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tv   Bloomberg Surveillance  Bloomberg  April 30, 2020 4:00am-5:00am EDT

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news in new york city. >> we begin here, organizing the manhattan project for coronavirus vaccine. it's called -- it's -- it wants doses available by the end of the year. the program will partner with from single companies in the military. president trump says he think china is determined to see him lose the november election and that's influencing beijing's response to the coronavirus outbreak. in an interview with reuters he says he is considering various ways to punish the chinese government and blames her for allowing the virus to spread. the death toll the u.k. from the coronavirus passing 26,000. -- saying the government won't ease the lockdown quickly. whereghting germany social distancing measures were relaxed. falling both nations
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more than 5% for the euro area later today. in the worst is still come. we end in china where factory data showing a domestic recovery being undercut by a global slump. slippingred pmi despite them moving into expansion territory. of economicecovery activity is likely to be on even and take a long time. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. covid-19. to gileadsitive news from on possible treatment for
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coronavirus. the chief executive says he is talking u.s. regulators over a possible emergency use approval. we also heard from anthony fauci saying this is quite good news. joining us is our expert. sam, last week we were talking about a trial that was disciplined for gilead. come where you see it going? -- for gilead. where do you see it going? >> obviously found she has seen patientsin terms of attended to the hospital cut short, etc.. this kind of day-to-day analysis of little bits of data and small trials that come out is what we , it's thenormal lives
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first some of ever seen it be done with the entire globe looking at it. so many caveats and variables when you look at this type of trial. onenot surprised we get showing no effect, we have got to test and believe the data that comes out of these control out ofand we just saw the national institute was one of the largest trials. witty simulant from trot -- from china yesterday. that didn't show anything, but that might've been they just tested too late in the patient. so i'm cautiously optimistic we have something here.
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francine: how many trials to we have. today we found astrazeneca was partnering over potential vaccine. are there six or seven different trials we should be looking at or these also working together? >> there are many trials going on. astrazeneca is testing a counter drug. .nother is testing there are many theories being tested in terms of treating the virus and the effects of the virus on the body. at the end of the day the easiest way to go back to way normal life is for people to be immune to this virus.
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they are basically one of the last pharma companies to get into the vaccine game. that is positive. thank you so much. an expert on everything he do with pharmaceuticals. the conversation you don't want to miss. speaking exclusively to the chief executive, we will talk about insurance, italy and the spread of the disease. this is bloomberg. ♪
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francine: this is bloomberg surveillance. we begin shell has cut its
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dividend for the first time since the second world war. the two thirds couple shock investors who relied on the generous returns for decades. this decision underscoring a gloomy outlook for the energy industry this year. net income of the energy giant was also down 46%. caused byl coronavirus has made its old targets possibly -- impossible. --re pretax profits before the quarter plunging 95%. largest mortgage lender lloyd's says the outlook is clearly challenging. a firstted a loss for quarter as stock traders were wiped out by market volatility due to the pandemic. revenue from equities trading 99%.
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of bank posting a net loss 326 million euros also setting aside 820 million for bad loans. better bloomberg business flash. francine: i've been looking to this -- forward to this all week. european insurers face an increasingly difficult task as the economic devastation rages on. italy's biggest insurer faces a particular challenge with its home market one of the hardest hit by the virus. it is not proposed cutting its to move but says plan it into parts. i'm glad to be joined by the chief executive of generale, thanks for joining us. what are the biggest concerns? a lot of businesses are going through a tough time but what are your specific concerns?
