Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Steeper falls on this but this is still early doors with what is going on with the benchmarks. Certainly what we also have going on is the treasury market as well. Seen a bit of the paring of the gains we have seen. Yields moving slightly to the upside. 1. 71 or thereabouts on that. Looking at futures. Flat for the s p on the futures. Lending a little bit of support. Cnh pretty much on move, we could see a gradually could get weaker. The offshore yuan 7. 07. Looking at sterling, we have 1. 30. Ver we have continued polls coming out suggesting the conservative well, boris johnson, did with the majority after the december 12 election. Thats what we have at the moment. Lets go to new york and join su keenan. Su we start with President Trump who is done a you turn on nato switching 180 degrees from his criticism to claiming credit for strengthening the alliance. Trump was especially vocal on efense spendingspens complaining that washington bears the burden for your safety. He warns nato members they must step up and pay their fair share. President trump natos becoming different that it was, much bigger than it was an much stronger than it was because people are telling are fulfilling those commitments. There are some countries that are not fulfilling their commitment. Maybe i will do with them from a trade standpoint. Su to australian oped Economic Growth slow last quarter as the government tax cuts failed to spurs betting. Gdp was less than half a percent thanks to government spending. Home building slowed while Household Spending remained weak. It comes the day after the reserve bank held Interest Rates at 0. 75 , following three cuts since june. To hong kongs business now. The outlook worsened further in november with the purchasing matters index of the economy falling to its lowest since 2003. The data from ihs market that surveyed 400 private Sector Companies fell to 38. 5 . The gauge has been below the 50 level that divides expansion and contraction since april of last year. In prime shopping districts in hong kong will fall sharply next year, according to property agencies. That is predicting reductions of at least 15 for street shop spaces in key areas as retail sales plunge amid ongoing protests. Streetlevel outlets charge the highest rents in the Third Quarter and they beat new yorks fifth avenue and bond street in london. 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. I am su keenan. This is bloomberg. Yvonne relations between washington and beijing are u. S. Y to see after lawmakers that pass a bill could sanction chinese officials for human rights abuses. It is a move that threatens to throw already tenuous trade talks into disarray. Lets get more insight from our Senior International editor. And our china correspondent. Lets start with you. Talk us through what is in this bill. The next steps now. What dilemma does this pose for President Trump . Yes. President trump has been in an awkward position here because he first of all head signs that legislation last week about hong kong. They had been, the chinese officials and u. S. Officials had been keeping these two things separate. In terms of the trade talks and the issue on hong kong. Once they signed the bill that change that and China Threatens retaliation. Talked about the entities list. Then, of course, this next bill comes up, which is basically what, passed the house and the last two hours was a bill that they would sanction chinese officials. This would affect chinese officials directly. They have threatened retaliation on that. President trump himself and been trying to sound optimistic about the trade talks now says obviously this makes it a lot tougher. He jsust told reporters that. David chime in. I would imagine with every fiber in my being this does not bode well. It damage is the mood music that china is making a putting restrictions on u. S. Officials for travel. We know china is speeding up the unreliable entities list according to the global times, that could include fedex. But we could get some clues on to what this means from chinas perspective when it comes to trade talks. If you look to chinas response of the passage of the hong kong bill, the viewpoint is that china gave a measured and symbolic response to that bill that placed the sentence on human rights organizations as naval halting u. S. This is to hong kong. It shows that china does not want to mix human rights with trade and they are eager to make a deal. Balance trying to having a strong stance to the domestic audience showing they are standing up to foreign interference while not putting pressure on its deteriorating economy. Haad this coming after donald trump commented in london there is no deadline. This naturally begs the question, is there no timeline, either, to discussions . Uiit is a wakeup call to the trade optimists and despite that, positive rhetoric we heard from larry kudlow that the trade strokes down to short it shows that areas of disagreement remain around the time line and amount of agricultural purchases from china and china demands for tariffs to be rolled back and we heard from wilbur ross that onse additional tariffs december 15 could go in place. Take a listen to what donald trump had to say in terms of the lack of agency has when it comes to making a deal. President trump in some ways, i like the idea of waiting until after the election for the china deal, but they want to make a deal now. It is got to be right. Now, the comments from trump and wilbur ross could also be part of this gamesmanship strategy to ratchet up pressure as this deadline comes near, but it does show that perhaps trump doesnt see this china deal is critical to his 2020 elections and that perhaps he is willing to go on the campaign trail saying that he is staying tough on china. So, he needs to get reelected to make those promises he had made. Rishaad of course we are ratcheting things up, the Trump White House has become more hawkish on china. What do we suspect is the next question. Congress still needs to pass this bill. The house did passive but it is different from the senate version. To pass the same bill. They want to do that quickly. Marco rubio, the lead sponsor in the senate, republican, says the ig. Ferences arent that b they have the same principle but they will try to do this before they leave for the holidays in a few weeks. It may extend into next year but they are going to try to do this quickly and that goes to the president desk. He will have a similar decision like he did last week about whether to sign on to the bill. He did this last week on the hong kong bill. Essentially putting more weight on domestic peace in terms of Congress Going along with them. He needs them. And overwhelming support for both bills. This one, if he does not sign it, they could probably override the veto. Toa time where hes trying negotiate with china at a time of been peace many hearings, it is not something you want to do, but of course this is raising the stakes with china and raising the threat of retaliation from chinese officials. Rishaad watch this space. Still ahead we get out bank of america saying that asian courtesies remain strong thanks to optimism for a trade deal. Will that remain true through 2020 . We will hear from the head of asia fx. Will we have that report pend. Next, china is currently heading towards another year of bond default records. Why some bond analysts are growing concerns about contagion. This is bloomberg. Just breaking news on the bloomberg terminals. This allgulators has to do with, of course, this fine on 5g chips, which could power your next, i suppose, Huawei Device our next years iphone as well. David i guess, how deep your pockets are. Speaking of the pockets we are talking bond default in china. Based on the number so far, that we could be headed for another record year in on shore bond default. Since the start of november pushing the total up now north. F in renminbi, 17 billion lets see what that means for beijing. Rishaad all this, Rebecca Chung is with us now. Rising defaults. What do they mean for the credit [inaudible] rising onshore defaults are that huge problem, given china is looking to adopt a market led approach to risk saying we are expected to see a certain amount of pain of course. We have not seen it in particular industries we have seen a lot of pain for companies the highest amount of default, on shore defaults came from this province. We expect to see pockets of difficulties. David with economies doing this, and deflation and cpi. What does it mean for offshore. Offshore has seen relatively few defaults. Eight defaulted bonds with 2 billion, compared to 