Bloomberg Morning time: Asia 04/30/2024

This is DAYBREAK.Asia. We're counting down to Asia's majormarket opens. And of course, it is really the dayafter in terms of monitoring what's going on with the yen, with the hugemoves that we saw on Monday, a sort of potentially a subtle confirmation of ofintervention that we saw in the comments from the currency chief this morning.But, of course, it also is just one part of a story of a big, big week that stilllies ahead going into that FOMC decision.Yeah, definitely Interesting timing from the Ministry of Finance, doing it on apublic holiday in Japan.

We'll get a chance to see how marketsreact in just a moment. But will it be enduring?You'd think perhaps not, unless the macro picture changes violently withwhat the Fed up later this week as well. Of course, it's not just Japan.We've seen that impact across Asian currencies.And to that point, of course, we had Samsung numbers and it also justmentioned in some of that commentary of getting that positive boost as a resultof that currency effect. Take a look at what we're seeing at theOpen. Of course, Samsung, the heavyweight, isgoing to be the name of the game today,.

Not just for the Korean markets, but ofcourse, also for some of the regional chip makers as well.The cost be is up by just over 1% at this point.We're still waiting for Samsung to come online with those earnings surging afterthe business across chips turned profitable for the first time since2022. This is part of that much bigger globaltheme that we're seeing of the development of boom, that it's turningthat cycle after a so much of that downturn.Right. We saw that $4.8 billion net incomenumber 6.62 trillion won.

Projections were four 5.63 trillion.So a handy beat and that's about four times Samsung's earnings just a yearearlier. So a lot has changed in that time.Samsung just coming online now. It is up by just about a 10th of 1%.We'll continue to kind of watch and wait to see how investors react to that.That stock, even though it's up about 17% over the past year, has reallyunderperformed perform compared to the likes of SK Hynix, which has doubled inthat period. We've seen NVIDIA about triple in thatperiod. And in fact, the Samsung of that Aprilpeak, we're actually down about 10%.

We're seeing a little bit of downsidethere when it comes to trading and Samsung continuing to watch that.But of course, the other big story as we've been talking about is what's beengoing on with again, we had the remarks from Canada, pretty measured.They'll be giving more information when the data release comes out at the end ofMay. But a lot of the market saying this iskind of tacit confirmation that something was done.The disclosure of those results will come at the end of May.So Paul, continuing to watch that, particularly as we've yet to get theFOMC decision.

Yeah, that's going to be the big onecoming up and it'll be very interesting to watch any potential yen moves off theback of that. Let's take a look at Apple trading herein Australia. Meanwhile, not a lot of action in theearly going. We're kind of flat, but of course we dohave the staggered open here in Australia.One stock that we have been watching that is trading, however, is BHP, theworld's biggest miner, and that's recovering some of the ground that itlost yesterday. Right now, better than half of 1%.Of course we are watching BHP very.

Closely as to whether or not it puts ina renewed bid for Anglo American after its initial $39 billion.All stock offering got rejected at the end of last week.We did see BHP shares selling off a little off the back of that, but as Isay, recovering a little today by about half of 1% elsewhere.We have got the Aussie dollar losing a little bit of ground.The Aussie versus the yen looks pretty good though.One or 243 If you're Australian, you think of taking a holiday in Japan, goodtime to go. The oil price backing off a little bitas well, 8835 there and got the Aussie.

Ten year yield also backing off.And let's take a look at how US Treasuries doing in the early trade.We did hear from the Treasury in the United States saying that it's going toneed to borrow more than it thought this quarter, more than analysts wereexpecting to about 243 billion that being forecast that announcement sawyields ease a bit, and that is a trend that we're seeing continue into theJapanese session, Heidi. The ten year right now, just about 4.6.Let's get some more pull on Samsung's earnings with the Bloomberg intelligenceAsia Pacific technology analyst Masahiro Michael McKee.So it must be a great relief, obviously,.

To get that chip division back toprofit. What's really interesting to you inthese numbers? Good morning.Yes, Samsung Electronics just reported their earnings and has already announcedthe preliminary earnings. So it was not a big surprise.But if we look at the division profit, we think that the semiconductor businessmade a profit. So that was really good, too.So I think that the overall memory chip market is improving, especially for theDRM and including the high bandwidth memory chips which is used for thegeneric applications.

