tv Bloomberg Daybreak Asia Bloomberg April 7, 2021 7:00pm-9:00pm EDT
only prolong the global pandemic. immunization campaigns can be hit by growing concerns of astrazeneca's covid shot. it is said to have a link to rare blood clots raising doubts about safety. we will speak exclusively to a tourism minister as the country prepares for a bubble with new zealand. >> let's look at the set up for asian markets, and what do you think? >> that aims to debut in hong kong in april 19, and we could see chinese credit data as soon as today. when it comes to the credit picture on the mainland, corporate has been in the spotlight which will leave slagging concerns about household credit. in japan, retail earnings are in focus. futures holding steady ahead of that. and nhk reports plans to open
stores in china with 10,000 in the next five years. we are talking about infections in tokyo, infections have hit a two month high. pulling up hr on the terminal, bloomberg's intelligence cautious over the complacency that we are seeing in credit markets that are nearly back to pre-pandemic levels. i says this severely under prices the risk for delayed asia openings, plus ig credit spreads could track wider in the next three quarters. and possibly about half of the rally that we have seen since march. with any pullback in fiscal support also exasperating the move. shery: hindering rollout campaigns around the world, astrazeneca accounts for a quarter of the total supply
deals signed this year. michelle cortez joins us now. shed some light for us on the safety of the vaccine. michelle: we are getting evidence that the astrazeneca vaccine can trigger a very rare blood clots, and they are looking at a specific type of blood clot that is happening in your brain and it is accompanied by low levels of play in your brain as well. it is exceedingly rare, the side effect we are talking about. the fact that there is a potentially deadly side effects with the astrazeneca shot is going to make it more difficult for people to be convinced to get it, because of course, a vaccine is to prevent an infection, so to put yourself at risk by getting the vaccine, especially if there is another alternative available is going to be a problem in some countries. the problem is in many places,
astrazeneca is the workhorse vaccine, the one that they are relying on to get people protected. if we do not get that kind of protection against the virus, we will have more cases, more hospitalizations, and more death from the infections. >> in terms of good news, we are looking ahead to potentially more older children to the age of 12 and older being able to receive vaccines in the very near future. that is goes some way to alleviate the concern of children being potential super-spreader's? michelle: absolutely. we are getting really great information back on how children are doing with these immunizations. not only are they at lower risks of actually attracting coronavirus come about when they do get vaccinated, the vaccines are incredibly effective in these children, so they are much
less likely to get any type of infection and as a result, they are less likely to spread the virus at all, especially not a super-spreader type of event. there is concern that leaving children unvaccinated could keep the virus circulating, basically creating the pool of potential infections. we know we are going to have to vaccinate these kids across the world, and that we are gettin -- the data that we are getting looks excellent. >> in terms of the big picture, you have these links being established between the astrazeneca shot and admittedly very rare blood clots. and also vaccine hesitancy with the supply issue as well. could this be a really problematic development in terms of getting the globe to a level of satisfactory immunity? michelle: it is definitely going to slow our vaccination approach
across the entire world. there is no doubt about it that people are going to be hesitant to get the astrazeneca shot. we see some countries putting restrictions on its. in the u.k., they are saying it should not be given to people under the age of 30. in other places in europe, they are saying over age 60 is who should be getting this vaccine but the problem is that people are going to be concerned about what does it mean for me individually and on average, it is going to be in nothing for most people. what it does mean is that you are protected against coronavirus, but the fact that there could be an infection, that there could be some type of complication with the vaccine is going to make people want to wait, especially we do have or than 13 other vaccines that are approved in some place in the world. we know that other vaccines are going to come and there are going to be some people who will say, i will just wait for the next one and by delaying the vaccine effort, that is going to keep the virus regulating for
that much longer. shery: also in time will re-have more variants and the one in the u.k. that has become more common in the u.s., what is the risk around this? michelle: we know the u.k. variant spread more quickly and we are seeing increased risk of serious disease from this particular variant, but the good news is when it comes to the u.k. variance, the vaccines appear to be potent against it. but the bigger concern is the variance out of south africa. that is pretty low levels in the u.s. in many parts of the world but that one does have a significant resistance profile against vaccinations. we are going -- concerned that that is going to garner more ground. we know that vaccines work against the u.k. variant, but what we would be concerned about
is if the south african strain started gaining the upper hand, or if there was another variant that emerged that was able to resist the vaccine like the south african variant. so far we have not seen that, so fingers crossed that we stick with the u.k. variant and get everyone vaccinated and protected against this virus. >> the latest on the vaccine rollout and the pandemic. indonesian president to has slammed richer nations for what he calls vaccine nationalism. indonesia has had to slow down its inoculation drive due to receiving less vaccines than expected. >> it depends on vaccine supply. vaccine supply with the schedule
that we had made, the vaccination would be completed at the end of the year, but do to supply, we have only vaccinated 449,000 people at the end of march. when the vaccine arrives at 70 million doses per month, we will be able to vaccinate at one million doses per day. >> where will you get your vaccines from because right now, even india is holding onto it supply of astrazeneca? >> that is where the problem lies. there are several delayed commitments, but still committed at a great volume. that is why i am asking world leaders to prevent to what is called vaccine nationalism. we must give vaccine access to all countries. poor countries, developing countries, developed countries must be given equal treatment. if not, the pandemic will not end. haslinda: vaccination is key to indonesia's economic recovery.
given the pace of the vaccination you are seeing, what assumptions are you making about the growth potential for indonesia for this year? >> the key for all countries is the vaccine and we believe if the vaccine is successful, economic growth will follow. the trust of the business world, the economic world is very important. if we are successful in upholding health protocols than this will have an impact on economic growth and economic recovery. haslinda: 5% growth this year, it 7% growth possible in gdp? >> for 2020, we know that indonesia's growth was at -2.1%. if we compared to g20 countries, i think it will compare with other countries.
