tv Bloomberg Markets Asia Bloomberg May 19, 2021 10:00pm-11:00pm EDT
we speak with bobby lee to see if the largest cryptocurrency still has room to run. haslinda: and we will be live in hong kong and hear about the perils of pandemic investing, and where he is finding value. yvonne: what a wild day. you had this crypto bloodbath that is spilling over into other asset classes. stocks and commodities. certainly you're going to see some volatility. asia taking it in stride. taking a look at how markets are looking, there is a bit of dip buying. better data out of japan. exports 30%, offering support for the market that were largely flat and taiwan. jakarta coming online. euro futures a touch lower. nifty futures slightly in the green. it really has been about what is going on in the crypto space. taking a look at the bloomberg
galaxy crypto index, down from 40%. extreme swings. we broke through some key technicals for bitcoin. $30,000 seems to be the psychological line. holding around $37,000 but we are seeing it down from 3% this morning. ethereum down 7%. litecoin as well. take a look at what the spillover effects have on commodities. they continue to crumble. china come iron ore back below $200 a ton. singapore futures p copper as well drop in the most since october. gold also flipping on the back of the fed taper concerns. the spot index, the fourth worst day this year. taking a look at currencies, dollar snapping four days of losses. you are seeing that in the euro and the aussie. commodity length currencies is certainly taking a hit. the aussie with the exception here, little on the back of aussie job numbers.
take a look at the offshore renminbi. seeing some strength this morning. have to continue to watch yields. bond markets, 156. the 10 year yield premium between china and the u.s. to a 15 month low. haslinda: all the swings and suddenly not for the faint hearted. breaking news out of new zealand. amid all the uncertainty, new zealand seeing a sees a stronger economic growth, smaller deficits, a budget deficit of 18.4 billion kiwi versus 16 forecast in december. for subsequent years, deficits were slower than previously forecast, falling to 2.3 billion kiwi dollars in 2025. in terms of treasury projection, it's returning to a budget surplus in 2027. so pretty optimistic view. new zealand forecasting faster economic growth. just to ep updated on sri lanka,
it's keeping rates unchanged at 5.5%. pretty much in line with expectations. peak minute -- keeping it unchanged for the seventh straight meeting. keeping ammunition for later amid lingering concerns about the economy. of course it is opened up its borders and is hoping mood could help drive growth going forward. also interesting to note, it is not just a buyers bond that's a key challenge for the economy. also 3.7 debt repayments it's set to see this year. 3.7 billion dollars. let's dive deeper into what markets are showing. mark cranfield joins us here from the lion city. some fed officials open to discussion tapering bond purchases at upcoming meetings. which brings us to the question of the day, which assets won't suffer in a taper tantrum? mark: probably everybody would
suffer in a real taper tantrum. it would be such a huge eventful financial markets. people have gotten so use of the fed and other central banks supporting their bond markets so they would certainly have disruptions across most asset classes. which don't need much excuse for people to look at anything which may have become a little bit overvalued in some respect. we are seeing commodities of course today having soft. iron ore getting a lot of attention, below $200 and looking pretty soft after a tremendous rally. copper also softening as well. it is probably the fact even though they are only talking about talking about tapering, it certainly gives people a reason to reassess some of the risks they are holding, and to see which assets they have already run ahead of very long way and to see whether or not they need to do any trimming. also seeing the effect from
cryptocurrencies as well, which is spilling over. yvonne: let's talk about some of those correlations. because it seems like it has been quite rare to see volatility in bitcoin spill over into more frothy part of the market. is this a new relationship when it comes to chris so -- ripped overseas assets now? mark: i think it has become big enough that people in other places do have to take some notice of it. i think for a while people who were trading bonds and currencies and equities to some extent were probably thinking this crypto world is not something you have to pay too much attention to. but the size of the swings the past couple weeks probably means there is an effect happening in that space will translate into reduced exposure elsewhere. for example, we have seen a ethereum futures, the 30 day volatility has gone up to something like 140%. to put that into context, bitcoin is around 85%. the vix is currently trading at
