>> good morning, we are counting down to asia's major market open. shery: i'm shery ahn in new york. relief bill optimism in the sust tempered by fears a new virus variant may trigger fresh lockdowns.

brexit. is set to have a deal before christmas. and we hear exclusively this choi. om let's find out what to watch. >> after a three-day drop, we re seeing the asia 100 up by wo eighths of one percent. the market gaining some ground, extending and remaining one of the few bright spots after leading asia's leaders on tuesday. we are waiting on assessment

from thailand along with .o.j.'s meeting minutes. they are losing a little steam after we saw a session on wall street that saw tech shares rise and energy settle. on that, we are seeing fall best low 47 per barrel as fuel demand outlook being threatened by the new virus strain coming into the picture. paul? paul: let's get more on the markets now. look at how the u.s. relief bill may help. expected impact to be limited. great to have you on the show again, we have that stimulus bill that passed just waiting for the president's signature now. markets rather tepid in response. you do wonder whether that stimulus is a, enough, and b is it getting to where it needs to go.

>> both of those, paul. in addition to that, the question is, is it coming very late? they have gone around for several months about how much they have amount should be and who should get the benefit and now it is underwell. ing. we are talking about $600 per adult, maybe $,200, one shot farc married couple who do not have a high enough income. but thereafter you're talking about $300 per month of unemployment ben 23i9 from the federal side and given that many of these households have had to get into debt and they have been without income and employment for several months, i simply don't think this is going to be enough. we're going to have this one measure and then probably three months later we will be talking about another $1 trillion to $1.5 trillion of additional

stimulus. it becomes an unending process without really solving the issue, paul. that's my chriscism. paul: do you expect the issue to be solved in 2021? doesn't do enough but what are you expectations next year? >> my expectation is the recession continues in the first half of 2021, i was almost alone saying in a few months ago. now there are more people that agree with me that this won't be a reshape red tvry -- recovery we are looking at. it is going to be more like a bottom. with a long that means the first half of 2021 continues to be in recession. i don't think that's going to change. the points i made are that we need structural changes which do not cost as much money. worker retraining, similar to

what the germans did at the beginning of the century. trying to get skilled immigrants mayor hen-new york michael bloomberg said in 2011 in terms of what needs to be done. give the workers the participation in the upside of firms so they have a return coming to them when the economy looks up, not just the companies and stockholders. the -- it makes the recovery more even footed, even handed and not worsen income inequality as we did after the 2008 bailout. shery: let me turn to china. expectations are high that perhaps china is a country that will drive global economic recovery into 2021. and yet, this chart showing now that nearly half of china's high yield bonds due next year wilmature in the first quarter.

this coming at a time when we're seeing more corporate defaults this year as well. will we continue to see this sort of turmoil in china's marks next year? and what are the indications of that? >> that's a timely question. i think we have a lot going on between the pandemic, which did hit china hard to begin with, and many, many companies in turn were unable to pay their debts and that in turn translated into defaults. now i think the debts are coming due, the economy is also recovering. i'm reasonably hopeful that the chinese government will be able which stop the companies are close to default without having any wholesale increase in what's taking place in 2021. also keep in mind that the economic recovery is gathering strength. china is the only country in the

whole world which has had a massive expansion in exports at a time when the other countries are suffering from restrictions and reduced export and that's also helping the chinese economy. to the extent the economy recovers faster than the defaults take place, shery, going into 2021, we still have a relatively positive outlook. but make no mistake. defaults are a risk but i think it is aing moreable risk in my opinion. shery: that's china. what about the rest of asia? we have seen january becoming the biggest month for junk dollar note issuances, back in 2019, 2018 as well and given this -- given the returns provided since the pandemic and how appealing it may be for investors to go into these high yield corporate bonds in asia, do you see any issues there where we could see heightened risk of default and potential financial risk there?

>> i see a heightened risk of default, shery, both in the case of the debt being issued by asian corporations, as well as with asian equity. where did it all come from? it comes from very low interest rates in western europe and in the united states. we have had massive quantitative easing take place in the case of the fed, for example, which has increased its balance sheet by 70% even from the beginning of this year to today. and the fed balance sheet has quin tupeled from late 2008 to he beginning -- has quintupled from late 2008 to the beginning of this year. the money is going into asian exy tos and asian debts. simply because it's much more attractive than what they can get back home in the western countries. there is a big risk not only in asia but overall emerging

markets, the enthusiasm that we have seen, you need to be careful. you cannot have a scattered approach to emerging markets. you need to be focused on what you're going to and that is not taking place yet with global investors. shery: always great having you n. for go to corina mitchell the latest. cree in a: beijing has raised for soybeans as they recovered from african swine fever, leading to a global price rally. commerce secretary wilbur ross told us beijing and washington agree more is needed. with western beijing market regulators have ordered the country's tech leaders to tighten oversight of ecommerce purchasing in the latest move to

rein in the increasingly powerful sector. six of the largest tech businesses were summoned including ali baba and tencent, saying they will monitor their so-called group buying model. israel heading for the further election in two years after its fragile governing coalition collapsed after seven months. the vote is scheduled for late march with polls suggesting a new challenger may win enough support to beat the veteran prime minister benjamin netanyahu. an alliance between the p.m. and the opposition leader had been formed expressly to avoid nother election. i'm corina mitchell, this is bloomberg. paul? paul: still to come, how chinese chip giant smic could evade president trump's latest crackdown and the chorus of washington hawks called for --

calls for more action. up next, the late oast then coronavirus variant causing alarm in europe and beyond. this is bloomberg. ♪ (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that and more in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you to maintain comfortable, correct form. that means better results in less time. you can do an uncomfortable, old-fashioned crunch or an aerotrainer super crunch. turn regular planks into turbo planks without getting down on the floor. and there are over 20 exercises to choose from. incredible for improving flexibility and perfect for enhancing yoga and pilates. and safe for all fitness levels. get gym results at home in just 10 minutes a day. no expensive machines, no expensive memberships.

