November 7, 2025 • 38 mins
Bloomberg Daybreak Weekend with Host Nathan Hager take a look at some of the stories we'll be tracking in the coming week.
- In the US – a look ahead to earnings from Walt Disney and Paramount-Skydance.
- In the UK – a look ahead to Portugal’s Web Summit.
- In Asia – a look ahead to China Singles’ day.
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:09):
This is Bloomberg day Break Weekend, our global look at
the top stories in the coming week from our Daybreak
anchors all around the world. Straight ahead on the program,
some big entertainment earnings are coming out this week. We'll
break down what to expect from Disney and Paramount Sky Dance.
I'm Nathan Hager in Washington.
Speaker 3 (00:26):
I'm krolyin Hepkea in London, where we're looking ahead to
Portugal's Web Summit as the country pivots to tech and AI.
Speaker 4 (00:33):
I'm dek Krisner looking ahead to Singles Day in China.
Speaker 1 (00:37):
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
eleven three y oh New York, Bloomberg ninety nine one, Washington, DC,
Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius
XM one twenty one, and around the world on Bloomberg Radio,
dot Com and the Bloomberg Business app.
Speaker 2 (01:01):
Good day to you. I'm Nathan Hager. We begin today's
program with a look at some upcoming earnings reports in
the entertainment sector. We get results this week from both
Walt Disney and Paramount sky Dance. For more on what
to expect from both these entertainment giants, we are joined
by Bloomberg Intelligence analyst Geita Ranganathan and Bloomberg Surveillance co
(01:23):
host Paul Sweeney, who spent a better part of his
career covering the media. Great to have both of you
with us on the weekend program. And let's start with Disney.
Obviously the biggest entertainment company in the world. Gita, what
are some of the key things we need to watch
from the House of Mouse this time around.
Speaker 5 (01:43):
Yeah, so, I think, as usual, the big thing that
we're watching for is the Parks segment. This is the
biggest segment for Disney, brings in about sixty percent of
their profits. So obviously, you know, any trends, any consumer trends,
are very very important. One of the key things that
you know, people have been concerned about for Disney for
this year is the competition from the opening of Epic
(02:06):
Universe in Florida, which happened in May. When they reported
last they actually showed a really good results. They were
able to hold their ground despite all of that competition,
So I think we're expecting to see more of that,
you know, resilient demand going into the quarter. And then
the other big thing that we're watching for is really
(02:27):
the streaming business. So in August, ESPN launched its streaming
platform for the very first time. We're going to look
to see if Disney management team provides any numbers in
terms of early adoption and just to see how that
launch has been going.
Speaker 2 (02:46):
Paul, you of course follow this company very closely as well.
I mean, I gotta admit when it comes to Disney streaming,
I sometimes forget about my Disney Plus subscription. I mean,
am I part of the problem here? I mean, how
do you see Disney navigating the very competitive streaming universe.
Speaker 6 (03:04):
Yeah, I think, Nathan, it all comes down, as it
usually does in the media business, to content, and Disney
has some of the absolute best content in the world,
including live sports. So when you put that all together,
it's just a question of how you deliver that content
to people. And when I came up into business, it
was through the cable bundle, it was through satellites like DirecTV.
(03:26):
Now it's streaming, and so you just got to figure
out how do you most efficiently get that content to
your client when they want your customer, when they want
it where they want it, and charge a price that
is profitable for you, and Disney's has a great track
record of doing that. Netflix paved the way and streaming
and really showed kind of the world how this new
media models can be. And now what we've seen from
(03:49):
the legacy media companies over the last ten years or so,
as Githa writes about with her research, is these legacy
media companies are trying to catch up. They're trying to
transition from a model where the cable TV bundle was
really a way to go to now streaming and Disney
is really doing a good good job, and I think
the street believes that they can certainly be a really
big player in the streaming business.
Speaker 2 (04:09):
Yeah, Githor, we've talked before about how Netflix has expanded
its own streaming strategy with live events, getting into sports
as well, and now with Disney introducing its own streaming
sports platform with ESPN Plus, is it kind of like
legacy media playing catch up again?
Speaker 5 (04:32):
Yes, a little bit of that, but you know the
way that they're kind of positioning ESPN, So Disney has
to be really careful. They're kind of walking a tightrope
here because remember they have the leading brand when it
comes to linear TV with ESPN. ESPN generates about fifteen
billion dollars from the linear TV model ear in and
ear out. You know, we're talking about affiliate fees. They
(04:54):
are the highest affiliate fee generator across the industry. They
charge something like ten dollars per month per subscriber, so
absolutely way way above competitors who charge maybe you know
or other channels that are at like one dollar or
one and a half dollars per month. So obviously they
have to be very careful to protect that legacy TV model,
but at the same time, they want to be able
(05:16):
to appeal to consumers who are outside the PATV ecosystem.
And there are a lot of consumers, by the way,
outside the PATV ecosystem. We're talking about sixty five to
seventy million households that do not take a PATV or
that do not subscribe to a PATV bundle, and so
it's really important to be able to, you know, provide
access to sports content and that's exactly what ESPN is
(05:38):
going after and we think that so far, you know,
they've done a really good job with that in terms
of putting their content out there. You talk about catchup
and are they a little bit late to the game. Yes,
maybe in terms of Disney Plus, but again with ESPN,
they had to be really measured, really deliberate, make sure
that they don't cannibalize, you know, their linear TV business,
(06:00):
which is really their cash go.
Speaker 2 (06:02):
And Paul, you mentioned the content slate that Disney has
as well. We haven't even talked about what, you know,
their traditional business, what's coming in the box office? What
are we expecting there?
Speaker 6 (06:13):
You know, it's interesting, as Githa writes in her research,
Disney is just in a phenomenal place from a content
creation perspective. They've got obviously all the Disney product that
has propelled the company for decades, but then they also
have the Star Wars stuff and the Marvel stuff, and
they just seem if they see something good out there
over the past ten or fifteen years, they went out
and bought it. So they have the best content in
(06:35):
the business and they usually lead box office by a
wide margin, although Warner Brothers is having a very good
year this year, so again Disney's at a spot you know.
You know, they bought the media assets, including the studio,
from Fox, so they have all of that content as well.
So from a content perspective, nobody really can compete against them,
(06:55):
and so they're in a great spot there, and they
monetize it better than anybody else, whether it's through the
cable bundle, through the streaming service, you know, making bringing
some of the content to the theme parks. That's kind
of been the magic of Disney as a company and
as a stock over the years, their ability to really
monetize their content as well or better than anybody else
out there.
Speaker 2 (07:15):
You know, we haven't even talked about the linear networks yet.
They've got ABC as well, and I think this is
going to be the quarter since the controversy surrounding Jimmy Kimmel,
isn't it. Is this going to be a hindrance potentially
the traditional broadcast and cable networks.
Speaker 5 (07:34):
Kitha, Yeah, So, I mean, you know, one thing that
all media companies, this is not just Disney, have to
contend with is cord cutting. Is a lot of pressure
with the linear TV networks. Of course, you had the
Jimmy Kimmel, you know, controversy. One thing that we're going
to be looking for when they report is whether that
Jimmy Kimmel's suspension actually hurt their streaming numbers because we
(07:57):
did get reports that users were kind of canceling, you know,
their subscriptions. Again, I don't think it's going to be material,
but this is something that all media companies have to
contend with. What is the plan that they have for
their networks? For Disney, ABC is a very important property
because it shares a lot of the sports rights with ESPN.
(08:19):
You know, they do show a lot of Monday night
football games. You know, they have NBA games, There's a
lot of college football. So you know, ABC is still
a very very important property to them. Yes, they have
a whole bunch of other cable TV networks, you know,
think about the whole Disney suite, you know, National Geographic,
all of those channels that are definitely insecular decline. But
(08:42):
so far there are no plans, at least publicly that
that Disney has said that they want to you know,
necessarily separate that business or sell that business. So again
we're kind of contending here with the melting ice cube.
Speaker 6 (08:53):
And Nathan you know, interesting on the subject. Laura Martin
Research Channels that need them in company came out with
a really provocative note about a month ago, saying that
Disney should just shut down the ABC network, make it
go dark, don't sell it, just shut it down. It's
a declining business, and it's really the only business business
that is under federal regulation. And if you want to
get out of the way President Trump and maybe some
(09:16):
heavy handed regulation, just sell it and or just shut
it down. Which I thought was an interesting topic.
Speaker 2 (09:21):
Yeah, I'm really interesting. Indeed, we're speaking with Paul Sweeney,
host of Bloomberg Surveillance and get the wronganathen of Bloomberg Intelligence.