22. even in march last year, the vix never reached 100. so you can see this is extreme volatility that people need to pay attention to. yvonne: mark cranfield joining us from singapore. some breaking news crossing the bloomberg. this is according to reuters, they are reporting that the bytedance co-founder is to step down as ceo. and the cofounder is to succeed in that position. this is according to reuters. but we know zhang yiming has been battling regulators in the u.s. and china. we will continue to see what more details we can get, but that's the line, the bytedance ceo to step down. let's get more on our top stories this morning. bitcoin's wildest swing yet causes outages at crypto it changes. our next guest is bobby lee, who
is also former ceo of china-based crypto exchange. you may or may but we talked to him a couple years ago. he is also the author of the promise of bitcoin, the future of money and how it can work for you. he joins us now live from las vegas. bobby, thank you so much for joining us. it's a very simple question. we are all still scratching our heads about what happened. but what is going on here? what happened? bobby: i think it is a scare tactic. i think bitcoin fundamentally is a global reserve asset change has not changed in the last 48 hours. it's been performing its duty. what has changed is countries, regulators, specifically news out of the china market, regulators, i guess they don't like to see bitcoin trading so high and they sent out a reminder about the 2017 communique that was from september of 2017. in my opinion it is just a rehash of past words. if you guys recall, in 2017,
that's when the bitcoin exchanges in china all shut down, including my company, we shut down voluntarily after the communique in september. so this is more of a rehash of that. in my perspective there is nothing new in terms of regulatory announcements. yvonne: if there is nothing new that we are hearing, why did the market react so negatively? bobby: i think it is just a market. the market is full of people, not everyone is up-to-date. i have been in the industry for 10 years and i clearly remember all these different regulatory threats and, you know, communiques, if you will. this time around, there's nothing new in there. if anything the news from september of 2017 was more impactful because it was actually action, meaning exchanges had to close down, and banks and other local businesses
could not transact in cryptocurrency. whereas today it is the same thing, just reminding people. but i do not see how they can shut down exchanges that have already been shut down. i don't see how they can clamp down on crypto transactions that do not exist. so i'm scratching my head. but when the prices come down, it is a good option to add more, to invest more, for who have been waiting on the sidelines. haslinda: but isn't it true that the volatility we saw overnight in the u.s., 30 down, 30 up, validates what china has been saying that it is too risky, too volatile, we don't want it? bobby: it is. i admit it is very volatile. in my book i spend a whole chapter about volatility. now, volatility does not equate to riskiness. this is a common mistake people make. volatility is just volatility. riskiness is when an investment
may not be risk-adjusted for its return. but in my opinion, bitcoin is very volatile, yet it is risk reward adjusted. so what is funny is the regulators, whether china or other countries, when they try to help the commoners by issuing these communiques warnings about cap the currency is very volatile, but what is funny is by them announcing it, it causes more volatility. as the previous gentlemen pointed out, bitcoin had an all-time high volatility in the last 24 hours. it is unfortunate what they are doing, trying to smack down bitcoin because it is too volatile, is causing more villa tile -- causing more volatility. but it is what it is. haslinda: that seems to be an east-west divide. we have more institutional investors embracing digital currencies in the west, but in the east led by china, there
seems to be a rejection. how does this east-west divide play out? bobby: it is because of the government. let's analyze that. the reason the western companies like tesla, microstrategy, paypal and so on, the reason they are able to invest in and buy bitcoin is because in the west, the sec, the regulators allow for it. there is nothing preventing companies from buying bitcoin. whereas in china specifically, the pboc disallow any companies from owning bitcoin assets. so you have some chinese companies listed on foreign exchanges. they may try to test and buy some cryptocurrency, but the vast majority of the real companies doing business in china, they don't want to offend the regulators, they don't touch bitcoin. and it comes back down to, why is that? china is a capital controlled society. we all know it, we just don't think about it. it is under cap a controls. bitcoin itself is a free currency.
