tencent downplayed it.the executive order is focused on wechat in the united states. gettingn the process of clarification from relevant parties in the u.s. >> the executives emphasized the distinction between wechat, the service used outside of china, including united states, and then the similar chinese app which is much bigger. order namedecutive wechat, not the other one. as it stands, that is why tencent is trying to get clarity. for tencent, any ban would be on wechat overseas and not the service in china. they say it would have a narrow impact on its business. haslinda: our chief correspondent, stephen engle. u.s.-china conflict resolution, we will have more on that just ahead. this is bloomberg. ♪ ahead of talks on the phase one trade deal, the blackstone group says u.s. chinese relations are affecting decisions. they hope to see them restore better ties. >> i do not think it is healthy for the largest economies in the world to be in conflict. i think the phase one negotiations are still moving forw

as you mentioned, we've seen a surge in tencent active users, both of tencent games but recently as chinaork and we know that the chinese new year how they just so actually we've seen sales in tencent's most honorant games including of kings and peacekeeper elite yeah, we should wait and see to see if fast maintained for a longer time. haslinda: what's the outlook for profitability? 13% the declined previous quarter when bite dawns the slowdown hammered ad rates. correct. the competition bite dance is the biggest problems tencent will be facing because spy dance has been competing tencent, a lot of new content areas, including games, short video apps and other online social content and that's why tencent will keep spending onh amount of its money investing costs in video platforms and entertainment platforms. yvonne: what else should we look for in terms of guidance? it's interesting to watch how the difference between alibaba and tencent. the coronavirus divided chinese internet companies into two camps. is dependent on the physical world like alibaba because it many -- types but for ten

tencent is very much in focus.this executive order and we're not actually coming off lows. down as much as 6%. 10% at one point. we're now down 6% as when he had into the break. haslinda: that's right. that's it for this edition of bloomberg markets asia. day break middle east is next. keep it here with us. this is bloomberg. hike! simon pagenaud takes the lead at the indy 500! coming to the green flag, racing at daytona. they're off... in the kentucky derby. rory mcllroy is a two time champion at east lake. he scores! stanley cup champions! touchdown! only mahomes. the big events are back and xfinity is your home for the return of live sports. >> the following is a paid program. the opinions and views expressed do not express those of bloomberg lp, its affiliates, or its employees. >> the following is a paid advertisement for the worx hydroshot, featuring paul. the worx hydroshot, the world's first portable power cleaner that lets you clean anytime, anywhere, fueled by a battery, it is self-contained and pressuriz

tencent has large stakes in many u.s. video game companies including riot games which makes league of nations and fortnite and activation blizzard which makes world of war craft and tesla, snap, streaming guild, nba, nfl and major league baseball we are waiting on the update to come through from tencent. as far as forecasts are for the q2 numbers, refinitive expect a rise we look at the share price in the shares of tencent it closed close to 1.5%. shares at tencent done at 520 and change before president trump announced these sanctions, if you will, on wechat and tencent, the shares were trading at $555 per share it has come down quite significantly since that, but all eyes now on the earnings to come through and it should be within the next hour when tencent reports. back to you guys >> thank you very much to tesla shares which have been rising more than 6% in after hour trading after it announced a five for one stock split which was smaller in the highly valued car maker. tesla said it will make stock ownership more for

annmarie: tencent is also in focus. protocols security involving tencent, the one that caught my eye, tencent owns a stake in epic, which has "fortnight" which a lot of people are obsessed with. what is the latest in this gaming saga? asking forhey are movement on how these gaining companies are dealing with the privacy of american data. owns the los angeles-based games, riot, which is the maker of "fortnight." says theyintelligence value the assets around $22 profit. 6%-7% of that is why you are seeing a move downward in tencent in hong kong. they are down about 1.5% in late trade, dragging on the hang seng tencent'srimming gains. it is another move as president trump looks to crackdown on chinese tech. juliette saly in singapore, thank you for your time. emmanuel cau, head of european equity strategy, barclays bank joins us this morning. thank you for your time. is there a risk we will see retaliation from beijing on u.s. tech or u.s. companies in general? it is not just huawei, wechat, it is now into gaming. where el

continue to watch whether the selloff in tencent continues.s 9:00 in beijing and shanghai. welcome to "bloomberg markets: china open." >> we are counting down the opening to trade in the mainland and hong kong. u.s. hitting back at the as sanctions on hong kong target prominent republicans marco rubio and ted cruz but beijing steering clear of top white house figures. >> tencent

