tv Bloomberg Daybreak Australia Bloomberg August 21, 2019 6:00pm-7:00pm EDT
paul: welcome to "daybreak australia." sophie: we're counting down to asia's major market opens. paul: here are the top stories we're covering the next hour. a mountain or a molehill? observers came to learn about rate policy and where the economy is heading with jay powell's speech. president trump talks tough
saying the u.s. is winning the trade war with china, but the u.s. deficit is set to balloon. toeing warns companies to the line if they want access to the mainland economy. get you started with a quick check of how markets closed the window session. stocks were higher. they pared back some earlier gains. the s&p 500 ended .8% higher with every sector on the s&p 500 and the green. retailers were also hired. today, we saw the bloomberg retail index at a three-week high as we saw some positive s and target, lowe' not to mention we saw that rally after we saw home depot's stronger second half. that theyes signaling were ready to ease but not really hinting that this july
rate cut was the start of an easing cycle, so two-year treasury yields rallied. treasury yields unchanged at the moment, so let's see where we are starting out the asian session. sophie: we are setting up for potentially positive gains with more earnings on tap for the region as well. we have a new zealand's report card to consider. gettingney, we will be , and we from qantas have a big earnings day from hong kong with stocks set for the worst quarter since 2015. as we await more central bank choose ahead of the jackson hole symposium, kiwi bond under pressure while the yen is ,olding its overnight losses above thatg steady
1502 level. we do have bank indonesia on top as well when it comes to the central bank lineup. we will see if it will deliver a second rate cut that is anticipated for this year, but it may not take action before the fed does. thanks, sophie. let's check in on first word news. >> the u.s. budget deficit is growing faster than expected, and the congressional budget office says president trump's trade war is a key drag on the economy. the shortfall is set to widen to one trillion dollars by fiscal 2020, up from an estimated $960 billion in the year ending september 30. in january, the budget office forecast that visits of $980 billion next year and did not see it topping $1 trillion until 2022. china is warning global business to toe the line on hong kong as protesters marked one month since commuters were violently attacked by gangs at a subway station. demonstrators set off fireworks think wishers and staged a sit
in in protest at police failing to arrive at the scene at the time of the attack or to prosecute anyone for the violence since. there was also a protest at the u.k. consulate in hong kong to demand britain's [indiscernible] a consulateirmed employee had been given 15-day detention in neighboring shenzhen for violating local regulations. the case is stoking fears in hong kong that beijing is expanding its judicial reach across the border. china is threatening retaliation against u.s. companies following washington's approval of arms sales to taiwan. the $8 billion deal for the f-16 marks a shift in u.s. policy, and beijing has warned against it before it was given the go-ahead. china says it will take all necessary measures in response, including the imposition of sanctions on american companies involved in the deal. the u.k. and germany both say
negotiating brexit, but neither side can say how it will happen. merkelohnson and angela both repeating a wish for an amicable split. johnson heads for talks with president emmanuel macron in paris. johnson saying a no deal brexit is now the likeliest scenario. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks. fed unity appears to be fraying ahead of the annual gathering of policy makers jackson hole. minutes from the july meeting show policymakers viewing the cut as an insurance move but did byue over lowering rates and how much. this comes as president trump continues to slam the fed.
