>> you are watching "bloomberg

daybreak: asia" coming to you live. >> we are counting down to the market openings. >> the top stories, a risk on rally set to continue in asia with peak rates and u.s. shares in a bull market. the biggest u.s. lenders may have to pay a larger portion for regional bank failures. plus, taiwan's president lanza new york, warning of an impact on relations. >> we have the open of stocks. we are looking at a brisk onset of trading. we had that positive lead from wall street. what is driving that is the expectation that that may be nearing the peak in rates and

jitters around the banking sector, those will continue te's, so we are watching -- two ease comes so we are watching tech stocks. it is a staggered start in australia. so far, the asx 200 up 0.3% the aussie dollar looking flat. subdued trading. investors betting the rba will engineer a soft landing but contain inflation. let's look around the broader region. new zealand trading to the upside. nikkei futures flat. earlier a pop of more than 2% at the open. we continue to watch china, the expectation for positive momentum from the split of alibaba and reopening momentum ahead. the yen near low against the

greenback. it seems that haven is not as it was a couple of days ago. >> it feels nice. perhaps some calm has returned. you're looking at red, but not a lot of moves early in the asian session and after the boost in the new york session, where the s&p 500 gained ground and every sector was in the green. the banking index gaining ground for a fourth consecutive session. the nasdaq 100, bull market, 20% gains. we are again in bull market territory so the key question is is it sustainable. it seems for now there seems to be some calm with treasuries unchanged. to europe a little bit. 10 year yield down.

-- two year yield up a little bit. 10 year yield down a little bit. when it comes to the oil markets. still down in the asian session. we thought that new york session. that put it into perspective. a two-week i still given the recovery rally -- high, still given the recovery rally. >> when it comes to the banking turmoil, even as calm is restored to investor sentiment, the fdic facing $23 billion in costs. bloomberg has learned it is steering a portion of the bird to the nation's biggest banks. what did you discover in your scoop? >> what we learned is the fdic is considering applying a special assessment to the nation's largest banks to recoup the losses to the insurance fund

it had to tap into to make insured and uninsured depositors whole in the wake of the collapse of silicon valley bank and signature bank. the agency said it was going to consider a new way to replenish it, but we are learning now they are mulling the idea of charging the nation's largest banks, who already contribute to it, but this may mean paying more. >> so, after the five-hour hearing today, what comes next? >> well, we know that after today's hearing, the agencies must ready a report for lawmakers and the public by may 1. we know that the fdic said it will be investigating the management of silicon valley bank and proposing this new special assessment rate, but we also learned the fed, particular the vice chair of supervision at the fed, he is open not just to

the fed report that looks into similar issues of what was wrong, but also they are open to independent investigation should lawmakers require it. >> how are we expecting him to take what they have from congress and included in the report? >> trying to make sure you address lawmaker concerns on both sides is an interesting question. there is criticism and concerns on both sides of the aisle, but addressing them is important. we know the agencies will not have examiners or any staff involved in supervising either of the two failed banks involved in this process, but it will require an independent look not just at the agency's own lapses in oversight and supervision, but where management went wrong and potentially new rules around capital requirements and potential stress testing. >> how long do we expect this to take? >> the anticipation is any new

rules which would be subject to consultation would be ready by may 1, both the fdic and fed have said that. we understand that even with respect to this potential new assessment of the fdic side, there will be engagement from the bank lobby and specific institutions to get a sense of how they may be on the hook for replenishing it, but between now and may 1 is the expected deadline. >> our reporter joining us. ubs shares rallied following the announcement of the return of the ubs ceo. it says it needs him at the helm. let's get more. is this a sense they want a steady hand, someone who has been through similar issues before, given the complexities of it? >> it is a colossal task and

isn't it, integrating two banks, quickly, and at the behest of the swiss authorities. there is quite a lot in his toolkit. he is experienced, having been at the bank nine years as ceo. a lot of scandals he was responsible for changing in the wake of those, so the rogue trader scandal in 2011 when the bank was hit with a couple of billion dollars of fines, he revamped the compliance structure in the years following that here it he did massive surgery on the fixed income business and generally tilted the whole bank in favor of its court wealth management unit. the task now is kind of some people think what is a magnitude bigger? the difficulty is you have to

please shareholders and please the swiss people, taxpayers, and government involved in this merger, and that is a key difference now, and he is untested in that realm. >> what changes in culture can we expect in the new entity, given that credit suisse has its own issues with mistakes and scandals? >> yes. years of management mistakes and scandals, as we know well. the difficulty that was highlighted yesterday was how you make sure their culture at the firm now and in the months and years ahead is appropriate for the reputation ubs once come so he described it as a culture filter all the staff we have to go through, not just the upper echelons of senior management, but the mid level engineer ranks

working for the company as well, and that speaks to the test that people will be put through, and if they fail it, they might find themselves leaving the institution, so there is a big test for the cultural element and also big test on how much of reputational damage in the hit credit suisse has taken in many areas of its business and how they go about fixing that under this new structure under the helm at ubs. >> even as credit suisse, the spectacular fall from grace and it ceases to exist as we know it, it is still coming under pressure for similar sorts of things is a tax evasion allegations in the u.s. this time. >> this report that has just come out speaks to those legacy issues. they are still having problems around the fact that they are essentially helping americans avoid the irs and avoid taxes.

it is a long-standing issue that is an issue today. part of his job will be tackling a lot of those things simmering under the surface, those legacy issues, and you can't fix those things overnight. they will take months if not years to fix, and there is no limit on his term, of course, an interesting development yesterday, but people will want some fixes pretty quickly, so they will have to demonstrate the repair work is happening quite fast. >> breaking news on netflix now. we are getting the latest moody's upgrade on netflix. senior unsecured notes. this is now being raised to investment grade. they are saying there have been fundamental improvements or they

are expected from revenue, membership growth, operating margin expansion. they are also pointing to governance considerations, specifically the implementation of a target depth range of 10 bacon dollars to $15 billion -- $10 billion to $15 billion. they anticipate growth from subscribers from the ad-supported service will be steady and provide a long-term opportunity for revenue growth, which is why moody's has just raised it to investment grade, netflix senior unsecured notes to aa3. >> thank you. taiwan's president has arrived in the u.s., spending two nights in new york, before heading to guatemala and belize. u.s. officials have tried to

play down the trip, despite china warning of new damage to relations. she plans to meet with kevin mccarthy on a return trip next week. the fed chief told a meeting of republican lawmakers that one more rate hike is likely sheer. kevin hearn met with jay powell says when asked about further rate rises, jay powell pointed the committee to the dot plot forecast and one more anticipated height. tidelands central bank has raised the interest rate for the fed time in sycamore tightening. they raised the rate by 25 basis points, consistent with expectations. they cited upside inflation risks from higher costs and demand pressures. they anticipate one more 25 basis point move in may. ai experts and industry leaders are calling on the training of ai models. a petition calling for a

six-month break was signed by more than 1000 people in the industry, including elon musk and steve wozniak. they said the system should be developed only after shared safety protocols. 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. >> still ahead, more on the growing geopolitical tensions over it the taiwanese president's visit to the u.s. we will speak with the austrian former ambassador to china to talk about what is at stake in what we could see from beijing in response. first, baltic capital markets -- bullock capital markets tells us why in just a moment. this is bloomberg. ♪

