Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

Actually, if people are lawabiding, they never think about endangering National Security, there is no cause for concern whatsoever. Is if therelegation is a National Security law in hong kong, the law should be enacted in hong kong by the Legislative Council. It should not be happening in beijing. The Hong Kong Government has been kept in the dark and the process. Again, this is wrong. Firstly, this is a national law. Of course if it is International Law it will have to be decided how to enact the law. Now, basic law states clearly that for matters of national , thise or Foreign Affairs is a matter for the cbg. No one would question that National Security is something outside the high degree of autonomy. Its a matter of sovereignty of the country. 18 after basic law, theres a process that allows National Laws to be added for implementation through hong kong through a specified procedure. The third point is the political reality. If you believe given the current political reality, given the current counsel, there could be rational discussion in the counsel so that law or National Security i think that is the political reality. The fourth point is that the National Peoples congress is the highest organ of power in the peoples republic of china. So you know therefore the status made. S law as the other point is the Hong Kong Government has been kept in the dark. That of course is not true. They have heard views of many law,e in for relating this including myself. June, it wasf presented, a draft of the law. He said although the timetable, the frame was tighter, they met with many people and heard many views, and they repeatedly heard the views of the chief executive and in civil officials principal officials on the third of june before a draft was available. Of course we were arranged to go to beijing. Thee was a team that is vice premier and other Senior Leaders went to to listen to our views. After that, they repeatedly sought our views on the draft law. Now, why is there this fallacy saying i was kept in the dark and i knew nothing about the law . I checked the record. Two weeks ago on the 13th of june i was here to answer english questions. The assumption of the questions was you guys knew nothing of the law. My response at the time was at kong nt, the hong was we have not seen the complete law. Ew nothing and were kept into the dark until the law came out on the 13th of june. That is stretching the imagination a bit. It is rather eyeopening. I must make this clarification today. Finally in the coming days and months, i and principal officials will continue to explain the National Security law and its up limitation to the public. But of course as and its implementation to the public. But it does involve very sensitive and intricate issues. We will step up education at thatls, and so on, so people will better understand the National Security law, and we will want to prevent them from being misled. This afternoon, the secretary for justice and secretary for security will attend a joint meeting of the legislator counsel to answer questions from members of the council. I will repeat my point in english briefly. Ladies and gentlemen, the National Security law came into effect on the 30th of june. Since then, swift actions have been taken to implement this very important piece of legislation, including first, establishment of a committee for safeguarding National Security which hong kong s. A. R. , was yesterday. I was in the chair of this committee. It was also attended by the National Security advisor appointed by the Central Government. We have also established second specialized enforcement and prosecution apartments respectively in the Hong Kong Police force and department of justice. We have also appointed key personnel, including the National Security committee secretarygeneral, and the head of the police National Security department, as well as the first batch of designated judges at the magistrate level in order to handle a first case of offense brought under the law. We have made relevant mentation rules for the police to use, or to carry out in article 43 of the National Security law yesterday, which takes effect today. On the part of the Central Government, they have approved setting up of the safeguarding National Security in the hong kong, headed by and also the appointment of the National Security advisor that i have just mentioned. I want to reiterate that this is a very important piece of legislation, and the Central Government has placed few trust and faith in hong kong as they are. The Hong Kong Government will vigorously implement this law, and i forewarn those radicals not to attempt to violate this law, or crossing the redline, because the consequences of breaching this law are very serious. Laila has been in effect for one full week. I would like to get a consolidated response, and to clarify some misrepresentations. That givenfirst say this is the piece of national thislation and the way legislation has been enacted is different from the local legislation process. It is only understandable that people in hong kong, they have comes some concerns about the content of this piece of legislation and its implementation. So we will do our utmost to explain to the people of hong kong what this law is all about. What this law is all about is very simple. It aims to prevent, curb, and punish four types of activities that would endanger National Security of the country. It only targets a very small minority of people who breach the law. At the same time, it will protect the overwhelming majority of hong kong citizens in exercising their legitimate rights and freedoms. I am pleased to say in the last few days, i noticed you might dispute that but i noticed there has been an increasing appreciation of the positive effect of this National Security legislation. Particularly in restoring stability in hong kong as reflected by some of the Market Sentiment in recent days. Not doom andis gloom for hong kong. I am sure with the passage of time and the facts being laid out, confidence will grow in one country, two systems and in hong kongs future. Let me try to respond to several areas of concerns or unfounded allegations. Allegation number one is this law signifies the death of one thisry, two systems, or very important principle is now being put into jeopardy. The answer for me is certainly the opposite. The National Security law aims to affirm and improve the implementation of one country, two systems, bt addressing risks of undermining National Security which is a matter within the purview of the Central Government. Enacting National Security legislation to protect sovereignty, territorial integrity and unity, is invariably the power and duty of the state in all countries. One country is the foundation of two systems, and this foundation will be seriously shifting if territorial integrity is being optimized and National Security is put at risk. This is a red line which should be very familiar to many of us and it should not be crossed. Given the escalating National Security risks that we have seen since june of last year and the ability of the Hong Kong Legislative Council to enact local legislation, the Central Government has to take resolute action to safeguard the countrys interest and to preserve one country, two systems. By the same token, in discharging the Central Governments responsibility over National Security, the National Security law provides for the setting up of a cpg office of National Security in hong kong, and reserve it for the Central Government jurisdiction to handle offenses under very specified circumstances. And i believe these specified circumstances will be real. And through a very clear approval mechanism. These are all legitimate acts of the Central Government to fulfill the one country requirement under the principle of one country, two systems. Is thisher allegation piece of law is very draconian and will undermine peoples freedoms and spread fear among hong kong citizens. First of all, i have not seen widespread fear among hong kong people in the last week. Some ofesponse is, as the legal experts have commented in the past few days, this National Security law is relatively mild as far as National Security laws are concerned. First, its scope is very defined and confined. It only deals with four kinds of acts and activities endanger National Security. The offenses that legal principles that we attach a lot of importance to like andumption of innocence respect of facts and so on, are being upheld. The law respects and protects human rights as provided for under the basic law. I would submit that instead of undermining peoples freedom, the National Security law will restore stability and help to ensure the great majority of hong kong people could exercise their rights and freedoms without being intimidated or attacked. So instead of spreading fear, the law actually removes fear, and lets hong kong people return to normal, peaceful life. And hong kong will resume her status