Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Decision tomorrow. Ok cutting rates during the sars outbreak. Stimuluspecting fiscal measures out of south korea, not to mention a hong kong budget so lets get a check of the markets with our cross assets reporter. Downading at session lows, 1. 9 . The nikkei two to five bringing yeartodate losses to more than 6 . Beensi 300 stocks have paring some of the losses, but still down. Hong kong done more than 1 . Fluctuation in 0. 25 . Ow up 0. 5 i want to look closer at the technicals when it comes to the nikkei 225. When you are in a deep selloff, when does it end . Can bees moving averages looked at as Technical Levels of support. It already dropped to the 50day and 100day moving averages. Moving average currently holding, bouncing off that level. We will see if we can close above it. If not, it could portend a super selloff. Lets get more Market Reaction in korea. David ingles is in hong kong. What stands out to you . On top of the price declines in the south korean won , for example, we are on the verge of the level we are watching, so volumes have come through this week. Almost oneo, we were billion shares. Yesterday was the most volume we goingeen on the kospi back to when i was a teenager. And we areay, halfway into the session, look volume ther large day in south korea. Watch thoseue to coronavirus headlines. One u. S. Soldier in south korea has tested positive for the virus. Emergingeing any value in the korean market now . That is where the issue is. Before the Virus Outbreak, one of the big market stories in asia last year was this routing we saw in everything, the entire south korean market, and that actually took valuations to the highest level in a decade before all of this took place, so it gives you a very high incentive if youre looking to sell and scared or uncertain how you price this in. It is a very high incentive for sellers at this time because of those valuations. That comesto see how to fruition sooner than later. In hong kong,s thank you for the latest on the markets. , china has reported 400 six additional cases of the coronavirus, bringing the National Total to just over 78,000, as fears of a pandemic arise with officials warning americans should prepare for a potential outbreak at home. Through the numbers out of china and hubei province. An additional 406 cases reported today out of china, comparing the 580 yesterday, so a decline with the total now over 78,000. The numbers today underscores chinaeory and data out of that there is a continued moderation in terms of the infection rate. A vast majority of the deaths reported today out of hubei china. E, 52 now in discharged over the last 24 hours. Youre looking at a total of 30,000 people who have reportedly recovered, but it is not just china in focus, the korea the world, south with over 1000 deaths. Where youin italy, have had 11 deaths, and in spain, about 1000 people quarantine. New caseys in switzerland, caray should, and austria. The u. S. Stepping up its preparedness. The cdc saying they have an could seeplan that School Closures and some events shut down, but they point to be in the position where if this , theyncrease in the u. S. Want to be in a place where they can effectively control that. The white house is saying they already have it under control, larry kudlow saying we have is contained. A different message from the cdc though. Chinese businesses, most smaller businesses in a race against the clock to survive as activity remains affected. What is china doing given that a lot of these businesses have not been able to Access Funding despite liquidity injections and Monetary Policy loosening . Chart froma terminal the Business Survey released a couple of hours ago. It is a Business Conditions index. They described it as shocking what they are seeing, a record drop for this index falling from 56 to 37. They look at profits and sales to investments. That is a reminder that the pressure private companies are under, and that is why you are seeing the state council coming out and outlining additional vat tax forcluding Companies Operating out of hubei , those costs will be held throughout march and may. They are stepping up funding for banks. For, lending that they want commercial banks to lend to private companies. The private sector accounts for 6 of gdp and 80 of jobs in china. Thank you. Lets get first word news with su keenan. Seesesident trump tremendous progress being made towards a trade deal with india, although there is no timetable for an agreement. Mayp suggested a new deal have to wait until after the elections before that could be signed. American officials have been trying to open up to agriculture and medical devices in return for indias preferential export status. Violence erupting in new delhi, with rival groups clashing over a new citizenship law. At least 10 people died and more than 180 were injured in two days of violence. India has seen widespread demonstrations since parliament approved a law that fast tracks while excluding muslims. Hosni mubarak has died. He was 91 years old. He ruled for 30 years, before being forced out by the arab spring uprising in 2011. He went on trial for the killing of more the nation at 50 protesters by security forces, but was only found guilty of fraud. President trump said he is considering an official response to chinas expulsion of 3 wall st journal reporters. Over ane expelled in which china was mentioned as the sick man of asia. It comes with a titfortat expulsion of chinese journalists from the u. S. We would look at what to expect from the budget later this hour. Plus, betting on support from the pboc, we hear from one Senior Fund Manager next. This is bloomberg. This is Bloomberg Markets asia. Another ceo fred for asian stocks after concerns over the coronavirus triggering a slide in stocks. The global bond rally is continuing as well. Investors are looking for signs of accommodation. Lets bring in our guest. We have seen the pboc doing what it can. We are expecting further monetary easing. Turnover, margin lending, is there a sense that confidence is being restored may too quickly . Yes, thats true. We saw a quick rebound in china heyshares, because it is retailinvestordominant. The Retail Investor is restoring their confidence quickly. We think at this moment that investors are more looking at the fiscal stimulus and monetary policies, but i think there could be a further correction when the numbers come out. , the current expectation for their gdp number for q1 is still quite high, so they could be further downward revised. As long as the outbreak is shortterm, it would not last until q2, and for the overall year, Economic Growth was to be sustainable. Investors will quickly after seeing the numbers go back to looking forward to the stimulus and economic recovery. Be lookingould you at if you were trying to structure your portfolio for the worst case scenario, that we dont know, one quarter, one year . Proofoes that coronavirus