shery: you are watching daybreak: asia live from new york and sydney. haidi: we are counting you down to asia's major market opens. wall street higher after more u.s. data points to stronger economic growth and a possible fed because with treasury yields lower across the curve. country garden may default or go out of business after first-half loss of almost $7 billion. we will speak exclusively to the president of key nvidia partner quanto cloud technology about the future of the ai boom. shery: u.s. futures early in the asian session after stocks and bonds gained in new york. the s&p 500 surpassing the vardy 500 level -- 4500 level despite regional lenders under pressure today. the fed issued private warnings to some lenders. we are digesting eco-data. weaker than expected private payrolls.

not to mention a downgrade when it came to the second quarter gdp numbers in the u.s. and rick -- it's related inflation gauges. treasury yields fell again in today's session. there is speculation the fed might be able to pause on tightening. that led to more upside for tech mega caps being led higher by apple. wti oil prices, not much in the asian session after edging slightly higher in the new york session. u.s. stockpiles falling to the lowest level since december. haidi: breaking news when it comes to korea industrial production just crossing the bloomberg. we are seeing south korea's industrial output falling 8% year on year. because of contraction of 6% when it comes to the estimate. that was worse than expectations in july. we saw that revised 5.9 prevent contraction in -- 549% contraction in june as well.

industrial outlook month on month decline of 2% again. worse than estimates of a fall of 1% and extending the contraction of 1.5% we saw in june. the cyclical leading index is rising by 0.4 points, a little bit of acceleration in the previous month. we are also watching for south korean exports this month. they are expected to see a hit by china stalling recovery -- china stalling recovery and weaker demand for semiconductors playing into all this. let's look at how we are setting up when it comes to the start of trading across asia. major markets are coming online in the next hour or so. sydney futures look pretty muted at this point. kiwi stocks off by about 4%. more broadly some expectations of modest gains potentially following wall street a little higher as u.s. eco-reports .2 slowing growth. -- point two slowing growth on beds the fed is entering the tightening cycle and once make

setting their sudden moves. the big elephant in the room for this part of the world is where we go with the chinese economic recovery. it of course hinges on the real estate sector. shery: property developer country garden is posting how the record first-half loss and warning of a possible default on its debt. annabelle joins us with details. it's not a great outlook from the company. annabelle: no, not great if you look forward for the company or backwards. numbers for the first half. losses of nearly $7 billion. compare that to over one year ago for the company. seeing a profit of about $85 million. that properly reflects this deep -- that drop reflects the steep decline in chinese housing markets. even though revenue was higher for the period, we saw more losses with a drop in sales and impairment charges that started to rise as well. a lot of the projects of country

garden remain unfinished. what else was interesting in earnings was country garden as well admitting the rolet has played in creating the sorts of numbers because they say that against of the weaker macro environment they are essentially too slow to recognize key challenges and pivotal way. this development has been very reliant on low tier cities that felt a pullback in consumer demand. the bottom line, getting back to your question around outlook for the company, they are essentially saying there is a serious risk now at hand of default for the company of it continues -- if it continues to operate in the way it is today. haidi: they are coming up against a key debt deadline. annabelle: yes. it summoned and negotiations are going on between banks, bondholders, at country gardens. when you have this drop-off in housing sales and add that this is a developer that has also impeded access to the debt and equity markets like other developers, that it does really

make it very difficult to service its debt obligations. the note to you are referring to is a yuan denominated one effectively due september 4 this coming monday. country garden ask to delay the payment on the coupon with a 40 day grace peri andod asked to stretch the repayment of the principal worth more than $.5 billion into 2026. bondholders have until thursday night local time in beijing, 10:00 p.m. to vote on the proposal. so far we have seen pushback from bondholders because the vote was supposed end of last friday but country garden had to extend the deadline for the vote until today because so many people had been asking for their full repayment by the original deadline. that chart looking at the dollar bonds is really in very deeply distressed territory now around 10% at face value. it points to the level of financing risk and issues facing the developers. shery: the biggest fear now is

we might be seeing signs of contagion. what are we seeing in terms of the shadow banking sector around the potential bailout of one of china's biggest trust firms? annabelle: yes, this is the start, possibly, as you say, of a state led by out. it is a bloomberg scoop. we understand from our sources china asked two of its biggest financial firms to dig into the books of zhongrong trust, one of the biggest firms by asset size. this is also a company that stopped payments earlier this month on a lot of investment products that were due. the risk here building from zhon and anothergron closely linked firmg is we get started to see financial contagion coming across the financial sector that then raises the risk of financial or social instability because we saw small scale protests after john gro --zhongrong stopped making

payments. beijing asked for citic trust co. and ctb trusted dr. bright china construction bank to dig into the books of zhongrong. reading the tea leaves it's difficult to see what could result from their involvement. historically we had a similar investigation by citic in 2021 that led to a bailout worth around $6.6 billion for the bad debt manager. haidi: the pboc held up meetings with the property developers and promised funding help. if now we are seeing greater extensions of potential policy to support private firms getting more access to funding. we hear the pboc held a meeting. we knew it was happening this week. they are now drafting these primary guidelines when it comes to private businesses getting better access to funding as we

see this broad ramp up of the emphasis to boost economic growth. central bank leaders and officials from other watchdogs in china meeting with representatives from more than 10 banks including private companies, among them property developers and manufacturers wednesday according to local media reports. the pboc governor pledging to direct more financial resources to private companies. a small micro sized enterprises as well according to the state media newspaper securities times. so, we are hearing about a potential target when it comes to lending and how these funds may be provided. but, it's really the same problem when it comes to boosting evidence -- confidence, i should say, as opposed to just making liquidity available. shery: in a week where we will see more band-aid out of china -- the expectation is now for broad deterioration out of -- across the board when it comes to official pmi. the manufacturing pmi has been in contract and territory for the past four months and we are

expecting it to shrink at a faster rate even. even the nonmanufacturing gauge, the services gauge is expected to fall close to the contraction threshold of around 50. currently it's at 51.5. the fact remains that people are traveling. we had the summer holiday season. they are spending a little more. but it really does not affect the broader structural issues that chinese people are facing, especially, with a deepening housing slump. and of course, the property sector, as we discussed, it is so important for the broader economy. haidi: yes. it's a challenging time for foreign and international business investors with exposure to china. we saw, secretary gina raimondo stressing the need for predictable regulatory environments in china. she wrapped up a visit intended euro -- improve business ties. she described the trip as productive and says nothing good comes from a lack of communication or decoupling adding u.s. businesses want a

