Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

The chinext is lackluster here. Indonesia coming online. The futures are not going anywhere in singapore today. We are watching that dollars story once again. The dollar weaker here. We did see the pound falling after the bop made the clearest signal yet that it may be considering negative Interest Rates. 104. 81 for the dollaryen. Take a look at crude. You better not be challenging us. You are watching a bit of a bid for iron ore. Global coronavirus cases have no topped 30 million with more than 940,000 deaths. Reported the most cases since the lockdown in may. There were more than 10,000 new infections. The northeast of england is introducing tough new restrictions. The bank of england has given the clearest signal yet that it may consider cutting Interest Rates to below zero for the first time in its history. The policy is part will be a similar move shortly after. Here in the u. S. , the Federal Reserve has started the second round of wall street stress tests. Unprecedented restraints on dividends and share buybacks. It will decide into is whether to prolong the limits on the biggest u. S. Banks. Juneeasures announced in were do to last until the third quarter. The highest level u. S. Official to visit taiwan in decades has made a second visit in just a matter of weeks, prompting the threat of retaliation. Is due toary of state meet the Prime Minister and attend a memorial for taiwans former president. Beijing called the visit provocative. Global news, 24 hours a day. I am Karina Mitchell, this is bloomberg. Tom senior u. S. Officials saying taiwans hopes are wishful thinking. They are tying in taiwan. We are watching and talking geopolitics, tencent shares. They are extending losses. That is after the Trump Administration asked Gaming Companies for information about their Data Security protocols involving tencent. It is the latest move in President Trumps crackdown on chinese tech firms. Lets get the details from jodi schneider. Tencentd of scrutiny is receiving . What are the concerns on the part of the u. S. Government . Inquiry about the Foreign Investment in the u. S. Invest businesses for National Security risks. This includes the trumpet administration looking into a number of Chinese Companies and their ties to u. S. Firms. This has been the latest source of tension with the beijing government. Trumpsrt of president election campaign. Tencent. King into that is the world possible largest gaming company. In epic. As a 40 stake they are taking a look at this and seeing if there should be any National Security concerns. Americanrly the use of personal data. We dont know exactly how this they haveout but increased their jurisdiction to review transactions by Foreign Companies retroactively if they maintain personal data of u. S. Citizens. Bloomberg intelligence is coming out with a note saying that this probe could threaten 22 billion of u. S. Assets. Significant impact potentially if the administration goes through with some type of investment or forcing investment. Lets talk about oracle and tiktok. What is the latest . Deal look will this like . The shape keeps taking different forms. We are hearing this from the u. S. Treasury secretary, steven mnuchin. Intends to hold a Public Offering of the ipo in about a year. This new company would be called tiktok global. That is what the treasury secretary is telling us. It would be the result of this transaction forced by President Trump because of his National Security concerns about tiktoks of chinese ownership. Secretary mnuchin has sent a revised term sheet and oracle has accepted it. The question is if the white house will approve this. President trump was asked about this. Administration officials spoke with companies but did not elaborate. Did we have any clarity . Did we have any more clarity on whether trump intended to sign off on this deal . Comments made some saying they indicated that he had good things to say about oracle. Given that the treasury secretary is now involved, you would need regulatory approval. Of anhough this is kind unusual deal, it could happen with the National Security concerns. The new terms are designed to protect the data of u. S. Citizens from falling into chinese hands. This includes 20 pages of detailed provisions over National Security. It would seem they are really trying to work that part of the deal to get over that National Security hurdle. This may be the way to do it. Our international editor. What we could expect out of this deal china moves to shore up its Financial Sector with new regulations that have wide reaching implications. We will get some analysis. Get at least for asian equities and ask why it is raising its exposure to korean stocks. That is , is bloomberg. Stocks are trading higher in asia. That whereest says rates are, risk assets show growth as well as fiscal expansion. This is the head of the asia equity strategy. Good to talk to you, frank. It has been a pretty choppy 24 hours. They delivered what they expected. They are pledging to go longer lower for longer. We see this volatility right now. Do you think risk assets are losing that the quiddity momentum that up until now has led them to go higher and higher . We think the risk assets are ready. We have this economic collapse, this vshaped. We have some fiscal expansion as well. You have those three conditions. Given the valuation where you are, you will have some volatility. The broad scenario under which we are working at the moment is that those three elements of gross liquidity and fiscal expansion will remain. Maybe for the next two quarters. What are you looking at in terms of allocation . Where should be investors be adding their exposure . In asia, it remains a story rest. Na versus the it is up to the political views we have in china on korea and taiwan. Frank we have a lot of growth. The growth has not accelerated. Even before the pandemic we had some growth issues in those economies. We started to see valuation becoming more attractive. Have anys we dont trigger on the growth, it will be difficult for us to take that view. On the other hand, what you have in China Remains an interesting market. That is not as attractive as it used to be. Be very korea to interesting market. Even after the march low. In 2021, we may be in a new earning cycle after the collapse that we have. Iny disappointing earnings the last few cycles. We started to see