1 00:00:00,240 --> 00:00:07,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:09,960 --> 00:00:12,480 Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the 3 00:00:12,480 --> 00:00:15,040 Speaker 2: top stories in the coming week from our Daybreak anchors 4 00:00:15,080 --> 00:00:17,439 Speaker 2: all around the world. Straight ahead on the program, and 5 00:00:17,520 --> 00:00:20,840 Speaker 2: look at how streaming can impact earnings at the media 6 00:00:20,920 --> 00:00:22,920 Speaker 2: and entertainment giant Walt Disney. 7 00:00:23,239 --> 00:00:24,720 Speaker 3: I'm Tom Busby in New York. 8 00:00:25,079 --> 00:00:27,920 Speaker 4: I'm collying Hetkit in London, where we're asking what's on 9 00:00:27,960 --> 00:00:30,280 Speaker 4: the cards for BP's earnings. 10 00:00:30,520 --> 00:00:33,400 Speaker 5: I'm Dog Krisner looking at how a production shift by 11 00:00:33,520 --> 00:00:37,240 Speaker 5: Apple has made India the number one exporter of smartphones 12 00:00:37,240 --> 00:00:37,960 Speaker 5: to the US. 13 00:00:38,520 --> 00:00:42,560 Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 14 00:00:42,560 --> 00:00:46,280 Speaker 1: eleven three zero, New York, Bloomberg ninety nine to one, Washington, DC, 15 00:00:46,760 --> 00:00:51,040 Speaker 1: Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, 16 00:00:51,440 --> 00:00:54,640 Speaker 1: Sirius XM one twenty one, and around the world on 17 00:00:54,720 --> 00:00:57,840 Speaker 1: Bloomberg Radio, dot Com and the Bloomberg Business App. 18 00:01:02,520 --> 00:01:03,920 Speaker 3: Good day to you. I'm Tom Buzzby. 19 00:01:04,000 --> 00:01:06,480 Speaker 2: We begin today's program with a look at a fresh 20 00:01:06,520 --> 00:01:10,440 Speaker 2: round of corporate earning, starting with the world's biggest entertainment giant, Disney. 21 00:01:10,720 --> 00:01:14,640 Speaker 2: For more, We're joined by Githa raganathin Bloomberg Intelligence analyst 22 00:01:14,880 --> 00:01:17,680 Speaker 2: on US media. Well, Geetha, thank you so much for 23 00:01:17,720 --> 00:01:21,759 Speaker 2: being with us once again, booming theme parks, Blockbuster Movies, 24 00:01:22,040 --> 00:01:25,319 Speaker 2: ESP and other networks, cruises, merchandising and with all that 25 00:01:25,680 --> 00:01:28,880 Speaker 2: besides Netflix, no one has proven how important streaming is 26 00:01:29,440 --> 00:01:33,120 Speaker 2: like Disney. So what do you expect this week from 27 00:01:33,200 --> 00:01:34,360 Speaker 2: Disney's results? 28 00:01:34,920 --> 00:01:35,120 Speaker 1: Yeah? 29 00:01:35,160 --> 00:01:38,200 Speaker 6: Thanks Tom, So. The sentiment actually has been really positive 30 00:01:39,040 --> 00:01:42,440 Speaker 6: for Disney, and it's really important that you bring up 31 00:01:42,640 --> 00:01:45,840 Speaker 6: the streaming segment because I think investors are now laser 32 00:01:45,920 --> 00:01:49,600 Speaker 6: focused on the rising profitability of the streaming business, and 33 00:01:49,640 --> 00:01:53,560 Speaker 6: we've seen Disney kind of completely turn that business around. 34 00:01:53,600 --> 00:01:55,240 Speaker 6: I mean, just a few years ago, they were losing 35 00:01:55,320 --> 00:01:58,680 Speaker 6: something like about four billion dollars a year. This year 36 00:01:58,760 --> 00:02:02,240 Speaker 6: they're going to a probably post almost one point two 37 00:02:02,280 --> 00:02:06,280 Speaker 6: to one point three billion dollars in profits, So definitely 38 00:02:06,520 --> 00:02:09,800 Speaker 6: a lot of good stuff going on there. They've increased prices, 39 00:02:09,800 --> 00:02:13,160 Speaker 6: so we're seeing great pricing power. They're really kind of 40 00:02:13,200 --> 00:02:16,399 Speaker 6: doubling down on their advertising business. And the one big 41 00:02:16,440 --> 00:02:18,799 Speaker 6: thing that happened during the quarter, and I think we're 42 00:02:18,840 --> 00:02:21,080 Speaker 6: going to want to hear a lot more about this 43 00:02:21,200 --> 00:02:23,960 Speaker 6: during the call is you know, everybody kind of knows 44 00:02:24,000 --> 00:02:26,880 Speaker 6: about this big Hulu custody battle that Disney was fighting 45 00:02:26,880 --> 00:02:31,480 Speaker 6: with Comcast that has finally concluded. So with full ownership 46 00:02:31,560 --> 00:02:34,839 Speaker 6: of Hulu now under their belt, we think it will 47 00:02:34,880 --> 00:02:38,640 Speaker 6: pave the way for much greater and deeper integration with 48 00:02:39,000 --> 00:02:42,639 Speaker 6: Disney Plus and that should really drive I think, overall 49 00:02:42,680 --> 00:02:45,120 Speaker 6: profitability as well as their advertising business. 50 00:02:45,360 --> 00:02:47,880 Speaker 2: And they've got now three properties that are streaming right 51 00:02:47,960 --> 00:02:50,040 Speaker 2: Disney Plus, Hulu and ESPN Plus. 52 00:02:50,160 --> 00:02:51,079 Speaker 3: Are they all? 53 00:02:51,560 --> 00:02:54,000 Speaker 2: I know, the crown jewel in that is Disney Plus, 54 00:02:54,400 --> 00:02:55,800 Speaker 2: But how are the other two doing? 55 00:02:56,120 --> 00:02:59,320 Speaker 6: They're doing very well And again very glad that you 56 00:02:59,360 --> 00:03:02,240 Speaker 6: bring that up, because yes, they do have ESPN Plus 57 00:03:02,360 --> 00:03:06,239 Speaker 6: right now. But the really big debut that we're all 58 00:03:06,240 --> 00:03:10,400 Speaker 6: waiting for is the what we call the flagship ESPN products. 59 00:03:10,400 --> 00:03:12,680 Speaker 6: So what you see right now on ESPN Plus is 60 00:03:12,720 --> 00:03:15,760 Speaker 6: more like the second tier sports. What we're going to 61 00:03:15,760 --> 00:03:18,840 Speaker 6: see with the flagship ESPN product, which launches in a 62 00:03:18,880 --> 00:03:22,079 Speaker 6: few weeks, is that everything that you get on their 63 00:03:22,320 --> 00:03:25,320 Speaker 6: ESPN linear TV network is now going to be available 64 00:03:25,720 --> 00:03:29,400 Speaker 6: on their streaming on the streaming platform for thirty dollars 65 00:03:29,440 --> 00:03:31,360 Speaker 6: a month. And again What is going to be really 66 00:03:31,360 --> 00:03:34,160 Speaker 6: interesting here, and you know investors are going to focus 67 00:03:34,160 --> 00:03:36,960 Speaker 6: a lot of their attention on, is the bundling strategy 68 00:03:36,960 --> 00:03:38,720 Speaker 6: that Disney is going to adopt. So we think when 69 00:03:38,760 --> 00:03:42,040 Speaker 6: they have these three great marquee products, you know, the 70 00:03:42,560 --> 00:03:45,680 Speaker 6: flagship ESPN streaming they have obviously Disney Plus as you mentioned, 71 00:03:45,720 --> 00:03:50,040 Speaker 6: and Hulu and kind of the bundle there, it is 72 00:03:50,160 --> 00:03:54,680 Speaker 6: really going to drive streaming profitability pretty significantly going forward. 73 00:03:55,080 --> 00:03:58,560 Speaker 2: Well, let's talk about subscribers, because Disney Plus now profitable 74 00:03:58,600 --> 00:04:01,080 Speaker 2: has what one hundred twenty five million or. 75 00:04:01,040 --> 00:04:03,720 Speaker 6: More, Yeah, somewhere in that region. Yeah, about one hundred 76 00:04:03,720 --> 00:04:05,080 Speaker 6: and thirty million subscribers and. 77 00:04:05,080 --> 00:04:07,720 Speaker 2: A lot of buzzworthy shows, not just and Or, but 78 00:04:08,000 --> 00:04:10,920 Speaker 2: a whole bunch of Star Wars shows, lucasfilms as well 79 00:04:10,920 --> 00:04:15,360 Speaker 2: as Marvel comic spinoffs. I mean, their content has really, 80 00:04:15,760 --> 00:04:18,240 Speaker 2: you know, really grown and matured. 81 00:04:18,520 --> 00:04:20,520 Speaker 6: You're absolutely right. So, you know, this was something that 82 00:04:20,560 --> 00:04:23,159 Speaker 6: they were struggling with just a few years ago. You know, 83 00:04:23,240 --> 00:04:25,360 Speaker 6: there was a lot of content, but people were kind 84 00:04:25,360 --> 00:04:28,080 Speaker 6: of complaining that maybe you know, it was more of 85 00:04:28,160 --> 00:04:31,920 Speaker 6: a focus of quantity rather than quality. They have definitely 86 00:04:32,080 --> 00:04:35,479 Speaker 6: kind of completely rejiggered their content engine, and we've seen 87 00:04:35,560 --> 00:04:38,760 Speaker 6: that kind of play out very very well, Tom on 88 00:04:38,800 --> 00:04:41,120 Speaker 6: the on the studio side of the business. So we've 89 00:04:41,160 --> 00:04:44,440 Speaker 6: seen you know, a lot more of their films kind 90 00:04:44,440 --> 00:04:47,600 Speaker 6: of perform pretty well. Just recently, you know, we had Thunderbolts, 91 00:04:47,600 --> 00:04:51,200 Speaker 6: we had of course, Fantastic Four, you know, so a 92 00:04:51,240 --> 00:04:53,919 Speaker 6: whole reboot of the of the Marvel franchise entering a 93 00:04:53,960 --> 00:04:57,840 Speaker 6: new phase. And you speak about content and how it's 94 00:04:57,839 --> 00:04:59,839 Speaker 6: going to be such a great differentiator. I mean, just 95 00:05:00,120 --> 00:05:02,479 Speaker 6: look at the next year. So just look at fiscal 96 00:05:02,560 --> 00:05:05,760 Speaker 6: twenty twenty six for Disney. This is going to be 97 00:05:05,839 --> 00:05:09,719 Speaker 6: an absolute bumper year for this company at the box office. 