tv Bloomberg Markets Asia Bloomberg January 19, 2021 9:00pm-11:00pm EST
plan as she says it is time to act big. she also rules out a weak dollar. haslinda: netflix says it no longer needs to borrow money to expand. rishaad: this is what it looks like. some gains in hong kong once more. seeing those gains, 6/10 of 1% to the upside. asx in australia higher as well. nikkei under a bit of pressure. a lot of this is down to what janet yellen is saying, delivering the biden administration's opening argument to lawmakers on his relief proposal to covid-19. around $1.9 trillion in the offering. let's look at these other asset classes. this is the look for the dollar.
dollar remains on the downside. 10 year yields again, the possibility of 50 year treasuries wedding the appetite of wall street investors -- whetting the appetite of wall street investors. if we do get the stimulus, it means people would return to work early, which means they would start using gasoline earlier as well. a downside for bitcoin. no particular reason for that one. let's kick it out to what else is going on. haslinda: four years of trump coming to an end. the trump admin attrition fired a parting shot -- administration fired a parting shot at beijing. six terry of state mike pompeo denouncing china's crackdown on uighurs as genocide, escalating tensions ahead of joe biden's inauguration. bruce, now outgoing secretary of state pompeo says china is engaging in genocide, what does biden's team do?
bruce: we know biden's team supports this idea. in a statement in august, the vice -- [indiscernible] genocide, he used that word and said biden stands against it in the stockist terms. in his confirmation hearing, the pick for six terry of state said h -- secretary of state said he agrees china's -- said he agrees china's crackdown of uighurs is genocide. there may not be as much difference as one might think between the two administrations. rishaad: is there anything we
learned about china policy from janet yellen's testimony? it does seem there were -- does seem there were hints it could be a continuation of what donald trump has been doing. >> it is unlikely we will hear any big changes based on janet yellen's testimony. she told senators we have to take on china's abusive practices, her words, and said the u.s. is prepared to use the full array of tools to address china's actions, including intellectual property violations, other things. she did say the u.s. would seek to work with the country's allies rather than proceed unilaterally. that would be a big change from the trump administration's approach to go it alone when it comes to china. haslinda: any news of pardons
from trump? we are hearing no self-pardon this time around. bruce: we are on pardon watch right now. the clock is ticking. the president has until 12:00 noon on wednesday to exercise his power to pardon. we have heard he is not planning to pardon himself or pardon members of his family or other close aides, but there is still time. with president trump, as we've learned, he can often do things people advise him not to do. it is still possible he will pardon himself. we will see in the next few hours. rishaad: bruce einhorn having a look at the last day of donald trump's presidency. don't miss our special coverage
of joe biden's inauguration. david westin will have an extended "balance of power." watch that on bloomberg television, radio and, quick. -- radio, and quicktake. let's get the first word news with karina mitchell in new york. karina: as president trump's time in the white house comes to a close, he is wishing the next administration luck while his legal team blocks attempts to access his tax returns. washington under strict security following the assault on the capitol two weeks ago. the top republican puts the blame squarely at trump's door. sen. mcconnell: last time the senate convened, we just reclaimed the capitol from violent criminals who tried to stop congress from doing our duty. the mob was fed lies. they were provoked by the president and other powerful people.
karina: treasury secretary nominee janet yellen met republican resistance to joe biden's coronavirus relief plan. she says now is the time to act big on support for the economy. her opponents, however, are wary of the $1.9 trillion cost, saying now is not the time for a laundry list of reforms. yellen saying she will not pursue an artificially weak dollar. the european central bank controlling government borrowing costs. the bank is buying bonds to limit the difference between yields for the strongest and weakest euro zone economies, with one source telling us policy have specific ideas. an official ecb spokesperson declined to comment. meanwhile, global coronavirus cases are now approaching 100 million, deaths already above 2 million. the u.s. accounts for 400,000 of
those fatalities, the worst single nation tally in the world. germany agreed to tigten -- tighten its covid measures. hong kong is to extend social distancing and expand mandatory virus testing. china is ramping up defenses against the coronavirus amid new infections, ramping up the construction of a new quarantine center in hubei province. it is expected to admit its first occupant wednesday. construction began only a week after a jump in covid cases in hebei. global news 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. haslinda: still ahead on "bloomberg markets: asia," district capital's michael allen on a hong kong family office. we discuss his top strategies
and the data analytics. that is ahead later this hour. rishaad: but next, the world has changed. renminbi --macquarie's viktor shvets joins our discussion. this is bloomberg. ♪ - [announcer] imagine having fuller, thicker, more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. they're personalized to match your own natural hair color and texture, so they'll blend right in for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music)
>> over the next few months, we are going to need more aid. we could not posted this relief package without an appreciation for the country's debt burden. right now, with interest rates at historic lows, the smartest thing we can do is act big. in the long run, i believe the benefits will far outweigh the costs. rishaad: joining us for analysis is viktor shvets at macquarie commodities and global markets. always a pleasure to have you on the program. if stimulus is not the word, it is a relief package. will it do the job? will it have unintended consequences? how does it bear with zero, if not negative interest rates?
