Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Delivery of 7 . Look how we are in terms of the major indexes. Asian markets, most in losses tracking to 3 drop on wall street overnight. Opened slightly earlier love earlier. Slightly lower earlier. We are watching petrochina down at this point in time. The hang seng, down about 1 . Kong announced an expansion of its restrictions aimed at curbing the spread of covid19. That would weigh on the economy even more. The sti, down more than 3 . This is a market that returned to bull territory recently and citi said investors are pricing in post recovery. Singapore reports higher cases, more than 1000 for the second day running. I want to dial back to the oil story because we see oil moving to the upside after two days of unprecedented action and a spectacular selloff. Opecplus ministers holding an unscheduled conference to discuss what has been going on. The closing statement signals there are no new measures planned at the moment. Lets bring in mliv asia editor. Oil is on the up. We had two historic days, massive selloffs. Where do we go from here . What are people saying . May be a screwed to the downside in the nearterm. To the downside in the nearterm. Brent has been relatively calm compared to the turbine turbulent wti market the past couple of days but even brent crude slipped below 20 a barrel and his extended losses further today. That clearly shows the recently doeed opecplus supply cuts little to solve the nearterm oversupply problem in the Global Market and therefore prices will remain under pressure for some time to come. For now, there seems to be little for producers to do about the demand destruction and lack of storage. Still on the longterm, some analysts say prices could recover later as producers, particularly in the u. S. , would be forced to cut output. To balance the market, more crude production may be forced to shut, but that is not happening fast enough at the moment. Haslinda weve been talking about the demand destruction caused by covid19. It does look like it is just a matter of time before we run out of space to store oil. How soon do you think we will get to that point . Sungwoo thats a tough question, but there is little doubt we are going to run out of space pretty soon as global Oil Stockpiles continue piling with people confined to their homes around the world. About eightplus of to nine billion dollars a day. And u. S. , crude stockpiles have jumped about 60 to almost 55 Million Barrels since the end of february and some analysts say inventories could reach capacity in the next few weeks. A major Storage Company recently said it had almost completely soldout space. Rishaad the cut doesnt kick in until may. That does not seem near enough to plug this demand destruction that has happened and some are suggesting we need 30 or 35 Million Barrels a day off if we are going to balance things out. What are you hearing . Pointo that is the worst of demand destruction we are forecasting, experiencing at the moment, according to a lot of forecasts by analysts and traders. As we go further out, probably later in the second half of the year, we could see a gradual increase or recovery in demand, but the question is whether that recovery is going to be fast enough or Strong Enough to lift oil prices high enough. Sungwoo park on the situation in the oil market. Lets get the first word headlines. It is astounding the number of Coronavirus Infections around the world, now topping two point 5 million with more than 175,000 people dead. However, the recovery rate for sufferers and italy has almost surpassed the number of new cases for the first time. Germany reported the smallest new infections this month, but the worldfamous oktoberfest has been canceled for the First Time Since world war ii. This process will need to become our new normal. Harvard university is hitting back at president comes criticism of Large Companies taking federal money amid the coronavirus. He attacked the university cautioned homage, which has reported to have borrowed more than 8 million from the scheme. Harvard insists it has not applied for nor has it received any funds through ppp and claims saying otherwise is in your credit inaccurate. Lockedre is extended its down with more than 1100 positive cases on tuesday, taking the total above 9000. Indonesia is banning travel amid reports many people who normally move or plan trips irrespective of the virus. Infections in indonesia have quadrupled this month with a peak seen coming at the end of may. A new Bloomberg Survey makes grim reading for casino operators in macau. Shoulder annected to 95 slump in growth earnings in the march quarter. All six operators are to report in the coming weeks. It underscores the deep damage of the virus and subsequent restrictions on travel and entertainment. Global news 24 hours a day, onair and online on tictoc and twitter, powered by more than 2700 journalists and analysts in more than 120 countries quick take on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Rishaad metabolix at what is going on after the break, coming up on Bloomberg Markets. Strategist, equities bouncing back. But built on hope and not much else. This is bloomberg. Were witnessing what happens when logistical running out of pipelines. Storage is a concern throughout the industry. Right at 30 Million Barrels a day the world is of his life right now. There is too much crude oil. It is getting stuffed in storage at a fast rate. It is a global problem. A lot more crude oil is on the way. In about three weeks, you will have the same situation with june crude oil. Everybody knows that. That is the way it is developing. I wouldnt get too excited about a price recovery anytime soon. The price will be sluggish for a long time. Banks and bonds, but it makes the matter worse and we get a negative crisis. Guests commenting on oils deepening collapse. Lets bring in eleanor creagh. Oil move assets in the near and longterm . Will it be oil that finally puts out the rally inequities . Eleanor it could be. Oil is probably a warning bell or proxy for other assets and Oil Oversupply but demand destruction. The rapid bounceback really looks like we have come too far too fast against the real economy backdrop, so it is optimistic relative to fundamentals and that is when the visibility, the future outlook is quite poor at the moment and the sharp contraction we have seen in the real economy and in corporate earnings leaves very little margin for error at current valuations, which are still above average and likely based on what our overinflated earnings estimates. Right now, perhaps one of the only certainties we can take is the volatility is going to remain. We are seeing higher lows in the volatility. That is signaling to us alarm bells are still sounding and it is really a traders market, so you want to if you are a longterm investor, you dont want to over trade and you want to keep that focus on capital preservation to avoid those behavioral biases that can run you into trouble. I think it is very important to make the distinction that the peak infection is not peak crisis. Opening up is going to be a pricocess and there will be a multiquarter comeback. Not a one quarter comeback. Haslinda emerging markets to this oil slump, prior to the slump, voices suggested e. M. s will lead the recovery. Eleanor well i think if the moment, it is going to be pretty difficult for gms to be bigger recovery lead the recovery. Please see currencies acting has a relief valve for emerging markets, but that could create secondary dislocations down the track and i think emerging markets are really going to struggle to recover and that could present a further drag on global activity as we move out of this peak crisis phase. At the moment, weve got breaking news from the chinese banks. Weve got at the moment banks bad loans rising in the First Quarter. No details being given. As soon as we do, we will get them to you. Out withrlines coming a quarter million shares at 26. 