Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240711

Policy speech. The city faces rising infection rates and a clamp from beijing. Joe biden names his Foreign Policy and Security Team as he with to calm Relations International friends and foes. He says america is back ready to lead. Haidi lets look at the set up at the start of trading. We are seeing some green shoots at the open, about. 4 higher. Global stocks as well as asian stocks continuing to be on a tear. We are watching keenly for developments in kiwi assets, given we had the rbc releasing its semiannual stability report. This is pushing the kiwi dollar higher. U. S. Ashed through . 70 yesterday and we are seeing expectations of negative rates dissipate even further. Unlovedtors rotate into areas, it may not mean the end of things that have been successful so far. John praveen is Portfolio Manager for qma. He joins us on the phone from new york. We are talking about what happens to big tech given the rotation trade gaining a more solid footing. Is it the behavioral changes, changes in technology, workforce instruction . These are permanent changes that will stick post pandemic . John that is our thesis and believe. Actually i would not use the word rotation, i would use the word broadening of the market. What we are seeing is many of ,he unloved areas of the market these cyclicals and value stocks that were beaten up because of the virus, in january could rally because of positive news on the vaccine front. A rally of the uncertainty associated with the u. S. Elections is beginning to fade as it looks like the Biden Administration will have a smooth transition. Stocks that have rallied thus far in 2020 are probably going to continue to do well because many of these peaks, the digitalization theme or the use , these themes are likely to continue. They are not likely to change because people are going back to work. And the end of the lockdowns may be around the corner. We remain positive on the outlook for those structural themes and the sectors and stocks that support those themes , technology, online retailing, communications services. They will continue to do well, but we would like to see a broadening into the cyclical names because of the recovery and also the value names, because they were beaten up. We will see a broadening of the market. Shery take a look at earnings ratios locally, rising toward multiyear highs in 2020. Given the unusual circumstances loosehe pandemic, monetary conditions, the expectations of stimulus, do we put aside traditional gauges of whether the market is overpriced or not . John we do not put aside traditional measures. Inhave to understand that 2020 these traditional measures valuation driven byd expansion a lot of monetary and fiscal stimulus. Forward, what we are likely to see in 2021 is a very strong rebound in earnings. Are weus expectations should see between 25 and 30 of earnings grow, which is understandable because we have had a big decline, so therefore we should have a demand. Also because we have a strong economic recovery, that should fuel earnings. Adjust to aons will more normal level. Shery will that be acrosstheboard around the world . Or are we talking about going back to the era of u. S. Exceptionalism when we saw the longest stretch of Economic Growth and boom market . Are we going back where the u. S. Is leading again . Led byhe rally this year the u. S. And, to some extent, by other countries like china, also an expansion of themes. Likeother Asian Countries china, taiwan, and korea have also had strong gains. Going forward, you are likely to see a catch up rally through other countries of europe and some other Asian Countries that have not participated in the rally. Catch upkely to see a rally in those markets. But it is a catch up, which means the u. S. Is going to continue to do well. Chinese csi will probably continue to do well. Technology stocks will continue to do well. Will you be avoiding, then . It is more about broadening. Many of these cyclical names, whether it is industrials, energy, materials, we are going to try to move some of those names and stocks, some of the value trades, from the small caps. Those have not participated in the rally, so we are likely to move into those stocks and the asian rockets markets that have not had a value, like india. And into europe. We are going to be getting exposure to those countries that are likely to have a catch up rally. May be take a little bit of money off the table in the areas that have had big rallies, not necessarily avoiding sectors. Haidi john provine, Portfolio Manager at qma, thank you. John biden has introduced his Foreign Policy and Security Experts as he seems to seeks to calm relations with International Friends and foes. He is promising a multilateral approach, issuing the America First approach of the trump administration. He said america is back ready to lead and not retreat. Wall street is sounding the alarm on a new global downturn, adding pressure on Central Banks to set aside politics and do more to spur demand. Optimism about a vaccine is offset by fear the delivery may take months while infection rates sort. Economists say it will not take much bad news for the u. S. , japan, and the euro area to contract again. The chinese premier says he expects the economy to see positive growth this year despite the covid induced downturn in the first quarter. Speaking after talks to the royal bank and imf, lee said china has been hit hard but is on a path to further recovery. He said allowing consumption to play a bigger role will drive expansion. As the end of] the year approaches, based on current data we can say with certainty and confidence that chinas economy can achieve positive growth in 2020. Reasonableward to a operating range next year. The u. S. Has confirmed its decision to designate as a threat to National Security designate cte as a threat to National Security. Zte are determined to drive and while way out of the u. S. Market. The fec will consider lifting prohibitive components when it meets next month. Global news 24 hours a day, onair and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. China Education Group is the largest listed Higher Education company on the mainland. We will be speaking with the cfo about his m a plan. Plus, carrie lam delivers her anticipated Economic Policy address. There is no shortage of issues from pandemic to policy. We will take a look at the rally we are seeing in sydney stocks. We have seen enhanced risk for Australian Investors and november looks like the best month ever. Morgan stanley also raising its price target to 6700 for the asx. This is bloomberg. Shery carrie lam is set to deliver her delayed annual policy address later. There is no shortage of challenges facing the city. The virus and a security clampdown from beijing are on top of perennial problems, including a housing shortage and the wealth gap. The city is caught between the u. S. And china. Kongen engle is in hong for us this morning. No shortage of complicated issues. What are we expecting from the address . Stephen this is a highly anticipated address from carrie lam because we have had relative calm in hong kong following a year of unrest. This is a chance for carrie lam to, instead of being on the offensive all the time, showing her vision for what hong kong can become now there is relative stability. There is the backdrop of the covid19 pandemic and there have been increased social distancing restrictions, including the closing of bars as of tomorrow, nightclubs, and other establishments. That is the immediate economic shock she must address. It is something both sides of the political divide would agree is a common enemy, the coronavirus. It is also key to economic revival. This is an economy in the deepest recession ever. Fullyear gdp growth or contraction is supposed to be in excess of 6 , so there is an urgency to get the pandemic under control. Then you can start reviving talks of the travel bubble with singapore or opening the border with china. A longerterm strategy is what xi jinping talked about on october 14. The policy address was supposed to happen on october 14 in the Legislative Council behind me, but xi jinping came south and gave a speech in shenzhen on the same day talking about deepening integration between the major cities of guangdong in Southern China with hong kong and macau. I am betting