1 00:00:00,240 --> 00:00:07,240 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:11,119 --> 00:00:13,680 Speaker 2: This is Bloomberg day Break Weekend, our global look at 3 00:00:13,680 --> 00:00:15,720 Speaker 2: the top stories in the coming week from our day 4 00:00:15,720 --> 00:00:18,640 Speaker 2: Break anchors all around the world. Straight ahead on the program, 5 00:00:18,640 --> 00:00:21,919 Speaker 2: Federal Reserve Chair Jerome Powell opening the door to a 6 00:00:21,960 --> 00:00:26,080 Speaker 2: possible interest rate cut as early as next month. Plus 7 00:00:26,160 --> 00:00:29,639 Speaker 2: earnings from the AI chipmaker and Vidia amid worries about 8 00:00:29,640 --> 00:00:33,040 Speaker 2: its business in China. I'm Tom Busby in New York. 9 00:00:33,400 --> 00:00:35,400 Speaker 3: I'm Stephen Carolyn London, who we are looking at the 10 00:00:35,440 --> 00:00:39,360 Speaker 3: difficult calculations looming for European governments as they prepare their 11 00:00:39,400 --> 00:00:40,960 Speaker 3: spending plans for next year. 12 00:00:41,479 --> 00:00:44,320 Speaker 4: I'm Dek Krisner, looking ahead to this week's rate decision 13 00:00:44,400 --> 00:00:46,720 Speaker 4: from the Bank of Korea, as well as the state 14 00:00:46,760 --> 00:00:48,800 Speaker 4: of the IPO market in Hong Kong. 15 00:00:50,400 --> 00:00:54,440 Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 16 00:00:54,480 --> 00:00:57,120 Speaker 1: eleven to three Yeho, New York, Bloomberg ninety nine to 17 00:00:57,120 --> 00:01:01,440 Speaker 1: one Washington, DC, Bloomberg ninety two nine in Boston, DAB 18 00:01:01,680 --> 00:01:05,959 Speaker 1: Digital Radio, London, Sirius XM one twenty one, and around 19 00:01:06,040 --> 00:01:09,080 Speaker 1: the world on Bloomberg Radio dot Com and The Bloomberg 20 00:01:09,120 --> 00:01:10,000 Speaker 1: Business app. 21 00:01:13,480 --> 00:01:14,039 Speaker 5: Good day to you. 22 00:01:14,160 --> 00:01:16,480 Speaker 2: I'm Tom Busby, and we begin today's program with some 23 00:01:16,560 --> 00:01:20,399 Speaker 2: revealing statements from Federal Reserve Chair Jerome Powell about possibly 24 00:01:20,680 --> 00:01:24,319 Speaker 2: changing the FED stance on rates. That's ahead of inflation 25 00:01:24,480 --> 00:01:27,320 Speaker 2: and personal incomes and spending data in the US. We're 26 00:01:27,360 --> 00:01:31,679 Speaker 2: joined by Stuart Paul, us economist with Bloomberg Economics. Well, Stuart, 27 00:01:31,720 --> 00:01:34,479 Speaker 2: I just want to hear your takeaways from Friday's rather 28 00:01:34,640 --> 00:01:37,399 Speaker 2: dubvish speech from Fedchair Jerome Powell, because it looks like 29 00:01:37,400 --> 00:01:39,920 Speaker 2: Wall Street's already pricing in a rate cut at the 30 00:01:39,920 --> 00:01:40,760 Speaker 2: September meeting. 31 00:01:41,160 --> 00:01:44,400 Speaker 6: Well, the hot headline that we got from the speech 32 00:01:44,440 --> 00:01:47,240 Speaker 6: at Jackson Hole is that the balance of risks for 33 00:01:47,280 --> 00:01:50,560 Speaker 6: the Federal Reserve and for monetary policymakers are shifting, and 34 00:01:50,600 --> 00:01:56,120 Speaker 6: in particular the downside risks to employment are shifting materially 35 00:01:56,240 --> 00:01:59,440 Speaker 6: they're rising. So, if anything, the Federal Reserve chairman was 36 00:01:59,520 --> 00:02:02,760 Speaker 6: opening the door or at least acknowledging the cooling labor 37 00:02:02,800 --> 00:02:06,560 Speaker 6: market and opening the door to a rate cut in September. 38 00:02:06,880 --> 00:02:10,360 Speaker 6: But if anything, I think the tone of the speech 39 00:02:10,760 --> 00:02:13,480 Speaker 6: was actually a little bit hawkish, so he could be 40 00:02:13,520 --> 00:02:17,400 Speaker 6: getting something like a hawkish cut in September. He was 41 00:02:17,480 --> 00:02:20,320 Speaker 6: really trying to keep people from reading too much into 42 00:02:20,320 --> 00:02:23,519 Speaker 6: the idea that the resumption of rate cuts would mean 43 00:02:23,919 --> 00:02:28,160 Speaker 6: a cycle of cutting follows. For example, he noted that 44 00:02:28,520 --> 00:02:30,840 Speaker 6: the labor market is cooling, The pace of hiring is 45 00:02:30,880 --> 00:02:34,320 Speaker 6: materially slowing, but there is not a lot of slack 46 00:02:34,480 --> 00:02:37,760 Speaker 6: in the labor market. The pace of GDP growth is slowing, 47 00:02:38,120 --> 00:02:42,560 Speaker 6: but there's not a lot of slack in economic activity. Yes, 48 00:02:43,080 --> 00:02:46,760 Speaker 6: risks to inflation are still skewed to the upside. So 49 00:02:46,800 --> 00:02:49,960 Speaker 6: he was very cautious in his tone. He acknowledged that 50 00:02:50,160 --> 00:02:53,560 Speaker 6: it might be time to adjust the stance of monetary policy, 51 00:02:53,880 --> 00:02:55,880 Speaker 6: but he was not willing to go so far as 52 00:02:55,919 --> 00:02:58,239 Speaker 6: to say there would be multiple sequential cuts. 53 00:02:58,440 --> 00:03:01,240 Speaker 2: Well, what he said about it is we're in a 54 00:03:01,320 --> 00:03:04,040 Speaker 2: curious kind of balance right now in the labor department. 55 00:03:04,120 --> 00:03:06,679 Speaker 2: So he is hedging his bets. And when you say 56 00:03:06,720 --> 00:03:10,840 Speaker 2: a hawkish cut, you just mean a quarter percentage point, right. 57 00:03:10,760 --> 00:03:14,400 Speaker 6: A quarter point cut, and a clear signal at the 58 00:03:14,480 --> 00:03:18,359 Speaker 6: time they decide to move right, that additional sequential rate 59 00:03:18,400 --> 00:03:22,000 Speaker 6: cuts are not predetermined. When we get something like a 60 00:03:22,040 --> 00:03:26,920 Speaker 6: hawkish cut, it's really an incremental loosening of monetary policy 61 00:03:27,480 --> 00:03:31,640 Speaker 6: plus hawkish messaging, and that's what Powell was starting to 62 00:03:31,680 --> 00:03:34,639 Speaker 6: signal in his final Jackson Whole speech. 63 00:03:35,240 --> 00:03:39,280 Speaker 2: We have had some dissension previously in the FED, some 64 00:03:39,320 --> 00:03:42,840 Speaker 2: members saying, hey, we're ready to cut any time. Has 65 00:03:42,880 --> 00:03:45,160 Speaker 2: that balance shifted now are there? Do you think it's 66 00:03:45,200 --> 00:03:47,960 Speaker 2: not just him, not just the one or two. Christopher 67 00:03:47,960 --> 00:03:50,760 Speaker 2: Waller and a few others are more saying this may 68 00:03:50,800 --> 00:03:51,400 Speaker 2: be the time. 69 00:03:52,040 --> 00:03:55,240 Speaker 6: Heading into Chairman Powell's speech, other members of the FOMC, 70 00:03:56,000 --> 00:04:00,520 Speaker 6: the branch presidents, including Susan Collins from Boston, All Goals 71 00:04:00,720 --> 00:04:03,840 Speaker 6: from Chicago, Beth Hammock from Cleveland, they were very clear 72 00:04:03,840 --> 00:04:06,160 Speaker 6: that they had not yet made up their mind that 73 00:04:06,240 --> 00:04:08,960 Speaker 6: this is the time to cut rates. There was a 74 00:04:09,000 --> 00:04:11,680 Speaker 6: coalition in July, and it seems like there's still a 75 00:04:11,680 --> 00:04:16,760 Speaker 6: coalition now that is very cautious about moving to looser 76 00:04:17,000 --> 00:04:20,120 Speaker 6: monetary policy right now. But I do think that what 77 00:04:20,160 --> 00:04:23,640 Speaker 6: we saw from Chairman from Chairman Powell, who does speak 78 00:04:24,080 --> 00:04:29,000 Speaker 6: mostly to the central tendency of the committee, that central 79 00:04:29,040 --> 00:04:32,240 Speaker 6: tendency that media FOMC participant is probably getting a little 80 00:04:32,240 --> 00:04:35,320 Speaker 6: bit more comfortable with the idea of moving relatively soon. 81 00:04:35,760 --> 00:04:38,479 Speaker 6: But I think that This is what's most important, This 82 00:04:38,760 --> 00:04:42,799 Speaker 6: relatively hawkish tone that was included in the speech, even 83 00:04:42,839 --> 00:04:45,880 Speaker 6: with signaling that they're becoming more comfortable with one rate cut, 84 00:04:46,400 --> 00:04:49,960 Speaker 6: it would just be probably one rate cut, and I 85 00:04:50,000 --> 00:04:53,120 Speaker 6: think that there could be a negotiation come September that 86 00:04:53,760 --> 00:04:56,520 Speaker 6: it's time to lower by a lower the federal funds 87 00:04:56,600 --> 00:05:00,000 Speaker 6: rate target range by a quarter point. But they would 88 00:05:00,080 --> 00:05:04,320 Speaker 6: move slowly, they'll move deliberately, they'll move cautiously, and probably 89 00:05:04,440 --> 00:05:08,960 Speaker 6: not another time this year. From an economic perspective, Does 90 00:05:09,000 --> 00:05:12,840 Speaker 6: it really matter if they move in September or November 91 00:05:12,960 --> 00:05:16,159 Speaker 6: or December. No, it doesn't really matter from an economic perspective. 