viktor: everything has negative consequent is, no matter -- negative consequences, no matter what you do. i tend to agree with janet yellen, now is not the time to be terribly concerned about the debt level. interestingly enough, it is the same janet yellen that was recommending balanced budgets not long ago. i had noticed she highlighted the debt problem. the reality is the debt problem will never go away. bad debt will never get meaningfully repaid anywhere globally and interest rates will never go up. in that context, should the government be permanently more proactive, rather than just an emergency measure like covid? i don't think we are ready to say the government is permanently now managing the economy, managing the business
cycle and capital markets cycle. let's give it another one or two dislocations down the track. right now we are still in the halfway house. we are trying to do a temporary stop without clarifying what does it mean. rishaad: interest rates can certainly stay lower, but there is something people are talking more about. there is more background noise about the possibility of inflation coming back. of course, the chances are quite small, but this is something we could see in 2021. viktor: yes. in 2021, purely mathematically, the chances are inflation, at least for g5 nations, will be around 3%, 4%, compared to less
than 1% today. that will be in the second half of 2021. the question is what will happen in 2022 and 2023. my view is that inflation will come off quite quickly as we progress through 2022, back to what is around 2%. so i'm not awfully concerned inflation will stay at a permanently elevated level. the reason for that is very simple. we have far too much d inflation in the system. -- de-inflation in the system. whatever the government does reduces the amount of inflation in the system. that could be a sticking point if i am incorrect and inflation accelerates substantially more and stays at a high level, then central banks will be in a tight spot. haslinda: broad dollar weakness. we heard from yellen saying she
is not after dollar strength -- dollar weakness either. this is positive for commodities. they seem to be factoring in perfection. viktor: yes. you can divide in different markets. clearly precious metals have different characteristics to, say, energy or industrial metals. i do agree. a lot of commodities are assuming a rapid recovery in economies and u.s. dollar generally staying at a low level. from that perspective, it is correct. you have to highlight we are rapidly moving into a not just digital economy, but also a more efficient economy as we go forward. a number of commodities will be needed to make that transition from an industrial age to information age. those commodities could go much
higher. that is what facilitates a move from just making better information flow to reporting automation, artificial intelligence and the rest. there will be some parts of the commodities cycle i think will stay on as we need to rebuild our underlying infrastructure. haslinda: weaker dollar supportive of copper and iron dips perhaps? viktor: yes. certain parts of commodities are really toxic and i don't think they will come back in any meaningful way. you are looking at things like coal. the basic core of energy has a limitation. but new energy, new resources, your cobalt, your lithium -- there will be a variety of commodities. commodity experts will be recommending over the
longer-term. haslinda: people talk about a cycle for commodities. what could stop this uptrend? viktor: if we do not agree the government is the primary driver. the question i am wrestling with, are we seeing the beginning of this new liberal era? or are we so polarized no one will agree on a permanent solution? it is a bit like hotel california. none of us can really check out anymore, but a lot of us don't want to stay in. you really can't agree on the policy prescriptions unless there is a societal consensus. in most countries, that societal consensus doesn't exist. what can derail a commodity
super cycle is what we see from the government and fiscal policies are temporary reactions to covid, and as soon as economy start to recover, the government will pull back on spending and investment and go back to more disinflationary requirements, similar to the last 10 to 15 years. rishaad: i want to have a look at the fourth quarter earnings season, suggesting growth trends are improving. how much of that is down to basic company earnings results? how much of it is down to the ability to have big share buybacks? viktor: in the case of japan, we don't do a great deal of share buybacks. that mostly applies to the united states. a lot of share buybacks were much more restrictive over the last 12 months than previously.
what we are seeing is revenues stop declining and operational leverage starting to come back. another thing you are seeing is the backward looking indicators. they have slow down grading on the way down, slow upgrading on the way up. what we have seen, at least in the asia-pacific, either the earnings really drop in august of 2020, after that there is a trend toward improvement. that improvement will carry into at least the first half of 2021. the question is, beyond, that, whether those expectations are too high, and i think they are. as you look at the fourth quarter and first quarter of
2021, i think trends are encouraging all across. rishaad: what are you looking at in terms of strategy? we've got the growth side of things. health care a crowded trade. online education, that sort of thing. that has been the big theme. are you looking at those still in pockets or are you moving elsewhere? viktor: i think value in cyclicality will continue to have regular runs as we progress for the first half of 2021. kind back to the issues of the role of the government and the role of fiscal and monetary policies, i think fiscal policy will become more contractionary toward the end of 2021 and the first half of 2022, which means most investors investing in cyclicality value will be reducing the multiples as
cyclical earnings are going on. value will have intermittent rallies in the first half of the year. we could have another 500 basis points of performance of value against growth. as we get toward the end of 2021, quality growth fanatics are going -- thematics are going to come back quite powerfully. if we have governments stepping in permanently and permanent cycles, a much stronger duration, then investors would not have cut multiples. value rallies would have been much stronger as we progressed through 2021. over the longer-term, if you start looking beyond 12, 18 months, anything to do with the new world -- robotics, automation, artificial intelligence, human genome, enhancement of humans --
anything to do with the brand new world is going to become much more important. new forms of energy. it is not just going to be social media, not just the manipulation of digits. that is what happened the last 15 years. it will be something else. the objective for investors would be to find those stocks. jeep is becoming popular for that reason as well. haslinda: viktor, thank you for your insight. viktor shvets of macquarie commodities and global markets head of asian strategy. plenty more to come. 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.
in china with its first locally built battery-powered suv. the car costs about $31,000, almost half a tesla model and is available for subsidies. vw says it can travel 400 kilometers, with a more expensive version having greater capacity. new energy vehicle sales in china rose 10% last year, topping one million units. microsoft is joining a $2 billion investment round in a self-driving project. microsoft will bring cloud and edge computing to the venture and take the post investment valuation to $30 billion. the original partner honda and other investors are also participating. cruise hoped to launch last year, but the date was pushed back. hong kong's government-backed subway operator will suffer an annual loss. the company says it expects a
four year shortfall of more than 600 million u.s. due to what it calls the impact of the coronavirus on city travel. it also cites revaluation losses in its company portfolio and a charge in real projects. rishaad: a bit of a mixed bag. the hang seng at the moment so-so close to the 30,000. 29,975. record southbound flows coming from mainland china to the hong kong markets. csi 3 3 -- csi 300 on a roll. nikkei 225, a bit of weakness. this due to yen strength. let's quickly check in with movers. this is a look at some the companies making waves.
