Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

Benchmark Interest Rate at 0. 25 . That is expected. We had the debt maintaining it will continue with the policy of 0. 25 for the beginning of next year. They are maintaining the benchmark Interest Rate. This meeting coming after four new cases ending new zealands 100 today virus free run. Perhaps more later on. Auckland back in lockdown. A lot were surprised about the resilience of the economy. They have to weigh the global risks, as well. The qe purchases are interesting, as well. Most werethey have to weigh thel a bit historic pick for joe biden, the first africanamerican. Pick for Vice President. And the first asianamerican. And some say it will help propel joe biden to the white house. Lets bring in Jodi Schneider to talk more about this decision. It seems this was a no surprise pick from joe biden. What does it tell us about the Democratic Party . First of all, joe biden said he would pick a woman, so thats not a surprise for his Vice President ial running mate. It was thought he would pick someone of color, given the attention on race in the u. S. Harris willenator be the first black woman and the first asianamerican on the major Party President ial ticket. She is also known as a tough campaigner. She is a junior senator from california. She won the statewide election in california. Three times. So she has a lot of credentials that joe biden and the democrats think will help in november. She does seem to think that implications for Foreign Policy, relationship with china, what are we anticipating . She has been on both sides of the china issue. On one hand, she has been tough. She didnt do a lot with china when she was District Attorney in san francisco, attorney general of california. That part of her career did not touch on Foreign Policy. It has only been in the senate where she has that type of experience. It may come up, how much experience she has on Foreign Policy. She has also been tough on china, in terms of intellectual property and saying they steal intellectual property and ship substandard products to the u. S. At the same time, she has also counseled that the u. S. Should cooperate with china, particularly in fighting Climate Change and handling relations with north korea. This is somewhat a different stance, certainly than the current administration, who has been tough on china and escalating the relationship. Be a mores may conciliatory approach. We will have to see. She really hasnt been tested much on the Foreign Policy front. This will be an area where there will be a lot of questions, and she will be questioned a lot on this. Trump we heard president responding to bidens pick with harsh comments about Kamala Harris. Does the bidenharris ticket, what does it mean for november . What are the chances of them beating President Trump . That will be very interesting. Sident trump has known been known to attack women, particularly when they are running against him. As we saw with hillary for years ago. It should be interesting, particularly with the atmosphere in the u. S. , given the theersation on race and death of george floyd and people turning out in big rallies. If President Trump attacks her on a racial basis, and a gender basis, there can be some serious blowback to that. We will really have to see how this plays out. Shes known as a tough campaigner. One of the reason joe biden chose her is her toughness. He also chose her because he really wanted to look for somebody with whom he thought he could have the kind of open, collegial, very close relationship he himself had as Vice President with president obama for eight years. He said thats important, and he things he can have that kind of open kind of relationship with Kamala Harris. We will have to see how this plays out. President trump attacking her today right off the bat. It will be interesting three months before the election, which will be a very different election, largely male in. There will certainly not be anytime soon on the Traditional Campaign trail. And the Democratic Convention coming up next week, as well. Jodi schneider, thank you for recapping the biggest story today. Some lines coming through the fed. The central bank giving rates unchanged. No surprise. Boosting their qe program up to 100 billion kiwi dollars. There is totals that they are weighing right now, including negative Interest Rates. Activee rates remain in preparation. They are looking at Something Like this. Extra tools can be deployed if extra stimulus is needed. They agree any move to negative rates could be effective. Getting one step closer to this alternative type of monetary policy. Haslinda thats right. And it is something that rbnz has maintained they will do whatever it takes. Lets get the first word headlines. Coronavirus continues to spread around the world, with the u. S. Accounting for a quarter of all cases. Florida reports another day of record deaths. Hong kong may bring its outbreak under control, reporting the lowest number of new infections since the resurgence one month ago. The city south32 new cases, down from the the city saw 32 new cases, down from. No talks on the table of stimulus in washington. They have not spoken for days, with the white house demand democrats refuse the demand they must double the current 1 trillion pending commitment. Markets have been content to let the issue run. The late session at tuesday indicates some. Yvonne the coronavirusyvonne is dragging on indias recovery. It down a fourth straight month in june as the economy struggles to reopen. The index of Industrial Production fell more than 16 . Less than a 21 decline seen in a bloomberg survey. India is heading for the first fullYear Contraction in more than four decades, with the imf seeing gdp shrinking 4. 5 . Two years after President Trump abandoned the iran nuclear deal, his administration is threatening a crisis at the United Nations by reimposing sanctions on tehran. It could push traditional u. S. Allies, germany and france, to side with russia and china at the Security Council. Members will vote on the u. S. Demand to make an arms ban on iran permanent. The current resolution expires in october. Yvonne coming up, we speak to the ceo for asean in south asia to hear how shes promoting diversity and inclusion. She joins us later on this hour from singapore. Next, our exclusive interview with the head of one of asias Fastest Growing private banks, the bank of singapore ceo is up next. Dont miss it. This is bloomberg. Haslinda at the moment, gold is down about 1. 4 . 1885. 0 level, kind of the biggest drop in seven years after bond yields spiked. 1894. T down about 2. 7 right now. Global markets are facing important crossroads in the second half of this year. No clarity when it comes to the virus pandemic and economic recovery. If thats not enough, we also have the ongoing u. S. China tensions and upcoming u. S. President ial elections to contend with. Lets bring in Bahren Shaari,eo of bank of singapore southeast asias second largest bank. Give us a sense of the mood among your clients. Are they keen to invest . How do they view risk right now . Declines continues the clients continue to remain invested. In case of additional volatility in the markets. Otherwise, they remain invested. Spoke in when we last march, you said you were advising clients to sell. What are you advising them to do now . Continue to maintain the stance to make sure the pandemic is not over yet. We have seen the sign of some recovery, but it is too early to say whether it is going to be the outward direction of recovery. Best to take a conciliatory stance, build a portfolio, maintain sufficient in case of volatility. Haslinda do you buy more gold . Not really. It is unique to have you need to have a diverse portfolio, a strong call portfolio. You need to have quality