92 00:05:16,240 --> 00:05:18,960 Speaker 6: So I think that the Chairman can build a coalition 93 00:05:19,320 --> 00:05:22,080 Speaker 6: given the fact that there had previously been dissension. He 94 00:05:22,160 --> 00:05:26,640 Speaker 6: can build a coalition now that would be more amenable 95 00:05:26,960 --> 00:05:29,800 Speaker 6: to lowering the federal funds r a target range, as 96 00:05:29,839 --> 00:05:32,039 Speaker 6: long as they feel like they're not getting too far 97 00:05:32,080 --> 00:05:35,360 Speaker 6: out ahead of their skis and that they're not devoted 98 00:05:35,440 --> 00:05:37,400 Speaker 6: to sequential rate cuts. 99 00:05:37,800 --> 00:05:40,479 Speaker 2: Well, one thing the Chairman has been consistent on is 100 00:05:40,520 --> 00:05:43,200 Speaker 2: that his decision, the decision of the Central Bank, will 101 00:05:43,200 --> 00:05:45,839 Speaker 2: be data dependent, and we're getting some important data this week. 102 00:05:45,920 --> 00:05:50,200 Speaker 2: July PCE the fence preferred measure of inflation and also 103 00:05:50,320 --> 00:05:54,039 Speaker 2: personal incomes and outlays. You know, just on Friday, the 104 00:05:54,120 --> 00:05:57,040 Speaker 2: Chairman said that the result of the Trump tariffs has 105 00:05:57,080 --> 00:06:01,200 Speaker 2: been now clearly visible, but the effects made relatively short lived. 106 00:06:01,279 --> 00:06:03,880 Speaker 2: So I mean, is he seeing inflation as maybe it 107 00:06:03,960 --> 00:06:04,640 Speaker 2: isn't so bad. 108 00:06:05,160 --> 00:06:07,680 Speaker 6: For the month of July, We're estimating that core PCE 109 00:06:08,160 --> 00:06:11,920 Speaker 6: prices rose zero point three percent on the month. There 110 00:06:11,960 --> 00:06:16,880 Speaker 6: was actually relatively less pass through of tariff price pressures 111 00:06:17,040 --> 00:06:20,680 Speaker 6: in the month of July. We had seen some in April, May, June, 112 00:06:20,839 --> 00:06:23,080 Speaker 6: a little bit less in July. Where a lot of 113 00:06:23,080 --> 00:06:25,760 Speaker 6: the core inflation pressures are going to be coming from 114 00:06:26,080 --> 00:06:29,240 Speaker 6: is actually from financial services prices. This is a lot 115 00:06:29,279 --> 00:06:32,440 Speaker 6: of things like portfolio management fees, for example. And when 116 00:06:32,440 --> 00:06:35,599 Speaker 6: you see financial services prices rising, it's mostly just the 117 00:06:35,640 --> 00:06:39,040 Speaker 6: reflection of a rally in the equity market. It's a 118 00:06:39,120 --> 00:06:43,480 Speaker 6: rally in financial asset prices that are feeding through into 119 00:06:43,480 --> 00:06:47,760 Speaker 6: financial services prices. And so there's an extent to which 120 00:06:47,880 --> 00:06:49,919 Speaker 6: the Committee is going to be looking at this July 121 00:06:50,080 --> 00:06:54,800 Speaker 6: PCE inflation report and thinking, hmm, there are elevated, frothy 122 00:06:55,000 --> 00:06:58,720 Speaker 6: asset markets and so even if we decide to cut 123 00:06:58,760 --> 00:07:01,080 Speaker 6: rates in September, even if we decide to cut rates 124 00:07:01,080 --> 00:07:04,320 Speaker 6: this year, we should be very slow and deliberate in 125 00:07:04,400 --> 00:07:09,440 Speaker 6: doing so. We still have a reasonably close federal funds 126 00:07:09,520 --> 00:07:12,560 Speaker 6: rate target to what we consider to be neutral right now. 127 00:07:12,680 --> 00:07:18,000 Speaker 6: Monetary policy is only modestly restrictive, if it's restrictive at all, 128 00:07:18,240 --> 00:07:20,040 Speaker 6: So we should move very slowly. 129 00:07:20,480 --> 00:07:23,440 Speaker 2: July PCE and personal spending both out just ahead of 130 00:07:23,440 --> 00:07:26,840 Speaker 2: Wall Street's opening bell this Friday. The next FED meeting 131 00:07:26,880 --> 00:07:29,800 Speaker 2: September sixteenth and seventeenth, a lot to look forward to 132 00:07:29,840 --> 00:07:33,200 Speaker 2: our thanks to Stuart paul Us, economist with Bloomberg Economics. 133 00:07:33,520 --> 00:07:36,080 Speaker 2: We move next to earnings from the last of text 134 00:07:36,160 --> 00:07:39,560 Speaker 2: Magnificent seven to report this period AI chip maker and Nvidia. 135 00:07:39,680 --> 00:07:42,760 Speaker 2: Those results from the world's only four trillion dollar company 136 00:07:42,800 --> 00:07:45,120 Speaker 2: are looming large over Wall Street because of all the 137 00:07:45,160 --> 00:07:49,560 Speaker 2: spending out artificial intelligence and questions about the company's business 138 00:07:49,640 --> 00:07:51,760 Speaker 2: in China. For more on what to expect and what 139 00:07:51,840 --> 00:07:55,760 Speaker 2: maybe next, we're joined by Kun John Sobani, Bloomberg Intelligence, 140 00:07:56,000 --> 00:08:00,560 Speaker 2: Senior Semiconductor analyst. Well, Kunjohn, thank you for here. In 141 00:08:00,640 --> 00:08:02,600 Speaker 2: video shares. They've taken a few hits in the past 142 00:08:02,640 --> 00:08:05,040 Speaker 2: week or so, and there are questions about tariffs and 143 00:08:05,080 --> 00:08:07,600 Speaker 2: what looks like a setback and its ability to sell 144 00:08:07,680 --> 00:08:10,640 Speaker 2: chips in China. So with all that, looking backwards, what 145 00:08:10,680 --> 00:08:13,000 Speaker 2: are you expecting to see in its second quarter results? 146 00:08:13,840 --> 00:08:17,480 Speaker 5: From a results and guide perspective, we expect Nvidia, in 147 00:08:17,520 --> 00:08:21,840 Speaker 5: its typical fashion, to deliver again a strong beat and raise. 148 00:08:22,600 --> 00:08:27,679 Speaker 5: Our checks suggest strong Blackwell ramp ongoing and also strong 149 00:08:27,760 --> 00:08:30,720 Speaker 5: networking attached along with it, so that should boost both 150 00:08:30,720 --> 00:08:34,120 Speaker 5: compute and networking. The GB three hundred, which is their 151 00:08:34,160 --> 00:08:37,640 Speaker 5: next version of Blackwell GPUs, also is likely to be 152 00:08:37,720 --> 00:08:40,480 Speaker 5: running ahead of schedules, so that can also help with 153 00:08:40,559 --> 00:08:44,319 Speaker 5: a guidance beat. But from a stock reaction perspective, the 154 00:08:44,400 --> 00:08:48,520 Speaker 5: key focus again will be on narrative rather than purely numbers, 155 00:08:48,520 --> 00:08:51,200 Speaker 5: as we have seen over the last few quarters. First, 156 00:08:51,280 --> 00:08:55,240 Speaker 5: a key topic front and center is the magnitude and 157 00:08:55,360 --> 00:08:59,040 Speaker 5: the timing of resuming the China Hills. They have now 158 00:08:59,080 --> 00:09:02,280 Speaker 5: received license approval from the Trump Admin, but there are 159 00:09:02,320 --> 00:09:06,120 Speaker 5: still a lot of unclarity and moving parts regarding how 160 00:09:06,240 --> 00:09:10,240 Speaker 5: soon can they restart production and start shipping if those 161 00:09:10,280 --> 00:09:14,160 Speaker 5: customers are still there wanting the same h twenty parts 162 00:09:14,480 --> 00:09:16,840 Speaker 5: news has come out which hasn't made confunded yet, but 163 00:09:16,880 --> 00:09:20,080 Speaker 5: there seems to be that the Chinese government forcing the 164 00:09:20,120 --> 00:09:22,120 Speaker 5: customers not to buy in Nvidia chips. So there's a 165 00:09:22,160 --> 00:09:24,560 Speaker 5: lot of moving parts around that China angle, which will 166 00:09:24,600 --> 00:09:25,439 Speaker 5: be very important. 167 00:09:25,640 --> 00:09:29,680 Speaker 2: Well, those chips that the Trump administration has given Nvidia 168 00:09:30,160 --> 00:09:34,600 Speaker 2: the access into China to sell, they're less powerful, certainly 169 00:09:34,600 --> 00:09:37,920 Speaker 2: not the Blackwell trips. These are older chips. So the 170 00:09:38,200 --> 00:09:40,920 Speaker 2: huaweis and the other companies there do they make a 171 00:09:40,960 --> 00:09:43,440 Speaker 2: similar product? I mean, is that the reason why if 172 00:09:43,480 --> 00:09:47,800 Speaker 2: this is confirmed about Beijing saying we don't want your chips. 