portfolio look like . We are still overweight equities in our strategies. Selective inry terms of stocks. The biggestse, problem is uncertainty, the worst thing the market doesnt have gradualwe inking and then come down q2, we will have gone through the four phases of recovery. Technology such as not affected by the outbreak come with those who we found first, then the industrial sectors will follow because of the fiscal stimulus. Later in the second half, the will recover,rs but those will take time because they are the hardest hit sector. Will be looking at the data. At this point, the market is more expensive. Investors are pretty much guessing what will be the economic impact. , and when the numbers are up, people will see policy support in the numbers from the companies will come out and they will have more solid expectations going forward. What about sectors that will not be able to make up a the loss of revenues from this outbreak . Be selectived to in terms of sectors and stocks. Revenuetors will lose for all of q1 and cannot make it back up. They definitely need to cut rent , so thert the retailers revenue in q1 will be a huge retailers, also especially restaurants or the Consumer Services side. Up what they lost in q1. Bee sectors might technologyrelated. We dont believe people will not buy smartphones forever. Theyve purchased delay the decision, then catch up later on when this situation is more stabilized. That is why we are selective in sectors right now and already sold some positions that will be impacted. Four you are overweight in chinese equities, so how do you gauge your preference, whether . Arge cap or small cap we have seen some resilience. , we do not differentiate between small cap and large cap but look specifically to company fundamentals. The government stimulus is important. Actually before the Virus Outbreak at the end of last year been pboc has already cutng policy with the rrr in the measures. ,he next stage will be stimulus is to stimulate in the demand. We would look at specific companies that profit from the consumer side. Time. Nk you for your , the asian currencies we are watching and that the Virus Outbreak. This is bloomberg. Has weakened won to at threeweek low. Bloombergsin emerging market and singapore. We have seen the korean won take a hit during the sars outbreak 17 years ago. Model puttingnew the path towards what aspects of a Virus Outbreak because currencies to react in certain ways, so what are you seeing . Isthe first big take away the model explains currency movements quite well, and the components are the countrys economic relationship with china , plus the local caseload for the virus. To theare referring Infectious Diseases vulnerability index. In terms of how the data is compiled, can you elaborate on what we are looking at here . Yes, i should say i started modeling it with the Infectious Disease index, but we left that out because one of the interesting findings was the markets did not care about Infectious Disease vulnerability , so those countries most vulnerable like indonesia, india, and the philippines are actually relatively unscathed. Globaluld change with a outbreak or another phase of the coronaVirus Outbreak. That was an interesting finding. Otherwise, as you were noting at was hit the korean won harder than our model would have predicted. The peso and taiwanese dollar are slightly more would say one would expect. You are saying that the to haveon seems overreacted. Are there any Currency Pairs that look resilient now, but infectious be reacting to the outbreak more . Would it would depend on what happened. The peso is somewhat surprising. Taiwan has moved less than you would have expected with the model. The real standouts are those countries that will be vulnerable in the event of a truly global pandemic. Issue, know as a side pandemic risks is something that could occur on multiple occasions in the future as well. With greater human population , andty, Climate Change increase consumption of Animal Protein make it more likely that these sorts of episodes occur. Thank you. Lets get the business flash headlines. Been criticized for a cycle of disruption. He is calling on the board to take matters seriously. Bloomberg heelling could leave the bank as soon as next year. Says the bank is looking aggressively at acquisitions. He says the bank is looking at targets across business lines and could fight anything that is not another u. S. Bank. He added j. P. Morgan has a greater appetite for deals, accommodative regulators. We are looking to be aggressive and acquisitions, so apple, facebook, google, payments, white label, black label, marketplaces, that is the world we will face. , we shouldes to m a be very creative. There are christians over one company ties to china. Oversees theo pension fund has been repeatedly accused as being a source for the chinese government. Stephen schwarzman and howards marks are pushing back, saying they are unwarranted. A lot more to come. This is bloomberg. 10 29 p. M. In hong kong and shanghai. Which isd south korea reported an additional 169 coronavirus cases which brings its total infection count to more than 1100 people. The countrys death toll rose to 11 after a mongolian man was confirmed to have died from the virus. The latest infections were centered in a city which has become the epicenter of the korean outbreak. The u. S. Centers for Disease Control and prevention here in the u. S. Has warned americans to prepare for a potential coronaVirus Outbreak. The cdc says that citizens should be prepared for disruptions to their daily lives. Ncluding the Closing Health Officials Say its not a matter of if, but a question of when the virus becomes widespread here in the u. S. 60 americans have contracted the virus so far and none have died. Its not so much a question of if this will happen anymore. Rather more a question of exactly when this will happen and how many people in this country will become infected and how many of those will develop severe or more complicated disease. We have been preparing to address this type of threat and limit the impact on our communities for many years. To tokyo now. The 2020 olympics scheduled to take place in tokyo are now in doubt as organizers say they are much more likely to be canceled been postponed if the coronavirus at wake outbreak worsens. The Committee Says organizers to decide,months adding that the skill of the event means it cannot be delayed or moved. Japan has spent almost 13 billion in preparation for the event, twice what it budgeted. Havesh authorities isolated 1000 workers. An italian man and his wife who were staying there tested positive for the virus. They may have been infected during a recent trip to italy. 