Slightly to the downside. The rallyderpinning we are seeing today. Adding to the losses that we saw for the gold price on friday. That is indicative of where we are. Take a look at what is going on here. There is a big rally for bonds and australia. As we getis is japanese funds shying away. Paper. Ssie that is where we are right now. Lets find out where we are with the first word news. Su thank you very much. Lets start with Michael Bloomberg. He is joining the crowded race for the white house, entering the Democratic Campaign with a mix of moderate policies and experience in business and government. The 77yearold launched his bid by saying that President Trump is an existential threat to the u. S. And to its values. He added that america cannot afford any more of what he termed was the president s reckless and unethical actions. Michael bloomberg is the founder and majority owner of our parent company. Minister Boris Johnson has launched a conservative Party Election manifesto, pledging to reinforce the National Health service and cap future tax increases. The tories hold a doubledigit lead in most opinion polls. That is ahead of the december 12 vote. One analyst suggests johnson will when a healthy parliamentary majority. Labor dismissed the tory manifesto as a billionaires dream. I wanted to be an exciting and productive dream. A year of prosperity. Do you want to wake up on friday the 13th and find a nightmare on downing street . [laughter] a coalition of chaos . I say lets go Carbon Neutral by neutral by christmas. Accusations against Benjamin Netanyahu of abuse and power. Primaryll hold a election. Israel is still without a government after two inconclusive elections this year. Against new protests fuel price increases have arrived at across the country. This Video Showing Police firing live rounds of demonstrate ammunition into crowds of demonstrators. The government is slowly restoring the internet after a week of shutdown. Continued officials to blame iranian exiles and foreign conspirators for the protests. I am su keenan, this is bloomberg. It does seem like prodemocracy candidates are ready to seize the election. We have a reporter outside on the streets to talk us through the process. Many records were set this time around. The record turnout. Sweep. Ocrats winning a as many as 388 seats out of a total of 452 can be taken by the prodemocracy side. Sawre the elections, we that the proestablishment side, which is essentially pro china, held more seats. A Sweeping Change across the board here. Ais has been seen as referendum on the protests, the government, and how they have been performing. The former chairman of the liberal party, which is pro establishment. This is what he had to say. More than 70 voted for the democrats. We have to have second thoughts. Among some of those wishes of the prodemocracy crowd, the , include genuine universal suffrage. An inquiry into police behavior. These are among the key issues that they have been demanding. Now the ball will fall into the court of the government to see how they are going to react. Rishaad these are district elections. It means that these counselors can advise the government here on things like fixing up parts, cutting down trees. However, it is more than that, isnt it . What happens next . Traditionally speaking, you are right. District counselors do do all those things. Now they will take on a bit more significance. Because this has been a public vote about the sentiment of what is going on. It is a call for the government to listen to what is being said by the vast majority of the voters out there. Now the ball is in the governments court. They really need to respond. One of the five demands as the independent inquiry into police action. At least a government has to respond to that. Theres also a call for universal suffrage. These elections also do have some impact further up the political line. Will voteon committee for the next chief executive. Thending on how well democrats do, and it does look like they will make a set gain, they will have some impact on how those other political structures are set. It could also make governing a lot more difficult for the current government. They will be more likely to be opposition. Rishaad thank you a lot. Kong on streets of hong the Election Results we had from sundays vote. David lets get to our other trade story. China says it will be taking a major Sticking Point in the talks. Plan . S the m i think youre right to characterize this as incremental. They want to raise the penalties for intellectual property theft. They want to lower the threshold for who could be prosecuted for some of these offenses. They want to make it easier for victims to claim compensation. More broadly, china is looking at 2022 as a target date for radically reducing the number of intellectual theft violations. That is the picture we have had out over the weekend. We have traded goshens going on. Ip theft has been a bugbear for the trump administration. That is part of why we are getting this movement from china. Private companies here in china are some of the biggest victims of ip that. It does dovetail with domestic policy to support domestic companies. Could help them as much as it moves the trade negotiations forward. Rishaad that is the point, isnt it . Does it move the dial in anyway . To some extent, it probably does some way to appealing the concerns in washington. This is been at the heart of those complaints from the trump administration. Have of the executives said in the last 12 months that ipy are concerned about theft. There have been improvements. It is less of a concern than it once was. But it is still there. It is still on the list even if it has moved down slightly. Looking at the soft and unofficial deadline of december 15. That is when these additional tariffs could come into place. Both sides say they are communicating. . Still about agreeing on agricultural processes. David great stuff. Tom mackenzie in beijing. Good to see you. My remind you a little bit of earlier this year