property market is the weak link in the chinese economy. some policymakers are hoping shore up the industry in terms of liquidity getting pumped into major property development players. and, lowering, at least, some of the interest rates in china helping to come a perhaps, insight a little mortgage borrowing among households. i think there's a long way to go. there is so much that has to be done in terms of simply getting incomplete projects completed so units can be delivered to households so they can begin paying monthly mortgage payments and to get the whole system

going once again. it is a difficulty in terms of consumer sentiment. i do not think there is a lot of strong sentiment among households to get back into the housing market now. so, this will probably be the slowest piece of the turnaround in the chinese economy. given the size of it, this is the biggest weight in terms of keeping china from getting registering a growth rate something more than 5%. we see about 5% as being a realistic target for this year for china. haidi: when it comes to how strong of an economic anger china is for the rest of the region does this mean we expect less of a threat for emerging markets given the global headwinds? steve: in the beginning because the recovery in china will be led more than -- by consumer spending down by manufacturing

or by construction, there will be a little less of an impact on the asia-pacific economy. the impact will be there. there will still be positive repercussions as trade picks up. but it will not be the same as if the housing market was strong and if there was demand for a lot of basic commodities. which would drive growth in the region. what that also means is, perhaps, the impact on inflation might not be all that strong. so, we should still be able to see inflation continue to ease across the asia-pacific. haidi: always great to chat with you steve cochrane apex economist at moody's analytics. there is more to come on daybreak: asia. this is bloomberg. this is bloomberg.

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haidi: still haven demand when it comes to the yen and swiss franc. the yen is crossing the 130 level for the first time since february 20 -- february 10. we are seeing broad dollar weakness with the bloomberg dollar index just sitting there and we are seeing strength when it comes to the aussie dollar and the kiwi dollar so far this morning. we have renewed concerns about the ongoing banking turmoil, not to mention, the fed's neel kashkari saying that the banking development could further strain the economy and bring the risk of u.s. recession closer. this is bloomberg. these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing. and more speed you need as your family keeps growing. check in on your current speed through the xfinity app

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>> apple ceo tim cook stresses what he calls a symbiotic relationship with china at a time when ties are strained. he is one of only a handful of top u.s. executives attending

the high-profile china development room in beijing. let's bring in stephen engle in hong kong. not a stress to say this years cdf is a bit awkward. stephen: it is, with the political situation between china and united states, and also coming off the heels of xi jinping's visit to moscow there he met arm in arm with vladimir putin. it comes at a time when the biden administration is doubling down on its export controls to china. just the friction is out there, front and center. these gentlemen have not spoken since november. i will get to that potential call in just a minute. at the china development forum, it is circled on the calendar before the covid zero and before the pandemic, you circle that went on the calendar for a big eating in beijing -- big meeting

in beijing. some of the top name executives are missing with the exception of steve schwarzman, ray dalio, and tim cook. they were all on the preliminary list of attendance. tim cook spoke on saturday, he did talk about the semi-attic relationship over the next few decades together and it has been. almost all the apple products were made in china, the iphones were made there through its partner, foxconn. even foxconn has talked about investing in india, diversifying the supply chain. other products of apple, whether it is the ipod, the chinese local partners looking to diversify capacity outside of china because of the prospect of increasing and prolonged tension between china and the united states. when supply chains move, as they have started to over the last three years, it is tough to move it back.

the china development forum, a little bit muted this time. we did hear from the vice premier, stressing that opening up is a national policy, it is a mark of modern china these are things we have heard from chinese leadership for years. a little bit different situation obviously, right now with the backdrop of the few clinical tensions. heidi: and what a backdrop. we know taiwan has a trip coming up in april, does that mean we won't get that phone call between the two leaders soon? stephen: there is a lot to talk between xi jinping and joe biden. the biden administration and others, they have made their choice. sources are telling us that beijing has rebuffed all of those overtures to have another call. they have not met in person or had a call since i believe,

november, the g20 in bali. a lot of issues have crept up. xi jinping's support of vladimir putin, not necessarily support of the war in ukraine, but he has chosen his diplomatic strategies on the global stage, and that is with vladimir putin. that offers a bit more of a sticky situation with joe biden as well, in talking and trying to iron out the difficulties with xi jinping. the call will happen at some point, let's hope. it won't happen according to sources, anytime soon. heidi: stephen engle there. let's get you to su keenan. >> bloomberg has learned the regional bank forced citizens bank first chair is an advanced talks to acquire svb. our sources say a deal is imminent, though no final decision has been made. u.s. authorities are said to consider expanding an emergency lending facility, that would help first republic bank shore

up its finances and avoid total collapse. israeli prime minister has fired his defense minister on a contentious plan to reduce the power of the supreme court. he was dismissed only 24 hours after making a dramatic speech and saying the plan is a threat to national security and should be halted. protesters were gathering in support of him while the session itself has seen massive demonstrations. credit suisse is facing a possible disciplinary action over how top managers ran the bank in the lead up to its collapse. switzerland's banking regulator told a newspaper that they had a cultural problem that translated into a lack of accountability. myanmar president says the regulator is exploring options for the proceedings. and training in london metal explains -- exchange, is finally