haslinda: it's 10: 20 9 a.m. in hong kong and shanghai. karina: the biden administration is said to be consideration to help airlines. a trade group suggests this commission should include government, carriers, travel operations and labor unions. airlines worldwide are losing billions as the virus decimates travel demands. carriers need government handouts to stay afloat. indonesia is widening the search for the crash of a giant air jet
after recovering wreckage and human remains in the java sea. the flight data recorders have been retrieved with the operation extended until thursday. the jet was a boeing 737 500 which had been out of service for nine months last year because of cutbacks associated with the virus pandemic. fringe messaging site parler has reappeared with the help of a russian service as it seeks to overcome internet bands that took it online. the ceo says the return was inevitable despite the service being dropped from the apple app store and losing its amazon privileges. now using dd os that is russian owned and registered in scotland. italy's most active volcano has burst back into life with a spectacular show. take a look. etna is the largest of italy's three volcanoes and attracts
tourists. the other volcanoes are stromboli and vesuvius, which last erupted in 1944. seismologists say there is little threat to people in the area. global news 24 hours per day, on-air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. haslinda: asian markets are mostly higher, adding to the gains yesterday. the reflation trade, investors by -- betting the biden government will push for growth. there is resistance to a stimulus package. hong kong inching closer to 30,000, a level last seen in 2019. that is thanks to chinese funds going on a buying spree in hong kong. the hang seng at 2900 -- 29,940.
no change expected, rates to stay at 1.75% given higher oil prices in the chinese rebound but the economic outlook is worse since the last meeting in november. some of the stocks we are tracking, ever-growing closed 16% higher in hong kong yesterday, it's best start since 2012. another company raised from neutral with a target point of $450 hong kong dollars. a chinese bank up, predicting a 60% upside potential for stocks listed in hong kong. china margins up 0.7%. let's stay with markets. the president-elect, joe biden, says he will petition to rejoin the paris climate accord on his
first day in office with green investments being a key policy. president trump and did u.s. participation -- ended u.s. person for patient -- participation in november. esg investing landscape, let's talk to michael au, a marketing director. good to have you with us. we saw trillions of dollars pumped into esg funds last year, trillions more to come. is there a sense that esg has become mainstream? michael: yes, i think the stable impact investing is mainstreaming. we have overcome doubts from investors about sacrificing returns and such, but i think in the previous year we really saw outperforming. haslinda: taking a look at the
next 12 months, what is the hottest esg investment for 2021? michael: what we are seeing, our firm spent time looking at esg data technology, sustainable food and green energy. very excited about the incoming biden administration, counting down the hours and china's commitment to emissions. these are huge catalysts for the greenhouse gas reduction and green energy space. haslinda: you talked about interest among family offices. is this driven by the fact that family offices are now, they are looked after by the younger generation, which seems to be more concerned about esg? michael: absolutely. we are set up around four years ago in response to family wishes driven by the next generation of owners.
they want to test values and find ways of matching our wealth and it is a risk we are taking where ignoring the exploitative investment strategies that we put in our portfolios. rishaad: i want, you have a couple companies you highlighted that you made investments in. one of them produces something called incredo-sugar. tell us about this. and one renewable energy startup . michael: certainly. incredo-sugar is created by an israeli startup which we met with in early 2019. their technology enhances the sweetness of sugar by 50%. we are proud of their work. they are launching the product in north america in the next few months. as a family with a history of
diabetes, we believe the way to manage our addiction to sugar especially among kids is by keeping the great taste while using less of it. h2pro is a startup that can generate hydrogen fuel in an efficient and cost-effective manner, light years away from competitors. it might make it practical for general public use in the next 10 years. we were introduced to the company by our partners and invested into a seed round at the end of 2019. they have been hitting milestones at a rapid pace and have added strategic investors from the energy space into their cap table. we see they will make hydrogen feasible for public transportation use in the next 5-10 years. rishaad: that is the holy grail, turn -- to produce hydrogen with
no environmental damage and to be able to split water into hydrogen and pure oxygen. that is what everybody has been trying to do. it is almost a form of alchemy. michael: it might seem that way but there is a lot of tech involved and we are proud to be backing this team. rishaad: also, just looking at what is going on in hong kong, you are looking to tap into these green, social impact green bonds. do you think currently the authorities here are doing enough to promote esg? michael: absolutely. i think a couple things, social impact bonds is a performance compensation program for social problems and green bonds have sustainability implications. our city has been stepping up the pace.
regulators have been very receptive and are actively working to lift our standard towards the top of global standards, so i think we might be slightly behind, right now we are playing catch-up but we will get there soon. haslinda: what needs to happen then? what would you like to see in terms of regulations? michael: i think increasing the pressure on green disclosures, and having certain standards for citation, will be critical in terms of rolling it out across hong kong, for example. i think a lot of corporate's have a lot of difficulty understanding what is expected of them, even on the board and operational level. so a clear plath -- path on disclosures and what to expect would be important. but i think as a city we need to
look into growing competency in the sustainable finance base by nurturing talent. as a global services hub i think we are well-positioned to do that. haslinda: there is also the issue of greenwashing. what needs to happen for that to be addressed? michael: i think that is part of the challenge of being an impact investor in this day. it is a hot topic. it is a boom that everybody is trying to take advantage of. but it is a layer of diligence you have to conduct when you are meeting with managers or companies to ensure that they are true in terms of their long-term mission alignments. that is additional work but we do see that as part of our alpha when it comes to investments. rishaad: michael, out of the
esg, which let her is the most important for you? michael: for us, the environment. without, we don't have a plan b so without that it would be difficult for the company to run in a sustainable way and that is where we are deploying our capital, into environmental efforts. i think the s and g can't be neglected. it is a balance. rishaad: a pleasure having you on the program. michael au, district capital managing director. former ibm boss speaking to bloomberg about her career including her focus on diversity and the empowerment of women. you are with bloomberg. ♪
who, to get us off food stamps, found her way to get back to an associates degree so she could get a job and we could go to school. i have had a scholarship from general motors through northwestern university. i first did work there. for that. -- before that. then i went to ibm. i love what mary does, she is passionate about cars. i wanted to apply technology to a lot of things. i went to ibm and the first day, of course i didn't have a blue suit. i hadn't had one. i'm not sure i had any suits. this was back in time, right? this is 1981. i had a blue suit, i came home from work, took my jacket off, put it on the couch and my husband said, do you realize the price tags are still on your suit? that is how i remember my first day. how gracious, there wasn't a single person who said anything. >> how influential was your mom?