every last dollar that she will be talking about ,er vision via beijing as well plans for greater integration of hong kong. Shery given how long this has been going on, what can she hope to receive to achieve from this one policy address . Stephen i think one thing she could do is give some confidence to the people of hong kong and assure them this is the right path forward. ,nce we get past the pandemic greater integration with the Southern China regions will be the future of hong kong. They have talked about it continuously. Paul chen, the financial secretary, said mobility is the most needed attribute of the young people. We may get some specifics on the job program bandied about in local media. That would include subsidies for young graduates in finance and technology to go to the mainland and study or work for a year. There could also be an expansion of the stock connect to include secondary listed Companies Like alibaba with mainland exchanges. Some specifics that will emphasize the integration with the mainland. There could be local issues as well on low Income Housing as well as cuts for commercial property. The main theme we are going to be listening to is about covid as well as integration and the greater future of hong kong. Haidi Stephen Engle from the streets of hong kong. We will have more perspective on carrie lams address ahead. We will hear from port shelters Richard Harris in the next hour. This is bloomberg. Haidi president elect has introduced the Foreign Policy experts he plans to nominate, declaring that america is back. Lets bring in Emily Wilkins in washington. Nominees reflect what he plans to do in his four years in office . Echoedhis nominees have bidens own stance that America Needs to rebuild its relationships with allies. Fromard a lot of contrast these nominees to trumps americas first approach and the individual trump had running his national Security Team. Had the newsday we janet yellen was the topic for treasury secretary. It sounds like she may have a few administrative challenges, getting access to 455 billion in funds if she gets that job and starts. Emily right. This is the funding that Steve Mnuchin clawed back from the Federal Reserve next week. That already irked democrats, but now he has moved that money into a general reserve that means yellen is not going to be able to deploy that funding unless she gets congressional approval. Haidi government congressional reporter Emily Wilkins there. The former Federal Reserve vice chairman has said the top priority for the central bank should be to undo the destructive actions from treasury secretary steven mnuchin. He spoke to our colleagues in new york. I think item number one on the feds agenda is to try the best it can, and the new secretary of the treasury, but that is not until january 20, will probably help to absolutelyndo the nasty, mean, destructive actions of secretary mnuchin in trying to destroy the emergency lending facilities, private insurance policies, thats what they are. Mr. Mnuchin looked and said, we dont need insurance anymore, there have been no claims, so lets destroy our insurance policies. Thats not the way i act or you act with your homeowners fire insurance. There has been no fire so lets cancel the policy. It was a crazy thing to do i think. Has to be a lot and polite then i just was said, in polite terms, more or less the same thing. What does yellen bring to the table as treasury secretary if confirmed . I am pleased as punch. I think she brings just about ,verything, brainpower for sure relevant knowledge of the Federal Reserve, academia, everywhere. Brings strongminded but i would say softhearted attitudes. We were talking before the break about inequality and things like that. She cares deeply about things like that. The chairman of the fed, which she used to be, is not in position to do much about that. The secretary of treasury, if she has the presidency or, and i hope she will if she has the president s year, and i hope she will, she is in position to do things about that. You can say she has been getting schooled for the position, though i dont think she was anticipating it for a very long time, and she is ready to execute. Is she ready to execute on the politicking . You have written at length about the fact that people, in particular america, suffers when we see economics and politics alive. Not justo do economics, but politicking as well. She is going to suffer from some of that for sure. I was mentioning before the break there is this roadblock named mcconnell who will still be there unless the democrats take those two seats in georgia. There is going to be a lot of hard negotiation, no doubt. It is not like janet yellen will just be able to go to president iden and say, we should do x, z, and they go to congress and it passes. Shery alan blinder speaking to Caroline Hyde and joe weisenthal. Lets get a check of breaking news. J. D. Health, the health unit of tocom, says it is seeking up 3. 5 billion dollars in a Hong Kong Ipo. Trading is expected to begin december 8. They are offering shares at 52, 8, and 70, 58 hong kong each. 381. 9 millioning shares, hoping to raise 3. 5 billion in that ipo. Again, the price 58 hong kong. Begins training december 8. Here is a quick check of the headlines. Dell Technology Posted quarterly revenues that beat expectations in a signed demand for pcs remains above in the work from home era. Sales rose almost 3 in the october period with profits almost half as much above as forecast. Dell has been moving to modernize by using a subscription model, letting clients pay for products as they go rather than upfront. Revenueted quarterly above wall street estimates, listed by customer upgrades for remote work and education. Income was down slightly to 15. 3 billion through october of remained above forecasts 14. 7 billion. Profit was . 62 a share, . 10 higher than some projections. Hp is trying to rebalance its corporate model with lower expenses and fewer employees. Chinese smartphone maker shall me has posted its fastest pace of Revenue Growth in two years as huawei lays back. September sales rose 33 to 11 billion with more than half originating outside its home market for the first time xiaomi has been a beneficiary of the u. S. Drive against huawei Deutsche Bank is weighing plans to permanently let most employees work two days a week from home as it draws lessons from the coronavirus. Germanys largest bank is said to have been discussing the move for several months and the two day rule has emerged as a preferred option. Deutsche spent 2 billion on rent and furniture last year and is looking to reduce expenditure. Next, bloomberg crunches the numbers on the best and worst places to be during the pandemic. This is bloomberg. Shery lets get a check of the markets. Here is Sophie Kamaruddin in hong kong. Sophie the global stock rally continuing in asia, nikkei futures adding 1 . A rally on wall street saw the benchmark clinch a fresh record. The biggest things signaling investors are not necessarily complacent. The kiwi dollar trading near a june 2018 hi even after the rbc governor signaled lower rates are necessary for new zealand. In sydney, gold miners under pressure as bullion is trading near a fourmonth low. Asi 600 higherhe with financials and resources, a cyclical tilt at play. Underperformed peers elsewhere in asiapacific. Japan, india, and south korea have garnered the most foreign attention, generating the most foreign inflows this quarter. Asia on course for the best quarterly inflows since 2014, which has helped the index clinch a fresh record this week with laggards in Southeast Asia joining the rally. Southeast asian stocks set for the best month since 1999. Crunchedoomberg has the numbers for the best and worst places to be in the coronavirus. We looked at where the virus has been handled most effectively with the least disruption. Lets run through the results with emma obrien. I have to scroll down a little bit to find where the United States is, 18 at the moment. Explain to me what their ranking is trying to capture. What were the elements taken into consideration . Emma a number of surprises came out of this. Covering this pandemic from the beginning, day after day, we started to notice how the places emerging best from this crisis, the lease fatalities, less disruption, were not necessarily the places you would have anticipated. Asia has stood