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tv   Bloomberg Daybreak Asia  Bloomberg  March 2, 2021 6:00pm-8:00pm EST

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♪ >> good morning. we are counting down to asia's major market open. >> i am shery ahn in new york. welcome to daybreak: asia. wall street to retreat on concerns about excessive optimism. treasuries climb and the dollar weekends. -- weakens. back to normal in a year, that
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is president biden's forecast. and johnson & johnson's single shot. and goldman sachs, the bank's chief lawyer the second person in many days to leave the top decision-making group. we have breaking news at the moment at the gm backed crude set to buy a startup called voyage. voyage as a company that provides and operates in retirement communities in florida and according to people familiar with the matter, the two companies are in serious discussion. no deal is imminent, but if it were to be struck, it would merge cruise's, and general motors, and cruise is in talks to buy startup voyage. and asia, we have a coming
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online. >> we are seeing stocks in the green, moderately higher, while the aussie dollar is holding about 78 ahead of the gdp report from australia, likely to show the growth moderated in the fourth quarter. this as the rba pledged support for the economy. japan, we are seeing nikkei futures on the upside. we have learned that japan is saying 35,000 people have had their first covid vaccine dose on friday, march 5. we could see modernity and another -- moderna and another company filing for approval. tech stocks alleged u.s. shares lower overnight, and we saw treasuries studying. we have treasury futures ticking higher for a four session. in the commodities patch, we are seeing crude under pressure, under $60 a barrel with opec said to increase production
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later this week. gold is trading lower. we had commentary from china, and we had the banking regulator warning a bubble risk overseas and pulling up the chart on the terminal, that is with the two key levels falling through the 50 day line and a long-term trendline and briefly fell below the level for this shanghai composite. this ahead of policymakers looking to provide support for the economy. >> let's get more on these markets, u.s. yields treading further higher. joining us now to discuss his senior investment strategist john adams. really the magnitude and the speed of the move as opposed to rising bond yields in general being problematic for equity markets. is this just the beginning of that volatility as we move
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towards normalization? john: i think you are exactly right, the speed and magnitude are the key components. our view is that we will see yields drift higher, and the question now is where do we go from here. there is a lot of stories at which point of this begins to impact equities, the 1.7 5% in the 10 year or at 2%, our view is that equities can withstand a modest backup from yields here, but we do not think there is a case for extreme inflation are hyperinflation, especially over the medium term. there are a inflationary forces long-term, but you could see it begin to take back down by the end of that year. >> as we move into the rotation trade, we are seeing the likes of some of these hotel and leisure cruise ship names
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starting to pick up from the stay-at-home trade. if we start to see the adult population vaccinated, what are your key picks here to benefit from that? jon: we really like equities, we are overweight. we are biased towards u.s. and emerging-market equities, and that is the reflation trade, reopening, and data in the u.s. continues to surprise on the upside. the data that we got yesterday is the latest evidence of that. economic data has been stronger than expected. earnings data is quite strong in the u.s. and analysts are marking up for this year. and tremendous fiscal policy in the u.s. with the $900 billion in december, looking at maybe 1.7 trillion dollars coming very shortly in the u.s.. despite concerns about valuation, we think there is room to run in the u.s..
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on the m side, there are a lot of forces supporting the emerging markets. we really support to capital flows in emerging markets and also political stability in the u.s. should be supportive as the margin, and we think it will be a weaker dollar. we think yields will not drift modestly higher. we have a bit of a bias towards u.s. invested grade corporate. the outlook look strong on a one to year basis. >> let me delve into your stimulus thoughts. where will you see the biggest impact, because of course on top of the stimulus package, we are already seeing the long-term infrastructure package that could be coming, but those companies are not necessarily high quality and they are quite
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cyclical. jon: a lot of the aid is going to the general populace and also state and local governments. two thirds of that stimulus would be spent this year and one third next year. it is laying the groundwork for sustained economic rally so that will be broadly supported across the board, but especially in services and all help bars and restaurants, those kinds of businesses. but it should all support durable goods, the economy more broadly, the housing markets, all of those kinds of areas. a huge amount of fiscal stimulus, we forget going back a couple of months ago, we did not expect any additional stimulus and now we will get almost $2 trillion. >> which is why people are concerned about overheating and the risk of inflation. we have a lot of fed speak this week, what will you be watching out for? jon: i will see if the fed
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changes their message at all. i think the market and the fed and whether they are at hearing to the average inflation targeting mandate, but we think the fed will continue to be dovish. they will the seeing inflation running for a sustained period, so we don't suspect tapering talk to any soon, we think they are very happy to see yields drift higher after the move we saw. some of the immediate concern here is probably off the table from that perspective. >> has the optimism, by the time it finally gets to that sense of normalcy, as president biden talks about, it has to be adequately priced into asset
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prices, right? jon: there is a lot of good news. i think you are right, we have gotten some concerns, but as we have seen earnings really picked up and seen strong lament times, price to earnings multiples, there is a lot priced into markets right now but we think you will see additional stimulus really towards the end of the year. again, the economy is coming in well above expectations, especially here in the u.s.. you could see concerns with volatility about rising rates or concerns about inflation, but smart perspective when you see the amazing degree of fiscal stimulus supported by economic growth, it is hard not to -- >> great to have your thoughts, senior investment strategist with his views of the market. you can get more in today's edition of daybreak as well.
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bloomberg subscribers, you can go on your terminals and it is also available on mobile, and the bloomberg app, and you can customize your settings so you only get the news on the assets you care about. let's get to vonnie quinn. vonnie: a vale -- a hearing will resume again wednesday afternoon in hong kong. and include some of the city's most prominent activists. most have objected to government requests to keep them in jails with their trials potentially months away. iran's president says the 2015 nuclear deal is not up for negotiation and the only way to restore is for the u.s. to rejoin. in a phone call with french president to macron , macron urged the iranian president to give signs of goodwill.
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after former u.s. president donald trump abandoned the deal almost three years ago. opec and its allies are poised to agree on a production increased thursday by as much as 1.5 million barrels a day. the cartel looks to cool a rapid rally in food prices -- crude prices. the economy is recovering. brent crude fell in london for a four session tuesday, but still up 20% for the year. the u.k. government is extending the workers furlough through september as the economy continues to be hit by covid-19. it is a key part of the chancellor's second budget handed down wednesday. he is proposing fiscal firepower with further tax breaks and support payments, but will warn the future sacrifices will be needed to pay down pandemic that. global news, 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries.
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i am vonnie quinn. this is bloomberg. shery: still ahead, president biden says that they will help boost production of johnson & johnson's coronavirus vaccine. we will assess the challenges to the vaccine rollout with dr. jessica from columbia university later this hour. plus, an interview with finance minister in chile on how their successful vaccination campaign has helped their growth outlook. this is bloomberg. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely
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with peace of mind at your local xfinity store.
