Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Brent also lowered to about 2. 3 . With treasuries. Havens like the dollar, the yen. We saw where the nerves are with dollar renminbi. Seeing the hikes inching closer for dollaritory china right now. 6. 4 ,ing a contraction of so we could be seeing a deeper contraction. Financialrom the secretary paul chan saying we could be facing the worst contraction on record. The rupiah seeing some strength here. The carry trade has been coming back. 14,000, 935 around 14,935. The trump ministration is stepping up its attack on china, saying that there is enormous evidence that the coronaVirus Outbreak emerged from a lab in wuhan and china covered it up. Secretary of state mike pao stopped short mike pompeo stopped short of saying the virus was manmade. While the Intelligence Committee continues to do its work, they should continue to verify so that we are certain. I can tell you that there is a significant amount of evidence that this came from that laboratory in wuhan. Business confidence in the u. K. Slumped the most on record last quarter as leaders say they see no recovery. Respondents to a Deloitte Survey say they expect revenues to be 20 lower this year than previously thought and they dont see demand returning to previrus levels until the middle of next year. Hong kong says the virus may trigger the citys worst economic slump ever. Secretary paul chan repeated his view of a contraction as much as 7 this year, which would be the deepest fall since records began in 1960. They expect an economic decline of about 6. 4 for the year. In australia, sydney is to restart Public Health auctions next weekend as the government continues to ease restrictions. New south wales has seen volumes collapse as there has been a suspension of traditional selling practices. Australia has seen around a dozen new cases of coronavirus each day for the past week. 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. Im karina mitchell. This is bloomberg. Tom thank you. Manufacturing pmi released across asia today are as bad or worse than expected as coronavirus driven lockdowns in the region and the rest of the world take their toll on demand. Policybal and economic editor Kathleen Hays is here with the numbers. A new record set today for contraction, not growth. Who was hardest hit . Kathleen six countries reporting. I have to give you all their numbers because the numbers were not so great to pretty bad. South korea did not fare too 42. 1 to 41. 6. In any other Business Cycle in south korea, asia, the world, you would say, how week. It is just that so many other countries have done much worse. Lockdowns in asian nations, lockdowns overseas have held their toll. Vietnam, from 41. 9 to 32. 7. You have to be above 50 to signal growth. This is contraction written large. 27. 5. Sia, down to the philippines, 31. 6. 46. 4 to 41. 3. These are numbers we have maybe not seen ever. South korean inflation rose to 0. 1 yearoveryear in april and 1. 0 in march. We know, when the bank of korea. As made recent rate cuts it should be may 28, just a few inflation and, as exports are weakening. Cutting rates more, we shall see. Bloomberg economics coming out with a terrific piece. They actually see the asian pmis index improving this month because they are looking at lockdowns starting to ease up. Some countries in europe, some states in the u. S. They are expecting that even if things do not get that much better, they will start getting worse. Is full ofs week economic reports from chinas trade report to the unimaginable u. S. Jobs report friday. What is the focus for you . Kathleen the end of the week is where it really gets hot, but i think you have to watch inflation reports, certainly in asia. Notthere are contrarians working because of lockdown, they think that ultimately, stimulus, big debt and deficit, that eventually, that will feed through to inflation. Indonesia today, philippines and thailand tomorrow. There growth rate is holding pretty steady. Philippines, a little bit weaker. Saying that there is room for easing in the philippines this year. Is going into further negative territory. As you mentioned, the trade reports for china, exports down 13. 3 yearoveryear. Now we know that china has worked to build up spending. There is a long lockdown in china, people reluctant to spend money as they get back to work. Remember, china, that is another reason why asian nations are experiencing weaker pmis. China, the number two economy in the world, not as much of a driver as it was. Payrolls expected to fall 21. 3 million in the month of april. The jobless rate is expected to hit 16 . Yvonne thank you, our Global Economics and policy editor Kathleen Hays. They fouryear bet on airlines stocks. We will check on asian carriers. Capitals edward lim sees a market bottom. We will discuss what markets and stocks are gaining his attention. This is bloomberg. U. S. Equity futures decline. We are seeing stocks open lower in asia to start the month of may. In world 10 rally shares in april, now being tested as investors assess efforts to ease lockdown restrictions amid a steady stream of ecodata. Lets bring that all in and ask for more from edward lim. Riskhould we look at heading forward in the month of may . Do you think that partial recovery is as good as it gets . Edward that is a very good question. The market has basically retraced more than 40 from the bottom. If you look at past president , where we arery in terms of however, we basically have this kind of price action one month into a recession. I think the market is due for some correction. Run up a little bit too much, too fast. In terms of, we could be seeing more of a correction, inld we retest the lows march . I think come before us retest the lows, two things have to happen. New cases, second wave of epidemic coming true. Hoping that it will be the last couple of months. Is economiceason fiscals, connected over and monetary policy. I think we looked at the numbers here, we tabulate in terms of the fiscal stimulus so far. More than 5 trillion, the u. S. Announcing another 434 billion. 