out for its strong performance. Smaller countries, even developing economies, were doing better than places, like you mentioned, like the u. S. We wanted to test that using a raft of indicators and thats how this ranking was born. We bring together 10 data points from case and death numbers, a measure that tracks access to vaccines, the gdp impact as well. We are trying to capture where the best places to be all right now with the least disruption to society and economies. It is a snapshot of the best and worst performers at this point in time, but that we fully expect to shift as the pandemic involves. Haidi what do the best performers have in common . Emma top five is overwhelmingly asiapacific with new zealand at number one, japan second, despite a recent uptick, and taiwan, which has not had a locally transmitted infection for more than 200 days, at number three. South korea, which has set the standard for testing and contact tracing, is there too, along with finland, the only nonasia european top performer. They have a few things in common, border restrictions is one. Most of them acted early and decisively when it came to shutting their borders, with International Travel approving a big contributor to how the virus spread. Other defining features of the places that came on top, the places that have proved the most resilient, is that they all, to some extent, brought their populations along with success at containing the coronavirus with the least disruption to business, community, the economy , appears to rely less on being able to order people into lockdowns and more on governments bringing the population along and generating a high degree of trust and compliance. Japan and korea have never gone into compulsory lockdowns. New zealand did but it had a clear and well communicated fourlevel alert system. Taiwan has developed apps that help people find ppe and masks and identify where infections occurred. Contrast this with the u. S. , where even mask wearing triggered intense popular backlash and pushback. Shery i look at the rankings and feel they make sense given the news from these countries. Were there any surprises . Emma the uks position was a bit of a surprise. It ranks below a raft of developing countries, including indonesia, bangladesh, pakistan. There is a few reasons. Rate is much higher, older population, and the economy is much more connected to the world and Global People flows. Places like bangladesh and pakistan also benefited from more recent experience with pandemics and infectious diseases. Pakistan still trying to eradicate polio. Ironically we found that Public Health care infrastructure in places like this and developing economies was more likely to be robust and fresher than in places like the u. K. , where it has been deprioritized over the past few decades. Haidi how is this likely to change when vaccines come into play . Emma vaccines will be a key determining factor Going Forward for how the ranking evolves. The u. S. Has the highest number of deals with front runner vaccine candidates, which did bolster it significantly, our resilience ranking. Given the situation with rising cases and deaths, it would have been 11 runs lower than its 18th position if we did not include this vaccine data point. It has an almost singular focus on securing a vaccine and, to some extent, treatments. Other places have positioned themselves pretty well for vaccine deals. Too, whichanada, comes in at 13. We also have signs European Countries are trying to come out of lockdowns before christmas, so that may shift the ranking as well. Lockdowns are imposed as a way of trying to snuff out the virus , but we view them as a negative at this point in the pandemic cycle. We are almost a year into this. Given the level of disruption they bring. When they ease off, we could see European Countries rise up. Haidi Global Business asia managing editor emma obrien with those pandemic rankings. The Singapore Central Bank chief says the Global Economic recovery is heading into a critical period. Exclusivelymberg why extraordinary stimulus measures cant continue indefinitely. I have no concerns on whats been done. If i have, it is about how are we going to unwind . Getting in is easy, getting out is not. How do you do it . Even in a conversation months before, you said it is not the right time to ease, but you have to start thinking about using. What needs to be in place before that happens . Recognizee have to that the worst of the crisis is most likely behind us. We have to proceed on that basis, that this is therefore a time to start tapering the level of support. You also recognize it is a Recovery Process and you have to start unwinding so you dont have a cliff effect when everything is pulled back at the same time. You have to do this gradually as the recovery progresses. There are no hard and fast rules. You dont pull back enough, you might be storing problems for the future when debt levels are high and you are forced to pull back to suddenly. Haslinda there is so much optimism that we will have enough vaccine by summer for everybody. Expectations of a recovery for the Global Economy . Are we looking at potentially a vshaped recovery when we have the vaccine . It is the level of output that matters and that will take a long time. I think it will be the end of 2021 and 2022 when most countries go back to precovid levels. That assumes the pandemic can be contained and a vaccine is a major part of that. Expectations that we are going to see largescale vaccinations by the middle of next year, rather optimistic. Not wanting to sound pessimistic. The Global Economy is recovering, will continue to recover, but it is going to take longer than what the markets seem to be thinking about when they look at the vaccine. Haslinda what risks remain for the Global Economy . If there are renewed outbreaks and lockdowns of the same scale and severity as earlier this year, that would paralyze economic activity. Thats a major risk. Some of that will have effects that will be longlasting. Then there is the issue of policies. If you get the balance wrong, withdraw to quickly, you might generate a doubledip recession. At the same time, if we go on at the current pace with so much debt, unwinding from the deck accumulation is going to be a major challenge over the next four or five years. The central bank cant keep buying all the government debt. That is going to put pressure on Interest Rates. Debt sustainability is going to be a challenge for many countries. Emerging market economies need to be careful. Haslinda given the unprecedented support from Central Banks, do you see their ability to respond to the next crisis being limited . Um, not quite. I guess in terms of Interest Rates, probably. That was already pretty much exhausted the last crisis, when Interest Rates came close to zero and remained there for a long time. The name of the game has shifted to quantitative easing and asset purchases, which flattens the yield curve and keeps the longterm yield low, thereby hopefully stimulating consumption and investment. I think from that perspective, the next crisis there is room for Central Banks to do more of this. Avi menon. T was ahead we will speak to the philippine secretary for industry innovation, ramon lopez. Plus the president of the Hotel Association of india. Next we will look at the impact this pandemic has had on the Education Sector with china with Education Group ceo bill muk. Shery we have new zealand 10 year yield rising to the highest level since july. We have seen this bond selloff globally and yields gaining ground on economic optimism. We have Coronavirus Vaccine optimism. We have seen Financial Stability reports confirming the economy remains resilient in new zealand and we have got news from the government they are proposing adding housing prices to the central bank mandate, so markets pricing out negative Interest Rates. Lets turn to Karina Mitchell for the first word headlines. Karina hong kong is reporting more virus infections with a sixth consecutive doubledigit daily increase. The City Government is tightening social distancing measures, closing bars and other venues for at least a week. Hong kong has avoided major spikes, but concern is rising. Carrie lam says infection rates must be brought under control. We have decided to further tighten these measures. We will focus on closing certain premises. These