173 00:09:47,720 --> 00:09:50,720 Speaker 5: At this point, there is if you take the best 174 00:09:50,760 --> 00:09:54,720 Speaker 5: available GPU over in China, yes, you know, it is 175 00:09:54,800 --> 00:09:58,880 Speaker 5: comparable to the older Age twenties that NVIDIAs said selling. 176 00:09:59,160 --> 00:10:02,800 Speaker 5: But regardless of that, those GPUs don't have enough supply 177 00:10:03,000 --> 00:10:06,000 Speaker 5: capacity because they don't have access to the leading edge 178 00:10:06,000 --> 00:10:09,440 Speaker 5: fabs as Nvidia does. So you know, if there was 179 00:10:09,520 --> 00:10:13,199 Speaker 5: no pressure from the Chinese government, the customers would happily 180 00:10:13,240 --> 00:10:15,760 Speaker 5: and readily buy a lot more of the Age twenties. 181 00:10:15,800 --> 00:10:19,520 Speaker 5: So right now, it's a lot more geopolitics driving this 182 00:10:19,640 --> 00:10:23,479 Speaker 5: scenario or rather than just pure demand, supply and performance comparison. 183 00:10:23,920 --> 00:10:26,679 Speaker 2: Well, Reuters reported last week that in Video may be 184 00:10:26,800 --> 00:10:29,480 Speaker 2: working on a new chip a little more powerful than 185 00:10:29,520 --> 00:10:32,679 Speaker 2: the Age twenty that is just for China. Has this 186 00:10:32,760 --> 00:10:33,920 Speaker 2: been confirmed. 187 00:10:34,080 --> 00:10:36,240 Speaker 5: This has not been confirmed. And again this is a 188 00:10:36,320 --> 00:10:38,959 Speaker 5: lot of news has come out over the last few 189 00:10:39,000 --> 00:10:41,959 Speaker 5: weeks which everyone including US is waiting to speak to 190 00:10:42,000 --> 00:10:45,440 Speaker 5: the company as they report earnings to confirm a lot 191 00:10:45,480 --> 00:10:48,000 Speaker 5: of these things. And you know, I wouldn't be surprised 192 00:10:48,040 --> 00:10:52,320 Speaker 5: regarding the new chip. Every big generation Leap architecture generation Leap, 193 00:10:52,760 --> 00:10:56,079 Speaker 5: Nvidia has designed a new chip for China. So now 194 00:10:56,120 --> 00:10:58,920 Speaker 5: we are as it is shipping blackwell, it makes sense 195 00:10:58,960 --> 00:11:02,160 Speaker 5: that it is designing a lower powered black Belt version, 196 00:11:02,200 --> 00:11:05,000 Speaker 5: which is what the Reuter News was talking about, and 197 00:11:05,080 --> 00:11:07,360 Speaker 5: so that would not be very surprising to us. But 198 00:11:07,440 --> 00:11:09,280 Speaker 5: again you would have to go through this whole cycle 199 00:11:09,360 --> 00:11:13,040 Speaker 5: of getting licensing and sanctions because it will be definitely 200 00:11:13,120 --> 00:11:14,800 Speaker 5: more powerful than the Age twenty. 201 00:11:15,480 --> 00:11:19,280 Speaker 2: Well, with all of this is a four trillion dollar company. 202 00:11:19,920 --> 00:11:23,480 Speaker 2: How important is China to Invidia's future revenue? I mean, 203 00:11:23,520 --> 00:11:25,560 Speaker 2: it looks like they're doing well without it, but we 204 00:11:25,640 --> 00:11:28,240 Speaker 2: all know it's the second largest economy on Earth. You know, 205 00:11:28,280 --> 00:11:32,840 Speaker 2: the spending is astronomical. How big is China to Invidia. 206 00:11:33,559 --> 00:11:35,520 Speaker 5: Yeah, so there are two parts of it. One is 207 00:11:35,520 --> 00:11:39,160 Speaker 5: from a tamp perspective. It's definitely the sort of biggest 208 00:11:39,160 --> 00:11:42,760 Speaker 5: stamp outside of the US when it comes to what 209 00:11:43,400 --> 00:11:48,120 Speaker 5: Nvidia can sell to, and it is home to the 210 00:11:48,160 --> 00:11:52,160 Speaker 5: next largest hyperscalers and cloud providers. So it's definitely a 211 00:11:52,200 --> 00:11:54,880 Speaker 5: big market that you don't want to lose out, especially 212 00:11:54,920 --> 00:11:58,719 Speaker 5: if you're Nvidia for the long term. But however, in 213 00:11:58,760 --> 00:12:01,000 Speaker 5: the near term, right now, you know it can do 214 00:12:01,280 --> 00:12:04,200 Speaker 5: very well without it. It is doing very well without it. 215 00:12:04,480 --> 00:12:09,040 Speaker 5: We don't suspect that this China headwind will stop from 216 00:12:09,080 --> 00:12:12,560 Speaker 5: it growing into the numbers and as estimates. But right now, 217 00:12:12,640 --> 00:12:15,160 Speaker 5: given the size and the growth it has delivered, the 218 00:12:15,240 --> 00:12:18,560 Speaker 5: focus is how better can you do? So even if 219 00:12:18,920 --> 00:12:21,640 Speaker 5: it's just let's call it ten to twenty billion dollars 220 00:12:21,640 --> 00:12:23,559 Speaker 5: a year right now, which is a drop in the 221 00:12:23,600 --> 00:12:26,440 Speaker 5: bucket given how much revenue they are setting everywhere else, 222 00:12:27,040 --> 00:12:30,360 Speaker 5: because all the investors and Byside is trying to just 223 00:12:30,520 --> 00:12:33,040 Speaker 5: get to the highest number, and if they can beat 224 00:12:33,080 --> 00:12:35,120 Speaker 5: that to that, the narrative will be a lot more 225 00:12:35,120 --> 00:12:37,400 Speaker 5: important right now than the numbers well. 226 00:12:37,240 --> 00:12:40,120 Speaker 2: In Vidious Q two earnings out after the market closes 227 00:12:40,160 --> 00:12:44,080 Speaker 2: this coming Wednesday. Are thanks to Kunjohn Sopani, Bloomberg Intelligence 228 00:12:44,200 --> 00:12:48,240 Speaker 2: Senior Semiconductor Analyst, and coming up on Bloomberg day Break weekend, 229 00:12:48,320 --> 00:12:51,400 Speaker 2: we'll look at the difficult calculations looming for European governments 230 00:12:51,440 --> 00:12:54,760 Speaker 2: as they prepare their spending plans for next year. I'm 231 00:12:54,800 --> 00:13:00,440 Speaker 2: Tom Busby, and this is Bloomber. This is Blueberg Day 232 00:13:00,440 --> 00:13:02,680 Speaker 2: Break Weekend, our global look ahead at the top stories 233 00:13:02,679 --> 00:13:05,480 Speaker 2: for investors in the coming week. I'm Tom Busby in 234 00:13:05,520 --> 00:13:08,000 Speaker 2: New York. Up later in our program, we'll look ahead 235 00:13:08,040 --> 00:13:11,800 Speaker 2: to a monetary policy decision from South Korea's Central Bank. 236 00:13:12,200 --> 00:13:14,880 Speaker 2: But first in Europe, the end of the traditional summer 237 00:13:14,920 --> 00:13:17,520 Speaker 2: holiday period will see politicians return to work in the 238 00:13:17,559 --> 00:13:20,880 Speaker 2: coming days. In many countries, their biggest challenge will be 239 00:13:20,960 --> 00:13:24,640 Speaker 2: drawing up budget plans that increase defense spending while also 240 00:13:24,679 --> 00:13:28,560 Speaker 2: tackling enormous debt piles amid week economic growth. In France, 241 00:13:28,600 --> 00:13:31,240 Speaker 2: the conversation will kick off at the annual summer conference 242 00:13:31,240 --> 00:13:35,080 Speaker 2: of the country's biggest business group MEDEF. For more, let's 243 00:13:35,080 --> 00:13:37,520 Speaker 2: go to London and bring in Bloomberg Daybreak. Europe banker 244 00:13:37,640 --> 00:13:38,880 Speaker 2: Stephen Carroll. 245 00:13:38,920 --> 00:13:42,480 Speaker 3: Tom It's a cliche, but politicians do take summer holidays 246 00:13:42,480 --> 00:13:44,480 Speaker 3: in Europe, and that usually means that at this time 247 00:13:44,520 --> 00:13:47,880 Speaker 3: of year, the looming political challenges return with the bang. 248 00:13:48,120 --> 00:13:50,920 Speaker 3: In France, the season known as Laurentree for schools but 249 00:13:51,000 --> 00:13:54,640 Speaker 3: also for politics. This year's MEDEF conference is a chance 250 00:13:54,640 --> 00:13:57,360 Speaker 3: for employers to set out their positions ahead of a 251 00:13:57,440 --> 00:14:01,320 Speaker 3: fractious budget to base. The Prime Minister U faces the 252 00:14:01,400 --> 00:14:05,000 Speaker 3: daunting task of building support in Parliament for his budget plan, 253 00:14:05,240 --> 00:14:08,640 Speaker 3: which contains forty four billion euros of tax rises and 254 00:14:08,720 --> 00:14:12,400 Speaker 3: spending cuts. Without a majority, his government's future hangs in 255 00:14:12,440 --> 00:14:15,440 Speaker 3: the balance. Bairu will be trying to avoid the fate 256 00:14:15,480 --> 00:14:18,640 Speaker 3: of his predecessor, Michel Bagnier, whose government was toppled over 257 00:14:18,679 --> 00:14:22,280 Speaker 3: its budget last December. The situation is causing growing concern 258 00:14:22,320 --> 00:14:25,440 Speaker 3: amongst investors, not just in France, but also in several 259 00:14:25,480 --> 00:14:29,400 Speaker 3: other European countries. Many governments are grappling with similar budget 260 00:14:29,400 --> 00:14:32,000 Speaker 3: try issues, and they need to submit their spending plans 261 00:14:32,000 --> 00:14:35,440 Speaker 3: to the European Union by mid October. They're balancing the 262 00:14:35,480 --> 00:14:38,920 Speaker 3: need to increase defense spending, pay bigger social welfare and 263 00:14:39,000 --> 00:14:42,880 Speaker 3: pension bills for their aging populations and cover debts encouraged 264 00:14:42,920 --> 00:14:46,000 Speaker 3: during the COVID pandemic, all the while trying to avoid 265 00:14:46,120 --> 00:14:50,480 Speaker 3: painful tax rises or spending cuts. Here's what Jeffrey's economist 266 00:14:50,520 --> 00:14:52,520 Speaker 3: Madupe out of Bembo had to say about the situation 267 00:14:52,600 --> 00:14:54,680 Speaker 3: when she spoke to us on Bloomberg Radio. 