United states within the decade. Nancy pelosi says that the house is ready to vote on a potential deal this week and Cocacola Europe is buying a soft drink or soft drink makers operations in australia. 19 premium eight to their last close. Lets have a check of the markets. We will start off with u. S. Futures, currently weaker by about 0. 2 . The cost is up right now but when they lasted they were higher by 0. 2 . Reporting higher a little but by a little more than 0. 25 . Europe as covid cases continue to rise is really weighing on crude at the moment. Continuing to prop up buying for january. Still some downward pressure there. Kathleen chinas leaders gathering in beijing to map out the fiveyear plan. The economic roadmap is expected to center around technological innovation. Mackenzie joins us from beijing with the preview. What should we watch for . They will be meeting here in the Chinese Capital over the next four days. We are expecting to get a bit of a steer in the next few days. We have a sense already by speaking to those close to the decisionmaking process as to what will be in focus. An additional 15 years from now. In terms of where the focus will be, you touched on a few of them. Is the policy position that xi jinping has been trying to flesh out. How they areon going to shift production in china tour the domestic consumer. Willould expect that change the way that things are produced here. Tracke going to keep on in terms of opening up markets there. There will be a focus on additional steps and what that means in terms of concrete policy changes. We will be looking out to see whether they have set a growth target. For the last plan they set a growth target of 6. 5 . This year they did not set a target because of the impact of the pandemic. They say that a target of 5 would be something that would be sufficient. That is Something Else we are looking for. That is more of a political vision but it will give some direction and tech innovation. What will they be doing to make sure that they take aim lead in areas like artificial ,ntelligence, quantum computing and more. And they want to be Carbon Neutral by 2050. Paul you also spoke to chinas former vice finance minister and current president about the what did he have to say . To him at a forum for financial reform at a place that took place in shanghai over the weekend. We talked about a broad number of topics. Also have the pandemic has impacted the lending that this bank has been doing. Across the asian region focused on infrastructure. We started by asking about the impact. The covid19 crisis recovery 6. 6ity has provided billion approved already. The Lending Program has increased. That is the important feature we did not expect. Because of the difficulty of preparing projects on the ground, remote work can do something but not as much as you like to see. We need boots on the ground. And then we have seen a slowdown in the mainstream business. How much distress are you seeing . Competent with very partners. What worries me and the bank is the deterioration in economic situations of some of our members. They are downgraded. That is translated of increased impairment charges to net income. Is it reasonable we dont do that. Debtors woulde normally honor their debt status to multilateral institutions because we are the net Capital Providers to these countries. At a time when they need financial resource. Confirmationad that they are very pleased with the way we have managed the bank. When you say interference i would say they should not define it as something completely negative, because people broadly refer to any suggestions or ideas from the government as interference. I dont look at it that way. We should remain humble and be willing to listen to the ideas and suggestions of shareholders. The economy is clearly recovering. How sustainable is it and what are the key risks . To control the local governments debt. Some of them have accumulated debt over the years for their. Evelopment coastal developer areas will have little difficulty if any to deal with that. So the Chinese Government is paying a lot of attention to the debt sustainability in some of these areas. If china takes care of this, no problem. You, you talkk to about the need for dialogue. Do you think that there is a chance after the election that a window might open up to some kind of partial reset of this relationship . Rhetoric, iof the think that the only solution is dialogue and mutual understanding. And as someone who has been dealing with american colleagues for many years, i say, im confident. I believe it eventually some people who got them excited would calm down. There is a potential for some kind of reset . Even more positive than that. There must be. And constructive dialogue between the sides. Finance as before former finance minister. Saying that there must be a reset in u. S. China relations and that the biggest risk to the chinese economy remains local Government Debt and at the banking level he wants to start switching and focusing away from that covid report. Tom mackenzie there, in beijing. Lets go to Karina Mitchell with the first lord first word headlines. Karina the u. S. Continues to make lines with record infections for the second day in a row. White house saying that the administration is not going to control the crisis. The Vice President mike pences chief of staff tested positive. In other news, the governor of the reserve bank of india is the latest prominent figure to test positive for covid19. B. I. Operations will continue as normal and he is in touch with all deputy governors and other officials. The Republicanled Senate has voted to advance a vote on the Supreme Court nominee Amy Coney Barrett despite democratic objections. Democrats intend to keep it in session. And the man who transformed samsung from a copycat appliance maker into the worlds biggest producer of cell phones, memory chips, has died. He had been in hospital for six years after suffering a heart attack and was treated for lung cancer in the 1990s. He was south koreas richest man with a net worth of 21 billion. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 100 countries. This is bloomberg. China escalated fiveyear plan and the u. S. Election. Will it reshape australias role on the world stage . And whitey pelosi house continue to play the blame game as pessimism mounts over a stimulus deal. This is bloomberg. Paul pessimism is mounting again over a preelection stimulus deal in washington. Speaker nancy pelosi and white house chief of staff mark meadows are accusing each other of moving the goal posts. Pelosi we are waiting for the final yes. They said that they would. Rep. Pelosi but they havent yet. We want it sooner and better and that is why we are making concessions. We are making concessions too. Editorhe Bloomberg News is on the line from washington. Have we reached the end of the road for a preelection deal . It looks like we have since the election is so close and the house is out tomorrow. Notice. Rt we can never say never. She sent Steven Mnuchin a list of the terms that she has about the white house package. When she gets that, there could be another round of talks to sh ow voters they are still working on a stimulus bill. Theyre coming to the threemonth mark. Arething is that they closer together on money. The white house has gone up to 1. 9 trillion and the democrats are at 2. 4 trillion. Pointis still a sticking speaker a some that pelosi would like to send to state and local governments which President Trump and the white house have said is a handout to poorly managed states. Year,en before the new equally, do they both have something to lose if nothing is passed . I personally think if nothing gets past there are a lot of people who have had their hopes raised for another round of stimulus checks. A e seeing kind of kshaped recovery. Some sectors doing very well but others really struggling. Is one republican senator quite optimistic about that. Scoring points against the opposition or this is a democratic bill or a republican bill, it is possible that something could be done. Kathleen up next, speaking of stimulus, elections and more, we cws stimulus manager. He warns against the exuberance over tech stocks. This is bloomberg. Kathleen markets are set for another week of waiting to see if a deal can be reached on the stimulus package. Our next guest thinks that they wont. Is the equities manager for the new fund. Welcome. The stimulus package still seems alive. They have hit a big roadblock. You are betting that it will not pass. Markets have been moving. Will they care . I dont believe that they will care much. It does not appear that there will be a stimulus package before the election. There is limited incentive on both sides to get a deal done. The market is not going to move on that. They have baked in that my baked in the election and is looking out six months and thinking what are the odds that life begins to normalize and a vaccine is introduced. Market leadership is likely to shift from what has led the market which has been highperforming or highgrowth tech businesses and nothing else. That we do get a vaccine in the normal life resumes, its likely that it will necessitate a rotation to the businesses that have been hurt. You are saying that the election will come and go whether trump pulls it off and wins or joe biden as the polls seem to predict wins. It is something that passes for the stock market. It doesnt seem to stand in the way of. A rally of a rally. Market, if it looks at consensus wisdom or conventional wisdom is already assuming that a joe Biden Victory will occur. The way thento market has looked at growth and rates and where well be in a couple years. To the extent that the current president is elected, it is not going to surprise people. The election, to the extent that it is decided quickly, will not be a deciding event interaction in the market. Decided it is not we believe that investing is really about the micro. Its really about finding businesses that will be bigger and stronger in three to five years. It is less about the macro and the events that are occurring. We look at businesses that can grow and get bigger. The trade desk is a perfect example. At the centerss of Online Advertising and a key provider of information services. That business came to market, the business has grown and the stock is up. They should be looking for businesses which we have owned since 2017. They should power through any kind of market event whether that is an election or the macro environment. Without getting into the nuts and bolts of what can go works, are you short anything . Is that the end of the work from home trade . How do you position ahead of that . That is a great