>> the federal reserve has let us down. they missed the call, they raised them too fast. they raised it too high. they should not have done the tightening, and they should not have raised them to the extent -- we could have had some raises, but nothing like they did. paul: global economics and policy editor kathleen hays is in washington now. can you describe for us the mood among policymakers at jackson hole at the moment -- kathleen hays is in wyoming now. i see some top fed officials starting to wonder into the jackson lake lodge where this is that has been held -- this is the 30th year it has been hell here. the symposium held for 35 years, but three decades, but this is the day before it actually starts in the evening. friday is the day powell gives his speech. these minutes make it all the
more interesting, don't they, what jay powell is going to say in a speech that everyone around the world is waiting to hear. it is clear that at least in the minutes, yes, this was viewed as , to outlook weak global growth, trade uncertainty, as you said, but also putting in three reasons signs of economic deceleration, risk management concerns, and too low inflation. there's a lot of talk today about this is not as dovish as some people had expected. the kansas city fed and the ,oston fed had dissented explaining that at length with me on monday, but remember, july 31 was when they made that rate cut. these are the minutes that some
of that meeting -- august 1 is when donald trump said guess what, on september 1, 10% tariffs on more chinese goods. i think it will be interesting to see now what jay powell says about all the things that happened between the july 31 meeting and today. 30-year bond went below 2% for the first time ever. briefly inverted, still very flat. more negative bond yields it seems every day. the german just sold a 30-year bond at a negative yield, right? i think that is what makes this speech so important. a lot of important things have happened in a very short period of time. shery: we have seen the fed chair disappointing several times when it comes to communication to the market. could he disappoint at jackson hole again? kathleen: let's think what we mean by disappoint. we talked about this. he could disappoint, but the minutes already have for some
people who thought these minutes would be so very dovish, even though there were two dissenters . although there were two people who wanted 50 basis point cuts. obviously, they were not voters. neel kashkari from minneapolis was probably one of them. guess could he disappoint in the sense of now he has the opportunity to set the record straight, people do not think these minutes were dovish enough , they do not think it reinforced the idea that you are going to get three more rate cuts this year, but that, i guess, is really the question now, isn't it, because he has a ,hance to put his stamp on it like this is what we saw july 31, but things have gotten worse since then. but we do not know what he will say. if he echoes the tenor of these minutes, i think people will still have the sense of i thought we were getting something more aggressive. shery: we will see what happens. we are just counting down to
that speech. kathleen hays, joining us from jackson hole. we will hear from the kansas city fed president later on thursday as well, so do not miss her comments ahead of jackson hole. let's get more on the market reaction to the fed minutes. stocks retreated from highs on the day. su keenan joins us with more on this. to stayid manage positive. we had a real shot in the arm from strong earnings results from retailers which are defying fears of recessions. let's go to the bloomberg. the exchange traded fund or etf techmimics the nasdaq heavy index, and we have been seeing a lot of investors or outflows run that index, and
then go to the big movies of the day, and it's fascinating to see retailers put the momentum play. target a record high walmart results, and that shows the ongoing resilience we are seeing with these discounters amid the broader retail industry. we saw lows really knock it out of the ballpark is gross margin beat expectations against combing fears -- combing -- calming fears, much better than expected. nordstrom better than expected and somehow avoiding the challenge of the bigger department store chains. after hours, we saw l brands, the parent company of victoria's secret, also beat expectations, though they did report weaker than expected sales in their core lingerie area. will and meanwhile, we saw oil futures falling.
gold retreating as well. what are traders saying? interesting.eally real surprise inventory data. you will see there was an unexpected buildup in supply. demand is continuing to pull 16% from the late april high, weakening global macroeconomic ,ata is really a key theme traders say. take a look at gold. it was up but fell in after hours after the fed minutes came out. fascinating to note, again, let's go back and take a look at etf's. the gold etf is continuing to add and build its backing in bully on. the gold momentum play continues apace in this uncertain economy. paul: thanks very much for that.
we just got some breaking news across the bloomberg terminal. a lot of earnings out of australia today. south32 the first out of the largesthe world's producer of metallurgical coal, so heavily involved in steelmaking. we are seeing a 1% drop in full-year net profit, down to $389 million. that is in this as well. .evenue was down 4% we also saw the dividend coming in weaker than expected as well, ..8 cents on the year last year, we had 6.2 cents. bit of in this therefore south32. we will have an interview with the ceo coming up a little later at 10 minutes to mid day in hong kong, just before 2:00 p.m. here