resuming during asian hours at 1:00 a.m. london time, 8:00 a.m. in hong kong. this canceled billions of dollars worth of deals in response to a runaway short squeeze. the market reopened a week later, but only from 8:00 a.m. in london. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. heidi: with the recent big turmoil, avenue capital ceo thinks there is little benefit for small businesses and other depositors to keep their money with regional banks instead of wall street giants, unless the fed steps in. >> what is the benefit of keeping your money in a smaller bank? even if that bank is doing extremely well? it is not one of the banks that, in essence, the fed worries

about systemic risk. even if there is a 1% probability, why wouldn't you move your money into jp morgan or b of a, into the banks that you know that if there is a problem, the fed has to step in? ultimately, all of this is a question of trust and confidence . the fed is trying to give everybody back that confidence but, if you are a business and you have 100 million or 200 million in a small bank, should you move it? i think ultimately, people will end up doing that unless the fed gives people guarantees that they have got nothing to worry about. >> so what you are saying -- unless the fed does do that and authority step in and provide guarantees, the regional banking system is unstable? >> it is not that it is unstable, it is that the question is, the risk of keeping

your capital there, even if it is a 1% probability, should you move it? that is really the question. >> if the answer to that is, yes, then the next logical conclusion is that these banks have a problem, because we are going to continue to see deposit flight and they are going to have an issue with their depositors just on an ongoing basis. i am wondering where that ultimately takes us? >> i think you will start seeing the numbers and in essence, over the course of the next month, if you are going to start seeing that deposits are moving out, then the fed will have to step in. if you see that deposits have stabilized, then the fed has done their job and given the confidence back. all i'm saying is if i am the ceo of the company and there is a 1% probability, what do you think you should do? ultimately, i think people will

end up moving there capital out. >> you are many things. when you take a look at the system, where are the opportunities and where is the trap? >> the opportunities for what we are right now is immense. i think it is for anyone who does private credit. the simple reason for that is, it will be more difficult and harder for banks now going forward to lend capital. or even if they lend money, they will require different covenants. it will just be harder. for folks like me, you will be able to step in and lend money, it will just be sort of a golden age for us, because we will be able to come in and the banking system, in my opinion right now, there will just be more requirements. there will either be more equity requirements, things will be more careful, the fed will supervise more. all that means is that it will

be harder to lend and for folks like me, it will be easier to come in and dictate terms. kathleen: now let's get to annabelle with the markets. annabelle: we are 40 minutes into the session now for australia and we are seeing some cautious optimism coming back into the markets. first, you had that lack of negative weekend news flow, more officially for banks coming through, including from the german finance ministers saying that which a bank was in a position. then he had what just came through the last half hour for first citizen who is apparently kneeling -- nearing a deal for svb. we are seeing aussie bank stocks just moving fractionally high here. we are watching as japan comes online in 20 minutes from now alongside deal. the topics bank index still pointing to a drop at the open.

we have seen sentiment improved fractionally with u.s. futures. positive in the last hour. what else we are looking today is that heightened risk of u.s. recession. and neel kashkari said the banking turmoil has brought that more and focus. he says it is too soon to forecast what will be the next rate decision, it still that more cautious tone is a little bit of a change for him because he has been a bigger proponent of rate moves to the upside. i'm also watching the japanese yen it is now trading fairly steady. still slightly better risk sentiment coming in. the aussie yen pair, typically a good indicator of the risk tone in the markets. heidi: we get an exclusive interview with the incoming president of japan's leading shipping companies. he gives his box on wage hikes, the yen, and russia's war in

ukraine. this is bloomberg. ♪

kathleen: shares in cover, a virtual reality software startup began trading on the tokyo stock exchange. it is valued at around $320 million. heidi: incoming president of japanese shipping company says he expects wage hikes to continue across several industries following years of stagnation. he takes a top job at the start of next month and in this exclusive interview, he tells bloomberg the businesses need to prepare for the rising cost of labor. >> [speaking non-english language] >> considering that wages and japan have not risen in more than 10 years, they will raise. the trend will probably continue. even if there are differences in levels in each industry, it is probably better to think of it as a continuing trend. heidi: the bank of japan will

have new governors and deputy governors this month. what is your outlook this year and how will it impact you? >> given we have seen negative impacts from the rapid rate rises in the u.s. recently, it is quite difficult for the new bank of japan leaders to egg it from the current policy and start raising rates. i think current policies will continue to be incidents -- an extent. there hasn't been any negative impact from our company's performance from the current policy. i don't see any issue if the policy stays as is. >> last year, the yen saw historic weakness against the dollar. how are you looking at the currency markets this year and how will it impact your management? >> this is the most difficult question. since i have been working as a cfo, i have been wrong the whole time. however, we expect it will be around ¥130 per dollar, at least through 2023. after that, it will settle down

to around 120. most of our income will be in dollars, so if the yen the vitiates, -- depreciates -- >> with geopolitical issues, there is a transition to block economy. how will that impact the shipping industry? >> in addition to that, production areas will likely change in response to population increases in southeast and africa. it makes more sense to move production sites closer to consumers. i also think that the logistics will shift. it is said that the block economy will progress more and more in the future under circumstances. automakers, not just japanese but also in the u.s. and france, have moved their production closer to consumption areas. we said the economic zone would narrow more and more because of this. in reality, there is no such

movement in the last 10 years. i don't deny the possibility of economic zones narrowing and turning into a block economy, but, i still have a little bit of a hard time figuring out whether or not that is really going to happen unless i take a closer look. to be honest, i would say, no. >> at the end of last year, japanese insurance providers temporarily halted the insurance among the war in ukraine. with the war on going, what kind of support measures would you like the japanese government to provide? >> it is obvious that transporting cargo on ships without insurance is a very dangerous act. at the end of last year, the insurance companies suddenly notified us that we could not renew our insurance. we were quite flustered, but in the end, we found an insurance company so our operation has not been impacted.

