haidi: a very good morning. i am haidi stroud-watts in sydney alongside shery ahn in new york. we are counting you down to the market opens in australia and south korea. welcome to "daybreak asia." top stories this hour, asian-pacific stocks look set for another -- tempered byimism caution from the federal reserve. oil maintains its recovery from last month's epic plunge as more economies emerge from lockdowns and production curbs start to trim the global glut.

few smiles and the magic kingdom. disney suffers a coronavirus hit with seem parks shot, movie theaters closed, and sports on hold. shery: a quick check of the market. this after u.s. stocks gained ground for a second day in the regular session. we have sentiment being boosted as more economies move towards easing lockdowns. still, in the last hour of trading, there were some cautionary comments on said officials that cut gains in half. new zealand stock scanning .8%. this would be a third session of gains. therir rate. rate.ir we have the rba leave rates unchanged. we are looking forward to retail sales numbers very soon and we will see how all of that toilet paper hoarding that we saw in

march is reflected in the numbers. not much movement for the japanese at the moment. tosident trump continues push the theory that the coronavirus originated and escaped from a lab inside wuhan but sources within the u.s. intelligence community say the intelligence is less than definitive. that as he pressed for the reopening of the economy. pres. trump: the people are not going to accept it. they will not accept it. and they should not accept it. we have a great country. we cannot keep it closed. i have had doctors say why don't close it for a couple of years? this is the united states of america. while some people be affected? yes. will somebody -- will some people be affected? yes, but we have to get it open soon. shery: emily wilkins joins us from washington, d.c. conflictingeen some messages coming from the intelligence agency. what are we seeing? emily: there have been

conflicting messages. you are absolutely right. u.s.you talk about the intelligence agencies, you are not just talking about one agency. you are talking about a number of them. we have been seeing most of them say that this theory that the virus began in labs in china is not accurate. ofhas not gotten their stamp approval for accuracy on it, and yet, you are seeing the trump administration -- in the trump administration, including mike pompeo, come out and say it did originate in a lab and blaming china for this outbreak and for the virus itself. we are just getting some breaking news when it comes to reportingrseas bank and impairment charge of 286 seeing dollars. that is slightly better than expectations of 790, 2 million singapore dollars as well as net

interest. 782 million singapore dollars as well as net interest. we will get more analysis in just a moment, but in terms of mike pompeo taking a more vocal role in all of this, and certainly, he has become more of a target in tiny state media within those so-called -- chinese state media as the person they are focusing on. emily: we have seen chinese state media really try to use the american response to the coronavirus outbreak to their own advantage when communicating with their citizens and trying to paint the u.s. as not doing as good of a job as china did when handling the virus. they denounced pompeo, his remarks. for most of the trump administration, china has avoided criticizing trump himself, but with some of these remarks you have seen from trump recently, it seems that they are beginning to get a build of frustration at what trump is

implying and sort of seeing this as his own -- trying to paint this as his own bungled response to what the u.s. has gone through. shery: right now, we are hearing the trump administration is extending its deadline to return those ppp loans. emily, what else have we heard about another phase for stimulus measures coming from the united states? emily: we are expecting to see more money perhaps go to the ppp. we might as well see another stimulus check that might come out for americans. remember, every american, a little more than $1000 depending on your income range. that was meant to stimulate the economy. we are also seeing discussions of testing, of research, as well as some things that may be people don't initially think about when it comes to the coronavirus but are still very important. things like how are we going to wind up building in november? students need to be home from

school and they need to access the school via the internet. what happens to be parts of the country where there is no broadband access? they are putting a lot of things into this upcoming bill. they are going to hit some resistance from republicans who are concerned that spending levels have been very, very high, are worried about the debt, the deficit, and want to begin to put things back, watch their spending a little more closely. we will be seeing how that plays out in the next several weeks. our congressional government reporter, emily wilkins, with the latest. let's get you a recap of the earnings lines crossing the bloomberg. first quarter impairment charge of 286 million dollars versus $93 million singapore versus a year earlier. loans to oil and gas sector at $10.2 billion since march 31. downside to the oil and energy

and gas sector is particularly prominent when it comes to the singaporean banks. first quarter number -- nonperforming loans ratio, 1.6%, a bit of a jump from 1.5% year on year. loan loss provisions are likely to be pushed out for all of the singaporean lenders. at $855me coming in million, slightly better than the 792 million seeing dollar expectations. exp ing dollar -- singaporean dollar expectations. that's get to karina mitchell for the first word headlines. karina: the u.k. has become the most seriously affected country in europe as virus the deaths surpass those of italy was almost 30,000 confirmed fatalities. it adds more pressure on the johnson government with critics saying it has been slow to respond to the pandemic. the prime minister ordered a lockdown much later than other european countries and was slow to begin testing in the early stages of the outbreak. the european central bank is

weighing a german court ruling that casts doubt on whether the asset purchase program is in line with e.u. law. the bank has three months to respond. it will not stop the program immediately and will not stop a plan to combat the pandemic fallout. however, it does raise questions over how far the ecb can push its monetary stimulus. malaysia cut its key rate by 50 basis points, the most since 2009. rate byshed the 2%, saying the outlook looks gloomy. indonesian with the weakest showing since 2001. and even have toll is expected in the coming months. a new report says india's virus lockdown saw the loss of more than 120 million jobs last month. meanwhile, hong kong is inching back to normal with plans to gradually loosen curbs on social activity as the virus takes an even deeper toll on the economy there.

retail sales plummeted further in march as visitors from china stayed away. values are slumped 42% from a year earlier while by volume, they fell almost 44%. two straight months of such severe declines is unprecedented. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. shery. shery: still ahead, no magic for disney. 1.4 billionith dollars in costs amid the coronavirus. we break down the results with mediatech. jp morgan says it expects the stock to fall after reaching their targets last week. we get the market outlook from global market strategist carrie craig. this is bloomberg. ♪

economies moved to consider easing lockdown restrictions around the world. the discrepancy between market behavior and economic reality remains. muddy waters -- told bloomberg he things stocks will slump again and current valuations do not make sense so let's get some further analysis from jp morgan asset management's kerry craig. is difficult to look at pricing and valuations and what is a sensible approach at the moment given that guidance, you know come out of the companies, is not terribly useful. and the outlook remains so murky. kerry: good morning. that is correct. i think that is the case that there is a quick question about how stale these earnings are. we are looking forward. that is the most important thing that equityts -- markets are forward-looking. they might be looking to the resumption in collectivity, the

