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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, and look at how tariffs on lumber and timber could impact the US housing market. I'm Tom Busby in New York.
I'm Caroline Hebge in London. What's in a prize, specifically the Nobel Prize Decisions.
I'm Dog Prisner looking at Chinese consumers during Golden Week plus trouble with some Hong Kong real estate.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven to three year, New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirias, XM one twenty one, and around the world on Bloomberg Radio, dot Com and the Bloomberg Business App.
Good day to you. I'm Tom Busby. We begin today's program with a new batch of tariffs announced by President Trump on imports of soft wood, timber, and lumber, as well as levees on kitchen cabinets, vanities, and upholstered wood products brought into the US. How will this impact the housing market moving forward? And what about housing prices?
For more?
We're joined by Drew Redding, Bloomberg Intelligence US home building Analyst. Well, Drew, thank you so much for being here, appreciated home builders.
Home buyers now, they've already been paying sky high prices, elevated mortgage rates, they've been paying tariffs on imported kitchen appliances, washers and dryers, and now October fourteenth, they'll be paying ten percent levees on softwood, lumber and timber, twenty five percent on kitchen cabinets, vanities, other pre assembled I mean, this is looking This is not good, is it?
Yeah? Well, certainly, you know, the consumer doesn't need higher costs when it comes to housing, given the affordability constraints that they've been under for the last several years. Just to take a step back on the tariffs, to put it in perspective, the US imports about thirteen million dollars or seven percent roughly of the goods used in new residential construction. So at the headline level, it's not necessarily a massive piece. But you know, there are particular areas
where tariffs will be felt perhaps more than others. If you look at the top of three countries that we import from, it's China. That's about twenty seven percent of imports. From there, we're talking about things like appliance, is lighting, electrical components, hand tools. The second is Mexico and from there we're primarily talking about gypsum products. So I think drywall Mexico is about seventy two percent of imports there.
And then third, you know, which has really come into focus now is Canada, which accounts for eighty five percent of lumber imports. So when you put all this together, the previously announced tariffs, you know, country specific fat and on reciprocal tariffs, along with these newly announced tariffs, we think that the costs, the total cost to a builder will be about ten thousand dollars per home, which which is a pretty staggering number. Now, we don't think the
builders will ultimately absorb all of these costs. I think, you know, they'll probably be spread throughout the supply chain. And when you think about the large public builders, they're really better positioned in this environment given you know, their scale now in terms of their ability to pass on to consumers. You know, I think that could be tough.
And you know, you've got prices already coming down for a lot of builders due to affordability, and then they're still having to use an elevated degree of incentives, which is accounted for as a reduction in salespace. So there's a lot of moving pieces. But at the end of the day, the point is that it becomes increasingly expensive to build a home, and I.
Mean this could really deter a lot of builders. Like you said, we're not worried about the KB homes and the Pulties of the world, but a lot of smaller ones from constructing new homes, at least initially.
Right.
No, it's a good point. And you know why we haven't seen a huge packed impact on you know, tariffs to this point. One of the things we have heard, and to your point, really from the smaller private builders, is that there hasn't been a lot of certainty, so they don't know what their costs are going to be. When you don't know what your costs are going to be, it's hard for you to plan out into the future
and put new production into the ground. So I do think it is definitely more challenging for the smaller names in the group. One thing that I think that's worth pointing out on the lumber side of this is that prior to this announcement of a ten percent tariff on software imports, we already had duties on lumber coming in from Canada. If you're talking about forty five percent on Canadian lumber imports, which again is eighty five percent of all the lumber imported into the US.
Yeah, I mean it sounds like some of these Canadian lumber makers, these these manufacturers could really be struggling now if you know, sales get hurt.
Yeah, it's a great point. And you know, the announcement really came because the administration wanted to open an investigation as to, you know, whether or not the lumber trade was of risk to national security, which they determined that it was. So the question becomes, well, can the US
produce enough lumber domestically to meet all the demand. And I think the answer for now is no. And you know, as I mentioned, we produced about seventy percent of the lumber utilized in the US and to get that to one hundred percent would really require a lot of time. The National Association of home builders estimates you know, somewhere around ten years to be able to achieve this. So certainly no small feat.
And not only the industrial or resilience, but also Trump's had the high quality jobs that this would create. Would they really be high quality jobs?