deficits in other countries are at -15%, minus 14%, -10%, and i think we are very careful at managing the economy. haslinda: 7% growth this year? >> we expect this year that 4.5% to 5.5%. haslinda: you have always pushed for lower rates, and in one of our earlier conversations, you said you wanted interest rates to go down, down, down. are we happy with where rates are? >> before, rates were at very high levels, but now at 3.5% so we are very happy. people are happy, the business world is happy. 53.2%, but if we are subduing
the pandemic, we can continue with the vaccination program and the economy will recover. haslinda: india's economic recovery is still very fragile. is there risk perhaps that the central bank would have to raise rates because the currency is under pressure and also because it is rising in the u.s. and they have to move in tandem. >> indeed. economic matters do not just depend on domestic factors by external factors. countries impact each other and policies also impact other countries including indonesia, and that is white prudence in managing the economy is important. we are very careful and the deficit is small compared with other countries. we will maintain this prudence, also on the monetary policy carried out by the bank indonesia. >> that was the indonesian
president speaking exclusively with haslinda amin. don't miss another exclusive conversation i had, the philippine central bank governor joining us from manila and the next hour. tourism minister also joining us exclusively and we will discuss the travel bubble with new zealand and vaccine experts from the eu amongst other topics. let's get to vonnie quinn. vonnie: the cdc has confirmed the u.k.'s covid-19 variant the most common strain in the u.s., overtaking the original form of the virus. depending and despite rising cases, new york announced it will reopen beaches in time for memorial day weekend and the public pools will open the following month. alabama will lift it state mandates on masks friday following similar moves by texas and indiana. president biden pushing pressure
-- putting pressure on republicans and urging congress to work swiftly to pass the infrastructure plan. he calls it a blueprint for the future saying it is vital to stay competitive with china. republican lawmakers sharply oppose the plan. pres. biden: china is waiting around to invest in the digital infrastructure, on research and development. i promise you, they are not waiting. they are counting on american democracy to be too slow, too limited, and to divided to keep pace. vonnie: meantime, treasury secretary alan expects president biden's proposed corporate tax hike -- she says the plan to raise corporate taxes will be fairer to all americans.
it will remove incentives for u.s. corporations to shift assets abroad. jp morgan ceo jamie dimon says he is optimistic the pandemic will end with a u.s. rebound that could last at least two years. he says the economic conditions and the new stimulus are likely to result in a boom that can run into 2023. dimon also warned that destruction of technology could shrink the bank. global news, 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> still ahead, the chip crunch continues. peter enbridge joins us to discuss how the shortage in semiconductors but also the disruption to other supply chains. coming up next, emily weiss says we are at a turning point.
>> under pressure after seeing the worst session in about two weeks. our next guest says that emerging markets are -- emily weis, great to have you back. we have seen a rising yield, stronger dollar, so when can we see this turning point and why do you expect it to happen? emily: i do think we are turning the quarter. we were thinking this would benefit emerging markets, but i think the piece is still broadly
intact. the inflation trade momentum got postponed, so we are still looking at an environment where a lot of the issues that plagued emerging markets in first quarter including rising u.s. yields, and unfortunately, covid still being a really bad reality in many countries, they are all looking like things are going to get better as we move forward. u.s. yields appear to be slightly more trapped. covid cases are set to drop, particularly if vaccination campaigns pick up momentum, and the idiosyncratic issues like turkey that proved to be just a temporary blip on emerging markets then a more systemic issue. shery: where are you seeing the opportunities. there is a lot strength in the chilean peso, because they have been ahead of the curve with
vaccinations, but that has not been the case for the rest of the developing nations. emily: it is important to make the regional and country distinctions. where we are focused in the immediate next quarter is on the countries that have the biggest exposure to the u.s. given the likes of mexico really coming to mind where exports to the u.s. make of around 70% of their total exports. and how to flow through to everything and these countries first, india stands out as having a pretty close connection. the second step will be the broader growth recovery. and it becomes more broad-based, particularly looking for europe, there is a catch up. and starting to have some of that momentum going forward, that will continue to benefit global growth will have broadly positive implications for emerging markets more broadly. >> how does the dollar play into
this in terms of volatility -- what is your gauge or your best assumption of what the greenback does and how that plays out across the e.m. complex the prices that have been seen. emily: starting with the dollar, it has been a tough call, but we are sticking with the more bearish call. the move we have seen was in the short-term in nature and predicated on the u.s. exceptionalism story where you have a combination of really significant repricing of growth expectations that happened between january and march. as
anticipate the better growth outcome and potential and encouraging fed pricing further down the line. i think a lot of the good news is already in the price. the story is pretty well appreciated and we had a pretty good payroll last week. the dollar has not moved that much as of late. it seems that most of that is in the price. that provides a huge tailwind with emerging markets on the currency side since this has been a major pressure point we have been watching. when it comes to the renminbi, it is something to watch given that china is going to start fully normalizing policy in the coming months, so we do not expect as much outperformance, but there are plenty of other currencies within the fx space that are relatively cheap versus where they have been historically. >> do you still see catch of opportunities in the european market if the vaccine rollout does not go as well or as quickly as planned? >> certainly the vaccine rollout has been a big disappointment in europe, and that is going to be a crucial part to pull together in order to have this growth outlook come together. we are confident that this is
just a postponement in the eventual rollout of the vaccine rather than a changing of the actual outcome. so at this point, we are feeling like the most pessimistic scenario is reflected in imf world economic forecast in terms of expectations for growth in 2021, but europe has the some -- smallest increase. there is pessimistic outlook on the euro. >> always great to have you with us, emily weis. we have a big exclusive interview coming up on friday and will be joined by the san francisco fed president on 7:30 a.m. hong kong time. let's get a quick check of the business flash headlines. amsterdam to raise millions of dollars from a block sale of $.10. it is remaining still the biggest shareholder, but sources tell bloomberg that they will place the at the top end, and that is a 5.5% discount to for the stocks. online grocery startup is said to be weighing a 500 million u.s. ipo. the company is making preparations for an offering as early as this year. robinhood is said to be seeking more revolving bank loans ahead of a planned ipo, after the firm raised it in a $3.4 billion equity deal to comply with the clearinghouse equity call. it could be one of the most closely watched ipo's of the year after drawing scrutiny for
♪ >> we are just over 30 minutes away from the start of trading in south korea and japan. we do have been japan southbank and blackrock leading a $640 million for a start up. also financial authorities now planning to ask the countries about their risk management practices and that is according to the nikkei newspaper. tokyo planning to impose new restrictions to combat virus control measures. a decision will come after hearing experts opinions on the matter. in south korea, we are watching the fallout from the main
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♪ >> this is daybreak: asia. i am vonnie quinn with the first word headlines. the indonesian president backing a push to expand the central bank's mandate, and he believes it should include with public support behind the legislative move which some analysts see as risking his independence. the indonesian president said that bank indonesia should also support sustainable growth and job creation. >> before rates were at the very high levels. now at 3.5%, we are happy.
