Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

We are looking at currencies, strength coming through for the yuan. Dollar weakness is a big factor. Of the planthe back signed off or agreed to on 0. 1 . Us, the euro is up weaknessollar again, down 0. 2 . Hade is still value to be when it comes to chinas bonds, 2. 96 is the yield the. Is the yield. Gold is closing in on 1900 an its spot price. Future is pointing to 1900 in the near future. Il down 0. 7 demandweakness is a factor. Rishaad lets get some sense in all of this. Joining us is frank benzimra, head of asia equity strategy, societe generale. Thank you for joining us. How was your strategy evolving . The last couple of months europe become bullish on , and here politics is playing an Important Role in closing the gap in terms of undervaluation. In asia we have been reinforcing the view on hong kong liquidity. Our remaining strategy is on china. Is that all down to this Recovery Fund and what that presents in terms of a more united cents in europe and the eu itself . A relationship where we could get a move toward fiscal unity . Frank yes. Looking at europe since the it has strongly underperformed is a u. S. Equity and has some political element behind it. When youyou have you finds point amounts in the euro were the it seems a month ago you can become more bullish on europe including the euro. This is the move we had been advocating for the last three months. Get confused on the rebound, talking about the economics, but if we get a , what is leftn for central governments and Central Banks to do here . This is clearly Downside Risk on global equities. A second wave is not something priced in at the moment. Happen, thethis with this condition and more policy ability will be the one to outperform. When we build our global portfolio, one of the reasons for the strategy stance on china is because of the ability to have further stimulus. What are you looking at in terms of the current earnings season, and what you expected to return to prepandemic levels . This time around you have downgraded earnings that are both severe and rapid. , you could say the worst of the earnings downgrade for this year is behind us. You could see a Second Quarter that will be better than the first quarter. Lowexpectation is extremely so it would be rather easy to be. Easy to beat. To look at the longer term in the different shape of the recovery. If you do not have a vshaped recovery or something that looks earningsa u or l, then beyond 2021 will be very much threatened. See a case like 2008 for earnings to come back to the precrisis levels. This is not our main scenario. At this juncture, we should take that into account. Tom you prefer Greater China to south asia. What is the rationale behind the call . To be furtherlity in case of need. The way the crisis has been managed. As an equity analyst, the most important thing i am looking at whatngs and how they they will have in the next two years. Crisis whereredit this is something that has been accelerated by the crisis. At the moment valuations are becoming more attractive, less demanding. I think we need to get more signs that we can get Real Recovery in the economy before getting back. Time,hank you for your frank benzimra, head of asia equity strategy, societe generale. Lets bring you the first word news with karina mitchell. Has maderesident trump a turn on the coronavirus, saying wearing a mask is a desirable option. He has resisted covering his face for months, saying he did not want to give the media an easy target. He says now it is patriotic to wear a mask in public. He repeated the message during his first Daily Briefing in months, which will now continue. When are asking everybody youre not able to socially distance, wear our mask. Whether you like it or not, they have an impact, and we need everything we can get. Karina tokyo is asking people to stay home is coronavirus levels rise again. The capital was to celebrate the opening of the olympic games, but infection rates have spiked in recent days. More than 1600 new cases in the past week. Hospitalizations up fivefold. Tokyo authorities in governor abe disagree. Hong kong is facing a third wave of the pandemic with fears that the infrastructure will be overwhelmed. Cityovernment says the will go into a new lockdown is false, calling the reports fake news and rumors. U. S. Lawmakers are moving toward a new stimulus package, although the parties remain a part on the total. Republicans says are in disarray over their delaying tactics, and their package is not close to what is needed. Republicans and democrats are ed on President Trumps call for a payroll tax cut. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Ahead, the big business of gender equality in 4 workplace, it could add trillion to economies within 10 years. Against u. S. Rhetoric china gets louder after two hackers are accused of working for beijing to steal vaccine secrets. Stay with us for the details. This is bloomberg. Tom the u. S. Is accusing two chinese hackers working for beijing to steal Coronavirus Research from western companies. This is the second time and a week a foreign nation has been singled out for vaccine related hacking. China is providing a safe haven for criminal hackers who in this case are hacking for their own personal gain but willing to help the state and oncall to do so. Seniorr International Editor joins us. How does this play into the tensions that already exist between beijing and washington . Jodi obviously in a diamond like this from the Justice Department stands to further increase tensions. We have had in the last few tensions between the u. S. And china over their treatment of hong kong, over the National Security law, origins of the covid pandemic, claims in the South China Sea in the future of 5g technology. Property theft has been a long source of strains between the countries, and this plays into that. It is unclear whether any information was actually hacked successfully in stealing Coronavirus Research. They declined to say that, but said the u. S. Is concerned attacks on Companies Working research could slow down their efforts. That plays into the largest security concern. Security concerns are one thing, but how might this affect research into a vaccine or a cure for coronavirus . ,odi that is a real concern and these systems were indeed hacked, why were they hacked, and what is done with that research . We know there is a number of efforts going on in various withries to try to come up a vaccine. That has been a concern among researchers and people in the medical community that this not be erased. It is an almost arms race between countries. Mike pompeo had some praise for britains stance on china, what was the message, and what plans is he discussing with his allies in the u. K. . Jodi mike pompeo was in london saying he wants to build a coalition that understands the threat posed by china. U. K. Talks with the foreign secretary, it was suggested there may be further , that they may have a coalition. The u. S. Has been pressuring the u. K. On huawei technology. Those were words of praise from the secretary of state. Rishaad thank you so much, Jodi Schneider. Precious metals are shining with gold and silver hitting prices we have not seen for years. How to play them . This is bloomberg. Rishaad Precious Metals and a multiyear high. Concerns over the pandemic and the outlook of further economic stimulus feels demands for haven assets. We were told how to play gold. With an etf you do not need to be inconvenienced about owning the bullion and storing and moving it place to place. Bullion is great, but how do you store it, hide it under a mattress . As an etf, it is an instrument to provide convenience by not dealing with the material. That seems to be helping silver as well. How much of