>> she said nobody defines your future. we watched and learned by looking at what she did. >> when you took the job in 2011, the new york times wrote this piece about your husband and how he was your support system. as a husband should be. and it had an impact on me because we often think support systems should be ended -- should be invisible but then we don't learn how people do it. i would love to learn how that partnership evolved. >> i just had my 40th wedding anniversary. what i say about mark, he is my biggest fan and i have been really blessed and lucky to have someone like that by my side who took as much pride, and tried to learn as much about ibm, and i feel like he was ibm's ambassador and took interest in my clients. it was a partnership and clearly i did nothing but work so i have
such great empathy for women who have children and these others up a spot -- these other responsibilities. i worked and mark took care of everything else. i was lucky. >> i'm sure you are selling yourself short and he is lucky to have you, as well. you said you never thought about yourself as being a woman ceo but that is how others have often thought of you. did you find that frustrating over the years or unfair in any way? >> that is an interesting question from two perspectives. i have often felt when i first became ceo i didn't want to be labeled that. i wanted to be recognized for what i could accomplish. many women feel that way. many people feel that way. but i will tell you a different side of that story, that as time went on, i did begin to realize this obligation to be a role model. you could see so many people that would react to not just what i did or what i said, but that it was, you are a role
model for their children, themselves, and the idea that you cannot be what you cannot see. i began to internalize that and felt it was an obligation. i changed my view about that. you saw me become more vocal about that and more involved in things because i realized, whether it is a woman nor any group, people have to have role models to see what is possible. that is an obligation in a positive way. i have said to other women, get ready because everything you do is magnified and personalized. i can't tell you that is there but that is what happens. power through and do what it is you think must be done. >> what is your advice to young women out there who want to be you, who want to be leaders? >> the one piece of advice i am best known for around the world, it is my husband that taught me this, early in my career.
i interviewed for a job, was offered it and i was nervous about taking it. i thought it -- i needed a few more years. i told the person let me think about it. i came home and mark said, do you think a man would have answered the question that yet -- that way? i remember the growth and comfort will never coexist. get really comfortable with being uncomfortable. when you are uncomfortable that means you are learning and growing. to your question about fear, i view those moments as wonderful learning opportunities. that is my biggest advice. >> have you replayed that story to yourself over the years as you have moments or you think a man wouldn't do this? >> what i replayed to myself these put yourself at risk. if you are nervous about something, fantastic. if you are not nervous, equally a concern. take on something different and go learn something new. >> ibm's shares declined during
your tenure as ceo. was that frustrating to watch? i know ceos always say they don't pay attention to the share price but it has to be distracting. is there something you think investors didn't get? >> look, we did return $43 billion to shareholders during my timeframe with dividend and the dividend group by 100%. clearly, obviously you would want your share price to grow so of course. i think the piece in which we had to undertake was the hard work to reinvent ibm for the long term. that is what we did. we had a tall order and we did it and i am really looking forward to this next chapter for the company. rishaad: former ibm chief executive ginni rometty there. join us for full coverage of joe biden's inauguration ceremony
that kicks off with david westin and balance of power. that will be at midnight hong kong time. coming up, one company was on an absolute tear after hours and it was netflix as it enjoyed a happy ending to 2020. subscriber numbers, smashing expectations. at the same time, "the queen's gambit" and "bridger 10 -- bridgerton" helped smash expectations. this is bloomberg. ♪
rishaad: netflix earning its biggest year in history, adding more customers than expected and saying it no longer needs to borrow money to build the entertainment arm. let's get more details from a reporter. that was a big thing, and the pitch shows they have -- they hit shows they have has engendered them getting into that position. >> this was a remarkable end to the year for netflix and what has been the biggest year for this company in its history. it is remarkable, to think that a streaming service that is no more than a decade old, and online media company, posted its
strongest year in growth and added close to -- added millions of subscribers. they benefited from the pandemic that i think it was another example of this moment in time accelerating things that were already happening. they saw strong growth in the streaming sector, posted strong growth in 2020 and netflix remains the clear leader. haslinda: i guess the question is whether the strong growth can be replicated in 2021. was it frontloaded? >> it was certainly frontloaded in halves of the year. they had a stronger first and second quarter than they had ever had before. the third quarter it slowed down considerably and they were cautious in their forecasts for the fourth quarter because of that pull forward a fact. they blew past the expectation.
they were relatively cautious in their forecast for the first quarter of 2021, and they said you should expect to still see some ramification from the blockbuster first half of the year. in terms of whether it is replicable, it is hard to project right now. they have, they are a mature business in the u.s. and canada and latin america despite being -- but despite being mature, they are adding 4-6,000,000 customers per year. the growth in europe, the middle east and africa has been the biggest engine, accounting for 41% of additions in 2020. how much room there is to grow remains to be seen but it seems like they still do because the growth has been accelerating. the place they have turned on in the past year or two is their second biggest contributor in their 2020, how they do in the year ahead depends both on how they continue to grow in japan and korea and whether they can
unlock some of the countries in south asia. they certainly have room to grow, it is a matter of execution. rishaad: the thing is, this is one of the ultimate ironies, vaccinations and global immunization is bad news for this company. >> it is bad news in that it may dampen some of the growth they have had, but the overall trajectory for streaming video on the internet has been up and to the right. i think how they perform on a longer-term basis will have less to do with the pandemic and more to do with, can they continue to produce shows that people love? will they have, how will their competition fair? disney plus he is doing well. will peacock and hbo max be
strong competitors? how popular will netflix be in other countries? they duval -- very well in developed economies where people have a lot of spending power. it doesn't do well in places where youtube serves as this free platform. down the line 3-5 years we will have debates about countries like indonesia and the philippines and nigeria, but we are not there yet. haslinda: truth be told, i have been glued to netflix. lucas, thank you for that. netflix shares down 7% this year after surging 70% last year. let's take a look at the markets in asia. most of asia in positive territory, signs of a return to the reflation, trade perhaps, the mx ei and asia index looking like this. investors mulling janet yellen's comments suggesting the biden presidency may continue some of