just want to get your views on tencent.ter has of these pandemic kind of success stories. are there risks to the long-term outlook for tencent and where we are seeing pricing? >> tencent has done really well. it is one of the names we put on our list a little bit earlier. it is obviously going to benefit, in terms of the products it has online, etc. at this point in time, we have it as being closer to fairly valued. of 460ave a fair value hong kong dollars on the stock. at the end of the day, results are coming up, we think the upside is limited, given the recent surge. thank you so much for joining us, lorraine tan. let's get a check on what to moving when it comes to this early part of the session. >> take a look at some stock movers in tokyo. to keita forecasted the profit will triple and its predicted minimal impacts from the virus will step up more than 5%. it's also making progress on managing debt levels. the stock up more than 30%. the 20 year low we hit back on march 18. sony this morning hit by supply chain woes a

tencent will show the rest of the games on its digital platforms including we chat and tencent video.ve been struggling because of the coronavirus. posted its biggest three-day event since may after saudi arabia renewed calls for resumembers to production quotas. they got the backing of russia which says the group should strive for high compliance. saudi arabia warned members not to test the kingdom's result. than 2700 more journalists and analysts. over to you. some lines crossing the terminal. saying the army east see command exercises.t those china says this is legitimate action promoting sovereignty. underes as u.s. exit -- secretary of state's warning the island. china warned of a response. theeems this is linked to visit. we will keep in the story as to when we get more. sure who is going to be attending. amid this strain we have seen between the u.s. and china. china as well. let's look at the markets. not liking any kind of direction. now, thingse right are slightly drifting higher but we are looking to end the week on a positive note. turningaq, futures positive but flat righ

workuch is we chat work -- to tencent?e any indication wechat needs to be spun off from tencent? how do you think about some of the components? shelly: i do not think there is a tencent without wechat. tencent has a huge gaming business and other businesses they are part of. there is not the same kind of reasoning there is behind tiktok. app andis a chinese people outside of china do not use it for messaging. it is to message with people inside of china. scarleter question that referred to earlier was what about the rest of tencent's businesses? the executive order was written broad. every indication is it is just looking at wechat. there is a lot of wiggle room for the commerce department to interpret the executive order. tencent owns a bunch of stakes and a bunch of u.s. and global businesses. snap, tesla, spotify, activision, the list goes on. what are those implications going to be, and even if the executive order does not act on those companies, are those companies going to want to have that relationship with tencent?

tencent earnings are out later today. kong's of hong pro-democracy lawmakers resign as beijing tightens control. carrie lam supports banning those not deemed sufficiently patriotic. let's look at how things are shaping up when it comes to the start of the session. it continues to get some of that rebounding onring concerns might want to stick to .rade could berecovery somewhat stop start. it did not move on rates and did at stimulus and effectively pushed back expectation for the timing of relative rates aired the kiwi market not pricing that in all of 2021. the nikkei's little bit negative but the top x are wiping out all of its losses for the ear and looking like that momentum could be sustained. take a look at futures up about s&p hittingsaw the the 10 week i. high. pro-democracy lawmakers in hong kong are set to resign en masse after beijing passed a to ban politicians not sufficiently stock. >> i would not say that for members remaining in a legislative council we will have a representative legislation. i welcome div

tencent and cathay pacific also due to report.largest lender to pay despite a drop in profit. commonwealth shares rising to percent at the start of cash trade. we are keeping an eye on gold after the tumble in gold prices overnight, but pulling back from 1900 and testing that 2011 hi. the kiwi dollar falling to a three-week low while implied ball has jumped ahead of the rbnz decision. haidi: let's bring in our next guest, the head of asia strategy. great to have you with us. as sophie was just telling us, we are seeing kiwi stocks leading the losses across asia after those renewed lockdowns. we saw a resurgence in the virus in a country that was doing phenomenally well when it came to eliminating the virus itself. say it is sustainable without a vaccine? >> as you can see, there is really no country that is 100% safe. we have seen us really a -- we have even seen myanmar succumb to covid yet again. aboute are more concerned than the second or third wave is how the economies are controlling local transmissions. china has already ha

should they actually -- should investors be more worried and tencent -- in tencent?e with valuations. that's, i believe, a huge discount compared to their net -- as well. 60% discount for that one. does tencent have more to lose? is all the good news priced and now -- priced in now? >> i don't even know what investors are doing in terms of driving up stocks in asia. there is so much madness going on. this is something that tencent pointed out in the conference call. as people go back to work in china and there is more normality going on, they are going to be spending less time on we chat and less time playing games. bosses hope less time watching videos and listening to music. those are kind of lockdown consumption patterns that will return to normal. normal is not as good as during a lockdown. yet on the flipside, the revenues they would get from things like advertising are not necessarily going to rebound as well as you would hope. because the global economy and chinese economy are still in massive, massive headwind for the advertising business. you are in this i h

