to punish china for tightening its grip on the city. oecd sounds athe warning about the coronavirus and its effect on jobs. global unemployment could top 9% or worse unless governments work together. taken look at markets right now, as you mentioned we are taking a bit of a breather from the global risk rally as the session in the u.s. stocks snapping five danes -- five days of gains. u.s. 10 year yield we saw briefly falling overnight, but now we are kind of going nowhere. and we do see a retreat from the yen. so we are still seeing here when it comes to gold, still holding above 1800, the highest in eight years. we are watching markets andening up like indonesia, really just marginal gains at best. csi 300, chinese stocks seem to

be also not seeing the robust gains we have seen the last couple days. looks like we are snapping out of six days of gains for mainland shares. hang seng also down 53 points or so. nikkei futures slightly positive. we are watching currencies and other bonds as well. we are looking of course at the dollar which is holding pretty steady after we saw some strength in the u.s. session. chinese 10 year yields, yields actually falling lower by two basis points. offshore room and be back above 710, 702. aussie dollar continuing to see weakness with victoria, melbourne under a six week lockdown. and of course we mentioned the yen earlier. we are watching the hong kong dollar very closely here. our scoop on how president trump's aids are waiting proposals to undermine hong kong's dollar. seems like right now it is just talk, a lot is hypothetical.

you are seeing a lot when it comes to the spot rate, but you see of the bit of movement in some of these markets, up slightly. of boostingback intervention to more than $1 billion to defend that peg. want to break some lines crossing. allstate are going to buy national general for $34.50 per share. they agreed to about $4 billion in cash. expected to close in early 2021, subject to regulatory approvals and other customary closing conditions. but that we are learning now, buying national general, $34.50 per share. our next guest believes investors should focus on tools like sentiments and free liquidity and not rely on the fundamentals. for example, economic and earnings growth forecasts. joining us with more is ajay kapur, head of equity strategy

of bank of america securities. ajay, always great to have you. tell us more. we have been talking about the divergence of the real economy and what we have seen in markets since late march. why are we looking at the wrong thing? ajay: good morning. shows ifhink our work you have a three-year view on holding a stock over the market, obviously the earnings outlook matters amount -- a lot. it amounts for 70% of total returns, the other 30% being sentiment and liquidity. sixver, if you say i have a month view or a one year view, then things turn around. in that case, it's sentiment and liquidity that account for most of your returns and earning numbers are not that important. and if you take that one step further, when we are in a recession like we were in the second quarter, or when markets bought amount, in the ensuing year, the asian markets rallied

about 50%, almost the entire 50% rally is driven by primarily sentiment and liquidity. i think that for some weird reason -- by the way, this happens almost all the time. i'm a little surprised what people say stuff like, hey, markets are up, even while fundamentals are down. that is almost always the way it marks -- it works at the start of a bull market. you do here it is the bears saying it is only a liquidity-driven rally, not necessarily seen as a positive sentiment. tell us a bit more. how long do you think this liquidity-driven rally is going on for an at what point do you worry about inflation and insolvency issues around some companies may be follow that could arise once we see more economies emerge from these lockdowns? rallyliquidity-driven

will be six months,, one year, two years, i do not really know. we last went from 2009 to 2019. so, that was a 10 year rally. the relationship between the world central bank balance sheets and the world equity market, or the world equity market -- so i think that is probably the most important driver. a lot of people are worried about the u.s./china trade war. both the countries had equity markets go up 50% each. and so, the point was that one should not have focused on the trade war. --

most countries have the covid stuff under control. there are outbreaks here and there but they are containable clusters. if you look at the earnings numbers, we have seen earnings revisions begin to pick up. earnings growth estimates next year will be pretty strong. a lot of fiscal and monetary stimulus. why'm not so sure bankruptcies have to go up way too much. we could potentially see a multiyear rally given that the fed along with other federal banks said they would ensure liquidity, rates will remain low into a least 2022. what will make you reassess your bullish stance? ajay: i think you're absolutely right. story is that sentiment is very poor, that positioning among institutional investors, especially hedge fund folks, is

very low. and the central banks be very easy. get uncomfortable if risk sentiment is very high, or positioning is very high. or most importantly, if the monetary policies begin to even think about talking about withdrawal of liquidity. they have done that in the past, in 2013. we didn't really do anything. that is what i am watching most closely. q3 are usually about rotation. do you see that rotation into asia and in particular, e.m. markets in asia? ajay: i think a bit of that is beginning to happen now, especially given what is happening to chinese equities, which we like a lot. i think the dollar have to probably weaken a little bit for

that to happen. earnings numbers will have to pick up. and i think we need a little bit more international flow into e.m. equities and especially into chinese equities. there is a big clarification between what is happening in china, taiwan, and korea compared to india and let america. a lot more -- and latin america. a lot more cyclical. so i do think if the data it's better and the surprises are still pretty strong, and people are under positioned on cyclicals, maybe some cutting of the beds of growth and secular stories is appropriate. i'm not saying reverse the bet, you reduce the bet. said thatu recently the u.s./china potential cold war could be good for investors.

tell us more of the rationale behind that? because what happens to revenues and profit margins if you see more companies being more self-reliant? ajay: again, this is like last year. a lot of people spent a lot of time trying to figure out the next tick in the trade war. both countries in a trade war, the equity markets did brilliantly. isain, i think the investor probably too negative about the so-called cold war or this rivalry between the u.s. and china, because like you mentioned, they worry about supply chain shortening not being optimal, costs going up, and so on. the world is not going to be as globalized and optimized as we have been used to for the last 30 or 40 years. my response is the exact opposite, because i went back to the cold war in between the u.s. and the soviet union. the second world war, the first world war, the great rivalry

between great britain and germany between 1890 and 1914, and the u.s. world war. what i found was countries and great powers compete, it is really very good for innovation, patterns -- if you compete with a guide better than you, both of you improve. this is exactly what i think will happen. i think science, technology innovation will improve tremendously. you are going to see new companies. you are going to see dual use technology between the military and civilian world. you are going to see new financial innovation. so i am very bullish about the prospects for innovation and productivity as these two great powers compete. , greata: ajay kapur insights. head of strategy at bank of america securities. here is your first word news.