resistance to joe biden's relief plan as she says it is time to act. she rules out a weak dollar policy to gain advantage. rishaad: hong kong stocks leading asia up although there is weakness in tokyo. the hang seng within sight of 30,000 within -- for the first time in 18 months. haslinda: tesla confirms its commitments to india with a landmark launch as promised. what may be a bumpy road ahead. rishaad: news breaking, this is after mike pompeo, the outgoing secretary of state in the u.s., calling the changing -- a province the victim of genocide. the chinese minister of foreign affairs says this interferes with china's internal affairs. it is saying at the moment that it is china's principles to respect human rights and erratic
i allies -- you radicalize people in the province. it is in the full compliance to combat terrorism. coming back after those comments from mike pence labeling china as perpetrating genocide. haslinda: signs of tensions easy -- no signs of tensions easing. asia mostly higher, investors mulling yellen's comments. the msci index up about 0.5 percent, china stocks need exposure to china as u.s. tech and trade competition will stay elevated this year. the csi 300 index up 1%. rishaad: looking at the sct,
seeing whether it is reflective of the broad asia-pacific, what is going on with the thai baht, in the bank of thailand, the baht advancing again against the dollar after helping low income individuals. the nifty expecting a flat start. we will be looking at lenders as these shadow banks manage challenges to recover from the pandemic and their asset quality set to deteriorate. there we have it. haslinda: let's get to our top story. president-elect joe biden's treasury secretary meeting resistance from republicans on her call to act big on stimulus. janet yellen says she is prepared to take on what she
calls china's abusive trade and economic policies. let's get the full picture from our seer -- our senior editor. let's talk about the one point trillion dollars relief plan, no surprise it is facing resistance from the gop. >> no surprise at all. this is something we have targeted for a while on this show, the idea that once biden took over and republicans were in the senate minority, you would start to see a lot of people who had been very freespending through the trump administration decide that the debt was a very important thing they wanted to focus on, and would be reluctant to spend massive, or they would be more reluctant i guess than they were under trump to spend big. some of the proposals in bidens stimulus plan, which has long been favored by democrats, will be some things like structurally, republicans
wouldn't want to do. but democrats will try to force through by attaching it to popular stuff, and you could almost dare republicans to oppose it. there will be a political gambit but even though yellen is reasonably popular, and this hearing showed she is pretty popular and it doesn't look like there will be a big obstacle to her confirmation, democrats shouldn't get comfortable with republicans voting for big things without having to be convinced. rishaad: in beijing, yellen commented on china saying the u.s. will take on its abusive practices. what is the take away? >> janet yellen may be a dove when it comes to fiscal policy but when it comes to trade with china she is clearly a hawk. her language at code that of the trump administration over the last four years with one key
difference. primarily she focused on what she called china's attempts to steal intellectual property, saying they were elect -- erecting illegal trade barriers. she pointed to subsidies in china that distorted the level playing field the u.s. is seeking. here is where the difference came in. she said she would work with allies to address these issues but she also said she would want to use and be open to using all tools at her disposal. the trump administration dug deep into the toolbox with china whether it was tariffs or sanctions or curbs on chinese corporate's. it is clear yet lynn -- yellen isn't prepared to do that yet. she is not yet ready to put those tools down. haslinda: mike pompeo unleashed a shot at china, labeling its crackdown on the uighur minority
as genocide. china says it strongly opposes this. >> china coming out in the last few minutes, saying they strongly oppose this distinction, the designation by mike pompeo as he is about to leave that what is happening is genocide. that was mike pompeo, china saying they impose -- they oppose this, this is interfering in internal affairs. china has consistently said this is about the radicalizing a population --de-radicalizing a population and tackling terrorism. pompeo cited sterilization, examples of forced labor, internment camps, things that media organizations and ngos reported on, the united nations set as many as a million people are held in internment camps. china says the our schools to re-educate the population. the u.s. has taken measures
linked to these policies. we heard from the incoming secretary of state, the nominee, saying he agrees with the terminology genocide and he would like to see more action against china including potentially curbing the import of goods from the province. we should expect more action going forward. rishaad: derek, going back to the last day of donald trump's presidency, outgoing presidents do this as a matter of course but this is being seen as a gesture of goodwill because he is wishing joe biden success. >> this week, we inaugurate a new administration then pray for its success in keeping america safe and prosperous. we extend our best wishes and we also want them to have luck. rishaad: there you go.
derek, tell us about it. >> in a way, the thing you are seeing here from trump is sort of, he is trying to put the events of the last couple weeks to bed and move forward a little bit, but still stopping well short of flat out declaration that said biden won the election, i lost fair and square. you don't see trump saying the words joe biden. we are about to go into a handoff where trump will take a very unusual step of not being there for his successors inauguration. trump will fly to florida early in the morning on air force one, land there, go to mar-a-lago and that is where he will be. there will be a sendoff ceremony there. we are not sure who will attend because a lot of other people in the trump orbit and the white house orbit will be at the capital for biden's swearingen.
we will see, but it is still an unusual circumstance. i will say, tom mentioned some important things on china. you should expect joe biden to keep up some of this rhetoric. it also will give biden a place to start from, where these are all actions he didn't take but our actions he came in with that he can now use as, do i want to keep this up or let this go? that becomes a point of leverage for biden early on in talks with china if that were to be a thing that comes forward. rishaad: derek wallbank, thank you. and our thanks to tom mackenzie. don't miss our coverage of the inauguration. that is live right here on bloomberg television, radio, and quicktake.
haslinda: the first word headlines for you, the european central bank is emulating its asian peers by controlling government borrowing costs but in a european way. the bank is buying bonds to limit the difference between yields the strongest and weakest euro zone economies but one source says policymakers have specific ideas on what is appropriate. an ecb spokesman client to comment. china is ramping up dissent against -- against the coronavirus, ramping up the construction of a quarantine center built outside a city. it holds more than 1700 rooms and is expected to admit its first occupants later wednesday. construction began last week after a jump in covid cases in the province. the biden administration is said to be considering a special commission to help airlines in the coronavirus downturn.