discusshina wants to the ban on tencent as well,, wechat i should say, meantime, parent company tencentbetter-than-expected results in question after question built in about wechat. what did we learn? conference call after revenue was up 29% and profit was better than all estimates on the bloomberg terminal, executives repeatedly emphasized the distinction between wechat, which is the messaging service used outside china, and a similar app. and the trump order specifically named wechat for the band. tencent officials are trying to figure out and clarify whether and means a ban on weixin wechat, or just wecap. if it is justcheck, it is not a material impact on their bottom line. ceo john low was on the call. >> the executive order is focused on wechat in the united states, and not our other businesses in the u.s.. we are in the process of seeking further clarification from relevant parties in the u.s. stephen: but you still have to consider if wechat is blocked in the u.s., it cuts off the key communication tool for businesses between the united states and china. chief north asian corres

tencent down about 3.5%.ng along the lines of $60 billion in market cap erased in two days. hang seng index, just a shade under 24,500. in case you missed it, inflation numbers were out, uneventful. more inflation on the consumer side. deflation on the factory side. plenty more ahead. we will get to the india open, plus more of your top stories, all up next. this is bloomberg. ♪ his is bloomberg. ♪ welcome back to the show. past two an eventful days as far as politics are concerned in hong kong. this morning news came quick and fast of the of -- the arrest of jimmy lai. you're looking at live pictures of apple daily of jimmy lai. shares of next digital related to him down about 14%. has beenngle of course telling us the biggest implications of this and in terms of what is next. at least seven were arrested this morning in hong kong on the back of this new national security law. looking at live pictures as we move into lunchtime. the headquarters of apple daily here in the city. haslinda: that's right. suspect

there's the sheer scale of tence tencent. fallout could touch sports to. tencurre tencent has a deal with the nba to stream games in china there's also american businesses operating in china relying on the app like starbucks, disney, mcdonald's the so-called super app is where a billion active users in china can shop, spend, stream, game much more within a single app. for that reason, apple and google could also sufficient if users switch because they can't access tencent apps. talk is turning to how the chinese might retaliate. these tech cold war began years ago. many of america's most popular internet services have been banned in china for a long time already, twitter, google, facebook to name a few that in part has enabled the rise of wechat and other chinese giants >> in terms of video games, as i understand it they would be unaffected by this ban, correct? >> there's still so much we don't know we do know that tencent has a stake in epic games and other video game players we don't know if those ties would have to be und

tencent is consequently around the world and invest in many things. it will be difficult to unwind their global position. wechat on the other hand is china, dealingin with people in china or the chinese diaspora, and is not of that useful elsewhere. we don't know what the administration intends to do on that count. taylor: caroline brought up a has point that u.s. tech not been allowed into china. why then should we allow chinese tech into the u.s.? does china need to rethink the strategy and the long game they are playing by forcing us out? they started this, and are they than surprised this is how we respond? what do you make of that? >> i think that gets to a couple of different arguments. the argument being we are not letting chinese companies in because u.s. companies are banned due to censorship, that might be one thing, but the argument that there is a threat to the united states, i think that is a stretch. the united states has long been a proponent of the free, open, global internet. the trump administration seems to have basically taken its

alibaba and tencent are watching out on that. of the u.s. exploring restrictions on tencent and ant group, a a lot of questions about what that means for the ipo is whether china could retaliate on this, has. haslinda: now let's get the first word headlines for you. theident trump is back in oval office despite continuing to be treated for covid-19 and being potentially contagious. he has not experience any symptoms in the past 24 hours, having been discharged from walter reed monday. president trump has been speaking about his experience and says he did not have to go to the hospital but did so on the advice of medical experts. >> i spent four days there, and didn't have to. i could've stated the white house but the dr. said because you are present, let's do it. i said fine. you tell me what. to do andi'm going to listen . haslinda: a new stimulus package is on hold in washington. nancy pelosiaker seems to be open to airline relief. seven mnuchin republicans blocked such a bill last week and called for more talks. airline stocks rose sharpl

tencent reported a strong quarter.s the games business continued at a 60% type of growth services something that is attributable by the strong profits to gains they had and also looking forward, they are adding some new games so one of the new games they added is on ios china for among the top three and then in some cases, it surpasses one of theirs. is veryd momentum strong. it's diversification in the business that makes it better for the headwinds. diversification in the games business, advertising, simtech, and clouds business, you see diversification. ons not just heavily relying one or two games but it's a strong pipeline there. it offsets the weakness. >> are you saying that will be enough to offset any of the weakness that may come from regulatory issues inside china? binnie: if you look at the guidelines that were recently out, it's saying we have to take one step back as we look at this. it's not unique to china. promoting fair practices, industry fantasies. if we step back and think about platforms, it's not