>> take a look at the first 15 minutes or so of trading in sydney. set for a pretty robust day with future stuff like this and a strong return of risk sentiment in the u.s. session, watching protects tax in particular -- tech stocks in particular. the asx up 0.90%. every segment in the green. it is information technology leading, up 1.3%. materials performing strongly.

energy out of financials as well. this, as we anticipate a pause from the rba after the softer than expected inflation print. we are watching for, pale and jobless numbers -- for retail and jobless numbers today to give us a better idea of how we are seeing monetary policy transmission play out. nikkei chicago futures flat. s&p futures really not moving much in either direction. our next guest is defensive and overweight on sectors that have historically performed in terms of stagflation and recession. she is a strategist at bullock capital markets. do you think that we are seeing when it comes to sentiment and the markets at the moment that is reflecting the actual risk that yes, a reflection is a potential, even as we see, i

guess, the volatility in the fear starting to pull back after this round of turmoil in the banks? >> yes. turmoil. upheaval. volatility. massive swings. these are amazing opportunities for debt buyers. you have seen a bull market in the sector that historically massively underperforms during cycles of rate hikes and recession, and that is tech, a look, i think the market is really just about the -- jazzed that the that could be cutting rates as fed fund futures are already prematurely discounting, prematurely in my view. i think the fed is more serious about inflation the market gives it credit for. i think the market has realized at this juncture that it has lost some credibility, arguably up a lot of -- a lot of

credibility with respect to its abilities, as well as its dual mandate that the fed has. so i believe this is premature. i think we could get a leg lower in the markets and my suspicion is this banking crises rather than deterring recession may be accelerates it because lending standards are going to tighten making loans harder to get, more expensive to get, and sending the consumer to entrench sooner than we thought. >> what opportunities do you see with this volatility? is it a chance to rebuild positions and financials? have we missed the chance to rebuild when it comes to tech given that it is in a bowl market now? >> was -- a bull market now? >> i did think that there would

be opportunities, entry points into larger banks that are healthier. we did see a move higher in banks, but under my base case scenario, which is the fed continues to hike and continues to curb inflation and possibly since the economy into a steeper recession than we would have expected given the tightening and lending standards that says it is not the best place to be in cyclicals. you don't want to be in consumer discretionary real estate, banks , sectors that benefit from lower rates rather than higher rates, so i remain defensive. i know it is increasingly consensus to be long tech and long discretionary and long high flyers at this point, but that is operating under the auspice of a fed that will be cutting in the near-term and it is premature to make that assumption.

>> do you think like those assets that traditionally do well during stagflation and recession, health care, utilities, for example? i ask this question because this is a new environment coming from massive amounts of qed around the world -- qe around the world. how do you do that when the economic picture has been so different than what we have seen so far? >> it is stunning. you can run the gamut of any strategist and everyone has a different perspective. a few weeks ago we were talking about immaculate disinflation, a soft landing, and at one point, no landing, so it runs the amit in terms of what people are expecting, but in that environment of heightened uncertainty, we are always living in uncertain times, but

this is unusual because the fed has gone long in the tooth with its ultralow policy, and now the question is will they go to loan in the tooth on the other side with the ultrahigh, higher for longer policy? so with that in the question on timing of when the recession commences i prefer to recommend our clients remain defensive in their equity positions for which i mentioned our health care, energy, which have done well in terms of stagflationary and recessionary environments, but add to that gold, cash, and i think you will be well-positioned for the coming year. haidi: i was going to say how much do you advise stashing some cash under the mattress as well? >> yeah, well, it depends on the risk profile, but if you are a conservative or ingressive investor, i would increase the cash position using short-term

treasury instruments. they are still attractive at these levels. so increase whatever position one currently has an increase it by several percentage points. >> always good having you with us, thank you. you can get a roundup of all the stories you need to know to get your day going on the terminal. it is also available on mobile and on the app. you can customize the settings to get the news on the industries and assets you care about. this is bloomberg. ♪

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>> a quick check of the business

flash headlines. adani group executives have met with u.s. investors including blackrock and pimco as part of plans for bonds. the conglomerate is aiming to raise $1 billion in two tranches by the strategy. two groups may sell those proposed bonds. wall street banks looking to trade credit loans. it is the latest effort to capture a slicethe private credit industry. sources say j.p. morgan chase, goldman sachs, and barclays are talking about facilitating secondary market transactions. >> look at the currency space. we saw the dollar moving slightly today, strengthening against most currencies. investors digesting the latest remarks by fed officials and looking to core pce data thursday. were watching a call from bank of america that sees a risk of

another fx liquidity crunch, this after all the bank turmoil. fx volatility is far from crisis levels after the collapse of svb bank, and even after the market emerged relatively unscathed from the latest banking issues, and implied volatility has jumped this month. you're looking at the trades in asian currencies. not a lot of movement, but the japanese yen at the moment it strengthening against the u.s. dollar. a little bit to that 132 level. coming up next, we dissect the visit by taiwan's president to the u.s. our guest joins us next. this is bloomberg. ♪

>> you are watching "daybreak: asia." i have a check on markets.