as one of the safest cities in the world. Our production of human rights is also demonstrated in the making of those detailed implementation rules that we announced yesterday, and took ef fect today. The rules were made by the chief executors together with the National Security committee at its inaugural meeting yesterday, and they laid down processes and authorizations before the police any National Security apartment can resort to the measures and power under article 43 of the law. Finally, the third ellie allegation is any law should be not drafted in secret in beijing, even keeping the hong kong chief executives in the dark. This is a piece of national law concerning matters outside of hong kongs high degree of autonomy. Its lack of defense and Foreign Affairs. Provides article 18 for the lifting of National Laws to annex three and promulgate for implementation in the hong kong sar. Third, i have to admit that by now, we should be Wishful Thinking for us to expect logical in the current medical climate to pass any National Security law. The highest organ of power in the peoples republic of china has the authority to enact laws for National Security, just like any other government all over the world. In preparing the draft legislation has actually listened to views expressed by many people. The National Peoples Congress Standing committee has listened to views of its chief executive. Key is myself and hong kong officials several times. They have taken our suggestions. It is much regretted that my comment made on the 23rd of june in this form in response to immediate inquiry that the hong kong has not seen complete details of the proposed legislation. It was this representative or deliberately misrepresented as hong kong being liberally kept in the dark. That is not true. In the days of head days ahead, we will continue to explain the law and put in place effective enforcement. We will also enhance publicity and School Education to better hong kong peoples understanding of this important piece of legislation, so that they will not be misled. This afternoon he secretary for justice and secretary for security and her colleagues will attend Legislative Council joint Panel Meeting to answer any members questions. Questions . Please raise your hand and identify your organization before you ask questions. On the left there. Good morning. Two questions. First, for the implementation rules, it spells out the powers of the National Security department of the Hong Kong Police force. Is there enough to address the concerns of the public . In many government officials have been online. For the implementation rules, removing integration and dangers of National Security come with that cover information about Police Officers so they and their family could be protected . Yesterday we announced the implementation rules in relation to the seven meshes under 43 of the law. So this is implementation rules, and the rules derive powers from the National Security law. Yesterday, expanding power of the police force, but that was wrong. It is just that these are implementation rules to spell out the conditions for using the powers given under the law. Announcingement in implementation rules to make sure there is protection of human rights freedoms. Ar example, if say theres place for evidence, the condition spells out as to who would give approval to do so. And that should address the concerns of the public. I am not going to go through each measure because it will take a long time, but studied the implementation rules in detail. Manywill find mainly of these measures are similar to existing provisions in various laws. There are at least four measures arrangementsimilar as to some of the laws are serious crimes. For serious crimes. New offensesre are under the law, so the existing law cannot cover that. That is why we need to spell out the arrangement again and the implementation rules so people will know clearly where they can find the information. They will know where to apply, and so on. I hope this implementation rules will help to address the concerns of the public. Will tell,id, time facts will tell. And you will see that this level be enforced very stringently and that peoples concern will be eased. And you will see generally people not fall far from the law. And then for Internet Service providers and other askedzations, they may be to remove information or messages online. There is this power. And the implementation rules actually spell out what sort of messages or information will have to be removed. Just to really not target what happened in past years. Bullied inups were the past year, and it is not to target that. Rather, we need to look at the law. The law prevents all types of crimes four types of crimes. If it is not these crimes, we cannot use this law. On the right in the back. The lady wearing spectacles. The Implementation Details laid down by the committee for safeguarding, does it mean it is subject to judicial review . If theres no protection of human rights or freedom you say the implementation rules are not giving excessive hours to Law Enforcement agencies. Arrangements keeping the same. So how can there be checks and balancing under the implementation rules . Another question is about the covid19. Weve seen local cases again. Areare not going to there other measures . What is the response on the bno announcement . First one about implementation. Rules the law states that the work of the committee for safeguarding National Security would not be made public. So it is not subject to judicial review and it is not to be interfered with as stated clearly in the law. So it is just my understanding, because i am not a legal theessor, but implementation rules are not subject to judicial review. There may be specific circumstances, but i will not go into details today because these are legal issues best left to the department of justice to deal with such cases. Again, thesey implementation rules are not empowering rules, but rather implementation rules. Power,the phases of the the power is actually derived from the National Security laws, the police force can take these actions. Between theconflict implementation rules and National Security law, the National Security law shall be overriding. We just want to spell out some systems for the police to take action. For example, intercepting communications. Of course we have a law on intercepting communications. Under article 43 it is stated that if there are reasonable grounds to believe there is a danger to National Security, comeshe authorization from me, the chief executive. But you can read the implementation rules. I have to be satisfied on various conditions before i would give the approval. Also, the committee will monitor the work of the National Security department after approval has been given. The second question is on the epidemic, and i thank you for the question. It is indeed worrying. We are not seeing low infected cases without history of trouble. So that means there are still transmissions in the community. For this reason, this afternoon i will be calling a meeting of the committee chaired by myself. Then we will review in a comprehensive manner the latest run of the epidemic. We will see if the sources can we have a and then relaxing of social distancing measures. While some may ask for further implementation of these social distancing measures, we will see if it is the right time to do so. Of course we will also review our Quarantine Centers and our capacities for doing tests. We will see whether they are sufficient. That includes what you just mentioned. I hope very much that we could go by our earlier announcement move in. To waiting to two, then a month or quarantined that is the chief executive of hong kong, carrie lam, giving a point by point rebuttal of criticisms that have been leveled at her, her administration, and beijing over this National Security law. Criticisms that have come from the u. S. , canada, the u. K. , european union, lawyers groups, rights groups. Carrie lam says some of these criticisms are fallacies. She wanted to address these fallacies. She also gave another warning towards what she said are radical groups in hong kong. She said the security law would sailing andmooth steady growth of hong kong and its progress. She spoke about markets responding positively to the law. She said they will not make the National Security Committee Work details public. They will remain private and secure. She also said they will reinforce the one country, two systems policy. And she said the law does not go against human rights and is not draconian. Yvonne yeah. As we were talking about, it seemed more of a defensive mode than carrie lam had exercised, trying to quell some speculation. But the headline i got she said surely this is not doom and gloom for hong kong. She said the markets certainly had been showing that, given it entered a bull market yesterday. We see it has been fluctuating between gains and losses. We were up close to 1. 