the trump administration has told the u.n. that it will formally quit the world health organization next year. it is giving 12 months notice and believe the party on july 6, 2021. the letter confirms president trump's decision to leave amid allegations that the w.h.o. is too close to china. joe biden is expected to reverse the move if he wins the election in november. coronavirus numbers are setting records across the u.s., with hospitalization in california hitting a new high, while florida and arizona also set new marks. global cases are near 11.7 million with deaths about 540,000. u.s. infections approaching 3 million alone with a fourth day of new cases rising above 30,000. u.s. fatalities are now recorded at over 130,000. of brazil has tested positive for the coronavirus, as cases in the country soar beyond 1.6 million.

hasvirus skeptic consistently played down the threat, but says he is perfectly well and is using the anti-malaria drug hydroxychloroquine. third world the leader to test positive. australia's second largest city is entering a 6 week lockdown as coronavirus infections threaten a second wave. people must remain at home in melbourne except for essential work and services, medical treatment, or education. victoria it recorded more than 130 new cases overnight. significantsays steps are needed. still ahead this hour, a look at a quality and diversity in the workplace.

aboutut what is ahead giving equal opportunities to employees later this hour. ahead, the latest on hong kong's national security law. find out how big tech is affected, and what the dollar peg is really under threat. this is bloomberg. ♪ this is bloomberg. ♪

top advisors in washington are set to want the u.s. to undermine the hong kong dollar to punish china for its tightening grip on the city. for more, let's go to selina wang in beijing. what do we know about this? how likely is this to come to fruition? selina: this has not gained serious traction yet according to our sources who say that this was raised as product -- part of

broader discussions with mike pompeo when discussing different ways to hit back at china for this national security law in hong kong. our sources say there are other options that are higher on the list, including potentially ending the hong kong u.s. extradition treaty, as well as potentially ending cooperation with the hong kong police. for some context here, this hong kong dollar, u.s. dollar peg has been in place since 1983. it keeps that currency within a fairly tight range, it does not fluctuate too far off that 7.8 level to the u.s. dollar. according to some analysts, breaking this peg and the destabilization it would cause the u.s. assets would potentially be more painful than anything it would cause to the hong kong dollar. in addition to that, it would be technically very difficult to break this peg. we have also learned that some administration officials in the united states strongly oppose this proposal, saying it would

do much more damage to u.s. and hong kong banks rather than damage china. on top of that, so far the market impact has been muted. if you look at the currency market indicators, they project there are not many traders who are betting that this peg could actually be broken. president trump says he is considering a ban on tiktok in the u.s.. before that we heard a report that tiktok would be pulling out of hong kong as a way to separate itself from the mainland business. so where does that leave the company now? selina: when it comes to trump's comments, he did not give any details on what that decision would entail, but it comes a day after secretary of state mike pompeo said that they are looking at this ban on tiktok over its ownership by a chinese tech giant. tiktok has pushed back against pompeo, reiterating it has never

provided any user data to the chinese government, nor would it do so if it was asked. it has been trying to distance itself from its parent company. disneynth they hired a executive as its ceo, and hundreds of people in the u.s. to look after security and safety in product decisions. i want you to listen to a conversation i had with an investor at dcm which had been -- he's talking about the decision on tiktok's part to exit the hong kong market over that national security law. >> tiktok exiting hong kong is probably a little bit more of a pr play to make sure that they as a purelywed chinese company, because a lot of investors in that company are american-based. goesnk hong kong, after it over this bump, actually will

flourish in terms of a market for chinese companies to go public. for tiktok exiting hong kong is actually a win-win situation. on the one hand it shows it is pro speech, in support of protecting user data from the chinese government. but at the same time it removes from hong kong i forum that was used by protesters to put videos calling for independence in hong kong. in addition to that, hong kong is a small market for tiktok would less than 2 million downloads. compare that to the u.s. where it has had more than 165 million downloads. yvonne: yeah. so, i can't imagine what the backlash would happen if we do see some type of ban in the u.s.. selina wang, thank you, joining us from beijing. just want to flag something from blue orca, a short seller that is now talking about a new stock

that is in their focus. they are now shorting china, saying they are alleging the company overstated its infant milk revenue, and now they are saying it values them at 5.67 per share. that is the latest we are hearing from blue orca. just take a look at the stock right now. the stock right now trades at around $15.24, now falling close to 4% in response to what we are seeing from this report. plenty more ahead. this is bloomberg. ♪ is bloomberg. ♪

this is bloomberg markets: asia. air asia is under yet more pressure as the coronavirus hammers the aviation industry. an external auditor is concerned about the carrier's prospect as

travel collapses. they announced a record quarterly loss and the auditor is also worried about mounting debt. there are quote, material uncertainties that may cast doubt on their ability to continue as a going concern. deutsche bank has been fined $150 million by a new york regulator over a string of compliance lapses connected to jeffrey epstein. they sought out epstein as a customer even after he was found guilty of soliciting underage girls. according to the regulator, the bank also helped him to pay out millions of dollars in legal settlements. barclays has revealed they have been reaching out to gauge interest in the top job as part of his long-term secession plan to secede they ceo. bloomberg understands the bank has engaged a search firm to carry out market mapping. a group of banking executives is set to have been contacted. the ceo is set to step down next

year. walmart jumped the most in three months ahead of venues of skipton service which will compete with amazon prime. walmart plus will roll out later this month costing $98 a year including same-day delivery of groceries and other products. investors hope plus will bring walmart's online business alongside amazon, which has become the default shopping option for millions of users. let's take a look at this stock currently down almost doublingng volume after blue orca said his talk drop fromimplied 54% the close on tuesday. rallied 111%. 557, ang evaluation of

massive drop if that were to come. we are seeing trading volume doubling. let's take a look at where we are with china brokerages. chinese brokerages have busted again. where we are in terms of the asian markets before we get to those brokerages. asia consolidating further, flat right now. higher pointing a tad after the s&p and nasdaq were down about 1%. the fed is open to doing more to support the economy. the dollar index pretty flat, $12.14. rebounding as investors turn cautious. the dollar has been inversely driving the s&p. new york crude taking a hit, as virus cases continue to climb. as promised, a look at chinese brokerages. most of them continue to rise

upwards. we also have the surge in volume. struggling to keep up, prompting glitches and slowness in trading. securities up by about 1%. csc financial up almost 2%. two year high for the shanghai composite index. prompting millions of mom-and-pop so rush in to make money, prompting some concerns. take this, do not opportunity to make a quick buck. pretty much a consolidation in asia today. not surprising given the rallies we have seen. yvonne: yep. just take a bit of a breather. coming up, an exclusive interview with an urban planning and infrastructure group. we hear from the ceo, next. this is bloomberg. ♪ this is bloomberg.