268 00:14:55,040 --> 00:14:58,440 Speaker 7: In previous kind of budget cycles last year, the opposition 269 00:14:58,520 --> 00:15:01,840 Speaker 7: knows that they can extract the game from the government, 270 00:15:01,840 --> 00:15:03,680 Speaker 7: and so they will do that. But I think the 271 00:15:03,760 --> 00:15:05,520 Speaker 7: question is how far it goes. Will it just be 272 00:15:05,560 --> 00:15:09,760 Speaker 7: a case of trying to maybe remove certain budget reductions 273 00:15:09,760 --> 00:15:12,240 Speaker 7: that have been penciled in, or will it be a 274 00:15:12,240 --> 00:15:14,240 Speaker 7: case of bringing down the government. And I think if 275 00:15:14,280 --> 00:15:16,000 Speaker 7: we get into that situation where it's a case of 276 00:15:16,000 --> 00:15:18,520 Speaker 7: bringing down the government, that's where I see. I mean, 277 00:15:18,840 --> 00:15:21,560 Speaker 7: it's a really big risk for France there because another 278 00:15:21,600 --> 00:15:24,360 Speaker 7: election then we're thinking about presidential elections, a lot of 279 00:15:24,400 --> 00:15:26,920 Speaker 7: uncertainty about who would come in presidential elections. I think 280 00:15:26,960 --> 00:15:28,920 Speaker 7: it really opens up a really big can of worms. 281 00:15:28,960 --> 00:15:30,760 Speaker 7: And that's why we are negative on France because I 282 00:15:30,760 --> 00:15:33,360 Speaker 7: think all of these sorts of scenarios that we're talking 283 00:15:33,400 --> 00:15:36,160 Speaker 7: about are very possible. They of course tell risks, but 284 00:15:36,240 --> 00:15:38,520 Speaker 7: they have a greater probability. 285 00:15:39,080 --> 00:15:41,280 Speaker 3: As Jeffrey's economist and we dupey out of Bembo speaking 286 00:15:41,320 --> 00:15:44,320 Speaker 3: to me recently about the situation in France. Let's get 287 00:15:44,320 --> 00:15:47,360 Speaker 3: into the broader political and economic challenges ahead, then with 288 00:15:47,440 --> 00:15:50,800 Speaker 3: our senior geoeconomics analyst for Europe, Antonio burrough So and 289 00:15:50,840 --> 00:15:54,640 Speaker 3: are European economist Anna Andrade. Welcome to you both. Antonio, 290 00:15:54,680 --> 00:15:56,720 Speaker 3: I want to start with you and just to lay 291 00:15:56,760 --> 00:16:00,280 Speaker 3: the land of the political situation in France the heading 292 00:16:00,280 --> 00:16:03,840 Speaker 3: into these difficult negotiations. What is the situation looking like 293 00:16:04,000 --> 00:16:04,720 Speaker 3: for the government. 294 00:16:06,400 --> 00:16:09,120 Speaker 8: Well, the picture is looking quite challenging, I would say, 295 00:16:09,160 --> 00:16:11,720 Speaker 8: because the problem, the main problem is that the government 296 00:16:11,840 --> 00:16:16,280 Speaker 8: lacks a majority in the National Assembly, that's the crucial 297 00:16:16,360 --> 00:16:19,800 Speaker 8: lower chamber in France. The government is essentially short of 298 00:16:20,160 --> 00:16:23,320 Speaker 8: seventy nine deputies, right, and I think that means two things. 299 00:16:23,680 --> 00:16:27,640 Speaker 8: The first is that it's very hard to get legislation 300 00:16:27,760 --> 00:16:30,080 Speaker 8: past in parliament, not just a budget. I mean, this 301 00:16:30,120 --> 00:16:33,600 Speaker 8: is a government that struggles to get things done in parliament. 302 00:16:34,160 --> 00:16:36,680 Speaker 8: And the second problem is that it basically leaves the 303 00:16:36,720 --> 00:16:40,920 Speaker 8: government exposed to potential no confidence motions in parliament, and 304 00:16:41,000 --> 00:16:44,440 Speaker 8: that you know, if a non confidence motion is supported 305 00:16:44,440 --> 00:16:46,480 Speaker 8: by the parliament, that leads to the collapse of the government, 306 00:16:46,480 --> 00:16:49,240 Speaker 8: which is what happened last year. Right, So, I think 307 00:16:49,360 --> 00:16:52,880 Speaker 8: that creates a very challenging situation for the government. Adding 308 00:16:52,920 --> 00:16:54,880 Speaker 8: to this is the fact that there is a lot 309 00:16:54,920 --> 00:16:58,960 Speaker 8: of political polarization in the country. Political parties are extremely polarized, 310 00:16:58,960 --> 00:17:02,600 Speaker 8: which makes reach compromise is also very difficult in parliament. 311 00:17:02,640 --> 00:17:04,639 Speaker 8: So as a whole, I would say it's fair to 312 00:17:04,680 --> 00:17:07,359 Speaker 8: characterize the political situation as quite difficult. 313 00:17:07,440 --> 00:17:11,720 Speaker 3: And let's turn to the fiscal situation that France is facing. 314 00:17:11,800 --> 00:17:14,200 Speaker 3: How did it get to this position and how does 315 00:17:14,240 --> 00:17:16,600 Speaker 3: it compare to what we're seeing elsewhere in Europe? 316 00:17:17,040 --> 00:17:20,399 Speaker 9: Sure so, I think the markets really woke up to 317 00:17:20,480 --> 00:17:23,840 Speaker 9: francis fiscal problems in twenty twenty four when Macron called 318 00:17:23,840 --> 00:17:26,960 Speaker 9: the snap election, but really the problems had been building 319 00:17:27,200 --> 00:17:30,920 Speaker 9: way before that. And if you look at the primary balance, 320 00:17:30,960 --> 00:17:34,399 Speaker 9: which provides a better reading on fiscal efforts because essentially 321 00:17:34,480 --> 00:17:38,000 Speaker 9: the excluding interest payments. While Greece, Italy and Portugal, all 322 00:17:38,000 --> 00:17:40,200 Speaker 9: the countries that have been most affected by the sovereign 323 00:17:40,200 --> 00:17:44,200 Speaker 9: depth crisis, were undertaking big consolidation efforts and targeting primary 324 00:17:44,280 --> 00:17:49,200 Speaker 9: balanced surpluses away from deficits. France was still running significant deficits. 325 00:17:49,400 --> 00:17:52,680 Speaker 9: Now it wasn't the only one. Spain was not necessarily 326 00:17:53,160 --> 00:17:55,920 Speaker 9: very committed to physical discipline as well. But the key 327 00:17:55,960 --> 00:17:59,040 Speaker 9: difference then as now was that growth was much faster there, 328 00:17:59,080 --> 00:18:02,600 Speaker 9: which helped reduced the dept to GDP ratio prior to 329 00:18:02,640 --> 00:18:06,040 Speaker 9: the pandemic, while in France it actually increased. And now 330 00:18:06,160 --> 00:18:09,240 Speaker 9: then we had the pandemic, which made everything worse. And 331 00:18:09,359 --> 00:18:12,520 Speaker 9: France in particularly has had a problem in braining and 332 00:18:12,600 --> 00:18:16,119 Speaker 9: spending over the past few years. Now that's due to 333 00:18:16,440 --> 00:18:21,560 Speaker 9: a mix of factors including slippadge by local authorities, growing 334 00:18:21,640 --> 00:18:26,600 Speaker 9: spending in pensions and disappointing tax revenues. And the government's 335 00:18:26,640 --> 00:18:30,239 Speaker 9: plan is quite ambitious. It's committed to that. I mean, 336 00:18:30,280 --> 00:18:33,919 Speaker 9: obviously the politics of it are quite difficult, as Antonio said, 337 00:18:34,400 --> 00:18:37,480 Speaker 9: but I would just flag that we also just don't 338 00:18:37,520 --> 00:18:40,880 Speaker 9: know where these savings beyond twenty twenty six are going 339 00:18:40,960 --> 00:18:44,479 Speaker 9: to come from, because in the medium term structural plans 340 00:18:44,520 --> 00:18:46,600 Speaker 9: that France sent to the Commission, and by the way, 341 00:18:46,640 --> 00:18:48,720 Speaker 9: this is not a friend's only problem. It's a problem 342 00:18:48,760 --> 00:18:51,560 Speaker 9: across all the governments. They send sort of the debt 343 00:18:51,600 --> 00:18:54,080 Speaker 9: deficity targets that they want to reach in five to 344 00:18:54,119 --> 00:18:57,480 Speaker 9: seven years, but they just haven't detailed the tax and 345 00:18:57,520 --> 00:19:01,080 Speaker 9: spending decisions that will underpin those targets. So the plans 346 00:19:01,160 --> 00:19:03,720 Speaker 9: are really not credible. 