profit return. That is something that is usually a good thing for the korean market. Tom we just have some lines crossing the bloomberg terminal by now. Owner, this is based in beijing, it is gaining confidence that beijing, the government here will ok this deal. This seems like another piece of the puzzle is being put together. We have revised terms sent from the treasury to oracle. We know that they have agreed to those revised terms, a key component, a key piece of the puzzle is beijing. It seems according to this reporting that they are getting closer to getting the approval, the other key piece of the puzzle is President Trump. Reminder wea get these reminders almost on a daily basis of the u. S. China tensions. Strategy for hedging . Think that the tension is a macro element. Any hike, noeen dollar funding restrictions on china banks. Something that could put china under much pressure. We have not seen this at the moment. Of course, it is necessary to have some hedge. You have a number of dimensions in this rising tension. Imagine we are going to talk again about the hike. It can be through the technology sector. Some names have been identified through this network. We know that some names have more sensitivity for the u. S. Economy. On the equity space, we found some way to hedge through some specific basket. I know you have upgraded korea to overweight. What stands out in the korean space to you . Is more about how you value trade between taiwan and korea. Taiwan had been downgraded. Technical move in doing that. We see earnings starting to broaden. Taiwan had earnings momentum. Very resilient. That is so rare in the last six months. Be. Could actually a top of it, you have relative value. The valuation could be very different. E loss of have this will impact liquidity. Not korean liquidity. There is a reason for that. Tom frank, we appreciate your time. T was Frank Benzimara benzimra. Coming up on the show, sources say uber could be set to sell part of its stake in china as it looks to raise cash and boost its share price. Details ahead, this is bloomberg. Latest business flash headlines. Unit of chinas number two planning aniant is ipo filing as soon as this month. Hong kong has seen a parade of biotech firms go public. Health Care Companies have raised 13 billion through first timeshare sales in asia this year. Breaking a 12 year record. Fresh highs after a proper surge of 1500 after the quarter ended. The biggest rubber glove maker jumped to a record 311 Million Dollars. Revenue is up 162 yearoveryear thanks to pandemic driven demand. Almost 400 soared this year while the company is exploring a listing in hong kong. Itsis weighing expansion of Asset Management business in china, taking advantage of relaxed rules to suspend this leading position in the 15 trillion market. The Money Management unit is planning doubledigit growth in its china headcount over the next few years. The competition is putting pressure on ubs which benefited from a first mover advantage in china. Seeking a said to be partial sale of its 6. 3 billion chinas company. Lets get more from arotech reporter in tokyo. What do we know so far russian mark what do we know so far . We know they are already freighto sell their business in europe and looking at was do with their autonomous unit as well. This amounts to a considerable chunk of change. Unfortunately, because of the coronavirus, the valuation of those stakes have been falling. They had to marked down the valley by about 2 billion. Huber had to sell their business to their rival. In the end, getting this equity, why would uber want to sell these stakes in their rivals right now . Softbank the scenes of , they have been pushing to unload the stakes. They are quite eager to get it higher. It still trade below the 45 ipo price. The argument is that markets are basically discounting the value of those stakes. Tom softbank is the biggest stock owner and the ridehailing space. They will have massive writedowns across their portfolio of companies. The ridehailer has been put to hit particularly hard. The secondary markets are trading at about 33 billion. Part of the reason there is so much interest in these moves is we will hopefully get set some sort of market reality check to see how much these companies are actually worth. Yvonne that was arotech reporter with the latest. Let look at japanese markets before they go to the lunch break. We are still in the green in tokyo as we get closer to that break. Japanese stocks are set for their fourth weekly gain. This has become the longest winning streak we have seen in Japanese Equities since november. We are seeing some strength in the currency, now below 105. The strongest since july. We are seeing some decent gains here. , we will talk a little bit more about capital research, new regulations in china for the lending sector. Of at could affect all this is bloomberg. Kong is 10 29 a. M. In hong and shanghai. I am Karina Mitchell. U. S. Says people who use we chat will not be targeted by President Trumps executive order that comes into effect sunday. The Commerce Department has to clarify which transactions will be and a judge may halt bo porter. Gaining gaming stakes are coming under scrutiny. Tiktokrg sources say owner is growing more confident chinas relators will approve the planned alliance with oracle. No transfer of the ai algorithm. They are planning an ipo entity new entity. Tencent will show english right games after a rights holder lost its contract. Tencent will show the rest of the games on its digital platforms including we chat and tencent video. Have been struggling because of the coronavirus. Posted its biggest threeday event since may after saudi arabia renewed calls for resumembers to production quotas. They got the backing of russia which says the group should strive for high compliance. Saudi arabia warned members not to test the kingdoms result. Than 2700 more journalists and analysts. Over to you. Some lines crossing the terminal. Saying the army east see command exercises. T those china says this is legitimate action promoting sovereignty. Underes as u. S. Exit secretary of states warning the island. China warned of a response. Theeems this is linked to visit. We will keep in the story as to when we get more. Sure who is going to be attending. Amid this strain we have seen between the u. S. And china. China as well. Lets look at the markets. Not liking any kind of direction. Now, thingse right are slightly drifting higher but we are looking to end the week on a positive note. Turningaq, futures positive but flat right now. U. S. Futures still lower by 0. 