premises are, in general, indoors. Most of them involve activities where you would take your mask off and there are crowds gathering. Karina tokyo says it is certain it can host a safe olympics next year despite rising infections. The governor says she is determined to put on a show, whatever it takes, with authorities trying to balance preventative measures against further damage to tourism and economy. The International Olympic Committee Says athletes and fans will be encouraged to be vaccinated. Thailand has welcomed the first foreign visitors in six months with the tourismdependent economy on its knees. October saw 1000 holidaymakers fly in, minuscule compared to 3 million a year ago. Relaxed measures to let businesses and tourism reopen but maintains a state of emergency. Global airlines fear record losses from the coronavirus will extend into next year as vaccine programs take time to spur a travel revival. One Company Predicts airlines will suffer a loss of 107 billion this year and next. That is five times more than during the financial crisis. Iata says it is devastating and unrelenting. Global news 24 hours a day, onair and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im Karina Mitchell. This is bloomberg. Shery lets take a look at education now. Restrictions have forced many schools to move to remote learning. Joining us is bill muk, cfo of china Education Group, one of the largest listed Higher Education companies in china. It has just reported earnings. Thank you for joining us. You also have presence in australia and the u. K. What are you seeing in the Education Sector now that we are almost a year into this pandemic . Bill given our focus on Higher Education, we believe the. Ovid19 impact. Is very minimal. China, the impact was the refunding of the boarding fee, less than 3 of the total revenue. Even with the pandemic we have been strong. Our bottom line was up by 37 . One thing that was not only unique to china, but every country around the world, the government tried to keep the Unemployment Rate low by keeping all the students in the school. Year, theythe coming have increased the new student quota. 30 ,s up by close to keeping more students in schools to keep Unemployment Rates low. Shery that is interesting. You are seeing expectations of more students because there is an expectation the job market wont be that good so they are going to stay in education for longer . Bill yes. I think that is what the government will trying to do. Programs. Nefited from if you have a first specialty degree, you are encouraged to take a second. With the incentive, we have benefited from all this policy. Haidi what do you expect for the pace of m a . Do you expect the momentum will continue and what are you looking at . Target or strategy is to acquire two to three schools a year and we have done that the last three years since our listing and we expect we will continue with such a target. The Higher Education of the business is not really affected by this pandemic, owners of the school and other businesses nots not the school and doing well, but the other businesses of the owner not doing well. The are forced to sell school to save their other businesses. Right now we are seeing more m a opportunities in the market. Shery you are looking currently at around 500 different targets. Do you have a target you want to achieve in terms of a number of acquisitions to grow the business . Bill we have been expecting to do two to three acquisitions a year. A started acquiring university of economics, one of the largest private universities in the country. 10 m aworking on about opportunities now, so we should be able to meet our target to have two to three acquisitions. Shery tell us a little bit about the future of the chinese education market. Bill i think we are very positive on the outlook. China there are about 15 Million Students in Higher Education. Right now the enrollment rate is about 50 increased from 43 a few years ago. By 2022rnment expects the enrollment rate will go up to 55 to 56 . , there will be more for us to educate. The government has made it clear the Participation Rate for the private sector will increase to nourrently about 22 less than 26 , still expecting more per dissipation from the private sector. Shery bill muk, it was great having you, cfo of china Education Group. We are getting the Japan Services ppi numbers for october, a contraction of 0. 6 year on year, bigger than was expected. It is interesting because falling to the red for the First Time Since may 2013, we have heard the recent orders for steel and lumber remain sluggish because of the pandemic. We are getting tokyo ppi numbers later this week, so watch out for that. Plenty more ahead. This is bloomberg. Haidi a quick check of the business flash headlines. Gap cellars has a weakness in his main sync brand and Banana Republic offset thirdquarter sales. It was twice what the streak was expecting that was driven by a 61 jump in online transaction. Gap continues to suffer between a divide between old navy and its own brand. It is Closing Stores and shifting further online. Tesla accelerates with its pending admission to the s p 500. The stock absorbed more than 500 this year, making elon musk the second richest person on the planet. Muska briefed an eu conference on longerrange cars. Capabletesla plans cars of traveling 1000 commenters on one charge. Vw is stepping up plans to expand in china. They will build a factory near shanghai with production expected to start in early 2022. The strategy is part of a global push as vw looks to gain ground in asia and north america. Two weeks ago they brought bought an american Truck Company for 3. 7 billion. Coming up, we are assessing the outlook of hong kong as carrie lam prepares a delayed policy address. We get the view of Richard Harris from port shelter investment management. Before that, we will be asking Dalton Investments ceo belita ong for her top picks. This is bloomberg. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Shery welcome to daybreak asia. I am shery ahn. Haidi i am haidi stroudwatts in sydney. Asias major markets have just opened for trade. Our top stories this hour, if you will look to build on wall streets gains as market friendly views triggered new optimism. The msci all country index is on track for its best month since its inception 30 years ago. Hong kong orders new virus measures as carrie lam prepares her speech. The city faces rising infection rates and security clamped down from beijing. Global airlines fearing losses from the coronavirus will extend into 2021 as vaccine programs take time to stir a revival. A loss of money this year and next. Lets get straight to the Market Action with Sophie Kamaruddin. Sophie. After in japan come tuesdays big ketchup rally, stocks are rising more than 1 and they open for the nikkei and the topix. The yen is trading near a oneweek low and jgb traders will be waiting for a sale. This after japan and china agreed to restart twoway travel by the end of this month. Flipping the board, we are watching to see any developments from chinas Foreign Ministers to south korea. We are seeing the class b opening higher by. 8 this morning. I want to highlight a note from jeffries. The korean won seeing some trading at 1108. Checking in on the moves in sydney, the asx 200 sent to raise yeartodate losses this morning. We are seeing financials and energy leave them higher. Gold miners are under pressure with Bullion Trading near a fourmonth low. For1800 level to watch bullion. While kiwi stocks are rising and the dollar is trading near a june 2018 high, we are seeing the 10 year yield rise to the highest level since july after the rbnzs kiwi operations. I want to highlight what is going on in the oil patch. Holding onto gains to trade near a march high. This as we are seeing rising demand from asia adding to the vaccine optimism. Asian stocks have been attracting the most foreign influence for the border since 2013. Is favoring em asia and Japanese Equities among their conviction calls in 2021. They see the rotation out of u. S. Big tech continuing, shery. Shery our next guest bullish on asia. Recovery but her main driver, the region, is the future. Joining us now is the chair. Great to have you with us. You are not the only one in asia. This chart showing how much money Foreign Investors have poured into korean stocks, 5 billion this