♪

haslinda: it's 10: 20 9 a.m. in hong kong and shanghai. the ranks ofined china critics saying beijing uses an extensive array of toxic -- tactics to steal u.s. trade secrets. the director says interference, threatening china -- chinese nationals living in america to advance programs that benefit china. he says all of these americans are over a barrel. boeing says it settled almost all wrongful death claims filed in the u.s. over the 2018 crash

of a 737 max operated by indonesia's lion air. it has reached an agreement concerning 171 of the 189 people on board the plane when it went down in the java see of jakarta. was followed by another in ethiopia in march of last year. the plane has been grounded ever since. violence broke out in serbia over a new virus curfew with protesters storming parliament in belgrade. the country is set to go back to lock down this weekend because of a spike in covid cases that has filled. the country lifted one of europe's strict deadlock -- strictest lockdowns in may. their death toll was the highest since the pandemic again. the vice chairman of the federal reserve says the bank can do more and will do more if needed to boost the u.s. economy. he says the fed has a lot of accommodations in place, but

would likely turn to additional guidance and asset purchases to support the recovery. the fed held rates near zero last month and signaled they are likely to stay there through at least 2022. north korea is ramping up tensions with the west, ruling out talks with the u.s. as true seouol.'s envoy flew to relations continue to sour. negotiations stalled in hanoi when the u.s. rejected the north's demand for widespread tensions relief. yvonne: taking a look at markets, seems like we are in for a new session on wednesday morning as we look ahead to not a lot of direction today. a bit of a breather when it comes to asian stocks, pretty much flat after what we signed the u.s. session which snapped

out of five days of gains. u.s. futures are positive, nifty higher by a fifth of a percent. look at the boards, we are watching individual markets, chinese stocks seem to be the reason why things have hit the pause button. mainland stocks pretty much flat. jakarta one of the standouts today, the asx 200 heading in the opposite direction after we talked about lockdowns underway in melbourne. when it comes to currencies, the dollar seems to be steady. we are seeing strength going into the rupiah, and the renminbi well above seven once again. for your hong kong dollar. there has been activity on this bloomberg's group that perhaps the u.s. is weighing options to undermine the hong kong dollar pay. hsbc is tiedocks,

to this hong kong story. the top administration priority has been finding ways to punish banks based in hong kong, particularly when it comes to hsbc after we heard of them supporting this legislation. percent., down 2.7 mtr just got those earnings, of $400lf was a loss million hong kong dollars. you are watching auto stocks, which had a great run in the past couple days. , one of them. it may be time to lock in these gains. they are putting byd and geely to a hold. let's take it to the lion city. singapore votes in an election on friday amid an economic downturn. assets to -- and efforts to contain the pandemic.

the ceo of an urban planning development group told us what he hopes him the next government. -- from the next government. bux the first thing we need to businessesy to get back into operation. for us, it is to get the construction activity going, and the workers back safely at the worksites and gear up the productivity level. that, to us, is the most important. secondly, take advantage of this covid-19 to rollout some of the new technologies. as you know, many people are working from home. in our sectors, the embracing of technology is important going forward. for companies to upgrade their relevantems and the

stuff in terms of embracing digital technologies are crucial. we want to encourage our businesses to transform, whether locally or internationally and compete elsewhere, as well. haslinda: your company is owned ownedasek, a state investor. it was given contracts during the pandemic to convert many facilities for covid-19 patients. do you hope to perhaps tap that experience for similar projects in singapore and elsewhere in the world? pandemiche covid-19 initially came up, we were activated mainly because today, we have the whole spectrum of health care from designing of hospitals to supervising

contracts for hospital construction, including hospital facilities and security. activated, we were and today, we have managed to put up 55,000 dates throughout singapore. the first on thousand were created in the first three days. of being activated at the last moment and being able to complete this in time and provide a safe and comfortable accommodation for the covid patients will help us going forward to branch more into the health care sector. haslinda: we are seeing surbana

making acquisitions within the pandemic. what is the thinking behind it and what is the strategy? is consolidation the way forward? did a numberime we , i want toions stress we look at acquiring companies, it is not just for financials. it is small in terms of their talent base and how they can add to our capabilities to deliver a better and sustainable solution for our planet. going forward, that would be our focus, to look at how we can adjust better, cheaper, and more sustainable ways. haslinda: are you looking at more acquisitions? don't want to let the cat

out of the bag, but obviously we are looking at companies that add scope to what we are doing. our focus will be in the asia-pacific, and to see how we can participate in some of the regional programs to build up their infrastructure and also, cities and regions. that issurbana jurong's ceo. ageism is on the rise. we will discuss this and more. will be joining us. this is bloomberg. ♪

yvonne: a check on the latest headlines, united airlines is warning the surgeon infections in the south and west u.s. runs the nation's recovery. shares slumped amid a fall in bookings particularly at its new -- it's new work hub -- its 16% ofhub. demand was

2019 levels at the start of this month, half of what it was earlier as travel demand rose. a chipmaker is planning to move its data and device management to softbank to focus on its main operations. the group was touted as a key initiative to move into managing information from devices being connected to the internet. it says it will strengthen its inlity to innovate semiconductors. softbank bought the company for $32 billion in 2016. new guidelines for international students in the u.s. are throwing plans for tuition into chaos. harvard's presidents has around 40% of their students will return to campus next said master while all courses will be taught remotely. many have to leave or transfer schools. there are more than one million foreign students in the u.s. inequality remains a

pressing problem and the chasm is wide economically, culturally, and digitally, creating and maintaining a diverse and inclusive work force to serve a diverse consumer base is vital to the success of virtually every business and the challenge needs to be faced head on. joining us to discuss this is richard eardley, chairman of inter-global diversity and inclusion counsel. good to have you with us. in the the benefits workplace is well documented. companies are finding it difficult. what is holding them back? richard: any number of things are preventing companies achieving kind of diversity balance they are looking for. to individualific companies. i think what we need to do is look at -- if an organization is trying to establish diversity throughout its organization and typically, it is at the top

