Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

Prices double the last couple of months. We have seen demand picking up. Taking a look at other markets, the focus is on chinese equities. They have been fluctuating between gains and losses. The shanghai cob is lower. They are largely flat after what we saw on friday. State funds trimming their holdings. There was the big news of the haltingetf in china trading until 10 30 a. M. This morning. They are saying the warning of thiss involved here tracks some of the largest stocks in shanghai. Take a look at singapore. This is reopening after the singapore election. Retaining the firm grip on power. When he 89 of seats. That is considered the weakest showing ever. Good. Be for stocks some analysts say a de a diverse up three quarters of 1 . We are taking a look at bonds and currencies. We watched the dollar posting the second weekly loss. It comes toing when the belly of the curve for u. S. Treasuries. Reversing some of the gains after we sell yields touch a record low on friday. Lower by one basis point. 10 year yield elevated. Your offshore renminbi, we are around the seven handle. Goldman reviving their 12 month target to 6. 7. They are sitting theyre saying the fundamentals a little bit better. You are looking at the yen as well. Some strength going into it at a two week high. Lets dig deeper and get more on the market with mark cranfield. Markets seem to be shrugging off virus cases. Never mind we are looking at 200,000 cases a day. Mark indeed. It is more to do with lockdowns and the fact they are not really happening and the threshold for them to restart is so high it is unlikely. If this friction between Economic Growth in the hopes it is going to gain traction around the world with the fact that people are willing to live with a certain amount of virus risk. What we saw in april and may where european countries, some parts of asia, shut down the whole country. It was very damaging for the economy. The chance of that happening again is remote. We are seeing specific lockdowns in parts of florida, texas and california reintroducing some tightening measures. It is not going to be across the whole country. That is the trend across the world. No one has the appetite for shutting down the whole economy. Business will continue for some extent. Here will be a place that is impacted if you look at melbourne, australia, there will be some hardship for the economy. That is only one part of the country. That is the kind of outlook equities are thinking about. Life can get on to some extent. It may not be as vibrant as 2019, but there is business to be done. People can make money. We just have to live with the virus as we can. Yvonne a big week for chinese data. The gdp numbers coming out later this week. This rally we have seen on the mainland seems to be pressing the pause button for now. Do you see this as a pause or the start of some type of correction . Mark it is a healthy sign that if you have the authorities trying to cool things down, this early in the equity rally, that has to be a good sign. A lot of people are making comparisons to this incredible stocks really we saw in 2014 into 2015, which eventually reversed very badly and was an ugly situation for chinese markets. Much earlier we are getting some noises from the authorities in china. Stock rallies are a good thing, but do. Not get carried away as we have reported, we have seen signs of major state related investors have been reducing their exposure last week. This is a much better sign for markets. We do not want markets to go up extraordinarily in one direction. That drags in too much speculative money. We are people are trying to be more realistic about it. The underlying signs, the gdp is going to be better. The highfrequency data is showing the chinese economy is opening up pretty well. It is way ahead of other countries. That does not justify stocks going up every day, but when you combine the improvement in the data and the willingness of authorities to get involved more quickly to call down the hot speculation, that is a much more healthy environment for the sawty market than what we when everything crashed in 2015. Haslinda we are at the start of the u. S. Earnings season. Which earnings are key for broad market . Mark of course there is going to be a lot of attention on the big tech stocks. They have driven so much of the turnaround in markets in the u. S. And globally over the past few weeks. It could be the financial sector, which gives us more information. There is a lot of interest in how banks manage to do with their trading environment. In the Second Quarter, high volatility across various security markets. People will be hoping the wall street banks made good use of the volatility to improve their earnings. Conversely, the major banks will be able to give us a read on what is happening in the real economy. They will see the potential risks if there are any bad loans they need to provision for. Banks will be able to tell people a lot more about what they are seeing happening in the underlying economy, not just in the tech sector. I will be Important Information that will be Important Information. People will be looking to the commercial sector as well to see if there any signs this work from home trend we are seeing, does that have any impact on the commercial lending space . Are we seeing Companies Giving back some of the office space, which they had earlier in the year . These are some of the things that will be in there. With the fact that so Many Companies did not want to give outlooks, it has been hard for analysts to get a read on what has been happening. It is much more interesting than usual. Yvonne well be focusing on that. Thank you. Mark cranfield. If you want to check out mliv for their commentary. Coronavirus kate is in the u. S. Rose to three and a quarter million with almost 56,000 new infections. Florida reported the biggest daily rise of any state since the pandemic struck. Effortss surge exceeds set in new york and california. Global infections are approaching 13 million with 565,000. S above new york city has reached a virus milestone. No new confirmed deaths for the First Time Since the infection peaked. Of arks the possible end four month stretch. The confirmed daily death toll 597its height on april 7 at with another 216 people likely to have died from the virus that they despite no positive test. Indiaions are surging in with almost 29,000 new cases reported on sunday including 550 deaths. It pushed india into third place in the global tally behind the United States and brazil. Ywoodases include a boll star and his son. India has reported 21,000 virus cases a day from us two weeks. Won 89 es ruling party of the vote in the election. It was overshadowed by criticism of the governments response to the coronavirus. The main opposition claimed 10 of the 93 seats available. The election was held during the worst economic slump on record. This was not a feelgood election but one where people are facing real problems and expect more to come. It is not as strong a mandate as i hoped but it is a good mandate. 