12 last year. The thing we are really watching our is whether or not we see state owned Companies Default in the dollar bond market. Has enter into some difficulty in his offering a debt restructuring plan. If we do see a default which comes from this province that would be the biggest default in 20 years. Rishaad what is it looking like looking into next year . The other thing is, how much is that contingent on further yuan weakness . Sure. I think the outlook, that will certainly be some struggles going into next year. I think what were looking is whether or not we will see that rising onshore default. Spill over offshore and start to Pressure Companies offshore, u. S. Dollar bonds. Other than that the question is whether or not beijing will start to allow the strategic or selective failures among the credit market as a whole. Rishaad thank you very much. Our Credit Report for china. David lets get the cross asset you. Our hong kongn studios. You heard the amount of default that are taking place. That reflects on pockets of weakness within certain industries. Same industries you would be avoiding . Our strategy, we started to focus on credit selection. Do a lot of Due Diligence on the Company Fundamentals and try to avoid those could have potential problems. So far, strategy has not touched anything that has david is it as basic as credit, cash flow, or is it more complicated the net . Than that . We we have a Good Relationship with the company and a good knowledge of the industry, it is possible to avoid those. As rebecca mentioned, those are the weaker fundamentals of the companies that have been recently default. We are seeing it is possible to avoid those. Rishaad how does this play into the overall strategy with half right now, Stock Selection and the like . Our company is very focused on looking at the fundamentals of the company. Not only the numbers on the Balance Sheet and income walkments, but we actually the extra mile to visit those companies, talk to the management and the supply chains to understand the whole picture. Yes, exactly. Also, we combine with some topdown now, because a lot of uncertainties in the market and also a lot more complicated environment. We also combined with the bigger picture. David what is happening macrowise, whether it is Monetary Policy, affects that you do the most . Think definitely this year the most difficult is the trade tensions uncertainties because, as you know, in and out of news overnight, also a lot of views on the trade topic. This is been huge. Investor sentiment the most. [indiscernible] it is affecting the sentiment in the markets. Even Good Companies are affected by the headlines. This year, and also going into next year, trade will still be concern for investors. Rishaad emerging markets valuations are 25 . Down to what we have in the u. S. Historically, quite the difference. Does it entice you, or do you think there is further to go in terms of the widening . Before the p. E. Of emerging markets with 25 to those of the u. S. , equities, actually we have been seeing that the economies and a lot of the emerging markets have for example, the china pmi has improved. Also has improved. We are starting to see economies in emerging markets are troug hing. Also, the Central Banks are in the easing mode, a lot of the Central Banks were seeing this actually a good backdrop for emerging markets to actually catch up with valuations for next are. Next year. David it was this time last year when everyone was saying we will get an Earnings Growth this yera. This year. Not earningsas growth. You have recession in some places. What makes you confident that the estimates right now are close to correct . Its true the estimates could still be revised downward because maybe some analysts were too optimistic but we look at very specific areas. Emergingle, asia in an market will be a good place. So, the Earnings Growth for next year will still be, like low teens or high single digits. That is no problem for asia as a whole. We look at a specific pocket, for example taiwan. Because they have very 5g cyclel upcoming and also because of the trade tensions between china and u. S. The supply chains in taiwan will benefit a lot. We find very healthy fundamentals Earnings Growth. Rishaad going into 2020, what is why Industry Group particularly that you would just one Industry Group you would not touch with a barge pole . There is no way we will get involved here. Metals. Nk base not precious but commodities. Because the economys are slowing down. Yes, we see stuff stock bottoming but not yet a full recovery. Metals will still be difficult especially in some pockets which are oversupplied. David one other pocket, a followup question, you like the retail sector. Rishaad that is a great one. Was pointing out, how can you be confident about valuations when earnings, the earning situation is very fluid . This is retail sales which we got recently. The most extraordinary pockets in this sector but valuation is really very cheap. It is almost at an historical trough. At this valuation level actually we find some Companies Already bought up. For example, some companies do not only have business in hong kong. They also have business in china, which is going pretty healthily. Hong kong has heard a lot. Hurt a lot. But on balance they have growth, not declining in terms of earning, they still have growth. Balancing chinas growth and the hong kong situation. For those cases, we think it is, you know, good entry point, but likely we will go and a little bit. Into Hong Kong Retail area. David never let a good crisis go to waste. Great stuff. Come back, of course. Rishaad that show you what we have on the way. As we head towards the tokyo lunchtime. Looking at some of those companies which have been making headlines across the asiapacific. This is bloomberg. Lets get to your latest business flash headlines. Google founders are stepping down as leaders of alphabet. They will end their daytoday operations but they will be controllings shares and stay on the board. Ceo of google meanwhile here pichai will be elevated to become the head of alphabet. In news gaves shares a boost extended trade. Shares in peloton, home exercise plunged 10 amid an online backlash over its latest christmas sales ad, slim for being sepsis with critics saying it seems like the woman is being pressured to keep her weight in check. An analyst expects the ad will be pulled and the controversy will die down. Shares is to sell more in hong kong and will offer an additional 75 million to add to price. That means it should raise 1. 7 billion, having already pocketed 11 billion in last months offering. The extra shares will begin trading in hong kong friday. Salesforce slumped after giving a profit forecast that fell short of expectations. Its acquisition of tableau had raised cuts. Sharel be 55 cents a in the current quarter, short of analyst estimates of 65 cents. Rose 32 to 4. 5 billion. Rishaad lets look at some of movers. Ing this is where refiner solves. And currently we have this is where we find ourselves. Currently we have metro pacific. What in to renegotiate some of these water contracts and the capital of the philippines. Making itsrning meetin fell. The warm weather has been affecting retail sales. Clo stores. Japan is off for lunch. This is bloomberg. Hong kong. 0 29 in i am su keenan with the first word headlines. Were avoided do is start with australias economy which slowed last quarter as the government tax cuts failed to spurs spending. Than half as percent. The house of representatives meanwhile has overwhelmingly approved legislation that would impose sanctions on chinese officials over human rights abuses against muslim minorities. The goal aims to support the ethnic uigher people. It risks retaliation from beijing just as the worlds two largest economies seek to close a trade deal. Iran has admitted Security Forces have shot and killed protesters during recent unrest across the country. Describing the victims as rioters. Media reported on clashes over an increase in gas prices. Is facing International Criticism for the crackdown the began on november 17. Amnesty International Says 200 have been killed so far. Allies, meanwhile are sending mixed signals about production curbs as they prepare to meet. Iraq a reiterated its view that the group should deepe its 400,000 barrels a day saying that he believes that saudi arabia supports the idea. An early meeting wound up without any discussion of new restrictions. The focus is on this scenario, additional 400,000 barrels per day. All opec country share. Su the European Central bank is facing pushback against a negative Interest Rate policy. The eurozone finance particular from Northern European countries have been challenging the banks subzero stance during confidential discussions on the regions economy. Sources say they are increasingly worried about the detrimental impact on savings an d pensions. And the latest job losses that italian bank pushes the global total past 75,000. Unicredit announced 8000 cuts tuesday. 