levels where you see that lack of diversity, then the starting point for everyone is data. quite often, you can look around and organization. you can see things don't look right. it might be the workforce is 50-50 male and female but at the leadership levels you see fewer women coming through so you can sense and see that things aren't right. but until you gather the data, you might be aware of a problem but it doesn't tell you exactly where the problem is or what levels in which functions or departments or geography you might have a problem. when we'd talk to organizations around this road you go on her journey you go on to establish true diversity and equality at work, the recommendation is to start with data to tell you where the problems lie. is it true that unconscious bias is in a big way

derailing dni efforts? richard: sure. it is one of the first things many organizations do. we are aware that if you ask most people, they will say i don't have any prejudices, i don't discriminate, i am equal and how i treat people and most people are like that. they come with an honest and fair intent. but we all have, as individuals, our own biases we are under -- unaware of. one of the first things organizations do, or tend to do, is that a rollout unconscious bias training as an awareness exercise to make people reflect on their own biases. but i think it is well documented now that simply rolling out unconscious bias training to raise awareness won't solve the issue. you probably need to take more practical steps to aid people in

eliminating that unconscious bias, because just because you are aware of it doesn't necessarily mean you can automatically do something about it. so the steps that we have undertaken at hays that we would recommend for customers and organizations in the recruitment process, first thing is, are you always looking in the same place for where you get your people? if you tend to go to the same university or advertising the same medium, you while -- are likely to get the same type of people in your organization. if you are planting -- likelying tv's, you are to feed that line managers unconscious bias. thehey can see these out at early decision-making state, that is another thing you can do to minimize the aspect of unconscious bias. then introducing -- sure? interrupt,orry to

but i wanted to ask what impact the coronavirus has had when it comes to the priorities some companies have when it comes to gender and diversity. do you think there are lasting impacts from this crisis that could change how the workforce implements will be played out, or recruiting diverse talent? richard: there are quite a few things that will probably have lasting effects. we are probably unaware of some of them. one of those things that i think will be beneficial for diversity in particular for gender equality is covid-19 has taught us that we can all work, or most people can work remotely and work flexibly. we will move to a more hybrid model whereby we are adept at working at home and in the office, and organizations that might have been reluctant to embrace home working and remote working now kind of maybe have

some comfort around that. we are likely to see more flexibility in the workplace. that has been one of the obstacles to gender equality, particularly at senior levels. the work-life balance equation gets more difficult to achieve, particularly at the onset of families. that is one thing that will have a positive impact i think on working in the future. more about the obstacles that women and senior -- in senior positions hold today. do you think the region is culturally different from what senior women in the u.s. or other western companies -- countries face? richard: i'm afraid so. if you look at the data, you the proportion of women in senior positions is not great anywhere in the world, but , as a generalization, tends

to lag behind gender representation at senior levels. so there is something perhaps cultural there, or maybe it is just other jobs in other locations have been quicker to embrace measures that will aid gender balance. if you look at some of the advanced or countries in europe that have not solved the issue but have gone a long way to addressing the issue, they have more, may be more embraced flexible working. it is interesting, when you look at flexible working on benefits, particularly around parenthood, one thing that countries have done, it -- is to focus on the father as well as the mother. you try to level the playing field. thinking social benefits around childcare to paternity leave, to the father in a

relationship to take more of the burden of the home care and isance things out, and that proving to have quite an impact canchange on how women progress their careers. it is important particularly when we look at senior levels and the impact of parenthood and the start of a family on career progression. we make sure we look at both genders in that equation. something interesting out of your survey, it found 70% of those you surveyed in china said leadership is diverse. that is higher than the average in asia which is 57%. is that a surprise? what is china doing that the rest of asia isn't? at our ownen i look china business, we have probably the highest female to male gender ratio there and we are

attracting more women into the organization and women are progressing through our equalzation, and we have pretty much representation in higher ranks. china seems culturally to be more attuned to women succeeding through those leadership ranks than some other places in asia. i think there was a cultural element. i don't think there is anything necessarily from -- i think it largely is cultural and probably organizations recognizing that with the massive demand there has been in china for human resources, having a playing field where it is only half the employee population is progressing through to leadership, it is a massive constraint on an organization's prospects. there is a business reality around needing to realize the potential of all your employees that i think china seems to have

figured out quicker and faster .han other places as much through economic necessity as cultural issues. yvonne: thanks so much for joining us, richard eardley. live pictures happening in camera, the prime minister scott -- in canberra, the prime minister scott morrison is speaking about melbourne entering lockdown. morrison says the victoria outbreak is a test for australia. this is after we saw a surging cases and a lot of it has been tied to the security lapses at melbourne hotels used the quarantine overseas arrivals. otherer states, -- unlike states, victoria contracted that task out to security firms and not a police so that may have contributed to the rising cases.

morrison, saying the situation in victoria is going to be a test for the rest of the country. plenty more ahead. this is bloomberg. ♪

yvonne: air asia groups external auditors raised concerns about the low cost carrier due to the collapse in the air travel industry that led to the airline

reporting record quarterly losses. for more, we are joined by our reporter. highlight the concerns they are highlighting. what are the biggest challenges for air asia? >> the biggest challenges how they will get passengers to come back to fly with them. that is going to be a considerable challenge, considering that a lot of these factors are beyond their control. it is governments that will have to ease travel restrictions they have, and that will be a major challenge going forward for air asia. what is air asia doing to resolve the concerns posed by the auditors? >> one of the things they said they are doing is, they are in talks with investors to see if they can investors toin raise funds. we hear looking at,

they reached out to banks for loans and possibly capital raising. so these are going to be critical going forward for air asia, because they are burning cash considerably every month. haslinda: our transport editor, keeping us up-to-date on developments at air asia. we have plenty more to come in the next hour. we will continue to attract the markets, which seem to show signs of consolidation after a solid run. stay with us. this is bloomberg. ♪

yvonne: it's almost 11:00 a.m.. haslinda: welcome to bloomberg markets, asia. yvonne: here are the top stories. stocks mixed as a global rally stalls. one loser is hsbc as concern arose that washington may punish banks based in hong kong. potentialamong those actions, we are told state department advisors want to undermine the hong kong dollar in retaliation for china's tightening grip on the city.