people are happy and most important thing is how we can improve demand and improve exports. we saw the at the end of march. a better position than before the pandemic. before the pandemic, it was just 51, and now it is 53.2 so we are optimistic that if we can subdue the pandemic a, we continue with the vaccination program and the economy will recover. vonnie: tokyo preparing that a decision will come after hearing expert opinions on the matter. government officials say the request is made and if it is made, they will promptly consider it as they get ready to host the summer olympics. japan says that one million people have had at least one vaccine shot. the white house has squashed speculation that it is not discussing a joint boycott of the 2022 beijing winter olympics
with its allies. tensions between the u.s. and china have been heightened over beijing's humans right record. they say the boycott would harm the interests of athletes. the white house said to be considering a pledge to cut u.s. greenhouse gas emissions by 50% or more by 2030 and that doubles the previous target set by the obama administration and would require dramatic changes in the power and other sectors. the goal has not been finalized but is expected to be unveiled at the climate summit later this month. global news, 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> let's turn to sophie kamaruddin in hong kong for a check of the markets. sophie: taking a look at how
we are faring, nikkei futures pointing to the downside. toshiba in focus given cbc capital's buyout bid. holding below the 110 handle, and the futures are little changed. likely to see cash yields fall. back to the dollar yen, seen trading in the upper levels, but saying the direction is upwards for the pair, noting it is risky to be complacent about the recent lackluster moves, and jamie dimon weighed in saying tenure treasuries are overpriced. and the two-year benchmark hitting 2% by year end, so not in a straight line. shery: are next to believes the global chip shortage will likely last until the end of this year and this will not be a one-off area joining us from san francisco, peter hanbury who
holds the expertise of semiconductors and manufacturing. thank you for joining us today. this global shortage really wreaking havoc on different industries. why do you think this is not a one-off, because we thought it perhaps was all pandemic induced. peter: great question. this is a big and complex crisis and three big things we are seeing in our research. we think this crisis is expanding, everyone sees and thinks this is expanding, and we think that players need to be thinking about the short term. that means securing chip supply but also managing financial picture. a lot of folks are losing revenue and both of those are squeezing financials. this is a long-term opportunity to reset some of the historical practices and overcome some of
the risk you just highlighted. we think players and to be thinking about how to develop a tech supply chain, which requires visibility across multiple tiers of supply base, as well as things like collaborative long-term planning. >> of course, we have heard that perhaps chinese and american semiconductor associations were getting together to talk and you have the government more involved these days? peter: yeah, of course. most players right now are really focused on the short term. players are scouring supply chains for chips and components, looking for repair and refurbished parts, negotiating accelerated production through an fracturing facility -- that is where 90% of the focus is today and there are efforts from a government perspective and they really come in two forms. one is how to support domestic
industries, we are seeing that with the chips back in the united states. in the last few months, there has also been retaliatory action where governments have taken action against critical bottlenecks in the supply chain. we are seeing a lot of companies focusing in the short-term, but we are definitely encouraging to take this in the long-term and reset some of the practices and overcome what is united as a longer-term challenge to manage these types of supply chains. >> is the auto industry structurally more vulnerable or do you suspect that there were other industries that will follow, the canary in the coal mine? peter: that is a great analogy. the auto industry got caught and they cut their orders just as everyone else was increasing their orders, so their capacity was basically reallocated to other customers.
the key message there is it was an allocation within the capacity of the industry. as you see other parts of the industry like smartphones and pcs running into crises and shortages, that is the signal of a bigger issue. they can kind of get what they want, but the challenge is their demand has grown, and their demand has grown larger in the industry, so instead of talking about reallocating the man and capacity within the industry, you are talking about adding more capacity to the industry and that is where it gets challenging. to build a fad, it takes about several billion dollars, and three to four years. to respond to the pc and smartphone shortage and add new capacity, we are talking billions of dollars and multiple years in order to add that type of capacity. >> houde soon do you expect
china to become a real player given that it has made it a national priority? peter: the chinese government, part of their five-year plan need goals around increasing domestic production of semiconductors and semiconductors in terms of consumption in china is one of the largest items on the trade deficit and oil and gas typically for the largest trade deficits for china, so it makes sense as a consumer, they also want to be a big producer. hard to track exactly how much they have invested here but they think it is over $100 billion, but they have had great success in certain portions of the industry. assembly and tests, these are areas where those dollars have enabled them to make good progress. leading edge, they are a bit more challenged, probably two or three generations behind other players in the industry, and
that is where you will see them have less impact in the short term. >> there has been concern over the reliance of the world on taiwan to provide the semiconductors, given that tengion's between taiwan and china. is this a risk? peter: yes. the leading edge of the industry is highly concentrated and that poses a number of risks, either geopolitical or basic operational risks with typhoons and earthquakes and water droughts, all of these are risks whenever you have a significant portion of capacity, they are concentrated in a limited geographical area. as we work with our clients and advise them how to think about this, there are two things to focus on. one is how do you break away some of the reliance and build other alternative suppliers, and how do you build the capabilities to know when there
is going to be an issue or some other suppliers so you can respond more quickly. >> we have seen carmakers really take a hit with the chip shortage and until we get the supplies to match demand, which industries will suffer most? peter: it is a great question and it is a couple of industries that will be impacted, and it is still playing out real time. the auto industry has been impacted and they were the canary in the coal mine that was impacted first. we have seen a million or so vehicles being taken off of total production volume for the year. pc industry, gaming industry, even smartphones with samsung are now being impacted as well, but i do not think anyone has the size yet of what the industry would like to sell versus what they will be able to sell. everyone is working hard to solve the challenges, but they will be the next ones impacted and quite so.