6 of gdp, tohan offset the potential Economic Loss we are modeling for the rest of this year. Issues different from what they are expecting right now. Tom if you do get a significant correction in may, do you look at that as the ability to extend exposure, and where would you be looking at that as the case . At equityvie looking exposure we would be looking at equity exposure. Increasing equity exposure in late march. The last couple of days, taking that down. The market has run up too much. Deploying the risk correction. Where would we go . I think it would be effective in the same sector that we like. Still, a highgrade debt. Inequities. It is just really looking for structural trends. Now, ample, Service Software service company. Iny are actually operating terms of the forecast for the year. Microsoft come on the back of the teams application, and things like zoom communications, y are operating in a world structural trends that would not be derailed whether covid19 and lockdown extends further. Tom where do you see the opportunities in the debt market . Central banks of course stepping up. Where do you want to be positioned when it comes to debt . Edward in terms of regional for em to be focusing on highgrade stay away from highyield or highyield exposure, less than 20 . Looking at highgrade, thestmentgrade debt in commercial markets. You mentioned fiscal stimulus, Central Banks. Is that enough for us to see some positive returns this year . Eps growth for much of the world, it seems like it is still in negative territory. Edward the analysis a couple of weeks ago, looking in the last , do we ever get the stock market to return . I think there has been seven occasions in the last 30 years where eps growth has been negative. Of the seven occasions, six of them equity markets returning possibly six of seven. We try to analyze why that is the case. The reason is this. Epshe six occasions, the stock market return was positive , we actually had where either there is a fiscal stimulus or monetary stimulus. Qe1, qe2, qe3,t ecb,nset of qe1 with the all of these occasions have coincided with monetary and fiscal stimulus. Expecting eps growth this year perhaps down 18 . 6 of global gdp, central bank oflowship s increased to 70 gdp. Yvonne it was back in late january, before this demo really spread before this pandemic really spread, that you are seeing opportunity in macau gaming stocks. It has plunged close to 100 . Have you changed your holdings . Edward no, we have kept our exposure in macau gaming. We have recently added equity exposure. The premise is that we are looking at market leaders, some of the big guys. No revenue, instituted only a moderate cut. How long do these Gaming Companies stay liquid . That in have the view 18 months time, the lockdown will continue in the form it is right now. We are quite happy to be holding onto the debt. On one equity, last week of the names. Tom edward, thank you very much. Adding equities when it comes to the macau gaming space. Edward lim of covenant capital. Macaus gaming revenue for april falls almost 100 . We will get the details. This is bloomberg. Things are not looking good for macau after the Gaming Sector saw its worst ever month on record. Lets bring in our gaming reporter. Macau has managed to keep the Virus Outbreak contained. Why do you think the numbers for april were so low . The april number was down all of this time, the money could have been made in one day. The main reason was, in late march, china and hong kong stepped up their Border Control because the virus was making its way all over the world. E can see no operators some casino operators saying there are virtually no customers. People have to be quarantined for 14 days. For half a, closed month, they are losing millions of dollars a day but they dont have any revenue. Tom when are they going to see some improvement, do you think . Right now, there are coronavirus cases in macau, hong kong, china tapering off, so we are seeing very few increasing in the latest days. This month, we think there will be relaxation of the travel curbs. Macaus chief executive said that he will ask china to increase a number of cities coverage so that in the future, when these virus cases are over, maybe we will see more of the individual travelers being able to come to macau. That will be a boon for the whole industry. What are the analysts sector you about the right now . Are they saying it is a chance to buy on these steps . Dips . These jinshan regarding the cash burn, actually they are sitting on a large chunk of cash. They all can last for one year or up to more than six years for the case of galaxy. We are seeing signs of improvement in may and the coming summer. Already a lot in april. Of course, the evaluation now is cheap compared to average historical levels. We are already seeing investors coming to pick up the opportunity here. Consumers and china have already been hampered by the drop of the virus in the past month. Whether they can come back and consume like before, it is a big question. Tom thank you for bringing that down for us, consumer reporter jinshan hong. U. S. Airlines with a difficult start to the week after news that Warren Buffett has dropped all of his holdings. He told the Berkshire Hathaways livestream that he sold all of his stake saying that the fallout has probably changed the industry forever. Say koreanm Seoul Airlines will call a Board Meeting this month to discuss a rights offer worth more than 800 million. The carrier will also consider asset sales to help navigate it way through the collapse of air travel. They say the government is prepared to offer help if the korean carrier agrees to restructure its business in light of the virus. Lufthansa expects to finalize talks with the government soon on an aid package as an alternative to a bailout. They say they are having a Constructive Exchange with berlin and hope to resume flights as soon as possible. Lufthansa is locked in talks with the governments of germany, switzerland, austria, and belgium. Coming up, we look at how the world has changed for the aviation business. Upside. Sees an this is bloomberg. These days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. 