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 su keenan. This is bloomberg. Thank you so much for that. Breaking news crossing the bloomberg. Out kong is set to hand 10,000 hong kong dollars to each as wen over the age of 18 prepare for the budget presentation today. We are expecting a bump in budget in terms of spending big to alleviate the economy from some of the impact we have seen of the most recent coronavirus threat but also six months of ongoing social unrest and protest. A slump in retail sales and Business Sentiment as well as in the property sector. We are expecting that annual budget to really address the fact that this is a city in recession and we ask that are expecting more recession to come. Expecting to see another contraction. We are learning more from Cathay Pacific in terms of the impact on the airline sector. 25,000 of their staff have taken up the offer of unpaid leave. We continue to watch the fallout when it comes to the tourism and airline sectors. We are getting the latest tweets from President Trump well saying that the cdc is doing a great job of handling the coronaVirus Outbreak, saying that this includes there he early closing of the u. S. Borders to certain areas of the world. Hes criticizing the democrats for opposing the closure of these borders as they said that it was too soon. This is Democratic Candidates debate in south carolina. Its interesting to point out that although President Trump and larry kudlow have been saying that the coronavirus has been contained outside of the u. S. , the cdc has come out warning americans that there could be disruptions to daily life. The cdc also really worried about the lack of these testing kits. They have developed some test but they have shown inconclusive results. Only 12 states and regions actually test for the virus. All these coronavirus headlines are having an impact on the market. Lets have a deeper look at what is happening across asia. We are joined now by sarah ponczek. What is the latest when it comes to this investor positioning as we continue to see the latest headlines on the virus . The selloff deepens. Were seeing investors shy away from areas of the market that are tilted towards cyclicality. X l. A. Is a fun that tracks industrial stocks. 850 million of outflows in one day. Seene past two days, weve 10 billion exit the largest s p 500 fund. , this is a funds fund that is heavily tilted towards japan, the largest geographical waiting. It has lost more than 18 of its assets this year. Shying away from global stocks. We see a steep selloff once again in japanese equities. On the flipside, we do continue to see investors move towards gold through the likes of gold etfs. We are seeing a little bit of a pickup when it comes to s p 500 march futures, rising. Nasdaq 100 contracts up by close to 1 . A little bit of a green shoot. Other investors are relying on the next report. Someed will come in at point, maybe in april, to save the market. Absolutely. The fed particularly is alive and well. Many investors pointing to Interest Rates and saying, we have record low Interest Rates on 10 year treasury yields. Markets are calling for the fed to act. We did have the vice chair come out overnight and say that its too soon to speculate. As of now, he believes that policy is in a good place. Theres one area of the market that is questioning the ecig efficacy. How substantive will the fed actually be in helping markets turn higher . If you were to take a look at stocks with low balance sheets, a Goldman Sachs back skit of companies with weak balance sheets. High debt loads. They have underperformed. They are about to enter a correction. Record low Interest Rates would be good for stocks with high debt loads. The problem is, if you believe that a recession is coming, that wont help you. All right. Thats a look at the markets. Breaking news crossing the bloomberg on tesla. We are hearing that tesla and panasonic are set to end their joint solar cell venture in new york. They will continue output of their factory. They are scrapping their partnership in producing solar cells after years of a struggling to ramp up output. The factory is located in upstate new york. The companies intend to continue working together on automotive factories. This is another setback in a very strained relationship which had been considered pretty key to panasonics turnaround story. When it comes to how impactful this is for the business, its not a huge part of teslas overall revenue. Its about 6 . We know that elon musk has been very passionate about the Energy Business and creating these synergies with the electric car side of the business. We will get you more details on that story. Tesla and panasonic and their solar cell output in upstate new york. Must go to hong kong lets go to hong kong. Local media reporting that 10,000 handed out to every citizen over the age of 18 as part of the budget. We are expecting a raft of other measures there as well. Hong kong is facing its first backtoback recessions on record. The coronavirus lowdown is coming hot on the heels of months of antigovernment protest. Yvonne man joins us now. We are hearing that the fairly controversial 10,000 to each citizen measure is going ahead. Thats according to local hong kong media. What else are we going to see in terms of these fast fiscal reserves that we know hong kong has . How will they deploy them to cushion the impact of the virus . Its interesting from the headline. We could be seeing cash hands out that handouts. Seeing cash hands outs. Will people say that money or spend it . Willoughby fed into the right parts of the economy that have been hit hard . Smb retail, tourism. The numbers have been bad. In terms of the ample supply of cash reserves, 144 billion worth. They have been saving up for a rainy day. Is now the time for these bold moves . We could be hearing the first budget deficit in 15 years from the finance secretary. He will deliver that speech and a half hour. Expectedted to read to announce a record deficit for this year. Deficits on budget top of the backtoback recessions. The chief executive did pledge earlier, a 3. 8 billion extra funding relief package. Most of which will go into a oneoff subsidy to the hardhit industries. Also to fighting this virus, so the health of the hospital authority. Production of surgical masks which we have seen a shortage of in the city. Thats on top of the 4. 5 billion stimulus measure we saw last year. We will see if this is enough. Bold moves from singapore, a bigbudget there. The biggest deficits in 1997. We will see if this works in avoiding another recession this year. This coming at a time that we are expecting the third consecutive quarter of gdp decline. Its not looking great. Fourth quarter, those numbers will be announced at the top of the hour. Paul 10 will highlight those in his speech. 2. 9 contraction is expected. That would mark the Third Quarter of contraction that weve seen in 2019. We look at the final annual numbers for last year. A deeper recession forecasted for this year. They have slashed their goal growth forecast to a contraction of 2. 