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the concern is about the people, i hope that the doctors will find a solution quite soon to take care of the people. in italy we've seen many people area, especially in the very productive and dynamic part of the italy so we -- so that is our concern, our first priority is the safety of our people and now we are also taking care of our customers and many of our customers, whether they are families or small businesses are under pressure so we try to do our best to support them and to help them, it is obviously a very challenging time for customers and clients so it's
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also a challenging time for us. it mean for your targets? with earnings fairly soon, a lot of companies event you revise them or have not given much of a forecast. how much will it impact your plan. we disclosed targets for the today we21 and as of thosehat we can achieve strategic targets by the end of 2021. pressure be under because business has been slowing down. we were hit by the economic crisis because it's our customers who were hit by the hit by we are directly
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the financial crisis but so far there is no financial crisis. we had a small hiccup. but manageable crash of the equities market which we can absorb which the industry can 2020 will be , wenitely under pressure will still stick to our targets for 2021. what kind of recovery are you banking on? is it a patchy recovery? v shapeexpecting a recovery? outirst of all we are not of crisis. countriesurrent getting out of the lockdown but it will be not returned to
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normalcy immediately. it will take time to go back to normal and the recovery depending on the economy might be quite slow. it'll take time to recover. having said that, i think the quick andill be quite need toause people will cover the risks, people need to invest their money. industry ofhe services the recovery will be faster than in the industry of sectors. us't forget it's easier for
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then therom home industry sectors. we expect a positive coverage for the financial industry and the insurance industry. it's important for us to get through these very challenging 2020 and be able to stand by our customers. results comer 2019 we have a high solvency ratios. we are strong enough to stand by our customers in this very challenging time. francine: can you talk to me your --, you are splitting into two tranches. our company will be able to pay it out? >> we are very comfortable when we decided to confirm our $.96
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per share dividend and we decided obviously to forgo the regulation -- this is the reason why, we decided to pay this dividend into tranche. the first will be paid in may right after the shareholders meeting and the second one will be paid in december, we will see what will be in the situation in december, but you know this has to be -- this has been decided on the basis of the balance sheet of 2019 which is a strong one. endill update this by the of the year. francine: what are you doing with m&a? i know you're quite key on doing that, how much do you have to
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spend and can you pick up bargains in this? always at the same time very disciplined and very opportunistic come with a strong cash position because of what we made in the past few years. part of this small cash. as of today once again the priority has been to reorganize the company to be able to work 90% from home. we definitely continue accelerating the digital transformation. with a good opportunity significant about of cash, it's good to have liquidity in this time. we will remain disciplined and
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opportunistic and i'm convinced that this challenging situation will create new opportunities for us and we will be in the situation to take advantage from them. does that mean you are looking at them or is it too risky due to everything going on? look at m&a opportunities. today's priority is to manage the current situation and to stand by our customers, to stand by our distribution chain who is also left under pressure. cope withiority is to this challenging situation. of course we are also looking at the future because it's not only
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to manage the current situation but also to predict the future in the recovery. look at your various exposure in different countries, which one is a country in europe that you think will pick up quicker? have you seen anything in the numbers they give us a glimpse that we should be looking out for on the macroeconomic side? i think the three major europe,s and markets in which by the way are the three major markets of generali. germany, france and italy. i think they remain strong economies. of course some of them have been infected serially. i think there will be a strong industryas well in the
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-- in those three countries. slower thanbit more some other countries come maybe some eastern europe countries, that i'm very confident that italy, germany and france, there recovery will be a strong one a steady one,l be it won't be a sharp one. and the ecb europe it takes the right position to help and support the european economy. thank you so much. chief executive of generali. we will have plenty more on covid-19 and some of the things chief executive's are watching
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out for including how they work from home. also following the news conference with christine lagarde after one trillion euros of emergency stimulus, what will she announce. what to expect from today's meeting next.
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>> higher edging costs while managing the portfolio.
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effectively a very low revenue for the equities underlying structured products. the generalit was chief executive -- generale chief executive officer. out withders wiped market volatility caused by the coronavirus. this was one of the things they were talking about. coming up, it's easy be decision day. the factors that markets are looking at. this is bloomberg. ♪
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finance, economics, politics. this is bloomberg surveillance. let's get to first word news in
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new york city. sciences saying there more than 50,000 courses of its experimental treatment set to ship. they are see -- they are waiting for approval from regulators. dr. fauci says it shows as a giving a positive effect in treating the virus but scientists are urging caution. this is neither a vaccine nor a qr. jerome powell voicing concerns about the long-term economic impact of the coronavirus. leavenks it could lead -- a permanent scar on the u.s. economy. chairman powell making the comments after the central bank, he says the battle to save the economy is far from over. and now european central bank will decide if one trillion euros in stimulus will be enough for the euro area. the expected increase in seven under 50 billion euro
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asset plan. -- 750 billion euro asset per search -- euro asset purchase plan. investors -- assures that if all goes to plan, the aerospace tighten will be generating cash again. boeing is treating -- shrinking its workforce by about 10%. production a streamliner jet will go forward. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. francine: let's focus on hedge funds and one in particular that's been well. investment managers have been snapping up those affected by the coronavirus pandemic.
