shery: welcome to "daybreak asia ." i am shery ahn in new york. haidi: i am haidi stroud-watts in sydney. our top stories this hour, asian stocks look set to resume declines after heavy losses on wall street. the selloff gathering momentum with tesla suffering its worst ever rout. astrazeneca putting its vaccine trial on hold. the drugmaker shares tumbling after hours. brexit moves markets after

boris johnson -- sparked outrage. news out ofing south korea. we are getting the jobless rate falling to 3.2 percent. the expectation was that the jobless rate would come in at 4.2 percent so this is much better than expected. we are also talking about the sixth straight month of decline in jobless rates. that 270 4000ring jobs were removed in august from a year earlier. we know that south korea has seen its government really boost those job creation efforts not to mention we could have seen domestic demand being held by the summer holiday season and more jobs being available. the government pushing for a fourth extra budget. this is of course helping workers and businesses who lost income due to the latest restrictions and jobless rates. 3.2%. in for august at

watch out for what happens later in the following months given we have seen this flare up in virus cases towards the end of august, haiti. -- haidi. haidi: pretty dire numbers coming out and we continue to watch what happens when it comes to the u.s. trading session. we were expecting after the long weekend to see a bit more of an optimistic view. no, the tech driven selloff is really looking like it is starting to show signs of infecting other assets as well. we are seeing futures not showing a very good picture, .7 percent lower when it comes to trading. s&p active futures. the nikkei 225 looking like it will get a downward start. off by .4%. dollar-yen pretty steady at this point, just shy of the 10-60 race --s the leadership

handle at the leadership race. new york screwed continuing to lose ground. we are now really in danger of share.that $36 a barrel shery: the trump administration xinjiangina after -- region of china. tom mackenzie joins us from beijing. why this action from the u.s.? michael: -- tom: this is a region of china where for a number of years, there's been allegations of gross human rights abuses, that attention, according to those allegations of up to one million muslims in these detention camps. china says they are simply vocational schools. clearly, this is part of the reason why you are now seeing

you ramping up. we have seen sanctions put in place on chinese officials by the united states. it builds on that action. three companies so far have been targeted by u.s. customs and border protection with these actions. six more by the end of the year. these are companies involved in the production of garments and textiles and cotton so it seems like we are just at the start of these new measures, targeting these companies that are based in changing -- xinjiang. this is a reason that -- region that produces 80% of china's cotton. the united states buys 30% of its garments from china. a lot of that cotton is getting into the textile trade, those garments ending up in u.s. shops. that is the concern from the trump administration. it's another reminder that the trump administration will use human rights as a pressure point on china as well as being concerned of course that there

is forced labor and there's been reports of forced labor from these camps, that that is ending up in the supply chain filtering through to the united states, so broadly, there is a context around the industry, what this will mean for the textiles industry globally but it's another reminder that human rights is a main pressure point for the united states over china. haidi: we are hearing more than 130 u.k. lawmakers have written to the chinese ambassador to condemn china's treatment of the uyghur muslim minority and saying the chinese government's actions must be stated for what they are, a systematic and calculated program of ethnic cleansing against the uyghur muslim people. another story we have been following, have we gotten a bit more information about the circumstances of the detention of the australian journalist in china? detailsicials given any as to why she has been detained? more than three weeks after

she was detained, august 14 was when she was taken away by chinese law enforcement, we did get comments from officials yesterday here in beijing giving some form of explanation as to why she's being detained, although there is a significant lack of detail. what they said is that the australian anchor for the english language broadcaster said she was suspected of carrying out criminal activities, endangering china's national security. again, she was detained on august 14. this is the first we have heard from chinese officials about why and the rationale for holding her. the allegations give authorities broad power to hold cheng lei for months and these are amongst the most serious allegations brought against a foreign journalist in china. it's a reminder of the pressure that is on the media community.

the journalist community in china. it's also of great concern for cheng lei and her family and of course, those concerns are widespread in australia. also a reminder of the rapid deterioration of relations between canberra and beijing. mackenzie in beijing. this comes over the last couple days after we saw the last two remaining australian journalists working for australian news outlets in china, being taken out of china under diplomatic assistance. let's get you the first word news with karina mitchell in new york. karina: the bank of thailand governor says the government is the only sector that can help stimulate the economy right now. speaking exclusively with bloomberg's haslinda amin, the central bank chief said public that restrictions should be eased to allow the government to spend more. thailand's benchmark interest rate has been cut three times and is at a record low. >> the problem now is not so

much of the liquidity. -- illiquidity. we have to focus on insolvency problems that occur. europe, a steady rise in new coronavirus cases as people return from holidays and the weather cools down. france reported 6000 new cases on tuesday with numbers steadily climbing for the past three weeks. spain, germany, and the u.k. are seeing a rise in u.s. sanctions. england has banned social gatherings of more than six people. a new bill will be publishing the u.k. that essentially rewrites an earlier agreement already signed with the e.u. critics have called the changes to the brexit withdrawal agreement unlawful and two of the most senior legal advisors have quit. it would allow a no-deal departure. trade talks resume today. up to half a million people in california have been affected by power cuts as heat waves and

wildfires continue to batter the state. portland general election has -- electric has switched off some areas in oregon. fires burning through more than 2 million acres. 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 karina mitchell. this is bloomberg. shery. shery: still ahead, a setback for one of the leading candidates for a coronavirus vaccine. astrazeneca shares fall after its phase three trial is put on hold. we will discuss the details. first, we take a step act from the market turmoil of today and look at investing in the future. bob brown will tell us why it is wise to bet on junk bonds in a zero rate world. this is bloomberg. ♪

shery: northern trust released its annual report that futures return expectations and forecasts for a range of asset classes. it predicts the global economy will see 2.6% average annualized growth over the next five years and the asset manager is betting on junk bonds to boost returns in a world of zero rates. let's get insights from bob brown. great to have you without spirit let me get started on this call you made. us.reat to have you with let me get started on this call you made. what opportunity are we talking about here? >> no one will get rich on yields, but it's a good way to diversify away from equities and still build on impressive gains that have been over the past several years. you hit it on the head. massive fiscal stimulus helps us get through covid-19, continued by what we call the massive monetary toolkit. we will be in a zero rate policy

environment for years in the u.s., japan, and europe, and the monetary fiscal stimulus combined helps avoid a recession and is very supportive of credit spreads come in -- of credit. but spreads come in. we are predicting returns for years. better than inflation, much better than cash. shery: if we are talking about hunting for yields, given we see perhaps an upswing in consumer prices and a push of a greater part of real yields and sovereign bonds below zero, what is the opportunity with emerging-market debt? bob: well, our view is that it will also hold and generate positive real rates of return. we expect inflation to be tested. testink it will fail that after the massive monetary stimulus, so bond markets around the world are well positioned to outperform cash in all their

domestic markets. there's certain markets which have truly inflationary risks. argentina, the weak currency continues to be an issue for inflation, but in most major bond markets around the world, major emerging markets, we really do not see inflation as being a risk to start generating negative real returns over a five-year horizon. we just do not see it. the low inflationary themes that have dominated over the last five years we think will stay in place. however, if it is going to be tested, we think it will be tested over the next year as we see the confluence of fiscal and monetary stimulus really taking place over the next year and that in particular, if there is a democratic sweep in the u.s., we might see even further increases in fiscal stimulus with a very accommodative set.

