Surging after chips turned profitable for the First Time Since 2022. This is part of a much bigger global theme where seeing of the Ai Development boom that it is turning the cycle after so much of a downturn. We saw the 4. 8 billion net income number, so a handy beat. That is about four times samsungs earnings just a year earlier. Samsung coming online now. Up about. 1 . We will continue to watch and wait to see how investors react to that stock even know it is up about 17 over the past year, it has underperformed compared to the likes of sk hynix which has doubled in that period, nvidia tripling in that period. Samsung off the april peak, actually down about 10 . Seeing a little bit of downside when it comes to trading in samsung. Continuing to watch that but the other big story is what has been going on with the yen. We had remarks pretty measured. They will be getting more information when the data release comes out at the end of may. But a lot of the markets seeing this as tacit confirmation something was done. The disclosure of the results will come at the end of may. We are continuing to watch that particularly as we have yet to get the fomc decision. Paul that will be the big one coming up and it will be very interesting to watch any potential yen moves off the back of that. Lets look at our trading in australia. Not a lot of action in the early going. We have the staggered open here in australia one stock we have been watching that is trading is bhp, and that is recovering some ground it lost yesterday. Right now better than half of 1 . Of course we are watching the hp very closely as to whether or not they posed a renewed bid for Anglo American after their initial Stock Offering got rejected at the end of last week we saw bhp shares recovering by about. 5 . Elsewhere we have the aussie dollar losing a little bit of ground. The aussie versus the yen looks pretty good though. The oil price backing off a little bit as well. We got the aussie 10 year yield also backing off. Lets look at how u. S. Treasuries are doing. We heard from the treasury in the u. S. Saying they need to borrow more than they thought and more than analysts were expecting. About 243 billion being forecast. The announcement saw yields ease, and that is a trend we are seeing continued into the japanese session. The 10 year just above 4. 6 . Haidi lets get more with masa hero waka suki. What is interesting to you in these numbers . Samsung just reported their earnings and it has already announced preliminary earnings. If we look at the Division Profit we think its Semiconductor Business made a profit. And that was really good. Overall the memory chip market is improving. Including the high been with highbandwidth memory chips used for ai. Basically we see the memory chip business is improving. So that was an interesting point. It achieved around 8 margin and we think that Business Conditions will improve going forward. Paul we have the Earnings Call coming up in a little under one hour. What are investors watching out for in terms of commentary around these numbers . Masahiro yes, we would like to check several key points. The first one would be the business environment. Especially volume growth should be very much closely watched. Sk hynix should be expecting some midteen volume increase in the second quarter. Samsung is forecasting higher than that or similar to that. Also we would like to check how they think about overall demand for highbandwidth memory this year and even next year. Sk hynix is seeing very Strong Demand and they decided to expand production capacity. So we would like to check how Strong Demand for Samsung Electronics is. If demand is strong enough, samsung may follow sk hynix capacity expansion strategy. Another point would be that the flash business as well, regarding samsung we have to check if business made a profit in the First Quarter or not. We would like to check how that business is improving in the second quarter. Who would also like to see the smartphone business for consumer electronics. Samsung has a very wide range of products in many countries. They know very much about the Macro Economy conditions. So we would like to see how samsung is seeing the global Macro Economy situation in the second quarter. Paul all right. Masahiro wakasugi there. Lets look at how samsung is performing right now along with some of the other big asian trip names as well. The reaction is pretty muted. Somewhat of a mixed bag. Samsung shares had a peak in april but lost about 10 of its ground since. The Earnings Call we will be watching very closely. The commentary particularly around the ai story. Sk hynix losing some ground, off by. 25 . Tesla suppliers as well, of course we had the story of elon musk making a flying visit to china. Well, that paid off. Tesla has approval from government officials to deploy driver assistance in what is the worlds now biggest auto market. Partnering with baidu on mapping. Still questions about how it will handle Data Security and privacy but we saw tesla shares soaring 15 monday and baidu also closing higher. In australia we have mover for you as well. Bhp shares currently gaining by three quarters of 1 . We saw them lose a little bit of ground yesterday off the back of that rejection by Anglo American for a 39 billion all stock bid. Bhp shares sold off a little monday but recovering pretty strongly at the moment. Haidi lets look at the yen. Look, this is the picture as we see quite a bit of sustained weakness. Flat at the moment at the 156 level. As we