when we saw the possibility of a trade deal being done . We are seeing that now with this runup in stocks. We could be heading to a fall if we dont get something done here. This is definitely one of the risks that is out there. We just published our 2020 views. There are two main risks that markets need to be aware of. They are wellknown and well flagged but they are certainly the ones to Pay Attention to. Number one would be traded number two would be the u. S. Election. On trade, the market has rallied quite significantly on the hopes of a trade deal being done. We have a trade tensions barometer up on bloomberg. It is at the 70 level. Which is pricing in the high probability of a deal. It was back at about the 10 level four months ago. Markets have had a strong repricing. The riskreward here is negatively skewed. If a trade deal is done, markets will be up flat. If there is no deal, they will fall. The second is the u. S. Election. If there is a possibility that there could be a unified democratic administration, it is highly likely that the tax cuts of 2017 would be rolled back. Then you are looking at something up to a 20 correction in the s p, which would be hard for our markets are to dodge. David i want to talk about the hong kong district elections. Does that change anything for you . Are sincere is that there is a pretty good balance with hong kong specifically. We are not just talking about the hang seng index. Kong index is a narrower focus. A lot of bad news has been priced into that. That, thee numbers on at over arading standard deviation below its tenyear average. The property stocks are trading at about a 50 discount. That is significantly below where they typically trade. That suggests a lot of negative news has been priced in. We just had a peaceful outcome to these elections. There may be room for some appreciation. Marketl maintain a weight of hong kong. The new cycle has been so unpredictable. That volatility makes it hard to handicap when one should be entering the market. View, have a longterm the more you should be oriented toward a positive view. Rishaad please stay with us. More coming up. We are also looking at the view of a regional rebound. Saying that trade tensions and the american elections could make 2020 a bumpy ride. More on that on the way. On this hour,ter hong kong home prices seem to be holding up in some places. We will be digging for the details. Have a look at the chart. We will talk a lot about this later. Youre watching bloomberg. Rishaad as we approach the end of the year, that see what we might expect from the markets. You were up all across the weekends to take us through this. But start with geography. Our big picture view is that we think next year will be moderately positive. That the Global Economy should have has been pretty well priced by the movements this year. That informs our broader view. There are some opportunities for better performance. Is china. The key point here is we are shifting our view from being to offshoree shares. Done the best in the region this year. There will be less of a positive flow argument there. That has provoked a lot of extra buying. We think it is the better for us to be writing. India, very quickly, we think there is a longdelayed cyclical recovery that will come. We believe they can give decent returns. We think there is a recovery in tech hardware. After a very disappointing earnings decline. Taiwan has performed exceptionally well. Australia is still extensive. Other markets are not looking as attractive. Being, youe point said several times in that answer, the question is, will there be a cyclical recovery . Tim that is a good request and. That is our core view. Maybe that does not come through because, truth be told, most forecasters have a more constructive view of the Global Economy. That has been pretty much true for the past few years. We do think there is good reasons for a moderate improvement. The significant easing of Interest Rates this year. That should help for growth. Number two is the moderation in trade tensions. That should be better for the environment. As long as trade is ok, we should be able to have some moderate lift. David if we dont get a trade deal, does that change anything . Is ok. Still our central view is that if we dont get any further escalation, maybe we get a little bit of rollback of september tariffs, but we are not looking into a significant decline in tariffs. If things are stable, we will get a moderate lift. If we have a reescalation of tariffs, that would change the numbers. Rishaad things like korea had a rough time in the market. I guess that pushes things down further. Thank you for mentioning valuation. The key points this year, just to give you a few numbers, we are looking for Earnings Growth in 2019. The market is up about 10 or 11 this year. The valuations expanded 18 . 13. 7 is at the top of the range. A lot of that recovery and earnings has been priced. I think the return next year will be more moderate. David i want to ask you about. That is contentious on some of the other things youre thinking about. Market saw a stock last week saw a start drop in that market. You think the market is expendable . What assumptions need to be in place . Tim it is a great question. The simple answer is earnings have to come through. Korea is very tech heavy. The earnings for the region fell 40 this year. You need to have that recovery of an easy base next year in order to get the market to come back. Rishaad one last question. Aggravate ar geography or jurisdiction you would completely ignore . Tim i would not go quite as far as that. One of the largest sectors by earnings is banks. If argument for the banks, we underweight them, is pretty difficult. In a world where Interest Rates are low and the yield curve is flat, that is not good for bankers. Rishaad good to see you. David coming up, we are talking hong kong. Alibaba says its retail offerings are oversubscribed and they will multifile multiply the shares. This is bloomberg. Rishaad we are back. Time to