the group airlines for america says it should include government carriers, travel operations and labor unions. airlines worldwide are losing billions as the virus devastates travel demand. those were your first word headlines. rishaad: still ahead, the risk of a reversal shows markets looking vulnerable. a private bank chief investment officer comes in. in mumbai, we speak with product chairman of a company that is reporting a 140% rise for net profits for the third quarter. all that is on the way. this is bloomberg.
that the biden administration will use its firepower to propel growth. the treasury picked janet yellen encountering early republican resistance to the near $2 trillion relief plan. let's discuss this with steve bice. what is she alluding to? she says the fed has done all it can end we need the fiscal plan in place. what are the implications for the economy and also perhaps investment as a consequence? steve: i think a lot of people will focus on her dollar comments, but for me, one of the most interesting pieces of what she said was she will be watching the debt financing costs very closely. i think she is alluding to the fact that the government wants to do more, the $1.9 trillion
stimulus is on the table, but the fed, if they want them to do fiscal policy they need to help them out in terms of make sure the financing costs are held down which remains cap bond yields. when we look at global fund manager surveys from merrill lynch, you do see people are focused on the cpu curve but our sense is, the fed is a long way from allowing that to happen from here. we have seen yields move higher, but janet yellen is basically telling the current fed chairman, you need to help us and we need to work together. rishaad: also, and we had those $600 checks, people were going to get to thousand dollar checks, does that mean even more froth coming into the equity market because those $600 checks are already engendered, perhaps
into the huge rally we saw in the spring? steve: i think there are two things at play. those checks were one part of it. it was fuel to the fire. people also had time on their hands to do things. i think those aspects did come out. you did see more money going into people's pockets, savings rates are already high so maybe that will find its way into the markets ultimately. the only thing i will say it will take time for this to happen. because of that very, very slender margin in the senate, we are expecting the republicans to use the filibuster from time to time on certain areas of the stimulus. it is coming, but maybe not as quickly as markets would like. rishaad: the other big one is foreign affairs.
janet yellen was almost intimating that this is normal in the relationship with beijing. will it be a cosmetic change more than anything? steve: i think what we have seen over the past five years is that, there is a shift from when the world was focused on global poverty, which is effectively reducing income equality around the globe. now, with trump's election victory four years ago, we are moving towards domestic inequality within the states and i think that means the structural element of putting the brakes on globalization, obviously that places china in the cross hairs from a u.s. policy perspective. the thing that will change is the way the u.s. addresses this both from an engaging with key strategic partners around the world, so europe and australia and the u.k. and their
partnerships, and also, we are less likely to be driven by tweets and more likely to be driven by a concerted effort to achieve change. that could reduce some of the uncertainty. ultimately, it could be positive for investors but the strategic direction is largely unchanged. haslinda: looking at the markets, hong kong headed towards 30,000, india towards 50,000. a lot of the good news is priced in. what is the risk of a reversal? what catalysts are needed for the rally to be sustained? steve: i think you are right. we have seen a lot of good news priced in. across markets, they look oversold or overbought depending on the market. the dollar looks oversold so it is a little short term, which i think will continue but treasury yields have gone up sharply. we think maybe that won't continue.
we believe equity markets are pricing a lot of good news. whether you look at the rsi or an indicator of market diversity, they are pointing towards a short-term pullback or consolidation, so obviously, this is difficult in terms of quantum, pretty difficult, but may be banking on something like 7% from an equity market perspective is where we might be. maybe the dollar index can go up another 2% or so before we were doomed the down -- resume the downtrend. maybe we should be a little more patient. haslinda: that takes us the question of the day, steve. how would the dollar fare under yellen? yellen said she is not after a weak dollar policy. what could make her change her mind? steve: i don't think, i mean, i
don't think she wants to say she wants a weaker dollar because that opens her to other governments to take the same stance from their own currency perspective. we see what she alluded to in her comments, as well. ultimately i think she will be happy with a weaker dollar. if you add up her comments on fiscal stimulus and also funding costs, which means the fed continues to expand its balance sheet for another 12, 24 months at least, from that perspective that would press the dollar together with the fiscal and trade deficits we are seeing. our sense is we broke lower in november last year, we are consolidating short-term but we will see another 6%, 7% from where we are today on the downside for the dollar in the coming 12 months and that could continue into 2022 but we don't have to make that call today. haslinda: steve brice, thanks
the kospi up about 36% since then. they reduced their overweight on korea to add to japan which they say has improving earning estimates. credit suisse says korea's got asia's best eps momentum. you have ev's, chips and autos in addition to increasing retail, so flipping the page, no-brainer at credit suisse. top picks include samsung and hyundai and kia, jumping to a 1997 high on speculation it may build the apple car. rishaad: looking at this, 24% up this month alone. why the optimism? sophie: an analyst at j.p. morgan, coming through with a stock upgrade. they are overweight with a price target boosted to $450 hong kong
dollars. for the food delivery company, they have seen growth as well as expanding city coverage for the community group buying model, which implies heavier investment which may erode margins. flipping the page as it builds out its footprint, it made a bid for china logistics, the third biggest warehouse operator in the country. haslinda: sophie kamaruddin. the check of the latest headlines, disney's executive chairman saw his compensation slump more than 50% last year to $21 million after the company curtailed bonuses and other pay and the pandemic. disney was hit hard by covid-19 which forced it to close theme parks. netflix soared as it ended its biggest year so far with more subscribers than forecast. it says it no longer needs to
borrow money to expand. it attracted more than 8.5 million new customers in the final quarter. this beats its internet forecast while wall street expected 6 billion -- 6 million new subscribers. rishaad: as we head into the china lunch break, seeing benchmarks just above water now. good gains on the chinex but elsewhere in the doldrums. we have gone into the green here particularly seeing trading in hong kong seeing the bulk of gains. the hang seng approaching 30,000, and investors weighing comments suggesting a tough line from joe biden administration towards china. looking at the banking side, doing well as this particular industry group has been a perennial laggard. loan prime rates were kept
haslinda: counting down to the indian open. futures pointing to a lower open. indian stocks rising the most in two months yesterday. nifty retreating from record highs. keep a watch on telecom. also still to come, r.g. chandramogan. rishaad: we will move through the first word headlines. president trump coming to a