2 . This himeeing some of currency catching like a korean won. Unm currency. The u. S. Administration scrutinizing more of tencents investments in Gaming Companies. You see tencent down 2 . Bloomberg intelligence saying this could threaten 22 billion of assets. Lg chem as well. The stock recovering after what we saw yesterday. Positive mowing a possible listing in hong kong. It is about value versus growth. For september, we are seeing value stocks on track for the time in 19 years. More of an apples to apples kind of comparison. It looks like that index is set to outperform the normal market cap version. Still a question about how much traction, this value trade to keep moving forward. Have been talking about the pieces of the puzzle coming together. Another piece of the puzzle, mike pompeo a hawk in all things china. The secretary of state coming backing the oracle tiktok deal. Earlier, we reported bytedance, which is the owner, believes it is close to getting the backing of beijing. Around the terms of this deal. We need to get President Trump it seems to sign off on it. Then, potentially, we are closer to getting this deal across the line. The secretary of state moving closer to backing the deal. And focus on on what is happening in the Financial Sector. Regulators have unveiled a raft reading ins aimed at the lending industry. It comes as a blow to groups that have racked up big profits that have seen little and a sector that have seen little regulation so far. We are joined by a member of a Research Group focusing on shadow lending. Great to get you on the show. I know you have been focused on the upcoming ipo. Lets get your view on these regulations. What is the purpose of these regulations . Are they necessary . Market since the stock crash, the pboc has been focused on adducing financial risk. Piece afterne piece, they went after the trusts, smaller banks. They are trying to reduce the potential for a blow up in the bubbles like we saw and the 2015 stock market debacle. At latest measures are aimed two sets of groups. One are large corporates that have become spelling conglomerates. The question i was debating is which is the aim here . Hmahave Companies Like doing a lot of Financial Transactions across a lot of sectors. Risk sectors. Few nobody really knew what their core businesses were. On out ofost business. Alibaba and aunt are in good favor. Are in good favor. Wasregulars said, ant running its own money. Have mored ant to bank regulations, having capital controls. Modelitched its business to becoming a feeder of capital. There are two parts of the business. One parts is the payments and another is the feeder part. Can play in the Global Financial system. But we are going to be looking very closely. We do not want you amassing too much capital. To what extent do you think these measures take the wind out of the sails for and . To what degree is it about addicting state banks . Protecting state banks . Financial protect the system while protecting the state banks. I think the wind was taken out of the sales a year or year and a half ago. Ants margins collapsed suddenly. They had to hand an extra piece of the action off to professional managers. We have taken that into account. The question is now, what i try to bring up in this report i see say yous go to a consumer and say we will take your 100 million yuan. Somebody has to figure out the fee structure. At some point, banks are going to be saying, we think we are paying too much of your fees. We want that business back. They will go to the state guys arend say, these getting too powerful. It is going to affect our business. We are the core of the economy in china. Ant is going to find battles tougher and tougher. Ant is that mean going to have to change the Business Model . They can sustain the Business Model they have now. The pboc is saying, you cannot manage your own money. The problem is, at what point are their margins going to get squeezed so much they get forced out of the business . Pdp business. I met with some pdp companies. Pboc said you cannot do this anymore. You cannot act as an intermediary. They became agents for the banks. 10 15 rgins went from to 1 2 . A lot of these are too small and unreliable and they had no capital controls. The question is at what point get big enough or greedy enough that banks say, you have to slow your business down . They could survive but will they be as profitable as they are now . I dont know. We are looking ahead to this listing in hong kong as well as china. As ad they look at ant tech company . Does it justify what some are saying is a 200 200 billion plus valuation . It is definitely a Financial Services company. The valuation depends on Significant Growth Going Forward. That is what im questioning. 2022,ou get into 2021, there may be the midst of their growth. I saw this years ago with phoenix media. When they did their ipo and everybody expected them to take a big part of the advertising business. Said,isting tv companies no way. You are not getting our market share. The question is, at what point are they going to plateau . Before we let you go, just your views on where things stand in terms of leverage in the financial system. How much and to what extent are the risks becoming visible . How concerned are you at this point . The regulars have done a good job shutting down the shadow banking system. Theoncerned has always been property sector. They are squeezing the developers for property, funding for the property. If you squeeze them too much, you are going to have a moment, a reversal in the property market. There are 500 defaults. Significant pressure on that market. That makes me nervous. Always good to get context on this as we dive deeper into some of this these relations and china. Coming up, he crisis on the high seas. Shattered labor norms, leaving almost a fifth of the Global Workforce stranded at sea. An exclusive report coming next. Hundreds of thousands of workers are stranded on merchant ships due to the pandemic, putting them at risk for labor violations. We have more on an exclusive report. This reporting you had in report, talking about the hardships many of these crews on the ships, how bad the conditions are tell us about the conditions are. It was really