4 . They are saying the domestic economy already was in a recession before this outbreak. There is little room now for households and businesses to whether another shock. Thank you. Coming up next, we will focus on a female disruptor. A woman who is shaking up the business of knowledge and making it more excessive a. This is bloomberg. This is Bloomberg Markets asia. Its time for this weeks bloomberg equality segment. Today we are featuring an entrepreneur who is trying to connect some of the worlds leatest minds the link via ink. A connect users to a community in more than 80 countries. Its founder and ceo is with us. Thank you very much for joining us today. Explain to us how link works. On paper, it sounds a little bit like linkedin and google as well. What is it exactly . Thanks for having me. Thats a good analogy anyway. The way we think of link is, a platform that powers the knowledge economy. The way we are approaching this is with the belief that the world is going through a knowledge revolution. People should be valued not just based on where you work and where you go to school but really about what you know. Offering isuilt the to enable the individual to monetize what they know by having conversations with customers and professionals that may appreciate their viewpoint or their insights on the problems that these individuals will be working on solving. Through that, we have basically built an Enterprise Business that works with more than 100 companies around the world and generates about seven digit revenues annually. How is your revenue model . Membership fees or ads on the platform . We believe in not having ad models for this. A different kind of incentive. The way we are looking at monetizing this is through subscriptions. Customers that are tapping this knowledge would be paying for access to this access. Business,that your you put it out there as being, this is a new type of service that you are creating. In terms of measurement of success, of performance, how do you assess how well you are doing . Thats a great question. Thanks for asking that. The way that we think about lynk is, while one aspect is collecting, customers with experts, we are trying to do is to come up with underlying technologies that allow for that indexing and that access to happen more efficiently at scale. The way we are measuring this is the amount of data that we are really using to do that in a way. Than a million questions on the platform already. We have more than 600,000 experts in the network. The way it works is, for each expert, we are building a knowledge credential and profile for each individual. Thereby allowing much more easy access to these individuals to allow them to put themselves out there and build their credentials over time. . You have said in the past that hong kong is not known as being the start of center of asia. We know the city is going through some pretty tough economic times. How are you finding it for your business . Are you finding the nature of the platform as seeing some resilience, given that it is online . Right. Perspective, it is twofold. Known culturally, you have a lot of very Diverse People coming together. It is a mixed pod. It makes it interesting. We have a very interesting International Team in hong kong with more than 20 nationalities, more than 20 link which is spoken. That is very unique. You dont see that in many parts of the world. The other thing about lynk, while we have our headquarter in hong kong, we have eight offices. We have offices in shanghai, singapore, india, new york, toronto. While there is some impact in terms of saying, we have to work ultimately access is not affected. Revenue wise, it is pretty global. We are very fortunate. Thank you so much for joining us. Thats the founder and ceo of Global Knowledge sharing platform lynk. Were getting local news reports eating more details of what the hong kong budget may look like. Planning for a total of 120 billion hong kong dollars in a relief package in the upcoming budget which is coming up and 50 minutes. Thats according to the south China Morning post. Lets get to the state visit of President Trump in india. Touting it as a tremendous amount of progress being made on a trade guild deal with india. He sought to transient that strengthen ties to the company country. We are joined by our asia government reporter. What did we see in terms of absolute actual compliments on both sides . There was a lot of pomp and celebration. President trump was evidently pleased with the welcoming crowds. This trip was about deepening seeswith a country that it pushing back chinas influence in asia. The military deal that they signed yesterday is an important part of that. They also talked about deepening commitments on cybersecurity. Of course, there was an emphasis on the role in the court. They talked about how they will work on a big trade deal which was expected to be at this time. They say they will be working on it. For india, the defense team was extremely deal was actually good news. Broadly, it is one friendship that he shares with President Trump. It would be good for him domestically. Quickly. Even while the president was there in new delhi, the were protests on the street. Should we be concerned about instability in india . People in delhi have been watching with a lot of concern because there have been violence against protesters who have been protesting against this new religionbased law which they say is against muslims. News poured in through the day yesterday about attacks on homes and protesters and journalists. It is significant that president said that he has raised the issue with Prime Minister modi. Tacitms like he received International Support for his government hardline action. Asked aboutmp was the violence in delhi, he sidestepped the issue of the ongoing violence. He said that he would leave that to india to handle. Thats our asia government reporter. Thank you so much for joining us. Run,g up, after a 15 year bob iger has handed the reins to another disney veteran. We will hear from them both, next. This is bloomberg. Bought geithner bob iger has handed power to the theme park head who becomes the companys new ceo. Eiger will stay on as chairman, focusing on disneys creative pursuits. He spoke to bloombergs emily chan. Is a great time to begin this transition. I was going to be leaving the company at the end of 2021. The board has been engaged in the process for quite some time and considering who best to succeed me. We have someone who not only knows the company very well, having run a few of are really important businesses including parks and resorts, but hes also someone that we know very well and we could not think of a better candidate to take over the company at this time. In terms of why now, we recently completed the acquisition of 21st century fox and have been engaged with assimilating those businesses. We also deployed a brandnew strategy. Our director of consumer and given the fact that our asset base and our new strategy is in place, my next priority was really making sure that our creative pipeline was as vibrant and as rich as possible. Its