the central companies, tencent. that side are some of the customers of tencent. this side, these are the suppliers. have a look at the second one. this is sorted by tencent's exposure to these companies. nexcon, sold revenue, 25% comes -- of revenue comes from tencent. another good example. the perfect world -- 6% of revenue comes from tencent. it is playing out across the pipeline, everything related to this "spiritual being." -- spiritual opium. yvonne: that is the rhetoric we've heard from beijing. impacting the whole supply chain now. rishaad: one wonders, it becomes -- maybe they can somehow mitigate some of this at least. the thing is they got all of these investments in various companies. we've got to look long and hard at what this -- they can do in the future. anyway, we will talk about another industry group altogether. standard chartered's comes out with second quarter bit later tuesday. analyst saying that the lender may announce a share buyback with a small dividend. we find out what is in store next. this is bloomberg. ♪ rishaad: as we have a look

tencent is a bit ensnared. they opened an investigation into allegations of sexual harassment, sexual discrimination, and sexual assault back in 2018 and the agency is alleging that riot games, which is owned by tencent, had secret agreements and class action with about 100 women, more than 100 women and allegedly did so without announcing that there was this agency investigation into these claims. this department is asking a court to instruct riot to inform those employees who signed those employees of their rights. another headache for 10 sent to deal with. we will have to see how this plays out. haidi: with the alibaba case and sexual assault accusations garnering a lot of criticism as well. stephen angle with the latest on china's tech sector. they released a little bit later with the blue lotus capital advisor, who will be joining us. philip is joining us as well. you can turn to your bloomberg for more on tencent's results. you can get commentary and analysis from bloomberg's expert editors. singapore --

tencent plunges. losing momentum. stocks dip on concerns that recovery from the pandemic is slowing down. and bp joins its peers. the ceo pledges discipline with renewable investments. good morning, everybody. a comeback to the second hour of the european market open. looking at futures, fairly flat and volatile. tubing around a little as we see the earnings coming through from the likes of vfw and socgen and the banking space. plenty to talk about this morning. other companies paying more for the types of services that mersk and others offered. and chip shortages and higher raw materials costs are also in the mix and coming through in some of the corporate reporting we are seeing this morning. let's look at where markets are opening up. we have the ftse 100 opening fairly flat. the ibex opening zero point 2% to the upside in spain and the cac 40 up by 0.25%. the u.s. futures picture outperforming european futures because the u.s. stumbled in the last part of its day yesterday so europe is catching down to that kind o

the derivative of tencent tracking higher, up 2.8%. we will talk about tencent in a moment. alcon surging, one of the best performers in europe. surgery is starting to return. this is a company that focuses on the eyecare sector. that seems to be coming back strongly. after so much of the health care sector was so focused on what is happening with covid, that is starting to change. carlsberg up 2.26%. apparently we are all going back to bars. alix: for now the cdc director here is saying vaccine effectiveness is falling in nursing homes. let's not all go out and drink the carlsberg. a swiss private bank is a managing partner -- parting ways in an unusual move after joining the firm. joining us is bloomberg's swiss banking reporter. what is the significance of this departure? >> basically collardi is leaving. his hiring was a surprise and his departure is not so much of a surprise because he had a hard time fitting in. he came with some baggage when he was the ceo of julius baer which was under investigation for money laundering. there was a lot of culture clash there. we are

tencent is up. let's get to the headlines, tencent warns investors to brace for more -- from the tech sector in china. china's largest company reported the slowest pace of revenue growth since early 2019, underscoring the impact of regulations on the tech sector, a major source of ad revenue and gaming. the crackdown has seen tencent lose more than 40% since its january peak. >> there will be in the short-term, a lot of new regulations. this should be expected, because the regulation has been quite loose over an industry, considering its size and importance. yvonne: bloomberg has learned that this company sold $1 billion worth of bonds in a sustainable deal, marking the first major global debt offering by a chinese tech firm since beijing escalated a crackdown on private enterprise. it sold 5.5 year and 10 year notes at 83 basis points and 100 15 basis points above comparable treasury. china mobile plans to invest $8.5 billion of a share listing proceeds into projects including a 5g network, cloud s

the crackdown is likely to continue to pester tencent. when it comes to a company like tencent, can we quantify how much of an impact regulatory headwinds will have on creating a longer structural slowdown? >> thank you for having me. i think last night's results basically our meeting market expectations. the problem is people are looking beyond the results. i think right now it is difficult to quantify how much more regulatory change is coming. one of the processes people can use is these internet platform companies. one of the concept that has been repeatedly reiterated in the communique from top -- from the top is the negative social impact. some companies, some people do things, it has a negative social impact on the rest of society. that is going to limit how much return you can generate from being a shareholder. from a regulatory point of view, probably one of the ways to measure is how much higher it is relative to the rest of the market. people would want to look at the return on equity on many of these internet platform companies