7 earlier in the session, but now we are putting much flat on that benchmark. Msci hong kong is lower by about. 2 . You are seeing the hong kong still study as a rock, 7. 75 on the stronger end. A lot of questions about how this will be implement it. Carrie lam said the implementation of this law does not mean empowering this enforcement agency. Of course we heard about these hardliners that have been put in this committee right now with the top decisionmakers still on carrie lam, but she will be supervised by these people who have moved up the ranks in the communist party. Plenty more ahead. This is bloomberg. S is bloomberg. It is almost 30 to you in hong kong and singapore. Im haslinda almond. Yvonne im yvonne man. We are focusing on the hong kong story today. Stocks have pretty much flatlined since we heard from carrie lam, the chief executive. The rest of the market seems to be consolidating after this big risk rally globally. U. S. Futures lower and the nasdaq futures are pretty much flat after hitting a record in the u. S. Session. Nikkei futures under a bit of pressure today. Take a look at what we are seeing when it comes to the china market because all eyes will be still on this unstoppable rally in the mainland after the 6 or nearly 6 gain yesterday. We are seeing the shanghai composite not as robust, but we are extending this rally by the three quarters of 1 . Up after seeing the biggest single day gain in five years for ashares. A lot of questions if this is a risk of the repeat of the 2015 bubble. The technical suggest not quite. State media struck a more moderate tone, urging investors to be more rational. You can see the hang seng, down about 1 5 of 1 . Hshares are now flat. Key to watch are the offshore. We have briefly strengthened past seven across the u. S. Dollar this morning. It looks like we are testing the seven level on the strength we have seen in the equity market. We are watching other benchmarks as well. We have seen the likes of jakarta coming online right now in the last halfhour. Slightly higher, not that great of a story today in terms of a lot of risk. Kospi is also lower largely driven by the samsung stock, down more than 1. 5 despite the fact the Second Quarter operating profit was a large beat. But a oneoff profit gain on display, as some would say. That is according to the company as well. Watching malaysia and australia today, both having central bank decisions. We are watching bonds. Yields continue to tick up. We watch the aussie 10 year yield lower by two basis points ahead of the rba. The china 10 year yield reached above 10 . The spread between the u. S. 10 year at a record high. The yen has unchanged and the aussie dollar flirting around . 70. We have Karina Mitchell in new york. Karina we heard from carrie lam after the Hong Kong Government has published more details about the controversial security law imposed by beijing. Investigating possible offenses under would not be allowed to Enter Properties without a warrant in called urgent situations. The report says suspects could be forced to handed travel documents and assets may be frozen. China is refusing to rule out blocking hong kong citizens from accepting the offer of a new in the u. K. , slamming london for what it calls gross interference in mainland affairs. The u. K. s offer to open the door to about 3 Million People further soured relations following the security law. Downing street says it is a serious breach of the 1994 hanover treaty. Theion seem to be easing on border between china and india after a deadly crash that left several soldiers dead or wounded. Forces are pulling back all of talks between highranking officers. The june 15 clash was the most spirited incident in 45 years. Beijing and new delhi say they will observe and respect the current border. Saudi arabias raising prices for august Oil Shipments to asia, the u. S. And europe, amid signs Energy Demand is recovering from the coronavirus collapse. Aramco listed its official price for light crude to asia for a Third Straight month, although it is less than expected. It raised its price to the u. S. For a fourmonth. The kingdom still asking Oil Producers to keep Cutting Supply to rebalance the market. Global news 24 hours a day on air and on bloombergquint take, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Haslinda. Haslinda china stock market has rallied for six straight weeks to a fiveyear high. That is giving boost to Exchange Traded funds. 3 billiondollar etf tracking chinese equities surged the most in a decade. Blackrocks ishares largecap etf sword in hopes of a quick economic recovery. Lets discuss that with thomas, head of apex ishares that blackrock commerce. Good to have you with us. Give us a sense of what is driving the rally in the chinese market. Is it a case of improving ecodata, the chase of china handling the virus well or is it the case of covering . Good morning. Thank you for having me. In regards to the huge rally we have seen in chinese equities over the last couple of days, i think theres a few factors at work. First of all, the selloff in the bond market is driving investors into equities. The second thing around liquidity, this is a liquidity driven bull market globally so it is not much different in china. In regards to the Institutional Investors that we speak to here, we have seen two years of under waiting in terms of chinese equities. So with the economic picture valuations slightly more attractive in chinese equities, we are seeing Foreign Investors move into chinese equities and i think that is something that will probably continue into the second half of the year. Is the rally in china different than that in the u. S. Where we see exuberance despite rising virus cases . Well, i think it is slightly different. In terms of the u. S. Rally, this has been a consensus trade for the last 10 years. China,wth projections in although have come down quite significantly this year, the velocity of the rebound does look like it is going to be quite strong. So, i do think investors will continue to look at china, maybe not so much after this recent rally, but i think into the second half of the year and into next year as well. I think chinese equities do offer a good diversification angle for Institutional Investors and also for those looking for some alpha. Can investors build on that exposure to chinese equities, thomas . Where do you see funds going right now, will it flow towards large caps in hong kong . Thomas yes, so, we have had a preference for onshore ashares for quite some time now. For a couple of reasons. One for the diversification angle i mentioned. The other around the inclusion of ashares into global indexes. We are really not having that this year, but certainly last year. I think Institutional Investors, at least offshore, are still quite implicit the way they look at chinese equities. Either onshore versus offshore. Now that valuations have come down offshore, we are going to have quite a slew of ipos in hong kong, investors are going to start looking to onshore china again also. Yvonne the msci deal that we saw with hong kong exchanges, winning the licensing deal, without improve flows into hong kong . Thomas it is certainly positive. It is something we have been looking at for a couple of years now. It has been one of the hurdles for Foreign Investors going into onshore chinese equities and not having the ability to actually hedge their position. I think this is definitely a tailwind for chinese equities. I think Institutional Investors globally in the Third Quarter of this year will rotate into asia. Obviously, china is a big part of that. We heard from hong kong chief executive carrie lam saying to the markets have reacted favorably, well to the security law. Sengso saw how the hang gave up gains on the day on the back of comments she made today. What is your view on how markets reacting or responding to this security law . Thomas i think what we are seeing in hong kong is similar to what we are seeing globally. Investors are looking through shortterm data to what is expected in 2021. And in terms of the actual gdp growth, Earnings Growth that we are expecting in 2021, it is much stronger in asia and in china also. I do expect in the shortterm, we will see some technical rotation into europe. In longerterm, we will see investors buy chinese equities, whether that is onshore or offshore. Yvonne thomas taw, we will leave it there. Thank you for sticking around, from blackrock there. A frenzy in the stock market in the mainland today in the last couple of days. Coming up, we will go to seoul and unpack secondquarter earnings. Operating profits beating estimates. We will have more analysis ahead with calaire kim. This is bloomberg. Yvonne Samsung Electronics posted operating profit of 6. 8 billion in the eight months ending in june, being the highest estimates. And store closures, samsung was able to benefit from surging chip demand. Lets get more from claire kyung min kim from Hana Financial investment. Claire, thank you for joining us. We heard from the company in the first quarter, they were projecting some type of profits light in the Second Quarter. Is this beat more of a oneoff here . We saw when it comes to profit gain in the display unit or is recovery really in place now . Claire i think except the runoff earnings, the pure profit q1 which the same as was 6. 