Let's shift over to Paramount sky Dance. The first quarter
that they're going to be reporting as Paramount sky Dance
under the new ownership with David Ellison at the helm,
a lot of job cuts, a lot of changes. Getha,
(09:42):
How could that play into the results?
Speaker 5 (09:44):
Yeah, we really expect the upcoming results to be a
big reset in the whole Paramount sky Dance outlook. I mean,
this will be the new management team's first big reveal
off its operational of its financial plans. As you just mentioned,
there's to be a mix of major cost cuts to
improve efficiency and there'll probably be some major investments that
(10:05):
they announced to support you know, long term growth, especially
on both on the content side as well as on
the tech side. We have to remember that this was
a company that was undermanaged, underinvested in for years, so
you know, really looking forward to see what they have
to say. But of course, the big looming question other
than results is are they going to make or are
they going to increase their bid for Warner Brothers Discovery.
Speaker 7 (10:29):
That is really the big.
Speaker 5 (10:30):
Big question.
Speaker 2 (10:31):
Absolutely I wanted to get into that with you, Paul.
Is Paramount Skydance is going to have to become Paramounts Skiddance,
Warner Brothers Discovery or whatever other names they're going to
have to put at the end of their title.
Speaker 6 (10:42):
Yeah, you know, it's interesting they have an enterprise value
of thirty billion dollars in at one point in time
that was a big media company. In today's world, it
really is not, and I think, you know, it's kind
of a lot of folks will call it, you know,
substandard in size, but you take a look at Warner
Brothers Discovery, it is three times the size of Paramount
at ninety billion dollars of enterprise value.
Speaker 8 (11:01):
So it's it's.
Speaker 6 (11:03):
Really a big something, a big pill to swallow there.
So they're going to need some help.
Speaker 5 (11:08):
Now.
Speaker 6 (11:08):
It's nice when Larry Elson is the CEO's father that
lends some support there, But they're going to need some
partners probably if they want to pursue this. Here so
be aching to see how it plays. And as Githa
well knows, this is a company that is now officially
in play. I mean the CEO said it, the board
has said it, and so it's just a question of
who and when, I think at what price.
Speaker 2 (11:30):
Yeah, it would be fascinating to see. I given the
merger between Disney and Fox just a few years ago,
if we see yet another major media entertainment merger like this,
where could that position Paramount against Disney with competing giant
content slates.
Speaker 6 (11:48):
KEITHA.
Speaker 5 (11:50):
Yeah, I think it puts them really within striking distance
of Disney. It puts them within striking distance of even
I would say in Netflix, because they're going to have
a fantastic content. They're going to have some best best
in class, I would say IP so really really puts
them on the map because right now, if you kind
of look at Paramount, they have about eighty million streaming subscribers.
(12:11):
You put that together though with HBO, Max which has
about one hundred and thirty million. You already get to
two hundred million, which is above what Disney has in
terms of streaming subscriptions, So definitely makes them a major player,
you know, somebody that you have to take note of,
and gives them a lot of firepower in terms of
growing both the studio business as well as the streaming platforms.
Speaker 2 (12:33):
Yeah, really busy entertainment earnings week on tap Forest. Thanks
to both of you for this. That's Paul Sweeney, co
host of Bloomberg Surveillance and geta ronganath and media analyst
from Bloomberg Intelligence, and coming up on Bloomberg Daybreak Weekend
will preview Portugal's Web Summit, one of the largest of
its kind in Europe. I'm Nathan Hager, and this is Bloomberg.
(13:07):
This is Bloomberg day Break Weekend, our global look ahead
at the top stories for investors in the coming week.
I'm Nathan Hager in Washington. Up later in our program,
Singles Day in China is coming up. We'll get a preview.
But first Portugal. It's looking to accelerate the growth of
its AI, technology and startup industries. For more than a decade,
the country's been louring top international business talent through its
(13:29):
Golden Visa program, but now it's also playing host of
billion dollar investments from the likes of Microsoft and Nvidia
in new AI data centers. With the Web Summit in
Lisbon taking place in the next few days, we want
to get more from Bloomberg Daybreak Europe Banker Caroline Hepger
in London.
Speaker 3 (13:46):
Nathan Portugal's Web Summit, which Bloomberg once dubbed the Davos
for Geeks, is one of the largest tech summits in Europe.
In the next few days, the forum in Lisbon will
hold discussions on topics ranging from AI to cybersecurity to fintech,
whilst playing host to speakers from Meta all the way
to tennis legend Maria Sharapova. It comes as the country
(14:10):
looks to consolidate its status as a tech haven and
to court investment in its burgeoning AI and startup industries.
Now in the last few weeks, investors have grown increasingly
concerned though, about the prospect of stretchtech, dot valuations and
maybe even an AI bubble. In Vidias, Jensen Wong spoke
(14:31):
to Blueberg's Ed Ludlow and tried to calm the market's nerves.
Speaker 8 (14:35):
I don't believe we're in an AI bubble, and the
reason for that is we're going through a natural transition
from an old computing model based on general purpose computing
to accelerated computing. We also know that AI has now
become good enough because of reasoning capability, research capabilities, its
ability to think. It's now generating tokens and now generating
(14:56):
intelligence that's worth paying for to the point where I'm
paying lots of it.
Speaker 3 (15:01):
That was Nvidia's Jensen Won speaking to Bloomberg's Ed Ludlow,
well as tech CEOs, then seek to reassure investors that
AI spending shows no signs of abating. Portugal is positioning
itself as one of the beneficiaries of Europe's AI build out.
How far, though, can the country's growing tech scene thrust
its economy into the twenty first century? Joining us now
(15:24):
is Bloomberg's Portugal bureau chief, Sofia Auto Ecosta. Sofia, good
to speak to you. So shall we start with the
Web Summit, which is one of the largest of its
kind in Europe? What do the main themes this year
that they'll be talking about actually kind of tell us
about Portugal's priorities.
Speaker 9 (15:43):
It's kind of the greatest hit of the biggest talking
points across AI and tech at the moment. So we
do have AI and ethics really exploring how to govern
this increasingly important industry in Europe and how really to
kind of align it with human values. We also have
the future of work climate, tech growth and startups, you
(16:06):
name it. And we do have the Finance Minister from
Portugal attending and expected to speak. So that really shows
you where the priorities life for this new government that
followed the elections earlier in May this year.
Speaker 7 (16:19):
That's really kind of.
Speaker 9 (16:20):
Throwing investment and subsidies at this industry, trying to position
Portugal as one of the forefront economies to invest in
in the European Union.
Speaker 3 (16:31):
Sophia, you've been writing about the town of Scenes, which
is on Portugal's dramatic Atlantic coast. Then actually this could
be a data center, a tech hub, not just for
Portugal but maybe for Europe. Tell us about what's been
happening there in terms of deals and breaking ground.
Speaker 9 (16:51):
So this is really interesting because this is a very
small town, about fifteen thousand residents. I went down there.
It's about an hour and a half's drive from our
Lisbon office. And what's happening there is investment from Chinese,
US European investors and.
Speaker 7 (17:11):
Quite a lot of it.
Speaker 9 (17:12):
So my interest was, you know, why are billions of
dollars pouring into this really small Portuguese town And one
of them is what's set to be one of the
biggest data center projects in the European Union. And it's
one point two gigawatts. Now, Karlyn, I have no idea
what what one point two gigawatts is, So just to
(17:32):
put it in context, that's about as much as the
entire metropolis of Lisbon consumes, so it's quite a lot
of energy. Now why does this matter? I mean, this
is a big investment. It's a ten billion dollar data center.
This is huge for Portugal, and Portugal is really trying
to say, hey, we're not just tourism, even though it
accounts for about a quarter of GDP and a lot
(17:56):
of jobs. So incredibly important of this still for the economy,
but that was important to bring the economy out of
the crisis, out of the not just the financial crisis,
but the sovereign deck crisis. But now, okay, let's invest
in the future. This is where it's at. The government
is making it easier for these companies to come here.
(18:18):
I spoke to the Stark Campus Data Center CEO and
he said, you know, we were welcomed with open arms.
And the Chinese battery maker calb is the fourth largest
battery maker in the world, so this is quite significant
as well. That's a two billion euro investment. They just
broke ground on their first battery factory outside of China.
(18:40):
They picked seeing this tiny, tiny town as the gateway
into the European Union and this was really heralded by
both sides of the political spectrum as a big step
forward for Portugal in terms of the green energy transition.
Speaker 3 (18:57):
Yeah, lots of visit is bit of population in Portugal
only just about ten million people. But the focus on
data centers, you know, raises the same question for Portugal
as across Europe, which is that the AI boom is
power hungry. There will be growing power demands. There's a
worry about whether it's going to strain Portugal's energy system.