10 29 a. M. In shanghai. White house sources are telling bloomberg that President Trump had two Intelligence Briefings before he imposed travel restrictions on china. On january 23, he was told the infection was set to spread globally. But that the infection would not be deadly for most people. A week later, he said that beijing was not sharing key data about the pandemic. Japan will start plans to restart the economy. The restrictions allow prefectures to shut businesses and allow people to stay home and work to end on wednesday. India is also extending is locked down by two weeks. Infection rates in europe continue to decline. Extend its shutdown until july 24. Fatalities in spain were at the lowest since march. New pictures of kim jongun did little to help evaluation of his spirits. There was no comment on the fact that he had been out of sight for three weeks and he had missed celebrations for his grandfathers birthday anniversary. With hiss show him sister. 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. Plenty of red across risk assets right now. The hang seng leading those losses. We are seeing it down 910 points. We are expecting gdp numbers later today. Philippines and the singapore and jakarta down by more than 2 . South korea dropped to the lowest level since 2009. You have this fear of renewed u. S. China trade talk. Each side is now trying to blame the source of the virus and who started it. You are seeing u. S. Futures lower than 50 . Yield sticking lower when it comes to fixed incomes. We continue to see that fallout. Watching when it comes to currencies as well. The dollar seems to be catching a bit of a haven bid. Could be wrong. We are seeing some weakness in malaysia. Some of these risk currencies like the aussie dollar are falling. Tom Warren Buffett is reversing calls on his airlines. It is interesting because he said years ago that he got burned by that and was sucked back into the trade in 2016. That seems that he is having regrets. That is quite a signal from Warren Buffett. Was trying tone get some more insight from him during that shareholders meeting. It seems like he is usually pretty bullish. He tempered some of that optimism. Is equitiesnks it that could outperform treasuries over the long run. Ittainly this reversal when comes to airlines will be a key focus for many investors out there. A perfect set up to our next guest. Tom he said he could not read consumer habits. Recentlyguest has published an indepth report on covid19s impact on hong kong. How bad will things get in when what turnaround . For hong kong the story is that much not that much different. Aviation, the longterm trajectory is still very firm. We believetterm there will be a lot of damage. Tom how much of this comes down to liquidity . We see Cathay Pacific as being the best positioned airline to have liquidity to carry through the next months. We dont see the same for a lot of our smaller airlines. Some of them were suffering for coronavirus hit. It is crunch time for them in the next month or two. We could see them falling off the map. Yvonne there seems to be pentup demand out there right now when it comes to Cathay Pacific. How quickly can they fill that capacity . Is this a chance for them to gain some market share given their dominance in hong kong . Looking at consumer and demand, we do see a lot of demand. Everyone is edging toward that again. The big issue is travel restrictions. Domesticlly is no market in hong kong. In order for them to ramp up operations, countries across europe the two open up. This is the Biggest Issue facing Cathay Pacific. Every Single Airline is facing the same issue. It is really just a matter of whether or not they can survive. If they can, they have a chance to gain a lot of market share. Yvonne how do you see the asian industry . What was at look like post covid19 . Will Consumer Behavior change . Will we see capacity cuts remain in place . Higher fares . What do you see as some of the biggest consequences . They will definitely be in the shortterm lower capacity. A lot of the airlines borrow on the fact that they lead the market. They will be cutting the capacity. The other thing is Business Travel. We are not sure how well Business Travel will rebound. It might be slightly better. But it really depends on the global economy. Certainwe think that big airlines have the capacity to adjust. If they can survive, it is a pretty big opportunity for them to take their competition in a new direction. The consolidation story, how well played is the chinese mainland airlines . In terms of potential acquisition . Will they be on the hunt for some of these bargains . Or will they be preparing their Balance Sheet and restructuring . We think the mainland carriers are in a pretty good position. It is basically what we saw in the u. S. Market. Market ishe chinese primed for that wave of consolidation. Possibly not this year. But in the next two or three years, we see them stopping up a lot of the smaller carriers in competition. That will be very good for the major airlines. They have all been suffering from competition. Have airlines managed in this part of the world to take advantage of that response . How is it sheltering them from the impact . Freight is offering a little bit of shelter. The Biggest Issue in asia pacific is passenger planes. If you are not flying them, you do not have the capacity to ship a lot of the light. Revenue yields being very strong. But they may not be at the same level as past years. We know airlines are adjusting rapidly. The next few months we see them capitalize a little bit more. Yvonne is that still under threat in any way . It seems like we are seeing protests in hong kong emerge once again. We are shifting from pandemic to the reemergence of these protests. That is a very good question. Hong kong is in a prime position to capture a lot of future demand. Hong kong will be that hub after the protests and the coronavirus. There are uncertainties and we are trying to balance them. The more ongoing issues within hong kong. It is hard to say right now. Things are unfolding. Whate trying to balance the best responses. Yvonne great report there. Up, a look at how india plans to revive its economy as it extends the locked by another two week. Carmakers reporting zero sales. This is bloomberg. Tom a quick check of the latest headlines. Adverselyvirus has affected business. That itsoper maintains financial position remains healthy. The Company Expects lodging projects to be facing headwinds as social