i would worry about tencent because of wechat. 0ne i would worry about tencent because of wechat. on it, they probably do things that could open them up to blackmail... those are the kinds of appsi blackmail... those are the kinds of apps i would start with. wechat has long been criticised for censoring users in china. a canadian company looked into how it moderated its users outside of china. we find routinely the topics related to perennial taboo issues like tiananmen square, hong kong, anything to do with tibet or the dalai lama, those are pretty routinely censored. the people we spoke to didn't seem to be too concerned about security issues. the reason why he is saying he doesn't wa nt reason why he is saying he doesn't want it in the us is because he thinks some of the data from users goes to the chinese government. this is not true. it is important to the country. i think that is the good pa rt country. i think that is the good part for us, because if there was not something bad would happen. research has found wechat censoring political consent and content related to covid—

companies as a result of what happens to tencent and wechat.what do you make of the tiktok side of the story? a company with 100 million americans used. now you have potentially twitter expressing interest here. twitter, microsoft, one of those a better bet? isaac: tiktok is the second example of chinese tech innovation that has really swarmed the world in a very impressive way. right now, microsoft's acquisition to lose. they have a much larger warchest. ump has alike tr microsoft acquisition in mind. there does not seem to be other major companies that are angling. there could be some very last-minute surprises from a company like amazon, but it seems like the safest guest right now is a gets purchased by american companies that microsoft will be the one to take it. emily: there is this issue of how well tiktok is comply with an order in terms of how it treats the data of children on the platform. that is now getting drudge up today by the ftc and doj. what do you make of that in the context of all of this? isaac: it is another reason why the

this as tencent posts revenue from its online gaming business.ed by stephen engle in hong kong. tencent's bread and butter powering through an otherwise turbulent first. stephen: -- first quarter. stephen: all of those people staying home, homebound gamers spending more and more. record net income. the revenue beat was quite considerable. revenue rising 26% to the equivalent of $15.2 u.s. dollars. the consensus estimate leading into this was for a revenue rise of 15%. online game sales, that is the bread and butter you talked about, rising 31% in the first quarter. that really helping offset shrinking ad spending and the record contraction overall in the chinese economy. that is one of the big concerns going forward, will advertising spending on online platforms rebound given that there is a new normal in corporate spending, job losses and the like? budgets are being revised. nonetheless, investors liking what they are hearing from tencent, even though shares did dip ahead of the results. shares in hong kong added $42 billion in our get value sin

tencent on a tear up 3%.reports at the end of today and we will dig into that story to see if they can raise prices in the second half. and samsung investors looking ahead to their earnings as well theednesday, up 5%, semiconductor story remains strong. ,peaking of kweichow moutai earnings are due later today. consumer sector, asset portfolio manager. are you taking profits with regard to kweichow moutai? they raised their price target, is that overdoing it? >> thank you for having me. havepect them to management guidance in line with 10% revenue growth and the third quarter is usually seasonally strong where consumers make purchases for the golden week and midautumn festival. the rest of the stories unrealistic expectations built in by the street and the buy side to justify its valuation raising this year. while devaluation is not cheap, we do not think it is particularly agree just. the market giving a premium for companies able to deliver earnings with certainty, especially with the virus cases in china fl

what i would most worry about is tencent because of wechat.opular messaging apps in the world, used by the entire chinese diaspora and people run companies on wechat, they have incredibly sensitive communication, they could open them up to blackmail and so those are the kinds of apps i would start with before an app like tiktok, which is mostly dancing teens. wechat has long been criticised for censoring users in china. then a canadian analytics company, citizen lab, looked into how wechat moderated its users outside of china. we find routinely that topics related to perennial taboo issues like tiananmen square, hong kong, falun gong, anything to do with tibet or the dalai lama, those are pretty routinely censored. the people we spoke to, though, did not seem to be too concerned about security issues. the reason why he is saying that he doesn't want it in the us is because he thinks that some of the data from users goes to the chinese government. no... this is not true, it's not, really. it is, like, very important to the country. so maybe the

but that is not so much compared to tencent and there mega r, wechat.ir many programmes. the many programmes don't allow you to download and install them, they are sub— applications within the wechat ecosystem, and a new tool developed by wechat. many programmes allow third parties to add new features to wechat on demand. it's a bit like having the entire app store already on your phone. the idea is you can do anything you ever wa nt is you can do anything you ever want on your phone without ever closing wechat. this convenient store is set up with wechat‘s head office was the better as you can walk around, pick up whatever you like and write the door and it will be automatically charged to your kuaishou account. —— wechat account. wechat relies on users handing over big chunks of their personal data and that now even includes your face. these vending machines are set up these vending machines are set up to use wechat‘s facial pay feature. the idea is you opt into it in the up and you can use your face today anything from these machines. it basically li