I mean that remains to be seen. And like I said, it's will take a lot of time to add new capacity to the industry. But you know, there are a lot of jobs along the supply train and in terms of you know, just the not only jobs you're creating at the mills, but logistics and you know, getting wood to factories to job sites and things like that. So it would certainly help.
Now let's talk about the other tariffs, and these are big. They're twenty five percent on on kitchen bathroom, Vanity's kitchen cabinets, that type of thing. We know that Ethan Allen, Lazy Boys source and manufacture a lot of their products in the US, But there are big retailers that import a ton of goods Wayfair William soonoma our Age formerly a restoration hardware. I mean, they may really be impacted by these tariffs, right, you.
Know, I think from from their perspective, you know, the impact isn't going to be as great as you might expect. But if you think about the individual consumer who is going out and making a single purchase, you know, on a kitchen cabinet or vanity, and was looking for a low cost option, all of a sudden to them that becomes significantly more expensive. So there's I think there's a big difference between how you know a home improvement retailer can manage the situation versus individual consumer.
A lot of challenges well our thanks to Drew Redding, Bloomberg Intelligence US home Building analyst. We move next to a turning point for big pharma. This past week, five US negotiated a three year reprieve on drug import tariffs in exchange for a promise to reduce what it charges Medicaid for some prescription meds, also to price future drugs on part with what it charges other wealthy nations, and
to sell certain drugs at discounted prices to the public. Now, how might this impact the pharmaceutical space, what other drug makers are working on their own deals, and what does it mean for consumers. For all that, we're joined by Madison Muller, Bloomberg Health reporter. Madison, thanks for being here.
Thanks for having me. I appreciate it.
Can you kind of detail the finer points of this agreement with the White House? And I'm most curious about trump RX. It sounds a little like his answer to Obamacare.
But yeah, it's an interesting concept, and I think we knew that they were working on something like this. I mean, for the last few months, the administration has been talking about direct to consumer websites and platforms. Some drug makers had already started doing that. Eli Lilly, for example, has
Lily direct. Nova Nordisk has been doing this for some of the real high demand drugs like GLP one weight loss drugs, And so we knew the administration was thinking about doing something like this, and its answer to one of the biggest priorities in terms of healthcare is lowering drug prices, and this is sort of one of the one of multiple things that the administration thinks could help address that by making a website where drug makers can put their drugs on there and at a steep discount
to the list price and have consumers sort of directly buy them from the manufacturers as a way to cut drug prices. But it's an interesting concept, and cash pay might not necessarily be super popular for other medications like it has been for the GLP one weight loss drugs.
Is that because so many of those other medications are so.
Expensive exactly, and the insurance landscape for weight loss drugs is quite patchy still, it's very difficult to get insurance coverage. The drugs are expensive, so a lot of people are willing to pay out of pocket for those medications. But in terms of this Feiser deal, some of the medications that we know that Pfizer will be discounting, like It's blood thinner Eloquist, those are usually covered by insurance anyway,
so people with insurance will have coverage for that. There wouldn't really be a reason for them to buy it directly from the manufacturer on a website like trump Orex, and those who don't have insurance, it's probably still going to be pretty expensive for now.
Some of the drugs that are made by Pfizer, by Lilly, by Johnson and Johnson all made or mostly made in the US. Let's talk about what Trump threatened to impose on branded drugs from outside the US. A one hundred percent tariff. Now, that's not going to help a whole lot of consumers is.
It right exactly. I mean, that's one thing that's been sort of in conflict with the administration's efforts to lower drug prices is if there are tariffs on pharmaceutical products, that could end up raising drug prices because it will make it a lot more expensive for manufacturers to make these medications. And like you said, all of the big US and you know, international drug makers have plants, have
manufacturing plants in the US. They're building more in the US, but the pharmaceutical supply chain is really complex, and they do have some elements of their manufacturing or supply outside of the US. ELI Lilly, for example, makes the critical first step in their weight loss and diabetes drugs Manjarro and zepbound in Ireland and then they ship it here and the rest of the manufacturing process happens here. So tariffs really had, you know, huge potential implications for this industry.
And what Peiser has been able to do is negotiate a three year reprieve and it's the assumption that other drug makers are going to try to follow suit with this.
Well, part Offiser's deal is they made a seventy billion dollar pledge to expand manufacturing and research and development here. So what is in Peiser's plans and what are some of the other US manufacturers doing.
