>> hong kong stocks fall more than 2.5% during the asian equities lower as a broad risk off move. cash trade is less than an hour away. stocks and futures decline as investors have concerns over the spread of a virus from china. and a digital tax truce. emmanuel macron and donald trump reach a truce not to impose punitive tariffs this year. president trump addresses the world economic forum in davos today. we are just under an hour away from the start of cash equity trading. at stake a look first off at futures. we have a picture you might not expect if you see the digital truce headline. that would seem to suggest it should be risk on. fewer tariffs, better for the economy. viruseless, this chinese and maybe the hong kong downgrade as well kind of spooking the market. as a result, you see futures down more than 0.5% across european indexes. take a look at the u.s. equity index and keep in mind the u.s. markets were closed yesterday for the martin luther king holiday. downasdaq, s&p, and the down, futures indicating they will all open down. anna: we have breaking news coming through. the low-cost airline sector. easyjet giving numbers, revenue ahead of estimates. a lot of talk about climate change over in davos. greta thunberg is due to be speaking there. whether she is keeping an eye on the prophet, if you like, of some of these businesses, we will seem. before tax better than the first half of 2019. full-year capacity sent to grow by around 3%. this is a sector that has been hit by higher oil prices. today, down by 1%. certainly that was the talk once we saw elevated tensions in the middle east. we do talk again about this being hurt. let's leave the prophet story there for a moment and the earnings season. as you were saying, selling across this asian session. the downgrade by moody's to hong kong having an impact, but also the coronavirus being cited by one of the reasons we are seeing this selloff. the hong kong market down by 2.6%. theresting to see on japanese sovereign bond markets a little bit of movement right out at the 30 year time horizon. boj, noheard from the change in policy stats. keep an eye on the earnings season. week we will be wrapping up the earnings story. news from ubs will be in focus. you have other breaking news? matt: the cfo of british petroleum is going to retire. down,going to step succeeded by the chief financial oilcer of bp, the big producer is going to retire and successor,amed a just want to bring you that news. change in the top of an industry seeing such volatility. yesterday we saw the oil price shoot up amid concerns about what is going on in iraq and libya. -- thethe oil price brand price, a 1% drop after the big jump yesterday. leaders, policymakers, executives are gathering in davos to talk shop while tackling inequality and the future of globalization. francine lacqua is there with a guest. >> good morning. -- it is executive good to have you. so much focus is on sustainability. i think my first question is what do you think the carbon price would need to be in order to achieve these net zero global emissions by 2015? >> we have different prices in different parts of the world, so we should have one to make this work. >> will we be able to do that? >> which is not easy. that was one of the reasons why in madrid, it did not work out. but let us assume we have one. it should be something between 20 and 40 euros. translate that into dollars if you want, it is more or less the same amount. progress if we go up as more competitive generation. that is basically the price. prices around 20 euros today. the globalook at economy being transitioned off fossil fuels, do we have the technology to do that? what technology do we need? >> we have technologies that enable this transition. up to a certain penetration of renewables. let us say we get up to 80%. past that -- we want to decide whether we want to kick out the other 20% left. for that, we think the storage technologies basically that will enable us to use renewable energy producing -- that is something that is being studied and worked at. i think this will happen in the next five years. >> technology coming from where? >> coming from other segments of the industry. namely automotive. the automotive industry is the industry that has the millions and millions of pieces that will drive this technology to economic levels. >> as we see more and more electric cars, how does that change your business? >> we will have electric cars. it changes our business into a consumption one side, but also the charging infrastructure that comes with electric cars and the ways in which you have to watch it. an electric car is a battery on wheels for us. any time is connected to the grid, it can provide services to the grid. the owner of the car can recover some of the cost of money. the services is great. >> but how do you power? the amount of power that is needed is incredible. >> it is large. assume electric cars will come in large numbers in a period of 10 years. it is not a problem. it can be managed. >> what can you do to reduce greenhouse gas emissions from natural gas? >> the only way to do that is , have that cutting out, the flaring, the methane leaks all around. second, work hard at reducing the amount of gas used for power generation and leave the gas to petrochemical applications. >> are they doing it seriously? or is it something people talk about to look good? >> if you look at the declarations, they are all committed. it is in their control. it is something they can do. it is something they should have done a little bit earlier. technology wise, it is totally possible. >> what is your take on the green new deal in europe? critics have been saying it is just not enough money. >> it is the right time to do it. it is time for europe to step in. and europe can have this leadership. the money europe has set aside is to be considered on top of the market money. more thanlready willing to invest in green technologies. i'm not looking at the green deal just on the money europe has put there, but put it on top of the large amount of money waiting for investment opportunities. i have no doubt of money there. it is not money the problem. perhaps -- that is more tricky. the money set aside to manage those sectors that suffer from transition. i think it is very wise this commission has targeted a large amount of money to use in that. that money that i think europe should use. >> thank you so much for joining us today on bloomberg. he is the chief executive of enel. back to you in london. we will have more interviews davos 2020.2020 -- >> francine will be back with us. coming up, an action-packed lineup. don't miss interviews with top executives including the ceos of microsoft. . , blackstone, and citigroup. plus we speak to the state bank of india chairman and hong kong chief executive carrie lam. ♪ matt: welcome back to bloomberg markets. this is "the european open." a little bit more than 45 minutes away from the start of cash trading across europe. let's get the first word news. economy will grow this year, but slower than expected. that is according to the international monetary fund. it predicts growth of 3.3% for 2020, down a 10th of a percentage on its projection in october. still a gain on 2019. the imf is cautiously optimistic. it says risks are now less skewed to the downside. china, a new stage of severity. beenalth workers have infected, one critically ill, after the world health organization confirmed person-to-person transmission for -- four people have died so far. 17 years ago, the sars outbreak killed around 800 people. and in the u.s., senate majority leader mitch mcconnell is planning a tight timeline for president trump's trial. on air and at quick take powered by bloomberg. this is bloomberg. thanks very much. tom mackenzie in beijing. let's get back to the world economic forum. francine lacqua is there again with another guest. >> joining us now is the executive director of the iea. we want to talk about renewables. we want to talk about the oil markets. will they balance because opec will comply and because in general geopolitics will take the steam out of the oil price? a very unique year behind us, 2019. , 2019,k at the last year 2020, oil prices remained more or less the same. $65. this year, we lost venezuela, iran, saudi arabia, then libya. this is all because the world is in a rush to oil, mostly coming from the united states. we expect some surplus of oil. one million barrels per day surplus. therefore, the libya issue we are facing now seems to be not a major challenge from the price point of view. having said that, i am concerned. one potential concern is a rock. -- iraq. the second largest producer of opec, producing close to 5 million barrels per day. iraq isnt developments, not very comforting. tensions.al anope the -- we all seem iraq which has stability and the production continues. someone could step in. do saudi's want to defend the oil price even more because of the saudi aramco ipo? fatih: definitely, but iraq is a big player. the numbers are big. , notin verdict today with too much, but i see iraq as a major issue, which is very important for the global oil markets and is set for the global economy. francine: how are you seeing demand? coming from emerging markets, or in general for oil? >> growth of one million barrels per day, perhaps higher. as strong as we have seen in the past. one million barrels per day, mostly coming from china. china, india,w and others are facing headwinds in terms of economic growth. coil --: went to ucp when do you see peak oil? oil fore see peak transportation, but not the entire oil. the petrochemical sector, for example, is going to grow. francine: when is peak oil for transportation? fatih: at least five years of time we can see peak oil for transportation. mainly driven by the efficiency gains in cars and trucks. four renewables, good news. only good news. wind --s from solar, onshore wind, offshore wind, they will all grow very strong. our numbers show in the next 10 new power of all plants built in the world will be renewables. improvement compared to previous years. francine: what is one piece of technology you wish we had to fully transition or be on the right path to the transition to a non-fossil fuel economy? fatih: there is no single technology. them, ie to pick one of would pick carbon storage. we need to accelerate that. carbon capture is very important. of fossilhuge amount fuels in the markets. let me give you one example. ago, fossil fuels in power generation was a 63% share. today it is still 63%. no change. renewables growth of because electricity demand is growing strongly and we are losing nuclear power. we need carbon capture and storage. it is the only technology. fossil fuels, we have oil, gas, and others. in the early stages. francine: how can we be so advanced and still not have a common harmonized carbon price? fatih: it is difficult. when we look at the global markets, it only consists of europe. we have china, india, indonesia, africa. they have other priorities. they do not put climate change as a top priority. they have other priorities. we have to recognize this. therefore, what is happening in europe is excellent. the green new deal. europe is responsible -- for only 9% of the emissions. 91% comes from somewhere else. europe's leadership is important, but it will not solve the problem by itself. we need other countries in the picture. co2 going into the atmosphere -- theyarta or paris or have the same effect on everybody. francine: thank you so much for joining us. the executive director of the iea. plenty more from the world economic forum. matt: looking forward to it. thanks so much. live at davos all week for you. a lot more coming up including ubs missing its first full year -- sorry, full-year profitability target, cutting its midterm goals. ♪ matt: welcome back to the european open. ubs has cut midterm goals underlining the task faced by a bulk honest. manus cranny to his ceo sergio ermotti. moneyare not focusing on in terms of quantity, but quality. the net new money should not be overemphasized. very solid net new money outcome for the year, particularly if you look at asia. 9% growth taking client assets to 450 million. going forward, we are dropping the net new money targets because, you know, i would describe the situation we are in now in terms of negative rates in europe versus france. continue toy will be something we look at. at the end of the day we are focused on growing our business and growing our profitability. is not aoney per se good indicator of doing that. actually, you can see how passive deposits are not being deployed. it is costing millions every year. we are going to focus again on quality of net new money, not quantity, going forward. manus: i'm just train to get a sense of what has happened since the trade deal took root in december. there was a shift in global sentiment. have you seen that translate at a client level and activity in the past month? >> yes. you compareat -- if not only year on year, but also the more recent history in respective client activity and going into late november and