tencent take a hit, and all of these chinese avr's following, but really, it seems to be about hot money inflows. those are the areas you want to stay away from. tencent, for example, has had antitrust issues. still, they continue to see venture capital investments going in and regulators seem to be now tightening regulations on those companies even more. haidi: this same part we spoke to about yesterday, the pavlovian response from everyone still bullish saying it will blow over or it is sector specific and very targeted, in particular the consumer-facing tech names. the regulatory write-downs we mentioned earlier, really showing up in alibaba's earnings. revenue missing estimates for the first time in two years. stephen engle joins us now. going into this, jack ma was where a lot of this started. how do they see this in the bottom line? stephen: i go away for nearly four weeks, and you guys are still talking about this regulatory crackdown. sorry, i tuned out for a little bit, but this real

a warning from tencent.

tencent is set to report second-quarter results. the tech giants outlook may be overshadowed by the risk of new regulatory crackdowns. 9:00 a.m. u.k., the world's largest sovereign wealth fund releases data. bloomberg economics expect a slight increase. u.s. energy administration publishes its latest crude oil report. we will be waiting for the latest fomc minutes. let's get straight to the bloomberg business flash. >> a chinese asset management company is set to receive new capitalization is part of a planned to take control of the embattled company. the biggest test in decades of china's willingness to support global borrowers amid a record wave of default. kathy woods laid out her case for why she is preparing holdings tied to chinese giants. she says she does not believe -- investment opportunities in the innovation space. >> china has made it a priority to invest in innovation. i'm wondering if something has changed their. -- changed there. every month that there has been some new form of increased regulatory oversight, crackdo

haidi: let's talk about tencent. this chart on bloomberg is showing valuations have fallen to an eight year low. they are soft falling as much as 11% in hong kong. we could potentially see more gaming scrutiny. >> this is the key component of tencent's big mix, multicomponent offerings across platforms and they have a lot of kids. i have a 13-year-old daughter, i been with her the last four weeks in the united states and including now in quarantine, i need regulations on how to get her off the gaming. i'm not necessarily taking page from the book of the chinese government because they are trying to restrict this. they posted a scathing criticism of what they call spiritual opium. they did delete that reference to the narcotic when they reposted the article but tencent responded, pledging further limits on the amount of time minors spend doing the week. one hour per day. they cannot do online purchases in the game and it is leading to concerns that tencent may ban outright children below the age of 12 from online gami

tencent bearing the brunt of this. it is hard not to imagine with this article talking about it being spiritual opium that there may not be additional follow-up. it is hard to tell exactly where this lands. matt: to me, it recalls a marxist, "religion is the opiate of the masses." in this case the chinese are saying do games or the opiate of the young masses. it is not just hitting hard in china. we see video game makers in the u.s. hit hard as well. take two down 10%. literally decimated. we talked to dave wilson, he rattled to me on bloomberg radio a number of videogame makers getting hit hard in this market. i am guessing china is a huge market for them as well. these things are not just played in their home territory. call of duty is something people play around the world. amanda: which is where the uncertainty gets problematic. it may be too broad to price in at the moment. every business looks at the chinese economy as a huge one, it wants to tap that growing middle class. these new reminders from the government

if you look at tencent, one of their key divisions is gaming. if you are going to hammer this -- and there has been a bit of jawboning by the government and state media on this, the moral hazards of the gaming industry on kids for several years now, and there have been rectification's internally in terms of tencent. but now we seem to be another whack-a-mole thing for investors to pay attention to, and that is if there is going to be an outright ban for gaming for kids below 10 years old. they are already talking about limiting kids' gaming hours low 18. great research on the bloomberg terminal overnight saying 6% of tencent's revenue comes from its 16 years or younger. this is a longer-term challenge for tencent and others, but perhaps short-term on the bottom line and on revenue might not be a big hit. manus: steve, thank you very much. our chief north asian correspondent putting the revenue lines in perspective. let's get to our guest this morning, anna stupnytska, fidelity investment global macro economist. this is the moment where we need t