the industrial demand rebound optimism is playing into that as well . It plays to it. Silver is the poor mans gold, and element that goes into the gold market, the depreciation of the dollar against other currencies, continued world of ratesisk and low interest. In addition to that you have the , andtrial use of silver that boost should change the relationship ring silver and gold. In terms of looking at the next year or two, a combination of factors, the underlying factors boosting gold and silver, and industrial factors that should change the ratio between silver and gold. Unprecedentedhe year that is 2020, do we look at gold as a commodity or currency . What do you advise investors to shift their perspective into . Of gettingthought gold as a commodity, it is not consumable, you never really lose the store of gold in the world. It is like a currency or an asset that fluctuates like other things. This is a moment where gold really works in terms of the yield you can get from it based on all the other things that have happened in the global economy. You do not have to worry about deterioration, consumption. It is unlike other commodities which gives you a sense of where the world is going rather than a snapshot. Is the momentum and bullishness we are seeing for gold unprecedented to you or comparable to any other periods of financial history in your experience . It is comparable to other periods. If you look at the price of gold and the currencies other than the u. S. Dollar, it has never been clear than currently. If you look at the nature of the world we are living in, we are going through a critical environment that can be compared to something far worse than the greek financial crisis when gold etfs came into being in a big way for investors. It is on the dangerous precipice of being like the Great Depression 19281932. There is something unique about it. We are seeing the play in gold in 20082009, the play in gold in 2016. Risk in the of , this is something nobody has seen. On preciousullish metals. What would make you change your . Tance if at all what elements would you take into account . The biggest would be if there were inflation rising in the World Economy somewhere, you can think about inflation in terms of food and fuel we have in the u. S. Have adverse weather conditions. If you look at the main food staples, soybeans, wheat, corn, they look like they could be inflationary, and with dollar depreciation, inflation across the country. Similarly with energy. Reflation could be a damper, a headwind. Ed Citigroup Global head, morse. Carrier latest business flash headlines, United Airlines reported a record quarterly loss of 2. 6 billion for the three thehs through june, and coronavirus slammed air travel. Revenue plunged 90 . 6000 workers have agreed to leave if the Company Looks to cut costs. United describes this is the worst time in its 90 year history. Snapchat slumped in late trade. 17 asthrough june rose uses relied on the app to spread information about the coronavirus. Active daily numbers of 238 million were one million behind their own forecast. Chinese ride hailer is preparing for a listing in hong kong. The move is driven by investors looking to cash out. It would be a Major Development for a company some call the uber of china whose ceo says is cashrich and has no need to go public. The last fundraising drive value the company at about 50 billion. Amazon set a new lobbing record in the Second Quarter amid rising antitrust scrutiny in washington. June,nt 4. 4 million in up 10 from the same time a year for theslightly higher march quarter. Amazon another big tech rivals are under investigation for abusing power to stifle competition as the coronavirus boosts demand. Look at markets as we head into the lunch break in japan. The nikkei under a bit of pressure at the moment. 0. 25 moved to the downside. We have preparations for the. Lympics at the forefront here the chief cabinet secretary has been talking, saying they are making the utmost effort for the olympics to take place next year. Pmis inmanufacturing falling activity easing for a rebound on the service side of things. That signals a broadbased recovery is struggling to gain traction in the country. Equities under pressure elsewhere, a bit of a mixed bag. This is bloomberg. Rishaad 10 29 a. M. In hong kong. In beijing. In 10 29 p. M. If you are watching new york. We have the first word headlines. New york state adding more reason to the quarantine list as virus cases climb across the nation. Governor cuomo says travelers in 31 states face mandatory quarantine entering the state. It is based on a sevenday day rolling average of cases. 704 new yorkers were hospitalized on tuesday. A new survey says casino operators in macau are likely to post a combined loss of more than 1 billion in the Second Quarter. The Six Companies will have negative numbers when they report soon with mgm china leading the decline. Macau has seen consumer revenue collapsed since april as the coronavirus closed borders and closed travel. Elon musk has o unlocked the moonshot bonus. The market value has risen above 150 billion and that means he can exercise additional stock options. The price of 350 means he would pocket more than 2 billion if he can sell the shares now. He unlocked a first award in may when tesla top 100 billion. The Central Bank Leadership as the country grapples with its worst ever economic crisis. Names have not been disclosed but one is a perspective thailand official and another from outside. The takeover on the first of october. Benchmarkut its ban rates to half of 1 . Tom lets check in on the markets now. China has rebounded from early losses in the session. Now looking Pretty Healthy in terms of the gains. Msci 300 posting gains. Financials, health care and Consumer Discretionary seem to be outstripping the other sectors. In terms of whats happening in australia, posting losses of over 1 . They are still concerned in terms of the virus in the state of victoria. We will get the budget on thursday and the deficit will be in focus. The msci pacific has seen gains. Hong kong is looking relatively healthy, up 4 10 of 1 . Didi may be looking to list in hong kong. Move along to the next board, the currencies is in focus as is gold which is surging again. Rallying close to the 1900 an ounce level which does not look too far off. The yuan has strengthened in the session. Todays session is up. Yuan. Or the offshore the euro is up as the stimulus plan has been agreed by europes leaders. 750 billion euros in additional stimulus. Rish . Rishaad to another stimulus plan which is facing loggerheads. Republican senators have hashed out steps for their proposed plan was dropped one of President Trumps key goals and democrats say it falls shy of what needs to be done. Kathleen hays is here with whats on the table so far. What hope is there of a quick agreement . A idea of the proposal as well. Kathleen yeah, well, it looks like its not going to be a quick conclusion. Notrepublicans are just ready for stimulus talks yet for a couple of reasons. Now, it is not that they dont agree on the basics. They have agreed on extending stimulus checks, extending Unemployment Benefits and providing more money for virus testing, for developing vaccines. Congressepublicans in all seem to agree on one important thing, and that is President Trumps proposed payroll tax cut is not a good idea. They think people need to get it directly in their pockets. That is one big reason why treasury secretary mnuchin and mark meadows, the chief of staff, who met with republicans in the morning and then democrats of the afternoon, dialing back hopes there could be a deal on the table agreed by democrats and republicans by the end of next week. The democrats, their leadership is saying we are ready to go. Weve got a great deal. It is the republicans lack of consensus that is delaying everything. Nancy pelosi giving a little dig saying the delay is there diss disarray. President trump says he sees a lot of progress. Both sides want to get of the of done. That is true but Mitch Mcconnell, who puts the gop plan together to present the democrats, says he does not see the bill passing, getting agreed on in two weeks either. One of the biggest reasons is republicans want a 1 trillion stimulus plan. Democrats have already proposed a 3. 