however, the insurance has becomes stricter than it used to be, and we have adopted the process of adding more insurance for one voyage at a time. this has made our situation very unstable as insurance for each voyage is not guaranteed. in this situation, the government support will naturally be necessary. we are currently asking the government for their help. >> japan has a target to go carbon neutral by 2050. what specific measures are necessary for the shipping industry to reach climate change goals? >> ships emit an extremely large amount of co2. we can reduce the co2 from switching to lng to other fuels. we can reduce emissions to zero if we switch to ammonia or hydrogen. in order to do this, we will have to gradually replace the ships, which will take a very long time. we have to do everything we can right now. one of the best ways to reduce co2 missions is to slow down the

speed of ships, which we call slow steaming. it will take years to change to alternative fuels and order new ships, but we will continue making efforts and do everything we can. heidi: speaking exclusively to bloomberg in tokyo. be sure to tune into bloomberg radio to hear more and get in-depth analysis from the daybreak team, broadcasting live from our studio in hong kong. or bloombergradio.com. this is bloomberg. ♪

kathleen: board is seeking to reverse losses in its ev unit which has seemed to reach about $3 billion this year did ceo told us the losses are only a temporary snag as it makes august on its factory in tennessee. >> we are not going to spend all this money to lose money. this is a profitable enterprise. we think we will make money a few years faster than tesla. there is -- we got to build the plans, engineer the vehicles, that is why we are losing a lot of money. we got to do a couple things.

we have to scale, scaling helps cost. we have to design the vehicle differ -- differently. and we have to get our distribution and manufacturing costs down. this will be about 30% smaller and. plus what happens inside the plant, will help us make money. all of those things are required to make money because the battery is very expensive. >> as you say, scale is important. the production as you will have an 8% positive margin in 2026. what scale assumptions do you have built into that model? >> we hope and plan on building capacity like this plant, 2 million incremental units a year. we make about five now, so 2 million is like the company will grow by more than 30%. that scaling is really important. 2 million units, no one has ever done that in north america, especially. we are already number two, our

vehicles are bestsellers in their segment like truck and van. we are very optimistic that we can get that profitability and we can scale. the biggest thing that scaling is batteries. david: you mentioned tesla and the tracker of tesla. they have something like an operating margin of 17%. even if you get to 8%, there is a gap. is your target tesla? do you think you can get to that level? >> we think we can do better than 8%. the reality is, tesla hasn't had a lot of competition until ford and other brands. their pricing will go down. year-over-year, tesla's prices have come down $7,000. they won't be able to keep that pricing forever because now they have competition. we are counting on a very

competitive pricing environment. we have been in this business for 120 years. he know that when a new market like this happens, the pricing comes down. even with that pricing, we expect to make that 8% plus margin. heidi: ford ceo speaking to david westin. what's get a quick check of the latest business flash. covid restrictions tinged fuel demand while domestic output of oil and gas rose to a record level. china petroleum and chemical as it is officially known posted net income of 9.6 $4 billion for 2022 compared with the new record $10 billion profit a year earlier. moscow has offered twitter employees grants in an attempt to stem an exodus of talent. less than the 44 billion musk paid to buy it last year. most has laid off thousands of employees in a series of job

cuts that then lead to mass resignations at twitter. final 36 satellite of its initial 600 and 16 satellite constellation. it has allowed elon musk's starling to offer broadband coverage this year. the ceo said the company now has a vast flanks on base cracked in orbit -- fast flying spacecraft in orbit. kathleen: these are the stocks we are watching shortly. first citizens is said to be acquiring silicon valley bank. watch midst of it see, ufj. -- mitsubishi. defense stocks in focus after reports that north korea testfired aces this -- suspected ballistic mitchell. -- missile. heidi: let's take a look on how we are setting up. this is a picture across trading here in sydney, that first hour

of trade, a lot of upside throughout, about 0.3% higher after what has been a volatile past couple of weeks and sessions in trading in sydney. we are seeing leadership when it comes to utilities, real estate up by just over 1%. energy is off by just about 1.3 as we continue to see that bearish town for oil traders even as crude edges of that higher after that weekly gain. the recession risks, the banking feud continues. we do have the market opens in seoul and tokyo next. this is bloomberg. ♪

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>> this is an important deal, we will see what it does. haidi: we will see what more we get. the deadline is just ahead. the rest of asia, looking very cautious as we kick off this trading week. i guess investors are wondering what else could be in store. annabelle: that is right. a lot of volatility in the days ahead. this is the open now for for japan and south korea. and the start of cash treasuries. what is on the radar over the coming few sessions, more fed officials will be speaking, a key measure of u.s. inflation is due. we can add to that renewed geopolitical feels, also north korea filing -- firing more missiles this morning.