has been affectedby this as well does that threaten its role and do you hold tencent in the etf >> tencent is one of the primary holdings if you look at the global landscape of virtual sim layings simulations of games, of viewsers in a virtual world, everyone from epic games to craft and maker of pub g to free fire is an investment company or partner of tencent to the extent in which having interconnection in virtual worlds is critical, tencent probably has the closest path towards that but now we're starting to see some of the regulatory or local environment limitations that may preclude them from doing that. the extent to which the ccp prevents tencent from deploying a system, from proliferating data from one experience to another, consumer spending, all of that is an impediment to building up an ecosystem comparable to roblox's today. >> does facebook benefit here? are they licking their chops and looking at the regulatory action in china and seeing this could provide an opening i looked, 20 times metaverse was mentioned on the last facebook earnings call. >> there has been a run-up i t

when it comes to tencent, following the most in 10 years. the last three biggest falls that tencent has had on record have come within the last week. valuations in terms of the 12 month target, nowhere near what analysts had, suggesting 733 hong kong dollars where tencent should be in 12 month time. it is at 430 today. there is still some pretty bullish colons out there. only one -- bullish calls out there. only one sell. manus: you have got to be brave, haven't you. it's like finding your passport. let's pivot to the politics in the backdrop. joining us now from beijing is our executive editor for greater china, john. it is the opioid that is gaming. it does not seem as if the politburo is stepping back in any way from their appetite. >> know, i do not think it is. what surprised to the market is we have had crackdowns on gaming before. a couple of years ago, there was a long period where the chinese government did not of any new titles for introduction to china . tencent put in a bunch of controls using facial recognition to make sure kids

tencent and focus, earnings out today. they're still wondering if the 40 3% share price tumble is the start. >> i would say it's close to the pattern, you probably are going to see the next two or three quarters, numbers are not good. >> better value if you believe in the business model, you might see prices like this again because there has been a selloff out of anxiety. >> i think the valuation of the market is going to stay down for a long time, until they become more inviting to foreign capital again. david: limits all of that and the big earnings coming out later today. we are looking at asia on track to break the five-day losing streak. if you look at this, you would not have any idea, some of these assets have swung and are essentially back at levels. we are also looking at south korea, movements in the currency. a warning that a possible intervention, given the currency right now. stronger on the korean won, tap of 1%. to the earlier point, have a look at where we are in the 10 year. you have some of these key cros

it has been a similar story for tencent. despite all of these crackdowns, continuing investments to flow to education. and now they are. really taken the heat from beijing. emily: shery ahn, the coanchor bloomberg daybreak australia and daybreak: asia a we will continue to cover this throughout the day. i want to stick with chips, nvidia, the biggest u.s. chip company has announced a $40 billion deal. they announced it back in september. u.k. is considering blocking the deal to the potential risks of national security. no final decisions made. bloomberg text and king joins us with more. what do you make of the mention of national security risks? >> what we have to point out is this is bloomberg's reporting. the ua -- the u.k. government has not said anything. to take you back to conversations you and i had, you remember we said the sticking point for a lot of people, how would something like this make its way, particularly with the value. companies and supplies. how could then end up with just one company? that was considere

francine: talk to us about what we heard from tencent. it seems to be a company in the eye of the storm when exposed to regulation, but also on its best behavior. >> i think the eye of the storm is the best way to describe it. earnings were good all things considered, that was the relief. but right back outside the eyewall. more regulatory headwinds, and that is why tencent is trading down now. alibaba hit a record low in hong kong. it is going to be focused on how much there is to come, and we do not think this is the end of the revelatory crackdown. there are a lot of avenues the government can go after. this will drag on for a couple of months at least. mark: the hong kong tech index, the hang seng is down more than 40% from six months ago. on a longer-term perspective it looks high. do you think the revelatory crackdown will continue, and how much further could the index fall? matthew: if we look at tencent as the bellwether, in 2018 when they had the gaming crackdown, the stock went down 50% and took about six months. we have matched

tencent has said only 3% of overall gross received come from this demographic. in a terms of the stock impact on one specific company or some specific companies, the big takeaway here is the extent to which china is willing to regulate and we've its way into the individual lives of its people. any sense you had china might be tapping the brakes on this, what can we do to rein in the power of big tech in the country, that is not going away. this shows it is continuing and the question is, who is next and how much more? emily: this is part of a broader agenda for resident xi jinping. even this seems former prescriptive than some other crackdowns the chinese government has made. why is this happening? >> i think the chinese communist party are reminding themselves and the global market of an important and often overlooked fact. they are communists. communists in general are not friendly to capital. and neither are they shy about intervening in the economy and indeed as tom giles mentioned, intervening in individual choices, children individual lives in ways at whic