were talking about earlier this comes before these expectations potentially come to fruition off that hawkish pivot from jay powell. Elsewhere we are seeing the bloomberg dollar Index Holding pretty steady. We heard that no doubt from the bank of australia pushing back its rates. Expectations for the rba from september now not expecting a cut until november. Lets bring in Garfield Reynolds who leads our markets live coverage pretty lets start with the postmanic monday situation for the yen. It looks like they did probably intervene. Commentary was still kind of ambiguous. If we assume that they did, they are not getting much bang for their buck. Garfield that is one of the things that have you wondering if they did, although from our point of view, if japan did intervene in the yen, they might have to some extent been forced into it. Because you had thin liquidity, the yen almost went through the 160. 20 dollar level that was the weakest since 1990. If you go past that, it is than back until the 1980s in terms of how weak the level is, what the scope of the climb is. To some extent it is the kind of territory where a government or a central bank would normally intervene for its currency. It is getting to unacceptably low levels. If they dont step in, you can get a really disorderly retreat. And that is very much about a tactical set up. I stress that tactical set up because you have the fomc and also nonforeign payrolls coming for the u. S. So there is a big event risk that whatever they did yesterday, if they did do it, could get overwritten by the impact that those events could have on u. S. Yields and therefore the differentiation between u. S. And japanese yields and expectations for those. Now, the backdrop is also that even though there is a wide discount between japanese rates and u. S. Rates, based on the fundamentals the way those are usually operated, most people would reckon that the yen is weaker than it should be now. So this has become very much a momentum trade, less than a fundamentals trade. The fundamentals got us to the 140, 150 area. Momentum has taken us past 150. To to some extent, yen bidders are asking, daring the ministry of finance to come in and drive them back out of it because the fundamentals dont necessarily match where the young the yen is at. That means we are all still on intervention watch. Yen volatility and implied volatility. The expectation traders have for swings is still at elevated levels. Elevated the most usually seen in the runup to centralbank meetings. So yeah, we are on watch. You would think there would be the potential for strong yen moves as we get these u. S. Data points coming in. Paul the yen story to a large extent overshadowed a lot of other news in the region. Hong kong shares rallying 20 off of january lows. Seems to be stalling out a bit. At the same time, about some chinese property stocks. How do we square that . Garfield the story for chinese and hong kong equities this year has very much been they are phenomenally cheap. Investors had been staying away for them, spurring that cheapness. Of course they had been very cheap for a reason. So the potential reward is there. So is that risk. And we have seen signs that the government is trying to support share market. The government is also trying to turn the property sector around, although it wants to do so without rewarding people who took what they might regard as unconscionable risks. So theres that question, will that be enough . Theres also the chinese share market has cried wolf, so to speak, or inverse wolf, so many times and investors have gotten burned. So anybody who has gone in at the bottom and has gotten a 20 return is thinking, might be time to take some money off the table. I can now, without sparking a r out. If i wait for too much longer, the greed and fear and says tips more towards fear as the greed part gets satisfied. It is still very much a speculators market rather than a buy an dhold one. Haidi Garfield Reynolds there. Still ahead, speaking of chinese stocks, megabanks reporting rare declines in Profit Margins getting squeezed. We will get some analysis from jeffreys next. This is bloomberg. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo paul we are going to get chinas official factory activity gauges for april coming up in the next hour with economists expecting the recovery to continue but at a slower pace. For more lets bring in our Greater ChinaSenior Executive editor john liu. We are expecting pmis to ease off a little in the month of april but there were a few days off in april, some Public Holidays. So can we explain this away with a seasonal argument or is this part of a trend . John i think there is a trend beginning to form. In march we got the first positive reading from manufacturing pmi in six months. It was an expansion, 50. 8. The consensus market is for 50. 