nerves looking a little bit less frayed as you say with that deal possibly coming through for first citizens, sent to by svb. it could be confirmed over the next few hours. . hoping to prop up sentiment, watching topix bank index very closely. it is fairly flat right now, we do see nick a trading a quarter percent to the upside. the question is whether this baking turmoil brings the risk of a u.s. recession closer. that was the key take away from the fed minneapolis president. his conversation earlier essentially saying that yes, we do have the risk of a downturn, certainly a lot more in focus here and bond traders as well our all about abandoning the wages that the fed will keep hiking rates. swaps market saying we will see 100 basis points reduction by the end of the year. in korea, the focus has been on the tech sector, given those

moves we have seen into the nasdaq, on watch for a bull market here. investors really liking those big names. we see the kosdaq outpacing the kospi. the korean won, still very close to that 1300 level, a little bit of pressure this morning for the currency. you can see what we are seeing in the aussie and pair. -- aussie yen pair. there is improving risk sentiment in the market. industry earlier, we do see the asx 200 moving higher. still that preference for the safer place, utilities stocks are nearly 1.6% in the green. also, we have the open for the nickel contract in london moving at nearly 8% to the upside. the first time we have seen this contract opening at this time in more than a year. after the lme suspended trading, canceled billions of dollars of deals, and that was in response

if you recall, to that runaway short squeeze that came through, centered around that top producer. haidi: let's bring our next guest who says the recent price reaction across the sector here in asia was puzzling. with us now is zhikai chen. always great to have you with us. it makes sense, because we continue to talk about it is a very different coupling picture when it comes to lenders across asia. places like australia where the business base is very different. the capital buffers are looking a lot more healthy. why are they being punished, and do you see those being a good opportunity? zhikai chen: yes, i think this round of prices in the u.s. has been quite puzzling, because this is quite different than the type of bank runs we saw before, which typically are at the root of a credit crisis where people

were worried about the bad debts and npl's on these banks. not a lot of reader because i would say to the asian banks in particular. when we look at the diversity, as well as the capital ratios. you look at what really stuck all of this off is the lack of the month-to-month on the sale of securities. that has also already taken through the p&l for the asian banks in general. you look at the concentration of the market, most of these banks if not all of them are [indiscernible] banks in to a domestic economy. as a result of that, they already have this. not really a lot of read across to the asian financial sector in my opinion from this crisis originated that in the u.s. and involved europe after. haidi: also, in terms of the

broader economic outlook, the counterbalance of china. are you looking for different ways to get exposure to the story? zhikai chen: we are liking some of the financial names, as you mentioned. and we believe that the recent earnings have forgiven us a little bit of a revival. we have more or less in-line earnings, the guidance is still weak, but the valuation is quite low compared to previous levels and expectations going to earnings season has been low. we would like to get some of the growth names in the region. kathleen: when you say that, can you give us some names and perhaps where in the region you are looking? or more the kind of company, the kind of stock you are looking for than particular countries? zhikai chen: we are more focused on the north asian companies right now. we don't talk about specific

names in particular -- if you look at the largest enterprising company in china right now, the recent sales has given us some hope for a recovery in advertising spending, a sign of a better confidence in terms of the underlying distance, because advertising is typically the first thing that you cut if you believe things are going the wrong way. the recent season, the guidance has been much better than expected. of course, going into it with low expectations, as well. that gives us an anchor in terms of the growth going forward. kathleen: in terms of china's role as a driver in the region and therefore, of many of the companies, are you concerned about the property sector fully recovering? are you convinced that the recovery is on track in terms of the economy? in terms of consumer spending, to drive the growth you need to see to make your picks come true? zhikai chen: sure.

i think in terms of last year, the growth potential and outlook is definitely better. i think the pipit that was announced in mid-november by the chinese authorities is very helpful to anchor consumer confidence and obviously spending as well at this critical time. the property sector is still an issue that is still working through the system, but if you look at the measures taken place , some of the key private sector developments, i think it makes a base in terms of where we would be in terms of property sales and property environment going into this year. we probably would be still a challenge to produce growth, seeing the damage that was done last year. the outlook for this year looks decent compared to the low levels that we saw last year.

haidi: how do you feel about consumer plays and where do you think that is going to be strongest? zhikai chen: but one is a more difficult one to say. if you look at the consumer data that we have seen so far, the -- high expectations a bit, january was still a bit weak. in january and february, there was much stronger rebound that we saw in the underlying numbers, but also varies civic subsectors is travel, restaurants, and obviously casino gambling. that has recovered much more strongly, but we are seeing some weaknesses of less strong growth in some of -- in terms of the consumer discretionary in terms of clothing and other

discretionary. it is a bit of a mixed bag right now. haidi: always great to have your investment ideas with us. head of asian equities at bnp paribas. let's get you back to annabelle in hong kong, talking about the preference. annabelle: overweight, that was his view. what we are seeing here with the open of training, at least for the japanese lenders, we are steel seeing the move to the downside. the biggest names all in the red here. that does come -- it is quite interesting because we haven't first citizens reportedly near a deal to acquire sbb, something that could be confirmed in the next few hours, though we did have more turmoil coming through for the sector in europe on friday with deutsche bank, declining as much as 15%. perhaps that is just feeding in