30 minutes from the open in tokyo. nikkei futures coming online in singapore. a pop at the open. we are 30 minutes into the session for australia. gains inditex space -- in the tech space. unsurprising. financials likewise up pacing broader gains for the asx 200. that is dented the assessment that the worst of the banking jitters are behind us. you can add to that the expectation that of nearing the end of the fed tightening cycle. the rba is in focus ahead of the meeting tuesday. economists expecting one more 25 basis point hike, but money markets expecting the central bank to pause. what is interesting is when you look at the outlook for recession in these economies or

and australia versus the u.s., we get a very different story coming through in terms of yield curves because the australian yield curve is still around that 50 basis point mark, did u.s. -- the u.s. deeply and contraction territory, so while there is the signal that recession ahead in the u.s. market, the australian market is suggesting that the governor could engineer a soft landing. that is also playing out in recession odds, even though economists have been raising the chance of recession and australia, it is still lower than other parts of the world, so that could be positive for governor phil lowe, who has faced criticism at home in australia. >> he will take some of the political heat off. let's get to first word headlines. >> bloomberg has learned the

fdic may ask big lenders to cover the cost of recent bank failures. sources say it could be part of the special assessment that will be announced in may. the fdic says it expects to pay $23 billion to cover deposits and svb bank and signature bank. a u.s. senate panel says credit suisse helps americans evade taxes and the bank committed major violations in its plea deal with the justice department. at cited what may be an ongoing tax concern with almost $100 million in secret offshore accounts. credit suisse says it is cooperating to clear concerns. regulators in singapore describing the outage that hit the digital banking services when state is unacceptable, the monetary authority asking southeast asia's biggest bank to conduct a thorough investigation into the 10-hour outage. the ceo says it will review what

happened. it follows a similar incident in november 2021. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this bloomberg. >> a busy time for geopolitics when it comes to china. several key events happening. the new premier is expected to make a pitch to foreign businesses. we are also expecting to hear from him in his speech. we are also watching the former taiwanese president who is in china on the first such visit by an ex leader of taiwan. terry gou visiting the u.s. to promote relations. the current taiwanese president touching down in new york for a two-day stopover. the biden administration is playing it down. china has warned that diplomatic fallout. >> one issue china will be watching closely is the push for

a better tax deal with the u.s. by taiwan, as the biden administration seeks to bring top chipmakers to the country. let's bring in mackenzie hawkins from washington. what does taiwan want and what is the likely u.s. response? >> taiwan's ask is simple, an agreement with the u.s. to end so-called double taxation, which is when taiwanese individuals and firms are taxed in the u.s. and on remittances basin back to taiwan. the u.s. has agreements to avoid double taxation with countries, but it is difficult with taiwan because the u.s. does not recognize taiwan as a sovereign nation and therefore cannot execute a treaty. the biden administration is keen to get something done because taiwanese firms are critical of the relevant of the chips and science act, aiming to boost

semiconductor manufacturing in the u.s. >> is that the challenge, the u.s. has not recognize taiwan as a sovereign nation? can they get an agreement? >> so, what we are hearing from sources in the administration now is they are exploring creative solutions to this challenge. any agreements with taiwan would set off alarm bells in china at a point that china/u.s. relations are at a low, but there is some precedent for an agreement between the u.s. and taiwan. as recently as 2016, they had an agreement where taiwanese banks would report u.s. customers to u.s. authorities here there is a long-standing transportation agreement between the two, so it is possible, but it is a heavy lift at the time the biden administration is approaching its relations with china very delicately. >> how does that beijing element

factor in in terms of support from members of congress? >> so, members of congress are rattling for legislation -- rallying for legislation the counters china. there is a resolution introduced by a bipartisan group of senators that was first introduced last session and begin introduced earlier this month that encourages the biden administration to pursue a tax with taiwan. it is important to note that this is a nonbinding resolution that is merely encouraging biden to take action on this front, and my hilt sources are telling me that senators are hoping agreement would be folded into ongoing bilateral trade negotiations between the u.s.-taiwan. this is a difficult congress and republicans control one chamber and democrats control the other, and not an especially productive congress as a result, but some keep members think that because this issue pertains to china that you might see members begin to sign on to this proposal.

there have been additional cosponsors from the moment it was introduced and it could gain traction this session. >> will, joining us now -- well, joining us now in our sydney studio is our guest, previously at the australian ambassador to china. great to have you with us, especially with so much going on with china-u.s.-taiwan. what do you make of this visit? they are downplaying it, but we have seen the reaction from beijing. >> yes, it is not as provocative as what we saw last year with the former speaker of the house and nancy pelosi's visit to taiwan. i think we saw if you like a maximum response from china last year. i don't think you will see anything like it on this occasion. there are presidents --

presi -- she will be meeting the speaker in los angeles and that will be seen as provocative. beijing is in a different space. since the national people's congress in february and the endorsement of xi jinping or his third term as president, i think we are seeing a moderation and china's diplomacy, a shift of gears as it were, moving away from the diplomacy that did so much damage to china, and they recognize that in beijing, and trying to repair their international image, both by friends and influencing people around the world. >> this is necessary? >> it is geopolitical, positioning china with the so-called global south, and as an alternative global leader and a very far-reaching agenda. we have seen china comport with

the 12-point peace plan for ukraine. they brokered that remarkable rapprochement between iran and saudi arabia a few weeks ago. you are seeing greater activity in china's global diplomacy. i would not want to derail this too much, but -- >> what does this tell you about his leadership, that he is outward looking and he wants to build these inroads again, that he wants to have that role in the global sphere? is that suggesting he's feeling good after what the country has gone through the last couple of years with domestic support? >> absolutely. absolutely. the forum this we currently going on in china, it is all talk with the new premier, openness, attracting foreign investment into china. it is not driven by economic necessity, although they are

watching the growth numbers and want to do 5% i just came back from beijing. my sense is that the play suspected business and really moving, and a great deal of confidence. we saw a remarkable thing at the beginning of this year where xi jinping with the zero covid policy reversed the policy overnight, and it goes to something we talked about last year when i was on the show, and that is xi jinping has to deal with the party. if anything happens that made threaten the legitimacy of the party, the party will move against xi jinping or change policies and and i think that is what we saw with the scrapping overnight of the zero covid policies. they saw the demonstrations and riots that took place elsewhere, shanghai and elsewhere in china, and realize the legitimacy of the party was under threat and change policy. >> so they change policy and opened up to the world and they

are opening up her business and sink they are back, but at the same -- saying they are back, but at the same time, how open is the world to china? what are you expecting? >> i think we are seeing the world respond quite constructively and positively. this week, in our form, we have twin visits by the prime minister of malaysia, the prime minister singapore, president macron has also announced she would be visiting china in april, accompanied by the president of the european commission. the prime minister of spain said he will be visiting shortly, so there is a lot of diplomatic and high level activity around china at present. >> there is a lot of optimism in

the markets as well, especially with alibaba's new restructuring, that perhaps the crackdown on big tech is done with. do expect investors to return to china? we have seen many false dawns in the past as well. >> we have, but we have seen a huge amount of money made by foreign firms in china. on one side of the ledger, there have been dawns, and on the other side of the ledger, many western counties made a fortune in china and continue to do so. i just came back from beijing, but the market seems to be in full slowing. the big european brand-name cars seem to be everywhere. so, on the ground, it feels different than how it seems when you're looking at china from abroad, filtered through much of the western media. so, i think this is a fairly positive moment again. >> that narrative is something

driving the wariness we see in foreign firms, foreign investors, startups. there is anecdotal and statistical evidence that a lot of businesses are hesitant. do you think the premier can change that with what he says today? will there be a charm offensive to bring that external capital back to china? i am curious because you advise businesses on both sides. >> very much so. the symbolism of jack ma coming back at this time is extraordinary. i don't know what it means to divide alibaba into six boutique businesses, pretty big boutiques , by the way, but the symbolism is outstanding because he was hounded out of the country and has been largely floating around the mediterranean on his yacht and suddenly terms up -- turns up this week. i think this is all quite significant in terms of the direction china is wishing to

follow. >> yeah, jack ma is back. china is back. >> terrific. >> great to have you with us. coming up next, we will look at what shifts to expect is the boj faces the first changing of the guard in a decade. that is next. this is bloomberg. ♪ what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