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shery: as lawmakers scramble to wrap up vaccine distribution a new variant of the coronavirus threatens to complicate immunization efforts. the c.d.c. said it's highly likely the new strain reported in the u.k. cub in the u.s. let's get the latest from robert. it wouldn't be senior prizing given that we do have travel between the u.k. and u.s. robert: it wouldn't be surprising at all. the u.k., they first said they first reported, i think in september, and it's been spreading ever since. now it's predominant variety in the london area. obviously people have been

flying back and forth, going to continental europe, so it wouldn't be surprising if we didn't have some cases in the u.s. the thing to keep in mind is this strain is post-lated to spread more easily, even more easily than regular highly transmissable covid-19 but it doesn't make you sicker, doesn't have a higher death rate. it's not something people should be panicking about. we're just kind of learning about right now the -- how much it's more transmissable the circumstantial evidence appears to ibbed kate that but there's not a lot of hard data right now. paul: in a practical sense is it going to change the health advice in the u.s. in any way? robert: i don't think so. right now the u.s. has a very high covid-19 rate. lots of cases, lots of deaths, hospitalizations at all-time highs. two vaccines are being rolled out but that's just beginning. people need to take precautions especially through the winter

season, there's a very, very high case load out there right now. paul: bloomberg health care reporter robert langreth right there. don't miss our chat with the c.o.e. of endiego about virus fallout. up next, can china sidestep president trump's latest crackdown? how it's changing operations to adapt. this is bloomberg. ♪ every year, we set out to do one thing: help the world believe in holiday magic. and this year was harder than ever. and yet, somehow, you all found a way to pull it off. it's not about the toys or the ornaments but about coming together. santa, santa, you're on mute! just wanted to say thanks. thanks for believing.

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paul: as 2020 wraps up, china looks set to miss its u.s. trade target amid still rising tensions between the two economies. secretary wilbur ross believes it will be a record year for agriculture purchases from beijing. he spoke to bloomberg about the work that needs to be done on u.s.-china ties. >> the chinese commitment to

purchase agriculture is huge. i believe what will turn out that this past year, that's just ending, will be the largest agricultural purchase year that china has ever had from the u.s. that's a very good thing because our farmers have been hurting. remember though, we have remained with tariffs on quite a lot of goods coming from china. and major reason for that is to still have some trading room so that if we do get the kinds of concessions that are needed for the bigger issues, that we have something to give them potentially in exchange. i think it was a very well balanced use of tariffs, pulling off tariffs on some in a reciprocal way as they lowered their taff -- tariff and nontariff trade baferiers to us, but leaving some in reserve so

we can get the rest of the way. because we must solve the technology problem, we must solve the industrial espionage. we must solve the stealing and secrets in various ways and we must solve their efforts to become the dominant military ower at our expense. >> president trump and you, i must say, have made that a priority, dealing with espionage and stealing secrets, can you measure that and see where we've made a difference or has it not kicked in yet? is there less of it today than four years ago? wilbur: they have passed some legislation that moves a little bit in the right direction. the big issues like market access still remain. so there is work to be done. and we knew that. remember, this was not an -- not

announced as a complete trade deal. this was announced as a phase one. we and the chinese both are well aware that there's much more to do and hopefully that will happen in the coming period. >> i don't want to let you go without asking you about one subject, it's not directly in your responsibility but you're a senior official in the u.s. government and that's the cyber attack reportedly from russia. i understand there's an ongoing investigation and we don't know exactly what's happened but can you give us a sense of the priority being given to this, figuring out who did it and what we need to do about it, what's being done? wilbur: there's a lot being done but since it's a work in progress i'm not at liberty to discuss it. i can assure you it is a very top priority of the intelligence community, of homeland security, of the effective departments and of the president and the vice president themselves. this is a very serious

situation. it's a very widespread hacking. nd a very sophisticated one. >> thank you so much, mr. secretary. one last, short question. you mentioned the ndaa, the defense authorization act. is there any question that the president will sign it? he suggested once he might veto it. wilbur: that is obviously up to him. as you know, it passed both houses with overwhelming bipartisan support and so i would hope that he would consider looking at it favorably. but he's the president. there's only one president at a time. and it's his decision what to do. shery: commerce secretary wilbur ross there. more pressure on china. republican lawmakers have written to the commerce secretary urging tighter restrictions on chinese chipmaker smic. president trump recently deemed the company a threat to u.s.