to the asian session in the early moments. 10 minutes into the session for japan and korea. let's see how the korean financials are faring, because we do have these stocks trading in negative territory, the broader index down 0.4%. we see the australian banks trading higher in today's training. let's move on, another sector we are focusing on is the defense stocks in korea and japan. these are looking mostly more positive here, that did come with north korea testing a spec did ballistic missile this morning. it does add to that a barrage that was seen over the last couple weeks. certainly a headache for those in south korea and the u.s.. kathleen: let's get to su keenan. su: u.n. to counter a plan by russia. the foreign ministry says that there is criminal intent and

undermines nonproliferation efforts. russian president vladimir putin is defending moscow's moves saying the u.s. has long kept nuclear weapons in the territory of its european allies. china's vice premier reassured global executives that the country will continue to open up to international businesses. he said at an annual forum that opening to the outside world is a national policy. he also wrote a message from president xi jinping who continues to pursue a mutual beneficial opening up. taiwan and honduras, more than eight decades of diplomatic relations, this is the central american company says it now recognizes the island as part of china. china and honduras will establish diplomatic ties, effective immediately. taiwan says the decision was rewritable and hurtful and lengthy hundred decision to the promise of chinese financial

support. australia's labor party has taken power in the most populous state of new south wales. it has ended 12 years of rule and has sealed a left-wing sweep across the mainland. abc reports that the leader became the 47th premier of new south wales. his party will win at least 47 seats, giving him the majority in the states parliament. final vote numbers will be confirmed in the coming days. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. kathleen: still ahead, a preview of the earnings reports from china's banking and tech companies. the latest on first citizens move to acquire silicon valley bank. this is bloomberg. ♪

>> i will say and emphasize that the macro prudential policy response has been swift and appropriate. i think it will contain the stress. meanwhile, the real economy has been stronger than expected during the first quarter of 2023 and inflation remains too high. haidi: the fed president on the central banks fight against inflation. so much of this has been upended by the ongoing banking turmoil. first citizen is said to be in advanced talks now to acquire silicon valley bank. let's bring in finance editor, adam. how much do we know about this potential deal and how close we are to nine more?

adam: it does look like they are in good position now. valley national may have dropped out, they were the other bidder that we saw at the back end of last week before the weekend talks really went into overdrive. i think that is especially clear here is that they are wanting to get this out and done at the close of business before markets open on monday, and they seem to be getting closer to that. it may now be just a matter of time before we get and the official confirmation of this, but we still have to wait and see. and of course, these talks could still go through, plenty of sensitivity and fragility. this is an asset that has been held by the last two weeks by the fbi see, and a lot has changed. the banking sector globally has gone through some quite significant changes, we have seen a lot of that in europe with the tie up with ubs and credit suisse. regionally and within the u.s. itself, there has been lots of

movements and lots of moving parts to the equation. it is clear that the regulators wanted to move swift on this and do want to get this done and finalized before the start of business on monday. kathleen: speaking of credit suisse, the investigation, a probe? stories about them trying to retain talent, how is this all going to play out, and what purpose is it going to serve? are they looking for malfeasance, criminal wrongdoing? adam: ultimately, we don't know a huge amount about what they might be reviewing at this point. the report seems to suggest that top management within credit suisse will be examined for the roles they played closer to the days that proceeded the tie up with ubs. also in the months leading up to that, who was in charge of making the decisions? who is in charge of ultimately taking responsibility for key

moments? you can almost make a timeline of key moments in the history of credit suisse over the last six to 12 months, but certainly in the last two or three weeks. many instances which are questionable. from an investor point of view, they do want some answers to those questions. who was in the driver seat making decisions? what were some of those internal discussions that were being had and who was having them? investors will be looking for some more meaningful answers and information to come out of this. for many of those people, it is a little bit too little too late. kathleen: adam, catching us up on the latest. now let's move on, china's central government is borrowing at the fastest pace on record. to finance more spending and ease the debt burden. let's get the details from john. is this a good sign that they

are stepping up and getting the money to do infrastructure, really financial stress? is it a not so good sign because they need to do this? how should we understand this? john: i think it is a sign there is action being taken. you have these local governments really take a punch on one hand. you have zero covid, all the spending they had to do for testing and quarantine, plus the drag on the local economy and tax revenue, then you also have the property market. home sales falling tremendously, not getting demand for land. as a result, china is trying to get the economy going again, these local governments don't have the money to spend on infrastructure and spend otherwise to get both ramped up again. you see the central government is borrowing in the first quarter at the fastest point since 1997. that is a sign they are trying to step in and get the economy going again. kathleen: there are also

diplomatic tensions. we have seen honduras taking the start of beijing and as a consequence, taiwan really losing an ally that has been with them for decades. john: taiwan has just 13 allies that recognized it as a country with formal diplomatic relations. most of those are around the caribbean. this has been an ongoing process ever since the new president took over in taiwan. and beijing has been actively luring these allies away, getting them to change the recognition to beijing. honduras, the latest of those over the weekend, signing a formal agreement to start ambassador relations with the people's republic of china and to recognize it as a part of chinese territory. he have to imagine that will continue as long as tensions remain. that beijing will continue to lure more and more. haidi: thank you, jean-luc.