98 00:05:09,720 --> 00:05:13,560 Speaker 6: We're looking at the release of Zootopia two. You're going 99 00:05:13,600 --> 00:05:18,200 Speaker 6: to have Avatar, Avengers, Mandalorian, Toy Story, so all their 100 00:05:18,200 --> 00:05:21,200 Speaker 6: biggest franchises. And then remember all of that is going 101 00:05:21,240 --> 00:05:23,960 Speaker 6: to come to the Disney Plus platform as well, So 102 00:05:24,000 --> 00:05:28,040 Speaker 6: we're going to you know, definitely see content keep driving 103 00:05:28,080 --> 00:05:30,039 Speaker 6: that flywheel for Disney at least when it comes to 104 00:05:30,200 --> 00:05:31,400 Speaker 6: subscriber momentum. 105 00:05:31,480 --> 00:05:34,240 Speaker 2: Well, and it's not only the movies that you talked 106 00:05:34,279 --> 00:05:38,080 Speaker 2: about next year, Avatar, Star Wars, Avengers, all coming back. 107 00:05:38,120 --> 00:05:40,120 Speaker 2: I mean, that could be a blowout year at the 108 00:05:40,120 --> 00:05:41,000 Speaker 2: box office. 109 00:05:41,240 --> 00:05:43,480 Speaker 6: It absolutely is going to be because you know, all 110 00:05:43,520 --> 00:05:46,479 Speaker 6: these movies, each of these properties, Tom, I mean, they 111 00:05:46,560 --> 00:05:49,720 Speaker 6: generate easily. We're talking like, you know, one and a 112 00:05:49,760 --> 00:05:52,479 Speaker 6: half to two billion dollars in you know, in global 113 00:05:52,520 --> 00:05:56,200 Speaker 6: box office ticket sales, so you have multiples of those 114 00:05:56,279 --> 00:05:58,920 Speaker 6: kind of coming out. You think of just even Zouotopia two, 115 00:05:59,560 --> 00:06:02,359 Speaker 6: that's a huge, huge franchise when it comes to the 116 00:06:02,400 --> 00:06:06,000 Speaker 6: Chinese market. So you know, they have all of these different, uh, 117 00:06:06,520 --> 00:06:09,000 Speaker 6: you know, titles that are coming out on on the 118 00:06:09,080 --> 00:06:11,520 Speaker 6: on the on the movie side, and then of course 119 00:06:11,560 --> 00:06:15,000 Speaker 6: you have a whole bunch of a different series that 120 00:06:15,040 --> 00:06:17,440 Speaker 6: they have for Disney Plus. So it looks really really strong. 121 00:06:17,440 --> 00:06:19,880 Speaker 6: I mean, the setup looks extremely strong for both this 122 00:06:19,960 --> 00:06:21,560 Speaker 6: year as well as fiscal twenty twenty six. 123 00:06:22,040 --> 00:06:23,240 Speaker 3: Well, a lot to look forward to. 124 00:06:23,360 --> 00:06:25,920 Speaker 2: Disney Q three earnings out on Wednesday, that's ahead of 125 00:06:25,920 --> 00:06:29,880 Speaker 2: Wall Street's opening bell Our thanks to GEETHA. Raganaffin, Bloomberg 126 00:06:29,920 --> 00:06:33,520 Speaker 2: Intelligence analyst on US Media. We move next to earnings 127 00:06:33,520 --> 00:06:37,279 Speaker 2: from the nation's biggest ride hailing giant, Uber, which, like 128 00:06:37,400 --> 00:06:40,080 Speaker 2: rival Lift, is now offering a lot more than just 129 00:06:40,240 --> 00:06:43,400 Speaker 2: rides and for more. We're joined by Mandeep Singh, Bloomberg 130 00:06:43,440 --> 00:06:47,800 Speaker 2: Intelligence Senior tech industry analyst Mandeep There is ride hailing, 131 00:06:47,960 --> 00:06:52,120 Speaker 2: Uber won subscriptions, Uber eats, partnerships with Instacart, Home Depot, 132 00:06:52,200 --> 00:06:56,400 Speaker 2: Delta Airlines, and a burgeoning robotaxi business, including a deal 133 00:06:56,400 --> 00:06:59,560 Speaker 2: with Lucid to make the next generation high end cars. 134 00:07:00,080 --> 00:07:02,360 Speaker 2: That's a lot going on. So what do you expect 135 00:07:02,360 --> 00:07:04,360 Speaker 2: to see from Uber's latest earnings. 136 00:07:04,800 --> 00:07:08,200 Speaker 7: I mean, look, when it comes to this quarter, you know, 137 00:07:08,279 --> 00:07:13,880 Speaker 7: the futuristic stuff like the robotaxis don't really matter as much. 138 00:07:14,040 --> 00:07:16,760 Speaker 7: At the same time, you know, everyone cares about the 139 00:07:16,880 --> 00:07:20,640 Speaker 7: ramp up of Wemo, so you want to see you know, 140 00:07:20,960 --> 00:07:24,160 Speaker 7: them expanding that partnership that they have in two cities, 141 00:07:24,200 --> 00:07:29,240 Speaker 7: Austin and Atlanta. Wemo has talked about using you know, 142 00:07:29,400 --> 00:07:34,400 Speaker 7: different partners like they've recently announced a partnership with Avis. 143 00:07:34,720 --> 00:07:38,400 Speaker 7: So it sort of puts Uber in a tough spot 144 00:07:38,480 --> 00:07:41,280 Speaker 7: that they don't want to rely just on Wemo. At 145 00:07:41,280 --> 00:07:44,080 Speaker 7: the same time, they've been doing their own stuff. You know, 146 00:07:44,160 --> 00:07:49,400 Speaker 7: you mentioned neuro I think that probably will help them 147 00:07:49,960 --> 00:07:55,400 Speaker 7: and lose it, you know, So to my mind, robotaxis 148 00:07:55,520 --> 00:07:59,600 Speaker 7: is an important aspect of how investors look at Uber, 149 00:07:59,720 --> 00:08:02,520 Speaker 7: you know, for the next five to ten years. BET, 150 00:08:03,160 --> 00:08:06,400 Speaker 7: but there's no doubt that Uber still has the scale 151 00:08:06,400 --> 00:08:09,520 Speaker 7: with one hundred and seventy five million monthly active users. 152 00:08:09,800 --> 00:08:14,040 Speaker 7: They've aggregated their demand when it comes to both delivery 153 00:08:14,240 --> 00:08:16,880 Speaker 7: as well as ride sharing, and that is what has 154 00:08:16,920 --> 00:08:20,360 Speaker 7: worked to their advantage. So being the scale player, being 155 00:08:20,400 --> 00:08:24,240 Speaker 7: able to grow ebit faster than the top line growth, 156 00:08:24,280 --> 00:08:27,880 Speaker 7: that is what has driven that shift in sentiment for 157 00:08:28,000 --> 00:08:31,000 Speaker 7: the stock over the last three four quarters. And I 158 00:08:31,120 --> 00:08:34,440 Speaker 7: expect them to execute on that. Where top line will 159 00:08:34,480 --> 00:08:38,760 Speaker 7: grow around sixteen seventeen percent, the ebitdel line would probably 160 00:08:38,800 --> 00:08:41,800 Speaker 7: grow over thirty percent, and they continue to show a 161 00:08:41,840 --> 00:08:43,240 Speaker 7: steady operating leverage. 162 00:08:43,840 --> 00:08:47,319 Speaker 2: The one hundred and seventy five million active monthly users. Yeah, 163 00:08:47,360 --> 00:08:50,360 Speaker 2: with all the economic uncertainty, it's really an astounding figure 164 00:08:50,400 --> 00:08:53,160 Speaker 2: that they're still adding customers. 165 00:08:53,160 --> 00:08:55,800 Speaker 7: When it comes to ride sharing and delivery. I mean, 166 00:08:55,840 --> 00:08:58,880 Speaker 7: these are integral part of our day to day lives. 