61 is very respectable in these circumstances. Yvonne still ahead, we get the take for bonds. Markets as for the the threat of the resurgence rises. Newinda how beijings security law may affect freedom in hong kong. This is bloomberg. Yvonne hundreds of thousands of hong kong residents voted in hong kongs democratic primaries define concerns about social distancing and the security law. Hong kong has been chipping away at free speech. The next director is the next guest is director of media law. She also taught ethics at the university of hong kong and joins us from chicago. Thank you for joining us. Kaluz how you think media freedoms believe all of under this National Security legislation freedoms will evolve under this National Security distillation. Weekshas been almost two since this new law has been implement it. We still do not know. We are waiting for the details of what might be happening. Are these know, there four new criminal offenses that have been created. Succession, subversion, terrorism, collusion with foreign entities. That will play out. We do know this will have a major implication for press freedom in hong kong because of journalists what can cover and who they can talk to. The primary goal is to put some kind of control over the prodemocracy marches and the election. The media is caught up in that. It will be impactful for foreign media as well. Article 27 of the basic law is where we find that press freedoms are enshrined in the committee constitution. How do you see that squaring with the new legislation . Do you think that hong kong is going to turn into more of the mainland model or could it be a hybrid where some sort of censorship is policed selectively . I think we have to wait and see because the law is written the way the law is written implies there will be a hybrid. There is article four that says they will respect human rights. It will respect the basic law. In the end, when push comes to shove, certainly, the new law will supersede any existing hong kong law. There is this hope that as these cases come out, that will get that we will get more clarity. There is the hope that hong kong courts, which have a good reputation for independence will continue to do so. Not necessarily restrictive in how they try to uphold will of low and basic will rentables, not wait until china gives some type of direction. Theinda you said before courageous local journalists are key to moving ahead. There is a fine line between courageous and putting yourself at risk of being sent behind bars. How do you suggest journalists navigate this tricky environment . They have to continue doing what they are going to do. In other words, journalists have shown over the years both projournalists that operate as well display repercussions, they continue to do the reporting. There has been a lot of there have been a lot of conflicts with the way police have been handling violence against journalists. They have been able to persevere about that persevere around that. Until we know more details, they will have to continue. They have shown they will continue to report vigorously about what is happening in hong kong and wait to see what kind of prosecutions come out that might give them boundaries. Continue as will they have shown in their coverage of the election the last two days. You have not seen them pulling back from their coverage. Haslinda what constitutes collusion with Foreign Forces to endanger National Security . I am wondering if it is ok for us to report that the u. S. Is criticizing beijings government for impingement of freedom. That is the big question. That is the question we do not know how it is defined. There are some indications collusion could be in the publication of or providing support. One of the things you have to look at is, whether someone talks to a foreign journalist, how journalists are covering these stories. That is the questions the foreign media will have to raise. The big issue and concern is not so much we will know more when there are further cases that i worked their way through the court that are worked through the court. In terms of how it pushes a different agenda. Collusion with Foreign Forces is also a message to those outside hong kong about what to report about, what to write about. That is beginning to have repercussions around the world. What do you think the response from the Media Companies is going to be . A target on our tha. Rthk. How can the news industry better prepare themselves . Circumstances with rthk as a public broadcaster. It always towed the line in being very vigorous in coverage. They continue to do some really good reporting. Certainly now, there is that type of control. That there will continue to be vigorous and aggressive journalism and reporting until they know what these boundaries are. Otherwise, what you have is a situation for selfcensorship. There might be some selfcensorship in the days and weeks to come. Because things are so undefined you mentioned, what is collusion . What is a state secret . One of the provisions says you cannot provide state secrets to a foreign entity. What is a state secret . In china, it is not defined. State secrets can be anything from financial data, a school exam result, things that are already publicly available on the internet and elsewhere. I think because there is this uncertainty about it, journalists have to move forward and continue to report. They already have some experience. Reporters in there are reporters in china already. They have been working under the parameters of that environment. They are still doing some vigorous reporting as well. Haslinda thank you so much for the insight today. The director of media law and policy initiatives at northwestern university. Still to come, unhinged from reality. That is the view of one bigname investor when it comes to the global stock market surge. Our conversation with mike nova kretz is next. This is bloomberg. Yvonne long time money manager mike nova kretz says we are clearly in a text field bubble and small investors should get out before it bursts. He told us why he things markets are unhinged from reality. This is a bubble. Certainly in the tech space. I remember one Alan Greenspan issued those words. We are unhinged from reality. The economy is slowing down. We are lurching in and out of covid. Tech market makes new highs every day. That is a classic speculative bubble. Lots of liquidity is buying its way into the story stocks. Just if it is zoom or tesla or beyond meat whatever stock has a story, everyone is rushing into, that gets me worried. What does that mean for the Retail Investor . We have done a lot of work on the momandpop investors. Are you concerned they may get burnt here at some point . Mike this reminds me a lot of the cryptocurrency market in 2017 where we had this crazy rally when bitcoin went from 8000 to 20,000. Lots of people bought in and it collapsed. These stocks are not like crypto. They are real companies. They are getting valued ahead of what i think reality will be. I think there will be a moment. Centralbank action or bighis case, we had a election coming up. Joe biden he wins. Lets assume he wins for a second because i think he will. Corporate taxes are raised. High income taxes are raised. That will be good for the market. We are still in this euphoric stage of the market going up every day. Fueled by tons of liquidity. I want to talk about that idea of joe biden. Just yesterday, he was saying he does not believe shareholder capitalism can continue. Going to bakeors in that thinking . Mike wall street was already moving that way. Paul jones has a thing called just capital. Isry fink is on the train as marc andreessen. Tons of people have been living that way and saying, we need multistate corporate capitalism. Just shareholder only is not working. The rich and poor gap is getting to wide. It is leaving the environment behind. There is this a in esg funds. Almost every fund wants to be in esg fund. I do think joe biden is moving to wall street. Wall street was already moving there. I do not think that is a concern for the market as much as the tax code. I want to go back for a second because you were talking about the skyhigh tech valuations. What is that mean in terms of what does that mean in terms of how you are investing . A friend of mine said, in markets like this, you want to be on an airplane on the seat closest to the exit. I missed this tech move. I was smart enough to not keep fighting it. I have not been participating. I have a lot of friends making a lot more money than i am these days. I have a whole bunch of gold and bitcoin. That is also participating in this liquidity driven bubble. They will be longerterm winners in the liquidity driven bubble. Manianot catching this you are seeing in the storied stocks. Haslinda galaxy Investment Partner mike novogratz. This is bloomberg. Tend to 10 29 in hong kong and new york. We begin with oil. It fell in asia trading. It may outline plans to scale back output curves that have helped stabilize the market. The opec plugs group will amid mounting expectation they will start to relax restrictions. We were told top russian producers will prepare to raise output next month. The u. K. Is to spend almost 900 million on new border infrastructure. The cabinet insists everything will be in place for the final split despite london and brussels failing to agree on terms. A leak from the trade secretary highlights concerns on border plans. A challenge from the world trade organization. Exit polls in poland sure the president ial election is too close to call with both candidates claiming victory. The vote pitched pitted a initialtive pundit with estimates giving both 50 within the margin of error. Official results may be released later today or tuesday. Carlos ghosn says he has hoping those flee japan last year but is refusing to offer details about his escape. Two citizens accused of facilitating the flight. A tv company, he declines he paid money to a company linked to one of the accused. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Haslinda looking at the markets, asia is starting off the week in positive territory, adding to two consecutive weeks of gains. There are risks. Virus cases rising globally. New cases, over 200,000 daily. The index up 1 . Right now, all sectors on the index in positive territory, led by industrials. Futures pointed to a higher open after the solid close on friday. The s p outpacing the nasdaq for the First Time Since late june. Investors support looking to the start of earnings season for further clues on how companies are faring amid this pandemic. Futures surging 3 . Possibly an indication of activity picking up. Flip the page, take a look at where we are in terms of those particular indexes. We are keeping an eye on that benchmark. Up by 1 . 2. 6 , the most since march. It of course has been in the spotlight, and unprecedented rally that has outpaced global counterparts. They have been wanting to put a lid on it. Morning about the dangers of a potential equities bubble. The china surging by 2 . Hsbc leading the advance. Its 50 two week high back in january and pretty much flat after the elections on friday. What you are seeing in the shanghai futures as well. They are searching in the mainland here today. It is up close to 6 right now. Aluminum also has been gaining. Iron ore, those futures are up 4 . When it comes to copper, the market really focusing on not just the chinese demand that seems to be picking up but also tight supply. We got news of this copper mine in chile. They rejected a final wage offer, raising the prospect of a strike at a time when the market fallinged by miners ill. You see this bigger surgeons when it comes to commodities. Rent in the other direction here today. Haslinda brent in the other direction here today. Haslinda policy meetings in japan, indonesia, and south korea. The boj will be noteworthy with Quarterly Outlook do on thursday. The be ok may look to ramp up other tools with rates already at a record low. Whetherts are split on Bank Indonesia will hold rates or cut to 4 . Lets bring in the head of asiapacific fixed income and ubs Asset Management who joins us now from hong kong. Good to have you with us. The rate decisions for many of the Central Banks, amid rising cases in new virus cases. How do you think they will signs the two between improving in china and perhaps a second wave in some rest of the world . Some parts of the world . The main reason for that is accumulating Foreign Exchange reserves so they have a lot of inflow, particularly from emergingmarket funds coming into this part of the world. It is pretty astounding now that you can get roughly a higher cand in indonesia then you in brazil. It seems a lot more stable amount perspective. Money is continuing to flow in. That will give them support on the currency side and allow them to continue cutting. We are in a really precarious position right now. A lot of people are looking at the average numbers around viruses. Some of the numbers are rising very fast. Numbers like the death rates are falling in particular states around the world or particular countries. Are expecting this virus death rate to accelerate from here, expecting the people catching it to accelerate from here. It will have an impact on markets. Obviously, in the earnings season, how banks are handling it. Lets pick up indonesia. Analysts are pretty divided as to what Bank Indonesia will do. The sums they 25 basis points. Others say perhaps it will stand pat. Where do you stand on this considering bia will be cognition of what does . It does not want deals to go too low. It wants investment to keep coming into the country. Are in the market now supporting the bonds and continuing obviously got a very high issuance rate with the fiscal policy being ramped up. A lot of the bonds out of the market. That suggests they are going to keep on cutting rates and that gives a signal to the bond market amid global participants to continue on supporting the bond market. They do not want to rattle any investor at the moment while they are still trying to have a very heavy schedule on the fiscal side. Probably cutting rates. Obviously, sticky with Inflation Numbers around asia. That has got to do with food and food prices late last year. Seems to have been rolled over. You have a lot of ppis spending down again. On the industrial side, you have deflationary signals. Crude is rolling over. Much lower inflation rates across the board, which again, we support for rate cuts and continual bids in bond markets across the region. Thene you mentioned about rattling we have seen in the bond market in indonesia. They are buying bonds directly from the government to fund more than half of its fiscal deficit. Option exploring such an as well. Do you think inflation and the risk to currencies and the rates market are displaced right now or is it justified . Hayden the bond market is giving you the true signal area wherever you look around the world, bonds are connected to stockonomy but not specific stories. We are seeing a risk on environment. In this case, yield curves are continuing to flatten. Developed markets are coming back down. We have seen breaks in some of the big markets like u. S. Treasuries. It is perplexing at the moment. For most people, the chinese bond market had quite a bit of a selloff here. A lot of that has to do with the signaling of governments and the move out of bonds into equities. We have seen huge withdrawals from the retail side out of Wealth Management products in bonds into equity products. We have seen a very large amount of selling that put a lot of pressure on the front part of the yield curve. We have seen a flattening in the yield curve. We think broadly, that has run its course now. The 310 around is in zone. Very rare to get an opportunity to find a bond market that has just sold off where the rest of the world is rallying. A nice relative value opportunity here as well. Yvonne do you think the bond market in china is being held hostage to what we are seeing in equity markets . The 2015 equity bubble was in part fueled by looser monetary policies so the pboc cannot exactly do much in terms of the way major stimulus now. Ayden i think you have quite good point there, but the pboc has been very adamant. They have done a very good job of guiding any of the liquidity they put into the economy. They want to see it going directly in and in a lot of cases, it backed away from further easing to have direct banks inia the policy particular into those specific sectors or directing banks to lend to small and medium enterprises. I dont think any economy will be able to get away from the Slower Growth environment. Look at the chinese numbers. Really, what we have seen here is they have had a big bounceback. What are the new orders . The new orders looked particularly weak to us. You can see this in the way the imports are also extremely weak as well, which is giving the sense that it is not as robust as they would like at this point. For us to further rate cuts, even though, as you point out, he is very correct in the short term. Markets are hostage to what is happening in equities. Given where the equity markets in china are, do you think that that would add pressure on the bond market in china . Well, it is unusual withse they started products late last year, so we had a lot of Retail Investors moving in and they had a great experience in the