Yeah, so, like we said, there are other US manufacturers and international manufacturers that have pledged billions of dollars of investments. Over the last couple of months we've seen I mean, I think Lily was the first one back in February, and since then there's been a lot of other pledges to invest. And so right now, what we're hearing is that these negotiations are sort of on hold for the time being in terms of this one hundred percent tariffs
that Trump had threatened. And there was also this ongoing two thirty two investigation, which is a national security investigation into the pharmaceutical supply chain sort of as to lay the groundwork for eventual tariffs. So we're hearing right now, as these sort of deals are going on, that all
of that is on pause for the time being. And I guess it was a couple of months ago the Trump administration sent letters to seventeen drug makers laying out a couple of specific demands, you know, to lower drug prices, look into direct to consumer, you know, offer discounts through medicaid, and so what we're seeing is Pfizer follow through on some of those demands and make promises that they will discount a lot of their drugs on this trump are
X website, that they'll just count drugs through medicaid, which that it's sort of Actually for the industry was a bit of a relief because they thought it was going to be worse than this, and it could be worse than this if there were sweeping most favored nation policies or tariffs implemented, and so for Pfizer, actually it was a good thing and there was some fault, you know, I guess follow through for the rest of the industry that this would be a good thing too well.
A lot to look forward to in a lot of deals, likely in the pipeline. Our thanks to Madison Muller, Bloomberg Health Reporter, and coming up on Bloomberg Gay Break Weekend, we'll look at the global political implications of the Nobel Prize decisions. I'm Tom Busby and this is Bloomberg. This is Bloomberg Gay Break Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom in New York. Up later in our program, a look at the Golden Week holiday in China and what
it'll mean for consumer spending. But first, a new batch of recipients for the Nobel Prize, one of the world's most prestigious accolades, established in the will of Swedish chemist and inventor Alfred Nobel to honor individuals who made outstanding contributions to humankind. The awards have become an emblem of achievement, even capturing the interest of US President Donald Trump. For more, Let's go to London and bring in Bloomberg Daybreak Europe anchor Caroline hepger Tom.
It's no secret that President Trump has been courting the idea of winning a Nobel Peace Prize for some time. According to Bloomberg opinion columnist Andres Klouth, it's one of the reasons he's been pushing so hard for a cease far between Russia and Ukraine. Other political leaders, including the Congolese president, have weighed into the debate, saying Trump will have earned the award if he can end more than three decades of conflict between Rwanda and the Democratic Republic
of Congo. And of course, previous US presidents have managed to impress the Nobel Committee in the past. Prior winners include Theodore Roosevelt, Jimmy Carter, and most recently Barack Obama in two thousand and nine. The current president mentioned the prize during his recent address to the United Nations General Assembly, although he did remain philosophical about his chances of winning.
I didn't think of it at the time because I was too busy working to save millions of lives, that is, the saving and stopping of these wars. But later I realized that the United Nations wasn't there for us.
They weren't there.
I thought of it really after the fact, not during these negotiations, which were not easy. That being the case, what is the purpose of the United Nations? The UN has such tremendous potential. I've always said it, such tremendous, tremendous potential. But it's not even coming close to living up to that potential for the most part, at least for now. All they seem to do is write a really strongly worded letter and then never follow that letter up.
It's empty words, and empty words don't solve war. The only thing that solves war and wars is action. Now, after ending all of these wars and also earlier negotiating the Abraham Accords, which is a very big thing for which our country received no credit, never receives credit. Everyone says that I should get the Nobel Peace Prize for
each one of these achievements. But for me, the real prize will be the sons and daughters who live to grow up with the mothers and fathers, because millions of people are no longer being killed in endless and unglorious wars.
That Donald Trump speaking there at the UN General Assembly in New York, so just how likely is it that he'll walk away with Nobel recognition and how important is the upcoming prize giving. It's something I've been discussing with our Nordic managing editor Katy Poyan Palo and Stockholm bureau chief Charles Daily. Charles, can I start with you Firstie? So the Nobels are obviously hugely prestigious. They are known around the world, just in terms of the history and
where we are for this year. To tell us a bit about the history of the Nobels and how they've come about.
Yep, sure, I mean to do that. We have to go back to eighteen ninety five and the Last Will and Testament, of a Swedish engineer and chemist by the name of Alfred Nobel, who is known really as well as the Nobel Prizes, he's also known for inventing dynamite as his claim to fame. In that will, he listed five prizes for those who have conferred the greatest benefit
to mankind in the preceding year. And there were five categories of prizes in the will physics, chemistry, physiology or medicine, literature and peace, and they were first awarded in nineteen oh one. Some years later, in nineteen sixty eight, however, a prize was added in memory of Alfred Nobel, and that was established by the central bank here in Sweden, which is called the Risbank, and not surprisingly that is called now the Economics Prize.