80 of the global cut has taken place in europe where a slowing economy has forced banks to slash costs. The asiapacific has seen the least impact with just over 500 job cuts. 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. On su keenan. This is bloomberg. David we are continuing to map out what 2020 looks like. Bank of americas release the 2020 after the storm. Things may have changed. Strategy. Asia fx which do you think might be at risk or stays the same . Rishaad which one will you be ripping up . Trades2020, resolution offer pretty good risk reward. When i look at asset prices and the rates in fx a lot of stuff well below where was in may 2019 we saw escalation of trade tensions. Aboute ways, we can talk if and when we get some resolution but if we do get a resolution we are at a point in the cycle were some of the league indicators are starting to pick up. We are at an Inflection Point for Global Growth. You look to our list of top 10 trade areas a lot of these ons pent up demand we saw 2019 being released at least to some extent in 2020. Aussieyen. Ng resolution of brexit going into 2020. We like breakevens across a lot of markets. They are very depressed. 2020, things have changed over the past couple of weeks. We do expect a resolution over the u. S. China trade and brexit nafta. He new all of that should lead to recovery in the first half of 2020. Rishaad given what happened today, the trade deal and given could trumps stated, he do it after the election next year, that is confusing. Not sure. I have been saying for the past three weeks, we will not know we have a phase one deal until it is done. And till it is done you will get a roller coaster of commerce between the u. S. And china and that is exactly what is happening over the past couple weeks. If you think about trumps comments, naturally in a negotiation in the final stages its in the interest of the u. S. And the chinese to talk about it so they can get a better deal. That is what trump seems to be doing. I can wait until 2020 china is saying we are prepared for the worst. That is naturally what you would expect in a negotiation. There are two key things. One is the 15 december tariff increase. Is that delayed . Wilbur ross mentioned that could be delayed. The second thing is do we see highlevel negotiations . Says get a headline that Steve Mnuchin will be visiting china or the other way around . If we see that headline that im still pretty convinced we can get a phase one deal. Yvonne it seems like dollar china is back in play, a keeps testing the limits. At the same time, you think about the dollar is weakening against g10 currencies. Is that sustainable . Definitely did do the extent to the extent that is a direct function of tariff escalation. You can have a decoupling of what the dollar is doing against broader g10 major currencies. Cny would be a function of what happens to tariffs. Again, a couple of these ago were talking about the rollback of tariffs. Which means that dollar cny should be at 690. Rolledif the tariffs are back, does the dollar roll over as well because that is good news. That is a very good question. Ultimately it does, but if you look at our trades, we do not really have an outright short dollar recommendation with the exception of cable. If you do get good news or get a resolution, the first thing that has to happen is that fed needs to reprice. The market is still pricing and easing of the federal reserve. Withuld be associated dollar strength. The first reaction is the dollar appreciates versus the lower yield, the yen. Rates markets is repriced and the treasury yields are back at 2 then you want to be selling the dollar but not right now. Rishaad if youre looking for haven, what you think of the yen . Were bearish on the yen, because the yen probably underperforms but Global Growth is picking up. That helps rates in japan to go down and we can flood and weakens the yen. There is a limit because you have local exporters coming in. You will have Pension Funds a Life Insurance companies that are very under hedged on their Foreign Investment so they will have an incentive to sell dollaryen above 1. 10. With the yen underperforms but there is a limit on how much they can underperform against major currencies. Yvonne bond markets right now in asia in general, in dealing with these two conflicting forces which is the negative trade headlines and it seems closer to or getting the end of the monetary easing cycle. Netnet, what does that mean for yields . Are we back to a bond rally . There still is room for some Central Banks to ease policy and the most obvious one is bank indonesia. We expect 50 basis point of cuts. Real rates are high. One of our recommended trades, long 10 year into bonds. That makes a lot of sense in 2020. Of course, youre right. There are other Central Banks were there is much less room. Probably being long bonds makes less sense in indonesia. David rba was out, hawkish, pushing back on the kiwi. The local is not ditching it. The locals will continue to talk about qe. Yvonne they are preparing for. Right. They took a different spin on it because they said 0. 25 is the level that will start thinking about unconventional measures. The rba to the extent possible want to avoid unconventional measures and raise and see the impact of easing which is the sensible thing to do. More in cut rates once 2020 but i think beyond that unconventional measures is not part of our baseline. Rishaad the central bank, is it obboring or interesting when you look at developed markets . Right now it is pretty interesting given that there is a significant rishaad we are talking less about the fed, because there are limits of Monetary Policy. The two things come into play. When you talk about centralbank policy, maybe it is boring. The ecb will be around. Negative Interest Rates but they will not move by march if you look at 10 year treasury yields and german bunds, there you have a significant risk premium factored in around the trade tension and wek Global Growth and you have recession fears. Thenr scenario plays out, things can get very interesting in these sort of 10 year part of the curves. That is some of the trade we have on. With the breakevens. Yvonne another one i saw is your note is the best contrarian asia traide to trade is to short three months in the indian rupee. Its moves so much in 2019 you have to go the other way. Bank of thailand has become a lot more concerned about cutting rates and implement the measures to prevent they have not been successful in 2019. But i think the indian rupee is interesting because what we call, we look at india now as peaked. There is pessimism. Everyone is bears and concerned about the crisis. Everyone is concerned about growth. Youg into 2020 now that have proactive fiscal and Monetary Policy in the government is now focused on reviving growth, the indian ru pee probably is going to do ok. The reserve bank of india, the central bank will be as ok as long as the rest of the asia fx are doing well. Yvonne happy new year if we do not see you. From bank of America Merrill lynch. The Bloomberg New Energy Finance summit, switching gears, taking place in shanghai and we are discussing how china carries new levels of sustainability while also chasing Economic Growth. Lets bring in justin wu, our new Energy Finance head of asiapacific. Joins us from shanghai. Talk us through what is on the agenda hear this coming your in a slowingt of cop25, economy. What does the government want to focus on next . The Chinese Government is all about putting its Economic Policy along with his sustainability agenda. Essentially we see that the economy is slowing in china and then it is trying to shift to a higher Value Economy focusing on things that produce higher values such as innovative sectors, high tech, electric field pulse Renewable Energy away from heavy industry. Those are things that are basically going to be enough for china to hit its paris goals, the last round of climate negotiations to peak emissions around 2030. The real question with cop 25 happening is can china do more . There will be a lot of pressure and sort of others saying that it needs to do more. That is still the largest emitter by far. Even with Good Progress in the last five years since paris, there is going to be pressure i guess to say that