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♪ >> president joe biden says merck will help its rival johnson & johnson and making it single shot vaccine. it is a bit to ramp-up supply before new variants of the virus appeared. pres. biden: we are now on track to have enough vaccine supply for every adult in america by
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the end of may. >> the president also said he returns for a return to normalcy within the year. really what we heard from biden was so encouraging by the end of may, we could all have enough vaccines to get innoculated and resume business as usual. what are we seeing in the supply side of things, especially with this partnership between j&j and merck? >> that is getting ahead of things because there are a of different pieces. there'll be enough for everyone to get one vaccine. some of these require two doses. it is not the everyone will be fully vaccinated by the end of may, but there'll be enough doses in the u.s. to get everyone started on the process. he is saying there'll be enough doses, but actually getting those doses into the arms of americans is a different topic. we will have to start creating
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some of these massive vaccination centers in more locations across the country, keeping them open for longer periods of time, and the lingering concern is the idea of ask and safety. there is a substantial portion of the population that is not interested in getting the vaccine and they are reluctant. actually getting to the end of may, getting all of those vaccines and arms is a different issue, and of course, the merck- j&j tie up, it will mostly benefit at the end of 2021. >> we are also seeing daily case numbers in the u.s. coming down, and fact, but experts are saying the numbers could be deceptive? michele: yes, there are very concerns about the variants emerging. we have heard the ones from
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south africa and brazil, and the u.k. variant is supposed to be the most widespread in the united states. there are newer ones coming out of new york and california. the concern is if the vaccines we have now and even all of the infections that we went through may not provide enough antibodies to keep the new variants under control. that is the concern. we are not seeing signs of widespread resistance from the new variants, but that is the concern that is emerging. what is happening as the virus is for the first time in the outbreak, experiencing people who already have antibodies to do the -- to the virus. all viruses try to survive. the only tools that they have are the tools that allow them to mutate. as they see more antibodies, they will be trying desperately to mutate to avoid them and that is where the real risk comes. if they figure out how to do that, then we can be in trouble
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and that is why the public health officials want everyone to continue wearing masks, do not listen to the state of texas saying masks are now optional. we have to keep transmission under control until we have enough people vaccinated to protect against the emergence of variants. >> bloomberg health care reporter michelle cortez with the latest. the japanese government to extend the covid state of emergency that is supposedly to expire this weekend. where are we at with the state of emergency in terms of the numbers? is there a legitimate reason that they should be extended? >> it depends, how you look at it. we are still seeing roughly about 300 new cases a day in tokyo. is that glass half-full or glass half-empty? under the current emergency, the main restrictions have been too close bars and restaurants at 8:00 p.m. and to encourage
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people not to go out, and that has had a devastating effect on the economy. we have seen a lot of bars and restaurants closed completely and retail sales down drastically. but we have been seeing in tokyo recently as people are no longer working from home so much, so commuter trains are packed again. there is a danger if the emergency is lifted, people will relax, go back to normal, and in japan, the vaccine has made little progress so far. there has been a great shortage of supply, so i will be months before a substantial portion of the population are vaccinated. if people do relax and start going out to bars and restaurants again, we could see a huge spike before the vaccine gets to hes immunity. -- herd immunity. >> the government seems to be
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pushing for the tokyo olympics, and they may have good reason, but what is going on with the rivalry with china's winter games? isabel: there are certain reasons why they would want to push ahead and also reasons why the public do not want it to go ahead. one is coming up recently and our conversations as organizers, that they are -- japan has been falling into china's shadow the past decade or so given the size of the population, that is inevitable. but there is still something that japan might pull off better than china and the olympics is potentially one of them. given that beijing is set to host the two winter olympics, some people familiar say their regional rivalry seems to be one reason why japan is so eager to press ahead. holding the games was supposed to help reestablish japan's prse -- presence on the
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global stage. even if it does go ahead at present, it looks to be a shadow of the normal event due to the restrictions. >> our politics reporter in tokyo, isabel reynolds. we are watching for the tokyo open and about 40 minutes. we are seeing nikkei futures often changed at the moment -- unchanged at the moment but this as we see the japanese yen weakening, and this also coming at a time with the boj defending their yield market. this is bloomberg. ♪
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♪ >> more now on the news we broke a few minutes ago.
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cutting the reserve requirement ratio for some banks and our coanchor tom mackenzie is in beijing. interesting that this comes after the commentary we heard about the concerns of a bubble, but we know seasonably, this is a tougher time for banks in terms of their buffers. tom: right. there is a focus on the need for support for small and medium-sized enterprises that have yet to fully recover, and suddenly the premier has made that are part of his focus. we expect to hear more when he delivers his work report on friday which gets underway on friday this week. you're right, it does jive with the overall message with the banking rates yesterday. it is on the front page of the chinese security journal, and would not have been published without getting the green light from the governor authorities. they are likely to be a targeted
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cut with banks that our lending to smes, those are the kinds of cuts that we saw to reserve ratios as well. >> let's talk about those comments, because yes, they did shape the market -- shake the markets. he was talking about asset bubbles. take a listen. >> the key of this is the bubbles which as i have said, the biggest -- and a lot of people are bound to speculate or make investments through buying homes, which is valid interest. >> the reason that investors got spooked is because such a warning is pretty rare. tom: it is. we know that deleveraging and financial risk is a concern of policy makers, but it was the sharpness of his words that were
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very pointed. he talked about the property sector, he used the word "danger." he looked overseas as well and that is what led to some of the selloff we saw yesterday in the markets. the concern he set about bubbles in foreign markets, and he expects to see that they are likely going to be a correction or at least a bubble bursting. some sharp comments from him. underscoring the need to crackdown on leverage and leverage ratios in china. there does seem to be a shift more broadly from the banking regulator and others around him to reign in financial risk and that is expected to be a continuing theme and we are expecting it to be fleshed out at the npc. the broader push to reign in leverage across the financial system. >> tom mackenzie in beijing. let's get a quick check of business flash headlines.
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800 million dollar ipo in hong kong. the listing would be centered on the restaurant business in mainland china including the taiwanese beef noodle chain and fried chicken chain that competes with kfc. they operate about 2600 outlets across china with more than 70,000 employees. not seeking reelection in 2022. thompson says he is accountable for the failings at the company where the exploration of money led to destruction. the fallout has already led to the departure of the former ceo and other senior executives. goldman sachs general counsel who helped the bank's saddle criminal probes into the scandal last year is quitting. he is the second to leave goldman stop group.