distancing and travel curbs stay in place. There may be some delays. Earnings report is the most difficult report the bank has ever had in years. Because of provisions with the coronavirus and a potential Money Laundering fine. Product sales in china are off by double digits in april. Sales remain slow in hong kong. Yvonne india will extend its nationwide lockdown for another two weeks from today as a number of new actions continues to climb despite 40 days of restriction. What is the latest plan . There are sectors where there have not been active coronavirus cases. But the industry is expecting a huge challenge. It will take more than a relaxation of measures to restart domestic demand. We had a recent survey of ceos. It indicated they expected to 612 months for demand to return. Some believe the fiscal year is unsalvageable. Tom indias automakers are suffering. They did not ship a single vehicle in the month of april. What is the outlook from here . They were struggling before the lockdown. The outlook is very bleak. They do not know when they will be able to renew production. Left theof workers major cities and industrial hubs when the country was locked down in march. Attracting them back to work will take some time. There is a lot of confusion around the lockdown measures. Major these present a challenge. Yvonne there was a big spike in cases over the weekend in india. Thank you for that update. We have plenty more ahead. This is bloomberg. Yvonne taking a look at markets once again. Asia and a bit of trouble. Some cautiousness as we start the month of may. China, japan, and thailand are closed for holidays. We are dealing with some lower volumes. The hang seng seeing the most declines. Really majors are leaving the losses today, and some tech names. Asiare watching southeast like the philippines, singapore, malaysia falling some 2 . We have some pmis coming out when it comes to Southeast Asia. We are still dealing with some pretty poor data out there. We are coming to a week with a busy schedule. The u. S. Jobs report will be key. Unimaginable what the job loss will be for the quarter. Opposes bailouts for Oil Companies that have not prepared themselves for the crash and prices. The slump has led to an unprecedented shutdown in u. S. Shale. The ceo spoke with us earlier. It is and are flexible, short cycle activity. That would include unconventionals here in the u. S. There are other projects where we can focus on productivity. There are reductions across our portfolio. Give me some visibility on how much we will see this . Year with 17he rigs running. We are down to five right now. These wells have strong early production. Disconnected. Indicated is we will finish the year it like we entered. Does that mean we can respect lower permian production in 2021 . Seems like you are really going to feel the hits of these cuts. The other thing we will be there will beis reductions in production. Not just impacts of our capital changes. But certainly in this market. We have countries that are subject to the opec agreements. There will be production curtailment there. Likely to curtail production in other parts of our portfolio. We will see production in the month of may down 3000 barrels a day. Perhaps in the same range. Im glad you brought up the opecplus cuts and logistics. Do you have a sense of how you will allocate your capex cuts . That is driven by our own views. That is one of our advantages. We are different. We came into this with the. Trongest Balance Sheet we are in control of these choices. We are in control of that. We will reduce this in a short cycle activity. How quickly can that come back . Or do you anticipate it will be permanent . It can come back relatively quickly. For stormslls down and hurricanes and things like that. At people are very good bringing production down and then ramping it back up. We will come back up again in a matter of weeks. Done in a way that is very careful. And does not cause damage to wells or reservoirs. Local reports here in hong kong that the government may let cinemas and gyms reopened. They may raise the limit on public gatherings eight. That could be some codenames. We have had eight days with zero new infections. Tom that is certainly good news. Seems like they are easing restrictions. Pmi data out for a. Umber of these economies trump said he will release a conclusive report on the chinese virus origins. Bloomberg. Staying connected your way is easier than ever. Youre just a tap away from personalized support on xfinity. Com. Get faster internet speeds with a click. Order xfi pods to your home in a snap. Or change your Xfinity Services with just a touch. All in one place. Youre only seconds away from all of that on xfinity. Com. Faster than a call. Easy as a tap. Now thats simple, easy, awesome. It is almost 11 00 in singapore. We are entering the last hour of the morning session here in hong kong. Here are the top stories. A return from a long weekend. U. S. Futures on the decline. Global virus infections top 3. 5 million, with deaths approaching 250,000. It all adds extra pressure. Several asian economies falling to record lows. This is Bloomberg Markets asia. The markets are pretty much read across the board. It is a risk off day. That risk off sentiment here in asia. Tensions on the korean peninsula. North and south exchanging fire. The hang seng is lower. Contraction of 6. 5 . Cinemas and gyms will reopen. A look at where we are in terms of the year. We have investors getting toward this haven. Hedge funds are boosting. Currently down by 2 . Markets down all the way. News whenme breaking it comes to reliant. Firm will beity investing 56. 