china, you need to do more and put something new on the table. David part of that strategy is the new ev targets which i believe they came out yesterday, that outlined their gold all the way to 2035. Is that realistic . They have a lot of work cut out for them and what does that mean . The ev targets have gone up to 25 of all car sales should be electric vehicles by 2025, up from 20 it shows that china is both confident that he can hit its targets in the. Year 2025 on electric vehicles just for comparison we think that this year, about 7 or 8 are going to be electric. This is a tripling of where we are today. It is pretty ambitious, but again it needs to set something new, sort of new signals for the economy in the next 10 years and now i think that this is one of the new signal saying we need to do more. Were going to focus also a lot more not just on building out the manufacturing value chain but also on quality of the electric vehicles. For instance, there is discussion about saying that nobody on th streak toe name a single chinese electric vehicle. Everybody says tesla. Can we build a chinese tesla by 2025 . Quality over quantity. That will be important itself. Rishaad you, of course, cover the Renewable Energy industry in china. The slowing economy there have an impact on what is going on in the united states, is the trade war also casting a pall . The trade wars on everybodys mind. We say it does not have a direct impact on the renewable industry, other than the fact it is slowing the economy. And all of these other things. But i think what is important is that we see that china has even know things are slower, the proportion of that investment that goes into Renewable Energy is still going up. In some ways this is pretty much embedded in the economy. But of course, regards to the whole climate discussion is that is this enough . Do we need to go a bit faster . More and more people are saying we need to put more things on the table, not just peak emissions but maybe to have a net zero target like some of the countries in europe have. Not saying china will put that on the table but that is part of the discussion now. Rishaad thank you so much. Justin wu from zhang on. From shanghai. In the next hour we will talk to [indiscernible] i murdered it. An exclusive interview with him. This is bloomberg. Rishaad you are back with bloomberg as we feature entrepreneurs efforts to close the gender gap. David we spoke with michelle sun the ceo of the First Code Academy. It is interesting when i look around the classrooms and we look at the age group of six to 12 years old the gender ratio is pretty balanced 50 50 boys and girls, and somehow once it hits around 12 years old the girls disappear and there is like all boys. And sometimes one or two girls. The gender divide starts pretty early. Why do you think that is the case . Yeah. I mean, when we speak to the parents in some of our students a girl sometimes get back to was and say, i want to do something more girly. Coding does not feel like too girly. I want to be with my girlfriends. That is sometimes the reason why they turnaround from starting to learn coding at the age fo 12. It is very much a part of the culture. You have the girls saying i do not want to do it, it is not girly. When you look at the Tech Industry, there is are having a bro culture. How do you begin to change that . It has been ingrained for so many years. Of the steps we should take is really should be aware of it as an industry and talk more about the behavior that can undermine minorities in the industry and start to encourage more of a discussion and to talk about these issues more openly. You left korea to move to the world of tech. Your first stock stashed startups fail and went you wet and yet you went at it. What made you determine to create a space for yourself in the Tech Industry . My first job in fineness was what planted might seed in the Tech Industry. I was an equity research. Analyst at goldman i went to visit multiple companies and understanding how Tech Companies actually change summary peoples lives through apps and their website. So, even know my first startup failed miserably, i still wanted to go at it. Im thankful for that experience. Was it tough for you to get funding for example, to get access to the resources you needed to start your own company . Do think it was harder because you are young, b, youre a woman in the tech space . It was incredibly tough. Swimminga company is in the open water not knowing what is around and learning to swim at the same time. Think as a do th minority that was some additional friction. At the same time, what ive learned to tell myself more in the journey is that, you know what . It is tough for everyone. Even if i am a male in my 40s it is still tough. Being the females in my 20s, i need to go at it and solve the problem as it goes and approach it in a more objective manner. Half the problem is the lack of mental, the role models in the Tech Industry when it comes to successful women. There are some and you are one of them, especially in asia. What kind of role model do you think you are for women who want a career in tech . Yeah. My know, i try to live by values and i feel that, you know, to blaze our own path and be persistent and seek out resources and be resourceful. Yvonne that was bloomberg with First Code Academy ceo michelle sun. You do not want to miss this next entry. David let the big names. The democratic president ial candidate Elizabeth Warren will join us. Wednesday 6 p. M. Eastern and thursday, 7 a. M. In the asiapacific in hong kong. This is bloomberg. Rishaad you are black with bloomberg markets. One of the most highlight heavily anticipated, the price shares thursday in what is expected to be the biggest public offering. The kingdom is searching for a two dollars trillion blockbuster define as the transformation of its economy. Things have not gone entirely to plan. Than anyes more profit other company in the world. And pumps more liquid than five of the Biggest Oil Companies combined. Its Petroleum Reserves could fuel the entire u. S. For 30 years. What should be valued at . Its complicated. Saudi aramcos fortune starts with a well, number seven of the persian gulf in 1938. Venturen, it is a joint between standard oil of california and texaco. The company flourishes. Eventually transforming into a state owned giant. Much of that is down to the price of oil. As the desert kingdom grows richer, a new generation seeks to transform and diversified the nations economy. How will the dream be funded . Listing of the crown jewel at top dollar. Of then the murder journalist Jamal Khashoggi sparks International Condemnation while attacks on Oil Facilities highlight major risks for the producer and potential investors. Off . Po is on, off, on, and back on, but not the hopedfor 2 trillion valuation. And not an international blockbuster. But a far more local affair. Still, it should become the worlds biggest public we traded company. So, where does this leave the kingdoms plans for the future . As the world turns its back on their ups what do and downs say about the future of fossil fuels . David yep. Something to look forward to. In case you missed it to look at the data that came out today, pmi out of hong kong, something we do not normally look at closely. 38. 5, the lowest level since the series started. Rishaad 2003, i believe or Something Like that. David all the way back. Yeah, 38. 5. 50 is the line in the sand. Speaking of pmi going the other way. Chinese pmi as you can see this recovery, and pretty much everything manufacturing services. And the private survey. Rishaad lets quickly look at what is going on marketwise. Weve got hong kong feeling its once more. Hang seng, not quite as bad as some predicted. 36, 114. Off by 1 . We have got the risk off tone we have been having to date, being rescinded. And Risk Appetite certainly taken off the table. Weve got heightened uncertainty over the tariff deadline. All happening here. Su it is almost 11 430 in the lion city. Rishaad im Rishaad Salamat up your the last hour of the morning session in hong kong. This is our top stories. U. S. Lawmakers approve a bill targeting chinas treatment of the uigher people. Beijing warns against interference. Asian stocks had the lowest is october after president comcast the doubt on a trade deal. He says he would be happy to wait until after the elections. Rishaad investing in southeast asias largest economy. Attracting foreign money to indonesia. This is bloomberg markets. Two days of losses as asian stocks the lowest since october after trump says we can wait for the china deal. He can wait a year. It is less than two weeks to the deadline, december 15. An unsure if those tariffs on chinese goods will be imposed. The rally we are seeing over the past several weeks works on the pretext that those tariffs will be put on hold and a deal will be signed. The asia index, the benchmark down by. 08 . No condition where the trade negotiations will go. I trending, the cs lower, the hang seng down by more than 1 . Property stocks the key leg up hanging onto the 1 gains on the year. We have the november pmi suggesting the lowest readings since april of 2003. That points perhaps to another deep gdp contraction in q4. Lets take a look at were havens all right now. Havens back and play. 1. 