a managing director spoke to us earlier about his outlook for tencent. >> tencent listed investment is about half in china internet and that has fallen by about 10% since the end of the quarter that they just reported. alongside that, they have about thousand enter capital investments, many of which are expected to be monetized by taking them public on exchanges such as in the u.s.. clearly, the route to monetization the tencent is built up is going to be difficult if not completely blocked in the near term. monetizing this extra assets, we put a conglomerate discount on them because if you went to sell these in other companies, the stock prices would crash. partly because the ability to directly monetize these is very difficult. what you are putting up there on the chart shows you the business is split between gaming, fintech, and cloud services and advertising. the social network services were especially disappointing which are the content services. those had tough comps and they are going to be increasing galatians on the types of content the chinese companies can provide to chinese

tencent has already responded. they put in was a five -- put in more safeguards and children overusing their gains. how much are they going to do to try to head off any particular regulatory issues? alix: thinks a lot. i appreciate it. this raises the broader question of how do you invest in china. clearly, if you are a company or an investor, you're going to want exposure to the consumer there. how do you do that now, when the middle-class ones of doing things that tencent provides and government cracks down on you? guy: do you want to invest in the big companies, or the middle? sized companies there was a piece on the bloomberg looking at china going down the europe route, not focusing on big companies, focusing on midsized companies and whether or not that is going to be where ultimately the growth comes from. alix:alix: but then when you are a middle sized company and you get bigger, they are going to clamp down on you. there's going to be some kind of ceiling you keep hitting. how do you grow a business when y

leila: certainly, in excess of 30% of tencent. we have seen enormous volatility , both in our demand flows, as well as extreme dislocation -- obviously owning 30% of such a large stock, a concentrated and large stock on our market. there's nothing we are going to be doing in the short term because we do allow free market forces to prevail. we have seen volatility relating to regulatory intervention in china on a number of occasions. this is not the first time. we do tend to see the stocks bouncing back. we are watching it carefully and ensuring appropriate price formation. alix: under what kind of conditions do you think you might think about limiting the waiting -- i understand you believe in free market, but the volatility we have seen and the crackdown in china does not seem to be stopping at all. what would be the conditions where you would rethink that? leila: we are contemplating limiting -- and its subsidiary or cross holding process in the local index. currently those are limited to 10%. we are contemplating limiting both

the stake in tencent is owned by process. they are buying an indian payments company for $4.7 billion. that will take some attention away from the tencent story. anna: during the hong kong session we saw the tencent share price recover from the earlier lows because of news flow from gaming companies. what about bundle switching back to a u.k. business? >> this is a company that if you have never heard of them, now you will. you will see their trucks on london roads. they had a big boost during the pandemic because they were delivering hygiene products, gloves, masks, and now have to pivot away from that. probably, it will probably reassure investors. anna: thank you so much. a few minutes until the start of the equity trading session. we have european equity market futures pointing to the upside. london playing catch-up, but the session in asia has turned around. mark: very much so. now that they are past jackson hole, one of the bears for the market was china, but we are seeing those stories still clearly in the headlines ev

tencent at the lowest point was down about 11%, closed down about 6%. one of its competitors, nintendo as well. asia-pacific analysts are saying that this is a reminder that we are not at peak china regulatory risk at. alix: such a great point, and very difficult for investors. we are waiting for new york city mayor bill de blasio begin speaking at a press conference. the rumor is he's going to require restaurants and customers to show proof of vaccination before dining indoors. bloomberg's senior editor for health care drew armstrong joins us now. walk us through what we know with these potential restrictions. drew: we end others have reported that for a lot of indoor activities, vaccination proof is going to be required to dine in restaurants. in a place like new york, you have a little over half of the population fully vaccinated. obviously for people who have been following this, much higher in manhattan, much less high-end some of the outer boroughs. one of the questions is what is this going to look like. we have seen airline flight attendants hav

the likes of tencent reports earnings tomorrow. on the back of the regulatory headline we got sang their needs to be more oversight in these online games. down for percent. alibaba, meituan. if you have an idol in the entertainment business, this is something to look out for. they will increase the scrutiny of the entertainment sector and the idol culture. the unhealthy fan culture has interfered in normal social and economic order. some stocks related to the entertainment business. that is what we are seeing so far today. david: it takes us into the broader conversation on the virus growth. the latest one, these last 60 minutes or so coming out and basically telling us they are planning to expand the current virus emergency in place over tokyo and other areas to seven more prefectures. august the 17th. we are looking at september 12. the move comes on the back of the number of patients in hospitals nationwide and severe cases climbing to a new record. let's discuss the impact on the consumer sector on sentiment, on the economy and