So basically we see that the overallsemiconductor business, especially memory chip business, is improving.So that. Was an interesting point on theoperating profit margin for the semiconductor division, achieved around8% operating margin. And we think that that businessconditions will improve going forward. So we've got the earnings call coming upwhen we that begins in a little about under an hour, I believe.What are investors watching out for in terms of some of the commentary aroundthese numbers? Yes, we would like to check several keypoints.

And the first one would be the deerbusiness environment, and especially the volume growth should be very muchclosely watched and they should be expecting that some kind of mid mid-teenvolume increase in second quarter. So we would like to check.Samsung is forecasting a higher than that.One may be similar to that. And also we would love to check the howthey think about the overall demand outlook for the high bandwidth memoryfor later this year and even next year. And the it's presque hi nukes is seeingvery strong demand and there is a highly decided to expand their productioncapacity.

So we would like to check how strong thedemand for Samsung Electronics. So if the demand is strong enough,Samsung may follow a high capacity expansion strategy.So we would like to check that point. And another point would be that the NANDflash business as well. Andregarding Samsung, we have to check if the NAND flash business made a profit inthe first quarter or not, but there still could be a bit worse than the DRAMbusiness. So we would like to check the how NANDflash business is improving in the second, second quarter.And also we would like to see smartphone.

Business, what consumer electronics are.Samsung has a very wide range of products and also in many countries, sothey know very much about the macroeconomic conditions.So we would like to see how Samsung is seeing that the global macro economysituation in the second quarter. All right.Bloomberg intelligence, asia pacific technology analyst and masahiro like asurrogate there. Let's take a look at how samsung isperforming right now along with some of the other bigger asian chip names aswell. Samsung's reaction, they pretty muted,really was somewhat of a mixed bag,.

Better by a quarter of 1% at the moment.Samsung shares over the had a peak back in April.They've lost about 10% of its ground since then.But that earnings call will be very, very closely watched with some of thecommentary around these numbers, particularly in terms of the AI story.Key rival SK Hynix actually losing a bit of ground at the moment, up by a quarterof 1%. Want to take a look at Tesla suppliersas well because, of course we brought you the story of Elon Musk making thatflying visit to China. Well, that paid off.We got news that Tesla has got.

In-principle approval from governmentofficials to deploy driver assistance in what is now the world's biggest automarket. It will be partnering with the techgiant Baidu. They are mapping still some questionsabout how it's going to handle data security and privacy, but the marketreally liked that story. We saw Tesla shares soaring 15% onMonday and Baidu's Ada's also closing a lot higher as well.Now, here in Australia, we've got a mover for you as well that we'rewatching. BHP shares currently gaining by threequarters of 1%.

We did see them lose a little bit ofground yesterday. And this is, of course, as I mentionedearlier, off the back of that rejection by Anglo American for a $39 billion allstock bid. BHP shares sold off a little bit onMonday, but recovering pretty strongly at the moment Heidi.Paul, let's take a look at the yen, of course, becauselook, this is the picture as we see still quite a bit of sustained weakness.Right. But flat at the moment at the 156 level.But of course, as we were talking about earlier, this comes before the FOMC,before these expectations potentially.

Come to fruition of that hawkish pivotfrom Jay Powell. Elsewhere around, we're seeing thedollar index holding pretty steady, the Aussie dollar at 6557.We had that no doubt from the Commonwealth Bank of Australia.CBA pushing back its rate cut expectations for the RBA from September,now not expecting a cut until November. Let's bring in David Reynolds who leadsthe markets live coverage. And let's start off with the posttraumatic Monday situation for the yen. So it looks like they probably didintervene. You know, the commentary was still kindof ambiguous, but if we assume that they.

Did, they're not getting much bang forthe buck. Yeah, that's one of the things that hasyou wondering if they did. Although from the other point of view,if if Japan did intervene in the yen, they might have to some extent beenforced into it because you have thin liquidity.The yen went almost through that 160.20 per dollar level.That's the that was the weakest saying in 1990.So if you go past that, it's in back to the eighties.As far as how weak the level is, what the scope of the decline is.So to some extent it's the kind of.

Territory where a government or acentral bank would normally intervene for its currency.It's getting to unacceptably low levels. There's no liquidity.If they don't step in, you could get a really disorderly retreat.So there's that and that's very much about a tacticalset up. I stress that tactical set up becauseyou do have the FOMC and also you have nonfarm payrolls coming for the US.So there's a big event risk that whatever they did yesterday, if they diddo it, could get overwritten by, you know, the impact that those events couldhave on US yields and therefore on the.