07. Year yield at rates staying lower for longer. The governor saying that q. E. Could be a possibility. So, government bonds very attractive right now. Indonesian 10year. Yield currently at 7 returns. That is among the highest yields in asia. Taking a look at where crude is now. 56. 39, up by half a percent. Rishaad lets have a look at what is going on with the Indian Trading day, 43 minutes away. This is what we have. Futures suggesting at the moment we will see a slight uplift perhaps. A downdraft taking place. In the last three trading days have seen a move down. Likewise the market as well, the last three trading days. A move by half a percent on the nifty. Rupee stable in the face of what has been dollar weakness but anyway we have got 71 rupees, against the dollar, slight move to the upside for the dollar. Rupee weakening a fraction and of course we have got that all important interestrate decision coming out of the reserve bank of india expected to be cutting again. Willoughby 25 basis point or 50 or somewhere in between will it be 25 basis points ors 50 or somewhere in between . Particular piece of paper. But find out what is happening elsewhere and find out what is going on with the first word news. Here is su keenan. Su thank you ve very much. We will start with hong kong and his business outlook. It worsened further in november with the purchasing Managers Index for the economy falling to its lowest since 2003. The data from ihs market that survey 400 private sector the gaugesaw the 38. 5 is below the 50 level that divide expansion and contraction since april of last year. Sticking with hong kong, brent in the prime shopping district will fall sharply in the coming year. Its predicting reductions of at least 15 for street shop spaces in key areas. As retail sales plunge amid ongoing protest. Street level outlets, they charge the highest rent in the Third Quarter, beating 5th avenue and bond street in london. To australia. Its economy slowed last quarter as tax cuts failed to spur spending. Gdp rose the less than half a percent from the second quarter. Whileuilding slowed Household Spending remained weawk. Weak. It comes the day after the reserve bank held Interest Rates following three cuts since june to try to weaken growth. To oil, on, proposed output cuts opec is sending mixed signals about production curbs. As they prepare to meet in vienna. Iraq has reiterated that the group should keep in output curbs by 400,000 barrels a day. An earlier meeting wound up without any discussion of the restriction. The focus is on this specific scenario. Additional 400,000 barrels. All member countries should share. Nobody should take [indiscernible] su 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. I am su keenan. This is bloomberg. Haslinda relations between washington and beijing are likely to be strained after lawmakers passed a bill that could sanctioned chinese officials for human rights abuses against muslim minorities. Its a move that threatens to throw 10 he was trade talks into disarray. Lets get insight from our Senior International editor. And our china correspondent. Lets start with you. What is in the bill . What are the next steps . What dilemma does it represent for President Trump . So, basically the bill would require the u. S. To sanctioned chinese officials for any human rights abuses in, against the Muslim Uighers in china. And, basically, individually session those people sanction those people. It is a tough bill. It has passed now with overwhelming support in both the house and the senate. The bills are different. U. S. Congress at you have to pass the same legislation before i can go to the present. They will work out their differences and the next few weeks. Leador marco rubio, the republican on the bill, said the printable remains the same. They want to pass this legislation. Has come outse against the legislation, has said it could retaliate. It said the same thing after the house and the senate both passed legislation which was signed by President Trump on the hong kong requiring basically that the state Department Certified annually that hong um, remains justifiably, separate in terms of autonomy from Mainland China to be able to continue to justify its special trading status. With both of those bills, obviously, china is concerned and has threatened retaliation. We dont know what the retaliation will be. But this is certainly an issue for President Trump as the tries to sign that trade deal. Rishaad with regards to that, beijing says this is a direct interference in chinas internal affairs. What are we expecting from the authorities there . And does it again throw more spammers into these trade talks . Well, when it comes to retaliation, weve heard suggestions from communist party u. S. Officials could face travel restrictions and the speeding up that could play sanctions on u. S. Companies. When it comes to how this fits into trade talks, we can get a glimpse of what that may look like from the response from china to the hong kong bill. The response to the hong kong bill has been pretty measured. And largely symbolic. China halted u. S. Naval ships visiting hong kong port. That is seen as largely symbolic, as something that does not want to mix human rights with the trade issue, showing that china is eager to reach a trade deal, because china is trying to show the domestic audience that they are staying tough on foreign interference while also preventing any escalation in the trade war, that could lead to deterioration of the economy. Haslinda we heard from trump. He said there is no deadline. He is willing to wait a year. What does it mean for the timeline of discussions . It dampens any of that trade optimism from earlier. Works ago we heard larry kudlow say that that trade deal was short strokes away. It shows in terms of some of the sticking points around agricultural purchases, the amount and the rollback of tariffs, u. S. And china are pretty far apart. Take a listen to what trump had to say at the nato summit on his lax view of the timeline. Ideadent trump i like the of waiting until after the election for the china deal but they want to make a deal now. It has got to be right. Now, in addition to those comments from trump, you also had wilbur ross saying it is likely that u. S. May slap additional tariffs on december 15. This could be part of the gamesmanship strategy, a ploy ahead of the deadline to put more pressure on china. But it also shows that trump may not be that keen to reach a deal ahead of the 2020 elections that be going willing to go on the campaign trail saying he will be hard on china but he has yet to meet the promises of china he said earlier. Rishaad the u. S. Is turning more hawkish. With regards to policy move toward china. What can we also expect . First of all, the have to vote on this. We expect that. It can take a little bit in congress. This is not happening overnight, which could give them time to get the trade deal done if they want to. Both things could happen at the same time. But this certainly is a tough on china message from the u. S. Congress. Two cases of legislation that of kind of sailed through, which does not happen much in congress now. We have to remember not only as President Trump running for reelection but most of the house and senate, the whole house is and a third of the senate. This message plays well, being tough on china and on the human rights side. There is politics behind this as well. President trump will face a decision again as he does on the hong kong bill about whether to sign it. He will likely be pressured in terms of, of domestic concerns G International ones especially if they have been able to separate us from the trade deal. Rishaad watch this space. Everything is moving fast. Wang, thanks, guys. Coming up later we will speak to the head of the Wealth Management asking about his efforts to win a bigger slice of asias ultra rich. Haslinda next we hear from the man responsible for attracting Foreign Investment to southeast asias biggest economy. My interview is just ahead. This is bloomberg. Haslinda welcome back. Mit has kicked off in shanghai bringing together executive some the Energy Industry to formulate a cleaner more competitive future. Joining us now from the event is the indonesia coordinator minister for Maritime Affairs and investment luhut pandjaitan. One of the keynote speakers. Luhut pandjaitan sophie, you arn of many responsibility but key to that is the need to attract Foreign Investments to address indonesias current account deficit. What concrete measures can be expected to address the issue . Yes, thank you very much. First of all, i think we spent years and decades maybe that we rely on [indiscernible] that makes our economy a little bit we rely on this especially after the trade war. Then we believe we are so rich in natural resources. We like to see value added. We change from the commoditybased to the value added based. That is what we are going to do today and some of this is an ongoing project. Besides that, also you are seeing more now hydropower because of the potential like 30,000, 33,000 megawatt of hydropower. 