50 each. The company is offering millions of shares in order to keep afloat. Public offering, share sale taking place and should bring in an estimated 1 billion to the airline. That is according to initial estimates. Taking a statement the funds will be used for general corporate purposes. Eleanor, well be seeing a lot of this as airline struggled to say afloat they afloat or in the air if they can take off. We saw Virgin Australian just yesterday, right . Eleanor you are exactly right. I think this plays into the historic moves we have seen in oil. Gain really all pain, no because the lockdowns prevent those Lower Oil Prices benefiting the consumer and the airline industry. Who would traditionally benefit. Anotherng to be nail in the coffin for airlines. Markets,of the oil less fundamental unless fundamentals improve over the next four weeks, we will experience or relive what we saw in the may contract with june, as well and it plays into the whole topic with airlines. Things Like International travel are really a long way off and we are potentially going to enter into a period rbc somewhat of a structural change toward International Travel with regards to people working from home and increase propensities favormpanies to videoconferencing over International Travel. I think there will be a big rethink of that which will be a suppressant on demand for the airline industry. That will play into the longterm demand outlook when it comes to oil. I think the focus now really, switching back to the oil market again, is on the risk of the Oil Companies being forced to shut down production, post possible bankruptcies, weve seen the back end of the curve falling. That is reflecting the true state of demand destruction and i think the key takeaway for those that may be understand the technical dynamics completely, the headline of historically cheap oil does not really make this a good buying opportunity and that is particularly in the etf space. That is something we are talking to our clients about a lot, were the technicalities like the contract role mean it will be hard to make money, even though we are seeing historic lows in oil prices, and the opportunity of single stock, strong balance sheet. Rishaad i want to just shift a little bit away from oil and get your view as to what we have had out of the earnings season thus far. I think things get worse before they improve. The u. S. , not that bad given the coronavirus got there fairly late. The Second Quarter is what we got to be worried about and Certain Companies not giving guidance, that is another source of research that concern. Eleanor you are exactly right. We have come too far too fast. We have such Poor Visibility at the moment. We know opening up will be a process, jobs around the world have been lost a frightening speed and that has its own subset of secondary implications that are going to lag on any economic recovery that we do see. There is no doubt there will be a very sharp rebound, but i think the notion of a vshaped recovery has been thrown out the window. Given the scale of Workers Worldwide affected by lockdown measures, that will have a Lasting Impact on consumption and spending. We are also seeing anecdotally, that is playing out in china, which is one of the countries to move through this initial crisis phase before other countries, given they were the first to lock down. Weve seen from the Early Warning signs emerging that Consumer Behavior is slow to recover. There are Health Concerns that dampen activity and that is going to mean the recovery is far more long and drawn out, and we will have a multiquarter hit to earnings. I think that in itself plays into the fact really where we are at now in terms of valuations. Equities look pretty expensive here. Eleanor creagh, sacco capital markets. Saxo capital markets. New cases surge among Migrant Workers. We will have the details next. This is bloomberg. Rishaad you are back with Bloomberg Markets. Singapore extending its locked on for a month after a surge in infections while global cases top more than 2. 5 million. It is quite a turnaround from singapore from being a hero in containment and it does seem like it is a cautionary tale. What happened here exactly . Yvonne it goes to show that ntries have experienced with experience in handling epidemics can be wrong. From being a standardbearer in how to contain the virus to being the largest reported outbreak in Southeast Asia and this traces back to the explosion of cases we see among Migrant Workers living in dormitories and they now account for more than 70 of confirmed cases in the city state. We saw the second day in the row where singapore saw more than 1000 new infections in a day and we heard from the Prime Minister saying singapore will extend its partial law that lockdown until june 1. Traditional 2. 7 billion dollars to support businesses. They also plan to close more work places where only the most essential Services Remain open. Say singapore was too slow in revising its Response Plan as development rolled on. Outd19, they turned nothing like sars. The old playbook needs to be thrown out. Also too slow they say is indonesia, now banning the annual holiday exodus. We see massive religious gatherings sparking new clusters in the region. Yvonne and religion has always been a sensitive issue, especially during a pandemic but indonesias case, it is perhaps warranted. New infections have quadrupled in this month alone. We are talking 7000 infections. It has claimed 616 lives in the country. There is a fear the exodus could spread the virus to the greater jakarta region. Eight indonesians heads for their hometown. People travel from big cities like jakarta to villages and towns last year so the numbers are quite enormous. We have seen religious groups virus hotspots around the world. In pakistan, they are tracking an event hosted by a sunni muslim missionary group that brought together 70,000 worshipers. For is now responsible more than a quarter of cases in the country. Haslinda yvonne man on the challenges facing the region in containing the virus. Lets do business flash headlines. Facebook planning to invest in the company that serves the Additional Needs of indias biggest companies. Facebook will tie up the technology of whatsapp with an Online Grocery store which aims merchants6 million online across india. The investment would make facebook the largest minority shareholder in the platform. Taiwan semi is warning of a potentially adverse impact of the coronavirus including possible interruptions of the Global Supply chain in its annual report. It says there may be production delays due to office shutdowns because of the pandemic. The company says the virus has caused it to modify practices and set up what it calls an academic prevention committee. Technologies is emerging as the big winner in the 170 inlion race to build 5g china. Despite being blast listed by the u. S. Has secured 4 billion of equipment orders from soft china mobile, beating out rivals like ericsson. Beijing has forcefully backed huawei. Going on with markets as we head toward the lunch break in tokyo, this is where we find ourselves. Equities under pressure across the board. Wasnt exactly a session to take on risk and wall street. It seems like the same scenario in this neck of the woods. Tokyo closed for lunch is next. This is bloomberg. It is 10 29 a. M. In hong kong. In asia trade after he collapse in contracts. The global rut triggered by slumping demand and lack of storage has frozen billions of dollars in capital spending. Offering no new policies in an unscheduled video call. Eu leaders open a summit this week with no clear instructions of how to finance the cover refund and no details on how they operate. It contains no financial costing, no time frames, and no vision of investment needed to stem the fallout. A tentative recovery in air travel in china is stuck at less than half the precoronavirus leisure trips. About 3000 about 30,000 domestic flights in china compared to 80,000 before coronavirus. The virus induced economic slump in japan is prompting banks toward lenders to expect investment losses. Downturn ist if the prolonged, more could face solvency issues and higher credit costs. They also warned that funding could become unstable. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Mitchell. This is bloomberg. Haslinda lets take a look at the markets. Oil still front and center. June contracts trading higher at this point after that slump. No more storage despite the gains we are seeing today. 80 . Own about when it comes to freight rates, down today. But the rates continue to be surging. Flip the page, take a look at where we are in terms of major market. It opened lower earlier. We are waiting for details on that. South korean president moon, it is not the only country that has been boosting stimulus. Singapore last night introducing 20 million more in stimulus. Take a look at where we are in terms of the hung saying in terms of the hang seng, trading lower today. The dollar was it. Hit. Ats particularly intervenerompted to for the first time in a long time. At news quickly, a look coming out of south korea. They will be providing liquidity and payment guarantees. This is coming across at the moment with regards to south korea. Extra budget here as well, that is what we have at the moment. Fund for those countries affected by the coronavirus. About 16 billion u. S. Dollars. Lhis news coming from seou where president mona speaking at an emergency meeting with cabinet members. Lets move to what is going on in china. Respondents survey see a return to normal activities in the mainland in the next three months or so. They have no plans to relocate supply sourcing outside of china. Lets get to beijing. War lastring the trade year, a lot of talk about supply chains. More talk of that amidst this pandemic. Your finding that perhaps that is not the case. The u. S. China trade dispute has led Many Companies to reassess supply chain strategies. Trendsl see those intact. However, the latest survey we conducted in terms of the impact that covid19 is having on supply chain strategies, they say that there is no abrupt shift in the supply chain strategy. Rishaad what do they see looking ahead . Still talking about 30 cna change here. Is there any particular Industry Groups we are looking at that are more likely to be shifting supply chain than others . I think for that remaining 30 , there are a few patterns that emerge. The supply chain operations, covid19 could accelerate. I think that is really part of risk diversification as opposed to an abrupt shift in and of itself. Obviously, that is highlighted to companies that they really have to have a diversity of supply chains in light of the pandemic. Secondly, the medical equipment acuteoducts theres, sectors, products acute supply shortages. On the one hand, the china market. On the other hand, adequate supply in other parts of the world. The chineseaslinda government has rolled out a few measures to help cushion the blow. Have companies in china been . Ble to leverage that aid first off, our surveys indicate that our member do not want to be discriminated against accessing that type of support. That oursupport countries received to date is really at the local level. Most of our Member Companies getrt that they are able to their manufacturing operations back on stream. Think what is surprising, the effectiveness and speed of that support. We are working with a number of companies to communicate to government that the large corporations, Foreign Corporations playing a meaningful role in small, Mediumsized Companies to stay afloat and revitalize during this challenging period. Haslinda just to break some news that is coming across the bloomberg terminal, chinas banks nonperforming loan ratio rising as of the end of q1. Chinas insurers operational costs will rise and will slow by 13 points on the year. Insurance premiums rising 14 in the First Quarter compared to a year ago. Not surprising that the mpl ratio rising at the end of q1. You talked about the disruption in the Global Supply chain and how companies in china the u. S. Companies in china are tweaking to ensure that the disruption in the future will not be so great. Is there anything about how china can help make this Global Supply chain more resilient post pandemic . In the shortterm, it is all about economic recovery to ensure that products and services not only can move across borders but fundamentally that there are there is demand for those products and services. Experiencing a decline in demand. 50 indicated that revenues were. Own significantly that is certainly part of the equation. The other area where the Chinese Government can take steps and not necessarily a big burden from a financial perspective is to announce some sort of tax. It would result in lower revenues, but at the same time, it would soften the blow. Economynd in the revitalized and started. Rishaad the Chinese Ambassador to the u. S. Has been talking about effectively rethinking relations between the two countries. That could mean anything but one would assume it would be to sort out their differences. , it could mean it would be further decoupling. What would your respondents say about that . Thatyou alluded to before, while supply chains might not be moved, there could be duplicate supply chains elsewhere. Think that a growing number of our companies are concerned about the rhetoric related to decoupling and recent tensions, ongoing tensions in the u. S. China relationship. They are responding in a number of ways. First, what we referred to as the china plus one strategy. That is to say they have sufficient investment operations. Nd manufacturing footprints at the same time, for those companies that are very export oriented or have a portion of their capacity, as to the export expect that to i have more flexibility. The other point i would like to and processpacts from their perspective, there that slight uptick in sentiment in the last month. Totentions as it relates covid19 are likely one of the reasons for that. Rishaad thank you very much china to the amcham president alan beebe. This story breaking out of beijing, the nonperforming loans, that ratio at 2. 04 on average at the end of the First Quarter. Atalso had the China Banking insurance rate, talking about chinese insurance operations rising notably. Growth slowed by 13 Percentage Points on the year. That is currently what we had out of the China Banking insurance rate. That story on nonperforming loans ratio rising by 2. 