4 trillion. If i see the numbers of 8. 1 thelion for q2 earnings, 1. 5 or 1. 6 trillion. Other than that, the operating profit was 6. 4 or 6. 5 trillion. Yvonne how do they mitigate the fallout here . Was it still the chips business that continues to benefit from work and home or to you see some relief in the smartphone business now . Claire i think that earnings upside came from the smartphone business and also other tech business such as tv and monitors. If i look at their business, the earnings by each division actually came from Consumer Electronics or hardware because of work from home activities and tv monitors. Did very speakers well. If i look at their chip business, their chip business was good anin q2. The q3 earnings, there is a downside. That, earnings came from i believe. Haslinda a large share of samsungs profit. What is the outlook looking forward in the quarters ahead . Claire good question. I think quarter over quarter, two things will be good in terms of their smartphone business. Again, you find by separating them month over month. Hsril and may were two mont affected by negative impacts from the coronavirus. June sales of smartphones was better than april or may numbers. If i look, there are two were three smartphones that would be better than q2. Why . Because even though the impact from corona is still kongnuously going on, hong is better prepared for saving the marketing costs samsung is better prepared for saving their marketing costs. And they are getting ready to launch a new flagship product. Their earnings of smartphone is better than q2 earnings. Haslinda im wondering if geopolitics could play in favor for samsung given the tensions between china and india. Could samsung benefit from that . Claire thats a really good question. Assuming there is a geopolitical situation between china and the u. S. And india and other countries. Hong kong could be a beneficiary samsung could be a beneficiary. But they cannot rely on those opportunities too much. Why . Is a very important customer for samsung, especially for their chip business. Are, chinas customers really important customers for samsung in terms of their smartphone business. Semiconductors to their chinese smartphones. Also, indian markets, really important. To record goods sales in those three areas, samsung needs a balance between u. S. And china and india. Samsung, laughed i cannot marry with someone in those situations. I believe samsung could have good opportunity, but the size of the opportunity for many market, from china, u. S. Or india is not so large. Claire, we are seeing theres not a lot of visibility in the shortterm. You mentioned the geopolitical tensions. Theres this pandemic, macro uncertainty. What chipmakers actually fare better in this environment now . Youre im sorry, could elaborate your question again . Yvonne which of the chipmakers that you follow will actually outperform . You talked about how samsung could perform the likes of sk hynix. Tell us why. Claire because they are very good at global supply. Because they are the own customers. If samsung makes mobile chips, they can sell those mobile chips to customers which means Samsung Smartphone division. They can make many components for their mobile business such as ram. Also, camera and the sensors. An internal ecosystem between chip business and other component business with the smartphone business. I think in the situations of high level of uncertainty for many geopolitical issues or pandemic, samsung will be better than sk hynix by the end of this year. Claire kyung min kim of Hana Financial investments. Thank you for your insight. An exclusive look at saudi arabia and the coronavirus pandemic. The Oil Prices Take a toll on their economy. This is bloomberg. Haslinda the saudi Bank Governor says see sees the light of the end of the tunnel for the economy. Although there is still a need to remain vigilant. He spoke exclusively to bloomberg on his outlook for saudis economy. I think it is too early to say a vshaped. Because barring any Downside Risk coming from the second wave of the virus, for example, or more negative developments in the global economy, we remain we see light at the end of the tunnel, yet we remain vigilant. Yousef since the coronavirus hit, you stepped in with coronavirus liquidity support problems. What happens after september . Do they get extended . Ahmed we have a program of support that has three elements. The first one was targeting the payments or the funding for lending with 95 garrit guarant. And the guarantees to the program where we guarantee we pay the fees for them. The earlier program, particularly was very successful. 70 increase in that signed about. The second one was the pure injection of liquidity. It came later on of opening the economy in june 1. The banking liquidity and enable the banks. This has given banks more room in terms of liquidity. The third one was the open which commenced at the end of june where we did not see a strong appetite coming from the bank given we still have plenty of liquidity. Back to your question whether we would extend or not, we are still reading all the indicators. On thes will depend first programs particularly. Yousef last time you didnt take a view and then it rose about 16 billion. Are you at this point encouraging more m a in this sector . Ahmed you dont want to put it as encouraged. A segment ofa as dynamism in the financial sector. As a regulator, we dont see harm if the two institutions find themselves. They have the desire to merge and they can add value to the sector, and we agree with that. They have value to the economy and that is what we saw. The first merger which did not when they, we agreed separate. Ention to this time, also, we agreed when they showed intention to merge. This remember that, still, is the initial stage. They are still in the process of merger and acquisition. It will be subject to the approval of all the regulators, including the general authority. Yousef the Saudi Foreign currency reserves has been front and center of much of our coverage in terms of understanding the impact of both the coronavirus and the lower oil prices. We are still at the lowest level since 2011. What does a recovery on that front likely to look like as you look to the second half of 2020 into 2021 . Ahmed it is still affordable as we see right now. Philly with about 40 months of coverage of import of goods and 80 of the broad stock of money. We did not see a significant changes of the end of this month with a preliminary data. Whateadings, of course, impacted this was the 40 billion transfer. A oneoff it was stronger. What will support our reserves, moreu can tell, theres positive signals coming from the oil market which we see them right now. Yvonne that was the saudi arabia and central Bank Governor speaking exclusively to bloomberg. A live crossing through, secretary of the state mike pompeo speaking to fox news and talk about the hong kong issue. One line that has come out saying the u. S. Is certainly looking at a ban on tiktok. Aso saying that hong kong is communist run city. This is all in the back of what we are seeing according to axios, reporting that tiktok will be pulling out of hong kong. Pulling that social video platform out of google and Apple App Stores in the city amid this restrictive new law that went into effect. The National Security legislation last week. What axios is saying the move means tiktok is try to separate itself, at least the business outside the mainland, from what we are seeing in light of what we have seen the geopolitical tensions and seeing on the back of this, a lot of tech companies. Google, facebook and twitter say they will not process user data request from the Hong Kong Government in response to this National Security legislation. Taking a look at markets, we are seeing a little bit of nerves in the hong kong market. Fluctuating between gains and losses. Now lower and extending the losses by. 5 after it ended the bull market and what we heard from carrie lam. Shanghai composite also off the highs but still extending what has been an unstoppable run, up 7 10 of 1 . This is bloomberg. It is almost 11 a. M. In hong kong. Welcome to Bloomberg Markets asia. Rishaad our top stories. Hong kongs chief executive defending sweeping new Police Powers under china security law which includes no more searchers and seizures and the power to muzzle social media. Haslinda asian markets powers ahead again. Forecastster smashing and softbank with its highest intraday levels in 20 years. Rishaad and benefiting from the fastwe meet indias growing video sharing app that is gaining users as chinese rivals are put out of the picture. Lets get some Market Action after moves. The asiapacific. This is what we have. A bit of a drift to the downside after a strong start. Really the moment being seen is the s p futures moving to the downside. India maybe opening a bit lower as well after the gains yesterday. Seeing across this part of the world. Lets have a look at the markets at the moment in play. The benchmarks. Hang seng really reversing a 1. 