month alone. We have the japan stock market at the highest in 1991. What are you liking . We like a lot of things in asia. We like the fact that in asia, despite the recent increases, is still much more reasonably priced than the u. S. , and the huge dispersion we have seen in performance among different types of stocks is evident not just in the u. S. Markets with a european markets but also in the asian markets. Specifically, if you take a look for energy isps compared to take for year to date from the beginning of this year until now, the tech index in the u. S. Has gone up 35 while the energy index has gone down 35 . This gives us, the stock pickers, really Fertile Ground to sign investments particularly in asia. Shery when there is so much optimism, we have to talk about the potential risks. The question of the day on our mliv blog is when will risk assets Price Inflation . Is inflation a concern to you . I inflation is a concern but think it is further down the road. It is how to get out of this economic downturn. Some asia has recovered, countries have recovered fully, but many have recovered almost fully. It is not the case at all in the states or in europe and there is still a long road to go before we i think the market will focus on concerns to do with inflation. Right now, the concern is more how to get people back to work, how to open schools, how to get life back to normal again. If the reflation trade is off, what about the Technology Trade . There an indication that some of these changing trends that we are seeing over the course of the pandemic, they are here to stay and so actually, there is value to be found longerterm in the tech plays . I think so. I think the economy has evolved in the past we were on towards more cloudbased activity, digitization, essentially, is here to stay. There are Many Companies in asia that are part of that story but they have not benefited the way angs have. A is an ethernet switch maker and while the average pe is saying that 35 and up a company like acton, which is still growing very fast, has a dominant stake in the best which are needed for cloud based business. Low 20s. T is in the it can grow at a much faster rate. There are bargains if you like bargains like that in asia which are more which are ignored by the auto market. Are seeing some interesting things. Korean markets at the record high. Japanese markets are seeing ofal investors dump out Global Equities and going back into jgbs, interestingly. Do you see this return home trade continuing and can it continue given we are starting to see more signs of new virus cases escalating in both korea and japan . Arees, well the virus cases increasing in both countries. The numbers are very low compared to other parts of the world. In the case of korea, for instance, one of the biggest problems with the korean market and part of the cause of the korean discount business is that the domestic investors were not investing in korea. Hugeyear, we have seen a surge in domestic investors which is what you really need to build a Strong Foundation for the stock market. The same thing is happening in india. In india, you had Something Like 40 plus million new accounts signed up for these monthly automatic investment programs and that really gives a solid floor to the stock market. Those are the types of changes you see as markets develop and we are seeing it in asia. Always great to have you. Lets get you through Karina Mitchell in new york. President elect joe biden introduced experts as he seeks to calm relations with International Friends and foes after four tumultuous years. The president elect is promising a multilateral approach, reversing the America First policy of the trump administration. He told nbc he will prioritize ending damaging executive orders and will not insist on investigations into president trump. And while, Stephen Mnuchin is putting unspent cares act cash into an account that his presumed successor will need professional authorization to use. Hes planning to put 455 billion dollars into the general fund which could make it hard for janet yellen to access on her own. Joe bidens Transition Team last week called mnuchins demand for the return of money from the fed deeply responsible. Chinese premier li keqiang says he expects the economy to see positive growth this year despite the covid induced sharp downturn. He said china has been hit hard by the virus but is on the path to forward to every recovery. As the end of the year approaches, based on current data, we can say with certainty and confidence that chinas economy can achieve positive growth in 2020. We look forward to a reasonable operating arrangement year. Japan and china have reached agreement to lift some virus travel restrictions, restarting flights for Business People by the end of the month. Chinese foreign minister will lateroshihide suga wednesday as beijing seeks to recalibrate ties ahead of joe bidens inauguration next year. The two sides remain far apart over disputed islands in the east china sea. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Shery. Shery still ahead, bloombergs new covid resilience ranking will tell you the best and worst places to be during the coronavirus era. Up next, we will look at the challenges facing carrie lam as hong kongs chief executive prepares to deliver her delayed annual policy address. This is bloomberg. Haidi carrie lam delivers her delayed annual policy address in just a few hours time. There is no shortage of challenges facing the city. Our chief north asia correspondent, Stephen Engle, is in the ledge co. Building in hong kong. From the pandemic, the politics, to the relationship to beijing, what are we expecting from her speech today . Stephen i am curious to know what her tone is going to be. She is no longer on the defensive as she has been over the last year, through the policies that have been obviously handed down from beijing and also some of her own governments policies. The city has returned to a relative calm. There is still the pandemic and theres more social distancing tightening that happened late yesterday. She will probably spend a lot of her policy address on the measures that the government here is going to take to alleviate the pandemic and also get Economic Growth back and part of that as well is getting the border with china back open. This is an economy that is suffering its worst recession on record and fullyear growth or contraction is expected to be 6. 1 . It might even be worse that given the second and third quarter. The tone be very interesting because she defended herself yesterday in a press conference at her normal Tuesday Morning address where reporters asked her who wrote your speech that you will be giving today, beijing or yourself . Theres a lot of skepticism here in hong kong since the National Security law was imposed on june 30 and also when the National Peoples Congress Standing committee handed down another law requiring royalty in the Legislative Council for lawmakers here that may be beijing is calling the shots. She refuted that claim and she said i have written the speech. We will be looking at the tone of the speech on how she addresses the three main imbalances, societal, economic, and political. What specific measures are we likely to see . Shortterm, shes going to be talking about the measures to contain the coronavirus. That is shortterm. Longerterm is going to be the grand scheme that is being hailed by president xi jinping as well as the local government here and that is hong kongs integration with the greater bay. Shenzhen was the centerpiece of xi jinpings speech just across the border on october 14, which by the way was the date the policy address of carrie lam was supposed to happen, xi jinping came south and he kind of upstaged her and she postponed the address today. What we are going to get our details of her plan and xi jinpings plan for hong kongs integration with Southern China. We will not get a lot of specifics. We might get some details on the expansion of the stock connect with the mainland exchanges including secondary listing stocks like alibaba may be participating in the Stock Connect Program as well as biotech companies. We might get details on the reported jobs program. Border toacross the work in china for a year or more. Coronavirus efforts as well as the greater bay. Stephen engle from the streets of hong kong. We will