strength around social distancing being used, data points to the contraction we have has and that explains the discrepancy for me that markets are seeing. manufacturing numbers have come out, and business surveys are taking this as the low. in economice low activity. the second quarter, we might see things recover from here, and that is the view of the equity markets. we cannot get around the fact that markets have rallied very hard off the lows of march. and the consequence of that is the valuations have gone up. it is a little bit more difficult to look at the market and

the uncertainties around whether the reopening of the economies will successfully go as planned, as governments pursue this policy of test and try to see if we get another spike in viral cases, that the earnings expectation will actually be looked up to. haidi: particularly as you get kind of the rising likelihood that we will see another round of this trade war, and certainly a diplomatic war between the u.s. and china. i am wondering, if you look at australia and new zealand, and talk about this reopening, does that mean australian assets are looking, if not cheap, but certainly more safe? that seems to be the case that the economies or markets we have seen control of the virus or at least an earlier starting of economic activity -- others have had more favorable treatment and that is particularly showing up when we look at the australian currency more than anything else. the equity market, it is more a case of the structure of the market. and in that case, because the tech sector is relatively smaller here compared to the u.s., which is holding back some of the equity performance. it definitely is showing up in terms of the outlook for economic growth being reflected in the currency and the ability

to trade and perhaps travel between new zealand and australia. that would be good for business and the economy. thinking about the outlook for china, the growth there, and australia is a very open economy in terms of how it works. any consequences around resumption of global trade would be as negative and potentially offset some of that positive news around the viral spread being contained

political factor in australia given that we are now hearing from prime minister morrison that he is saying that the european union will be the one who called for an independent probe in the coronavirus outbreak in china, but of course, we have already seen this war of words between china and australia? kerry: yeah, it is a delicate situation. a huge influx of tourism, education, students coming in to australia, capital flows. it is a delicate balancing act for a politician to try to manage in terms of there is this sort of rise in xenophobic attitude towards china thanks to the virus in many economies around the world. we will push ahead with china and clarify those answers. to me, the rise of that political risk is something that is really unnecessary at the moment given the fragile state of many economies. there are larger questions around how corporate behavior and consumption or consumer behavior will change on the back of this. the oillike we saw with price war between saudi and russia, a lot of these things can be mistimed and do more damage than perhaps they initially thought. shery: when it comes to some themes and sectors, we have of course seen a lot of focus on the faangs and the big tech giants. we have heard this sector is

overvalued. i wonder if it is worth playing into it just because a post-pandemic world could really play into their strengths. kerry: i think particularly in the case of technology, the cyclical themes versus the secular ones, it has plane through for a number of years now and probably will continue to do so. for me, there is the take away businessis which is resiliency and thinking about the companies that have the balance sheets with the larger stability to capitalize on this crisis. afterwards, and think about perhaps consolidations in some sectors that may happen on the back of that. it is thinking about who will be the biggest beneficiary afterwards and coming back to that behavior around consumption and corporate's that does seem like tech is a very obvious one. you will see that in other sectors as well. privateting --

transport attitudes towards travel. you might see it elsewhere in terms of thinking about how companies operate in terms of real estate. greater work from home policy to control cost, downsizing office space. that may play through on the back of this which may be more telling. in the near term, it is still the case that being relative defensive in positioning when it comes to equities, and that does with-- growthier stocks long-term characteristics in them given the uncertainties around the economic outlook for now. youy: kerry craig, thank very much, as always, j.p. morgan asset management. coming up, our guest talks about an extraordinary shock. he tells us the short and long-term impact of the pandemic in an exclusive interview. this is bloomberg. ♪

>> billionaire investor sam zell says the global economy and nearly everyone will be permanently scarred from the coronavirus pandemic. the chairman and founder spoke to bloomberg erik schatzker about the short and long-term effects of the crisis. despite the fact that we have been in lockdown for six weeks to seven weeks, there is very littleactivity, very transactional activity, very little opportunity to do anything. is in kind ofody a, you know, dear in the headlights kind of stature at -- deer in headlights kind of stature at the moment, and at least so far, just sitting here, watching, and we are not seeing anything happen. erik: why do you think that is? is it because prices are not low enough yet? sam: oh, i think that rather ian referring to this crisis,

think that there's been very for priceortunity discovery. sellers is that those that wanted to sell don't remember the prices that were available seven or eight weeks ago. the buyers are looking at a very different world. and they are expecting to see significant discounts from where we were seven weeks ago, and when you have got that big a spread, nothing happens, and i think that is an accurate description. erik: what about you? what do you need to see before you feel motivated, inclined, even excited about putting capital to work? sam: i think we are all faced with an extraordinary level of uncertainty. uncertainty on how the reopening will go. uncertainty as to when the reopening will happen.

uncertain about how people will respond, how soon will anybody get on an airplane, how soon will anybody stay in a hotel, how soon will anybody go to a mall? the fact that these places may be open does not necessarily mean that they will be doing business. and so, i think that that level of uncertainty, rather than people taking action, i think everybody is sitting on the sidelines, waiting for more clarification. erik: what do you think is the greatest misconception many people are under right now, as they look into this uncertain future? sam: i think that too many anticipating a kind of v-like recovery, you know?

that we have been through this terrible period, the period is going to end, that virus numbers are going to go down, and the world is going to go back to normal. us willink that all of be living, you know, in isolated form in one form or another. i have not taken in anybody in eight weeks. i have no frame of reference for that. that has never been the case before. seen ournow, we have whole lives changed, and i think your ability or your likelihood of forgetting that is going to take a long time. spanish -- whos is failed to learn from history is doomed to repeat it. we have a lot of history that we will be learning about and remembering, and it is going to

affect everything we do, and answered you by saying i think it is going to take quite a while. and then, it is not going to be return back to where we were." erik: my grandparents were permanently scarred by their experience in the great depression. you are old enough to have known a lot about that generation. do you think this is going to be something like that? sam: yup. as a matter of fact, it is really funny that you should say that, because the way i have described it to the people is i said, you know, i grew up -- i was in high school in the 1950's, and even in the 1950's, you know, which was 20 years after the end of world war ii, there were 25 years after the depression, there were still friends of mine who talked about the depression and talked about the impact on their family.