the most important thing at the company, particularly given the new strategy. In order for me to concentrate on those creative pursuits of the company, i really needed to turn over the reins to someone else so that they could essentially run the company daytoday and free me up to do what i think should be the priority at this point. It made perfect sense. It also creates a really smooth transition, given the fact that ill be around to advise bob when he needs it and to bring him into the processes that he has not been as familiar with. Tot gives me the opportunity spend the time during this time really working on our creative side. It is effective immediately. Bob talked about the strategy. Where do you intend to double down . To double down on the exact same strategies that bob established 15 years ago that have served us so well. At thecore of Everything Center of our brand is our creative storytelling. If it is right, Everything Else is right. No matter what distribution , so thee you put it in thing ive really taken away from bob igers legacy is get the content right and Everything Else follow suit. Changing of the guard. That was bob iger and disneys new ceo speaking with bloombergs emily chang. Lets take a look ahead. Markets coverage does continue in the next hour. We are seeing the selloff continue here in asia. This is bloomberg. It is almost 11 00 in singapore, 8 30 a. M. In mumbai. Of thehe last hour trading session in hong kong. Fears of a coronavirus pandemic roil financial markets. Cases in south korea have topped 1100. The cdc warns of widespread disruption if the virus spreads in the u. S. But the administration sees no cause for concern yet. Breaksh handout, cash and investment. Hong kong prepares to deliver a budget to save an economy wracked by the virus and protests. This is bloomberg. Lets get straight to markets and our asset reporter in new york. Sarah, it was an epic route of the u. S. And asia. We do see markets off their lows of the session and we do see u. S. Futures rebounding. S p 500 futures up 0. 7 but a really rough, not just one day but todays, the worst two days straight since 2015, 2 days declines. F the csi 100 down 0. 7 , it was before. Ther the hang seng off 0. 8 . The hang seng bounced off the moving average, acting lets look at the board. A couple stocks within japanese lower,s that are trading wedding related companies, there were reports the coronavirus had been spreading through gyms in japan and that is weighing on sports companies, each falling. A wedding company, there have been some presumptions that weddings may be canceled if people dont want to bring together large groups of people. That company, off by 3. 8 . Our asset reporter, sarah, thank you. We are keeping an eye on hong kong. It is budget day and we are waiting to hear from the financial secretary who will deliver the budget. There we have it, looking at him right now. Coming amidudget disruptions by the coronavirus. Protest innths of the city, sending the economy into a recession. Estimatingpaul chan gdp 2 , and that has been downgraded due to the prolonged protests. He has to take into account the coronavirus concerns as well. That is weighing on the economy the economy,in already in recession. They are expecting a back to back any will recession for the first time in a long while for the city, hong kong looking for the first deficit in more than 15 years. In my conversation with kerry in davos, she says digging into their reserves says depends. We are waiting for what paul chan has to say. Us onina economist joins the line. What are you expecting . Could expecting paul chan a little bit more than what he said. He said there will be 3 of gdp in 2020, 2021ed fiscal year and we believe that most, half of them have been announced. Fighting fundss and 10ed a few days ago, billion of social welfare measures announced a month ago hospitalsllion to the for supplies. These are announced before. 40se amounted to around billion hunky 40 billion. That is 3 of gdp. Hk includesillion handoutsssions and tax although it may not be very effective. Not very effective we have charts saying the recession could be even deeper. It is looking at a contraction of 2. 5 . How bad could it look if these measures are not enough . My forecast for 2020 is negative 4. 45 . This already comes in this fiscal stimulus the government will put in. I believe when you get cash at havemoment, when people very little consumption, what do they do to stay safe back of this is not something really effective during the epidemic. It could be effective if the handout now but if they handout now but the consumers could spend the money later. We dont know because consumer withinr could change these few months. So this is a big question for me. Also, handing out cash to not be effective in helping gdp but could be stabilizing the job market. But still, many restaurants, due coronavirus,ts and are facing very big pressure to close down. Chan saying hong is in 2019 gdp contraction. Economists expecting 1 , so this is worse than expected. What is your reaction . You talked about unemployment. Are we looking at unemployment at 5 , which will be quite substantial . Ismy forecast for 2019 1. 175, so if you rounded off, it is 1. 2 . There is anything special for 2019 because we know it the second part of 2019, is all about protests affecting retailers and transportation. This is already known. Of the budget is not known, how it could effectively boost the economy and stabilize employment. This is important. If you stabilize employment, you almost stabilize consumption. Iris will stay with us. Hong kong now says the worst economic fallout from the outbreak, that is coming from , and this is expressed by other countries including singapore. Lets get more on hong kongs budget with jeremy, good to have you with us. What measures are you looking at to help revitalize hong kongs economy . It is very important right now because the economy is very bad in hong kong because of the outbreak of coronavirus. I think the measures people are looking for is not right now, the key thing is the cash flow for the enterprise. People are looking for whether the government can put measures that can help the enterprise to obtain Interest Rate loans, such that they can finance the operation during a difficult time. This can also help the enterprise to maintain their not makeand redundancies during this particular special time. Probably the is, payment of tax payments, the government already [indiscernible] if you have difficulty, you can actually do for your tax payment. But you still need to look at, provide some documentation. People are hoping the government can approve first [indiscernible] the enterprise can obtain the funds to finance operations as soon as possible. It is also about tax incentives to attract capital so we wont see capital flight to the likes of singapore. What types of incentives would work . For the medium and longterm, tocourse hong kong needs think about tax