check in with the latest business flash headlines. There has been a changing in the order among asias most valuable companies. A rebound in prices helped their profit turnaround. Samsung earnings may remain in a double digit slumped even as they have been beating estimates. It is a nether day down under. The formula maker has been bought. David a quick look at the big movers across the region. Is the forecast for today. Very few movers to the downside here in hong kong today. This is bloomberg. Is 10 29 i am su keenan with the first word headlines. We start in india. Indian would be the only immersion currency to weaken this quarter. Economic growth at a sixyear low. 5 from a high and july and is being pressured by rising public debt among shadow banks. Is deeper slowdown and longer lasting than it originally thought. Democracy candidates in hong kong have taken an early lead in the District Council elections according to local media reports. The early count suggests a. Andslide win they cast their ballot sunday and the first opportunity to comment after months of protests. Is theedia says the u. S. Biggest destabilizing element in hong kong. Riskmerican politicians pushing the city into a dangerous of this as they use the hong kong card. The commentary comes as President Trump deliberated setting into law a bill that would require annual reviews of hong kongs trading status with a rhinoceros has become extinct in malaysia after the last of its species died of cancer on saturday while living in captivity. This monitoring rhino is the smallest of the species and it once roamed across asia, however its numbers have shrunk drastically because of deforestation and poaching. This is bloomberg. Global news 24 hours a day on tictoc and twitter powered by 2700 analysts and journalists. Im su keenan and this is bloomberg. Another angle on one of relatively stable despite months of unrest that we have been witnessing. This might all change. One of the biggest property agencies in the territory. We are joined by the director of Property Data and research. We put it t charts. We are up 10 . We have come down 5 . Why the crash . The itlook at it, is only 5 on average. Even compared to last year, more than 10 . Experienced up and down cycles. Year,10 correction last another 10 in the first half of this year. The the whole reason other reason is because of the political situation. Not to mention, Interest Rates. Last year, people expected Interest Rates to hike over time. , they end of last year did not expect a rate cut this year. Together, with cumulative demand, the public price increased ring the first half. Talk. Er with the trade it is more correct compared to last year. The demand is not cheaper housing, but it has been laid at the doorstep. Out andrs have come said it would be putting more out. Are you seeing more signs of them actually doing that . Difficult it is because if you look at it, over the next five years. , like look at this number average, 18 to 20,000 a year. We are talking about completion. We need time to build the unit on the site. So maybe it is not being materialized. Rishaad a greater sense of purpose and getting that sorted out. Actually, it is increasing. That 93,000 is still not enough. 15 to 20,000 units a year. If you look at the next five , it increases about 37 . ,f you look at the longerterm you are talking about 99. ,ot to mention during the peak we are 50 short from completion. Years theast 10 population increased half a million. This is likely to continue. Demandlooking at organic from the population, what is the supply number that brings that from 20,000 . You mentioned about speculating. This duty. We had think the organic demand you are talking about, over the past three years, on average about 50,000 people get married. Think that is the demand. Thinkhe past 10 years, i that deters people but it makes it hard for people to upgrade their properties. As long as Interest Rates are low, that is what we know at this moment. Expect a crash. Is three or four times what the market can turn out in the number of unit. Do you think that is an accurate assessment . Yes. 90,000 over the next five years. The average is about 20,000. Even though we achieve 17,000 year in the past 10 years. You can see the price continue to go up. Key point. T is the is there a point when they level off . It will ease a little bit, especially if the Current Situation continues. The other important point is unemployment. The reason why the past 10 years , it is because of low interest rate. And low unemployment. Unemploymentears, hovered. I think, if unemployment increases, it will have some impact on price, but if you look at the supply side, if we do not see at many, if you they do not have the urge to sell. The Holding Power is pretty strong. We only see if the Current Situation continues. Does any of your analysis have any implications for the rental side . Rent increases, but not as fast as price. Rent is up a little bit because we have passed the peak season. Ranked te, increasing by 2 . Years, we see price and rent increasing. Increasing rent is not as bad as the price. David yes or no. Markete hong kong money need that . No. David loud and clear. Rishaad up next, more on alibaba. This is bloomberg. Rishaad you are back with Bloomberg Markets. Naming 10 potential directors. Saying they will live before fridays deadline. 10 billion needed from Warren Buffett to get that deal over the line. David shares down 1. 5 . A potential investigation by the banking regulator that would have the power to disqualify executives. Accused of widespread breaches of Money Laundering and of failing to spot the transactions. The bank says it already expects more than 50 million in terms of cost associated with the ongoing. Saudi aramco has taken it to divide. Bloomberg is being told the presentations whereby invitation only. A range of banks are struggling to raise outside of saudi arabia. This time tomorrow, one of the most anticipated listings. Here in hong kong. Rishaad we will discuss that. She is