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-- goldman's group. coming up next, merck teaming up with rival johnson & johnson to ramp up arrival of the johnson & johnson vaccine. this is bloomberg. ♪
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>> this is "daybreak asia." new zealand house prices rose more than 14% on the year in february. class a space before years. the current rate of growth for use over the coming months. that's be one part of the finance ministers directions. the rbnz to factor in the impact. the market is overheating amid record low borrowing costs. the biden administration announced its first sanctions against russia in a sign of deepening tensions. it's policy and kremlin for the
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poisoning and jailing of alexei navalny. it targets officials. it targets other russians allied with vladimir putin. the australian cabinet minister is at the center of a race allegation dating back to 1988 and he is likely to break his silence. government sources say the man is planning to make a statement and take several questions from journalists. he will not that down and will strongly deny any wrongdoing. the woman who alleged the rape died in june of 2020. new york's legislative leaders have agreed to cut back emergency powers granted to andrew cuomo at the start of the pandemic, the latest blow to his tenure amid calls for him to resign. he faces claims of inappropriate behavior from at least three women and his administration is accused of underreporting nursing home covid deaths. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700
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journalists and analysts in more than 120 countries. this is bloomberg. jerry. -- shery. shery: the single-dose johnson & johnson vaccine is getting a production boost from a rival drug maker. merck will help manufacture the shots in an effort that will ramp up supply. >> we are on track to have enough supplies for every adult in america by the end of may. shery: this is more good news on top of the fact that u.s. inspections continue to drop, dropping below 50,000 for the first time since october at a time when we are seeing increasing cases and deaths around the world. brazil just now logging 1006 hundred 41 covid-19 deaths in the past 24 hours. this is a daily record for brazil. joining us now to discuss all things pandemic and vaccines is dr. jessica, senior technical director at the school of public
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health. thank you for joining us today. it is really great news. it seems that we have heard in the u.s. from president aydin, the acceleration of manufacturing of this covid-19 vaccine. how feasible is it that all americans will actually have a shot available by the end of may given that it also depends on distribution as well? >> i don't think we are looking at all adults receiving the vaccine by the end of may. the great news today was that merck is teaming up with johnson & johnson. there will be enough supply by the end of may for all adults. after we have the supply, we have delivery and we have to tackle uptake. to tackle delivery, we have to pay close attention to the racial and ethnic disparities in vaccine access that we have been experiencing so far.
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we also have to pay attention to the inconsistent supplies that some states have been experiencing. some people have to travel over 200 miles to reach a vaccine location and that really only works for people who are highly motivated and have a car. we have to pay attention to all the variations in eligibility that we have seen in different states. so that is the delivery side and then as i mentioned, the third critical step after supply and delivery is uptake and they really work hard on vaccine hesitancy. that will require building trust and getting good information out there. we think the news that president trump and his wife, melania, -- that is a type of example we need to see where we have people who are very well known politicians, celebrities, all
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kinds of leaders need to step up and show that they are getting vaccinated and that will go a long way towards vaccine hesitancy. shery: we did not necessarily know that the former president had been vaccinated back then. it would have been a good show of confidence if he had. let's talk about -- they will prioritize teachers her vaccines. do we need a federal push when it comes to availability for vaccination sites as well? >> i think it will be great to have more consistency across states so that people do not have to, for example, try to go across state lines. it would be really terrific to have that consistent eligibility and i agree that it will go a long way towards confidence in sending our children to school. haidi: the numbers you cite for
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vaccine refusal in the initial stages are quite shocking. health workers, 15%. in the military, 30%. how do you get around this in the sense of -- is this type of vaccine hesitancy different from the traditional anti-factors we associate with parents not wanting to give their children the mmr vaccine, for example. jessica: it may be related but i also think that anytime something new is introduced, whether it's a new kind of technology or vaccine, we always see -- it's called a diffusion of innovation and there are going to be the early adopters who run in and want to be the first ones to take it or use new technology and then there's late adopters. so we have to realize that that is a normal part of our
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experience, whenever there is something that is new introduced. we are aware of the anti-factors in the background so we have to pay attention to that as well. there is a normal pattern of early adopters and late adopters use the new vaccine is it spreads by word-of-mouth and you get a critical mass and then pick up the pace. haidi: we have 200 65 million doses distributed and really just a small handful of adverse events being reported. before we let you go, it's not just vaccine hesitancy but also vaccine arbitrage that dr. fauci had spoken about early this week. is it a problem to you that there are people who will get the vaccine but want to get the most effective or safest one? jessica: i have heard this question before from others.
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i think it is something that, you know, we can expect people will ask that question, which vaccine is the best, now that we have three different ones available, but really, they are all highly effective at protecting us from severe illness, hospitalization, and death, and those are really the most important endpoints so i would say we should take whatever vaccine is available to you and not try and wait it out and see if you can get the vaccine that your neighbor got, thinking that somehow that is a better one. i think we are fortunate to have three really excellent vaccines. two are certainly available now and the third one will become available very soon. shery: senior technical director at icap at columbia university school of public health. thank you for your time. that's turn to one country starting to see the economic
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upside of a covid-19 vaccine. it has vaccinated 17% of its population, the highest rate in latin america and also about many developed countries. copper nearing record highs. the finance minister told me that growth could top expectations this year. >> we expect we are going to see much more interesting things. as a matter of fact, for the year, our official numbers are 5% growth. probably, it will be higher. we need to be larger than that. shery: will you be upgrading that forecast given that moody's and santander have put growth at five 5%? -- 5.5%? rodrigo: the vaccination process is working but of course, we need to see how it's going to
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develop in the next few months. we expect that by the middle of the year, probably more than 60% of the population will be vaccinated and that will be a very good number and probably will be good for our economy, but we need to work on that and we need to see how public policy is working. we are having public policy on -- and also we are having public policy on jobs by means of subsidies. >> given the successful vaccination campaign, the government's approval ratings have increased. you have seen lots of protests and social unrest in 2019 2020. will this be a chance to revamp the legacy of the administration? rodrigo: we are also having a process here in cuba.