5 alien dollars and geo platforms. They were closing in on some kind of deal. Take a look at the rest of the markets. China, japan, and thailand are closed today. The dollar is up across asia. U. S. And china tensions are ratcheting up once again. Here in the u. S. , the Trump Administration is stepping up its attack on china, saying there is enormous evidence that the outbreak emerged from a lab and beijing covered it up. It was not said manmade but this is not the first time the world has been exposed to a virus because of failures in tight chinese research. We should verify so we are certain. There is a significant amount of evidence that this came from the laboratory in wuhan. Will announce plans to restart the economy. They were to end on wednesday. India is extending its locked down two weeks. Comes despite new infections not falling during the 20 day shutting. Singapore wants people to continue to work remotely even as it works to prepare to ease the virus lockdown. Manufacturing and other sectors should prepare for a gradual reopening. The philippines has halted all flights in and out of the country. Infection rates in europe continue to decline in the worst infected countries. Itsce is to extend emergency until july 24. Germany has seen the fewest since the end of march. 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. Haslinda pmis across asia are as bad or worse than expected. New record set today for contractions. What countries were hit hardest . That is a very important question to ask. Even the stronger countries are suffering. Lets start with who is really taking a hard at this point. Europe. S. , china, the philippine set a new record. Their numbers slipped to 31. 6 in april. They have seen business and Consumer Confidence fall. Vietnam had a fall. Just to get a sense of what is china was down. About 18 . India about a 16 decline. Exports weekend. They are the force fourthlargest exporter in the world. It may not get a lot better but it wont get worse from here. It seems there is some light at the end of the tunnel. Yvonne this will be a big week for data. You have the u. S. Jobs report on friday. What is expected . We will get a lot of inflation numbers. There is more room to ease policy in the philippines. The trade report for china will be very big. It is expected to show exports down 13. 3 yearoveryear. This is what drives chinas economy. This is what makes it able to order items. How does this reflect the may and june numbers for the region . The jobs report will be a big one . It is expected to show payroll fell 21. 3 million in april. We will see how the markets digests this. Is it really factored in or will a headline like that have the negative impact that some people are bracing for . Kathleen hays on the line. President trump accuses beijing of a coverup is tensions between china and the rest of the world escalate between the origins of the coronavirus. We will get the view from control risk later on. Haslinda we talk fixedincome a scenariod find out for low Economic Growth and shutdowns are here to stay. This is bloomberg. Haslinda emerging Market Investors head into the first week of may with history against them. Currencies and local bonds have declined in may and eight of the last 10 years. The further decline could be in place. He believes risk assets are reacting to liquidity. Good to have you with us. Some say they would not want to own em bonds. But that seems to broad brush, no . It is. I think there are some pockets of value. There will be returns. I think that is here to stay. Haslinda he did say that some shoes will drop. What are we looking at exactly . It,f you step back about this crisis will have a long tail. That light at the end of the tunnel will probably be a recession. Or the economy is running below capacity. There are some longterm changes that will go through the economy. One of which will be higher savings rates, which will have a impact on the market and the economy. The world has changed for some industries. It is port important that investors build their investment around that. In april, credit markets rallied strongly. We saw bond issuance is a record high. That was despite the fundamentals looking quite dire. Seems like it is a bit of a phone mode trade. To think that is likely to continue in may . That is a great question. The response has been nothing short of spectacular. That amounted to around 20 of gdp. Past, there has been close to 3 trillion of liquidity investments and announcements made. Fed injection from the could get to around 35 of gdp in this quarter alone. There hasfact that been substantial liquidity injection. Primarily the markets that will benefit from that are the credit markets. Seeing the markets that the feds and the other Central Banks are directly targeting. Settles, west believe the yield levels will continue to be low. Higher up in terms of credit quality. All of this is to say that the recovery has room to go. What about when it comes to china . That is a record here as they tried to pay for the infrastructure. Does that open any kind of opportunities . Or is there a concern of oversupply . For china there are two things to say. We expect china to do more, whether it is through the local government, government budget deficit. It is important to say we think the chinese stimulus will not be the big bank kind of approach to the crisis. There are some repercussions. The renewed, aggressive rhetoric isween the u. S. And china driving some of the risk assets in the hang seng performance this morning. This is an important point to keep in mind. Haslinda will the dollar remain king . Alreadyat the fed is embarking on unlimited qe . That is a question we keep asking ourselves. Stte if you sell dollar, what are you going to buy . The evolution if of the pandemic in the u. S. The u. S. Will be in a relatively stronger position. At this point it is not. The rest of the world is going to think that. The u. S. Dollar will continue to be strong. That by saying we see some dollar weakness. This is being impacted by the aggressive rhetoric between the u. S. And china. We think it will remain strong. Haslinda thank you so much for your insight. Escalatecome, tensions as kim jongun reemerges after several weeks out of the public eye. Details ahead. This is bloomberg. Yvonne north Korean Leader kim jong in has resurfaced after a nearly three week absence. Questions over the state of his health remain. We have been tracking all of the developments. What more do we know . There is still more mystery. Saturdaypearance on answered some key questions. He is alive. But it does not solve the mystery of why he was out of the public eye for three weeks. Did he have Cardiovascular Surgery . Did he have a botched procedure . Whats he isolated because of the coronavirus . We have heard all of these reports. It is unlikely that he underwent surgery. It is unlikely that he had a simple