bond market. It has rallied for 12 months. They have seen a bit of volatility. Retail investor is looking at 5 yield, that can happen in the equity market. China is a momentum driven market. The management products are getting a lot more momentum coming into the bond markets as well. The new dynamic we are dealing with here, a lot of it has already been withdrawn. Bond space. Probably going into equities. Than dedicated funds. For us, it has played out here. Now looking for opportunities to get along the chinese bond market. The pboc has begun to withdraw its special easing facilities that were meant to support the economy. Is there concern that it could be doing that too soon given especially when you take a look at unemployment . That is still a huge concern for china. Like to us, it feels fiscal policy and Monetary Policy side. One saying they have done enough, the other saying they have done enough. We feel like they need a combination of the most powerful forces together. This is not a time on the monetary or fiscal side to be on austerity here. New back away from fiscal. Monetary policy. It tends to not work if you dont get that followon. We think they have to do both. The household and consumer side is still on a very weak leg at the moment. The other thing is around the currencies, seeing the particularly strong currency right now. A global inflow as well for the first time coming into the equity markets, so it has been a record demand, equity market for global participants. The bonds backing up here. Thestors coming into chinese bond market, they are coming from a low base, bullish for the currency right now. Notes, youyour mentioned that part of the Investment Case for china is the whole pathway towards globalization for the renminbi as well. How far away is it from something china actually wants to something that is actually a reality . What do we see for this currency to be on par for the yen and the euro, for example . Wants absolutely, china it. And the world will be a much happier place if we have a more balanced currency strategy where we have a third in euro, 130 and remember you, and one third in the u. S. Dollar one third in rmb, one third in the u. S. Dollar. It has been hugely positive. Have signals that they want to continue on moving away from the dollar and moved to the remember the to the rmb. I think china is well aware of that and that is why they kept the currency steady. They moved towards the basket. Keeping that stable with their trading partners. That is why you see currencies like the korean won, australia dollar. They have been very large components of that. They want to keep stability for those countries or those currencies. , ubsnda Hayden Briscoe Asset Management, thank you for staying with us today. Our interview after the opposition saw its best ever result in singapores latest election. This is bloomberg. Haslinda singapores ruling party retains a firm grip on power despite its weakest performance in five decades. Lin. Poke to sylvia assessment ofr the oppositions performance. Overall, we have gained 10 seats, but a reality check, it is 10 out of 93. In many countries in the world, that would be considered marginalized. Haslinda do you think the Younger Voters tipped the balance for the opposition this time around . Sylvia it is hard to say until at the in more detail results by district. It consists of largely new Public Housing where there is a large proportion of Younger Voters below the age of 45, and suffered, ween we were not expecting to win the grc, but it looks like during the campaign, the momentum shifted, and because our team in that area met the profile of the voters, meaning that the oldest candidate was 44, the youngest was 26, they were all parents of young children, which was basically the profile of a large number of voters in that area. Nationwide, i am not able to say whether the Younger Voters tipped the balance overall. It made a big difference. About howwe talked the opposition has come a long way, from no opposition to a representation of one from five to now 10. Realistically, do you envision a day where the opposition can provide a true alternative to the php . Sylvia rome was not built in a day. I know this personally, too. What you mentioned, i walked through it with the workers party. Joined them 20 years ago. A lot of how singapore moves forward, whether the ruling party the smaller majority in parliament in the next few elections, or whether it deteriorates to the point where the voters feel that another party is able to take over, this is all in the horizon. Not so immediate i think. What our elections have shown is that they take their vote very seriously. Willt think that they vote as a protest but they will also look at what is at stake, who is providing the alternative, and whether they think they can accept that person as a member of parliament. This is a question from singapore, to decide, and i do not think it will come in a big bang, but it will calm more incrementally at least. Haslinda when we talk about how singaporeans want change, will that change come with the deputy Prime Minister taking the home . What kind of leadership do you think he will provide . How difficult will it be . Your take on it. Sylvia i know him personally, although not very well, because he was a police scholar. I was a Police Officer in the past. Head of the recruitment interview. Think accounts, i everyone agrees that he is a very decent man. I suppose in a sense he might be more comfortable crunching numbers and so on. Charismatic is not a term we would ascribe to him but that does not mean the Prime Minister has to be charismatic. He can show competence in other ways. If he becomeshat pm, he will have his own style of leadership, he will have a team with him so it is not just him alone. Islectively, if the team able to move forward in convincing opponents that the party most capable of improving their standard of life, then they probably can, in that sense, make the necessary adjustment to maintain voter, vents. Voter confidence. Yvonne sylvia lim sylvia lim that was. Bloomberg that was sylvia lim. Bloomberg is reaching out for the election results. Is said to consider exiting air asia. We have details, next. This is bloomberg. Yvonne reports say is considering an exit from the air asia India Venture where it holds a majority stake. Lets bring in our asia export reporter. What would air asia indian need now to stay afloat . Obviously, it definitely needs more investment. Asiaweek, we heard of air approaching tata to possibly sell their stake to tata. Today, we get a report saying that tata is not interested. Find someoned to who might be able to take their shares off air asia or get banks bringingf they are cash and not flying as much as they used to so they need cash one way or the other. Cathay also in the news. How important is this fundraising for the airline . [no audio] haslinda kyunghee . Yvonne i think we might have lost her. We will try to bring her back a little bit later on but as we count our down to that, take a look at market today. We are seeing quite a bit of risk being put on the table here today as we look in on this monday morning and you are seeing these major benchmarks as well after two weeks of straight gains, the likes of the hang seng up 140 points. The shanghai composite, we continue after the retreat we saw on friday, despite the fact that we are hearing some of these etf folders saying perhaps there are some risks. They have halted that big cap etf in shanghai until it reopens half an hour ago. The china still the standout chinex still the standout. Flipping the board, we are seeing green across the board when it comes to some of these asian benchmarks as well. The kospi is up 1. 