Differentiation between us and Japaneseyields and expectations for those. Now,the backdrop is also that even though there's a wide discount between Japaneserates and US rates based on the fundamentals, the way those have usuallyoperated, most people would reckon that the yen is weaker than it should be now.So this has become very much a momentum trade, less than a fundamental strategy.The fundamentals got us to the sort of 140, 150 area.The momentum has taken us past 150. So to some extent, Yen bears are asking,you know, the daring the Ministry of Finance to come in and drive them backout of it because the fundamentals don't.

Necessarily match where the yen is thatwhere the units act. So that means we're all still on theintervention watch yen volatility and implied volatility.So the expectations that traders have for swings in the currency is still up.Very elevated levels of sort of elevated levels usually seen in the run up tocentral bank meetings. Yeah.So, yeah, we're on watch.And you would think there'll be, you know, the potential for strong yen movesas we get these updated points coming out.That yen story to a large extent.

Overshadowed a lot of the other news inthe region. And another story we've been watching iswhat's been going on in Hong Kong. I mean, shares they're rallying 20% offJanuary lows but seems to be stalling out a bit and at the same time, a bouncein Chinese property stocks. How do we square that circle?Well, it's it's the story for Chinese and Hong Kongequities this year has very much been the phenomenally cheap investors hadbeen staying away from them for, you know, spurring that cheapness, ofcourse, have been very cheap for a reason.So the potential reward is there.

So is that risk.You know, and we've seen signs that the government is trying to support theshare market. The government is also trying to turnthe property sector around, although it wants to do so without rewarding peoplewho took what they might regard as unconscionable risks.So there's that question, you know, will that be enough?And there's also, you know, the Chinese share market has cried wolf, so tospeak, or inverse wolf, as it were, the all clear so many times and investorshave gotten burned. So anybody who's gone in at the bottomand has got a 20% return has got to be.

Thinking it might be time to take somemoney off the table, because I don't yeah, I can now without sparking a rout.If I wait for too much longer. The sort of the greed and fear nexustips more and more towards fear as the greed pockets satisfied, it's still verymuch a speculative market rather than a buy and hold one couple.Reynolds who leads our markets live Asia coverage there still ahead.Speaking of Chinese stocks, the megabanks reporting a rare declines inprofit margins. They're getting squeezed.We'll be getting some analysis from Jefferies, their outlook as well, next.This is Bloomberg.

We're going to get China's official andprivate factory activity gauges for April coming up in the next hour, witheconomists expecting the recovery to continue but at a slower pace.So for more on this, let's bring in our Greater China senior executive editorJohn Newton, Beijing. John, we are expecting PMIs to ease offa little in the month of April, but, you know, there were a few days off inApril, some public holidays. So can we explain this away with aseasonal argument or is this part of a trend?I think there is a there is a trend beginning to form.In March, we got the first positive.

Reading for manufacturing PMI in sixmonths. It was an expansion, 50.8.We're expecting the consensus market consensus is for 50.3.So a slight pullback. Paul, you talked about that vacation.That was actually the first time that spending on a per trip basis increasedversus 2019. And so there is some building momentumwhen it comes to optimism. You talk to Garfield about the stockmarket earlier. We've got inflows.There's a little bit more positive sort of sentiment about real estate.We had Chengdu removing any limitations.

On purchases and that really stokingsome optimism that other cities would follow and we would see an increase inhome buying. And John, it comes at a time when we'reseeing signs of increased international engagement from Chinese leaders.But there's been a flurry of high level meetings with the US and visits, and nowwe're hearing that she's headed to Europe.These trade relationships, are they more important than ever right now?I think they are extremely important given how weak the Chinese consumer hasbeen. China has a capacity issue.There are factories churning out.

Products, be they toys or shoes orelectronic electronics or electric vehicles.There is just not been enough consumption here in China to digest allthat production. And so China needs to be able to to shipsome of those products overseas to continue that economic expansion.And if the relationship that China has with the US, the West is so tense thatthat limits the the ability of companies to ship those products overseas, that'sgoing to be detrimental to the economy. And and we have seen a much moreaccommodative attitude taken by the leadership here when it comes to dealingwith the West.

And I think that's what we'll see whenPresident Xi visits Europe. A Greater China senior executive editor.John, do their big earnings make of course for China as well?Banker has been one that we've been watching financial woes there continueto mount. The embattled developer posting a netloss for the second straight quarter, the $50 million loss coming as itstruggles continues to struggle with slumping sales and a cash crunch there.Banco was, of course, China's second largest developer by sales last year.We've seen its stock and bonds on a slide over concerns over its financialcondition.