surprising to us. It is not easy to get these guys to talk. Many times they have been instructed not to talk to the media. To they were so desperate tell their stories. We have spoken to more than 40 seafarers. We have found crushing violations of martine law. Us theylf of them told have worked on ships without a current contract. They are being directed and sometimes threatened to sign contract extensions and they feel they may not get have no choice or may not get rehired. They feel they are not being paid for their work. They are working overtime without being paid. We found these alleged violations on ships large and small throughout the industry and it is likely to get worse. Such important reporting. What is being done to get these men and women off the ships . The seafarersood ask every day. One of the questions is who is responsible for the crew and these conditions . It turns out, there is a patchwork of companies responsible for every ship and its crew. Operator, agency ships manager that runs the crew. A shipowner. And in the charter, whose goods are being transported. They should have responsibilities but a lot of them are trying to pass the buck. The ship owners and managers, the union, they are working with port authorities and governments to ease some of these restrictions. Thee is a big call within industry to get ship investors involved. People like massmutual, oaktree capital, to lend their voice to get these guys off the ships. And of course consumer companies. Walmart, all of these consumer companies. Home because of covid ordering things from amazon. A lot of us do not connect the dots to figure out the human costs that are at risk right now to get these products to us. You mentioned just now, how is this going to impact the shipping industry as well as consumers . A lot of the experts are saying the situation is not going to be resolved anytime soon. If it does not, it is going to disrupt trade. This flow of goods, that will probably come to a halt. It is coming just around christmas, the Holiday Season is just around the corner. That is not going to be good for consumer companies. For shipping, it is complex. A lot of these guys are turned off by the shipments and say land, im going to look for another job on land. Thank you so much for bringing your story. I am sure it has taken a lot of time to get these stories but very important to let our viewers know. Make sure to check out that piece. Financep, new zealands minister said the economy is rebounding strongly. This is bloomberg. Ngly. This is bloomberg. Saw its worst economic slump since the great depression. A Strict Lockdown brought the company to a standstill. We spoke to the mr. And asked whether it is time to consider a different option to boast of economy. We are seeing the economy, using the robustness we have, coming back strongly. We are going to have an operator, much lower than restrictions in the last few months. Experts exports are holding up. Eric our economy is looking strong. We have continued to deliver a wage subsidy program. About 1. 7 million new zealanders who will stay and work. There has been plenty of investment and stimulus money. Now we are moving into much more positive territory in the september quarter. Consideringthey are negative rates. Ase considering as early next year. You have any concerns about negative rates for the country . Are Monetary Policy is independently by the reserve bank. They have provided certainty saying they will not move the official rate, at least not until march of next year. We have to see the economy stabilize. Rebound strongly through the next couple of quarters. And no doubt take that into account as they go forward. What we used to call unconventional Monetary Policy is front and center. There has been a fair degree of quantitative easing. The markets are liquid. Things are going reasonably well and financial markets. They will bear all that in mind. When they think about decisions post next year. Could it compromise some of the things you are doing given negative rates . Banks would be less willing to lend during this downturn. Stable bankingry system in new zealand and banks have found their way through this time well. Reasonablynding large amounts into the economy. Of oured by the role reserve bank. At the moment, they are doing well. As long as the economy continues to do that, new zealand will be in a strong position. Monetary policy worked well during this time and i would like to see that continue. Would it help efforts if there are further delayed plans to raise Capital Requirements . They made the decision to delay those through july. Hanks have remained strong. Balance sheets are strong and historically have been so. To me, it was the appropriate decision for the reserve bank to have made. July gives us more room for the economy to solidified. See that being extended. That would be up to the reserve bank to decide. I see no indication they are planning to do that. Are you worried about the optics should negative rates happen . What does that signal to the International Investor about the strength of the kiwi economy . Is it a concern next signals a point where they have run out of ammo . New zealand is not alone in the challenges that a one and 100 year shock provide. Those will be issues the central bank bears in mind as they work their way through the next time. The new zealand economy is a robust economy and our exports are up. We are seeing good levels of investment oath overseas and domestically. Of things awful lot that change in a short time. To the beinge get in the next year, people will see how the new zealand economy has gone. Ratings agencies continue to view us favorably. They know we have a strong Balance Sheet and disciplined approach. There is an awful lot of water to go under the bridge. That was the new zealand finance minister. Checking in on the markets. A divergent picture between the shanghai composite, still in the green. The asian general benchmarks looking like that. Futures in the u. S. Also flat. The s p futures down 0. 