America. Takata shares collapsing after the daily limit was removed. Rishaad toshiba falling at its own hurdle, unable to finalize the sale of the chip unit right todays deadline. Onare keeping an eye toshiba, looking ahead to reaction out of janet yellen what she has been saying and marriage draghi and that is how it is buying out when it comes to equities. Looking at the markets themselves and etfs, i want to pull up a chart, 445, and this is the growth we have seen in the demand for these etfs, and now on pace to hit a record of 300 billion, topping 2015 and 2016 combined, growth driven by foreign buyers piling into these funds during the first half of seeking out u. S. Stocks in this rising Interest Rate environment, all of this down to Goldman Sachs and saying it is only the second time during the past eight quarters that Foreign Investors have been net buyers of u. S. Equities. There you go. All of this very interesting as we have had a slew of Central Banks be that take away from janet yellen, valuations and asset prices looking expensive, giving investors some food for thought. Not much has changed in terms of whether we expect the fed to change or fear from its rate it down dayory, but in asia after the selloff on wall street overnight. We do have southeast asia, singapore, malaysia coming online, so lets get it over to shery ahn. Did see wall street falling the most in the six weeks. We are tracking goes losses in asia as well. Also, dollar weakness, a plunge did nothing,llen well mario draghi striking a hawkish town, so some pressure on asian currencies, including the yen, gaining. 2 . That is pressuring equity markets, the nikkei falling. 2 , the kospi falling by as much, the korean won the losing ground after four sessions of strength. One equity market that is interesting is the taiex coming back down. 8 . A stellarhas had 27 yeargain of 14 , a high, but now economists at bloomberg, nine out of 11 saying the taiex could be running out of steam, so ending around this level or lower. With a weaker dollar came to boost for the metals and oil, but oil a story i will get to later. Steel gaining 2. 7 in asian markets. We had some optimistic comments premier li kashing and china. The striking move in the dollar was against the euro, mario draghi more hawkish, and janet yellen not doing much to support the dollar. We saw the dollar fall to a yearly low, so a twoyear low for the dxy. For the euro, the strength in the euro passing key resistant levels. J. P. Morgan and rbc saying there are many areas left for the year dollar. Ar euro we did try to pass the 113 level , and it finally went through post u. S. Election high. , andext level would be 114 that we saw after brexit around june, and after that would be 117 around august 2015, so a few areas left only for the euro dollar, while in commodities and oil, oil the longest run of gains in a while after api data showing u. S. Stockpiles that expanded. Rishaad thank you for that. Lets find out what is going on with first word news headlines. Haslinda a new cyber attack hitting companies and institutions from europe to the u. S. , accompanied by ransom demands. Have inn 2000 entities hit from Government Systems in nuclearto the chernobyl facility. Googles record 2. 7 billion dollar fine in the eu could be just a fraction of the costs it may ultimately face for skewing search results in its favor. Dent googlesill 90 billion cash pile, and the regulatory backlash targeting services, thus the chance of further penalties. Weif we find noncompliance, are of course will have to prove it, even though you will have to pay the penalty from day one of noncompliance, but lets see if we get there, because i see no reason why google should not comply. They have a very strong incentive. You have a Strong Company and we need to competition in the markets for shopping comparison. It needs mores time to reach final agreement on the sale of its chip is this business. It had wanted to sign today. Western digital and kkr submitted final of this final bids. Hong kong exchanges and Clearing Services can explain tuesdays sudden plunge in many smallcap shares, but david webb told bloomberg that it points to ongoing problems with regulatory. Ystems, were aed that companies complex web of cross shareholding. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Haidi if you are a centralbank washer, then you will probably paying close attention today. Mario draghi, mark carney, fed chair janet yellen herself, and of focus was the stability their respective Financial Systems and the ability to adapt. Ramy inocencio innocence you is our centralbank washer today. We do love centralbank speak, so why dont we get started with the fed. We have been taking apart the fact that Janet Yellens comments on asset in valuations being richer than the average has brought impact to the markets, but aside from that, par 4 for the course as the captain of the fed ship, basically staying the course in terms of rate hikes. , one rate hike later this year, but when it comes to the situation with the Financial System in the u. S. , she said it is much safer and much sounder. Stressed the doddfrank tests last week with all 34 banks passing, and she also said that there was some optimism looking to the future. Lets go ahead and take a listen. Will i say there will never, ever be another financial crisis , probably that would be going too far, but i do think we are much safer and i hope that it will not be an our lifetimes, and i dont believe it will be. So not in our lifetimes for financial crisis. Correct, bute is there is one nagging question and a lot of people looking at inflation and unemployment. The question is what has happened to the phillips curve. 92, i love this title, because this is not supposed to happen. The blue line is unemployment at 4. 