Let's get more insight.We should mention who's the head of China Financial Property Research atJefferies. Great to have you with us.So no signs of improvement for bank or really across the broader propertysector despite a number of measures of support from the government.Where does this story go from here, given we know how much of the broadereconomy relies on property and property adjacent industries?Good question. So first of all, we actually think thatChina will continue its moderate supportive policies for our propertysector.

In the past one week, we actually seethat quite a lot of cities, including some two tier two cities, started tosignificantly loosen the purchase restriction.But on the other hand, is that while quite a lot of investors are stillexpecting some bazooka stimulus, which we actually think there is low chance tohappen. So overall, if there is no webcast,email us. And the China continues to support morelike comfortable, affordable housing rather than like commercial housing, weactually see that the property sales would continue to decline, although thatdecline could be more moderate in the.

Second half of this year, comparing tothe first half due to the high due to the relativelylow base. We've seen a plunge in Ivanka's cashcoverage on short term debt to 98% from 151% at the end of 2023.Does this give an indication that for bunker and perhaps for a number of theseother developers that we'll need to see more urgency and frequency in assetdisposals? We do think that, yes, for quite a lotof developers, including some regional developers, there is more urgent forthem to sell to dispose more assets in order to boost that solvency.So for that one coup, we noticed that in.

The first quarter the monthly sales isactually about like 19 billion per month.It's actually a shot of our estimated break even level cash flow break evenlevel of about like 25 billion per month.So yeah, they definitely need to sell more.But however, it's quite still quite difficult to quite challenge in thisenvironment to dispose assets considering such a weak property market.Do you think that Ivanka can avoid a default or the need for a bailout?And if it did need a bailout, how well-placed is the local Shenzengovernment to provide that support?.

So if the situation hasn't changed,let's say, if it's very hard to see a turnaround of the cells and also thedisposal of asset for remain slowly. Then bank.Bank may probably need some support from either the local government or thecentral government for local government because for one is actually 27% hold byShenzhen metro, which is a wholly subsidiary of Shandong government.We actually already saw some support for supportive policies from the Shenzhengovernment. However, if we look at Shenzhen Natural,its own profitability, it actually doesn't have a like very strongprofitable business model and its own.

Balance sheet remains quite weak.Besides, Shanghai has another regional city developer defaulted on public debtin February. So we actually think that the chance fora bailout from Shenzhen government to lend is relatively small.Shooting. And of course, China's banks are veryexposed to what's been going on in the property market as well.And we saw from the results yesterday, profit slipping.How well equipped are China's banks to withstand this this long winter inChinese property? So first is that regarding to the Chinabanks property decline.

It was mainly due to the net interestmargin contraction rather than the asset quality pressure.In the first quarter, the bank still reported NPL ratio quite,quite stable. Some even see the improvement quarter onquarter in NPA ratios, especially those large asset banks.So the net interest margin pressure is the key issue, is the key pressure forthe reported a profit for four banks. We still see the net interest margincontraction in the rest of the year into first quarter of next year, mainlyaffected by the RPI cuts, especially in the first quarter this year.We do see some light loan pricing as.

Well as like as well as like new loanyield will continue to decline due to the very weak credit amount this year.So when do you see the actual bottoming out for margin erosion?Because it's hard to see a situation right now that the government stopspressing on these banks. Right.Very good question. So, yes, and my happened is that westill see banks long rosier, much higher than the nominal GDP, GDP growth,especially for Swiss banks. We see that you can see that the firstquarter of loan growth is still more is still around like 12% or at least a morethan 10% year on year, while nominal GDP.

Growth in the first quarter is actuallylower than 5%. So this situation may continue in the inthe rest of the year. Therefore, the overall net interestmargin, as we just mentioned, still was due a decline.So the earliest a time that we expect a letting just moderate margin bottomingis first quarter next year due to both a weak credit demand and as well as theRPI, RPI cuts. All right.All right. Susan Chen, head of China Financial andProperty Research at Jefferies, thanks so much for joining us.We have plenty more to come on DAYBREAK.

Asia, this is Bloomberg. Take a look at.Currency is, of course, front and center is really still dollar yen.We saw in the overnight session that momentum move in the yen actuallydriving the dollar to a two week low. But we are seeing that a lot of momentumnow. Really, if there was intervention, itdoesn't seem like it has had much of a long lasting impact.More to come here on DAYBREAK. Asia.This is Bloomberg. All right.Let's take a look at how crypto assets.