2 . That is the picture over and singapore. Yvonne. We are not dealing with a lot of catalysts. The dollar has studied a bit. You are seeing asia fx catching a bid. Continuing to hold onto that gain. 1 . Korean won up planning more to come. This is bloomberg. So youre a small business, or a big one. You were thriving, but then. Oh. Ah. Okay. Plan, pivot. How do you bounce back . You dont, you bounce forward, with serious and reliable internet. Powered by the largest gig Speed Network in america. But is it secure . Sure its secure. And even if the power goes down, your connection doesnt. So how do i do this . You dont do this. We do this, together. Bounce forward, with comcast business. It is almost 11 00 a. M. Here in singapore and hong kong. Welcome to Bloomberg Markets asia. Here is a look at top stories. In trumpsncent crosshairs again. Await clarity on the we chat been. Ban. Beijing willsigns sign off on the alliance with oracle. We are waiting for trumps approval. Thailands protest leaders planning the biggest demonstration since 2014. Struggling for direction a little bit in asia. Following losses coming through on wall street. Momentum,it of upside the asiapacific index up 0. 8 . We are seeing declines at tencent. We will get more on that shortly. Edging back. E the biggest weekly advance since june. Won, in anthe korean absolute terror against the dollar, eight month high on dollar weakness. Similar to what you are seeing. The Stock Exchange of thailand moving up. Some optimism there. The deputy Prime Minister saint thailand may avoid the worst Economic Performance predicted, revisiting cash handouts to its citizens. It is against the backdrop of induss. We could see a bit of a reversal. Yields barely moving. That is the markets. Lets get to the first word news. Here is Karina Mitchell in new york. Latesttill have the pandemic numbers. Coronavirus cases topping 30 million. 940 thousand deaths as the World Health Organization warns of a resurgence in europe. France reporting the most daily cases since may. For the second time in less than a week, there were more than 10,000 new infections. The northeast of england is introducing tough new instructions restrictions. The bank of england has given the clearest signal it may consider cutting Interest Rates to below zero. Governor Andrew Bailey said the policy is part of the toolkit. Market traders are betting the next 10 basis points of easing will come in february. Here in the u. S. , the Federal Reserve has started a second round of stress tests and is considering extending unprecedented restraints. The fed says it will decide in the next two weeks whether to prolong limits on the biggest u. S. Banks. Were dueres announced to lapse at the end of the third quarter. Highest level officials a highest level official to visit taiwan has made a second visit. Prompting threats of retaliation. The under secretary of state arrived and is due to meet the islands president and premier as well as attend a memorial for the former president beijing has called the visit provocative. Global news, 24 hours a day, powered by more than 2700 journalists and analysts. This is bloomberg. I will send it back to my friend risch and hong kong. Losses in chairs, this final trading day. This came after the trump at minister asian asked given committees in the u. S. For information about their Data Security protocols which involved tencent. It is the latest move in the crackdown. Tencentd of scrutiny is receiving with these companies . What other concerns on the part of the American Government . Stakes in Something Like 20 2 billion. The committee on Foreign Investment in the u. S. , chaired by the Treasury Department and investigates foreign acquisitions of businesses, is the body that is looking into this. It sent letters to Companies Including epic games and others to inquire about security protocols. Said someone familiar with the matter who asked not to be named. Tencent owned Los Angelesbased riot and has 40 stake in epic. Trump cern, and Donald Administration is this kind of data could be misused in some way. Is also heightened scrutiny of Chinese Companies and their ties to u. S. Firms, which increasingly have become a source of tension between President Trump. This is part of his Reelection Campaign bid, he is going to be tough in china and any american businesses doing business with china on the grounds of National Security. Speaking of that, lets get the latest. Oracles deal for tiktok. This seemsing to be changing by the hour, just in the past couple of hours, the chinese owner is getting more withdent its alliance oracle, the company that put in a bid, this will pass muster with chinese regulators which is a key step. At the same time, we are hearing from the treasury secretary that this deal about the shape about the shape of this deal. He says it would be called tiktok global. Alliance toorm an hold an initial Public Offering. The treasury secretary said they revised terms wednesday. The company and oracle have accepted it, apparently. It sounds more and more like this deal might happen. President trump has not said whether he would accept it. He says he is looking at it. At the same time, Larry Ellison is a supporter of President Trump and has had Campaign Events for him. The president says good things about Larry Ellison and seems to be going in that direction to allow this deal with this shape to go forward. Of course, this keeps changing the shape, the shape of this keeps changing. There maybe a few other rounds before there is a deal that is accepted. I think President Trump would describe Larry Ellison as a terrific guy. What happens subsequently . Have the deal has been complicated because it needs to be signed off by chinese authorities. And then regulatory authorities. There are a number of different steps. Again, President Trump is the one who started this in motion because he said he is going to man tiktok in the u. S. If a deal did not occur where it was under american ownership. Since he is the one who sent this thing going, and it is going in the direction he wants, one would assume hes going to approve it. Whether this would be a precedent for other kinds of things, we would have to see in the future. Been a distinct and unusual kind of deal that has been triggered by the president himself, saying he was going to ban this technology if it did not fall into the right shape in terms of american ownership. Jodi schneider with us and hong kong. Still ahead, an exclusive interview with the chairman of Sri Lankan Airlines on how the carrier is navigating the pandemic. His outlook for international travel. Track forarkets on the first weekly climbs this month as investors looking for the next catalyst. Discussing strategy with mng investments. That is next. This is bloomberg. Stocks in asia are mixed but remain on course to climb for the first week set september. Investors looking for the next catalyst to reignite the rally. Where are you looking for value . Growthng the growth train continues. Good morning. Covid led many investors to extend their timeframe. Situations,at many particularly in the west. You since markets are disconnected from reality. However, if you look at multiple sectors, we are seeing some signs of recovery. Has ledong term, covid to an acceleration of demand and an increase in the size of markets for Many Industries touching on health care, consumer, and blend these technologies. We are seeing a convergence eating too multiple areas of opportunity. Field rally continues. Where specifically within tech are you looking as we try to see opportunities in 2021 . 