shery: as the fed prepares for its annual jackson hole symposium, everyone will be looking for signs of where the economy is headed. investors will be keeping a close eye on jerome powell's opening speech for clues on if the fed is ramping up for another cut for markets, having already priced one in, but should they? odds of a recession have been rising. as you can see from this chart, since 1967, whenever those arts
and probability jump above 35%, it has been followed by a recession, though that probability currently sits at 31 .4. the u.s. economy, though, remains strong, including gdp growth, and many say that as a reason to be optimistic. you can see here that we are currently in the green with growth, but a solid and steady. bank of america's ceo told bloomberg we have nothing to fear about recession right now except for the fear of a recession. paul: thanks very much for that. let's get to more analysis with brandywine's global fixed income portfolio manager, jack mcintyre. i just want to point out the chart here on the bloomberg terminal showing expectations on the market, particularly with this 25 basis cut for september pretty much baked into the market, expecting more neon that. considering what we're just talking about, about the only thing to fear being fear itself,
comments of eric rosenberg the , do you get a sense the fed is getting pushed around by the market here? >> certainly, the markets or the bond vigilantes, and i'm one of those, are sending a message to the fed that they tightened too much less year. they need to ease. having said that, the fed and the market is in a tough spot. globally, the consumer is in good shape. it is the business sector, particularly manufacturing, that is sort of showing softness. we don't know how that is going to play out. is it going to be a vicious cycle where softness in the business sector leaks into consumer, and then we really slow down, or is there going to is stronghe consumer enough to support businesses? until we get clarity on that, the fed is going to have to err on the side of easing, but maybe not as much as what the bond market would want. paul: how difficult is this
speech going to be for jay powell at jackson hole? he has so much to balance now. as we saw from the fed minutes, there is a lot of dissent among policymakers. is the best a market can hope for a bit of clarity, never content? >> you are right, we need clarity. ant we need clarity about is epic it was a little bit of a communication blunder, that they labeled the rate cut last fomc meeting as sort of a midcycle adjustment. the markets wanted more because we don't know -- with that scenario i just laid out, we do not know how things will play out from a global growth standpoint. this could be the start of a more prolonged rate cutting cycle, but the message the fed and powell said about this being just a midcycle adjustment clearly disappointed the markets. what i think we will get out of shift towardis a
the fed getting more flexibility, optionality. what i mean by that is simply maybe's ending a message to the market that they are open to sht this might be a little more prolonged rate cutting cycle as opposed to one or two of rate cuts. shery: we had the two/10 curve briefly inverting again. what did you take away from the fomc minutes? >> i was not expecting to get a lot out of the minutes, and i was not disappointed because again, a lot has changed since the fomc meeting. i have been investing in bonds for 30-plus years. i cannot remember a time over 18 of-we were that 10-year yields declined by 50 basis points. that's pretty amazing. and a lot of things have changed. i'm looking more forward, and a think the markets are, too, more towards jackson hole to get more clarity on some of the things i talked about, but surprisingly, there's a wide range of views at the fed because the ones that want more rate cuts are looking
at softness in the business sector. the ones who say we should not do anything on rates are looking at the consumer, and the consumer for now is in good shape. at thoses, take a look retail earnings reports. let's talk about your call on your note that interest rates will not go negative in the u.s. the gdp chart on the bloomberg showing negative debt around the world. yieldshe direction of very clear at this point? >> two points, i'm still constructive on treasury yields, expecting them to go lower, but i do not see policy rates or market rates going negative because i don't think they are part of the solution. the central bank taking rates negative are punishing savers. i think the u.s. from a growth betterint, we are in a position than europe and japan, but treasuries offer relative value versus european bonds still jgb, so i am
constructive on treasuries, but having said that, i just outlined this huge rally that we have. the market needs to consolidate. to get yields heading lower from here given the strength of this move, we need to see weakness in the labor market. until that happens, i expect bond yields, treasury yields to sort of drift sideways for a a while. : thanks very much for joining us. newshave more breaking across the bloomberg at the moment. royal dutch shell making an and a surely an operator of a number of gas power plants and cells to large businesses. currently has a market cap of $440 million. offering a pretty decent premium over wednesday's close, values the company at $617 million.