national security. there are ways for smic to avoid trump's crackdown. bloomberg's tech reporter ian king joins us now. last week when we got the new regulations from the u.s. it looked like the company was in big trull. now we've got hawks complaining they didn't go far enough. what do we know? ian: that's exactly right. we've got basically two conflicting opinions going on here. for those that are sort of very aggressive toward china, they believe china -- that the u.s. needs to be push this as far as it possibly can. it's basically saying look, this attack, the new regulations on smic look really tough, look like smic is going to really, really struggle but if you threekt fine print they don't mean very much. this all comes down to chip equipment. whether smic can buy chip making equipment which it primarily needs from the u.s., or not.

and the rules are written -- the rules as written don't really stop u.s. companies from carrying on with business as usual. >> smic is not alone. it's one of a number of countries the u.s. is going after but why the interest in smic in particular? ian: as you know, most chips in the world are -- owe most of their existence to u.s. technology. the sust home to the largest producers and china on the flip side of that is the biggest market for semiconductors but has very little capabilities. so that's a key pressure point at least from the u.s. perspective. we've seen china talk about how they're going to invest heavily in building their own industry, building their own independence, lessening their reliance on u.s. technology. smic really is, for wan of a better comparison, the chinese

version of psmc. it's a chip maker that can manufacture lots of different products on a contract basis. t's been arguably years behind psmc and other companies but been attracting a lot of attention recently because the chinese government said look, here's some money, get on with it. get better. we need you to get better. that's brought it into focus. the u.s. is arguing, you make chips for the military, they said we don't, so whether it's trade spoil or security depends on the eye of the beholder but it's become a focus point, that's for sure. paul: how significant a player is smic to china as it stands at the moment in the chip industry worldwide? and are there any more effective easures the u.s. could take? fast ic is definitely a

follower at best, it's nowhere near as good as psmc or samsung is at doing that probably not as shares, not a significant player worldwide but arguably the sort of springboard that china might use to build on. what the critics of this legislation are saying is look, we need to cut it off from even really old equipment, right? ecause in theory it could buy, quote-unquote, old equipment and build on to it and increase capabilities there. that's what's being asked for, effectively. a tighter, you know, process which would have much more constrictive effect on smic. paul: bloomberg technology reporter ian king. a check of the latest business headlines. the sec says ripple labs and its

top executives misled investors the world's third largest cryptocurrencies. saying they selled millions ithout registering them. company is being accused of increase this the opioid problem. the suit comes two months after wal-mart said it was being made a scapegoat for official's failure to deal with pe the prescription drug prices. amazon will delay raising fees it charges independent merchants to store and ship goods. it foe lows criticism about the cost of doing business with the

company. he said in normal times amazon hikes like ng fee other companies, but for now will continue to absorb costs. shery: we have communications stocks and real estate leading gains, up .7%. material the only sector under pressure right now. we're watching very closely the sprofede the coronavirus cases across the area. kiwi stocks at a record high at the moment. confidence has been high across new zealand. of course they'ving mored to rein in the coronavirus pandemic, consumer confidence jumping, business sentiment jumping this week. yap these futures under a little bit of pressure. the japanese yen has been stuck in since the beginning of last week. right now it's around 103 level. u.s. futures unchanged. this of course coming after we

fluctuated throughout the session and the holiday trading season keeping volumes of liquidity low. we'll talk brexit after the break. this is bloomberg. ♪

corina: this is "daybreak asia." president-elect biden warns the darkest days of covid-19 are still to come, calling on congress to be ready to pass another stimulus package early next year. he said the battle for the future -- is in the future not in the past. biden didn't specify how much money he might request from congress when he takes office. >> unemployment extended for another 10 weeks. going to take a lot longer than that. congress did its job this week and i can and i must ask them to

do it again next year. corina. the japanese government maintaining a gloomy view of the economy saying crens main severe despite some signs of improvement. the cabinet office describes the overall picture in the same grim terms as last month while noting an uptick for exports. it also lowers the government's assessment for private consumption. the official cost of the postponed tokyo olympics has jumped by more than 20% to $15.4 billion. that's up almost $3 billion from last year's estimate. the rise blamed on a 12-month delay caused by the virus. the real cost may be significantly higher than officially reported and more han $25 billion. india's economic recovery shows signs of stabilizing as fresh virus concerns mount. only high frequency indicaters

tracked by bloomberg were steady in november, keeping the so-called animal spirits needle unchanged. the r.b.i. revised its forecast. global news 24 hours a day on air and on bloomberg quick take by analysts in more than 120 countries. i'm corina mitchell, this is bloomberg. shery. shery: south korea's $168 billion sovereign wealth fund wants to increase investment in alternative assets in the near future betting that zero and near-zero interest rates will remain for a long time. i spoke to them about how they plan to achieve that. >> we continue to keep our position because next year we expect the economy to rebound. quity is up. >> how is the vaccine rollout

affecting your investment themes? what's your long-term strategy? the spread to use and we know -- we make our, you -- lots of strategy but small ch a market, use gains rather than big gains. lso long-term our direction. to heavily increase our portion of it. it's around 16%. i think we can increase up to 20% within three years. shery: where do you see the opportunities within alternative

investments? > we are focusing on structure and scale. it is something we need right now, because technology has ecome a big part of our lives. it is more important than ever because of covid-19. also because we live in an aging society. shery: you cut one of your biggest stock investments when it came to ali baba. what was the reasoning behind that? >> there's no change in our urrent position. we are increasing our investment with china and we have to reconsider even the kind to be

changed. at this stage we have to wait and see for the other development. shery: we are seeing these huge rallies when it comes to those giant tech stocks. are we seeing a disconnect with fundamentals and just economic reality? > yes. they're going to finance markets. he rollout goes very well. maybe to sell them penny, you don't know. shery: perhaps supporting emerging markets has been also a weak u.s. dollar. what's a trend that you see and what are your assumptions for

the strength of the greenback? >> strength of greenback may not e possible for the time being. no money will go out outside of the u.s. emerging markets might be another source of investment. so given the kind of situation, goingot easy to say we're to have strong greenbacks. so for the time being, it will -- the dollar will continue to be weak. shery: given this microeconomic backdrop and the huge rally in equities, what's your expectation for your rate of returns this year? could we expect another year of double digit returns? >> even though they're going to continue a low interest rate, obviously they will market really. double digits really may not be ossible.