tencent, 3.5% up. happy barbara -- alibaba is healthier, but alibaba itself is down a fraction. a revenue miss and an overall maze -- miss as well. we were talking yesterday about video gaming being "spiritual opium." that is gone now. yvonne: electronic drugs. you start to see the tone from state media. they are walking back the harshness when it comes to how they described the gaming industry. this is what we have been coming through this morning and seeing -- it is immoral to blame schools, given companies or parents, alone for children who spend long hours online playing games. a collective effort to tackle this issue they are seeing in the society, that is what we have been hearing about today. david: now do you take advantage of this lull, this opening in the cloud? just be ready for a lot of vol. when you look at actual volatility in msci china, keep in mind, you had the revenue miss, and tencent is the other one. alibaba and tencent are 25% of this index. different stories within that. 57 is the level of vol. the last eight days or so, five of those days, we have seen a

tencent and others surging. jd.com gained ground after revenue beat estimates. we could potentially have more developments on the way. the sec has begun issuing new disclosure requirements for chinese companies looking to lift after it halted ipo's earlier. last month they called for a pause in ipo's. the surge in 2021 halted. haidi: it is interesting, jd.com, the chinese e-commerce giant, announcing the chinese tech crackdown. it beat estimates as consumer spending increased. we have -- jd has often played second fiddle to alibaba. what is it doing differently from alibaba, tencent? >> there are a couple things going on. alibaba and tencent are more high-profile and have been more targeted by government regulators. especially alibaba. in their most recent quarter alibaba and tencent did see sales miss. jd did not. they have not been in the cross hairs, but the other main reason, they have their big june 18 shopping festival in that second quarter and got a big boost in transactional volumes. that helped boost sales 26%. that beat forecast. those surging transac

taking a look at how these gaming giants like tencent react. we had these new gaming codes from the chinese government limiting for teenager to be able to play games for three hours a week. they can only offer them between the hours of 8:00 and 9:00 on fridays and weekends and holidays. i'm not sure a lot of people knew this, there were restrictions in place previously but they were 1.5 hours a day. this is good news for some parents, who are looking for an excuse to get their kids off those games. kathleen: i should give some kid my identity. i watch no gaming at all. nobody is going to make it out like a bandit if you are member of the e.u. making new restrictions on the travel industry. expecting to hit international travelers to the united states but limits for new covid cases is 75 per 100,000. in -- the airline lobby groups say it is a problem for the airline industry. haidi: speaking of vaccine mandates and getting that level up, we're hearing from bhc they are considering offering jobs on site to get much of their workforce back there.

whe what you see is tencent bringing more safeguards to protect under 18 age group and make sure they are not bareaking the rules. that is an area the chinese government is concerned about at this point in time there is also a report suggesting that alibaba and tencent are looking to change business practices that could potentially fall foul of certain rules coming into effect you see the companies trying to tighten data protection. at this point, tech companies are trying to think about what is coming next and preempt the moves with the new policies. dom. >> arjun in china with the latest on the tech crackdown thank you. >>> coming up on the show. a former adviser to jeff bezos saying so long to amazon amid the push into the grocery business details on the high profile departurconge mi up next we're back in just a moment. e and from mochaccinos to merlot, your smile will always be brilliant. crest 3d white brilliance. 100% stain removal, 24 hour stain resistance to lock in your whitest smile. crest. the #1 toothpaste brand in america. make fitness routine with pure protein. high prot

for the popular title honor of kings tencent derives one-third of the revenue from gaming. the fact there is stricter control of the gaming industry is enough to slam the stock and raise speculation this industry and the company could be another target the government has targeted the gaming in the past, but yjust this year, president xi described it as a mental health concern for children in the same speech, he criticized after school tutoring and called it a social program it looks like beijing is more sensitive today about this situation. we saw that report just hours later was deleted. brian, i think tencent is not taking chances they announced new curbs for minors to get access to that particular flagship game >> wow really they are calling it out and naming names and there hasn't been any kind of a b barricade or blockade or stopping games they are still out there and with a little government warning nudge? >> reporter: yeah. that government warning nudge has been coming to the industry for quite some time. in 2008, it was actually diagnosed as a clinical disorder if y

we have the tencent buyback boosting sentiment, tencent rallying about 9% in the new york session. another company rallying despite canceling a major expansion because of privacy concerns. baidu gaining almost a percent, while jd.com is still gaining after hours. this being helped by the fact that arc's cathie wood is saying she is more optimistic than pessimistic in the long run. wood spoke to bloomberg about what has changed. >> we have been pulling out of china. we started last november, after the debacle around the amped group -- ant group ipo and banishment of jack ma. we saw signs that the government was going to get tough on companies. companies which were more than unicorns, they had exploded onto the scene, and have become so powerful, as had their leaders, that they almost seemed to be threatening the government. at least that seems to be our take on the government's response. we were a bit cautious, pulled away. our flagship fund moved out of most chinese stocks, i think we were out probably late april, late may. you never know 100% of the time. i think the online educat