a savings plan for deutsche bank area 12 months into a turnaround, we hear from the ceo this hour. haslinda: the asian rally, taking a bit of a breather, taking a pause after the loss on wall street overnight. whether it is a healthy consolidation of stocks or something more, we don't know. pacific in msci asia positive territory, up 0.3 percent, gains for the msci emi index, which continues to rally. the future a higher open and the s&p and nasdaq down about 1% on tuesday. moreed is open to doing for the economy. some say it will be doing more when necessary. nifty futures pointing to a higher open, the sensex at the highest level since early march after three months of gains. we have been seeing a broad

rally. stocks are gaining and some say good opportunities for the momentum for traders to play into. the csi 300 index, up by 0.5% right now, it has been unstoppable for chinese stocks. monday's surge added 460 billion dollars to chinese stock values. the csi at a five-year high. same story for the hang seng, up by 0.5%, never mind concerns about the hong kong dollar and comments out of the u.s., the suggesting more upside could come. jcomp higher by 1% and the 0.3%. index higher by some gains consolidating now, and taking a look at where we are in terms of the dollar 13ex, it is flat at $12

cents right now. the dollar easing somewhat. investors are turning cautious. it remains a dollars story. the hong kong dollar, unchanged, 7.75. the yuan 7.0203. guest isur next maintaining his preference for u.s. and asian equities. you.s great to have you started this term of the fomo trade late last year. how far are we on it? will this be a driver for the -- this to continue or do you see other catalysts for the second half? out, if fear of missing you look at the cash levels on

portfolios, they are extremely high, two to three times more than they were during the global financial crisis. so i think this will continue to be in place. what is interesting is, the markets are actually broadening, so if you look at the u.s., it is no longer a narrow market pulled up by technology companies. we are seeing a broadening. if you look at s&p stocks trading above the moving average, they have been going up. it is not unhealthy or fomotainable, so like being in place. there is noo tina, alternative. you can find a home somewhere for cash bonds and equities. cash and bonds are trading near zero so what is left? we think

there are a few things with this market and equities. you maintain tech exposure like in the u.s., the nasdaq has a record, there are questions about valuations and some say this may be close to bubble territory in the tech sector. i'm guessing you don't agree. is becoming a digital economy. we are at the start of it. for example, e-commerce is 15% of total retail sales. there is still quite a long runway. drop computing is another big thing that will happen. companies will move from on-premise data centers into the cloud. if you look at earnings of companies in technology, they are exploding. they are doing well. sectors, companies in the traditional sectors, it is clear

to us that the technology tailwind remains. can this continue? i think it , thebecause these days world is becoming a digital economy. lots of the business models of these companies are a lot more scalable. upbeat about seem the outlook for the xg markets but we are seeing mom and pops jumping in, trying to make a quick buck in the equity market. we are seeing this in china and singapore. surely there is concern? >> that is another interesting feature that we noticed. if you look at the u.s., which is indicative of the rest of the world, there has been, during the selloff, lots of new accounts being opened on various platforms. ony have said customers

robin hood platforms are speculators, but if you think , thisthe other platforms tells me there is a poll of retail liquidity -- a pool of retail liquidity that we are forced to contend with and that would be positive for the markets. so i think to some extent, the investor is no longer behind the buy high, so low. due to the democratization of the landscape, customers have access to knowledge, information on the markets through the internet, and on top of that, there is a brokerage fee that is zero. we see that in europe, japan, asia, singapore. the number of accounts that are accounts, hasnt

gone up in the midst of the selloff. upt is another positive prop in support of the markets. haslinda: we are seeing a zero yield world expected for several years. in theeaks are needed portfolio -- the 60-40 portfolio? bond the credit or the side, it is important that one should have bonds in the portfolio are though the yields are up rather lower. that is because unlike equities, the certainty of cash flows and returns are quite high, higher than equities. in the bond space, the double are and triple bees, they yielding about four. if you look at the regions, the high yield is where you want to be because the yields are in fact pointing to a default rate

of much higher. credit agencies' predictions for asia, which is 5%-6%. yvonne: you mentioned there are not many alternatives. gold is ahead. are you saying that is the way you barbell your strategy? that brings us to the question we have been asking viewers, where is gold speak at the moment? -- hed's peek at the moment? see inflation perk up due to the stimulus but we could see inflation. that hasn't transpired yet. are you fearful that the gold rally could be capped anyway? -- in any way? as a diversifier in the portfolios so we are

advising clients to construct their portfolios through a barbell. you want growth boosters, so technology, china equities, then you want income generating assets. singapore is one we like. and 10% in gold and gold mining stocks, because they act as a good risk diversifier. it mitigates the entire, it increases resilience through the entire portfolio. on top of that, we think the drivers for gold remains a tailwind for gold because rates are going to stay low for a considerable amount of time. gold thrives in this kind of environment. thank you so much for your insights. let's get to the first word headlines. are settingnumbers

records across the u.s. with hospitalizations in california hitting a new high. florida and arizona set new marks. global cases are near 11 point 7 million with deaths about 540,000. u.s. infections are approaching 3 million alone. on the fourth day, new cases rose above 50,000. u.s. for tallies are reported at over 130,000 -- fertility's are reported at over 130,000. testedsident of brazil positive for coronavirus. he has consistently played down the threat and said he is perfectly well and is using the anti-malaria drug hydroxychloroquine. bolsonaro is the third world leader to test positive for the virus. australia's second largest city is entering a lockdown as new infections threatened a second

wave. people must remain at home in melbourne except for essential work and services. medical treatment or education. victoria recorded over 130 new cases overnight, one of the biggest daily increases since the pandemic began. significant steps are needed. violence has broken out in serbia over a new virus curfew with protesters briefly storming parliament in belgrade. the country is set to go back to lock down this weekend because of a spike in covid cases. millionan country of 7 lifted one of europe's strict lockdowns in may. still ahead, opportunities in venture capital. we will hear from key voices. thesche bank's ceo and

singapore democratic party's secretary-general. next, the latest on hong kong's national security law. threats to big tech in the city. this is bloomberg. ♪