i think they'll continue double digit markets. shery: that's his outlook for south korea and broader markets. let's bring in the head of global investments, daniel yu. mr. choi seemed skeptical that this rally will continue into 2021. what are your expectations? >> i'm a bit more aggressive than him. risewe're expecting s&p to to about 4,200. also i'm looking at nasdaq going up to about 14,500. we're looking at at least low 10% plus of the upside for the global market. if you look at the cost pee as well, we're looking at -- at the

kospi as well, we're looking at that hitting 2,300 sometime next year. we're a bit more aggressive in terms of market. shery: some would say it's a little stretched at the moment especially at a time when we see waves and waves of new virus infections. are you basing your optimism on the fact that we are going to see the vaccine rollout? and how would that, you know, be balanced out with the fact that perhaps a lot of the good news has already been priced in? >> right. maybe that's the case. but based on my modeling, at the current interest rate environment and at the current growth rate and liquid injections and also the level of the fiscal policies that is really happening, i think that the equity market is probably one of the cheapest relative to any other financial assets including bonds and other things. o i don't think, whether the

recovery will happen at a great pace will be determined -- will determine the upside. i think if that happens, then i'm look at not just 10% plus, probably looking at 20% plus. i am looking at, with the vaccine coming through in the first quarter, gradually the economy will improve next year. but i think that the trend you are seeing in erms of the -- you are seeing online business flourishing and how the structures are changing and the e.v. marks flourishing, the alternative energies flourishing. so all these structure changes happening. fi look at these companies, they're looking very cheap despite that stocks are up quite significantly. so we're quite bullish on the specific sectors that is changing in the last several years. shery: at what point does a stronger currency start to weigh

on the markets? we continue to see the incredible strength in the korean yuan and we heard that perhaps the weak u.s. dollar will go away, that seems to be a bit of a consensus call these days. given that exports are so important not only for south korea broadly in the economy, these companies on the kospi that depend so much on those shipments. >> let me start with that currency view. we're being quite aggressive out the korean yyuan and saying the dollar will weaken aggressive will and now -- the saying the dollar ill weaken aggressively. the system is looking very, very strong. despite the huge injection supply side, fundamentally, i

don't think the u.s. dollar will depreciate that much further. we're probably looking at when trump entered his power, i think it hit about 88, 87, i think that's probably the bottom. which means the korean won, i done see the korean won depreciating below 10,000. sorry, below 1,000. if that's the case, i don't think that it will be really severe in terms of the currency implications to the exporters because korean companies obviously are much more competitive not just on the price side but the product policy side. particularly i'm looking at the semiconductor business. we're probably entering a quite aggressive super psych only the semiconductor side including the equipment. i am looking at first quarter next year to be a very strong growth year. i think the first half will look very good.

even in this cycle, i think it will probably last until the year 2022. end of 2022. if we think that, i see quite an upside potential for korean kospi, including taiwan as well. these two country, taiwan and korea, i'm excite -- i'm quite excited to be quite bullish at this point in time. paul: you mentioned a moment ago you do consider equities cheap relative to assets but they're not particularly cheap relative to earnings, are they? what about that part of the equation. >> if you're talking 245eb9 multiples, you look at the u.s. s&p it's trading about 22 times. historical average would be 17 or 16 times, obviously much more expensive. you have to look at the interest rate environment. interest rate environment is much lower if you compare to the 1940's when you had a massive aggressive injection of

liquidities and boosting after world war ii. at that time the interest rate environment was about 2% to 2.5%. right now u.s. is zero percentage over 10 years. it's only about .89%. i think the multiple, and used to expend it. that's why when we look at the first quart over this year, you saw the s&p 500 expanding to about 25 times key multiple at the peak. right now is at 22. i think it's going to break that 25 times multiple in the future. i don't know how high that is going to go up. because this is interest rate environment when you have a 10 year at 1% versus 2% that's a big difference. also we need to apply that to the area as well. and if you run the digital income model or cash flow models we'll see expansion of the p.b.i. as well.

yes it might look expensive on a historical basis but in my view it's not expensive in the current environment. there's a concern, interest rates might go up. that's the key for the factor that equity might not look attractive in the future. paul: let's talk briefly about that. one of the biggest risks is inflation or even hype for inflation. i feel like in this conversation it's like talking about the search for life on mars. c.p.i. is flatlining in most developed countries. quickly, where is the inflation going to come from? >> i don't see that inflation coming from any time soon. that's why i think the cycle is looking good for year 2021 as well as 2022. the reason why the inflation is not really coming is because of this -- the business becoming very, very big. you are seeing the door dash and delivery services, you're seeing the online businesses.