investments, diversify between the growth of stocks, as well as the value and cyclical stocks. Portfolio,ur court you have to have a bond investment portfolio. Gold is one of the Asset Classes that you should have exposure to, but yo should not be exposure overly exposed to gold. There will be price movements that you need to manage. Banksa what about the credit line to customers . Are you giving them full leverage at normal time . What are you doing with that . We do give leverage to our clients against their portfolios. We have not changed that. But we need to make sure they line and not to overexpose themselves in the current market environment. We know from the latest numbers from the big banks in singapore, they set aside a bigger provisions for npls. What are they doing at this point in time . A differentess is business. We lend to clients on initial assets, we diversify across all Asset Classes. We are managing that based on the daily market. We monitor clients margin and ce going close to the marching levels, so they can in the eventelves of volatility in the market. Are your clients worried about the National Security law in hong kong . People themost situation. They are looking to see how this will pan out. Like many others in the industry, we are looking how this will go. Peoplea are more looking to relocate out of hong kongs . What are you hearing from your clients . No, i think most people are still sticking with the wait and see approach. Most people see the situation will get better. Theyrey are making sure they can position themselves in the situation in the event that it is worse than expected, or better than expected, most will have to prepare themselves. Haslinda are you then saying you are not revealing your growth plans in hong kong . Yes. We are not revealing our growth plans in hong kong. We still see a lot of opportunity in the Greater China area. We are still continuing to focus our growth on that region. Aum,nda looking at your it rose over 2 from a year ago end of billion as of the june. That is still off of your high, 190 billion. Any insight on this . Because we are impacted by the market valuation. That has an impact on the aum. We do see continuing flow from from acrossecially the region, more from the middle east, north asia, and south asia. Not as much as it used to be in 2019. See, ia when do you guess, the time when you can start growing your aum . What kind of targets are you setting . We dont set any targets. We are taking advantage of the situation in the markets. With ourntinuing clients now. Not as fast as it used to be. We have to work with clients to see how they can continue to preserve what they have and make sure they strengthen their portfolio. It will be the First Priority we need to make sure we achieve for our clients. Forward, theng virus is expected to stay with us for some time. That puts a lid on travel and facetoface interactions with clients. Theres concerns perhaps the Current Situation will make it more difficult to onboard other clients. Yes indeed. What we are doing now is we are working with more partners on the ground who have a Good Relationship with clients. We work with them to see how to provide the solution to their clients, as well as looking for other ways for onboarding clients, other than through facetoface meetings. Haslinda where do you see the biggest growth . Which markets would that be . Is still a good growth opportunity. We see growth in the middle east market. Coreeast asia is our market. Singapore is still growing. That will be a market we continue to focus on. Go, a before we i think this is to make sure we remain relevant to our clients to come out with good advice, strong solutions, understanding our clients demand. Making sure we continue to build a strong platform that can support the demand and needs of our clients. I think that keeps me awake at night. , ceo of Bahren Shaari bank of singapore. Thank you for your insight. Yvonne lets take a look at gold prices. Continuing their tumble for a second day. 2. 7 after we saw the biggest drop in seven years, close to 5 . The Precious Metals really following. Silver futures down from 9 . We broke below the 24 threshold. After a 10 drop we saw yesterday. This falls on the backdrop of the rotation we see in markets, where things that were the darlings, like treasury yields, they are picking up again. Its definitely impacting the gold price today. The dollar also seems to be gaining footing. I think its more about the really old story at the moment. Lets take a look at real yield story at the moment. Lets take a look at gold. It seems we may have gone too far. We may have further to fall. We could be a little ways before we hit the support levels. To8 is perhaps the next cue watch. Around 1881 at the moment. Plenty more ahead. This is bloomberg. Yvonne youre watching Bloomberg Markets asia. Tesla stocks surged after they announced they are splitting elevated shares in a 5 1 exchange, making a stock less expensive for individuals. They have been at record highs, making it the Worlds Largest automaker by market cap. Each shareholder will get four additional shares of common stock on august 21. Tesla will trade on an adjusted basis 10 days later. Commonwealth bank is to pay close to the maximum permitted dividend, even as surging debt provisions push profits to a sevenyear low. Australias largest lender will pay 98 aussie cents a share, down from 221 a year ago. They hold the dividends earlier this year, u. S. And european regulators are capping or suspending payouts and buybacks. Boeings hopes of bringing the 737 max may be hindered by regulators outside the u. S. Eu and canadian officials are concerned about software revamps. Fears Global Certification may slip into next year. Last week, the faa launched a process that can see as soon as october. The jet has been grounded globally for almost 18 months. Haslinda asian markets mostly lower. Extending the times to about. 40 . Have a higher open, after the s p 500 ended lower over the timing of the stimulus package. Tracking the dollar. Gold futures currently down by 2. 6 . Gold heading for the biggest drop in seven years after u. S. U. S. Dollar,nd the 1183. More to come. This is bloomberg. Yvonne 10 29 in hong kong and shanghai. Here are your first wood headlines. President ial contender joe biden picked, let harris as his running mate, hoping her africanamerican ties and self branding as a progressive will protect propel him to the white house. She ran against biden in the primaries and is the first black woman and the first asianamerican on a major party ticket. Harris has 13 california elections, having started her career as a District Attorney. A Hong Kong Media tycoon, jimmy bail. Has been released on he and others were held under chinas security law, reinforcing fears beijing will suppress dissent and antichina views. His apple daily newspaper is were now for its condemnation of authoritarianism. The Trump Administration is tightening the screws on beijing by labeling all goods from hong kong as made in china. The move will begin from september 25 although the likely impact on the city may be limited. The majority of puncture hong kong shipments to the u. S. Are. Xports only about 1 were domestically made. Uptok is beeping beefing in lobby in washington. The chinese owned video sharing app must find an american buyer by the middle of next month or shut down to make amid claims of a National Security threat. It is advertising what it calls Government Affairs positions and seeks to boost its influence in washington. A look at the markets, investors looking for the rally to proceed but not finding it today. The dow, due to the timing of test ofulus package, a the market coming with a phase one trade deal review ahead from larry kudlow that china is meeting obligations for the trade deal. The msci down zero point 4 , the benchmark in china low whether lower for a second day. Lower by almost 4 and the hang seng in negative territory. Some of the stocks we are watching, cafe, tencent cathay hascent, slumped about 40 since its march lows but today it is up buys by 7. 