3 . If that falls, inflation is supposed to rise, the white line is not rising. The question is when is that going to change. Janet yellen said she was optimistic and thinks inflation will eventually kick in, but did not give any details. Rishaad lets have a look at what else, a busy week. Mark carney a change in words and action. Thats right. Lets look at what is happening first with mario draghi. There are two words that stuck out, one was persistence, the other prudence, persistence in the current policy, but prudence in terms of the ability to change it. We can be confident that our policy is working and its all effects on inflation will rationally materialize. For that, our policy needs to be persistent, and we need to be prudent in how we adjust its parameters to improve economic conditions. That prudence and possible movement is found in the possible balance, possible unwind of the Balance Sheet, 8489. Take a look at the white line. The Balance Sheet of the ecb, 4. 1 trillion euros, but unicredit says mario draghi may have shown his hand and made the First Step Towards less accommodation. Unicredit saying a tapering announcement might come as soon as september 7, the euro rising the most on Mario Draghis remarks. Switching to the bank of england, some change of action. Says he wants to raise the Capital Requirement for british banks. Is that heng here will increase that by 11. 4 billion pounds and raise the capital buffer to 0. 5 , and if all things stay the same looking ahead to november, that offer increase will rise to 1 . He said the outcome of brexit is uncertain, so he will be watching that closely. Nice one. Still ahead, hong kong marking 20 years since the return to chinese rule. We hear about the changing landscape in the financial sector. Assessing toshibas future, asking Oasis Management about the chance of a delisting as that ship unit sale is delayed. This is bloomberg. Rishaad i am Rishaad Salamat in hong kong. Haidi i am haidi lun in sydney. The latest this is flash headlines. Launching a new highly encrypted phone. Bloomberg the company will continue to set aside 10 of its annual revenue for research and development. China remains the toughest market because barriers to entry are so low. China being the most competitive market, and it is important for us, so now we will display the security phone at the congress in shanghai, and we will demonstrate the leading Encryption Technology in all four layers, the chip, the hardware layer, system, and thingsm layer, so those will differentiate us in the business and Public Service sectors. Hua hia, allows better quality photography and dark places and goes on sale in europe at 500. Prices for north america are yet to be set. A 21 and nestle planning billion Share Buyback and looking for acquisitions days after daniel lowes third point called for a shakeup. Company last completed a repurchase in 2013 and Mark Schneider said the buyback was a lower priority than reinvesting in paying dividends. Called on nestle to sell its 23 stake in loreal and take on more debt. Rishaad headlines at the moment, and the yuan fix taking place, strengthening the fixing by one third of 1 , the most they have done since june the first. 6. 8053. Rence rate is ,hen it rains, it pours toshibas president apologizing to shareholders after the company admitted it had not reached an agreement on selling its memory chip unit. A oasis guest runs management, which has had some success pushing for better governance at japanese companies. He is with me now. On top ofe story this, these allegations of price fixing in the u. S. Really, what is going on here . This is really not helpful. Toshiba had opportunities to fix the problems, but this is really disappointing to shareholders. Rishaad it looks like we would get this deal done with this partnership. Be anyd not seem to rush, but toshiba wanted to get this done quickly, so this is not a done deal yet . Toshiba has to get this done this year. The question is will they take the highest price are what is most appropriate for them are the japanese government . There are players, kkr that has submitted a new deal with Western Digital, broadcom, and the preferred bidder. Look, shareholders want them to get a deal done. They want the deal done at the best price. Rishaad looming large is, well, perhaps a delisting. We have seen the company will be moving on to the tier two bank of the index, which means the howe price will get hit, so bad would it be if this company was delisted, and what you auditg about a possible of this company and getting this Earnings Report released. They need to get qualified or unqualified auditing by august 10. If they dont get that done, than they do get delisted. If they get delisted, Something Like 40 , 50 of the shares gets sold, so good for price, bad for individual shareholders, and the real debate is whether pricewaterhousecoopers will give them a qualified opinion. Quarter, theyd have not given an opinion on their financials. Debate aboutn a whether they can sign off on the 2016 financials, so that debate continues to go on. The government is involved now. Today scandal does not help. Rishaad these are just ask nations, but just accusations, but it does not help. Delisting,f all, the they need to release audited Financial Statements this year, but they cant have two years of losses, so one option that is not open is restating 2016, because that would make them two years in the red, and that is also grounds for delisting. A lot of headlines about Western Digital and the issues they are creating with legal action, but they are not the problem, right . What is the actual delay . Are they trying to get the financial things in order and so on and so forth . Insiders. Not we dont have any nonpublic information. They are clearly trying to get the deal done. Western digital has been a spanner in the works, deciding toshiba has a deal with Western Digital and they have threatened lawsuits to prevent the sale, so there are a lot of moving parts. This is a big, complicated haidi this is a distraction and they should just sell to get out of the way . I think that the lawsuits are a distraction, but im not counsel to toshiba. Toshibas counsel has publicly said as much. Western digital is just trying to get a leg up in the negotiations. I do believe they are trying to sell it. We are eager to see a deal done. Haidi for all of the government scandals plaguing toshiba, this is a broader japan inc. Story, isnt it . Policy . Punitive actions . Voting against directors . Corporate governance needs to be improved. That is a comment upon shareholders to stand up this week. Shareholders need to vote for better corporate governance. Shareholders need to put forward proxies. Corporates need to understand they need to treat minorities better. Employees need to stand up and somethingare doing wrong, it is better for the company and the long run to stand up now and admit to it and stand up now and say look, lets improve ourselves. So it is incumbent upon investors, management, and employees to stand up to improve corporate governance. Haidi easier said than done. Stay with us. We will get more in a moment. Things toshiba and these governance issues plaguing japanese corporates. This is bloomberg. Rishaad we continue our conversation about toshiba with 7675,anagement here at no surprise here. This year has seen extreme volatility for toshiba given the nuclear business, no earnings, now, well, huge problem trying to log off its memory chip unit as well. Is recommending voting against all directors amid repeated scandals. What gives at the end of the day . What changing horses right now, probably a terrible thing to be doing . You can vote against the directors. I dont think that will pass. Butink that is a sentiment, will not pass. Toshiba needs to focus. It is not a bad idea. They have already changed horses once in terms of the ceo. They need to get this done. They have massive issues to deal with, so you are right. Changing leadership is not the best idea in the next two months. Rishaad in 10 seconds or less, when this company be around in a year . Toshiba will be around, will it be listed as the question. Rishaad will it be called toshiba elevators . Maybe toshiba nuclear. Rishaad there we go. Oasis management. Coming up, after that small cap meltdown on tuesday, a recovery and hong kong as the trading day gets underway. This is bloomberg. Rishaad there we go. , we start theur trading day in hong kong. Counting down to that. 4 . Remarket off by languishingti still , 44 a barrel. Cyber attack reaching asia, stocks likely to be flat today. We have this Enigma Network roiling markets with sudden losses of 90 . I am Rishaad Salamat coming to you from bloombergs asia headquarters. Haidi i am haidi lun here in sydney. We are parsing some of the fed speak and other central bank remarks coming through overnight. Not moving the needle when it comes to expectations of where the fed goes with its tightening regime, but talking about the market valuations being high. The other thing is the imf overnight, which in the report downgrading u. S. Growth expectations, and specifically a trump expectations of reflation trade and fiscal stimulus. China ate markets in the open feeling that downward pressure, the shanghai composite losing. 4 . This comes after three days of gains. At the open, all sectors in the red with tech and financials leading the declines. It is a similar move for the hang seng index, the lowest since june 23. What happen with hong kong stocks yesterday at the close what 17 firms lost 40 of their close,rice just near the a market value of more than 6 billion. Traders suggesting this was due to some links with the companies underbrokerage which is , solatory investigations the hang seng index was resilient, although now losing ground, but a Broader Market move. Enterprise, growth , theprise, these markets stock markets index saw it plunged to the lowest level since august 2015. The growth Enterprise Market index here you can see it as opposed to the broader hang seng thex from the start of year, and this dramatic move we saw yesterday at the close, we will see if those 17 stocks that plunged about 40 in the last session continue to fall throughout the day. Another interesting move out of the pboc was the support that some traders say was given to the onshore and offshore yuan. At the close yesterday right before 4 00, the offshore yuan started to strengthen, and now stabilization and consolidation around those levels, but bb h market saying the pboc may have asianened by having its bank selloff dollars in hong kong. A lot of analysts betting for a stronger onshore yuan fixing because of inflows, including the bond connect. People are expecting it to start around july 3, guys. For that. Hanks a lot lines through from toshiba as we wait for this memory chip business being sold off. We will not have it today, as was hoped by toshiba. Western digital is a partner in that should business, saying Western Digital is according to toshiba management unfairly obstructing the sale of that memory chip business. Just seeing what else is happening at the moment, march next year apparently being, well, time to take a look at what is going on, a deadline now saying they hope to close this chip deal by march of next year. They were hoping to do it today, so this is all really in play still. Right, politics trumping, well, some policy. That is what some people are saying about obama care. Who knew . President s agenda hit another speed trump with republicans postponing a vote on a new health care bill. At least five gop member said they would block debate on the bill which was drafted in secret by mitch mcconnell. The delay is another setback on the republican sevenyear campaign to repeal and replace the 2010 of Affordable Care act. We will talk and we will see what we can do. We are getting very close, but for the country, we have to have health care, and it cant be obamacare, which is melting down. The other side is saying all sorts of things before they even knew what t