trump, back on top on trade after signs of progress with china. joins us house editor now. we keep getting conflicting messages from the president. he's ready to make a deal, he's probably going to make a deal. what exactly did he say this time around? spoke tos time, he reporters on his way out of the white house, which he often does when he's about to travel. he was asked about how things were going with china. he's obviously getting a lot of questions about that amid reports that the trade war is weighing on growth, weighing on the economy and that that -- and i signs of recession could be on the horizon. today, he basically defended his tough stance with china, and at one point, he sort of turned and looked up at the sky and said, "i'm the chosen one" to deal tradehina and this
imbalance. he's getting heat because of the harm it is inflicting on america's farmers and the risk it carries for economic growth, he's trying to basically keep his base in the game with him and say that, you know, obama, bush, nobody else took on china. it needed to happen. this going to be some short-term pain. that's what he said yesterday as well. he's hoping people stick with him. : thanks very much for that. more breaking news, more earnings this time from qantas ,n the bloomberg terminal slightly less than $1.37 billion . earnings per share beat better than last year. 6.5%year net income down
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paul: 8:30 a.m. on a mild thursday. the market open 90 minutes away. futures trading higher by a little more than .4% following u.s. equities markets higher as well. loads of stocks to watch out for at the open. qantas,own 32, -- south32, origin energy, and plenty more as well. i'm paul allen in sydney. shery: i'm shery ahn in new york where it is 6:30 p.m. ritika: policymakers feud rate cuts as insurance against weak inflation and the risk of a slump in investment triggered by
a trade war according to fed minutes. they will do to counter the effects of uncertainty and slowing global growth thsince 2p says it's not enough and is calling for a bigger cut. chosen one. somebody had to do it, so i'm taking on china. i'm taking on china on trade, and you know what? we are winning. a: unrest in hong kong is set to inflict more damage on the economy with housing rates seen in decline. a complete reversal from the 3% gain seen in a previous report. this is the protest began in june. president trump is lashing out at automakers who are pushing back at his plan to weaken fuel
efficiency requirements. he says his proposal would lower car prices and raised safety levels. he added there would be little impact on the environment and dismissed his critics as foolish and politically correct. trump wants to pull back on efficiency regulations introduced under president obama. president trump says he canceled a trip to copenhagen because the danish prime minister made a his apparent that wish to buy greenland was absurd a mess she hoped it was a joke. trump said her comments were nasty and sarcastic and that no one should talk to the united states in that way under his administration. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. .'m ritika gupta this is bloomberg. shery: let's get to sophie in hong kong for what to watch on markets this morning. so be: keeping an eye on bond wait on more
central bank news. another sign the global bond market rally may be losing steam with that debt pile nearing $17 trillion. the worldsued pressure for yesterday-year bond that paid nothing. signtes this is an ominous for cash bonds, but the jury is still out over this is a turning point in the rally for long end rates. while technically a failed option, investors can always buy in the future and not participate in options, so keep an eye on what goes on, particularly in the long end of the curve are bond markets. volumes have been notably low for treasuries ahead of the jackson hole symposium. our global markets editor is here with more. can we expect anything to change as we await jay powell's
comments? >> they do seem to be some weaknesses people gear up for what powell will tell us and how he will be balancing this beer the market has been gunning for severe rate cuts for some time now, but as you can see, this chart shows it pretty well. some of those bets are starting to be just wound down. coming off those lows, that white line shows how especially on the back of the minutes which may be did not tell us a huge amount other than the fact there is a large amount of disagreement within the fed, that powell is going to have to play a pretty delicate balancing act. people are not wanting to put on any really big bets before we hear from powell on friday. we do have the indonesian rate decision that could move the dial flow, but there's little else really in terms of data --
this is mainly an earnings story on the equity side, especially in australia this morning as people really wait out to hear from powell in jackson hole on friday. shery: we continue to see the trade conflict between japan and south korea. interestingly, that is allowing an investment firm to turn frictions into an investment strategy. what are they doing? >> yes, and you often see this with thematic equity strategies are borne out, those changes in the global trade landscape. this is just one example of how that is happening in the latest trade conflict between japan and korea that has erupted in recent months. at nh monday folks asset management and they have a specific korean fund that looks to invest directly in local korean suppliers that might benefit from the japanese restrictions on exporting some of the key material to korea,
and of course, the chart of here shows you the extent of that dependency that japan has with the reliance on some of those korean suppliers. it will be interesting to watch this one and see how it plays out over the next months, and if this really does develop into a more significant issue over the next year or two, how the equity fund managers can manage to benefit from this theme, but just one example of how this latest escalation in the trade war is at least a allowing some specific strategies to develop that might help people get a little bit of an edge in this hard-to-find yield world. shery: thank you so much for that. our bloomberg global markets editor adam haigh and you can find his charts on bgg be go library on your bloomberg. more dire predictions for the economy amid standoff between protesters and police. our chief asia correspondent stephen engle is in hong kong.