close. he wishes the next administration lock. the president will skip joe biden's inauguration with washington under strict security following the assault on the capital two weeks ago. republicans putting the blame squarely at trump store. >> the last time the senate convened, we had just reclaimed the capital from violent criminals who tried to stop congress from doing our duties. the mob was fed lies. they were provoked by the president and other powerful people. rishaad: janet yellen has met republican resistance to joe biden's virus relief plan. speaking at her virtual senate hearing, she said now is the time to act big on support for the economy. her opponents are wary of the $1.9 trillion cost, saying now is not the time for a laundry
list of reforms. she also said she would not continue and artificially wait -- weak dollar. human terrains. the flight data recorders have been retrieved in the operation extended until thursday. the jet was a boeing 37 -- 737 which had been out of service last year because of the pandemic. those were your first word headlines. haslinda: after a year of political and economic instability, 2021 isn't shaping up much better for thailand. virus cases climbed again recently. the pandemic recovery is looking uncertain. looming over everything is months of rallies where protesters openly criticized the monarchy. a thai woman was handed a 43 year jail sentence for insulting
senior royals. joining us now is dan 10 kate. what are the economic and political challenges that thailand is facing? >> on the economy side, tourism has been decimated by the pandemic. factories shutting. farmers are facing the worst drought in four decades. the whole country is really hurting. these protests against the monarchy. thousands of people gathering to demand more accountability answer insperity on finances and the right to openly criticize the royal family. rishaad: most of the time, the king has been boosting his presence in thailand. hasn't he? >> that's right. he has stayed in the country for most of his reign. he's been in germany where his
presence has become a political issue. he's been in thailand since he came back in october. one of the longest and's home -- stints home since the unrest began. he attended religious ceremonies , handing out diplomas, charity projects. that sort of thing. haslinda: has this had any impact on protests? >> the protesters at this point are really looking for more than just a few jesters by the monarch -- gestures by the monarch. systemic changes at the heart of thailand's political system. a lot of those demands are beyond what is politically possible at the moment in thailand. they are really trying to change the conversation completely around the monarchy including by being able to speak freely.
the sentence yesterday, 43 years in prison for a woman sharing something on social media, this goes against everything the protesters are fighting for. stuff like this could potentially build more resentment and cause more instability in thailand over the long run. haslinda: asia government managing editor on the latest out of thailand. let's do a check on the markets right now. the msci asia index at record levels, rising for a second session. up about 1/10 of 1%. u.s. futures rising. dollar's ahead of inauguration. nikkei 225 down by 6/10 of 1%, slumping from a record. perhaps technicals showing signs of absorption. hong kong closer to 40,000,
record cash inflows from china. let's take a look at where we are in terms of commodities. oil, the iea cutting its oil demand outlook by 600,000 barrels a day. opec-plus will help drain 100 million barrels from inventory. that should keep the market on track for a strong recovery. bitcoin at 35,407. rishaad: up next, makes this of interview with the chairman of one of india's largest milk producers. this is bloomberg. ♪
haslinda: it's that time of the day again. we are zooming in on india. our next guest runs one of the country's biggest private dairy companies. they just released third quarter earnings which showed a jump in net profit. the world's largest producer with more than a fifth of global output according to the food and agricultural organization. joining us for an expose of interview now is founder and chairman r.g. chandramogan. good to have you with us. those numbers, are they sustainable?
have you benefited from the pandemic? the numbers are solid. r.g.: sorry. i'm not able to hear you properly. hello? haslinda: we will try to get back to you, reconnect that line. while we try to reconnect the line, shares of the lantus rose on it second day of grading in europe. it was created by the combination of chrysler. we spoke with the coo about the challenges ahead including what brexit means for the sourcing of parts. >> we are pleased with the brexit deal. it has been dramatic. had this deal not been inked. but we are pleased with the deal. we are assessing two very different views.
we understand that all of this is about electrification. it's about sourcing electrified parts from inside the u.k. and european union. we are strong in that kind of situation. we have vertical integration strategy which is very powerful as we are going to engineer and manufacture electric motors, electrified transmissions, battery packs, battery cells. our vertical integration is very powerful. therefore, we can source a lot of components from the territory which is the u.k. plus the european union. that's creating a good foundation. we are now in the process of calculating all of our business plans, making sure that it makes sense or not. at the end of the day, we will be fine. either we invest in the u.k. or
continental europe. that depends on the logistic costs and any bureaucracy that could slow down our processes, logistic and supply processes. that will be a decision that will be made within the next few weeks, if not one or two months. we are on that way. so far, what we see is reasonably positive. i think that the brexit deal negotiation was a good thing. we would like to keep our u.k. friends in our family and make sure that we provide to them also safe, clean, affordable mobility. this is our goal. >> possible further investment -- >> we are not excluding that. we can't conclude yet. >> on china. china has been pointed out by yourself as really in need of a new strategy, both psa and sta have not done well in china at all. can you provide us with some
initial details about what your thoughts are? a new partner perhaps. or new brands or a new way of doing business in what is the world's biggest market. >> you are absolute we write. -- absolutely right. we need to take care about the current situation in china. the good thing is that we can now share the diagnosis and our understanding of the root causes for the difficulties and challenges, which we are now going to do. we have spent -- set a specific team with talk executives from the two families to share all the diagnosis and make sure that we understand why we did not achieve good results. we are going to rebuild our strategy in china. we are going to make sure that if need be, we have a different course of action to make sure that we can take our fair share of the market. in the course of 2021, we will
come up with a career -- clear strategy for china that will be based on the assessments and the diagnosis that the two families have achieved so far. we don't exclude anything from their. we know that it has to change. one way or another, it has to change. we need to find the best way to change. rishaad: speaking to bloomberg. let's bring black -- back our exclusive guest, r.g. chandramogan. looking at this question of due diligence the. in a funny way, you actually benefited from the lockdown in india and the pandemic. you came out with a very solid set of numbers. tell us about your experience and journey over the past eight months. r.g.: actually, we had already invested in the path for getting a better benefit.