5gare also looking ahead to and the likes of other growth areas, too. Increasing adoption of 5g will increase opportunities for work from home companies. The house companies. Companies. Video gaming that will be a key narrative focus for us. Are plenty of opportunities for longterm investors to offer. I would encourage people to not focus entirely on something that is. Com. Traditional industries, as well. There is value in automotive sectors. In machinery and manufacturing. A broadbased value system you are seeing, beyond a small concentration of tech giants. I wanted to ask you specifically as well which countries in asia where you see growth. There has been such a dichotomy. How countries have fared with the virus. India and ending asia not doing well saw whatnot doing so well. But you quite like india. Lets start in the west. India is of interest to us. Lets look at the percentage of the population i think should and will have connectivity in the next 35 years. Overlay on top of that low levels of ecommerce penetration. Shift from unorganized to organized retail. You lay that on top of each other and you see a large growth set. What is important is not to think of india or companies xerating in india as the company of india. Be organic opportunities that will be around for the long term. How does this spat between beijing and new delhi dovetail into this . With perhaps no some of those opportunities arising and india, Enterprise Software, things which were perhaps being occupied by Chinese Companies. Indian companies have a role to play. They could be hugely beneficial for investors. I agree with that totally. I think we are seeing that across multiple sectors, agricultural equipment, drone technology, Enterprise Software and technology. There are increasing levels of investment, volume and dollar commitment we have not seen before. Reason whys is the you are seeing india being so attractive for Many Companies that have developed strong votes in the west. There will be many opportunities in india for years to come. Then we come to the way these like thereey look was only one way and that was to the upside. People are looking at the old way, a linear fashion in terms of valuations. We have a world looking increasingly nonlinear. I like that question. Be world is and always will nonlinear. Small things have a big impact. People who have missed some of this recent rally are missing the fact the financial world in particular is increasingly nonlinear. If you look at the comparison of assets,ets to financial how quickly they are increasing. The acceleration of Market Opportunities and growth opportunities. Brought forth by the current virus situation. If you look at the leverage being introduced through central bank support, that is nonlinear. When we look at traditional valuation, i dont think that really captures the opportunities out there. I would like to see a we are optimists. We have staked our careers on opportunities available in asia. We think there is plenty to go. Quick question. Covid has accelerated trends prevalent before. Where are we with those . Do those fit into your Investment Strategy . There is acrosstheboard impact. North asia to australia and new zealand, the way management teams have managed cross purchases. Many companies will emerge from this time. There will be impacts how they structure their costs. Side, ecommerce has been a clear winner. Video gaming continues to be a winner. Live commerce has been a trend that began in asia and is pretty to the west. You are seeing this acceleration and expansion. It is not just a revenue opportunity, it is a clear cost opportunity. Anybody who has spent money on infrastructure, building out infrastructure, that will be a difficult thing to overcome. We do want to get your thoughts on our mliv question. When markets are going to start to price in negative rates from the fed. You have many guests in during the day more qualified. I am not quite sure. Ago, where currencies were versus where they are today. Interest rates. I grew up in the u. S. In the 80s. Interest rates were double digits. The end was north of 200. Zero,y collapsed down to the thought was, how would they survive. They will continue to win. I will defer to your other guests, but i would like to adjust. T they will underplayed your insights. That was very insightful. With us from singapore in Bloomberg Markets asia. Still to come, protesters critical of thailands monarchy planning a gathering. The biggest since the 2014 coup. We will have a report from bangkok coming next. Protest leaders critical of the thai monarchy are planning to host the biggest gathering since 2014. Our reporter is in bangkok. How many people are expected to join the protest this weekend . It is expected up to 100,000 protesters are going to be showing up tomorrow at a Bangkok University campus. The size of the movement has expanded. The last protest, we had over 10,000 people. This time, it is going to be 10 times more than that. The movement could include more than just students. You see more middleclass, workingclass people. Who have also been impacted by on course fornomy the steepest ever contraction. What is it that they want . Governmenti responded in any way . Mainly callingre nta draftedto the ju constitution. The most controversial demand is state laws and it occurred to the kings powers. They have said there can into amending the constitution. They have said there will be Security Forces present. Ince the protists began july, there have been people arrested by the police. There are a number of people facing charges for participating in protests. Us all right, thank you so much. Latestet now to the business flash headlines. They are planning a 1 billion hong kong ipo. Hong kong has seen a parade of biotech firms go public with a surge in demand. Health Care Companies have raised 13 billion. Glove seeing fresh highs after profit surged 1500 . Net income at the biggest rubber glove maker jumped 311 million. With revenue up thanks to pandemic driven demand. Shares in singapore have soared. Ae company is exploring listing in hong kong. Ubs weighing expansion of its asset and meant business in na, taking advantage to the Money Management unit planning double agent growth. Foreign competition is putting pressure on ubs. Lets have a look at markets ahead of that lunch break. We are moving to the upside. Hong kong, dragged a bit down by what is going on in tencent. The index of thigh 0. 