7 advance today. We did have carrie lam, the chief executive of the territory, coming out and saying the markets have responded positively to the security law. Those comments did not really create much euphoria for the hang seng and investors pushing that market down, now 3 10 of 1 . Shanghai composite, 1 to the upside. Unchanged as we await a cut from the Malaysian Central Bank by 25 basis points. That market is moving about 2 10 of 1 . Take a look at the aussie dollar head of Interest Rate decision and what what has been going on with the dollar as a whole. The u. S. Dollar pretty much flat. The yen again. The aussie dollar nudging higher. We were approaching the 70 u. S. Cents level. Thenger there ahead of Interest Rate decision from the central bank. Haslinda. Kongs chiefg executive has defended sweeping new powers of the citys police force and national secured a law imposed last week in beijing. Carrie lam said the laws will not undermine human rights and freedom. She claims it has been welcomed by Financial Markets. Im glad to see in the past few days that some have come to acknowledge there is a positive part of the law. It will help promote stability and prosperity in hong kong. You can see in the market, that has been the direction taken. Haslinda lets get more from our correspondent selina wang. What have we learned about these new Police Powers . Selina the Hong Kong Government recently released seven new implication regulations which of provide detail on how it will be applied. We heard carrie lam saying this does not expand powers but critics already say that this would severely restrict speech and it may even be more concerning than the National Security law itself. These new regulations state that Hong Kong Police can search premises without warrants under exceptional circumstances. Authorities can block suspects under investigation for National Security offense for leaving hong kong. Authorities can demand information from political groups outside of the city. Authorities can order Internet Companies to remove content or seize their equipment. And to ensure enforcement, failure to comply will result in a fine of 13,000 and up to two years in prison. Google, facebook, as well as twitter saying it hits pause on Data Requests coming from the Hong Kong Government and it has been put on the doorstep of his National Security law, right . Selina that is right. Google, facebook and twitter saying they are suspending cooperation with authorities in terms of providing user data. Apple says it is still assessing the impact of the law. Meanwhile, tiktok has said it is pulling at social media app outside of hong kongs google and Apple App Stores. This is as tiktok has come under increasing scrutiny for its parent company, a chinese tech giant. And secretary of state mike pompeo just telling fox news now that the u. S. Is looking at a ba non on tiktok. It is unclear how this will play out. According to new details on them plummeting the National Security law, if Police Suspect an electronic message may endanger National Security. Authorities may ask the publisher platform or even network Service Providers to remove or restrict access to it. Those who do not comply face a fine and imprisonment for one year. It is unclear what happens to information that can be stored in servers overseas that police are looking for, but the implementation law also stipulates that Service Providers failing to help could also be subject to a fine and six months imprisonment. Haslinda our china correspondent selina wang in beijing. Lets get the first word headlines for you. The u. S. Remains the focus of the coronavirus pandemic with countrywide cases rising than the past weeks average. However, florida and arizona saw new infections below recent levels. New jersey saw the rate jumped to its highest in 10 weeks. Senate Majority Leader Mitch Mcconnell expects congress will pass one final virus rescue package later this month, saying the country needs another boost. The u. S. Supreme court has suspendhe decision to the pipeline. It follows the ruling in a lower court that it be shut down amid an Environmental Review that could run into next year. The decision is seen as a big win for native american tribes at the expense of the Trump Administration and the oil industry. Saudi arabias raising prices for august Oil Shipments to asia, the u. S. And Northern Europe amid signs of recovery from the coronavirus collapse. Aramco lifted its official price for an arab crew to asia for a Third Straight month. Although less than expected. It raised its price in the u. S. Whereforfor a fourth month. A fire at its nuclear site caused significant damage and slowed the development of advanced centrifuges. The top body says that because of the incident has been determined and will be announced later as it may have been hit by a cyberattack. Tehran says it will replace damaged building with a bigger one that has more advanced equipment. Tensions seem to be easing on the himalayan border between china and india after a deadly clashes that left several soldiers dead, four wounded. Forces are falling back amid talks amid highranking officials. The june clash was the most serious incident in 45 years. Beijing and new delhi say they will respect the current border. Bank indonesia has agreed to buy billions of dollars of thernment dealt to help finance response of the coronavirus. It will take 27 billion of bonds directly from the government as the benchmark sevenday rate. Ministers will also issue almost 9 billion of bonds to support small business. Part of the interest costs bonds by the bank. Rishaad still to come, we have a trio of exclusives. Jimmy levin. Ministersian finance zafrul aziz. Dont miss those. This is bloomberg. Haslinda the pandemic has most companies talking about covid numbers and strategies. Jimmy levin says there is money to be made in credit. He was speaking exclusively on bloombergs front row. Jimmy this is going to be going on for a long time. There will be defaults, there will be stops and starts. Today, i use this example a lot. Precovid, the u. S. Highyield market at least for a moment traded Something Like 350 basis points over risk. So, the average highyield bond was 350 over. At that time, and this had been going on up and down for the last several years, there was plenty of capital being raised that recalled activation funds. The activation funds needed to be activated upon some event. That event was typically Something Like high yield going to 700 over or 750 over. Because at that moment in time, if highyield ever got to 750 over, well, thats got to be in unbelievable opportunity to deploy capital and credit opportunistically. That is where it is today. The u. S. Highyield market today, depending on which bank index you want to use it is something in the zone of 700 over. The market is trading at the level where people said i only hope it goes there so the fund can activate it and i can participate in this opportunism. I think it is both. I think theres going to be there is a continues to be a terrific moneymaking opportunity in credit. It certainly what look like the march 23 lows. Erik one of the four businesses you are in are structured credit and clos. Those businesses thrive in the decade after the financial crisis. What is the future for them now . Jimmy i think it will be similar on the way out of this recovery. A little while longer to get back, and the exact shape of it is unclear, but that growth in largely the clo market, but really just credit creation there was an incredible amount of credit creation than a decade after the financial crisis. Whenever that are is that much credit creation, there will be structures to sit inside of, get this treated, get diced and ultimately get managed. Erik we got to the point in january and february where many people were starting to sound the alarm about the amount of leverage in corporate Balance Sheets and sovereign bond markets and credit markets together. If we are going to have even more, are we not just inflating a bigger bubble to burst when the next downturn comes along . Jimmy i think a little yes, a little no. What i mean by that is what happened here to the economy was probably almost singularly unique in history. The economy was moving along and then subsequently ran into a multimonth revenue hole. Theres all kinds of different ways to measure. You will hear people quote that phenomenon a lot of different ways. But the world was not built when i say the world, companies, consumers, mall owners, lenders, whoever it is the world is not bill for the zero revenue scenario. So, a certain amount of what happened was the government in a way doing its job, which is when something extorted area happens