>> you are watching "bloomberg daybreak: asia." coming from you live that's coming to you live from new york, sydney, hong kong.

>> coming down the market open in tokyo and seoul. >> australia has just come online, the top stories this hour, alibaba planning a historic restructuring. giving han stock -- hong kong stocks a boost, aussie and kiwi bond yields rising up to selling and u.s. treasuries come up so ahead it may be the biggest overhaul in years as they each stepped through the wreckage of svb, we hear specifically from the top financial watchdog about the potential risk of the global banking turmoil and the property slump. >> we have the open of this asx 200, a fairly eager leading from the wall street session, certainly a period where we understood come the fears around that banking sector contagion have been largely contained, of that we are taking a look at how bank stocks are coming online and the etf trading to the outside on the early morning --

moments of trade. the flipside of this contagion being under wraps for now. it is about the direction for the fed up specifically for the outlook for rates, not look -- not really expecting a lot of momentum in either direction in equities, bonds, in fx given that we are waiting for more key data including the fed preferred gauge for inflation, but on the inflation front in australia we will have those numbers due in the next hour. we are expecting the inflation for february to take down to 7% that could give it the rba reason to pause at its next meeting, taking a look around the rest of the region today we do have new zealand stocks already online trading weaker, nikkei futures looking fairly muted. the focus on china today not only are we expecting further strength coming into the currency of the same half, fidelity saying we should expect every opening trade bounced to. come in the second quarter as the outlook surround jobs, a lot

of focus around alibaba today what that means as stocks generally and there are other positive factors for mainland stocks. >> this only are, let's take a look at what the u.s. did, after look at the big golden dragon -- green on the screen come s&p 500 down to tense of a percent,. the nasdaq down .5%. here is the story come when there is a banking story getting worse, i will buy -- is a nice safe haven, if the banking crisis is cooling off maybe i will sell my tech shares. in terms of bond market the same kind of story, as of focus on the banking crisis as a reason for a safe haven bid. more on the fact that investors are starting to reprice risk, looking more at the fed may being able to do a rate hike at the may meeting, energy stocks very interesting, the biggest gain or come a 1.5%, the clash

between a rock and the kurdish region, curtailing exports, you can see the still green on the screen, here it is the golden dragon index. restructuring, ipo's, unlocking value, etc.. the golden dragon index is up 3.5%. alibaba at the highest level of they up 50% tencent at 8%, baidu at 5 -- -- >> let's get more when it comes to the largest overhaul in the more than two decade history. this is really the culmination of reels of -- years of regulatory pressure from beijing. he says it is a combination of what they had to do, as well as unlocking value for investors. . >> this answers a lot of questions and raises a lot of questions i would get the raising questions and just a

bit, the and -- the answering of questions this is a bit of a breakup if you want to call it that, not a forced breakup, it likely internally structured, it would have to have the blessing obviously of the central government to beijing to have this go forward. to have this behemoth, we all know alibaba, really used it earth to buy up a lot of different businesses. it shape them their own way. that is why there was this big antimonopoly regulatory crackdown. what we are seeing now is a breaking up of that large -- and unlocking the value, it did become a little bit too big, it did not create the returns. there are a lot of businesses that were not making money, they were drags on profitability. they had potential, i'm talking specifically like cloud intelligence where they will spend a lot more on the cloud. it is the fastest growing

division, and revenue terms but it has been a drag. again, it is about six different divisions. they will have their own ceos. they will have their own decision-making. they will have their own fundraising and potentially ipo. we will have to see. that is where it raises a lot of questions. is the sum of the parts equal or greater in the whole? that is the big question. >> as for ipo's is there remnant of the jack ma halo around alibaba and now these units? >> again it comes back to unlocking the value of those individual businesses, obviously e-commerce is a big bread-and-butter of alibaba. 70% thereabouts of revenue. that would have its own value, obviously. it is the other divisions like cloud intelligence, that will be run by the new ceo and chairman. that is daniel. other senior executives in the alibaba universe will take over

key divisions as well. it will be up to them, for their fundraising and whether they want to go ipo. basically what is happening, alibaba is tingling on a string right in front of global investors right now. six potentially, very attractive ipo's. again, institutional fund and institutional investors got burned by the -- that was scuttled in the final days on the 11th hour. again it is tingling for hong kong, it tingling for global investors to possibly get into this, instead of a large group, alibaba has returned nothing. remember alibaba was a a hundred billion dollar -- 800 billion valuation before the regulatory crackdown. it lost more than $500 billion in value. i come back to the initial thesis, initial question, is the sum of those six parts greater than the whole before the crackdown? yet to be seen.

>> if the crackdown was overcome a maybe it is. top federal reserve official says svb failed to address clear risks leading to its collapse. here is michael bark testifying in front of congress. >> this is a textbook case of bank mismanagement, the risk the bank face, interest rate risk and liquidity risk our bread and butter liquidity issues. they are quite vulnerable to risk shocks and did not take the actions necessary to meet that. >> for more now let's go to bloomberg's political news director jodi schneider in washington. what was the main message from lawmakers to regulars before the senate banking committee? >> i think there were several messages, one is things are sound and you do not have to worry, we do not have a larger problem here. if there is one we will act.

also they were laying blame squarely at the feet of the managers, we heard the quote about the textbook case of mismanagement. they were saying there was mismanagement here, and there is not necessarily a larger problem, although when they came up with solutions, one of them was to have higher liquidity and capital standards for banks more -- worth more than a hundred billion in assets, there was a lot of criticism from lawmakers to the regulators saying, why didn't you catch this sooner? from both sides of the isle that came, but also particularly from republican saying, you are telling us we need to fix this problem, but basically you missed it in the first place, they are saying we do not need more regulation we need better supervision. >> what are we expecting to hear from the house financial city curve -- services committee meeting tomorrow?