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saying credit markets offer an exceptional opportunity in investment-grade assets and collateralized loans. the hedge fund manages a total of $5 billion in assets. we are delighted to speak on the phone with their chief executive , he joins us now on the phone. always great to speak to you. thanks for giving a celibate of your time. where you focusing your firepower and ready see the dislocations? >> good morning. opportunity, we view the possibility primarily in credit. they can still provide some this, but in a time like
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carefullyly prefer think thend so we search for royalty value is what needs to be done. obviously it's always good value and so there are some cautions to be -- precautions to be taken. are there enough opportunities out there given the ecb and also the federal buying of corporate bonds. thing we think europe particularly is a very attractive playground, we look at european stocks with it, a much better spread in terms of average compared to the u.s. situation and markets much less to expose -- much less exposed
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to energy. also the policy response in , with which is targeted guaranteed loans and so on, the europe asponse in government measures are making a condition. there are a couple of reasons why we need to basically look against unknowns. we think it might wea bit high given the fact just don't know how we will exit from the lockdown and whether there will be a second wave and
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then how the cash flows will sustain this. so it may look cheap but we think the value of the moment in credit exposures is unknown. caned securities which stress against a downturn or ise banks where there structure protection in those bonds that those provide very significant buffer against the ups and downs of the market. it went to a more fundamental driven strategy. francine: how do you see volatility in the markets playing out? there is a lot of speculation
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. obviously the moment the policy response has been -- in my opinion they are all in and adding to the table so activity this sort of and today the markets have .eacted in the past few weeks we believe the exit from the situation will be fairly smooth. that's not necessarily the base case scenario and we are dealing with a virus that is highly contagious and no one really such whether there will be k-smoove the shape type of return to normal. we need to be ready for
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volatility, for ups and downs of the market. the crisisill before and entering the crisis they should be very highly convinced the return of the cycle would come because evaluations were it was tood because high. those weaknesses were there before the pandemic. it the pandemic is going to exacerbate them. we think the actual smooth exit from the crisis is not necessarily a given. looking at some of the valuations, you made a killing on returns. i want to get your thoughts on what's happening in the u.k.. 66% of. is now saying
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businesses apply for government wage subsidy. do you see any value in some of the u.k. assets? think the topic of brexit has been set aside for a moment. we are very carefully researching the possibility across europe and the u.k. is one of them. i think the policy response in europe has been very targeted with all those loans and exemption of social charges. in some countries those have been extremely conditional at protecting employment. that's a major difference between europe and u.s.. basicallyen unemployment skyrocket. and there is a risk that this
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crisis will turn into a consumer crisis. francine: talk to me about this 1.1 billion dollar fund for distressed debt. what are you looking at? european targeting markets. we see there is better value. we target more the structure finance market and financials where we think there is enough offer for the uncertainty the let's say crisis sector. and in the next -- there will be much more fun exposuredriven type of on high-yield in particular in
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the investment-grade technology. it's basically trying to let people forget that equity is positive to credit and when that ,ort of volatility happens financials were deemed, a lot of retail funds buying in the short liquidity window. and by definition a lot of that is now redemption flows in creating an opportunity to buy those assets. thank you so much for your time today. chief executive co. chief investment officer. conversation with the
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chief executive and we will ask about measures being taken. this is bloomberg ♪ -- this is bloomberg. ♪
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francine: good morning everyone. loss, then unexpected first quarterly loss after stock traders thought of the volatility in the markets. talk to the chief executive about what's coming. see is an underlying risk which is representative of what we had in mind. crisis, af the covid mix of overly provisions.