operation. With all of these videos and photos we are seeing, we have to get the clues from them. Experts are poring over them. We see that he did not lose any weight over the last three weeks. He is still fairly robust. Officials say he did not. Somea Serious Health scare have seen a scar on the underside of his wrist with what could be a coronary. That would be in line with those speculations that he had Cardiovascular Surgery. Or some kind of probe put in. To hisf speculation as health. That he islude around at his sister, who was widely speculated to be the next in line, is in many of these photos and the video that was put out. The people in close proximity to him are often showing that her star has not been diminished. Shots were fired across the dmz the day after kim reappeared. Should we be ruling anything out . Is more mystery involving this incident as well. Mike pompeo said it was probably accidental. South korean officials also saying it was unintentional. Former south korean Army Officials say it was a likely calculated move. There were shot by soldiers. There was retaliation. Yvonne lets take a look at we are bouncing off the session lows. This is despite the fact we saw cases there. That lockdown was extended by two weeks. Take a look at the hang seng. That is the weakest market today. A bit of topdown after being off for so long. Here are some of the movers we are watching. Southeast asia suffering today. We are watching defense stocks. Emergence inuns that one photo. We are seeing some of these defense stocks having lower in korea. Shares are lower. We are watching some of this live in hong kong. They are leading those declines. Oil prices setting lower. A deeper slump today. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 12 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Haslinda through looking at live pictures of the lion city. A. M. Almost 11 30 we are in the middle of the trading day. The spr trading lower. Only three stocks out of 30 Companies Listed on the stir in the positive. Over the weekend, there will be sniffing structural significant structural changes. Some industries will be disrupted. Many workers will have to accept pay cuts so that companies can survive. The sti down 2. 5 . Lets get the first word headlines with karina mitchell. Asian countries slumped to record lows in april. Even as china begins to restart. Pmis across Southeast Asia posted their weakest readings since the series began with indonesias bmi coming in at 27. 5. South korea, japan and taiwan recorded pmis at their lowest level since the financial crisis. In australia, sydney is to restart open house Property Inspections and public auctions from next weekend is the government continues to ease coronavirus restrictions. New south wales market has seen transaction volumes collapse as social distance volumes force the suspension of traditional practices. Australia has seen a dozen new cases of coronavirus each day for the past week. Hong kong says the virus may trigger the citys worst economic slump ever. Financial secretary paul chan repeated his view of a contraction of as much as 7 this year, which would be the deepest fall since records began in the 1960s. A Bloomberg Survey sees an economic decline of about 6. 4 this year. Here in the u. S. , white house sources are telling bloomberg President Trump had two Intelligence Briefings before he imposed travel restrictions on f the in an attempt to hal coronavirus. He was told that they infected would not be deadly for most people. One week later, the part the president was brief to beijing was not sharing key data about the pandemic. 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. Im karina mitchell. This is bloomberg. The u. S. Says it has little doubt china misled the world about the scale and risk of the coronaVirus Outbreak. As trump adds beijing sawtek covered up as the disease became a global pandemic. His comments, as tensions between the two nations climb. Lets bring in steve welford, partner and head of the global risk analysis at control risk. Thank you for joining us. How should investors interpret the latest ratcheting up of tensions between the u. S. And china . Can we see this as more of a sideshow or a new phase in the relationship they could spiral out of control . Steve i would not call it a new phase. What the covid19 pandemic has done is accelerate significant trends that were already underway in terms of the u. S. China relationship. If we think back to late last preceding 24 months, the u. S. Relationship with china was already on a significant downturn. Right now, what we are seeing is allegations of chinese mismanagement at the early stages of the pandemic. One of allegations wild allegations that it might have manufactured the virus as a way of continuing this feud. It plays very well to a u. S. Audience. Nobody loses votes in the forthcoming president ial elections for being soft on china. As far as investors are concerned, it is going to be a continuation of the feud that has been going on for a long time. T is going to johnson tate going to concentrate minds in board rooms about where to locate supply chains. Just how vulnerable you are if you have a major Production Base in china. All of those questions were already in place prior to covid. They are still going to be in plano. Play now. Yvonne you mentioned the efforts the u. S. Is undergoing to hold china accountable, even threatening tariffs as we heard from President Trump. Do think this is going to be an overreach for the u. S. Given the fact they are knowing they are going to need to rely on china and most of the region for economic recovery . Steve yes. Again, i think if we are going to see material retaliation by the u. S. , it is going to be on the same kind of terms of what was going on prior to the virus. It is going to be singling out corporate. It is going to be in the realm of elements of trade. A focus on sensitive areas of the economy. Blanketot going to see trade destroying measures by the United States because it would be far too damaging for its own economy. It is interesting to note that right any the eye of the covid pandemic in the u. S. , the administration took time out to effectively exclude China Telecom from the u. S. Market on the grounds that it