less arbitrary environment in china. secretary armando: i hear about unfairness, arbitrary decisions, lack of due process, rates on businesses that go unexplained, tens of millions of dollars of funds for reasons that are not clear. add, my point -- and, my point is action speaks louder than words. as long as that is happening on the ground, that makes it very risky for u.s. businesses to do business here. haidi: let's bring in bloomberg's senior editor alan wong from beijing. walk us through the key takeaways from raimondo's visit. alan: this is different from other commerce ministry visits in the past where you had a lot of things agreed on ahead of time. this time some people expected china to resume purchases to be

announced and that did not happen. that is besides the point. the point was really state relations. testing the tie between two countries. right now, there is a lot of concern about, especially, and unpredictable regulatory environment. that is something the u.s. wants to press upon china. allowing u.s. companies here, how china will navigate issues like charity, data transfers. you have to remember a lot of u.s. companies like micron, intel, have been affected recently by all of these unpredictable regulatory moves. that is one of the reasons why yesterday, at a foreign affairs meeting, you found them a bit defensive about the issue. they said, well, the m tram survey still shows 66% of u.s. businesses are planning to increasingly retain investors in china. this is a probable combination

between the two countries overall not a lot of deliverables. right now, they don't have full mechanisms for talks in the future over very tough issues. they have vice ministerial discussions twice a year and meetings between ministers once a year. that's a very good start. shery: it's been a very busy week for beijing in diplomatic meetings read the u.k. foreign secretary is in beijing looking to mend those ties. take a listen to what the foreign secretary told bloomberg about the purpose of his visit. secretary cleverly: this is my first trip to beijing, but i am having a continuation of meetings that i have had with senior representatives of the chinese government since i have become foreign secretary. this is about engaging directly with the chinese government, building lines of communication, addressing the areas where we have disagreements, and also, looking at opportunities to work

together on some of the major issues affecting both our countries and the world. whether that be climate change, the resolution of the war in ukraine. shery: how much did sec. cleverly achieve? allen: again, the bar is low. it is the first visit in five years. i think he basically took advantage of his window, the easing between u.s. and china, to come to china and he raised a lot of tough issues. shenyang, hong kong. issues, especially ukraine. he wanted china to tow the line in ukraine given the fact that bloomberg is reporting vladimir putin may be visiting china in october and we know the icc has an arrest warrant out under his name. so, it is an opportunity for the u.k. to show its pragmatism. we know rishi sunak has been

more pragmatic than his predecessor on china. just like the u.s., there is an opportunity now for the two countries to talk ahead of the u.s. presidential elections coming up next year. even in the u.k., you have to fall in line with the tories that don't want cleverly talking with china. you have the u.k. and china, whose economy is slowing. it is an opportunity to maybe do a little business. shery: annabellem --allen wan joining us from beijing. we discussed markets with the financial advisor for strategic wealth capital. this is bloomberg. t got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com ♪ (upbeat music) ♪

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haidi: a mixed picture into the thursday session with potentially gains being tracked. u.s. stocks gaining again on the narrative with softer u.s. data adding to expectations that perhaps the fed is towards the end of a tightening cycle, or at least, willing to wait and see. the picture across futures. sydney futures flat at the moment with a little upside. news even on the back foot by about .3%. chicago nikkei futures but pretty modest at this point.

south korean industrial production numbers came softer than expected haitians. -- and then expectations coming down to where chinese policymakers go from here in terms of incremental measures we have seen so far, marietta as they are, to support flagging growth in the chinese economy. s&p futures moderately higher at this point. equity futures for hong kong in positive territory as well. treasury yields, bond yields more broadly lower. that has helped to support equity sentiment. let's bring in adrianne yamaki, a founder and financial advisor at strategic world capital. how much do you buy into the fact we are now seeing a few data points that look interesting out of the u.s. and whether that will mean a softer approach by the fed going forward and whether it means we have seen the highs when it comes to bond yields threatening the equity rally? adrianne: it is still interesting because the yield curve is still inverted.

that means that we are buying a lot of t-bills because at about 5.5% for six months the yield pickup is quite good. because the yield curve has inverted, it is interesting that the duration right now, having an approach where you have a short term treasuries then actually getting yield pickup by going further out in duration, there is much less risky now than there was a couple years ago. so, we are taking a look at where the valuations, where they are -- there are distortions in the valuation of fixed income. we are certainly a lot closer to the end of the interest rate increases than a not. so, we are at a really unusual fixed income situation now. it's causing -- it is unusual. so, it does cause a lot of opportunities where we did not expected for example in duration.

haidi: opportunities in international equities versus the u.s. where you talk about valuation disconnect after more than a decade of gains for the equity markets there. do you think those value opportunities in asia internationally extended to china even as the economy remains such a bugbear for investors? adrianne: it's interesting. across international markets they behaved so differently. there are commonalities. look at the bigger macro picture. the commonalities like a strong u.s. dollar versus weakening. that does give tailwinds to international. for example, over the last eight months, the u.s. dollar has fallen. it has weekend that have to its peers. the euro, the yen. that is a benefit to international securities. when we look now at simple valuations and we take the u.s. dollar strength or weakness out

of the equation, earnings abroad and the valuations, the amount we would pay to have those public companies, they are trading at a steep discount to u.s. equities. right now the s&p is at about 18, almost 19 pe. it is about 12 to 13 times. shery: talking about valuations and at the gap we are seeing their, what about other develop markets -- developed markets ex u.s.? how do they compare? i ask because we are seeing a pickup of travel for example coming from china and the rest of asia. luxury goods spending as well. can we expect upside for these european luxury names? annabelle: -- adrianne: i was talking to somebody at lg mh. that's a huge conglomerate that is really global.

even though they are based in france, most of their revenue is x europe. even though the european consumer is fairly strong, we see it weakening in china and stronger in europe. that's interesting because of the portfolio of the companies of the brands. they have a lot of diversification across currencies, across markets. for example, the chinese consumer has been self-made. the european is fairly strong. the u.s., we still are spending the last of the covid savings we have, but still keeping afloat. so companies that do have a monopoly on certain brands, on certain key types of products, they will continue to do well for the foreseeable future. shery: following the latest headlines in the u.s. when it comes to banking regulation we continue to see the fed might be

privately warning these smaller banks to really be careful with liquidity. to really be prepared. when we have a fed that keeps rates higher for longer, potentially, what does it mean for the smaller lenders? will we see another march banking crisis? adrianne: great question. a lot of the regulations are still being developed. a lot of it is coming out because of silicon valley. as we see, when we think of the bigger picture about, what are these extra layers, the safety measures, the regulations? what are the requirements for holding the -- the holding requirements and leverage. that would affect smaller banks much much or strongly that it will the larger banks. in addition, smaller banks, smaller companies in general, as rates are high, they tended to

be more highly leveraged and intense at their bottom line. i don't know if the government is trying to put in place safety measures so we don't see what we saw in march of this year. that said, i think what will happen is the costs will be passed to consumers. and the banks will probably struggle unless they can adapt quickly. my guess is we will see some consolidation in the industry. shery: great to have you with us adrianne yamaki founder and strategic advisor at strategic was capital. there is more to come on daybreak asia. this is bloomberg. this is bloomberg.