>> outgoing boj governor kuroda who change the course of global markets when he unleashed a firehose of japanese cash on the investment world. we are talking about more than $3 trillion of funds. now his successor is likely to dismantle his legacy, setting the stage for flow reversal, which could send shockwaves through the world economy. that is the subject of our big take today, the $3 trillion threat to global markets. let's go to ruth carson in singapore. investors getting nervous. >> absolutely. it is the fear of the unknown for many investors around the world. $3.4 trillion is nothing to sniff at because japanese investors have been punished for years for saving vocally at home

, so they had no choice but to bring the money offshore. since 2016 a particular in the introduction of controls, they have pumped money into treasuries, singapore stocks, and should they raise interest rates further, all of this could unravel. or talking about trains of dollars getting taken out. bond yields from the u.s. could rise. governments have been used to having a secure line of cash. japan suddenly having to find investors elsewhere. the reality is most market participants do expect that the boj will change monetary policy this year because inflation as we know is rising in japan, so there is a lot at stake here. >> up a lot at stake. we can't drive that point home more. the majority of this $3.4 trillion mountain of funds,

where has it gone under the tenure of governor kuroda? >> a lot of research. a lot of data crunching. we found the japanese have invested virtually everywhere. i mean virtually everywhere, government bonds, stock markets and the netherlands, risky loans in the u.s., europe, brazil debt. investors are big and u.s. government bonds. japanese investors of the single biggest foreign holders of u.s. treasuries. they also owned about 10% of australian/dutch debt, stocks and singapore, the u.k., and the u.s., and the list goes on. >> so are we envisioning the impact here to be more volatility in the markets, or potential repercussions for the global economy when you have money being sucked up from u.s. treasuries and it being more expensive to fund debt and

having broader ballooning repercussions around the world? >> this is the million dollar question that some of the brightest minds in the investment world are trying to answer. so yes, we are talking yields rising in the world's biggest market, u.s. treasuries, australia, the netherlands, governments having to find new buyers for their debt. as well as the interest rate differential with the u.s. as it narrows. this is why people are nervous, the flow reversal we are talking about right now is already underway. japanese investors sold the record amount of global debt last year because boj introduced the tiniest changes to normalize policy. imagine what could happen next if should that ramp up -- that should ramp up? >> that story hits the terminal

in 10 minutes. that is ruth carson and singapore. china construction bank has delivered a full-year profit increase of over 7% as net income grows to $47 billion, beating estimates. other chinese lenders are expected to shout they are on solid ground despite the turmoil across banking sectors in the u.s. and europe. let's bring in our senior analyst now. historically, we are always worried about chinese lenders and the nonperforming loans portfolio as being in evergreen concern, right, but at this point, are we looking at them as much more stable some of the big , regional lenders in the u.s. and europe? >> well, for the biggest chinese banks, you will see that tonight , and you start with the china construction bank last night. it is an issue that is behind them. if you look at the nonperforming

loan ratio, they have been improving that since early 2021. we may still see some improvement this year. also, they have a very good -- there coverage ratio is very healthy. for instance, for china construction bank, 241% or so, so i don't think as quality will be the problem in 2023. >> how are we expecting consumer confidence that has been hit, of course, with the covid zero policy, not to mention the property issues in china to be reflected in lender balance sheets? >> those in fact, for the biggest banks in china, they have the luxury to cherry pick the best borrowers for their

lands. from the corporate side, at the very least. so far, we don't see any deterioration because of the covid zero policy over the past two years. they have been improving their asset quality over the same period of time. i think much of those nonperforming loans are in a lower tier banking system in the country. >> we have more to come. this is bloomberg. ♪

>> all right. we are looking ahead to key alibaba conference call taking place at 8:00 a.m. hong kong time. we have seen the outsized investor reaction, right, overwhelmingly positive at this restructuring plan to turn alibaba into six baby alibabas, although that is some big babies when you look at the profitability, but we are really waiting for more detail, but all of this comes of course, as we have jack ma also returning to the spotlight as well and lots of questions as to whether this really sets up the expectations as to whether or not this is now a model that we will see for

other big tech giants, the likes of tencent and baidu. >> i can't get over the big navy bob -- baby babas. >> investors liking the right cap plan, splitting that empire into six big baby babas, yielding public offerings as well. you can see the sin hong kong, up 12%. that has helped global tech stocks. you can turn to your bloomberg for this. you can get commentary and analysis from bloomberg experts and editors. the market opens in seoul, korea and tokyo are next. this is bloomberg. ♪

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daybreak: asia. " coming up from a positive session on wall street, every -- in the green. the bull market of more than 20% from its low. more on those tech stocks given that we will have more on the restructuring of alibaba. haidi: that has created so much optimism that this will unlock value for shareholders, but also potentially create a blueprint for other major tech giants to do the same. at the likes of tencent. let's take a look at how all of this is repeating into optimism as we get into the market opens here. annabelle: finally a sense of optimism, a sense of calm returning to the session and asia. we have the open for japan and south korea are upon us. volatility index really an indication, citing back down to eight three week low. a sense of a sigh of relief that

is being breezed by some traders in the market today. treasury yields a lot more subdued. we have been looking at moves of more than 20 basis points in either direction over the last couple of weeks. we are getting a sense that the worst of the jitters around the banking sector has passed, also expectation to building that we are nearing the peak for fed rates. that is positive for riskier assets read at the yen baring the print of this. we are sipping down to 133, that currency down 1.35% against the greenback. we did have 90% or just over of the s&p 500 closing in ring territory. one sector in focus is financials, of course. we did see those performing better on wall street today. we are keeping an eye on how the topix bank index is faring. that index weaker in the open,