extraordinary happens, the government is the last line of defense. You can look at the direct dollars or the indirect dollars as the government filling a revenue goahole that otherwise would have cascaded into an even worse outcome for everybody. Now, too much of a good thing is, you know, can be risky so there is talk of moral hazard and there is talk of whether the highyield bond buying part was necessary and so on. But, big picture, there was a 10 trillion hole in the economy and the Financial Markets sees that as a result. The government filled a hole and a variety of things to unglue that. Haslinda that was art exclusive front row interview with jimmy levin. Weve got another front row exclusive with barry diller tomorrow at 10 p. M. In hong kong. Beginning the week in an upbeat mood. Stocks drifting today. The dollar remaining to its closer level since we have seen since the early part of june. Lets bring this together and joint jp morgans head of Equity Research jamie sullivan. What is going on at the moment . It seems that people are looking at the data and seeing a rebound taking place. Are you seeing that . Fervently natural given lockdowns being eased. Are they mistaking a rebound for a recovery . So, good morning at thank you for having me on the show. I think there are two points i would make. Number one, people will see in the data what they want to see. Yes, data in many markets have rebounded but we cannot forget in the United States and the philippines and indonesia, we are seeing significant second waves. We are seeing incremental lockdowns. When we look to the highfrequency data that we track closely at jp morgan, we are seeing a reduction in mobility and reduction in Overall Economic activity in many of these markets which will create a drag on Global Growth as we move into the second half. I think that the outlook on the data at least from our perspective is very clear. It is important to go country by country. Here in asia, the data coming out of china is better than markets like indonesia and the philippines. Rishaad ok. And the data itself for years, if you look at u. S. Unemployment numbers, historically the number of unemployed has averaged three times more than continuing claims. We have claims now which are exceeding the number of people unemployed by a factor of about 5 million. Alson, the Data Collection has a caveat to it. James again, i will make two quick. Points. One is the velocity of the situation we are in the middle of right now. Unemployment numbers versus claims will differentiate foray ap period of time. When we look at employment in the u. S. Sectors most hit by the crisis, we saw almost a 50 employment loss. Those sectors on our numbers have rebounded about 50 of that decline. Again, we are seeing this resurgence so we expect another downturn in some of these employment numbers. The second point i would highlight directly to your question is we are in a somewhat unique period of time where anything on the planet that can be counted is now available as a primary data set. At jp morgan and other organizations, we are actively tracking mobility statistics by city, bites up a location in away we never had the capability to do before. We are tracking app usage data, geospatial data. So, the ability to see through to what people are actually doing versus what they claim or what the answer to a survey makes this a very different situation than crises past. We have a better view of events on the ground and weve had historically. Rishaad looking at centralbank action here, james, weve got so much easing, free money out there. How much damage can that do in companieserm in sense that should not really be around at the moment alive and these zombie firms which could lead to bankruptcies just on any real or anyave of a pandemic such thing like that. Is that concern you . James it is an absolutely critical question. Jp morgan numbers going up to 278 of global gdp. That is a 35 increase from precovid levels. That significant he outpaces the 20 increase we saw post Global Financial crisis. It is the highest level we have ever recorded. If we think about that structurally, with that means is ultimately debt is deflationary. What we see in high debt are also very high saving rates which means people are spending less, which means potential overall Global Growth is lower. What we are likely to see and the jp morgan base case right now is structurally lower Global Growth moving forward. Very low rates for an extended period of time to carry these high debt loads. That creates a very difficult growth situation for the next 10 to 20 years. James, china is going gangbusters. 7 gain just last two weeks alone. If you are not playing china right now, is it too late to get in . James we dont think so. We are still overweight china. In the markets conversation, it is important to put things into context. The china response to covid has resulted in a relatively stable situation, particularly if we compare it to the u. S. , indonesia and the philippines. So, the stability of the economic rebound in china does look better than some of the other markets that we are looking at around the region. If i look at a significant tourism drag on many economies, philippines, thailand. If i look at north asia, some of the outperforming markets that have been exposed to the tech cycle, korea and taiwan, we are seeing significant inventory built in those markets. Increased tech demands are already in the price, already in the warehouse. So china for us within asia context really stands out. Haslinda do you expect the china rally to release the animal spirits through the rest of asia . James the china conversation is interesting for a variety of different reasons. Again, the government response has been very strong and has contributed to the stability and economic rebound. We are not expecting significant reclosures in china in the way that we could potentially see it in the, that we are starting to see in the philippines and indonesia. That gives us a more stable background against which to forecast. In addition, we are seeing an environment where the credit provision and the credit cycle in china is starting to pick up. We are not seeing that result in a tell formation so we have an positive on the chinese Financial Institutions for some time now. The overall Growth Outlook looks good. We have china exiting near 6 growth. Not for the entire year, but from a run rate perspective, we have them exiting back at a more normal level. Unlike rest of world, we do have china getting to a 2021 Growth Profile that is similar to what we expected precovid that is not the case for the rest of the world where we are forecasting and complete recovery. From that perspective, china stands out. In a world starved of growth, china looks very interesting. Haslinda james, always great insight. James sullivan from jp morgan. If you are a bloomberg subscriber, you can catch up with all of our interviews using our interactive function. You can also join the conversation by sending instant messages to our team during our live shows. Check it out a tv. This is bloomberg. Rishaad lets have a look at the latest business flash headlines. Samsung second quarer earnings smashing big expectations. Forecasting operating profit of 6. 8 billion, up 28 from the year before. That is as the coronavirus pandemic fueled a boon in internet use. Chip sales making up for falling revenue from smartphone sales. Tech will no longer process user request from the Hong Kong Government amid concerns of the citys new security law that criminalizes antigovernment protests. Facebook says it has pulled cooperation while it conducts human rights assessment. The move applies to the core social network as well as instagram and whatsapp. Twitter says it has great concerns about the laws intentions. China suffering its first major group because of what it calls its shortterm liquidity problem, which is being caused by large debt and high borrowing costs that has aulted since the offshore affected sales. Haslinda it looks like consolidation in the asian markets gained. They are no longer there. Asia giving up gains in the morning. The index currently flat at 165. 37 from itsp march lows. Capital group among those betting from asia outperforming u. S. Stocks leading up to the election in november. The s p futures pointing to a lower open. The s p has rallied 40 from march. Even his volatility remains elevated. The dollar index is flat at 12. 09. The dollar heading for its worst run in a month. Oil keeping within the 40 range and has hit a wall as it doubled in value since april. Take a look at where we are in terms of the north asian stocks that have gone pretty much gangbusters. China up 1. 