tencent up 4%. the hang seng tech rally extending its gains over -- a two-day gain of around 7% now. rishaad: you mentioned jd.com. we had the tech crackdown in china, but their sales were a big beat, pretty much down to consumer spending increasing. correspondent stephen engle is with us. what is jd doing which is different to alibaba and the likes of tencent? they both saw sales, not exactly what you might call as good as they thought. stephen: their sales did meet expectations. rishaad: but they were still pretty big the. stephen: sure. jd is not a big high-profile target of regulators, but they are ensnared in the net. jd.com shares are down 40% before today's rally since the peak in february. they had been ensnared. the boost from the second quarter was their equivalent to the alibaba single days in september, well, jd has it in june. they got a big transactional volume boost, up 26%. that was better than expectations. so you are may be finding investors going, this is good news in the chinese

you have seen a mass exit from tencent. jd.com reported fantastic numbers. again, they are not necessarily in the same regulatory spotlight as an alibaba. they really don't have the same type of antimonopoly and cybersecurity dynamics when these guys showed 27% growth, outlining at least a 32, 35% growth of the next couple of years and you look at a 22 times multiple which makes this a $95 stock, there's still a lot of reason to get excited about some of these names i don't think the pressure's been removed i've been talking about why i don't think china really necessarily cares about the global investor as much they care about some of the social issue, but, but, we have seen this before. these stocks were overdone but if you look at alibaba, there's still such a long way to go for this stock to even get out of this down channel in fact, it's probably around 210 before you get out of that downward trend a really kbexciting move. weaker dollar helps. i don't think you're out of the woods. >> it wasn't too many days ago that tencent had its earnings call and e

alibaba, xiaomi and tencent hits. there is more scrutiny over gaming, and three hours maximum screen time. top 10 and bottom 10, a lot of these will be on the chinese mainland. a lot of them limit up and limit down. in terms of earnings coming through, you want to watch evergrande, that is a stock we are tracking closely. a quick look at the pmi numbers. on the chinese mainland. we talked about nonmanufacturing earlier. four of the five major manufacturing components of this is part of the production side of the business not in contraction. the only thing holding up is output, new orders and things like inventories and supply delivery times looking like they are under a little bit of pressure. yvonne: as you mentioned, is this covid related or doesn't have more ominous signs of the recovery moving forward? as beijing tries to drive into the strategically important sector, hardware getting a boost. firms pouring a lot of money into the sector and shielding themselves from regulatory risk. $5.4 billion pumped into this

check out shares of tencent music, baidu, didi and alibaba managed to end with gains after spending most of the session in negative territory how do you look at the moves, the move or the underperformance on a relative basis of alibaba. >> right, so baba got below that -- it actually traded down near 150 intraday before a quick reversal at that point it was down about 50% off of those highs and really we're at 15-month lows. some of this is getting to a place where valuation people -- you get to a place whereyou say, oh, my gosh, i didn't think i would see it here. if you look on a trailing basis around 17 times p/e. we've tried to handicap, we've tried to actually put the valuation of the chinese government here, and i think you really still have issues on headwinds. i think you can see a bounce here it's not all in back in the pool, and i think the same thing, the tencent media -- excuse me, yeah, streaming ultimately tme ticker is something i think is even more of a concern just because of the nature of that businessand it' more specific, even though they've also had such a leadership

that is what tencent was labeled in terms of their video games. we will break that down later on in the hour. guy: let's get into that. certainly a story a lot of people have been focusing on. concerns continue to grow about the impact of chip shortages for many automakers. we heard about this today. earlier we spoke to nxp semi, it's ceo -- i will get this out eventually. alix: it's ok. [laughter] >> the shortage is going to stretch into next year. it is hard to predict when we are out of the shortage, but i can absolutely assure we are growing capacity next order. we will shift another 15% higher revenues into automotive's than we did in the last quarter. guy: joining us now is ubs's global wealth management asset allocation head. talk about what is happening with the global economy and how we should think about the investment strategy around it. what we are hearing a lot of, and we talked to a lot of ceos about what is happening within their businesses, and they are all talking about either labor shortages or stuff shortages, supply chain short