Are tracking at the moment.We've got Bitcoin rising again, just shy of $64,000.Been a good year for digital assets. Bitcoin itself up 50% year to date.Of course, it is notoriously volatile, but the launch of the spot Bitcoin ETFsin the US back in January that really catalyzed prices to go higher and nowit's going to be Hong Kong's turn Hong Kong spot Bitcoin and ether ETFs aregoing to debut today and this marks a crucial step for the city as it aims tobuild a hub for digital assets. Bloomberg's Annabel draws this with ournext guest at the Hong Kong Stock Exchange Bell.Thanks, Paul.

Yes, You said that really big morningfor the city today, given we've got these three ETF issuers that arebringing not only spot Bitcoin ETFs to market, but the ether spot ETF, etherETFs as well. But let's discuss now bring in our firstguest. This is Brian Roberts, head of equitiesproduct development at HKT. And Brian, I think really what peoplewant to know is just the level of interest we're going to see.Of course, there's been a lot of funds that have gone into the US ETFs.Will we see a similar sort of flow for Hong Kong, do you think?Yeah, well, I think Sanibel for having.

Me today is a pleasure as we kind ofusher in the next frontier for Hong Kong ETFs and we're excited to welcome thethe, the first Asia's first virtual asset spot ETFs with the listing ofthree Bitcoin spot ETFs and three ether spot ETFs as well.I think this is really going to go a long way to enrich our product diversityand also just further strengthen Hong Kong's position as ETFs marketplace.I think for investors as well, this is actually going to bring out a productthat's listed on a familiar exchange for them that really brings a scalable linkto it from traditional finance to virtual assets.And I think with these products, it's.

Really going to help to kind of reducesome of the complexities and burdens of owning virtual assets outright, andthey'll be able to now access these products.And probably a little less than an hour from now on, Hong Kong exchange andthey'll be able to do so in a very familiar wrapper that's liquid,transparent and also trades during Asian trading hours.And I think that's very, very important now with all of those positive aspectsto it then. But what what are you actually expectingin terms of demand for these? What's sort of a um, for instance in theto the year end.

Yeah.So I mean we don't put any kind of expectations around there.I think for us this is day one of the journey.This has been kind of the last couple of years.We've been really working towards bringing this out into the market.A year ago we brought out the futures based spot ETF.Today is we're going to mark the the listing of Asia's first spot, VirtualAsset ETFs. And you can kind of see from thebackground here, there's a lot of interest in for these kind of productsin the market.

The futures ETF though haven't seengreat subscription so far. So would you expect the demand to bebetter than what we've seen for the likes of, say, swaps, for instance, orSamsung Asset Management's futures and futures ETFs?Yeah, I think the the futures based ETFs, I think they've actually startedto gain some momentum this year. We've seen really good increase intrading volume. This year they're trading about 50million HKD a day. So we've seen an increase there.And they've also raised over 500 million HKD in assets.So I think as the the market has kind of.

Turned around for bitcoin and ether andseen better performance, we're seeing more investors coming into that space.And I think now with the spot ETFs, I think this will just be anotheraddition, just kind of enrich the product diversity.And I do think there is demand for investors to get this spot assets, theBitcoin in the Etherium assets here. So I think this would be really goodwhen it comes to diversity. Then when could we expect perhaps indifferent structured products to come to the market?Because I think also what investors want to see in Hong Kong is, is anything thatsort of linked to derivatives, for.

Instance?Yeah, Yeah. I think any time we at HK, we're alwaystrying to create really a vibrant, you know, product network effect.So we'll start with the ETFs and start to build that out.There could be levered in inverse that comes down the road, structuredproducts, derivatives. Again, we want to start with the cashproducts, build up the initial demand from there, and then from there we canstart to kind of expand that product ecosystem.You think? LEVITT And inverse is what's next foryou?.

Well, I think we'll continue to kind ofiterate here. I think we can continue to go into thephysical spot assets, maybe composite types of products, eventually gettinginto maybe levered in inverse types of strategies.There are needs for investors to be able to get access to inverse types ofstrategies for hedging needs and in different things along those lines.So there's possibilities of that down the road.But we need to see how this one kind of develops and matures before we kind ofgo to that space. What can really, of course, stimulate alot of demand would be whether these.