5 trillion plan. Many of them saying more is needed. It is a pretty big bridge across at this point. Tom what are some of the key differences that have to be hammered out between the democrats and the republicans . How long is it expected to take . Kathleen lets talk about how long is it going to take. Everybody wants to get this done. The white house and Congress Want to get it done before lawmakers go out on their scheduled august break. If they have to wait until september, getting closer to the election. Another thing, you will have allowed benefits to runup. The 600 a week in employment checks and at the rest of the month. President trump has said he may not sign a bill that does not have the payroll tax cut. Steve mnuchin said today he does not see any redlines, he sees some flexibility on this. I think that remains to be seen. Republicans, one thing they want to do is cut the 600 a week Unemployment Benefits because they think they are too high for some people. They wont go back to work, it is a disincentive. Some democrats probably disagree. Some things Mitch Mcconnell wants, he wants the Small Business payments to be more targeted to those hardest hit by the pandemic. In some cases, democrats are more in favor of money for Small Businesses, making it easier for them to get it. Mcconnell is in favor of child care assistance, more funding for vaccines, aiding schools reopening. You get the feeling there is probably some scope for agreement. Probably one of the biggest differences is just how much democrats want to spend. How many more groups they want to extend this to. And republicans are looking to the deficit and said we want to give a lot more money, but they are looking down the road to say how will we pay this back . Allowed to happen. You will see how people are saying on both sides, two weeks would be desirable, but maybe thats not going to happen. Tom Global Economics and policy editor kathleen hays, thank you very much. Coming up, Global Management consultant tells us how asia could add over 4 trillion to ti economic outpt in a next decade by advancing gender equality in the workplace. We go over that research with Kweilin Ellingrud next. This is bloomberg. Tom welcome back. It is time for the weekly bloomberg equality segment where we discuss issues of race, ethnicity, gender, income and sexual orientation, and how these disparities affect people, businesses and economies. Ellingrud whoilin instigated research into the Economic Impact of gender inequality in nearly 100 countries. Thank you for joining us. You have a particular focus on asia in this research. Pretty stunning numbers you dog up and came out with as an accent of incentive to encourage businesses and governments to include in greater gender equality. What dividends could there be if we get to a place of gender equality is put in place . Kweilin it is a pretty big opportunity. It is worth 4. 3 trillion in asia if women were to participate more equally to men in the work place. That is not fully quality. That is actually what we call a best in the region scenario. We have looked historically over the last 10 years at every single region in the country that has made the most improvement in that region over the last 10 years. Then, we matched that rate of improvement. In asia, that would be improving gender equality at the rate of singapore. In western europe, improving at the rate of spain. In let america, improving at the rate of argentina. When you do that, that is when asia would achieve that 4. 3 trillion. About 60 of it is from greater workforce participation from women. More women getting into the formal workplace. About 20 of it is from greater parttime or better parttime versus fulltime. Around the world, women have the majority of fulltime jobs and the minority. In the last 20 , is through sector mix. Men tend to be concentrated in higher average output and women in lower average output. If that were more to equalize, that would drive the last 20 . Thats 12 of gdp over the course of 10 years. It is the equivalent of adding the economies of germany and austria to asia gdp. It is a significant deal. Tom just going to interrupt our conversation to bring a breaking line on the terminal. Breaking news that the state of victoria industrial is reporting now a Record Number of virus cases. The number is 484 new virus cases in the state of victoria in australia. That is a new record for the state. Obviously, the concern around the upper it in the state of victoria, particularly melbourne remain squarely in focus for australian policymakers. Lets switch it back to this conversation about gender equality. To what extent does it break down across the region. I guess the key question is, what are the policy prescriptions you would advise policymakers and businesses to consider to get back to the point where we are getting gender equality in the workplace . Kweilin yeah, so, across the region, it varies quite a bit from country to country. Let me put asia and a broader global perspective as we did do this Research Across 100 Different Countries. Globally, we created a simple number. What we call a gender parity score. A simple number between zero and one. 0 being perfect inequality and one being perfect equality between genders. If you look around the world, australia is at a 71 or so. 76 in western europe and north america. Thatave latin america in range. Asia is about 58. Right in line with Subsaharan Africa and a little bit ahead of the middle east. But, asia at 58 out of 100 in this gender parity score. Within asia, theres quite a bit of countries diversity in terms of gender parity or gender equality in work and in society. You have countries at their most equal side of that range with the philippines at a 71 out of 100. Vietnam at about 70. Singapore at 68. And china at 66. Those would be the top four performing countries on gender equality, of this gender parity score. On the other end of the spectrum, you got pakistan at 40. Bangladesh at 48. India at 50. Nepal at 52. And malaysia, where my mother is from, 54. That would be the other end of the spectrum. Even within countries, theres quite a bit of diversity in terms of some provinces and regions within countries being at pretty advanced global averages and others at quite low numbers. A lot of diversity in scores than india as well as within indonesia in particular. Tom it is not just a question of jobs, it is a question of the quality sorry, let me get you to carry on because i know as to about prescription so answer that one. Sorry for interrupting. Kweilin not at all. I think policy prescriptions i think the question is how do you focus on the key areas at the pinpoints in the workforce and the Talent Pipeline . What we see in asia and particular in the workplace is the most senior levels of leadership in the workplace as well as at the board level. That is not to say there are not other challenges. In secondary and Tertiary Education in india and pakistan, there are gender gaps. The most consistent gap that we see are at the leadership level across asian countries. For example, in japan, 1 of senior managers are women and 3 are held by women. In india come about the same range. 