347 00:19:04,359 --> 00:19:07,119 Speaker 3: Well, let's discuss that further, Antonio. I mean, it was 348 00:19:07,200 --> 00:19:09,639 Speaker 3: unusual to see the French Prime Minister lay out the 349 00:19:09,680 --> 00:19:13,240 Speaker 3: first draft of his spending plans quite early in the summer. 350 00:19:13,480 --> 00:19:16,199 Speaker 3: There was lots of unpopular proposals, and it's like cutting 351 00:19:16,200 --> 00:19:20,240 Speaker 3: two public holidays for example. What chances are there really 352 00:19:20,359 --> 00:19:23,479 Speaker 3: being able to get a compromise on a budget for France. 353 00:19:25,200 --> 00:19:29,720 Speaker 8: Well, just like last year were essentially the government collapsed 354 00:19:29,760 --> 00:19:33,160 Speaker 8: over the budget and then last minute emergency budget had 355 00:19:33,160 --> 00:19:35,600 Speaker 8: to be approved. I think it's going to be very 356 00:19:35,600 --> 00:19:38,280 Speaker 8: hard for the government to get the budget passed. In 357 00:19:38,359 --> 00:19:42,560 Speaker 8: a survey that was done in July by French poster Elab, 358 00:19:43,160 --> 00:19:46,359 Speaker 8: you could see that seventy two percent of respondents said that, 359 00:19:46,800 --> 00:19:48,879 Speaker 8: you know, they acknowledged that dead must be reduced, but 360 00:19:48,920 --> 00:19:51,119 Speaker 8: that the efforts been demanded by the budget by the 361 00:19:51,160 --> 00:19:53,760 Speaker 8: government are too great. Right, So it's not a popular budget. 362 00:19:54,119 --> 00:19:58,159 Speaker 8: Also same survey, sixty six percent of respondents say that 363 00:19:58,200 --> 00:20:00,880 Speaker 8: they want the position parties to file and no confidence 364 00:20:00,920 --> 00:20:03,760 Speaker 8: motion is the government right, So you can see it's 365 00:20:04,040 --> 00:20:08,880 Speaker 8: not a particularly popular budget and you know, the challenge 366 00:20:09,160 --> 00:20:11,520 Speaker 8: of the fact that you need to really engage in 367 00:20:11,520 --> 00:20:14,840 Speaker 8: physical consolidation to reduce the budget deficit is compounded by 368 00:20:14,840 --> 00:20:18,560 Speaker 8: the lack of parliamentary majority. But that doesn't mean that 369 00:20:18,560 --> 00:20:21,120 Speaker 8: the government cannot make some concessions. In fact, I don't 370 00:20:21,200 --> 00:20:24,080 Speaker 8: think the current the budget in this current form might 371 00:20:24,080 --> 00:20:25,919 Speaker 8: be able to be passed, but I think the government 372 00:20:25,920 --> 00:20:28,520 Speaker 8: can provides certain concessions to at least have a chance 373 00:20:28,560 --> 00:20:30,560 Speaker 8: to get it approved by opposition parties. 374 00:20:31,160 --> 00:20:34,000 Speaker 3: And Antonio because we're thinking about this in the context 375 00:20:34,000 --> 00:20:36,679 Speaker 3: of this upcoming business conference, where of course employers and 376 00:20:36,880 --> 00:20:38,879 Speaker 3: business leaders are going to be very worried about what 377 00:20:38,920 --> 00:20:42,119 Speaker 3: it could mean for them fiscally. They've previously been asked 378 00:20:42,160 --> 00:20:45,760 Speaker 3: to give larger contributions in terms of payroll taxes towards 379 00:20:45,800 --> 00:20:49,840 Speaker 3: the French budget. I mean, how worried do employers and 380 00:20:49,880 --> 00:20:52,360 Speaker 3: perhaps citizens have to be about tax ris as being 381 00:20:52,400 --> 00:20:54,479 Speaker 3: part of an eventual budget package in France. 382 00:20:55,600 --> 00:20:58,160 Speaker 8: Well, I think that depends on the final compromise that 383 00:20:58,960 --> 00:21:01,879 Speaker 8: the government, if they can get a compromise, that the 384 00:21:02,000 --> 00:21:05,400 Speaker 8: form of that that will take. So, as I said, 385 00:21:05,440 --> 00:21:08,280 Speaker 8: I think there is room for concessions and I think that's, 386 00:21:08,440 --> 00:21:10,520 Speaker 8: by the way, probably why the initial draft of the 387 00:21:10,520 --> 00:21:13,960 Speaker 8: budget looks so tough, because I think the strategy of 388 00:21:14,760 --> 00:21:18,200 Speaker 8: Prime Minister consul who is essentially to present a very 389 00:21:18,240 --> 00:21:21,199 Speaker 8: tough budget and then leave room to negotiate with opposition parties. 390 00:21:22,359 --> 00:21:26,720 Speaker 8: But obviously consolidation physical consolidation is never popular, so the 391 00:21:26,800 --> 00:21:29,119 Speaker 8: problem is that opposition parties do not want to be 392 00:21:29,160 --> 00:21:32,080 Speaker 8: associated with the consolidation efforts. That being said, if you 393 00:21:32,119 --> 00:21:35,439 Speaker 8: look in terms of potential compromises. So last year, the 394 00:21:35,480 --> 00:21:39,680 Speaker 8: previous government of Prime Minister Darnie tried to make concessions 395 00:21:39,680 --> 00:21:42,400 Speaker 8: to the far right National Rally Party of my Elepen 396 00:21:43,040 --> 00:21:45,320 Speaker 8: and then that backfire in the end, actually a no 397 00:21:45,400 --> 00:21:47,520 Speaker 8: confidence motion, as I said, was voted and the government 398 00:21:47,600 --> 00:21:50,199 Speaker 8: ended up collapsing. So I think the government is not 399 00:21:50,240 --> 00:21:53,520 Speaker 8: going to look at its right, rather, in my look 400 00:21:53,680 --> 00:21:56,080 Speaker 8: towards its left when you have the Socialist Party which 401 00:21:56,119 --> 00:21:59,320 Speaker 8: has rejected the budget in its current form. But I 402 00:21:59,359 --> 00:22:02,239 Speaker 8: think the strut might be to try to offer some 403 00:22:02,280 --> 00:22:05,919 Speaker 8: concessions on what the Socialists called physical gassis, which is 404 00:22:06,000 --> 00:22:10,520 Speaker 8: essentially increase taxes on the highest earners in the country. 405 00:22:10,920 --> 00:22:14,280 Speaker 8: So I think ultimately you might see some concessions that 406 00:22:14,359 --> 00:22:17,640 Speaker 8: might look like tax increases, even though the government would 407 00:22:17,680 --> 00:22:20,600 Speaker 8: try to keep those at a minimum because Macone and 408 00:22:20,680 --> 00:22:24,600 Speaker 8: by who are really fixated or not increasing taxes. But 409 00:22:24,800 --> 00:22:27,280 Speaker 8: that might be an area. But you might find some 410 00:22:27,320 --> 00:22:30,520 Speaker 8: concessions that might lead ultimately to the plole of the budget. 411 00:22:30,960 --> 00:22:33,920 Speaker 3: And in terms of the broader economic outlook for France 412 00:22:33,960 --> 00:22:36,280 Speaker 3: and for the euro Area, I mean, what should we 413 00:22:36,359 --> 00:22:39,840 Speaker 3: be watching out for. I suppose the potential petfalls as 414 00:22:39,880 --> 00:22:43,600 Speaker 3: policymakers are considering what effect their decisions might have on 415 00:22:43,680 --> 00:22:46,400 Speaker 3: the economic trajectory for the country. 