22,000 megawatt. Then you can see soon with a 2 per kilowatt hour of electricity price we can generate lowcost wind energy to produce good material in indonesia. Haslinda is that a Game Changing . Will it attrack investors attract investors . You have met with the saudi prince and jared kushner. Are they were attracted to indonesia as an investment destination . I spoke in tokyo last weekend. And, yesterday he came to jakarta and we discussed about this project and also considered to have a Sovereign Wealth Fund together with with international develops finance corporation. From washington. I think we are moving toward that direction because we should also consider not only producing fossilng with, with energy but we are thinking right now that you are seeing also clean energy is like, like hydropower or geo thermal. Because indonesia has 29,000 megawatt geothermal potential. Clean energy like solar panels and wind power, etc. Abundances a big of fun of energy in indonesia. We would like to maximize using this energy in order to maintain also good pollution initial less pollution in indonesia. Haslinda this clean energy projects, how much of fti will be attracted over the next two to three years . Yes. At lease for the moment, 40 years ago, i think for only one example, like the nickel ore, 12 billion. Right now it is going to be 2054, like, 30 billion u. S. Dollars. Aroundort last year, five point 8 billion in this year will be around 9 billion because of the we produce carbon steel. By connection we can produce 13o, we can export like billion. By 2024, stainless steel and carbon steel and we can export may be around 35 billion for indonesia. Now we are also go through, to the lithium battery. We are ongoing to this project and we discuss this, been discussing this with some other Companies Like volkswagen. And in china and hyundai. Because of the need of the battery they will want to keep that i believe anytime march next year in indonesia. Rishaad this is were shot in hong kong. Want to get get a sense of think you have signed 30 deals that would go down to the belt and road initiative. Tell of this if this has been about them first of all . Our relations with china is very, very good. We do not have any problem. Any country with indonesia that we have to comply with emissions. Number one they have to bring the first of technology. Because of an environment of concern to numbertwo, you have to use as much as possible indonesian labor. So, quality of our people. Besides that also to create jeopardy and it is for our own people. If they dont have the people then they have to build. Together with the government of indonesia and order to replace the Foreign Workers in that industry after four years. Number three, you have to to have technology transfer. We like to educate and improve the Human Capital in indonesia. Number four, they have to, how to call it, we dont want just to exploit our own resources while not create Job Opportunities in indonesia. The last one, we have to we dont want to be, likely call it debt trap. You have to do it in government under the umbrella so, by doing this, i think we believe that our economy is going to be still moving very well. Gdp we gdp, our debt to can maintain below 3 . Been doing over the last five years. Rishaad you just said you relations with china on very good are very good but how do you balance this Bri Initiative with the territorial dispute you have had with the country . Are you any closer to resolving those . Is resolving those going to be key to having good relations . We dont have problem with the territory dispute. So far our relation i think is very good with china. Dont see that become a big issue. We dont discuss this dispute with china. Rishaad all right. There have been territorial disputes in the past but they. Ould crop up again do you have any guarantees built into these deals you are doing with Chinese Companies and the like . We have understanding very much on this issue. I dont think that we can, you know, how you call it, come up with this issue right now. I believe we have already a good understanding about this. So, are you saying that indonesia will not need to make any concessions for any of the deals from china . Course, yes. Of when youre talking about the territorial integrity of indonesia we are not going to discuss about that, because we understand. We respect international law. We just do based on international law. Everybody has to respect, also for this understanding, yeah. Haslinda indonesia has been increasingly been looking towards china for a lot of the investments in its infrastructure. Could you quantify for us the kind of investment from china that can be expected over the next few years . Well, i think we will discuss with china are very good write up. We have a committee together with china are very good right now. Indonesiachina infrastructure project. There were several projects. Which is also b to b. We also have some other projects like and ongoing now hydropower. But i think various projects right now with china but we offer also the same opportunity to other countries who want to invest in indonesia like japan, like america, also like united arab states, which is very close to indonesia today. Haslinda how much money do you need for your Infrastructure Projects from these possible players . Well, at least now in talking beyondot that. At least 150 billion. 50 billion already pipeline on the energy, like petrochemical. Like oil refinery. 40 like, like another billion also for this sectors of mining. Value added industry. Target, various Infrastructure Projects like a power plant. This is also about the hydropower. Also geothermal. And solar panel. And wind power, yeah. T want tominister, jus get your views on nickel. You have this export balance of the moment. After you saw a very heavy demand. Are you planning to do the same sort of things for other metals here as well . Proper concentrate, that sort of thing. Me repeat it does not mean that this is only for a realistic approach, no. The Foreign Investment in indonesian is because we need it so much. Can growhink we economy. I want to create Job Opportunities. To get also some, you know, how do we maintain our resources in indonesia. This is very important it otherwise, just make something and then we export the raw material and then we do not get the Job Opportunities. While our target, poverty, also a big issue we have to tackle. That is the policy. Dont miss understand that we are going to affectiority is to indonesia. Rishaad thank you so much for joining us today. Big thanks to our and tunisian indonesian coordinating Maritime Affairs. As we head towards that china lunch break we will go to the 90 minutes or thereabouts. We are seeing a downdraft but we are off the lows for the major equity benchmarks. Seeing this risk off certainly at the moment grabbing hold of what is going on regional. Stocks sliding. Highend uncertainty over this months tariff deadline, december 15. What we do have is chinese equities just coming back. Down to also the Trump Administration downplaying the urgency of signing a trade deal. Also, a somewhat damaging to sentiment with a vote in the u. S. House to sanction chinese officials for human rights abuses. Something that china is threatening to retaliate against. This is a look at shanghai and this is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Almost 11 30 a. M. In singapore where it is in the middle of the trading day. Singapore developers sounded a note of caution saying there is , and thepply allectors threatening to put damper on property