4 of Senior Management roles and 11 . China at about 11 of senior manager roles and 10 of board seats. Those would be at the one end of the spectrum, the low end of representation. But the other end of the spectrum within asia, youve got australia at one in five women in leadership roles. About 18 at the board level. Singapore at one in four women, one in four leaders at the Senior Management role are women but only a percent of board seats. Across the board, even for countries that are relatively well represented within asia, still a long way to go in terms of senior women in leadership roles and board seats across asia. If i were to target the policy prescriptions, it would be at those levels. We have seen examples around the world ranging from quotas that have been successful in a number of countries as well as more aspirational targets, partnerships between government and companies. Has been a there collaboration between the German Government and many of the large employers to share best practices and raise the level of diversity across the board and many of those companies. Me, they were talking policy prescriptions. It will differ from country to country. Get ander solutions to empower women and get them into these jobs . Kweilin if i look across Different Countries and the solutions that have been created, i think they have a couple of things in common. One, they focus clearly on a particular pinpoint. Whether it is women and Senior Leadership positions, whether it is women in the formal work economy. Work in, 60 of women formal distance agriculture. A solution in india targeted to those women would be very important. Across the board, what we have seen more recently is there has been a challenge particularly with covid19. You were just describing some of the recordbreaking numbers in victoria. We have seen covid19 affect women and men across the globe, but particularly women partly because they do much more unpaid care work than men. Women on average in asia and globally to about three times as much unpaid care work cooking, cleaning, taking care of kids as men. In some countries in asia, that is as much as 10 to one. That, we have actually found that jobs for women in this covid19 era are actually 1. 8 times as vulnerable as the jobs of men. If we are not careful, i think some of the recent gains that have been inconsistent but there have been some gains in gender equality over the past few years across these countries will be lost because we will make negative Progress Given the pressures of covid19 in some countries with kids not going to school and additional care work challenges. It is a difficult time in terms of work and unpaid care work for women and men. Rishaad absolute pleasure having you on the program. Kweilin ellingrud joining us. Ok, lets switch over to what we have coming up. Seven deaths in a population of 23 million. Taiwan has earned Global Recognition for its efforts to contain the coronavirus. In a moment, we will hear how big data played a key role in that fight. We have our interview with s digital minister audrey tang, next. Rishaad parts of the world grapple with the second and third waves of covid19 infections, taiwan has been praised for its handling of the pandemic. The government set up big testing analytics and Contact Tracing to fight the virus. Taiwans digital minister audrey with how they did it and without invading privacy. Atrey what we are looking is we aare challenging Civil Society to find more ways in order to make the Contact Tracing work. For example, a collaboration borne out of the taiwanu. S. Joint statements, one of the winners specifically developed an app that persons can install in order to track their temperatures and symptoms. It is as a way to protect the privacy of the person and their friend and family because memories are not reliable and may be worth more than the medical officer requires. When its working strictly speaking for the individual and their families and community benefits, it has much more rate of being adopted. People will be wary of the idea. How is taiwan helping to protect and secure its data . Whether it is data on its citizens or other data it might have at the lower level . What are the steps taiwan is taking towards this . Audrey basically, our idea is that social sector needs to mint the data. The ownership needs to be firmly rested on Civil Society using open source code, algorithms. Making sure people can collaborate on this collaborative entirely managed by open community. Including the quality measurements that is thousands of boxes. Primary school teachers, anyone who wants to buy those, they can pay less than 100. Everyone has brought in them as human rights. 5g is less than 16 a month. To thee can contribute sensing of the data around whether air quality, around water quality. When the data sources are curated by people, we talk about competence and the ability of literacy which is the consumer of data. When everyone is a producer, they will have the checks and balances in a collaborative fashion rather than relying on a single point of truth whether it is in a capitalist regime or the state. About things like cyberattack and cybersecurity . How does taiwan protect its information and data from that . That is an ongoing problem whether it is at the state level or lower levels with accounts being hacked. Also accusations that there are places that can try to hack into virus. Audrey one of the most important ideas and cybersecurity is the idea of advanced threat hunting, meaning that you hire white hat hackers or white hat hackers volunteer to work for you, with you to disclose those vulnerabilities and give you a chance to think in a way how attackers would think in a kind of real drill without the malicious acts. For the major public digital services, for example, the owndriving car or our exchange system, and each of those cases for six month or so, we invite a white hat hacker so that they can try and hack into the system. People are actually deployed in a wider population. If they discover those switches, they are like badges of honor, we make sure we pay them well and treat them well. You are actually having a very lucrative career. You dont have to do exercises because there are real cases every hour and you get to meet with the president and the minister all the time so you get treated very well like a National Hero so you want go to the dark side. Tom that was Taiwan Digital minister audrey tang. Taiwans ministry of Foreign Affairs saying theyre concerned china will target taiwan after the Hong Kong Security law. Taiwan is in talks with the u. S. On security related issues. That is from taiwans minister of corn affairs. We have more debuts and they are red hot once again. We have seen chinas listings at a 10 year high. They have raised about 50 billion so far this year. Look at that. Microelectronics up 350 . Just incredible. Huge appetite for these new tech listings. Some of those in the pharmaceutical space. We can see whats happening in the Broader Markets. These have our trading debuts again. Incredible gains. Lets toss it back to rish now. Plenty more coming up ahead including the taiwan story and plenty more on the markets. Stay with us. This is bloomberg. Hey, kids welcome to camp tonsafun on xfinity its summer camp, but in your living room. Learn how to draw with a minions expert. How to build an indoor Obstacle Course plus. Whatever shes doing. And me, jade cattapreta. The host of es the soup camp tonsafun. Its like summer camp, but minus the poison ivy. Unless you own poison ivy. In which case, why . Just say summer camp into your xfinity voice remote to join. It is almost 11 a. M. In the lion city of hong kong. Welcome to Bloomberg Markets asia. Rishaad this is a look at the top stories. The United States and United Kingdom him to get more action against china on human rights. Mike pompeo says washington is in for a long struggle with beijing. Haslinda global virus infections approach 15 million as o hong kong faces the third wave. The government says speculation of a new lockdown is fake news. Rishaad in the worlds top food delivery app turns to ai and self driving cars as demand surges. We hear from them this hour. Haslinda we will do a check on asian markets, pretty mixed after the muted session on wall street overnight. The msci index up for a fourth straight day. About 1 from wiping out its loss for the year. The shanghai composite index expanding its gains for today and for the year, up or than 2 right now. Of u. S. Concerns tensions. Investors brushing that off. The u. S. Accusing chinese attackers of stealing secrets from weapon companies and 11 nations. Intellectual property has long been a source of strain between the two sides. The hang seng up 4 10 of 1 . On hongeeping an eye Kong Exchange shares which jumped as much as 9. 