4 on average by the end of the First Quarter. Coming up, netflix emerging as the true king as millions of people could not get enough of joe exotics being cat antics. This is bloomberg. Haslinda lets do a quick check of the latest business flash headlines. On a new fundraising round that what value the company above 15 billion. The maker of fortnite and the house party an, which has exploded in popularity during the pandemic has hired a Financial Advisor and is said to be aiming for a cash injection of up to a billion dollars. Another day, another company withdrawing Earnings Guidance for 2020. Lyf time, ridehailer lyftng uncertaintyt flaming uncertainty over the coronavirus. Parent is another benefit from the virus. Daily users have soared. People try to stay connected during the pandemic and beyond. Daily users in the First Quarter, some 5 million more in the First Quarter. Ify say, too early to know that will boost revenue. Lockdown dueglobal to the endemic house, as you would imagine, been a boon for netflix. It added a Record Number of paid it had been reckoning on. That quickly fizzled. There are concerns on what happens next. Do people start do people stop watching their television . That is the key question. Away their numbers. If you look at the after hours trade, it was flat after initially surging by 12 . That is when they said they expected 7. 5 million new subscribers in the Second Quarter. That is not bad but not as good as the 15. 8 million jump. Check out the big picture year to date for netflix. Better than 44 . Prices hit new highs this week. Investors getting used to the new motto, pandemic and chill. They thought it might last for a while. We have one more chart of how the viewer patterns for many streaming services are playing out for americans. You might notice that it is really surging in the day when Many Americans are working from home. Maybe they are watching from home. Might back to work, that come back down. It could decelerate as home confinement ends. There has been a lot of talk about a show called tiger king named joeazy guy exotic. Many people are saying that they are concerned that this huge trend could last. Haslinda it is not just the americans. A lot of netflix growth also comes from international subscribers. Snapchat was another win after hours. Certainly seeing big growth. India largely responsible for that. Netflix saying that. Also, a sizable boost in the asiapacific region. That has certainly played into the surge and the global lockdown clearly apply. Snap was on fire. Shares surged as much as 22 in late trading. That was after they said that the apps popularity was accelerating during the lockdown. Coursend daily users of blew away analyst projections as well. They are also saying it is too soon to know if this surge in usage will boost revenue. That is because advertisers are expected to trim budgets during the outbreak. We will be interested if this transitions into the regular trade. We did see a lot of social media stocks kind of rise after hours with strong reports from both netflix and snap. Rishaad thanks for that. Su keenan joining us from new york. News coming out, headlines from this. The chinese banking and insurance regulatory commission. Coffee, a terrible ride of it the past few weeks. They are saying china bank should closely monitor loans to luckin. That is where we are with just those headlines in the regulatory body saying that chinese insurers have been receiving liability claims as well. Hasin coffee apparently small outstanding loans but they should be closely monitored according to the cbirc. Coming up, we are talking facebook in india. Assetsow billions into owned by the Company Owned by the countrys richest man. This is bloomberg. Haslinda facebook is betting on india, announcing plans to take a stake in a company. Lets get more on that story. Take us through the details of the deal and how it would affect in theital landscape country. 5. 7 point 7 billion billion dollars. Until recently, he has been the richest man in asia. He has taken strong steps from transforming his country his company from an Energy Conglomerate and ecommerce giant. This is really big for them. A bil billion half lion. World, likein the alphabet or amazon. It already has 388 million subscribers. Givenok, the deal is big, that they are looking at the future. Shrieking revenues with the lockdown shrinking revenues with the lockdown. No spring vacation pictures with your friends because there is no travel. Whatad looking elsewhere, are we expecting when we get the start of the trading day about 50 minutes away . Nupur we are in the midst of the earnings season. Companies have announced results including top Software Exporters like infosys. The market is expecting the government to come up with stimulus measures. Company commentary, how it will shape up. We are under a lockdown which will extend to nearly 40 days in india. They want to understand some companies, how things will be in the short to mediumterm. Rishaad thank you very much indeed. Mumbai. Harya in haslinda lets take a look at the markets. Pretty much red. Toward positive territory as we speak. Oil, the main focus. The rout of the oil market. By hang sent currently up 0. 7 . Petro china is also trading lower. Stay tuned. We have got an interview with House Speaker nancy pelosi on balance of power at 12 00 noon wednesday if you are watching in new york, 5 00 p. M. In london. This is bloomberg. Haslinda it is a most 11 00 city. 11 00 in the lion rishaad we are entering the last hours of the morning session in hong kong. This is a look at our top stories. Asiapacific equities sliding a made continued Energy Weakness and the coronavirus turmoil. Oil edging higher. Global virus infections meanwhile topping 2. 5 million with more than 175,000 deaths. Singapore extending its lockdown for a month after a surge in infections. And relations need a reset. Chinas envoy in washington saying ties need a serious rethink. We will discuss the comments. This is Bloomberg Markets. Haslinda in the markets, it is about oil. Oil continues to be the focus, in turmoil, spilling over into the equity markets. 9 after up by slumping for two days. Traders trading 40 a barrel. Oil higher right now, but a ways off. It is about oversupply. So much oil out there. There is no more storage room. Lets look at where we are in terms of those indexes. Asian markets in losses across the board, dragging the 3 drop on wall street overnight. Investors taking the oil slump as a reflection at how deep the recession is. Csx 300 lower at the open. Guessrrently i reacting after china banks rising to 2 as of the end of the First Quarter. The hung saying down bys hang seng down by 610 of 1 . The likes of petro china putting a drag on the index. Pretty much risk off across the board. Lets look at what is happening with Southeast Asian markets, whether the trend continues. Is the position we find yourselves in with the bangkok market. The majorager benchmark indices. Manila 1. 5 down. 43 minutes away from the start of the session in india. Lets look at the prospects of the trading day. Nifty. On the a rupee marginally weaker. A bond market pretty much unchanged. What we are watching out for in terms of the stocks on the indian market, facebook is going to buy a near 10 stake in a platform. Hpsc reduces its retail prime lending rate on housing loans. All manufacturing locations of a company have permission to operate at scaleddown levels. Those are things to watch out for towards the start of the session in mumbai. Lets have a look at what is going on with the first word news as we go to new york and join Karina Mitchell. Karina the number of Coronavirus Infections around the world topped 2. 