5 percent, tencent lower by 1 . Cba paid close to med maximum dividend as profit declined and net income for the Second Quarter of 196. 8 million, and 97 slump from a year ago. That is how it is looking for some of the stocks we are tracking. At livetake a look pictures out of taipei, the u. S. Health secretary alex azar on his fourth day of his trip to taiwan. You are seeing him visiting a factory that makes face masks in new taipei city. We talked about how controversial this trip has been between the u. S. And taiwan and further escalating tensions with beijing. We have heard china condemn this trip, as well. That is what we are seeing at the moment. Lets talk about geopolitics. In hong kong, jimmy lai has been released on bail after his a rate arrest on monday. Lets go to Stephen Engle, joining us for the latest. What is next for mr. Lai . He has to go through the prosecutorial process in hong kong. We heard another act to vest who was arrested activist who was arrested monday, 10 people were arrested under the National Security law, including agnes work who says she has to surrender her passport. Fory lai was in detention 36 hours. He was released from the Police Station just after midnight. He declined to speak to the media that had gathered outside when he was released on bail. The day before, he had, the headquarters of next media, which publishes the apple daily, raided. His yacht was searched. He was under detention for suspicion of collusion with Foreign Forces under the National Security law, as well as, i got a statement from hong kong police, saying there are suspicions as well of financial fraud. These individuals, many of whom have been released on bail, including jimmy lais two sons and agnes chao and a freelance journalist, have been released on bail and they expect to go through the prosecutorial process in hong kong. Chinada we are hearing has given its blessing to the extension of the current legislative term in hong kong. What is the significance of that . It represents the second time in as many months that chinas parliament, the Standing Committee of the npc, has weighed in to interpret the basic law. The first time was june 30 with the implementation of the National Security law. This time, the Standing Committee unanimously passed a resolution to continue operations of the current Legislative Council session for no less than one year. Even the terms of those lawmakers who had been disqualified previously for the september 6 election would be extended. The election was postponed for up to one year by carrie lam under the pretext that it wouldnt be held safely under the coronavirus. Many prodemocracy candidates and those who were disqualified politicalt was more persecution, if you will, to limit the chances for a prodemocracy candidate in the election, which is delayed by at least a year. No label the u. S. Will hong kong products as aid in china. Symbolic or significant . Limited actual impact area there are few direct exports from hong kong to the u. S. , most are reexports. There are 39 billion worth of exports to the u. S. From hong kong but only one point 2 were domestic hong kong exports. 80 work reexports from china. Of the hongmoval kong special trading status and china is ignoring its unique role as the separate member of the wto. Expect hong kong to talk to the wto to see if that is a breach of the rules. Yvonne Stephen Engle there. Bringing you back live pictures coming out of taiwan with alex azar, the u. S. Health secretary, visiting a plant that produces face masks. We heard earlier in a telephone briefing from alex azar that they discussed a taiwan investment in u. S. Medical production, so perhaps this trip does yield something between the two nations. Talking a little more about cooperation between the u. S. And taiwan, im sure beijing is watching this closely and not going to be able to appease people from beijing on this trip but we will continue this conversation. A taiwanese lawmaker will be joining us in the next hour of Bloomberg Markets to talk about the implications of this video this visit and what it means to relations with china. Plenty more coming up, including Standard Chartereds regional ceo. We will talk about the bank cost of her city and inclusion strategy, next. This is bloomberg. Yvonne it is that time where we feature forwardlooking conversations with Business Leaders and find out how they are paving the way for a more equal future. Our next guest runs a Diverse Workforce for Standard Chartered and asean and she counts diversity as one key priority to help her workers overcome hidden biases. Joining us is judy hsu, the regional ceo. Thank you for joining us. Most people might not know this but before you became one of the most influential bankers in southeast asia, you had a past life as a record artist for more than 10 years. To start things off, tell us how you broken the world of banking what obstacles did you have to overcome not just as a woman but someone in a different industry . i was singing professionally when i was in university, and it was something i wanted to do, a dream that i always had growing up. But i also knew that it is not something i could do forever. So i went back to Business School and during Business School i had a summer intern job in a bank. That is how i started banking. I remember going to work on the first day as a summer intern in the bank, at that time it was in taiwan, my recording career was in taiwan, and it was quite weird because people knew me as a singer. They thought i would go in and, with full makeup and some kind of costume or something. When i walked in looking ordinary, they thought, ok. Lets get back to work. You have to make sure that you are like everybody else, that you are very professional, dedicated and hardworking. That is what ultimately drives what i do every day. It has been 30 years since i have been banking. Been in banking . Has that experience shaped you as the regional ceo, incorporating diversity and inclusion in your Business Strategy . Your company is already ethnically diverse. What more needs to be done . Back to our go statement, to drive commerce and prosperity throughout unique diversity, which is what you said, the recipe is very much core to our strategy. We operate across 60 markets. Not very different markets, from the u. S. To the u. K. , within the region, singapore is different from india. It is important that while we have a very important focus on diversity, that we make sure our programs are taking into account the local challenges. Me, it isr, for important we attract talent both locally and internationally, and to do that, we also have to take risks. It is not easy. All of us want people to work for us that have great track records on everything, but ultimately, i think for us to groom talent and give them the opportunity to do bigger things is to take risks on people and i think as a leader, that is what we are encouraged to do. I think the other thing all of us are focused on is around while you have great diversity, and we have that across our market, how do you get the best in that diversity . That is really about working with, innovating and allowing them to flourish, to be whoever they want. That is all about inclusion, creating an environment where can be whoevery they want. For me, that is very important. As you pointed out, i started my and that a singer doesnt stop me from becoming a banker and people shouldnt have the prerequisite inking that because you are doing that, you cant do this. We have to be role modeling as leaders that openmindedness. You