7 . Stick here with us. This is bloomberg. Its pretty inspiring the way families redefined the word school this year. Its why, at xfinity, were committed to helping kids keep learning through the summer. And help College Students studying at home stay connected through our university program. Were providing affordable Internet Access to low income families through our internet essentials program. And this summer, xfinity is creating a Virtual Summer camp for kids at home all on xfinity x1. Were committed to helping all families stay connected. Learn more at xfinity. Com education. Haslinda it is almost 11 30 a. M. In the lion city. The sti trading down by a tad. It is a mixed picture and the rest of asia. Singapore betting on vacation to fill the tourism hole due to the coronavirus, but it cannot fail that 20 billion tourism hiole it is experience hole is experiencing right now. The government has set aside 65 billion to cushion the blow and the city backing large domestic markets. It has relied on international travelers. About 20 billion hole cannot be filled at this point in time. Lets get the first word headlines for you. The u. K. Confirms it is reviewing any role huawei may play in its 5g network, saying the country can be left vulnerable to say vendors. Ignoring u. S. Warnings that washington would sever intelligence ties of the company was not banned. Officials are now reassessing that petition. Outa is refusing to rule blocking hong kong citizens from accepting the offer of a new life in the u. K. , slamming lunday for what beijing calls gross interference in mainline affairs. The u. K. Officially opened the ir doors to 3 Million People which soured relations. Downing street says it is a serious breach of the 1984 handover treaty. President trump is said to be preparing new executive orders on a range of issues including china. Chief of staff mark meadows says the white house is looking at how the u. S. Should with china but did not specify when the orders would be done. Includesues integration. The president tweeting that china has done great damage to the u. S. And the world. Malaysias finance ministers says the government still has the firepower to get the economy back on track. In an exclusive interview, he also discussed ongoing negotiations about the Goldman Sachs scandal but started by giving his outlook to the rest of the year. We have been going through a challenging time here in malaysia, just like what is happening globally. The forecast for this year, for 2 , is between 0. 5 and which is in line with what was forecast today. As you correctly said just now, the expectation is for 2021 to perform better. This year, it will probably be between 0. 5 and 2 . Can you give us a number for that 2021 growth target . 2021, we have not officially announced any target. If you look at the Analyst Consensus numbers, it is between 6 and 8 gdp growth. That is what banks have recently announced that is forecast for 2021. Your budget to parliament on november 6. These book of the future proving the economy at a time the country is grappling with increasing unemployment. What will be your key priorities and will the 2021 budget be bigger than the last . Yes. When you look at what we have done so far, we have now six packages. Around 68 billion. If you think about the budget for november, thats really for 2021. The focus in the immediate term is to get the economy back up. We have seen a number of people, number of factories open again in may when we reopened the economy. For 2021, the focus will be on ensuring this growth expected in the third and Fourth Quarter is sustained. What we have shown so far is that malaysias economy is resilient so far today. Will you skew towards more spending or costcutting in the budget . It is the early days, but whats important is we need to stimulate the economy. If we need spending, that means we have to invest for the future. You look at the levels today, it is still manageable and forecasted to be around 5 or 6 . We still have room on the Monetary Policy as well. The focus is to get the economy back up and focus on the people, the businesses, and then stimulate the economy. Is there another aid package in the works . The last package that was announced early june, that package is a dynamic and agile package. Should we need to have another package, then we are ready to do so. We will see how it goes. The plan in todays world has to be a dynamic one. The economy is picking up so we are quite optimistic that we dont need one anytime soon. The head of the policy decision, we have seen the bond curve steepening on that easing bias. We are seeing longer data yields an elevated as markets are seeking clarity on fiscal policy. As you just affirm, you are expecting the fiscal gap to widen to 5. 8 to 6 this year. That would be the biggest gap in over a decade. How will this be financed . Deficit wasst actually in 2009 which was around 6 or 7 . It is probably this year. It would be financed mainly by market. L domestic think where we are heading next year, we look at the kind of stimulus packages that were announced so far. You wont see that again. Down. Ould expect it to go rishaad that was the malaysian finance minister with sophie kamaruddin. Getting some headlines from the bank of japan. The 30 year option taking place for the japanese government debt. The bid higher than forecast with regards to that. This means the average yield, price of yield is 0. 61 . Able to buy 31 of the planned buys and we have the 30 year bond, 3. 92 . The 10 year with four basis points and the plus column and this is where we are with the steepening yield curve, spreading further as we have record debt issuance in place. The bond market taking place in japan and the backdrop of trying to keep yield control going with the 10 year yield targeting 0 . Four basis points in the green there. Haslinda. Haslinda lets get to india now. Indian Internet Companies have been the biggest gainers of the governments decision to ban as many as 59 china linked apps. , which ism his roposo owned by modi group. 22 million users in just two days. The countrys biggest and fastestgrowing short form video platform. Joins user and ceo now. Good to have you with us. You have said nothing in your life has come close to this. Give us a sense of what you mean by this and how does it change the digital landscape in india . First of all, thank you for inviting me. You are right. I have seen a lot of growth businesses in my life for the past 10 or 12 years, but i dont think i have seen anything go up like this which it has done in the last week. Strong because of the change in policies, adding close to 10 million users a day. I think we are about 75 million users right now and growing. I think the second part of your question, this effectively is an opportunity for a lot of the Indian Tech Companies to fill a void. A void that is really large and as theortunity for india h hub in the world. You dont get these opportunities if the borders are not absolutely open for countries like india. Where you can have an open opportunity, an open Playing Field to claim. That is what we are trying to do with roposo now. And feel very excited about that. Haslinda we talked about how s has benefited from the latest developments. Can they compete with tiktok in terms of engagement . Naveen we have seen close to 40 million engagement already. Our product was very good. It has been in the works for the last several years. It is a very strong product, part one. Part two, we have to look more fundamentally at the issue of any other application out there in the space. I dont think they are very ingrained in the indian society, culture and values. Entertainment,in one has to be very clear youre embedded as that player. I think roposo does very well with that. It connects with its creators and the consumers much more deeply. We are seeing a very high level of engagement. I think when and if tiktok comes back, we will be able to compete against that with out a doubt. Rishaad you dont really have tiktok out of the picture for a long time then when you have to prepare for them to return, yeah . Naveen in business strategy, if you dont plan for things to always to be great and not to have any competition. Therefore, we are ok with that. We think the creators who are the core of this new entertainment absolutely are eroking for much more saf platforms to showcase their creativity. Roposo is clearly that and has much longer longevity. That is what they have seen. When they move forward to us, we are getting reports of 5000 creators moving on to the roposo platform on a daily basis and that is a Massive Movement of creative talent from one platform to the next. We think they are here because they are seeing great tools for themselves. But the community and consumers are consuming the content. Rishaad i just want to shift to, i suppose, the wider businesses in india. Risk capital, Venture Capital has been thin on the ground. Do you think with these 59 apps being effectively taken out of the picture, it is a new opportunity for these companies . And do you think you have got this situation changing in Venture Capital coming back in your view . Naveen two things. One, india was never a great place from a pure digital justny perspective because by the sheer nature of their borders and india being so open, if one is purely digital company, you