so it is fundamentally incompatible for a capital controlled society. in other words, china has its hands tied behind its back. it cannot allow for free market trading of bitcoin because its own capital currency control. haslinda: --. yvonne: it begs the question that, analysts are saying winter is coming, we could see volatility for days to come. what is your take? what is the fair value for bitcoin? bobby: winter will come after the bull market runs over. however, in my opinion, this is not nearly the end of the bull market for 2021. i think this year, i've been following the market for 10 years now. and every bull market cycle, every three or four years, the price goes up in order of magnitude. so if you look at the recent high from april, to about $6 3,000, which is fairly triple
the price of the 2017 high. so it's nowhere near the top of the bow market for the cycle. but regardless, going up the bull market cycle there will be many setbacks. this correction up to 50% is one of the bigger corrections. but i personally think it will all wash over in a few weeks or months and will resume back to a bull market for bitcoin to hear. but next year will be the real bear market. yvonne: ok. what we make of this elon musk premium? we are that has evaporated since he made these announcements about bitcoin. markets are so focused on every word and tweet he says about cryptocurrency. can it really be the future of money if one person can really manipulate a cryptocurrency this much? bobby: that is a good point. he has an outsized the megaphone come if you will. so what he says does move the markets. but what is unfortunate is he
does not have a strong understanding of bitcoin and the fundamentals of capital currency the way many of the other experienced investors in bitcoin. i myself have put in 10 years of time studying bitcoin, learning about it and being an occupant or. he probably has just looked about at the last few years at most. so the point is his conviction is not very strong. his recent criticism, many of it is not valid in the circle of the crypto industry, cryptocurrency community. so while he just has a large megaphone and people get swayed, it's unfortunate sometimes he is spreading the wrong information. haslinda: bobby, thank you so much for your insight. bobby lee, ceo of valet, also former ceo of btcc. let's get the first word news now with vonnie quinn in new york. vonnie: thanks. israeli prime minister benjamin netanyahu says airstrikes in the gaza strip will continue,
despite calls from president biden to immediately wind down the conflict. he says he is determined to continue military action until security is restored to israeli citizens. he and biden spoke wednesday for the 4th time since violence broke out between israel and hamas last week. president biden says the u.s. must defend open and safe sea lanes and nations including russia and china seek to assert greater control over maritime regions. he made the comment during his first commencement address as president. the u.s. has criticized china for expanding its military presence in the south china sea, and also russia for creating alcoves along the l -- along the arctic coast. rising by more than one third from april one global trade was hammered by the pandemic. overseas shipments up 30% from a year ago, as economic recovery gains. exports to the u.s. rose 45% and
europe was not far behind. machinery orders, a leading indicator of capital spending, also gained in march. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. yvonne: still ahead, with authorities not accepting the coronavirus can spread through the air, we ask what needs to be done on the policy front. that is later on. haslinda: next, a look at what is in store for blank check listings and e-minis this year with a market capital. this is bloomberg. ♪ is bloomberg. ♪
place in hong kong this afternoon. it's held in tandem with a foundation that supports programs to eradicate gynecological cancers in hong kong. sophie kamaruddin is there for us. sophie: i am here at the command center for the investment conference and i am joined by one of the speakers for the afternoon session, manoj jain, co-cio. this is certainly different from the last time you spoke here in monaco about two years ago. n that time, the spac scene has been heating up. more than 300 listings in the u.s. this year, but we are seeing some of that traction slow down given the sec had a warning for this space. where are we in the micro -- market cycle? manoj: thank you for inviting me. the spac market overall is a highly topical market. press coverage on it, whether
driven by celebrity endorsement, the quality of the private equity sponsors, the quality of some individual executives, or former executives from four to 500 companies that are now sponsoring spac's. what is clear is globally, and it is coming towards asia, and we have seen that acceleration is here, is there is a growing acceptance of the product. whether that is the mind of the ipo to provide capital to the sponsors to give them two years to find a target, whether it is a target company having a greater acceptance to going down the route of spac vs. an ipo or trade sale or a deal with a traditional private equity firm. and a greater institutional understanding of the product. which in combination means the process that these companies can go down is far more robust, and there's far greater repeatability to it. similar to a lot of similar financial products, once these ideas come to fruition in the market can see they work, it's