(19:19):
I mean, we did see blackouts in Portugal earlier this
year and that was blamed on a number of factors,
but one of them was you know the green and
clean energy system, there is the infrastructure going to be
able to cope.
Speaker 9 (19:33):
So that's the big question, and there's been a lot
of discussion at the government level but also at the
company level over who really should take the lead on
investing in the grid infrastructure here.
Speaker 7 (19:46):
We actually had EDP that's.
Speaker 9 (19:48):
Portugal's biggest utility today, saying that it plans to allocate
a significant amount of money into investing in the grid
here in Portugal, but.
Speaker 7 (19:59):
Also in Spain where they have a market.
Speaker 9 (20:01):
And I'll just tell you that number three point six
billion euros in electricity, grids and infrastructure through twenty twenty eight.
Speaker 7 (20:09):
That's a big number, Caroline. So the problem here, or
I mean, I.
Speaker 9 (20:13):
Guess the issue I wouldn't call it a problem, is
that Portugal uses renewable energy for about seventy percent of
its energy consumption, so that's a pretty big proportion, and
it still also imports a bit of energy, a lot
of that from Spain. So whether to kind of reduce
the reliance on the Spanish grid, that's one question. Whether
(20:37):
to improve the infrastructure here and whether it makes sense
for private companies to do that and share the load
with the government these are all still questions and there's
still a lot of looking into what happened around that blackout.
The Portugal does like to blame its neighbors in Spain
for that.
Speaker 3 (20:55):
Indeed, in terms of startups, Portugal's also got an interesting
scene there Sword Health, this startup that uses AI for
medical rehabilitation, for example, that has raised quite a lot
of money and is now more valuable than everything other
than about five listed companies in Lisbon. Is that part
(21:17):
of a kind of growing scene as well? If you're
seeing data centers, you're seeing all of this interest. Is
there also a bit of a growing startup scene in Portugal?
Speaker 9 (21:26):
Yeah, there is, and you know, there has been an
attempt for the past decade or so to really nurture
startups in Portugal. But I think this one really grabbed
my attention, Caroline, because it was valued at three billion
dollars in a financing round last year, and this year
in June it was valued at four billion dollars, and
(21:47):
as you said, this is this is pretty significant for Portugal.
It's one of the most valuable private companies for sure,
and one of the most valuable companies you know, full
stop in Portugal and It's also backed by Founders fund,
so very high profile investors looking at this company and.
Speaker 7 (22:05):
What it does is obviously quite interesting.
Speaker 9 (22:07):
It's looking at pain management solutions and physical rehabilitation using AI,
obviously a buzzword for investors at the moment. But you know,
the fact that you can found these companies in Portugal,
you can also stay here not necessarily have to go
all the way to Silicon Valley to scale suggests that
(22:28):
the country is taking these things more seriously, is understanding
that these companies need more of an infrastructure around them,
and the government actually just recently said it would cut
taxes for companies, which would be a big help as well.
Speaker 3 (22:43):
Okay, that's interesting in terms of what the government is
hoping for and what the public in Portugal make of
all of this. Portugal still got a GDP per capita
that is amongst the lowest in Western Europe, so there
must surely be a desire for the economy to do
you well, But what is the government's political ambition, what's
(23:03):
the response from the public.
Speaker 9 (23:05):
So there's always a tension between the foreign money that's
coming into Portugal, which has obviously been hugely important for
the economy, not just these kind of investments into tech,
but also from overseas residents coming to live here. Portugal
has seen a big rise in American, Chinese, Russian citizens
(23:28):
coming to live here. There's a tension between that and
what it can do for the country and the country's economy.
But actually, you know what that means for the locals
who have always been here and are seeing the price
of real estate go up beyond affordable levels. The housing
affordability in Portugal has actually seen the worst decline in
(23:51):
the European Union in the past decades. So it's a
huge tension point for the Portuguese public here. When I
went down to Size and spoke to locals there, you know,
they said, it's all good and we respect what the
government's trying to do in bringing Chinese and American investment here.
But our buildings are, you know, crumbling. We only have
(24:13):
one healthcare center, the hospitals far away, the roads are cracking.
You know, where is the investment actually in locals and
in what we care about, and in creating jobs for
people who really still struggle to pay the rent and
their rising energy bills and send their children to school.
(24:36):
So there's always that tension between local interests and what
the government is doing at the macro level, which is
attrapped as much foreign investment as it can.
Speaker 3 (24:45):
Very interesting. Sophia, thank you so much for spending some
time with us. That is blimpag's Portugal bureau chief, Sofia
auto Ecosta. Of course, this comes ahead of the Web Summit,
which takes place in Portugal in the next few days,
and we'll continue our full coverage and analysis of Europe's
AI build out here on Bloomberg Radio. I'm Caroline Hepga
(25:09):
in London. You can catch us every weekday morning for
Bloomberg Daybreak. You at beginning at six am in London.
That's one am on Wall Street.
Speaker 2 (25:16):
Nathan, Thanks Caroline. Man coming up on Bloomberg day Break. Weekend.
Singles Day in China is approaching. We'll check in on
what's become the largest shopping day in the world. I'm
Nathan Hagar and this is Bloomberg. I'm Nathan Hager in
(25:40):
Washington with your global look ahead at the top stories
for investors in the coming week. Now we want to
head to China, where Singles Day will be celebrated in
the coming week. It's the unofficial holiday that's become the
largest shopping day in the world, and it's spreading across
Southeast Asia. Let's get to the host of the Daybreak
Asia podcast, Doug List for a preview.
Speaker 4 (26:01):
Nathan, retailers in China are not taking any chances this year.
Many have stretched their sales to as long as five weeks. Now,
we know the Chinese economy has been struggling. Weak domestic
demand has become call it a characteristic and so e
commerce giants like Ali, Babajd dot Com are working to
entice shoppers. The question is whether they'll succeed. For a
(26:24):
closer look, I'm joined by Bloomberg analyst Katherine Limb. She
covers the retail and e commerce industries in Asia from
our bureau in Singapore. Catherine, thank you so much for
making time to chat with me. Can we talk about
the big picture? First? Talk to me about expectations and
the extent to which these big retail names are concerned,
(26:44):
perhaps about underperforming.
Speaker 10 (26:47):
We had a very week third quarter in China and
that's really pushing retailers to bang the book and try
to get more out of singles Day and in fourth quarter.
And the reality is, as I speak to retailers over
the last two weeks itself, Singles Days off to a
fairly weak start. You know, we're halfway through the shopping
(27:10):
festival right now. I do see more promotions coming up
and keeping the fingers crossed that that's enough to really
try and push thing ahead.
Speaker 4 (27:18):
So, Catherine, I'm wondering about the role of the government
in trying to make Singles Day a success. What steps,
if any, has Beijing taken.
Speaker 10 (27:28):
Well, we've seen the offer of you know, vouchers perks.
They are also supporting e commerce platforms and retailers to
try and come up with better service levels. But at
the end of the day, it's really the confidence of
the consumers right now, particularly if property prices as at
(27:48):
value still says very low incomes outlooks still stay uncertain,
it's going to be hard for consumers to want to
spend more in you know, an environment of uncertainties.
Speaker 4 (28:00):
About US brands like Apple and Nike, what are the
expectations for these brands?
Speaker 11 (28:06):
Now?
Speaker 10 (28:06):
What isn't just thing is that you know, for these
two brands, you know, they were off to a very
week start since the beginning of the year, and we'll
actually start to see things coming up better for them
different fundamental reasons. Off a lower base, but they are
creeping up. And I'll take Nike for instance. On the
first day of Ali Baba sale, they were off to
(28:28):
a very weak start. They did not lead the sportswear
sales ranking as they did before in the last two years.
And you know, two weeks down the road, they've actually
creep up to being the third, nowhere near the first,
but you know, still a good you know, improvement, and
again I'm hoping to actually see more over the next
two years.
Speaker 4 (28:47):
So do you think it's more likely that Chinese consumers
will favor the local brands this year, perhaps more so
than they have in the past.
Speaker 10 (28:54):
I don't think it's going to be that this thing
this year. It's moll about, you know, the value proposition
that on the table for the consumers. We are at
a somewhat balance point between nationalism, being very nationalistic about
local brands itself and foreign brands. At the end of
the day, it is what is on the table at
a good price, you know, for the consumers, and they
(29:15):
will be willing to take that if it comes to Not.
Speaker 4 (29:18):
A day goes by when we're not discussing artificial intelligence,
and I'm curious about the way in which companies like
JD and Baba are using AI to drive sales this year.