>> we are getting breaking news when it comes to tencent shares. the amsterdam based company processing the tencent estate sale at the five hong kong dollars each. that is exactly what -- 500 $95 each. it will still remain the largest shareholder in tencent and that is at the top of the market range at 595 hong kong dollar and 55% discount to the stock max closed. our next guest, we have a new report from australia urging to combat the economic fallout of the coronavirus and tensions with china. we are joined by australia's minister for trade -- and great to have you with us. the other part of what the recommendations say is a call to arms for australian businesses
to help reengage with china. the commerce minister has not responded to your correspondence adding back to january and i am wondering what you expect the private sector and businesses to achieve here. >> what the report suggests and i think it is a very good, sensible approach is that we should take a team australia approach when it comes to how we navigate the very complex indo pacific environment at this time. one of the key things that we need to be looking to is business, to show leadership and make sure that they are continuing to engage and work with government to make sure that we speakers one when it comes to expanding our market across the indo pacific, but right across the globe. >> at the same time even in the last couple of days, the geopolitical old circumstances grow more complex. we hear from china warning
camera that the -- if they were to join in the sanctions, that there would be retaliatory action. is it possible for the government to take a stand on principle without further damaging what is already a deteriorated relationship? dan: one thing that will always be very clear about is that we will protect our sovereignty and we will protect our national interest, and we will do that when it comes to our relationships with any country. that is something which was made very clear is nonnegotiable. that does not mean that we cannot have productive relationships. good friends are always able to have very difficult conversations. we have an economic relationship with china which is demonstrated by the complementarity of our two economies, and that has helped grow and has helped millions in china come out of
poverty and helped many of our economy. we think we can have constructive relationships with those in constructive relationships will be built on us protecting our sovereignty and our national interests, and we have made that clear that that is nonnegotiable. >> specifically with regard to the unofficial cold band, there has been no shipments to china since december. do you see the end to the cold band anytime soon? dan: we continue to work through these issues at officials levels, but one of the things that we are also working on is making sure that when it comes to our exports, that we are looking to diversify our markets, and the resilience of australian exporters over the last six to 12 months as we have dealt with covid-19 and some of these difficult issues with our strained relationship with china has come to the fore. they have been able to strike
out and reach new markets and be able to make sure that we continue to be able to provide export dollars to the australian economy and i look forward to continuing to work with our business community here in nostril yet and particularly our export community to make sure that we continue to diversify into as many markets as we can and that is why rapport i launched yesterday is so important because it sets out a further blueprint as to how we can seek to do that in the indo pacific. shery: tell us about the final report of the asia task force because you also talk about re-engaging with china in a certain approach. dan: right. what this blueprint does is it sets out ways that we can work with other countries right across the indo pacific and identifying particular markets where we might be able to export services, goods, or enhance the
investment relationship further. it is a very good blueprint and it makes that telling point that is more we can do this as team australia, business and government working right across the region, we want to continue to build on that and enhance that, but also, that we want to make sure we are making it as easy as possible for exporters to do business in the indo pacific. we continue to work with business to not only implemented this report but make sure when it comes to doing business right in the indo pacific, the government is doing everything we can to support our exporters. shery: you have also announced that the travel bubble with new zealand. what will be your next target when it comes to opening borders? dan: we are obviously looking to implemented the travel bubble, and it will be put in place in a
couple of weeks and we are going to work with new zealand to make sure that it is the success that we want it to be, and particularly important for our tourism industry in australia, and there is 1.4 million new zealanders that visit australia every year and they spent $1.6 billion. when we want to take as many of our kiwi cousins coming to australia and spending big once the two-way bubble is up and running. we will then look at what our other options are. i have had discussions previously with my counterpart to see if we might be able to expand the bubble to singapore down the track it, and i will continue those discussions, and also their opportunities with japan, south korea, vietnam who have all done well when it comes to dealing with covid-19. we will continue to look for opportunities, but at the moment, our real focus is just making sure that the bubble that
we have created with new zealand works and we can get as many kiwi's as we possibly can visiting our tourism destinations in australia. * >> will it be a problem if a lot of people are vaccinated and they are not and australia -- in australia, does that slow a road to full vaccination and endangered the recovery of our tourism sector there and reopening of borders? dan: we are obviously doing everything we can to make sure that is -- make sure that many australians as we can are vaccinated. we are getting close to reaching the one million mark and that will further grow as we continue to bring the online domestic
production onboard and that is one of the most important decisions that the government made last year was to create the own domestic production, because there is shortfalls and vaccination supplies globally and the fact that we will be able to have over time nearly a million doses being produced a week here in australia is something that is going to stand in very good stead. we will continue to roll the vaccine out and while we are targeting those people, the elderly australians in particular, we have to make sure we do it carefully and we are doing it in the approach where we are working with authorities to make sure that it is done where we are maximizing the safety of all australians, and once we deal especially with our elderly, will be able to look at how we can then progress the vaccination rollout as we deal with the broadyu population -- broader population.