would have other companies coming and create, subsidizing consumers with global consumers. But the only kind of Digital Companies in india were the offline to online Digital Companies because that required physical infrastructure and supply chain changes on the ground. What this does right now is create a vacuum. Where one could actually go out as investors both Global Investors could go off to the indian Digital Ecosystem and you have an opportunity to create the next large Digital Enterprise out there for india. It is an opportunity to create it may not have been created otherwise. Inmobi was among the First Investments for softbank in india. Has softbanks approach in india changed . Is it still pushing for rapid growth . Naveen i think softbank has changed its approach to great extent in terms of looking for economics and building businesses that are sustainable in scaling over a long period of time. Both the changes it has gone through, but also because of changes due to covid. I think it is very important for businesses to have far significant businesses that will have profits over a short period of time. We were one of the only companies that paid a prophet back in 2016. Torefore, we have been able invest in multiple other businesses and create not just but roposo right now. Not seem tos does be the time you need to invest, thinking about this opportunity being presented for you. In order to that, you need money. Would one of the options be to list . If so, are you planning to . Onlyn i must say this has been a week where this craziness has happened. I havent had time to think about these things. We certainly would look for capital and accelerate this growth. But one of the things we do have, because we already own a very Large Consumer property, we two large platforms together, they help each other grow much faster. We are not necessarily looking for capital to spend on customer acquisitions because we can that is one. I have never seen a brand that gets created in a matter of a few weeks. Brand,is now a household nationalistic brent created on the back of an massive vendor. A lot of the capital that is typically used for growth and Building Consumer businesses, i think the work is already done for that so we have to make sure we continue to build a better and better product and give our creators great set of tools internet environment where they can create the next innovation of entertainment for us. Rishaad naveen, good stuff. Thank you for joining us. Joining us for an exclusive chat from some that india. Lets have a look at what is at the moment a positive picture. Slightly on the upside. 1 10 of 1 . Ave the big winner moratorium which is bringing a bit of relief with regards to the balance sheet. We had a Strict Lockdown destroying consumption and we do get a bit of relief for that company as a result. The biggest decline at 1. 5 . Lots more on the way. This is bloomberg. Haslinda we are waiting a couple of policy decisions today at Central Banks in malaysia and australia announced their next moves. Malaysia could see a cut of 25 basis points. Lets get more from a chief asia economics correspondent. Lets start with bank of malaysia. Why are we not expecting a cut today . Well, malaysias economy is not just being hit by the waiving of the coronavirus pandemic. It is also dealing with low oil prices and political uncertainty. We know the three months have been pretty heavy for the economy. Exports fell almost 20 per six 26 in may. Production also fell by a of 32 . Even though theres a feeling the economy may be passed the worst of things, three opening will have its limits until a vaccine comes along. We heard the finance minister earlier say there is stimulus. At 25 economists expected basis point at a record low. Rishaad 25 basis points is the bank of australia. Are we expecting any signals . No change is expected in that rate. Are we expecting signals in terms of further stimulus and what more can be done in the monetary side of things . Enda no change on the policy side, as you mentioned. It will be interesting to see what kind of commentary comes up, because australia has been one of the stories and containing the virus. It will be interesting to see if theres a sense of optimism there. At nother that even hint needing much stimulus as they initially thought. They were probably comment on the strength of the Australian Dollar in this rally. Lets not forget the complication we are seeing in melbourne and victoria today with the lockdowns happening there and talk of an even harder lockdown to come. It will be interesting how we see in economy that managed to control the virus, how the recovery goes and whether it is a sharp recovery or more prolonged one. Rishaad enda, thank you. Chief asia economics correspondent. A lot more on the way, including new zealand interested in limited the number of citizens returning home. Details on that. This is bloomberg. Rishaad you are back with Bloomberg Markets as we have the latest business flash headlines. Airasia posting a record quarterly loss of the three months until the end of march. Coronavirus impact. The group ceo calling at the toughest challenges the airline launched in 2001. The group has cut cost by more than 50 since it boosts liquidity. More than one half over the next three years and encourages as many as 80,000 staff to work from home. The company is one of japans biggest employers and describes the work as a shift to the new normal. Month stipend to help set up and maintain workspace at home. Factory workers are unaffected by this. Limitda new zealand will the number of citizens flying home to reduce pressure on its overflowing quarantine. The move comes as kiwis flock to go home after the South Pacific nation eliminated covid19. Lets get more with our reporter who joins us from the lion city. We have restrictions reimposed in new zealand, while at the same time, and that asia is reopening. What is the latest . Thats right. Definitely a different approach for those two economies. New zealand is being ultracautious for some time in excepting those residents coming home. They have put that temporary limit on air new zealand, threeweekold on new bookings of International Services into new zealand following the governments request. The government cited over 26,000 people have been managed through isolation and quarantine since like march. That is beginning to be quite a strain on the facilities that they have. Right now, almost 6000 people in 28 facilities, and it is typically hotels approved for the purpose. The government is working to increase capacity but they have put a pause on those residents returning home. As you mentioned, bali quite a different story right now. They are reopening under pressure to rescue the Tourism Industry in indonesia. Local visitors will be accepted on the island from july 31 and they are planning to have foreign visitors from september 11. That is quite a surprise to some. Maybe a highrisk effort given that the people of people the number of people infected by the virus has jumped. A cause for concern that indonesia has the most number of infections infidelities in Southeast Asia but they are trying to gain momentum. Course, michelle, of many people in hong kong are going on several staycations, domestic tourism, and some nations relying on that to give the economy a bit of a shot on the arm. Like hong kong, how does a small city state, singapore, fo actually managed to do that . Can it work for them . Michelle you and i can see how it plays out in small city states but singapores hotels are trying to get back on board. They have given their green light to host domestic forests. They have been trying to transition after posting quarantine individuals including some residents recently who have been allowed back into the country and have to bear the cost of that quarantine. Singapore has bench struggling to get the Tourism Industry back off the ground. 20 billion in revenue last year and more than 90 million visitors. Those numbers we see plunging this year. As they get on board with more reopenings, currently in phase two, they are trying to open up more businesses and allow the industry to get back on its feet again. Haslinda singapore not the worst off. You think taiwan. Michelle yeah, certainly, judging by official forecasts. 8. 1 decline by the government of thailand is going to be lowest across asia if it comes to fruition. Unfortunately, a lot of things weighing on it, particularly the Tourism Sector which takes up 1 5 of the economy but currently down to 15 now. A lot weighing on it. Haslinda we have to leave it there. Michelle jamrisko in singapore. That is it for Bloomberg Markets asia. Bloomberg daybreak middle east is next. Stick here with us. This is bloomberg. This is bloomberg daybreak middle east,. Investors struggle concerns about the evergrowing number of coronavirus infections. Click the australian central Bank Governors has he sees the light at the end of the tunnel as Consumer Spending begins to pick up. Hear our exclusive interview. Abu