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haidi: look at the stories breaking headlines. u.s. senate republican leader mitch mcconnell froze on wednesday after a reporter asked

about his possible reelection. the 81-year-old stopped and stared ahead for more than 30 seconds after the question before saying, ok. this is the second freezing smell from mcconnell after a similar incident back in july. some of singapore's biggest international banks have been embroiled in the largest money laundering cases. 10 foreigners have been arrest with funds involving over $1 billion worth of assets. they are tied to some of the individuals to banks like uob and dbs. much more to come here on "daybreak asia". this is bloomberg. ♪

annabelle: this is "daybreak asia".

last day of the trading month for august here with a lot of focus over the past few weeks being on china stocks because we've seen that selloff and in response, the measures that have come through from beijing to bring stability into the markets it seems like cutting stamp tax on stock trades. these are factors to try to bring investors back into the market. what's interesting is that over the course of this week the csi 300 gained around 2%, so it's best result on a weekly basis so far since july. but when you look at what foreigners have been doing, we continue to see outflows from the markets on the northbound channel is on track for record outflows for the month of august. southbound is a different story. we see eight straight days of china fund's buying into hong

kong stocks. it does tell us that perhaps there is that sense of stability coming into the market from this perspective, let's look at the names that china funds are buying up. may swan, china mobile, these are all the top three names that have been heavily bought over the past three weeks. it really is about that sense of trying to bring calm back into the market given there are just so many macro risks that are still on the rise. shery: risks to this $60 trillion financial system in china to the persistent property issues. country garden teetering on the brink of default and the risk from the property turmoil now spreading. that's discuss this with head of china and hong kong research at cgs imb securities. great to have you with us, we have seen the new policy makers come up with a slew of measures in the way to simulate demand in order to help developers. what are some of the measures

that might make a difference? >> i think it's around the help, but i think we need to see more. they tried to loosen the home purchase restriction, but i think it is because it is in china. people expect prices to go up further, so they hesitate to buy the property now. i would say, we need to see more from the policymaker. shery: so you don't expect the cuts that are likely for those existing mortgage rates that won't necessarily help sentiment, and what could? >> a little bit, but, as i said, the homebuyer, they are quite

cautious about the outlook, and their income market since the last year. also, a lot of people have the liquidity problem. from a policy perspective, they need to solve the problem first. they still are likely. and also, the added price like evergrande. [standby] haidi: this question is becoming a real one.

if you look at bloomberg economics numbers you see 4.2 trillion yuan bank loan within a year. even if some of those are extended or all are extended, there still a significant funding gap. so what happens there if we expect the fundraiser is still going to be difficult? do we see the government finally stepping in? >> ok, i think given the existing situation, the government must move. we would see it in more of the so-called good developer. so i think, in my view, in order to solve this policy, they need to step in and provide 2 trillion of the funds to solve the problem.

haidi: if there are government steps or some sort of shared responsibility framework, what would they look like? are there hits to equity, potentially a mix of all those things, a fiscal burden being taken on by governments? >> so far, we haven't seen that much. so that could be the solution, the central government or the local government are those helping to actually solve the problem. so far we haven't seen that many cases and we haven't seen any success case so far. shery: even those developers that have been backed by a local state owned firm, they are starting to feel the pressure as well. are we going to see more signs of contagion now that also that shadow banking sector seems to be seeing some flareups?

>> yes, i think china bank, they are one of the top ones in china. they also said there is the overall operation. so, this also illustrates the situation of the property market. i think the current situation is really for the whole center. in my view, policymakers really need to have some immersion to help reset it. you know there is the measure but it's just not good enough. shery: will beijing be able to

achieve it's about 5% growth target for this year? >> if it's problematic in the current situation, it will be able to deteriorate from here. haidi: head of china and hong kong research at cmi be securities. more to come here on "daybreak asia". this is bloomberg. ♪

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shery: bloomberg has learned that u.s. prosecutors are looking into whether tesla's plan to purchase hard to get construction materials was inappropriate use of company funds. lou burke su keenan joins us now with the latest. it looks like one of elon musk's top lieutenants is under scrutiny? su: a key lieutenant is the focus of the request for information that we are hearing is now coming from the u.s. prosecutors in the form of various subpoenas. the focus is on the key lieutenant in the individual at the center of an internal tesla probe into these issues that begin earlier last year. sources tell us that subpoenas were sent to current and former tesla employees in recent weeks and the focus appears to be on a

2022 purchasing order for a special and unusual kind of glass. in fact, it was flagged internally by tesla's auditing and became an internal focus. and now, we are told, wall street journal reporting for us, not only the department of justice but the sec is investigating this secret glasshouse project, which wall street journal sources say was known as project 42. the glasshouse is reported to be scheduled to be will near austin and the question was this a glasshouse that was being built for elon musk. there are board members that are interested in this inquiry. some of those who got subpoenas close to the matter have been asked to testify in a new york court as early as next month, that would be september, we are also told that the focus is on correspondence to and from musk,

and that also prosecutors are taking a close look at a former employee who was the director of tesla's factory, engineering and construction. all very interesting developments. haidi: there appears to be an early-stage investigation? su: we like to point out when there's request for information, u.s. prosecutors may be looking at certain things, it doesn't necessarily result in either criminal or civil action. they don't really have enough basis to move forward at this point, but what's interesting is you have oath agencies taking a close look. of course the issue that would be here is whether a company, publicly traded companies funds were being used to build a house for a private individual and that is the question that is still open. haidi: bloomberg su keenan with the latest. let's look at the other tech

stories we are watching. apple is testing the use of 3d printers to produce the steel base used by some of its upcoming smart watches. bloomberg's sources telling us that it will save time and help the environment as well as the approach has the potential to streamline apple supply chain, and if that happens, we are told the tech giant could expand the process to more products over the years. the world's top tech companies have applied for state aid to make laptops in india under the $2 billion incentive plan, companies are entitled to cashback of almost 5% of the factory prices or finished products. the move comes after india announced plans to impose the requirement for tech imports from november. china is do to approve the first batch of generative ai surfaces for public rollout as soon as this week. the sources say this saudi space regulator will give the green light to a handful of firms, including baidu.