5 million with more than 175,000 people dead. The recovery rate for sufferers in italy surpassed the number of new cases for the first time. Germany reported the smallest new infections this month. Oktoberfest has been canceled for the First Time Since world war ii. Our approach to stopping transmission must continue to adapt and evolve along with the epidemic. At least until a vaccine is found. This process will need to become our new normal. Haslinda meanwhile, singapore is extending its virus lockdown for a month after a surge in infections. There are more than 1100 positive cases tuesday, taking the total above 9000. In indonesia, they are banning travel for the festival as many are planning moves irrespective of the virus. A peak coming near the end of may. China is calling for a reset of relations with the u. S. Amid the coronavirus, saying the lack of transparency in washington beijingssador told us shared all it knows about the infection. The u. S. Doubted chinas openness about the virus. Global news 24 hours a day on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Haslinda lets get insight into the markets. Asian stocks arbitrating after a risk off session on wall street. Several factors weighing in on markets from continued volatility on Energy Markets to other signs companies are finding it hard to provide outlooks. Our next guest sees values in stocks and believes we are quite near the bottom in asian equities. Always good to have you with us. Why the optimism . How can you call a bottom when we are not sure still how this pandemic will play out . With this volatility year to date, we are down in the asian markets. The way we look at value is not price oneearnings, the equity per se, but we look at it from a relative perspective. If you look at bonds and cash deposits, we think certain segments of the asian markets are giving you a lot of value. For example, singapore and china toks are offering between 5 6 . We think these are sustainable. Point in time. Haslinda are we seeing oil plunged . How much of a risk is oil . We have to avoid allocation into the oil play. Having said that, we do like the European Integrated oil. They have fallen some 40 here to date. Valuations are very attractive. If you look at their track record in terms of paying out dividends, they have been maintaining or at least growing dividends for a long time. Their Business Model is integrated upstream and downstream, we think dividends are sustainable at high single digits. Oil has come down a lot. We avoid oil, especially upstream, but integrated oil majors is a segment we think is attractive from a dividend angle. Haslinda looking at what you are liking, you like ecommerce, e payments. This is potentially a crowded space given everyone is calling for them to be outperforming in the coming quarters. Been pushing these themes for the last two to three years. This pandemic only reinforces nd. S tre working from home, staying from home, cloud computing, 5g will be the winners. How do we then advised our clients advise our clients . You want to barbell your portfolio. On one end, you are buying into highyielding assets like dividend yielding stocks, corporate bonds, because we are in a low Interest Rate environment. On the other end, consecutive growth. The agingone, population. Health care spending can only go up. With this pandemic, it again reinforced health care as a favorite sector for us. Fallout how does the following sars in 2003 and also c in happened after the gf 2008, 2009 inform the way you are recommending people invest . There is a big difference between what we are going through now. In gfc, as he would recall, the banks you would recall, the banks were broken. Now the banks are up and running and greasing the economy with credit availability. Severity is not as damaging from this point of view. Compare this pandemic with sars. Again, different proportions. Sars was very regional. We have to be a little bit more careful. Peaking ofsee the infection cases. In fact, looking for it to come down. 25 from there up bottom. For this recovery to be sustainable, we need to see these cases come down and economies gradually reopening. Again, haslinda was asking about what sectors you like, you said ecommerce, epayment, these are things you are looking at as gaining more traction as we come out of covid19 and the terrible situation the world finds itself in. People are talking about a new normal. There is so much talk about new normals in the past. It is always a slight change. It will not be a radical revolution, is it . No. Longterm irreversible trends, whether there is covid or not, these trends will be growing. Nothing is going to stop that. Thesest be involved in sectors of ecommerce and cloud computing, robotics, automation and what have you. Muchad thank you very indeed. Dbs Investment Group chief investment officer. Lets quickly get to this deal taking place. A platform facebook has taken a near 10 stake in, investing some 5. 7 billion in various platforms. This partnership will offer Innovative Solutions jio ying looking at that stock certainly when the indian session gets underway in 33 minutes. We will also be talking about ecommerce elsewhere. We have one of south asias biggest such companies telling us how it is gaining the trust of new customers amid the pandemic. Its ceo joining us later this hour. Haslinda up next, singapore boosts stimulus as it records another day with more than 1000 new infections. We have details just ahead. This is bloomberg. Rishaad a briefing in about 45 minutes noon hong kong time. They have approved the new Hong Kong Civil Service head. This is also the approval came through of a new hong kong Mainland Affairs chief as well. It was flagged in various news reports before, but we are getting some confirmation with regards to the changes in top political positions, or nonpolitical when it comes to the Civil Service head. Government positions in hong kong. That is what we have. Haslinda on the virus front, singapore is extending its virus lockdown for a month after a surge in infections. While global cases top 2. 5 million, our Bloomberg Markets coanchor has the latest. Singapore has switched from being a hero containing the virus to now a cautionary tale. What happened . Yvonne in just a matter of days it went from a standardbearer in how to contain this virus to now the largest recorded outbreak in Southeast Asia. This goes to show the countries that experienced handling epidemics can be wrongfooted as well. Tracing back to the explosion of cases among Migrant Workers living in dormitories, which now account for more than 70 of all confirmed cases. We have seen the second day in a row in singapore with more than a thousand new infections in the last 24 hours. The Prime Minister extending that partial lockdown until june 1. They will be adding an additional 2. 7 billion to support businesses. They will scale up testing and also plan to close more workplaces as well with only the most essential services meaning open. Some experts remaining open. Some experts say singapore was too slow dealing with covid19. They said it was nothing like sars. They have to start anew. Rishaad yvonne, i think we are going into the holy month of ramadan for muslims tomorrow for 30 days. At the end of it is this big holiday, a massive religious gathering taking place. That has been banned in indonesia. This is all because of these new virus clusters in this part of the world. Tell us a little bit more. Yvonne in indonesias case, this exodus is warranted. In terms of new cases in the country, they quadrupled in this month alone. 