So how important do you think it is then to Swedish people.
I think the fact that a Nobel Prize is seen as you know, the most prestigious award in the world in its field is really a source of national pride for a country that, you know, let's be honest, is only ten point five million people on the northern edges of Europe. I think it's worth also noting that Sweden is a nation that looks outward beyond its borders in many respects. So the international attention that these prizes gone
is of huge importance to the country. Nobel Day on December tenth, which is the anniversary of Nobel's death, is when the prizes are awarded by the King and there is a lavish banquet in Stockholm City Hall. And it's probably fair to say that that is the biggest academic and cultural highlight of the year in Sweden.
So deliberations normally do take place in secret. So what do we know about the process for this year.
Yeah, the process for this year is as with other years. So Nobel in his will listed the institutions responsible for awarding the prize, for example the Royal Swedish Academy of Sciences and for the Peace Prize it is a committee of five elected by Norway's Parliament. Then there is an approved list of nominators, for example former winners, members of the Swedish Academy, or professors or chair people affiliated with universities, and they can then put forward a name and a
voting committee then decides on the winner or winners. There can only be three winners per prize. Is the maximum number of winners per prize, and disclosure about nominations is restricted for fifty years, so very a process shrouded in secrecy.
So Katy, let me turn to you the history of awarding the Peace Prize by Norway to foreign leaders. It has at times been controversial.
Well, absolutely, it's been controversial. So one thing to know about this prize is you cannot ever give it to a person that has deceased, And so living people tend to after being awarded, continue their careers and lives, and sometimes they do things that don't really kind of fit in with the spirit of why they were awarded a
peace prize. One super well known example is two thousand and nine when Barack Obama was awarded the Nobel Peace Prize just nine months after becoming US president, and he of course went on to take a lot of US troops into Afghanistan.
Yes, and of course we know that President Trump has been talking about wanting to win the prize for some time, and so again this perhaps put some pressure, adds some pressure to these awards. When did we first find out about his ambitions?
Trump has been talking about this for almost a decade. He keeps bringing up the fact that Obama was given the prize and says, you know, if he were named Obama, he would have been given this prize. In ten seconds. Trump talks about having brokeered peace or helped end seven wars, but many of these are actually a little bit questionable.
Indeed, in terms of the political implications. Then the pressure, I wonder whether that is being felt. And maybe also we don't know were the US president to win, what might be the implications in the fallout.
I think the big question is what if he doesn't win. This is where the main implication is or Norway. Really very recently, Trump declared that not winning would represent a big insult to our country. He there sort of applied some pressure on the Norwegians. Norwegians are really worried about this. They're bracing for what's happening if Trump doesn't win. Now, if Trump were to win, I think a lot of people would put to question the sort of foundation of
the Nobel Peace Prize and what it's done for. But the same question has been raised with the previous winner. As you know, Obama himself questioned his own.
Victory indeed, But then, of course, the Peace Prize is separate from the Norwegian government. So whilst there might be trepidation, how does that factor into the kind of decision making.
The committee is independent, we know that, and some of the controversial decisions it's taken in the past were precisely because it is independent. The Norwegian government wanted no conflict with China in twenty ten, and yet the committee you know, went and awarded the Chinese dissident that year.
Charles, just coming back to you in our specific sphere, there's always lots of interest in the prize in economics, as well as the other sciences that are awarded, in literature and so on. Again, we don't know very much about those awards, But what do you think might be in the mix here for all of those of the hugely important nobels.
That's a very difficult question because it really is hard to name names. I mean, the betting odds at the moment are really only available for the Peace and Literature prizes. The favorites for the literature this year include the Australian fiction writer Gerald Mernaine and also the Mexican author Christina Rivera Gaza. So yeah, in conclusion, it's really hard to sort of say were we think the winners might be.
It might be worth noting though, however, in terms of the science related awards, prizes are typically shared by multiple scholars and they often have an affiliation to universities on the respective research departments. The North America and Europe tend to dominate the science related prizes as well. And I think you know, one area that's caught a lot of media attention rightly in recent years has been the lack
of women representation on the awards. And you know, I don't think that necessarily reflects badly on the Nobel committee per se, but probably is more a reflection of the barriers that women face in working and progressing through the scientific community.