25 . Still on the lunch break. Should be coming back in 34 minutes. Afx, pretty much flat. Asian stocks on course to climb for the first week in september. Having a look at those chinese markets, into the lunch break. Move for bigbased caps. Shanghai composite up 0. 6 . Weaker, little bit against the backdrop of what has been happening with the dollar. Certainly stocks at the moment asian currencies, rising. Yuan at levels we have not seen for 16 months. Security concerns raised in the u. S. , that is also affecting the overall market mood. It is almost 11 30 a. M. And singapore. We are in the middle of the trading day. Seeing singapore stocks down. The index down zero point 2 . We are seeing good gains from the likes of seeing up or exchange. Also, watching the singapore dollar. A dollar slide similar to what you have been seeing with the korean won. This after the dovish u. S. Fed dampened the manned for the greenback. Dollar index steady, somewhat, after falling 0. 7 this week. Lets get the first word headlines and head to new york. Thank you. The u. S. Says people who use we chat for personal and business communication will not be targeted by President Trumps executive order. The Commerce Department has yet to clarify which transactions will be prohibited, a judge may yet halt the order. We chat gaming stakes coming under scrutiny. The committee on Foreign Investment is including for its 40 stake in epic games. Is growing more confident the chinese regulators will approve the planned alliance with oracle. That is providing the deal does not involve a transfer of the ai algorithms. An ipo nextnning year. Englishwill show premier leagues in china after a former rights holder lost its contract. Tencent will show the rest of on itssons games digital platforms including we video. D tencent english teams have been struggling financially. The league will explore free to air options. Oil posted its biggest threeday advance in saudi arabia forcefully called they condemned Cartel Members who cheated and got the backing of russia. Warned members not to test result. Global news, 24 hours a day, in anger and bloomberg quicktake. And 120by analysts countries. At asian markets, we are slightly higher. We are seeing a weekly gain of around 1. 5 . That is going to be the biggest we have seen or the first. We are looking at this unwind and growth, trade, and value stocks. Here, thee looking at set to outperform the index. We are basically asking guests about how much this can unwind. The widest in 20 years. The is the widest since dotcom bubble. All right. Lets have a look at what is going on in india. Facing a bleak economic outlook. As the epicenter. Most projecting a doubledigit decline. Could we put these downgrades down to the passage in india . Seems a rush to downgrade prospects. Surge inid, the recent virus cases. Means india will take longer to recover. , the some of the recent central bank warned the recovery what it means for the economy, over 8 over three years of growth, it is staring the deepest economic putting millions of jobs at risk. For hugeies brace losses. Doubledigit contraction is more likely than not for asias thirdlargest economy. Here in singapore, we are seeing policy support which has underpinned lots of economies. What can policymakers do to support the Indian Economy . The government needs to step up very quickly. The bulk of supporters come from central banks. Fiscal stimulus is also needed. Beengovernment has consumed with its spending plan. There will be a downgrade to junk and that will be extremely embarrassing in a year when they plan to open up the bond market to foreigners. Fiscal, we see the deficit has shot beyond the budget target. Options are there to support the economy. This is an extraordinary situation. It will lead to extraordinary measures. Means,aordinary measures i guess what it means for the longterm outgrowth Growth Outlook as well . It is bleak. The 78 Growth Investors were getting used to is probably in the distant past. Thanks are struggling with bad loans. Committees are busy deleveraging. Household Balance Sheets are under stress. It has huge implications for investment and demand. Companies are shedding jobs. Recoveryake indian along longwinded one. Mightime ministers dream remain just that. Thank you so much. Turbulent times for airlines as the pandemic continues to hit global travel. We will speak to the Sri Lankan Airlines chair. This is bloomberg. The aviation sector there, airlines battling the worst crisis in the history. Haveof thousands of jobs been cut. Hardest hit of all our airlines dependent on international travel. Sri lanka is one of them. Thank you very much indeed for joining us. Thank you for having us. Ends there any light at the of the tunnel . Give the same answer most of the other airlines feel. Nobody can predict at the world, it depends how the can get covid under control. Country, the campaign to control covid, we are one of the best countries at the moment. We dont have any community spread. Patients are restricted to quarantines and hospitals. It is this the problem is not about our country. It is about what is happening in the region and the world. That is our worry. Whoever is coming into the country has to take permission from the government. People coming in have to be quarantined for two weeks. We are operating in cargo and we bring a lot of sri lankans stuck in the country. Say we are about 75 down. Paranoid at the same time. It is really bad. Better. Et the government will plan to open it up. Sri lanka is somewhat dependent on tourism. It is one of the hot tourism destinations. 