the chinese firms that its chatgpt rival will be released to the public on thursday. shery: the ai computing boom has supercharged nvidia and it's taiwan's based partner. the partnership started long before this ai wave when the two worked together to develop server product back in 2015. that collaboration sparked this viral moment at a tech expo in taipei when jensen long on -- offered his signature leather jacket to qtc president mike young. bloomberg's yvonne man spoke exclusively to him and asked him why he thinks the ai boom can last. >> it was just one year, everything came out. so i do believe this is really -- in the flesh. it's going to maintain and you

will see it's keeping stronger and stronger for the upcoming years. yvonne: how much is qtc's revenue related to ai and how do you see that percentage of growth trend in the next few years? rights for the second half of this year, i think our shares of tpu, among my division, that will be somewhere around maybe 65% from a revenue point of view. and i'm expecting next year, the share will come up. this second half, due to the shortage of gpu's, because tsmc's capacity constrained and also the packaging kobolds constraint. i think we have a very much limited supply, but next year, i think nvidia will solve everything.

if you are talking about only just the gpu, that will be a couple of times of growth. yvonne: how many times, can you put a number on it? >> at least twice or three. yvonne: are you getting more visibility on supply now? >> this is actually very difficult to create. but basically, what i can see is that the demand is quite strong, and the supply chain is actually not only just for the gpu's, but also like a power supply, pcb. and also like the thermal module changes. all kinds of supply chain. i think they easily could increase their capacity and the production. so, i believe everybody actually

works on the same direction, and hopefully next year will be better. yvonne: geopolitics is a big part of that. how do you see the tensions between u.s. and china impacting how qtc manages your supply chains? >> we always have an expansion plan because we also tried to de-risk our investment. for example, we have a big operation based in shanghai, and we also have a big operation based here in taiwan. two years ago we also started working on the taiwan factories. yvonne: do you think it's possible for supply chains to shift largely away from china? is there any alternative to a market like china? >> frankly speaking i still believe china is the biggest market. so, moving on outside of china may be one thing.

china's economy will be back. so i do believe people will still focus on both. one in china, maybe the rest of the world. haidi: the qtc president with bloomberg's yvonne man. we do have much more to come on "daybreak asia". this is bloomberg. ♪ ♪

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shery: take a look at how we are setting up in the asian session after we saw broad gains throughout the week with the risk on sentiment on moderating economic data here in the u.s. with expectations of the fed might be a bill to pause in september. you are looking at kiwi stocks falling 42nd session today. we are talking about the lower levels in more than a week. this after we psaki we downside for the kiwi dollar for the past two weeks already. when it comes to the asx 200 futures, broadly unchanged after we gained ground to the highest level since mid august. we are also watching nikkei futures, which have shown a little more upside of three cents of 1%. we had u.s. stocks and bonds rising again. so perhaps a little bit of tailwind coming from that in the japanese yen is also still pass that 146 level, despite the fact

that we are seeing a little bit of dollar weakness. of course. haidi, we do have breaking news out of japan. haidi: yes, we do. we have some of these industrial production as well as retail sales numbers coming through. retail sales rising 6.8% year on year. that's actually stronger than expectations of 5.5%. on a month on month basis we see a gain of 2.1 percent, that's beating expectations, which is 8/10 of 1%. industrial output is a little bit more lackluster. we see a contraction of 2.5% on the year. that's worse with expectations of a contraction of 1.4%. the output numbers for august, september rising 2.6% in 2.64%. that's consecutively. overall, that is a brighter picture when it comes to what we would potentially see in the momentum of economic growth.

of course that is fitting into the continued reflation effort in japan. this comes as we heard from one of the boj's -- and winding what is remaining of the stimulus, indicating that the boj might turn its 2% inflation goal by early next year. of course that could potential he pave the way for an interest rate increase, that's according to -- really interesting when it comes to what we see with your band, countercyclical when you see what's going on the other central banks around the world. potentially if we see the data continuing to come in stronger-than-expected. we might be closer to that boj policy winding than we think. shery: which is why investors are cautious about the way the japanese yen goes despite the fact that we see this weakness of around 146. but of course we are following what's happening around china. plenty of eco-data earnings out of the country. the weakness in chinese brokerage shares has continued

despite china's recent efforts to boost its capital markets. for more on this let's bring in our asia stocks reporter. why are we seeing this weakness in these brokerages and how alarming is it? john: good morning. the weakness in chinese brokerage shares is quite surprising to a lot of market watchers because it's supposed to benefit the most directly, and the potential increase in trading volume at the potential boost through their earnings and not attracting investors back to the sector. since chinese brokerages see the movement for onshore trading, this is telling at it shows us how the broader sentiment is in the offshore market right now. haidi: there are a lot of broader concerns prevailing when it comes to market sentiment at the moment. >> for one, there are ongoing

concerns about whether the policies rode out by chinese -- can help investor confidence. we have country garden just reported a record first-half loss. so you know, this is really showing the funding issues and the slowing home sales that are ongoing. we also have this unfolding crisis at the shadow banking sectors, all of that is really harming investor confidence, and we have foreigners poised for onshore shells -- shares at a record pace this month. whether there are more forceful measures coming out of china to restore investor confidence. haidi: our asia stocks reporter looking at some of the remaining challenges for investors looking into china exposure. have a look at the stocks we are watching in korea, japan and

australia. companies may gain after north korea testfired to ballistic missiles. watching the usual names. hyundai, elevator, all of those things that will be in focus. auto is in focus with production rising 10% last month with the july record that's more than 918,000 vehicles on the back of robust demand and further easing of pandemic related disruptions. shares could see some downward pressure, giving the expected sales forecast. and, fruit and vegetable wholesaler with a net income of 26 million australian dollars. that's down 32% from one year earlier. shery: we are headed towards the australia open and we are following the stock markets at the highest level. three sessions of gains as we saw that risk on sentiment spread across asia. the aussie dollar be steady at

the moment at that 64 79 u.s. cents level. and at the same time we are watching yields because of course we have seen treasury yields continuing to decline this week on moderating economic data. coming up in the next hour, we will talk market strategy with j.p. morgan, who remains bullish on the ai stocks. plus, you read key joining us to preview china's pmi numbers, which they say are worsening in august, with services the sole spot. the market opens in sydney, seoul and tokyo are next. this is bloomberg. ♪

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shery: this is "daybreak asia", counting down to asia's major market open after u.s. stocks and bonds rose again in the new york session. investors adjusting some u.s. economic data showing more moderation of fear, but investors across asia have plenty of asian data tonight just as well. haidi: so much of that focus on china. these pmi numbers with expectations of stimulus measures from policymakers as the focus continues when it comes to the property sector. i -- a lot for investors to be worried about. annabelle: absolutely. country garden is one of those things we will watch at the open of the markets. we've got the start of trading for japan, south korea -- really at the start of trading for cash treasuries. as you say, in the session on wall street, there's that story of bad news becoming good news for stock investors because we saw the u.s. second-quarter gdp revised down to 2.1 percent from