if you do not see inflation then, i don't think we'll ever see it. right to benvestors thinking it's ok? the fed has got this monetary policy which will stay extraordinarily loose? if you listen to j.p. morgan, these price only bets that are being made are essentially -- you are seeing investors sacrifice capital preservation as a cornerstone of debt investing in exchange for rich returns. is that a dangerous place to be? bob: no, we still think that there is a 50-40 portfolio. yield curves are steep. year trading of 55 basis points and then you roll down to basically a zero rate over a 10 year horizon. highertal return will be

than your starting yield point, in our mind, and you will generate a return. investment grade bonds in particular continue to provide capital preservation and income generation. is it as much income as you would have hoped for or wanted several years ago? of course not. you have to take on more volatility than you would have for. yes. still, it's a lot less volatility than an equity market lose 21%that you can of single stock or 4% of broadly diversified tech index. so what you get from fixed income assets has to be put in a broader context of your overall asset class choices. let me get your views on equities. we have seen the resumption of trading from the long weekend. the tech rout continuing. tesla having just a horrible time. indication of, ok,

you buy every dip at an opportunity? the market has thrown every type of investment value metric ratio out of the window. are these dips more opportunities to get investors if you are not already? significant,ip is there is a change. we went neutral on u.s. equities back in june. that was a neutral position. we wanted to continue to participate in upside. we did not think it was appropriate to be bearish and underweight u.s. equities. from a valuation perspective, it had been made. view, as a technical one-year horizon. equities will be close to flat before earnings catch up to valuations and you start earning returns over a five-year horizon. between now and year-end, we can easily come up.

etf is 30%100 year-to-date. if i were to tell an investor on january 1, there would be a major pandemic, that the global autonomy would lose double-digit growth on an annualized basis in the second quarter, that we still would not have a vaccine, clearly effective treatment in september. but your investments will be up over 30%. i think you say i will take that. i but you take 25%. if we see a bit more profit-taking given the overall conditions, no one should be surprised at that. if you take a longer term view, the real take away from our five-year view is after five years of extraordinary returns in the u.s., 10% plus returns, you get to keep them and build it on them at about 5% a year. we don't think that is too bad. haidi: really appreciate your

time with us. bob browne joining us from chicago. just talking through some of the investments. we didn't have breaking news crossing the bloomberg. more on this astrazeneca covid-19 trial pause we have seen. u.s. and european regulators are probing astrazeneca and the covid-19 trial. itselfd from the company that it had put a pause on research in its experimental vaccine after a person who was participating in the phase 3 conical trial became ill with what it says is an unexplained illness. we will get more on that story. all the details, up next. this is bloomberg. ♪

haidi: we are getting more details on astrazeneca pausing their vaccine trials with u.s. and european regulators having pause vaccine trials. they are probing the covid vaccine. we are hearing that the u.s. and european -- is actually standard. this of course after they had to pause that trial after a person who was participating in the clinical trials became ill. let's get more from our health care reporter, michelle cortez. what do we know so far? michelle: we know that there was a single person who was involved in astrazeneca's clinical trial that did receive the immunization and subsequently fell very sick. we don't know exactly what happened to that person although it has been reported that they are likely to recover and we do know from the way that it came out that it is likely that that person received the vaccine itself so the concern is that the vaccine made somebody who was otherwise healthy sick somehow but of course, it is possible that people get sick just in general anyway.

may be its circumstantial and not directly because of the vaccine because it is such a huge issue. they are pausing the trial. they are going to analyze the data and let us know whether or not their work can continue. astrazeneca was one of the many pharmaceutical companies that signed a joint letter pledging that they would not sacrifice safety at the expense of the vaccine race. is that nonetheless a real concern that safety shortcuts, efficacy shortcuts, will be made in this race to become the first market? michelle: this actually shows that people are not going to be taking a shortcut. when it is a single person who has gotten six, when you could make excuses along the lines -- people get sick every day. they could have discontinued the trial while they were doing the analysis. the fact that they have temporarily halted the work and they are no longer immunizing anyone with this vaccine, it

does indicate that they are taking it seriously and that they are not going to cut any corners. it also means that this incredibly tight timeline everyone is on will get pushed back at least a little bit at least when it comes to astrazeneca. we have heard this other vaccine they have been asked to look and see whether or not they also have had anything like this crop up in their trials. what isn the meantime, the latest on the coronavirus pandemic across the world? we continue to see the surge in france becoming what the health minister calls were some. we are seeing the u.s. -- worrisome. we are seeing u.s. cases topping 6 million. michelle: it is not going down. we are going into this indoor season. things are rainy and cold in many parts of the country and we are seeing students go back to school, colleges, universities, people starting to congregate again, and everyone is tired of a lot of the safety measures like social distancing and

wearing masks. as a result, we are seeing the rates start to creep back up again. hospitalizations and deaths are going to follow so the concern is that it is going to be bad. the question is how bad is it going to get and at what point might we have a vaccine? shery: michelle cortez with the latest on the global pandemic. let's get a quick check of the latest business flash headlines. singapore state fund -- more in china than in its country following gains and companies including alibaba. the latest annual report shows exposure to china and 29% against 24% for singapore, which is the lowest since the fund was formed 45 years ago. the main singapore holdings fell because of the coronavirus. >> the chinese market. china is the largest part of our portfolio right now in the singles market. it is where we have our exposure. shery: apple is set to hold an

online event next tuesday telling customers only that time flies. some analysts think the new iphone could also be made public. the company has earlier said the new handset would not be released until october because of supply chain issues with pandemic. a company which makes the popular game has removed tencent's rights to distribute the franchise in india. from now on, the south korean parent will take care of all publishing possibilities in india after new delhi band nned almost 200 chinese apps from operating in the country. it is unclear what kind of initial disruptions consumers will face. tesla shares had their worst day since the company was listed more than 10 years ago. the plunge followed a decision by the s&p 500 not to include tesla on the index and the completion of the companies $5 billion share sale. the stock is still up 300% this