3, so a slight pullback. You talked about that vacation. That was actually the first time that spending on a per trip basis increased versus 2019. And so there is some Building Momentum when it comes to optimism. You talked to garfield about the stock market. There is a little more positive sentiment about real estate. We had chen do removing any limitations on purchases and that really stoking optimism other cities would follow and we would see a decrease in homebuying. Haidi it comes at a time signs of increased International Engagement from chinese leaders and there has been a flurry of highlevel meetings with the u. S. And now we are hearing he is headed to europe. Are these trade relationships more important than ever right now . John i think they are extremely important, given how weak the Chinese Consumer has been. China has a capacity issue. There are factories turning out products, be they toys or shoes or electronics or electric vehicles. There has just not been enough consumption in china to digest all that production. So china needs to be able to ship some of those products overseas to continue that economic expansion. If the relationship that china has with the u. S. , the west, is so tense that it limits the ability of companies to ship those products overseas, that will be detrimental to the economy. We have seen a much more accommodative attitude taken by the leadership here when it comes to dealing with the west. And i think that is what we will see when president xi visits europe. Haidi our Greater ChinaSenior Executive editor john liu there. A big earnings week for china. Financial woes continue to mount, the embattled developer posting a net loss for the Second Straight Quarter as it continues to struggle with slumping sales and a cash crunch. Vanke was chinas second largest developer last year. We are seeing stock and bonds on a slide over concerns over its financial condition. Lets get more insight with shujin chen, head of financial that jeffries. Great to have you with us. No signs of improvement for vanke despite a number of measures of support from the government. Where does this story go from here, given we know how much of the broader economy relies on property and property adjacent industries . Shujin good question. First we think that china will continue its moderate supportive for the property sector. We have seen quite a lot of cities including some tier two cities started to significantly lose purchase restrictions. On the other hand is while quite a lot of investors are still expecting stimulus, which we think there is a low chance to happen. Overall if china continues to support more Affordable Housing rather than commercial housing, we actually see that property sales will continue to decline. Although the decline could be more moderate in the second half of this year compared to the first half due to the relatively low base. Haidi we have seen a plunge in vankes cash coverage since 2023. Does this give an indication that for a number of these developers that we need to see more urgency and frequency in asset disposals . Shujin we do think that yes, for quite a lot of developers including some regional soe developers, there is more urgency for them to dispose assets in order to boost their solvency. For vanke, we noticed that in the First Quarter their Monthly Sales is around 19 billion per month. It is short of our estimated cash flow breakeven level. So yeah, they definitely need to sell. It is quite challenging in this environment to dispose assets considering such a weak Property Market. Paul do you think that vanke can avoid a default or a need for a bailout . And if it did need a bailout, how wellplaced is a local government to provide that support . Shujin if the situation has not changed, if it is very hard to see sales and the disposal of asset remains low, then vanke m ay probably need support from either the local government or the central government. For local government, because vanke is 27 held by shenzhen metro, a subsidiary of the sanjay and government. Weve already seen supportive policies from the government. However, if we look its own it doesnt have a strong profitable Business Model and its own Balance Sheet remains quite weak. Shenzhen has another regional soe developer default on public debt in february. So the chance of a bailout from the shenzhen government is relatively small. Paul of course chinas banks are very exposed to what has been going on in the Property Market as well. We saw from the results yesterday profit slipping. How wellequipped are chinas banks to expand this long winter in chinese property . Shujin first is regarding the china Banks Property declined it was mainly due to the Net Interest Margin contraction rather than the quality pressure. In the First Quarter banks still reported a ratio quite stable. Some even see the improvement quarter to quarter, especially the large soe banks. The margin pressure is the key pressure for reported profits. For banks we still see Net Interest Margin contraction the rest of the year. Until the First Quarter next year. Mainly affected by the cuts, especially the First Quarter this year. We still see loan pricing as well as new loan yield will continue to decline due to the very weak Credit Demand this year. Haidi when do you see the actual ottoman out for erosion . Bottoming out for erosion . It is hard to imagine the government stop pressing on these banks. Shujin yes, on the one hand we still see banks loan growth much higher than nominal gdp growth. Especially for sco e banks for soe banks. First quarter growth is still around 12 , or at least more than 10 year on year. While nominal gdp growth is still less than 5 . This situation may continue the rest of the year. Therefore the overall Net Interest Margin will still decline. The earnings is the time we expect bottoming his First Quarter next year due to both weak Credit Demand and the apr cuts. Paul shujin chen, had i financial and Property Research at jefferies. Plenty more to come on daybreak asia. This is bloomberg. Haidi take a look at currencies. Front and center is still dollar yen print we saw in the overnight session that momentum move in the end driving the dolla