and i'm doing all my shopping online these days, right? so with covid-19. even when covid-19 passes away, because of the price differential, i don't see that the offline is going to be really flourishing industry anymore. if that's the case, inflation will be sub dude and commodity prices might be going up but not to the level you saw in 2008 or 2011. if that's the case, you're looking at a very nice goal diloches period over the -- nice goldilocks period over the next few months. paul: daniel, thanks for joining us. still to come, chaos at the coast a sign of things to come as the u.k. reaches a deal with france to resume the brexit countdown continues. this is bloomberg. ♪

shery: in less than 15 minutes away from the start of trading in japan and south korea. let's turn to sophie for what to watch in the market. sophie: not exactly christmas cheer in this holiday-shortened week. upside for asian stocks with asia index, the same performance or a little better than you saw potentially this year. ibbett on a cyclical recovery.

ners are a downer, after a three-day drop. stalled somewhat after a three-day advance. yen holding steady at mid 103 levels. the aussie dollar gaining a little ground this morning and the pound nudging higher. staying below the 134 level. the relative cost to hedge against losses over the next two weeks highest among global peers. this could be a dramatic finish to the brexit process. paul: staying with brexit, nine months of talks between the u.k. and e.u. hanging in the balance though there is some hope of a deal this week.

>> we are in a crucial moment. and we are giving it a final push. in 10 days, the u.k. will leave the market and i will continue to work in total transparency with the other states right now. paul: bloomberg opinion come um nist john arthur is tracking the development. the history of the u.k. and e.u. is characterized by brinksmanship and breakthroughs. is that going to happen this time? >> i think yes. i don't think either particularly the british, given the scenes we have seen of -- leftf trucks left at up.ount all the e.u. wans to see what happens if they end this without

a deal. although there are a many relatively very poor communities around the british land that do rely to a great extent on fishing, in the greater scheme of things what they are arguing about is so tiny as a proportion of the whole that i don't think many people will have much sympathy if that is what stops a deal. so it still has to be the best bet that some kind of compromise will get thrashed out in the next 24 hours or so. >> how much leverage does the u.k. have at a time when we have seen those trucks lining up at the border because they have to close the border because of this new strain of the virus. is that making it more difficult for boris johnson to negotiate here? >> it is a bit, yes. it's obviously embarrassing and scary for the british. i think it's actually been some kind of a problem on the european side as well because

they want to be careful now not to look as though they've been vindictive over brexit which i think they truly haven't been. this is about trying to work out what to do to protect themselves against this very scary variant of the virus that's emerged in the south of england. it does weaken the british position. they know that boris johnson's political position is remarkably weak for a guy who doesn't have to go to the country for another four years. he's in a terribly weak position at the moment thanks to the mishandling of the virus. and while he doesn't want to appear to settle for a really bad deal over brexit, he really with the of living real chaos that could happen with a no-deal exit at the same time as the virus reaches a new peak is something that he

obviously has to avoid if he possibly can. so again the odds always have been that the deal will -- a deal will be done more on the e.u. than british terms because the e.u. is bigger and has more leverage. i think that's even more the case now than it was before. shery: given what we've seen with brexit and the new strain, tell us about the reaction in the markets. you make the point that we have seen volatility in the equity side of thing, not necessarily in the bond markets. what's happening? >> really it's all been -- all strength has been taken by the currency. the dollar has been very weak for a while which meant that the pound had got strong against the dollar so we've had some dramatic falls there against the e.u., there isn't all that much room for the pound fall against the euro. there's been relatively muted

volatility there as well. i think to some extent it may be a question of space of mind, there's a limit to the number of things any given trader can worry about at any one point. and somehow or other this has been relegated among people's concerns. but british stock, the stock market has performed very badly this year so there's some degree of the risk of a no deal is replaced -- is reflected there. it's surprising though, i think there would be more downside if they really do have a no-deal exit. paul: bloomberg opinion columnist john aurthurs there. b.o.j. minutes from the october policy meeting. most members saying that the three easing measures have had the intended effect and most b.o.j. members also saying it is appropriate to continue firm financing. one board member saying sufficient capacity is left in the covid program.

not much reaction on the yen. futures for the nikkei which opened at the top of the hour still mostly positive. plenty more to come on "daybreak asia." this is bloomberg. ♪

paul: a quick check of the latest business headlines. apple's plan to enter the

self-driving electric vehicle market getting positive reviews with analysts saying the company has what it takes to be a force in the growing sector. apple aims to launch an autonomous car powered by in-house batteries by 2024. that's if apple -- that sent apple shares to its highest since september. elon musk said apple rejected a possible meeting about buying then-struggling tesla. he reached out to them, saying he would have sold tesla to apple for about a tenth of its current value. and nemakers moderna biontech fell heavily. biontech shares have been popular but are also some of the most volatile. the average daily price is more than three times the broader index. still to come, a prediction that the commodities cycle will

remain strong. we'll get the outlook from the k-2 asset management in a moment. tokyo opens at the top of the hour. this is bloomberg. ♪