-- john lou. symbiotic relationship with china, this comes at a time when official ties are significantly strained. he is one of a handful of top u.s. executives attending the china development forum in beijing. let's bring in stephen engle who joins us out of hong kong. is there a sense of awkwardness at this year's forum? stephen: you could say that. awkwardness may be for the u.s. executives who are there in beijing. back home, many executives perhaps are viewing this is not a good time to go to china and try to drum up business because of the perceptions that could be translated back home. but, tim cook is there as others like ray dalio and steve schwarzman were on the list of

attendees as well as pfizer's head. but, tim cook to talk about a symbiotic relationship on saturday any panel while also highlighting some of the shared concerns about the, some of the troubles in the tech world. his comments about stressing the ties with china were the most newsworthy, because supply chains are changing. foxconn, which makes almost all the iphones in central china, they have already announced they will be opening a factory in india. supply chains are starting to shift. it is not moving completely away from china, but the china development forum is interesting, because it is a place and time at least before the pandemic -- first time in person since 2019. it is a place where the government of china can court for investment and foreign companies to come and say look, this is what we can do.

if you look at that and cham survey last month, first time in 25 years that china is not top three investment priority for a majority of u.s. arms. is that a trend that will continue? or is it a sign of the times given the friction between china and the united states? kathleen: how about eight xi jinping and biden call? stephen: all these things that i just mentioned make it difficult for those two to have a call. they have not met in person or had a call since november at the g20 in october. a lot of time has passed and a lot of ill will has developed, in particular last week when xi jinping goes to moscow and spends three days with vladimir putin. that does not sit well with the white house as well as the allies. there is lots of issues, taiwan needs to be discussed, export controls, ukraine.

sources are telling us that u.s. efforts to try and set up another call between biden and xi jinping have been rebuffed right now, it doesn't look like a call is in the cards. kathleen: you can get a round up of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers can go to dayb . also on mobile. and you can customize your settings so you only get news on the industries and apps you care about. this is bloomberg. ♪

kathleen: let's get a check of the latest business flash headlines. sinopec's earnings fall last year as covid restrictions pinched fuel demand while domestic out of oil and gas rose

to an record level. china petroleum posted net income of nine point 6 billion for 2022 compared with a near record $10 million profit a year earlier. oneweb launched the final 36 satellites in its initial 616 satellite constellation. it has allowed the rival of elon musk starling to offer global broadband coverage. ceo neil masterson says the company now has a flask -- faust lying spacecraft in orbit. elon musk has reportedly offered twitter employees new equity grants, valuing the company at $20 billion in an attempt to stem an exodus of talent. it is less than half the 44 billion he paid to buy the plot last year. he has laid off thousands of employees in a series of job cuts that led to mass resignations. haidi: let's take a look at what we are seeing when it comes to

commodities trading at the moment at the start of the session here in asia. take a look at nickel, finally returning to regular trading hours after what we have seen in quite a bit of crisis engulfing this part of the commodities world. also watching out for monday morning asian market hours, that recovery from the runaway short squeeze that we saw a really upending the nickel market since last march. also watching for some of those industrial production numbers out of asia. ♪ i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do.

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kathleen: this is daybreak: asia. bloomberg has learned that the regional bank first citizens bancshares is in advanced talks to acquire svb. our sources say a deal is

imminent but no final decision has been made at this time. meanwhile, u.s. authorities are said to consider expanding emergency lending facility to move help republic bank shore up its finances and avoid total collapse. credit suisse facing a possible probe and disciplinary action over how top managers ran the bank in the lead up to its collapse. thanking regulator told a local newspaper that the bank had a cultural problem that translated into a lack of accountability. president marlene says the regulator is exploring options for the proceedings. and israeli prime minister is -- has fired his defense minister for dissenting on a contentious plan to reduce the power of the supreme court. he was dismissed 24-hour's after making a dramatic speech saying the plan is a threat to national security and should be halted.

protesters gathered in support while the legislation has seen massive demonstrations for weeks. north korea has testfired another suspected ballistic missile on monday. south korea's military says it was launched toward waters off the east of the peninsula. the move comes after the u.s. and south korea began their largest exercise in about five years and also planned the live fire drills in june. north korea has for years, called joint drills a prelude to an invasion and nuclear war. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan, this is bloomberg. haidi: china's banks prove they may remain on solid ground this week. still reeling from weeks of banking turmoil. discuss all of this with olivia.

the big chinese lenders in focus, what are we expecting and how much do the fundamentals really differ compared to what we are seeing play out in the u.s. and europe? olivia: a number of china megabanks are reporting earnings thursday. they may be able to offer some relative calm to investors. they have proved themselves to be less susceptible by outperforming the u.s. and europe appears in the stock market. we are expecting these bank lenders, including icbc, bank of china, to post 30 days. i think you see the large world this bank by assets in the world may see a 2.7% increase in its net income compared to a year earlier. kathleen: we are also expecting earnings from chinese property developers, expected to post annual net loss since listing. olivia: country garden earlier warned of a preliminary net loss of up to 7.5 billion. that would

be its first full year net loss since its hong kong listing in 2007. we are expecting the company to continue to see earnings pressure and the margins as it struggles to raise its rates in lower tier cities. investors will be watching out for any comments and outlook on the chinese property sector which has actually shown signs of early stabilization. haidi: what are the expectations for [indiscernible]? olivia: petrochina's income jumped up to 68% while they expect the full year income to double. it would actually be a record breaker due to rising price in oil and gas, according to her own analysts. the company's pre-luminary income jumped to 92%. that is because the price of its lithium salt products rose

significantly last year due to a very strong demand from downstream customers. kathleen: breaking news editor, olivia tam. now let's bring in hao hong. always going to have you on the show. i want to start by asking you about the banking crisis, reticular lee with china's a t-1 bond issuers. china are among the largest and that market just completely jolted when credit suisse holders of those bonds were wiped out. that is what can happen. what does -- does this mean much for china's financial sector for investors? isn't something that will just come and go once all these things get worked out? hao hong: i think the problem is being perceived as a european and u.s. specific problem. even though the chinese banks

are the largest bond issuers, and also initially across the board, all 81 bond issuers were hit really badly. i think it is -- has largely stabilized. and over the course of this week, the banks will release the results which is supposed to be a low single-digit growth for last year. i think overall, that is the reason why the chinese banks are faring so much better than european counterparts. kathleen: but the property market certainly is an issue. one of your -- one thing you're watching closely, recovery will continue, is what happens to the property sector. hao hong: i think that is the biggest overhang for the chinese economy. last week, -- last year, the chinese property sector has been hit really bad, more than one

third for the year and also property investment was down. i think everyone is looking at the property sector to see, it is such a big part of the chinese economy. i think for the first two months of this year, the results has been quite encouraging, especially in the secondary market. we'll know that the secondary market doesn't really matter with gdp growth. it really shows some recovery and confidence in the home center. we are waiting to see for the results, and new home sales to see how sustainable is the recovery? then we can draw a conclusion for the chinese economy this year. haidi: we talk about the need to wait to see if there is more of a study footing in this recovery, what if this is as good as it gets? could this be the new normal? hao hong: i think if you look at

the lending figure, the medium to long-term household borrowing hasn't been increasing. the lending has been concentrated in the stable sectors. i think the mid to long-term households -- it is really showing that people are not buying as much new property as before. at the same time, the industrial activities leading indicators are trending up. it remains to be seen. i think it is too soon to draw any conclusion. my best case is for an economic recovery for this year. haidi: your price target for the china and hong kong hasn't changed. could there be further upside if we are really seeing this kind

of haven status for chinese equities, given what has been happening elsewhere? hao hong: our target for the hang seng is 23,000. i think if the u.s. is really attracted to a recession by the banking crisis and also the european economy is not looking good with inflation pleasures so high -- i think it is very difficult for china to have a very strong recovery. having said that, this year, the chinese ensure market has been steady even though it has been volatile. i think the overall index level has been stable. i will say that if the u.s. is not doing well, i think the entire world will be dragged into a recession. in that kind of environment, it is very difficult for china to

give you absolute return rather than relative return. kathleen: what about trade, supply chain, all those things that do seem to be receiving but at the same time, trade, the flow is not so good in many ways. how is that going to affect china? is this something that we are going to start getting past this year? hao hong: i think exports for this year is going to be very difficult. i think it has started to slow down in the fourth or last year and continues to slowdown. i think the fed's policy really is to hike interest rates to suppress domestic bond rising. we are seeing a decelerating trend with export growth. i wouldn't be surprised to see this year that net exports will be 0% growth to chinese gdp growth. that is the reason why property sector recovery is even more important than before and also

if the property sector doesn't recover, consumption won't recover very strongly either. then what remains is the government spending, which is under severe pressure from last year. haidi: we saw some robust numbers out of tencent, certainly things are starting to pick up a bit more. are you bullish on china tech? how do you navigate that, given that we continue to have that broad geopolitical tension between beijing and washington? hao hong: i think the chinese tech sector now mostly will be the internet platform companies that have been really hit hard. i think this year is sort of the first year we are seeing new gaming license approval, also relaxed on many of the policy curbs on the sectors.

i think as a result, the companies are recovering from a very low base and because valuation on many of these companies is still being depressed. so, i am relatively more positive on the sector. haidi: always great to chat with you, partner at chief economist at grow investment group. this is bloomberg. ♪ the new chase ink business premier card is made for people like sam who make...? ...everyday products... ...designed smarter. like a smart coffee grinder - that orders fresh beans for you. oh, genius! for more breakthroughs like that... ...i need a breakthrough card... like ours! with 2.5% cash back on purchases of $5,000 or more... plus unlimited 2% cash back on all other purchases! and with greater spending potential, sam can keep making smart ideas... ...a brilliant reality! the new ink business premier card from chase for business. make more of what's yours.

kathleen: let's take a look at the asian markets opening. while you have nikkei up, kospi is down, aussie and new zealand markets are doing better. the u.s. momentum from friday and going into futures opening has been positive. not big gains, but gains that suggest there is enough going on in the banking sector, among financial regulators, the fact that citizens is possibly getting ready to take svb bank off of the fdic's hands, pointing to the fact that something that has broiled markets around the world may be starting to heal itself a bit, that will be something that will be tested in terms of the impact on this first day of the trading week. haidi: watching bitcoin, too.

liquidity across crypto markets is at a 10 month low. that is happening as firms that buy and sell digital tokens lose access to dollar payment systems. let's take a look at where they may find a source of support. perhaps not where we would expect. annabelle: it has really been a big question for the crypto sector, generally. we had the collapse of signature bank, silver gate a few weeks ago. then it was, who will be banking this sector? as it turns out, it could be here in hong kong and specifically a chinese state owned banks picking up the slack, which is very interesting, knowing that crypto has been banned in mainland china. what we're hearing is that the hong kong branches of banks are some of the lenders that have started offering crypto services

or crypto banking services to local firms or otherwise, already making inquiries. we do understand that least one occasion sales reps have approached one of the crypto players and entertained offers. kathleen: this is a really big olive branch, this is a big week for the crypto sector in hong kong and how do you look at that? annabelle: that is right. it does come down to china having band could on the mainland, that is interesting. also significant sentiment, because while we have seen the u.s. cracking down on the sector, they have been slow to push regulations. a lot of regulation through enforcements through actions of the sec. there aren't really many different locations where crypto firms can turn to. the middle east is one, but here in hong kong, that could be the answer to this.

one source, being able to open a cryptocurrency account at a bank, that is something groundbreaking. the groundbreaking aspect is what pertains to crypto in hong kong, this week marks the end of a consultation period for when virtual asset trading rules. that will take place, new rules will take effect june 1. a lot of interest coming back into the city. kathleen: be sure to tune in to bloomberg radio to hear more from the days big newsmakers, in-depth analysis from the daybreak team, broadcasting live. you can listen via the app, radio plus, or bloombergradio.com. plenty more ahead. stay with us. ♪ fallen in love with a portable blender. blendjet 2 gives you ice-crushing, big blender power on-the-go.

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kathleen: alibaba and jack ma is one of the best chances of repairing reputation with the private sector. he is apparently not jumping on invitations from authorities to help out. let's bring in lulu. i think a lot of people around the world wonder what is going on with jack now, what is the latest? lulu: jack is choosing to stay outside of china focusing on

agriculture technology research. we are told this is despite reach out from some authorities in the country asking him to go back to the country to showcase the authorities support for private entrepreneurship. we have also been told that internally, he has told executives at alibaba not to obsess over his return and that he would still be committed to the company's access from afar. haidi: what does what has happened to jack tell us about the state of private entrepreneurship in china? lulu: this development is interesting, because the country right now is in a stage where you have people like the premier saying that they have unwavering support for the private sector and he has asked regulators to step on the gas and not just the brakes when it comes to regulatory issues. i think this deep-rooted mistrust is still very present

in the country with private entrepreneurs and the global investor community and jack's absence from the country is a symbol of that mistrust, partly the reason for that is because we do have the sense where the government is dictating what companies and entrepreneurs are considered good versus using a very market-based approach to deciding whether companies should thrive. also, it is still a challenging environment to be a billionaire in china right now where you have the country's top elite, staying away from politics and giving away their fortunes. kathleen: what is the latest with the company? lulu: it is very unlikely for aunt to come to the market and do a public listing. have been told by sources. also when it does come to the market, it will be very different from the 315 billion giant that we knew from 2020.

also, the company might leave out some of the technology and also database and oversee -- overseas businesses that are not core to financial operations. lots of progress still in motion. also, the company is waiting to hand in an application for the financial holding license that will ensure it survival. haidi: lulu chen there with our big take on jack ma. really fascinating developments. also some developments when it comes to cocoa at the moment. 2.27 times over some scrap. we have been watching this $1 billion offer for some entertainment. boosting those shares to an all-time high in this escalating battle for control of the kapok label. we actually saw as some

entertainment plunging as that tender offer ended. kakao offering to buy entertainment shares through march 26. we also see weakness when it comes to kakao, 1.8% lower. two point 27 times oversubscribed as we continue to watch. we are also watching for what other potential targets for acquisition there are after dropping that bid to acquire sm entertainment after that offer from kakao. kathleen: the enemy's electric carmaker vin fact is planning to ship its second batched of ev's to north america. the company will send 900 long-range suvs to both california and canada. they are considering an ipo in the u.s. as soon as the second quarter of this year.

latest filings showed it lost $2.1 billion last year. standard charter has agreed to sell its business in jordan to arab jordan investment bank. emerging markets focused bank is looking to simplify its operations and focus on higher growth markets in africa and the middle east. it has been approved by the central bank of jordan, but no terms were disclosed. haidi: some stocks we are watching, developers in focus, the chairman of major building green landholdings expects the housing market to slump again this year. not a good signal for those waiting for the rebound. we are also watching sinopec on the back of those for year 2022 results. a lot more earnings to watch out for as well. let's take a look at where we are heading when it comes to broader market sentiment. we did the an uptick in u.s.

futures today, despite ongoing concerns about whether neel kashkari has said this ongoing banking turmoil heightens the risk of a u.s. recession being closer. futures up by 0.4%. we are looking at ftse china futures looking pretty flat at the moment. we will see whether there is more impetus when it comes to the pboc's easing measures. a big week when it comes to key earnings for the chinese markets. we are seeing broadly asian equities creeping higher. a very sensitive and cautious trading at the moment. let's take a look at european stock futures. we are seeing stocks ftse futures looking like this after what an end to the week. ftse 100 is also joining as these concerns over the banking turmoil were turned with a resurgent through the course of

last friday's session. more equity strategists are coming around to the view that there on the upside between now and the end of the year. we have seen the indexes really heavyweights with banks and other growth sensitive companies suffering the most. we will see if some of these developments when it comes to svb might change sentiment later. that is it for us, looking ahead to the start of trading in hong kong. ♪

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♪ >> good monday morning from hong kong, it is 9:00 a.m.. welcome to bloomberg markets china open. >