Speaker 10 (29:29):
Well, there's lots of you know AI shopping assistanms, lots
of marketing push, you know, just based on what you
are browsing. It's a lot more back end rather than
you know, what we see as consumers itself. But clearly,
you know, they know what we are looking at and
they are pushing these items, you know, repeatedly to the
(29:49):
face of the consumers to try and get the conversion
rates to actually go up. So you know, this is
definitely a good period during Singles Day to test start
some of these algorithms as well as these programs, because
that's where they're going to actually try and improvise on
that for twenty twenty six.
Speaker 4 (30:08):
So as long as we're talking about technology, how has
the smartphone business been performing on the mainland.
Speaker 10 (30:15):
Well, you know, definitely we are still seeing some form
of subsidies coming through from the government, so that's actually
helping iphoned seventeen model. So far, the platforms, whether it's
JD dot Com, Ali Baba's team, or they've been actually
pushing for more sales of it, and I'll actually like
to throw in that mate one which has actually ventured
(30:38):
into speedy delivery or quick commerce for that matter. They
are also now being able to actually deliver new iPhones
to you, like, you know, within an hour.
Speaker 4 (30:49):
So we know, Singles Days started in China and since
then it's spread to many parts of Southeast Asia. So
I'm curious away from the mainland when you look at
other jurisdictions. I know you're in Singapore, I'm also thinking
about Hong Kong, even Taiwan. Are there other jurisdictions that
are expected to perform, let's say, better than the mainland.
Speaker 10 (31:08):
I think if we actually look firstly at Singles Day,
Singles Days no longer about China, and I think you're
right on that that we're also seeing Ali Express, you know, Talubau, Globo,
JD dot Com Global also launching promotions and campaigns for
this Singles Day outside of China. So are they doing better?
I think yes for certain jurisdiction like Singapore for Southeast Asia,
(31:34):
And it's really because we're off from a very low
base and we're starting to actually see more of those
value propositions coming through from Maidi and China products, and
you know they are actually very decent for the price
that you're actually paying for them.
Speaker 4 (31:49):
So Catherine, what about experiences, whether it's entertainment or even
visiting a restaurant? Are these industries expected to do well?
Speaker 10 (31:57):
That has actually taken off during d long National Day holiday.
And you know, when you talk about restaurants the consumption itself,
let's not forget that. You know, there is now the
counter coming in from takeaways, food deliveries. And again, you know,
I'll go back to what I've just mentioned about the convenience,
(32:18):
you know, the east of it. You know, we've actually
seemed the latest catering or restaurant services sales continue to
actually slowe down. That may be a bit of uptick
in October. The overall scheme of things, I think more
people are actually you know, doing food deliveries rather than
going to the restaurants.
Speaker 4 (32:39):
Catherine, we'll leave it there, Thank you so very much.
Bloomberg's Katherine Lim our senior analyst covering both retail and
e commerce across the APAC. From our bureau in Singapore,
we go to Hong Kong next, where the Global Financial
Leaders Investment Summer took place over the last week. That's
where we caught up with Goldman Sachs CEO David Solomon.
(33:00):
He spoke with Bloomberg TV host Yvonne Mann and David Nglace.
The conversation started with a question about the US China
trade truths.
Speaker 11 (33:09):
I think at the moment, you know, a de escalation
is a good thing, but there's obviously a lot of
work to do to really arrive at a real stable.
Speaker 12 (33:19):
Deal that can endure, you know, over a period of time.
Speaker 11 (33:22):
I'm encouraged by the prospect of a potential visit from
the US President that was telegraphed in the fall. But
for the moment, you know, I did not think the
escalation on either side was constructive, and so you know,
I much prefer a de escalation.
Speaker 12 (33:34):
I think both both sides.
Speaker 11 (33:37):
Really had a purpose in that meeting to talk constructively,
to have a more de escalated environment, and that allows
now for constructive conversations as.
Speaker 12 (33:46):
They move forward.
Speaker 13 (33:47):
One year truce though between the two is that a
good or bad thing? I mean, what did to do
in terms of business sentiment when there was a twelve
month time frame?
Speaker 11 (33:54):
Now it's better then, it's better than an escalation at
on reasonable levels, which is kind of where we were,
you know, over the most recent time. Trade negotiations are
complicated and there are a lot of issues on the table.
They need thoughtful responses and responses that can be durable. Yes,
there's some uncertainty because it's a one year delay at
all of this, but it's also a realistic period of
(34:15):
time to try to get the right kind of deal
done so both economies can move forward in a constructive way.
And look, these are the two most important economies in
the world. I think it's very important that you know,
we arrive in a better place where we can both
participate constructively with each other in the global growth of
the world.
Speaker 14 (34:32):
I mean, speaking of let me borrow your phrase, participate.
There's been a resurgence in equity capital market raising here.
Speaker 5 (34:39):
In Hong Kong.
Speaker 14 (34:40):
A lot of the Chinese companies, tech or otherwise are
raising capital for the future. I want to get your
sense as someone who sits in New York, you travel,
of course all around the world. Is there a lot
of appetite now from US based investors to participate by
giving that capital to Chinese companies right now? In order
to do there's you know, I realize there.
Speaker 11 (35:00):
An sure, there's.
Speaker 12 (35:02):
More appetite for it than there was twelve months ago.
Speaker 11 (35:04):
I remember actually last November sitting in a dinner in
the United States with a group of US investors and
this topic came up, and there were a couple of
investors that basically said, we all should be looking to China.
Speaker 12 (35:19):
And the reason, the reason that had evolved that way
is if you look.
Speaker 11 (35:23):
Last fall, the prices had gotten so cheap, the capital
flows had moved so in the other direction that you
just knew that things would come more into balance and
there'd be a recycling.
Speaker 12 (35:34):
And we've seen that recycling.
Speaker 11 (35:35):
You've seen a big move and prices year over year,
you've seen more foreign capital come in.
Speaker 12 (35:39):
And start to participate.
Speaker 11 (35:41):
That's a fundamentally different question about the big capital allocators
really fundamentally shifting their allocations up to be higher again.
Speaker 12 (35:49):
So far, direct.
Speaker 11 (35:50):
Investment in China has come down, and I think one
of the big questions is until we understand kind of
the trade and the geopolitical landscape, it's harder see significant
shifts back to higher levels of foreign direct investment and.
Speaker 12 (36:04):
More capital allocation.
Speaker 11 (36:05):
But for the moment, those flows are making for a
better IPO market here and more opportunities here.
Speaker 12 (36:11):
How do you look at that?
Speaker 13 (36:12):
I mean, the whole competition has kind of changed into
the dynamics, right. You have so many of these Chinese
banks now that are doing some of these deals with
Chinese companies. When it comes to going public, how does
Goldman Sachs compete.
Speaker 11 (36:24):
Well, you know, goldmin Sex competes just fine, thank you
very much. When it comes to taking public companies public
on a global stage, Golden Sex is a leading position.
Speaker 12 (36:32):
We've had a leading position for fifty years.
Speaker 11 (36:35):
And there's always competition in the business, and you know,
we'll continue to compete, so we welcome competition. But we
have a pretty active footprint out here, as you well know.
They have a pretty active footprint around the world. And look,
one of the big advantages. I just had breakfast with.
Speaker 12 (36:49):
A company here that.
Speaker 11 (36:52):
It's actually a Chinese company, but the you know, the CEO,
the founder was here and why does he value Golden Sex.
He values Golden Sex because we have a sess to people, information,
capital markets all over the world, you know, not just
in a narrow portion of the world.
Speaker 12 (37:05):
And so it's a competitive business. It always will be.
But I'm comfortable that we have the resources in the
position to compete.
Speaker 14 (37:11):
Effectively, right and you know, you know I've been greeting up,
of course, and I understand your history. You guys have
been doing business in China very long time. You guys
took the big banks public back twenty plus years ago.
So I mean you're headed there in my understanding, after here,
you're going to China. Of course you speak with regulators,
what have you? What's your long term vision for difranchise
(37:32):
in Greater China? What do you want what do you
want your franchise to become longer?
Speaker 11 (37:37):
I think you have to look at Goldman Sachs and
just think strategically that as a global firm, that when
you think about our businesses, what are our two big
businesses global banking and markets, the investment banking and trading
business and asset and wealth management. And so if you
think about how we think strategically about the firm, what
advantages does the firm have besides the fact that we
have at scale businesses, we're very good at the those activities,
(38:00):
we're leaders of those activities, and we have a right
to compete and win, you know with those activities.
Speaker 4 (38:05):
That was David Solomon, CEO of Goldman Sachs, speaking with
Bloomberg TV host Vonn Men and David Nglace at the
Global Financial Leader's Investment Summit in Hong Kong. I'm Doug Krisner.
You can catch us weekdays for the Daybreak Asia podcast.
It's available wherever you get your podcast.
Speaker 2 (38:23):
Nathan, Thanks Doug, and that does it for this edition
of Bloomberg Daybreak Weekend. Join us again Monday morning at
five am Wall Street Time for the latest on markets
overseas and the news you need to start your day.