but still we will be keeping an eye on it as we get trading underway. let's turn to korea, because we are keeping and i am particular another sector, the tech one given that we saw the nasdaq entering the market territory. a little lower and the cause stack outpacing -- kosdaq outpacing gains. the korean won trading around the key 1300 level. let's turn to australia. we have that session what our integrating. tech stocks up 1.5%. we are watching what is happening with oil, because we have seen at the rally selling of late, weak demand halting momentum buying. just looking at headlines crossing, we do have new zealand march business activity outlook. that index has risen to -8.5, still a negative territory. shery: let's bring in our next

guest who prefers chinese equities on policy more supportive compared to the u.s. and europe. the senior cross asset strategist at standard charter and wealth management. good to have you with us. we are awaiting a conference call by alibaba to see what their restructuring will look like. how supportive's policy on the regulatory side of things when it comes to china right now? >> i think china in an interesting juncture. the opposite spectrum where we certainly see consumption and investments and distressed starting to show signs of life and recovery since late december. obviously we have seen quite a number of fiscal measures being introduced by authorities as well. trying to tie off the credit crunch as well. those are supportive measures.

when we look at china, even from an earnings perspective, the developed markets are revised down. it will support overweight into the chinese market. shery: of course, we are seeing with the banking turmoil in the u.s. and europe increased probability of recession perhaps , and the fact that a softish lending might not be achieved. is china a good diversifier in that sense that they are doing their own thing, a little more insulated from global markets? >> yes, certainly, and we have also seen a cut by banks as well. that should support lending.

if you look at the overall in the u.s., [indiscernible] we are probably not ready to proceed with banks fully met on lending to the economy. we are more cautious when it comes to growth in the u.s. vis-a-vis china. haidi: you do expect though for the rebounds when it comes to 81. it that been an overreaction, or do you think there is some permanent ongoing issues when it comes to confidence now? >> i think markets are trying to find and calibrate the risk of owning such instruments. in the u.s. and the measures taken by the swiss national bank are unprecedented. there are multiple restrictions. boe and hong kong authorities coming out to clarify that right

now audubon's [indiscernible] they have to take a hit first. the market is trying to find footing given the risk that we are seeing so far. it will take some time for the market to stabilize and before we see normalization again. haidi: if you are constructive on china, does that mean you are more constructive on the broader emerging markets complex, and if so, what asset classes are you looking at? >> we like china and believe the recovery and reopening intranet will benefit the entire asia region. we are constructive on asian equities, chinese equities as well. obviously the asian u.s. dollar currency bonds. that is quite interesting, because the yuan is quite high, above 6%. we see the chinese economy

providing measures, keogh assures in the asian bond -- key issuers in the asian bond segment. haidi: when it comes to central-bank expectations, where do you side with when it comes to do we think that the fed is going to succumb to the pressure in the markets? because if the banking turmoil in a sense has started to improve from a sentiment of confidence point of view, does that give them more ability to continue tightening? >> i think the fed is in a dilemma, because on one hand if you look at core inflation is running at 5%, it might be 6%.

we got growth data and pmi data, those are in negative territory or protection area territory. they are in a dilemma, because if they were to loosen or cut rates too quickly, that might revive [indiscernible]. if they do not they will start to deteriorate. they are trying a delicate balancing act. they -- we expect them to hike one more time. a rate cut in the old once there are more signs of significant deterioration in the growth outlook. haidi: senior cross asset strategist at standard charter wealth management. let's get you to vonnie quinn. vonnie: south korea is expected it approve a bill that offers tax breaks to the country's semiconductor industry.

the k chips act will increase from 8% to 15% for companies that invest in manufacturing festivities. small to medium firms was to get a rise to 25%. the act is intended to spur domestic investment for tech companies including samsung and sk hynix. regulators in singapore are describing the lengthy outage that hit banking services on wednesday is unacceptable. the monetary authority has asked southeast asia's biggest bank to conduct a thorough investigation following the outage, which lasted 10 hours. the dbs ceo says the company will review what happened following a similar incident in november 2021. ai experts and industry leaders are calling on developers to halt the training of powerful ai models. a petition calling for a six month break from training ai systems was signed by more than 1000 people in the industry, including elon musk and steve wozniak. at the tech leaders say ai

systems more powerful should be developed only after shared safety protocols. australia up las vegas biggest employers will be forced to reveal their gender pay gaps as part of his new income inequality legislation passed by parliament. companies with more than 100 workers will be required to disclose the disparity on a yearly basis as of the nation seeks to speed up workplace equality. australia's gender pay gap is above the average of 10%. the federal reserve chief has told a private meeting of republican lawmakers at that one more rate hike is likely this year. kevin hearn chairs the republican committee and met behind closed doors with jay powell. when asked about further rate rises powell pointed the committee to the latest dot plot forecast showing one more dissipated hike. -- anticipated hike. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: we have korea and japan open for trade now. annabelle is watching the

movers. annabelle: that is right, focusing in particular on what is happening in chips stocks. firstly we had the nasdaq entering bull market territory, so that is positive for tech broadly, but the focus is well today. we did see intel overnight announcing new server chips would come sooner than expected. that stocks surged seven point 6%, also help to rally global chips stocks held by another positive forecast coming through from eight german chipmaker that followed what we had from micron i day earlier. we have stocks moving to the upside. we are keeping an eye on what is happening in the korean chips space. this is not only reflecting these stories, but if you change of now and take a look at what is happening in korea, we are expecting the government to pass its own chips act amid friction between the u.s. and china. it will increase the tax credit

to 15% from the current 8% for major companies investing in manufacturing so it is and also smaller and medium-sized firms will see their tax rate go up to 25% from the 16% that it is now. something that will provide a boost to local players. chips stocks are moving to the upside. haidi: and of course we are watching tech stocks overall, as we are getting more details when it comes to the ongoing alibaba conference call. let's bring in stephen engle covering alibaba since its founding more than two decades ago. how far we have come. what hearing so far? there are lots of questions about with the new governance will look like and how long this process will take. >> so many questions to be answered and asked on this conference call that is ongoing. tune into top live on the bloomberg terminal and follow it blow-by-blow. they are in the introduction, actually the first few questions

from analysts. what they went to get a sense from from the chairman and ceo as well as the cfo, those are the only two alibaba executives on this conference call right now. none of the six new division heads other than daniel jong have joined. we thought we would get inside into those particular divisions. essentially many are asking what is going to be the difference of alibaba going forward as previous, and they are basically outlining the synergies and reasons for this break up into six divisions. daniel saying they need to unleash productivity, become more agile amid market challenges and heighten competition. a lot of the same things they said in that statement they released yesterday when they announce that breakup. he is also essentially saying that they will be independently operated, so that is interesting.