enda: in terms of the tech stocks, today the trigger is more specifically regulating tencent, warning that more regulation is coming, and that china is looking at companies for the redistribution of wealth. tech stocks might take the headlines. but this is something of a more fundamental reshaping of the economy going on that is all about boosting population growth , creating a more productive workforce, and manufacturing new technology. jonathan: i would go beyond may the luxury players as well that have taken a hit off the back of this. most people attribute it the move in europe right now to the conversation we are having. the biggest risk at the moment for investors, something that has lingered for a long time, the risk of a property tax. a big property tax going through in china. can you walk us through what that would look like and what that could possibly do growth more broadly? dan: i think property in total counts for maybe 1/4 of activity in china. there has been discussion around property taxes. there's even been discussion about higher taxes in general. but i think here an

we are seeing a bit of love for chinese tech names, the likes of jd.com up 15 percentage points, tencent up 9 percentage points the handover for european equities has been positive but is a cautious session. we are only up about a tenth of a pest ablng point in terms of the individual indices let's break it down more the ftse 100 is dropping down about a tenth of a percentage point, sainz bury we saukd about that stock because of the u.s. private equity interest, today trading on the back foot down a couple of a percentage points but we do have a good performance from miners at the top of the ftse today. luxury in focus, the ties to chain a big one but luxury are doing well today given the performance in china in germany up about 0.3 of a percentage point a smidge better than expectations at 1.6 percentage points in terms of sectors we have defenses on the back foot, teleco utilities down, some of the banks under pressure at the top the high sensitive basket of travel and leisure is up 1.6 percentage points and perhaps again another sector reacting positively to that fda approval for pfi

so as a result, we are seeing the likes of tencent down about 3.5% here in asian trade trading. now this is the market they want to attract for the future, so there are tens of millions of gamers online in china. the extent to which this addiction for some is such a problem — we heard beijing call it a spiritual opioid recently. as part of these ongoing restrictions, we will also see these gaming companies have to link their platforms to state addiction services so that people can seek help when needed. apparently this is about beijing trying to encourage its young people towards more productive activities for the future workforce. now of course this comes on the backdrop of a wider crackdown we are seeing particularly when it comes to technology, like with alibaba and app groups listing its company delayed at the 11th hour, as well as when it comes to dd. this has been extended to dd. this has been extended to other sectors as well, most recently we've been talking about the crackdown that comes to the liquor industry as well as... now with this extension, further crackdown w

tencent, down 15 baidu, 20% with others like didi just brutal charts here. not to mention the education tech names that lost about half of their value hong kong's hang seng index fell about 9% for the month, and that's not even saying anything about the kweb etf that trades over here. we have beenhere before with chinese gaming tencent, the obvious target, drives a third of the revenue from gaming. perhaps less obvious is that these u.s. companies that have been moving further into the chinese gaming system, because of the opportunity there, like a roadblock, shares were down 5.5% its china license has gone live and it does have that high exposure to the younger demographic, which beijing and the ccp would rather do their studies than become gamers and content creators. >> i can't decide or figure out, i guess, how much investors are supposed to care about this. cnbc's arjun carpel points out that the state media article that used the word opium for the -- it was pulled back, right? and then revised and reposted without that language, softened a bit. maybe t

hong kong trading of names like tencent which at one point took a 10% hit went absolutely self and now you see follow through here in the u.s. but net ease down 11%, yes tencent though slightly off the lows, now down 7%, billy billy down 8%, china's crackdown spreading to u.s. video game stocks, let's say at kohl's, not necessarily the flu, but act it vision blizzard, electronic arts, take two interactive, zinga are all moving lower from one to nearly 4% at beijing's spillover to u.s. stocks, how should investors handle this very complicated situation over which they have very little control, and that is, china's government waking up everyday and deciding to make a target out of different sectors. to our floor show traders, hugh johnson on the phone and scott fullman. hugh, we got you on the phone because you are one of the few people with decades and decades, i believe four decades of experience, dealing with all kinds of market moves. i know i'm calling you out, and black swans, et cetera. >> uh-huh. liz: you've got to talk to us about this because look clearly u.s. indices are holdi

liz: just tencent? tencent is a huge conglomerate. they are throwing cash at everything, not just videogaming. there is exposure elsewhere that might help deal with the attack against videogamers by beijing. online education stocks got killed when the country and the government said no more. we don't want you teaching on weekends. we don't want you teaching foreign textbooks. this is a problem for investors, is it not? >> certainly the had hock nature, the lack of clarity on what is the gameplan, in terms of after-school tutoring, we might not like the rationale, liz, there is one. china's census came out a few months ago. the average woman in chin china 1.3 children per woman. that is the well below the replacement policy of 2.1. what the policymakers are doing, what are the costs associated with having kids that are keeping parents from having children? now china doesn't have a problem in the short run because it has a very big gen-z population but after-school tutoring is clearly one of the areas where upwards of 25% of urban famil