2.4%, and then we also had the adp jobs report adding fewer than expected rolls over the course of august. though this is really just reinforcing speculation for us that the fed is near the end of its signing cycle. and we saw treasury yields edging lower. you can see that 10 year yield coming online fairly steady, but the dollar in focus, a little bit mixed against its g10 peers, but certainly the yen has been under pressure and we are back above that 146 as we get into the end of august, the last day of the trading month. the strength we see in japanese equities and bond markets over the past few weeks is certainly also been a rebalancing pressure focus because asset managers in japan have been forced to redo their portfolios to meet stringent allocation rules is one of the factors as being cited as leading to yen weakness. still in japan, eco-data is what we just had, industrial output coming in for the month of july down 2% on the month. that's versus the estimates of

one point 4% contraction even though retail sales are holding up a little bit better. let's take a look at what's happening in korea at the start of trading because eco-data is in focus. we had industrial production down 8% on the year in july. so the second straight month for south korea certainly was not expected by economist but flagging and raising concern about the growth outlook, and that really does make the balancing act for the be ok even more difficult in terms of direction for stocks but coming online fairly steady. investors waiting for that other big data point. you just mentioned that, this is the china pmi data that is due out at about one and a half hours from now. essentially we are expecting to see slipping pmi's across the board. bloomberg economics team more bearish than the consensus. still expected to be under that key 50 level. this take a look at ausdrill you

as well, in the session today, we got brent crude coming online a little bit higher, china data numbers are going to be closely tracked by oil traders, keeping out focus on u.s. stock aisles. it does seem that traders are taking those in shrine. in terms of the outlook for stocks. the asx 200 coming out fairly flat. we are rounded two-week high for the index. tracking particular focus, qantas online in a couple of minutes with a staggered start, but has been sued for allegedly selling seats on canceled flights. no gray outlook for the airline. it has been under a lot of public pressure. shery: let's bring in asia equity strategist at j.p. morgan, great to have you with us, we were just talking about all of these eco-data points that investors have to digest today. what are the biggest drivers this point in asian markets? >> when you think about markets

in asia, our framing for most of this year has been the combination of what's happening in the u.s. micro cycle, what's happening in the chinese macro cycle, and there's the ongoing ai bubble. you think about it, the u.s. macro cycle is very much in inflation driven cycle, so we are much more focused on what happens with inflation then to what happens with growth. you see this and bond equity curve relations being very much more positive at this point. on the other hand, the chinese cycle has been a growth driven cycle. the bond equity correlation. they have been upsetting staring at different ways and we have been trying to time both of these cycles and we will probably continue to do that over the rest of the year and try to figure out where the market goes. that space is approving some of their own models for the coming days. we will probably get some further steam ahead. shery: let's delve into the

china macro cycle because there are so many concerns right now in different facets of the chinese economy. we know that of course the housing some continues, but i keep hearing more and more analysts talk about not just a cyclical slowdown but a structural issue in china. how big of a risk is this? >> i think you hit it very much on the head because what happens is that in a cyclical downturn, it just becomes a lot easier to underestimate -- or overestimate the structure of slowdown. that is what people are doing up this point. you think about the chinese economy, obviously there are a lot of challenges, and these are not unexpected. people have been worrying about many of these challenges for a while. i guess the big one in the recent years has been policy uncertainty. from a business perspective, if you are not very sure of how the roots are going to be over the next five to 10 years, you are going to invest your own capital

in your own time trying to play that game. that has been one big source of uncertainty for the chinese economy and that's why from a corporate confidence inspected, that has been lacking. in terms of property, debt and demographics, all of these have solutions which don't need to be systemically problematic. so, from a long-term perspective, as long as you are able to solve this proper confidence issue, and maybe we need further commitments from the government on this front, i think it could be better than what most people are fearing right now. haidi: it's interesting you talk about the interest rate recession versus the balance sheet recession. doesn't run the risk of becoming last, particularly if we see, in a number of these cases, the government having to take that onto their balance sheet? >> i think the biggest difference when you compare with japan, for instance, the biggest

difference in china right now is that you are not see the triple top in equity prices, home prices and in leverage. if there ever was a problem in chinese equity, it was probably in 2007 where at most, 2015. the leverage peaked in 2015 and has been falling ever since if you look at the credit gaps. and then the other housing prices. housing prices are stabilizing, it's not really collapsing the same way that it did in japan. what this means is that households in china are not forced to deleverage the way that it was in japan because much of the borrowing was collateralized by these asset values and asset values were falling so you are forced to deleverage. the spending is low that it's not because people have been forced to deleverage, it's because there is no confidence in people are just saving rather

than spending at this point. again, if you are able to solve these confidence issues and that brings more jobs into the pictures, a lot of these problems start to solve themselves without necessarily having to go down the path of debt deflation or a balance sheet recession. haidi: the confidence in the risk of that, disinflationary mindset sticking is a big one. but if you look at the other end of the spectrum, where are you finding good alternatives when it comes to china? india not lacking any investor confidence. >> absolutely. india, if you look at equity market performance, ethics performance flows into the markets, or even economic revisions, india's correlation were china has been falling since 2012 and continues to go more and more negative. at this point the correlations on all of these fronts between india and china is very much

negative. like you said, india is on the opposite end of the spectrum in terms of consumer confidence, business confidence and investor confidence in terms of putting money to work in the indian market. the only challenge investors bring to us is that they are already overweight in india, and the only sector that looks like something that they could borrow at reasonable valuations, which is the banks and it's already massively overweight the banks. maybe you have see some of these moves in the smaller, mid-cap space in india, which is been growing, and so we could see some diversification back into the larger caps. but other than that, the main challenge for investors in india is really what to buy. shery: let's talk about that other leg of the asian markets which is the ai bubble that you mention. who and where can we find the biggest winners? >> i think that the obvious beneficiaries are the ai

ecosystem, which includes the semiconductors, the servers, the networking equipment, the model providers, the application providers, all of these things are direct and officiate. i think you can have security in there as well. surely the need would increase over there. but i think what is still underappreciated is how much the rest of the economy or the rest of the corporate sector could see improvement by adopting these ai applications and models in terms of -- basically where generate if ai does, it makes it much more easier and cheaper to generate conversation, code and content and all of these things can be used by many sectors in the economy to kind of reduce the cost and improve their margins. that's the area that we think that investors have overlooked. and perhaps rightly because many of these benefits will take time, but that's where we will

see the next move higher in terms of the ai impact. haidi: always great to chat with you. a look at the movers. and of course, this reputational hit that we see for qantas continuing. annabelle: we had good earnings out of the company earlier this weaker end of last week. it's the reputational risk in the pmi continues to add up in this morning it's being sued with its australia flagship. allegedly for selling tickets for thousands of flights that have already canceled. this relates to more than 8000 scheduled flights that were supposed to take place between may and july of last year. the claim is that qantas kept selling tickets on its website for an average of more than two weeks, and in some cases, for more than a month after services were scrapped.