talk about bias, all of us have biases. I have biases. It is important when the bias creeps up a we remind ourselves, stop it. Be open minded. That is something all leaders must become better at. Has the pandemic impacted equality efforts in any way . Pandemic has the been something that has accelerated many trends. In banking, digitization. I think the pandemic has accelerated the Flexible Work culture. I think we have always had cyclical work policies at stanchart but people dont always put up their hands to do it, to apply for it because they fear people will think they are not ambitious and have this if they are not wanting to progress in their careers, it is because they want Flexible Working. What the pandemic has done is to prove that people can be very anductive working from home banking can be entirely virtual. What i also see is that inclusive leaders tend to do better, tend to respond much better in the pandemic. We are on video right now, and it is different when you are building that connectivity with your team through video versus through in person. I think the empathy, that curiosity, that care and kindness is so important, that inclusiveness. In the video, it is so easy, you dont see people as clearly as yousee them in person, that are a more inclusive leader. It is more difficult, because andphysical sort of divide through video but what i am seeing is this whole experimental experiment of working from home, working inclusiveannels, that leaders are i think more successful. That is why we continue to remind our team that you have to through to succeed and these challenging times, through being a lot more inclusive. In a regionu are that is mainly consisting of emerging markets. In the pandemic, that has increased the gaps between the haves and the havenots. Is there a sense that these emerging economies could end up becoming submerged, a term which minister insenior singapore . Repeat that . Can you repeat the question . Haslinda is there a sense that the emerging markets will be submerged, given the gap between the haves and the havenots are increasing with the pandemic . Judy definitely, the pandemic doesnt help between the haves and the havenots. Hence, i think government interventions are very important as banks, weeriod. Facilitate finance, we continue to work with ngos and continue to work with governments to make sure we get credit to people where it is most needed. But you are right. The pandemic doesnt help the haves and havenots. It is important that we stay very conscious of these differences and continue as corporates to do our part to support many of the people who are suffering due to the pandemic. We have a question that is very timely for our segment, how does gender equality influence assets . There is plenty of research out there that higher proportions of women in leadership help improve company performance. How much diversity does diversity matter for macro investors when it comes to investments and portfolios . Diversity is not just about gender. It is about ethnicity, age. I do think any organization with a much more diverse culture is better to navigate the crisis and ultimately, that has to be part of the company strategy. That also translates to performance. As an investor, ultimately we ,ave to invest in performance for sustainable performance and i do thank companies that are able to weather the crisis tend to be companies that are really focused on diversity and inclusion and ensuring that we get the best out of the company and the Company Still delivers. Diversity is not just about people that are in the company or our colleagues. It is about also, being able to have a very diverse set of clients, to support them, as well. Another thing we also look at, which is important, is the diversity of our suppliers. We want to support suppliers. As a bank, we are here to make a viable we have business, but alternately it is equally important we play our part in contributing to the environment and contributing to the success of all the communities that we are a part of. It was a pleasure. Thanks. Bankhsu from stanchart from singapore. Coming up, more bank returns, a prophet, a surprise new venture. We have the details coming up. This is bloomberg. Yvonne softbank bounced back into profitability following record losses and now, it is ready to jump into a new venture. It is not the usual thing softbank is known for. Instead it is forming a Traditional Asset Management business to trade public stocks. We will get more for out from our executive editor joining us from tokyo. Why now, why get into Asset Management . Interesting. It was a surprise when Masayoshi Son talked about it yesterday on the conference call. Softbank ran into some troubles last year with some of its investments in startups, particularly we work. This was the quarter where the company returned to profitability, as you mentioned. The bottom line was the income of 12 billion, much of that came from onetime gains related to sprint, the u. S. Wireless business they sold to tmobile, then they sold stock in it. With the return to profitability, Masayoshi Son is unveiling a new initiative, the move to Asset Management, and he described it as a continuation of his effort to make investments in the technology sector, particularly companies he calls related to the information revolution. With the vision fund, 100 billion vision fund, he is investing in private startups and the new Asset Management arm will be to invest in publicly traded stocks. He mentioned a few yesterday, including apple, amazon and facebook. They are moving more in that direction. Does the move makes sense . Peter it is not clear. It certainly raised a few eyebrows among the investors and analysts we talked to. It is not clear why softbank things it thinks it would have an edge in taking these publicly traded stocks. Investors, if they are looking for investments, they can make their own choices about amazon or facebook or apple. These are not unknown companies, certainly. Softbank is growing more liquid these days. They had some debt problems and their shares were dropping. Masa is in the middle of selling off assets, more than he ever has in the past. He announced a program to sell 4. 5 trillion yen ¥4. 5 trillion. They are getting more capital and he portrayed this as a way to use that money effectively to invest in tech stocks. To be clear, softbank had some successes in the past. Alibaba was its biggest hit in terms of investing in a company, than waiting until they went public. Even in the public markets, they invested in the chip company nvidia and made a lot of money on that. This is an effort to continue in that direction. Peter elstrom joining us from tokyo. Live pictures out of taiwan, alex azar on day four of his taiwan trip, visiting a facemask factory. Talking more about the investment when it comes to u. S. Medical production. We have a lawmaker joining us on the implications, next. This is bloomberg. Businesses are starting to bounce back. But what if you could do better than that . Like adapt. Discover. Deliver. In new ways. To new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back. But bounce forward. Thats why were helping you stay ahead and adapt with a network you can count on, 24 7 support and Flexible Solutions that work wherever you are. Call or go online today. Haslinda its almost 11 00 a. M. In singapore and hong kong. Welcome to Bloomberg Markets asia. At our this is a look top stories. Joe biden picks his running mate for november. Kamala harris challenged him in the democratic primaries herself as a progressive prosecutor. Is releasedmmy lai on bail. Authorities saybrook he broke National Security laws. The future rishaad the future of u. S. China relations. We are joined by the chair of taiwans Foreign Affairs and defense committee. Haslinda we are in the red in asia, mostly lower on the back of the losses in the u. S. Overnight. There is concern about the timing of the spending package. Both sides have yet to come to a conclusion. Down, the benchmark in china lower, extending the decline for the day. We had new zealand keeping its lower 0. 