was potentially dealing with sensitive technology. Youre going to see a continuation of that. Haslinda some are suggesting we could emerge from this pandemic with a u. S. China cold war. When would that be a best Case Scenario . Steve i think cold war is an you areement because of aalking really territorial or geopolitical rivalry. It is almost forgotten in this era of debate about the decline of the u. S. That it is still the hegemony. Ng military we are not talking about those terms. In terms of the u. S. Combating the rise of china, trying to contain chinas self belief it is a risen power. It is a superpower in its own right. To continue in the realm of research,hnology, blow, counter blow, that is where it is going to remain. Haslinda away from the u. S. And china, could the pandemic change liberalization as we know it because more and more countries are being nationalistic, taking care of their own interest. Steve the short answer is yes. Then, i would point to pandemic just accelerating trends that were already well underway. If you talk about the global nationalism,omic that predates the pandemic. The pandemic is simply being used as a profound example of why countries would wish to bring a lot of their production home. Of japan hasister used that to really encourage japanese businesses to divest from china and bring a lot of production home and move up the technological value change in the process. That is being repeated around the world. Is being used as an accelerant for that. You have done a lot of research or analysis on how countries in asia have handled this crisis. How are you breaking down which are the success cases so far and which are the ones that are a little bit too slow in responding to this crisis . Bit early toa judge success. In terms of individual countries handling this. , domesticallyna after an incredibly shaky start to dealing with the pandemic, which the Trump Administration is now exploiting, has done extremely well in getting to a point where it is resuming its economy if not in the realm of recovery. There was a number of economy, the taiwanese, the South Koreans , to a lesser extent, the singaporeans, who took a a lot of lessons from the sars epidemic in the early 2000 and applied those to Pandemic Management and were able to do better than china in many respects in that they could keep their economies more open and they could manage the spread of it without the same degree of draconian lockdown as china. That has been borne out in the polls. The south korean president has has beenis party resoundingly reelected in what they called the first covid19 n wasion where that wi predicated on his governments management of the pandemic. Singapore, japan will be judged on their pandemic handling in forthcoming elections. Ifse are the middle powers you like. Scale, it might largeel to say so economies in the region such as indonesia that have had a haphazard approach to managing the pandemic and have focused more on ensuring their populations retain the right to work versus suppression of the disease to any massive extent. Knows in the, who longer term . It might be cruel and cynical to say so, but those economies are focused on maintaining the economy versus managing the disease. Might have been a more sensible choice. Here,da if i can jump in more and more countries especially those in the western world like the u. K. Are seeking investigation into chinas role in the pandemic. Asian nations would refrain from putting that pressure on china. Steve yes. Nations are going to let the europeans and americans lead on this because there is little political gain in jumping on board with it. Thealso, quite frankly, likelihood of any kind of global investigation on chinese soil into the background of this virus is now completely gone. China has shut the doors. It probably would have never opened them in the first place, but certainly u. S. Rhetoric and french rhetoric and so one has really closed the door on any kind of realistic inquiry. Why rock the boat if you are trying to maintain a decent relationship with china in this part of the world . Haslinda right. Great insight. Speakingford to us from singapore. Restrictions within a week. A look at asias virus situation is just ahead. This is bloomberg. Yvonne just a couple moments away from the india open. We did see nifty futures pointing positive and define what we are seeing for the rest of the region, which is a risk off session although we are off far. Ows of the day so it continues to be the bad data we get from the pmis in Southeast Asia, continue to show a struggle when it comes to manufacturing. You have the u. S. China story which continues to be a ratcheting up of tensions. That is weighing on risk assets today. You are looking at what we are seeing here when it comes to the nifty. It seems like i am not sure if this is the life pricing, what we are seeing some red on the board as this market does open. We are dealing with not just a bad data across the region but also when it comes to india as well where resell zero shipments from the automakers to dealers. We continue to see with is lockdown in india, playing a part in this deterioration in the economy. Lockdownto see the extended for another two weeks as we see a spike up in cases over the weekend. They are easing some of the restrictions in some areas to revive the economic activity. Youre seeing the car stocks taking a big hit today. Suzuki down 5. 