ETFs are included into the ETF Connectprogram to give mainland Chinese investors access.When would that happen? Yeah, so I think that's a greatquestion. And just a couple of weeks ago, the SAICand CCXI had a joint announcement that actually is going to reduce the producteligibility so lower some of the threat, some of the eligibility threshold.So lowering the, um, requirement, lowering the securities weighting.And so now when this goes into effect and hopefully that'll come into effecthere in the next several months, what it will do is it allow ETFs for southbound,the southbound ETFs in Hong Kong to hold.

Up to about 40% international securitiesin there. So I think this.It's going to be a great source of product innovation.Seeing more issuers come into this market, more products being eligible,both for mainland investors via Hong Kong and for international investorsgoing into the mainland and virtual assets, I mean, we can look at that kindof down the road, but I think we're just excited about the new kind ofenhancement that we're going to have that was just announced a couple ofweeks ago. So there's four ETFs right now that areon the ETF Connect program out of, say,.

180 or so in the city.How many more then do you think will be eligible with the new criteria?I mean, right now, I mean, we'll we'll go through the review process here in acouple of months and we'll see kind of where everything kind of falls.But I do think we'll start to see more ETFs included both in the North and theSouth to be included in ETF Connect. And again, I think, you know, for usit's less about what will be included kind of day one in this initial kind ofphase. But again, I think it's going to allowETF issuers new and potential and existing ETF issuers to bring out newkind of strategies that will help to.

Meet demand in the mainland.And last year, of course, and this is a bit of a bigger picture question, but wedid have the the Saudi ETF listed in the city.Yeah. What are you doing in the otherdirection? Yeah.Yeah. So, you know, as you mentioned, latelast year, we we listed the CSP Saudi Arabia ETF.That ETF has done really well and now has over eight and a half billion HongKong dollars worth of volume. It's the largest Saudi Arabia ETF in theworld.

And this is all part of really the, youknow, Hong Kong and China having better connections with the Middle East andvice versa. So that was the first stage of it all,where we would love to see some of our products in China, equity in Hong Kongequities go to the Saudi Arabia ETF market.And I think we'll work with, you know, our counterparts over there, the ETFissuers in Saudi Arabia, to eventually make that happen.But again, Saudi Arabia ETF here is the first step.Next step will be to bring products there in due course.All right, Brian, thanks for your time.

That was Brian Roberts there from VIXPaul. And you can probably hear the enthusiasmin the air this morning. Of course, we're just approaching thatlisting ceremony that will start in the spot, eighth spot.Bitcoin ETFs coming live in about 50 minutes from now.All right. Bloomberg's NFL drill is there in a veryvibrant, lively Hong Kong Stock Exchange.And we're going to have more on Hong Kong's crypto ETF debut later on today.You can catch our interviews with the CEOs of China, AMC, Harvest GlobalInvestments and hash capital at these.

Times that you see on your screen.Binance's CEO Changpeng Zhao was be sentenced on Tuesday after a guilty pleaon US money laundering violations. Prosecutors want a three year prisonsentence for the crypto billionaire, also known as Cross has said.Asia editor Richard Henderson joins us now for today's big take.So, Richard, is it likely that he's going to be sentenced to those threeyears? Yes, that's a good question.That's obviously what we're all waiting for.It's important to note it was only a week ago that the US prosecutors hadrequested those three years.

The sentencing guidelines that everyonehad been talking about indicated about 18 months.So this is obviously double that length of time.So some of the reasons for why the US prosecutors have asked for a longersentence for those three years is see these flippant attitudes.We know that in the past he's told his own employees, and this is according toUS authorities, to break the rules, to wantonly, you know, flagrantly avoid theregulations that the company should have been following.And so it's that attitude that permeated through the company the US alleges.That's one of the reasons that they're.

Looking for a harsher a harsher sentenceof three years, which it has failed.Has there been much impact and going forward to him finance itself?That's a great question. There has been very limited impact fromwhat we can gather, talking to users of the platform.And let's remember that Binance is the largest crypto exchange globally.Its market share was up to around 60% of spot crypto.That's around 40%. Now, it did dip in its recover to around40%. That makes it still the world's biggest.So that's really important.

Users are still using finance in termsof its operations. The board is is basically packed with alot of those who are close to Sisi during his time as CEO.His partner or former partner who is the mother of his three children is isclosely involved in the company's operations.Overall, it appears that things are going quite well.We saw a 30% increase in users in calendar year 2023 and also in the yearto the end of March. Estimated revenues from Bloombergestimates are almost $10 billion. So it's a hugely profitable business,doing very well.