australians composition watchdog is behind the allegation and its proceedings and the federal court against the airline. amongst the orders that is seeking it includes penalties, injunctions, declarations and costs. you can see sliding as we get trading underway. the take a look at another sector and focus this morning. this is one that we haven't focused on too much over the last few weeks, but essentially tracking cannabis stocks in australia because we got u.s. health officials now recommending to reduce restrictions on marijuana, and that could boost optimism for the sector so the u.s. drug enforcement agency says it's going to review its classification of cannabis following that letter from health officials to loosen their rules and the push to reclassify marijuana could help reinvigorate the embattled cannabis industry. some of the stocks already climbing and watch those other names as they come underway. let's take a look at defense-related companies in asia, there likewise, moving a

little bit to the upside this morning, but we did see this after north korea testfired two suspected ballistic missiles. this was a week after a failed to put a spy satellite into orbit. south korea says that the missiles were fired towards the east of its peninsula. we've also had japan local media coming out and saying the missiles appear to have fallen outside of japan's exclusive economic zone. we are just seeing some of those stocks moving a little higher as we get underway. shery: you bp you joining us to preview china's pmi data, which may see worsening across the board in august, with services in a bright spot. much more ahead. this is bloomberg. ♪ ♪ (upbeat music) ♪ ( ♪♪ ) woah. ( ♪♪ ) ( ♪♪ ) ( ♪♪ )

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haidi: chinese property developer country garden had a record first-half loss on a possible default on its debt. this get from our shanghai bureau chief. what is this mean for investors and creditors? charlie: it's a record, but it's nothing surprising, given the company has issues a week ago. it's mainly caused by asset

compartment and a sharp drop in prices. what's worth more noting is the company's warning that it may not be able to continue asset concerns -- it may not continue growing concerns because of uncertainty. in the company may not be -- if the performance continues to deteriorate, it may not be able to meet the financial obligation. the company is china's largest developer by a number of projects, and it is this sixth-largest developer by sales. that's a total of $35 billion debts, including $15 billion maturing this year. so, it's facing a lot of payment pressure, and what we are hearing is the company is trying to currently extend the payment

for 3.9 billion yuan bond. it's in negotiation with its creditors at the same time the company is facing the end of a grace time for a dollar bond coupon next week. so the company is facing short-term liquidity pressure. on the credit and equities market, investors have chosen to dump its securities, including stocks and bonds. stocks are penny stock down 67% from its recent high and its dollar bond trading at slightly over 10 sent the dollar. it's very seriously distressed level. shery: we are starting to lose count of all of the measures account by beijing in order to help these developers to support demand, stimulate purchases in the property sector, how are all of these measures going?

charlie: the policymakers are just trying to prop up the market, prevented from collapsing. so, they have all kinds of policies, including lower threshold for homebuyers, also cutting -- it's reported recently, the cutting of mortgage rate for borrowers making houses more affordable. but the key thing is, investor buyers confidence if people are not expecting home prices to rise, and if they are expecting their income to grow in the future, and they are not expected to spend big time on houses. and as you may have noticed, recently, based on the numbers of developer sales, for example,

people are not buying sales declining, despite all the measures. besides their confidence issue, the supply is also a huge problem. china has like 27 trillion yuan worth of excessive inventory by goldman sachs in the recent report, and a lot of them are unfinished projects. there's a huge supply overhead. shery: the latest on the property sector in china. the pboc also drafting policies to give private businesses better access to funding as authorities or ramp up to boost broader economic growth, china economy joins us with the latest. how meaningful with this move be by the pboc? jill: i think that this move is just the latest in a drumbeat of measures in pboc and

policymakers are trying to roll out this economy. i think what's meaningful is that this is preliminary policies. the fact that the pboc met with manufacturers, property developers, this is the second time in august that the pboc has really met with companies, and trying to talk them them about what their finance needs are, how they can make that happen. of these measures, what we know is it seems like the central bank is trying to make financial institutions set targets for how much they are actually serving private companies, so that's one tangible measure coming out of this announcement from yesterday. but ultimately, that's not a giant fix it for boosting the demand issue that we ultimately have here. we've got this ultimate crisis of confidence, avenue got this lack of sentiment within the economy just drafting rules that are going to tell financial institutions doesn't

automatically fix everything. but the latest measure feels like we have something every day coming out telling us that policymakers are aware of the slowdown from the economy and this is the way they are trying to fix it, falling short of any kind of massive stimulus measures. haidi: seeing signals every day in the data. pmi's today, we expect to see across-the-board deterioration continue? >> at this point we expect headline manufacturing pmi gauge that will be a contraction for several months. that's the bloomberg economist consensus. more interesting is this nonmanufacturing gauge. that confines the construction and the services sector. services has been a bright spot of the economy with people expecting spending money on going out. they aren't spinning on goods. i think what we want to look for in there is any kind of

deterioration. that's the underlying gauge that we want to see if there's a more significant traction. so we will have to see what's to come. haidi: china economy entity it -- editor. we have much more to come on "daybreak asia". this is bloomberg. ♪ ys making me look great. for taking care of the shopping... so i can take care of this. i'd like to thank my stylist, now getting dressed is so easy. thanks for getting my fit just right. for finding me looks that work for me and my budget. for finding me my favorite pair of jeans. i'd like to thank stitch fix because, i look good. thanks stitch fix, you just get me. -they get me. -you just get me. and they'll get you, too. take your style quiz today.

shery: some of the biggest local and international banks and singapore are becoming embroiled in one of the city's largest money laundering cases. let's bring in our correspondent. what more do we know about this case? >> according to our colleagues at bloomberg news, these 10 individuals charged held money with banks, including city and our and uob. they allegedly tried to defraud

banks including standard charter and cimb, forging documents. the total amount of money that they held in assets runs up to 740 million dollars, and these individuals use that money to buy everything from luxury cars towed golf memberships, also upper scale luxury condos. it really shines a light on the amount of money that has been brought in for these illicit money flows. haidi: what are the implications for banks and reputational he for singapore? >> the singapore government right now is asking documents from at least 10 financial institutions. the issue at hand right now is this case raises the question whether there was enough guardrails against money laundering, and also illicit money flows into the important financial hub, and also, what

was the role that all of these players, including banks and also property real estate agents, traders, and also luxury golf clubs, what was the role that they played in enabling this to happen? haidi: let's get you up-to-date with some of the other stories globally we are following. drone attacks have hit multiple parts of russia. ukraine's counter of fists -- offensive gets underway. for military planes were damaged. russian air defenses claim they shot down drones and other regions including near moscow. it comes as the ukraine -- ukraine k came under an aerial assault. two people were killed in kyiv and dozens of russian -- were shot down overnight. two suspected ballistic missiles a week after the satellite failed for the second time in three months. they were fired off the east of the peninsula and they look to have landed outside of japan's exclusive economic zone.