7000 infections. It claimed 616 lives, the highest in fatalities in the region. There is this fear there is going to be a spread of the virus for the greater jakarta region if they allow this type of movement to happen. This is a ritual where one of eight indonesians head to their home towns, an estimated 19. 5 million travel from jakarta last year. Religion has been a sensitive issue for governments, especially in a pandemic. We have seen religious groups linked to virus hotspots around the world. South korea was a top case, pakistan as well. Authorities tracking an event hosted by a sunni missionary group that brought together 70,000 worshipers. That alone has been responsible for more than a quarter of the cases in the country. That same group also a center of spike in india and malaysia. There is some concern of these types of gatherings. Rishaad thank you very much indeed for that, yvonne man, our markets, anger joining us coanchor joining us. The threemonth came through at 1. 82 , a move of four basis points lower. Coming up, the white house floating the idea of a ban on Saudi Oil Imports as it weighs options to rescue the countrys oil industry. You are with bloomberg. Haslinda lets do a quick check of the latest business headlines. Chevron is being told to halt Oil Production in venezuela immediately as the u. S. Pushes for regime change. The company can no longer drill, products,ransport oil although it still may ensure the safety of its operations in venezuela until december. The decision also applies to Oilfield Service providers halliburton, becker hughes, and weatherford. United airlines is seeking more than 1 billion in share sales, stepping up assets to boost capital amid the virusinduced collapse in air travel. The offering is priced at 2 6. 50. The sale is the first from a major u. S. Airline in the pandemic and comes even as the government steps in with federal support. Top chipmaker taiwan semis warning of a potential adverse impact from the coronavirus, including possible interruption of the Global Supply chain. In its annual report, it says there may be production delays due to shutdowns because of the pandemic. The company says the virus caused it to modify practices and set up what it calls an Epidemic Prevention committee. Athaad lets have a look the oil price meltdown. We saw a recovery taking place in this june contract. Certainly a that is word. Wti down 2 . Just erasing the gains that we did have before. We saw a recovery, but that has been reversed. The former chief executive of bp says the demand for crude in the end will take a long time to recover. John brown telling bloomberg exclusively that concerns like the virus will force a change in demand. Come downion will certainly in the states as new production is not added to the future. Demand, i think, very sluggish indeed. Will take a long time to recover. It is down very heavily at the moment, around 30 . But it will come back, i think, slowly as people will be very consuming behavior that has changed as a result of the virus. I would be not surprised if you look at oil prices being much lower for longer. You brought up opecplus. There is conversation they are going to move their cuts forward, maybe even take it deeper. A. 5 Million Barrels of oil a day. Saudi arabia did not want to go below that. 8. 5 Million Barrels of oil a day. Dent you really have to production a lot to support the price. In the end, that is not sustainable. It is what we saw when eventually the cuts were not uptainable, people opened the caps and oil stayed low. There is a lot of oil. It depends on the register of demand. Demand i cant see this growing very steeply for a very long time. I think all of these are temporary things. Could you help me understand the roadmap to stronger demand . Do gasoline inventories need to come down, then refining margins improved, then we soak up oil in the market . When we talk about recovery, what is the process . John it is just that. First is underlying demand for economic activity. There in mind bear in mind the growth of ddp determines the growth of oil gdp determines the growth of oil slowly. We are getting more efficient at oil every year. For every less oil increase in gdp. Inventories have to be consumed. People really want to consume oil. Aviation, transportation, a variety of things like that. I think there is a much bigger overlay on this today. That is peoples great concern about climate and the use of hydrocarbons, which generate both methane and Carbon Dioxide into the atmosphere and increase Global Climate change. I believe this is something that in terms ofn, and behavior, i do think people are beginning to reflect on viruses creating health problems. Ceo johnthe former bp browne speaking exclusively to bloomberg. This is what we have in the absence of trading in tokyo. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] haslinda looking at live pictures of the lion city. We are in the middle of the trading day. The lionthe losses in city. Tracking the losses in all of asia. Singapore stocks returned to bull territory. Investors starting to price and price in a virus recovery. Singapore reported 1000 new cases for the second day in a row. The lockdown has been extended for a month. The msci down 1. 3 . Lets get the first word headlines with Karina Mitchell in new york. Karina we start in japan, where the virus induced economic slump is propping the central bank to warn lenders to expect investment losses. The boj report says if the downturn is prolonged, more companies could face solvency issues and higher credit costs. It also warned fx funding may become more unstable, but said the economy remains resilient. A tentative recovery in air travel in china at last at less than half precoronavirus levels. 135,000 to mystic flights are operating dalian china compared covid19 shutfore down travel. Irs is the number of mainland flights has stalled since then. A new Bloomberg Survey makes grim leading for casino operators in macau. They are expected to shoulder a 95 slump in growth earnings. All six operators are to report in the coming weeks. Declines would underscore the deep damage being inflicted by the virus and subsequent restrictions on travel and entertainment. Eu leaders open a Virtual Summit this week with no clear instructions on how to finance the finance the virus recovery fund. The videoconference will discuss the roadmap for tackling the pandemic, but it contains no timeframe and no vision of the investment needed to stem the fallout. No concrete decisions are expected on friday. Global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Lets take a look at the markets. It is pretty much a risk on day. Asian stocks are trading on the back of the oil rout. Wti june contract raising early gains, now back in the moneyit seems in the money. We some great losses over the past two days. We are quickly running out of storage space. Date. Ill down 80 year to brent down 70 in that time period. Looking at the major indexes, the csi 300 index back in negative territory, giving up a bit of gain we saw earlier. Chinas ratio rising 2 as of the end of q1. The hang seng dragged down by hsbc. Research have been extended. Fitch recently downgraded hong kong from aa to aa minus. We know gdp estimates for the city have been downgraded as well. Appetiteack of risk across the board. Risk off. Rishaad you are seeing that as well with what we have with those flaccid volumes currently, seeing perhaps a little bit of a comeback, if you will. Lets quickly have a look at the tensions between the chinese and americans. Beijings ambassador to washington is the latest official to suggest the strained twoway ties are in need of an overhaul. He was making