permanently scarred is exactly the right word. i think there is very little doubt that we are all going to be permanently scarred by having lived through this pandemic. that was billionaire investor sam zell speaking with erik schatzker. let's get you a quick check of the latest business flash headlines. capital one's staff will work from home until at least after the labor day holiday, said in what could be a benchmark for the financial industry's return. richard fairbank has promised staff they will be given at least six weeks notice before any decision to reopen workplaces. capital one has three quarters of its workforce, around 40,000 people, doing their jobs remotely. united airlines is planning to slash 30% of white collar when virus restrictions lift in

october. 35 hundred managerial and administrative positions will go and office workers will be told to take 20 days leave without pay before the deadline. the federal government's 25 billion dollar payroll support package runs out at the end of september. virgin atlantic is to cut around one third of its staff as travel demands plummet. more than 3000 jobs will go and it will close its hub at -- after failing to secure a bailout from the u.k. government. his airline will concentrate on operations at heathrow and manchester. british airways is looking -- has signaled up to 12,000 job losses. coming up next on "daybreak asia ," global central banks continuing to pledge whatever it takes to contain the economic damage from the pandemic. we will be discussing the latest developments on the ecb and the german ruling on its bond buying program, next. this is bloomberg. ♪

karina: this is "daybreak asia." i am karina mitchell with the first word headlines. excuse me. the white house is discussing shutting down the coronavirus task force, possibly as soon as this month with vice president mike pence saying it has achieved its goal. he said that u.s. has it slowed the spread of the infection and the administration is confident it can meet demands for medical resources in the future. pens added any decision on the -- pence added any decision would be based on conditions at the time. u.s.-china conditions continue to sour. beijing turning its fury on president trump's top diplomat after the white house repeated the infection came from a lab in wuhan. chinese state media released a

torrent of criticism as mike of mike pompeo, calling him a liar. has shownduro evidence he claims proves american mercenaries have tried to launch a coup. he said two u.s. citizens have been arrested after their armed group crossed the border from columbia and blamed washington. he claimed the u.s. is fully behind the action, although the trump administration denies any involvement. a new report from the international energy agency says iran's nuclear program received record infections last year with monitors given wide access to reactors. it comes amid increasing criticism from washington but says -- were able to identify tehran's nuclear commitments. the trump administration has imposed stronger sanctions on iran. global news, 24 hours a day, on air and on quicktake by

bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. haidi. look at how take a we are setting up this midweek session. we are seeing a bit of positivity for u.s. futures after what was really an uncertain session overnight. wall street sentiment really fleeing between positive validity -- positivity and negativity. we are also taking a look at the set up here in asia, looking like a pretty mixed session going into the start of reopening of trading in china. on the upside, we are seeing kiwi stocks trade higher for a third consecutive day, jumping to a high after unemployment numbers came in better-than-expected for the first quarter. australia also looking like a mildly positive to a slight start to trading today. we are watching out for some of the big minors and how they

miners and how they trade today. watching the yen, we are seeing pretty subdued trading action in that safe haven. the european central bank has repeated its pledge to do whatever is needed to contain the economic fallout from the coronavirus. although germany's top court has cast doubt on the bank's ability to do just that. our global economics and policy editor, kathleen hays, is here with all the details. germany's constitutional court says the ecb must prove its bond purchases are legal, and then the ecb said it will keep buying bonds regardless. kathleen: well, there you go. i mean, why would the european central bank -- there was a meeting late today, and this is what came out of it. onically, the judges germany's constitutional court ruled that quantitative easing is not consistent with e.u. treaties and german

authorities should have challenged this in the past. the ecb acknowledged what they said in a statement but they also responded saying, number one, the e.u. has already ruled that these purchases are illegal, and then they went on to say this, "the governing council remains fully committed to doing everything necessary within its mandate to ensure that inflation rises." that is their mandate. its medium-term aim and the monetary policy action taken in pursuit of the objective of maintaining prices ability is transmitted to all parts of the economy into all jurisdictions of the euro area." in other words, we got to be doing this bond purchasing from everybody, including germany. the 750 billion euro pandemic purchase program, not affected by this court ruling. it applies only to the 2.7 trillion euros of quantitative easing bond purchases already

done. importantly, the ruling gives the ecb three months to prove that kiwi is legal. ameeting called the decision legal bombshell and it may affect perceptions of how effective the ecb can be. we saw the euro weaken, italian bond yields rising, and investors are wondering if they can continue. just has to scrutinize their actions. the door is open, but from the ecb side, it is like they are saying we know what we are doing. we will see what happens next. toery: turning two negara -- bank negara, can this be the last easing for malaysia of the year? sam: i am so glad -- kathleen: i am so glad you asked that question. a lot of people are saying, no. they cut an aggressive 50 basis points, the biggest cut since 2009.

the third move they have made this year, taking that key rate down to 2%. let's take a look at a bloomberg terminal chart to show you just how dramatically in the last few months that has risen. that is interesting, too. this aggressive rate cut comes the day after malaysia's government has started reopening the economy, so that is potentially a step towards better growth, which of course, the prime minister there says has cost malaysia about, what is it, $14 billion this year. it is a big bite out of the economy. no wonder everyone wants to do something about it. $15 billion, actually. what do we have now? the oil price collapse has hit malaysia hard. a weaker global demand for commodities will continue to hurt their export revenues. china is getting back to work, but retail demand, they will not see a lot of demand there. as we were just saying, bloomberg economics is looking

for another 50 basis points of rate cuts in malaysia before -- for four years, so there is expected to be more. the lockdowns are going to ease. the impact, the damage, is still there. shery: kathleen hays, our global economics and policy editor there. disney falling in extended trade after profits plunged. we will look at the numbers with porter bibb. this is bloomberg. ♪

the radiotify ceo -- advertising market. he told us that a large share of that money will shift online for services that until now have relied on paid subscriptions. in an exclusive interview, he spoke about the impact of the coronavirus on the company. >> the crazy thing, i think, for us, is just how global the business is. to 80ow, we are in close countries around the world, so we are dealing with all these various stages of the pandemic. making in- which is your recovery. you have europe, which is right in the epicenter and was in the epicenter since early march. you have the u.s., which is kind of right now in the middle of the epicenter, and you have -- that will probably enter the epicenter shortly, so we are all

in different stages of this epidemic, and what is just fascinating for me has been just seeing how the consumption habits have just shifted overnight. i do not think we have ever seen anything like this since the inception of the company of just how people changed habits, changed what they are listening to, how they are engaging with that content, so it has just been really been responding to this new reality that we are living in. while at the same time, making it culturally appropriate. 286 million users, 130 million paying subscribers, in 79 markets. how do you expect listening to shift over the next few months? daniel: we have been seeing an influx of new users coming to the service, including, which we are very happy about all the users -- old users returning to the platform, but it is hard to say. my guess will be as good as anyone's about when this will

change and how quickly things can turn back into normal. for us specifically, the big, big thing is really around the commute, so to the point when people are starting to return offices, their place of work, i suspect we are going to see something that looks a lot more like normalcy for us. also, second thing for us is just the gym. people are listening a lot to music while working out, you know. again, people are working out, but not going to the gym so much, so that is impacting the type of music that people are listening to as well. so i suspect, as we are seeing places of work, work opening up, gyms opening up, we as a company will be a lot more like normal again. >> this has really been hard on the music industry. there have not been any live

concerts. you have john legend doing home concert, selena gomez instagraming her home studio. how hard do you think the music industry itself will be had by this? daniel: it is absolutely going to be massive, specifically for artists themselves. if you look at an average artist today, about 80% of their income comes from touring, so the fact that they cannot tour and likely will not be able to tour for much of the summer, which is one of the greatest points for concerts as well, will impact many, many musicians a lot. and not just that, but we are talking about all the roadies and everyone else who makes these concerts happen. so it's a big, big thing, and it is something that we as a company are very focused on and why we also created the covid-19 relief fund, where we want to match donations towards the music industry. ceo daniel ek.