year, making its market cap or than toyota and volkswagen. 's fortunes were not helped. the electric truck maker shares sent soaring by as much as 53%. the doc is gm taking an 11% stake and getting one seat on the board. they have yet to generate any meaningful revenue but gm will ofrt production by the end 2022. still to come, boris johnson is drawing flak even from within his own party as he threatens to break international law brexit. -- international law over brexit. we will have an update, next. this is bloomberg. ♪

haidi: brexit is moving markets again after boris johnson's threat to break international law over the divorce deal sparked outrage even from members of his own party. the pound now really suffering that 60 day long losing -- six day long losing streak. , we were just talking about these new and for brexit.s johnson can still add volatility into the market. >> yes. a surprise.is i don't think anybody really thought that there would be an

attempt to backtrack on the deal that was so exhaustively made less than a year ago. is evident that the government, the u.k. government, has not really got its story straight. the classic quote was from brandon lewis. he said this does break international law in a specific and limited way. that's all right. it is still not going to help very much. strange situation that the government finds itself in. think this is probably a time -- boris johnson come out whatever else one thinks of him -- boris johnson come out whatever else one thinks of him, he is charming

guy. a charming guy. we should however take him somewhat seriously on this one. i think the governments generally want to maintain -- what this is ultimately about is the ability of the u.k. government to subsidize its own sees fit, as it state aid, which is a complicated -- it's a way of two the terms of trade without actually directly involving tariffs. and it appears that johnson and the team around here are really quite committed to maintaining the ability to do it.

reasons to go ahead with this. i would still take very seriously the notion that the british are going to try and take over a no-deal exit. shery: the currency market is not taking this seriously. john: i don't think so, compared to what you might have expected. what we are ultimately facing at this point is a hard exit at the end of this year when if there is no deal, written will be on the same trade as a new baseline country with the world trade organization. though the overwhelming majority of british trade is with the eurozone and the eurozone is 17 miles away across the english channel, it would be operating on the bare minimal terms, which would be on the face of it a straightforward disaster. strongly aheady of where it was when the deal came into shape at the beginning of last year. it is still roughly where was compared to the euro, which suggests to me there's a lot of

delay. shery: always great having your thoughts. john authers joining us from new york. let's get to karina mitchell with the first word headlines. karina: we start in china. the u.s. has banned imports from three chinese firms in the countries -- from the countries xinjiang province and says it plans to add curbs to six more companies. xinjiang produces more than 80% of china's cotton and the u.s. imports 30% of its clothing from china. beijing made its first comments about an australian journalist being held in china, saying bob cheng lei is accused of endangering national security. she was detained last month. the allegations are among the most serious ever brought against a foreign journalist in china. india and china have accused each other of firing warning

shots on their disputed himalayan border. if true, they would be the first shots fired in four decades despite officials from both sides agreeing to diffuse tensions. china accused indian troops of illegally crossing the line of control. india says that is not true and denies firing any shots. 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 karina mitchell. this is bloomberg. shery, back to you. state fundapore's has increased its exposure to china despite the geopolitical turmoil with assets surpassing its home market of singapore for the first time ever. chinese holdings rose to 29% of assets compared with 24% for singapore. our chief correspondent, haslinda amin, spoke to temasek 's cio. the largest part of our portfolio today right now in

the single market. china is very domestic market oriented. the point you made about alibaba, that is really a nonissue. basically, we had most of our shares in the hong kong listing and we divided them between hong kong and the u.s. so we could trade and both time zones. generally in china, around biotech, general consumption, simtech, all areas are like that. we feel fully positive about that. haslinda: how do you assess the risks in hong kong with the national security line greater scrutiny by beijing? rohit: ♪ hong kong ♪ is going through its own challenges -- hong kong is going through its own challenges.

all of our investors are really focused on china. isnificant market that china -- the growth in consumption, the growth in the economy. we are seeing this year china is the only economy with a pause in gdp growth. generally speaking, we are constructive. haslinda: one of the themes that cancer is that southeast asian -- could be muted. what -- that emerged is that southeast asian curbs could be muted. rohit: we are investing globally across all markets. asia is an attractive region because of the rapid increase in digitization in this part of the economy, the use of the internet across various businesses. it's not just a traditional e-commerce and gaming but we are seeing financial services other areas.

some of it is early. we are looking at it very closely. haslinda: where in particular? you are encouraged by the opportunities in the region. rohit: some say outside of singapore. , they are twotnam very active economies. report together with google on the southeast then economy and they have largest sort of potential markets in the economy. those are the two markets accordingly with the maximum opportunities. there are other areas, too. the chief investment strategist speaking to haslinda amin. coming up next on "daybreak asia ," women need not apply. why there is not a single female contender for japan's next prime

minister despite shinzo abe's vow to help japanese women shine. this is bloomberg. ♪

haidi: chinese shoppers are returning to luxury shopping as pent-up man has driven luxury goods makers to double-digit revenue growth in the latest quarter compared to the same period a year ago.

one is seeing unexpected sales growth in china and now plans to add eight more stores across the country. joining us now to discuss growth prospects is the ceo. great to have you with us. i guess i'm wondering if you see this as sustainable because we talked a lot about the consumption trends when china emerged from the pandemic, the revenge spending, reunion dressing. is that something that is likely to taper off? >> so far, we see significant growth in china as it has always been in the past. the issue this year, which is very different, is that the chinese customers are staying in china compared to before, where they used to travel a lot. two thirds of what they were spending when traveling abroad. let me ask you about your business in hong kong. the luxury jewelry and watch sales growth outlook has been troubling for some time. do you have any anticipation of

a recovery, particularly as travel restrictions and the political situation probably means we will not see a strong return of tourism flow to hong kong for quite some time? jean-marc: the situation in hong kong is of course extremely challenging, especially for the watches industry, which was extremely dependent on tourism and affect that the mainland chinese got to travel so far in hong kong as it was before. rerouting many of these tourists in mainland china. on the locald customers in hong kong. having the benefit from the customers. don't get the international travelers. we don't see forecasts which are more positive as the pandemic on one side plus restrictions on other side limit the number of tourists on the island. does this dynamic

affect your business decisions like opening more stores? jean-marc: i would say that this year, we will open at least a minimum of eight stores. we have not reduced the number of stores opening, especially in a, but also america. all of our stores will open in china where we will have 50 stores for our brand, which makes china by far the largest country in terms of the number of stores in the world. it is a third of locations in the world. talk about the macroeconomic picture. we had strength in the u.s. dollar, but of course, this trend has been weakening this gtv chart on the bloomberg. for our viewers, showing how the dollar rsi, climbing from the most oversold levels of the last decade as we continue to see the weakness in the greenback. how does this affect your business given you produce watches in switzerland? jean-marc: we export 95% of what