the u.s. and south korea kick off joint military drills to move that pyongyang called a prelude to an invasion. mitch mcconnell froze on wednesday after a reporter still asked about his possible reelection. the 81-year-old stopped and stared ahead for more than 30 seconds after question before saying ok. this is the second such freezing spell from a, laughter is similar incident back in july. age has become an issue in the u.s. election campaign with some critics calling president biden to old to serve another term. to ol(announcer)another term. enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy. release works with your body, not against it,

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annabelle: this is "daybreak asia".

i have a check on markets. 30 minutes into the session for sydney, solon tokyo. we are focused on the eco-data kicking off with what happened in the u.s. overnight because we saw that gdp data that was revised down from the second quarter to two point 1%, previously at 2.4%. adp jobs numbers showing fewer than expected rolls over the course of august. all of this points broadly to the fed nearing the end of its dining cycle, and really reinforcing that consensusbuilding over the past couple of weeks. that is leaning to moves in the bond space and we continue to see that retreat in yields led by the front end of the curve. we are also watching a mix dollar in the g10 space but for equities, it is certainly boosting the outlook. we seen the nikkei rising for tens of 1%. otherwise, we also have economic data in focus in asia as well. japan, we had industrial production numbers out for the month of july, showing outward, slipping 2% on the month that was more than had been expected.

korea we had industrial data as well. again, much weaker than had been expected with a contraction of 8% on the year. certainly complicating the outlook for the be ok. otherwise, the focus of what's happening in china. we have emi numbers in at the hours ahead. we are expecting to see further weakening across-the-board for manufacturing and the services sector, even though we did see more robust spending on the tourism over the summer months. but concerns for the manufacturing sector. changing on. earnings in focus, we have nearly 96% of the msci china index so far reporting the broad consensus. yes we've had names beating and that's being felt in the tech sector. but now stocks era disappointing investors. haidi: disappointing, also when it comes the chinese economic outlook. but tonight that -- despite that, the path of the economy might be back on track for a

rebound. this is of course the live real-time data that we look at. they managing director from earlier. >> i think and all the doom and gloom going on right now, markets are overlooking the fact that if you look at chinese consumer spending towards the travel and leisure sector towards dining out component, that's actually continuing on a pretty strong trajectory all summer long. you even starting to see some amounts of improvement. haidi: let's bring in the seeing asia economists. great to have you with us. i actually was a little bit surprised at the findings because they were overall much more optimistic and seems to suggest that this was a market sentiment issue and that they were seeing a recovery across -- in a pretty broad-based away. are you that optimistic that we are going to see up turnaround based on the patchwork of measures that we've seen from policymakers?

>> i do agree with china beige book that there has been negative sentiment building up of the summer and the market is pricing in a moment for china. and that is not the most likely scenario in this case, it is true that we are seeing double-digit expansion in a few key areas, including hospitality with catering sources increasing by 60%. we see over 100% year on year for rail travel, and we also see double-digit expansion in key manufacturing sectors like solar pv, ev's. in other core technologies. it is not all doom and gloom. there are some areas that are still expanding. not enough to offset overall declines in the property sector, that is a huge sector accounting for 25% of gdp, but enough to justify this view that it is not all doom and gloom, we will see

recovery and activity towards the trend around four by 5% growth, it's not an overheating or a massive rebound, but we do expect that all the measures announced in the past week will start to translate to a broadening of the economic recovery, away from services and towards other areas of the economy as well. given the new nature of these measures, it will take longer than investors are hoping for, but it will happen, nonetheless. haidi: one of the measures announced this week was mortgage rate cuts. to what extent does that meaningfully free up household financing and therefore contribute to consumption sentiment and the property sector continue to be the biggest driver households? especially if homeowners have to contend with potentially lower prices. >> that is a really great question. i think you hit the nail on the head.

the move to lower mortgage rates on existing mortgages prior to this move, existing mortgages were only adjusted at the beginning of the year until they cut rates halfway through the year. those households would've had to wait for the next year in order to benefit from the nor -- from the more favorable financing terms. the move doesn't really do much in terms of promoting demand for houses or helping this sector, but the move does improve the monetary policy transmission, and as you mentioned, it does free up extra disposable income to shore up domestic consumption. it is not going to address all of the problems that are afflicting chinese domestic sentiment, but it is a step in the right direction and we will continue to see more similar measures in the months ahead. i think there's another interesting thing for monetary policy. that is the fact that they are

working on improving the transmission means they are gearing up to delivering figure rate cuts in the fourth quarter of this year. that is something to also keep in mind. haidi: do you think direct household payments will be more effective and necessary? >> if they were able to to catch hands outs, it would help with sentiment. if they are able to test the entire population of 1.4 billion twice a day within 40 eight hours, that it should be relatively easy for them to deliver a cash handout. people would be cooperative with that effort as opposed to testing. there seems to be another issue that is holding them back, potentially fiscal room or concerns that they would stoke inflation too much or perhaps it's ideological. but what we are seeing is they're doing something similar through taxation. they government is not receiving tax revenues from things like ev's. they will extend those tax cuts

to other areas of consumer spending and that is in direct transfer of financing from the central government to households so we are seeing a little bit of that period on the eve week -- ev friend it's 1.3% of gdp. it's bigger than what the u.s. is currently doing on ev's, but we think they need to be more generous and in the hypothetical scenario that they'd did do cash handouts, it would help tremendously with domestic sentiment. but i think it's unlikely that they will do that. shery: or we continue to see this weakness in factory numbers, but it's interesting that in india, the manufacturing out performers might help those latest gdp numbers, what are you expecting? >> correct, overall we are seeing weak export numbers coming out of asia. all of that is linked to a shift

in consumption away from goods and toward services. we see a very clearly in the u.s., but that is affecting some of the traditional powerhouses in asia. india sticks out because they are benefiting from insuring trends. they are benefiting from infrastructure spending. and in the second year there are benefiting from lower commodities, lower energy prices. so that is one of the factors that will drive an upside surprise to the indian gdp numbers this week. indian equities have been doing well but they have been lagging other asian markets around south korea and japan. so would be interesting to see if it's meaningful enough to actually turn this around and lead to an outperformance in india equities in the second half, something to keep in mind as well for today. shery: senior asia economist at uvp. thank you for joining us. we have an alert coming from mexico. we are getting confirmation that

mexico center -- senator will get the opposition presidential nomination coming from the pri president, now speaking in a webcast saying that the pri party supports his presidential nomination. the election is not to take place until next june. so we have seen a bit of caution when it comes to her a competing candidate to abide by campaign roles but this is now coming days before the president announced its own likely candidate later next week, now the mexican senator is now getting the opposition. haidi: coming up coming here why the king video partner believes the ai frenzy is far from being over. our exclusive with the president is next. this is bloomberg. ♪