the biggest changes that each of the segments within the company will be independently operated companies. alibaba has been laying out the groundwork for such change for years. we want to get a sense in this conference call, political and regulatory risks now going forward compared to the last 2.5 years, which is wiped out $500 billion plus in a value. the turnaround plans for the nonperforming divisions and the supercharged plans for the units that are doing well. ipo plans as well as what happens to this drove of data. shery: they seem to be saying at least for now the right things, things that investors want to hear. they want to unleash productivity through this change, they want to be more agile, respond faster to change. it investor reaction has been pretty positive. what else can we expect to hear from them? >> we are just going to get the details, and there will have the opportunity for key analysts to

ask specific questions. i saw one queen-size -- concise writing from j.p. morgan. what will change and what will not? that is what we need to get, really granular detail is what they are asking for. daniel jong will be put on the spot. many analysts between today and yesterday when this news broke or the night before actually is what is the root of this? was this a direct result of the government saying you are too big, too monopolistic. we need to essentially break you up, and does it go to the backdrop of the main story. and that is alibaba, that big monolith became too large, too much data, it had too much sway over the chinese economy. is this breakup unlocking value

in each of those individual divisions for global investors? is the aim to prevent alibaba from becoming so large and having so much sway over the economy again? shery: stephen engle down on what is happening at the alibaba conference. for more on what is to become with the big baby babas, turn to tliv to get more analysis. more major chinese banks are said to report earnings after profit estimates beat estimates. our guest gives us a preview. we look deeper into geopolitical tensions with taiwan's prime minister arriving in the u.s. more on beijing's response next. this is bloomberg. ♪ ...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...

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haidi: we are continuing to

listen to the alibaba conference call, briefing on the big pickup plan to create six separate may be -- bay babas. the ceo has been taking so many questions about the timeline, which businesses get turned around? there were to map towards an ipo as well as questions about the political risk that is wiped out so much shareholder value to this point. let's take a listen. >> that will be a future consideration. >> to the next question, someone from ubs. go ahead. >> thank you, management, for taking my question. we look forward very much to seeing the reorganization unlock value for the alibaba group. in addition to this reorganization, can i confirm we will continue to execute the

existing share buyback program? >> thanks for that question. first of all, i would like to state that our commitment to the existing share repurchase program has not changed. going forward, we will continue to evaluate our share buyback program periodically based on the free cash flow generated from and cash investment needs of our business group companies and other investments. in addition, we will continue to monetize certain of the less strategic investments in our investment portfolio in order to improve our capital structure. so those are our plans. i would also like to particularly note that share

buyback is only one of the methods to enhance shareholder value. going forward, we will now have even more options to enhance shareholder's value after the restructuring. as these business units become independent companies as they potentially go ipo, there will be even more ways that we can enhance value for shareholders. >> thank you. the next question is from alicia up citigroup. go ahead. >> good morning, daniel. thank you for taking my question. my question is as follows. before this reorganization, alibaba group had both a lot of synergies across various business units. i am wondering how the synergies will be impacted under the new structure? >> thank you, alisha.

that has been a very important question for us that we have looked at closely and the context of this restructuring. because these business groups have as you said established a lot of synergies, strong synergies over the years in terms of data, in terms of consumers, technology, other key functions as well. so it is a very important question for us as well. an important issue that we can continue to maintain and build on those synergies in order to create value for customers in the market. those synergies are hugely important and is a key differentiator in the context of intense market can -- competition. following these years of

development, there are very stable cooperative relations across the different businesses. they serve one another. they work together. shery: executives briefing on the company's breakup plan. we are listening to daniel jang the ceo and chairman. now we are listening to tony shu. let's bring in our chief asian correspondent stephen engle. there were questions about synergies among the different companies. what stood out to you? >> to be honest, i was locked out of the conference call, so i have no idea what they are saying over the last couple of minutes. just being completely transparent. i am looking back into the terminal. obviously there are tons of analyst questions about the teacher going forward and what the regulatory environment is going to be like.

much has changed on the regulatory and political front over the last two years. in that time we have lost about $600 billion u.s. in market value for alibaba. now according to investors, they are welcoming this news to break up into six individual divisions, but how will they unlock that value if there are not the synergies among the six different divisions? let's go back to the conference call. shery: basically going on what toby was telling us that alibaba will continue to monetize the less important assets, and the company will consider whether to keep control of future spinoffs. he was also asked about the synergies. the company is indeed independent, and toby says alibaba is talking synergies think the stable relationships between units will not necessarily change. given your experience covering

alibaba for two decades, tell us how important that is and what we have seen from alibaba's different divisions working together and what the challenges will be when we split this massive giant into these big baby babas. >> obviously the big issue is are these viable standalone divisions? the six of them, because it they have grown up in an ecosystem of shared data and shared referrals. they have grown this largess not only through acquisitions of start ups and building up their platform of services that could be interlinked, and perhaps as the government would attest, monopolistic behavior. they do not have the ability to be a giant monogamous -- monolith and monopoly anymore because of the pressure and essentially breakup of the giant companies. how are the six individual units

going to be able to thrive on their own? some have better business models than others. cloud and intelligence division probably has the most potential in cording to a number of analysts i have spoken to in the last 24 hours, and not surprisingly that will be headed up by the current chairman and ceo. the cloud intelligence division, which would include some ai technologies, could potentially be the biggest ipo and one of the first to go ipo. haidi: let's get back to the conference call him up because we are getting to the final question, and it is really asking what of the future ipo? that call has just finished, and the ceo saying the company will continue to evaluate the timing of a hong kong listing in terms of the question of what progress we have seen with the primary listing status of the parent company. also when it comes to expectations of separate ipos and when they might go to market

for each of these separate entities. they are saying the market will be the best judgment of that, to see how it investors judge the synergies and progress as they do this restructuring. really interesting that this is obviously not a coincidence with jack ma's return to the spotlight. shery: it seems investors are taking this positively. we have seen a huge run-up in the alibaba stock in hong kong and also from all of these other tech giants, because you were thinking chinese regulators are done with a crack down the tech sector. this conference call was scheduled for about 30 minutes. they did around 25 minutes. there were a lot of questions and answers about what will be different and what will stay the same in alibaba. let's see how analyst take the responses from daniel and toby,

who were talking about continuing to monetize the less important assets to consider whether they keep control of future spinoffs and see how the markets react of the china open. haidi: you talked about the timing. that is significant in itself. we know historically alibaba conference calls can go for well over one hour. at 25 minutes i can imagine there are some callers who did not get a chance to ask their questions. we continue to wait for more details. go to your bloomberg for more on this. tliv is where the analysis is from our experts as we wrap up this alibaba conference call talking about the six separate entities. 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...