tencent denied this and told bbc click that all content shared among international users of wechat is not the only reason trump has decided to ban wechat. it is far more political than that. and to be honest it is hard to look past the fact that these tech companies have been sucked into a wider geopolitical battle between two superpowers. the battle over social media and especially who owns our personal data, is seen by many as the next big emerging rivalry between china and the us. in march, the chinese owners of internet hook—up app grindr sold up for $600 million, they had been forced to sell by the us regulators over national security concerns relating to the data on the app. in may, chinese social media company kuaishou launched an app in the us called zynn, which after becoming one of the most popular apps, was removed from both the google play store and apple's app store after being accused of plagiarising videos. but tiktok is now under pressure from us regulators and may be banned by the white house. i set a date of around september 15, at which point it will be out of busin

on tencent.dential working group on financial markets is strengtheng that sec regulations. the group has not determined how to enforce guidelines but the final penalty for companies that do not comply would be a delisting. there has been no headway in talks between the white house and democrats for a new virus relief package. both sides are accusing the other of refusing to compromise. one key difference is still the top line number. the democrats want $3.5 trillion of aid. the republicans want $1 trillion. u.k. prime minister boris johnson has pledged 355 million pounds to help with brexit red tape in northern ireland. repeatedly said there would not be checks on goods from great britain to northern ireland. the announcement of a program to pay for the paperwork confirms there will be. madehe time being, uber more money delivering food then it did from transporting people. that failed to offset a steep decline in ridership. andter sales felt 29%, doing a decade of growth -- fell 29 ending a deca

tencent video. english clubs have been struggling because of the coronavirus. the premier league said it will continue to ask floor other options. still ahead, we will speak to the new zealand finance minister in the wake of the country second quarter gdp report in less than a month until the upcoming relax -- upcoming election. thefirst, we talk about outlook for the recovery. this is bloomberg. ♪ shery: the fed's lower rate for longer philosophy means the central bank will get inflation, maybe just not the kind it wants. let's bring in the will equity strategist from wells fargo securities. in this asset price bubble situation? how much worse could get? anna: worse, or better in some ways, right? we have had this equity melt up and with the fed coming up, the new phrase we like to uses don't fight the dots. if rates are going to stay low, what it does is help investors or give them even more reason to lever up and put on risk. that could come in the form of more equities. we've already seen the na

on tencent. peter, great to have you on the program.there a concern that as the and,investigates intense they could invest tiktok or are they far behind us? ther: already tencent is in sights of the trump administration. the trump administration has come up with a ban on wechat, and now they are asking game companies about how they treat the data that their users are generating. tencent has been investing income is around the world, particularly in games, for a very long time. they have stakes in some pretty big gimmick companies around the world, with many users, including epic, the studio behind fortnite, and also riot games, which has league of legends. the administration wants to understand how that data is being used, and at the most extreme, they may push for tencent to divest some of these stakes that they have in these companies. the all-time midwest pedigree, the university of chicago school of economics. is this capitalism? i know you were not talk the stuff in the university of chicago, but the bottom line to me it is corpora

patrick: we have held tencent for a number of years. you have seen what has happened with technology companies as they reported their q2 numbers, so we expect a very strong quarter. we think that will matter much more to tencent than soundbites from the white house, so we don't think extremes occur. wechat not being able to be used for u.s. citizens does not change the bottom line or the top line of tea set -- of tencent. basically, wechat is being used by citizens of china to can indicate with their family and china. we think the more extreme measures will not be put in place, and earnings will drive the stock market than basically u.s.-china tensions right now. yousef: a note coming through on the bloomberg as we waited for the numbers on the italian bond sale. ,he 10-year has now been sold and that yields dropped 0.9% to 0.4%, and that is critical, because it is actually the 21.st yield since february just to stay with the china theme as well for the moment, patrick, maybe keeping the italian 10-year and might as well, from across as

tencent in trump's crosshairs again.he chinese tech giant. we await clarity on the wechat pay am.

shares and tencent plummet.'s exports jumped in july as economic activity and the rest of the world restarted but a contraction in imports shows the fragility of the domestic recovery persists. the white house and democrats fail to strike a deal on stimulus. the differences are still significant. this as the july jobs report rooms. welcome to "bloomberg daybreak: europe." the jobs report will be key perhaps in adding to that debate over whether we are seeing a slowing of a recovery in the jobs market. tone, we see in risk-off in markets based on the u.s.-china tensions. the executive order by president trump banning u.s. residents and businesses from interacting with tiktok and wechat means we see losses in asia on a broad basis but china and hong kong bearing the brunt of the losses. global equities heading for a weekly gain. we will see if that continues into the session. s&p futures point to a lower open. we are seeing a little bit of weakness in the offshore yuan and the dollar broadly strengthening a little