2 5 , extending the qa the qe. The benchmark is lower by 1. 5 , 1000 11,471. The rbnz, the stocks in new the kospi flat at 2417, easing. Look at whatng a we can expect from the india open after yesterdays advance, on the singapore contract on the nifty. Indias factory output declined again, the economy struggling to reopen amid the coronavirus pandemic. Looking at gold, the big story, two point 4 down, erasing some of the losses but still below 1900 per ounce. Look at the yield on the 10 year, creeping up 60 four basis points at the moment. The rise that pushed gold to these record highs coming to an abrupt halt. The haven, boasting the biggest drop in seven years because of the bond yield story which had been supporting what was going on with gold. Treasury bond yields climbing, cutting into the negative real rates. 10 year treasury yields jumping the most since june ahead of an expected flood of corporate and Government Debt issuance. Positive data, helping with u. S. Producer prices, increasing faster than have been anticipated. U. S. Dollar index moving up by 0. 1 . Biden has named california senator Kamala Harris as his running mate for november. He is betting her ties to the Africanamerican Community will help propel him to the white house. She is the first black woman and first asianamerican on a major Party President ial ticket. Our Senior Editor joins us. A progressive prosecutor and a safe bet . Yes. , let harris is somebody who had been , the harris is somebody Kamala Harris had been seen as the frontrunner because she ticked a lot of boxes. She is something the bidens have known for a long time. When she was an attorney general in california, she and joe bidens late son beau were Close Friends and allies. She has been in that orbit for a while. There was a big question mark over her debate performance when she went at joe biden and whether that could be pushed to the side, the hard feelings have been set aside. In harris, you get an historic and safe pick both at the same time. Democrats from across the spectrum i have talked to are thrilled about this pick. Progressives from Bernie Sanders all the way to the moderates like doug jones, the most vulnerable senator for the democrats, are really happy with the pick. It seems to have united all across the board. She seems to be a very domestic focused individual, given her activism. Are there implications for Foreign Policy . And also the relationship beijing has with washington . Are. Ere i have gone through her Foreign Policy portfolio in the last couple hours again and harris is going to be someone who is going symp sympathetic atico with him on Foreign Policy. When it comes to china, her leading thing is that treatment women. Er women uyghur she joined in saying the u. S. Should speak more on china about human rights while still saying the u. S. Can partner with china on a host of other issues. She said that u. S. Needs to speak up on hong kong. She has been in that alignment with joe biden a lot. The other thing that is notable, you mentioned in the intro, she will be the first asianamerican woman on a major president ial ticket for full stop. India, hercame from father from jamaica, a story of immigrants so she brings that perspective to this race. Thanks so much. Derek wallbank in singapore for us. Lets go from singapore to new york. We have the first word news with karina mitchell. Karina in hong kong, activist and tycoon jimmy lai has been released on bail after being accused of collusion. He and others were held under the security law, reinforcing fears beijing will suppress antichinese views. Renowned forer is its condemnation of chinese authoritarianism. The Trump Administration is tightening the screws on beijing by labeling all goods from hong kong as made in china. The move will begin september 25, although the likely impact on the city may be limited. The vast majority of hong kong shipments are reexports of the citys almost 40 billion of your,nts to america last 1 were domestically made. Tiktok is beefing up its team in washington, hiring lobbyists. The chinese owned video sharing app must find an american buyer by the middle of next month or shut down amid claims it is a National Security threat. It is advertising what it calls Government Affairs positions as it seeks to boost its influence in washington. Two years after President Trump abandoned the iran nuclear deal, the administration is threatening a crisis at the u. N. By reimposing sanctions on tehran. This move could push traditional u. S. Allies germany and france to side with russia and china. The Security Council will vote on a u. S. Demand to make an arms ban on iran permanent. The current resolution is set to expire in october. Global news global news 24 hours per day, onair and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im karina mitchell. This is bloomberg. Looking at the reserve bank of new zealand, it decided to keep rates on hold at 0. 2 5 , the benchmark remaining there as most people have predicted. The governor theyre saying the decision was finalized today and the outbreak of coronavirus didnt change that and they didnt know more than the public about what was going on with the outbreak in new zealand, with auckland put into lockdown. Fiscal policy remains a primary responder to the crisis. You cansome commentary, catch more if you go to the go function on the bloomberg or the live go function, as well. Still ahead, we speak to a taiwanese lawmaker about the implications of the u. S. Health secretarys visit and the implications for relations with china. Next, we talk strategy guest as more economies require stimulus. Haslinda golds rout continues with prices plunging below 1900 per ounce. The rally stalled as u. S. Bond yields advance, eroding the havens appeal. Goldman sachs says it is closing its long silver trade idea, taking away a 50 profit over the last month as smart metals surges towards its 30 price target but they see a structural bull market for Precious Metals in the mediumterm and a new high for gold and silver amid efforts by governments to debase they are currencies. Cion jooste, global manager, joins us. Good to have you with us. What do you think . Is this a buying opportunity . Johan i think yes. I think the reaction might have been a bit technical. I would concur with a longterm that this isnt necessarily an inflation edge but more the Currency Debasement argument. I see a lot of uncertainty still coming up, so i would say mop up if you dont have. Haslinda where will gold peak . Some people say 2300 dollars, some people say 3000, some people said 5,000. Say 5,000. Ldnt levels aside,the the diversification benefit to getting it in a crisis environment is more important than whether you want to split or 25 hundred00 dollars. You wouldnt put a positive score on it if you didnt think they would leave doubledigit so that leaves me thinking the low 3300, 2200. Not as precipitously steep as we butthe rise over 2000, certainly more upside. Why has gold surged . People were hedging against inflation, but there is no sign of inflation stopping. Could that lead to a selloff in gold and a drop in prices . The onlythink if reason you are buying gold is an inflation hedge, you are probably not having the right hypothesis. Inflation is not a problem in the mediumterm. We are looking at a deflationary shock when policymakers are doing their best to stimulate the economys to not go into deflation. That is a bigger deal in the near term. You mentioned the opportunity cost of holding gold is lower as but thelds go down, bond as a hedge undermining the second step, as an inflation hedge i dont think there is much to commend gold from that point of view. Note, lookingat at the dollar, you would expect it to rise, it has a little but not as much as gold has fallen with the reverse correlation in place. Lots of people are blaming the recent dollar weakness on real rates or negative real rates. Is that really the explanation as to why gold was weaker . Havey, the two ways to negative real rates get further into the red, that is by perhaps an Interest Rate cut by the fed which doesnt look likely, or inflation going up, and that would mean a strong u. S. Economy so it makes no sense. Why is gold where it is . Question. D the real rate argument is one part of a bigger picture. Where thek at inflation is, and where there isnt any, if you look at what they need to do with real rates to get the economy going, it is softeru say, you need and what happens next . Why gold . I think it is a geopolitical thing. I was going to mention there is a risk on, risk off thing happening which is why the dollar is not rising as much as it might have if there was a closer correlation between it and gold. What we have seen through march and april is still more or less in place, which is as the market, irrespective of what i might think about the outlook, as markets go higher on the back of Risk Appetite returns, that is not great for the dollar but that aside, you have enough players that have taken gold as a hedge against the geopolitical or other systemic issues and maybe inflation is not the whole story. Trying to figure out what the real story is. Geopolitics doesnt seem to be playing apart. We dont see the pandemic locally speaking also moving the dial that much, either. What is your take on both of those two massive issues we have going on around the globe, that they dont seem to be really being market sensitive in any great manner or whatever . Johan interesting question. Im perplexed also but if you look at what the Analysis Shows for the last quarter or two, it is liquidity driven. The market tends to run ahead of expectations or certainly, the actual numbers. It has taken the view that all the liquidity pumped into the system is going to get us out on the other end relatively unscathed. You can debate that and i would certainly characterize that as an optimistic assessment, but that is what is going on, almost blind faith that policymakers will continue to support markets and economies with continued rounds of stimulus. The risk as you mentioned is clearly the pandemic is not under control. Example,oking at, for in the Financial Sector, lots and lots of provisioning that has to happen because of the damage to the underlying economy. At some point, everybody goes, wait a minute. We are in a recession. If you take away the stimulus we probably are. But at the moment, the market is pricing in the cash that is coming in as opposed to the risks that might be very difficult to quantify out towards the end of the year, q1 or q2 of next year. Question, itast has been bearish and depressing. Tell me something positive you see that you want to highlight. Banks andentioned the provisioning. Beingn mind, despite negative about the outlook, once the Financial Sector sees potential losses to provision for these, if there is any upside surprise, they would have overprovisioned and there is a snapback coming and usually the market does pretty well with largecap financials and they do well and they have been underperforming. That could be in play if you start to see control of the virus and economies starting to rebound and delinquency rates on globally, ifide that starts abating, that could be an interesting contrarian place. Getting the timing right would be difficult because i could see that move quickly. At the same time, other industries that have been pariahs because of what the virus has done to them, like travel, that could be an interesting play as soon as you want to get bullish on the virus and the influence starting to wane. It is not as if it is all doom and gloom. We have to be aware of the fact that some industries and sectors have been badly hit and a recovery could, you could almost have a gold type of recovery, gold prices and the price action, in some of these sectors and the clouds start lifting. You dont want to get caught in a negative mindset perennially. Great talking to you. Officeooste, global cio managing directory. Coming up, Hong Kong Security law and the beijing influence with lawmakers. That is on the way. This is bloomberg. This is bloomberg. Rishaad you are back with Bloomberg Markets. Jimmy lai has been released on bail after his arrest monday on alleged breaches to chinas National Soul security National Security law. Stephen engle has the latest. What now, i suppose . Got to go through the legal process. This is unprecedented because these charges and the arrests were made under the National Security law, which is about a month and a half old. Uncertain times for sure, but the police have put out a arrestst saying the were made on suspicion of collusion with Foreign Forces and they mentioned about potential or suspicious financial fraud so we will have to look into that. A number of the arrests that were made on monday, 10 people including jimmy lai and his two sons as well as a number of prodemocracy advocates, agnes chao has been released on bail. Jimmy lai after he was released speak to the media, but agnes chow did so and said more people should keep an eye on the situation and i hope hong kong ors shall not give up, that being attributed to the local Radio Station here, speaking to chow cho when she wasw when she was released on bail. Jimmy lais media company, shares have surged, 1100 . They surged again today but they are giving back a lot of those gains. Ons was a nine cent stock friday of last weekend it is now one dollar 14 cents and some people say this is a new form of , beingst, small bids bought in support of jimmy lai. Haslinda it seems that china has okayed the oneyear extension of the current legislative term in hong kong. It is interesting because this represents the second time in as many months that chinas parliament, the Standing Committee of the body, has weighed in to interpret the basic law, the first being the implementation of the National Security law. Now, basically the Standing Committee unanimously passed a resolution to continue the operations of the current Legislative Council session for no less than one year. This follows carrie lam, the chief executives postponement of elections which were due to be held september 6. She delayed that, postponed it for one year amid fears of the coronavirus, but prodemocracy advocates and candidates, some of whom have been disqualified for that now postponed election, say that the delay was more likely due to limit the potential gains of prodemocracy candidates. The u. S. Is forcing hong kong to mark or label its products as made in china. This could be a symbolic move but it does have other ramifications, doesnt it . It is symbolic and the end of an era. Keep in mind it will have limited actual impact, just a different label on products that are made here. Hong kong had 39 billion dollars u. S. Dollars worth of exports to the u. S. , but only 1. 2 were though were domestically made imports. Most of those were reexports coming from china. Those who do make products here exposed tohnically those new trump tariffs if they are going to be labeled made in china. This is part of Donald Trumps removal of hong kongs special trading status. In hong kong they are protesting the move which they say ignores hong kongs unique role less a separate member of the wto separate from china on trade matters. Stephen engle on that. Thats do a check on the china markets now, it is in negative or negative territory, down for a second day in a row. China stocks hovering on a 20 Day Moving Average struggling to overtake the 4800 level for the past month. The csi extending a decline for the day, down almost 2 . The shanghai composite low by has been on chinext a tear, down 3. 5 . The sentiment in asia is down for a second day. We are keeping watch on the benchmarks in korea. Keep it here with us. This is bloomberg. Hike Simon Pagenaud takes the lead at the indy 500 coming to the green flag, racing at daytona. Theyre off. In the kentucky derby. Rory mcllroy is a two time champion at east lake. He scores stanley cup champions touchdown only mahomes. The big events are back and xfinity is your home for the return of live sports. Haslinda live pictures of the lion city, almost 11 30 a. M. In singapore, in the middle of the trading day. The essence the sei extending stocks among some the biggest losers today. To have ais expected slow and long recovery from the economic slowdown. Gdp forecasts of a contraction 5 7 . The sei down by 0. 5 . Here are your first word headlines. Joe biden has picked kamala inris as his running mate november, hoping her africanamerican ties and branding as a progressive will propel him to the white house. She ran against biden and the democratic primaries and is the first black woman and the first asianamerican on a major party ticket. Won three california elections. Thee are growing fears that virus in washington will drag on for weeks with no talks on the table. The white house, demanding democrats reduce the demand that the government must double its current spending commitment. Markets have been generally content to let the issue run, but a late session slump tuesday indicates some pessimism. The coronavirus continues to spread around the world. The u. S. Accounting for a quarter of all cases. Florida, reporting another day of record deaths. Hong kong may be bringing its outbreak under control, reporting the lowest number of new infections since the resurgence began a month ago. The city saw 32 new local cases, down from the high double digits. Minister put prime auckland under new restrictions after four cases of coronavirus were found in one city household. 102 cases of after no Community Transmissions in new zealand. Casesia recorded 410 new in the past day and a record 21 deaths. Melbourne has been in lockdown for more than a month. Is dragging on indias recovery with factory output down for a fourth straight month as the economy struggles to reopen. The index of Industrial Production fell more than 16 , less than the 21 decline seen in the bloomberg survey. India is heading for its first for illegally full Year Contract in contraction in decades. Alex azar says a corporation and china has been lacking. This after meeting the time when hes foreign minister. His visit has been condemned by beijing and comes against a backdrop of escalating tensions between the u. S. And china over a wide range of issues. Lets get to taipei. A lawmaker and chair of Parliament Affairs joins us. What is your take on this visit . Delectation get delegation is the highest ranking visit since 1979. This means the outcome of the past years, we increase mutual cooperation and the relationship. Taiwan is a member in the pacific. We are a democracy and we take our responsibility for the regional stability. We regard the visit from the , it is aates by azar milestone for the past 14 years. Toond, does the first case it is the first case to practice the taiwan triple act, which allows time on in the taiwan and the highest officer, the prime minister, the president , the Vice President , is not allowed to visit washington, d. C. Lawe passing the act, the allowed to visit each other but the ability to practice the act. This delegation means the first case to fulfill the taiwan triple act. Years, taiwan has been isolated by Chinese Communist partys influence. This visit means the interference from the ccp has been reduced a lot. It allows taiwan to act as a normal country. In the past, in the past 20 years, we are not allowed to the organization, even the nonpolitics, we are prohibited but we hope since this unreasonable, unfair arrangement for taiwan can be lifted. Looking at what is happening in this coming together between taiwan and the u. S. , bringing the relationship a bit closer, arent you risking the ire of beijing . Arent you at the moment even license to the hawks within the communist party . Giving license to the hawks within the communist party . We have been frightened by ccp for years. To defendto fit our family, our country. , china always condemned. They always are using different kinds of words or military activities. Tests, the taiwanese to us, words isnese, ccps our everyday normal situation. We can contribute our capabilities. We not rely on others help. Our intelligence, public health, owncal care, we have our friends and advantage in the world. China using politics to region to reason is the lose of taiwan and it is the lose of the world. At this moment when azars aregation visits, chinese fighters to cross Taiwan Strait and the taiwan air force, we are using air force to get them away. Over the past few months, there have been chinese air fighters to harass taiwan. We hope beijing government can be a reasonable and responsible neighbor country and stop using these military way. It will help asia. It will help china themselves. About closer talk relations between taiwan and the u. S. Is there any clarity how far the u. S. Is willing to go to support , to show its support for taiwan . Is it willing to use military force if china were to attack . I am a member of National Defense committee. Theaiwan, we think responsibility to defend taiwan is our own. We put responsibility on our shoulders. We cannot rely on any other country. Friends want to help, we appreciated. We didnt count on security of United States commitment. [indiscernible] largestple, we are the chips. R of i. T. We are the largest supplier in many Industrial Supply chains. E are a reliable supplier once taiwan can be secured and this region will be stabilized and secure, too. We have a potential crisis in this region. Taiwan strait in the south china sea, taiwan will play an Important Role in this area. We didnt count on United States help. Withnt to cooperate International Communities to peace andegions prosperity. The National Defense capability is our own. Actually, we do need some to shorten the gap between taiwan and china. This year is 2020. China has enough capability to transport troops to occupy taiwan. We in the near future, maybe have modernized capabilities. Taiwanow increased ned capability to defend us and we want to have International Structure to maintain the status quo and the peace in this area. Of taiwanspeaking zone capability, have you managed to convince the u. S. To upgrade your Patriot Missile system . Any update on that . Taiwanthe past 10 years, has fallen far behind in underwater capability and our major tanks, they are 40 years old. Our air fighters are 20 years old. So our equipment and our military systems is out of our need. For the past four years, our president put a lot of effort improvingudget, into our special systems, our weapons, and tried to make our equipment our militarys equipment better. Inwant to keep major tanks 2023. Our own submarines, the first one will be in 2023. 5 in 2023. Tain f1 we aremodel s15 ab, 16. We havehem to f thousands of old air fighters that have achieved upgrades. So the gap between taiwans military and the pla, we are shortening that. Not only in the military way, we all believe in taiwan, democracy will be our best weapon. Taiwan is a democracy, freedom and we value human rights. These kinds of values are our daily life. We think the difference between bestn and china is the taiwan. We are using our military, we are using our democracy to deal comingr difficulties from china. Have been closely watching events in hong kong. What is your take away from this . 