haslinda: top advisors in washington are set to want the u.s. to undermine the hong kong dollar peg. let's go to our correspondent. what do we know about this plan? how likely will this come to fruition? gainedproposal has not serious traction according to sources. it hasn't reached the level of officials in the white house, and it is one of many ideas being discussed in order to hit back at beijing for the coronavirus. these are discussions among advisors to secretary of state mike pompeo. we learned our are higher options on the list, including

breaking the hong kong-u.s. extradition treaty as well as ending cooperation with the hong kong police. for context, this hong kong dollar-u.s. dollar peg has been in place since 1983. to trade around a fairly narrow band around the 7.8 level around the u.s. dollar. if the peg is broken, analysts say the pain it would cause as a result of destabilization of u.s. assets would exceed any pain caused the hong kong dollar. that is on top of the fact that breaking the peg would be technically very difficult. sources say there are a officials in the u.s. who wrongly opposed this. they believe it would be more damaging to u.s. and hong kong banks versus china. if you look at the market reaction, it has been muted, showing traders aren't betting that the breaking of the peg would actually happen.

yvonne: could be just talk and that is it. let's talk more about the things we have heard from president trump, saying he is considering a ban on tiktok in the u.s. has tried tok distance itself from the u.s. and reiterated it has never share data with the chinese government, nor would it share the data if it was asked. last month it hired disney's executive to be ceo and said it has hired hundreds of employees in the u.s.. public support for protecting data, saying it will exit hong kong. a cofounder and managing partner who had invested in a company which was acquired by bytedance and merged with tiktok.

>> tiktok exiting hong kong is probably more of a pr play to , theyure they don't aren't viewed as a purely chinese company, because many investors in the company are american-based. goesnk hong kong, after it over this bump, will actually flourish in terms of a market for chinese companies to go public. kong couldting hong be beneficial for the communist party when it comes to tiktok because that platform was used by pro-democracy protesters to post videos calling for independence in hong kong. selina wang from beijing. fallstocks, we saw it potentially because of the story we broke when it comes to the

u.s. weighing whether it will undermine the hong kong dollar peg. sources tell us a top administration priority has been finding ways to punish banks based in hong kong, particularly hsbc. the stock is down from 2.5% and is downart -- stanchart 1.6 percent. lots of questions about how feasible this kind of option could be at this moment. i had of you were send me an email saying, the fact that we are limiting hong kong banks from buying u.s. dollars will only endanger the u.s. dollars reserve currency status and could backfire if this comes to fruition. that will be a key question as we debate this issue. coming up, we talk about deutsche bank. just one year after an historic revamp, the challenges ahead for the ceo. this is bloomberg. ♪

yvonne: a quick check on the latest headlines, barclays it has beenvealed reaching out to gauge interest in the top job as part of a succession plan to succeed the ceo. the bank engaged in an executive search -- engaged in executive search firm to engage in market mapping. the ceo was expected to step down next year. deutsche bank has been fined 150 million dollars by the new york regulator over a string of compliance lapses tied to jeffrey epstein. deutsche bank was found to have sought out jeffrey epstein is a customer after he was found guilty of soliciting underage girls and 2008. the bank also helped him pay out millions of dollars in legal settlements. haslinda: shares of deutsche bank are beating almost every

big lender in europe just one year after an ambitious restructuring plan. now it sees the potential for takeovers, although a number of challenges remain before that can become a reality. ceo spoke to blumberg about lessons learned about the financial crisis. >> the last big financial crisis where we were part of the problem, now we are part of the solution. we should be the solution. with the balance sheet come all the work we have done, if you compare 2008-2 thousand nine, when we had an economic recession in europe, but also theally, if you compare capital ratio, the liquidity, the working capital consumption you alsoate to today, see a lot of corporations in this world also, most of our clients, actually improve the

way they work with working capital. they improved their capital position and their liquidity position. i think the resilience of a lot of our clients is even higher than 10-12 years ago. then you have the unprecedented support programs from the central banks, which we are talking about government and a lot of governments [indiscernible] i have to applaud what germany has done. i'm positive on the european steps initiated over the last six or seven weeks. that works to contain this pandemic in conjunction with the federal bank measures. if you take these three items, government support programs, central-bank measures, and the improvement of balance sheets of our clients, then i do think there is a lot of resilience in the system. do we see more default than last year? of course.

is it controllable? yes. that is the base for our assumption for the year 2020. to one of the dominating topics in the past few weeks in germany, which is viacom. deutsche bank has said it is willing to help them bank. -- help wire card bank. what kind of help are you thinking about? >> i know you will be disappointed, but i am not prepared to give a lot of details. one thing is clear, last year, we formed the corporate bank. that is the heart of deutsche bank that is why deutsche bank was founded 150 years ago, to support and facilitate corporations around the world. for that, you need the basic product to be cash management

and payments. there is the potential opportunity to look into technology, to look into payment schemes. of course, we are assessing that, and that is exactly what we currently do, whether there is something more to that, it is too early. we now own the transparency, and that is the first thing to be done. players inof the key the payment and transaction banking services, and we almost have an obligation to look into the situation and think whether there is an opportunity or whether we can save a lot. >> there might be a situation where if it turns out to be valuable enough and interesting enough, you would think about buying parts of that business? >> too early to judge, but i think we made it clear last year when we also assessed the

potential of other transactions in germany, the kiefer deutsche bank, it must always be of added value to shareholders. if this is the case, we are happy to look into certain companies but it must be also better than all of our standalone and existing programs. bank's ceo.utsche yvonne: alright. that certainly says something. not seeing a lot when it comes to the market direction at this point after the global risk rally. chinese stocks take a pause, regional benchmarks slightly higher following what we are seeing in u.s. futures and gold. off a bit, but we are maintaining nine-year highs. chinese equities, csi 300 up

0.5%. this is bloomberg. ♪

haslinda: the pandemic and the economic fallout may be stress testing the startup ecosystem, but that hasn't stopped venture capital fund be capital from shoring up over $800 million in its second fund. the company is cofounded by a facebook billionaire. let's bring in their general partner and co-head of asia. good to have you with us. is thellion, what strategy? what will you be focusing on? will it be mobility? what is it?