I'm Nathan Hager. Stay with us. Top stories and global
business headlines are coming up right now.
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:09):
This is Bloomberg day Break Weekend, our global look at
the top stories in the coming week from our Daybreak
anchors all around the world. Straight ahead on the program,
some big entertainment earnings are coming out this week. We'll
break down what to expect from Disney and Paramount Sky Dance.
I'm Nathan Hager in Washington.
Speaker 3 (00:26):
I'm krolyin Hepkea in London, where we're looking ahead to
Portugal's Web Summit as the country pivots to tech and AI.
Speaker 4 (00:33):
I'm dek Krisner looking ahead to Singles Day in China.
Speaker 1 (00:37):
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
eleven three y oh New York, Bloomberg ninety nine one, Washington, DC,
Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius
XM one twenty one, and around the world on Bloomberg Radio,
dot Com and the Bloomberg Business app.
Speaker 2 (01:01):
Good day to you. I'm Nathan Hager. We begin today's
program with a look at some upcoming earnings reports in
the entertainment sector. We get results this week from both
Walt Disney and Paramount sky Dance. For more on what
to expect from both these entertainment giants, we are joined
by Bloomberg Intelligence analyst Geita Ranganathan and Bloomberg Surveillance co
(01:23):
host Paul Sweeney, who spent a better part of his
career covering the media. Great to have both of you
with us on the weekend program. And let's start with Disney.
Obviously the biggest entertainment company in the world. Gita, what
are some of the key things we need to watch
from the House of Mouse this time around.
Speaker 5 (01:43):
Yeah, so, I think, as usual, the big thing that
we're watching for is the Parks segment. This is the
biggest segment for Disney, brings in about sixty percent of
their profits. So obviously, you know, any trends, any consumer trends,
are very very important. One of the key things that
you know, people have been concerned about for Disney for
this year is the competition from the opening of Epic
(02:06):
Universe in Florida, which happened in May. When they reported
last they actually showed a really good results. They were
able to hold their ground despite all of that competition,
So I think we're expecting to see more of that,
you know, resilient demand going into the quarter. And then
the other big thing that we're watching for is really
(02:27):
the streaming business. So in August, ESPN launched its streaming
platform for the very first time. We're going to look
to see if Disney management team provides any numbers in
terms of early adoption and just to see how that
launch has been going.
Speaker 2 (02:46):
Paul, you of course follow this company very closely as well.
I mean, I gotta admit when it comes to Disney streaming,
I sometimes forget about my Disney Plus subscription. I mean,
am I part of the problem here? I mean, how
do you see Disney navigating the very competitive streaming universe.
Speaker 6 (03:04):
Yeah, I think, Nathan, it all comes down, as it
usually does in the media business, to content, and Disney
has some of the absolute best content in the world,
including live sports. So when you put that all together,
it's just a question of how you deliver that content
to people. And when I came up into business, it
was through the cable bundle, it was through satellites like DirecTV.
(03:26):
Now it's streaming, and so you just got to figure
out how do you most efficiently get that content to
your client when they want your customer, when they want
it where they want it, and charge a price that
is profitable for you, and Disney's has a great track
record of doing that. Netflix paved the way and streaming
and really showed kind of the world how this new
media models can be. And now what we've seen from
(03:49):
the legacy media companies over the last ten years or so,
as Githa writes about with her research, is these legacy
media companies are trying to catch up. They're trying to
transition from a model where the cable TV bundle was
really a way to go to now streaming and Disney
is really doing a good good job, and I think
the street believes that they can certainly be a really
big player in the streaming business.
Speaker 2 (04:09):
Yeah, Githor, we've talked before about how Netflix has expanded
its own streaming strategy with live events, getting into sports
as well, and now with Disney introducing its own streaming
sports platform with ESPN Plus, is it kind of like
legacy media playing catch up again?
Speaker 5 (04:32):
Yes, a little bit of that, but you know the
way that they're kind of positioning ESPN, So Disney has
to be really careful. They're kind of walking a tightrope
here because remember they have the leading brand when it
comes to linear TV with ESPN. ESPN generates about fifteen
billion dollars from the linear TV model ear in and
ear out. You know, we're talking about affiliate fees. They
(04:54):
are the highest affiliate fee generator across the industry. They
charge something like ten dollars per month per subscriber, so
absolutely way way above competitors who charge maybe you know
or other channels that are at like one dollar or
one and a half dollars per month. So obviously they
have to be very careful to protect that legacy TV model,
but at the same time, they want to be able
(05:16):
to appeal to consumers who are outside the PATV ecosystem.
And there are a lot of consumers, by the way,
outside the PATV ecosystem. We're talking about sixty five to
seventy million households that do not take a PATV or
that do not subscribe to a PATV bundle, and so
it's really important to be able to, you know, provide
access to sports content and that's exactly what ESPN is
(05:38):
going after and we think that so far, you know,
they've done a really good job with that in terms
of putting their content out there. You talk about catchup
and are they a little bit late to the game. Yes,
maybe in terms of Disney Plus, but again with ESPN,
they had to be really measured, really deliberate, make sure
that they don't cannibalize, you know, their linear TV business,
(06:00):
which is really their cash go.
Speaker 2 (06:02):
And Paul, you mentioned the content slate that Disney has
as well. We haven't even talked about what, you know,
their traditional business, what's coming in the box office? What
are we expecting there?
Speaker 6 (06:13):
You know, it's interesting, as Githa writes in her research,
Disney is just in a phenomenal place from a content
creation perspective. They've got obviously all the Disney product that
has propelled the company for decades, but then they also
have the Star Wars stuff and the Marvel stuff, and
they just seem if they see something good out there
over the past ten or fifteen years, they went out
and bought it. So they have the best content in
(06:35):
the business and they usually lead box office by a
wide margin, although Warner Brothers is having a very good
year this year, so again Disney's at a spot you know.
You know, they bought the media assets, including the studio,
from Fox, so they have all of that content as well.
So from a content perspective, nobody really can compete against them,
(06:55):
and so they're in a great spot there, and they
monetize it better than anybody else, whether it's through the
cable bundle, through the streaming service, you know, making bringing
some of the content to the theme parks. That's kind
of been the magic of Disney as a company and
as a stock over the years, their ability to really
monetize their content as well or better than anybody else
out there.
Speaker 2 (07:15):
You know, we haven't even talked about the linear networks yet.
They've got ABC as well, and I think this is
going to be the quarter since the controversy surrounding Jimmy Kimmel,
isn't it. Is this going to be a hindrance potentially
the traditional broadcast and cable networks.
Speaker 5 (07:34):
Kitha, Yeah, So, I mean, you know, one thing that
all media companies, this is not just Disney, have to
contend with is cord cutting. Is a lot of pressure
with the linear TV networks. Of course, you had the
Jimmy Kimmel, you know, controversy. One thing that we're going
to be looking for when they report is whether that
Jimmy Kimmel's suspension actually hurt their streaming numbers because we
(07:57):
did get reports that users were kind of canceling, you know,
their subscriptions. Again, I don't think it's going to be material,
but this is something that all media companies have to
contend with. What is the plan that they have for
their networks? For Disney, ABC is a very important property
because it shares a lot of the sports rights with ESPN.
(08:19):
You know, they do show a lot of Monday night
football games. You know, they have NBA games, There's a
lot of college football. So you know, ABC is still
a very very important property to them. Yes, they have
a whole bunch of other cable TV networks, you know,
think about the whole Disney suite, you know, National Geographic,
all of those channels that are definitely insecular decline. But
(08:42):
so far there are no plans, at least publicly that
that Disney has said that they want to you know,
necessarily separate that business or sell that business. So again
we're kind of contending here with the melting ice cube.
Speaker 6 (08:53):
And Nathan you know, interesting on the subject. Laura Martin
Research Channels that need them in company came out with
a really provocative note about a month ago, saying that
Disney should just shut down the ABC network, make it
go dark, don't sell it, just shut it down. It's
a declining business, and it's really the only business business
that is under federal regulation. And if you want to
get out of the way President Trump and maybe some
(09:16):
heavy handed regulation, just sell it and or just shut
it down. Which I thought was an interesting topic.
Speaker 2 (09:21):
Yeah, I'm really interesting. Indeed, we're speaking with Paul Sweeney,
host of Bloomberg Surveillance and get the wronganathen of Bloomberg Intelligence.
Let's shift over to Paramount sky Dance. The first quarter
that they're going to be reporting as Paramount sky Dance
under the new ownership with David Ellison at the helm,
a lot of job cuts, a lot of changes. Getha,
(09:42):
How could that play into the results?