those comments during a Bloomberg New economy conversation series. I should be hoping for more than that. Not just a pause intentions, but a serious rethinking of the very foundation of this important relationship. Rishaad lets get more on these ties and bring in stephen engle. What does rethinking actually made . Does it mean kiss and makeup or does it mean decoupling . You are seeing signs of decoupling through the trade war with oem manufacturers looking elsewhere around the world for manufacturing. The first order of business, if they do want to reset the relationship, is bridge that trust deficit that has grown, economically, diplomatically, and military to military. The blame game over the virus has really going both ways. The latest, donald trump yesterday saying there would be consequences if china was knowingly responsible for the coronavirus outbreak. Of course china has absolutely denied those allegations. Others as well in europe, like the u. K. Foreign secretary when Boris Johnson was in the hospital. He said britain can no longer have business as usual with china. We heard eu diplomats talk of mounting anger to chinas behavior during the pandemic, whether it is the distortion they say of the truth. The eu chamber of china president says the atmosphere in europe is rather toxic when it comes to china. Cui says it is time for a rethinking of relationships between the u. S. And china, it already seems it is happening. Haslinda we have been talking about how these are unprecedented times. What is this we are hearing about a u. S. State trying to sue china over the coronavirus . Stephen the state of missouri is suing china for what it called Appalling Campaign of deceit that led to the death of state residents. Missouri has 177 deaths from the coronavirus. This is a lawsuit filed in federal court. It is highly unlikely to go further than this. It is another sign of the fr ayed relationship caused by acrimony for more than a year with the trade war and now coronavirus. In the bloomberg discussion, cui riskai said decoupling that k could be happening in the minds already of americans. Haslinda as if we dont have enough problems on our hands militarily, the u. S. And china ramping up tensions in the South China Sea. Stephen we are hearing u. S. Military has sent two of its warships, the america, an Amphibious Assault ship, as well as the bunker hill, a guided missile cruiser, into the contested waters in the South China Sea off of malaysia. We have seen evidence of chinese warships patrolling. Over the weekend the Chinese Government announced it formally established two new districts in the South China Sea that included dozens of the contested island or islands or submerged reefs. This has been a flash point. China and the u. S. Have deep intertwined relationships. The economy is at the top. Diplomatic relations are being strained. Military to military has always been strained. When the other two points of the triangle, economy and diplomatic relations start suffering, military to military could be a flashpoint. That is the concern in the South China Sea. Haslinda stephen engle. More to come on the show, the ceo of a pakistan based Ecommerce Company discusses how the pandemic is helping to drive online deliveries across south asia. More to come. This is bloomberg. Haslinda welcome back. Facebook is to invest 5. 7 billion in jio platforms, the company that serves the digital needs of indias Reliance Industries. Facebook will tie up the technology of whatsapp with an Online Grocery store which aims to sell smes across asia. The investment would give facebook 10 of jio at 66 billion. Mukesh ambani says the deal will empower up to 30 million businesses. Movead we are going to across various indian borders to a company which operates in bangladesh, nepal, and pakistan. We are looking at a Company Called daraz in the context of the coronavirus pandemic as it could be a catalyst for the growth of ecommerce in those countries. Pakistan surging since i looked out came into effect a month ago. Since a lockdown came into effect a month ago. Daraz bought by alibaba two years ago. With us is the ceo, bjarke mikkelsen. Thank you for joining us. Tell us about daraz for people who dont know. Bjarke daraz is a general ecommerce business. We operate across categories. We are operating in five countries across south asia with half a billion people in them. Internet penetration is still low, but it is catching up with the rest of Southeast Asia. We are optimistic about the Growth Potential there. Rishaad we have only got some 25 penetration thus far. You have been doubling sales in pakistan. I want to start with that at the moment. Tell me about how growth is being affected by the pandemic. All, we have of been hugely impacted, like i think most other businesses. Part of it is shortterm and part has longerterm implications. I would split it into three parts, number one being the physical restrictions we experienced as a result of lockdowns and perfused. This is a shortterm impact, but it has a Significant Impact on our delivery services. We are delivering sickly percent 60 to 70 of our parcels to our own logistics companies. We are having conversations on how to use our services to provide growth for smes in a tough time. I am confident over the next week or two we will have a stable logistics infrastructure. That is the basis for the economic recovery we all have to fight for. Number two in terms of impact is the work processes. This whole work from home situation has been challenging for everybody, but i have been positively surprised. Learningre is a lot of about the power of the digital workspace and how we can engage employees and improve productivity and efficiency. That we want to take after things have gone back to normal and implement. This has been a positive. The last point is customer demand. As many other ecommerce companies, we have seen a big surge in demand for essential products. Just have to break some news to do with the oil market. The oil price on its lowest intraday price since november 2001. Then we have headlines from australia, who say they want to set up a Strategic Oil reserve for the country. Bizarrely, they want that reserve held in the u. S. , according to the energy minister. Dont know why they are going to do that. That is the headline coming through. Tell us about where you are seeing your biggest growth. You have pakistan, sri lanka, myanmar, bangladesh, and nepal. Bjarke the biggest growth in the last year has come from our bangladeshi and sri lanka businesses where we have seen incredible growth. Up to hundred percent year on year. 200 year on year. It is the result of a number of things, and for structure investments pay enough, good Infrastructure Investments paying off, and having the right team on the ground operationally. Myanmar is our biggest market. It is going 100 year on year. Still very high growth. We expect that to continue over the coming years as well. Haslinda of course, we are seeing how this pandemic has driven online sales. Do you see it as an opportunity for daraz to take market share from brickandmortar retailers . Think that isi inevitable that will happen, that this whole situation will accelerate the shift from offline to online. But to be honest, right now it is not so much a fight for capturing as much market share as we can, it is about making sure the whole economy and businesses get back on track. If we have a bigger share of a very small pie, that is something which is not good for anybody. Absolutely it will shift. Australia has not changed. It is about having a large consort