>> great to be speaking again. this stage of on investing. that means as we look at companies that have found a market fit, we will be helping them scale to the next level. from a company standpoint, the investment size of $10 million-$16 million, what we are founders ands teams that want a large market opportunity. is shapingh financial services and banking and insurance, health care, transportation, logistics, and we are looking for a company that takes a global approach to scaling up their business. is the mostat exciting thing out there? what are the sum -- what are some of

the brightest spots when it comes to tech investing? >> we used to look at things in the context of where things stand. at the most macrolevel, you see tech, if you look at the public markets from january to june, the returns data, the second-best performing sector. more importantly, we spend time looking at companies, are they observing, we see a few friends emerging. businesses are doing much better. servicere [indiscernible] businesses which have been cash guzzling will face challenges, but you have to d average. if you look at the next level, look at where software is being

sold, if it is being sold into places like pharma and the governor -- the government, it is doing well. with airlines, travel and hospitality, those sectors are becoming dead. we have a distant lens of how things go. us.ne: thanks for joining i read recently you are telling your portfolio company or advising them that now is the time for some mna's. is it because of the lack of ipo options out there? >> look at the data of the last 40 years about how companies , this isted to crises a recession but a different crisis. some of the big learnings are, partave to, for the first is showing resilience in the

now. part of that is thinking about the business model. thinking about, how do you transform through the processes? a big part of it is rebounding and preparing how you rebound from the current crisis. some of that is, yes, if you are well-positioned, can you actually think about acquisition of talent? can you think about companies that you may want to keep on the radar? maybe not immediately, but we are encouraging companies to look. tohink they are prepared bounce on the opportunity when we see a rebound, which will take time. are you seeing more consolidation in the space? there are questions about the e-commerce space in southeast asia, for example. how do you view it? , andr view has always been part of tech is backing the number one player and that has

been a big part of our philosophy, and the question on e-commerce, there are two parts to it. if you look at traditional e-commerce across the u.s., china, india, southeast asia, it becomes one where one or two players emerge, or two or three players emerge and become strong. for us as a fund, we have been efficient more businesses in e-commerce. if you look at our portfolio, that will continue. does a lot of focus on enablers, backingtics players, the leading payments companies. then we see there is a multiyear structural growth ahead. theyng at the last data, -- the economical data was $100 million so that is growth in four years. toexpect that number to go

$300 billion in the next 2-4 years. , can you support 10-15we think it is a your view for companies that can enable commerce. recently, we saw india ban 59 chinese apps. how should global tech companies navigate geopolitics across the >>ion and across the world? it is a good question. right now is a time for investors [indiscernible] there are so many macro things happening. looking at the last two or three months, we had an oil price shock, and health pandemic, geopolitical tensions. part of it is just demarcating between what is happening in the

short-term or what is going to happen in the long-term. the philosophy we have is looking at long-term business models that will survive in the long term. who knows what will happen next of selectingg part and screening is to look globally, to see which of these will be stronger in the next quarter or two quarters but also in the long term. i would say it is going to be choppy in the short-term. it is going to be uncertain in the short-term. businesses that will survive and thrive in the next 10, 15 years, we encourage founders and management teams over the next month, two months to kind of make opportunities. it is hard to predict. the reality is uncertain. there are many of these things that one needs to be observing

and adapting to rapidly. howinda: we talked about you are advising companies to pursue mna's. are you getting them to grow as much as possible to be as profitable as possible, given what we saw with softbank and we work? >> for us, the philosophy has always been about focusing on companies that are strong. was about unitit economics. spokee spoke last, we about the private equity view to investing in that has been ingrained in our philosophy. for businesses that are capital efficient. [indiscernible] are very efficient

businesses. if you are a strong business model, and can grow in an efficient way, for the number modelsyers, for business which are cash guzzling, i think it will have a hard time for business models where your economics are not working out, it will be a hard time. capital will be more scarce. the ecosystem, to really take some of the business models and focus on some of these fundamentals of running a business. it is a good thing that will happen over the next few years. [indiscernible] vc billion was invested into backed tech companies, so we expect while the amount of investment may taper down a bit, we expect more capital efficiency from businesses in the next 12, 18, 24 months.

us,ne: thanks for joining kabir narang. the fbi joined the ranks of china critics saying beijing uses an extensive array of toxics to steal u.s. trade secrets and influence politics. christopher wray says this includes hacking, threatening chinese nationals in america, and co-opting people close to political officials to advance programs that benefit china. he adds, this leaves america over a barrel. the trump administration told the u.n. it will quit the world health organization next year. it is giving 12 months notice and will leave the body july 6, 2020 one. the letter confirms president trump's decision to leave amid allegations of the who being too close to china. joe biden is expected to reverse the move if he wins the election in november. exports fell for a fourth straight month as global demand

struggles with the coronavirus and rising tensions between the u.s. and china. outbound shipments fell three point 8%, slightly more than forecast. imports plunged more than 8%, leaving a trade surplus of 5 billion u.s. dollars. exports to southeast asia, japan and europe rose to the u.s. and china. haslinda: coming up, singapore in survival mode. reinvent itself again following this week's election. this is bloomberg. ♪ ♪

haslinda: you are looking at live pictures of the lion city. the sti currently trading pretty flat. one stock we are tracking is the exchange. restorede is being after the loss of its recommendations over a month ago. listing the stock to abide. they cited the acquisition is an asset trading platform and strong plating -- trading platform dented by the msci's move of its index licensing to none other than rival hong kong. 0.9%.up by

let's stay with the lion city. the coronavirus is proving the ultimate test for singapore ahead of friday's election, but the lion city has a reputation for reinventing itself during times of crisis. the ruling party is hoping it can do so again. let's bring in our senior asia economics reporter. what are the differences singapore is facing as it tries to prosper? its independence in 1965, singapore has had the mindset of being obsessed with survival. we heard the deputy prime minister say we are finished if we close up. they are pushing to be a bustling trade hub, constantly innovating. we have seen them take an aggressive stance on transforming the economy, finding new industries to invest in. after the sars at up -- epidemic they lifted a ban on casinos to

attract more tourists. this crisis is different in magnitude. we know with the contraction, it is as much as 7%, the worst singapore has had, but the mindset is the same. they are going full throttle into the digital revolution, investing in areas like ai and biomedical sciences. that will probably set it apart from previous crises. the governments refrain is, emerge stronger. it is now about how quickly they can do that. will we assess this? how will the global community be able to measure whether singapore is successful in reinventing itself? >> there are two time frames we are thinking about. the longer term, because they have these lofty ambitions, talking about high-minded goals for the future. it will be a test as to whether