So my thanks there to Bloomberg's Charles Daily and Katty poyan Palo. We'll have full coverage of the Nobel Prize ceremonies across at Bloomberg platforms. I'm Caroline Hepgar here in London and you can catch us every weekday morning for Blueberg Daybreak you at beginning at six am in London, that's one am on Wall Street.
Tom, Thank you Caroline, and coming up on Bloomberg Daybreak weekend, I'll look at China's Golden Week holiday and what it could reveal about the strength of the Chinese consumer. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead of the top stories for investors in the coming week. I'm Tom Busby in New York. In China, the Golden Week holiday is now underway.
It began last Wednesday with National Day and runs through the mid Autumn festival, and the government is hoping Chinese consumers will celebrate for more. Let's get to the host of the Daybreak Asia podcast, Doug Krisner.
Tom, Golden Week is regarded as the most important travel period in China. Authorities are expecting two point four billion people to travel during this eight day break, and needless to say, the holiday represents a major opportunity for more domestic consumption. Joining me now is Bloomberg's Catherine Lim, retail analyst for Bloomberg Intelligence. She's on the line from Singapore. Thank you so much for making time to chat with me.
Can you give me a sense on the extent to which there is optimism over the outlook for consumer spending this year?
Right?
You know, happy to be here and gen as you've highlighted we are into the world holiday period. Over eight days, you're gonna see celebrations not just for National Day, but also the mid Autumn festival, which is a traditional, you
know event that family and friends together. So it was very timely seeing how some of the cities are issuing consumption vouchers out to their consumers so that you could stimulate a little bit more of that spending, which admittedly had put on a dreg in August because there was a calender shift in that very important mid autumn festival that I've just talked about, where by family and friends gether.
I'm wondering about sentiment right now, and maybe we can tie to the equity markets in China which have been performing very well. Is that expected to provide some positivity to sentiment?
Do you think?
Well, definitely, I guess you know, when you look at asset and asset value creation, it's either property if not. Do you know the equity market, and I think in the last two to three years, both of these market hasn't been you know, in the best of shape. In year to date, equity market the rarely definitely brings relieved and you know, does help stimulate that centiment if you ask me.
So, when I think of destinations in China, one of the things that comes to mind is Macau and the casinos. Are people feeling reasonably optimistic about casino business this year and traffic at the big places, well.
We've also seen traffic, and I would say, you know, the table roles, etc. Picking up in terms of our crowd, so that is a good sign. On the other hand, what I'll say is that you know, a lot of these spenders, whether your gamblers or your shoppers per se, there is more discerning spending that we have observed, So I'm not sure whether we should be putting that much
bet on Macau. Similarly, you know, even Hong Kong per se, I would say that, you know, after the recent typhoon hits and we are anticipating another typhoon hitting you know, the South over the next ten days, et cetera, it may not actually be you know, the biggest thing for
these two autonomous regions within the country itself. I'm a little more optimistic about domestic tourism within the country, as you know, more of the shoppers or consumers take a break out into you know, the suburban regions and there are more camping sites as well as you know, areas that consumers can take a break from the city.
So you mentioned a moment ago that domestic governments in China are handing out vouchers and coupons and things to kind of stimulate domestic consumption. Give me a sense of how they are applied and whether we should be looking for kind of high frequency data among retailers, whether it's more a story about restaurants, whether it's a story about air travel.
Right, you know, for restaurants, definitely, because you know, we are still seeing lots of promotions ongoing for platforms like Ali Baba, may twe and JD dot Com when it
comes to food delivery and quick commerce. You know, you would have heard of the competition that was ongoing among these three companies since the beginning, since the middle of this year itself, and it continues to actually intensify as we go into the holiday season again, you know, all the gatherings that's going on now that will likely come
through and on a more intensified level into October and November. Doug, Let's not forget that we are now very close to the start of the Singles Day shopping festival, which is essentially a near two month long shopping festival, and it will kick start sometimes on the seventh of October, which is essentially next week itself. Once the consumers returns from
the holidays, they may actually be shopping more online. So I would say that, going back to your earlier point about consumption vouchers, it's definitely good to actually have an extra vouchure on hand to spend. But we'll let's look at the discretionary side of things itself. Those spending may actually come through in October and November, particularly during the Singles Day promotions.