have more perspective on carrie lams policy address ahead. We will hear from Richard Harris this hour. Anotherlens human and from the Chinese University of hong kong. This is bloomberg. The reserve bank of new zealands annual Financial Stability report has been complicated by the government is asking for more emphasis on housing prices. Kathleen hays has the takeaways from governor adrian orr its press conference. Questions focus on what the government request means for the rbnz. What did he say . Kathleen he responded as a responsible central banker would, saying he certainly understands what the governments concern is about rising home prices and noting that the rbnz has taken that into account. The report was upbeat on the economy. The labor market is stronger than they would have expected, and banks are wellpositioned to face any risk they might have to. Because the finance minister sent this message on tuesday saying what can you do to get housing more in the mix, lets take a look at why many new zealanders are concerned. It cut its key rate nearly to zero. They have shot up, still very high. This, adrian orr said low rates are necessary to boost growth in the pandemic. He also said they are taking this into account already and set their policies for the dual mandate that is no inflation, high unemployment. Willing toy are assist the government in getting more affordability for new zealand and said they have no concern about centralbank independence, which the government recognizes. Lets listen to what they told reporters. Clear that made very there is no intention to alter the and dependence of the reserve bank of new zealand. At one side, it gives me confidence, the fact that we are prepared to have these conversations in an open environment. That itself shows comfort and confidence in the Operational Capability of the reserve bank. Kathleen he also added the rbnz is not being asked to target home prices. I think he handled this saying the central bank was responsible were ready to work with the government but clearly defending what they have done so far and what it means in terms of helping to boost growth even if you are concerned about housing affordability. As we continue to monitor economic recovery, in terms of resilience, we heard from li keqiang giving a pretty up beat view as to Growth Prospects for next year. Kathleen he certainly did. People have been wondering about the peoples bank of china. Sees theer said he economy returning to its proper range next year. I want to pull up another chart, just looking about how china had that very unusual drop down in growth and now it has shot back up to just about 5 . He says chinas macro policies will remain stable, effective, and sustainable. In particular, the strategy will allow consumption to lead growth. People criticize them. Theyll open up to foreigners and we will absolutely not pursue a trade surplus. Response toonly a president trump. Its a response to other leaders in other countries around the world who feel that china has to step up to drive growth themselves. That is exactly what lee says they are going to do. A tough 2020 turns into what could be a better 2021 for china. Proper range of development. I like that. Kathleen hays there. Global airlines fearing record losses from the coronavirus will extend into next year as potential vaccine programs will take time to stir a travel revival. It is protecting carriers will suffer a combined loss this year and next. The outgoing director general told bloomberg how much more support he thinks the industry will need. Nexte estimate for the seven months to 10 months in terms of cash injections from government, excluding that because it is already too heavily indebted, its around 70 to 80 billion. That is what we need on top of what has been already injected in the industry which has been around 160 billion from government. We are pretty grateful for development to have reacted so quickly and strongly. We just saw a share price chart of what has happened with the travel sector. Share prices of many of the companies that are members have gone up really, really strongly over the last few days. Why should governments be putting up more money when the Financial Markets seem to be prepared to invest in this space again . Why shouldnt the airlines go to the markets on the credit side or equity side and raise more . Airlines will have their own Financial Strategy but what we can say is that the need for cash the coming seven months to eight months is around 70 to 80 billion. Its a strong need for cash in a difficult situation due to the drop in traffic. A major drop in revenue. We will have lost the revenue. Than 800like more billion so you can imagine the stress under which we are in terms of cash. The reason why we need additional Government Support part of it could be provided by the market. We think that the market will everything, all the needs that the industry requests to survive and the reason why we are asking for additional Government Support. A wisenally, its investment strategy. You know, to put the money for the industry to be ready to recover and to survive and then they will be able probably to shares they have acquired in our airlines, so to make better use of public money. I think that is an important point. Guy the market is starting to see the light at the end of the tunnel and im wondering whether industry should be taking greater advantage of this. I understand that it is going to be a very deep and dark winter. I think we see that. Nevertheless, the vaccine story does seem to be providing an idea of the timescale on which we are now operating. We now know how long the tunnel is and as a result of which, i am wondering how that changes the dynamic in terms of how the industry is going to seek to survive. You must be aware that our processes for next year are vaccine available by mid2021 which is not something insane, which is pretty reasonable because you need to proportion ofcant the population vaccinated to lift all travel restrictions and do whatever they can to restaff traffic. Here is a quick check of the latest business flash headlines. Singapore airlines returned to the credit markets for a second time this month as it looks to bolster cash. The carrier raised three and 70 billion u. S. Dollars in a private placement of 10 year bonds, having brought in 630 million u. S. Two weeks ago through a convertible note. Singapore Airlines Reported a record quarterly loss this month. The simtech startup is said to be chasing new funding as it looks to double its market valuation from 36 to 7 billion. The payments platform has benefited from the global pandemic. As more people shop online and businesses look to process payments. Paypal. Pete with Saudi Basic Industries is set to be considering an ipo and the Specialty Chemicals unit. The chemicals unit generates about 2 billion in annual revenue. This is bloomberg. Shery the markets rally in asia continues as we get more vaccine optimism around the world. We are seeing u. S. Futures also gaining ground, up. 4 . Nasdaq e minis as well after u. S. Stocks finished at a record high. We also have optimism over the formal start of joe bidens transition. When it comes to risk sentiment, the aussie japanese yen also under pressure and past that level. Not to mention the nikkei at a 1991 high. Bloomberg crunched the numbers to determine the best and worst places to be in the coronavirus era. We look at where the virus has been handled most effectively with the least amount of disruption. Lets run through the results within Asia Consumer Health care reporter rachel chang. What do we try to incorporate in these rankings . What are they showing us . Rachel i think the starting point is the fact that covid19 the boardtely changed and upended everything we know about the world. What we have done with this indicatorsincrease for mortality rates. It includes access to covid19 vaccine. Includedlaw lockdowns. Haidi when you take a look at the best performers, what do they all have in common . Rachel one of the things that people have said, you know, the ranking was not we had authoritarian countries like vietnam. It is not something that puts countries in place to handle the pandemic. What we found is that is not true at all. 10 areof the top democracies. What they have in common is that handling the pandemic order people into doing what you want to do. Its