>> is there any indication that there will be securing of non-astrazeneca vaccines or accelerating the approvals of other vaccines given the concerns over rare blood clots and also concern of supply coming from europe? dan: we have contractual arrangements with pfizer and we will be looking to make sure that those contractual obligations are adhered to and so far, pfizer has been very good with working with the australian government to make sure the contractual obligations are being adhered to. we will continue to have those discussions with them. we will also look at what other vaccines we could bring on board, but you have to remember, when it comes to astrazeneca, we continue to take the advice of our medical experts and those medical experts are obviously looking very closely at the astrazeneca vaccine, and we are
continuing to roll that out to where it is safe to do so. we will continue to take their advice, but the fact that we still have the domestic production here and the fact that our medical experts are saying especially when it comes to elderly australians, it is safe for them to have the vaccine, that is what we will listen to and we will take their advice as we continue to roll the vaccine out here in australia. >> do you anticipate vaccine passport or documentation being used in australia? dan: that is something that is being considered globally, and that is something that we will have to take into consideration here down the track as to how we would work when it comes to bringing up more travel when it comes to our borders opening up. we might have to ensure it but integrity issues around vaccine passports, but it is one of the
things which could help us move more rapidly to opening of our international borders, so that is something that is under consideration and something collectively that we are going to have to work through with other countries. >> final question when it comes to the collapse of greens ill capital. as the governmental likely putting on the investment had to step in with financing to keep that operation going? dan: there is a lot of moving parts at the moment when it comes to these issues, so at this state, we are just monitoring to see where we will end up, and there are legal arrangements and legal processes in place which we are closely monitoring. at this stage, very much from the government's point of view,
this is just a watch closely and let's see how it all unfolds over the coming week. shery: thank you for your time. dan tehan, australia's minister for trade, tourism, and inves tment. we are watching south korean housing and construction stocks, this after an opposition candidate who promised to drastically ease rebuilding old houses, this really was a test for president moon jae-in, but we saw his ruling democratic party suffering a crushing defeat and a soaring housing prices where key issues, so we are watching those housing and construction stocks. and have seen moon jae-in pledging to make housing more
affordable when he was elected, but pricing has doubled in the last five years. this coming at a time when south korean salaries have only risen by less than 20%. haidi: of course, we continuing to watch toshiba as well, and this as we have been monitoring the moves in the stock for some time. it has gained the 33% over the past year, but we have been following this story about cvc capital partners offering about ¥5,000 per share to buy out toshiba. we are hearing about that special committee being formed to consider that proposal. that is one to watch. let's take a look at the markets and we will come online, and new zealand, this is what we are seeing. 4/10 of 1% for the last trade. futures in sydney looking like we see a bit of a pop of --
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vaccine nationalism and saying that he sees no end without equal access to inoculations. rising inflation amid a spike in covid cases. our exclusive interview is later the sour. shery: japan, south korea, and australia coming online. let's turn to sophie for what to watch. sophie: in japan, we are seeing moves to the downside, off by one third of 1%. we are also waiting on retailer earnings and also watching for any details regarding the potential repositioning of stricter virus curves in tokyo after infections rose to a two-month tide. jgb traders have a five-year option to watch out for when it comes to the dollar yen staying below 110. worrying about complacency given that the move could be higher for the pair. nissan today that the carmaker
will be reducing auto production in light of the ongoing chip shortage. toshiba shares on watch this on the back of the buyout offer. and turning to south korea, housing and construction names with the satisfaction with the moon jae-in administration. now we are seeing the cost at 2/10 of 1%, and back towards the 1119 level after touching 1116 yesterday. over to the open and the tenure yield -- the 10-year yield, just holding losses above the 76 level, and futures are heading lower per commonwealth bank seeing undervaluation for the aussie dollar on the face of abroad greenback strength, but
the dollar is seeing its downtrend. that would lift the aussie currency. the dollar will lose steam in the second half which should alleviate some of the depreciation that we have seen, but not before the currency drops to 660. we are seeing the offshore rate testing the level, this is the dollar is holding its biggest gain since march 30. seeing u.s. yields -- saying the tax agenda in the united states could serve as a counterweight, and soak at the 10-year yield with the by year end. we have the u.s. 10 year trading around 1626 at the start of the asian session. shery: our next guest is concerned about a pickup in inflation. the ceo of global cio offers an independent advisories. great to have you with us.
what is it about the data that makes you think a pickup inflation is more than just a reflationary pulse, that is going to be more than just transitory? gary: i have a look at the u.s. inflation data, and i'm surprised to find that 80% of the components that are the fine detail level are now seeing inflation, meaningful inflation, and this comes before we had the release of pent-up demand or before we have seen significant effects likely from the biden reflation program. plus other reflation that is going on around the world. shery: does that mean that we are setting up for further volatility and bond markets and is that attentively gets bad enough this time around to have impact on what we see with equity violation? gary: i think it does. the next three to four months, we will see probably the worst in the pickup in inflation, because what we had last year
was significant deflation around the world from around march, april, may, june. that will be reversed with the pipeline inflation that we are ready seeing and as we have seen with chip prices, they are rising, lots of inflation around the world. we will see big headline numbers, above 3% probably, and that will spook the bond market. the 10-year yield will be trying to get back above the highs we have seen recently, but the fed may still stealthily put its hand in and keep it suppressed, but the markets will know that yields want to go higher. shery: we are seeing more numbers when it comes to potential tax rates not only in the u.s., but globally. the corporate tax rate has been in some key nations including tax havens like ireland as well, and will higher tax rates globally have a material impact and is this something that you are considering?
gary:gary: it is something that we consider. we go back to one president trump cut the corporate tax rates, the stock market was struggling behind that -- struggling prior to that, and then had a real burst when the tax rate came in. the attack on the multinationals is really not what people pricing that into the market and i think if there is one dampener on equity market performance going forward to, it would be a general rising corporate tax in order to pay for the significant fiscal deficits built up through the pandemic. shery: one of your views, making a little bit of a u-turn on your notes because you say you have a greater belief in the commodity super cycle, but i have to be skeptical, when we saw the commodity super cycle, it was really china lead. now we have china start curbing
back on lending, tightening a little bit. will this hamper this rise? gary: not at all. they are a bit loose and a bit tight, but an underlying policy is to go green. it is carbon neutrality, and the scale of what they are investing in order to get to the carbon neutrality will overwhelm many of these day-to-day considerations, so substantial money being spent in china, substantial money being sent and the u.s. -- spent in the u.s., everyone wants to go green at the same time, and that will force commodity prices higher. >> gary dugan, it is great having you with us. toshiba rising more than 5%, jumping to the upper limits on the previous session.