167 00:08:58,920 --> 00:09:03,199 Speaker 7: You know, everyone has to eat three meals a day. Now, 168 00:09:03,200 --> 00:09:05,160 Speaker 7: you're not going to order it on Uber or door 169 00:09:05,240 --> 00:09:08,360 Speaker 7: dash every meal, but there are always times when you 170 00:09:08,760 --> 00:09:11,439 Speaker 7: like to use these type of services, and that's what's 171 00:09:11,760 --> 00:09:16,040 Speaker 7: drive the frequency for both door Dash and Uber. The 172 00:09:16,080 --> 00:09:20,440 Speaker 7: field has consolidated now to these two players. I think 173 00:09:20,720 --> 00:09:25,280 Speaker 7: Uber's partnership with instacart has also helped them sort of 174 00:09:25,360 --> 00:09:28,439 Speaker 7: connect with more users. That's why that MAU number has 175 00:09:28,480 --> 00:09:32,559 Speaker 7: grown faster over the last few quarters because of that 176 00:09:32,960 --> 00:09:36,240 Speaker 7: cross sell. But with that being said, look they've ramped 177 00:09:36,320 --> 00:09:40,880 Speaker 7: up ads now. The reason why operating leverage has been 178 00:09:41,000 --> 00:09:44,000 Speaker 7: better over the past few quarters is because ads is 179 00:09:44,040 --> 00:09:47,400 Speaker 7: a one point five billion dollar business for Uber. That 180 00:09:47,600 --> 00:09:51,120 Speaker 7: wasn't the case. And the reason why ads are working 181 00:09:51,440 --> 00:09:54,640 Speaker 7: is because they have the scale, they aggregate demand, they 182 00:09:54,679 --> 00:09:58,880 Speaker 7: have the supply on the platform, and once you have that, 183 00:09:59,200 --> 00:10:03,400 Speaker 7: ads become obvious choice for monetization, and that's what they've 184 00:10:03,440 --> 00:10:06,760 Speaker 7: been successfully able to do. Door Dashes doing the same. 185 00:10:07,240 --> 00:10:11,600 Speaker 7: Lift's problem is because of the smaller size, their ads 186 00:10:11,640 --> 00:10:15,320 Speaker 7: are just not as useful to the advertisers as they 187 00:10:15,320 --> 00:10:15,920 Speaker 7: are on just. 188 00:10:15,880 --> 00:10:17,520 Speaker 3: Out ranging that volume of people. 189 00:10:17,520 --> 00:10:19,280 Speaker 2: That's right, Yeah, Well, I want to go back to 190 00:10:19,320 --> 00:10:22,480 Speaker 2: the robotaxi wars because that's what it really is. And 191 00:10:23,000 --> 00:10:24,880 Speaker 2: you're right, a lot of this is futuristic, a lot 192 00:10:24,920 --> 00:10:27,679 Speaker 2: of it is five ten years, but there are more 193 00:10:27,720 --> 00:10:28,400 Speaker 2: players than ever. 194 00:10:28,440 --> 00:10:28,640 Speaker 6: Now. 195 00:10:28,760 --> 00:10:31,760 Speaker 2: We know that Tesla just in June finally came out 196 00:10:31,800 --> 00:10:35,960 Speaker 2: with its cybercab in Austin. Very small, very limited, but 197 00:10:36,679 --> 00:10:40,480 Speaker 2: lift we talked about their self driving shuttles. Uber, you know, 198 00:10:40,920 --> 00:10:44,640 Speaker 2: the partnerships and expanding more. However, way Mo looks like 199 00:10:44,679 --> 00:10:48,280 Speaker 2: it has another partner in Dallas next year with Avas. 200 00:10:48,360 --> 00:10:50,760 Speaker 2: I mean, is it are they just hedging their bets 201 00:10:51,320 --> 00:10:54,600 Speaker 2: or is there enough out there, enough business, enough partners, 202 00:10:55,080 --> 00:10:58,440 Speaker 2: enough autos that we're going to see this everywhere or 203 00:10:58,520 --> 00:11:01,520 Speaker 2: try to see it everywhere? And is it really going 204 00:11:01,600 --> 00:11:02,800 Speaker 2: to be a game changer? 205 00:11:03,280 --> 00:11:06,520 Speaker 7: I mean, just to give you a sense of Uber scale, 206 00:11:06,600 --> 00:11:11,800 Speaker 7: they do almost nine billion ride sharing trips every year 207 00:11:11,840 --> 00:11:15,760 Speaker 7: globally and out of that US is close to four billion. 208 00:11:16,240 --> 00:11:19,839 Speaker 7: So when you compare that to Wemo's current volume, Vemo 209 00:11:20,000 --> 00:11:22,520 Speaker 7: is at a run rate of maybe thirteen to fifteen 210 00:11:22,600 --> 00:11:28,440 Speaker 7: million rides annually. Uber does that in one day exactly. 211 00:11:28,480 --> 00:11:32,440 Speaker 7: And Uber has that scale that no one else has. 212 00:11:32,480 --> 00:11:36,319 Speaker 7: And that's where Wemo, even though they're hedging their bets, 213 00:11:36,640 --> 00:11:40,320 Speaker 7: I think partnering with Uber does give them that, you know, 214 00:11:40,440 --> 00:11:44,520 Speaker 7: demand in terms of the user base and the volume 215 00:11:44,679 --> 00:11:47,400 Speaker 7: of trips that they can do with Uber that they 216 00:11:47,480 --> 00:11:50,160 Speaker 7: can't do elsewhere on their own. At the same time, 217 00:11:50,200 --> 00:11:53,320 Speaker 7: You're right, I think Wevemo's approach right now is to 218 00:11:53,880 --> 00:11:57,760 Speaker 7: hedge their bets and partner with as many people because 219 00:11:58,280 --> 00:12:02,120 Speaker 7: they don't want to be overly ligned on Uber because 220 00:12:02,160 --> 00:12:04,719 Speaker 7: it hurts the take rates. You know, in the end, 221 00:12:04,800 --> 00:12:08,840 Speaker 7: it's all about how much is Uber gonna keep, how 222 00:12:08,920 --> 00:12:11,680 Speaker 7: much is WIMO gonna keep, how much is fleet operator 223 00:12:11,840 --> 00:12:14,840 Speaker 7: gonna get because there is some cleaning and maintenance involved 224 00:12:14,840 --> 00:12:18,360 Speaker 7: with these autonomous rights, and you know, there are different 225 00:12:18,840 --> 00:12:23,319 Speaker 7: parts of the ecosystem. So I think luring your reliance 226 00:12:23,360 --> 00:12:26,760 Speaker 7: on one player does serve Waymo well in the long term. 227 00:12:26,960 --> 00:12:27,120 Speaker 3: Well. 228 00:12:27,200 --> 00:12:29,640 Speaker 2: Uber Q two earnings out this Wednesday, just ahead of 229 00:12:29,640 --> 00:12:31,880 Speaker 2: the opening. Bell Lift is out that same day after 230 00:12:31,920 --> 00:12:35,440 Speaker 2: the close. Our thanks to man Deep Sing, Bloomberg Intelligence 231 00:12:35,600 --> 00:12:38,840 Speaker 2: senior tech industry analyst, and coming up on Bloomberg Day 232 00:12:38,880 --> 00:12:40,920 Speaker 2: Break weekend, we'll look ahead to earnings from the British 233 00:12:40,920 --> 00:12:44,720 Speaker 2: Oil on the Gas Giant BP. I'm Tom Busby and 234 00:12:44,840 --> 00:12:58,800 Speaker 2: this is Bloomberg. This is Bloomberg Day Break weekend, our 235 00:12:58,800 --> 00:13:01,200 Speaker 2: global look ahead at the top stories for investors in 236 00:13:01,240 --> 00:13:01,920 Speaker 2: the coming week. 237 00:13:02,200 --> 00:13:03,679 Speaker 3: I'm Tom Busby in New York. 238 00:13:04,200 --> 00:13:06,440 Speaker 2: Up later in our program we'll look at how a 239 00:13:06,480 --> 00:13:10,600 Speaker 2: production shift by Apple is impacting smartphone production elsewhere in Asia. 240 00:13:11,000 --> 00:13:14,720 Speaker 2: But first, following a deluge of European results, oil giant 241 00:13:14,800 --> 00:13:18,160 Speaker 2: BP reports its earnings this week. The London based energy 242 00:13:18,160 --> 00:13:21,760 Speaker 2: firm recently replaced its chairman amid pressure for a new direction, 243 00:13:22,400 --> 00:13:25,439 Speaker 2: but has that change paid off for more Let's get 244 00:13:25,480 --> 00:13:28,800 Speaker 2: to London and bring in Bloomberg Daybreak Europe anchor Caroline 245 00:13:28,840 --> 00:13:30,079 Speaker 2: hepgar Tom. 246 00:13:30,240 --> 00:13:33,400 Speaker 4: BP is one of the big names of the oil industry, 247 00:13:33,520 --> 00:13:36,840 Speaker 4: but it's lagged behind fellow oil and gas majors in 248 00:13:36,920 --> 00:13:40,679 Speaker 4: recent years, with lackluster returns, a mountain of debt, and 249 00:13:40,840 --> 00:13:45,760 Speaker 4: an aborted attempt to transition to renewables. Activist shareholder Elliott 250 00:13:45,760 --> 00:13:50,439 Speaker 4: Investment Management has criticized the company for lacking urgency and ambition, 251 00:13:50,960 --> 00:13:55,359 Speaker 4: appealing to new chairman Albert Manifold to focus on improving 252 00:13:55,400 --> 00:13:59,360 Speaker 4: the firm's cost base and capital allocation. This is in 253 00:13:59,400 --> 00:14:02,680 Speaker 4: contrast rival Shell, which has focused its business on oil 254 00:14:02,720 --> 00:14:05,960 Speaker 4: and gas and denied reports in June that it was 255 00:14:06,080 --> 00:14:10,439 Speaker 4: in talks to acquire BP. Also to contend with are 256 00:14:10,679 --> 00:14:15,520 Speaker 4: the sector headwinds a trading environment beset by geopolitical uncertainty, 257 00:14:15,640 --> 00:14:20,240 Speaker 4: conflict in the Middle East and between Russia and Ukraine. 258 00:14:20,480 --> 00:14:23,720 Speaker 4: The plight of oil markets and energy providers is such 259 00:14:23,760 --> 00:14:27,960 Speaker 4: a precarious environment. It's something that Bloomberg's Asia Energy editor 260 00:14:28,040 --> 00:14:33,280 Speaker 4: Stephen Sapcinski expanded on recently, discussing the risks posed by 261 00:14:33,400 --> 00:14:35,160 Speaker 4: current White House policy. 