>> we have the same officials testifying, we will have the treasury official, fbi see trevor --fdic chairman testifying tomorrow. they will say the same kinds of things. the questioning may be different this is the house financial services committee, obviously the house is run by republicans now, will have more republican lawmakers asking the questions then you did in the senate banking committee, they will largely be asking the same kinds of things, i am sure we will continue to hear criticism of federal officials and why they did not stop this is, why the did not notice it sooner. also we are likely to hear some things about esg, and they are concerned that banks are paying attention to things like environment, maybe they were missing the boat on paying attention to baking standards and practices. i am sure we what you're more of that tomorrow from some

lawmakers than we did today in the senate. >> bloomberg's political news director with the latest, let's get to vonnie quinn. >> the head of south korea's financial watchdog says the slumping property department may lead to controls on financing loans. they told bloomberg exclusively that authorities have assessed some 5000 projects relying on the loans and they are ready to act swiftly. measures have been put in place to -- following an unexpected credit conch -- crunch last year causing developers to full. >> after that incident, myself and my colleague, including finance minister, head of bank of korea, and fsc. we are quite certainly sort of

vaccinated. >> u.s. prosecutors have filed a new charge against sam bankman-fried accusing him of bribing chinese officials unfreeze accounts of alameda research. they authorized a $40 million payment in 2021 seeking to regain access to the assets. he has pled not guilty to several fraud charges, he is accused of funneling money from alameda and ftx to cover personal -- >> facing collective fines, this is part of investigations of tax fraud and money laundering. it follows raids carried out in december relating to a dividend of a trausch stretch -- strategy. to avoid a dividend tax. they are also part of the investigation. bloomberg has learned white house national security advisor jake sullivan spoke with china's

top devil met friday amid rising tensions. -- top diplomats and ahead of fried -- amid friday's rising tensions. it is not expected until after his return. global news, 24 hours a day, on air and on bloomberg origionals, powered by more than 2700 journalists and analysts in more than 120 countries. kathleen. >> still ahead, more on the alibaba plans to separate in situ -- into six divisions and standalone countries and why tencent may want to follow suit. this is bloomberg. ♪

>> take a look at how australian assets are trading as we get into the inflation meeting today.

we are expecting it to be soft enough potentially to add to that final picture as we into the rba meeting. altering -- bolstering the case for the central bank deposit week. we see a downside becomes a broader equities trading. a quarter of 1% lower. we are watching a little bit of the aussie dollar being on the back foot despite the delegate set for the lowest price -- dollar gauge set for the lowest price in eight weeks. >>. the next guest says the bending turmoil may be a blessing in disguise it likely means the fed will and rate hikes sooner than later. she is achieve market strategist at invesco. is it possible that come what you're saying is, it will hit credit enough, it will hit lending enough, that will slow inflation down and that will move the fed? guest: i think what we have seen already is that the fed has

downwardly revised its expectations for rate hikes, right? we have been communicated several weeks before the march decision that the fed was likely to hike rates 50 basis points. then we had this banking many crisis, and the fed scale backed its plans and give us a 25 basis point hike. i think the language we have heard has been tempered since the banking problems arose. i would expect that the fed is much more likely to hit the pause button soon, certainly sooner than it would have had we not had this banking many crisis. i think that is going to be the thing. everything in moderation, i think that will certainly curtail the level of damage done to the u.s. economy as a result of this aggressive rate hikes cycle. of course, we are already seeing disinflationary environment

likely to continue. certainly credit conditions tightening will help. >> we have a big widening of the spread between junk bonds and investment grade credits. if the fed stops hiking and signals this is that, how will that affect that relationship and what does it mean for investors? what would you advise? >> i would anticipate we will not see a real risk on market environment until we get, not just a fed pause, but real comfort that thinking problems are behind us. then we might see markets discount an economic recovery in 2024. right defensive positioning makes sense. under waiting equities and overweighting defensive parts of the stock market like technology, health care, utilities. overweight fixed income, overweighting investment grade credit. really attractive yield

opportunities there, and historically has performed well at the end of rate hike cycles. >> the alibaba spinoff news will no doubt by a fire under chinese and hong kong risk assets today. take a look at this chart what we have already seen when it comes to the rotation from value to growth. there is, one way looking at the fact that clearly investors are expecting a pullback when it comes to the tightening regimes. is this the way you invest when it comes to asia, especially in emerging asia, one of the ways want to get exposure to china? guest: i am excited about asia emerging markets equities. clearly the china reopening, thus far has been successful. i think ultimately it will exceed most investor's expectations. the reality is already that we have been pleasantly surprised by what is happening in the property sector. not just in terms of investment

but in terms of prices. in general we are seeing revenge living start as we saw with other economies when they reopened. i would actually be more positive on cyclicals, within asia em, because this is a growth story. this is an economy that is in the recovery phase. it is growing. that's just a given stance that one would take in the u.s. -- that would suggest a different stance than one taken in the u.s.. >> when you start to see the indications these markets are expecting a pause from the fed. certainly a lot of markets we see firmed up expectations of a pause like here in australia, providing the inflation rating comes in today as expected. does that mean you are -- invested going into the second half of the year? guest: i think you want to

carefully increase exposure to risk assets. we are likely to see a significant level of volatility in the near-term. there is still some unknowns. we just do not know how significant credit tightening is going to be. i think it is important to be cautious, as one increases their exposure and becomes more fully invested. >> christina, thank you very much. chief market strategist at invesco. you can get around of of the stories you need to know to get your day going today's addition of daybreak. terminal subscribers go to dayb go. you can customize your settings the only get the news on the industries and assets you truly care about. this is bloomberg. ♪

>> trading in tokyo, and soul, so that stories we are working on today. out of japan we are looking at sony stock, the fair trade commission giving his gaming rival -- it's gaming rival microsoft the go-ahead the acquisition of activision blizzard. watching softbank and how that investment in alibaba could be affected by potential split into six units. in korea we are watching legal trouble mount for terra former labs, doak juan, they are making a lot of effort secure his extradition. they are considering lifting a shortselling band as early as this year. revealing and an exclusive interview with bloomberg.

kia unveiling its first three row suv as it seeks to compete with tesla, sales began the second half of the year. >> u.s. prosecutors have filed a new charge against sam bateman freed, accuse him -- accusing him of bribing chinese officials to unfreeze accounts at alameda research. ava, tells about this new allegation. he already has more than a dozen in front of him. guest: exactly this makes it the 13th charge he is facing. prosecutors allege that he directed 40 million dollars in cryptocurrencies paid two chinese government officials as part of a bribe. he was trying to get more than a billion dollars of cryptocurrency that was frozen on exchanges in china. >> ftx headquarters in the bahamas, before the collapse. how prosecutors tied sam bateman freed his current conduct we have learned in china? >> ftx moved to the bahamas in

2019-2020. before that he was in hong kong and a we had alameda research base and hong kong doing trading in china. >> what is next for him, where does he start? >> we expect to see him in court again on thursday. there was a court order today that he turned up to be arraigned for the remaining charges he is not pleaded to get -- yet. >> bloomberg legal reporter ava, let's get a quick check of the latest business flash headlines this hour. shanghai stock exchange has called off a hearing on the $9.4 billion ipo as another hurdle on the road to the big as planned listing of the year. no reason given for the move, but it is key for the seed and fertilizer giant to kick off the long-awaited ipo. back in 2021 they briefly suspended the application

pending an update to the earnings. >> they will handout a record fifth dividend for this financial year, paying a dividend of $927 million even as a parent company seeks to shore up funds to trim debt. they also own 70% of the listed unit that minds and export commodities including zinc, iron or, aluminum. there is a group of key bondholders 10 months after first defaulting on public dollar bonds. under the agreement, they will get new debt maturing in two to nine years, extending maturities and shorter dated new bonds and beholders all be able to swap out sunac debt into sunac services. amc shares soaring after amazon ways possible after -- acquisition of the struggling chain. saying it could serve as a

platform as -- for the 12 the 50 movies amazon plans to release in cinema annually. consumers are slow to return to cinemas following the pandemic. still ahead the input -- the allocation for china's tech center. alibaba announcing old plan to spin off six separate units. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network, with no line activation fees or term contracts... saving you up to 75% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today.