3 . Taipei is higher by close to 100 points. Singapore is the only one unchanged, a reopening after that election result, but yes, seems to be doing a bit of catchup to what we saw on friday. Haslinda a risk on day. Plenty more to come in the next hour of Bloomberg Markets asia. Stay with us next. This is bloomberg. Haslinda it is almost 11 00 a. M. And singapore and hong kong. I am haslinda amin. Welcome to Bloomberg Markets asia. Rishaad i am Rishaad Salamat it. Salamat. It rishaad they resume their advanced climbing. Bank later this hour after concluding an investigation into its financing unit. Conflict of interest charges. Party singapores ruling winning a new mandate. The Prime Minister says it is a respectable result in what certainly was not a feelgood election. Elsewhere in asia, we are seeing solid gains today ahead of the earnings season in and japan is in outperform her. Global Equities Trading near the highest since february. The msci index inching upward, up by more than 1 . 166. Sectors in positive territory. Industrials leading the pack. Higherures pointing to a open. U. S. Futures on solid having a solid close on friday. The s p outpacing the nasdaq for the First Time Since late june. Brent crude, 42. 80 one, lower ahead of a meeting of top teachers this week. It could outline plans to scale back cuts that have stabilized prices. The challenge is how to avoid a taper tantrum similar to the tension in 2013. Flip the page, take a look at where we are in terms of those individual benchmarks. We are keeping a close eye on the csi 300 index, up i more than one right now. We have the shanghai composition falling. 6 on friday, the most march. Some apprehension because of this unprecedented rally. We had authorities acting to put a lid on the frenzy. The chinex surging. Rxi up. Re the focus, the two day primaries helped i parties. Leading the peg higher. Highsi is 12 its 52 week back in january. Lets take a look at where we are in terms of some of those commodity plays. Oil is currently lower. Ahead of that meeting i opec. Lets get the first word news with Karina Mitchell in new york. Karina coronavirus cases in the u. S. Rose for more than three point two 5 million with almost 56,000 new infections. Florida reported the biggest daily rise in any state since the pandemic struck. Set inge exceeds records new york, california, and texas, although net deaths did fall by half. Mobile infections are approaching 13 million with fatalities about 500 62 5000. In new york city, we have reached a virus milestone, reporting no new confirmed that for the First Time Since the infection each. It marks the end of a fourmonth stretch. The confirmed daily death toll hit its height on april 7 at 597 with another 216 people likely to have died from the virus that day despite no positive tests. Inections are searching india with almost 29,000 new cases reported sunday including 550 deaths. It pushes india into third place in the global talley behind the u. S. And brazil. New cases include a ball he would star and his son and their dawdle and his daughter also tested positive. Australia is restricting the number of citizens allowed to return from overseas as virus cases spike and forced the state of victoria into a sixweek lockdown. Weekly arrivals are being cut to 4000 from 6. 5 thousand to ease pressure on hotel isolation. Returnees will have to pay for their own accommodation in the two week quarantine period. It had been paid for by the government. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Rishaad thanks. Take a look at asian stocks. Haslinda was looking at a day where we are seeing move to the upside and also alongside that, i u. S. And europe and equity interest matching that. It is the start of earnings season in the u. S. In particular. Our next guest feeling the coming days may give the investors some food for thought amid the current euphoria. Is in singapore. Anticipation going into this season marked by perhaps a bit of a recovery taking place but it is a backward looking set of figures. Banks kicking things off of this week. What do you think is the picture likely to be painted here . The secondrt off quarter season. I think the question here is whether we will get the credit deterioration story that analysts have been worrying about given what we saw in the first half of the this year. The labor market fallout as well. We have to wait and see but i think if you look at the market right now, generally, it still looks fairly constructive. Mainly because a lot of banks are very cautious. In terms of their policy, the system is very accommodative. Although we have seen a second wave of infection, nevertheless, there is the sense that they are going into the lockdown story. Rishaad absolutely. It is a backward looking one. We will be i suppose looking at forward guidance, and that was companies inmany the last earnings season. And if we do get more guidance, i guess we have got to take that as a big positive. I think in terms of the corporate guidance, everyones warning that the covid19 has taken up a chunk out of the forecast, but if you look in terms of the outcome on the back of the economic data, it points towards greater stabilization. Are looking at the expansion story again for the u. S. Although we have headwinds such as the u. S. China trade tensions, nevertheless, as the economy opens, there is a sense that we are going slowly back to business as usual. Liquidity is consumers are gradually getting back onto their feet. We might indeed get positive surprises here. One should also remember that this is a rebound which is associated with many places, many countries using lockdowns. Is there momentum to carry us forward into a recovery, a rebound to a recovery, and that is the point . Selena i think that has been a lot of debate about whether this is going to be a vshaped, ushaped or lshaped recovery. Styling of the Global Economy in the first or Second Quarter of this year. Any form of st stabilization i do suspect that Financial Markets are frontloaded and have macroeconomic data. If we get any surprises on the nomic data, nevertheless, it is very constructive. We do think that the Central Banks including the fed will basically be on tap and that was really what will limit the downside for any retracement that we see. You talk about how the ecb and the fed have suggested that policy release further. The question is what will it mean bonds . What do you expect the boss to be rallying in the second half of this year . Seena actually, we did them trying to push the 10year treasury yield to test the 1 but it failed. Actually, it is back down at the bottom of broad ranges. That suggests that actually, the bond market is cautious for the near term. I think it will take a greater importation to push impetus to push through. Although they are leading toward more explicit foreign guidance, they are contemplating negative territory. The upside for the bond market from here is pretty limited. We dontipside, also, see any sharp selloff. Anything, the fed has committed to Interest Rate recovery levels all the way out to 2022 as well. We are set in the range and we have a bit of a range. U. S. China trade tensions edging higher and also there was a little bit of a disconnect between where equity markets are and on markets are right now. Haslinda i guess the operative word is negative five year yield. 100 year yield. Already close to zero. Is it just a matter of time before we get negative yields for tencent 30s as well . Tends and 30s as well tens and 30s as well . Selena it looks like we will get a push in that direction. As long as the said modes onto the gains, cutting rates into the negative territory, this is predicated on the u. S. Economy stabilizing in the second half despite some of the second wave concerns. We can probably avoid this for the next one to three months. They have a lot of liquidity. That is what is really holding down that. If you look at the data, it does suggest probably the worst is over. The shape of the recovery, it may not be nevertheless, i think it will take much more sincere, you know, second wave, for instance, to push us back to the the pandemic is still spreading. It does seem like, i dont know, investors could be looking for shelter still. Selena actually, the fundamental picture has not changed that much. Macro recovery story is fueling the risk on sentiment. That has been offset by the ongoing virus spread in the u. S. At the moment, we think the dollar will hold. U. S. Equities, they have ranged high. A little bit stronger in terms of the upperhand right now. Going ahead, this is going to be a very busy week. They