262 00:14:36,040 --> 00:14:38,240 Speaker 8: While oil prices did rise and there is a fear 263 00:14:38,280 --> 00:14:41,080 Speaker 8: that Trump will do something that could restrict Russian oil 264 00:14:41,120 --> 00:14:43,960 Speaker 8: on the market, there is also the view that this 265 00:14:44,040 --> 00:14:47,480 Speaker 8: could be a taco sort of situation. Trump always chickens out. 266 00:14:47,800 --> 00:14:51,400 Speaker 8: So how exactly will this play out? It's unclear, But 267 00:14:51,520 --> 00:14:54,120 Speaker 8: because there are so few details, it's hard for people 268 00:14:54,120 --> 00:14:56,440 Speaker 8: in the market to take a really bullish position on 269 00:14:56,480 --> 00:14:57,160 Speaker 8: this at the moment. 270 00:14:57,640 --> 00:15:01,680 Speaker 4: That was Bloomberg Energy reporter stephen's Chinsky. So can BP 271 00:15:01,880 --> 00:15:05,360 Speaker 4: put its best foot forward against a difficult backdrop. I'm 272 00:15:05,400 --> 00:15:09,239 Speaker 4: joined Boblinberg's team leader for oil trading in Europe, Alic Nightingale, 273 00:15:09,280 --> 00:15:11,880 Speaker 4: and our markets report to sam Un said, welcome to 274 00:15:11,880 --> 00:15:14,040 Speaker 4: both of you. How can I start with you? Just 275 00:15:14,040 --> 00:15:17,120 Speaker 4: give us the context ahead of BP's earnings. What is 276 00:15:17,160 --> 00:15:20,000 Speaker 4: your impression of the first half of the year for BP. 277 00:15:20,200 --> 00:15:21,560 Speaker 4: Do they have a turnaround plan. 278 00:15:22,600 --> 00:15:27,120 Speaker 9: Yeah, they've got a turnaround plan. They haven't got into 279 00:15:27,200 --> 00:15:31,080 Speaker 9: the real meat of the turnaround yet. They need to 280 00:15:31,240 --> 00:15:34,840 Speaker 9: kind of start looking at att disposals and you know, 281 00:15:34,960 --> 00:15:36,920 Speaker 9: a lot of the big work is still to come. 282 00:15:37,360 --> 00:15:41,760 Speaker 9: They have got a new chairman, which was an important 283 00:15:41,800 --> 00:15:46,120 Speaker 9: part part of, you know, their strategy and just getting 284 00:15:46,120 --> 00:15:49,280 Speaker 9: things on the right footing. They've made changes to the board, 285 00:15:49,600 --> 00:15:52,520 Speaker 9: so things are starting to come into place, and now 286 00:15:52,720 --> 00:15:55,920 Speaker 9: they're under pressure to deliver on the big kind of 287 00:15:55,920 --> 00:15:58,680 Speaker 9: strategic reset that they've they promised investors. 288 00:16:00,200 --> 00:16:06,400 Speaker 4: Has uncertainty from tariffs and geopolitical instability affected the market 289 00:16:06,560 --> 00:16:11,680 Speaker 4: around BP, the oil markets, that's a great question. 290 00:16:12,240 --> 00:16:15,680 Speaker 9: And what we're seeing time and time again so far 291 00:16:15,720 --> 00:16:19,160 Speaker 9: this quarter is that the oil majors and oil companies 292 00:16:19,160 --> 00:16:21,640 Speaker 9: are saying that they've had the wrong kind of volatility. 293 00:16:22,480 --> 00:16:25,560 Speaker 9: These guys are really good at trading, you know, supply 294 00:16:25,600 --> 00:16:28,360 Speaker 9: and demand. They've got better visibility than anybody else on 295 00:16:29,000 --> 00:16:31,920 Speaker 9: where things are tight, when there's not enough supply, or 296 00:16:31,920 --> 00:16:36,160 Speaker 9: then when there's too much supply. But when you move 297 00:16:36,200 --> 00:16:41,000 Speaker 9: into kind of tweets and geopolitical things and things that 298 00:16:41,280 --> 00:16:43,520 Speaker 9: you know, we have as good an idea as anybody 299 00:16:43,520 --> 00:16:46,680 Speaker 9: else of whether the US is going to bomb Iran 300 00:16:46,760 --> 00:16:49,600 Speaker 9: or something like that. You know, it becomes a bit 301 00:16:49,640 --> 00:16:51,680 Speaker 9: more of a guessing game. So what they do. They 302 00:16:51,800 --> 00:16:55,680 Speaker 9: retreat from risk. It doesn't mean that they become worse traders. 303 00:16:55,680 --> 00:16:58,200 Speaker 9: It just means that they retreat from risk and risk 304 00:16:58,720 --> 00:17:01,920 Speaker 9: and trading is a big part of kind of profit 305 00:17:01,960 --> 00:17:04,720 Speaker 9: boosting for the European all majors like BP and Shell. 306 00:17:05,280 --> 00:17:08,199 Speaker 9: So I think he's probably been a tougher environment on 307 00:17:08,280 --> 00:17:12,600 Speaker 9: the trading side for the whole space were yet to see. 308 00:17:12,640 --> 00:17:15,800 Speaker 9: BP didn't warn about that in their updates, so maybe 309 00:17:15,840 --> 00:17:18,040 Speaker 9: they did, Okay, but I think there is you know, 310 00:17:18,160 --> 00:17:24,639 Speaker 9: Total said they have to be careful about trading. Shell 311 00:17:24,720 --> 00:17:27,919 Speaker 9: said that there's a risk of environment equanor similar stuff. 312 00:17:27,960 --> 00:17:30,919 Speaker 9: So yeah, there are issues around just trying to be 313 00:17:31,080 --> 00:17:34,879 Speaker 9: more risk averse when you've got these geopolitical headlines and 314 00:17:34,880 --> 00:17:37,600 Speaker 9: headlines that are not about supply demand fundamentals. 315 00:17:38,960 --> 00:17:42,320 Speaker 4: Sam, how are BP's results likely to compare with other 316 00:17:42,480 --> 00:17:46,439 Speaker 4: energy companies in the market in the middle of results season. 317 00:17:46,880 --> 00:17:48,640 Speaker 10: Yeah, And I think actually what I was just talking 318 00:17:48,680 --> 00:17:51,680 Speaker 10: about there is really the interesting part of it, because 319 00:17:51,720 --> 00:17:55,000 Speaker 10: BP didn't have such a weak trading update, you know, 320 00:17:55,040 --> 00:17:56,520 Speaker 10: in terms of how their all training is doing and 321 00:17:56,560 --> 00:17:58,920 Speaker 10: that kind of thing. But that has been what we've 322 00:17:58,920 --> 00:18:02,680 Speaker 10: heard from everyone else across the sector, and what you're 323 00:18:02,680 --> 00:18:05,439 Speaker 10: also hearing as well is that investors are trying to 324 00:18:05,480 --> 00:18:07,280 Speaker 10: sort of look through this a little bit. You know 325 00:18:07,320 --> 00:18:09,880 Speaker 10: that hopefully with tariff deals getting done, with a little 326 00:18:09,920 --> 00:18:12,240 Speaker 10: bit of that those trade tensions coming down, the old 327 00:18:12,280 --> 00:18:15,600 Speaker 10: traders can get back to focusing on the supply demand 328 00:18:15,640 --> 00:18:18,960 Speaker 10: fundamentals and get away from the kind of as I 329 00:18:19,040 --> 00:18:22,119 Speaker 10: was saying, the kind of wrong kind of volatility. However, 330 00:18:22,359 --> 00:18:24,840 Speaker 10: you know, I think, as we've seen with the copper market, 331 00:18:24,880 --> 00:18:30,200 Speaker 10: for example, the potential that these unpredictable events can keep 332 00:18:30,240 --> 00:18:33,040 Speaker 10: happening is very much still in play. So I think 333 00:18:33,119 --> 00:18:35,800 Speaker 10: that will be a key part for BP, and then 334 00:18:35,840 --> 00:18:37,200 Speaker 10: across the rest of their results it will be the 335 00:18:37,200 --> 00:18:39,080 Speaker 10: same things as a lot of the other companies with 336 00:18:39,200 --> 00:18:43,080 Speaker 10: the trading, with the trading almost put aside, if you like, 337 00:18:43,080 --> 00:18:45,440 Speaker 10: because they release a little bit earlier on that, how 338 00:18:45,440 --> 00:18:48,120 Speaker 10: are the actual operations doing, how are they performing within 339 00:18:48,160 --> 00:18:51,639 Speaker 10: the company, And then for BP, specifically buybacks. You know, 340 00:18:51,640 --> 00:18:53,119 Speaker 10: are they going to keep up the pace of bibacs 341 00:18:53,560 --> 00:18:57,320 Speaker 10: cut it and the restructuring? You know, how have they 342 00:18:57,359 --> 00:19:00,320 Speaker 10: made any kind of extra progress on this very big, 343 00:19:00,680 --> 00:19:01,800 Speaker 10: very significantly structuring. 