we are doing historically from switzerland. that is for all the major operators of branch from switzerland in terms of watches. we are used to fluctuations in terms of currencies. they are the major currencies in which we are invoicing our business. their way we are operating is we have a worldwide pricing structure which makes for customers shopping on travelers. having the same type of pricing, the differencey, of the vat. whether there is a major difference in currencies increasing or potentially decreasing, depending on the region of prices. to me about watch trends. for a long time, the trend was the bigger the better. the big statement watches, bulky watches that your brand is

really renowned for. we have seen a reversal. you even seamen resorting -- see men resorting to smaller timepieces. do these trends affect the number of sales and popularity of your product? jean-marc: we are seeing something interesting. our top 20 bestsellers are more or less always the same. however, with the importance of china getting the bigger magnitude in terms of sales share, we see that chinese are getting more in the lower sizes of our assortment. however, it remains one of the brands which is having a large part of its business in the large-size. shery: jean-marc pontroue, thank you so much for your insights into your business. he's the ceo of a watch company. we go from watches to cars. we have been reporting tesla suffering its biggest one-day drop with investors spooked by

general motors announcing a 2 billion-dollar equity stake in electric truck maker nikola. the no cash deal broadens gm's bet on alternative energy vehicles while providing nikola with credibility. the founder spoke with caroline hyde. >> it is a really good deal for both parties. oem thatle to get an can instantly build our nikola badger with a factory that already exists. it takes billions to build a factory and decades to learn the supply chains the right way. the second thing they bring to us is the ability to leverage their batteries and their other parts so that would be there parts supply. the batteries will save nikola billions of dollars over the life of the agreement. even just from the batteries alone, we already doubled what we exchanged in in-kind

services. we gained over $1 billion in savings on the batteries alone. it is a huge -- just a huge advantage along with the axis of everything else. imagine having one of the best teams in the world to manufacture your truck for you. honestly just could not wish for anything better. >> a lot of comparisons are drawn between your company intesa because of the name and because of -- you are both in the electric vehicle industry. your approach to manufacturing is a lot different from the approach tesla took, and of course, you also have the ancillary businesses when it comes to hydrogen. how does the partnership with regard to gm -- is that going to allow you to sidestep some of the challenges and pitfalls that tesla went through in trying to ramp up its own production of its various vehicles? trevor: right or wrong, we took a totally different approach

that tesla did. tesla had access to an immense amount of capital, spent tens of billions of dollars, so they can kinda do things on their own. we knew when we started that there was no way to raise that kind of capital immediately. it was really important for us to be able to build these relationships, so people -- we really focus on the big semi trucks. that is where our company came from. and we have got over $10 billion in preorders for those trucks waiting to be built. margins are huge. we partnered with another company to do it. we did the same thing with gm. this has allowed us to save billions of dollars on the factory and allows us to get to market fast, enter a supply chain that already exists, and for the badger, it allows us to be competitive against everybody in the world. we will have a truck out in 1.5 years of production. that's incredible. >> with regard to potential sales, what types of volumes are you hoping to sort of reach in

the short-term, say within the first year or so of production? trevor: we have to be careful not to run too fast. we have seen this. i use tesla as a good understanding because they have been through a lot of problems and learn from them. therehe model y came out, was a tremendous amount of problems with paint and having issues coming off the fact . we can build as many trucks as we want. can you service them, warranty them, make customers happy? we are not looking to build .5 million trucks a year. we want to focus on a small quantity that's very profitable and make it an item that everyone wants and there might not be enough supply of it. we are not trying to build .5 million per year. caroline: how about sales and servicing? will that beyond my nikola or driven by gm -- will that be owned by nikola or driven by gm? caroline: we don't think -- trevor: we don't think the existing way of doing things is the right thing to probably a

blend. tesla does everything themselves. we don't do and everything. we just do some of it. direct to consumer for the sales is important for us and we have that, we are the ones in charge of that. also, we will probably partner with someone on warranty. that might be gm, someone else. we want a nationwide infrastructure immediately. caroline: what about states like texas where you cannot do direct to consumer in that way? that's a big truck market. trevor: there's a lot of ways to handle that. tesla has figured a lot of those out. some of those are distributed outside, brought in. we believe texas and these other states -- if you are doing service with them -- we believe they will allow you to work with them. it's a little bit of legislation and in the next 1.5 years, we will have that put a much all figured out. haidi: trevor milton -- pretty much all figured out. speakingevor milton

with caroline hyde and romaine bostick. this is bloomberg. ♪

>> japan's democratic party has started its campaign to replace shinzo abe. the front runner. next week, isabel reynolds is tracking the events. withsuga heavily -- with suga

heavily favored, where is the tension focusing now? >> three candidates registered for the election yesterday so the front runner is suga, who was the right-hand man to shinzo abe. he would be the continuity candidate. he has two rivals. the former foreign minister and the former defense minister. he is heavily favored because of the factional support he has within the party. what people are looking at now is the question of when he might call the next election. there's been a lot of speculation about a snap election coming very soon because of a leap in popularity for the cabinet which he might want to take advantage of it on the other hand, has been dang himself that he does not really for an election during the coronavirus situation. he feels it is his job to resolve the issue before getting on with politics as usual. a look at thetake lineup in terms of the leadership prospects, it does not exactly look great robin onyx, does it? -- great for

abenomics, does it? isabel: no. which history of the ldp, has control japan for a very long time, since the 1950's, only one woman has ever managed to get onto the ballot for the leadership election, that loan get near to winning it. there are a lot of reasons behind that. the powerful factions within the party, none of the heads of the factions are women. that makes it hard for anyone to gain 20 votes you need to support you to get onto the ballot, and even getting onto the ballot is an important move for any politician because it gets your name out there and it makes you a familiar household name and improves your prospects for a future career. shery: if it did not succeed under prime minister abe, what will be his legacy? isabel: well, that is a good question, but i think what suga has been emphasizing in his speeches in the last few days is

really the economic legacy, and it is certainly true that in terms of employment and so on, abe did pretty well during his almost eight years in office. the only other issue is that that achievement has evaporated due to the coronavirus. achievement has kind of disappeared in the last few months of his administration. biggestt seems like the uncertainty or question mark over policy continuity is to do with foreign relations. it is suga potentially a much more domestically focused candidate? isabel: [no audio] isabel.e may have lost isabel reynolds, our bloomberg politics reporter in tokyo, taking a look at the leadership race in japan. let's take a look at asian markets, set to follow the loser as we saw their continued selloff in the u.s. overnight. the tech driven daily of selling

debt -- deluge continues. we are seeing downside of over 1% when it comes to trading in new zealand and we are of course watching this bait over negative rates continue. ly eyeingnd reported the likes of sweden. we are seeing sydney futures extendingower, losses by over 2%, setting up for a pretty ugly star in sydney. -- start in sydney. hold.ial now being put on nikkei futures looking like a dismal start as well. shery: coming up, and extrusive interview -- -- as the an exclusive -- an exclusive interview. we speak with the ceo and cofounder plus perspective on hong kong's property market. a diversified portfolio with the

total growth of over 1.2 million square feet. we speak with the ceo. the market opens in sydney, seoul, and tokyo, next. this is bloomberg. ♪ so you're a small business,