are looking for chinese secondquarter growth numbers. I think that will give us a sense of the chinese recovery story. We are going to see entrenchment of the recovery story, for instance. Haslinda selina wang bank, selena ling, from a cbc bank. Virus cases in the states hit a record high. What is behind that decision. Chinese citizens living abroad as the government moves to make them pay levees back home. We have details on that on the way. This is bloomberg. Haslinda china has started tracking down some of its citizens living abroad to collect taxes, surprising expats have never had to pay tax on overseas income. Lets get more on this with our consumer reporter in hong kong. Is the Chinese Government doing in terms of taxing expats overseas . Tothis may sound familiar Many Americans living abroad as the u. S. Also has similar taxation. It is new and surprising for many chinese expats. China did not really enforce this power until recently. We have learned state owned operating in hong kong to declare the 2019 income so they can pay taxes at home. Are informing employees working at other places such as singapore. The reaction is from the people affected . They cannot be particularly happy. How big is the likely impact for these individuals . What sort of rates have been charged, etc. , etc. . Jinshan basically nobody will be have the. It signals the beginning of what could be a major shakeup for one of the largest expat communities in the world. Expattance, a chinese in hong kong has only had to pay a maximum of 15 of their salaries, one third of mainland chinas highest tax bracket, which is 45 percent. What might be the implications for companies . In ann it could result impact of some of the people are already considering to move away from hong kong to avoid such inconvenience. Moreover, chinas personal income tax law is not just about paychecks overseas. Subjects to dividends and property sales, all aspects of personal gains to taxation back home. That is likely to force Many Companies to shoulder the tax burden. Thank you so much for joining us there. Jinshan hong joining us, Bloomberg Consumer reporter. The coronavirus lockdowns have stoked an unprecedented number of new Retail Investors entering into the whole investing game. More on the rise in retail in the broader markets with the founder of Interactive Brokers group. That is next. You are with bloomberg. Rishaad you are back with Bloomberg Markets asia. Retail investors flooding markets during lockdowns in recent months as stocks rebounded and we caught up and talked exclusively with the veteran market maker and founder of a company about whether retail trading will become a more significant market force in the future. This phenomenon should be looked at as a sudden spurt in an otherwise existing very longterm trend. Stock ande commodities exchanges became computerized towards the end of the last century, which enabled. He emergence of Online Brokers the computerized process angle of back office functions. Brokers tod online offer direct access to their customers at extremely low costs. And very low latency. Been going onas gradually 40 years. The coronavirus, this suddenly picked up speed. The virus will eventually rather soon, i think, the fear will disappear. That the trading volumes will subside. We let that go back on the way to the levels where they used to be. Using the experience of accounts, learned about investing and trading, so those peoples activities will remain. What does that mean . Who are the people that are really entering this market . Are they much younger people . Do they have the resources they need to be trading this market . Tend to be thes most sophisticated type. They have the money and education. They tend to be in the technology or financial or in management. Know what they are doing. All this nonsense i hear in the news that these are people have no idea what they are doing. It isthat is true, but not, i would say, its not generally true for people in the markets. These people are not very different than they were a year ago. Aslinda Thomas Peterffy a quick check of the latest business flash headlines. Wants toiotech company raise 2 billion in a direct offering of more than 145 million shares. For working capital and other purposes. 1420tock was comprised at three, equivalent to 185, five point 6 below its close on friday. The blood Cancer Treatment became the first drum to win u. S. Approval. It white house trade advisor Peter Navarro says he expects President Trump to take strong action against trainees own social media apps tiktok and we chat for information were chair warfare against the u. S. He says the administration is just Getting Started and would not rule out banning them. They are under scrutiny for the use of private data. Applied to the u. S. For permission to resume deliveries of Electronic Components to huawei. The Economic Times says the requests went in ahead of tuesdays deadline without indicating where it got the information. Always under increasing pressure from the trump administration, which is seeking a global rejection as a threat to National Security. Indias most valuable lender by market cap has held an investigation into allegations of improper lending and conflict of interest at its financing operations. We are told hpsc ruled out keeping the units former head after the inquiry reported the hadncing unit had led outstanding loans of 16 billion as of march 31. And asias wealthiest man has attracted yet another bigname to its Digital Services enter. Qualcomm is to invest almost 100 million into the jio platform, taking the total fundraising to more than 15 billion since april. Qualcomm ventures will take a 15 stake to help the rollout of 5g services in india. About 65valuation of billion. Rishaad lets have a look at what is going on with markets as we head to the chinese lunch break. Having a look at the performers at the moment, we have had eight days of gains out of nine. We saw considerable selloff taking place. Widespread selloff. There has been a bit of context. We have had a situation with all the buying of equities, we are in a position where the we areals are telling us in severe overbought territory and that compares to what we saw in 2015 as you can see with the red arrow to the lefthand side and that is where we are. The different colors representing the different markets. , there weai composite go. That is the white lines, and indeed, we have the chinext there in yellow. On what we have for copper as well as this surge continuing. Prices and london on the way up. Rejectednes in chile the final wage but raised a prospect of a strike at a time when the market has been rattled by miners falling ill during the global pandemic. A surge in copper as well. This is bloomberg. The best tv experience just got better because now you can watch all your favorite hulu shows and movies on xfinity. Youre only a voice command away from Award Winning shows like the handmaids tale, to new hits like little fires everywhere. And fx originals you can only watch on hulu. Thats just the beginning of what you can experience with hulu on xfinity. Tv made simple, easy, awesome. Haslinda it is almost 11 30 a. M. And report. We are in the middle of the trading day. Singapore has just had an election on friday. Results coming in early saturday morning. Singapores party suffered its weakest performance in 55 years in off this. Our next guest does not believe the outcome will affect the economy much but things covid19 has a greater effect. Lets bring in the chairman. He is well known for his legendary investment in baidu 20 years ago. Good to have you with us. No impact, do you think, on the elections of singapore . Thank you for having me. I do not think there will be any impact because at the end of the day, the executive manager for the country will continue as they have planned, but the people have spoken, and they want more opposition in parliament and a kinder and humbler government. People voted it would possibly help create a more innovative society. Actually, all the candidates who spoke out spoke about spending more. Nobody said very much about how to earn more. I do not think there has been a lot