we are talking at the highest level since 2015 and this is after cvc capital partners offered about ¥5,000 per share to buy out toshiba and this is valued abound -- around 22 point -- $22 million. this is the first rates after we had that confirmation and the ¥5,000 per share number to buy out toshiba, we are now looking at the company jumping and at the highest level s 2015. let's get to vonnie quinn. vonnie: u.s. president joe biden putting pressure on republicans to support is two point $2 trillion infrastructure plan. speaking from the white house, biden called it a blueprint for the future saying it is vital for the u.s. to stay competitive china. republican lawmakers oppose the plan which is also seeing opposition from democrats.
treasury secretary janet yellen expects president biden's corporate tax plan to recoup about $2 billion over the next decade. yellen says the plan would be fairer to all americans, pay for biden's infrastructure proposal, and remove incentives for u.s. corporations to shift assets abroad. jp morgan ceo jamie dimon says he is optimistic the pandemic will end with a u.s. rebound that could last two years. in his letter, he said the economic conditions and the new stimulus are likely to result in a boom that may run into 2023. dimon also warns that destruction by technology could shrink the role of traditional banks and the financial system. the cdc has confirmed the u.k.'s covid-19 variant the most common strain in the united states, overtaking the original virus. despite raising cases across the
country, new york announced it will reopen beaches and time for memorial day and public pools will reopen the following month. alabama will lift its state mandate unmasks the friday following similar moves from texas and indiana. global news, 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. haidi: still ahead, we speak exclusively with the philippine central bank governor about the economic toll and the monetary policy response. coming up next, more hurdles in the global enoch elation campaign with the link between acknowledging astrazeneca vaccine and rare blood clots. we get the latest. this is bloomberg. ♪
to the green economy to help drive growth. speaking exclusively to bloomberg markets, the president says he has been talking to elon musk about bella being a lithium battery industry. he also speaks about geopolitics including myanmar. >> indonesia has vast opportunities and potentials to move towards a economy, green product. in the future, indonesia wants to have a lithium battery industry for electric vehicles. i think the potential with high added values for the country, that is what we choose. i have talked a lot about lithium battery with elon musk. haslinda: a question on your sovereign wealth fund which has come to fruition after years of talks, take us through some of the targets you have for your sovereign wealth fund.
>> we have indonesia investment authority and this is a sovereign wealth fund we just established. we get full authority to pressure most. i believe by establishing trust that way, the indonesian authority will develop more. i give management target that within six months, they need to reach $50 billion in the next two to three years, $200 billion. haslinda: i would like to touch on geopolitics which is become front and center due to the pandemic. a new biden administration in power for four months now. what is your take on what the biden administration means for asian partners, asian allies like indonesia? >> we see the u.s. government has a big role in the economy
weather in asia or indonesia. the most important thing is how we continue to step up relations between the u.s. and the u.s. and indonesia either in economy, investments, or trade. if we continue to step us up, our relations will improve. indonesia has good relations with all countries. haslinda: mr. president, as the leader of the largest and most popular muslim nation, what is your take on what is happening in the such when province -- in the province to do with the muslim uighurs? what role can indonesia play? >> islam and democracy can walk hand-in-hand. we must not contradict islam with democracy. all countries can do that but it will depend on the elites, on the leaders. i've always feared that islam in indonesia is moderate.
islam and indonesia respect each other and we expect all countries to do the same. haslinda: how about myanmar? we know indonesia has been pushing to get a more carbonated response to what is happening in myanmar, but to date, this has not been achieved. what can be done and what would it take to take a tougher stance? >> i have talked so the malaysian prime minister and i called, and also sent foreigners to visit asian countries. i proposed the hold an asian summit specifically to talk about the situation in myanmar. we expect that our approach through dialogue can solve this thing problems. >> indonesian president speaking exclusively with haslinda amin.
growing links between astrazeneca's covid shot and rare blood clots could hinder vaccine campaigns around the world. astrazeneca accounts for .25 of supply deals, and our senior editor has the latest. how serious are the concerns about the shot? >> we heard today from the european medicines agency and they confirmed there is a link between the astrazeneca vaccine what they are calling rare but dangerous clotting events in a number of countries where the vaccine has been used. the safety committee concluded that the unusual blood clots to be looked at as very rare side effects but of course, this is a concern and we heard from british regulators who are more cautious, saying that further investigation was needed. u.k. regulators saying that they are recommending that people
younger than 30 receive other vaccines that they can and most of these cases of blood clots have occurred in people younger than 60 years old. >> we are seeing the likes of spain and potentially italy lamenting the use for elderly people. we are seeing all of these new novel variants as well. do you have data that that tells us whether these vaccines work against new variants? jodi: the u.s. which is having a much more accelerated vaccine campaign then europe is seeing problems on the others i. covid numbers have been dropping since mid-january and now cases are up again because of these variants. we heard from the cdc director today rochelle walensky saying that she is concerned about the spread of these variants and that they are the largest growth in cases in the be 117 variant
first seen in the u.k. in places like michigan, it is spreading rapidly and in some cases, it brings on more harmful -- the outbreak is more harmful, so this is a concern in the u.s. it is the race between vaccine and the variants. >> that was jodi schneider in new york. we have lots more to come on daybreak asia. this is bloomberg. ♪
this investor optimism about the deal? >> yes. as you just said, shares are continuing to surge after rising by the daily limit of 18%. what we can expect is for a prices to rise to about ¥5,000 apiece which is the approximated offer price, but afterword, analysts are saying that share prices can be subjective to volatile trading because a lot of different things can happen from here and it is it hard to expect what exactly the next step will be and how the deal unfolds. shery: what is this meaning for corporate governance in japan? >> and means a growing influence of shareholder activism. for a long time, it seemed like shareholder activism seemed to be a series of efforts that
turned out to be moot, but a lot of different things can turn out from here, but for now, because it is seemed to have triggered this field by cdc, investors have seen cvc coming to rescue and turn around the company if everything has happened as planned. >> tough times keep going for credit suisse. bloomberg has learned that the ceo is facing tough question term his own staff, his board, and investors. sources say there was a lot of anger and venting during the ceo conference call with the dozens of managing directors at the bank. >> yes, bloomberg has learned that this global conference call took place late tuesday and that it quickly turned contentious.