Catherine will leave it there. Thank you so very much, Bloomberg's Catherine Lim, retail analyst for Bloomberg Intelligence. Catherine joining us from Singapore, So we go from the Chinese consumer to the challenges facing some of the most wealthy families in Hong Kong. Joining me now is Bloomberg Shirley Joo. Shirley and her team have been reporting on how trouble in several high profile real estate projects is creating financial
risk for some very wealthy families in China. Shirley, thank you for making time to chat with me before we get to specific examples. Can you help me understand the state of the Hong Kong real estate market right now?
So, Hong Kong's property market has been in a crisis since COVID. It's mainly to do with the rising interest rate globally and the slowing economy in China. A lot of developers borrowed a lot of money before COVID and before you know, Hong Kong sort of plunged into years of political turmoil and the COVID isolation around the time
of twenty seventeen and twenty eighteen. That was when you know, a lot of developers and a lot of smaller businesses borrowed a lot of money and invested heavily into the real estate sector. But then, you know, during COVID, people stopped traveling and the retail businesses really did very badly. And after COVID, China's economy started to slow down, and that really put a lot of pressure on developers and the businesses that sort of went on in the real
estate sector. Today, real estate prices, we have data showing that it's about thirty percent down from the pre COVID level.
So can you give me an example of how a wealthy family in Hong Kong made a big bet on a major real estate project, only to see that project underperform in a major way mis expectations wildly.
New World is one of the most high profile examples of this. They borrowed a lot of money to invest in developing several major projects, including a huge shopping mall and hotel complex near Hong Kong's famous Victoria Harbor and mega shopping mall near Hong Kong's International Airport, as well
as a sports park near Hong Kong's old Airport. And they did that in twenty seventeen and twenty eighteen, and they spent a lot of money, fueled by debt, and then in twenty nineteen, Hong Kong started to enter this prolonged period of political turmoil and COVID isolation, and after COVID, Hong Kong's economy didn't rebound, it slowed down, so a lot of these projects didn't really have time to materialize.
They didn't have the chance to generate cash for New World to pay off their debt, and that's why New World's step problem really emerged over the past two years and it was pushed to the brink of default. And it had to line up Hong Kong's biggest ever refinancing with dozens of banks, and it put it off. But then banks started to feel that they had too much exposure on your world.
One of the things that I think is very interesting here in terms of context is the notion of family empires being involved here. It's not just a company. It's almost like a dynasty, isn't it. And you mentioned in your piece this issue which I found very interesting the notion of self correcting. So when a family makes a mistake, it's the dynamics of the family sometimes that can make the correcting process even more challenging, right.
Right, Yeah, So the issue with a lot of family owned businesses is that a lot of the decision making is sometimes down to the personal whim of family members. Even though they hired professional managers to run their companies, the final decision making will be swighed by the will of family members, and that's making management more difficult and less professional. And in New World's case, because they expanded so aggressively in twenty seventeen and twenty eighteen and the
timing was really bad. So now there that problem really showed, and that's really raising an alarm bell for a lot of other family owned businesses in Hong Kong and around the world as well.
So we know on the mainland, the government's been very concerned about problems with the property market. How is the local government in Hong Kong viewing this situation right now? Are people very concerned?
People are concerned, and that was why you would see reports about Hong Kong's mondatary Authority actually following up on New wor World refinancing effort. You know, there were reports about Hong Kong Monetary Authority calling banks up to check on the status on their refinancing arrangement with New World, and banks felt that they didn't want to be the one that make New World default and trigger the rippling
effect on Hong Kong's economy. So there is this saying that New World is too big to fail, and that really showed during its refinancing effort with the banks and with the involvement of Hong Kong's monetary authorities.
When I think about the residential market in Hong Kong, I know that for years there have been challenges trying to add to new supplies. So many restrictions on developing land and yet here we have a situation where commercial developers don't seem to have any problems. Can you imagine a world where things get turned and so that perhaps in a way, these companies begin to focus their energy, maybe more on residential property than on commercial property.
That's exactly what New World is doing right now. So now they are refocusing on selling and building more residential projects and from selling apartments that will generate money for them to pay down debt. So that's their main strategy right now.
Shirley, we'll leave it there. Thank you so very much, Bloomberg Shirley Joe in Hong Kong, and I'm Doug Chrisner. Catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast. Tom.
Thanks Doug, and that does it for this edition of Bloomberg day Break 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 Tom Buzzby. Stay with us. Top stories and global business headlines are coming up right now.