great for adoption. we have seen that in the u.s. and now we are starting to see it in asia. and so i think as a vehicle for companies to go public, we think it is playing a very vital role in the capital market. historically at one point in time, private equity participants were viewed in a certain light. now they are viewed as a very vital part of that capital market. in a similar way i would argue a few years ago spac's were viewed in a certain way. sophie: still nascent in asia. what does it mean for the de-spac process? manoj: in asia, the u.s. was first in its grasp and adoption of the product. then that product has come towards asia seven a last six months we have seen a number of asia-sponsored driven spac's, which is good. they are from individuals, private equity firms, hedge funds such as ourselves, which have ipo'd their own spac's. the key to the product is the
despac. can these sponsors find a target that matches their profile and ultimately get their part -- there target approved and get to trade well in the u.s. capital market? from that perspective we are quite early in that is a function of lifecycle, i.e. the spac's only ipo'd in the last two months and generally they have two years to find a target. over time as these asian sectors find targets, announce them, close them, that will further ratify the product. sophie: there is certainly a lot of waiting in the wings. just this week we had the artisan acquisition trading below $10. more coming down the pipeline. what kind of interest are you seeing from doctors, sponsors, as you said, more people coming into the mix in that ecosystem? manoj: overall, i think given the profile of the product in the u.s., it was incumbent upon
a lot of capital providers in this region to look at it. whether you are on the buy side or a sponsor perspective, what is it, how does it work, how do the economics work, are there targets in my ecosystem that would be willing to go through this transaction? so we are seeing great adoption of that. and i think with a greater number of spac's out there, a greater number looking for targets and getting those targets to agree to acquisitions and get them to trade well, means you will see further underwriting of the product. so it is only being a good thing. but again, it is a function of time because we have not seen that despac wave happen yet. sophie: there are nuances around geographies when it comes to arranging a spac deal. manoj: sure. when you look at a spac, they are generally within the criteria, is a messaging to the market in terms of, this is who we are as a sponsor, this is our value ad, and this is generally the geography or the industry. so, if you have a fortune 500 executive who's got a background
in technology, by definition there is a higher probability he will be going after a techtarget. in a similar way what you see in the asia region is some of the spac's and spec sponsors target a particular geography. we see a number target southeast asia, greater china, asia overall. so we get to see that when you see the sponsors bring those ipo's to the market. sophie: what are the implications on return for spac 's? manoj: in general what we are seeing is with a greater adoption and viability of the product, if you are a target company retain an advisor and say my next age of growth and i need that next age of capital. so logically what they will do is they will to an ipo, a trade sale, potential transaction with a private equity firm, now they have what is called a spac-off. that's a generic term that we use, but what that means is it is incumbent upon the company to explore alternatives.
versus where were you -- then there's the question of working out for the company, which of the best spac's to partner with. the key thing here is a spac is a merger. the target company has to choose the right sponsor to partner with to come to the capital market. sophie: southeast asia has been a hotbed of activity. richard leigh and peter thiel setting up their third southeast asia spac grab to list via spac in july on the u.s. what kind of valuations can you see down the track, given what we have around it now? manoj: the valuation is about the projections the company coming to the market. to give you an idea of scaling, the biggest spac in history that has been done with a large target, $40 billion. what is more important is when you look at the spac mathematics of how they work, you generally
see the minim size -- the minimum size will be $1 billion plus. how that then dovetails in, it means generally the float, which is important, will be at least $300 billion. so you do want a large target therefore has a large float. when you get to the evaluation, it is incumbent upon the sponsor and management to bring the company to the market at an appropriate valuation which the company can then grow into as they deliver on projections. sophie: thank you so much for giving us some insight to the spac industry, which as you say is in the early stages in asia. back to you in the studio. yvonne: sophie kamaruddin with manoj jain there. take a look at all the updates there on your bloomberg. plenty of analysis and commentary going on. taking a look at markets. big earnings coming out of tencent later today.
♪ >> we go through soul-searching times like this. >> i think people in the industry have come to make their peace with the volatility, albeit we certainly had quite a ride over the past 24 hours. >> nobody knows the speed limit. nobody knows if you can drive or slow. and then you have a speed limit and everybody knows what the rules are, and they can adjust their behavior. >> right now it doesn't have a reach into the economy that has systemic implications for us. >> economists from china suddenly had an impact.