344 00:19:01,800 --> 00:19:03,120 Speaker 1: They have to do well in. 345 00:19:03,119 --> 00:19:06,639 Speaker 4: Terms of the buyback, paying out dividends. That is always 346 00:19:06,680 --> 00:19:10,040 Speaker 4: a very important component in the London market, isn't it. 347 00:19:10,119 --> 00:19:11,879 Speaker 4: What are we expecting around that? 348 00:19:12,880 --> 00:19:17,520 Speaker 9: We saw declining profits for the other oil companies and 349 00:19:18,480 --> 00:19:22,000 Speaker 9: BP's training update wasn't too bad, So I would have 350 00:19:22,040 --> 00:19:24,800 Speaker 9: thought that they'll keep it, keep the buybacks and there 351 00:19:24,800 --> 00:19:28,840 Speaker 9: won't be too much alarm on that front. So yeah, 352 00:19:28,880 --> 00:19:31,720 Speaker 9: I wouldn't be you know, I think that the expectation 353 00:19:31,880 --> 00:19:33,000 Speaker 9: is that that won't be. 354 00:19:33,000 --> 00:19:39,040 Speaker 4: Changing in terms of also the sustainability issues for BP. 355 00:19:39,280 --> 00:19:41,960 Speaker 4: So they're in the middle of reversing what was a 356 00:19:42,040 --> 00:19:46,480 Speaker 4: pivot to sustainability. How does that compare to what other 357 00:19:46,600 --> 00:19:53,040 Speaker 4: oil companies are doing and fossil fuel production now, I 358 00:19:53,119 --> 00:19:53,480 Speaker 4: think I. 359 00:19:53,400 --> 00:19:59,240 Speaker 9: Think there's a general is not singular, there's not one theme, 360 00:19:59,359 --> 00:20:01,920 Speaker 9: but I think there is a move to kind of 361 00:20:02,600 --> 00:20:07,399 Speaker 9: be less engaged with renewables and things like that, and 362 00:20:07,640 --> 00:20:11,200 Speaker 9: an emphasis on hydrocarbons. If you look at how the 363 00:20:11,320 --> 00:20:13,800 Speaker 9: US oil companies that have never been quite so kind 364 00:20:13,840 --> 00:20:18,880 Speaker 9: of wedded to kind of environmental sustainability type of stuff. 365 00:20:19,600 --> 00:20:22,280 Speaker 9: You know, they've done better and they've been more focused 366 00:20:22,320 --> 00:20:25,280 Speaker 9: on what they always were and I think you've seen 367 00:20:25,440 --> 00:20:28,199 Speaker 9: a pivot back towards that. But it's not universal. You know, 368 00:20:30,320 --> 00:20:34,600 Speaker 9: there are oil companies that have kind of stuck stuck 369 00:20:34,640 --> 00:20:36,960 Speaker 9: to it more. But you know, we've seen moves out 370 00:20:36,960 --> 00:20:41,359 Speaker 9: of green hydrogen. BP is a big Australia project, so 371 00:20:41,640 --> 00:20:44,199 Speaker 9: you know there's a lot going on in terms of 372 00:20:44,240 --> 00:20:46,240 Speaker 9: moving away from it and moving back to a focus 373 00:20:46,320 --> 00:20:47,639 Speaker 9: on oil and gas. 374 00:20:48,800 --> 00:20:54,520 Speaker 4: In terms of activist management, Sam BP shareholder's Elliott Investment Management, 375 00:20:54,920 --> 00:20:58,200 Speaker 4: they are so called activists investors, aren't they And they 376 00:20:58,240 --> 00:21:02,720 Speaker 4: certainly have made a number umber of statements around BP 377 00:21:02,840 --> 00:21:05,560 Speaker 4: and what they'd like the business to look like. How 378 00:21:05,600 --> 00:21:07,840 Speaker 4: do you think that relationship is and how does it 379 00:21:07,880 --> 00:21:11,480 Speaker 4: fit into kind of US activist investment in the UK 380 00:21:11,560 --> 00:21:12,040 Speaker 4: and Europe. 381 00:21:12,359 --> 00:21:15,439 Speaker 10: Well, I think with the BP in particular. So you know, 382 00:21:15,600 --> 00:21:17,199 Speaker 10: as I was just talking about, you know a lot 383 00:21:17,240 --> 00:21:19,919 Speaker 10: of companies are still staying in that renewable space and 384 00:21:19,960 --> 00:21:22,199 Speaker 10: one of the big things that was pushed for for 385 00:21:22,440 --> 00:21:25,800 Speaker 10: at BP and by Elliott in particular, is moving back 386 00:21:25,840 --> 00:21:29,560 Speaker 10: over to these the hydrocarbs, the fossil fuels, because in 387 00:21:29,600 --> 00:21:32,199 Speaker 10: part of the valuation on the stock, you know, BP's 388 00:21:32,280 --> 00:21:34,800 Speaker 10: evaluation and their shares have done extremely poorly, you know, 389 00:21:34,840 --> 00:21:36,520 Speaker 10: against a lot of the other majors over the last 390 00:21:36,520 --> 00:21:39,600 Speaker 10: couple of years. I think that's a major part of it. 391 00:21:39,640 --> 00:21:41,920 Speaker 10: But what they need to be able to do over 392 00:21:41,960 --> 00:21:44,639 Speaker 10: the course of you know, the whole restructuring process that 393 00:21:44,680 --> 00:21:48,520 Speaker 10: they're going through, is balance that with decent operations and 394 00:21:48,560 --> 00:21:51,640 Speaker 10: then with you know, pulling away from the new renewable 395 00:21:51,680 --> 00:21:53,639 Speaker 10: side of things, but balancing those two things out. Other 396 00:21:53,680 --> 00:21:55,239 Speaker 10: companies have just done that a little bit better than 397 00:21:55,280 --> 00:21:58,080 Speaker 10: BP have, I think for the results, I think what 398 00:21:58,119 --> 00:22:00,760 Speaker 10: you're likely to see is if there's an in honesty, 399 00:22:00,800 --> 00:22:03,480 Speaker 10: there's not probably going to be an enormous amount of 400 00:22:03,520 --> 00:22:07,200 Speaker 10: extra progress made, you know what we'll see. But what 401 00:22:07,320 --> 00:22:10,040 Speaker 10: Elliott and what certainly investors seem to think when the 402 00:22:10,080 --> 00:22:12,840 Speaker 10: restructuring was first announced is that it needed to go 403 00:22:12,880 --> 00:22:15,240 Speaker 10: a little bit further. So maybe they will be looking 404 00:22:15,240 --> 00:22:16,520 Speaker 10: for that kind of thing. I don't think that's the 405 00:22:16,560 --> 00:22:18,639 Speaker 10: kind of thing you'll get with the results, But that's 406 00:22:18,680 --> 00:22:21,120 Speaker 10: going to be the focus going forward for Eliot in particular. 407 00:22:21,760 --> 00:22:24,239 Speaker 4: Al can you just give us a view on the 408 00:22:24,280 --> 00:22:26,800 Speaker 4: second half of this year and into next year what 409 00:22:26,960 --> 00:22:29,119 Speaker 4: BP will be thinking about. As you say, it's a 410 00:22:29,200 --> 00:22:32,960 Speaker 4: much more unstable, uncertain world, maybe risk is coming off 411 00:22:32,960 --> 00:22:35,879 Speaker 4: the table. I mean, OPEK and its allies continue to 412 00:22:35,920 --> 00:22:39,760 Speaker 4: add barrels to the market. There's a very uncertain white 413 00:22:39,800 --> 00:22:41,960 Speaker 4: house when it comes to energy policy. What are you 414 00:22:42,040 --> 00:22:45,160 Speaker 4: thinking about? What are all the market's thinking about when 415 00:22:45,160 --> 00:22:47,480 Speaker 4: it comes to BP and the market for the rest 416 00:22:47,480 --> 00:22:48,040 Speaker 4: of this year. 417 00:22:49,800 --> 00:22:55,520 Speaker 9: I think BP everybody else is easy to forget that 418 00:22:54,840 --> 00:22:58,600 Speaker 9: the oil price is really important and the gas price 419 00:22:58,720 --> 00:23:05,320 Speaker 9: is really important. You know, a few bucks of move 420 00:23:05,400 --> 00:23:10,040 Speaker 9: in the oil price can affect their revenues very significantly, 421 00:23:10,880 --> 00:23:13,960 Speaker 9: and so that's important. Now what's going on with the 422 00:23:13,960 --> 00:23:17,800 Speaker 9: oil price. The widespread expectation is that as we move 423 00:23:17,840 --> 00:23:20,000 Speaker 9: into the second half of this year into early twenty 424 00:23:20,080 --> 00:23:24,159 Speaker 9: twenty six, we're going to see a surplus building up. 425 00:23:24,240 --> 00:23:28,280 Speaker 9: OPIC keeps on adding barrels, you know, I think I 426 00:23:28,280 --> 00:23:33,240 Speaker 9: think that the Trump terrris haven't really crushed demand like 427 00:23:33,280 --> 00:23:37,320 Speaker 9: people kind of maybe predicted it they would, But there's 428 00:23:37,359 --> 00:23:40,399 Speaker 9: still are kind of an uncertainty economically that probably hasn't 429 00:23:40,440 --> 00:23:43,360 Speaker 9: been helpful. So you've lost a bit of demand, you're 430 00:23:43,359 --> 00:23:46,240 Speaker 9: certainly adding some supply. There's non opic supply coming in. 431 00:23:46,560 --> 00:23:50,159 Speaker 9: So the expectation among the big forecasting agencies like the 432 00:23:50,160 --> 00:23:54,479 Speaker 9: International Energy Agency and the EIA is that they're going 433 00:23:54,520 --> 00:23:58,600 Speaker 9: to see a surplus moving into next year. Surplus isn't 434 00:23:58,720 --> 00:24:03,000 Speaker 9: usually very good for oil prices, and therefore, you know, 435 00:24:03,000 --> 00:24:05,280 Speaker 9: it's not great for BP or anybody else if that 436 00:24:05,359 --> 00:24:07,520 Speaker 9: starts to be the case. If you start to see 437 00:24:08,000 --> 00:24:11,879 Speaker 9: a glove building up, then oil price is bad and 438 00:24:12,000 --> 00:24:15,080 Speaker 9: that's that isn't good for the stock prices of these 439 00:24:15,119 --> 00:24:15,760 Speaker 9: oil companies. 