416 00:22:46,560 --> 00:22:49,600 Speaker 9: Yeah, I mean growth in France in your area hasn't 417 00:22:49,640 --> 00:22:52,880 Speaker 9: been spectacular over the past few years, but I would 418 00:22:52,880 --> 00:22:55,440 Speaker 9: say that given all the shocks that the currency block 419 00:22:55,480 --> 00:22:58,479 Speaker 9: has been hit by, I think it has been holding 420 00:22:58,560 --> 00:23:02,440 Speaker 9: up fairly recently. Of course, you know there's a big 421 00:23:02,560 --> 00:23:06,280 Speaker 9: utrogenerity bit across your area. We have spaying grecent Portugal 422 00:23:06,359 --> 00:23:11,280 Speaker 9: really experiencing dicent growth runs, while Germany barely growing. France 423 00:23:11,359 --> 00:23:13,760 Speaker 9: is somewhere in the middle. And now when I think 424 00:23:13,760 --> 00:23:17,000 Speaker 9: about the outlook over the next few years, I think 425 00:23:17,080 --> 00:23:20,560 Speaker 9: it's going to be essentially shaped by three things. One 426 00:23:20,640 --> 00:23:23,679 Speaker 9: is fiscal and in that i'm including, you know, the 427 00:23:23,720 --> 00:23:27,679 Speaker 9: defense spending. The other is obviously US tariffs, and the 428 00:23:27,720 --> 00:23:31,359 Speaker 9: third one is the euro appreciation. Now, the ear area 429 00:23:31,640 --> 00:23:34,560 Speaker 9: had a strong start at the beginning of the year. 430 00:23:35,280 --> 00:23:38,080 Speaker 9: Essentially that was due to front floating ahead of the 431 00:23:38,200 --> 00:23:42,119 Speaker 9: US tariffs, and that should ensure that growth is above 432 00:23:42,160 --> 00:23:45,280 Speaker 9: one percent this year. But the base of growth, at 433 00:23:45,359 --> 00:23:48,040 Speaker 9: least in our forecast, we expect it to moderate over 434 00:23:48,080 --> 00:23:50,879 Speaker 9: the coming quarters to around point two point three percent, 435 00:23:50,920 --> 00:23:53,520 Speaker 9: which is really below trend, and for twenty twenty six 436 00:23:53,560 --> 00:23:56,680 Speaker 9: we expect zero point eight percent. Now, it could be worse, 437 00:23:56,720 --> 00:23:59,159 Speaker 9: and it could be worse generally for your area if 438 00:23:59,200 --> 00:24:02,920 Speaker 9: we hadn't had this sort of fiscal listening coming from Germany. 439 00:24:03,000 --> 00:24:07,120 Speaker 9: Germany is has engaged on spending splurge in infrastructure and defense, 440 00:24:07,560 --> 00:24:11,000 Speaker 9: which we expect to start fitting through next year. But 441 00:24:11,040 --> 00:24:13,080 Speaker 9: I would say that's sort of that fiscal loosening is 442 00:24:13,080 --> 00:24:16,000 Speaker 9: really a story that's contained to Germany because in other countries, 443 00:24:16,040 --> 00:24:20,560 Speaker 9: as Antoni just now said, The trend in France and 444 00:24:20,600 --> 00:24:23,919 Speaker 9: in Italy for instance, is one of fiscal tightening, so 445 00:24:23,920 --> 00:24:27,520 Speaker 9: the support from that will be modest. And then the 446 00:24:27,560 --> 00:24:30,240 Speaker 9: big question is how tariff's and uncertainty will play out. 447 00:24:31,200 --> 00:24:35,719 Speaker 9: Tariffs will affect all countries, obviously to different extents, and 448 00:24:36,000 --> 00:24:38,560 Speaker 9: we expect I mean, we've had a trade deal being 449 00:24:38,640 --> 00:24:42,440 Speaker 9: reached which sort of maybe provide some stability, but taken 450 00:24:42,440 --> 00:24:45,919 Speaker 9: together with uncertainty, we still expect that to drag on growth. 451 00:24:45,960 --> 00:24:49,119 Speaker 9: And we're actually expecting a point four percent heat to 452 00:24:49,160 --> 00:24:52,800 Speaker 9: the level of GDP at peak, so you know, there 453 00:24:52,800 --> 00:24:55,040 Speaker 9: will be some growth, but it will be modest and 454 00:24:55,119 --> 00:24:58,320 Speaker 9: sort of you know, brought down by taris and uncertainty overall. 455 00:24:58,680 --> 00:25:02,359 Speaker 3: Okay, Antonio Burrows, our senior geo economics analyst for Europe, 456 00:25:02,400 --> 00:25:04,760 Speaker 3: and our European economist Anna Andrada, thank you to you 457 00:25:04,800 --> 00:25:07,080 Speaker 3: both for helping set us up for what is expected 458 00:25:07,080 --> 00:25:09,520 Speaker 3: to be a long debate over the French budget and 459 00:25:09,560 --> 00:25:12,959 Speaker 3: the European budget cycle to come. I'm Stephen Caroll in London. 460 00:25:13,000 --> 00:25:15,560 Speaker 3: You can catch us every weekday morning here for Bloomberg 461 00:25:15,600 --> 00:25:18,040 Speaker 3: Daybreak here at beginning at six am in London and 462 00:25:18,200 --> 00:25:21,720 Speaker 3: one am on Wall Street, Tom, Thank you, Steven, and 463 00:25:21,840 --> 00:25:24,040 Speaker 3: coming up on Bloomberg day Break Weekend, we'll look ahead 464 00:25:24,080 --> 00:25:27,120 Speaker 3: to a monetary policy decision from the Bank of Korea. 465 00:25:27,440 --> 00:25:41,720 Speaker 3: I'm Tom Busby and this is Bloomberg. This is Bloomberg 466 00:25:41,800 --> 00:25:43,920 Speaker 3: day Break Weekend, our global look ahead at the top 467 00:25:43,960 --> 00:25:45,680 Speaker 3: stories for investors in the coming week. 468 00:25:45,960 --> 00:25:49,080 Speaker 2: I'm Tom Busby in New York. South Korea's Central Bank 469 00:25:49,080 --> 00:25:52,560 Speaker 2: faces a tough call on rates next week. Economists are 470 00:25:52,600 --> 00:25:56,359 Speaker 2: divided over whether the BOK will extend its easing cycle 471 00:25:56,480 --> 00:25:59,520 Speaker 2: or keep the current two point five percent rate unchanged. 472 00:25:59,640 --> 00:26:01,880 Speaker 2: For more, let's get to the host of the Daybreak 473 00:26:01,920 --> 00:26:03,880 Speaker 2: Asia podcast, Doug Krisner. 474 00:26:04,320 --> 00:26:04,600 Speaker 8: Tom. 475 00:26:04,680 --> 00:26:08,480 Speaker 4: South Korea's economy rebounded in the second quarter, although recently 476 00:26:08,640 --> 00:26:11,240 Speaker 4: the Governor of the Bank of Korea Ri Chang Yong 477 00:26:11,480 --> 00:26:14,879 Speaker 4: said it still faces high levels of uncertainty as a 478 00:26:14,920 --> 00:26:18,160 Speaker 4: result of US trade policy. Now, trade is just one 479 00:26:18,200 --> 00:26:21,199 Speaker 4: of many factors the BOK will have to consider in 480 00:26:21,240 --> 00:26:23,679 Speaker 4: the week ahead. For a closer look, I'm joined by 481 00:26:23,680 --> 00:26:28,000 Speaker 4: Bloomberg's Brian Fowler. He is senior Asia ecogov editor for 482 00:26:28,119 --> 00:26:31,320 Speaker 4: Bloomberg News, joining us in the Japanese capital of Tokyo. 483 00:26:31,440 --> 00:26:33,240 Speaker 4: Thank you so much. For making time to chat with me. 484 00:26:33,640 --> 00:26:36,920 Speaker 4: As I recall the BOK meeting in July when the 485 00:26:37,320 --> 00:26:40,200 Speaker 4: policy rate was held steady at two and a half percent. 486 00:26:40,640 --> 00:26:43,200 Speaker 4: At the time, Governory seemed to keep the door open 487 00:26:43,280 --> 00:26:46,680 Speaker 4: to a rate cut this month. Has anything changed between 488 00:26:46,800 --> 00:26:47,640 Speaker 4: then and now. 489 00:26:47,960 --> 00:26:50,280 Speaker 10: Well, Doug, so he definitely kept the door open to 490 00:26:50,320 --> 00:26:53,240 Speaker 10: a cut. He said at the time that four of 491 00:26:53,280 --> 00:26:56,240 Speaker 10: the board members, that's four out of seven, were open 492 00:26:56,320 --> 00:26:58,399 Speaker 10: to a rate cut sometime in the next three months. 493 00:26:58,400 --> 00:27:01,159 Speaker 10: And that's a pretty clear signal that the BIAS is 494 00:27:01,160 --> 00:27:04,800 Speaker 10: towards further easing, and probably further easing pretty much in 495 00:27:04,840 --> 00:27:09,400 Speaker 10: the short term. He also cited concerns about household debt 496 00:27:09,520 --> 00:27:12,399 Speaker 10: and the housing market and soul and that tends to 497 00:27:13,240 --> 00:27:16,520 Speaker 10: raise the risk of financial imbalances and that's something he 498 00:27:16,560 --> 00:27:18,760 Speaker 10: wants to keep an eye on. And I think another 499 00:27:18,840 --> 00:27:23,760 Speaker 10: reason why the BOK began its pause in June and 500 00:27:23,840 --> 00:27:27,399 Speaker 10: July is that there were fading thoughts of the FED 501 00:27:27,880 --> 00:27:31,280 Speaker 10: easing policy and the BOK tends to want to move 502 00:27:31,840 --> 00:27:34,679 Speaker 10: in lockstep with the Fed in order to avoid putting 503 00:27:34,680 --> 00:27:37,960 Speaker 10: downward pressure on the wand the one was the weakest 504 00:27:38,280 --> 00:27:40,760 Speaker 10: major currency against the dollar of last year. And that 505 00:27:41,600 --> 00:27:44,840 Speaker 10: repped up inflationary pressure. So that's one thing they want 506 00:27:44,880 --> 00:27:45,520 Speaker 10: to keep an eye on. 507 00:27:45,680 --> 00:27:48,640 Speaker 4: So when you look at the household debt story, I'm curious, 508 00:27:48,840 --> 00:27:52,399 Speaker 4: is that more likely to be concentrated in mortgage lending 509 00:27:52,560 --> 00:27:56,000 Speaker 4: or are there other forms of borrowing that may trouble 510 00:27:56,119 --> 00:27:57,320 Speaker 4: the Bank of Korea. 511 00:27:57,520 --> 00:28:01,440 Speaker 10: Mortgage lending is absolutely the key fact there because that's 512 00:28:01,520 --> 00:28:05,640 Speaker 10: driven by the housing market in Sol when it's hot, 513 00:28:06,080 --> 00:28:09,159 Speaker 10: and that people tend to borrow money to speculate on 514 00:28:09,200 --> 00:28:13,960 Speaker 10: that market. And we've seen housing prices rise now in 515 00:28:14,080 --> 00:28:18,960 Speaker 10: Sel for twenty eight consecutive weeks. But on the other hand, 516 00:28:19,160 --> 00:28:22,640 Speaker 10: the pace of increase has slowed after the government took 517 00:28:22,680 --> 00:28:27,040 Speaker 10: some steps to cool demand, including putting some restrictions on 518 00:28:27,119 --> 00:28:27,879 Speaker 10: mortgage lending. 