prices. Again, the sti currently down. 7 . For now, though, lets get to first word headlines. Su keenan in new york. Su we start with the u. S. House of representatives which has overwhelmingly approved supportion that would sanctions. It risks retaliation from beijing just as the worlds two largest economies seek to close a trade deal. Stocks meanwhile fell around the world as President Trump cast doubt on a trade deal with china happening any time soon speaking in london ahead of the nato summit, the president signaled he would be prepared to wait another year before reaching and accord, saying, i have no deadlines. Wilbur ross later confirming the u. S. Will levy new tariffs on chinese goods next week if nothing changes. In some ways, i like the idea of waiting until after the election for the china deal, but they want to make a deal now and we will see if the deal is going to be right. Its got to be right. Has admitted Security Forces have shot and killed protesters during recent unrest across the country, describing the victims as rioters. State media reported on widespread clashes over an increase in gas prices. Tehran is facing growing International Criticism for the crackdown on demonstrations that began on november 15. Amnesty International Says at least 200 people have died. President trump has revived his rocket man nickname for kim jongun and the threat of military force against north korea. He has revisited the name he once used to mock can just hours said it wouldg have a Christmas Gift for america if the administration. Ails to meet its demands global news 24 hours a day on air and at quick take by bloomberg, powered by or than 2700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Rishaad lets have a look at what is going on marketwise. We have hong kong and tokyo down 1. 1 , more weakness in the asx 200. We were looking perhaps at perhaps a big fall, and some are predicting a bigger fall than this after what happened in new york overnight. Press on top of this. We had this uighur bill being passed by the house. Risk assets facing a rough day up thefficials brought trade war. Risk assets perhaps too complacent. Awayve a mere 13 minutes until the indian session. Fair value means we could more. Ly see down a little rupee, there we go, just a little bit weaker. The dollar appreciating against that, the yield on the 10year, bond traders having an eye on that bank of india decision. Rishaad lets turn to a swiss asset manager aiming to double its assets in asia and the next 10 years as Wealth Managers compete for a share of the increasing number of ultrarich in this part of the world. Welcome to the program. How are you going to do it . Usingare going to do it our reputation, our brand, clear fortegy, being out there High Net Worth and ultraHigh Net Worth rishaad a lot of people do that. What means what makes you think you will be able to . I think we have an edge on some of the bigger ones. We are a private company. Rishaad territorially, where are you earmarking first of all . North asia. We are putting focus on china and Greater China overall out of hong kong. In parallel, South East Asia out of singapore. These are the two hubs that should provide us the next for years regarding growth. Rishaad it is an endorsement if you are expanding here. It will be a hub for china, and in light of what has been going on in the streets and protests and an economy which is at the moment really in a deep recession, does it put you off at all . No, actually, it is a country where we are currently investing probably more than we have ever invested, and i think one has to be a bit contrarian sometimes. I think it is in these moments you have to show your commitment. Rishaad of course, this is a good moment for saying singapore will be the other half. Correct. Movesd have you seen any from hong kong toward singapore, which is what many have been touting . I think there is interest from clients that we have not industry or any anyment of assets in significant fashion. The call from boris kolodny is the new symbol for private bankers. How many of these calls have you made in asia . What is the hiring increase that we have seen in the region . Madethink initially, we very few calls to invest. We first wanted to be clear on our strategy. Now we have it. As we communicate the strategy, we have the opportunity of choosing the right people to implement the strategy. We made a few calls recently, and i think they turned out to be quite positive with a number of people that have joined us to reinforce the ranks and in particular on some of the markets where maybe we have and less present in the past and thinking about Greater China and china in particular. What kind of headcount increase have you seen, and what kind of increase are you looking for over the next 12 months perhaps . This year in asia, we have added high doubledigit headcounts. We are past the mark of 300 50 employees for the group and i think we will see in the years to come we are not just looking at the next quarter or the next 12 months. In the next five years, thats the plan we had to double the headcount in the Wealth Management side of the business. Are you growing faster now . Rivals like ubs and Credit Suisse are dominant in this part of the world. Are you comfortable with the pace you are seeing . Inthere were many regions the world that we were competing for resources in the group. We have made asia our number one priority. Are starting from a lower base, i think growth rates will be significant in the years to come. Hiring, some say you have not had the kind of success in asia that you did in the middle east. What is your response to that . I think we started in different phases. I think the first focus when we started the new fiveyear plan was on europe, our core market. Thats where we are also the strongest. Then we started to expand in front circles. We moved to the middle east and then to asia and i think for asia, the strategy also had to go handinhand with the change in leadership, and that is something we have been able to announce this summer. Its not that it was not a priority. Its just we could not do everything at the same time. What is the plan, what is the goal . Today, we are in the , probablylth managers toward the second half of the list, and i think our ambition is to get into the top 10. It is not so much and ambition about size but also about quality. When we look at our client base, we generally tend to have ultraHigh Net Worth individuals. More than world two 3 of our individuals maintain account 100 millionh us of 2 3 of ourmore than individuals. We are present in close to 30 countries today. Rishaad you have been out of hong kong, but what about getting a Private Banking license . Course, also partner with the chinese company. What is your preferred route . Weve been looking at this market for the past 20 years. I think weve seen different evolutions. I think we are finally entering a chapter where there could be a successful onshore venture for a wealth manager. I think it is a little early for us. We would like to be kind of late movers. I think generally, we like to go on our own, and i think some of the jvs have been successful, some not. I think we have to see this new chapter where foreign players can own the majority or entire business. I think that is a good prerequisite for us to look at this market in the next few years. Tell me about then, moving away from the business itself, the way you perceive what is going on in terms of asset, in terms of this trade war. Typically, this is a market condition, and we should not rejoice in that, but that would get clients to talk to us to try to understand where we are in the cycle and what to do, what type of Asset Classes we should be investing in, how it protected wealth, and yet, they dont want to miss in the next i percent or 10 rally, so it is an interesting period of time for a wealth manager and being the trusted advisor of our clients. We are overall quite positive for our clients. There will be Slower Growth overall in the next 12 months to come, but we think people should remain invested. That is something we see clients wanting to invest in, and not only the typical large private equity players, but also more regional players and erect transactions. That is something we are able to provide to our clients, and i think also the whole trend of responsible investing purpose over profit this is something we also have Strong Demand for our clientele at the moment. Biggest risk in the market then . I think we are experiencing it right now, this uncertainty around relationships. Im talking about political relationships that are basically crossing over into Economic