And of course, we've got the backdrop ofthis this boom in crypto assets with Bitcoin touching a high back in March.So if Ceesay does go to prison, what are the chances that he can still sleepwell, knowing that he's still a billionaire?Yes. Well, as part of his plea agreement, heis allowed to keep his shares in Binance.He has around a 90% stake. The value of that is around $43 billion.He ranks on Bloomberg's own rich list on number number 38.So this is one of the wealthiest individuals in the world and by far thewealthiest prison inmates.

When he when he eventually does go toprison, whether it's for 18 months or three years or some time in between.So he he will still be wildly wealthy and will be leaving prison after his hissentence. A billionaire one expects, given the thefortunes of finance so far. And and this resurgence we're seeingacross across the crypto world helped along this year by spike Bitcoin ETFslaunched in the US and now today in Hong Kong as well.Across asset Asia editor Richard Henderson there.And subscribers can read the full story for today's big take on the terminal.You can head over to Bloomberg.com as.

Well.More to come here on DAYBREAK. Asia.This is Bloomberg. Well, data security is again takingcenter stage in the intensifying rivalry between the US and China, as afterWashington last week moved to force the sale or ban of Tik Tok.Beijing, on the other hand, seems to be embracing firms that play by its rules,including Tesla from all its bring our Asia Government and economycorrespondent Rebecca Chang. Welcome.So it is interesting, isn't it? Because on the one hand you have theongoing engagement, high level.

Engagement.Yellen Blinken will talk a little bit about as he headed to Europe soon.But at the same time, you know, these evergreen areas of tension continue toplay out. Yes, I think the Tesla tick tock storyis an excellent encapsulation of that. It really is a sort of tale of two techcompanies here. And we see tick tock on the one handfacing this divest or ban bill, and it did take quite some time.It's worth remembering to finally get to a framework where US lawmakers feltcomfortable actually moving on that legislation.This is effectively years in the works.

Versus firms like Tesla with that Bidenpartnership now announced. And what essentially we're seeing isthat as we see increasing obstacles and challenges, a bit more trade frictionwhen it comes to physical trades and access to strategic technologies.But that data too, is equally moving along these lines of the fragmentedworld and becoming sort of increasingly disparate and separate with the US, ofcourse, taking on some of those qualities of of restricting Internetaccess, which which China has long, long been criticized for.Well, as Heidi mentioned, we've got China's president, Xi Jinping, on hisway to Europe.

He has been there for five years.What achievements is he seeking on this trip?Yes, this is a really interesting one, too.That kicks off May the fifth. And we are going to see him going toFrance, Hungary and Serbia. And even that sort of selection ofcountries is quite interesting here. So his first trip to the European Unionin five years now France. So some really interesting sort detailscoming on coming out from what we're going to expect from that trip.But, you know, for President Xi Jinping, Emmanuel Macron poses a figure thatperhaps is more receptive to his.

Messaging.We know that Mackerel is planning to invite President Xi Jinping to hisgrandmother's house in the Pyrenees. And it's sort of this very reciprocalpersonal gesture that in some ways matches the invitation that Xi Jinpingextended to Macron when he was last in Beijing, inviting him to the Guangdonggovernor's residence, which is where Xi Jinping's father was posted.So we are seeing the sort of personal touch coming in here, but it's going tobe a challenge. Of course, these big presiding issuesover a VS is still reigning. France, of course, was one of the mainbackers of that EU probe into EVs.

And China, for its part, has alsotargeted an anti-dumping probe that essentially looks at French and Frenchliquor and cognac. And so we are expecting Macron to raisethat issue of cognac act at this dinner at the Elysee that he's planning for XiJinping. So as much as we are seeing sort of boththese warm gestures on both sides, quite a few points of friction.Now government and economy correspondent Rebecca John Wilkins, who we all acrossof course, that European foray by Xi Jinping take a look at how marketsaround the region are trading. And broadly, we are seeing a bit ofupside tracking the Wall Street session.

Higher there.We are seeing leadership from Japan, of course, after that delayed opening witha public holiday yesterday, giving traders really in Japan the first chanceto react to the volatile yen session on Monday that sparked suspicion ofintervention, which may or may not be kind of getting closer to beingconfirmed. And we are seeing quite a bit of upsidethere, both for the Nikkei and the broader topics as well.The big outperformer when it comes to the topics is really Toyota seeing again of almost 2% there as we continue to watch the the play out when it comesto the yen, we're also seeing quite a.