440 00:24:17,280 --> 00:24:20,640 Speaker 4: And Europe of course has recently committed SAM to buying 441 00:24:20,960 --> 00:24:24,760 Speaker 4: much more energy and energy products from the US, for example. 442 00:24:24,840 --> 00:24:29,720 Speaker 4: So we have geopolitics, we have conflicts, we have uncertainty. 443 00:24:30,760 --> 00:24:32,800 Speaker 4: How are you thinking about the rest of the year 444 00:24:32,840 --> 00:24:37,000 Speaker 4: for BP and in context for the earning picture? 445 00:24:37,119 --> 00:24:39,520 Speaker 10: Yeah, I actually what Ilse said there is is a 446 00:24:39,560 --> 00:24:42,160 Speaker 10: really important point which you know, we should always keep 447 00:24:42,200 --> 00:24:43,879 Speaker 10: in mind what the oil price is doing and what 448 00:24:43,920 --> 00:24:45,440 Speaker 10: the outlook is for the ol press over the course 449 00:24:45,480 --> 00:24:46,840 Speaker 10: of the rest of the year. But when you have 450 00:24:46,880 --> 00:24:49,080 Speaker 10: a market that is under pressure like that, you know, 451 00:24:49,200 --> 00:24:51,080 Speaker 10: either it coming from the oil price or from the 452 00:24:51,160 --> 00:24:53,840 Speaker 10: kind of broader uncertainties in the market. Demand. Uncertainty is 453 00:24:53,880 --> 00:24:55,720 Speaker 10: going into the rest of the year. I don't think 454 00:24:55,720 --> 00:24:57,760 Speaker 10: we can sit here and say that uncertainty is over 455 00:24:57,920 --> 00:25:00,320 Speaker 10: in any way. So over the course of rest of 456 00:25:00,320 --> 00:25:03,320 Speaker 10: the year for BP, because they are coming at it 457 00:25:03,320 --> 00:25:06,200 Speaker 10: from a slightly weaker position, I think that they will 458 00:25:06,359 --> 00:25:08,399 Speaker 10: they will have to deliver, you know, well, they have 459 00:25:08,480 --> 00:25:10,800 Speaker 10: to show their investors that they are delivering on the 460 00:25:10,840 --> 00:25:14,320 Speaker 10: plan that they have managed to put together, and so 461 00:25:14,560 --> 00:25:16,680 Speaker 10: there will be a bar for them to get over 462 00:25:16,720 --> 00:25:18,400 Speaker 10: I think for the earning and then for the rest 463 00:25:18,400 --> 00:25:20,160 Speaker 10: of the year to show that progress. 464 00:25:20,400 --> 00:25:23,600 Speaker 4: Okay, many thanks to both of you. To Bloomberg, Sam 465 00:25:23,640 --> 00:25:26,920 Speaker 4: Onsteed and Alec Nightingale, thank you so much for your time. 466 00:25:27,160 --> 00:25:29,600 Speaker 4: Really good to speak to you ahead of BP's earnings 467 00:25:29,640 --> 00:25:32,160 Speaker 4: in the next few days. I'm Caroline Hepge here in London. 468 00:25:32,200 --> 00:25:34,879 Speaker 4: You can catch us every weekday morning for Bloomberg Daybreak 469 00:25:34,920 --> 00:25:36,840 Speaker 4: you at beginning at six am in London. That's one 470 00:25:36,840 --> 00:25:38,000 Speaker 4: I am on Wall Street. 471 00:25:38,240 --> 00:25:38,600 Speaker 7: Tom. 472 00:25:38,960 --> 00:25:42,120 Speaker 2: Thanks Caroline and coming up on Bloomberg Daybreak Weekend how 473 00:25:42,119 --> 00:25:45,119 Speaker 2: a shift by Apple has turned India into the world's 474 00:25:45,160 --> 00:25:49,080 Speaker 2: top maker of smartphones ship to the US. I'm Tom Busby, 475 00:25:49,160 --> 00:26:03,000 Speaker 2: and this is Bloomberg. This is Bloomberg day Break Weekend, 476 00:26:03,000 --> 00:26:05,359 Speaker 2: our global look ahead at the top stories for investors 477 00:26:05,359 --> 00:26:06,040 Speaker 2: in the coming week. 478 00:26:06,359 --> 00:26:07,840 Speaker 3: I'm Tom Busby in New York. 479 00:26:08,080 --> 00:26:11,479 Speaker 2: Global supply chains began to shift during the pandemic, and 480 00:26:11,560 --> 00:26:14,439 Speaker 2: that shifting became more dramatic with the rollout of President 481 00:26:14,480 --> 00:26:17,240 Speaker 2: Trump's tariffs as high as one hundred and fifty percent 482 00:26:17,280 --> 00:26:20,320 Speaker 2: for Chinese exports to the US, and that caused Apple 483 00:26:20,520 --> 00:26:24,320 Speaker 2: to reimagine its production network. For more on those results, 484 00:26:24,400 --> 00:26:27,000 Speaker 2: let's get to the host of the Daybreak Asia podcast, 485 00:26:27,240 --> 00:26:27,960 Speaker 2: Doug Krisner. 486 00:26:28,440 --> 00:26:32,080 Speaker 5: Tom As Apple began to diversify its supply chain further, 487 00:26:32,280 --> 00:26:35,359 Speaker 5: the company doubled down on India, and that got a 488 00:26:35,400 --> 00:26:39,000 Speaker 5: reaction from President Trump. Back in May, he threatened CEO 489 00:26:39,119 --> 00:26:42,119 Speaker 5: Tim Cook with a twenty five percent tariff on Apple 490 00:26:42,200 --> 00:26:46,159 Speaker 5: products unless the company shifted production to the US. 491 00:26:46,520 --> 00:26:48,520 Speaker 11: I had an understanding with him that he wouldn't be 492 00:26:48,600 --> 00:26:48,879 Speaker 11: doing this. 493 00:26:48,960 --> 00:26:50,879 Speaker 12: He said, he's going to India to bill plants. 494 00:26:50,920 --> 00:26:52,719 Speaker 11: I said, that's okay, to go to India, but you're 495 00:26:52,760 --> 00:26:54,480 Speaker 11: not going to sell them to here without tariffs. 496 00:26:54,560 --> 00:26:57,960 Speaker 5: But Apple followed through and deepened its ties in India, 497 00:26:58,040 --> 00:27:01,640 Speaker 5: and in the quarter through June, India became the largest 498 00:27:01,640 --> 00:27:04,520 Speaker 5: manufacturer of smartphone shipped to the US for the very 499 00:27:04,520 --> 00:27:08,840 Speaker 5: first time. According to data from Canalis, Indian produced handhelds 500 00:27:09,080 --> 00:27:12,679 Speaker 5: accounted for forty four percent of the American market. Vietnam, 501 00:27:12,880 --> 00:27:16,439 Speaker 5: home to much of Samsung's production, came in second. China 502 00:27:16,560 --> 00:27:19,320 Speaker 5: dropped to just twenty five percent. That's down from more 503 00:27:19,359 --> 00:27:22,600 Speaker 5: than sixty percent a year ago. Let's take a closer 504 00:27:22,640 --> 00:27:26,040 Speaker 5: look now. Joining me is Sun Culp Fartial. He is 505 00:27:26,160 --> 00:27:29,400 Speaker 5: India technology reporter for Bloomberg News, joining us from our 506 00:27:29,520 --> 00:27:32,640 Speaker 5: bureau in New Delhi. Sun Culp, thank you so much 507 00:27:32,680 --> 00:27:35,119 Speaker 5: for making time to chat with me. Can I begin 508 00:27:35,240 --> 00:27:40,160 Speaker 5: by asking for some perspective on Apple's relationship with India. 509 00:27:40,200 --> 00:27:41,520 Speaker 5: When did it actually begin? 510 00:27:42,080 --> 00:27:46,240 Speaker 12: I mean, Apple sol iPhones it India forever, but the 511 00:27:46,359 --> 00:27:51,200 Speaker 12: relationship has especially become better and more meaningful and more 512 00:27:51,200 --> 00:27:55,040 Speaker 12: important in the last four years. Twenty seventeen was the 513 00:27:55,040 --> 00:27:59,239 Speaker 12: first time Tim Cook visited India as Apple CEO. At 514 00:27:59,240 --> 00:28:01,920 Speaker 12: that time, he met with the Prime Minister and Ardiamodi. 515 00:28:02,359 --> 00:28:05,680 Speaker 12: Both of them had a chat and there was requests 516 00:28:05,720 --> 00:28:09,360 Speaker 12: from India that Apple should manufacture in India. And then 517 00:28:09,400 --> 00:28:15,280 Speaker 12: we saw that in twenty seventeen, Apple actually started assembling 518 00:28:15,760 --> 00:28:18,800 Speaker 12: a few test units of what was back then called 519 00:28:18,880 --> 00:28:22,720 Speaker 12: the iPhone SE but that was sort of a test run. 520 00:28:22,840 --> 00:28:26,800 Speaker 12: This assembly was done in Bangalore in south of India, 521 00:28:27,760 --> 00:28:31,560 Speaker 12: so the relationship started there. But in twenty twenty one, 522 00:28:32,240 --> 00:28:36,560 Speaker 12: Apple actually won financial incentives or what I should actually 523 00:28:36,560 --> 00:28:41,240 Speaker 12: call state subsidies to manufacture in India, and that's when 524 00:28:41,240 --> 00:28:45,480 Speaker 12: they really scaled up production. And you know, today more 525 00:28:45,480 --> 00:28:48,479 Speaker 12: than a fifth of iPhones are assembled in India. More 526 00:28:48,480 --> 00:28:51,200 Speaker 12: than a fifth of the global iPhone output is being 527 00:28:51,240 --> 00:28:54,000 Speaker 12: done out of India. So that's a quick recap of 528 00:28:54,000 --> 00:28:54,480 Speaker 12: the history. 