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haidi: taiwan's president has landed in new york for a

stopover on her way to central america. the biden administration officials have tried to plague of the trip with china saying it would further damage ties between washington and beijing. let's get more details from our correspondent who is traveling with the president read which we expected him and that the white house is at downplaying this and saying it is a regular scheduled transfer visit. >> she just landed in new york a few hours ago, and right now she is having her first public event on u.s. soil. this is a dinner banquet with about 700 americans from new york, d.c., pittsburgh, boston and the surrounding region. they'll come here to new york to see the president. and when she was going to give a speech just now, almost everyone in the room stood up and gave her a big applause with someone

even chanting taiwan, i love you. it shows taiwanese americans here really have a strong support for the president, so she jokingly said i am not going to run for president again next year, but thank you for all of your passionate support. she is expected to stay in new york for two nights before heading to guatemala and belize, two of taiwan's central american allies in the following days. next week during her return trip, she is going to try to transit through los angeles, where she is expected to meet the u.s. house speaker kevin mccarthy. just hours before boarding on the plane, china warned that if there is any meeting between her and mccarthy, it is a serious propagation, and trying it would definitely take measures to respond to that. so the uncertainty from that certainly will give an already

front u.s. china relations another tension. shery: what can we expect of the business side of things? we know that taiwan has been pushing for a taxi will from the u.s. >> u.s. president joe biden as been trying to attract technology and chipmakers to come to the u.s. they have already promised them that it investment in arizona. right now taiwanese officials and companies have been pushing very hard for the issue of double taxation, so they urge the u.s. government that it has to come up with a way to find some kind of tax deals with taiwan, just as they did with many other countries. but the problem with that is that u.s. did not formally

recognize taiwan as a sovereign nation, so signing any kind of tax deal like that would essentially escalate already fraught u.s.-china tensions and maybe lead to very strong reactions or pushback from china. it is believed the u.s. government as to come up with some kind of creative arrangement to deal with this double taxation issue. doing that, it can successfully attract chipmakers like tsmc to continue their investment on u.s. soil. shery: cindy wang joining us from new york and traveling with the president. it is early in the asian session, but we are seeing a mixed picture despite the strong need for wall street. let's go back to annabelle. annabelle: it has been interesting, because we had so much expectation coming into the day's trading that perhaps we could breathe a sigh of relief because we have this expectation worst of the banking turmoil was

over, and also that the fed would be nearing the end of its rate hike cycle. the nasdaq entering bull market territory, but half an hour into the session with japan and korea, we are seeing sentiment slipped across the board. broader benchmark trading a negative territory, and nikkei leading losses it down .5 of 1%. a stronger dollar perhaps weighing on the picture. you can see the korean won around the key 1300 level. commodity linked currencies associated with progrowth ones trading and negative territory. the korean won or the aussie dollar and kiwi dollar under pressure. traders going back into the haven place like the japanese yen up .2 of 1%. we do have futures pointing to slight gains for hong kong at the open. we did actually see the golden dragon index continuing to add to that 3.5% rally on tuesday,

down to alibaba, it's a big grand plan to split into six different business units. we change up now, take a look at how softbank is trading given that it has been a big investor in the company, it has relied heavily on alibaba to help offset losses elsewhere in its portfolio to find a different start ups. that stock continuing to slide as the session gets underway. alibaba saying it will continue to evaluate this plan. it does intend to stay an agile company, we will get further reaction at the opening of hong kong and less than one hour. shery: very curious to see how they react to the comments. let's get to vonnie quinn it with first word headlines. vonnie: bloomberg has learned fbi seat may ask big lenders to pay extra to cover the cost of recent bank failures. our sources say it could be part of the agency's special assessment that will be announced in may. fdic's as it expects to pay close to 23 begin dollars to cover deposits in svb and signature.

a u.s. senate panel says credit suisse continues to help rich americans evade tax. the committee said the bank committed major violations in its we deal with the justice department. it also cited what may be an ongoing tax conspiracy involving almost $100 million in secret offshore accounts. credit suisse says it is cooperating with agencies to clear concerns. india as announced $109 billion of on sales for its fiscal first half hour plan as the global banking crisis drives yields lower. the government plans to send -- sell more 30 and 40 are papers. at the offering represents 50% of the record for your target. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. haidi: well the u.s. is currently listed with examples of what can break at a time of high interest rates and a looming recession, china may be entering a positive feedback loop where growth could surprise

to the upside. let's bring in sophia. we have been seeing china as a surprising source of low volatility over the past couple of weeks, but are we seeing that potentially translate into further upside? >> exactly, china has been somewhat of a stabilizing force amid really heightened global volatility. a lot of the focus has been on the property sector, of course. that is the key driver on the economy, and the fact that home sales and prices rose earlier than economists expected pains are rosier picture for the outlook. we know that consumer confidence is still quite low. that is the key challenge for policymakers going forward, but it does intend to lag a turnaround in the property sector. i think there is a lot of pessimism in the market right now. people are searching for bad news to justify a more bearish

macro outlook, and china -- let's not forget, it is the world's second-largest economy with the gdp target of 5%. most economists are saying it will be easy for china to beat that, and we are getting a more optimistic tone out of beijing. the premier pitching china as a place of foreign investment right now. he is also hosting foreign ceos and executives in beijing and saying, look, the short-term picture might be a bit complicated, the economy is still recovering, but be patient and take a long-term view. this has been a very difficult quarter for markets. there have been a lot of distractions, but the narrative is changing somewhat in china. shery: is that change also one of the reasons that you talked about how people are scouring for any bad news related to china now, given all of the optimism that we have had so

far? these hedge funds seem to be cutting some positions. >> hedge funds cut their bets on the reopening trade by about half, and they are positioned short of the tech space, which has been in a difficult trade given the bob that alibaba has given the space. this narrative is shifted to quite quickly, and hedge fund is fast money. let's see what happens in the second quarter, the first quarter as been all about rotation. you really have to chase the reopening trade, because it is fast, and people need to see more data to kind of justify the fact that china's economy is recovering. let's not forget march pmi, and when we got the data for february, that surprise so much on the upside and positioning was so bearish that we actually got a big rally in chinese markets. let's see if that gives people more evidence of how china abuzz

economy is doing, but investors are still very skeptical. we need more data not just from china inc. but also from the consumer really to show that people are willing to spend for the first time in about three years. alibaba really providing a boost to the tech space, because that also goes to show in the narrative, aging is turning a bit more business friendly, pro-entrepreneur and making the business environment a little bit easier for the private sector. that is another narrative that is shifting that could really boost confidence among investors as well. shery: bloomberg's chief china correspondent. we will get more insight into china with the earnings outlooks for china's megabanks this after profit growth beat estimates. fitch ratings joins us next. this is bloomberg.