Uncertainty and i think that is today the biggest risk how move awaytrade war from globalization, and that is everywhere, bring us into a new world order . I think that is today the biggest risk and if this will materialize or not, we will see, but i think we are getting a first taste of how difficult relationships are becoming. One, and i think maybe the second biggest risk is how we will move away from my would say low Interest Rates and low Interest Rate environments back into normal market dynamics. I think we have seen that that moment in time is being banks in by central order to back up there inflation targets, but at some stage, we need to make sure intervention does not become the new norm. Before we let you go, just one final question what are you advising your clients to do at this stage . We are advising them to do three things stay invested in risky assets or equity makes or equities. Do not go out of the markets right now because we feel the markets could still go up further. At the same time, to increase the allocation in private equity, so in real assets, and the third one is to look for some form of protections in order to have some part of the Asset Allocation that is on the safe side. Thank you so much for your insight today. Still to come google enters a new era. Founders larry page and sergei reins. Nd over the what that means for the company next. This is bloomberg. To theyork is opening downside. Lets get started in mumbai. Close for a Third Straight session tuesday. What are we looking at . Well, this could be the fourth straight day of a negative close. We are looking at a negative start for both benchmark indices and also for the broader market, and this is coming after Global Markets have been in a tizzy of both the comments coming from the u. S. President he progress there is no with regard to sealing the deal with china, so he knew trade war threat has tempered the u. S. Market. It slipped below the 20day moving average. Banking stocks have been witnessing unwinding on the futures side. Back home in india, tomorrow being the Monetary Policy, the focus will be on what the policy throws up. The bank held an analyst day almost after a decade. A lot of brokerages have increased targets. Its already one of the topperforming stocks this year, so you have brokerages like ubs that raise the target price to 620. Of course, all of them have a buy rating. , theding to Morgan Stanley target is about 775 and a stock already has been trading around its alltime high levels. You could see some minor doubting coming about, and they exchanges toosed would refile applications with securities with regard to accessing those debt shares, and the stock has been, however, subdued on a year basis. Year to date thank you. Isgle parent alphabet ringing and the change. Larry page and sergey brin are both said to be stepping down from there day to cooroles with bloombergs set to take on the roles of ceo ofnue google and ceo google and alphabet. Theres a lot of headline surprise, but structurally, the Company Remains the same. The two stanford graduates who founded a huge empire about two decades ago stepping down but remaining with the company. They will not be involved daytoday. You are looking at cofounder larry page, who reminded everyone that he and cofounder sergey brin created an Unconventional Company and that in 2005, when they reorganized they had given sundar pj the ceo role, which indicated their confidence in him back then, to be ceo of google, and they are again saying they have confidence in him in letting him lead both companies. Quoting directly from their statement, they wrote, we are deeply committed to google and alphabet for the long term and will remain actively involved as board members. And these are the largest shareholders. They say they plan to continue talking with him regularly especially on topics they are passionate about. Many point out that these creative engineers have less and less involved in the company in recent years. Shares rose after hours. In fact, they were up about 1 . Big picture, they were up about 21 year. They have had a recent bit of a bumpy ride, but gene munster, a widely followed tech analyst, says this next chapter is going to be very interesting and that these cofounders would not cede control or be comfortable with anyone in the ceo spot unless they truly supported him, and they believe that is the situation here. There are many tech analysts that believe the company is in very good hands. What about timing here . Larry page has been criticized for not engaging more as google has been increasingly scrutinized by a whole body of regulators and lawmakers. That is a really important point, and there are some mindful of that. They are just surprised the change did not happen sooner. You can see google has done well, but what is ahead, the next chapter, is going to be about policy and data privacy and regulation. One analyst said they really did not picture these two cofounders spending their days testifying in front of lawmakers about these issues when they really are creative types. Theres also questions that arise here about what the next years could look like. Again, there are these questions that are weighing on the company. Theres also a very new chapter for sundar. He had been ceo, but there had been some authority with larry page. He has the complete text hoxie he is nowtseat sitting on. We have a lot more coming up ahead including a look at what we have marketwise. This down arrow story continues in hong kong as well as in turkey, but hong kong going to the lunch break as well. This is bloomberg. Our largest investor is now warren buffett. He said you guys are the chicago cubs are the business world. You not only had a bad decade, you had a bad century. The u. S. Is stepping up its efforts against huawei and cte. Washington has created a new agency with a 60 billion budget to help businesses purchase telco equipment from other firms. Told bloomberg where he sees the agency putting its money in a bid to find a viable alternative to huawei. When people talk about competition in this space, largely, they are focused on the radio access vendors, and theres three main alternatives to huawei, which are ericsson, nokia, and samsung. Beyond that, the components that go into a lot of this gear are american or at least western european. Those include Companies Like qualcomm, juniper, intel, and numerous other companies that are in the united states. A lot of Companies Stand to gain from selecting a trusted Radio Access Network vendor for future technology. Think germanyi and france have been hesitant to block or ban a specific company like huawei or z te. How do you work with them to get them on board and see the risks that you see and potentially actually ban a specific company . We are not trying to get them to ban any particular company. We been working more than a year now to educate them about the risks of 5g networks. The most important thing to understand is that software can be updated instantaneously, and that update can contain a backdoor or update to disrupt the system. Were talking about also having to apply measures of what our trusted networks, and most fundamental of those is the vendor must be headquartered in a country that has the rule of law and an independent judiciary. Factor to look at his transparency of ownership as well as funding mechanisms for the company. In the case of a company like huawei, what is the role of the Chinese Communist party in huawei and who actually owns the company . It is claimed to be owned by 99 private ownership, but thats probably controlled by the Chinese Communist party. We keep hearing allegations of security threats, but other than allegations of vulnerability, related to voter fraud, we have not seen much in terms of evidence. How much evidence have you seen on those back doors and Cyber Threats so far . We know the United Kingdom looked at huaweis technology. Theyve had a relationship with them nine years, and every year, they find serious and Systemic Software engineering defects. Effectively what we have is a bug door that has so many vulnerabilities in what huawei is producing that it is impossible to really determine if there was an intent put one those they are for future intent to put one of those there for future vulnerability that will be compromised. Taylor i am taylor riggs in San Francisco and this is bloomberg technology. Coming up a major shakeup at the top of alphabet. Google cofounders larry page and sergey brin are stepping down. But they wont have to search long for a new ceo. We will have the latest. Plus, dorsey on the move. The twitter ceo is set to spend half the year in africa