about a high level of social trust, social fabric. Trust in science, government guidance, and wanting to do something for the greater good and follow the public rules. Nordicit in the countries, japan and korea in the top 10, things like that. Tell us a little bit about the surprises you are seeing there as well. One of the bigger divergences we saw in the ranking was within europe where the major western European Countries like france, the u. K. , italy, are at the lower half of the ranking. They have not emerged. These are places that are ranked higher. One of the major issues these cases faced was connectedness which in the covid era has become a curse. The more travel that they had come the more infections would see that early. What we have seen is that as the crisis has progressed, these countries in western europe have not stopped the kind of travel tot they needed to contain maintain the gains of earlier phases. We saw a round of summer vacations that have very much seated this ferocious new wave that is putting them back on lock down now. For thea big contract northern European Countries. They are all in the top 10. These countries are part of the schengen zone. They did not allow outsiders to come in for most of the year and that has allowed them to maintain their success so that was a big diversions that we saw. Divergence that we saw. Haidi will we get to the next date of distribution . Does that change the overall picture . Rachel one of the important indicators in the ranking is how many supply agreements Different Countries have with phase three. The vaccine agreement indicator has helped to push up the. Anking otherwise, the strategy is not there. The vaccine indicator, they had the most agreements in the world right now. What we are going to see as we come into a situation where vaccine start getting approved and distributed is that these countries are in a really good position to see a quick turnaround in their cases and fatalities. We expect in a couple of months that with the u. S. So wellpositioned to access these extraordinarily effective vaccines that there could be a big drop in the cases and that could quickly push them up the rankings. Our issue consumer and health editor. Carrie lam delivering her delayed policy address. There is no shortage of issues from pandemic to politics. We will be discussing what is on the agenda. This is bloomberg. I am Karina Mitchell with the first word headlines. Wall street is sounding the alarm on a new global downturn, adding pressure on Central Banks and governments to set aside politics and do more to spur demand. Optimism about a virus vaccine is onset by fear that it livery may take months while infection rates continue to soar. Economists say it will not take much bad news for the u. S. , japan, and the euro area to contract again either in this court or the next. Meanwhile, tokyo says it is certain it can host the olympics safely this year despite rising covid19 infections. The governor says she is determined to put on a show, whatever it takes, as authorities try and balance preventative measures against further damage to tourism and the wider economy. The International Olympic Committee Says athletes and fans will be encouraged to be vaccinated to protect themselves and others, and the u. S. Has confirmed its decision to toignate zte as a threat National Security over concerns its equipment could be used for spying. The federal connotations Commission Remains determined to drive them out of the u. S. Market. Carriers rely on their cheap gear. They will consider listing components when it meets next month. More than . 5 billion worth of australian coal is stock on ships anchored at chinese ports as the diplomatic spat continues to hit trade. More than 50 vessels have been waiting a month or longer to offload cargo. Thats 6 million tons of coal and 1000 seafarers stuck at sea. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Haidi. Kongs leader, carrie lam, is facing no shortage of issues when she delivers her annual policy address later. The chief executive has to grapple with the new wave of virus cases. Also balance the political demands from beijing and clamp down on hong kong. Lets bring in Richard Harris. Have you as always. You think this is going to be a nonevent despite the tricky issues carrie lam had on her plate . I think one of the problems was that this policy address was supposed to be given six weeks ago but carrie lam decided at the very last minute to go to china for a series of meetings. Its believed to those meetings were to try and open the border with china so they failed. Its different to difficult to understand why she waited six weeks in order to give it. The expectations are extremely low. Confidence in the chief executive is also low because of her track record. It seems difficult to see that we are going to have any thing really meaningful coming out of todays address. This something that investors just ignore . Richard of course, we dont know what she is going to have in the address. I suspect what she will probably be talking about is how much we had a lot of talk about the greater bay area recently. And how hong kong should be getting more integrated in that and that is all nice rhetoric but really, we have some more deepseated issues in hong kong. We do have a lot of the classes looking to maybe put some money overseas, may be brushing off their passports, that sort of thing. It is not very healthy for hong kong. Onalso need some policy work poverty and welfare and issues like that. They seem to be very much on the back burner in favor of the political issues carrie lam seems to want to talk about so i think in terms of investors, are we likely to see anything new happening . Probably not. In any case, most of the key Investment Decisions will be driven by how chinas operating the Big Companies in hong kong or chinese orientated, so i dont really think her policy address is going to be of that much difference to investors at this as it might be elsewhere. Shery markets are not a speck to more fiscal stimulus coming from the City Government . And how about playing into more longterm goals coming from china like the focus on technology . There is a focus like that but remember, in reality, we are only 8 million people. We are pretty small. We have this Enormous Technology center so it seems difficult to see really how hong kong is going to compete there. In terms of fiscal stimulus, theres not really an awful lot the government can do. They cannot really cut tax rates when tax rates are around 16 . That proves to be quite difficult. The government has been giving individuals to try and support them. There is space to do more infrastructure work but the government has tended to put its infrastructure money into an armistice projects which dont really help individuals rather than smaller projects. Theres plenty of infrastructure work that needs to be done, roads that need to be improved, all of this sort of stuff. That is important. That would trickle money down to the economy. The bottom line, is that going to sink the hong kong stock market . I think not. We continue to see investors talk about the consumption and trade in china, the tech trade as well. How do you factor in the new Regional Comprehensive Economic Partnership by china . Tangible economic or market benefits coming from that packedt . Richard it remains to be seen. This is a very broadbrush agreement between 15 countries, many of which china has ongoing disputes with. It sounds good on the surface. There are many good things that have come out of a pack, which is the smaller Asian Countries which got together to try and push this move by bringing china and australasia in. There are quite good things that happened there. Whether it will be translated to the big stage, i do not know. At the moment, it looks like it is a nice overweening agreements between many countries, but i think the devil is very much in the details there and it will be quite a while. You are looking years before we are really going to see real improvements i think come in as a result of that. You have Global Markets on track for their best month on record. Issue markets taking a look at the kospi at record highs. Japanese markets still searching higher as well. Is it hard to talk about the risk of a downside event when we get a tapering . With all the good news over the vaccine, the Economic