>> it was a rehashing of an announcement that had also been made in 2017. it is in nonmaterial event in our view. yvonne: some of our guests talking about the collapse in cryptocurrencies. that continuing today as we look at what has been going on with bitcoin. in the red when it comes to the likes of litecoin, ether, bitcoin. ethereum fell 40%. we were talking to bobby lee about this. he was saying, that bear market is not happening anytime this year. he says in a bull market can still go on until perhaps next year. take a look at bitcoin-related stocks in asia. we have the commodity related stocks as well, given the fall in commodities, perhaps a spillover from the likes of bitcoin. china is trying to cool down these commodity prices, suddenly
putting a roof over what we have been seeing. jd down. haslinda: it puts into question with alexa goldman and citi have been saying, that we will see a new era for commodities. and puts into question what happens to the commodities supercycle. we will see. let's get the first word news with vonnie quinn in new york. >> thank you. the european union has endorsed quarantine-free visitors from countries designated as low-risk. but paves the way for more transatlantic flights. the approval for this drug could be fun alleged this week. -- finalized this week. british prime minister boris johnson reiterated the stands
for not covering to countries not on the greenest. -- not on the green list. >> you should not be going to an adverse list country except for extreme circumstance such as a serious illness of a family member. you should not be going to an adverse-list country on holiday. if you do go, than as i say, we will enforce the 10 --day quarantine period. and if you break the rules, you face very substantial fines. >> south korean president moon jae-in to a lonely president biden this week. north korea is said to be at the top of the agenda. the white house wants to build on the 2018 agreement drafted between president trump and kim jong-un. the biden administration has indicated it may be ready to ease sanctions in exchange for pyongyang, winding back its nuclear arsenal.
china has released its first photograph from mars, four days after it successfully landed a spacecraft on the planet for the first time. the agency said the cameras were installed on the front and back of their robotic rover. a test down on the northern service -- -- it touched down on the northern hemisphere of mars. japan is set to approve the use of astrazeneca's vaccine as early as thursday. nhk reports of the move comes after trials in the nation confirmed its efficacy. the health agency will approve both the astrazeneca and the moderna vaccine, but it may raise age limits for the astrazeneca jab. global news, 24 hours a day, on air and on bloomberg quicktake, powered by over 2700 journalists
and analysts in more than 120 countries. i am vonnie quinn. yvonne: the vaccination rate in hong kong is lagging other financial hubs like singapore and new york despite relatively few cases. that could erode the city's competitiveness and permanently change the course of its future. bloomberg's annabelle droulers reports. ♪ >> fewer than 15% of people have had their covid shots in hong kong, and that has the business community worried. >> other areas of the asia-pacific region, including singapore, are moving ahead. >> hong kong can fall behind if it doesn't do that. >> quarantine measures are among the strictest in the world, which is a major issue for ex-pats, who have gone months, even years without seeing loved ones. >> it becomes a factor in mood. it starts to make people wonder if they are going to be stuck here and whether it is actually worth it. >> relocation agency asian tigers, is recording fewer international arrivals. >> we are 60% down on the number of inbounds. that is very dramatic.
. >> prompting calls for more guidance from the government. >> could we have some kpis? an idea of how you will open up again and not haphazard planning, because it makes it stressful and more difficult. >> they need to pronounce a clear pathway to open borders. >> i think we all wish they would move on a little bit to relaxing a little bit. move a little bit faster. >> some criticize rules for being inconsistent. >> there is still a long gaps and a lot of unfair situations in government policy today. >> and there are question marks on whether the business should mandate itself vaccinations. >> folks who work in certain industries understand, that is required to do their business so they may be able to push the envelope further. but western companies here will value individual rights. >> i would like to see a better take-up.
i am a little reluctant to cross that line and to think business should do it, because they have genuine concerns. >> after a tough few years for hong kong, vaccine hesitancy is complicating the path forward. >> in the next half year or are you, the pandemic will be up and down, because government there policy is not yet -- because government policy is not there. >> we could have a situation where people are running ipos want to be in singapore rather than hong kong. >> i think there will be a shortage of labor for certain specialized roles. we have not seen it yet, but i think it will start to happen. >> we will see it continuing of this inflection point where people are going to be questioning, what is hong kong? where is hong kong going? ♪ haslinda: bloomberg's annabelle droulers. we want to bring you live pictures of gaza.
israel and hamas could reach a cease-fire as soon as friday. of course, there has been mounting pressure, especially from the u.s., for that to happen. the u.s. along with egyptian and several other european nations, and qatar, have been working to pressure netanyahu and hamas leaders in gaza to end the military campaign. now we have dow jones reporting that israel and hamas could reach that cease-fire as soon as friday. getting back to the pandemic. the world health organization now says that covid-19 can spread through the air. this conclusion comes as scientists call for an overhaul of ventilation systems to prevent outbreaks of the virus. there is a study that says cleaner indoor air will not just fight the fundamental, it could also reduce the risk of other respiratory infections that cost the u.s. alone more than $50 billion per year.