the call was a part of crisis management right after the bank had announced its bid to lose almost 5 billion do to the archegos, and the ceo was grilled about the bank's exposure and risk profile, and we are told that he did not give detailed answers and instead to have of the new chairman. that that would provide an opportunity to review strategy. a quick review of credit suisse's stock price shows that it is down 15%. this comes as shares of arrival bangs are soaring as market activity has boosted them. we also look at what happened earlier tuesday, credit suisse had announced it was taking a
write-down of $4.7 billion due to its losses tied to archegos. in a separate announcement, it said that seven key executives would lead of those included and the chief risk officer, many of the departing executives bloomberg was able to tell by viewing internal memos are directly tied to risk making decisions at the bank. shery: the ceo is facing questions from the board of directors, what is the latest there? su: what we are hearing is that all of these questions particularly from the board and investors have to do with the stain question -- same question. how is it that credit suisse suffered such extreme exposure and when its rivals seemed to
escape their relations with archegos from little to no damage? and for top traders, it is a double whammy, because not only is the stock price lowered, but when we go into the bloomberg, we can see those huge gains and again, most players in the mergers and acquisitions activities, most investment banks and made the big profit which is been wiped out by the archegos loss, and also that 2021 may not bring richer worlds as well. as we hear the new chairman when he arrives later this month. back to you. shery: su keenan with the latest on archegos and credit suisse. the australian securities and investment commission has commenced a civil proceeding against westpac.
alleging the bank stole consumer credit insurance to over 380 customers who had not requested or agreed to by the policies. westpac has acknowledged proceedings and says it is carefully considering these claims and will cooperate. shareholders will vote on whether goldman sachs will publish a report on its arbitration policy for sexual harassment complaints on workplace culture. the bank is telling shareholders to vote against doing so. they are under scrutiny. many companies have abolished it. singapore-based startup raised money, and the company provides computer vision and machine learning. they valued the company around
necessitated restrictions and lockdowns. inflation in the philippines is rising the fastest pace, as the country struggles to pull itself out of a recession. kathleen hays has more. >> yes, a lot of factors now. we are happy to have an interview with benjamin diokno, the governor, the chief of the philippine central bank. it is great to see you. i hope we can see each other soon in person, but it is nice to see you now, sir. benjamin: thank you for having me. >> i want to start with this question, what is the scope for monetary policy in the face of lockdowns in manila?
it may be a drag on growth, we don't know, but if it is and you see a need for stimulus, and the government tries to put cash on inflation, is there room -- caps on inflation, is the room? benjamin: first, last year, we unleashed more than 2 trillion pesos worth of measures. we cut policy rates, the reserve requirements, increase the capacity of banks to support small enterprises and businesses , and i think there is enough liquidity in the system that still has to be digested, so
where we are is we feel our current monetary policy stance is appropriate for the recovery, so i don't think there will be drastic moves on our part to inject more liquidity into the system. inflation is a little high this year, but we are confident it will be within a 2% to 4% target range, so we don't see a significant move on the part of the monetary board. we feel it is the job of the authorities to address the current crisis. kathleen: when you look at the first quarter, this year's gdp, how much of a cut from growth do expect from the lockdowns, and
that the fact that cases are rising in the philippines and the vaccine rollout is going slowly? benjamin: before the ongoing lockdown, we reject the economy will grow by 6.5% 27.5% this year. the imf -- to 7.5% this year. the imf recently adjusted their number 26.9%. because of the -- to 6.9 percent. because of the lockdown, that is approximately half the economy, our secretary is projecting that would be 0.8% from our forecast. we will be looking at 6% to 7%
growth, where the imf projection will kick in, and of course, wet this month, the economic managers will meet this month, so the economy can grow 6% to 7% this year. kathleen: even with these lockdowns, it sounds optimistic. do you think there is a need for more fiscal stimulus? benjamin: there is a need. i think, for example, we need to take care of the poor and formable affected by the lot -- vulnerable affected by the lockdowns. i think you would agree with me,
lockdowns are difficult for democracies. look at the u.s., germany, u.k., right? they are disciplined and follow the lockdown, so we are looking at the metric, and i think they did well in that metric. kathleen: if you don't think you will raise rates, what about other monetary policy tools to support the recovery? benjamin: as i said, the current monetary policy we have adopted, we cut 100 basis points last year, the current rate now is 2%, the lowest ever in this country. we cut the reserve requirement
from 18% to 12%, with a special accommodation for small regional enterprises, so it is still appropriate at this time. we are looking at the fiscal and health authorities to do their jobs. kathleen: have you approved the government's request to extend the no-interest loans that were authorized in december? benjamin: yes, right now, we have some 540 billion pesos, approximately $11 billion, and we have acted on it. they have requested the new loans. we feel the national government needs this assistance, and under
the charter of the central bank of the philippines, we are allowed to lend to the government in extraordinary times. kathleen: the imf is morning this week that abrupt rate hikes for a sudden move is less accommodative. we did not get those from the minutes. this could hurt the philippines because of capital outflows, bond yields, etc. does this concern you? benjamin: i think it is a wrong interpretation. when you talk about emerging economies, the rise in the 10 year bond rate in the u.s. will affect all emerging economies. we are in a different position. our debt to gdp ratio is still
comfortable. when the crisis started, it was in the neighborhood of less than 40%, good compared to other emerging economies and develop economies. -- developed economies. right now we are in the neighborhood of 55%. we are ok. kathleen: ok. makes sense. how are you factoring in the strong recovery in the u.s. and china? how are you factoring that in for your trade balance, exports, growth, as you try to get the economy on a stronger path again? benjamin: i think we will benefit from the strong economy of both the u.s. and china, because the top three trading partners of the philippines are the u.s., china, and japan, so
any improvement in the economies of our trading partners will be beneficial to us. we see exports will grow by a percent next year, and -- 8% and 12%. that is necessary for a recovery efforts. kathleen: one final question about inflation expectations. you said central bankers are watching this closely in the philippines, the u.s. are you concerned if you go through a temporary increase in inflation -- that this could unsettle inflation expectations and this could be a lasting effect of this policy and not hiking rates because it's not the right thing right now and not necessary? benjamin: that is a good question. the philippines has a long history of inflation targeting.