>> welcome to "daybreak asia." i am shery ahn. >> i am paul allen in sydney. asia's major markets have just opened for trade. our top stories this hour, asian stocks face a cautious start as relief to optimism is tempered by fears a new virus variant may trigger fresh lockdowns and travel curbs. france ended a ban on cross

travel traffic. a possible brexit deal before christmas. hang seng index considers wide-ranging changes to the stock benchmark in hong kong. if approved, it would dilute the influence of some of the largest companies. shery: japan and south korea coming online. let's get to the market action with sophie in hong kong. onhie: after losses we saw tuesday, the nikkei 225 and topix gaining ground. this is a way to learn if the government will decide to revise legislation providing covid aid to businesses that comply with cyrus restrictions. the boj minutes from october, it is appropriate to continue financing. the yen seeing some strength. trades,itional haven that no longer holds with the greenback, the key currency. in the jgb space, traders keeping an eye on the 10 year yield, which is matching towards

the zero level once again. checking in on the moves in south korea. upside moves for the benchmark this morning. it is gaining ground while the korean won, 1109. let's switch out the board to check in on moves in sydney. aussie shares, we are seeing a three-day decline. it boosts utilities, real estate, and tech gaining ground. energy stocks, they have bounced back even as the -- falling $74 a barrel. thisstocks on the rise morning while emerging shares are holding steady after a three-day decline, the worst losing streak for ems since october, but flipping the change, renaissance capital recommends a pro risk stance.

it might be at the start of their own great -- given the rebound anticipated for the sector. dollar weakness as well. cyclicals as well as commodities. paul. next guest says the strength seen in the commodities cycle is set to continue. the asset-management head of research joins us now from melbourne. what is your outlook for commodities heading into 2021 and how best do you position for that? position where we are aggressively long since march. it will go into 2021. not as long, but still be commodities cycle. it is innovative. your curve management liquidity expansion, etc. and the fiscal policy demands they are putting on governments to expand that policy initiative. fiscal policy will be more

targeted, infrastructure template japanese -- a to follow. the demand for iron ore and copper will continue to be more robust. thatare well above levels analyst expectations have forecasted. economists come back online, the imf forecasts, that's a very good backdrop for oil commodities, in particular iron ore and copper. targeted fiscal policy. it was more broad-based across the board. that is the support going forward. that's casting a shadow over everything these days, the coronavirus. in sydney, we had this recent outbreak at beaches. there hearing from

minister announcing h new cases of community transmission in the past 24 hours so that is encouraging some modest easing of restrictions for the christmas period. how much of a risk factor was this uncertainty over the coronavirus outbreak in australia creating? george: it is a big uncertainty. equity markets on friday questioning it. starting off the day before last. travel and leisure stocks in australia and this happens on the back of these cases. aggregate earnings in the travel and leisure industry are going to expand on the back of all that stimulus measures. banks expanding balance sheets. that liquidity will persist. our birgit earnings will expand in australia. it will expand globally as well. there are significant challenges of course with the pandemic and as economies are closed down and reopened.

the more that is happening, the more fiscal monetary policy that will continue into the years ahead. they expand to the end of 21 into 2022, notwithstanding. it is not a pure way of looking at it. look at the 10 year moving average. earnings will expand on the back of policy support. people are looking through the challenges as economies are going online and offline and addressing these health challenges. shery: one of the key risks you point out for 2021 is debt servicing. this chart showing how the em bond spreads have been narrowing since that spike during the coronavirus selloff in march. it that we could see sovereign distress given

they tend to be more idiosyncratic? george: significant sovereign risks going forward. long em equities but on the capital structure, the back of the support going around globally. on the debt side, with the emerging companies defaulting this calendar year, those issues of sovereigns will be a significant issue. to club would really have get its act together and understand what it has to deal with. it would be a new problem created and 1/5 of sovereigns out there are at severe sub investment grade with indications of default. that's an issue of a can being kicked down the road. emerging market earnings will expand on the back of liquidity measures. u.s. dollar weakness since then. sovereigns need to fund that liability. helping to kick the can down the

road. i think there is significant risk in the years ahead. it's going to be a little bit more innovative going forward. debtnitiative has a lot of outstanding. defaults will be rising going forward. i know you noticed shorts at the moment are active but not particularly large. i wonder if that is a vote of confidence in the broader recovery or is there something else at play here? george: liquidity. that's the way to look at it. global and domestic funds. it will make its money getting back off. the duration is short. been typical of long 2012 sot managers since very difficult to have sustained positions. short help add value to

portfolios. there are some companies that need to be shorted. there's expensive or governance issues. those cases persist. very difficult to run those shorts for long periods of time for duration because of the liquidity measure and as you come back on, markets open, looking at where congress can do stimulus. they do work. it is a quote for long periods of time. aey are coming in and out timely daytrading on the short. it givenhe way to play the extraordinary amount of balance sheets globally. they are not as good as each other. thank head of research, you so much for joining us. we have breaking news at the moment.

as expected, president releasing some pardons ahead of him leaving office. notable ones including some lawmakers. george papadopoulos, the first ,rump advisor to be arrested pleading guilty to lying to federal agents, he is being granted full pardon. we have lawmakers like chris collins that had a two-year prison sentence because of conspiracy to commit that in-line to the fbi. also the same for the former lawmaker who was convicted in 2018 on charges of fraud and money laundering, granted a full pardon. also duncan hunter, a former lawmaker convicted for corruption. we have a few more names, others, many, and pardons coming our way from president trump as he is ready to leave office and of course, president biden would be taking office on january 20.