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we will be starting on that next april. we are going to elect a representative in the process. we think that will be a good process in the sense that in some way, we are starting to participate here and to set our rules for the next three years and of course, that will be a process which is probably going to have stable rules for the next three to 40 years. shery: some people are afraid that those changes will do away with some of those investor friendly rules that chile is very famous for. what do you say to that ? rodrigo: if you look to our history, of course, we will have some -- but also we know that people here can talk to each
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other and we can have a unique country for all of us so in that sense, we think we are going to have this crucial period. it will be a very good discussion period. that is the point. the point is we are going to have stable rules for the next 30 to 40 years. haidi: that was the chilean finance minister, rodrigo cerda, speaking earlier to shery. we are hearing that president biden is withdrawing neera tanden's nomination after we really are seeing this nomination being derailed by some of the twitter comments that neera tanden had made on her twitter account. people speaking anonymously to the post saying that this sort of bipartisan opposition is not going to come down. a republican for alaska is still
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undecided on whether she would support tandon if she does need that one support from a republican in order to get that and it does look like the white house is planning to withdraw the nomination for neera tanden as a director of the office of management and budget. we are expecting that on tuesday evening. we do have lots more to come. this is bloomberg. ♪
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>> i would suspect there is a
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pretty good chance you will see rates going up and people are starting to worry about that. >> the moves, my eye. >> i think we honestly have control of the yield curve at the short end. when it moves, it depends a lot on the driver. >> are seeing a multiyear stimulus unfolding in the u.s. as a justified rise in real yields that central banks should not be trying to -- >> news about vaccines or news about health of the economy or news about fiscal stimulus, then i think it is a natural reaction. >> high would be concerned if i thought this condition or persistent tightening in financial conditions. >> the reason -- they are all very important in determining different factors in markets. >> i would not buy 10 year treasuries. >> as you heard from several
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guests, the past for rates may be higher. in china, more tolerance for higher rates as we see a gradual stimulus exit. in the u.s., speakers are not overly concerned with elevated yields. that has calmed down volatility for now. pulling up the board, the rba has moved to address volatility in bond markets, maintaining its commitment to build targets. we are seeing australian bonds move higher while the aussie is above 78. the rba will become less dovish. the central bank not extending its yield controls for the november maturities and aussie stocks, we are seeing them gain ground. we have materials and consumer names among the sectors gaining ground while tech and energy are under pressure. coproducers are also climbing. in sydney, bullion prices hovering above that 17.30 level. gold prices are looking -- as we
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are seeing gold prices trend ever lower and ubs forecasting more headwinds in the second half for bullion, cutting their goal forecast by $150. shery: shery. let's -- shery. shery: let's turn to goldman sachs. karen is the second executive to leave goldman's top decision-making body following the exit of the cohead. our guest joins us with more from new york. some high-profile exit. what do we know so far about them leaving the company and how significant is this? >> it is significant only because we have seen a lot of senior-level positions change over at goldman in recent days, let alone recent months so we have also seen a very senior leader in the merchant banking
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division leave the firm. we have seen two major consumer executives leave to go to walmart. that was a big area for goldman sachs and now, remember, a bank's general counsel is really a confidant to the ceo. they are a heartbeat away like that. they worked very closely and now we are looking at kathleen rambler taking over as the firm's new top lawyer, a former white house counsel during the obama administration, head of regulatory affairs and something to continue on with david solomon defining his era. haidi: so what next in terms of the turnover that we are seeing? what is the new makeup -- what does the new makeup of the executive potentially look like? >> that's a great question
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because the general counsel turning over at a time that they are really getting past the 1mdb scandal for the most part. that is something that is the big thing behind them. but the other area, consumers in particular, the exit of two major executives at that division puts a lot of pressure on the head of wealth. they look to expand the division as they seek to attract new talent. it will be interesting. the pressure really is on them to perform. there have been exits at goldman at the senior level for many years. it is a place where people get older, they retire, and it's a place where the new generation is set to rise but let's make sure that that happens. haidi: sonali basak with that story in new york. coming up next, after gamestop, amc, and nokia, japan's central bank may be the unlikely stock
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that retail investors are sending shares surging. this is bloomberg. ♪
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haidi: -- shery: here is a quick check of the latest business flash headlines. intel has been told to pay close to $2.2 billion in what is one of the biggest patent damages awarded in u.s. history.
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a federal court rejected intel's denials that it infringed two patents owned by another company. one of them was invalid because it claims to cover work done by intel engineers. intel says it will appeal. j.p. morgan and westpac will pay a combined 32 million u.s. dollars to resolve antitrust claims over their alleged role in a scheme to rig australia's equivalent of -- this lawsuit comes two years after jp morgan agreed to settle for $7 million. the lawsuit targets more than a dozen top australian and global financial institutions for allegedly conspiring to manipulate the australian bank preference rate. australian firm's net -- an australian firm is offering hybrid bonds as the market runs at its highest pace in over a
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decade. it will be the company's first hybrid following similar deals in australia and singapore and u.s. dollars. haidi: one stop we will be watching, as we have over the past couple of days when trading begins in tokyo, is that of the ankle japan. it joined equities with surges in valuations led by retail investors. shares hitting their limit for the second consecutive day. our reporter joins us now to discuss exactly what is going on here so is this kind of a status symbol of owning shares in a central bank, is it about capital gains? what are we seeing here? >> the bank of japan is actually a listed entity unknown to some investors. it is kind of bizarre that a lot of the attention is on finance mongers on twitter. in 1989 when the nikkei was added, the boj share was at --
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it was a status symbol. people bought into these shares and got their subscriber certificates and framed them in their rooms. i think we are seeing the same kind of phenomenon right now in such a liquid market with retail investors quite active and jumping into stocks that they can get a couple gains on. >> what is the broader theme right now? what is this telling us about markets and investors shoko: retail investment -- investors? shoko: retail investors are actors. you also have to keep in mind that it has very little free flow and type volumes so there's no benefit to coding it either because you get no voting rights in very limited dividends but
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strategists said it does not really matter to short-term investors that only care about capital gains and it's only just haidi: great story. shoko odo in tokyo. let's take a look at the other stocks we are watching other than the bank of japan. sophie, what is on your radar? sophie: you are watching japanese restaurant stocks on a nikkei report that tokyo plans to extend the virus emergency that is to expire this weekend and we are keeping an eye on japanese retailers with data out. keeping an eye on nomura as the group prepares to create an investment arm to tap private markets. the organization is the first major segment overhaul since 2010. japanese and korean stocks also on watch following u.s. sales numbers that we got out overnight and a quick check on how markets are faring so far. see what's going on with the gdp report due out from australia later this morning. the asx 200 gaining ground.
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materials leaving that climb but we have kiwi stocks under pressure off .3% and nikkei futures pointing to gains this morning while they can is in a resistance range ahead of that level. in korea, we will be looking to see how also stocks may perform following the u.s. sales data we got out overnight. shery. shery: we will be watching the markets closely as we head to the open. coming up, we are joined by andrew sullivan to discuss hong kong future as a financial center and another guest shares his market outlook and investment strategy. the opens in tokyo and seoul are. this is bloomberg. ♪ -- our next. -- are next. this is bloomberg. ♪
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>> "daybreak asia "daybreak asia welcome to." i am shery ahn. -- welcome to "daybreak asia." i am shery ahn. haidi: asia's major markets have just opened for trade. asian stocks are set for a muted start after tax led a wall street retreat. treasuries climb in the dollar weakens. back to normal in a year. that is president biden forecast as the vaccination effort ramps up with merck to help make the
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single shot vaccine. a measure of how recent virus flareups hit the recovery. we will be breaking the gdp numbers in 30 minutes time. let's take a look at how asian markets, tokyo, and seoul are joining today. sophie. sophie: turning to japan where we digest local media reporting that tokyo may ask for an extension of the virus emergency. the nikkei adding .2%. the topix slightly higher. that stock has now supplanted toyota as the heaviest weighted shares on the topix as of last week and check out the yen holding below 107 and jgb's are slightly higher here. buying in the superlong sector. may slow down on thursday. switching the board to check in on the open in south korea this morning. the kospi, one of the few gainers during tuesday's
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session. we are seeing some downside. the korean won is on the back foot. we are keeping an eye on korean bonds after the 10 year yield fell as the extra budget came in smaller than expected and switching out the board, checking in on how we are faring with australian shares this morning, we are seeing tech under pressure, energy shares are mixed with wti slipping for a fourth straight session with opec-plus expected to increase production. the asx 200 adding .7% while the aussie 10 year yield is slightly under pressure ahead of the gdp report due out from australia and we are seeing cash treasury yields just slightly higher on the tenure this morning as we are seeing stabilization in bond markets. volatility subsiding. the valley of the u.s. curb may be in store for violent moves in reaction to any signs of accelerating inflation that made her long-lasting. with that prospect of heavy yields, that is seen weighing on gold in the back half of the year. ubs cutting its outlook for
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bullying by year-end. shery. shery: our next guest says the reflation trade is continuing despite the increase in volatility. joining us from singapore is the development committee chair at the investment management association of singapore. always great having you with us. we have seen these recent rotations and tech really getting hit hard. they have stretch valuations which takes me to our question of the day on mliv. what sector, if not tech, will lead, especially when you have that reflation call ongoing? >> the relation call -- reflation call will affect sectors that are more cyclical in nature. we have seen them do much better on hopes of higher prices and high demand. we will also see financials improve as well. yield curve steepening but also in close credit metrics.
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provisions can be worked on this year. other cyclicals, industrials, and then if you look at the stocks which are the most affected by the pandemic, such as stocks around the travel industry, those are really recovering and i think they have further room to recover as we open up and get good news like what we heard from the u.s. earlier on. haidi: we also saw commodities rally because of all the things you just told us but at the same time, this gtv chart on the bloomberg showing that gold has not really performed that well. given the higher yields. i see in your notes you are finding it attractive. why? >> gold has tumbled quite a bit as we see from your chart, from the highs back in august. now that real rates are going up a little bit, that is putting pressure on the price of gold. gold does react as well to risk
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protections and we have seen a decline in etf's. if gold has another angle, i think, which is very positive for it right now. if it is long as the balance sheets keep expanding, investors have to look for an alternative to the dollar and to the euro and central banks expanding their monetary base and gold is one of those types of currencies. finally, when india and china start recovering and india is starting to recover, the demand for physical jewelry gold will start rising as well. >> as you rightly point out, a stronger u.s. dollar will has massive implications for emerging markets. we're you see resilience within ems if we were to get another round of something adjacent to a taper tantrum?
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rajeev: it depends on which angle of the taper tantrum we got. just to train that a little bit, back in 2013, it jumped higher in u.s. treasury yields as well as a stronger dollar and that really hit emerging-market. this time around, we have seen higher yields. high don't expect a jump of that magnitude like we saw in 2013 but the dollar however looks more stable to even decline. so for emerging markets, it is not the similar set up we had back then which was very frightening and they also come from a much healthier position despite the pandemic. there are no big current account deficits in most emerging-market countries and that really hurt them in 2013 and will save them this time around, but that defensive countries will not be those links to commodities. the suppliers of commodities will do better and quite a few latin american and other
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suppliers of commodities are better positioned for a cyclical recovery. >> speaking of reliance on commodities intake, we have the chinese npc kicking off on friday. what are you most looking to get out of from the work report and some of the policy measures? what is important for you? rajeev: the prime minister's speech on friday is going to be key to see where he puts his emphasis. we have already seen some preparatory comments come out around it from banking regulators as well as those you mentioned earlier on around reserve requirement ratios being used for the sme's. those are a bit conflicting. if they are worried about bubbles and overheating or is it going to be very gradual?
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that is something we can worry about because it's very difficult to regulate china precisely so if you over tighten, that could have an even bigger implication worldwide than that has had in the past because china has grown so much. haidi: where does that leave the yuan, given we are seeing it more than anchor currency and its influence seem to be rising -- seems to be rising? rajeev: it's important for the currency situation worldwide, absolutely. we saw a very strong appreciation of demand from july last your on words. it stalled a bit now in line with the dollar actually using to depreciate it more and staging a bit of a rally. i think as the dollar resumes its weakening trend, it will be attractive. also higher interest rates than the euro and the yen and shares of chinese currency, among
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global portfolio managers, has increased a bit, but it is still quite far from a size which would reflect the chinese economy. the yuan is not that volatile and gives you that deal. it is somewhat less correlated with other currencies as well. haidi: great to have you with us. rajeev de mello. let's get you to vonnie quinn in new york. >> opec and its allies are poised to agree on a production increased thursday by as much as 1.5 million euros a day as the cartel looks to cool a rapid rally in crude prices. an agreement to hike supply would be the latest sign that the global economy is recovering from damage wrought by the coronavirus. brent crude fell for a fourth straight session on tuesday but it is still out more than 20% for the year. the u.k. government is extending a worker furlough scheme through to september as its economy
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continues to be hit by covid-19. it is a key part of her she soon asked second budget to be handed down wednesday. he wants to drive recovery with further tax breaks but you warns that future sacrifices will be needed to pay down huge pandemic that. tokyo is reportedly planning to ask the japanese government to extend its state of emergency. virus restrictions were due to expire this weekend. the nikkei reports the city is looking for a two-week extension and will discuss the plan. the tokyo governor warned that the decline of infections has slowed recently, casting doubts on the state of emergency. hong kong tells authorities investigating whether the death of a 63-year-old man is related to his inoculation for the covid-19 vaccine. the man who had chronic respiratory illnesses developed shortness of breath two days after receiving the jab.
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bookings to get the pfizer biontech vaccine opened from this morning. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, australia's fourth quarter gdp print is expected to show a slower but robust recovery. we break the numbers in just under half an hour. haidi: president biden says there will be a vaccine for every u.s. adult by the end of may after what he is calling a historic partnership between j&j and merck. the details, ahead. this is bloomberg. ♪
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>> president joe biden says merck will help its rival, johnson & johnson, in making this single shot covid-19 vaccine. it is a bid to ramp up the supply before the new variant of the viruses appear.
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>> we are on track to have enough vaccine supply for every adult in america by the end of may. haidi: biden also says he hopes we will return to normalcy within a year. let's bring in michelle cortez. what else do we know about these plans to increase supply of the nearly authorized j&j vaccine? having the supply does not mean it will all be rolled out by that time either. michelle: exactly. merck is going to help johnson & johnson with producing the active ingredient used in the vaccine and the process that is causing a lot of the bottlenecks in the u.s. it will take a little while for merck to get up to speed when it comes to getting to those johnson & johnson products so we are expecting to really see the biggest impact in the second half of the year so that does also imply that we are going to be meeting these vaccines for some time to come.
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shery: at least for now, we are seeing that the u.s. caseload is coming down but some experts are saying this could be a little bit deceptive. what exactly do we know about these virus infections? michelle: the cases are coming down universally across the united states but there are some specific areas that are increasing just a little bit. in 16 different locations across the u.s., we are seeing numbers start to creep up and of course, the concern is that these new variants are emerging. we heard a lot about the one from south africa and brazil, the u.k. variant, the dominant strain in the u.s. by the end of this month, and there's concern about what we are seeing in new york and california. the cdc in particular is warning about that. they really want to make sure that we will not be getting these new variants expanding rapidly across the united states and mutating further to evade the vaccine and natural immunity that people have gotten because
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of previous infections. that would be a catastrophic evolution of the virus, if it is able to evade the potency of the natural immune system and the vaccine. we are not there yet. we are hoping to immunize broadly across the country and avoid that from happening but that is the concern that the public health officials are concerned about. haidi: we are getting some developing news when it comes to mass mandates. texas lifting ask mandates despite dire warnings about a fourth wave and we are hearing that the mississippi governor is lifting covid research in that whole county as well. we are also expecting to hear from the cdc to give these new guidelines to potentially create these vaccinated bubbles, saying that fully vaccinated people can spend time with other fully vaccinated people in groups without having to wear masks. michelle: that is something that the cdc is talking about. they are trying to determine
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what exactly will be safe for people to do and what they need to do is get a little bit more information in terms of what is safe and what degree of transmission is possible even in fully vaccinated people. there is also an element of education and marketing that is happening here. not that we are thinking about going specifically to a vaccine passport but the idea that if you have protection and that protection allows you to do a greater number of things, that might encourage more people to get vaccinated, thereby increasing the number of people who have protection and moving us closer to herd immunity, which protects the entire population. we are going to need something to actually encourage people who are on the fence, who are still worried about the vaccination, which has proven to be very effective and very safe, but to get them -- to get vaccination rates up into the 90% range that we are really hoping to get to before the end of the year. shery: michelle cortez, our
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bloomberg health care reporter. during this pandemic, many of america's rich have actually become richer. elizabeth warren has unveiled plans for an ultra millionaire tax, saying it would raise $3 trillion over the next decade. speaking to bloomberg, senator warren responded to comments on other democrats, including larry summers, that the stimulus spend is too much. >> he is wrong. look, we should have learned the lesson, number one lesson from the 2008 crash, is that when you do not put enough into recovery, recovery is slow and some folks never get a chance to get to where they were before, much less the able to thrive and go forward. we need a full, strong, robust recovery. that is what the secretary of the treasury says, that's what the head of the fed says, that is what the top economists in this country say so i think we got to do this. >> what about the minimum wage?
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it's looking like the minimum wage is not going to be included in this and many progressives want to see it included. >> i would love to see it included. the problem ultimately is the filibuster. we are trying to get the minimum wage in through a package in reconciliation because we want to do it by majority vote. we think that a majority of people will vote for the minimum wage, that we can make that work. but as long as we have a filibuster, mitch mcconnell has a veto. mitch mcconnell should not have a veto. we need to get rid of the filibuster. >> some senators in your party, senator manchin, they have come out against this. >> in order to get things done, we are going to have to deal with the fundamental question. does mitch mcconnell get a veto or are we going to do the things that the american people sent us here to do? i don't think the american people want us to sit back and say we cannot get anything done,
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cannot get a minimum wage past, cannot get immigration reform, cannot get gun safety, cannot get universal childcare, cannot do things that are broadly supported across this country because mitch mcconnell, in the minority, has the power to block that. so i think what is going to happen is we are going to keep putting up the things that we need to do and if mitch mcconnell keeps blocking them, i think democrats will step up and get rid of the filibuster. >> one of the questions i get from republicans when we talk about all of these different plans is how are we going to pay for it? you have an idea. the wealth tax. you tweaked it from the last version. >> let's remind everyone what this is, a tax on fortunes that are bigger than $50 million, so your first $50 million is free and clear, no tax at all, but your 50 millionth and first dollar, two cents. until you hit $1 billion and
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then we add a little bit more on top of that. that would raise over the next 10 years $3 trillion. >> what do you want to do with that money? >> we could do universal childcare. we could do a big infrastructure package. we could do more on racial equity. we could do an environmental package. it would give us the resources to help build up -- >> why is now a good time? the feedback from the wall street crowd has been attacked this. this is senator warren once again demonizing wealth, demonizing the wealthy. why now, why is now the moment? >> let's talk about demonizing for just one minute here. the 99% in america, the people who don't have $50 million in assets, the 99% last year paid about 7.2% of their total wealth in taxes. the top 1/10 of 1% of people
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above 50 million, they paid 3.2 percent. less than half as much. this is not demonizing. you can still grow your fortune. just pitch in two cents so everybody else gets a chance. haidi: elizabeth warren with kevin cirilli. coming up next on "daybreak asia ," southeast asia's most valuable company expects e-commerce revenue to double, supporting growth. we will be breaking down the latest earnings, just ahead. this is bloomberg. ♪
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>> tencent backed -- expects commerce revenue to double in 2021 as southeast asia's most valuable company cancel a jump in online shopping demand to continue after the pandemic. edwin chan has more details on this.
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that e-commerce outlook seems pretty strong and optimistic. what is that telling us? edwin: the vote of confidence and the fact that online shopping will persist after the pandemic. i think many in the industry have this vague fear that in a pandemic, it will peter out as vaccinations proceed and the world kind of returns to normal but i think they expect online shopping to move toward online shopping -- they expect the move to be a permanent one. haidi: what is the decision-making behind the acquisition or the creation of it? edwin: it's an interesting acquisition. the market has been expecting a big move into the simtech space or financial and what they are doing is, in a sense, mirroring
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what is happening around the world. tech giants realize that they can marshal these enormous user bases that have built up over the years into really a very dynamic sort of online amtek service. so this is an initial move that essentially formalizes their simtech ambitions, deploying $1 billion in capital towards a newly established unit called c capital in hopes of creating what will be a third growth pillar for the company after e-commerce and online gaming. haidi: edwin chan, our asian tech editor. let's get you a quick check of the latest business flash headlines this hour. a taiwanese food giant is said to be weighing an ipo in hong kong. sources say the listing would be centered on its restaurant is missing mainland china and that includes the taiwanese beef noodle chain and a fried chicken
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chain which competes with kfc. the gm back to self driving vehicle company is said to be in talks to buy an autonomous technology startup that operates in retirement communities in florida. bloomberg understands that talks have progressed to a serious stage. rio tinto's chairman will not be seeking reelection in 2022. he says he is accountable for the failings with companies mining explosion last year to the destruction of an ancient aboriginal site. the fallout from rio's actions have led to the departure of the former ceo and other senior executives. coming up next, we are minutes away from the fourth quarter australian gdp release. we will be getting reaction in just a few moments time. we will get more details as to the robust this of the economic recovery. lots more to come. this is bloomberg. ♪
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>> what a beat when it comes to australian gdp just crossing the bloomberg. 3.1%, that quarter on quarter number beating expectations of 2.5% but go easing from the third quarter's 3.3%. when it comes to a year on year basis, it is a contraction of 1.1 percent but much better than we expected contraction of 1.9% according to economists we spoke to and the pace of the economic contraction easing from 3.8% that we had in the previous third quarter. this of course as we continue to look ahead to the pace of this
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rebound. in the third quarter, we had a sharp rebound marking the end of the first technical recession since 1991. instead, we have seen iron ore prices and other commodity prices really going through the roof. we are also looking for details when it comes to continued consumer spending. that is likely to have been a big contributor to the fourth quarter gdp along with a partial recovery in business sentiment as well so this all taking into account the fact that we saw the rba taking a breather in terms of exercising any new policy tools in yesterday's decision but reiterating its commitment to easy policy settings and saying that rates probably will not rise until 2024. we are also just getting healthier more numbers. fourth-quarter household spending rising over 4% quarter on quarter. household savings ratio coming in at 12% in the fourth quarter as well as we continue to get that detail coming through. let's take a look at the economic outlook.
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kathleen hays is here. australia alongside new zealand are two of the -- positive news stories when it comes to a post pandemic recovery, right? kathleen: yes, they are. it's one of the reasons economists, investors, the reserve bank of australia see basically a solid outlook for the year ahead. when we go over these numbers, one of the themes is, like a lot of economies, australia is still digging out of a hole. i don't want to gloss over the fact that even though the third quarter beat handily, and it does look like household spending was one of the reasons they did that, we are looking at the australian dollar. in terms of the gdp, the quarterly number was three point 1%, but given the year-over-year comparisons, and this is what most economists look at, that is the lower chart. the economy is still 1.1% below the growth it had at the end of
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2019 so this is the issue. now how fast is the economy go as we look ahead? when you look at retail sales, for example, let's look at those. the recent retail sales number, looking at january, we see a gain of 0.6% and we are down 3.9% in december. they were up 7.1% on the retail sales so that is a good development, although it is volatile so far. in the fourth quarter, some people were worried about, oh my gosh, are people going to keep spending as much money? that is certainly a plus. another plus is the fact that the unemployment rate has started to come down. the peak was at 7.5%. it's back up to 6.99. the question is, will that continue to move in that direction? bloomberg economics says you
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have the vaccine distribution and easy monetary policy will be the fundamentals supporting the economy this year. we have also seen some uptick in capital spending so so far, so good. looks like solid growth ahead and the question is of course how strong it gets and how long it continues. shery: and also the question is, what does the rba do? they have already been defending their yield target. kathleen: that is a big issue because they certainly do not want yields to get so high that they start putting a damper on growth, although they have a very hot housing market and house prices continue to rise. that might cool that part of the economy off. at the same time, when we look at what rba said in his policy statement yesterday, recovery is well underway. stronger and coming earlier than they had expected. they also point out that the
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recovery depends on the health situation. that includes, you know, people still social distancing, etc., the vaccines rolling out and maintaining significant fiscal and monetary support. they do see a bumpy and uneven path ahead for the economy but we will show you this inflation chart now because they see subdued wage and price pressures ahead sometime before they achieve that inflation target. 2% to three percent. you can see that they are still far below that when it comes to inflation. basically, the tone is very dovish, as you know. they did not exactly shift their target yet it they are committed to continuing to buy three year bonds and keep that yield where it is supposed to be. 0.1%. and the gdp number is good enough to make them feel that it is working. at the same time, things are not so great that they cannot move back to the policy they have now. >> kathleen hays with a breakdown of the australian gdp
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numbers and what they are doing but let's turn to hong kong right now because we have an alert on the bloomberg. the ihs market pmi coming at 50 point two. finally in expansion territory after two months of being in contraction. the economy has suffered not only from the coronavirus pandemic also social unrest. we did get that budget last week. about $15.5 billion of fiscal support in the way for the hong kong economy. pmi now back in expansion territory. for the china market open in the next hour, let's turn to sophie for what to watch in the markets. sophie. sophie: first a quick check on the hong kong dollar which is at the weakest level since march we are below that 776 level as market assess the impact of the increase and we are waiting on a private reading of chinese pmi. ahead of that, you have the offshore rate holding above the 647 level after retreating from 648 as signals targeted easing
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which could be further reinforced by chatter that the pboc may cut the rrr for some banks in march as it seeks to balance for the uneven recovery on the mainland and checking in on the aussie dollar, some slight gains after we got that gdp report. the rba maintaining its dovish tilt. it plans to keep borrowing costs low even in the face of rising home prices and loans which are being closely monitored for any deterioration in lending standards. a quick check on how sure markets are faring in asia and we are seeing marginal gains across the board. we are seeing swings in tokyo and seoul. the asx 200 up .6% as we are seeing the materials gain ground but energy stocks are swinging. over in seoul, we are seeing utilities and health care on the rise while tech shares are under pressure in seoul as well as in tokyo. even the bullish forecast not
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listing displays and we are seeing honda edge higher even after posting an 11% drop in u.s. sales but overall looking like modest gains in asia and we are seeing the minis gaining ground -- he minis -- e-minis gaining ground. haidi. haidi: taking a look at hong kong's future as a financial center. andrew sullivan will join us next. this is bloomberg. ♪
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vonnie: this is "daybreak asia." markets teaming up with competitors johnson & johnson to help mass-produce j&j's single shot covid-19 vaccine area president joe biden announced the partnership as the immunization rates narrow and governments ramp up vaccine supplies. the vaccine was authorized for u.s. use saturday, making it the third vaccine available to the country's mass inoculation efforts. the white house is said to be withdrawing neera tanden's nomination to leave the office of managing budgets. it marks president biden's first defeat for a cabinet post. sources say she lacked the votes to be confirmed in the closely divided senate with moderate democrat senator joe mansion opposing her nomination. biden said tandon will still have a role in his administration.
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a bail hearing for dozens of pro-democracy activists before they are tried on subversion charges will resume again wednesday afternoon in hong kong. the 47 defendants include some of the most prominent activists. most have objected to government requests to keep them in jail with their trials potentially months away. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> hong kong's financial secretary is not ruling out further trading tax hikes week after the budget measures sent stocks tumbling. he spoke to our chief north asia correspondent, stephen engle. >> after the announcement of the increase, the market moves up and down along with international markets but the turnover has been huge. last year, the efforts were 150
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billion hong kong dollars, which is also already a substantial increase compared to the year before. but in february this year, in january of this year, in the past week, it has remained at a very high level, close to $20 billion, so we will continue to monitor the market development and keep an open mind, but on the other hand, according to the information available to us up until now, we do not think there is a modest increase which harms our competitiveness. >> i just want to give you the power of the bloomberg because we are getting reaction already. the hang seng is falling right now on comments he made earlier in this interview that you are not ruling out further hikes to the stamp duty. do you care to elaborate on that? do you feel that this will spook investors further? paul: i don't think it is fair
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to link these two together. particularly when i answer your question, i do not say that we are planning anything to increase additional spending. you were asking me, going forward, are we going to withdraw to increase? that is my reading of your question. i said we will continue to monitor the situation, the market developments, and at this stage, i would not commit one way or the other. stephen: in the last year, we have seen a surgeon so-called backdoor listing companies, blank check companies, special purpose acquisition company's. singapore is open to them. we have seen a number of different listings from hong kong entities and the united rates. we have the richest man here in hong kong also launched one. you, as financial secretary, who has to assess the risks to the
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economy, are you open to having hong kong be a center for those listings here? paul: i have asked the securities and futures commission and hong kong to work together, not just to look at that but to -- the ability of our own hong kong version of it which is on the one hand enabling this new fundraising arrangement to be allowed in hong kong, but on the other hand, upholding protection. we are looking at this seriously. stephen: you mentioned about a dividend tax or capital gains tax. is this something that hong kong should consider given the budget deficit situation? stephen: not -- paul: not at this stage. there is a differential between a standard rate for individuals
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and the standard rate for players. that differential historically is to take care of the effect of the dividend tax, meaning that they have been taxed extra. so it will not be taxed again. this is number one. number two, there are retirees who depend on dividend income to fund their retirement expenses so i think we could not take individual taxes in isolation. we need to look at what options are available to us and what are the best combinations. >> paul chan speaking to stephen engle. let's get some more analysis on hong kong's future as a financial hub. let's bring in our next best to has been living in the city for two decades. andrew sullivan joins us now. that me start off big.
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really big somatic stuff. do you think hong kong ultimately can continue with its financial sense of success and position in asia given concerns about influence from beijing and retaliation from washington? andrew: i certainly think it can continue in the foreseeable future. the fact that u.s. has shown and demonstrated it can weaponize both the u.s. dollar and u.s. investment funds is obviously a concern for hong kong, but in the short-term, people invest in hong kong not just from the u.s., but around the world, and they are enmeshed here because they like the companies we have listed here. they get some exposure to china and the growth that has come to china over the last 10 years and the growth they are looking forward to in the next 20 years. in the short term, unless there is something dramatic that changes, we might see a curtailment from the u.s. if they continue putting sanctions on but we are still a global
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investment center. we are not just u.s. centric. haidi: in that sense, do you see hong kong and regulators meeting to work much harder, and how much of a disappointment is it to lose that crown jewel of ant financial -- not lose it, but it just has not happened. andrew: it's key. the key to any market is how much do people want to invest in those companies? and that is really what drives people. for hong kong, you know, the action on the mainland, all its actions on the mainland, because a lot of the companies list here are chinese companies, and what the hang seng we organizations -- there's going to be more chinese companies. really looking at the political risk from china as much as anything else and the reason for investing in hong kong and the stocks here. in the short-term, we don't really see very much changing. people still want to invest in
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that chinese growth story, in the development of that nation and that's going to continue. the move forward into more tech stocks, e-commerce stocks, something that historically hong kong did not have and did not really grow on its own, it illustrates our need for hong kong to really relate to china and to be the poster boy for china as far as investment goes. >> we are also hearing that hong kong is exploring those listings. does that make sense for hong kong? andrew: like most things, it is another revenue stream. it's a matter of protecting investors, having a framework that is going to appeal. one of the interesting things is that it takes companies that are cautious about ipo's or have private equity money in them, right straight to the listed
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status without having to go through that rigmarole. it still means there are risks involved, that due diligence needs to be done, and they need to make sure that the founders and investors are probably protected. it is something that is certainly attractive to any market globally but you also have to ask yourself, you know, these are companies that have decided not to go the ipo root. what is going to attract them to, and list in hong kong? generally speaking, because there are other companies of a similar nature or within a similar political background, and at this state, we are not really seeing a huge number of chinese companies that cannot go down the normal ipo root. certainly, there are those taking place in the u.s. and coming out of europe, but that's
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not something that i think is going to be attractive in hong kong. >> what about the geopolitical risks stemming from the u.s.? we have seen more moves to curve flows to china. andrew: that's always going to be a worry now. has soon as trump weaponized dollar and then put restrictions on government, u.s. government money investing into chinese firms, it is a new risk that investors have to take on board but you have to remember, it's only a risk as far as u.s. investors are concerned and i think this is one of the problems that maybe some of the index writers will have to take into account. they may be have to do dual indexes, indexes for u.s. investors and for the rest of the world that are not restricted by the u.s. restrictions. it should not make a huge difference. in the amount of money that u.s. investors actually invest overseas, while large in total
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terms, it's actually quite small. >> andrew sullivan, always great having your thoughts. you can tune into bloomberg radio to hear more from the days big newsmakers and you can also get in-depth analysis from the daybreak team, broadcasting from our studio in hong kong. listen via the app or radio. plenty more ahead. stay with us. ♪
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>> the chinese markets kick off in less than half an hour. let's turn to sophie for what to watch. sophie. vonnie: -- sophie: hong kong shares kicking off in half an hour. we will be keeping a close eye on shares in the hong kong exchange after nicholas was approved by regulators on tuesday to serve as the next chief of the board, starting on may 24. berg intelligence expecting he will expedite progress on strategic initiatives. the ets connect as well as the ipo. we are keeping a close eye on a chinese chip player which has reportedly received supply licenses from some u.s. equipment makers and the company said its short-term operations will not be impacted by sanctions. keeping a close eye on shares as well after the group reported a plunge in february property sales despite the discount it offered in an effort to pair back debt. keeping a close eye on any
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market reaction to chatter that targeted easing may be on the horizon for policymakers. analysts predicting that the pboc may trim the rrr for some banks as of march 5. policymakers are managing an uneven recovery when it comes to the growth on the mainland. haidi. haidi: jeffrey's head of china strategy research will be joining us for those big china and hong kong market opens after that bubble warning from regulators and also after that report in the china securities journal that we could see a rrr cut for some banks in march. let's take a look at the state of play when it comes to markets at the moment. fairly calm session as treasuries continue to stabilize. we had a decent bump when it comes to the fourth quarter gdp numbers out of australia. the s&p futures for the u.s. are up by .3%, looking like we will see a moderate open after the decline we saw in markets on
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wall street overnight. taiex futures up by .7% and you have ftse china a 50 futures looking like a pretty muted start to trading. before we go, this is a fun story we have been following. a japanese billionaire has kicked off a global contest to select eight crew members to join him on a private spacex flight around the moon in 2023. if you recall, he has been in the headlines quite a bit. earlier on, he had actually meant to participate in a matchmaking tv series where he wanted to meet the love of his life who he would then take that person to the moon. back down from that series but now he's just looking for eight people from various backgrounds and i can imagine that there will be a lot of applicants. you and i were talking about whether we would want to go to mars if there was an opportunity. go to the moon. shery: no way. the way he put it, he thinks this is going to be fun, that he wants to make it a fun trip.
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six days around the moon. i have fear of flying. i'm not going all the way to the moon for six days. haidi: you know, at least they won't have covid there. i'm wondering what the quarantine restrictions might need to be when you get back from such a trip but it's really interesting. he calls it fun. i would be really interested to see how many applications he gets and what kind of people that he is saying people from all kinds of backgrounds can join in. six days around the man. he would pick the eight finalists based on how they would use a trip to push the envelope in their respective field and their willingness to support other crewmembers. heisey a reality tv show. -- i see a reality tv show. shery: 27,000 women apply for that. that seems a pretty popular idea, going to the moon or mars. i don't know. not for me. but i do get you. with the coronavirus here,
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right? at least no virus there. on that note, that's it for "daybreak asia." our markets coverage continues. the start of trade in hong kong, shanghai, and shenzhen. this is bloomberg. ♪ and you can get a roundup of the -- this is bloomberg. ♪
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tom: it is 9:00 a.m. in beijing and hong kong. welcome. david: good morning. we're counting down to the open of trade. wednesday's session ahead on the chinese mainland and here in hong kong. john is readying ambitious plans to become a semiconductor superpower. beijing wants technology giants to rival intel


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