at the weekend, you had tencent's annual games conference.nk most notably the digitalization -- sorry, the mobile games. you saw a launch date of august 12 for mobile fighter, which aligns with their quarterly result earnings date. -- this game has, as of yesterday -- there is so estimate that might monetize it one billion u.s. dollars for the first year of annualized gross revenue. i think there is some concern but a lot of lunches. notablyelopment houses, japan, the pokemon company, i think there is attention on a competing product to amazon twitch. i think there is a lot of catalyst for that to support the company into the second half. the normalization of revenues into these upcoming earnings and the increased costs, together with these technical levels, like you said, i think the share price bumping up against the 500 hong kong dollar level has been a key resistance level. we have seen it more expensive at the beginning of 2018. i think it is not impossible we could get there at the second half given what we have talked about with the ga

good numbers from tencent, 3.2% up.s of late, the single day record sales figure, perhaps feeding into the sales price. jd.com could be hurt by the antitrust regulations in china. but it was a good day for jd.com. health got permission to float on the hong kong park it -- market. ev maker a chinese posted a better than expected growth margin as a public company. also forecasting fourth quarter revenue more than a year ago. we spoke to ryan. ryan: the company did not operate on where the stock price is. shareholder has received good value and the stock has performed well, but we have not been operating the company because the stock markets are priced. generally in the last few months, we have seen a significant pickup in terms of momentum in the chinese ev market. and otherse xpeng are getting the benefit of that. it is one of the reasons catalyzing movement in the stock sector. >> there is a lot of competition. tesla is one of them. a homegrown ev competitor is nio. how did you reach profits before nio? you offer your v

and have fined alibaba tencent over past acquisitions and say they are reviewing pending tencent mergerrrespondent stephen engle is in hong kong. where will the immediate impact be felt? felten: obviously is being immediately in the share prices of the two big tech titans in china. both of those companies stood in hong kong and alibaba also has adr in united states, which sunk overnight as well. immediate pressure on these tech titans that have fingers in many pies in the chinese tech space. they have helped incubate second-tier companies. now what they are doing is drawing scrutiny of the antimonopoly regulator because they are worried about possible price-fixing in the industries theirave consolidated in all-encompassing platforms. there are number of different allegations. we have seen the market regular come out with fines. according to bloomberg intelligence, the fines are immaterial, fairly small. alibaba for not displacing its in timed stake in retail. china literature is a tencent affiliate also censured by the regular for another past deal for alibaba,o deal this was back in 20

peers, tencent has a target on its back.since president trump announced his plan to ban we chat, the company has lost $42 billion. in the earnings conference call this morning, tencent executives address the band. -- addressed the ban. they downplayed the impact, saying it would probably only applied to its overseas operations and not affect its internal services. throughout the call, company executives stressed over and over again they are still trying to figure out how this executive order would be applied. the expectation is apple and google we need to pull we chat from their app stores. they would probably suspend updates and perhaps blackout services. it is not clear if apple would be able to offer the app within china. tencentis critical for because the app is the conduit to distribute all of tencent's comp tent -- content. beijing will be doing some of the bidding because chinese and u.s. negotiators will be meeting to make sure they bring up the we check -- the we chat ban. alix: fintech there is huge. that would be

to provide administrator -- to provide information about security protocols with chinese behemoth tencentmeanwhile, bytedance and oracle have tentatively agreed to a deal has to be approved by the chinese government, and there is significant confusion about timelines. let's check in without markets ended the day with senior markets correspondent scarlet fu , leading declines but outperforming all year. what has been happening? scarlet: there was a lot going on and to some extent, you can blame the federal reserve, j powell saying rate will stay at current levels, lower for longer, but investors were expecting a dovish surprise and were left hanging. when you look at equities, most of the damages from the large cap, big tech names, but it was a broad decline, eight out of 11 sectors in 20 active 24 sectors finishing lower. outperformance today were value encyclical stocks. if you look at the past two weeks, it has been a clear theme. the two best-performing groups were materials and industrials and the worst performers were tech and communication services and tack is pretty much apple and

china giant tencent back to the kitchen table.oldman sachs of the latest bank to send bankers home after an employee tested positive in its men had it can -- manhattan headquarters. an interview with mark schneider coming up. welcome to "bloomberg surveillance." a lot going on in the markets. a lot of focus is on what we heard from the bank of england yesterday and whether that will filter through longer term in terms of negative rates. now overall, the markets are focusing on that. they are focusing on some of the things that we saw this week, which is m&a. in.ks general in europe edging lower it seems to be that a lot of markets are in a holding pattern. let's get straight to the bloomberg first word news. here in london is also leigh-ann gerrans. and oracle seem to be edging closer to eight tiktok deal. they have tentatively agreed to terms with the treasury department. bytedance is also increasingly confident that plans will win the approval of regulators in beijing. assuming it happens, a new firm would aim to hold an ipo in