the most notable ones, a few lawmakers, also george papadopoulos. the first trump advisor to be arrested as part of the russian meddling investigation. let's turn to karina mitchell with the first word headlines. sophie: brexit talks remain in the balance although officials on both side hope to bring them to a conclusion this week. boris johnson and ursula von der leyen intervened personally on monday and tuesday in a last-ditch bid to clinch a deal before the split at the end of the year. negotiators has both sides are ready to make a final push. >> we are in crucial moments. are giving it a final boost. in 10 days, the u.k. will lead the single market and i will continue to work in total transparency with the member states. it expects u.s. says

china's purchase of agricultural goods this year to be the biggest on record. it raised orders from soybeans. spurring a global price rally. surge.s seen a similar wilbur ross told us beijing and washington agree more is needed. china and russia are stepping up military pressure on the u.s., flying joint patrols over the western pacific to highlight their increasingly close ties. says two strategic bombers join chinese warplanes in omission over waters west of japan in the east china sea. russia says the patrol was not directed against any third country. a similar exercise was flown in july last year. israel is heading for a fourth election in just two years after its fragile governing coalition collapsed after seven months. the vote is scheduled for late months with polls suggesting a new challenger may win enough support to beat benjamin netanyahu. an alliance between the pm and

benny gantz have been formed expressly to avoid another election. 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. paul, over to you. paul: exclusive insight into the investment outlook of south korea. we sit down with the kic boss. the latest on the sydney lockdown as authorities battle to contain a virus outbreak. this is bloomberg. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $400 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely

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paul: australia has eased some virus restrictions in new south wales ahead of dismiss. hearing from the new south wales government at the moment. doctor is talking

right now. whatever hearing? -- what are we hearing? >> today we have the state premier come out earlier saying we had eight new cases of the virus which is not a significant spike in cases. he seems to be pretty consistent with the last few days, which is more encouraging. she is also trying to tow the line between keeping everyone safe and making sure everyone can have an enjoyable christmas. some of the restrictions have changed in terms of the avalon cluster in the northern beaches. it's a little bit hard to determine exactly who is allowed where because he's really dicing up and regions based on how many cases are present in each suburb he is slightly releasing some restrictions for the northern beaches so that on the 24th, 26, people are allowed home, but on the 27th,

restrictions will return back to normal. the biggestare remaining concerns that authorities are looking at now? found patient zero so that is something the health authorities are scrambling to uncover. the other thing that is concerning is the fact that many of these cases are popping up, not in the northern suburbs, northern beaches, suburbs. yesterday, we had one employee at a cafe in the eastern suburbs in sydney working for three days with the virus. we are likely to see some of those cases erupt after working three days with virus. but that's probably some of the biggest concern, the fact that we have not had patient zero yet discovered. paul: those restrictions you describe, just a couple days around christmas, but what about new year's eve?

that is typically an event that draws hundreds of thousands of people to sydney's waterfront. what are the plans around that celebration? >> that have not really been any for any strongs intention from the government to shut down new year's eve which is kind of surprising that we have got a potential disaster on the horizon. we have had a lot of public health officials come forward, strongly urging that new year's eve celebrations are called off. it is something that the government seems to be monitoring on a daily basis. goingks like it might be forward. it's hard to say at this stage, paul. representative with the latest in australia. our outlook for south korea including alternative asset to invest in. our exclusive interview. this is bloomberg. ♪ - i'm doug hirsch.

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shery: breaking news at the moment. president trump speaking on a video post on twitter, saying he is asking congress to amend the covid relief funding package. aidng that the covid spending bill has unnecessary components. 2.3mber, congress passed a trillion year-end spending bill and stimulus package. the package was around $900 billion and it was the second biggest that the u.s. has ever seen and president trump now saying that he has asked congress to amend the covid that hasnding package unnecessary components. we will have to keep watching what that means for the timeline of names. to thelso linked government shutdown and lawmakers heading for their holiday recess. south korea is $160 billion sovereign wealth fund wants to

increase investment in alternative assets in the near future, betting that near zero interest rates will remain for a long time. ceopoke exclusively to the about how they plan to achieve this. continued -- next year, we are going to expect an economic rebound. .quities are overweight rollouts a vaccine affecting your investments seems? emes?is here -- th what is your long-term strategy? our asset managers more vigilant to the markets change up. we introduce the board game.

strategy. market uncertainty. we use a small boardgame rather than -- so there is strategy. our, with us a long time is -- increasing the portion of the process. it was around 16%. it was up to 20%. where do you see alternatives within alternative investments -- opportunities within alternative investments? heenam: let me level it a little bit more about this sector. first, -- will lead. something will lead right now. technology has become a big part of our lives. next, the sector is more important than ever.

covid-19. also because we live in an aging society. shery: you caught one of your biggest stock investments when it came to alibaba. what was the logic and reasoning behind that? heenam: alibaba, there is no radical change. -- position in the increasing -- in china. we have to reconsider even the kind of change. photo development. shery: we are seeing these huge rallies when it comes to those giant tech stocks. are we seeing a disconnect with fundamentals and economic reality? heenam: yes.