incentives to attract Foreign Investments to set up their operations. We have been doing that very well for, especially for financial Interest Rates. There are a number of tax incentives, offshore funds, captive insurance, lately we have the Aircraft Leasing arrangement. Havether industry, we only Tax Deductions for high Tech Industry and for r d expenditures you could get a text eduction. I think we should put more tax incentives to attract Foreign Investment coming through hong kong. For example, we can offer special tax rates for Foreign Companies coming to hong kong to set up an r d center in hong kong. We need to increase our tax itaty network such that would minimize the withholding tax imposed on Royalty Income received by these high tech companies. Might havey, we refundable tax Credit System for r d expenditures because most of the r d center in the first few years, it will be in a loss position so existing supertex deductions will not help that. If they can convert part of the expenditure into a reversible a refundable tax credit. On top of the highTech Industry, i think the government should also think about launching the regional headquarter center because most of the Multinational Companies, whether they have operations in asia, they will choose between singapore and hong kong and most of the Multinational Companies in singaporeo stay because of the tax incentives. Even though most of the corporations may be in china or other parts of asia, hong kong has a geographic advantage. [indiscernible] if hong kong wants to be more competitive in these areas, they should also have tax incentives. Jeremy, i want to recap the headlines out of hong kong right now. Paul chan saying hong kongs 2020 gdp growth forecast could zero. 5 . Tion of 1. 5 he previously said hong kongs growth good beef from flat, zero, to 1 , that is deeper than the previous contraction expected. Hong kong 2020 underlying inflation forecast is 2. 5 and its gdp forecast for that hong kong, it may see worse fallout. When you take a look at the text the tech situation, how attractive is it . Reviewt time we saw any of the tech environment in hong kong was in 1976. Correct. , one of theof the acts of the Hong Kong Government is to review the hong kong taxation system. We1976, when the review, comprehensively reviewed the taxation system, we were basically in Manufacturing Type of a Manufacturing Type of economy. Hong kong has become a financial and service industry, so most of the tax law has not been updated and properly refreshed. The development of the hong kong economy. So that is number one, asking the government to look at the tax law comprehensively and also look at some of the tax incentives weep shout in recent years, whether they are effective or not. If they are not, they should talk to the industry and see whether we can improve the tax incentive scheme. Reason for a comprehensive review of the taxation system in hong kong is that the hong kong territorial basis of taxation, this basically has been working very ofl in the past because most the Foreign Companies, they find hong kong [indiscernible] but with theendly, sometives put in place of the initiatives affect the effectiveness of the hong kong territorial taxation system. So hong kong should review to become more competitive in terms of the taxation system. You go,y, before we let we have a line from paul chang saying paul chan saying there should be a maximum cap of 20,000 hong kong dollars. Your reaction . We have been doing that for a number of years. I think that will help to a certain extent, the enterprise. They would get some tax refund back. His is what we expected we think this will continue another year, especially in this difficult year for the tax rebate, for the enterprise. Thank you soi, much for your insight. Kong. Budget day in Hong Hong Kong financial secretary paul chan delivering the 20202021 budget right now. Global subscribers can watch that on live go. To recap, hong kong 2020 gdp growth forecast now to contraction of 1. 5 to half a percent. The first word headlines with su keenan in new york. Beijing, whichh has released its latest figures on the coronavirus. It shows a dip in both the number of new cases and the number of new deaths. There were 406 additional infections on tuesday, nearly all of them in a certain province. That brings the total in china to just over 78,000. Two more people lost their lives. Chinas death stole death has risen. President trump says tremendous progress is being made towards a trade deal with india. There is no timetable for an agreement. He is on a second day in the country. He suggested any deal may have to wait until after the u. S. Elections before it could be signed. American officials have been working to open india up to u. S. Agriculture and medical devices in return for restoration of indias preferential export status. Violence has interrupted rivald in new delhi with groups clashing with themselves in a police over a citizenship law. At least 10 people died and more than 180 were injured in two days of violence. India has seen widespread violence since the summer when Parliament Fast tracked naturalization for some foreignborn religious minorities but excludes muslims. The former ejection president Hosni Mubarak has died treaty was 91. He ruled for 30 years before being forced out about this by the arab spring uprising in 2011. He went on trial for the killing of more than 850 protesters by his security forces, but in the end he was only found guilty of fraud. Global news 24 hours a day come on iran on quick take by day, ong 24 hours a quick take by bloomberg, im su keenan and this is bloomberg. We will continue to watch the hong kong budget speech and bring you the latest on the coronaVirus Outbreak. Driving hour, self a self driving Company Secures funding. We will hear from the ceo. This is bloomberg. Welcome back. Fears of a pandemic are rising with u. S. Health officials warning americans to prepare for a potential coronaVirus Outbreak at home. Cases and china have risen to just over 78,000. South korea has more than 1100 infections. Our china correspondent joins us from beijing. Run us through the latest numbers. The pace of infections continues to moderate in china, that is the good news. An additional 408 cases announced today, compared to 500 yesterday. The numbers of deaths is decreasing, as well, on a daily basis. An additional 52 people died in the last 24 hours or so, according to the official data, and another positive is the numbers of people who are being discharged, and recovered from the illness qamar round 2400. No more than 30,000 people have recovered since the start of the virus in china. If you take this data out of value. T face south Korea Remains a hotspot so a bullet above 1100 confirmed infections. They reported 12 deaths. Challenging for south korea authorities. In europe, the focus is on italy and spain. In italy, 11 deaths have been 300 22d and around confirmed cases. In spain, they had to shut down and quarantine about 1000 people at a hotel in the Canary Islands after one of them was confirmed to be affected with the virus. Additional cases in europe in countries likes little and for the first time as well as croatia and austria reporting additional cases. In the u. S. , the cdc unveiled a emergency plan. The white house, playing down the economic potential market impacts, saying things in the u. S. At least are under control. The cdc, getting prepared. Thank you so much for that. To run through the headlines out of hong kong, we have hong kong revising its fourthquarter gdp zero. 3 o minus quarter on quarter from 0. 