5 yesterday. Today, they are extending gains by about 1 10 of 1 . Jci, well, pretty flat right now. 51. 18. Think of indonesia says its policies remain prudent. No changes the strategy after the rate cut last week. Take a look at where we are in terms of the currencies. Euro stronger on the back of an eu 750 billion euros stimulus deal. The currency near its strongest since early 2019, now up almost 3 this year. Some say the rally is here to stay. The yuan also getting a left from inflows in china stock market. Further dollaryuan declines. Bloomberg intelligence say the yuan can climb beyond the resistance level of 6. 9 before the november election. Gold, 1858. Inching closer to 1900. Gold nearing a record. Silver at the highest in almost seven years. Precious metals soaring on the back of concerns of the virus amid the outlook for the Global Economic stimulus. Falling longterm u. S. Yields also boosting demand. Silver, 22. 24. Take a look at where we are in terms of gold. Expanding gains. Virgin get 70 of its revenue from gold production. Perhaps this is the beginning of a longawaited inflection inflation play. Rishaad lets have a look at the prospects for the Indian Trading day. We are about 43 minutes away from the indians futures. 2 10 of 1 of the upside. We would be building on some of the gains we saw in the tuesday session. Looking at the work we would be having today, indian equity markets could be up for six straight session if we do move up. Mixed. These global cues got equities in the region turning more positive after a mixed start to the session. Going to be looking at reaction for Companies Like unilever. Along iwwith other broader markt stocks. Earnings reported by them, seeing action as well to what they had to say. Looking elsewhere, the aussie dollar has been on an absolute tear. Strong. Ad the thai opening up 2 10 of 1 to the upside. Speculation about who the new Central Bank Governor will be there at the bank of thailand. That is something we are watching out for as well. That is where we are currently with regard to that. Haslinda, it is looking like a positive start for india and bangkok. Story forgreen equities in thailand. Haslinda tiit is a happy hump day. Lets get the first word headlines. U. S. Lawmakers edging towards a new virus stimulus package. Although the two parties remain a part of the total. Speaker pelosi says the republicans are in disarray over there delaying tactics as the gops trillion dollar package is not close to what is needed. Republicans and democrats are divided on President Trumps calls for a payroll tax cut to be included in the plan. A new Bloomberg Survey says casino operators in macau are likely to posed a combined loss of more than 1 billion in the Second Quarter. The Six Companies will have negative numbers when the y soon with mgm and nbm china leading the decline. Casino revenue collapsed as the coronavirus closed waters and slashed travel. Thailand has narrowed the race for the leadership of softbank with two leaders. One is set to be the bank of thailand official and the other coming from outside. The new governor will take over on october 1. The bank has cut its benchmark rate three times this year to a record low of. 5 . Rishaad asian stocks, we are seeing a move to the other side but a bit muted. That is about the timing of the fresh u. S. Stimulus program. Investors looking for the next catalyst to take the Broader Market updated our next guest believes etfs could be an option for investors looking to reposition their equity amid market volatility. Lets bring in susan chen, head of ishares asiapacific at blackrock. Thank you for joining us. This etfn idea of what market is like in asia and the potential it does have. Good morning, thank you for having me. Etfs are becoming an integral tool to implement active decisions and hopefully by all types of investors. This part ofin the world continues to accelerate. And in particular, in fixed income and most recently we see more demand in sustainability. Rishaad ok, its interesting because etfs are regarded as a tool for passive investors but you disagree. Tell us why. Susan all investing decisions are active decisions. Whether a manager chooses an exposure that is an index based etf or they choose to do stockpicking, it is active. We are seeing more and more investors and Money Managers use etfs as a component in their portfolio. How does the sort of robinhood trading now dovetail into your business . Commission free equity trading and the like affect whats going on with the Exchange Traded funds side of things. Susan that is one element. There ise to the etf, some benefits to etf. It is not impacted. It continues to trade like an equity exposure but with all the benefits of a fund. Susan, we talk about how management takes an active role in etfs. We are beginning to see traditional funds launching etfs that by the asset without the index. Do you see this gaining momentum . Do you see active management shaping the etf landscape . Susan that is a great question. And what weetf categorize as etfs are benchmarks to indices. We are very much of the view that we follow the index rules. There are some managers that are taking the application of the etf and lodging other types of exposures through that lens. As long as the descriptions are transparent and investors see what they are investing in, i think that is fine. And the categorization by each of the exchanges and regulators are clear to that. There will be a diverse range of what we call the Exchange Traded products, as opposed to Exchange Traded funds. Uplinda i want to bring this chart. It shows how china, the rally in china has pretty much helped asia outperform the u. S. But what we also saw last year was a temporary suspension of a china etf. It had dropped by the daily limit of 10 , after 60 this month. What risks do you see in that . Susan so, i think when you look at these types of movements, the suspensions are aligned to the exchange rules. Like any share that would trade down, it would stop trading. Then, it would resume trading based on the exchange rules. We dont see any issues here. I think the one thing to remember is that the etfs are offering liquidity and transparency in extreme market volatility for all investors around the globe. If china worries you at this point in time, how do you best capture the asia focus story . What we have seen is investors are incredibly interested in investing in china today. In particular in fixed income. China bonds as a category has been in high demand with its yield around 2 and the global yield close to zero today. We are seeing this as an asset class in demand and growth. So, i would say not to worry as the investment remains incredibly attractive. Ask ad just w we question to you which is what would it take the etf to keep on growing for the next couple of decades thereabouts . What does it need to take the market further in this part of the world . I think one of the things is regulatory changes. What are you concerned about in terms of what regulators in various jurisdictions are doing . Susan for further growth, what we see is that as long as regulators continue on the path of asking for transparency, continue on the path of focusing on liquidity so that investors have the option for them to invest, we think this is all positive. And like the markets in the west, when regulators focus on increased transparency and liquidity, it has been a tremendous tailwind for the growth of etf markets. We see this is a huge opportunity across the asiapacific. This fierceesnt cup addition within the space . Blackrock cut its biggest etf last month. The first zero fee bond fund. What is the future for zero fee funds Going Forward . What is your take on that . Really neveris zero fee funds. There always costs in some regard. Category ofave a lowcost etfs which are our core exposures. However, that as a percentage of our universe. We still have a large universe of what we call our precision attruments and those trade respectively higher fees than are lowcost family. I think there is going to be hurdles. Investors are looking at return and their riskadjusted return and how that is versus cost as opposed to absolute cost. We are seeing that more and more today than ever as returns and the search for yields becomes more relentless than ever as we see rates are going to be remaining low for the nearterm. Haslinda susan, thank you for your insights. Susan chan from blackrock. Still ahead, chinese mainland professionals in hong kong are caught off guard by new tax rules with some facing is the pike. Forill speak with feng ao advice on chinese financial firms. Rishaad washington accuses two hackers of working for beijing and looking to forge a coalition with u. K. To resist chinese influence. This is bloomberg. Haslinda welcome back. Heir says itact expects daily food orders to grow three to four full over the next five years. It is already the worlds biggest Meal Delivery business. Taking about 30 million orders every day. In an exclusive interview with bloomberg, the chief scientist told us the company is counting on a. I. To help cope with the surgeon business surge in business. We are working on some new th ings. We are working on autonomous delivery vehicles so we can help much more delivery to deliver more orders to the consumer. You can see the selfdriving vehicles can deliver food. Using technology to augment reality. The user can take a picture to and reuse the recognition system knows where this is. Can see on the screen more steps and what the other consumers recently saw and what is the best. What proportion of the delivery side of business would you expect to be fully automated . And in what kind of timeframe . Gradually gete into our business. Autonomous delivery still has a lot of technical and policy challenges. But we are testing baton of his delivery in beijing right now autonomous delivery in beijing right now. We have a few vehicles regularly. In my opinion, we should have really Mature Technology in three to five years. And then you will see a lot of delivery vehicles all around the city or maybe all around the country. Is the end goal for automation to replace the delivery drivers that you employ or work alongside those delivery drivers . Definitely not. The goal of Autonomous Vehicles is to help the couriers to deliver more food. Demand of we saw the the service is growing very fast in china. Now, we have about 13 million orders every day. But, we are expecting this inber to three or four times the next five years. Automaticot have any advantage, we will have three or four times couriers in the next five years. Were using selfdriving vehicles to help our couriers to deliver more food. And also, we believe in the future, it will be in the form of combined delivery so some couriers will take care the last 100 meters. Wille public streets, we use a vehicle to do deliveries. Is a lot of debate within the u. S. Now about data privacy, Data Security when it comes to china. Also, chinas Artificial Intelligence ambitions. Companies are in focus right now. Justified set of concerns within the u. S. . Or is this a misunderstanding . I think it is a misunderstanding. A lot of we have internet companies. If we do a. I. Themes, we definitely need to use data to understand the physical world. I leave everything internet takes privacyna very seriously. They protect the user data very carefully. Publishple, we do those are but statistics data, not individual user data. We take individual user data very seriously. Data isers of confidential. Even if i want to check an individual users information, i cannot do that. The chief scientist therefore meituan dianping. Going to look at the tensions between beijing and washington. The war of worldds getting louder. This is bloomberg. Rishaad the United States is accusing a few chinese hackers of working for beijing to steal data, including Coronavirus Research from western companies. It is the second time in a week a foreign power has been singled out for vaccine related hacking. China is providing a safe haven for criminal hackers who, as in this case, are packing in part for their own personal gain, but willing to help the state and on call to do so. Rishaad our senior International Editor Jodi Schneider joins us. What are the implications of this regarding the escalating tensions between the two countries here . Expecteds is certainly to raise the tensions further. The u. S. Accusing the two men of being assisted by Chinas Ministry of state security and the defense contractors and Weapons Systems were hacked along with rhett medical research for these are certainly serious charges. Head of the Justice Departments National Securities division says these are part of the countries that have come to rob, replicate and replace strategy for technological development. He declined to say whether the hackers were actually successful in stealing Coronavirus Research , but obviously the u. S. Is concerned it because slowdown their efforts or result in data being manipulated. Jodi, sec. Of had praise for britain and china. Discussed are being with the leaders there . Jodi the secretary of state did praise britain for its tougher stance on china as they met there. There was even talk about having a more coordinated action against beijing. This is mike pompeo saying he wants to build a coalition that understands the threat posed by with u. K. Foreign sectary. There was suggestion there could be further action at the group of seven level. This follows some actions by the u. K. Against china. For the been to huawei fifth Generation Wireless Networks and recently introduced a next tradition policy with hong kong. We are seeing tensions between the u. S. And u. K. Rise with china and now the strategy against china and we will see where that goes in the future. They are able to have this coalition. Thank you very much for that. Senior editor, Jodi Schneider. We head towards the chine lunch break. We have seen a bit of strength. 1. 4 the shanghai composite. Lets take a look at this chart because what we have is this rally pushing the stocks and valuations up. We have not seen the pe multiples up for a few years. Since 2015, there about. We have had a lot of debuts as well take place in china and they are going great. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. 