point. Has beenrally predicated on better earnings dramaticallye lower Interest Rates than we had a couple years ago. One would expect that other businesses, whether thats restaurants, businesses that are relying on daily life transactions, one has to believe those businesses will begin to outperform. What investors should be looking at is anticipating that this cou adding to those businesses six months before that becomes a significant event. Kathleen you have some interesting picks. Constellation software. Why do you like it, how is it going to do . Constellation software is a business that goes grows through all market environments and has 80 recurring revenue and it is a cashgenerating machine. It generates through good times and tough times and it will grow through the pandemic. And through a return to normalcy. Shaposhnik, thank you for joining us today. Lets get a quick check at the business flash headlines. Has ma says the group set the price of the dual asia ipo. Offeringkongshanghai is aimed to be the biggest ipo ever and aims to raise at least 35 billion. They passed a saudi aramco share size last year. Hold an online roadshow on tuesday. Itsnb is splitting privately held shares ahead of the planned distinct telling stockholders that the board has approved a 2 1 split. The deal will leave shares valued at 34. 88 apiece. Such a split reduces the price of shares for current investors while doubling those of current holders. And Cocacola Europe has agreed to buy in australia. Worth 24 billion u. S. Dollars. The sydney based company is valued at 6. 6 billion u. S. Cocacola and the board says the intend to recommend the offer unanimously. 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Com. Paul you are watching daybreak australia. Transformed Samsung Electronics into one of the worlds most powerful tech titans has died at 78. A look at his legacy and with the future holds for samsung. Hee was the visionary behind Samsung Electronics. The worlds biggest producer of smart phones, televisions and memory chips. He pushed them up the technological ladder following the death of his father. Telling employees to change everything except for your wife and your children. Early 1990s, samsung had surpassed its japanese and american peers, becoming the Industry Leader in chips. Global like tronics powerhouse today Global Electronics powerhouse today is the cornerstone of the korean economy. They had their setbacks and controversies. Lee was mired in political scandal in the late 1990s after being convicted of paying bribes to the government for which he was pardoned a year later. In 2009, he was found guilty of dutyvasion and breach of for intentionally causing losses. Are setless, the reins to pass to his only son, who has been that defect a de facto leader since 2018. There are allegations of bribery and corruption which he has repeatedly denied. Lee is expected to eventually inherit the company which continues to be one of the worlds leading electronic players. Kathleen that was a look at the legacy of lee kunhee. On to the first word news with Karina Mitchell. Karina we start down under. Stated nolian report new covid cases or deaths over 24 hours. It is the first a since june of no new cases increasing pressure on the Prime Minister to ease the lockdown. HasPrime Minister criticized his decision to extend restrictions to the rest of the month citing damage to the economy. The king of malaysia has rejected calls for a state of emergency to tackle the coronavirus. After the opposition denounced a request to hold on to power. The government has been handling the crisis well and called on lawmakers to stop politicking and undermining civility. He hasme minister says noted the opinion and will discuss the matter further. Thailand faces more antigovernment demonstrations as there are calls to resign. On mondayrally again following demonstrations in the capital and in provinces around the country. Protest leaders say they are not impressed by the lifting of the state of emergency in bangkok. Brexit talks are being extended into the coming week as the u. K. Indicates optimism about a deal. The top eu negotiator will stay in london as the sides move to more intense disclosures. Government continues demand more concessions from the eu. Mitchell, this is bloomberg. Now for morning calls for a snapshot of notable views ahead of the asiatrading day. Sophie. Investors looking to looking forlays cheap stocks that can ride chinese growth. European miners tick the box with exposure to Infrastructure Spending in china. Flipping the page, citi one of the best ways to play. 40 p valuations with a discount to the msci world index. That is the cheapest in 10 years. Other industries with highs closer to china are now expensive. Citi recommending going overweight chinese equities. Kathleen chinas 10 year yield is near its 2020 high. Chinas growth seen gaining momentum, that is seeing added pressure to bonds. Seems less inclined to ease monetary policy. Politics is a key factor. Jason chang a jp morgan could see the benchmark going to as high as 3. 