we have seen the hong kong economy starting to contrast -- to contract already. how bad is it getting? stephen: where we need to start looking is forward. the last couple of months of this unrest combined with escalating trade tension between china and the united states and china's decision to allow the yuan to weaken, because many hong kong companies get their revenue from china and that weakening yuan is pressuring them. analysts on average are seeing a 19% slump in operating income for the full year 2019. it would be the biggest contraction since 2008. of course, the trade war, as i mentioned, the week yuan, and these mounting or i should say prolonged protests with no end in sight. amber hill capital saying the third quarter could the potentially worse and the downsides of prices have not
been fully reflected in share prices. one stock that was hammered yesterday was hong kong and china gas company. one of the single-digit stop stockhere, three is the code. it fell 5.3%, as much as 5.8%, the most since 2009 on disappointing results. it called the local business environment full of challenges, and we have been mentioning cathay pacific after dwyer pacific's chairman and the cathay pacific's chairman had to go to beijing, basically acquiescing to the demands of the civil aviation authority to the flight manifest, the crew manifest for all over protestsna of cathay pacific's crew and their support of the hong kong protest. they expect now significant impact on revenue from august onward. business and leisure travel into
hong kong have weakened substantially and traffic from hong kong is starting to soften. demand on china routes falling nearly 3% in july. the airline did fall in july, but the key again, like many of these companies going forward with all this uncertainty, forward bookings have fallen by what they say, double digits in july and that is why they are giving this warning about traffic going forward from august onward. it is full of uncertainty right now for many hong kong companies here, especially those doing business in china. in the next hour or so, i will go into more detail about the pressure companies like cathay pacific and others are having basically sending out directives across their networks to tell employees not to necessarily s in hongn the protest kong for fear of retribution from china. call: uncertainty very much a theme of the moment and other
random variables thrown in. of ave this detention consulate employee. how does that come look at things? >> it complicates things considerably if this does blowup. we gotten confirmation that he was a 28-year-old employee at the u.k. consulate in hong kong. he has been placed under administrative detention in allegation of violating local laws. the u.k. has offered consular assistance. but aa hong kong resident british overseas passport holder. the foreign minister -- a foreign ministry spokesperson has described the case as a domestic matter and warned london against meddling, but again, as you mentioned, this is yet another example perhaps of our testers either seizing on another example of china's opec , and i don't know
how this one is going to play out, but again, it is maybe adding a little bit of protesters whohe say china's opaque justice system is not the system they want for hong kong in the future. : one to watch there. thanks very much for joining us. still to come, we will break with ouras earnings chief market strategist evan lucas. this is bloomberg. ♪
billion barrels of oil equivalent. , one ofto kohl's now the major retailers in australia. full-year net income, $1.44 billion, special dividend of 11.5 australian sense. final dividend per share $.24, still waiting on more headlines dropping from kohl's, but so far, looks to be a reasonable set of numbers. i'm going to stop talking about earnings now. shery: i'll think we can because we have to turn to qantas. we got them coming out with full-year underlying profit missing analyst estimates as growth headwinds and the trade war loom, so let's get some insight from our next guest, evan lucas, chief investment fromegist joining us melbourne today. let's get you started with qantas numbers. we saw a slight miss when it came to pretax profit.
1.3 billion aussie dollars, but dividend per share raised to 13 aussie since -- cents. first of all, give us your take of the numbers first. >> qantas share price has been trading in a very tight range basically since their full-year numbers last year, so trade as as $5.80 and that period. the initial take is probably in line. yes, it is in this on the as stt a bit of a touch with regards to underlying in pt. withld say it is in line slightly better on international, slightly worse on domestic. you need to drill into the , which as abit group is slightly better than what most people had on a segment basis, so it beats underlying ebit by about $500
million, so that is pretty reasonable. i would also point out that there again, their loyalty program is an absolute standout. underlying ebit on that was 375 million dollars. that's another record. the highest it has been in seven years. if you look at how it is working, the margins are also staying very strong, so about 24.1% margin, compared to the rest of the segment. there will be huge calls from today again from the analytical world around the possibility of spinning it out because there's an argument to be made that probably being inside the group is devaluing the overall assets of the program and that will probably be one of the big talking points today. shery: what does it say that the domestic side of the business is not performing as strong? qantas, or is it a reflection of the broader market? >> it is probably a reflection
of the broader market. we know they have been slowing down. if you look at the updates, operation costs have been fairly flat year-over-year. they did have a big headwind ins year in the increase field lots. it was a big number, so that was always going to be hard to reach. the decline comes in the fact there is a slowdown in overall consumption in gdp and that is probably sorting through into ledger numbers, which are slightly weaker. business tends to not move, and you can see that as well. think they would still be fairly happy with where they sit. business is still a little bit lagging. brandlow price jet star probably was not with the market was expecting.