Speaker 5 (09:44):
Yeah, we really expect the upcoming results to be a
big reset in the whole Paramount sky Dance outlook. I mean,
this will be the new management team's first big reveal
off its operational of its financial plans. As you just mentioned,
there's to be a mix of major cost cuts to
improve efficiency and there'll probably be some major investments that
(10:05):
they announced to support you know, long term growth, especially
on both on the content side as well as on
the tech side. We have to remember that this was
a company that was undermanaged, underinvested in for years, so
you know, really looking forward to see what they have
to say. But of course, the big looming question other
than results is are they going to make or are
they going to increase their bid for Warner Brothers Discovery.
Speaker 7 (10:29):
That is really the big.
Speaker 5 (10:30):
Big question.
Speaker 2 (10:31):
Absolutely I wanted to get into that with you, Paul.
Is Paramount Skydance is going to have to become Paramounts Skiddance,
Warner Brothers Discovery or whatever other names they're going to
have to put at the end of their title.
Speaker 6 (10:42):
Yeah, you know, it's interesting they have an enterprise value
of thirty billion dollars in at one point in time
that was a big media company. In today's world, it
really is not, and I think, you know, it's kind
of a lot of folks will call it, you know,
substandard in size, but you take a look at Warner
Brothers Discovery, it is three times the size of Paramount
at ninety billion dollars of enterprise value.
Speaker 8 (11:01):
So it's it's.
Speaker 6 (11:03):
Really a big something, a big pill to swallow there.
So they're going to need some help.
Speaker 5 (11:08):
Now.
Speaker 6 (11:08):
It's nice when Larry Elson is the CEO's father that
lends some support there, But they're going to need some
partners probably if they want to pursue this. Here so
be aching to see how it plays. And as Githa
well knows, this is a company that is now officially
in play. I mean the CEO said it, the board
has said it, and so it's just a question of
who and when, I think at what price.
Speaker 2 (11:30):
Yeah, it would be fascinating to see. I given the
merger between Disney and Fox just a few years ago,
if we see yet another major media entertainment merger like this,
where could that position Paramount against Disney with competing giant
content slates.
Speaker 6 (11:48):
KEITHA.
Speaker 5 (11:50):
Yeah, I think it puts them really within striking distance
of Disney. It puts them within striking distance of even
I would say in Netflix, because they're going to have
a fantastic content. They're going to have some best best
in class, I would say IP so really really puts
them on the map because right now, if you kind
of look at Paramount, they have about eighty million streaming subscribers.
(12:11):
You put that together though with HBO, Max which has
about one hundred and thirty million. You already get to
two hundred million, which is above what Disney has in
terms of streaming subscriptions, So definitely makes them a major player,
you know, somebody that you have to take note of,
and gives them a lot of firepower in terms of
growing both the studio business as well as the streaming platforms.
Speaker 2 (12:33):
Yeah, really busy entertainment earnings week on tap Forest. Thanks
to both of you for this. That's Paul Sweeney, co
host of Bloomberg Surveillance and geta ronganath and media analyst
from Bloomberg Intelligence, and coming up on Bloomberg Daybreak Weekend
will preview Portugal's Web Summit, one of the largest of
its kind in Europe. I'm Nathan Hager, and this is Bloomberg.
(13:07):
This is Bloomberg day Break Weekend, our global look ahead
at the top stories for investors in the coming week.
I'm Nathan Hager in Washington. Up later in our program,
Singles Day in China is coming up. We'll get a preview.
But first Portugal. It's looking to accelerate the growth of
its AI, technology and startup industries. For more than a decade,
the country's been louring top international business talent through its
(13:29):
Golden Visa program, but now it's also playing host of
billion dollar investments from the likes of Microsoft and Nvidia
in new AI data centers. With the Web Summit in
Lisbon taking place in the next few days, we want
to get more from Bloomberg Daybreak Europe Banker Caroline Hepger
in London.
Speaker 3 (13:46):
Nathan Portugal's Web Summit, which Bloomberg once dubbed the Davos
for Geeks, is one of the largest tech summits in Europe.
In the next few days, the forum in Lisbon will
hold discussions on topics ranging from AI to cybersecurity to fintech,
whilst playing host to speakers from Meta all the way
to tennis legend Maria Sharapova. It comes as the country
(14:10):
looks to consolidate its status as a tech haven and
to court investment in its burgeoning AI and startup industries.
Now in the last few weeks, investors have grown increasingly
concerned though, about the prospect of stretchtech, dot valuations and
maybe even an AI bubble. In Vidias, Jensen Wong spoke
(14:31):
to Blueberg's Ed Ludlow and tried to calm the market's nerves.
Speaker 8 (14:35):
I don't believe we're in an AI bubble, and the
reason for that is we're going through a natural transition
from an old computing model based on general purpose computing
to accelerated computing. We also know that AI has now
become good enough because of reasoning capability, research capabilities, its
ability to think. It's now generating tokens and now generating
(14:56):
intelligence that's worth paying for to the point where I'm
paying lots of it.
Speaker 3 (15:01):
That was Nvidia's Jensen Won speaking to Bloomberg's Ed Ludlow,
well as tech CEOs, then seek to reassure investors that
AI spending shows no signs of abating. Portugal is positioning
itself as one of the beneficiaries of Europe's AI build out.
How far, though, can the country's growing tech scene thrust
its economy into the twenty first century? Joining us now
(15:24):
is Bloomberg's Portugal bureau chief, Sofia Auto Ecosta. Sofia, good
to speak to you. So shall we start with the
Web Summit, which is one of the largest of its
kind in Europe? What do the main themes this year
that they'll be talking about actually kind of tell us
about Portugal's priorities.
Speaker 9 (15:43):
It's kind of the greatest hit of the biggest talking
points across AI and tech at the moment. So we
do have AI and ethics really exploring how to govern
this increasingly important industry in Europe and how really to
kind of align it with human values. We also have
the future of work climate, tech growth and startups, you
(16:06):
name it. And we do have the Finance Minister from
Portugal attending and expected to speak. So that really shows
you where the priorities life for this new government that
followed the elections earlier in May this year.
Speaker 7 (16:19):
That's really kind of.
Speaker 9 (16:20):
Throwing investment and subsidies at this industry, trying to position
Portugal as one of the forefront economies to invest in
in the European Union.
Speaker 3 (16:31):
Sophia, you've been writing about the town of Scenes, which
is on Portugal's dramatic Atlantic coast. Then actually this could
be a data center, a tech hub, not just for
Portugal but maybe for Europe. Tell us about what's been
happening there in terms of deals and breaking ground.
Speaker 9 (16:51):
So this is really interesting because this is a very
small town, about fifteen thousand residents. I went down there.
It's about an hour and a half's drive from our
Lisbon office. And what's happening there is investment from Chinese,
US European investors and.
Speaker 7 (17:11):
Quite a lot of it.
Speaker 9 (17:12):
So my interest was, you know, why are billions of
dollars pouring into this really small Portuguese town And one
of them is what's set to be one of the
biggest data center projects in the European Union. And it's
one point two gigawatts. Now, Karlyn, I have no idea
what what one point two gigawatts is, So just to
(17:32):
put it in context, that's about as much as the
entire metropolis of Lisbon consumes, so it's quite a lot
of energy. Now why does this matter? I mean, this
is a big investment. It's a ten billion dollar data center.
This is huge for Portugal, and Portugal is really trying
to say, hey, we're not just tourism, even though it
accounts for about a quarter of GDP and a lot
(17:56):
of jobs. So incredibly important of this still for the economy,
but that was important to bring the economy out of
the crisis, out of the not just the financial crisis,
but the sovereign deck crisis. But now, okay, let's invest
in the future. This is where it's at. The government
is making it easier for these companies to come here.
(18:18):
I spoke to the Stark Campus Data Center CEO and
he said, you know, we were welcomed with open arms.
And the Chinese battery maker calb is the fourth largest
battery maker in the world, so this is quite significant
as well. That's a two billion euro investment. They just
broke ground on their first battery factory outside of China.
(18:40):
They picked seeing this tiny, tiny town as the gateway
into the European Union and this was really heralded by
both sides of the political spectrum as a big step
forward for Portugal in terms of the green energy transition.
Speaker 3 (18:57):
Yeah, lots of visit is bit of population in Portugal
only just about ten million people. But the focus on
data centers, you know, raises the same question for Portugal
as across Europe, which is that the AI boom is
power hungry. There will be growing power demands. There's a
worry about whether it's going to strain Portugal's energy system.
(19:19):
I mean, we did see blackouts in Portugal earlier this
year and that was blamed on a number of factors,
but one of them was you know the green and
clean energy system, there is the infrastructure going to be
able to cope.