of discussion about how the country should make a living better. This i am hoping there will be more debate and more thought about how singapore should be structured going forward. We have been climbing up this that was set up by the years ago,ation which is importing jobs but as we become more and more expensive, it will be harder and harder to jobs and we will have to create jobs. So we are trying to make singapore into a very elevated place where jobs can be created and it is hard. It requires a total ecosystem that requires a lot of changes. End, policieshat would you like to see from the next government . What policies need to be in place . What policies would you like to see . I think, you know, the policies will need to be very focused on trying to make singapore more creative and more theretive, and i think are quite a lot of things you can do from that perspective. Release aou need to lot more talent into the private sector. Secondly, you need to i guess increase the capital here. It is like welding and ecosystem. If you want to build, say, Something Like the it is different from a zoo. In a zoo, you bring animals, you feed them, and everything is fine. If you wanted to create an ecosystem, you need to have every part of the ecosystem all moving in tandem, otherwise, you will not be able to create something that lives on its own. So it is like a chicken and a. And egg. You need Venture Capital to come but before Venture Capitalists will come, you need startups to, and creative entrepreneurs to come. They will not come unless there is Venture Capital as well. Theres a lot of new emphasis and a very focused approach in trying to create this ecosystem and make sure that it survives. In continuing. Continuum. Like a Silicon Valley for the east and that is very possible to be because Silicon Valley is very far away and very focused on the west. I think there is potential to create a Silicon Valley for the east, especially now that, you know, hong kong is becoming more chinese. There is a potential for more independent asian country to serve china, india, southeast asia, which is more than half the population of the world. Rishaad just getting back to the election, do you think that this perhaps has marked a resurgence in the opposition or is it a oneoff oneoff . Do you think the opposition has some decent policies that will help in what you do, and economically speaking, singapore can achieve . Finian i think a lot depends on what the pap does. The ruling party listens to the people and reacts. Then, they would stop this slide. It is a question of whether they have an open enough ear. But people have clearly spoken. As far as whether it will result in a change in the economy, i would like to hear more from the opposition about how the country should make money. More much easier to spend after it has been earned. And although i agree that we have the capacity to spend more and be a kinder society, at the end of the day, we have to find a means to pay for it. That, finiany with tan. A meeting of opec and its allies this week which may outline plans to scale back the output curbs that helped stabilize the market. The opecplus group will review forecasts on wednesday. Announcing expectations it will start to relax restrictions. We are told top russian producers are preparing to raise the u. K. Is to spend all of 900 Million Dollars on new border brexitructure, with less than six months away. The cabinet insists everything will be in place for the final split despite london and brussels so far failing to agree to terms. A leak from the trade secretary highlights concerns about border plans including the threat of smuggling and a challenge from the wto. Exit polls in poland to show the president ial election is too close to call with both candidates claiming victory. Thevote pitched conservative incumbent versus with initial estimates hitting both about 50 within the margin of error. Official results may be released on wednesday or tuesday. Islos ghosn said he helping those who helped him flee japan last year. He is refusing to offer details about his escape. Two u. S. Citizens are in detention. One accused of facilitating his flight from tokyo to beirut in december. Tv,king to all arabia carlos ghosn declined to comment on claims he paid 860,000 to a company linked to one of the accused. Lets bring back finian of he chairman partners. Thank you for staying with us. There talking about election and really what has been happening there. Lets have a look at the poor having a remarkable opportunity in many ways to become the Silicon Valley of the east. Tell us a bit about that new think that singapore itself is not grasping it, as it were. Finian it requires a very big change and making a very big change is always hard to do. There are still jobs to be imported. Haveport jobs because we multinationals here. It is still possible they are continuing to attract investments. And it seems like we can carry on that way. But the writing is on the wall. As multinationals only come here because we are cheaper. And we have to continue to be cheap, which is not the goal. The goal is to increase the standard of living, and eventually, we will be too expensive for multinationals to come here in a big way. We will have no choice but to look for more innovative, more entrepreneurial ways of creating jobs. Right now, the main jobs are imported because multinationals come with very good jobs, and then the whole hierarchy of companies are set up to assist this. If you do not bring the big guys, the small guys will have difficulty to find products to make and services to produce. Jobs,er for us to create we will have to produce a whole world. Rishaad i want to talk about your investors. You are famous for investing early on in baidu. Tell us about some of the other companies you are investing in. , from a huge list of them a company in san diego which is trying to cure cancer and osteoarthritis, alzheimers, and you have another one that is capable of getting heat out of the ground nearly anywhere in the world. Theres many of them. Give us an idea of some of the ones you are finding the most promise with. Finian the San Diego Company has six different molecules in human clinical trials, trying to indications,se eight of them in the oncology space for cancer. Also for alzheimers, etc. , they have two molecules in phase three of linick all trials, so that is very, very exciting. It will be extremely impactful for a disease that is debilitating and fatal and incurable currently so we are very excited about that. You mentioned the geothermal company. They have made some very serious breakthroughs. Geothermal is the greenest of green energies and it is also able and able to be delivered, rather than window or solar, which is intermittent. The ground is always hot. If you can achieve extracting heat from the ground, cheaply, then we have a real competitor to fossil fuel. Very glad. That which is based in calgary, canada, has found a way to reduce prices by a factor of three, so far already proven by their pilot. They can bring that down by another factor of three, which is a factor of nine in total, which brings its prices approaching that of fossil fuels, and that is extremely exciting. We have this Company Based in oxford, england, which is in the race to produce a vaccine for covid19, and then obviously, it is so important for all of us so we can return to normal. We have a company in singapore that has a solution to an alternative to plastic, which is biodegradable. And can hopefully solve the poisoning that we are all experiencing from plastic. Out of all of those, which one do you think is going to have the biggest impact and also perhaps have the biggest returns for you . Which is the one you would perhaps bet the house on . Finian all of them would return more than 100. These are homerun investments. And we have got more on top of that. But in terms of impact, right now, we are all in the middle of covid19 pandemic. A Company Based in oxford, i think has the biggest chance to change the world from where it is currently. This pandemic is destroying the worlds economy to an extent we have never seen before. [no audio] haslinda finian