we have the credibility, and inflation expectations, we are not worried about it, the change, the mood in inflation expectations. it is because they have confidence in the central bank of the philippines. kathleen: i think a lot of people don't realize the philippines is one of the leaders in this path of inflation targeting. you have been doing it for so long. thank you for joining us. benjamin: thank you. kathleen: that was benjamin diokno. >> great conversation. let's talk about developing nations around the world, like the philippines and other countries. we are seeing the toll the pandemic has brought forth towards a global middle class. we are talking about new numbers
that now shows the middle class globally has shrunk last year for the first time since the 1990's, 150 million people falling down the socioeconomic ladder, and india has the biggest chunk of the losses when it comes to this middle-class income population. south asia, sub-saharan africa as well. where can we see those losses, because they are not buying cars? this is the first card that many indians choose to purchase -- car many indians have chosen to purchase, about $6,000. it has declined since february. a great set of numbers, a great chart, great personal stories. check those out. plenty more to come.
he said they should not just manage the currency, but support growth and job creation. >> before rates were 7%. now 3.5%, people are happy. the most important thing is how we can improve demand, consumption, exports. we saw that in march. the index was in a better position from before the pandemic at 53.2. before the pandemic, 51. now, we are optimistic if we can subdue the pandemic, the economy will recover. vonnie: the white house has confirmed it's not discussing a joint boycott at the 20
between olympics. officials say -- the 2022 olympics. they say it would run counter to the charter. the white house considering a plan to cut greenhouse in missions by 50% by 2030, doubling the previous target set by the obama administration, and would require changes in many sectors. nicole has not been finalized, but it will be unveiled before later this month. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: we are headed towards the open in china. we are 45 minutes into the trading session in japan and australia. let's check the markets. sophie: mixed in asia.
the kospi under pressure. samsung weighing the most. most sectors in the red. the nikkei off by 0.6%, as shares jumping on an offer. stocks gaining ground. this is lifting the index by 1% this morning. we are seeing the under pressure in sydney. it is noted it's not known how many people will fly when it opens up. this chart on the terminal, bloomberg intelligence is cautious global travel is elusive as governments make be wary of reopening borders, fueling credit spreads widening, so we may see that retracement
from march. fiscal support could exacerbate that move, but not turning off the taps yet. the governor told kathleen hays there is a need for fiscal stimulus and the philippines. in india, the government has embarked on a barring plan, and the central-bank formulae sing its qe buying -- central-bank formulating its qe buying. faxing shortages in india hampered the rollout in several states, including cities like mumbai. shery: austria expanding in asian markets -- australia expanding in asian markets. earlier, the minister for tourism and trade, said exporters need to leave the push in the environment. >> we should take an approach to
navigate the complex indo pacific environment at this time. one of the key things we need to be looking to is business, to show leadership and make sure they continue to engage, and work with government to make sure we speak as one when we look to expand markets across the indo pacific and the globe. shery: even in the last couple of days, the geopolitical circumstances grow more complex. we heard from china, warning if they were to join in on global sanctions against chinese officials over alleged human rights abuses that there would be retaliatory action. is it possible for the government to take a stand on principle without further damaging what is a deteriorating
relationship? dan: one thing that we will be clear about is we will protect our sovereignty and national interest, and we would do that when it comes to our relationship with any country. we make clear that is nonnegotiable, but that does not mean we cannot have productive relationships. good friends are always able to have conversations. we have an economic relationship with china, which is demonstrated by our two economies, helping millions in china come out of poverty, and so we think we can have constructive relationships, but those relationships will be built on us protecting our sovereignty and national interest, and we made that clear that it is nonnegotiable. shery: with regard to the ban,
there has been no shipments to china since december. do you see an end anytime soon? dan we: continue to work through these issues at official levels, but one thing we are working on is making sure when it comes to our colleagues, we are looking to diversify markets. the resilience of exporters for the last six months to 12 months as we have dealt with these issues with our trading relationship with china has come to the fore. they have been able to reach new markets, and we need to continue to provide export dollars to the economy, and i look forward to continuing to work with our business community here, and in particular our export community, to continue to diversify into as
many markets as we can. that is why the report yesterday is so important, because it sets out a blueprint as to how we can do that in the indo pacific. shery: you have just announced the travel bubble with new zealand. what will be your next target when it comes to opening borders? dan: we are looking to implement the travel bubble in a couple of weeks. we will work with new zealand to make sure it is the success we wanted to be, particularly important for our tourism industry. there are 1.4 million people who visit every gear and spend $1.6 billion, and we want to see as many of our q. week cousins -- kiwi coming and spending big.
alliance on -- by a landslide. we are joined by our bureau chief. first of all, give us the result of the mayoral elections and how significant they are. >> two major collections. one in the largest korean city, seoul, korea, the capital, and the conservative candidate won 60%, versus 40% for the ruling party candidate. the same held for the pusan, korea mayoral elections as well, sending a bad signal to the presidents democratic party. shery: we talked about the aspects of dissatisfaction and unhappiness expressed at the moment. what are the implications for
government policy and what can they do to shore up sentiment going into the next election? >> the presidential election is coming up in 11 months. they need to do a lot, particularly the ruling party, if they want to retain the presidential office. the anger now is high, particularly related to housing prices, which have doubled in the last five years, while wages have only gone up 20%. that, as well as the government stumbling on the vaccine rollout , it is a pretty amazing from a year ago, when that party was the super majority in the parliament off of their praise of their management of the virus , but it has been frustrating for the public related to the rollout of the vaccine, and there have been some scandals and corruption allegations that have her the current
♪ david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind, i've often thought, was private equity. [laughter] david: and then i started interviewing. i watched your interviews, so i know how to do some interviewing. i learned from doing interviews how leaders make it to the top. >> i asked how much he wanted. he said 250. i said fine. i did not negotiate with him. and i did no due diligence. david: