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tv   Bloomberg Markets Asia  Bloomberg  January 14, 2021 9:00pm-11:00pm EST

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package to bolster the u.s. economy. he says america cannot afford to miss the moment. >> the world health organization's mission to trace the origins of covid-19 in wuhan is off to a rocky start. two members have been denied entry to china. rishaad: let's have a look at what is going on market wise. things at the moment seemed to be dominated by what is going on in the u.s. not only that a relief package that joe biden is promising. hang seng done 3/10 up one -- down 3/10 of 1%. we get this u.s. blacklist. investors scrutinizing president-elect jode biden's relief plan. the cost, $1.9 trillion. there are very few surprises
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catching investors off guard. more direct payments to hospitals and expansion of jobless benefits and enlargements of vaccinations. shanghai composite in positive terrain. u.s. dollar moving to the upside. crude oil in tandem. bitcoin approaching 40,000. yields, we are seeing a two basis point move to the upside. 10 year yields .0%. they claim continues to pull back most of the losses from this week's swift plunger we saw. -- plunge we saw appeared let's find out what is going on first word news wise as we join karina mitchell. karina: joe biden biden will ask congress to back a new relief package. in the first of a two part strategy that includes longer-term goals such as infrastructure and climate change. the initial program is worth $1.9 trillion and will be a test
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of relations with the swift senate. the president-elect admits the proposal is expensive but insists america cannot afford to act -- cannot afford not to act. >> the crisis of suffering is in plain sight and there is no time to waste. we have to act and we have to act now. karina: the federal reserve is stepping down talk over premature talk of its bond buying program. jay powell says policymakers know they have to be careful in how they discuss asset purchases and one of the less is of the dice lessons at the financial crisis is they have to be wary of exiting too early. the world health organization's mission to trace the origins of the coronavirus pandemic has seen a rocky start with two members of its team denied entry to wuhan. the dow jones says they were prevented from boarding a flight after testing positive for
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covid-19 antibodies during transit in singapore. the 13 scientists who have arrived will spend two weeks in quarantine. over 10 north korea. it is thought to have displayed nuclear advances in new submarine launch of a ballistic mitchell. -- ballistic missile. among the weapons, there appears to be a new version of the existing sub lunch missile, which was thought to be capable of striking japan. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. haslinda: asian markets. the index down to tens of 1%. get more market reaction with mark cranfield. taking a look where the markets are right now, currently done to tens of 1%. is this a reaction to biden's
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speech and relief plan or is this a case of gains that have gone too far? >> possibly a little of both. if there is any concern at all, it is how joe biden's government is going to pay for all of these promises on spending. one of the lines which caught traders attention is biden saying we will pay for them by making sure everyone pays their fair share. that could be a hint that higher taxes are coming in the united states, which would be a short-term negative for the equity market. that is one of the reasons you are seeing equity futures a little bit lower. nothing dramatic. we will have to wait for the american markets to open later in the day before we get a clear response. it is going to be a bit of a higher wall to clyde. markets have built in a lot of optimism. the stimulus has been projected for a long time. the numbers are very large. the spending factor has
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influenced treasury market. yields have gone up. if we are going to get a near-term increase in taxes, that may not have been fully factored in to stock markets. i could be a reason for a little bit of negativity. certainly an excuse for people to take money off the table. we will see how the day develops. we would expect more people to be thinking about and discussing when will the tax hikes come in and where will they be? would they be most in the corporate sector? the tax question will be a much bigger one as the day develops. rishaad: investors have been piling into asian assets. some are arguing they are looking a bit frothy, particularly if you look at india, which has had continued record highs. what are you looking at in particular? >> we have a story running today about some of the areas where there have been some very exciting moves and possibly people may have overdone it a little bit.
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on our list is the kospi index. one of the reasons that was chosen is if you look at what happened with the kospi over the past 12 months, when we had the dip in the index in march, it came down to the lowest level it had been since 2009. since then, it has rebounded incredibly appeared from the low points to the high point, which there was a record achieved earlier this week, in something like a 128% turnaround. this is one of the major stock markets in the world. this is not a small market by any means. it shows there is a lot of exuberance that has been going on in korea. if you look at japan, although the nikkei 225 in absolute terms is a long way to go before it reaches the all-time highs that were seen in early 1990 when it almost reached 40,000, the nikkei is getting closer to 29th
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artisan at the moment. -- 29,000 at the moment. in dollar terms, it has achieved a record high this week, partly because the yen is somewhat stronger than it was decades ago. if you want to go for some really crazy extraordinary moves, the most outstanding one is japan power futures where the rally has been something like 13 times since early december, which is even more than bitcoin. rishaad: mark cranfield in singapore. we have got still to come on bloomberg markets, china dominating e-commerce. possibly slowing its growth down. we are going to be looking at that with jason david's. a big focus on china's big players. haslinda: that is later this
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hour but next, a look at the implications of the u.s. blacklisting of cnooc and xiaomi as the trump administration raises the pressure on beijing before joe biden takes office. this is bloomberg. ♪
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rishaad: the united states is blacklisting chinese smart foot -- smartphone maker xiaomi. stephen engle has the details. let's kick things off with cnooc . what does this mean for the company and moreover, does it have any chance of succeeding in its stated goal of trying to alleviate tensions any the south china sea?
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-- tensions in the child -- tensions in the south china sea? >> become s department is the latest come out on cnooc, adding it to its entities list. congress has two lists. the military and users list as well as the entities list, which essentially will ban cnooc from accessing u.s. technology and u.s. intellectual property. in that sense, commerce is going after its ability to aid as wilbur ross said, the military ambitions of the chinese, in particular, the south china sea because he says china's reckless and belligerence actions in the south china sea and its push to acquire sensitive property and technology for militarization efforts are a threat to u.s. national security. wilbur ross says cnooc acts as a bully.
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that is the premise why they were added to the list. as i said, according to these different lists, you can see a synopsis. there is a commerce list, two commerce lists. there are two different treasury lists. one for individuals and one for not specific individuals and companies, which by the way, i was going through the long list. it is a long list. cnooc is also on the treasury company list. the consequence there is americans would be for a from investing in -- would be for bitten for investing in that company. cannot buy, sell and hold shares that are linked including the subsidiaries of any of those listed companies. the caveat is as we had a guest on earlier who talked about xiaomi, there is a waiting period. 365 days they have to take
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action post being added to the list. investors can wait until november 11 when the first executive order for these blacklists was first issued to divest. this one particular investor says i am not selling. we can wait and see how the blighted administration is -- how the biden administration is going to handle this. haslinda: as we speak, the spreads why didn't five to 10 basis points while dollar notes go up 35 to 40 basis points. that is according to credit traders. talk to us about xiaomi getting included in this blacklist. >> this is potentially an even bigger story. cnooc would be the more obvious 30 -- obvious target. xiaomi, we were talking yesterday how treasury perhaps
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convinced the defense department for not including alibaba and tencent. and therefore not causing a stampede of unwinding of those big tech shares. xiaomi, it is also on the radar and invested by global investors. the stock as of 180% over the last 365 days. today, it is tanking. xiaomi, the mobile phone maker in china, it is a big in india and other places in southeast asia. it will now be potentially as it has been added to the defense department's blacklist along with the commercial aviation airplane maker, which wants to rival bowling and airbus, they will be subject to the investment ban i talked about, which would not necessarily take effect for americans until november of next year. still, it is overhang on xiaomi
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shares, which have been on a tear as of late. haslinda: bonds taking a dime there. here is the latest business flash headlines. semi conductor planning record expansion. that would be more than 10 billion above last year. most of the money will be devoted to advance processes. revenue up to $14 billion. bytedance is said to have won approval for an ipo in hong kong that could raise $5 billion. tencent technology says demand for a share sale next week and is hoping for a bow you asian of $50 billion. price share made its name in rural china before expanding to larger audiences.
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indonesia has ordered the country's airlines to check older jets following the crash of a boeing 737 500 that killed all 62 people on board. the flight data recorder has been recovered as divers continue to look for the cockpit voice recorder. eight airlines fly the series in asia. the jet was almost 27 years old. rishaad: coming up, we have the cohead of economic research saying why he is going to expect -- after the region took the lead in 2020. details coming up. this is bloomberg. ♪
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haslinda: welcome back. china's economic recovery is accelerating their layer after its first 20 bars lockdowns and success in controlling covid-19 is letting it boost its share in global trade and investment. we are expecting gdp figures on monday with china the only major economy avoiding contraction according to our bloomberg survey. joining us is the hsbc cohead of economic research. good to have you with us. china going and very strongly despite the trade war that was started by trump himself. >> that is right. china really pulled ahead last year, gaining global market share in terms of the size of gdp. it is not just down to the coronavirus. it even started before. when we look closely at the trade numbers even in 2018,
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2019, china continued to gain global market share despite the tariffs it was facing in the u.s. because china remains highly competitive, making inroads in sophisticated goods, exporting more components in which other industries rely. china has been on a tear when it comes to export performance for several years. continuing its amazing run. haslinda: that momentum is said to build in 2021 given the biden administration. there will be more stability. >> that is right. the u.s. fiscal stimulus injects a lot of vitality into the u.s. economy and means that there upside risk to some extent for global gdp growth given the u.s. is leading. however, this year might be a year when asian exports slow at
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the margin. that is because last year's demand was goods intensive. households in the u.s. and europe demanded those laptops, that furniture because they stayed at home. recovery will be led by services and for -- and services are less goods intensive. there may be as good of a payback in 2021. haslinda: we keep talking about the strong yuan versus the dollar. when you take a look at the yuan versus a basket of currencies, it is at a level we saw four years ago. when you take a look at the yuan , it has to be in the context of dollar weakness, not yuan dollar strength -- not yuan strength. >> if you look at the bilateral u.s. dollar, china yuan rate,
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that means the loss of competitiveness for china is not as large. structurally, china has reduced its dependence on the u.s. market. ozzie on is now -- asean is the biggest trade relationship for china. from that perspective, the dollar matters at the margin last now than it did perhaps four or five years ago when china was structurally more dependent on the u.s. these things have been distorted because of the coronavirus but china has brought it is exposure to -- has broadened its exposure to other markets. rishaad: i want to get your views on inflation. more people are talking about this, which has been largely discounted by central banks, so jesting there are not going to be signs of inflation for the foreseeable. that is changing, is it not? >> it is. we see investors getting nervous
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about inflation. you saw the rise in yields. a couple of factors driving this. one is commodity prices keep rising. it is not just oil but food that really worries many in southeast asia. that always injects volatility and cpi readings. the second big unknown is that if you have a snapback from these lockdowns, if you have a services led recovery that might be very strong, does that add fuel to core inflation and then presents us with a much more persistent inflation problem? rishaad: the thing is, the fed with the inflation averaging, surely that is building in them being a late into the game effectively, which could mean they lose a handle and price increases. >> yes, and this might be an example of always finding the last war.
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what is on policymakers minds including at the fed is not to receive the mistakes of the aftermath of the global financial crisis when there is a sense that perhaps we tightened fiscally and monetarily a bit too quickly and that stretched out the recovery. it meant that the unemployment did not decline as quickly. this is a different animal. we are not coming back from a financial crisis. we are coming back from a pandemic. if these vaccines are a magic key to normalize everything, perhaps we are being a bit too loose on the monetary front. that is playing itself at -- out in asset prices. is there a bit too much dovishness here on policymakers? that might become a worry in the coming months. rishaad: a relief package is
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effectively printing money. the thing here is we should not overplay the risks here, so what are the chances of us giving more inflation or high inflation? give us a sense of what the chances are. >> almost certainly inflation will ramp up in the next two quarters whether in the native state or across asia. the question is how persistent is this increase in inflation? in the u.s., you might see cpi well above 2%. the question is, does that taper off into year end because after initial exuberance of vaccines, you might be left with structural problems like higher unemployment. if you do not get the drill down again over the second half of the year, that suggests we are looking at a much more in -- much more persistent inflation problem and that would warrant a much more aggressive monetary policy response. the verdict will come probably
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during the third quarter. markets might be exceedingly volatile going into that. rishaad: always a pleasure. have a good one. the hsbc cohead of economic research. looking at the drawdown, seeing equities in this part of the world. regional markets eking out some small gains after starting off negatively. kospi, 1.7% to the downside. let's check in with japan. looking at the nikkei 225 at the moment, off by about 1/5 the 1%. seeing a half of a percent decline. that dollar strength playing out not that much with the yen but with other currencies. this is the situation. carmakers still feeling it as we can see with the topics auto transport index.
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great numbers there. much better than anticipated figures in terms of the last quarter. that is -- already baked into the price. ♪
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karina: it is 10:29 a.m. in hong kong and shanghai. i'm karina mitchell. the u.s. is imposing new sanctions on beijing over its increasing role in the south china sea, putting travel bans on officials for alleged violations of freedom from navigation and disputed waters. he hopes the company can promote cooperation under the biden administration. one day after the house impeached president trump a second time, there is little
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idea of when his trial will happen or what form it may take. speaker nancy pelosi has yet to reveal when she will send the article to the senate and republican leader mitch mcconnell and his counterpart, chuck schumer, have not said how they will hinder -- how they will handle the case. more than half of japan is under a virus state of emergency with infections spreading across the country. measures include telling bars and restaurants to close at 8:00 in the evening and for people to avoid unnecessary outings that will last until february 7. the emergency includes japan's major economic parts such as osaka. filipino -- the filipino president is telling his daughter to forget trying to succeed him next year, saying the job is not for women. he said the daughter will not run in the election despite a recent survey indicating she is the right pic to follow him.
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she chairs an alliance of political parties and campaign for senate president in 2019. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. rishaad: the governor is speaking. he has been talking about gdp growth at about 3%. warning about household debt. can be used to show high growth. a constant concern in korea. the level of debt held by the households. they are going to keep easing until there is a stable recovery expected. he also said the pace of economic recovery depends on consumption. that is an exercise entity obvious. -- exercise in the obvious.
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saying they need to pay more attention to financial stability as well. there we have it. haslinda: the cost down 1.5%, giving up its early gains in the broader market. investors mulling over the much-anticipated 1.9 trillion dollar relief package by biden. a prospect for higher taxes, putting a dampener there. the csi threaded index up about 1/10 of 1%. taking a look at some of the stocks we are watching. xiaomi, cnooc, the u.s. blacklisting them in final push to up the ante. xiaomi slumping about 9%. taking a look at currencies, asian currency index having one of its longest winning streaks in more than two decades and for
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the most part, that is because of a weaker dollar. cities says the yen in focus. it is set to strengthen by 100. there you have it. snapshot of the markets. rishaad: let's have a look at this virus and the pandemic and how it is reshaping our world. consumers shopping online and agree or numbers. the crisis is increasing number of consumers who worry using so-called social commerce. using networking website as vehicles to promote products and services. our next guest says this phenomenon is the fastest-growing segment during the pandemic. let's get to jason davis. give us an idea of what social commerce actually is. >> social commerce is any form of e-commerce that leverages social interaction to convince us to buy things.
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this trend really took off in the pandemic. so many of us have been stuck at home and craving social interaction that the idea of shopping with others, with friends has taken off. as become the fastest-growing segment. probably the company doing the most innovative things in social commerce is one of the chinese big tech giants that most people in the west do not know about. they have innovated a very interesting business model around group and team-based buying where people get together in the platform, they form a group and they negotiate very good prices with vendors as part of this direct to consumer model that has been very innovative. they are really challenging some of the bigger chinese big tech like alibaba and jay-z really taking off. rishaad: how did these business
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models then benefit also normal social media platforms? are they taking notice of this? >> that is absolutely right. we can probably say that social media, social commerce 1.0 was started by instagram and facebook. they have a very different model. it is based on influencers. we all know these popular people on instagram. they drive sales through advertising and promotion. it is supplier driven. they will link up with an influencer. their model is demand or consumer driven. consumers getting together and deciding when they would like to buy. as a result, this model has no need for an influencer who takes a huge share of the profit. companies like facebook have really realized that this might be the new wave and you can imagine they started to invest in this new form of social
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commerce as well. we have started to see facebook and instagram and debating with what they saw it -- what they call shops, which allows small vendors to organize some of these groups. they have also started to do customize audiences, basically copying the model with a team-based buying approach. i think there is a quiet revolution happening in social commerce that a lot of us are not talking about yet. when you start to see a company take on alibaba and jd, i think it is happening now. rishaad: you talk about influencers, which are very important in the development of social media websites in the west, how do influencers work with a company like this? >> it is pretty interesting. of course there are prominent people on the website and they tend to use livestreaming to help to organize these groups.
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what is interesting is vendors are not reliant on those people. they may be there. there helping to organize groups, but they do not take such a large share of the profit. if you look at instagram, the influencers are the most prominent people, even more prominent that the brands any times. people like the kardashians, they have made quite a business for themselves. we do not see that over in demand driven team-based social commerce. it seems to be more demand and consumer driven. haslinda: when you take a look at these e-commerce companies, they are coming under greater scrutiny. we are seeing this in the u.s. we are seeing this in china. could regulation impact innovation? what is the outlook for these companies? >> i think it is going to be the big topic probably for these companies in 2021. it is interesting it is happening in parallel. it is not just the u.s. where we
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are seeing a great fanfare happened over social media in the past week. we are also seeing it happen in china with investigations into alibaba and some interest in pin ooredoo low. how these companies manage their government relation, how they respond to some of these good decisions may determine if they actually succeed. nonetheless, while that regulation and the geopolitical things are happening, underneath it all, there is innovation. the regulators need to create space that allows the innovation to thrive. it is not just in china. we are seeing a social revolution happening in the u.s. many of the hottest companies worldwide are -- are employing a social model. new companies like clubhouse and discord. for any of us who have little kids, we play games like among us, and perhaps tiktok. they have more interactivity to
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them. [no audio]
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>> should investigate and try to improve conditions. i think they will. as they become more prominent, they will respond to that pressure. it is important to understand the context of why that is happening. it is part of a larger competition that is playing out in e-commerce in china. particularly with alibaba and j.d.. alibaba and j.d. are having -- are trying to move into that social space. when you have the two biggest big tech's coming for your lunch and a.
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i expect this pressure will continue and i hope that companies like this will put in place some sort of future, some sort of limits on the overwork that can happen that can lead to problems and other things. >> interesting to note that for chinese e-commerce companies, they're getting clamp down. on the other, the u.s. is trying to limit growth. how will this play out? >> i am not an expert on what is happening on u.s. regulation. there does appear to be a trend. i think most of the regulations are concerning infrastructure companies. companies that have the
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capability of interfacing with telecommunications infrastructure or maybe commercial and for financial technology. most of the regulations so far have been focused on those things. and what that means is it has left e-commerce mostly open. you have not seen as many regulations going after companies like alibaba or j.d.. from the u.s. regulators. as long as that continues to be the focus, that u.s. big c national security interest is best served by focusing on infrastructure, i would expect e-commerce will continue to thrive both in china and in all the other markets where these players operate. i think you probably know i am thinking south east asia. there has been a big push by a lot of chinese and other companies to develop e-commerce in southeast asia. i would expect that would continue to thrive as long as regulatory burden does not focus
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on e-commerce. rishaad: a lot of food for thought there. we have more news coming out of -- the bank of korea governor. we have him talking about the virus vaccine program saying and is surely the rollout is going better than anticipated. thing attention to what is going on with the cosby and karen stocks moving to the upside. we are a .2% up for the kospi. talking about even a small shock and how that could rattle stockmarkets. saying it is hard to judge if there is a bubble in south korean stockmarkets. going on to talk about asset prices. they are suggesting they see the financial system in korea as being solid. talking generally about the
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economy and the improving export picture, which is setting the drag on growth, which is coming from conception. saying the vaccine rollout is better than anticipated and talking about any vaccine delay, global policy change. that is the moment, the governor lee talking about it in seoul. haslinda: on the back of the boe keeping rates unchanged. up next, the largest chipmaker is pouring as much as $28 entered spending this year as it aims to maintain its dominance and supply key american clients. the details from taipei next. this is bloomberg. ♪
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haslinda: tsmc is set to go on a 28 billion dollars spending blessed. asia tech reporter debbie wu has been tracking the company in taipei. why is it raising its capex to such a staggering level? >> good morning. thanks for having me. tsmc's management had said they believe high-performance computing related products will help fuel the company's growth
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for the next few years. they are investing a healthy some to maintain its technology lead to better serve its key clients including apple. 80% of capex that go as high as $28 billion will go into event technology. this suggests the company expects a surge in business for cutting edge chipmaking. analysts now expect intel will be outsourcing some of its chips. tsmc could be using money to prepare for the capacity for that. rishaad: what about the suppliers here? tsmc suppliers who could benefit from the spending spree? >> tsmc shares jumped yesterday in the u.s. and in taipei.
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major equipment supplies including asml and applied materials all rose significantly yesterday. in tokyo, we see that japanese equipment and semi conductor suppliers including tokyo electric, there stocks jumped in tokyo today. rishaad: debbie wu in taipei. let's have a look at the latest business flash headlines with canon surging by as much as 9%. that is the most in almost two years. it came out with profits ahead of estimates. operating profit coming in at over a billion dollars. that is around 80% of the forecast. canon pointing to a recovery in demand for cameras and home-based printers. saying office space printer equipment does of -- does pose a challenge. cnooc is being blacklisted by the administration for allegedly
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drilling any disputed waters in the south china sea. the move will deny the company access to technology without specific permission and follows the blacklisting of 60 companies last month. washington saying cnooc represents a continuing threat to u.s. national security. >> cnooc is the largest oil company in china and one of the largest oil companies in the world. they have been using mobile rigs, one in particular, to bully countries like vietnam and others on what they call the south china sea's. rishaad: singapore airlines debut dollar bonds rose on the first day of trade, signaling strong investor confidence in government support for the carrier. singapore airlines raising happy billion dollars from the offering as it looks to build cash buffers during the pandemic. the spread of 260 basis points to the primary market and
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attracting almost $3 billion. staying with aviation, a planned restructuring of air asia's long-haul service is getting the support of plain leasing companies. that as it looks to stay in the air after the pandemic. 15 of the 20 leases saying they do not want it to be liquidated. that is according to a document some of the airline. airbus, rolls-royce and bnp paribas among those supporting the rescue plan. there is a lot more -- haslinda: plenty more ahead including -- ♪
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rishaad: after multiple delays, scientist from the world health organization i've arrived in wuhan to look into the origins of covid-19. china has been facing widespread criticism for its lack of transparency about the outbreak. this is quite something. they have had to quarantine as well, haven't they? >> that is right. anybody observing this entire situation could feel the whole thing could become a movie in couple of years. getting the expert team into china has been dogged at every step. two of the experts tested negative on antibody tests so china does not allow them immediately to get in. what we know from the who is the
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rest of the team is in and have started their quarantine. these two remain in singapore taking more tests. i think it is not a flat rejection right now. it is important to note that while this is a requirement china has for all travelers, this is also a refuted requirement. not all countries require the antibody test on top of the normal test. it continues to be a challenge and we will have to see. haslinda: meantime, india is set to take -- to kick off its massive vaccination drive starting tomorrow. what you said, it is going to be challenging. -- like you said, it is going to be challenging. >> that is>> something that the entire region and india is looking at. the fact that health care infrastructure is inadequate. it will be challenges to face. india has the big advantage of having the world's biggest
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manufacturer located in india. they have produced so many doses they are already preparing to supply some of these doses to neighbors like afghanistan and bangladesh. we know brazil, south africa also looking for doses. they will not have the supply bottleneck that a lot of people are facing. the question now is, can they get the doses out to the population? rishaad: rachel chang leading bloomberg's health care coverage in asia. bank of korea news conference, i believe it has ended. the governors saying it is not the time to end lending facilities. he has been talking about the policy stance. they left interest rates on hold at half a percent earlier on. saying it'd -- saying it is not a time to be shifting that. concern that a lot of stock market investment has been based
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on leverage. also saying it is impossible to to at the moment whether or not there is a bubble in south korean stocks and the pace of the stock market gains, 8% plus so far this month. suggesting it is faster than it should be and also suggesting any small shock could undermine confidence and rattled those markets as well. that is what we have. also talking with a vaccine, saying the take-up has been better than anticipated. the governors speaking in seoul. haslinda: a sense that the governor is sending some shivers down the spines of investors in korea. the kospi down after earlier gains. investors mulling over the $1.9 trillion stimulus plan by biden. what it may mean for the economy, what it may mean in terms of taxes going forward. some stocks we are watching including xioami and cnooc,
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these companies deemed to have links with the chinese let terry. xiaomi down almost 10%. lenny more to come. keep it here with us -- play more to come. keep it here with ♪ us. this is bloomberg. ♪ -- keep it here with us. this is bloomberg. ♪
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haslinda: welcome to "bloomberg daybreak: asia." rishaad: here are the headlines. haslinda: joe biden proposes a
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package to bolster the economy. he admits it will be expensive. rishaad: a monumental task, india preparing the biggest vaccination program in the world. the rollout starts saturday, this after the deepest economic contraction on record. haslinda: asian markets swinging between gains and losses, the 1.9 trillion dollar plan, investors wondering what it means. this is the index moving ever so slightly, under pressure after the governor talked about markets and bubbles. rishaad: having the thailand market coming on board.
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we have that benchmark, but another as well. joe biden will be asking congress for $1.9 trillion. the package risking swift opposition over big-ticket spending, including aid to state and local governments. earlier, guests weighed in on the impact. >> this doesn't feel well targeted. some parts of the stimulus makes sense and might make the economy recover faster. >> i think it will be a sizable number because people feel like this is the last, big cares act issue. >> this is an opening bid. there will have to be some
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discussion to make the case for this package. haslinda: let's get perspective from our guest. good to have you with us. $1.9 trillion is bigger than most expected. the economy could get a lift, but there could be higher taxes. not great news. >> i think there is pressure in washington to get this stimulus package through with the democratic clean sweep we have experienced, it is likely to go through, so it will be good for the biden administration. the stimulus should be very effective. to be clear, donald trump was very much in favor of increasing stimulus for the american population.
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an additional $1400 is in line with what he recommended as well , so there is a strong likelihood we will see the stimulus get passed. how that gets paid back in the inflationary impact on the markets have yet to be seen, but in the near term, the stimulus will be welcome and continue to propel the growth story in markets last year and this year as well. haslinda: it will propel tech? >> our view is still bullish on tech. we know what happened last year with the stay-at-home stocks on a tear, the market reporting those businesses. we have a lot of conviction in
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the tech rally. we see that continue with korea and taiwan, for example. much of that trend continues. our view is there will be some shakeout. not every e-commerce player is a long-term winner. there are regulatory risks around the internet names in china. it will be trickier to navigate, but the trends long-term are robust. haslinda: what is the bond market telling us? yields are higher. is this an acknowledgment that growth is coming? >> that is our scenario. we were predicting bond yields would go up. that happened. the bond market was more cautious last year in terms of covid, vaccines, growth, etc.
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it seems to have taken into account a global growth acceleration, so it is in line with our base case scenario. we were not surprised with that. it is possible we will get 1.5% for treasuries, which is where we were last january. that is something we are looking at in terms of the level, so i think this was a long time coming and is not surprising to markets. rishaad: isn't it also telling us that people are expecting inflation to creep back in? >> absolutely. inflation has become top of mind, yet again. the real thing to watch is food price inflation and how that affects the bottom line with the consumer.
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we have been seeing inflation across the market. this is something we are watching carefully. those commodities have rallied pretty hard on the back of the reflation theme, global growth, acceleration. we don't see that 2% target anytime soon, but we are watching it. rishaad: overlaying, of course, the geopolitics, the relationship between beijing and washington on the most people have suggested there will be no change in terms of substance, merely style. would you go along with that? if so, it may suggest the things get worse between the two countries. >> i think it is fair to say that the relationship between the u.s. and china will remain similar to how it is today. the only consensus in washington
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is -- they want to be tough on china, regardless of who is in the white house, so the expectation is joe biden will continue to put pressure on china. that is what the american population wants and expects. however, the handling of relationships, bringing other countries in and negotiating practices being different, so we will see the tensions, maybe not escalate, but continue, but without as much volatility. it seems like everything is changing every day in terms of how to interpret rules around the npc, but we do expect there will be tension and different centers, especially with tech, ip, and china leading in asia, and the u.s. in the western part of the world.
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-- [indiscernible] rishaad: i think we just lost her. thank you. we can move along and look at first word news headlines. >> ok. the federal reserve tamping down talk of a reduction in its bond buying program, saying now is not the time. jerome powell says policymakers know they have to be careful about asset purchases, and one lesson from the financial crisis is they must be careful about exiting too early. there was a fear of repeating 2013. >> we will no longer raise interest rates just because, for example, if unemployment were to be well below our current estimates of unemployment, that
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would not be a reason to raise interest rates, unless we see trouble or other imbalances. >> u.s. jobless claims surged as covid depressed tiring. initially, it rose to almost one million, beginning january 9. a wide number of states are reporting increases. a survey expected little change, and the potential for momentum with a larger federal stimulus plan under joe biden. >> i am bullish about 2021, overall. that is dependent on covid. we have some hard months ahead of us. the second half will be robust growth, but we will take some time to fully dig out and get back to where we were prior to covid. >> the philippines president is telling his daughter to forget
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trying to succeed him, saying the job is not for women. he said she will not run in the election, despite the survey that she is the top pick to follow him. she chairs an alliance of political parties. most of the candidates she supports won. a new submarine launched ballistic missile as president trump leaves office. there was a military parade in pyongyang. there appears to be a new version of a submarine-launch missile capable of striking japan. iran fires cruise missiles as part of a drill near the gulf of oman. the missiles hit their targets. it took place among heightened tensions with the u.s. over iran's nuclear program and comes days after it says it will
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resume the production of fuel for some nuclear reactors. 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. this is bloomberg. rishaad: still to come, blacklisted, the trump administration making moves before joe biden takes office. we have more on that story on the way. ♪ haslinda: plus, gold has been one of the best-performing assets. it's all consumer demand fall to the lowest level. we have the outlook this hour. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back?
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rishaad: let's get to the market action. at the moment, 13 minutes of trading in bangkok. 0.4% up. the baht regaining strength. we have for in inflows coming in , supporting markets. looking at the nifty. half an hour from the start in mumbai. at the moment, indications it will be coming off records in india, down 33 points on that futures contract. we will see how that translates into the open. the rupee little change. it has been a time for india where we have seen the rbi not doing anything with policy, saying recent measures is a step towards tightening, as it were. haslinda: the stock market, what
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a rally. in asia, the broader markets, gains, losses, the index currently flat. investors digesting the $1.9 trillion relief plan. south korea under pressure, down 1.2%, after governor lee talked about markets. the kospi went higher before that. the hang seng currently up 0.4%. we are looking xiaomi and cnooc, included in the u.s. blacklist. xiaomi plunging 8%. rishaad: the u.s. is blacklisting cnooc. it is said to be a last ditch effort against beijing by the trump administration. a dramatic plunge in hong kong today.
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joining us for details is stephen engle and our oil and gas analyst. what is the stated reason why they have come to this decision? what does it mean for both of these companies, i suppose? >> we will unpack it, then unpack the impact. the commerce secretary wilbur ross out with this addition to the entities list, adding cnooc, china's largest offshore drilling, upstream. it is not the biggest oil company. that is sinopec petro china. the big player in the drilling in the south china sea as well, that is what wilbur ross highlighted, saying cnooc allegedly is complicit with the ambitions of the chinese military, the pla, in its desire
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to expand and drill in the south china sea, as well as what he says is bully its neighbors, who are joint claimants to those waters in the oil fields of the south china sea, so adding cnooc to the entities list, this is essentially a commerce department blacklisting, it prohibits that company from accessing u.s. technology without permissions. haslinda: we know that inclusion is surprising. how does it impact the company? >> the impact can be twofold. first, operations. second, share price performance. for now, the u.s. comments department only restricts the group and access to technologies without permission, but that may also affect the parent company more than the group company, as
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it is more of an energy conglomerate and has different business exposure, but the impact for the listed company would be limited, and most services and equipment are domestically produced by affiliate companies within the cnooc group. meanwhile, cnooc's operation, for example, oil and gas sales, other activities, and its jvs with oil majors, for now, the impact on the company and operations will be limited. second, share price performance, cnooc limited has dual listings in hong kong and new york. it's nyse is only a small part of capitalization, so it should not affect share price much, however, the investment ban, quite a number of
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passive investment funds, all different kinds of etf's, to consider removing cnooc from the index, that would create a sizable outflow for the shares. in msci china, it is about 52 bps, to multiple days of trading volume. the impact could be more in ends. rishaad: it does seem we have a trump administration going out with the bank rather than a whimper -- bang rather than a whimper. >> yes. on cnooc, i'm looking at the
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list of the treasury departments blacklist, and cnooc is on that, too. that would also apply, but not for 365 days after the addition to the list, so also sources telling bloomberg news on cnooc that this ban from the commerce department would not necessarily apply to the oil market, as well as other areas, like the jvs mentioned that would not impact that. xiaomi is the one with the direct impact on the stock market. yesterday, the blacklist, the story was it would not be applied to alibaba and tencent. perhaps the treasury department has convinced him not to add that, but the defense department has added xiaomi, the big mobile
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phone maker in china to the defense blacklist, which ultimately could lead to, or will lead, if it is not reversed, would lead to an investment band for americans who would have to the fast there shares a year from now, as well as -- have to divest there shares a year from now. also, there would have to be a sale to boeing and airbus. it could be unwound after the biden administration takes over. haslinda: that is the big question. stephen engle, thank you. well, we are in the middle of the trading day in singapore. currently up 0.3%, the third day of gains. up next, time for and look at some of the top recommendations
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across markets. plenty more ahead. this is bloomberg. ♪ ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.
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haslinda: a quick check of the business flash headlines. surging 9%, the most for two years, after full-year profit the top estimates. full-year operating profit jumped $1 billion, 80% above forecast. they cite a recovering demand for cameras and printers, saying it still remains a challenge. the main chinese rival to a video sharing site is said to have one approval for an ipo in hong kong that could raise $5 billion. demand for a share sale next week, hoping for a valuation of
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$50 billion. it made its name in rural china before expanding to larger audiences. rishaad: let's get straight to sophie kamaruddin. what are you watching? sophie: deutsche bank rising their price target, noting customers may need to commit early due to capacity. flipping the page, and investment anticipating the porsche, with intel expected to remain customers, so maintaining the price coal. the cash dividend is supposed to be supportive for the price well. haslinda: which stocks are you watching?
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sophie: i'm looking at those that bode well for other things. there is seeing upside for japanese production equipment maker's, with the market expected to grow -- makers, with the market expected to grow. they have boosted price targets due to demand. it was highlighted in their thursday update. rishaad: thank you. let's get straight to markets. this time, quite a lot of news. we are on the downside. we have the central bank, the pboc, training cash from the financial system, interbank borrowing costs at all-time lows , first withdrawals since july, also new numbers, 3.7 percent
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increase from a year ago in december, and xiaomi and cnooc under pressure, as the pentagon blacklist those entities. a lot more on the way. this is bloomberg. ♪
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haslinda: we are counting down to the india open. higher and higher they go. another record for the sensex. not yet at 50,000. investor sentiment boosted by hope of the economy. earnings turning around. questioning of gains have gone too far, too fast. many more corrections around -- along the way. we are keeping tabs on hcl technology. four rupees per share. revenues of two to 3%. crossing the 10 billion
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milestone. the virus front and center. india will start one of the largest vaccinations. people from -- it is planning to offer 20 million doses of the vaccine to its neighbors. nepal, bangladesh, afghanistan and mauritius. the india open coming up in about 14 minutes. rishaad: governments administrations across the asia-pacific from japan to hong kong. the caution coming in contrast with the rush to immunize in many western nations. the asia reporter joins us. tell us about the dissidents in this part of the world or righteous caution. >> asian officials here are
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basically saying they do not need to rush to inoculate their populations at the same pace as their western counterparts because they are not seeing the type of raging daily caseloads and thousands of deaths each day that have justified the emergency approvals and expedited processes that western nations like the u.k. or u.s. have taken to start rolling out these vaccination programs. haslinda: what could be the implications of the move? >> there is a real risk a lot of the populations across the asia-pacific will get a little bit anxious, maybe angry. a lot of people here have been dealing with social distancing restrictions, all sorts of restrictions on business in daily life for much longer than countries have in the west. there is a sense of frustration and virus fatigue across large
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parts of asia. the officials are saying this is not necessarily a case where as soon as we begin vaccinating we can start lifting these restrictions. they are saying these two things are not immediately correlated. just because we wait a few more weeks does not mean we are not taking the virus seriously. there is still a risk especially places in hong kong that dealt with protests and have been in recession for quite a long time, people or businesses, people who have kids out of school are going to get angry. rishaad: there are also some concerns among people and populations at large these pharmaceutical companies have been granted legal immunity in rushed negotiation's. how does that figure in? >> that was what south korea's health minister told us as part of our reporting. it is a real concern.
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a lot of places like the u.k. were doing rolling reviews of the virus data. vaccine data as it came through. these emergency approvals for these vaccines are unprecedented, the scale of the virus and vaccination program is unprecedented and the technologies are new. so there is a lot of concern among asian officials. they say that concern is echoed more broadly in a lot of these populations, places like south korea and japan. there is hesitation about vaccinations more broadly. the research has borne that out. a lot of people here are nervous about pushing through with a rushed rollout, botching some part of it. like you have seen in certain western countries and actually alienating some people from taking the virus -- the vaccine. meaning you may not be able to get the 80% threshold of herd
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immunity where you will see thanksgiving back to normal. they do not want to rush it, mess it up and not get the final 15, 20%. haslinda: the issue is public confidence. how do you boost that? we have already seen the likes of leaders taking the first shot. what else is needed to boost that competence? >> exactly. in particular, with a lot of developing nations using the chinese vaccine, there has been some worry if they are only offered the sinovac vaccine as opposed to western ones that have higher efficacy rights, there is some concern about that. the research -- there was a study that came out recently about hong kong. it said the biggest thing governments can do is put out the messaging themselves.
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not relying on common sense or doctors and positions to come out and say it. it is the governments themselves they need to be saying it. that is the thing that is being proven to increase confidence in vaccine. that is what experts are recommending governments do. nature people understand these things are safe and it makes sense to get vaccinated. haslinda: let's get the first word headlines with karina mitchell in new york. karina: we will stay on the vaccine and the virus. the world health organization's mission to trace the origin of the pandemic has seen a rocky start with two members of its team denied entry to china. they were prevented from boarding a flight after testing positive for covid-19 antibodies during transit in singapore. those who have arrived spend two weeks in quarantine. more than halve of japan is
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under a virus state of emergency with infection spreading across the country. measures include telling bars and restaurants to close at 8:00 p.m. it will last until at least february 7. three emergency includes osaka and -- the emergency includes osaka and covers 50% of the economy. jode biden will ask congress to back a new virus relief package for the u.s. economy, the first of a two part strategy that includes longer-term goals such as infrastructure and climate change. the initial program is worth $1.9 trillion and will be a test of relations with a split senate. he insist america cannot afford not to act. >> the crisis of deep human suffering is in plain sight. there is no time to waste. we have to act and we have to act now. karina: one day after the house
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impeach president trump a second time, there is still little idea of when his trail will happen or what form it might take. speaker nancy pelosi has yet to reveal when she will send the article to the senate and the mitch mcconnell and chuck schumer have not said how they will handle the case. pelosi faces questioning about her plan later friday. jeff reseau says he is planning to fly -- jeff bezos says he has planning to fly passengers as early as april after another successful test mission. the rocket took off from texas. this time carrying a life-size mannequin to the edge of space. the dummy will one day be replaced by space tourists at a cost of $200,000 per seat. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. haslinda: taking a look at the
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markets, asia in limbo. swinging within gains and losses. investors taking into account the stimulus pan from -- to most plan from biden. futures pointing to a lower open. perhaps way down by prospects by higher taxes. canon rising as much as 8.9% after preliminary profit beat estimates. japanese stocks were at record highs in dollar terms. look at where we are in terms of commodities. they are flat. commodities showing all signs of a structural bull market. a weak dollar. taking a look at where crude is right now. holding near a 10 month high. rishaad: coming up, the council
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tipping india's economic recovery to boost demand for the precious metals. the managing director joins us next right here on bloomberg. ♪
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rishaad: you are back with bloomberg markets. gold demand in india suffering because of pandemic related disruptions. the world gold council says india's economic recovery will boost demand. the country is one of the largest markets in the world for gold. it has a central role. joining us is the world gold council pr. thank you for joining us. give us an idea of where demand is and is likely to go. >> demand was very low for the first three quarters. the fourth quarter, data will come out in the next few days. we saw demand dropped to one of its lowest ever. that was due to the lockdown. we also saw that the high prices put off the customers because they were looking for an entry point and that was not provided in 2020. quarter four was a slightly
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different scenario. people started coming out of their homes. what we hear is the quarter was much better than quarter three. however, the whole year 2020 will go down as one of the lowest. rishaad: gold demand in india has been gradually declining imperceptibly at times even, but it has been on a downward trajectory. is gold losing its allure in india? >> you're absolutely right. gold has been losing ground the last couple of years, particularly since demonetization. the allure of gold has not gone away. what is happening is the transition to a more transparent system of buying gold. that does take its time. india's per capita consumption of gold is still very low. we had done an analysis years
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ago that showed as prosperity increases, people buy more gold. if you keep that in mind, you will see gold demand coming back. what is happening today is there are various initiatives taken by the government on transparency measures, which have affected the buying behaviors. we saw demand dropped. 2019 was also one of our lowest years. we had seen normally about 850 tons of demand. all of this happened because the government started insisting on -- lots of measures have been taken, which affected the buying behavior. but they are coming back. old has not lost a lower. -- gold has not lost allure. haslinda: tell me, -- rishaad: tell me, with the rise of cryptocurrencies, as that in into demand for precious metal
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you come >> as far as -- or metal? >> as far as india is concerned, it is not a fate gold demand. you have to also see gold is very culturally relevant for many occasions from birth to death. i doubt if bitcoin as far as we are concerned will be a big threat to gold in india. it is more a speculative investment, whereas we have gold as a physical asset and a commodity. you also get loans against gold. many things are attached to gold, which cannot be taken away. haslinda: you talk about the allure staying and demand will come back. what will drive the demand? how soon will the demand return?
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what does it mean for gold prices? >> let me put it this way. i will give you a data point. 2009, soon after the crisis, we saw demand dropped to one of its lowest. 641 tons, because people were fearful. lots of things happen. goal salt one of its lowest years. -- goebel to stall one of its lowest years. he saw how the demand came back with 815, 910. then it touched 1000 tons as well. this is what happened to gold demand in india because structurally there is nothing that has changed. family still want gold. weddings are defined by how much gold you have not of those have changed. the other important thing is gold is still not viewed as an asset you can get through the banking system. that makes it far more alluring
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for the people. it is not just a currency. it is more about an off bank asset. all of these factors, none of them have changed. we still have controls about tanks not dealing in gold, which makes it a lot more attractive to people who do not use the banking system. in terms of policy, in terms of culture, nothing has changed. prices have gone up. people have stopped buying the quantities they used to buy because there is a question of affordability. there are these measures, the tax number, all that being insisted at a limit. all of those have definitely affected gold demand. rishaad: tell me, jewelry of course is the mainstay of gold demand in essence, but jewelry for the younger person in india is not quite as attractive as it
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used to be. how does the industry tackle that with millenials looking at gold in completely different light or jewelry i should say in a complete different light? >> what is happening today is the market is moving toward organized players. there are big players in the market who have actually understood this trend. they are coming out with their own ways of innovation. different ways of marketing. these initiatives have just started. weddings still drive gold demand. jewelry demand comes from weddings. the big players have caught on to this trend that if millions have to be attracted, it has to be different locations and a different way of approaching them. you will see the impact in the next few years, but you are absolutely right. millenials have an aversion to this heavy jewelry. we could say if industry does
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not react, we will lose them. haslinda: what is the risk for the gold market in india? there is still uncertainty about the virus and the vaccine. >> what is the question, surya -- question, sorry? haslinda: what is the risk to demand for gold in india? >> as i said, 2020 has been a washout practically. weddings have gotten rescheduled. quite a lot of social functions have not happened. they are going to come back. as we see people coming out and as the vaccines are rolled out, as we speak, the vaccines have started getting road up. you will see this demand comes back. the social functions, the weddings take place.
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2021, you will see a big spurt in demand. it has few factors which one cannot estimate now. haslinda: world gold council india. being really optimistic about recovery for gold demand in india. let's do a quick check of the indian markets. across asia, pretty mixed. investors taking into account the stimulus package from biden. $1.9 trillion worth. the sensex in positive territory. the level we are looking at is -- up next, why wall street is fuming at an 11th hour rule.
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keep it here with us. this is bloomberg. ♪
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rishaad: back with bloomberg markets as we have a look at the latest headlines. singapore airlines debut dollar bonds rose in their first day of trading.
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sia i a raising half $1 billion from the offerings as it looks to build cash buffers during the pandemic. a spread of 260 basis points at attracted almost three billion dollars worth of orders. they planned restructuring of air asia x is gaining the support of plain leasing companies as it looks to stay in the air after the pandemic. 15 of the 20 leases say they do not want air asia to be liquidated. that is coming from a court document summative by the airline itself. airbus and bnp paribas among those supporting the rescue plan. haslinda: banks are in the spotlight in these final days of the trumpet administration. jp morgan will kick off our earnings season in wall street's friday session. in move that was not expected, imposing a last-minute rule. su keenan shows -- su keenan
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joins us. wall street not happy about this. su: that is an understatement. just as the big banks are set to will out the earnings, the biggest wall street -- against watchdog in the trump white house infuriates the banks. the occ chip is enforcing the bank to lend gun makers, oil drillers and other controversial industries that might normally refuse. some firms are considering lawsuits and the head of a bank industry trade association is pushing back, saying the overall lags logic and legal basics. it ignores facts about how banking works and it will undermine the safety and soundness of banks. he goes on to say it is unlikely to withstand scrutiny. we should point out in the final days of trump presidency, we are seeing a multitude of agencies reportedly jam through new rules before president-elect biden takes over. it is unusual for the occ, which
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is normally seen as industry friendly, to be outraging banks in this manner. rishaad: all of this is ahead of the earnings season for the banks as well. we have seen stocks on a bit of a tear up. lots of optimism surrounding the figures appeared walk us through some of the expectations. su: let's jump quickly into the bloomberg because banks have already been on a tear. there is a view that perhaps the bank earnings, which are expected to be strong, are already priced in. then you have the so-called reflation trade. that has a lot to do with the so-called biden spending plan we heard about. a bank analyst says the spending, the fed had the vaccine progress are three factors that are going to put things in good shape. let's listen.
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>> the reflation trade is back on. more spending, higher interest rates. you certainly see that with president-elect biden's plans that have come out. anyone of these would be a game changer, to have all three in three months is -- i would say the odds of seven like that happening are one in 500. this is better news for u.s. banks and their ability to support the u.s. economy. su: as jp morgan kicks things off, trading will be in focus. back to you. haslinda: su keenan in new york. we will have more coverage of the bank earnings in the coming days. here are the key events we are watching next week. on monday, china releases fourth-quarter gdp and other economic indicators, which are expected to reflect a sustained recovery. joe biden's treasury picked,
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janet yellen, faces the senate finance committee on tuesday and the next day, biden officially becomes the 46th u.s. president. on friday, we will get rate decisions from the european and japanese central bank. rishaad: coming up later on today, we are going to be speaking with the chairman and president of top italian football club ac milan. do not miss that interview. markets showing a mixed performance. hang seng index at the moment moving marginally to the upside. looking into some weakness for the tokyo stocks as well. against this backdrop of joe biden unveiling the $1.9 trillion relief package. no surprise but ultimately it is better to travel than arrive. we travel to the upside. we have the selloff taking place on the news.
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the nikkei down half of 1%. heading to the hang seng break for lunch. hong kong shares up about 16 points. 28,513. best of daybreak middle east is next. ♪
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emily: i'm emily chang in san francisco and this is bloomberg technology. president-elect biden is said to propose a $1.9 trillion stimulus plan. we will have all the details. plus, the right decision for twitter. ceo jack dorsey defends the social network's


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