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yup, the best really did get better. magnificent. xfinity x1 just got even better, with peacock premium included at no additional cost. no strings attached. haidi: welcome to "bloomberg daybreak: asia." asia's major markets have just opened for trade. shery: patient stocks look set to resume declines after heavy losses on wall street. a sullivan u.s. tech gathers momentum with tesla suffering its worst ever rout. astrazeneca putting its leading covid-19 vaccine trial on hold. the drugmaker shares tumbling after hours.

we are talking health care investing in the time of covid. a virtual conference kicks off in hong kong. haidi: let's get straight to the market action with sophie. what are we seeing? sophie: we are seeing this risk off tone take hold. stocks are under pressure. the nikkei to do five off -- 225 off more than 1%. an iphone supplier may be vulnerable to profit-taking. vaccine makers also on the radar, a partner with astrazeneca. that stock losing as much as 3% at the start of cash trade. we are watching drugmakers in seoul as well. korea to begin mass reduction of the coronavirus antibody treatment. -- production of a coronavirus antibody treatment. we are keeping an eye on samsung. they were reportedly to comply with a u.s. ban on chip supplies to huawei.

chip shares under pressure. keeping an eye on korean asset managers as well. kospi off 2.1%. the korean won trading 11.90 as we digest the jobs data. the unemployment rate fell surprisingly. we have a continued downbeat outlook. the government preparing to submit its forth extra budget that will add to the debt supply. the 10-year above 1.5% to south korea. the bok taking steps to stabilize the market. let's turn to australia, where earnings faced tough recovery. asx 200 snapping a two day gain,

ahead of consumer confidence data. the kiwi dollar with negative rate bets a headwind. flipping the board to check in on the u.s. treasury, the yield extend its loss early in asia. assets overnight flattening despite heavy credit sales. i'll shar -- offshore yuan trading at a low. we have inflation data from china later this morning. check out u.s. futures, losing ground with astrazeneca. the vaccine setback adding to the drag. half-paired its earlier loss. a tech soul of overnight saw tesla mark its worst day ever. shery: see how this will affect trading in the asian hours, let's turn to our managing editor mark cudmore. we continue to see reaction to vaccine headlines. what are we expecting in asian

trading mark: i think this is a particularly important date, whether this is just a dip people will buy into or whether this will accelerate in the next couple weeks. if it is a buy the idp opportunity -- dip opportunity, we need debility today. we are not getting positive developments on u.s. china front. we are not getting positive news on the stimulus front. we had negative news on the virus front. we are not getting a fresh positive there. we have gone through the easy bit of the economic recovery. essentially all the good news is behind us. we are getting to the situation where the pain of the last few days in markets means we are starting to see the contagion spillover across many assets. if the losses get much further, this is its own negative momentum. today is really crucial.

at the moment i think we will go for a bigger correction. to next when it comes to the u.s. dollar? mark: i think the u.s. dollar has more to rebound. in terms of one of the most stretched positions in the fx world, it is the short dollar position. as we see the squeezing of momentum trades, whether that is in tesla, apple, whether we see bitcoin selloff, those mean we will see a return to the dollar. this does not change the longer-term dollar narrative. which are in the camp of the dollar over the next couple years will depreciate, that is possible. that is not changed because we will see the dollar hover. the longer-term fundamentals

will still bearish the dollar. haidi: what does that mean for oil? we are below the summer trading range, headed toward $36 a barrel. mark: i think oil is one of the most interesting, probably overlooked -- not overlooked, but we have been focused on the tech selloff. tesla and apple are big names. the tesla rally has been extraordinary. the tech story has been painful. that volatility in the tech space should not be surprising. the volatility is less s alarming than oil. the news continues to be quite negative and is undermining the recovery story. demand is not coming through as fast as people wanted. i think tech is the headline thing. it is a little distracting. i think the oil market will be a

better guide of where the correction is heading. haidi: interesting. you can follow more of mark's thoughts and trading day action on the markets live blog. there is commentary and analysis from bloomberg's expert editors, so you can get exactly what is going on with your investments at any given point. let's look at pharma stocks trading in the early part of the session. we had the report from astrazeneca as well as news from u.s. and european regulators saying they are investigating that phase 3 trial that has been paused, given the news that there was a serious adverse event experienced by one of the participants in that trial. as a safety risk, that trial has been stopped for now. the australian pharmaceutical giant had signed a deal earlier in the last few days with astrazeneca for manufacturing of

seeingvid-19 vaccine, downside in the first half of the session of over 2.5%. cross watching green corporation. lower bya trading 2.36%. we are getting past these safety and efficacy hurdles. vaccine may not be as easy as politically hoped. let's get to karina mitchell with the headlines. karina: europe is seeing a steady rise in new coronavirus cases as the weather starts to cool. france reported 6000 new cases on tuesday. spain, germany, and the u.k. are seeing a rise in new infections. england has banned social gatherings of more than six people. in the divorce giving everyone a headache, a new bill will be

published today in the u.k. that effectively rewrites part of an earlier agreement already signed with the eu in relation to britain's split from europe. critics called the changes to the brexit withdrawal unlawful. two of the u.k.'s most senior advisors have quit. trade talks resume today. after half a million people in california have been affected by power cuts, heat waves, wildfires to need to better the state. portland general electric switched out some powers to customers in oregon. temperatures have soared to new records in the napa valley. the fire spread to more than 2000 acres. india and china accuse each other of firing warning shots over the disputed himalayan border. if true, they would be the first shots fired in four decades. this is despite both sides agreeing to diffuse the tensions. it denies firing any

shots. global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. mitchell. this is bloomberg. shery: next, the u.s. wretches up tensions with china. we explained the latest action and the industries it affects, next. this is bloomberg. ♪

shery: we continue to see pressure on softbank, now losing for a fifth consecutive session. at the lowest level since july of this year. we have seen the u.s. tech selloff accelerating. the likes of tesla losing almost 20%. apple wiping out more than $120 billion in market value.

just on tuesday, softbank continuing those losses. we have some other news with softbank. its chief compliance officer also leaving the company. the trump administration has banned imports from three companies in a region of china over beijing's alleged repression of muslims. joining us now for the latest is our senior international editor jodi schneider. what imports is the trump administration specifically banning? jodi: these curbs would come on cotton, textiles, and tomatoes. this is the u.s. customs and border protection service. the issued what is called a withhold release order which he uses to combat forced labor in the global supply chain against these companies, basically

saying they have used forced labor to produce these products. going -- say they are there will be six other companies, three that operate in cotton, textile and apparel and two in air products by the end of the year. this could have an impact on the textile industry. the u.s. imports some 30% of its apparel from china. it will have a large impact on supply chains. this will ratchet up the tension more between the u.s. and china. haidi: speaking of ratcheted up tensions, deterioration in the relationship between australia and china continues. we heard more details as to why beijing is detaining an australian tv anchor. what are the allegations they

are making? an trillion citizen employed by china's english like which broadcaster -- language broadcaster. according to a foreign ministry spokesperson, she is suspected of carrying out criminal activities that endanger china's national security. these allegations basically give broad authority, broad power to hold suspects for months without charge or access to a lawyer. they are among the most serious allegations brought against a foreign journalist in china. this comes amid worsening situations for the prince in fora -- press in china, australian media outlets. they left the country after questioning from the ministry of state security in this last-minute exit. the foreign press in beijing is under pressure as the u.s. and china tussle over visas for

chinese journalists based in the u.s. as well as western journalists based in china. even before these departures, china expelled 17 correspondence working for american media outlets. correspondents working for american media outlets. haidi: all the facets of that china-u.s., china-westerly relationship. american companies seemed to have stalled. the company could restrict overseas tech deals. emily chang spoke to the tiktok vp of u.s. public policy over how these recent geopolitical tensions could impact any sale or future growth prospects of the company. >> this company is taking the world by storm. it is something beloved by over 100 million americans. we are continuing to grow. our user engagement numbers are

incredible. we just created a $1 billion creator fund in the united states to support our creators. the content on the platform is great, it is joyful. we are doing great. people are loving it. emily: i know you can't tell us the exact timeline of where you are in a deal, but we are a week away from the president's deadline. what can you tell us about what tiktok is looking for and whether microsoft or oracle in body that -- embody that? >> we are optimistic. our focus is on our community and creators. we have over 1500 employees in the u.s. we have been growing rapidly with employees in a lot of states that typically don't have tech jobs like michigan and florida and texas, tennessee and others. we plan on hiring another 10,000 employees over the next few years. our focus still is on growth and the community.

we remain optimistic to be around for years to come. emily: are you concerned about the economic impact if the president does succeed in banning the platform, if a deal is done, given how many users across the country are using this platform? >> listen, i am an optimist. we remain optimistic. certainly the worst case scenario would be unfortunate for 100 million plus americans that love the platform and use it every day and the small businesses relying on tiktok and the future employees across the country. there would be a major impact. we are focusing on the positive and plan on doing what is best for our community. there aret said, questions about what tiktok and the chinese government's

relationship is. it seems the chinese government is going to exert some influence over the deal. how do you balance two opposing governments? >> we find ourselves in interesting geopolitical times. the situation between the u.s. and china and the global economy today is a difficult one. as a private company that is looking to bring entertaining content -- as i mentioned, tiktok is not available in china. many were not aware about that. we are trying to stay out of geopolitics the best we can and is on the business and creators. certainly the macroeconomic and macro political climate is a challenging one at the moment. emily: you are involved in tiktok's transparency and accountability center. for all of the toys tiktok has brought its users, there are

criticisms that it does not play to the best parts of our humanity. what are your priorities, especially going into what is bound to be a very contentious u.s. election? >> that is an important question. many technology, knees have been criticized over the last two years by not being that transparent or accountable. we are looking to go a step further. that is why we created this transparency and accountability center where we already had government visitors virtually. we plan on bringing in policymakers and showing an unprecedented behind the scenes look at the algorithm, how the source code works, talk about our content moderation policies, how content goes on the platform, how and what we are removing and how the cybersecurity practices, all those things policymakers are interested in, not just about tiktok, but for all platforms. we want to set the standard for

transparency and accountability to all platforms. haidi: that was tiktok's vice president of u.s. public policy speaking with emily chang. next, steven krein joins us to take a look at health care's innovation, what that means through investment opportunities in the sector. this is bloomberg. ♪

haidi: a conference kicks off virtually in hong kong later, bringing together top investors. our next guest is one of the speakers of startup health, which invests in health care companies. let's discuss the opportunities in that space. bringing in ceo steven krein. obviously health care front and center in this pandemic year. beyond the impact of covid-19, beyond the vaccine race, what other kinds of health care

moonshots are you looking at? steven: covid-19 and epidemic has ushered in a completely new era, not only in every industry, but health care specifically. it demonstrates how unprepared everyone globally was to deal with all the equities and things affecting people all around the world. years,e last 10 or 15 there has been a lot of innovation, but a lack of adoption of that innovation in companies all around the world. the pandemic i think has moved it from a nice to have to a need to have. we have seen a wholesale shift of adoption to the technologies developed over the last several years. we are passionate about supporting and investing in the entrepreneurs building the companies to solve some of the biggest health challenges of our time. haidi: are we seeing the same trends in health care technology

that we are seeing across the border -- across broader tech? the changes when it comes to digitization, when it comes to consumer habits will be permanent, even after the pandemic? steven: yeah, i think there is a new historical context needed. there was talk about b.c. and a.c at -- if you don't have an after covid plan for how your technology, your service can help in this new covid environment, you are kind of irrelevant. this after-covid world requires a different type of agility, a different type of ability to adapt. for a lot of entrepreneurs, how do you scale and bring your solutions to market? there has been a lot of regulatory and other mindset limitations in health care.

i think the pandemic has opened up across the board a whole new opportunity set by sales cycles changing and everything about the adoption pace changing. shery: has it opened up wallets as well? how readily available is funding? steven: 2020 has already surpassed previous year's funding, in digital health in particular. we believe 2020 will be by far the largest funding to date by venture capitalists, by private equity investors in backing the kind of entrepreneurs and companies needed in this new world we are living in. from our perspective, this is the opportunity to lean in like we are and invest in entrepreneurs around the world who are collaborating to achieve moonshot's, those seemingly impossible goals like bringing care to everyone around the

world. haidi: what sort of criteria do you have when you are looking at these companies? steven: mindset matters most. entrepreneurs the and the innovators, the mindset these partners putting together as they build these companies. goal toan ambitious move the dial and not shy away from long-term thinking about how to make continuity of purpose goals. shery: steven krein, great to have your thoughts. ceo of startup health. don't miss our interviews from the conference. anwill hear from the police -- the oasis management founder. check it out on the times you see on your screen. this is bloomberg.