519 00:28:28,040 --> 00:28:30,320 Speaker 4: So where do we find the inflation story right now 520 00:28:30,359 --> 00:28:32,840 Speaker 4: in South Korea? I know that the recent numbers on 521 00:28:33,000 --> 00:28:36,239 Speaker 4: consumer prices earlier in the month seemed to suggest a 522 00:28:36,240 --> 00:28:40,080 Speaker 4: bit of deceleration. And I just saw the recent print 523 00:28:40,160 --> 00:28:43,360 Speaker 4: on producer prices. They advanced at an annual rate in 524 00:28:43,440 --> 00:28:46,960 Speaker 4: July by a half of one percent. Is that considered hot? 525 00:28:47,480 --> 00:28:50,479 Speaker 10: That consumer inflation is a little bit hot? Consumer prices 526 00:28:50,600 --> 00:28:54,160 Speaker 10: rose two point one percent in July. The BOK has 527 00:28:54,240 --> 00:28:59,840 Speaker 10: a target of two percent, and core inflation rose two 528 00:29:00,480 --> 00:29:04,240 Speaker 10: so it's right about at the Bok's target. I think 529 00:29:04,480 --> 00:29:07,600 Speaker 10: going forward, the BOKA wants to see if the tariffs 530 00:29:07,640 --> 00:29:11,640 Speaker 10: have an inflationary impact impact on prices and if that 531 00:29:11,680 --> 00:29:15,320 Speaker 10: feeds into the economy were broadly. 532 00:29:15,120 --> 00:29:17,400 Speaker 4: So, the tariff story is obviously a key part of 533 00:29:17,440 --> 00:29:20,000 Speaker 4: the trade story, and when I think of South Korea, 534 00:29:20,080 --> 00:29:25,160 Speaker 4: I think of not only automobiles, semiconductors as well. How 535 00:29:25,200 --> 00:29:29,520 Speaker 4: have trade flows been, especially to the US in light 536 00:29:29,560 --> 00:29:30,360 Speaker 4: of these tariffs. 537 00:29:30,560 --> 00:29:33,680 Speaker 10: We had some early trade data for August showing that 538 00:29:33,840 --> 00:29:38,120 Speaker 10: exports to the US have started to fall until now 539 00:29:38,280 --> 00:29:40,840 Speaker 10: we had actually we had a lot of front loading, 540 00:29:40,920 --> 00:29:46,360 Speaker 10: so exports held up relatively well. Also, companies like Samsung 541 00:29:46,440 --> 00:29:51,440 Speaker 10: electronics tech sector did pretty well because the Trump administration 542 00:29:51,520 --> 00:29:56,280 Speaker 10: puts some exclusions on consumer electronic goods and that's helped 543 00:29:56,520 --> 00:29:59,440 Speaker 10: put a floor under those exports. Also, of course, the 544 00:29:59,520 --> 00:30:02,440 Speaker 10: supply chain relationships with Apple of help, as Apple has 545 00:30:02,480 --> 00:30:07,640 Speaker 10: managed to win some exemptions going forward, though, as you mentioned, 546 00:30:07,680 --> 00:30:11,440 Speaker 10: I mean, the outlook is pretty cloudy. Trump has threatened 547 00:30:11,440 --> 00:30:13,600 Speaker 10: to put new tariffs on chips by the end of 548 00:30:13,640 --> 00:30:16,440 Speaker 10: this month, and that would be a huge threat to 549 00:30:16,680 --> 00:30:20,160 Speaker 10: South Korea's economy because it relies very heavily on trade, 550 00:30:20,160 --> 00:30:22,600 Speaker 10: and in particular on trade of semiconductors. 551 00:30:22,680 --> 00:30:25,040 Speaker 4: So when you think of sentiment on both the business 552 00:30:25,080 --> 00:30:28,640 Speaker 4: side and the consumer side, what's it been like. How 553 00:30:28,640 --> 00:30:29,560 Speaker 4: are people feeling. 554 00:30:30,160 --> 00:30:32,600 Speaker 10: I think they're feeling a little bit worried about how 555 00:30:32,640 --> 00:30:36,400 Speaker 10: things are going. The Bank of Korea's GDP forecast for 556 00:30:36,480 --> 00:30:40,640 Speaker 10: this year calls for zero point nine percent growth. That 557 00:30:40,680 --> 00:30:44,959 Speaker 10: would be the weakest performance since the pandemic, when the 558 00:30:45,000 --> 00:30:49,080 Speaker 10: economy contracted in twenty twenty. And I think people are 559 00:30:49,080 --> 00:30:51,800 Speaker 10: thinking this the shoe is is about to drop. It 560 00:30:51,840 --> 00:30:55,120 Speaker 10: hasn't really dropped thus far, and there's concern about how 561 00:30:55,160 --> 00:30:58,440 Speaker 10: things happen, how things in full from August on now. 562 00:30:58,480 --> 00:31:01,840 Speaker 4: I know recently within the last several months, there's been 563 00:31:01,840 --> 00:31:04,320 Speaker 4: a little bit of turbulence on the political side in 564 00:31:04,360 --> 00:31:07,000 Speaker 4: South Korea. Have things calmed down right now to help 565 00:31:07,240 --> 00:31:10,560 Speaker 4: maybe support the idea that the Bok has a little 566 00:31:10,600 --> 00:31:14,200 Speaker 4: bit more flexibility to do its job and not to 567 00:31:14,240 --> 00:31:16,720 Speaker 4: be distracted by political developments. 568 00:31:17,240 --> 00:31:21,960 Speaker 10: Definitely. The new administration got started obviously in early June, 569 00:31:22,200 --> 00:31:27,080 Speaker 10: and that's taken away a huge source of uncertainty. Lee 570 00:31:27,240 --> 00:31:31,920 Speaker 10: so far has done his best to first of all 571 00:31:32,040 --> 00:31:35,960 Speaker 10: put aside any sort of concerns about diplomatic spats with Japan, 572 00:31:36,240 --> 00:31:40,760 Speaker 10: and I think that's he's looking confident, and that's meaning 573 00:31:40,800 --> 00:31:44,239 Speaker 10: that the government can come through with fiscal stimulus if 574 00:31:44,240 --> 00:31:45,240 Speaker 10: it feels that it needs to. 575 00:31:45,520 --> 00:31:49,080 Speaker 4: That is Brian Fowler. He is senior Asia ecogov editor 576 00:31:49,080 --> 00:31:52,800 Speaker 4: for Bloomberg News. Joining from our studios in Tokyo, let's 577 00:31:52,800 --> 00:31:56,400 Speaker 4: pivot to one of the most important equity markets in Asia. 578 00:31:56,480 --> 00:32:01,080 Speaker 4: Hong Kong Exchanges and Clearing posted record quarterly again of 579 00:32:01,120 --> 00:32:06,200 Speaker 4: forty one percent. Trading surged with average daily turnover nearly doubling, 580 00:32:06,600 --> 00:32:10,680 Speaker 4: and new listings rebounded, with IPO applications topping two hundred. 581 00:32:10,960 --> 00:32:14,240 Speaker 4: The exchange of CEO is Bonnie Chan, and she recently 582 00:32:14,280 --> 00:32:18,760 Speaker 4: told Bloomberg how she is optimistic about international investors returning 583 00:32:18,800 --> 00:32:21,840 Speaker 4: to Chinese assets and how that will keep momentum strong. 584 00:32:22,280 --> 00:32:25,640 Speaker 4: Here is part of chance conversation with Bloomberg zivonn Man. 585 00:32:26,160 --> 00:32:29,560 Speaker 11: Another quarter of record profit. You have trading that's been 586 00:32:29,560 --> 00:32:33,760 Speaker 11: booming and now more than two hundred active applications on 587 00:32:33,800 --> 00:32:36,520 Speaker 11: the pipeline. What stood out to you for this quarter. 588 00:32:37,120 --> 00:32:40,239 Speaker 12: You know what really stands out for me for this 589 00:32:40,360 --> 00:32:43,600 Speaker 12: quarter is the fact that it's writing on a pretty 590 00:32:43,640 --> 00:32:48,720 Speaker 12: sustained momentum. If you look at our results, this is 591 00:32:48,760 --> 00:32:55,000 Speaker 12: actually another set of record half yearly results. We deliver 592 00:32:55,000 --> 00:32:58,400 Speaker 12: a pretty strong a pretty strong set already for the 593 00:32:58,400 --> 00:33:01,560 Speaker 12: second half of twenty twenty four. And so for me, 594 00:33:02,920 --> 00:33:07,600 Speaker 12: my biggest takeaway is that actually, since I think September 595 00:33:07,640 --> 00:33:12,760 Speaker 12: twenty twenty four, gradually we're seeing a return of interest 596 00:33:13,320 --> 00:33:17,880 Speaker 12: from international investors and they want to again look for 597 00:33:17,920 --> 00:33:21,040 Speaker 12: opportunities to deploy more capital to this part of the world. 