we have our guest, professor of technology joining us from brisbane. she is also a consultant to the w.h.o. thank you for joining us. give us a sense of what you have learned. you talk about that it is infectious and can be done through the air. how far can it have a, and what should be done -- how far can it travel? >> a lot of questions. this is something that we learned now. we have a very good understanding of what is happening to the particles generated when we speak and when we breathe. they are in the air. they can travel meters, tens of meters in the indoor environment, basically as far as airflow will take them. so we have quite a good understanding of what these particles do in the air in what they can do in terms of being inhaled. haslinda: so what should policymakers and companies be
doing now? what actions need to be taken them bearing in mind that it is difficult to control where air travels. >> it doesn't stop other companies or organizations. first we need a strategy for this. you mentioned the w.h.o.. ideally we should have a statement from the who. it is coming. but they still have some qualifiers in the statement of airborne transmission. we need to have national recognition of airborne transmission, and standards changed, specifically in the statement acknowledging that the document is to control airborne transmission. while this is in the system, then the building companies, whoever is building will have to comply with this kind of regulation.
so this is the hierarchy of how we will deal with this process. it doesn't start from individuals. it has got to be a system in place. yvonne: this is a very controversial topic. up until recently, you still have many researchers, even authorities that were saying that covid was spread through droplets or objects. you are suggesting now, aerosols are a key source of transition. why did it take more than a year? why has it taken more than a year for the cdc and w.h.o. to agree with you? dr. morawska: this is a very good question. history books will be written about this. there wasn't much misunderstanding of contradictions between scientists. this was not accepted by the decision-makers. why adherents to the old dogma stating that if you were at arms
length, you are safe, all kinds of political reasons. there there there is a whole cocktail of problems. whether you call it droplets, we are talking about articles generated from human x territory at -- human activities. it depends on the size they travel, shorter distance or longer distance, but there is no division between bigger and smaller if they continue. so it is not scientific controversy, it is, if anything, lack of political will to do something about this. yvonne: interesting. i have to wonder, as well, professor, the line from the cbc this week is that if you are vaccinated, then you don't need to wear a mask anymore. do you think that is the right approach, in your view? dr. morawska: if people are vaccinated, than probably they
would contract the virus, of course, much smaller. not zero, but much smaller. the probability that they would be spreading the virus is minimal. i believe asking people who are vaccinated to still keep wearing a mask would not be a good idea, because then people would be less compliant. i agree that people who are vaccinated should be allowed not to wear a mask. haslinda: professor, we are seeing various variants developing. do you see perhaps the virus, they way we fight the virus will have to change in the foreseeable future? dr. morawska: well, this is going a bit outside my area of expertise -- i am not an expert in virology.
before we need vaccinations every year to target this particular new strain. it would be strange to expect that this virus would not be changing. it does change. but whether it is a new strategy, whether it is a new vaccine adapted to the new type of virus, new strain. but in terms of the measures we are talking here about controlling airborne transmissions, they will not change dependency on the virus. we still need regulations. the ventilation. efficient and sufficient ventilation, regardless of the virus we are talking about. yvonne: what about quarantine camps? is there any reason, given your research, that people will have to quarantine for seven, 14 or 21 days if proper ventilation systems are not in place, or does it actually increase
chances of transmission? dr. morawska: in the quarantine facilities? this is the question? yvonne: yes. dr. morawska: the quarantine facilities, there are hotels. those hotels were not designed with infection control in mind. so, some of them are better and some of them are worse. most important is that in each case they have ventilation that can be checked. the most important is that air does not flow from the rooms where the quarantined guests are, doesn't flow to other rooms, and doesn't flow to the core doors through any gaps or openings. this is the key. if this is prevented, then the facility is safe of course. there are issues with opening the doors and interactions through the corridor. they should be minimized.