disney fell in after hours trading after reporting profit plunged in the second quarter. disney is exposed to the covid-19 crisis on multiple fronts with theme parks shut down, movie theaters closed, and live sports canceled. let's bring in porter bibb, managing partner. great to have you with us. when it comes to divisional performance, it seems pretty much in line with expectations, with theme parks taking the biggest hit. how surprised are you with the magnitude of the fall? we are talking about a profit plunged by half. -- plunge by half. porter: disney's second quarter ended march 28. it does not include april. if it had come of the results would be a lot worse than they were today. plus remainw disney in the saving grace there. how does it compare to other streaming device services? because there are so many out

there right now. disney tracked netflix, which added about 30 million subscribers worldwide during the second quarter. disney topped out at the end of april with 54 million subscribers, which is actually terrific. they had originally projected, when they launched last november, not to hit 50 million or 55 million until 2024, so the pandemic has been very beneficial to anybody in the streaming business, except for one, and that's the holy grail ofthe big earnings gem disney, which has traditionally been espn. with no live sports, espn had umps, very inadequate to

keep it in the streaming business. it got a huge lift for two days with the nfl football draft, and games,series of virtual particularly that disney produced. last dance, which was michael jordan's story. but today, they were reduced to showing the opening game of the south korean professional stonell league and skipping contest across the u.s. really without content and losing not only millions of viewers, but hundreds of millions of advertising dollars, because they do not have the content to keep the audience glued to the screen. the same really holds true for the other aspects of disney. media,me parks and the combined, or two thirds of

disney's revenue and -- are two thirds of disney's revenue and profits on both of them are really suffering right now, even though disney plus did exceptionally well in adding new subscribers. nearlys at a huge cost, $1 billion in content costs. and the biggest problem that people are not focusing on in terms of disney and the entire u.s. media industry, as well as advertising, is the fact that content production has stopped almost completely right now in hollywood and across the u.s. there is no content being made, and it is going to leave the television networks, cable networks, and streaming companies, like disney plus and netflix, with no new content six to 12 months from now, because nobody knows exactly when begin.tion is going to re-

haidi: that pipeline for content is really at risk. i wanted to go back on the theme parks, because one of our bloomberg opinion columnists made a really good point, which is that disney's business is built around large groups of people doing stuff together. how much does that get impacted in the longer term if we see permanent changes to consumer behavior? we know that shanghai disney land is going to be reopened but we don't even have a good visibility over what that is going to look like with months, may be years of social distancing measures. porter: it is more morale building than economic. when shanghai disneyland opens days, there, in 10 will be almost -- you can count the visitors on one hand. china is going to take it very slow, and so is disney, and ramping it up, and nobody knows exactly what will happen, if

there is a boomerang effect with the virus coming back some time later this summer. i think that the theme parks and disney's cruise lines especially longoing to be long -- a way off from ever coming back to normal. they will. down ontainly not disney as a company. it has the best content, the best reputation, the best experience, the best talent, the best management, in the media entertainment industry, but it cannot fight the pandemic virus, and it's going to be a long, long time right now before that stock recovers. optionsy, it is a stock and straddle play for investors because the aftermarket, after they made their quarterly

announcements and deliver the results, the stock dropped almost 18 points, and i think it is going to be highly volatile over the next six months or seven months, because disney is not going to bounceback any quicker than anybody else. it is the biggest entertainment company in the world, and it is like turning a battleship around. it is going to have to take its time. probablyll, by 2023, be back where it was, and maybe even exceed its market performance this year, which has been pretty spectacular up until the pandemic. which makes it a pretty attractive proposition right now if you are a longer-term investor who is willing to ride out a couple of years. porter: i would be a long-term investor in disney. there is nobody who has a bigger, brighter future. but it is not going to happen tomorrow. that's the point.

great to have you with us. mediatech capital partner's porter bibb with us. coming up next, we will be , joining usa ceo exclusively to discuss the online for o entertainment and streaming services amid the social distancing era. this is bloomberg. ♪ erg. ♪

shery: let's get a quick check of the latest business flash headlines. airbnb is cutting a quarter of its workforce as the coronavirus rabbit as global travel. about 1900 staff are affected with the ceo saying the world is living through the most harrowing crisis in living memory. global travel comes to a standstill. airbnb was poised to the dig it -- to be the biggest stock listing of the year. uber and lyft are being sued by california for allegedly violating a new state law designed to give the gig economy workers the benefit of employees. the ride-hailers tried to save on labor costs by designating workers as independent contractors. theyomplaint asserts gained unfair advantage, and if they lose the case, they could be paced to pay overtime, health care, and other benefits.

hurts has won support -- hertz has won support from lenders. the waivers gave the company until may 22 to develop a strategy to better reflect the impact of the coronavirus on its business model. they have been talking to creditors about using the debt burden, although it is ready to file for chapter 11 if necessary. time as mainland markets come back online after an extended holiday. let's get to hong kong. sophie kamaruddin is going to take a look at the reopening. we are unlikely to see a replay of february's painful reopening, although in the catch up, there has been quite a bit of bad news. quick recap, after the lunar new year, chinese as 9% innk as much february, and since then, onshore markets have stabilized as the government rolls out targeted stimulus measures, yet

investors are not reaping the returns seen at the start of 2020 for the shanghai composite, trailing global stocks last month by the most in nearly two years. as for today, we could see a cautious start to may given the renewed covid -- as well as disappointing earnings from china with energy the worst performing sector. nonetheless, sentiment may be cushioned by bets on even more stimulus and investors will be looking for signals at the upcoming legislative meetings, which are set to start on may 22, and the key thing to watch today, that will be the pboc's daily fixing. the central bank may seek to calm markets with a stronger fix after the offshore yuan's recent ek lower. the offshore young trading above 720. watch for what the reference rate may be today. getting a quick snapshot of volatility, currency traders are not expecting moves with the implied vol staying below the year's peak.