december, last year we saw much more constructive and active environment. this is the reason why. since 2010. i think if you also look at -- clients expect and we expect a further drop in gdp growth globally somehow embedded in the market. the normalization of brexit, of trade tensions between the u.s. littlena, is giving a bit more comfort to investors. there is a need for a lot of this cash to be deployed. there is a much more constructive tone and the seasonality factor should not be forgotten. in that sense we have a much more constructive view on q4. -- on q1, but still, the visibility and the volatility and the uncertainty remains there. anna: that was sergio ermotti, ceo of ubs speaking to manus cranny earlier. a lot of focus on the asian session overnight with regards to the hong kong market. we see the hang seng down by 2.7% after hong kong got a downgrade from moody's. also a lot of focus on the coronavirus. the chinese renminbi well represented. ♪ welcome back to bloomberg markets. this is the market open. 30 minutes away from the start of cash equity trading. you can see futures are down. asian equity indexes are falling fairly severely. if you take a look at the gmm, you will notice the hong kong hsi is down 2.7%. the hang seng down 2.7%. the outbreak of a deadly virus has already led to disruptions in across financial markets. for some strategists, it is alarming enough to cash out. this is no question that virus is already very serious. when it comes to financial markets, the question isn't the scale and length of impact. according to strategists, it is going to be short-lived and once the academic -- epidemic is controlled, the impact will fade. were you look at jefferies, who thinks the impact is going to be concentrated. for them, it is all about the hong kong consumer, which they said is going to take a hit quickly. however, it will be a significant impact. then you look at strategists who are very alarmed. we look at a money manager like amber hill who says it is time to cash out ahead of the lunar new year. that also means avoiding travel stocks. it also coincides with a holiday period, which means thin trading , rush to safety, and we could see yields in treasuries drop by nine basis points. anna: interesting to see the asian equity markets responding quite severely to these. dani burger with the latest on what the market is saying about this. this deadly virus. let us get a bloomberg first word news update. for that we go to beijing. presidents trump and micron may have reached a truce over digital taxes. neither france nor the u.s. will impose punitive tariffs this year. the readout from washington was more muted. it may reduce transatlantic tensions and prevent escalation into another trade war. the bank of japan left rates unchanged this morning. it also painted a brighter outlook,f the economic raising growth projections for the first time in a year. the central bank says overseas risks remain significant, but they have decreased. economists noted the outlook for inflation still remains week. saysommission president the eu must be prepared to back up its diplomacy with force. this as the block discusses sending troops to libya. >> the european union needs to have hard power, but always diplomacy and crisis prevention. only that together is comprehensive security. >> 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. this is bloomberg. anna: thanks very much. the markets are watching very closely what's going on in china with the coronavirus. plenty to talk about in terms of climate change on the slopes of amin has ae haslinda guest with her. ofjoining me is the ceo indonesia's biggest property developer. good to have you with us. first i would like to have your take on the economy. growth has been tepid despite all efforts to boost gdp. what has gone wrong? >> growth is looking good this year. 7%.owhere close to >> not yet. this week the president is submitting to parliament the omnibus law, which is trying to streamline 79 different laws and a thousand clauses. it covers labor reform, tax reform, investment reform, and the goal is to create enough jobs for the unemployed, plus a 2 million new entrants that come to the workforce every year. for that, growth must govern the current 5% to 6%. omnibusre seeing this is going to be a. . game changer for indonesia. >> i think so. >> when will we see 7% growth? >> that is a better question for our ministers, but indonesia is one of the few countries where you see growth. years, indonesia has tried to achieve 7%, but we are living in a slower environment generally. 6.5% would be excellent for indonesia. especially with the backdrop of inflation continuing to come down. inflation last year was 3%. very helpfully -- healthy. you see the opportunities? how are you seizing these opportunities? momentumk the indonesia has is perfect for the businesses we are in. real estate will benefit immensely from the infrastructure the president has rolled out. finally the last two quarters of 2019 we are beginning to see a sustained and strong pickup in purchases of homes. also in our health care business. that is another business that has done well. ebita group and we are going to continue to build on that. care,r it is health malls, i'm very excited for 2020. >> how excited are you about the move to move the capital? do you see opportunities there? >> i think the move of the capital is another landmark policy the president is running on. boostk that will investment and capital spending and also help to spread out and address the issues of any quality of growth. >> you have cooperation with softbank. do you see cooperation materializing in the new capital in terms of new projects? >> we are doing a lot. i am a big believer developers must think alike consumer companies. we have to think about the customer journey, think more about the customer experience. to do so, technology is an important part of it. our partnership with softbank's to apply a lot of artificial intelligence, big data technologies, into townships and developments. i hope we will have that opportunity to do so in the new capital as well. >> you talk about opportunities in indonesia. when it comes to foreign investors, they see policies being a bit more nationalistic. it's like taking a step forward and two steps back. they are pretty uncertain if that is the bucket they want to be putting money in areas your take? >> that is a fair assessment and one the government acknowledges. bill beinge in the submitted, the government is taking concrete actions to address the concerns of many