529 00:28:54,880 --> 00:28:57,400 Speaker 5: So we know that Apple has been diversifying its supply 530 00:28:57,600 --> 00:29:01,880 Speaker 5: chain away from China. I'm curious about the technology that 531 00:29:01,960 --> 00:29:05,360 Speaker 5: Apple is using in India to produce these devices. Hanhaigh 532 00:29:05,360 --> 00:29:08,479 Speaker 5: Precision is the world's largest maker of iPhones. How does 533 00:29:08,520 --> 00:29:11,480 Speaker 5: a company like Hanhai fit into the picture of Apple 534 00:29:11,520 --> 00:29:11,960 Speaker 5: in India. 535 00:29:12,840 --> 00:29:17,720 Speaker 12: Yes, they have been key in Apple's manufacturing success or 536 00:29:17,760 --> 00:29:21,760 Speaker 12: assembly in India. I just want our listeners to know 537 00:29:21,800 --> 00:29:24,840 Speaker 12: that there's very little difference between manufacturing and assembly now, 538 00:29:25,360 --> 00:29:27,800 Speaker 12: and India does quite a bit of assembly now, but 539 00:29:27,880 --> 00:29:30,680 Speaker 12: a lot of components is yet are sourced from China. 540 00:29:31,400 --> 00:29:35,200 Speaker 12: Fox Corn, as Hanahai is more widely known. They made 541 00:29:35,280 --> 00:29:38,840 Speaker 12: the first iPhone in India sometime in late twenty twenty 542 00:29:38,920 --> 00:29:42,040 Speaker 12: or twenty one, and they made iPhone ten in India 543 00:29:42,400 --> 00:29:45,520 Speaker 12: for the first time, and from then on, you know, 544 00:29:45,560 --> 00:29:49,160 Speaker 12: they've been ramping up production. Last year they produced iPhone 545 00:29:49,240 --> 00:29:52,920 Speaker 12: sixteen at the same time as the global launch from India. 546 00:29:53,040 --> 00:29:55,920 Speaker 12: So a lot of components still come from China, but 547 00:29:56,040 --> 00:30:00,840 Speaker 12: Apple is very actively scouting for partners here. Fox Corn 548 00:30:00,960 --> 00:30:03,400 Speaker 12: has one factory in the south of India and they're 549 00:30:03,400 --> 00:30:05,600 Speaker 12: building another one, which is their second largest plant in 550 00:30:05,600 --> 00:30:06,000 Speaker 12: the world. 551 00:30:06,480 --> 00:30:09,440 Speaker 5: To what extent has the workforce in India been an 552 00:30:09,440 --> 00:30:12,640 Speaker 5: attraction for a company like Apple, a workforce that may 553 00:30:12,680 --> 00:30:15,000 Speaker 5: be technologically sophisticated. 554 00:30:15,720 --> 00:30:19,640 Speaker 12: So the workforce is quite a big advantage for Apple 555 00:30:19,640 --> 00:30:24,960 Speaker 12: in India. First of all, when fox Conn began assembling 556 00:30:25,000 --> 00:30:28,520 Speaker 12: iPhones in India, another unit of fox Corn was already 557 00:30:28,640 --> 00:30:32,080 Speaker 12: active in India making Shaomi phones and you know, some 558 00:30:32,240 --> 00:30:36,480 Speaker 12: other phones. They had devised the model where they brought 559 00:30:36,480 --> 00:30:39,600 Speaker 12: in a lot of women workers in India, especially women 560 00:30:39,640 --> 00:30:43,280 Speaker 12: workers as seen as more hard working, more reliable. They 561 00:30:43,320 --> 00:30:47,080 Speaker 12: stick to the job. Sometimes they're the only breadwinners in 562 00:30:47,120 --> 00:30:50,400 Speaker 12: the family, so Apple stuck to that model. About seventy 563 00:30:50,440 --> 00:30:55,080 Speaker 12: percent of their workforce in the factories is comprised of women. 564 00:30:55,840 --> 00:31:02,120 Speaker 12: It's an advantage because these workers otherwise have not gotten jobs. 565 00:31:02,120 --> 00:31:04,200 Speaker 12: Probably some of them would have been married really early, 566 00:31:04,560 --> 00:31:06,960 Speaker 12: so it's a good thing for their families. And this 567 00:31:07,080 --> 00:31:11,400 Speaker 12: workforce has proven very reliable for Apple and from scratched 568 00:31:11,480 --> 00:31:13,920 Speaker 12: to making one fifth of the iPhones. That says something. 569 00:31:14,240 --> 00:31:18,560 Speaker 5: I'm wondering whether other technology firms beyond Apple are looking 570 00:31:18,600 --> 00:31:21,800 Speaker 5: at India on the production side and seeing all of 571 00:31:21,840 --> 00:31:24,840 Speaker 5: the points of attraction that you've just kind of laid 572 00:31:24,880 --> 00:31:29,480 Speaker 5: out and thinking about maybe investing resources putting more production 573 00:31:29,600 --> 00:31:31,040 Speaker 5: lines in place in India. 574 00:31:31,080 --> 00:31:34,360 Speaker 12: Is that happening, Yes, to some extent, it is happening, 575 00:31:35,000 --> 00:31:39,560 Speaker 12: to be sure, China still is a huge manufacturing superpower, 576 00:31:40,000 --> 00:31:43,200 Speaker 12: and we're very small compared to China, but it's also 577 00:31:43,320 --> 00:31:46,840 Speaker 12: early days for India. Some other firms that are now 578 00:31:46,880 --> 00:31:51,360 Speaker 12: making their products in India include Google, Bloomberg broke the 579 00:31:51,440 --> 00:31:54,920 Speaker 12: story last year about Google making its Pixel phones in India. Now, 580 00:31:54,960 --> 00:31:57,480 Speaker 12: the volumes of Pixel phones or the sales are much 581 00:31:57,520 --> 00:32:02,440 Speaker 12: smaller compared to Apple. Samsung has a huge factory on 582 00:32:02,480 --> 00:32:05,320 Speaker 12: the outskirts of Delhi. It's a little bit smaller than 583 00:32:05,320 --> 00:32:09,440 Speaker 12: their plant in Vietnam, but they make phones in India 584 00:32:09,840 --> 00:32:13,040 Speaker 12: and they export them as well. In fact, when that 585 00:32:13,040 --> 00:32:16,640 Speaker 12: factory was inaugurated a few years ago, I remember Samsung 586 00:32:16,720 --> 00:32:19,080 Speaker 12: said that we're now going to make in India for 587 00:32:19,240 --> 00:32:23,720 Speaker 12: the world. There are companies here that assemble laptops for 588 00:32:24,440 --> 00:32:28,200 Speaker 12: ACER and HP and Dell. So yes, I mean India's 589 00:32:28,200 --> 00:32:33,080 Speaker 12: stature as a manufacturing hub is definitely growing. Is it 590 00:32:33,280 --> 00:32:36,120 Speaker 12: right to compare it to China? No, We're still very early. 591 00:32:36,560 --> 00:32:39,040 Speaker 5: But I'm curious whether or not it's beginning to move 592 00:32:39,160 --> 00:32:44,400 Speaker 5: beyond some of these devices like handheld or smartphones and 593 00:32:44,640 --> 00:32:49,240 Speaker 5: into things like semiconductors, whether we're talking about microprocessors or 594 00:32:49,600 --> 00:32:52,720 Speaker 5: sophisticated computer memory. Is that happening at all. 595 00:32:53,560 --> 00:32:57,520 Speaker 12: Yes, that's beginning to happen. I think it's a very 596 00:32:57,520 --> 00:33:00,760 Speaker 12: big push by Prime Minister and Arrange Room, these government 597 00:33:00,880 --> 00:33:07,760 Speaker 12: to make India reliant electronically in electronic products and the 598 00:33:07,840 --> 00:33:11,200 Speaker 12: chip shortage kind of showed nations that they needed to 599 00:33:11,240 --> 00:33:15,360 Speaker 12: be reliant, self reliant. So what we've seen is that Micron, 600 00:33:15,960 --> 00:33:19,560 Speaker 12: the US company, has entered India. They're building a plant 601 00:33:19,920 --> 00:33:22,720 Speaker 12: in the western state of Gujarat, which also happens to 602 00:33:22,720 --> 00:33:24,600 Speaker 12: be the home state of the Prime Minister of India. 603 00:33:25,840 --> 00:33:28,760 Speaker 12: Then we see Tata Conglomerate, which is one of the 604 00:33:28,760 --> 00:33:33,480 Speaker 12: biggest Indian conglomerates. They are building a factory again in Gujarat. 605 00:33:34,280 --> 00:33:37,440 Speaker 12: They're going to be making legacy semiconductors. So India is 606 00:33:37,480 --> 00:33:40,719 Speaker 12: not making the kind of cutting edge semiconductors that are 607 00:33:40,760 --> 00:33:44,200 Speaker 12: TSMC makes. TSMC has not even come to India and 608 00:33:44,240 --> 00:33:47,480 Speaker 12: may not for some time, but India started its journey 609 00:33:47,800 --> 00:33:49,520 Speaker 12: towards manufacturing chips. 610 00:33:50,080 --> 00:33:52,200 Speaker 5: So it seems like there's a fair amount of foreign 611 00:33:52,200 --> 00:33:55,440 Speaker 5: direct investment that's been moving into the Indian market. 