state media first went hard at tencent. now they are pulling back a little bit. it pays to pay attention. haidi: you can get more of context and analysis on the ongoing crackdown at the bloomberg technology channel on youtube. her arrest treated -- created a diplomatic incident. they have been covering this. it does not bode so well for them. >> that is right. it has been a long road to get here. as she goes into this final stretch, the advance -- chances come down to one in a hundred that she will be released. the large majority of cases from the u.s. you end up going through this. haidi: what happens once the person is handed over? what can we expect to happen? >> there will be a few more steps. these hearings will go through august 20. at that point, the judge will make a decision. at that point, she will have the chance to appeal. both sides have the chance to appeal. it could be a very long time before we are talking about her being handed over to authorities in the u.s.. haidi: there has been criticism of canada's extradition laws. >> the extradition wall h

what is jb doing differently than alibaba and tencent? >> they are in the same boat, under the regulatory framework, the crackdown, there are so many questions left to be insert on the regulatory front. that does affect a company like jb.com, which is smaller, still huge, but a smaller competitor to alibaba. they have not been singled out or targeted in the regular tory framework. when the net is cast wide, on issues like data security, anticompetitive behaviors and the like, they are going to be caught in that net. the stock is down about 40% from the february peak. they happened to have their big annual shaaban festival, equivalent to a single day in november. the june 18th festival, they got a big surge in transactional volume, which saw the revenue jumped 26%, which was more than forecast by the analysts surveyed by bloomberg. it was also the slowest pace of growth we have seen from jd.com since china emerged from the pandemic lockdown last year. some good and bad, but they got a big pop up. there's going to be regulatory overhang goi

reporter: it is certainly an interesting move by tencent. they have said they will allocate another $7.5 billion for social causes. in this case it was specifically for wealth distribution. this is the second time they are doing this. they are doubling the amount of money to $15 billion. this is not the sort of thing you typically see from companies, but these are not typical days for china. chinese companies are trying to figure out these new rules of the road as beijing begins to crack down on a whole lot of sectors, tech in particular. but i goes well beyond that into real estate and some other areas. tencent like some many other companies now are trying to do their part for what the beijing authorities are now calling, and prosperity. it is not just about being a profit maximizing capitalists. they need to contribute to this common prosperity, too. haidi: will we see a more philanthropic tilt from other major tech giants, as well? reporter: you're certainly seeing it already. many of the richest people in the country who have made their

tencent is also one investor. next, the taliban's rapid advance in afghanistan leaves many questions, including how the regime will exert their authority. johns hopkins professor daniel markey tells us how he expects the crisis to unfold. don't miss our big interviews ahead. we hear from the singapore trade and industry minister. this is bloomberg. ♪ in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities. total gym includes everything you need to get into the best shape of your life. for every body at any age. it works every muscle group, including your core, using your own body weight as resistance. customers love

i think this is the session low that we have seen, and tencent, at least tencent is back in positive territory. alibaba at fresh new record lows after they hit that record yesterday. and this is on the back of the earnings story as well for this tech stock, and it is a bloodbath out there. david: this is a graph we have been tracking, kind of stabilizing in the early days of august. where we are now is exactly the drawdown from the peak asia tech index. we have now exceeded 45%. on the broader point, let's change this up and look at what this week has been. normally, you get the u.s. outperforming, europe, emerging markets, another rotation within that, but when you look at the chart, emerging markets, s&p 500, the euro stocks 600 are actually falling now. can we change this? there were a go. all on track for -- there we go. all on track for weekly declines, but we still have most of the trading day left to go. yvonne: we are joined by greater china executive editor jean-luc for the latest. we had a bit of a pause, and a lot of analysts were saying that we have seen the worst of this

[indiscernible] is it bargain hunting, stocks looking cheap as tencent is low with the buyback? they're also moving up? what went down became too cheap. [indiscernible] does it represent a bargain? year end highs up 15% under 22% move. what are you looking at? david: is three days. three days including what is happening today. gap higher. i'm not sure how clear that is. when you look at what is happening to the opening, 6600 on the hsx index. we are 90 points short of that level. i will show you why. have a look at alibaba. yesterday at the price of that specific option was up 400%. in other words, people were betting we might not get there but i guess the perception that things might actually get there, driving the call option up. as far as that one was concerned, up 120%. there is a lot of speculation into the traders market. yvonne: when it comes to a signal from policymakers, pboc made a big thing -- signal that they are trying to boost liquidity and add some juice into these markets as well. 50 billion and the banking system a couple of minutes ago. seven-day reversal. as w