Speaker 9 (19:33):
So that's the big question, and there's been a lot
of discussion at the government level but also at the
company level over who really should take the lead on
investing in the grid infrastructure here.
Speaker 7 (19:46):
We actually had EDP that's.
Speaker 9 (19:48):
Portugal's biggest utility today, saying that it plans to allocate
a significant amount of money into investing in the grid
here in Portugal, but.
Speaker 7 (19:59):
Also in Spain where they have a market.
Speaker 9 (20:01):
And I'll just tell you that number three point six
billion euros in electricity, grids and infrastructure through twenty twenty eight.
Speaker 7 (20:09):
That's a big number, Caroline. So the problem here, or
I mean, I.
Speaker 9 (20:13):
Guess the issue I wouldn't call it a problem, is
that Portugal uses renewable energy for about seventy percent of
its energy consumption, so that's a pretty big proportion, and
it still also imports a bit of energy, a lot
of that from Spain. So whether to kind of reduce
the reliance on the Spanish grid, that's one question. Whether
(20:37):
to improve the infrastructure here and whether it makes sense
for private companies to do that and share the load
with the government these are all still questions and there's
still a lot of looking into what happened around that blackout.
The Portugal does like to blame its neighbors in Spain
for that.
Speaker 3 (20:55):
Indeed, in terms of startups, Portugal's also got an interesting
scene there Sword Health, this startup that uses AI for
medical rehabilitation, for example, that has raised quite a lot
of money and is now more valuable than everything other
than about five listed companies in Lisbon. Is that part
(21:17):
of a kind of growing scene as well? If you're
seeing data centers, you're seeing all of this interest. Is
there also a bit of a growing startup scene in Portugal?
Speaker 9 (21:26):
Yeah, there is, and you know, there has been an
attempt for the past decade or so to really nurture
startups in Portugal. But I think this one really grabbed
my attention, Caroline, because it was valued at three billion
dollars in a financing round last year, and this year
in June it was valued at four billion dollars, and
(21:47):
as you said, this is this is pretty significant for Portugal.
It's one of the most valuable private companies for sure,
and one of the most valuable companies you know, full
stop in Portugal and It's also backed by Founders fund,
so very high profile investors looking at this company and.
Speaker 7 (22:05):
What it does is obviously quite interesting.
Speaker 9 (22:07):
It's looking at pain management solutions and physical rehabilitation using AI,
obviously a buzzword for investors at the moment. But you know,
the fact that you can found these companies in Portugal,
you can also stay here not necessarily have to go
all the way to Silicon Valley to scale suggests that
(22:28):
the country is taking these things more seriously, is understanding
that these companies need more of an infrastructure around them,
and the government actually just recently said it would cut
taxes for companies, which would be a big help as well.
Speaker 3 (22:43):
Okay, that's interesting in terms of what the government is
hoping for and what the public in Portugal make of
all of this. Portugal still got a GDP per capita
that is amongst the lowest in Western Europe, so there
must surely be a desire for the economy to do
you well, But what is the government's political ambition, what's
(23:03):
the response from the public.
Speaker 9 (23:05):
So there's always a tension between the foreign money that's
coming into Portugal, which has obviously been hugely important for
the economy, not just these kind of investments into tech,
but also from overseas residents coming to live here. Portugal
has seen a big rise in American, Chinese, Russian citizens
(23:28):
coming to live here. There's a tension between that and
what it can do for the country and the country's economy.
But actually, you know what that means for the locals
who have always been here and are seeing the price
of real estate go up beyond affordable levels. The housing
affordability in Portugal has actually seen the worst decline in
(23:51):
the European Union in the past decades. So it's a
huge tension point for the Portuguese public here. When I
went down to Size and spoke to locals there, you know,
they said, it's all good and we respect what the
government's trying to do in bringing Chinese and American investment here.
But our buildings are, you know, crumbling. We only have
(24:13):
one healthcare center, the hospitals far away, the roads are cracking.
You know, where is the investment actually in locals and
in what we care about, and in creating jobs for
people who really still struggle to pay the rent and
their rising energy bills and send their children to school.
(24:36):
So there's always that tension between local interests and what
the government is doing at the macro level, which is
attrapped as much foreign investment as it can.
Speaker 3 (24:45):
Very interesting. Sophia, thank you so much for spending some
time with us. That is blimpag's Portugal bureau chief, Sofia
auto Ecosta. Of course, this comes ahead of the Web Summit,
which takes place in Portugal in the next few days,
and we'll continue our full coverage and analysis of Europe's
AI build out here on Bloomberg Radio. I'm Caroline Hepga
(25:09):
in London. You can catch us every weekday morning for
Bloomberg Daybreak. You at beginning at six am in London.
That's one am on Wall Street.
Speaker 2 (25:16):
Nathan, Thanks Caroline. Man coming up on Bloomberg day Break. Weekend.
Singles Day in China is approaching. We'll check in on
what's become the largest shopping day in the world. I'm
Nathan Hagar and this is Bloomberg. I'm Nathan Hager in
(25:40):
Washington with your global look ahead at the top stories
for investors in the coming week. Now we want to
head to China, where Singles Day will be celebrated in
the coming week. It's the unofficial holiday that's become the
largest shopping day in the world, and it's spreading across
Southeast Asia. Let's get to the host of the Daybreak
Asia podcast, Doug List for a preview.
Speaker 4 (26:01):
Nathan, retailers in China are not taking any chances this year.
Many have stretched their sales to as long as five weeks. Now,
we know the Chinese economy has been struggling. Weak domestic
demand has become call it a characteristic and so e
commerce giants like Ali, Babajd dot Com are working to
entice shoppers. The question is whether they'll succeed. For a
(26:24):
closer look, I'm joined by Bloomberg analyst Katherine Limb. She
covers the retail and e commerce industries in Asia from
our bureau in Singapore. Catherine, thank you so much for
making time to chat with me. Can we talk about
the big picture? First? Talk to me about expectations and
the extent to which these big retail names are concerned,
(26:44):
perhaps about underperforming.
Speaker 10 (26:47):
We had a very week third quarter in China and
that's really pushing retailers to bang the book and try
to get more out of singles Day and in fourth quarter.
And the reality is, as I speak to retailers over
the last two weeks itself, Singles Days off to a
fairly weak start. You know, we're halfway through the shopping
(27:10):
festival right now. I do see more promotions coming up
and keeping the fingers crossed that that's enough to really
try and push thing ahead.
Speaker 4 (27:18):
So, Catherine, I'm wondering about the role of the government
in trying to make Singles Day a success. What steps,
if any, has Beijing taken.
Speaker 10 (27:28):
Well, we've seen the offer of you know, vouchers perks.
They are also supporting e commerce platforms and retailers to
try and come up with better service levels. But at
the end of the day, it's really the confidence of
the consumers right now, particularly if property prices as at
(27:48):
value still says very low incomes outlooks still stay uncertain,
it's going to be hard for consumers to want to
spend more in you know, an environment of uncertainties.
Speaker 4 (28:00):
About US brands like Apple and Nike, what are the
expectations for these brands?
Speaker 11 (28:06):
Now?
Speaker 10 (28:06):
What isn't just thing is that you know, for these
two brands, you know, they were off to a very
week start since the beginning of the year, and we'll
actually start to see things coming up better for them
different fundamental reasons. Off a lower base, but they are
creeping up. And I'll take Nike for instance. On the
first day of Ali Baba sale, they were off to
(28:28):
a very weak start. They did not lead the sportswear
sales ranking as they did before in the last two years.
And you know, two weeks down the road, they've actually
creep up to being the third, nowhere near the first,
but you know, still a good you know, improvement, and
again I'm hoping to actually see more over the next
two years.
Speaker 4 (28:47):
So do you think it's more likely that Chinese consumers
will favor the local brands this year, perhaps more so
than they have in the past.
Speaker 10 (28:54):
I don't think it's going to be that this thing
this year. It's moll about, you know, the value proposition
that on the table for the consumers. We are at
a somewhat balance point between nationalism, being very nationalistic about
local brands itself and foreign brands. At the end of
the day, it is what is on the table at
a good price, you know, for the consumers, and they
(29:15):
will be willing to take that if it comes to Not.
Speaker 4 (29:18):
A day goes by when we're not discussing artificial intelligence,
and I'm curious about the way in which companies like
JD and Baba are using AI to drive sales this year.
Speaker 10 (29:29):
Well, there's lots of you know AI shopping assistanms, lots
of marketing push, you know, just based on what you
are browsing. It's a lot more back end rather than
you know, what we see as consumers itself. But clearly,
you know, they know what we are looking at and
they are pushing these items, you know, repeatedly to the
(29:49):
face of the consumers to try and get the conversion
rates to actually go up. So you know, this is
definitely a good period during Singles Day to test start
some of these algorithms as well as these programs, because
that's where they're going to actually try and improvise on
that for twenty twenty six.