4 . , and hong kongg ,s also handing out as expected as reported earlier, 10,000 eachkong dollars to permanent resident. Hong kong, it is budget day. We are looking at the financial secretary paul chan looking to boost the economy which is already in recession. Expectations are for a backtoback annual recession for the first time in a very long time. Still to come, we will bring you the latest on hong kongs budget. To the the response virus and social unrest. This is bloomberg. Lets do a check of the latest business flash headlines. Activist investor and one and a robust investor criticized a cycle of disruption. Another regulative [indiscernible] scrutiny of their ties to jeffrey epstein. This has led to public embarrassment and he is calling on the board to make take the matter seriously. The criticism asks questions about his future, with sources saying he could leave the bank as soon as next year. s ceo says the bank is looking aggressively at atuisitions, and speaking the investor day in new york, he said the bank is looking at targets across his miss lines and could buy anything that is not another u. S. Bank is misaligned zedd could buy anything that is not another u. S. Bank. We are looking and will be more aggressive in acquisitions across the board. You will get some form of competition from amazon, apple, bankook, google, payments, in a box, marketplaces. That is the world we will face. We should be very creative. Much like an everything rout in the markets. Where Mainland China is right now, the cfi 300 index down 0. 2 , looking unscathed. Seeing red across the board for asia. X down a whopping 2. 6 the chinext down 2. 6 . Pictures of the city. Almost 11 30 a. M. In singapore. 9 . Ntly down by in line with most of the region. The release of earnings earlier this morning. The latest to freeze wages. Fees between 5 and 15 . 1 . Ently down more than lets take another look at markets. , what is the latest we are seeing when it comes to investor positioning . Some say we are not seeing capitulation . Sarah we are not seeing capitulation. It is very notable that benchmarks are off. When it comes to investor positioning, we continue to see investors moving away from different areas of the market that are cyclical or exposed to growth. Has lost about 10 billion. Take a look. This tracks the industrial sector. In onelost 850 million day. That is a record outflow for the funds since it was intercepted. For the funds. Assets, so fars this year. You do see this move away from cyclicals. You continue to investors moving. Haslinda will the fed come to the rescue . Coming back to save the markets and save the day . Sarah it is still alive and well. Enoughe going gets rough , they will fix it. It is way too soon to speculate about the effect of the coronavirus. Just look at where Interest Rates are right now, and year record lows. It points to the idea that the market does want the said to act. Even if the fed were to cut Interest Rates, how effective would that be if you took a look at companies. Wouldy low Interest Rate be helping the stocks. Downturn. En a massive close to a correction. People are very worried about growth. If a fedd rate cut rate cut is not going to be effective, they could help with that. Haslinda we are already talking about negative rates. Sarah, at what point are falling rates and issue . Amount hasglobal shot back up, as we have seen this global bond rally. 14 trillion in value. Mixed Interest Rates are already an issue from a valuation perspective. It would help the stock picture. If you believe they are as low because of a dire growth outlook, that is a bad scenario for stocks. Cio and he said rates are already an issue. If you were to look at another level, it would be 1 . If we were to fall below 1 on the 10 year, that would be or ignite a signal. Sarah, thank you so much for that. Now, hong kongs budget is being delivered right now. Yvonne mann joins us from hong kong. What have they revealed so far . Billion in relief. That is double what we saw in 2019. The city expecting the record deficit for the fiscal 2020 year. What we learned so far . Loans. Erest some help from the small and medium businesses that have been hit hard. Coronavirus. It is no surprise. We were expecting that. Cash handouts for permanent residence above the age of 18. There are a lot of . There were a lot of question marks, if he was going to go for this. He was not sure this would feed into the right part of the economy. The question is if people are going to spend it or put it in the bank. Time, whenhis consumption is so low, it might be hard to see how effective a cash handout can be. Help in stabilizing unemployment. Evising quarter on quarter, slightly better. It is slightly better than the 0. 4 contraction. 2. 9 contraction. 2019 now annually. When it came to 2020, that has actually been a downgrade of 1. 5 , a downgrade from the positive earlier. Haslinda looking at a contraction for 2020. About ties inay china . Mentioned it was important that they maintain the ties that they have with china. It probably will not bode well for protesters. Actually an erosion of their identity. That thetimistic economy will recover and was confident in chinas economy, that they will rebound once the outbreak subsides. They should also it is something that they are looking forward to. Policyve the adequate tools to maintain stability. Haslinda taking us through the details of the budget. Trial. Ng will offer a they have been under a lot of pressure, repaying loans. Still with us is iris. Ofyou follow developments the budget, is it enough . For corporate, this is actually a good idea, but not enough. For ament is that restaurant, a chain restaurant not a chain restaurant but a small restaurant. Very little this is that will not be of the the problem industry. Better than none because they can still pay their wages. , it is, for this one for all the broad taxpayers. Ifelieve it would be better they focus on lower income groups and get them more benefits, including education benefits. So that we can be more equal. China is still trying to be physically prudent. Ensuring that we do not go overboard. Resources are finite. Because it is an issue of finance resources. Fiscal reserve. Spends 82 billion this year, it is 7. 