there should be rules about this. but it can be managed. but with this specifically in mind, ventilation needs to be checked and controlled for this purpose. yvonne: lidia morawska professor , thank you for joining us. still, hoping to bounce back from its $200 million antitrust slight. we look at whether the crowd boom will help boost its bottom line. this is bloomberg. ♪
linda: the ceo of bytedance is stepping down. let's go to tom mackenzie in beijing for more. this is big news. what do we know? tom: it is absolutely, we are talking about the world's most valuable tech company, bytedance, the owner of tiktok and other companies in china. we are talking about. zhang yiming, the ceo. they put out a memo to employees. zhang yiming
founded the company in 2012. he says he wants to focus on long-term strategy. again, this was a company that many people, were looking at its potential ipo as early as this year, and also a company that was caught up in the geopolitics of the trump administration, paging versus washington last year, when the trump administration tried to ban. it. . but this is big news, the ceo henning its rains -- the ceo handing the reins to its hr chief. yvonne: we talked about the saga last year and it is interesting to see what led to this. he was facing a lot of pressure from the u.s. as well as china at the sometime. what does this say about the pressure on tech ceos in china? tom: yes, there is usher on executives here in china, technology executives, not just
because of geopolitics, there is also the anti-monopoly push that we are seeing executed by regulators here in china, the antitrust probe, that has notably affected of the bubba. they had to pay the fine. tencent is expected to be in the spotlight as well. we know that meituan is also being probed as part of the antimonopoly push. you have seen of the exact is stepping down, as well, largely, you would presume, because of all the spotlight from regulators. you had jack ma, humbled after the pulling of the ant ipo. the founder of meituan was also under scrutiny a few weeks ago after posting a poem online that was seen by some as being critical of beijing. suddenly it seems like executives here are feeling the heat amidst this regulatory scrutiny, and overseas, the
geopolitical tension impact on their businesses and their overseas holdings. yvonne: tom mackenzie in beijing with the latest on tick invited dennis. speaking on the regulatory scrutiny, we were talking about tencent. it will deliver results after markets close in hong kong today . let's get to our chief correspondent in asia, stephen engle, joining us with a preview. stephen: as tom laid out, the whole pressure and the scrutiny. the scrutiny from the regulators leads to supervision come out right, or some sort of -- leads to supervision, right? so far tencent has not squarely in the crosshairs like alibaba, but the speculation is that they will be. they have the fintech operations, similar kind of risks that the chinese government wants to reduce in lending and other things.
so we don't know yet what kind of fintech crackdown and what will happen to their data, or even on the anti-competitive front. what we do know, as tom was talking about bytedance, we know that bytedance is one of the rivals of tencent, that has accused tencent through wechat, on all-encompassing ecosystem, accusing wechat of locking users into only -- related platforms and services, basically blocking links to other services like doyen, which is the equivalent of tiktok, from bytedance. so there is scrutiny, but it is not affecting results. the results we get after the markets closed should be good. operating profit and revenue both should gain over 20% year-over-year. they have had strong games and cloud performance, and also
advertising spending is keeping pace with the recovery in the chinese economy. yvonne: we will see how it goes. stephen engle, our chief asia correspondent. homework context and more analysis when it comes to china's crackdown, make sure to watch the bloomberg technology channel on youtube, as well. you can see the great work stephen has been doing the past couple of months. china redlines. this is bloomberg. ♪
yvonne: taking a look at h uarong bonds, down 4.5%, now trading below $.45 on the dollar. traders continue to scratch their heads about what his next. are we going to see some type of bailout from china? they continue to hear from the company, saying that everything is fine, but certainly traders are on average. the are seeing volatility intensifying as beijing keeps a lot of traders guessing on that front. there have been conflicting media reports feeling uncertainty when it comes to the bonds. we have yet to hear a clear signal on the fate of the
company right now, has. haslinda: speaking of volatility it is volatility in the equity markets especially overnight in the u.s., here in asia, the slide continues. asian markets are lower after the roller coaster ride. the msci asia pacific index down 0.3%. investors mulling over fed minutes. fed officials talking about tapering a lot of questions about bitcoin. if the currencies continue to slide after the 30% slump and hike up. not for the fainthearted, for sure. lots of questions about bitcoin , whether it is a store of value. that bloomberg cryptocurrency index is down, but far away from the 30% slump we saw overnight. commodities are weighed down by inflation concerns. copper extended losses, after falling the most since october. lingering concerns about china, china's demand for commodities
>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: i am emily chang in san francisco, and this is "bloomberg technology." coming up in the next hour, a stomach-churning day for crypto investors. bitcoin plummeting 31% in the
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