presidents from doing business with text talk -- tiktok, we chat, and tencent. the move could impact businesses as big as apple and starbucks and shut down a major form of personal communication between the u.s. and china. doubtsre increasing about an agreement on another round of stimulus. the president now expected to bypass congress with more executive orders. microsoft leading some of the declines today. scarlet fu has been following the market action. talk to us about the trading moves on the back of all this tension rising between the u.s. and china. scarlet: fridays in august are not usually known to be heavy news days, but we had a jobs report today and we had president trump stepping up his campaign against chinese tech companies. the stock market closed mixed with the s&p and dow little changed. between a huge contrast small caps and the nasdaq. focus really on gold. the relentless rally in gold prices and the selloff in the dollar, the better than expected jobs report reverse that trade. gold still finishing the week up. the dollar finished up 0.5%. t

from his perspective, he says that tencent will owe china. any way a restraint on growth? google, apple, so vast cannot get a foothold in china. a huge i think it is restraint because you are seeing startups not want to be here in the u.s. chinese engineers and phd students not wanting to come out to the u.s. if you think about tiktok, it was a chinese app. you would not have tiktok today. it would not exist. for many, it is a silly app that people waste time on on videos, but the heart of it and its in thet is a lot of jobs u.s. economy. multiply that by many years of suppressed investment, and it will have long-term impact. joe: the big u.s. digital services are not really in is this in china. do you think that china will retaliate in some way? what would that look like potentially? y: to retaliate from a tech perspective, it has apple. not only does china make up a huge amount of your business in apple, but also their factories or their, or most of the -- oftories are there, or most them. china has a myriad of ways of responding. is not ne

. ♪ tencent reported in 18% rise in first-quarter revenues.latforms, search engines, so those look slightly cheaper. it is going to be important to see how strong of growth they had in the first quarter and how guidance will be in the second quarter. haslinda: having said that, what do you make of the risks? we are seeing a resurgence in u.s.-china trade tensions, perhaps also in virus cases. trajectoryhange the of the stocks and the markets going forward from here? ken: it would to some extent. if you look at where we are right now, most industries expect china to have 1% to 1.5% gdp growth for 2020. if the trade war starts to happen again and earnings starts to deteriorate and we start to see growth fall again in china, that is going to have an effect in terms of valuation and pricing. the markets haven't fully priced in a potential escalation. we do have to be careful of the geopolitical tensions in the coming weeks and months ahead. haslinda: how about negative rates? the fed has been reluctant to say that it is headed that way. but we hav

tencent remains attractive to her.ch is strengthen the on and offshore yuan. since may soest the reflationary trade in charge it seems again. tohaad: getting straight what is happening in the bank of time market. this is where the said is, up fairly -- pretty much unchanged. thailand's economy in focus. it could contract for a second straight year in 2021. as the tourism reopening continues. justso have the process prospects of the indian trading day starting negative according to the nifty futures contract down.g in singapore, .3% banking stocks are going to be important causing the indices to end with losses monday. certainly at the moment looking at those industry groups. moving along and have a look at a big win on paper but not much in the real world. donald ruling that trump's tariffs on chinese good violated international regulations but it is unlikely to make much of a difference. let's get to our senior editor. walk us through this really because it is a bit of a paper tiger as such. audio] rishaad: we are hav

alibaba, samsung, tencent. it is similar to the u.s.bal investors are reaching for growth and that is mostly been technology and quality factors. you said, china pretty much leading gains among e.m., but not so much for e.m. markets in southeast asia, they are lagging behind peers in asia. what could turn that around? about: if you're asking north asia, it's a different story. if you take out telecoms, you have less than 1% exposure to technology. old, value driven type economies. the rotation we have been seeing over the last week or two into value, the question is what kind of legs does that have at this point? if you look the disparity in valuations between growth and russell 2000, for example, there's a huge divergence. i think what we are advising clients at the moment, you need to have some exposure into the technology, health care type names, they have stronger balance sheets and reported better earnings than the value play. but they are a little bit expensive and there are risks moving into u.s. elections specifically, and you p

tencent 1.2% to the downside.curities toacquired a bigger rival create an entity worth something like $13 billion, the latest bit of consolidation among the 130 brokers in the country. a look at what is going on, 47% ,p and elsewhere, tencent escalating tensions between beijing and washington over tech playing out. like asia taking a pause this monday. that is it. daybreak middle east is next. this is bloomberg. ♪ >> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates or its employees. >> the following is a paid presentation brought to you by rare collectibles tv. >> our country was founded on life, liberty, and the pursuit of happiness. representing this idealism is our american eagle. the bald eagle was chosen in 1780 two to represent the united states because of its longif