so significant depreciation for the yuan may be curbed unless fresh trade tariffs are imposed. shery: south korea reasons trading at the top of the hour. what are you watching? sophie: we will be keeping an eye on korean automakers with april sales data due this wednesday. monthly figures were absolutely dismal with a 40% drop for kia.ai and both have restarted operations at their american plans on monday and hyundai is to reopen a factory in india today, and also, this wednesday, south korea is further relaxing social distancing measures that were put in place since march 22, which is worrisome for concerns over imported infections. turning to the korean won, after losing 5% in the first three months, it is the worst performer in asia so far this quarter, and standard chartered expect it will remain among the least promising in the region along with the sing dollar,

given seasonal repatriation pressures coupled with weak exports for south korea. shery: we are seeing kiwi stocks gaining ground for a second -- a third session. this as we got first quarter unemployment numbers earlier. the rate coming in at 4.2%. sydney futures also down .3%. we had seen the rba leaving the cash rate study. we are looking forward to those retail sales numbers out of australia. of course, we saw a lot of toilet paper hoarding in the month of march, so we will be seeing whether that is reflected in the numbers. crude prices about $25 a barrel. we are seeing and using of the supply -- an easing of the supply glut with production cuts. andng up, our guest, another guest from the retail management association. we will be joined by the rbs chairman, howard davis, at 7:00

p.m. sydney time, 5:00 p.m. in hong kong. this is bloomberg. ♪

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get a $50 prepaid card when you switch. it's the most reliable wireless network. and it could save you hundreds. xfinity mobile. ♪ ♪ ♪ ♪ ♪ >> good morning. ahn in newon, in -- york, alongside haidi stroud-watts. uncertainty after a late stumble on wall street. lockdown optimism tempered by caution from the federal reserve. oil maintains recovery from last month's epic plunge as production curves --

coronavirus cases, 255,000 people dead. china hits back on u.s. criticism, saying the trump administration is lying. how sharesa look at are trading in asia. haidi: after a very uncertain session, concerns related to the economic reopening, and president trump essentially saying they should reopen even andreat health cost, federal reserve officials tempering enthusiasm. opening up in australia, down 0.1%, a moderate start to the day. watching the miners, after citi called for the rally to start fading. kiwi stocks jumping the most in about a week, trading at the highest levels we have seen in about a week. u.s. futures showing moderate upside. we see very little movement in

the yen. shery: take a look at what korea is doing, coming back from holiday. gainingeing the kospi 1.3% as south korea is further easing social distancing measures. automakers, releasing april sales data, something to keep an eye on. we see the korean won trading, another session of downside pressure against the u.s. dollar for the korean won. take a look at what commodities are doing. brent seeing wti, continue to gain ground. wti, the longest winning streak in about nine months. brent trading above $30 a barrel, since the middle of april. gold futures trading higher, at about the $1700 level. spot gold is under a little

pressure. we of course have more countries moving to ease coronavirus restrictions, and safe haven demand would not be as strong. haidi: chinese markets reopen in the next hour, after several days off. and it's a geopolitical backdrop where u.s.-china tensions ratcheted up again several notches, already affecting currencies. our guest joins us now out of hong kong. great to have you again. ahead of the reopening, we had quite a bit of bad news for chinese investors to take in over the last few days. is there real concern we're getting into another round of uncertainty and diplomacy between the u.s. and china now? risk,l, it's always a

since 2018 when china and the u.s. engaged in the trade war, basically the relationship between the two countries deteriorated. now, heading into an election year, they may use china and their relationship as one of the chips to win the election. alwaysink the case is there, just at this time it's a little surprising to be resurfacing, because i think at the moment most countries should be focusing on healing their economies rather than trying to damage the relationship further. haidi: in the meantime, mainland china stocks have been pretty steady. from the start of the pandemic to now, steady, although underwhelming in terms of the

size of the rallies we have seen. weakening in offshore yuan, so how does that play into appetite for chinese assets, and broader emerging markets? even thoughytear, there was great uncertainty surrounding markets, we see chinese stocks in a range. i think probably because china is managing the virus outbreak slightly better than the rest of the world, and is actually coming out of it ahead of the rest of the countries. the chinese market is steady, and if you look at relative notormance, even though in the same terms, downside risk people willmited, so probably continue to allocate towards this time of the world. going into the chinese markets,

before the trading halt for the holiday, the flow was quite strong. i'd say people are not pessimistic, but then at the same time because of the virus outbreak and the economic return this year. haidi: we saw the s&p 500 today close 2868. viewers aor our chart showing the shanghai composite interacting with the s&p 500, in a very interesting way. every time the shanghai composite equals or falls below the s&p 500, your study found the shanghai composite starts to outperform. will we see this, this time? does this dynamic still hold with this unprecedented time of fiscal and monetary support of both economies? >> yeah, it is a very

interesting observation. also, when shanghai starts to outperform, when shanghai's relative performance to the u.s. is at the current level, for some reason in the history the shanghai composite tends to outperform. ofative to the valuation shanghai versus the u.s., now at u.s. even/e, and the after the correction is 26 times. nowink the u.s. is for benefiting from a very strong fiscal and monetary stimulus, while the pboc here is restrained, very measured, the monetary stimulus is very measured. so i think the outperformance of shanghai relative to the u.s. is thecular trend, but

history does suggest shanghai stocks outperform here. how muching forward, of the market moves will depend on what role the united states and china play on the global stage? because we spoke to an earlier guessed about how while the u.s. is withdrawn from the global stage, we are seeing china trying to expand influence abroad. and now with even more u.s.-china trade tensions, will this also be felt in the market? >> i think so. the twod really is for countries that need to work very closely together -- i think from some of the supply chain especially from the u.s., and starting in 2018 some

manufacturers relocating to parts of southeast asia. the tensions's , are already here and over time i'd expect a reorganization of the supply chain. what are your expectations for the delay in terms of what policy measures we could expect, signaling gdp, will they put forward a gdb target, a combined target for the two years? thereh, i think this year will be less emphasis on growth targets. after all, you have a horrific quarter,rter -- first and going to the second quarter you have the economy slowly reopening. i think the focus would be,

given the tremendous slowdown, how you keep jobs stable and how you take care of the less fortunate people in society, help them to get over this very difficult period. demand isn appearing, you have to think domestic to stimulate demand and economic growth. already, we see consumption coupons for people to spend, and i think looking at the may holiday numbers, people are coming out to spend. so things are reopening, but very slowly. be less focused on growth targets and more on helping social well-being, and probably more details on

stimulus plans like infrastructure spending. hong, always great to talk to you. joining us from bocom. coming up, franklin templeton's emerging markets portfolio manager. haidi: still ahead, we speak to the hong kong retail management association after quarterly sales drop by a record. plus, oil's recovery from last month's epic plunge accelerating. we ask if they will be enough to actually turn the glut. this is bloomberg.

>> you are watching "daybreak asia." the u.k. has become the most seriously-affected country in europe as virus deaths surpass italy, almost 30,000 confirmed fatalities. it adds more pressure on the

johnson government, who critics say has been slow to respond to the pandemic. the prime minister ordered a lockdown much later than most european countries, and was slow to begin testing in early stages of the outbreak. in the u.s., the white house is discussing shutting down the coronavirus task force as soon as this month, with vice president mike pence saying it has achieved its goal, saying the u.s. has slowed spread of the infection and the administration "is confident it can meet demands for medical resources in the future." pence said any decision would be based on conditions at the time. the european central bank is weighing a german court ruling that casts doubt on whether its asset purchase program is in line with law. they have three months to respond. the ruling will not stop the program immediately and will not stop the separate 750 billion euro plan to combat pandemic fallout, but it does raise questions over how far the ecb can push monetary stimulus.

and, unemployment rose in new pandemics the covid-19 started to push the economy toward recession. rate climbed to 4.2%, slightly below what was forecast. new zealand is bracing for recession at a surge in unemployment as closures and a nationwide lockdown force businesses to make workers redundant. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. global coronavirus cases have topped 3.6 million. more than 255,000 people have died, but many countries believe the worst is over. south korea is one of those who seems to think so, today replacing social distancing with something that roughly translates to "everyday distancing." let's get to rishaad salamat. what do we understand

everyday distancing to mean? rishaad: it is mysterious, isn't it? it basically means to keep a casual distance going about your daily activities, but not as intensely as perhaps previously. many companies using those guidelines as a cue to switch from working from home to returning to the office. in another sign the country is normalizing, south korea's professional baseball league began to play in a sports-starved season of covid-19. there were no fans. there were cheerleaders, all wearing masks, with 25,000 empty seats in seoul's stadium. the return to just a degree of normalcy has caught attention of the united kingdom, the chief science advisor praising seoul for bringing the pathogen under control with contact tracing, and approach the u.k. departed from in march. they say south korea was a fine example.

india we are also seeing is trying to normalize. is this such a good idea, given that the country has had so many issues in getting coronavirus under control there? absolutely.l, after 40 days of strict stay at home orders, perhaps not being actually adhered to. but the more serious thing, naval warships will be used in a huge repatriation to bring back thousands of indians stranded abroad, many of whom lost their jobs. those without any coronavirus symptoms, obviously, will be back, and ittravel is set to be the biggest ever

peace repatriation exercise in history. millions of indians work in the arab world, particularly in the persian gulf, and many have become unemployed due to the economic fallout of the pandemic. shery: japan could be about to approve gilead sciences's experimental drug, remdesivir. what is the latest? rishaad: this is according to reuters, the health minister they're saying it could be approved as early as thursday. meanwhile, gilead is in talk with leading pharmaceutical manufacturing companies about them being able to produce this drug for europe and asia and the developing world through at least 2022, for treatment of this disease, covid-19. and they are looking at longer-term voluntary licenses for generic drug makers in pakistan and india which will produce remdesivir for developing countries, utilizing extensive experience providing medicine to low and middle-income countries during

emergency humanitarian crisis, using well-established distribution networks. this of course was a drug used in the ebola outbreak in africa as well. it does look as though this drug is getting some traction, even though the jury is out in some countries about its efficacy, and indeed whether it will be approved and many other countries other than japan is something we will have to really keep an eye on closely. shery: rishaad salamat. coming up, oil is extending gains in its longest rally in more than a year. is there more room to run a production cut optimism? we will discuss. this is bloomberg. ♪

shery: oil extended gains a sixth day, as the recovery from last month's epic plunge accelerates as production cuts have whittled down the supply glut and more countries ease

their coronavirus lockdowns. let's get the latest from james thornhill. could we finally say supply glut has peaked? james: not sure about that, but certainly this is a very strong rally, a 60 day of gains, the longest rally -- sixth day of gains, the longest rally in a year. this is driven by the production cuts we have seen kick in, rather than any pickup in demand. obviously you have the -- 10lus, $10 million barrels a day cut back from day one, and u.s. shale producers. diamondback energy in the last 48 hours announcing production cuts. that's what is driving the strong rally, back to $25 a 'll probablybut we need to see more recovery on the

demand side. do we have expectations that will ramp up? obviously, china is back up and running and we are hearing increased expectations that the u.s. and other countries will start opening their economies back up. but it looks pretty slow, in terms of that translating into demand increase? .ames: yes, that's right, haid : it is anybody's guess really, when we see strong demand picking up. china starting-- to get back to normal, south korea, the economy there on the recovery trail, and some early signs out of the u.s., possibly that demand might at least be bottoming out and starting to recover from here, but we really need to see the lockdowns across the states and northern europe ease in a more significant fashion, more than we have seen thus far, before demand really

does start to pick up. cautious saying we have seen the bottom of this market. clearly we are better than we were two weeks ago, but that's not to say, we could and get from where we are now. shery: we are seeing the stockpile buildup start to slow down. what are we seeing in terms of energy companies here in the u.s., starting to cut production as well? james: it is interesting. pricethe difference in between the front month contract and the following month. indicator strongest you can get that the market is less confirmed about -- concerned about storage levels. it fell into negative last month when the expiring contracts,

people holding that had no place to store it. the fact it has tightened is a sign people are perhaps less worried about storage levels. as you mentioned, cushing, oklahoma stockpiles have shown signs of stabilizing, and probably will not be in a situation in the coming month where people are left holding physical oil with nowhere to store it. there are production cuts as well. the market seems to be in a slightly more stable place than it was. shery: bloomberg energy reporter james thornhill. let's get a first check of the latest business flash headlines. singapore's united overseas bank reported a quarterly profit drop .

first quarter income fell almost 20%, 600 million u.s. dollars, compared to $200 million, and what the bank described as a "challenging environment." the coronavirus cost disney as much as $1.4 billion last quarter, $1 billion of that from shuttered theme parks alone. earnings plunged by more than half, $.50 per share versus estimates of $.86. advertising revenue on broadcast assets also fell. one bright spot, shanghai disney reopening on monday. the top broadcaster in the philippines is off the air. the tv and radio stations closed to comply with a government order after its license expired. they were attacked by rodrigo duterte in the past for allegedly refusing to air his political ads during the 2016 election. the state failed to renew a license, with regulators saying

it doesn't have a valid franchise approved by congress. shery: taking a look at what markets are doing at the moment. .9%,e the kospi, gaining every share on the kospi green right now, as the country further eases social distancing measures. do watch out for automakers releasing april sales numbers. the asx 200 under pressure, down rba holdwe had the rates steady. watch out for retail sales, later this month. kiwi stocks gaining ground a third session. first quarter unemployment rate earlier today, coming in at 4.2%. after weres unchanged, sell u.s. stocks gaining for a second day in the new york session. we had sentiment boosted by some economies starting to ease lockdowns.

hong kong and singapore pmi's, due in just moments, coming up. this is bloomberg. ♪ these days staying connected is more important than ever.

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♪ haidi: we are just getting breaking news. argentina and creditors are set to be negotiating concessions when it comes to the long-awaited bond deal. a a lot of of breaking news crossing at the moment. shery: including a comment from ., the supreme court is saying justice ruth bader ginsburg has been hospitalized. the court releasing a statement that justice ginsburg has undergone gallbladder treatment. remember, justice ginsburg was only the second female justice in the u.s. up in court,

appointed by president bill clinton in 1993. this up in court says she is undergoing gallbladder treatment. are of course just getting breaking news when it comes to pmi numbers out of singapore, and in hong kong. 36.9kong pmi coming in at for the month of april, actually slightly better than the prior month, 34.9, so a little improvement although clearly still in contraction territory. let's get the number with singapore, that number falling to 28, the singapore purchasing managers index, manufacturing falling to 28.1. let's get analysis from hong kong now, bringing in our chief north asia correspondent stephen engle. what is the key takeaway here? let's start with singapore. stephen: the singapore number is

pretty horrific, 28.1. 33.3 the previous month was the historic low for bloomberg data going back to the year 2000, so 28.1, far in contraction territory. of course, singapore has been extremely hard-hit by the virus in the last few months, with 19,410 infections, 18 deaths. the majority of cases are linked to migrant workers living in cramped dormitories. however, 80% of singapore's workforce is now working at home after in early april singapore authorities implemented a circuit breaker approach to containing the virus. but the government is planning to get some workplaces to especiallym may 12, industries important to the global supply chain. the transit minister said the manufacturing sector should start making plans for gradual reopening of the economy in the coming weeks. but this is just a really good

indicator of how much singapore has been shut down pretty much by this virus, and that circuit breaker. the official pmi for april on monday fell to 44.7, the third month in a row below 50, so this number, 28.1, pretty dire. less hard-hitng, by the virus in cases then singapore but the economy sure suffering badly. stephen: the economy obviously suffering badly. we got the gdp number, down 8.3%, 8.7% i believe it was, the third straight quarter. 8.9%, excuse me, third straight quarter of contraction. hong kong has just over 1000 ands cases and four deaths, we just got news this week and yesterday that social distancing restrictions are starting to be lifted. will bers, theaters allowed to reopen on friday. schools finally have a date for

reopening at least partially. but again, the economy has been triple-hit by the u.s.-china trade war, by the seven months of protests last year and now the coronavirus. march retail sales sinking 42% year-over-year, the second straight month of declines of more than 40%. the word we use often here, "unprecedented." so yes, the market pmi for april, 36.9. it is better than march, better than february, maybe indicating there is some optimism, that containment efforts have worked in hong kong, because it has not been as hard-hit as places like singapore. but still, the singapore economy, as the financial secretary mentioned, is in for significant trouble for the rest of the year. stephen engle with the latest numbers. coming up shortly, more perspective on hong kong's tseil, joined by annie yau

of the hong kong retail association. >> u.s.-china relations continue to sour over coronavirus, with beijing turning fury on president trump's top diplomat. after the white house said the infection came from a lab in wuhan, chinese state media issued a torrent of criticism at mike pompeo, calling him "people and a liar," rejecting his evidence. haszuelan president maduro shown evidence he claims proves american mercenaries tried to launch a coup, and says two u.s. citizens were arrested after crashing the border from colombia. he claims the u.s. is fully behind their actions, although the trump administration denies involvement. meanwhile, a new report from the international energy agency says iran's nuclear program received

record inspections last year with monitors given wide access to reactors, amid increasing criticism from washington, but says that inspectors were able to verify tehran's commitment under the nuclear the u.s. disbanded. the trump has imposed stronger sanctions. harvard university sees a revenue shortfall of $1 billion over the next two academic years as the virus hits further education. the richest u.s. college faces a drop of $400 million in and dissipated income through june, and a further $750 million shortfall for the following 12 months. harvard says difficult decisions will have to be made, including possible staff furloughs and even layoffs. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. apollo global management

is applauding the fed's support for investment grade borrowers, of they say the promise liquidity probably means the market is ahead of itself. they spoke to bloomberg about whether there is a need to go deeper. >> i think while it was not a surprise what the fed did on the primary and secondary credit facilities, as you pointed out, the inclusion of the former investment-grade companies that fell to junk, and the inclusion certainlyeld etf's, took the market by surprise. even thoughse that were very wel structured, they have not been put into practice yet, and as you point out, there's been massive investment-great issuance. so certainly this is a new area for the fed. you have central banks around

the globe taking action. what they did in asia and hong kong, they went and bought equities. i suspect while powell has done a tremendous job and they have a at of what-if scenarios, this present time i don't see them expanding beyond what they've done. with regard to asset-backed facilities, telf was a great d today in 2008-2009, an they announced the triple-a application to triple-a securities. we would argue that if the fed expanded that facility, they would really, because of the evolution of the markets and how many companies financed through asset-backed franchise finance, thet finance in terms of industry, i think that would

touch a lot more american companies which need liquidity right now. e're you describe, what w talking about, shows credit is really the lifeblood of the u.s. economy, the global economy. companies can't operate without liquidity. the great american companies we're putting t, capital into those companies so they can adjust their business plans appropriately. >> so, are you or are you not in ningrd marks' camp, bemoa the amount of fed liquidity competing with private capital? >> we don't spend our time -- [laughter] i think that, you have to tip your hat to what the leadership of the fed and treasury have done, the most unique economic crisis we've ever faced globally, and the response has been thoughtful, swift, decisive, so that is good for

america. that's what we care about. >> every manager i talked to says something along the lines of the following. they'll be fine. how, if the economy is in shambles, if downgrades are multiplying, bankruptcies are thaterating, is it vehicles loaded with leveraged loans are fine? >> well, there's two parts tot answer, one the structure and second what is underlying. i would say, if you look back at this period of time versus 2008, in 2008 the crisis was at the intersection of commercial banks in the u.s. and commercial real estate. today the intersection of the crisis is, beyond the obvious, entertainment, lodging, travel, will be an intersection of structural credit, probably commercial real estate, and some secular headwinds in a variety of industries like retail.