5 of the fiscal reserve. It is not really a critical thing. I think that this year is the year to spend fiscal money. Haslinda thank you so much for your assessment, downgrading for now, lets go to su keenan in new york. Su the latest on the coronavirus. Americans about the coronaVirus Outbreak. Be prepared for disruptions to their daily lives. Health Officials Say it is not a matter of is but when the virus comes widespread in the u. S. It is not so much a question of if this will happen, but a question of when it will happen. And how many people will become infected . Severe orill develop more complicated diseases . We have been preparing to address this for many years. Su olympics in tokyo are in doubt. Organizers have two to three months to decide. The scale of the amount the event means that it cannot be delayed or removed. Authorities have isolated about 1000 guests and workers on the canary island. That is after an italian man and his wife who were staying there tested positive for the coronavirus. Infectedhave been during a recent trip to italy. The number of Coronavirus Infections continues to rise including 34 new cases. New infections were found in bahrain and kuwait. All of the linked to iran. That has prompted airlines to restrict flight. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im su keenan. This is bloomberg. More headlines from the hong kong budget, allocating 700 million in terms to promote tourism. Prolonged protest we have been seeing, allocating those funds for tourism and fixed rate mortgage. Still to come on the show, after a 15 year run, handing over the reins to another disney veteran. We will hear from them, next. This is bloomberg. Haslinda Indian Markets have just opened. Lets get over to mumbai. Standing by to take us through what to expect. How is it looking . Not great. In line with how the equities have been behaving. That is what futures were indicating this morning. They have reached some key levels. Around thereading mark. Below that mark of 14,000. To the moving average. Sing below those apples those levels. Performing in this calendar. About 72lso down points. We could be in for more volatility. We had the monthly contract expiring. You are watching indian banks, and indian banks. Yes. They have been in focus. Let me begin with that. Morgan stanley has come out with an interesting report. What they have done is raised the target price from the earlier target. The raten for that is of 520, due to likely gains. It has reacted positively. A restriction and branch opening. Haslinda thank you for that update. Disneys bob iger has handed the reins over. This is effective immediately. Focusing on disneys greatest pursuit. Is a great time to begin this transition. I was going to be leaving the company and my role as ceo in 2021. The board has been engaged in the process for quite some time. We have someone who not only buts the company very well he is also someone that we know very well and we could not think of a better candidate to take over at this time. We have been engaged in assimilating those businesses and we have deployed a brandnew with disney plus, hulu and hot start. These and our asset strategy is in place, my next priority was to make sure that the creative pipeline was as creative and rich as possible, the most important thing at the company, given the new strategy. In order for me to focus on those endeavors of the company, i needed to turn over the reins to somebody else, so they could essentially run the company daytoday. Sense and itct creates a smooth transition, given the fact that i will be around to advise bob when he needs it. That gives me the opportunity to spend the time working on our creative side. Some talk about the streaming strategy. Ome sequels where do you intend to double down . I intend to double down on the same strategies that served so well. Our brand is creative storytelling. If it is right, Everything Else is right. The thing i have taken away from his legacy is to get the content right. That was bob iger and his replacement speaking with bloomberg. Investing inyota the latest funding round. Interview, next. This is bloomberg. Haslinda chineseamerican startup raised four hundred Million Dollars in funding from toyota, pushing the startup valuation to more than 3 billion. Talking about what the funding will be used for. Forhe money is partially the continuation. Another is to make the Mobility Services more like a reality to to make it faster. How are you going to commercialize the activity . You have two goals. One is to provide an Autonomous Vehicle system and the other is to look at Mobility Services. How does that happen . Gearedcollaboration is towards the second one. Ai and toyota collaborate with the systems that ai built. You commercialize your toyota had your business. Together a safe and reliable vehicle, and we use that for the right sharing services. Pilote already launched operation in china and in california. He partnered with other automakers. Did toyota insist on any exclusivity when they gave you this latest round of funding . I am honored that toyota is very openminded. We shared the same vision that the Mobility Service has a benefit to all. Toyota actually is quite other,nded to allow potential collaborations down the road. What market are you prioritizing . You have been testing in china and california. Where do you think you will go to market first . We are focusing on testing and r d. Which market to tackle first will depend on the maturity of the technology and the regulatory factor. It is too early to tell. . Will see where lippi in china or the u. S. . China or the u. S. . Do we see partnered with any other automakers . That is definitely a possibility. This investment does not have a strong exclusivity. There could be possibilities. There is nothing concrete yet. How many years can you keep going with the funds you have already raised . There is a compatibility market where the growth it really depends on our growth rate. It will vary around two to three years. Ai whatribe pony has been the impact from the coronavirus, in terms of testing . Impacted your work in Mainland China . It has impacted somewhat, but it is rather limited. We actually already resumed testing and some operations in china. And that is is next. That is it for Bloomberg Markets asia. Bloomberg daybreak europe middle east is next. Tv just keeps getting better. How you watch it does too. This is xfinity x1. Featuring the Emmy Awardwinning voice remote. Streaming Services Without changing passwords and input. Live sports with realtime stats and scores. Access to the most 4k content. And your movies and shows to go. The best tv experience is the best tv value. Xfinity x1. Simple. Easy. Awesome. Xfinity. The future of awesome. Manus this is bloomberg daybreak middle east. Controlers for disease and prevention warning america to prepare for an outbreak at home. More than 80,000 cases. 7. 6 . P 500 has lost european stocks in the worst skids since the referendum. And 10 year treasuries at a record low. Latest flare as the debate gets its first mention