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Streamlining a framework for issuers seeking a secondary listening. This is a Significant Development fo which suffered some delistings in the past year. It saw its stock price stumble in may after the msci announced it would move licensing for deridde derivative products. This development is good for the country. Sti down 8 10 of 1 . Rishaad taking a look at the markets. Hang seng is just about flat. Vacillating now between the gain line. Nikkei coming on stream with losses, one third of 1 . Only nine seconds of trade. The aussie dollar going great. The story of the day has to be silver. It was up over 10 at one stage. And people looking for haven submit all this uncertainty as to what happens with the Global Pandemic and economic stimulus packages around the world. Stimulus packages on the table, nothing able to be decided on in congress. And the eu, some resolution took place 24 hours ago but the devils remain in the details. Lets move on and have a look at the first word headlines. President trump making a 180 degree turn on the coronavirus, now saying the wearing of masks is a desirable option. He has resisted covering his face for months, saying he didnt want to give the Mainstream Media an easy target. He now says that is patrio tic to wear a mask in office. He made the statement in his address. Pres. Trump when you were not able to socially distance, wear a mask. Whether you like the mask or not, they have an impact. They will have an effect and we need everything we can get. The bank of australia has suffered its worst virus since the virus begin. 484 news cases from the state of victoria. The capital melbourne with the city of about 5 Million People has been in lockdown since the we get. Earlier this week, the National Government has promised another 450 billion towards a Wage Subsidy Program as it fights the pandemic. Tokyo asking people to stay at home this long weekend as coronavirus levels rise once more. The capital had been celebrating the opening of the olympics, but it has seem infection rates spike. More than 1600 new cases have been reported in the past week with hospitalizations up almost fivefold. Tokyo authorities and the abe disagree over the severity of the surge. Hong kong facing its third wave of the pandemic. The medical infrastructure may be overwhelmed. Many of uncertain prominence. The city will go into a new lockdown is false, calling the reports fake news and rumor. Hong kong had been seen as a model of how to control the coronavirus. Staying with the same theme. New york state adding more regions to the quarantine list as virus numbers climb across the country. Governor cuomo said travelers from 31 states face mandatory isolation as they enter new york and more areas may be added to the list. The warning is based on a seven day rolling average with positive test in excess of 10 . Over 700 new yorkers were hospitalized on tuesday. We are counting down to the start of the session in india. We are looking at a mildly positive start to the trading day there. Companies that come out with their earnings. Stocksbank, expect those to be reacting. Looking at the nifty with a degree of price discovery, up 2 10 of 1 . The indian open is about 12 minutes away from now. That is a look at what is going on market wise and this is bloomberg. Haslinda closed amusement parks, movie theaters and sports cocacola feels a different kind of impact. The company sees an improvement after navigating the Second Quarter. We spoke with coo james quincy about changes amid the pandemic. There is so much ahead of us. Its back to the old phrase, the known unknowns. Whether it is the virus itself or the economic aftermath and reopening, and government support, whether it be employment or furloughed. It is difficult to see the shape of the recovery, how quick or how slow. Not all countries will be the same. What we are focused on is accelerating implementation of our strategy. Staying focused and adaptable so that we can respond as things go quicker or slower Going Forward. So that we can come out a Stronger Company when this ends. What does that mean can greatly . Where are you innovating . Are you going to try to sell to consumers at home more if we are going to be in this lock in, lockdown . And we are not sure if restaurants willfully opened in the next 12 months . James we are going to do a few things. The first thing, we will accelerate the paring down of our volume. We have been driving getting out rates at the top and. Withf that experimentation things that do not work, we will that we can focus resources on the best brands, the best categories and really strengthen the portfolio to help us come out of this. We are accelerating in things we know well. We are investing where we know there is growth. Whether that be in the or unable to take away from restaurants, selling through the window of a drivethru. Aspectse channels and and different channels that are growing. Here are categories coke zero sugar is still growing today. Where we see things are not working normally then we faster would but we can invest behind the challenge that is growing. We will be growing long after this crisis has ended. Pepsi has gotten into the energy drink sector, so competing with you on that. Of dont have the same type snack business like that. How do you fend off competition and or try to get market share in another area . James we have a few strategies. We are in the beverage business. We think that will be the epicenter of opportunities for a long time to come. In the end, we have a great brand. That is the most likely place we will have. What we are focused on in the shortterm is winning where the world is. Winning in the channels that are open. We cannot have a disproportionately higher share in the channel. Open, thatannels are is when shared daytoday and during the crisis so when it ends, we will look stronger in those channels and the channels that are doing better will be in a much stronger position Going Forward. We gain share in the athome channel, in the Second Quarter. That will be our focus particular for the next few quarters. We want to win the reopening. Customerstypes of that is one big categorization. Helping them reopen as effectively as possible. It will put them in the best position to thrive in the future. Ceoinda that was cocacola james quincy. Chinese professionals in hong kong are considering moving back home as declared the 2019 global. Employees of chinas fles ar faced with a tax rate of 45 , compared to 50 in hong kong. Onlyng revised tax rules, recently disclosed details on how to comply. It is still unclear how chinese authorities will apply the new tax rules in hong kong. Ao, he us is feng advises chinese banks, insurers and trusts on laws. Feng ao, thank you for joining us. Im wondering what do you make of the timing of this new tax rule . Do you think it has to do with china trying to prop up its economy . Feng yes, thank you for your interview. This is a very hot topic. It is intended to lower the tax burden on the poor and middleclass by making the rich pay more. A duty to pay tax on the Global Income. ,ut for those working abroad it had not been generally enforced because there wasnt a detailed legal basis for coordination. In january 2020, Chinese Tax Authority issued instructions on how to comply with the tax law. Chinese stateny owned enterprises started telling their employees who has transferred from the mainland to declare their 2020, 2019 income. So they can pay tax back home. Gotoyees in other locations the same message. Some people say they are considering going back to china, higher living costs in hong kong and high taxes and the china mainland. Now their options is to go into another platform and it cancels his or her chinese helsel registration if a person lives in a place long enough to qualify. Thank you. Know it will hit the chinese expats first. 