the other would argue this is year when alan joyce took a really big hit by writing down a lot of assets, redefining the program, we are five years into it now, and he is showing it is becoming a top quarter airline. profitability is very impressive compared to european and u.s. peers, and it will continue to do pretty well in what is basically glorified bus services. it has done there strongly over that period. it probably will decline in terms of initial reaction, but overall, it shows qantas is on pretty solid footing to continue to perform well over the next decade. paul: that's a very good point. after years of pain, qantas returning reasonably healthy dividends to shareholders. $.13 was better than expected.
what do you make of this buyback as well? >> that was also out there. there have been a lot of rumor the buyback was coming. it is there, it is in line, so i do not expect it to be a showstopper and something the market can really get on board with. they do have a reason to do it. as i said, it is a value acquisition they have had since fiscal year 2014. it's very strong. shareholders backing them in. the fact that we're almost one dollar lower than where we were this time last year does make sense from a strategic point of view. again, i would probably point out how qantas is operating. it is becoming very slick, very stable operations. the other thing to highlight is net debt, which continues to get lower and lower.
they don't hold airlines on books, they lease them, which is a much more efficient way of doing business. that has been the five-year strategic deal in the results probably show you why they did that back then. paul: before i let you go, i want to talk about something kind of fun from object sunrise -- project sunrise. they're going to start testing nonstop flights from sydney to new york and london using 787 dreamliner's. how disruptive with this proved to be if he gets off the ground? the >> i think your answer also comes into what you said in terms of pet projects. is question i have to ask can customers injure what would and 21-our19 flights. that is an incredible amount of time to be in one area. if they are going to have to in seate lose space
numbers -- you can see on your screen right now, they are looking at having ways of entertainment/physical exercise areas. the ability also to sleep needs to be put into it. all that is there. it it can improve margins, the vile means, he will go ahead with it. he certainly wants the facility in new york linked. it is a huge profitable line, but at the moment, it is broken up by stopping at lax. if he can go all that way, margins will probably be stronger. you got to look at it from comfort, and that is probably his hurdle in the short-term, if customers can accept a flight of that link -- links -- of that length. fory: thank you so much we will also be joined by qantas ' ceo at 9:00 a.m. hong kong time, 11:00 a.m. if you are
shery: goldman sachs' trading division is planning its biggest hiring spree in years and the focus is on coders or tech-related roles. our u.s. finance editor joins us now. this really gives you a sense where wall street is headed. >> it sure does. thesen is pushing to add tech people, computer coders and experts to its trading desk. we talked to the cohead of the engineering division on the trading desk, and he said they will be very active in poaching talent. goldman is going to be looking for staff not only from other finance firms but also from tech companies. they will be putting these and in in new york london as they seek to really
ramp up this technological push. goals? at are the what is the endpoint for this effort? >> like many firms, goldman is trying to stay ahead as the pace of technological change keeps getting quicker and quicker all the time. a goldman sachs, they had a marquis latform called , for example, and they are still building that out dish -- they have a trading platform called mark -- marquee. is using, goldman technology to make everything faster. that means more deals, more business, more revenue. a timealso coming at when goldman is seeing significant of people in trading, not only a goldman but other banks as well. >> we just had the worst first
half of a year and maybe a decade when it comes to wall street trading revenue. banks are cutting jobs not only here on wall street, but also in europe. everything is in of people. automation is fundamentally changing the way that these trading desks operate. in this case, at least, bankers are being left out in the cold while goldman searches for computer programmers. for: thanks very much joining us. let's get a quick check now of the latest business flash headlines. jpmorgan is closing the chase pay app in its third reversal on digital offerings in three months. customers have been told they will not be able to use the app to pay by smartphone, although chase hate will still be available on websites and apps of retailers that accept it.
it was launched to compete in the growing instant payment sector. shery: hsbc said to be way of a bid for of eva -- bid for aviv'' s operations in asia. little the deal is in the early stages but it would help hsbc bolster its insurance options in asia. aviva operations could be worth as much as $4 million. paul: in new zealand, full-year net income above estimates. proper came in at 200 70 million kiwi dollars and 170 million u.s. dollars, $10 million above projections. the airline is searching for a new ceo. cfo jeff mcdowell is due to stand in until a replacement is found. shery: plenty more in the next hour on "daybreak asia."