so as a manager, the benefit, you have capital that is arguably locked up, you have liabilities that are fixed for many years. >> i am sorry to interrupt, but i want to make sure we can go through this before we run out of time. is there trouble in clo land, or from the standpoint of a manager like apollo, do you worry about those structures and the underlying debt? or do you see that is more of an opportunity to pick up what the clo's can't buy anymore? >> we look at it as an opportunity. the ability, the role clo's played in the past is going to change. there's going to be a dramatic demand for private credit, and across the breadth of our wetform, our $200 billion, are looking to expand our avenues a private credit. we also announced on our call last week that we were in the process of raising over $20 billion of capital for a variety of dislocation and distressed strategies. from our perspective, what is

going on in the clo market is an opportunity for a firm like apollo, a leader in alternative credit. shery: apollo global management's jim beltre -- zelte r. coming up, hong kong's battered retailers endured another painful month in march, where retail sales plunged 42%. we discussed with hong kong retail association chairman annie yau tse. this is bloomberg. ♪

♪ ♪ china tourist will probably be half of what used to be. >> covid-19 is an accelerator in promoting us to adopt and evolve quickly to cope with market conditions. >> i don't see how the retail sector, the tourism sector can survive another six months of this kind of downturn. some of our guests commenting on the outlook for hong kong's retail sector. a look at the latest headlines. airbnb cutting a quarter of its workforce as coronavirus ravages global travel. affected, with

the ceo saying the world is living through the most harrowing crisis in living memory as global travel comes to a standstill. $2ry: airbnb has raised billion in a bid to weather the virus follow-up. united airlines planning to cut 30% of white-collar jobs. around 3500 managerial and administrative positions will go, and office workers will be told to take 20 days of leave without pay before the deadline to pare costs. government's $25 billion payroll support package runs out at the end of september. virgin atlantic it will cut about a third of staff as travel demand plummets. 3000 jobs will go and they will close the hub at london gatwick after failing to secure a bailout from the u.k. government. richard branson's airline will

now concentrate operations at heathrow and manchester. rival british airways is also looking to exit gatwick and has signaled 12,000 job losses. let's get back to the outlook for the retail sector in hong kong, as retail sales endured another painful month in march. we are joined by hong kong retail management association chairman annie yau tse. she is also head of one of the city's biggest jewelers. great to have you with us. of course, a membership in your association accounts for more than 8000 retail outlets. what are you hearing from the ground about how painful it has been during this coronavirus pandemic? are experiencing the worst decline on record. are now talking about survival. as you know, we have the highest rent on earth in hong kong, which is a major cost for all retailers. so the keyt i whether wes can t

sufficient concessions from our landlords. everybody is struggling for survival, and it's really talking about whether we can get everybody, from landlords, from government. this is the way we are heading. how big of a cost is rent in hong kong? we have course know how pricey housing and the commercial retail is in the city, so how big of a part of costs is rent, and could we expect any relief on this front? annie: well, it depends on which sector you are talking about. but normally, it could range 20% a few percent to, over of your turnover. right now, as we are suffering, we have almost had no business

in some sectors,, talking about luxury, high-end items. right now, the percentage is high, so it's really hard to survive. we do have to cut costs. that is the only way. haidi: i want to put up a chart for the benefit of our viewers showing how bad it is particularly for the segment you focused on, which is luxury jewelry. we know that's also really the segment that tends to pay the most eye watering rents for these flagship stores and retail positions. watch and jewelry sales in march fell to the lowest on record, and if you look at the breakdown in terms of how the segments of retail performed they are the ones being hardest-hit.

recovery, we do see a is unlikely that recovery will be meaningful across the luxury segment, because that sort of discretionary spending is the furthest away from essential that you can get. annie: right. are also talking about fashion, cosmetics, they are also very hard-hit. categories all these heavily rely on tourism. right now, as everybody knows, we don't have any tourists in hong kong, and that's because of his pandemic but also because of unrest in hong kong we have been suffering for all year last year. facingailers are are going to and need to downsize. our capacity is for

millions of tourists coming into hong kong, and in the pandemic, it's going to last for quite a long time. even when the pandemic has ended, it still takes a long time for us to recover the traffic. hard for us to survive, so i think downsizing is going to be our focus. also, people going to online business, people in hong kong changing habits to buy online. but the retail sector in hong kong is quite physical. we need to put more focus on online business, and that's why it's hard to maintain this way right now, and we will have

to be downsizing. haidi: are you concerned, very quickly, that even after the pandemic you will see the protests resume? hope: well, of course we hong kong will be stable knowscally, but nobody what is going to happen. it seems that the protests are just on a smaller scale than before. and i think retailers in hong -- there must be some other opportunities for us. looking fort millions of tourists coming to hong kong, in a month? situations i

don't think are going to resume and we have to find a new way of doing our business. thank you for joining us. annie yau tse from the hong kong retail management association for us. that is about it for daybreak asia, but more on hong kong's economic outlook in the coming hours. this is bloomberg. ♪

♪ >> quarterly profit dropped as impacted credit costs. we bring in our analyst. what are your key takeaways? did they perform relative to your expectations? >> good morning. yes, we were talking about almost 20%. the margin came sooner than expected, and this year and next year will be critical. we see there may be more room points,0 to 40 basis and we need more guidance around

that as well. haidi: what are problem areas or sectors -- the two other singapore banks have the most distress to deal with? >> i think the biggest sector is oil and gas, which has issues. uob disclosed about $10.2 billion of exposure to oil and gas. 2.5 billion is upstream. that is one problem. other vulnerable sectors include aviation, gaming, tourism. particularly, small businesses that are usually more vulnerable in these downturns, uob might be more exposed to those. shery: and we have yes bank reporting today as well. the key things to watch out for there? >> yes bank, we saw a 34% decline in the quarter between

september and march 1. that indicates the key challenge. it was not able to generate enough revenue to cover operating costs. we are looking this quarter to see how they could turn around quickly, and the next milestone can bringly, how they business momentum back as well. shery: thank you. we'll be talking to a big banking executive later on bloomberg. rbs' chairman will be on at 5:00 p.m. hong kong, if you are watching from sydney at 7:00 p.m. coming up, more market analysis with window asset management cio pan yue. and an exclusive interview with mark barnett. that's it from "daybreak asia." "the china open" is next.

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>> it is a 9:00 a.m. in beijing, and singapore. i'm tom mackenzie. >> i'm david ingles. we are counting down to the open of trade. not just in hong kong. the chinese mail and reopens. our top stories. coronavirus infections pass 3.6 million, with 255,000 dead. china hits back at u.s. criticism, saying the trump