598 00:33:22,160 --> 00:33:26,239 Speaker 12: You see it, I think manifested in many ways in 599 00:33:26,240 --> 00:33:29,320 Speaker 12: our daily turnover, but also I think you know in 600 00:33:29,440 --> 00:33:32,600 Speaker 12: the way that all these investors around the world are 601 00:33:32,640 --> 00:33:34,440 Speaker 12: participating in our IPOs. 602 00:33:35,080 --> 00:33:37,440 Speaker 11: The key question is it's sustainable. You mentioned about average 603 00:33:37,480 --> 00:33:40,320 Speaker 11: daily turnover, which you nearly double from a year ago. 604 00:33:40,760 --> 00:33:43,360 Speaker 11: Obviously with liquidity it has been quite ample. With these 605 00:33:43,360 --> 00:33:46,000 Speaker 11: sell bound flows. What could extend the streak? 606 00:33:46,080 --> 00:33:46,240 Speaker 9: Right? 607 00:33:46,480 --> 00:33:50,600 Speaker 12: International investors are really again focusing on China assets, and 608 00:33:50,680 --> 00:33:54,520 Speaker 12: I think as they try to come back to treasure hunt, 609 00:33:55,320 --> 00:33:58,600 Speaker 12: it is a very good thing that we have equally 610 00:33:58,760 --> 00:34:01,760 Speaker 12: a robust pipeline to match their appetite. I think that 611 00:34:01,880 --> 00:34:05,200 Speaker 12: is very very important. So you mentioned our pipeline. We're 612 00:34:05,240 --> 00:34:12,080 Speaker 12: currently over two hundred companies already having filed their applications, 613 00:34:12,280 --> 00:34:15,279 Speaker 12: and in fact, you know, on a daily basis, I'm 614 00:34:15,320 --> 00:34:17,960 Speaker 12: speaking to a lot more so I think, you know, 615 00:34:18,160 --> 00:34:22,320 Speaker 12: with the backdrop of you know, really the interest returning 616 00:34:22,960 --> 00:34:26,120 Speaker 12: in earnest as well as you know, all these very 617 00:34:26,160 --> 00:34:31,240 Speaker 12: exciting investment opportunities coming online, I do hope that the 618 00:34:31,280 --> 00:34:32,640 Speaker 12: momentum can carry on. 619 00:34:32,880 --> 00:34:35,719 Speaker 11: How confident are you the Hong Kong can reclaim the 620 00:34:35,800 --> 00:34:38,120 Speaker 11: number one IPO venue this year? 621 00:34:38,480 --> 00:34:41,040 Speaker 12: Yeah? People always ask me that question. I think it's 622 00:34:41,080 --> 00:34:43,239 Speaker 12: certainly good to be sort of all the way at 623 00:34:43,320 --> 00:34:45,600 Speaker 12: the top of the league table. I mean, at the moment, 624 00:34:45,880 --> 00:34:49,000 Speaker 12: we're in a very good position, and we do have 625 00:34:49,080 --> 00:34:53,040 Speaker 12: the pipeline to help us deliver and help us stay 626 00:34:53,400 --> 00:34:56,120 Speaker 12: stay up there. But you know, to me, the more 627 00:34:56,160 --> 00:35:00,600 Speaker 12: important thing really is to make sure that we able 628 00:35:00,680 --> 00:35:04,640 Speaker 12: to support the fundraising needs of these companies. And this year, 629 00:35:04,719 --> 00:35:09,680 Speaker 12: I keep talking about the IPO pipeline, I think we 630 00:35:09,840 --> 00:35:13,200 Speaker 12: also need to look at the follow on fundraising, which 631 00:35:13,200 --> 00:35:18,080 Speaker 12: in fact has raised more money than the IPO proceeds. 632 00:35:18,320 --> 00:35:21,840 Speaker 12: So yeah, today we have raised about sixteen billion US 633 00:35:21,960 --> 00:35:25,759 Speaker 12: dollars close to seventeen for you by way of IPOs, 634 00:35:25,880 --> 00:35:28,920 Speaker 12: but we have actually more than forty billion NEUS dollars 635 00:35:29,000 --> 00:35:33,200 Speaker 12: raised by companies already listed on our exchange. So to me, 636 00:35:34,200 --> 00:35:37,640 Speaker 12: so long as we continue to support the fundraising needs 637 00:35:37,640 --> 00:35:41,080 Speaker 12: of these companies, we continue to improve our listing framework. 638 00:35:41,320 --> 00:35:43,080 Speaker 11: Are you still doing a lot of marketing or do 639 00:35:43,120 --> 00:35:44,839 Speaker 11: you think companies are starting to come to you now? 640 00:35:45,440 --> 00:35:46,040 Speaker 10: I think both. 641 00:35:46,239 --> 00:35:50,359 Speaker 12: I mean companies certainly, I think saw how well we've 642 00:35:50,440 --> 00:35:54,640 Speaker 12: done in the IPO space, and so I think on 643 00:35:54,680 --> 00:35:57,399 Speaker 12: the average I probably need two to three companies per 644 00:35:57,480 --> 00:36:01,480 Speaker 12: day or to you know, wanting to understand more what 645 00:36:01,520 --> 00:36:05,640 Speaker 12: we have to offer, and I want to expand the 646 00:36:05,760 --> 00:36:08,920 Speaker 12: universe a little bit. I think it's very encouraging that 647 00:36:09,520 --> 00:36:13,040 Speaker 12: in the past few months we have seen an increased 648 00:36:13,040 --> 00:36:18,400 Speaker 12: appetite of companies beyond just the mainland China wanting to 649 00:36:18,680 --> 00:36:21,160 Speaker 12: use Hong Kong as their or pick Hong Kong as 650 00:36:21,200 --> 00:36:22,200 Speaker 12: their listening venue. 651 00:36:22,280 --> 00:36:24,160 Speaker 11: We've seen a bit of a quiet resurgence in the 652 00:36:24,239 --> 00:36:26,560 Speaker 11: Asian market and the IPO market. There seems to be 653 00:36:26,560 --> 00:36:29,040 Speaker 11: coming back to life right again as well, What does 654 00:36:29,080 --> 00:36:32,640 Speaker 11: the rebound in Shanghai and Shanxen mean for the pipeline here. 655 00:36:32,880 --> 00:36:36,840 Speaker 12: I think that will be very, very encouraging because the 656 00:36:36,880 --> 00:36:40,480 Speaker 12: way I see it, we always say the capital markets 657 00:36:40,520 --> 00:36:43,440 Speaker 12: is there to serve the real economy. So the fact 658 00:36:43,440 --> 00:36:47,120 Speaker 12: that capital markets are doing well, you know, should suggest 659 00:36:47,160 --> 00:36:51,080 Speaker 12: that actually, you know, there's a lot of positive momentum 660 00:36:51,120 --> 00:36:54,600 Speaker 12: in the real economy as well. China is a big country. 661 00:36:55,080 --> 00:36:59,320 Speaker 12: It is producing a lot of very exciting investment opportunities. 662 00:36:59,400 --> 00:37:03,000 Speaker 12: I mean, you see our pipeline, right, it's really felled 663 00:37:03,080 --> 00:37:06,400 Speaker 12: with a lot of excitement and then certainly enough for 664 00:37:06,840 --> 00:37:11,480 Speaker 12: more than just Hong Kong to support. And I think 665 00:37:11,640 --> 00:37:18,399 Speaker 12: increasingly I'm seeing the you know, the few exchanges in China, right, 666 00:37:18,480 --> 00:37:23,120 Speaker 12: So Shanghai, Shinjin, Beijing and the Hong Kong market really 667 00:37:23,320 --> 00:37:29,279 Speaker 12: playing a very complimentary role. Now for Hong Kong, I 668 00:37:29,320 --> 00:37:32,120 Speaker 12: think one advantage we have is certainly the connection to 669 00:37:32,160 --> 00:37:35,520 Speaker 12: the rest of the world. And therefore, for a lot 670 00:37:35,560 --> 00:37:39,240 Speaker 12: of companies when they decide to pick which venue to list, 671 00:37:40,280 --> 00:37:43,560 Speaker 12: one thing which will gravitate them towards Hong Kong is 672 00:37:43,600 --> 00:37:48,560 Speaker 12: if they have overseas expansion plans, and we actually saw 673 00:37:48,600 --> 00:37:51,680 Speaker 12: that in a lot of companies which have been listed 674 00:37:51,800 --> 00:37:54,880 Speaker 12: in the past few months. They want to raise proceeds. 675 00:37:54,960 --> 00:37:59,239 Speaker 12: They want to therefore use the proceeds to expand overseas, 676 00:37:59,320 --> 00:38:02,879 Speaker 12: and I think that is one thing which Hong Kong 677 00:38:02,920 --> 00:38:04,720 Speaker 12: can actually serve the best. 678 00:38:05,080 --> 00:38:07,680 Speaker 4: That was Bonni Chan, she is the CEO of Hong 679 00:38:07,760 --> 00:38:11,880 Speaker 4: Kong Exchanges and Clearing, speaking with Bloomberg TV host Yvonne 680 00:38:11,960 --> 00:38:14,880 Speaker 4: Mann and I'm Doug Chrisner. You can catch us weekdays 681 00:38:14,960 --> 00:38:18,200 Speaker 4: for the Daybreak Asia podcast. It's available wherever you get 682 00:38:18,239 --> 00:38:18,920 Speaker 4: your podcast. 683 00:38:19,320 --> 00:38:21,880 Speaker 2: Tom, Thank you, Doug. And that does it for this 684 00:38:22,040 --> 00:38:24,840 Speaker 2: edition of Bloomberg day Break Weekend. Join us again Monday 685 00:38:24,840 --> 00:38:26,840 Speaker 2: morning at five am Wall Street Time for the latest 686 00:38:26,880 --> 00:38:29,279 Speaker 2: on markets, overseas and the news you need to start 687 00:38:29,320 --> 00:38:32,680 Speaker 2: your day. I'm Tom Busby. Stay with us. Top stories 688 00:38:32,680 --> 00:38:35,239 Speaker 2: and global business headlines are coming up right now.