4 of our tourism coming ddp coming from tourism. The airline has gotten concerned in a big way. We have taken many measures, just like the airlines. Moves to cut costs. We renegotiated with our lessers. Factoring all those in. We have salaries for employees, pay cuts. These are the measures we are taking. You mentioned the leases. Are you likely to be changing airbus to from another place . Do you need any more aircraft . Even in the post covid world . Good question. That was our plan. We are, weg at are in negotiations with a airbus. We need to see what the best option is for us. I am not in a position to tell you what the final situation is going to be. A lot of other airlines have been laying off staff. Have you furloughed yours or outright sacked some people . We are furloughed. We have not terminated anybody outright. Been contracted stuff. Stuff, we have kept them on the payroll. With that before covid, we had 7000 staff. Now we have brought it closer to 5000. That is a little bit high with the current operations. To seetaking measures how we can make it a more lean organization. It is a great opportunity for Sri Lankan Airlines. In terms of the leasing costs. Managed to reduce leasing costs 18 . Aboutd say we have saved 100 million per annum. We have restructured the organization. There is more work to be done. Shape be in a much better when things come back to normal. Of coming backul to profitability. That kind of situation. Blessing andsa in disguise. Hopefully things can come back sooner rather than later. It sounds like you are in a better position than other airlines. Are you looking at selling off any part of your business . We have heard Chinese Airlines were showing interest. Have you been involved in any of those . Not to privatize, but open up the company. Thinking of the chair holder. Shareholders. , we are thinking about 1 billion of pay. Banks, we own government banks. We have raised money to address most of the rates having to do with the government. We are talking to the government, the economy this may not be the best time in terms of being capitalized or in debt. Been supporting us up till now. Confident they will support us until we pass through. They can be opportunity. Since we are a small airline, with 24 aircraft, we are in a much better shape than the larger airlines. Flying post covid look like in terms of things like social distancing and the fact a lot of the revenue is going to come . Are people going to be squashed together prepend them in . Social distancing. I dont know whether it is really going to take place inside aircraft. That is going to be a thing for everybody. Believe. Ething i dont we have taken measures to cut down on expenses. Expect revenues come it in at the same levels as before. To be have taken measures a lean organization. We may be in a much better position. The earning to profitability, we feel we can get into that. If the government is willing to support us, that will help. Sorry . Hello . Just going to as the same question about travel bubbles. Any more on that . Do know if the government in sri lanka is talking to any other countries about travel bubbles. Travel thought about bubbles between the u. K. And sri lanka. Theres a lot of travel happening. These are the three countries we are looking at. Singapore airport. There is much happening. Got at thehas moment, we are engaging our mission. That is something we are looking at. Finally, what about flights to nowhere . We have seen Singapore Airlines do this. Qantas as well, flights to nowhere we start at one airport and and another, sold out in 10 minutes. Something like that would work with the tourists. Thats is what we feel. With domestic passengers, i dont there would be much interest in that kind of thing. Waitingpeople were just for that. The Sri Lankan Airlines chairman. Wek at indian markets, here go. We got at the moment new virus figures coming through. Some grim reading. The firstaebfdfddadbcacacacacaca derfdfddadbcacacacacacacaaa aale were at which you can feel comfortable. What is next for u. S. Business . Monthly merchandise value of 100 Million Dollars has always been our strategic goal. Regard for a breakeven point. Even though we achieved our goal, our business is not profitable yet. We are not profitable only because we continue investing in u. S. Markets. We believe we can propel our numbers to 200 million or 300 million. We are carefully monitoring the Economic Situation and will make additional investments or shift focus to profitability. With the change in leadership in japan, what are your expectations for the next minister . Outlook for us your the japanese economy Going Forward . I think we can expect policy continuation from the new Prime Minister. Abe. S worked under mr. Pandemic clear how the or economic recovery will play out from here on. For me, the coronavirus is a bigger worry. The impact spares no one. It is debatable how much more the government can do but it is faced with a balancing act. Trying to boast the economy. We appear to be seeing a downward trend in infection rates. My hope is the current policy will remain unchanged. Shintaro yamato talking to us. Fede have the atlanta president and how Speaker Pelosi as well. Coming up. Make sure you catch the lineup for the bloomberg green festival, a virtual gathering of our titian nurse of the core issues of climate action. The telecom sector. On the way down. A story out at the moment the new Prime Minister has called for mobile carriers to lower fees. Companies, ntto down 3. 1 . Asking his communications mr. To come to a conclusion on his request to cut mobile fees. That was reported a bit earlier on. We have another look at markets as well. We do. We are watching what is happening with tencent. It has now turned positive even though you have tencent down zero point 1. 5 in the reports the Trump Administration has asked gaming committees to hand over information on data collection. That is it for Bloomberg Markets asia. This is bloomberg. The following is a paid program. The opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. Announcer the following is a paid advertisement for scalpmed, brought to you by cell matrix technologies. Announcer nothing grows your hair back better than scalpmed. I really can see the difference. I can see this hair coming in. I have hair on my head. I can brush my hair now. Within two months, i got my hair back. Its just like a Second Chance at life. No hormones, no surgery