612 00:33:56,040 --> 00:33:59,200 Speaker 12: Yes, definitely. So you know, India announced billions of dollars 613 00:33:59,240 --> 00:34:03,000 Speaker 12: worth of state subsidies to encourage the assembly and the 614 00:34:03,040 --> 00:34:08,080 Speaker 12: manufacturing of smartphones. Then it has announced another scheme with 615 00:34:08,280 --> 00:34:13,319 Speaker 12: some early billions to push the manufacturing of servers and 616 00:34:13,440 --> 00:34:17,240 Speaker 12: laptops and tablets. It has a ten billion dollar fund 617 00:34:17,480 --> 00:34:20,839 Speaker 12: to encourage chip making in the country. So it has 618 00:34:20,920 --> 00:34:24,320 Speaker 12: spent some amount of government money, some substantial amount of 619 00:34:24,360 --> 00:34:28,080 Speaker 12: government money to attract assembly and manufacturing to India. 620 00:34:28,200 --> 00:34:31,000 Speaker 5: That was send culled Farti al There, India Tech reporter 621 00:34:31,080 --> 00:34:34,240 Speaker 5: for Bloomberg News. Let's move next to the property sector. 622 00:34:34,320 --> 00:34:38,200 Speaker 5: For both Hong Kong and mainland China, new property sales 623 00:34:38,239 --> 00:34:42,479 Speaker 5: across forty seven Chinese cities fell nineteen percent between July 624 00:34:42,600 --> 00:34:45,920 Speaker 5: first and the twenty third, and Bloomberg Intelligence says this 625 00:34:46,080 --> 00:34:49,439 Speaker 5: could portend a deepening sales downturn in the second half 626 00:34:49,440 --> 00:34:53,279 Speaker 5: of the year. Buyer sentiment has weakened since April's US 627 00:34:53,400 --> 00:34:57,960 Speaker 5: tariff announcements, and it's threatening to undermine previous stimulus efforts. 628 00:34:58,280 --> 00:35:01,040 Speaker 5: For some insight, let's bring in Adrill Chan. He is 629 00:35:01,120 --> 00:35:04,000 Speaker 5: chair of Hong Long Properties. Adrill joins us from our 630 00:35:04,040 --> 00:35:06,000 Speaker 5: studios in Hong Kong. Good of you to make time 631 00:35:06,040 --> 00:35:07,920 Speaker 5: to chat with me. I want to bring up a 632 00:35:07,960 --> 00:35:10,800 Speaker 5: sore subject right out of the gate. I'm sorry because 633 00:35:10,840 --> 00:35:14,840 Speaker 5: I noted that net income for your company was down 634 00:35:14,960 --> 00:35:18,160 Speaker 5: fourteen percent year over year in the latest period. Can 635 00:35:18,200 --> 00:35:20,200 Speaker 5: you give me a sense of what's happening, what you're 636 00:35:20,200 --> 00:35:21,240 Speaker 5: struggling with right. 637 00:35:21,120 --> 00:35:25,520 Speaker 11: Now, Thanks Doug. The decrease in net income really is 638 00:35:25,719 --> 00:35:29,000 Speaker 11: as a result of a lower number of sales of departments, 639 00:35:29,640 --> 00:35:32,840 Speaker 11: and that is something that fluctuates for us. The primary 640 00:35:33,000 --> 00:35:36,320 Speaker 11: sector of our business is retail leasing and office leasing, 641 00:35:36,360 --> 00:35:41,120 Speaker 11: so commercial leasing is actually down low single digits, which 642 00:35:41,400 --> 00:35:44,440 Speaker 11: is a lot less bad than being down fourteen percent, 643 00:35:44,960 --> 00:35:47,759 Speaker 11: but that's the explanation for that. If you look into 644 00:35:48,360 --> 00:35:52,640 Speaker 11: retail and offices, retail has been actually surprisingly resilient in 645 00:35:52,640 --> 00:35:55,719 Speaker 11: the Mainland. I think our share price has reacted relatively 646 00:35:55,800 --> 00:35:59,719 Speaker 11: well since the announcement of our results, and that's a 647 00:35:59,719 --> 00:36:01,640 Speaker 11: little bit of a surprise to me, honestly, but I 648 00:36:01,640 --> 00:36:05,640 Speaker 11: think that the market was perhaps expecting worse. So we're 649 00:36:05,640 --> 00:36:09,760 Speaker 11: down retail sales low single digits, but I think people 650 00:36:09,760 --> 00:36:11,120 Speaker 11: were probably expecting worse than that. 651 00:36:11,280 --> 00:36:14,160 Speaker 5: So give me a sense of what your portfolio looks like. 652 00:36:14,200 --> 00:36:17,200 Speaker 5: When you talk about retail spaces, I think shopping malls. 653 00:36:17,239 --> 00:36:22,240 Speaker 5: Are you catering to retailers that perhaps service the higher 654 00:36:22,320 --> 00:36:25,320 Speaker 5: end of the market. Are these luxury type retailers primarily? 655 00:36:25,680 --> 00:36:29,520 Speaker 11: Absolutely so. Our biggest exposure is to the luxury brands, 656 00:36:29,960 --> 00:36:32,359 Speaker 11: and as we've been seeing over the past couple of days, 657 00:36:32,360 --> 00:36:36,320 Speaker 11: the luxury brands have been posting let's say, mixed results. 658 00:36:37,080 --> 00:36:41,840 Speaker 11: Asia extrapan is sort of broadly flat ish, while Japan 659 00:36:41,920 --> 00:36:44,040 Speaker 11: is down significantly, and that kind of I think is 660 00:36:44,080 --> 00:36:49,000 Speaker 11: what explains our reasonable performance. A lot less Chinese outbound 661 00:36:49,000 --> 00:36:53,120 Speaker 11: tourism to Japan for shopping and staying on shore to 662 00:36:53,160 --> 00:36:56,239 Speaker 11: do that shopping. So that's one of the macro trends 663 00:36:56,239 --> 00:36:58,279 Speaker 11: that we've seen. I don't know if that's because of 664 00:36:58,840 --> 00:37:01,719 Speaker 11: all this rumors about earthquakes and this and that, but 665 00:37:02,239 --> 00:37:06,040 Speaker 11: for various reasons, the Chinese consumers seem to be staying 666 00:37:06,080 --> 00:37:07,880 Speaker 11: put on shore. 667 00:37:08,000 --> 00:37:10,359 Speaker 5: So when you cater to that segment of the real 668 00:37:10,440 --> 00:37:14,800 Speaker 5: estate market, those higher end retailers, do they have expectations 669 00:37:14,840 --> 00:37:20,399 Speaker 5: about certain upgrades or modifications that the landlord in your 670 00:37:20,480 --> 00:37:23,480 Speaker 5: case has to provide them, And does that kind of 671 00:37:23,560 --> 00:37:26,919 Speaker 5: draw down or maybe force you to do a little 672 00:37:26,920 --> 00:37:28,200 Speaker 5: bit of cap. 673 00:37:28,160 --> 00:37:31,919 Speaker 11: X Oh, it certainly does. So, you know, in terms 674 00:37:31,960 --> 00:37:35,400 Speaker 11: of luxury moles, this sector in the mainland of China 675 00:37:36,000 --> 00:37:39,000 Speaker 11: has only been around for maybe twenty years or so, 676 00:37:39,320 --> 00:37:41,879 Speaker 11: twenty twenty five years, and so if you think about 677 00:37:41,960 --> 00:37:44,760 Speaker 11: the lifetime of a mall, that's kind of the time 678 00:37:44,840 --> 00:37:47,920 Speaker 11: that you need to definitely start looking into CAPEX upgrades. 679 00:37:48,200 --> 00:37:51,160 Speaker 11: We've done quite a few. We've done three upgrades in 680 00:37:51,640 --> 00:37:53,840 Speaker 11: three of our separate males across the mainland. 681 00:37:54,280 --> 00:37:55,640 Speaker 5: They've been well received. 682 00:37:55,960 --> 00:37:59,279 Speaker 11: I think now in terms of the market cycles, it's 683 00:37:59,280 --> 00:38:02,000 Speaker 11: a relative down it's probably a good time to be 684 00:38:02,080 --> 00:38:05,040 Speaker 11: investing in oneself. That being said, because we're in a 685 00:38:05,080 --> 00:38:08,680 Speaker 11: down market, the tenants have pricing power. It's a buyer's 686 00:38:08,680 --> 00:38:11,880 Speaker 11: market for our tenants, and so we have to make 687 00:38:11,920 --> 00:38:13,920 Speaker 11: sure that we're on the ball in terms of how 688 00:38:13,960 --> 00:38:17,920 Speaker 11: those capecks upgrades go and our ability to deliver on 689 00:38:18,000 --> 00:38:20,399 Speaker 11: an operations and service that is. 690 00:38:20,360 --> 00:38:23,000 Speaker 5: A drill chan share of Hong Long Properties. And I'm 691 00:38:23,000 --> 00:38:25,720 Speaker 5: Doug Krisner. You can catch us weekdays for the Daybreak 692 00:38:25,719 --> 00:38:29,400 Speaker 5: Asia podcast. It's available wherever you get your podcast. 693 00:38:29,880 --> 00:38:33,040 Speaker 2: Tom, Thanks Doug, and that does it for this edition 694 00:38:33,040 --> 00:38:35,960 Speaker 2: of Bloomberg day Break Weekend. Join us again Monday morning 695 00:38:36,000 --> 00:38:37,880 Speaker 2: at five am Wall Street Time for the latest on 696 00:38:38,000 --> 00:38:40,799 Speaker 2: markets overseas and the news you need to start your day. 697 00:38:41,200 --> 00:38:44,320 Speaker 2: I'm Tom Busby. Stay with us. Top stories and global 698 00:38:44,360 --> 00:38:47,080 Speaker 2: business headlines are coming up right now.