hi;
are you sure it does not transmit ANY charecters?looks like it should send one charecter and then stop sending.
other way to send charecter could be:

rx_tx_isr:
jbc ri,jmp_rec
clr ti
mov sbuf,p1
reti
jmp_rec:
clr p1.7
cpl p1.0
reti


;initial code
;generating s/w interrupt to initiate tx
setb ti
jmp $
end
regards
pranav