80,000 to 150,000 estimated in hong kong. 50 million the chinese expats in the world. How easy or complicated will it be to get the collection done . Feng yes. As you know, the China State Owned Enterprises will be affected. Their headquarters are in mainland china. Generally, their headquarters have their employees Global Salary information. The same for the banks in hong kong. Pure enterprise, their salaries in hong kong is unknown to the tax authorities. Haslinda at 45 , the rate is very high. Will it impact chinas competitiveness . Will it cause a brain drain . What are you hearing from the companies you advise . Feng yeah. If chinese working abroad, they have to take care and pay chinese tax on their Global Income in accordance with the regulations. If you dont want to pay taxes in china, you need to control the number of days you stay in china. And why it is becoming a chinese resident. I suspect the individuals in can try to prove to china that their residency, acknowledged interest and of term to the definition tog kong than mainland, prove that you are a tax resident of china. So, would it me, work as the americans do that you pay your local taxes and then you have to pay a little more on top to get to what the chinese authorities are demanding . What would be the exemptions here . What sort of hit can people expect, chinese expats expect to have living in singapore or hong kong, for instance . The u. S. Tax law, a resident is subject to u. S. Federal income taxes on his ore worldwide income or her worldwide income. There are residents living in hong kong. Even other u. S. Federal tax rate is much higher than hong kong tax rate, they do not relocate back to the u. S. System, the Legal Executive power is becoming stronger and stronger. According to the individual income tax law of the peoples chinese of china, the tax resident, if he or she stays in china for 180 days or more. What does it all symbolize ultimately . What does it tell you about the state of the chinese economy . Feng the economy in china is good. It is still in the Second Season of 2020. That can many people have businesses from city to city. Every day. Rishaad right. How can some of these state owned enterprises mitigate this extra taxation . Is there the appetite or even money to start paying people more so it is kind of equalized . Chinese taxk the authorities intended to lower the tax rate for the poor and middle classes. Reach one to pay more tax the rich to pay more tax and the future. , theu know, from this year china has been approved and will be next year. The simple concept we have approved the system of taxing in china. To pay all the taxes that they owed before they died. [crosstalk. ] haslinda chinese rules are more extensive than some of the other countries. They include salaries, dividends, sales. Feng yeah. , 45 taxcome in china rate. For the Dividend Income, only 20 fixed tax rate in china. People most Chinese People working abroad want to have more Dividend Income than salary income because Dividend Income has a lower tax rate. Much. D thank you so feng ao there. Indian markets just open. We do have various companies coming out with earnings at the start of the trading day. Up 7 them, access bank, or thereabouts. 71 . 1 . The banking index moving to the upside by 2 3 of 1 . The broader benchmarks from pulling back too bad. The nikkei index 3 10 of 1 . The rial. Looking at some of the stocks we are watching. Checking in with access bank. 5. 5 up. The redlever also in for earnings. You can see how investors have been really receiving the stocks today. 1. 5 to the downside. Thats a look at indian markets. This is bloomberg. Rishaad you are back with Bloomberg Markets. President xi jinping calling on companies to step up for the economy as tensions with washington. He was speaking at a symposium presented by tech companies. Asian tech editor has the story for us. What more did the chinese president have to say . His speech was quite wideranging. As you mentioned, there were executives from microsoft, panasonic. Basically, he implored them to invest more in things like Human Capital to modernize the supply chain and to invest in r d and new tech. Broadly speaking, it was a plea to encourage companies and to call on them to step up their innovation in china. Haslinda colum, how significant is this . Colum well, this is quite important. Bearing in mind the context of this is happening under. At home in china, the Economic Situation obviously is pretty grave given the pandemic. Under smallloyment and Mediumsized Enterprises are struggling. Exports are facing a difficult time given that the Global Markets are also experiencing a pandemic. It is against this backdrop again of increasing tensions between the u. S. And china. Clearly, it is urgent that the government called on the Business Community to play a bigger role and they are pledging as well to make it easier for the Business Community to do that. I think it is also significant if we look at comments regarding globalization and it seems to be signaling that china is committed to proceeding on the path towards globalization even if other countries and their actions may be suggested otherwise. Other point of note getaad sorry, just want to to asking you how was this speech received and what has been the general reaction to it . Colum so far judging by the market reaction, it has been well received. Some of the participants yesterday, some of their stocks have performed quite well today. Looking at hike vision and infrared, they have been looking at gains this morning somewhere in the vision of 3 . I think another point that was definitely significant from the speech was the emphasis of calling on these companies to not only look at the Global Markets, but to take renewed efforts to focus on the china market and to build their presence and increase their reliance on the domestic market. I think that was the significant. And the market responding positively to this, probably interpreting this is a sign that things could be Getting Better for the Business Community in china. Columda asia tech editor murphy in beijing. Lets get a quick check of the business flash headlines. Unilever posted better than expected profits for junes, boosted by a new emergent customer stockpiling amid the worlds biggest virus lockdown. Unilever reported a 7 rise in net income with revenue up more than 4 . Markets were more resilient than urban ones, reflecting an exodus from cities. Amazon with a new record in the Second Quarter amid rising antitrust scrutiny in washington. It spent 4. 4 million in the june period, up almost 10 from the same time a year ago and slightly higher than the bill for the march quarter. Amazon and other big tex rivals under investigation for abusing with to stifle competition coronavirus boosting demand. Facebook is adding information about the upcoming election, including messages from President Trump and joe biden. The labels will tell users to seek official voting information and include a link to usa. Gov. Facebook is reacting to criticism that it has not done enough to combat elections. This information and policy will apply to all votes regardless of accuracy. The chinese ridehailer didi is said to be preparing for a listing in hong kong. The move is driven by investors looking to cash out. It would be a Major Development for a company sometimes called the uber of china. The ceo has always said it is cash rich and has no need to go public. The last fundraising drive in 2018 valued the company at about 50 billion. Rishaad right. That is it from Bloomberg Markets. We are off to dubai where you can catch bloomberg daybreak middle east on a day where stocks are trading mixed. A lot more on the way. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Announcer the following is a paid presentation brought to you by rare collectibles tv. Coming up next, you will see an actual original mint sealed bag of 1964 kennedy half dollars opened for the first time ever. This bag of 1964 mint state kennedys has been sealed for 56 years and has been authenticated and designated by the numismatic Guaranty Program as firstday