5 with a biden win. Paul last week marked another busy stretch. There is more risk sentiment now. Head ofat axa, the fixed income in asia, he has turned neutral in asian and neutral bonds. Given the uncertainty in the moves by central banks. He is watching movement of the greenback which could be one of the key factors driving dollardebt in the next 12 to 18 months. The heavy offerings continue in asia. They said, the focus on highquality picks. He said he focused individual names. Hong kong and Shanghai Hotels have done a fair amount of work to identify their next location in china as domestic demand fuels recovery on the mainland. That is according to the ceo who says that hong kong needs borders to open for any increased business. Forward, we think that what local demand there is, we are already taking advantage of. If we are looking for further growth there has to be some opening of borders. News that there will be a travel bubble in singapore, but that is not enough. Safety about personal and health and that is very important, but we know that the balance between the economy and employment. For people with businesses like mine, what we hope for is that travel protocols would be established that will enable people to travel again without taking unnecessary risks, but a balance of risk and a sensible approach toward travel. China is a most back to normal. What are you seeing . We have been quite surprised at the quick pace of recovery among domestic markets in china. And if you think of the u. S. , hotels in the u. S. Have a big proportion of business from the domestic market. Intracountry of traveling. That is happening in china too. Even at our end mother is a lot of Domestic Travel even at our end, there is a lot of Domestic Travel. The recovery has been very fast. In shanghai is enjoying occupancy of 80 which in other places, one would not be seeing. Can you share anything outside of shanghai . We have done a fair amount of work. Cities. Visited several openminded. To most important thing is make sure that we deliver the brand promise in Hong Kong Shanghai and beijing are the pillars of our presence. Ofough the spreading reputation and people putting in ood word for us, that will lead to growth continuing. Operating profits just under 100 million. What are the targets for this year and are you on track . I think it will be a surprise moment ourt at the aspiration is just to get back to breakeven because of the extent to which we have been hit around the world, so at the moment the focus is on cash, and the target is to be cash positive. Your situation now . We are hoping to get to cash neutral within the reasonably foreseeable future. David there is a perception that we should not have locked down to the extent that we did. Same, the nexte time this happens, before we decide to lock things down again, lets have a proper think and not rush in . Is that an accurate framing to the argument . Us areink people like not in position to make an informed judgment on the balance of health risk. We have many experts in that business. I dont think that businesses can make that judgment. Coming up next, we will be speaking with the former Australian Foreign minister bob carr about how political and economic uncertainties in the u. S. Will impact australia with respect china. This is bloomberg. Paul escalating tensions with pandemic andal fracturing race relations. It appears we are seeing a turning point in history but what will the world look like after the election and what is the impact on australia. Joining usyou for today. We have President Trump speaking right now to some halloween celebrations at the white house. Said not so long ago that this is the most important election in history. It feels like we hear that tagline every election but is it spot on this climb this time . I think it is spot on for a way that hasnt been for a long time. If theres going to be another four years of donald trump, americas friends are going to be worried. Ands havealia talked up australians have talked up a trump presidency, but for the most part there is a fair bit of apprehension here or trump to be rewarded with another four years. Trump presidency has upended alliances. Australia going through a tough patch with china. Biden win trump or alter the picture . Question for whether america will behave by putting their own interests first. Certainly under trump and to some extent under biden there could be a grand deal with china. With respect to biden, i think probably a more measured and more diplomatic increase in the areas of collaboration. Cannot rule out that he would suddenly, emboldened by reelection, unveil plans for a big understanding hat strikes med w as interesting is the way hes clinged to the trade deal. Never during the Election Campaign has he made the antichina point by saying he is contemplating tearing that up. That meansia, american exports to china will ours. Over kathleen china has been aggressive in some ways. Look at the south china sea. Did someone need to start a push back against chinas power . Not economically but politically . Responses a reasonable given chinese behavior in the south china sea, and determination of legal autonomy in hong kong. Hong kong had a reasonable response to step up the coordination of the consultation. Relationsrnational 101 that if you start flexing , your finding the nations in the neighborhood theking we have a head for possibility that they become more overtly aggressive. More, having been assertive, cant complain if that is the outcome. Kathleen you have written about Climate Change and how the next administration, whether trump or biden, might take steps that would not