these one hundred thousand jobs and opportunities the government pledged can be filled, especially whether they can move forward with the rescaling of the rapidly aging population, adapting to new industries. in the medium-term, we have to guess past the election -- get past the election. we will see how they flatten the curve on the case count. we have a chart showing we have gotten there a little bit, but they are looking to stabilize the labor market and a big part of the conversation this year has been around the foreign workers. a lot of talk about how to change my how those workers are housed. and how the pay structure may change for those workers. a lot to tackle. they will be tackling the balance between reopening travel and remaining cautious about not opening too quickly. we will get a glimpse of how deep the economy is in the hole with q2 gdp figures coming out

tuesday. it is not looking good, more than a 10% drop year on year that analysts are looking for. we will see the road ahead as soon as it comes. michelle that is jamrisko in the lion city. one of singapore's leading opposition parties criticized the government for using a fake news law to dispute comments from its chairman. the chairman -- and officials said authorities discourage urged covid testing for migrant workers. -- false statements. with voting on friday, the general secretary was asked for his response to the governments actions. >> this is not accurate. use out and clarify, why the law? and we can have a healthy debate.

it is something we feel is a distraction. it is not something that is healthy for the political discourse in singapore. >> the ruling party has been in power since 1965. there are 11 opposition parties this time around competing in the election. although opposition parties may not be competing against one another, why haven't there been a better coordination among the opposition parties? >> i think it takes time to build up that confidence, that trust, and that is what we wanted to do and what we started off calling for in 2018. we tried to encourage -- in the past, you would not have seen opposition parties coming together like this. we are off to an encouraging start. i think you will see some of the opposition parties coming

together and coming up with a common message. that is what we are going to do going forward. i can only see things fielding up. commentators say the opposition will be obliterated and the ruling party will win all 93 seats. your take on that? >> only in the last decade with the advent of the new media, social media, we have had a chance to be able to break into the national political discourse. we are doing it right now, but everything is still in the hands of the people. we are not just fighting against the ruling party. you are fighting against the entire state machinery. many people understand this but a large segment of them haven't lived for more than half a century under one-party rule. iny still have difficulty

accessing the information as far as the opposition is concerned, to make that informed decision when they get to the polls. haslinda: going all-out and access to social media, can you take a third of the seats in this election? >> even for example, your haveng, whatever pulls you that is not have, encouraged in singapore. even exit polls are banned. but you have all these laws in place. ideally, i could gaze in a crystal ball and tell you but i can't. all i know is, for us in the singapore democratic party, we have 11 candidates and a clear message to singaporeans that we hope they will see for what it candidates -- 11 pathetic, isn't it? 93 seats up

for grabs and 11 candidates. light on can you shed the policies you were implementing -- you would implement if you were in government? >> in the immediate term we are facing an existential crisis in terms of the economic situation caused by coronavirus. the one thing you want to be able to do is to make sure the people continue to have confidence in the economy so they can continue spending as normally as they can. haslinda: what policy will be in place for that? >> what we want to see is some form of benefits for people who are going to get returns, and by all accounts you will see tens of thousands of people, the projection is those numbers, people getting returns. what do they do when the bills continue to pile up? you want to be able to get some money so they can sustain the shock. when they do, they will use the money to spend locally and make and businesses survive,

don't go into a tailspin, and have to retrench and then you are into a deflationary cycle. singapore's was them a credit party secretary general. indian markets just opening up, we will talk about where the government could soon be knocking on r.b.i.'s door again as it runs out of options to raise funds. details, next. this is bloomberg. ♪

yvonne: india is running out of options to fund spending plans and may turn to the r.b.i. asset faces a deficit of up to 7% of gdp, the widest in more than two decades. here with more is our south asia economics editor. tell us what support can the r.b.i. give at this point? there are a few options open to the government in seeking help from the r.b.i. the first one is, the government is going to have to borrow record amounts this year to fund its widening fiscal deficits. r.b.i. toowing on the

be the buyer of that extra debt, so to directly finance the differences. this is something the r.b.i. can't do by law, but there is an escape clause in the law that if thereem to do that is a national calamity or there is a severe slowdown in the economy. we have seen indonesia this week, two weeks, the government reached an agreement with the central bank that they can purchase, directly purchase a large chunk of the government bonds that will be sold. there is pressure on the r.b.i. to do that. a second option the government has is to increase its dividends it gets from the r.b.i., so india's central bank pays dividends to the government every year based on the profits it makes from the printing of currency and business.

it could request the r.b.i. to beyonde those dividends what it planned for the year, for the full year. we have a situation where the government is under severe revenue constraints, and it has plugging the fiscal shortfall cell fault -- somehow -- somehow. the likely outcome is turning to the r.b.i. for help. haslinda: what are the risks for the r.b.i.? financing of the deficit is something emerging markets, especially central banks, have not been doing in the past. there are risks around inflation, the currency, and the central banks'independence. if you have a huge increase in cash being pumped into the economy, that won't drive up

inflation. at the moment, you don't have much demand in the economy, given the virus outbreak and the world slowdown happening before the virus. so inflation is not a problem at could turn but that quickly, especially if you have your currency also coming under pressure. then, there is the risk also of a credit rating downgrade, so india at the moment is on negative watch by two of the credit grading companies and if they deem that direct financing by the central bank would raise more risks for the economy, that could prompt them to downgrade the economy. nasreen, thank you. , awe look at india markets slight gain today for the rest of asia, as well.

that is it for us on bloomberg markets, asia. bloomberg daybreak: middle east is coming up. this is bloomberg. ♪

>> the following is a paid program. the opinions and views expressed do not reflect the opinions of bloomberg lp, affiliates, or employees. >> the following is a paid presentation brought to you by rare collectibles tv. announcer: the morgan silver dollar is without a doubt the most iconic coin in united states numismatics history, designed by united states mint assistant engraver george t. morgan, this silver dollar series was minted from 1878-1904, then again for one year in 1921. the morgan dollar is nearly one ounce in weight and has a 90% silver content, thereby