covid has really affected us getting there. that is not what we intended. slowly, things are coming back. now, we are getting the fruits of the investments we made in the past. it has nothing to do with covid. it's not a covid benefit. it's a benefit of past investors. rishaad: how is the pandemic affecting your business at the moment? >> the pandemic initially affected -- covid did not affected. initially, the shops were closed and we are not allowed to sell a premium product. april, may, june is the big summer. we suffered. the first quarter, we suffered. the second quarter, suffered. the third quarter was normalcy. this quarter, we are coming back to the expected results.
haslinda: could you shed some light on that? what is the outlook for your output, your profit for the year as well as the year after? r.g.: actively -- actually, it will be better than what we have been seeing through right now. most of our investments are coming to an end. almost three projects are getting started before march 21. one project in --. these projects will deliver. it calls for an investment of something like 80 million u.s.. all of this will be functional by the end of this year. the benefits of this particular investment, we are supposed to get the benefits to come. haslinda: your business has been
focused pretty much on india. would you be considering an expansion outside the country? r.g.: no. india has room to develop in different states. we would like to focus just in india. the expansion continues to develop. maybe for some time, we prefer to focus in india. haslinda: what are your expansion plans for india? r.g.: right now, probably bombay. we are already available in four major states of india. we are available. at a later date, we will be focusing in the coming year.
the two other states that are going to be added are --. factories are starting at the end of this month. rishaad: your losses from your non-milk business, things like ready-to-eat pizzas, losses have been widening. how you -- how are you going to address that? r.g.: [inaudible] hit me again. rishaad: you've been seeing losses widened at your ready-to-eat pizza business. those have widened in the third quarter compared to the second. how are you going to address this? r.g.: pizza, frozen is something new to the indian market. we are a little ahead of the times. gradually, things are improving.
we are trying to introduce some products in our milk outlets. we have retail outlets numbering around 3500. you will be able to have a traditional product for sale and extreme mental things in the business. that will be by september of next year. haslinda: india is set to announce its budget in february. what are you hoping to see? r.g.: january? haslinda: what are you hoping to see from india's budget announcement in february? r.g.: wait and see. normally, there will be no major changes. india has given a [inaudible]
it will not be detrimental. rishaad: our thanks to r.g. chandramogan. quick check on the indian markets. they started up a couple minutes ago. we have a sense x up. it was close to the 50,000 level. nifty on the way up. look at the shadows of banking. a bit of pressure on them. nifty 100 on the way up. a positive start but only just there as far as indian equities go. coming up, as promised, elon musk renewing his commitment to india. a bumpy road ahead. why it's the hardest market to crack.
he was among a group of four trump supporters accused last year of using money to rebuild the wall campaign for personal gain. trump likely to pardon bannon, accused of defrauding donors. that's according to people familiar with the matter. rishaad: yes. trump could still change his mind. elon musk's confirmation that tesla will enter india sparked off incitement -- excitement among fans. it may be the hardest market to crack. let's bring in our asia transport coverage. what do we know about tesla's venture in india? >> we don't actually know a whole lot officially. there's been a lot of unsubstantiated speculation in local media that the company is in discussions with state
officials but has yet to decide on a space. they are looking at opening some showrooms or a research and development sector. possibly a factory. that seems to be lower on the list of speculations. last week, elon musk responded to a blog post with the words, as promised. this sparked excitement in india. there's even an india tesla fan club. those members were super excited. some of those people have had tesla ev's on order since as early as 2016. they are still waiting for the possibility of getting these cars. tesla representative in beijing declined to comment. there's a lot that we don't actually know. haslinda: it's not going to be straightforward. what are some of the challenges tesla faces in trying to crack this market? >> there are a number of key
challenges that tesla is going to face, particularly when you look at their success in china which is now the world's biggest market for ev's. tesla is basically the best selling car there when you look at electric vehicles. one of the main hurdles they are going to face is the infrastructure. about 60% of the worlds slow charging spots are in china. india doesn't have that infrastructure. the government has committed some money, not as much as china, to developing these spots where you would be able to charge one of these electric cards if you had it. the other issue that tesla is going to face in india is cost. tesla is particularly making premium electric vehicles. in india, most of the cars are sold in the 10,000 end under
bracket. this is putting the tesla's out of reach of the vast majority of people, every people in india. that has analysts forecasting that even their most affordable car will only appeal to about 1/5 of the market. it's an uphill battle. haslinda: katrina nicholas in singapore. let's do a quick check of the latest business headlines. vw is taking the fight to tesla in china with locally built, factory powered suvs. it costs about $31,000, half the tesla. it's eligible for subsidies. vw says it can travel 400 kilometers with a more expensive version having greater capacity. electric vehicle sales in china rose last year. the electric car movement may be closed to a breakthrough moment with an israeli company saying it has a battery that can be
charged in just five minutes. the powerpack comes from its partner in china and has already been demonstrated in a two wheeler. they are aiming for a mass rollout by 2025. there are questions about existing plug-in infrastructure. rishaad: we were just talking about the run-up to the joe biden inauguration. really comparing it to what we saw in the run-up from the election in november of donald trump to when he was inaugurated, the same timeframe. we get the msci asia pacific index rallying more than 20% since the november vote. this is in a marked contrast to what happened back in 2016. that's when we saw a 1% gain in that time for the msci asia pacific index before the lead up
to the 2017 inauguration. this is really the moment to watch out for. this run-up from november to the inauguration is actually the best performance in the span of u.s. elections going back to 1992. haslinda: not to mention the u.s. stocks have gone gangbusters rich. here's what blackrock is saying. investors need exposure to the u.s., to china as well. the trade tensions between the two notwithstanding, [no audio] [inaudible] we will hear more from blackrock this hour, right? rishaad: absolutely. we will hear from their chief investment strategist for the aipac. he's been saying that investors need exposure to the u.s. and china.
♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." in the next hour, netflix still on fire. paid subscribers increasing 23% year-over-year in the last quarter of the year. global demand, the big driver. we will speak to someone who thinks that netflix needs to keep digging in. could netflix add gaming or could audio even be the way?