be good for australia on that front. Explain your concern. A i think that action by Biden Administration on climate, we will be certain he will be making this a high priority. I think its good for the world and good for america. President , biden, americaing about, says will receive will achieve zero emissions by 2050, and by have all carbon out of its electricity, thats a m. Jor challenge to australia biden, will ber more like brazil and saudi arabia, as an outlier, as a changer, a climate skeptic or denier, than the europeans, canada, new zealand, japan, south korea. The other partners. It is a real prospect that the Biden Administration will vigorously pursue climate compliance. That means recruiting allies. Point, with that catalyze some change in australia . Im certain that our friends in the south pacific, the small island developing states, who have previously been critical of youreon climate going to be very critical of your big neighbor next door that commitment toa net zero emissions by 2050. Australia will come under quite a bit of pressure if biden becomes president because climate is undoubtedly a democrats priority. Kathleen thank you, bobc carr, such a fascinating conversation. re awayrget, if you from the screen you can always find indepth analysis on bloomberg radio, broadcasting live from our studio in hong kong. Plenty ahead. Stay with us. Paul you are seeing live pictures of melbourne in the state of victoria where there has been good news, no new coronavirus cases in the past 24 hours and no new covid19 related deaths. The situation appears to be turning a corner. Facing criticism for refusing to relax restrictions. Some encouraging news out of victoria. European has offered to buy the australian arm for 12. 90 a share. The negotiations are said to be advanced with the results expected within days. For more on this, Harry Brandon joins us from sydney. What does this do for Cocacola European partners . , europe already one of the biggest bottlers in the world. Theyre primarily based in europe. This balances out their footprint. There are others who are transcontinental as well. They work across africa as well as in europe. This will make cokes European Partners global. Spain, in germany, france. They will be adding more. A totally different diversity and demographic to the mix. Kathleen i saw this headline from bloomberg. I believe this was a scoop. I had to google. Cocacola is so confusing. The Cocacola Company what is the history . It takes a bit of figuring. Basically, they are the bottling. That means that the Cocacola Company, based in atlanta, the developer of the original secret sauce many years ago, they still hold significant shares in these bottlers. They havelate 1990s, been trying to separate and make the company more of an asset, like you see with any Smart Business model like apple, separating the manufacturing from the formulation and marketing of the business. Not badlers are businesses, they are just asset heavy and yield stocks and dividends, like a bond. Kathleen will shareholders support this . That has to have something to do with how the market reacts overall . I think they own about 20 of coke europe. L. D 30 of amati for the rest of the shareholders, it is a generous premium. Thursdays trading, and a higher premium based on the last few months. The coke Atlanta Company is going to get slightly worse terms. There was an interesting wrinkle in the release. They are making an effort to get the deal done quickly and cleanly. It will be interesting to watch days to see ifew shareholders go for this. Kathleen thank you for joining us. Now a quick check on the latest business flash headlines. Secondhalf earnings will be reduced by 1. 2 billion aussie dollars. Dollars of aussie that will come from writing out the intangibles. Another 450 million is being set aside to pay Money Laundering finds. The taiwanbased cable and connector acre is set to start production for apple later in india as the iphone maker increases its presence. The chairman of the company is the brother of foxconn technologies founder terry gross. Other Apple Partners are setting up subsidiaries in india. Amazon put in a court order that puts a temporary hold on the future sale to the alliance industry. Arbitration in singapore is said to restrain future retail and its founders with the sale of assets. Amazon claims they had a previous agreement. In the next hour, scotia bank joins us to talk about what to expect from china this week. And we will be speaking with Christian Pond about the u. S. This is bloomberg. [announcer] imagine having fuller, thicker, more voluminous hair instantly. All it takes is just one session at hairclub. Introducing xtrands. Xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. Theyre personalized to match your own natural hair color and texture, so theyll blend right in for a natural, effortless look. Call in the next five minutes and when you buy 500 strands, you get 500 strands free. Call right now. upbeat music good morning. I am paul in sydney. We are cutting down to ages major market open. Welcome to daybreak asia. Our top stories this hour, chinas leaders need to draft their fiveyear plan. The roadmap may help the mainland exceed that of the u. S. Within the next decade. Stimulus talks remained locked with the agreement described
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