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haidi: let's take a look at the markets. we have quick news when it comes to australian consumer confidence. the consumer confidence index for september rising to 93 points, sticking up from the previous month of 79.5, which is a pretty interesting reading given during that period we had the stricter lockdown measures. a total decimation of business activity in victoria. seasonally adjusted month on month. that number picking up by 18% versus a previous contraction of almost 10%. a little bit of good news, but

likely unable to help out the broader asx 200. we are in particular watching out for a number of stocks affected by the deterioration of the relationship between china and australia. itsad news, china saying raidedists' offices were after australian media outlets were taken out of china after diplomatic tensions. we are watching pharmaceutical players in asia. astrazeneca said it was forced to pause its phase 3 covid droid after an adverse event -- trail after an adverse event was reported. offre seeing the kospi by close to 1%. new zealand down when it comes to equity trading. we are watching the bond market. the two year yield looking like

it will inevitably approach zero. expectationse over for rates begins to gain pace. karina: the u.s. has banned imports from three chinese firms in the country's xinjiang province after alleged abuse of minority uighur muslims. contenttions threatened and -- cotton and computer parts. the u.s. imports about 30% of its clothing from china. astrazeneca's u.s. traded shares fell after the british drugmaker's phase 3 coronavirus vaccine trial was put on hold. the vaccine is being developed with oxford university. statementy says in a the pause is a routine action after one of the trial dispense fell ill -- participants fell ill.

it is working to keep the trial moving. senate majority leader mitch mcconnell is working on a vote for the latest u.s. to millis package as early as -- stimulus package as early as this week. the democrats are looking for at least three times the amount. house speaker nancy pelosi told bloomberg the package is nowhere near enough. pelosi: what they have is so meager that it insults the intelligence of the american people. it does not solve the problem and -- again, we know we have to compromise. we know we have to negotiate to reach an agreement. we all want an agreement, make no mistake, but get real, mitch mcconnell. karina: global news 24 hours a day on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. those of the headlines. haidi: china's consumer sector

rebounding. the strength of that in focus. we are waiting august inflation data. asia bring in our chief economics correspondent. what is the outlook when it comes to inflation and how that plays into the global inflation story? >> i think there are a few dynamics at play. we know food prices have been going through the roof in china. that is impacting consumer prices. that is expecting to be fading. food prices are coming off. the broader consumer rebound remains somewhat cautious. the expectation is consumer prices may -- some pressure may have come off consumer prices. ngs,he producer side of thi there is an expectation higher oil prices and higher iron ore

prices may have eased the decline in factory deflation. that is important for the cost of paying back debt. the pbi side of things is better. ppi is the transmission channel for how china exports inflation or deflation to the rest of the world. a modest better story on ppi. that is a plank of support for global inflation too. shery: what are we learning from chinese car sales about the consumer story? know the consumer rebound in china has been slow. we had a big bounceback in car sales in august in china. we saw a big rebound in demand from anything from suv's through to minivans. almost 9% on month.

it speaks to this idea that the consumer is coming back, in sectors at least. our own colleague in beijing did an analysis last week that high-end shopping is coming back faster than eating out, basic recreation activities people were doing before the pandemic. is it still has a long way to go. the consumer story is lacking on the industrial rebound. haidi: thailand's public debt restrictions should be eased to allow the government to spend more, that according to the outgoing bank of thailand governor who has been looking at options to probably economy at a time when interest rates are at an all-time low. he was speaking to haslinda amin. >> the policy rate is already quite low, a historic low.

if you look at liquidity from the macro perspective, we believe there is ample liquidity in the financial markets. the challenge now is moving away from the liquidity problem to insolvency problems. policy,combinations of financial policy, monetary policies to make sure we can address the insolvency problems. haslinda: safe to say that for the year the bot is done with rate cutting? >> no. we keep all policy tools on the table. by lowering the policy rate alone with the transmission mechanism not working at the current time because costs have come up substantively. by looking at forms of policy

like the loans we have introduced, we provide cheap funding at a fairly low rate to the banks so that the banks can fund lends. those types of central-bank policies can be more targeted and i think more appropriate for the current situation. -4.5% year to date, among the worst performance in asia. does the baht reflect fundamentals now? betterink it is moving in line with the development of the economy. expectingare you weakness to persist? it seems to be that way.

highly volatile as well. you look at the signs of global liquidity out there. by a particular incident, particular news. haslinda: [indiscernible] the deepest gdp fall since 1998. keep to that rebound is the tourism sector, which is at risk of a meltdown. what is the downside risk to the projection of the bot? outou have rightly pointed sector is key in our protection. we do reveal our forecast on a

quarterly basis. a new forecast will come out towards the end of this month. we have a monetary policy committee meeting. suction on the tourism sector is important to growth in our gdp forecast. haslinda: there is an increasing call for the government to do more. the public debt to gdp ratio close to the 60% limit, which means the government will find it hard to spend more at a time when it needs to spend more. how do you see the government managing the dilemma? the 60%rsonal view that public debt to gdp limit can be relaxed. it was the limit set up during the normal times. if you look at 60% of public debt to gdp, it is not high by international standards as compared to other emerging

markets in the region. identifyenge is to fiscal stimulus measures. focus onvernment can segments, particularly those related to creating employment for particular segments of the people that have been badly affected by the current crisis, i think that is more important than the debt ceiling limit. haidi: that was the bank of thailand governor speaking exclusively to haslinda amin. next, a hong kong property investor joins us. we ask ceo keith wu about the outlook to the city's real estate market. away from the screen you can find analysis on bloomberg radio, now broadcasting live from our studio in hong kong. via theg v -- listen in

app or bloomberg radio.com. plenty more ahead. stay with us. ♪

haidi: singapore's state fund now has more investments in china than its own country for the first time. following gains in companies including alibaba. its latest report shows exposure

to china at 29% against 24% to singapore. that is the lowest since the fund was formed. temasek's singapore holdings fill because of the -- fell because of the coronavirus. >> china has the largest part of our portfolio today. tesla shares have their worst day since the company was listed more than 10 years ago. the plunge followed decision by the s&p 500 not to include tesla on the index at the completion of the company's $500 billion share sell. its market cap still bigger than toyota and volkswagen. tesla's fortunes won't help g.m. taking a $2 billion stake in its rival nikola. deal sees g.m. taking an 11% stake and getting one seat on the board. nikola has yet to generate any