tencent reporting near better-than-expected results.al deliveries climbed about 8% from a year earlier. coming up next, new zealand reporting its first community infections in more than 100 days while russia approves its first vaccine even as trials go on. we have the latest just ahead. this is bloomberg. ♪ >> you are watching daybreak australia. joe biden has picks kamala harris as his running mate in november, hoping her african-american times and self branding is a progressive will propel him to the white house. she ran in the democratic primaries and is the first black woman on a major party ticket. she has 13 california already elections, having started her career as a district attorney in san francisco. jimmy lie has been released from detention after being accused of collusion with formal -- foreign forces. inand others were cut up sweeping fears beijing will increase also's -- all dissent. his daily apple newspaper is read out for its condemnation of chinese authoritarianism. the trump administration is tightening the screws on

epic is not tencent's largest moneymaker, they have many other moneymakers.ics.one of many $.10 -- tencetnt's. are they using the political tension against us, definitely. they are making apple look like that evil mega-corps. it's not true. way, it's not just apple, google has also pulled fortnite from the app store. apple gets a lot more of the attention, but there is a potential, if this continues to appsout, all of epic games are at stake. my kids are on houseparty talking to their grandparents and that would be a big low if they could not access that from the app store. do you expect that this tactic will work on apple and google, or that they will stick to the policy that they've had over the last several years, that the app store has been in existence? the criticism that apple and google do enforce the rules inconsistently, at times? eliran: i will start from the beginning. look, apple and google decreased frictions for both consumers and developers. -- they have enabled developers to ship millions of apps. the app store has only been around for about 1

if you looked at a two-year picture, tencent is a winner. i don't know, teddy, it feels like you are taking the other side of tencent. what about the overall chinese stock picture here? >> well, first of all, i have to admit that i have never owned any of the chinese stocks from the get-go. no particular reason, i guess it's simply a matter of you can't kiss all the girls. i have simply not been involved with them. if i were to pick some chinese names, tencent would be if not the very top, would be pretty close to the top, as would baba. but i think if you look back with all the geopolitical issues we have had with china over the years, including what's going on today, every time these stocks have gotten weak as a result of geopolitical issues, clearly they have been a buy. so i think that -- i don't know if it's today or tomorrow, but if they get weak enough and they very well could, technically, on the short term, you probably want to buy them, not sell them. liz: yeah. we have to see what the so-called retaliation by china is. apparently

transactions with bytedance and we chat owner tencent. said the two companies present significant threat to national security adding that the apps could allow beijing access to private data of american citizens. the move is to take effect in 45 days we have this report. >> reporter: u.s. president trump has issued aek tiff orders blocking transactions with bytedance and tencent which owns we chat starting in 45 days time both cite national security concerns and address the threat supposedly posed by these apps it is the scope that is unclear. we are waiting to see how they'll be defined this comes a week after trump threatened to ban tiktok it has until september 15 to see its u.s. business snapped up by microsoft or see it banned in the u.s. this could put pressure to address some of these national security concerns. tiktok has come under fire in washington over concerns it uses data in america that could end up in the hands of the chinese government a similar order that threatens chinese government to access personal data of americans t

is said to be considering restrictions on payment apps by aunt and tencent -- ant and tencent.could record-breaking plans. let's get more on this. what do we know about these discussions and what is being proposed? >> this would mark a major escalation in the u.s. confrontation with beijing and people familiar with the situation say u.s. officials are said to be concerned about from ant and tencent, they could give china access to banking and personal data of hundreds of millions of people. exploringf restrictions was reportedly discussed last week in the white house situation room. we are not sure if the proposal where the idea has been formally proposed to the president. that key sticking points would be defined as the appropriate approach to do this as well as a legally sound one. the trump administration has received brushback from two federal district court judges in the attempt to ban tiktok and wechat in the united states and is seen as a bigger target, the crown jewel of china's rising innovative economy, even more so than perhaps huawei, which has been in the trump tar

and tencent reaching the record of theid the launch iphone's league of legends game. for tencent. still on progress for their pio. we are watching securities. scrapping merger plans. lower for westpac as well, consolidating its international operations. this is bloomberg. ♪ s. this is bloomberg. ♪ >> is 10:29 p.m. in new york and d.c. and here are your first part headlines. the imf is slashing its outlook for india even further, saying it faces the biggest contraction among imaging -- major emerging markets. far worse than the 4.5% decline the imf saw in june. india imposed the world's biggest national lockdown in march. bank of indonesia held rates as expected as it focuses on debt purchases to help support the weakening economy. the seven a reverse rate at 4%, the bank has opted for unconventional measures to revive the indonesian economy which is set for its first annual contraction since the asian financial crisis of the late 1990's. malaysian opposition leader seems to have missed out in his latest bid for power, failing to convince the king that he has the support he claims