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shery: we are close to the end of china's earnings season. 96% of companies have now had results with four out of 10 missing estimates. material and health care firms with the biggest downside. china's big three state-owned airlines reporting net losses in

the first half. this bring in our asia reporter. where these earnings affecting the economy in china and the broader of these businesses? >> it came out when china was close for a significant time. the country's biggest carrier operating 900 aircraft the same for china, which is a country -- when you look at china eastern, they saw their net losses on the quarter double. it's a bit of a mixed picture when you look at the net loss performance, but we are looking out for green shoots, as it were, because they have been relying heavily on the profit center as it were, and we see

how it would shift internationally with capacity still down compared to pre-covid levels. haidi: was there anything surprising to you from these numbers and anything else we should be keeping? >> absolutely, what we did actually see was quarter revenue actually reaching the parable to pre-covid. it's an encouraging sign, as are seen, many people are paying more to travel at the moment, so it's more expensive and the airlines are benefiting. we have losses overall for them with 200 billion yuan. so it's quite a high watermark. we look going forward, we are looking to see how these airlines are going to perform in the next couple of quarters around the week chinese economy with a we consumer sentiment. that is activity particularly

around the property. there is also a little bit of excitement with china's big three airlines and across the industry, potentially about to take it off the boeing 737 max for the first time in four and a half years. that would be in encouraging sign, but at least for them they will be spending money again, and when they are losing money, not ideal. we are looking out more for chinese has to say in the investor briefing later. haidi: bloomberg's asia transport reporter. federal warning -- earnings reports out of china saying that first-half profits found 19%, even developers with some government support are vulnerable to the housing slump. it's a largely flat growth for 2022. they have plans to issue a dividend payout as chairman. current market conditions were worse than he had expected.

two of china's largest banks say first-half profits rose as industry margins narrowed. that income was at 1.2%. bank of china's profit was up a 10th of a percent. chinese lenders are under pressure to boost business activity and consumer processes economic growth slows. they directed banks to cut rates on mortgages. putting a squeeze on margins further. china posted a record first-half profit with net income rising from 4% to $11.7 billion. that was driven by the increase in sales for spoiled products that offsets the kleins in chemicals. charters largest oil companies is in contract with sears peers, they saw their profits shrink. shery: there are supercharged shares of nvidia and a bigger moved to the taiwan-based partner.

the president of qantas subsidiary a told us about their collaboration with the tech giant and why he thinks this ai boom can last. >> i think it makes me recall the 2050 -- in that time we codeveloped the first ai server. we started the journey. he is very much interested in artificial intelligence. he's talking about ai not just because of 2015, those who start from the year 2000. based on this, then we start the

journey. so, each generation of nvidia's gpu server, we have the product. most important thing, we also work with them as people. we also contribute a lot back to nvidia. >> you mentioned this partnership is going way back for the ai boom. did you see this explosive growth would happen or did it exceed your expectations? >> we've been waiting, waiting and waiting. in this industry, checking all of it for 5, 10 years, that's pretty normal. i think our investment into the ai -- from my perspective, it actually starts from the consultancy. i think less than 10 years, so i

feel good. also, it's the adoptive by microsoft, currently light of facebook. google, amazon, they are all adopting that. and it's all just within one year everything comes out. i do believe this is really not -- in the flesh. it's going to maintain and you see he will keep getting stronger and stronger for the upcoming years. yvonne: i want to talk to about what happened recently. nvidia's founder came to taiwan and he personally came to your booth and it was a great moment where you got to wear his leather jacket.

first of all, how did that moment happen? >> it's not arranged. yvonne: did he offer ask? >> i didn't ask, he offered. we just invite him to join us because we collaborated first and knew the gpu server. yvonne: you said it was heavy. >> look at the jacket, usually a little light. he has a very heavy one and i think it's because this also heavyweight. haidi: qtcs president speaking

exclusively to yvonne man. more to come on "daybreak asia". this is bloomberg. ♪

haidi: as the deadline approaches for greater gender diversity on the boards of hong kong listed companies, major chinese firms are beginning to ask. that's get more from bruce einhorn. what are we seeing from mainland

chinese companies when it comes to adding gender diversity? bruce: the hong kong stock exchange has a rule that took effect at the beginning of last year, giving companies three years to have gender diversity on their boards. so, we are about halfway there. the big obstacle for a long time has been companies from mainland china that have all-male boards. that is starting to shrink now, so, at the moment there are now five companies from the mainland that still don't have a woman on their boards, that's out of that six hang seng index companies. all but one of them are from mainland china. most recently we've seen mates one, the big food delivery company from china, at its first woman to the board. there are other companies that

have yet to do that, but have said that they are considering, for instance, byd, the automaker, the smartphone maker have both said that while at the moment they still have a woman on the board, it's something that they are actively considering. they have until the end of next year to have gender diversity on their boards. how does -- shery: how does hong kong compared to other markets? bruce: hong kong, one thing to say is that hong kong has made a lot of progress. one year ago, women accounted for 15.7% of -- of directorship to hong kong. that number is now 19.3. hong kong is therefore ahead of japan, which only has 16.6% of its directorships held by women. hong kong is far behind other markets, australia has more than

a third. there are -- the target that a lot of people have for representation on boards is, should aim for 30% of the board to be female. there are some hong kong companies, the hang seng index, that have reached that target, but still a long way to go. the first step is just adding a first woman, again, the deadline for that is the end of next year. shery: bloomberg's bruce einhorn. we see trading across asia, a bit of a mixed picture. we see gains for the nikkei up for 10th of 1%, being led higher by real estate and consumer discretionary stocks. although we are seeing utilities and communications services weighing on the index. broad upside across asia, including the japanese yen and the korean won, this after we saw the dollar falling to a two-week low in the kospi right

now down a 10th of 1%. of course we are headed toward a china market open. when it comes to hong kong, it's bracing for super typhoon's. a lot on track to hit the city right now, live pictures, still it's gorgeous out there, that the expectation now is that it may shut down the city, including the $5 trillion stock market on friday, given that super typhoon is approaching after hitting the northern philippines. it might be the closest of the city on friday. that's it from "daybreak asia". markets coverage continues. bloomberg markets china open is next. this is bloomberg. ♪ sy to get lost tment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management.

>> this is my kitchen table and also my filing system.