Data in this part of the world pretty resilient, is it time to start thinking about what happens when that money gets withdrawn . Looking at the price action we are seeing in new zealand today . Richard we have to wonder whether the liquidity is going to be withdrawn. We have janet yellen coming in as secretary for the treasury. She is very much on the side of spending. Modernds towards monetary theory which is that Interest Rates are so low. We might as well borrow more and more. That only puts the burden onto our children. The bottom line is markets like liquidity. Already, we are at alltime highs, at very high pe levels in many markets. Valuation is out of the window. We are looking into liquidity and a behavioral drive for the market and that makes it much more difficult to look at and estimate and analyze but i think in the shortterm, if you are looking at Something Like bidens 100 days, i think for withperiod, we will see investors looking towards the equity markets. Shery always great having your insights. Next, the Monetary Authority of Singapore Says titer simtech regulation is not hindering its Digital Banking plans but there is a bigger challenge looming for global policymakers. We hear exclusively from the managing director. This is bloomberg. Haidi heres a quick check of the latest business flash headlines. The head of volkswagen is said to be struggling to win backing for his executive picks and wants the board to support more significant reforms. Sources say vws counsel is opposing the candidates to succeed the cso as well as his choice to fill the vacant chief role. The two positions are key to the efforts to reduce cost and boost efficiency. Tos arm is stepping up plans expand in china. It will build a factory near shanghai to make its swedish brand with production expected to start early in 2022. The strategy is part of a wider global push as vw looks to gain ground in the asian and north american markets. Two weeks ago, he bought for 3. 7 Truck Company billion. J. D. Health has released details of its Hong Kong Ipo to raise around 3. 5 billion u. S. Dollars. It will offer 382 million shares between 63 to 71 hong kong dollars each. Six cornerstone investors have agreed to subscribe to around 1. 4 billion of stock including Singapore Wealth Fund gic and blackrock. Pricing is expected december 1 and the listing itself on december 8. Singapores financial regular will stick with its plans despite tightening scrutiny in beijing and washington that is hitting Major Chinese applicants. The Central Banks chief spoke exclusively with bloomberg. We are on track so we should be able to announce by the end have alwaysand i been struck by the excitement over Digital Banking. It is not new in singapore. It is not new in most parts of the world. Banks have gone highly digital. Interesting to note that quite a number of simtech companies shortlisted chinese simtech companies p or what to they bring to the table interesting to note that quite a number of shortlisted chinese simtech companies what do they bring to the table . Ravi they have done extremely well in terms of the ability to harness data, to draw insights, and to provide very customized services, just in time services. That has been quite remarkable. Chinacomes at a time when is clamping down on its major simtech companies. We have seen how the ipo has been derailed because of that. Are you concerned that that could be an issue for singapore . What do you make of chinas move . Ravi its a move in the right direction. Is it about leveling the Playing Field . Ravi it is. We are happy that this is happening. Here is thatory the chinese regulators are bringing them into that. To thekes no impact digital banks here, assuming that the chinese banks succeeded in getting a license because we will be subjecting them to our requirements regardless of what they are subject to in china. They would have to meet our requirements here. Our philosophy is simple. Carry out similar activities, similar risks, and then you are subjected to similar rules and requirements. That will be the case. You look like a bank, do what a bank does, you have to be regulated just like a bank. In your view, is china now on par in terms of its scrutiny of its simtech companies with the rest of the world . Ravi they are definitely moving in that direction. I would not hazard to guess how much they have. I do not know all the details, but from all of our conversations with our counterparts in china, that is what they have been continually emphasizing. Financial stability is now a very important priority for china. Yearen we sat here and ago, facebook was launching libra and that surprised world. A year on, we are having several Central Banks talking about digitalg their own currency. Have you been surprised by the about turn . Ravi a little, yes. I was surprised about the hype around libra and hype around the Central Bank Digital currencies. I think what has been forgotten in many of these much of this excitement, is what is the purpose, the use case, the problem we are trying to solve . Where do they come in . From our perspective, its mostly in the process crossborder context because today in singapore, i can pay you and you can pay me on a mobile phone. Our problem is paying our friends in america and europe or china and india because that goes through the traditional Correspondent Banking network which is hugely cumbersome and sometimes not very secure and all of them take a slice of our money, a big chunk, actually, to that is what we need change. As i said before, its a feeling of banks and Central Banks that we have not solved this problem. Something that is quite basic. Could it change the Financial System that is driven by the u. S. Dollar . It includes a vast number. Not just china, but switzerland, even cambodia. There is talk about whether this will replace the u. S. Dollar. It is not in the digital or physical form of a currency that makes it internationally acceptable. It is intangible, confident trust in that currency and that has a lot to do with the governance, the institutional mechanisms, the currency convertibility, free flow of capital and so on. These are attributes the United States enjoys and the u. S. Dollar enjoys. Shery that was the Monetary Authority of ravi menon, speaking with haslinda amin. Xiaomi posted its fastest sales growth in two years, growing its market share as u. S. Sanctions pummeled rivals. s bring in Senior Analyst how sustainable is this sort of sales growth . In the near term or even next year, xiaomi continues to be in a sweet spot. The pricing of the devices suits the demand very well and as you mentioned, given the trade sanctions of huawei, xiaomi continues to benefit a lot and its a matter of time when the other Chinese Brands are coming in to gain a bigger slice but in the meantime, xiaomi, which already has a good presence in europe, you know, got the first advantage and at the same time, the distribution panel, online distribution channel, it bodes well amid the pandemic. Tots why we expect xiaomi continue to beat industry shipment growth. But then of course, there could be other risk factors as well. What are the major risks for that smartphone business . Anthea the market is concerned about maybe huawei could make a comeback and we know that huawei brandy sold its lower end to another Chinese Company said know, ald mean, you little bit of comeback for huawei. The premium settlement, there could be possibilities of some easing in restrictions now that biden is going to be the president soon so that would be another concern. And also at the same time in india, which xiaomi has been number one, it continues to have good smartphone shipment growth. However, we also know that domestic companies, they are partnering with google. They want to come back and launch smartphones as well. These are the more longterm headwinds potentially for its smartphone business. Haidi our Bloomberg Intelligence Senior Analyst anthea lai. Coming up on the next hour of daybreak asia, we will be speaking about the etf business in asia. He joins us at the top of the hour. The counting down to carrie lams policy address in hong kong. The chairman is with us later. This is bloomberg. 9 00 a. M. In beijing and shanghai. Welcome to Bloomberg Markets china open. I am tom mackenzie. David i am david ingles. Streetslding on wall gains. For its bestrack month ever. Tom