1992does it mean for the one china principle . Does now need to be more clearly delineated . Kong to taiwan is a tragedy and a warning. Kong as asing hong taiwan, trying to lure one country, two systems. Has given, hong kong up the freedom of option. Over severale path years. The one country, two systems is extinguished. Perhaps a few days, they arrest the media reporters and the owners. They destroy the freedom of media. Using the hong kong National Security law to destroy the right to speak out on the street, to protest. To taiwan, we are so familiar with hong kong. In the world, only hong kong and taiwan using the traditional chinese character. It is quite different with chinese simplified characters. There are thousands of hong kong students in taiwan. In taiwan, we watched hong kong soap operas. In hong kong, they listen to singers from taiwan. We have a close relationship. That is why china is using hong kong as a lure to show taiwan, one country, two systems, it works. However, they destroyed one country, two systems themselves. In taiwan, a lot of people say situation iskongs a warning to taiwan costs future. Taiwans future. If we give up our own National Defense, our sovereignty, our and go to hong kongs model, our future, our children will live hong konglike lives. It is miserable. In taiwan, we try to help hong kong protesters, especially those young kids, as much as possible. We are using hong kong as a license to let taiwanese people understand, you can never trust communists. So much fornk you that. Yu. Was wang ting existentials facing threats, tencent and Cathay Pacific caught in the crossfire between china and the u. S. This is bloomberg. Haslinda tencent reports earnings later and is set to report robust sales despite being caught in the crossfire of increasing u. S. China tensions. Lets get more with our markets reporter. What are we expecting . Despite the fact that we have seen that trump banner assault on tencents we chat app, it is expected to be a Strong Quarter for the Second Quarter because this is a company that has really boosted, has been boosted by the pandemic, by working from home and staying at home. We saw mobile gaming revenue up by some 64 in the First Quarter, sales on the whole for the Second Quarter are likely to rise by 26 and we are expecting 10. 4 percent growth in earnings per share which is higher than what we saw in the First Quarter of 6 . We have seen tencent shares rebound from the drop we saw caused by the trump assault, if you will come on we chat and remember, this is a country that has done well since its march lows, 55 versus the 12 percent in the overall hang seng index. Analysts are incredibly bullish on tencent with the market cap up by a third of the total index. Analysts ratings on this stock, zero cells with most Still Holding onto their buy recommendations despite the fact that we have seen a few move to hold. Something, weme have Cathay Pacific numbers out in 15 minutes. These numbers are not expected to be good. But bizarrely, the stock prices have been going through the roof. It is interesting. Isis, we have seen the rumor sell but the rumor is that cathay says it will have a huge loss of 1. 3 billion, and historic loss. You have for higher finance costs and losses from air china but cargo is expected to remain fairly resilient and low fuel costs may have eased some cost burdens. This chart shows you the damage that has happened to global news 24 hours per day, onair and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. That has happened to cathay. Now it is bigger than Cathay Pacific which has a market cap of 4. 8 billion. Rishaad thank you. Thank you so much. Still to come, resurrecting the consumer economy. Lessons learned from a brewery in wuhan. Our interview is next. This is bloomberg. Haslinda one of the first Global Companies to feel the impact of the virus crisis with its large exposure to the chinese markets, a brewery in wuhan. They are seeing demand pickup as Life Interest inches back to normal. The ceo says his Company Learned valuable lessons in the pandemic. Ourn wuhan, we have one of close to 40 breweries. We have a big operation in china, it is one of our top five countries, we have 30,000 colleagues there. Wuhan is a big ore and it is one of many. Everything in the country went through a locked down, shut down. Consumers, businesses, everything from month and a half, then we started reopening and wuhan was one of the last brewers to reopen. Now everything is back to normal as much as it can be in china. When you look at retailers, bars, restaurants, they are pretty much all open. So china is ahead of the curve. The same with korea, south korea, we have big business there and they experienced covid as china did, at the end of january. They are all backed to normal back to normal. Is wuhan a bellwether for Global Consumption trends . We learned a lot in china. One of the big advantages of being a global company, and we operate on all continents and have big business around all major countries, the big advantage is that we learn from china early on how to be able to operate and guarantee the safety of our people, how to observe and understand where consumers are going in terms of their consumption, how to adapt our supply chain to the new reality, and when the pandemic started becoming, going to europe, africa, the americas, we had the protocols were developed in china and south korea on how to operate. All we had to do is translate torything, because you had observe social distancing, for example, within the breweries so you had to operate with fewer people. You had to work from home. You had consumers now not being able to go to bars and restaurants and hotels or travel and in a lot of locations, migrating to the inhome location. Consumers are buying more in supermarkets, Grocery Stores and that had a big impact on the supply chain in terms of packaging, brand mix, in terms of delivery, distribution. So agility was something we learn from china that was very key to navigate given the fluidity of the situation, certainly because every country was a bit different in how the pandemic developed and what measures governments took in Different Countries in terms of mandates, stayathome and how consumers also reacted. But the learning and china was key for us to navigate in europe, africa, the americas. You Just Announced record beer sales. It seems like people cant wait to start drinking again. Was what is driving this and is it sustainable . In china, because it was the first big country of ours that was affected, we did a lot of Consumer Research during the pandemic and what we saw was that, the question was, what would you like to do when the pandemic is over . What they told us is that they would love to go back to their normal life. They would love to go to restaurants, travel, to meet their friends physically, to go visit relatives, family members, and do all sorts of things, go to ball games and music festivals. That gave us a little bit of an insight that yes, there will be a new normal, but the fundamental things that consumers are trying to do they have free time, trying to keep a close relationship with family and friends, are still very much deep inside of them, and we dont think those things will change. Haslinda lets take a quick look at where gold is trading because it has collapsed below 1900. D 900 gold looking like this, after setting a record of 2000. EarningsCathay Pacific out in just about six minutes from now, looking at the net loss of one point 3 billion u. S. Dollars. This is bloomberg. The following is a paid presentation brought to you by rare collectibles tv. The 10 indianhead gold eagle containing nearly half of an ounce of pure gold is one of only two coins that the designer