5 . The likes of by shock auto down for. 5 . Plans to extend Japans National state of emergency until the end of the month. There are reports the Health Ministry has begun its special improvement process. Us fromer joins singapore. Our reporter joins us from singapore. Japanse hearing from public broadcaster nhk that a special approval process to allow remdesivir to be used as a potential treatment for covid19 patients in japan could be completed in a week. U. S. Regulators have already cleared the drug for emergency use. This could become the first treatment drug available in japan. Available at be specific hospitals under the Health Ministry jurisdiction. It does look like a lockdown in japan, the state of emergency is going to be extended until the end of the month. It was supposed to be listed on wednesday, the Prime Minister abe had expressed concern the Health Care System is overloaded. We have about 14,800 cases. That is the lowest of all the g7 countries. You still have another wonder 60 cases reported in tokyo another 100 safety cases reported in tokyo. This gives power to the governors. They are in favor of the measures stay in place until the 31st of may. Residents will be encouraged to stay at home. Businesses will be directed to close. The Prime Minister singh citizens in japan need to be prepared for the fact their previous lives may not come back anytime soon. That may be the case for india as well with that lockdown also being extended. It seems like even after 40 days of this measure, we have not seen the government help flatten the curve. Not. Tte absolutely 42,500 infections and nearly 1400 deaths. The curve is not flattening in india at all. The lockdown is going to be increased or extended until another two weeks. Theas a 40 day lockdown on 25th of may. It will continue for another two weeks. Within that fortnight, movement between states will not be allowed, but some restrictions are being eased. Already have farmers back at work. The manufacturing of essential goods including drugs and medical devices. Lion city,ere in the another month of the second break. Some restrictions are being lifted. What can you tell us . Juliette as you and i both knows, the Circuit Breaker was due to and tomorrow. It has been extended until the first of june. Some of the restrictions will be eased tomorrow. That includes barbershops, laundry services, some retail outlets for delivery and takeaway and traditional chinese medicine practitioners. In the 19th of may, students sitting National Exams and those attending universities be allowed to return in small groups. Of theoting, about 70 workforce is telecommuting. We cannot expect that to end after june the first. We still have 18,200 cases. Yesterday was the 10th day of cases. 10th day of cases below 1000. Most of them in the foreign dorm workers situation. They should still be working from home even after june the first. Im not sure when i will next see you. Yvonne alright. We need some more virtual that is what we need. Thanks for the update. Lets do a quick check of the latest is flash headlines. The coronavirus has adversely affected business. The developer maintains the financial position remains healthy. The Company Expects retail and lodging prices to be facing headwinds during this quarter as social distancing and travel curbs stay in place. Capital land warrants velp or is makes parents delays. The westpac ceo says the latest Earnings Report is the most difficult result the bank has had in years. 70 onst half plunged the back of loan provisions because of the corunna virus and a potential record Money Laundering find. Ands deferring a decision will review various options over the course of the year. Korean airlines will call a Board Meeting to discuss and offering worth 800 million. It will also consider asset sales to navigate a way through the virus. The government is prepared to offer help if the carrier agrees to restructure its business in light of the virus. Coming up, hong kong could be set for one of its deepest slums on record as the government warns of an Economic Impact of continued prodemocracy protests. That is just ahead. This is bloomberg. Yvonne hong kongs financial secretary warned the city could be hit by the worst economic slump on record do street protests and the front of virus pandemic. Gdp is excited to be worse than thought. Lets head to our markets coanchor. We are seeing the gdp numbers later on today. How bad are they going to get . And ad just over four half hours to go. Almost certainly worse in the Asian International crisis. Depending with the Global Situation as it is, expect todays figure to reveal the slump has deepened stupendously in the first quarter. Economists can add a drop of six and a half percent last year. Contraction on record. As much as 7 . We already know the mainland chopper is not coming. It is very difficult to do so. Also because of civil unrest. The question is if they will ever return. The property market, which has been a key economic driver for mainlande and the chinese buyers are shying away from real estate. No transactions took place involving a buyer from the mainland. This is an open economy. It will be hit longer as though Global Impact reverberates. As street protests kick off again, the economy will be battered by rising unemployment and businesses closing down in this quarter and onwards. Speaking of the protests, some are addicting a return to the protest when the lockdown ends. No end in sight it seems. You would not have thought so yesterday when i was on the beach. Thent in the local or local outbreaks. Do not forget this economic slump started well before this pandemic. It is the third part of a triple whammy. The city was already wheeling after the trade war and civil unrest. The government is taking measures to put a lid on things should they reappear. The administration tried to shrug off criticism of recent arrests. They say the criticism is unfounded. Protesters ofing jeopardizing the future of the city. Beijing is accused of further undermining its autonomy and basic law after calling demonstrations on friday you legal activities. Last years protest in the virus led to a rise in unemployment with tourism and transport being hit like never before. If there is a return to unrest, some are saying the economy will be decimated. That would mean activity would be reduced by a 10th. The question is, are they being optimistic . Back to you guys. Yvonne that was our Bloomberg Markets coanchor Rishaad Salamat it. Jumping in anda joining the fray when it comes to the wreck off the risk off session to putt despite what the futures were pointing. The decline in sense x more than 4 as the auto sector that is certainly taking the worst hit today with zero shipments we are seeing to dealers in the month. Take a look at the hang seng purity there are lower by manager 40 points. Southeast asia looking terrible. Record lows that we so much of the region. That is right across it is read across it is red across the board. Bloomberg daybreak middle east is next. Keep it here with us. 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