tan, we will have more. Thank you so much for your insights today both on the issue of the elections in singapore as well as the we are a few minutes away from the start of trade in mumbai. Lets take a look at whether india will be joining the rally here in asia. It is looking like futures are pointing to, if i can just get those numbers out, we will take a look at where futures are pointing. There you have it. Nifty futures pointing to a high pretty much in line with the rest of asia. It is risk on. In thearting the week money after two consecutive weeks of gains. Lots to watch out for when we talk about the indian market. The indian banks are already struggling with one of the worst bad loan ratios, set to face even more pain as the virus pandemic slams growth. Plenty more to come. Nifty futures pointing to a high open. This is bloomberg. Rishaad you are back with Bloomberg Markets, just getting you the open in india. Should just about starting underway. They are at the moment going up. The nifty up by. 1 currently. We have also got a move up for the sensex. Just news coming through at the moment, hong kongs book fair is going to be postponed and it is down to the coronavirus, and this of course as we see a resurgence of the pandemic taking place here in the territory. Coronavirus cases in hong kong thus far, 1469. That is the indian open. Nifty banking index, 1. 1 to the upside, and certainly we have some news with regards to banks. Indias most valuable mentor is said to have conducted investigations into lending practices at its financing unit. Sources say the bank has checked allegations involving the former head of the unit that accounts for more than 10 of the banks total loans. For more on this bloombergs group, we are joined by the India Finance reporter in mumbai. Shed some light on what has been found. As you just mentioned correctly, the bank is the most valuable in terms of market capitalization in india. It is very widely held among Foreign Investors so it is a closely watched bank. The investments we mentioned in there has about how been investigations regarding the recent lending arm, lending business for the bank, has raised some questions for the bank. So far, this is a little bit unexpected because hdc bank is known for its strong lending practices, Corporate Governance issues, so you know, concern for the investors and People Like Us who have been closely monitoring the bank in terms of how business. Few lenders of the who has shadow banking crisis. It has one of the lowest back loan ratios in the indian Banking System so you can understand the kinds of this news will have in the kind of concerns at this news will have on investors minds. This is what investors have been comfortable about. Lending practices which so far have been really strong. One man seems to be at the center all of this as well. Can you tell us a little bit about him . It is about continuity, too. Tell us. Suvashree sure. The man that you mentioned, his name is which as you mentioned, 10 of the banks business. He was 63 when he retired. March 31. He was getting extensions for the last three years. He was supposed to retire in 2017. He continued for the next three years. He will get another few months extension until october, when the currency of the bank retires. This is very important part of the book. He has been a veteran in the industry and in the bank. He has been in the bank for 18 years. T was important oneng from one place to field to the other. He was supposed to be a very important official in this regard. Haslinda suvashree ghosh, finance reporter in mumbai. Including theead, floods in the northern regions of china. This is bloomberg. Haslinda china is warning of serious floods in his northern regions. The country raised its flood response alert to the second highest level. For more on this, we are joined by the executive editor of rater china. A week of torrential rain, millions without homes. Has been pretty devastating indeed. Since june, the death toll has gone to 141 so far. Millions of people have been forced to relocate, as you said. So far, the economic toll is about 12 billion u. S. Dollars. Bad are just how things, john . This is something which is not being widely reported. Tell us a little bit about the extent of this flooding and the economic damage it is actually causing. For thousands of years, has been dealing with floods. And so far, at 140 one, the death count is high, and obviously, theres lots of considering the situation could deteriorate. But in 2016, we also had flooding that ended up causing the deaths of about 170 people. In 2010, there was almost 1000 who died in the floods that year. All the way back to 1998, which were the most devastating floods the country has had in decades. 4000 people died in those floods. As of now, relative to past disasters and flooding, this is not that bad yet, but the concern is as the rain continues, things will deteriorate. Haslinda where is it most severe . We heard from president xi jinping saying that he wants better measures in place. What measures can be implemented . John i think the number one thing that officials want to try and do is to save as many lives as possible so you know, we have seen footage on state tv of people stranded in their homes by the flooding, people being stranded in their cars. Authorities are doing all they can to make sure anyone who is in danger is saved. The rain has been mostly in the south of the country, but now, it is starting to move north. There is more concerned around concern around the yellow river that we could see flooding as well which would expand the devastation, obviously. Rishaad thank you very much indeed. John liu, Bloomberg News executive editor for greater china. News coming through. We saw the start of the trading session in india and we are looking at the banks, looking at yes bank. Down nearly 18 at one stage. It has recovered somewhat. It was down 17. 8 percent. Public offer is now being slated for july 15 and that could lead to some dilution. As a result of that, we are seeing some weakness. Just over 10 , haslinda. Haslinda lets do a quick check of the latest business flash headlines. 3000 off theed crossover for months after sales began. Of 50,000. Short the price reduction follows similar moves for teslas other models. Some analysts see signs of weak demands. Tesla delivered more than 90,000 cars in the Second Quarter. The stock was up 270 this year. Credit suisse is said to be considering cutting hundreds of jobs as the coronavirus boosts online operations. The bank is looking to save money to meet profit targets. The new ceo is said to be considering cuts to credit suisses Domestic Branch network. The bank, which was a cornerstone of his previous plan. Workexecutive chairman of we says he expects positive cash flow next year. He told the ft it will be a profitable venture with a diversity of assets in 12 months. Wework has struggled through the coronavirus as people work from home. Its workforce has been cut in half and it has been bailed out by softbank to the tune of nearly 10 billion. The chairman at walt disneys theme parks business says he is happy with demand as the Company Began reopening its flagship resorts in florida. The Magic Kingdom and the Animal Kingdom reopened saturday. Disneys Hollywood Studios will follow on wednesday. The parks had been closed for four months because of coronavirus. They reopened even a slowdown reported record new cases. As florida reported record new cases. Out we we have found have this yes bank story at the moment, seeing the Share Price Fall on public offer. On top of matt, we have got a hang seng lunch break on top of that, we have a hang seng break. One thing we learned was the hong kong book fair is to be postponed amid a resurgence in the coronavirus according to cable television. 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. The following is a paid presentation brought to you by rare collectibles tv. Our country was founded on life, liberty, and the pursuit of happiness. Representing this idealism is our american eagle. The bald eagle was chosen in 1782 to represent the United States because of its long life, majestic looks, and great