meaningful revenue. >> it is actually a good deal for both parties. probably the most important thing about this is we are able to get an oem with supply chain with an instantly build factory that already exists. shery: apple fire to back -- fired back, seeking compensation for lost fees. epic sued apple last month after the iphone maker removed fortnite from the app store, alleging the gaming company breached its terms of service. epic filed a similar suit against google. >> one of the biggest beneficiaries from the pandemic, netflix, still can't escape disruption to its services. the company's cofounder and cohead spoke to bloomberg about the issues as well as the

company's ceo a range. -- ceo arrangement. >> it is dependent upon two people. it is an unusual situation. if you think of every family, there are generally two ceo's running the family. you just have to be very close. we have been together for more than 20 years. with the two of us totally confident it will work great. >> the pandemic has in many ways played into netflix's hands. you are in a perfect addition for this moment. that said, projects are backing up. i am not complaining, but it is getting harder to find something new to watch every night. how do you think the entertainment industry looks different when it emerges from this? >> it is a challenge from lack of production, especially in the u.s. and europe. and in much of asia. in the u.s. it is still quite

slow and challenging. that is going to have an effect more next year than this year. not only for us, but for our competitors also. everyone is figuring out how to make it work, just like if there is a writer's strike or other things that happened over the last 50 years. in the long-term, i think covid is a historical footnote, kind of like the 1918 pandemic that we read about today. emily: you said there is a space for many streaming services in the market. you were impressed by what disney accomplished. hbo max launched anew. how many of these services have the potential to reach 500 million people? will there be consolidation in who is left standing? reed: there is a huge difference between disney plus with 60 million subscribers in the first

year and hbo max, which is 3 million or 4 million. one of those is really incredible. i would not have guessed you could get to 60 plus million in the first year. we will see depending on what the quality of the services are. over time there will be consolidation like fox-disney, which has proven to be great for disney. there will probably be more of that. consumers want fewer brands that give a wide range of entertainment. emily: how many years left before netflix has to think about something new? what might that be? would you be open to a big acquisition -- videogames, social media? reed: we always try to keep an open mind. first company, we acquired a lot of companies. we have been through that. mostly we want to make our service better.

at least five, 20 years of growth, focused on making our service better and better. we have always added new types of programming. for example, starting a series and expanding it to film and nonfiction, now animation. we will continue to expand what we offer in the service. haidi: the netflix co-ceo and cofounder spoken to emily chang. hong kong's economy was hit hard by months of antigovernment protest, the pandemic ended tourism which led to months of social distancing. those challenges were reflected in sunlight reit. its ceo keith wu joins us now. great to have you with us. let's start with your most recent results. tell us about the challenges and the bright spots you saw in your

latest reporting season. hi keith, do you have us? i was just asking you to explain the bright spots and challenges you saw in your last reporting season. right, we will try to come back to keith wu and talk about his sunlight reit. in the meantime, hong kong listed chinese bank stocks are down this year. they have never been this cheap. let's look at why with bloomberg's china market senator. what has been pressuring chinese bank stocks? >> this has been a several year pressure point for the sector. started a few years back with xi jinping's deleveraging efforts.

the pandemic obviously has increased things further. there was a call several months ago for major banks to cut their profitability. there has also been low interest rates not only around the world, but also in china. bad loans are at record high levels in china. there are a confluence of issues pressuring the sector in addition this year to the past few years. haidi: what is the bullish investment case for this sector? kevin: people have been saying for several years now that these stocks are too cheap to ignore. the valuations are near historic lows. they can't fall much further. the last few years shows things can continue to fall, even if they are at cheap levels.

we need to see some turnaround as far as profitability goes, whether that comes from higher interest rates, the ability to excise some of the bad loans that the sector was seeing. there is no clear, easy answer for the sector. it seems these valuations will stay depressed, at least in the near term. shery: we are trying to go back to our guest, ceo keith wu of sunlight reit. they have retail and office properties in hong kong, a market challenged not only by the ongoing protests, but by the pandemic. keith, i hope we have you know. we were just asking you about your latest reporting season. what were some of the challenges and bright spots? keith: we had a very good first half, meaning july to december. things got eroded by the difficult operating conditions due to the covid-19 outbreak.

retail in particular has been difficult. as a whole, we had a rather flat year. is a balanced exposure to both office and retail. while retail has been hampered by the looked down and absence of tourist -- lockdown and absence of tourist arrivals, we have gone out quite all right. wherebyn a new normalcy consumer behavior, work from home, etc. are going to be the key features of our lives. as a landlord, we have to respond quite swiftly to these changing market conditions. haidi: tell us how you plan to weather these uncertainties given you have those retail and office facing properties that are under pressure. with more tenants asking for

lower rent, how do you plan to weather the next half a year until we actually get a vaccine for this pandemic? keith: our annual report this year at sunlight reit is called extending care. that means in the immediate term we have to care for our stakeholders. we have launched rent relief, promotional campaigns for difficult tenants on one hand. on the other hand, i want to make sure our office and retail destinations are safe. that means sanitization, etc. on the more medium-term note, the outlook is dependent on the duration of the pandemic. we have seen some bright spots. if you know the recent developments in hong kong, no doubt the number of infectious cases have gradually been going down. there is a bit of relaxation

implement it. -- implemented. we think we will have a better final quarter of 2020. going forward, in facing this new normalcy, we need to invest, investing into environmental enhancements, tax enhancements, and also trade optimizations such that we will have a more balanced exposure to trade and tenants, which can be more productive more so in the middle of this change. having said that, sunlight reit has always been a balanced landlord. 50% of our retail assets are community driven retail assets. the rest of the assets are basically decentralized properties which are very affordable. may pass, itndemic

is just a matter of time. but the political issues china faces seems to be long-term. do you think the property market will survive that aspect of the uncertainty? keith: if you look at the last 15 months in hong kong, yes it has been affected by the social unrest and political uncertainty. i think you can see residential property prices remain -- the covid-19 outbreak had a much more impact compared to the social unrest. that is our business experience over the last 15 months. going forward, i think hong kong confused bytle bit the political developments, different aspects, but on the other hand, if we are sticking to community spending, that is

very much in vogue. much forank you so joining us. sunlight reit ceo keith wu from hong kong. that is it for "bloomberg daybreak: asia." this is bloomberg. ♪

>> it is 9:00 a.m. in beijing and shanghai. welcome to bloomberg shanghai open. counting down to the open of trade in china and hong kong. the top story today, stocks across the region down along with u.s. futures after the tech selloff led by tesla and apple.