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>> you are watching "bloomberg daybreak: asia," with a check on markets we are half an hour into the session for the asx 200. declining by 0.3%, that is

leading the drop in the session, unsurprising given the move from wall street, as investors move out of the megacap tech names. giving that the banking sector crisis appears to be contained. treasury yields once again moving in the session rising again. if you bring of the full screen we can take a look at how they are going in the australian session today. we see the threes and attends both moving higher, but fairly muted here. we do expect more data to be watched very closely by the head , including the preferred inflation gauge that is due this week. we change on dow, we are also seeing in the fx space -- change onto now and what we see in the fx space, is the dollar index down 12 of the last 14 session, can provide a bit of a boost to some parts of the markets in asia.

china one of the bright spots of the session, we do have some thoughts that the reopening rally could be another like ahead. >> bloomberg intelligence says alibaba's fundraising push could -- they are senior analyst for asia-pacific consumer, credit -- captain lynn joins us now with more analysis. it seems like one of the phrases we hear over and over again, his may not add up to the sum of the parts. what is your view? >> let's take a step back, the company reorganized their structure to actually set up these six businesses. since. 2021 honestly speaking, if it were not for the covid therapist we have seen in mainland china last year, this entire -- covid flare ops we saw in mainland

china last year, it could have come earlier. it is not too much big of a surprise honestly. of course you know it reiterates that the company has plans to raise money for specific businesses and again, this is something that they have mentioned about in 2021. haidi: the question is, did they have a choice? did they have to do this for survival or does this happen to also parallel the new growth priorities from the government? guest: right. i think again, the regulatory overhead that we see not just for alibaba but for the rest of the stocks have actually cleared antimonopoly as well as scrutinies uncertain operations. more importantly i think right now, the entire market and how fluid it is, it does actually

warrant a more nimble structure. the essence of actually breaking them up into the smaller pieces. i am looking forward to see how the six different ceos, plan out and strategize the next steps over the year. bear in mind 2023 we are looking at a slightly slower e-commerce space. haidi: the market enthusiasm is palpable. does this not become potential new structure for other tech giants? tencent is the others -- obvious one given how much is in that universe. >> never say never, they certainly and could actually be more m&a's, more restructuring, and as i highlighted earlier, we are stepping into a sector, the tech sector, where the growth is obviously slower than before. there is now more time and space for management to look at what

is the best way to optimize resources they have right now. haidi: bloomberg intelligence senior analyst for asia-pacific, joining us, let's get to vonnie quinn with the first word headlines. >> top u.s. officials outlining what is likely to be the biggest overhaul of inking regulations in years. fed vice president -- banking regulations in years. it will include capital and liquidity requirement for institutions north of $100 million. republican lawmakers opposed tougher standards for lenders. st. louis fed president jim says regulatory policy rather than interest rates can contain follow from the banking sector turmoil. he says initial stresses been on the rise in the recent -- bank failures, the macro potential policy response has been swift and appropriate.

goldman sachs is taking up the leadership ranks at the heart of the capital markets business. following an overhaul in october that verged investment banking and trading operations. internal memo says michael marsh becomes -- three partners in goldman's investment bank is said to be leaving the firm amid a shakeup and slump in dealmaking. bloomberg sources says jamie dimon will be deposed over his bank's decision to retain delete sex offender's jeffrey epstein as a client. the judge has ordered all related positions to be complete by the end of may. lawyers have fought efforts have diamond opposed arguing he had no involvement in decisions about epstein's accounts. global news, 24 hours a day, on air and on bloomberg origionals, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn this is bloomberg. >> up next as regulators and lawmakers put tighter controls on u.s. banks we will speak to unsw about risk of

mismanagement in the global financial system. this is bloomberg. ♪

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contagion. >> we will continue to closely monitor conditions and the banking systems. >> they are tools we would use again. >> prepare to use all of our tools. >> to ensure american's deposits are safe. >> we are committed to ensuring deposits are safe. >> depositors will have access to their savings. >> the banking system is sound and resilient. >> regional banks of the united states many stores of debt remain a source of strength of the system. >> top u.s. financial officials speaking on the collapse of regional lenders, welcome to our sydney studio, who has been watching all the testimony, and of course huge the romans of the past couple of weeks. is it -- develop and so the past couple of weeks. >> it is probably an issue of all of the above. they interacted with management five times in the lead up to this sense 2021.

continually management have this issue flagged. management did not do anything and the railways did not -- regulators did not follow. it is almost like a failure and all them. the role back in 2018 did not help matters. if management was -- the regulator rollback is only part of the story. >> the other part is svb, or when you look at credit suisse, each have idiosyncratic issues. do you oppose the idea of having a business where the client base is very neat and very much interest rate sensitive? guest: say for example your looking at svb. in the u.s. allowed banks are smaller regional banks. if you do not have svb then you can have first republic, or first citizens that ultimately bought svb. they are serving local committees and make some sense. the real problem with them is that they have a big concentrated risk. either in the deposit book for the loan book. either svb had a big risk of all

depositors living at once or some banks are lending to the agricultural center, their loans could sour. you have a lot of risks that need to be addressed. they need to be addressed in a nuanced way, rather than assuming it is small banks that are risky. maybe there are small banks that are more risky and the needs be more specific oversight for those firms. haidi: how would regulation have solve this, as more than one critic today even at the hearing said you had plenty of regulations. you just were not paying enough attention. you were asleep at the switch, as one senator put it. when you look at the various accounts of this, it is hard to go away from the conclusion that, they have the rules, even new sometimes it was going on. they did not act. guest: that is absolutely right. part of the issue of course is that the regulators interacted and nothing happened. the question is, the regulators

may be of the flag concerns, but if the powers in a do a thing about them, they do not have the tools to force silicon valley bank to do some thing about all these issues. you end up with the problems. regulation has a role to play, but not considerably excessive regulation or truck onion regulation -- draconian regulation that would harm banks in excessive way. what is the exact risk and how you address it? interest rate risk you get firms to hedge correct? do you get the firms to diversify their positive -- the deposit book? regulation is to be appropriate for the context. more regulation for the sycamore regulation will not solve anything. haidi: on of the things that frugally is that the economy changed, central banking changed rapidly and regulation and the way it is carried out by the fdic and more did not. that is what help created the

problem. >> certainly faltering of the background. say for example inflation with the fed hiking rates of the steepest trajectories ever. that was in the background. this created a big issue with the asset side of the equation for silicon valley bank and also depositors need to withdraw money. the problem was silicon valley bank should have been taking steps to avoid that becoming an issue. for example the should big interest rate hedging, or maybe they should have hedged interest rate risks, they should have more capital in reserve to mitigate the problems. the problem silicon valley bank that there was a boom leading up to the pandemic, a boom leading up to the downturn, they took up deposits from the tech sector and loaned at low interest rates. they did not think of what happened if things go bad. how do we actually this command? do we need a risk management officer? they did not have one. that is a big issue is silicon valley bank that they really need to address in advance.

>> is it over? what happens now? one of the guests painted it as the latest snowball in the big boom bust cycle built up by easy money. we already had crypto, we see pressure on emerging markets and now banking turmoil. what comes next? >> with silicon valley bank acquired by first citizens it seems to stem the bleeding. it seems to have stopped or slowed the deposit-- the big concern is a bit it's going. they go to other banks or money market runs, if that was the -- funds, if that is what happens what happens next is a broader banking collapse. recede to be -- we seem to be in a holding period,'s people waiting to see if it gets worse or better. it is also living 10% on a daily basis for many of the days recently. many of the smaller regional banks are trading more like

options at the moment. they declined so much stocks are almost just have an option value. will the firm see expectations go back to the fundamental before the crisis or eventually go to zero? that is what we see at the moment. what happens next? it depends on if things get worst. at the moment we see the markets muddle through, what it takes is stability and a return to the market assessing the firms on the precrisis fundamentals. haidi: really great to have you with us, associated professor at the city school of banking and finance. south korea top financial watchdogs of the nation's likely -- unlikely to express the likes of silicon valley bank collapse. he joins us now from soul, ration, wagering? -- rish, what are you hearing?

>> a wide-ranging interview on how last year the bank of korea was one of the first major banks to raise interest rates. what this led to was an unprecedented credit crunch. the developer behind legoland, that went bust. it was eventually bailed out by the local authority. what that meant, a series of measures were put in, what he called vaccinated the banking system against something like a collapse with what we saw with svb. essentially, because of the measures he does not see any follow-up from what happened over there in california. and of course what happened with credit suisse. he talked about the coco bonds are something this particular regulatory framework can handle given the bond to set higher with them. very confident the korean bank it -- banking international system is resistant to banking

turmoil. this is what he had to say about all that. >> we opened up our capital market in 1992. we did some tweaks and 97. after that there was little institutional support for our investors to access our market. we need to fix that. for example, we want international financial institutions to participate in our onshore interbank fx market. as long as they meet certain criteria. we want to extend our fx market operating time. >> they are very restrictive, i think? 3:38 think they close -- >> we will extend the time until two in the morning when london stock exchange closes. we want the fx market to be open. >> it may not make a difference,

it may not trigger inclusion into a develop market indices. what it may do is shortselling. where are you there? >> is a very stressful situation with inflation and high interest rate. it collapsed last autumn, almost hit 2000 index number. under those circumstances, it is very hard for the regulator to deregulate the shortselling. there is financial -- the financial turmoil was clear. we will look into the regulation of shortselling. hopefully this year. >> i want to move quickly to cryptocurrencies. how do you regulate them here as well? >> we do not.

atul. -- at all. >> how are you monitoring the situation we have seen with regards to svb. if it is not crypto, i meant to say sfb. >> before the luna terror collapse, -- tera collapse the demand for regulatory body is to keep the legacy financial market away from crypto market. so we can keep the risk away from our market. that sort of work here. even after the collapse of the crypto market, even after ftx, given the incidence like a silver gate or svb, the korean market was not hurt that bad. personally, i went to my office in june, everyone within the

financial regulatory body said no to my suggestion that we need to develop some kind of regulatory scheme to give debtors more confidence on the market. no matter how we hate it or dislike it, it still exists there. now we are talking about making law to have some sort of legal regulatory body here. >> ok, final question on this. he was arrested for tera luna, and wanting to be extradited to the u.s., would you prosecute him in korea or south korea instead? >> [laughter] i am not quite sure if i can answer that. like i said, up to my office

last june, i worked with prosecutor's office as well. luna terra happened back then. there was this case in the prosecutor's office, we helped quite a lot for them to understand what happened in the financial market. we supplied legal criteria for them to apply the criminal law to him and his colleagues. i want them to come to korea. >> that was the governor there. it was interesting they were talking if do one should be tried in the u.s. are extradited to korea. -- is the foreman who led the

charge, i should say led the investigation into samsung, and delete prosecutor for that -- and the lead prosecutor for that. he did go to jail for. they want to be included in developed market indices for both government bonds and the same time indices and equities in korea. whether things would be expanding the time it can be traded, and the current complete blanket ban on shortselling be removed in certain parts. a good interview and certainly a man who is trying to change the regulatory ground here in south korea. >> absolutely terrific interview. hats off. bloomberg markets coanchor, plenty ahead. this is bloomberg. ♪

what does it mean to be ever better? its your customers getting what they ordered when they expect it. discover how ryder ecommerce makes your customer's experience ever better. >> a quick check of the latest business flash headlines, micron technology gave a better sales forecast fully next quarter's parking hopes that the worst of the industry slump the over. the largest u.s. maker of memory chips say the sales maybe better than analyst estimates things to a supply demand balance. they announced an end to job cuts. >> it soared 446% as a child

newsmaker -- chinese automaker so a record number of electric vehicles. they sold electric and plug-in hybrids in 2022, or than the previous 4 years combined and 30% of all energy vehicle sales in china. that is the latest of the business flash headlines. haidi: take a look at what we are watching when we get to the open in japan and korea, shares of alibaba clearly in focus. the plan to split the e-commerce giant, introducing a model for global tech giants to unlock value. chipmakers as well, micron offering a better forecast than expected. sparking a little bit of hope that the worst of the brutal industry slump may be over. also coming up in the next hour of daybreak, they will offer insights on where investor should be focusing on a rising

rate environment as banks rein in letting -- lending. we feel the impacts of the banking turmoil even with the talk of central banks pausing. they see china playing a key role in global oil demand this year. this is bloomberg. ♪

>> this is "daybreak asia." a lot of focus on banks. regulators spoke about alibaba

stealing the thunder with this announcement that it is going to split into six units. haidi. haidi: unlocking value for investors. the question is whether this is going to be the model for other tech giants. we are watching australian inflation, the last piece of the puzzle before we get to what is expected to be a pause from the rba next week. what are we watching? >> counting down to the opens now in japan and korea. today in asia, the focus very much on the reaction we are going to get to alibaba's plan to split into six units and at the open here in tokyo, we are going to be watching shares of softbank very closely. that stock is not treated at the open. we are not seeing that spread matching just yet but we are looking for a pop at the open for softbank, given that this is a company that has relied so heavily on the chinese tech giant to generate cash to other start up investments and to

compensate for losses in the vision fund portfolio. running around the region, the focus is also moving to the banking sector, whether that has been contained for now. we are taking a look at what that means for the direction for the dollar in particular. the japanese yen very much in focus and we have seen the big winner out of this turmoil, up around 4% against the greenback over the course of this month. in terms of what else we are watching in the day's trading, we are a little bit sideways. lack of momentum at the start of the day here. unsurprising given that we are focused on the fed and the direction of the rates and there is a lot of data coming up in the days ahead including the preferred inflation gauge but let's change onto what we are seeing in korea at the open because we have seen treasury yields, rising expectation that we will have one more rate on the table. that has been a negative for the nasdaq in the prior session. we are seeing tech investors move away from those more safe

haven plays in the tech sector and nasdaq futures are little bit higher. because--fractionally gaining at the open. the korean won in focus around the 1300 level. let's change onto australia now because tech is the laggard in the session, up around .5%. stocks are looking a little bit weaker. as you say, haidi, we are waiting for that inflation data that is due 30 minutes from now. the expectation that it could give the rba another reason to pause at its next meeting, brent crude is in positive territory. investors are waiting for that opec-plus meeting next week although the guidance so far is we cannot expect any sort of production cuts. but so far today, really focusing on alibaba and what the stock split means and waiting. -- softbank to start trading for the first reaction in asia. haidi: let's get in more from our next guest who sees a low

risk of systemic financial collapse from stressors in the banking sector. with us now is the coo at a capital company. does sentiment feel fragile to you? it would not take a lot to really create a crisis of confidence again. >> correct so we have to differentiate here between what can be a negative move with respect to risk sentiment in the market and the real systemic risk. with respect to the sentiment, it is fragile so it is enough for one more negative headline relating to the financial industry come up particularly for the risk to come back and asset valuation to decline once again and cause quite a bit of headline risk linking it to a potential stress with respect to valuations but when you look at actual systemic risk, we believe that because of what central banks are doing, especially the fed, who have been very proactive in backstopping problems before they arise, we think an actual real systemic

issue with respect to the financial industry is likely to be avoided but volatility is here to stay. haidi: i want to get your views on what we saw from alibaba and that is going to be the driving story for hong kong, china, as well as some of these tech names trading today. how much value does it unlock for investors in this company or is this a model that you see potentially working for other big tech giants? >> this is a decision which makes great economic and strategic sense. splitting it up into six smaller companies definitely unlocks quite a bit of value. you have seen that in the stock market move yesterday and you will probably see it today as well in the hong kong stock exchange but it is also from a strategic point of view because given what is happeneding in china, being too large is not a plus anymore so being able to be smaller, more nimble, more dynamic, it goes in line with

everything with respect to the themes and ideas floating around in china. that is a strategic plus in our point of view and we expect other large corporate's to take a look at what alibaba has done a potentially replicate throughout the sector. we would not be surprised to see further headlines in line with what has happened over the next few months. annabelle: as -- kathleen: as this banking crisis stabilizes, this adds more weight to the view that the fed will do a rate hike, markets are pricing in more of a rate hike at the may meeting, and markets -- equity markets still seem to believe it so how do you navigate back? what does that mean for investors? what's it means we are going to remain very volatile once again. we probably had only one or two weeks where the fed and the interest rates market has been aligned and that was after the recent fed meeting but once again, the fed is saying they are not going to be cutting into the year end and the markets are thinking they are going to be cutting twice. if the fed is correct, you are

going to be potentially having a bit of a reawakening for the equities market so that means is that you have to keep portfolios relatively light. you have to make sure that you are very proactive and reactive as soon as the news comes out in order to be able to change or risk appetite and basically change accordingly to the news. once again, if equities market already is pricing in two cuts and that is not going to be happening come automatically, you are going to be having a negative equities correction going forward once it is going to be priced in. >> there may be a little bit of a slowdown in lending because the big banks have not been hurt by this pair they can lend as much as they want but to the extent that that happens and credit tightens, where am i going to put my money now? what part of the various security markets. phil: exact -- >> exactly because of what you said, banks are going to be lending less because of the stress they are facing as of now.

private credit becomes an increasingly interesting space because you will be able to provide credit at good companies which could not find funding from the banking sector and you can charge quite a bit of a premium so credits bets are going to be increasing and you can lock in that return on the private side once again for the next three years depending on what kind of these you are getting. that is an area which is very interesting and that we are increasingly allocating to that so with respect to the public credit space, credit spreads here so far could have a little bit of a risk of widening but because of interest rates that have declined so far, bond prices have held up and we continue to like the shorter end of the curve pill look at three years to four years. private credit is really where we see a lot of value going forward. kathleen: thank you so much. ceo at sgmc capital. annabelle: we have got one of the first reactions to alibaba

in asia, announcing its plan to split into six different business units. the general read through from different investors and analysts is this is going to help unlock for their value and crystallize the market cap of alibaba into the stock price as well so softbank here you can see up around 5% at the open in tokyo. this is a company that counts alibaba as one of its most important investments. it really has relied on its stake in the chinese tech giant over the last few years to generate cash for other start and compensate for losses in its vision fund portfolio so this is the state of play for softbank as we get trading underway here and can expect possibly for that to continue to climb into the session today. let's change onto another sector we are focusing on today and that is the asian chipmakers. a little bit mixed in the session, mostly to the sound side -- downside. giving a better than expected forecasts for the current quarter. it expects sales of as much as $3.9 billion. the average analyst estimate was

$3.75 billion but still, the stock is under a little bit of pressure. some of the bigger suppliers to the company and big ship names in korea but we did see of course the nasdaq slipping in the price session with rising treasury yields. let's change on one more center we are focusing on today. shares of asian payment firms. these names mostly under pressure in the session today. apple is now beginning to roll out its first by now, pay later -- buy now, pay later style service in the u.s. kathleen. kathleen: thank ep had let's get to vonnie quinn with the first word headlines. vonnie: the head of south korea's financial watchdog says the slumping property market may lead to defaults on project financing loans. he told bloomberg that authorities have assessed some 5000 projects, relying on these loans, and ready to act swiftly.

>> after experiencing that incident myself and my colleague, including finance minister -- bank of korea fsc, we are quite certain we sort of vaccinated. vonnie: u.s. prosecutors filed a new charge against sam bankman-fried. it is alleged the ftx cofounder authorized a payment in 22 a new one, seeking to regain access to the assets. he already pleaded not guilty to several fraud charges, accused of fondling billions of dollars from ftx to alameda for personal expenses. french banks including bnp paribas and societe generale

face collective fines of more than $1.1 billion as part of investigations into tax fraud and money laundering. it follows raids carried out in december relating to a dividend arbitrage strategy where shareholders transferred stock for a short period to investors based abroad to avoid a dividend tax. hsbc, natixis, and exxon are also part of the investigation. bloomberg has learned white house national security advisor jake sullivan spoke with the top diplomat amid rising tensions. the call happened just days ahead of taiwan president's plans to stop in the u.s. the white house is looking to arrange a phone call between president biden and china's xi jinping but that is not expected until after his return. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. kathleen: here what the corporate restructuring could

mean for mounting breakup pressures. more just ahead. top u.s. financial officials tell congress there should be stronger regulation of regional banks following the collapse of spv. the highlights, coming up next. this is bloomberg. ♪

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go. go air that runs factory. go sensors and software. go find leaks. go fix-em. emerson technology detects compressed air leaks to save manufacturers, like colgate, over 20% in energy costs. go brush your teeth. go boldly. emerson. >> this is a textbook case of bank mismanagement. >> we were seeing serious distress at other institutions. >> we used important tools to act quickly to prevent contagion. >> we will continue to closely monitor conditions in the banking system. >> they are tools we would use again. >> prepared to use all of our tools. >> we are committed to ensuring all deposits are safe. >> depositors will continue to have access to savings.

correct our banking system is sound and resilient. what's a source of strength for the system. correct -- kathleen: u.s. officials talking about the collapse original lenders. let's get more with su keenan now. indications of a major regulatory overhaul. a lot of pushback against to many regulations are not used well enough it what do we take away from all of this? su: it was a hot seat for the three key officials. they came to help kick off the first of two congressional hearings about what the heck happened in the wake of the recent bank turmoil and these three key bank regulators, came with testimony and criticism for the banks, mainly silicon valley bank. the top banking reg later, michael barr, saying they took way too many risks of the ron kind. they did not take actions. you heard from the fdic chair.

policies were clearly under attack and they shifted some of the blame and outlined new rules that will likely include more focus on lenders with assets larger than $100 billion that are not deemed systemically important at this point. the u.s. bank round, the big red line is march 8. the s&p was the white line, the banking index dipped down but has now stabilized so that is the context in which they were delivering their view on what should happen. the main message, things are sound but they lay the blame squarely at the feet of the managers. senate members had very tough questions. haidi. haidi: later on wednesday, the same regulators who got tough questions from the senate committee will be in the hot seat again before the house members paid what are we expecting there? --house

members. what are we expecting? kathleen: we started to hear some of the questions which kathleen alluded to. do we really need tougher regulation as these three key banking officials indicate or do we simply need better oversight? the senators came out with some very tough questions. why didn't you catch this sooner? the big questions coming from republicans. you are telling us you need to fix the problem when you missed it, the tone of some of the tougher questions. we need better supervision. that was another type of comment they were getting. the house financial services committee is run by republicans. you could have a much harsher tone as some of the issues came up in the senate hearing that could be echoed again in this house hearing is things about esg. are these banks misdirected, focusing on issues like esg rather than paying attention to

fundamentals, banking hundreds and practices, likely to be criticism and dustup between democrats and republicans on the 20 change under the trump administration which reduced some of the scrutiny on these regional banks. stay tuned. >> stay tuned for the next installment. the ongoing global banking turmoil put china's regional lenders under fresh scrutiny. for more, let's bring in senior analyst fraser financials, francis chan. the likely impact on chinese banks, what do we see from the global banking -- given that we know from a lot of issues -- the loan book, there have been ongoing challenges. >> so far, the impact from the global banking is on the larger chinese banks and it will be about the rising cds in the

global markets like we see with the increase in the cds for the five years. also, if we look over the past 18 months, they have been the most prolific among peers. from onwards, they may consider going back to the markets. they can have lower rates. obviously, they are problematic. they have not been much impacted. >> how much do you expect the reopening two affect the earnings outlook? >> they will have a much bigger lending push this year because the chinese government, beijing, is targeting a 5% gdp growth.

after a low growth last year. for many of the banks, it is the policy, too. the earnings will be capped for the biggest banks. >> bloomberg intelligence senior analyst fraser financials, francis chan. more to come here on daybreak. this is bloomberg. ♪

>> the head of south korea's financial watchdogs says the slumping property market may lead to defaults on financing loans. in his first ever meeting, he told us exclusively that authorities have assessed 5000 projects relying on these loans, triggered an unexpected credit crunch. >> if any serious financial

institutions or big companies fall, with the burden of increased interest rate -- interest payment or collapse of collecting their incomes from counterparts, that puts a systematic problem on our economy and financial markets. ever since the incident at legoland and life insurance, we reviewed literally all project -- realistic project finance, like thousands of them. some of them might fail eventually. we spread all these effects throughout timelines gradually. i don't think we will see any severe damage on our

macroeconomic side. >> we had central banks around the world lifting up interest rates. in light of that, how would you assess the state of korea's credit markets now? >> yes. we survived -- starting from october. we executed this market stability -- stabilizing measure. -- stabilizing the bond market out of it. after experiencing that incident myself and my colleague including finance minister had a bank of korea -- the head of the

bank of korea, we are quite certainly sort of vaccinated out of the previous event. >> the ones in switzerland here, could that possibly happen here? >> the answer is no. i don't think they exposed the kind of risk here in korea. the near future. the balance sheet is more sound. the portfolio of securities and proportions feel low. mostly a short-term securities. on the deposit side, it consists of mostly retail, small amount of deposits. a small chance that it might

happen in korea. >> what about that sort of thing? >> the trigger point, one of the reasons that terrified investors in europe was there bond was wiped out as well. here in korea, they are not designed that way. the trigger point is more complicated. it's much harder to achieve so it is quite safe. >> you have recently been talking about the banks needing to fulfill the social role that they have. the obligation to fulfill. >> doesn't mean that they need to just depart their money out of their pocket for no reason. >> the money feast.

>> yes, he said that. >> do you agree with him? it seems that you do. >> in the short run, i want bankers to acknowledge that the market is designed that way and they are getting a big chunk of money out of the system. they might just alleviate the burden on the individuals. >> that's service governor speaking to rishaad salamat. let's get a quick check of the latest business flash headlines. micron technology gave a better sales forecasts for the current quarter, sparking hopes that the worst of the industry slump may be over. sales may reach 3.9 billion

dollars, better than analyst estimates. the company announced an increase in job cuts. shares soared in new york following a report that amazon is weighing a possible acquisition of the struggling movie theater chain. amsi theaters could serve as a platform for 12 to 15 movies that amazon plans to releasing cinemas annually. -- release in cinemas annually. taking a look at softbank, the price is up 6%. links to alibaba. it looks like they are paying for them today. keep it right here. a lot more coming. this is "daybreak asia

>> let's take a look at the latest -- what we are seeing when it comes to these highly anticipated cpi numbers out of australia. 6.8% is what we have got and that is softer than the 7.2% that was largely expected.

we spoke with deanna. she said a reading of 6.9 percent would solidify this expectation that the reserve bank of australia next week would opt for a pause. we see headline cpi, the year on year number for february calling significantly from the 7.4% was signed january, coming at 6.8%. this gives the rba potentially a little bit more breathing space as we see political pressure to potentially opt for that pause as well. recent bouts of banking turmoil globally even though australian lenders are in a much different and a lot of people say on much more comfortable spot compared to u.s. and european lenders. take a look at the reaction when it comes to the aussie dollar, trading -- i of 67 u.s. cents -- just shy of 67 u.s. cents. we are also expecting the impact on australian bonds as well

having outperformed following the global banking turmoil. the three year yield rising, the dollar dropping .2% on that miss in the cpi reading. >> that's right. this has been a closely tracked indicator by the rba given that it was looking for more clues as to whether it could justify passing rates at its upcoming meeting. in the session today, the focus on what the fed is likely to do, the expectation we are going to see perhaps one more hike given that the banking sector turmoil does seem largely contained for now. they still have more data points due in the u.s. markets in wait and see mode. you can take a look here when you look at the projected trading volumes well off the 20 day moving averages today. 20% lower where we would be in the session so investors are sitting on the sidelines somewhat.

let's change on. one big focus point for asia today and mainland markets in china opening in the next hour and in hong kong. that will be the reaction we will get from alibaba's spinoff plan, separating into business units. it has been a major investor in the company that really relied on its alibaba state to fund its other start ups and also to help offset losses in its vision fund so that stock of more than 5% in the first half hour of trading in tokyo, changing on now because sticking with the alibaba theme, it could be helping to propel the hang seng tech index further given we have seen reversing its year-to-date losses and it is trading marginally in positive territory that has been perhaps a little bit of optimism around the reopening rally that has dissipated somewhat. analysts saying that should recover again in the second quarter. this alibaba spinoff could be a

blueprint for other big tech giants in mainland china. haidi: looking at tencent in particular and let's get more for the implications of the spinoff plan, what it means for the broader tech sector. i want to bring in a managing partner at msa capital. good to have you with us as always. when you take a look at this, it is sort of irrelevant whether they were compelled to do this first arrival because it does seem to nine with what investors want and what regulators want as well. ben: certainly. i think it appeases regulators. this is a business that would not exist in western standards because it has so many different licenses and business lines. for the regulators, they should have never allowed it to come together in the first place so it's almost two given by western standards. in a business perspective, it makes sense. we have seen spinoff like this

and precedent from the likes of jd.com who spun off the health business, logistics business, technology/finance business, and it can lead to further valuation. we forget how big these things are and we need to break them apart to see some of the parts as tencent has done with investments, holdings, and other actions as i mentioned from other tech giants. i think people see that this is a much larger business than they originally thought it was. haidi: so much of it is about unlocking more shareholder value. when you compare to the u.s. tech giants, it is not even close. is this a way for china's tech giants, but of course more broadly, to be able to unlock more of that? chinese tech firms, even the biggest ones, are truly lagging. ben: certainly and you will see

this across the board. meituan will have some levels of spinoffs. didi had an economist unit and other business lines of finance space. i think tencent will see further spinoffs. we saw tencent spin off its music unit. it's a very different structure relative to the united states because tech giants do everything. as a result of that, they have huge numbers of business lines. in the chat gdp space, every one of the major five tech players have their own business there and could ultimately spin that out so it is a trend you will see continuously. kathleen: it seems that crackdown came at a cost to a certain extent. would you say that now, this was a smart move by the chinese government to enforce these things to go in a certain direction? ben: there's huge amounts of

historical precedent. we broke up standard oil in the united states. even amazon will struggle on a going forward baseness -- basis to hold its lines in one hood. in the west, we do not that an eye[ -- abt an eye when they would get too much monopolistic control over certain regulators this is plaintiff -- blatant regulation and should have happened a long time ago. kathleen: who with the investors be? i need to snap up these ipo's as soon as i can. ben: these are in huge demand because these are proven business models with significant customer basis. -- bases. they will suck money away from expanding to business lines. if you are an investor today, jd health, all the entertainment -- ali entertainment and logistics. there will be robust demand.

people complained when alibaba spun off in the financial platform years ago. today, look at the value. it is great on an independent basis. these will be in high demand from your average retail as well as institutional investors. >> is there any sense in which breaking up a behemoth, a monopoly, doing the right thing, does it open the door not just for the sales of these ipo's, does it create space, does it create room, does it create capital to go into newer, smaller startup type ventures? ben: that was always the hope. as a firm, we have not invested in financial technology space in china because essentially it is a duopoly. by breaking up some of these folks, he would see more early-stage opportunities, more egalitarian markets. i think that is a positive development. you will have these behemoths. they are still at ant financial,

all the cloud -- ali cloud, jd cloud. we hope that is something that could be easily dislodged by one of the giants stepping down into that space. that is what you have to look out for. stepping into the footprints of the giants and it remains a challenge for early-stage opportunities. >> does this improve sentiment when it comes to early-stage investors? you said at the china development forum, the message beijing wants to get across is they are reopened for business, that there should be confidence in the chinese market, but we are looking at the impact over the past few years. e.u. businesses and startups saying there's been a 20% drop in interest in wanting to get into china and american businesses are the same. the american chamber of commerce saying for the first time in 25 years, china is not a top three destination for american small businesses. is that something that will recover, do you think? ben: it depends on what sector

you are in. you don't want to go head-to-head with one of the giants. american investor sentiment in china and business sentiment is at all-time lows at the china development forum. the delegation was a fraction of what it usually is. it is a combination of political pressure from washington as well as negative sentiment or fears that the regulators in china were unpredictable. this is more on the political push rather than the challenge facing the market. the europeans where they in full force and very much angling to do more business in china, pick up some of the slack left by the americans. it's clear if you are purely business oriented, you are going to want to expand your business in china. kathleen: thank you so very much, giving us a lot of perspective, a look ahead for what is going to happen in china . as managing partner at msa capital. that's get to vonnie quinn for the first word headlines. vonnie: top u.s. officials are

outlining what is likely to be the biggest overhaul in banking regulations in years. the fed vice chair for supervision says the rules will indicate higher capital and liquidity requirements for institutions with assets north of $100 million. prior to the collapse, republican lawmakers had opposed to tougher standards for lenders. seamless fed president jim bullard it's as regular tory policy rather than interest rates can contain fallout from the banking sector turmoil. excuse me. in an essay posted on the banks website, financial stress has been on the rise in the wake of recent bank failures. he says the policy response to these events has been swift and appropriate. goldman sachs is shaking up the leadership ranks at the heart of its capital markets business in this follows an overhaul in october that merged investment banking and trading operations. an internal memo says michael marsh becomes head of the africa financing group.

three partners in the investment bank are said to be leaving the firm made a slump in dealmaking. global news powered by more than , 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi. haidi: coming up next, sanford joins us with their outlook for oil this year as demand from china drives growth. this is bloomberg. ♪ ever better. it's when disruption hits your supply chain and ryder makes sure you're ever delivering with freight brokerage to transportation management, truckload capacity and dedicated trucks and drivers.

>> seeing some moves when it comes to aussie assets after inflation came in softer than expected, that easing bolstering support for the case for a rate pond from the reserve bank. we saw that 6.8% advancement in the consumer price indicator from a year earlier, down from 7.4% and also weaker than the 7.2% across consensus expectations. looking like a tepid session when it comes to trading on the asx today. the aussie getting further weakness as we really saw that inflation print coming in softer than expected.

this even as we had broad-based dollar weakness as well over the past few sessions. weakness when it comes to the three year yield at 2.9% from just shy of 3% ahead of that announcement. we are looking for support when it comes to the aussie dollar at 66.25. that is a march 24 low but potentially if we have that more devilish read on the rba, which of course would be welcoming that inflation result. but still expecting to keep that tightening bias giving that he is well above the inflation target. kathleen: let's look oil now. the trade today, oil extending near its biggest rally and we know the iraqi clash is just going on and on and on, curbing exports. we are seeing signs of that now and it has to do with iraq and kurdish region disputes. wasn't it just a couple days ago, it seems, that it was $69 a barrel?

a move that continues to move higher. also up more than a half percent. let's go into our next guest because oil links directly with china's state-owned petroleum giants, preparing for a rebound in demand after lifting pandemic restrictions that caused rare drops last year. consumption is expected to rise at the fastest rate since 2012. senior oil analyst at sanford c bernstein. china's covid lockdown heard a demand for oil. china is reopening and back in the driver's seat so what does this all mean for oil companies right now in china? >> it is a clear positive particularly for company as we saw signs of results yesterday and they guided 7% to 8% growth

and product demand so that is a million barrels per day if you apply that to china overall so it's going to be a very strong year for downstream demand so if you are positioned in refining, chemicals, that recovery in demand for petroleum products is going to be very positive not just for volumes but also from margins. >> is the frosting on the cake going ahead, maybe not in the previous quarter, but going ahead not a good situation for the middle east, but the clash between iraq and the kurdish regions? that is continuing to boost prices. is this going to add some juice, some fuel to a gain in the profits for these companies? >> i think that obviously last year was an incredible year for oil companies globally where we saw brent average $100 per barrel last year. we think we are going to be $80 to $90 a barrel so maybe a little bit lower than last year.

if we look at the market dynamics, we are in an oversupply market right now but as we move into the second half of the year, the combination of growth that we are going to see in chinese demand for the curbs and russian exports as a result of e.u. sanctions and should lead to brand trading higher than we are seeing right now. the biggest risk to that scenario is if we enter some sort of recession in the second half of the and clearly the risks have increased since the start of 2023 but overall, it is looking pretty constructive for oil. haidi: when you take a look at the strength of the chinese recovery, is there a fear that we are sort of pinning our hopes on an economy -- even the recovery we have seen so far has been weaker than expected. >> i think that is fair to say. the recovery may be has been a bit lackluster. we have to give it time and we

are at a fairly early stage in the recovery. you look at just the numbers and we saw oil consumption decline in china last year. we had not seen that for over 30 years. if you look at consumption of jet fuel which was almost one third of what it was at pre-covid levels, we are seeing a strong recovery in airline demand in china. we are seeing increased demand across the board which is boosting gasoline consumption. if you look at the chemical section as well, which has been a big driver of demand, there is a lot of capacity coming on this year that will boost consumption. >> talk us through some of your picks in the energy space. for china, cnooc was one of them, and you also like to woodside. >> cnooc and woodside are two companies you have to own if you believe in higher commodity prices. it creates a large discount, this intrinsic value being on

the u.s. entity list. we see a lot of upside there, particularly with free cash flow almost close to 20% for that stock and dividends around 10% to 15%. for woodside, it has really benefited last year from higher lng prices as a result of russia's invasion of ukraine. we have seen lng prices come off in the first quarter on a milder winter in europe. as we go into the winter ahead and see very little incremental supply coming on, greater competition and progress from china. overall, the situation still looks pretty tight in the market so we expect lng prices will come back again in the second half of the year that will benefit woodside which is really the premier lng company in the region. >> to get specific about this

week, a couple of days ago, cnooc shares tumbled after they missed estimates because of the covid lockdown. this is the last part of last year nevertheless, sinopec is expected to do -- cnooc, i should say, is poised for record earnings according to our bloomberg intelligence team. what is the difference between cnooc and sinopec to have this potentially different outcome if the forecast is correct? >> cnooc is geared towards an upside in oil prices. it's an externally well-run company. strong volume growth, high free cash flow. the company -- they are geared towards that higher commodity price. with sinopec, it is playing the demand in china. sinopec will benefit more from oil prices in the 70 to 80 dollars per barrel range, benefiting from downstream

volumes. you should certainly be -- encino, there is excellent value in that stock. investors are looking to be a little bit more cautious, a little bit more conservative, and sinopec does not depend on higher crude prices from here and benefits from that stronger china recovery that we see looking pretty good right now. haidi: always great to have you with us. be sure to tune into bloomberg radio to hear more from the days big newsmakers and get in-depth analysis from the daybreak team. broadcasting from our studio in hong kong. you can listen by the app and bloombergradio.com. this is bloomberg. ♪

>> 10 months after first defaulting on public dollar bonds. under the agreement, the holders will get new data maturing into 90 years. sunak may extend maturities on shorter dated new bonds. they will be able to swap debt into shares of sunak services. shares slide after david announces that lyft is not for

sale. instead, he says the company will focus on the ridesharing business and use lower shares for uber. some speculated it may come up as a result of recent management shakeup. >> not for sale. it opens the door to that. being acquired by a larger player that does something different or does it not make sense to you? >> people can make these sorts of arguments about how aggregation is good but my argument is on making sure for our customers and drivers, we are doing a great job. >> some stocks we are watching ahead of the markets opening in hong kong and china. tech stocks may move after alibaba announced plans to split into six business units. shares of asian chipmakers in focus following the better forecast for the current quarter and asia's elected vehicle

makers may move after byd said profits searched almost 450%. keep an eye on it, haidi. haidi: that is it for daybreak asia. are markets coverage continues. we look ahead to the start of trading in hong kong, shanghai, and xinjiang. bloomberg markets, the china open, is next. this is bloomberg. ♪

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>> welcome to bloomberg markets a china open. our top stories this morning, chinese tech said to rally on alibaba is a plan to split into six u