of policy products. It is about using our technology to create a fun experience on our app and providing High Quality Services across our channels. That is the same as before the covid19 situation. There are more now willing to try out the online Business Model. After the lockdowns are lifted, this is a trend we expect to continue. We are in the same boat. It is about getting the economies restarted and smes back on track. Haslinda in terms of expertise, in terms of changes since that acquisition by alibaba, what have been the major differences . Impactsthe three main of the alibaba acquisition, number one being technology. We are now powered by alibaba marketplace technology, unparalleled in the world from what i have seen. This is a huge advantage when you are building the marketplace. To be honest, setting up a small Ecommerce Store is not difficult, but managing a huge marketplace with millions of customers and tens of thousands of sellers and more than 20 million live products and still providing a good service to your customers and sellers this is very challenging. This is where a Strong Technology market Place Platform is essential. Number one is on the technology side. We are fully powered by alibabas technology now. The second is on the supply chain, both from selling crossborder products, but working with suppliers to supply our local suppliers so they can still more efficiently on our platform, and helping to integrate the whole supply chain from the origin of the product to the end consumer. The last point is about the learning. Every time we go through a challenge, it is something alibaba has been through before. They have always understood and respected that daraz is its own unique region and we have to have a localized approach to the market, but they are willing to help and i would say they have i haveised about been surprised about the level of support every time we reached out and asked for help. Rishaad youve got all of these countries surrounding india. Of course weve got very little trade between india and pakistan as years of animosity have led to that. Do you have any plans to break into that country . Bjarke no. I think india is a market where there is already a number of large ecommerce players, primarily amazon. We have no plans going into india. But we are working directly with india for some of our other countries. It is a bit complicated for pakistan, but we have a number of good tech relationships with india. Rishaad very quickly, what sort of growth are you expecting looking ahead in the mediumterm, three or four years . Bjarke if we look beyond the current situation, i think it will accelerate the shift from offline to online. I am optimistic and expect we will continue to see 200 plus growth in the coming years. Everything in the markets is pointing in the right direction, so we are very optimistic. Rishaad thank you very much indeed for your time. Bjarke mikkelsen, ceo of daraz joining us from singapore. Lets look at the oil market. A smooth down in the oil price. Brent sentiment dropping as much as 13. 6 . Barrel. Ude at 16. 95 a this all coming through as we saw the huge moves for wti of late as well. All against this backdrop, a huge fall off in demand for the black stuff. Checking in on Indian Markets who came online five minutes ago. This is the position. Moving to the upside. A surprise, really, given how futures are pointing to negativity. We are seeing a comeback taking on the regional markets. One company to keep an eye on his Reliance Industries is Reliance Industries, up a percent higher after facebook 10 stake i Reliancen Jio in reliance jio. That stock going 8 higher. Haslinda just ahead, socalled quarantine breakout stars like netflixsg have obstructions through the roof. How long can this fuel the streaming joints growth giants growth . We will discuss that next. Haslinda the global lockdown due to the pandemic has been a boon for netflix. It added a Record Number of paid subscribers, almost double what analysts forecasted. Su keenan joins us with the after hours action. Su, a big stock surge quickly fizzled. Is that a concern about what happens when the shutdown finally ends . Su absolutely. That is the question. Netflix added 15. 8 million new paid subscribers. That is a blowout by any standard and sent the stock shooting up by double digits. It came right back down when it said netflix expects 7. 5 million new some scrubbers next quarter. Subscribers next quarter. While 7. 5 million new subscribers is a good number, ambassadors clearly want more. Check out the year today chart. You will note prices hit new highs this week, up some 34 yeartodate as investors realize it is not sustainable unless the pandemic shut in continues. Pandemic isnt and chill is the motto of a lot of new netflix users. Check out this bar chart bloomberg has of the viewing patterns of those during the pandemic. It spikes during the working hours. That is revealing, because it means people who are working from home are also watching streaming video, whether it be disney plus or some other service in the middle of the day. That is the concern, when these people go back to work, the subscriber ship will probably come down. Netflix said as much. 162ard Free Cash Flow of million was a big headline. That is the First Quarter we have seen the measurement positive since 2014. We also heard from netflix they are going to keep the shows going. Will they run out of shows . With people Binge Watching shows like tiger king, which is a crazy show of americans who own tigers and exotic animals as pets and a woman who tries to get them locked up. It ends with somebody in jail. That has become a bit of a sensation during this lockdown in the u. S. Rishaad and su, is it working from home or shirking from home . Netflix growth also coming from international subscribers. Snapchat another big win after hours. Su netflix lets just talk about the growth. We definitely saw growth in india. That was a huge surge for netflix. In other in another bar chart, a surge in the asiapacific as well. Snap, which is a parent of snapchat, stole the show after hours as well. Shares were on fire, jumping as much as 22 . Goingays the apps are crazy in terms of popularity as people are locked in, reaching an average of 229 million daily users. Back to you. Rishaad su, thank you. Su keenan there. Some of the big stories we had over the last hour or so brent crude hit levels not seen since november 2001. That following on the heels of what we saw with the wti contract as well. Haslinda that is it from Bloomberg Markets asia. Bloomberg middle east is next. This is bloomberg. Nowadays you do more from home than ever before. The xfinity my account app puts you in control with Digital Tools to give you the help you need when you need it. Get fast and easy answers with personalized help 24 hours a day, 7 days a week. Change your wifi password to a phrase thats easy to remember. Even troubleshoot your services on your own. Were working to make things a little easier for everyone. Download the xfinity my account app today. The following is a paid program. The opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. The following is a paid presentation brought to you by rare collectibles tv. Announcer in 1792, as a Young Country in its formative stages, the United States of america needed to assert its status as a new global power to the leading countries around the world. As a way to firmly declare to the world that the United States of america was now an independent country that would continue to propel freedom, the first president of the united st