Bit of upside for Korean equities.It is a Samsung story, of course, that CHIP division finally returning toprofit. A pretty healthy reaction all round.But of course, Samsung see a pretty muted response given that stock hasreally underperformed the other chip leaders like Nvidia and SK Hynix.Korean companies, though, when it comes to first quarter earnings, some progressbeing made when it comes to corporate reform.We are seeing Korean equities getting some love from funds that have shunnedother emerging market Asia peers there. The other spotlight that we've cast onis over trading houses in Japan.

As we get this Japan reopened, we'reseeing broad upside, really robust upside, including for Sumitomo, who'sleading all of this with Elliott management having built a quite largestake in Sumitomo. This is, of course, Warren Buffett's oneof Warren Buffett's favorite Japanese trading houses.That was according to Bloomberg reporting.We had seen, of course, Elliot previously pushing for governancechanges at Toshiba, at SoftBank as well, and time reaching a record high lastweek and just extending those gains today up by over 7%.Well, you can also tune into Bloomberg.

Radio to hear more from the day's bignewsmakers, get in-depth analysis on our top stories from the DAYBREAK teamthere. We're broadcasting live from our studioin Hong Kong. You can listen in via the app Radio Plusor Bloomberg Radio dot com. This is Bloomberg. The top corporate stories that we'refollowing this hour. Paramount Global has replaced its CEO,Bob Bakish, with the management committee headed by three seniorexecutives. The media giant is negotiating apossible merger with independent.

Producer Skydance, led by David Ellison.Separately, Paramount reported first quarter earnings that beat estimates onthe back of Super Bowl ad sales and improving results from its streamingservice. We work at its major financial backers,including SoftBank, have struck a new restructuring deal, spurning a competingplan from co-founder Adam Neumann. The senior lenders have agreed toprovide $450 million in financing in exchange for equity in the reorganizedbusiness. The deal could see work exit bankruptcyprotection in the coming months. What we hear from Samsung a little bitearlier this morning and South Korea's.

Robust first quarter earnings and itsgovernments corporate reform initiatives are fueling foreign investors faith in astock market. For more Asia stocks, reporter ShikhaMukherjee joins us now. She has Korea's earnings season been sofar compared to its peers? Hi, Bill.So, yeah, just for some context, foreign funds have put about $1.7 billion intoSouth Korea stock market in April. That's in the total higher for longerinterest rates narrative, a stronger dollar.So it's looking pretty good for the stock market.Most of the markets have seen net.

Outflows in emerging Asia, excludingChina. The earnings season is a big driver forthis optimism. Nearly 70% of the companies that havereported earnings so far have better posted better than expected results,according to Goldman Sachs analysis. Of course, this morning we saw Samsungadding to that with its big profit beat and returning to profitability for thefirst time since 2022. And you also have industrials andconsumer staples firms that have beaten estimates quite nicely.Some examples are Samsung, S.A. there's also HD Korea shipbuilding.And ahead of the second quarter, Goldman.

Has seen that IT firms and consumerstaples firms are seeing positive earnings revisions from analysts.So it's quite a good trend going on in the market right now.What if she goes in the corporate value up trade, losing momentum of late?And we know this is a longer term story, but our traders do positive on theresolution of the so-called Korea discount.Absolutely, Heidi. So at the corporate value of trade isexpected to see some momentum from May 2nd.Hopefully, that's what investors are hoping for.And that's one of the other reasons why.

Foreign funds are still getting into themarket. The Korea exchange is expected to comeout with more concrete measures on this corporate value program that's intendedto boost evaluations of companies and improve shareholder returns in thecountry. And they kind of did quite disappointedthe market back in February. So I think everyone's going to be keenlywatching on Thursday when the Korean exchange comes out with more details.We're also expecting a value up index to be launched in the country that willtrack the firms that will benefit the most from any such initiative ifimplementation is carried out properly.

The bellwethers to watch, though, willbe the family controlled firms such as Samsung, because really these are theones where change in terms of carpentry forms has to happen the most.And lastly, policymakers are tabling or looking to tabledividends being taxed separately. Okay.Asia stocks reporter Shikha Mukerji there.Let's just take a quick look at how Samsung is doing.Of course, we had a beat on some of those headline numbers.The mobile unit ended up being the single largest contributor to firstquarter earnings.

Samsung shares not picking up a bitbetter by 1.7%. We do have the earnings call starting atthe top of the hour. So stay tuned for headlines out of that.All right. That's it for Bloomberg Daybreak.Asian markets coverage continues to the start of trade in Hong Kong, Shanghaiand Shenzhen.

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