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and someone off switch are two files. , we haveof perspective had a lot of prudence and we give a range of the kinds of risk we expect to endure. scenario of a 6.8 minus a drop in the euro zone. points for close to 13 -- -13% drop in the euro zone. we should be within this range. thehe fact you've set aside 820 million low -- a 20 million euros, -- 820 million euros aside, can you put in a number for 2020 in terms of loan loss
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provisions? prudence of the scenarios but also the benefit of all the confidence. ,hat's specific in this crisis france is the most agile in him lamenting these which makes the provision in the forecast very difficult. the base case 70 basis points. 10 that represent 500 million .uros of risk 3.5 billion euros. points soith 65 basis it's more or less this kind of level in this base case scenario with -6.8% overall gdp drop in the euro zone. again a more extreme and
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long-term scenario of loan activity and potentially with the second wave of coronavirus contagion. >> we expect them to contract by nearly 6% first quarter. each of the bank ceos who spoken to have talked about a drawdown of credit by major institutions. have you seen that and can you give us any numbers and are companies in the process of repaying you? yes, existing facilities which increases the risk, but i think it's overall not that significant. it happened at the beginning and now a lot of companies have gone to the market successfully raising funds with bond issues. it's very specific to france. we have already put in place, we
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have received close to 18 billion euros of guarantees by the government. be in two weeks time it will in the accounts of the company. feel -- that has had no effect on our capital because 90% is guaranteed by the government. a lot of that is put on the table by the government to help the companies to go through this crisis. good news, say the the guidance we get, we have options of draft down grading of credit is that's where we keep a good buffer on our capital. so i think really the action of the central bank and governments should help to limit the damage with a relatively high figures in terms of drops of gdp. francine: that was the chief
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executive earlier this morning. we have another great exclusive within of the chief executive asking about his target for the forecast. this is bloomberg. ♪
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francine: good morning everyone. let's focus some of the company has said in terms of earnings. this is coupled with a sharp contraction in gdp. activities --ean let's get straight to the chief executive who joins us on the phone. thank you for joining us. give us a little bit of insight on how activities -- activity in china is picking up. will that be how long it will take for activity to pick up in the western world? >> china for us is used as an example, the entered first in the pandemic and as it seems the
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situation is now under control. we saw a sharp contraction of activity after the chinese new year which is a consequence of the decision of the government to stop economic activities. ,ust to give you an example they decided to close the -- and the volumes we were providing dropped. since then the decision to reopen in the last day of february gave back additional activity and we are now at production levels of minus four -5%. -- minus 45%. -- 4% to 5%.
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economy recovery linked to andtical decisions additional recovery for us. themve to treat or provide francine: is there a danger countries will -- large --estments in plants to d.c. those getting pushed back in the epidemic? -- do you see those getting pushed back in the epidemic? we are advocating this recovery be done in a greenway.
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a couple months ago around the if our mental urgency and the consequences of climate change, the effect on the quality of life in this instance is not disappeared. all these issues are still there and need to be tackled. to improve the situation with respect to those issues in the money will have to be directed with that goal. what does it mean for your targets and divestment plan? is everything postpone for a , we are devoting arehim lamenting a plan, we at a level of confidence in the which was changing our business model.
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and we have the possibility to are testinguse we another way of operating a company. we may have lessons to draw. forward with the processes. impacted by the current market conditions but we have flexibility enough for the whole disposal plan that they will be able to meet the target. thank you so much for joining us. chief executive of suez. one of our exclusive -- not only is about earnings, but
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jobs and the european central christine lagarde has done so much already, we will look at that press conference together live and in full. a lot of the focus on what central banks are not doing now but what they can do once recovery takes hold. that was the thrust of what we heard from jay powell. this is bloomberg. ♪
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francine: europe's record recession. french and spanish gdp plummet more than 5%. oil giantks as the stops its dividend for the first time since world war ii. we hear from both chief says ites and gilead has 50,000 doses of its covid-19 therapy, scientist urge caution with regulators yet to give approval. this is bloomberg surveillance. tom, there is a lot going on. a lot of earnings and we have the european central bank and what christine lagarde has to say if she is going to have extra measures given what they've done already, a look at what they say and what stimulus will mea


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