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shery: a little bit of a mixed picture when it comes to stocks across asia despite the positive lead from wall street. the tech sector one of the big gainers on the msci asia map after the massive one 100 enter the bull market territory in the new york session, up more than 20% from its december low.

chinese tech stocks have gotten a boost recently given alibaba's new restructuring announcement. we will see how chinese tech stocks react at the open in china. we are watching earnings season in the country underway right now as well. haidi: the bank earnings season is in focus, and in particular him there has been turmoil for some lenders in the u.s. and europe. it has put struggling chinese lenders under new scrutiny. let's bring our next guest who says the difference between china and some of these other coming -- economies is the level of support from the government. with us is the head of greater china bank ratings at fitch ratings. we did see one bank as one of the examples of financial institutions that were allowed to fail and china. do you see regulators paying a lot more attention this time,

given what is going on overseas? >> if we look at what has happened within the china regulatory landscape since 2017, for example, there actually has been quite a lot of regulatory pushing forward and financial reform to address some of the contagion to risk. for example, we talked extensively at fitch about the risk was smaller chinese banks. whether it relates to off-balance-sheet exposure. at some point, it was possible 40% or 50% of their assets where it invested in investments. that would of course increase contagion to risk if there was stress within the financial system, but with the reduction in some of these off balance sheet and financing activities, we feel this risk is subsided

for china. also, more importantly we do see more examples of preemptive regulatory intervention from mainland authorities, and that also helps restore market confidence. haidi: we have seen some of these signs of potentially they are preparing for the possibility of needing bailouts, the financial stability fund, the encouraging of provincial governments on bond issuances to recapitalize smaller banks. how much of a turnaround is this given that there has been a growing focus on the importance of moral hazard, market discipline over the last few years? >> it is still relatively small. in the event of distress, we still expect the state to come in and provide support, and so far when we look at the competitive landscape in china

at the moment, indeed the smaller chinese banks are finding it increasingly difficult. whether it is because of asset quality pressure from properties, for example, these smaller banks tend to have a narrower geographical focus. for those that operate in lower tier cities that will be under greater asset pressure. that flows into capitalization. much of the recent changes with regards to the proposed new capital rules and also aiming to centralize some of the regulatory power, that is aimed to reduce consistency within the center. hoping to improve the comparability and also the supervision for all banks within the system. shery: you mentioned about more regulatory oversight recently coming from beijing. tell us a bit about how that has

impacted some of your views of the smaller lenders that we talked about and perhaps even the bigger ones. >> by and large, the banking system, commercial banks basically, it is a confidence model. you cannot have it banks functioning properly if people do not believe in the viability of the banks. and so i think a lot of the regulatory reform is really aimed at producing systematic contagion risk. it is aimed to improve governance and also transparency within the sector, and these trends if they prove to be sustainable, and if the execution of these reforms it in better disclosure, then that could be potentially credit positive to how we view the operating environment for chinese banks. shery: what will it take to get a good execution coming from the regional level, especially with

local officials having to do the job? >> that is part of what the financial reform, consolidating some of the regulatory powers. that is what the aim is is to try to reduce the level of influence on a more local, regional level, so you can have more comprehensive, more overriding approach in terms of regulating the banks to ensure that they are being regulated on a consistent basis, and that will allow the authorities to detect for risk, for example, at an earlier stage so they can take comprehensive measures if needed. shery: good to have you with us, grace. coming up next, group executives are said to meet with u.s. investors. we check in on how it events the negotiations are at whether there is any sign of a deal.

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haidi: sources are telling bloomberg that adani group executives have met u.s. investors including rock and pimco as part of plans. the companies are advanced in

negotiations. let's bring in our managing editor. about, what do we know about these talks and how they went in terms of interest appetite? >> they have been going on for some time. as soon as the hindenburg report, which has thrown a cat among the pigeons when it comes to the ambitions of the adani group, as an understatement. they have been going on since february, and what we understand is they are looking or aiming to do it in two tranches with a total of up to $2 billion? >> what are we expecting investor reaction to be? >> that will be an interesting thing. they will be a barometer into whether the firefighting and reputational repair at the adani group has been focusing on for the past couple of months in the

wake of the hindenburg bombshell, whether that has been successful and had impact. we will see potentially in the market for this. it will be a real litmus test for the group. haidi: does that mean we are potentially seeing the end, as you said the cat amongst the pigeons. we are seeing confident market trust adequately recover? >> i think that is a tough question. you only need to see the reaction in some of the adani stocks when there are reports of them having difficulties with funding as we did see this week, and you can see that the sentiment is still quite cautious of their, because as you can see adani unit selling off again whenever there is concern around their funding

abilities. the stability we might have been seeing over the past couple of weeks is very fragile, i would say. and if the adani group knows it. they are really raining in -- reining in their ambitions compared to last year when the world was their oyster. shery: our managing editor emma o'brien with the latest on adani. we are looking forward to the market opens in china as we just got the conference call by alibaba on its restructuring into six independent units. and i really am curious to see what the market reaction will be as we heard that this restructuring and reorganization is already underway. it seems really the ceo as well as the cfo had the best things to say about why they were trying to do this take a listen to daniel jan.

>> going forward, we will now have even more options to enhance shareholder value after the restructuring. as these business units become independent companies, as they potentially go ipo, there will be even more ways we can advance value for shareholders. shery: obviously that was toby xu, the cfo of alibaba, but i think the message was clear and similar. they really had trendy words like unleash productivity, acuity, responding faster to change, all really great things to say about what is to come as analysts kept asking about what will be different and what will stay the same. haidi: and lots of questions about the timeline, the governance. how do the governance of these six separate units come together? what is the pathway to ipo's or other path to market

potentially look like? what is the progress when it comes to the bigger ipo? they continue to assess market conditions and progress toward the hong kong ipo. but really beyond that, still a lot of questions from shareholders and a lot of people on that investor call that probably wanted to go longer for -- than 25 minutes. the board saying they will initially remain in control of the six units but will reduce its role for it to become more of an asset or capital backer. all of this coming at a time when we see that timing, jack ma reemerging into the spotlight in china as well, so many changes aloft. that is it for "bloomberg daybreak: asia." we will get a lot more on this top story at next. this is bloomberg. ♪ ever better.

david: this is, uh, my kitchen table, and it is also my filing system.