Speaker 4 (30:08):
So as long as we're talking about technology, how has
the smartphone business been performing on the mainland.
Speaker 10 (30:15):
Well, you know, definitely we are still seeing some form
of subsidies coming through from the government, so that's actually
helping iphoned seventeen model. So far, the platforms, whether it's
JD dot Com, Ali Baba's team, or they've been actually
pushing for more sales of it, and I'll actually like
to throw in that mate one which has actually ventured
(30:38):
into speedy delivery or quick commerce for that matter. They
are also now being able to actually deliver new iPhones
to you, like, you know, within an hour.
Speaker 4 (30:49):
So we know, Singles Days started in China and since
then it's spread to many parts of Southeast Asia. So
I'm curious away from the mainland when you look at
other jurisdictions. I know you're in Singapore, I'm also thinking
about Hong Kong, even Taiwan. Are there other jurisdictions that
are expected to perform, let's say, better than the mainland.
Speaker 10 (31:08):
I think if we actually look firstly at Singles Day,
Singles Days no longer about China, and I think you're
right on that that we're also seeing Ali Express, you know, Talubau, Globo,
JD dot Com Global also launching promotions and campaigns for
this Singles Day outside of China. So are they doing better?
I think yes for certain jurisdiction like Singapore for Southeast Asia,
(31:34):
And it's really because we're off from a very low
base and we're starting to actually see more of those
value propositions coming through from Maidi and China products, and
you know they are actually very decent for the price
that you're actually paying for them.
Speaker 4 (31:49):
So Catherine, what about experiences, whether it's entertainment or even
visiting a restaurant? Are these industries expected to do well?
Speaker 10 (31:57):
That has actually taken off during d long National Day holiday.
And you know, when you talk about restaurants the consumption itself,
let's not forget that. You know, there is now the
counter coming in from takeaways, food deliveries. And again, you know,
I'll go back to what I've just mentioned about the convenience,
(32:18):
you know, the east of it. You know, we've actually
seemed the latest catering or restaurant services sales continue to
actually slowe down. That may be a bit of uptick
in October. The overall scheme of things, I think more
people are actually you know, doing food deliveries rather than
going to the restaurants.
Speaker 4 (32:39):
Catherine, we'll leave it there, Thank you so very much.
Bloomberg's Katherine Lim our senior analyst covering both retail and
e commerce across the APAC. From our bureau in Singapore,
we go to Hong Kong next, where the Global Financial
Leaders Investment Summer took place over the last week. That's
where we caught up with Goldman Sachs CEO David Solomon.
(33:00):
He spoke with Bloomberg TV host Yvonne Mann and David Nglace.
The conversation started with a question about the US China
trade truths.
Speaker 11 (33:09):
I think at the moment, you know, a de escalation
is a good thing, but there's obviously a lot of
work to do to really arrive at a real stable.
Speaker 12 (33:19):
Deal that can endure, you know, over a period of time.
Speaker 11 (33:22):
I'm encouraged by the prospect of a potential visit from
the US President that was telegraphed in the fall. But
for the moment, you know, I did not think the
escalation on either side was constructive, and so you know,
I much prefer a de escalation.
Speaker 12 (33:34):
I think both both sides.
Speaker 11 (33:37):
Really had a purpose in that meeting to talk constructively,
to have a more de escalated environment, and that allows
now for constructive conversations as.
Speaker 12 (33:46):
They move forward.
Speaker 13 (33:47):
One year truce though between the two is that a
good or bad thing? I mean, what did to do
in terms of business sentiment when there was a twelve
month time frame?
Speaker 11 (33:54):
Now it's better then, it's better than an escalation at
on reasonable levels, which is kind of where we were,
you know, over the most recent time. Trade negotiations are
complicated and there are a lot of issues on the table.
They need thoughtful responses and responses that can be durable. Yes,
there's some uncertainty because it's a one year delay at
all of this, but it's also a realistic period of
(34:15):
time to try to get the right kind of deal
done so both economies can move forward in a constructive way.
And look, these are the two most important economies in
the world. I think it's very important that you know,
we arrive in a better place where we can both
participate constructively with each other in the global growth of
the world.
Speaker 14 (34:32):
I mean, speaking of let me borrow your phrase, participate.
There's been a resurgence in equity capital market raising here.
Speaker 5 (34:39):
In Hong Kong.
Speaker 14 (34:40):
A lot of the Chinese companies, tech or otherwise are
raising capital for the future. I want to get your
sense as someone who sits in New York, you travel,
of course all around the world. Is there a lot
of appetite now from US based investors to participate by
giving that capital to Chinese companies right now? In order
to do there's you know, I realize there.
Speaker 11 (35:00):
An sure, there's.
Speaker 12 (35:02):
More appetite for it than there was twelve months ago.
Speaker 11 (35:04):
I remember actually last November sitting in a dinner in
the United States with a group of US investors and
this topic came up, and there were a couple of
investors that basically said, we all should be looking to China.
Speaker 12 (35:19):
And the reason, the reason that had evolved that way
is if you look.
Speaker 11 (35:23):
Last fall, the prices had gotten so cheap, the capital
flows had moved so in the other direction that you
just knew that things would come more into balance and
there'd be a recycling.
Speaker 12 (35:34):
And we've seen that recycling.
Speaker 11 (35:35):
You've seen a big move and prices year over year,
you've seen more foreign capital come in.
Speaker 12 (35:39):
And start to participate.
Speaker 11 (35:41):
That's a fundamentally different question about the big capital allocators
really fundamentally shifting their allocations up to be higher again.
Speaker 12 (35:49):
So far, direct.
Speaker 11 (35:50):
Investment in China has come down, and I think one
of the big questions is until we understand kind of
the trade and the geopolitical landscape, it's harder see significant
shifts back to higher levels of foreign direct investment and.
Speaker 12 (36:04):
More capital allocation.
Speaker 11 (36:05):
But for the moment, those flows are making for a
better IPO market here and more opportunities here.
Speaker 12 (36:11):
How do you look at that?
Speaker 13 (36:12):
I mean, the whole competition has kind of changed into
the dynamics, right. You have so many of these Chinese
banks now that are doing some of these deals with
Chinese companies. When it comes to going public, how does
Goldman Sachs compete.
Speaker 11 (36:24):
Well, you know, goldmin Sex competes just fine, thank you
very much. When it comes to taking public companies public
on a global stage, Golden Sex is a leading position.
Speaker 12 (36:32):
We've had a leading position for fifty years.
Speaker 11 (36:35):
And there's always competition in the business, and you know,
we'll continue to compete, so we welcome competition. But we
have a pretty active footprint out here, as you well know.
They have a pretty active footprint around the world. And look,
one of the big advantages. I just had breakfast with.
Speaker 12 (36:49):
A company here that.
Speaker 11 (36:52):
It's actually a Chinese company, but the you know, the CEO,
the founder was here and why does he value Golden Sex.
He values Golden Sex because we have a sess to people, information,
capital markets all over the world, you know, not just
in a narrow portion of the world.
Speaker 12 (37:05):
And so it's a competitive business. It always will be.
But I'm comfortable that we have the resources in the
position to compete.
Speaker 14 (37:11):
Effectively, right and you know, you know I've been greeting up,
of course, and I understand your history. You guys have
been doing business in China very long time. You guys
took the big banks public back twenty plus years ago.
So I mean you're headed there in my understanding, after here,
you're going to China. Of course you speak with regulators,
what have you? What's your long term vision for difranchise
(37:32):
in Greater China? What do you want what do you
want your franchise to become longer?
Speaker 11 (37:37):
I think you have to look at Goldman Sachs and
just think strategically that as a global firm, that when
you think about our businesses, what are our two big
businesses global banking and markets, the investment banking and trading
business and asset and wealth management. And so if you
think about how we think strategically about the firm, what
advantages does the firm have besides the fact that we
have at scale businesses, we're very good at the those activities,
(38:00):
we're leaders of those activities, and we have a right
to compete and win, you know with those activities.
Speaker 4 (38:05):
That was David Solomon, CEO of Goldman Sachs, speaking with
Bloomberg TV host Vonn Men and David Nglace at the
Global Financial Leader's Investment Summit in Hong Kong. I'm Doug Krisner.
You can catch us weekdays for the Daybreak Asia podcast.
It's available wherever you get your podcast.
Speaker 2 (38:23):
Nathan, Thanks Doug, and that does it for this edition
of Bloomberg Daybreak Weekend. Join us again Monday morning at
five am Wall Street Time for the latest on markets
overseas and the news you need to start your day.
I'm Nathan Hager. Stay with us. Top stories and global
business headlines are coming up right now.
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