they are going to be disconnected. the vaccine rollout, and if it works very well, that economy will go back to the recovery. maybe 2022, 2023. we are now. shery: perhaps supporting emerging markets has been also a weak u.s. dollar. what is the kind you see and what are your assumptions for the strength of the greenback? heenam: strength of the greenback may not be possible for the time being. as i said earlier. more money will go outside the u.s. emerging-market might be -- investment theme. situation,kind of

it's not easy to say we will have strong greenbacks. for the time being, it will continue to be weak. shery: given this macro economic backdrop, not to mention this huge rally in equities, what is your expectation for your greater returns this year? could we expect another year of double digit returns? heenam: low interest rates. we will be back. the corporation record -- they will continue to -- that double digit market. paul: that is the ceo, heenam choi. breaking news with president trump in the last couple of minutes, the president asking congress to amend their covid

relief bill. he says it contains many unnecessary components. he also wants to see those checks increased to $2000 from $600, so the president making these remarks in a video message on twitter, saying he wants congress to amend the covid relief bill and see those stimulus checks rates from $600 to $2000. take a look at the market reaction. in australia, we are flat. the materials sector weighing on the markets. most sectors are higher. the nikkei higher by .4%. south korea pushing higher as well by .5%. in australia, we are higher by .9%. , 103 point 55 against the dollar. u.s. dollar showing a bit of strength. we will bring you more on that news from president trump as we receive it, but up next, a major overhaul being considered on hong kong's stock #. we will -- benchmark.

we will have details, coming up. this is bloomberg. ♪

paul: as we have been discussing, we heard that news from president trump, seeking to get some amendments to that covid relief bill from the congress and increase the size of the stimulus checks. let's get to sophie kamaruddin in hong kong for market reaction. sophie, what are you seeing? sophie: that latest in d.c. and with the christmas holidays basically upon us, you have to wonder who is around to redraw outlooks for 2021 until after the holidays. we are seeing green across the screen for asian stocks, let higher by the asx 200, which is set to snap a three-day decline. u.s. futures, we are seeing them

nudge lower with trump asking congress to amend it covid relief package but switching up the board, we are not seeing much in a way of reaction when it comes to the dollar. the bloomberg dollar index is slightly lower this year after a three-day gain and the u.s. 10 year yield flipping slightly below the 91 basis point level. check out what's going on with the aussie dollar adding .2%, this after losing .8% overnight. cba cautioning that there could be a short-term pullback for the australian dollar especially if there is a more pronounced correction when it comes to iron ore prices and check out what is going on with the pound gaining some ground, could be looking at the 134 level. david help any knowing that while a brexit deal is well priced by the market, cable could climb towards 13 nine depending on the shape of any accord. the devil is very much in the details.

ultimately, we will keep an eye on what is going on in d.c. the bloomberg dollar index not getting much reaction. shery: karina mitchell for the first word headlines. karina: -- word: let's get the first headlines. joe biden is warning the darkest days of covid-19 are still to come, calling on congress to be ready to pass another stimulus package next year. he says the battle against the pandemic is in the future, not the past, and the u.s. must support state and local governments and offer other economic relief. biden did not specify how much money he might request from congress when he takes office. extended for is another 10 weeks. it's going to take a lot longer than that. the congress did its job last must ask i can and i them to do it again next year. isry: that u.k. government

said to be considering moving more areas of england into lockdown to counter a variant of the coronavirus. that is reported to be spreading fast. sources tell us ministers are discussing imposing the highest restrictions across more of the country, which would force all nonessential businesses to close. london and the southeast of england were put into tier four at the weekend. france is reopening trade links with the u.k. two days after a temporary suspension in traffic closed over other channel ports. paris says travel from the u.k. to the continent will resume for e.u. citizens and residents able to provide negative covid tests. other nationals will be allowed to make only essential trips and necessary,ys if personal travel should be avoided until further notice. reports from beijing say market regulators have ordered the countries tech leaders to

tighten oversight of e-commerce purchasing. the latest moves to reign in the increasingly powerful internet sector. six of china's largest tech businesses were summoned for talks including alibaba and tencent with the regulator saying it will increase monitoring of the so-called -- model. those were your first word headlines. paul: as we have been hearing, president trump has issued a video via tweet asking congress to amend the covid relief bill. he says it contains unnecessary elements. he would also like to see the size of stimulus checks increased to $2000. bruce joins us now with more. what are the implications of this? how is this going to get done? bruce: that's a good question. i'm trying to get a good understanding of what is going on. it seems to me that president trump has just issued a video

that lists in great detail all of the different items that are included in the bill, but it's not the actual covid relief bill . he is explaining all the things he objects to that are in the omnibus bill that they passed at the same time, that they attached the covid relief bill two. shery:shery: it's strange. -- to. shery: he has not clarified if he has vetoed or not. he is asking congress for changes and amendments. what does that mean, practically speaking, it he were to veto this bill? we know lawmakers are headed for the holiday break and we also need the funding before the government shuts down. think you've every now looking at a government shutdown or people are going to have to, you know, head back to washington, work for the holidays.

unexpected. steven mnuchin, the treasury secretary, is involved in these talks, and therefore, i think everyone in congress.net the white house had buy-in to this -- congress thought that the white house had buy-in to this. shery: we waited nine months to see this come to fruition. lote: ok, well, there's a in the stimulus, including $600 in one-off payments to most americans, $300 for additional unemployment benefits, money for vaccine distribution, development, money for small businesses through the ppp program, and a lot of other things. money for transportation, money for education. in addition to that, there was the overall omnibus bill that would keep the government going,

and that included all of the foreign aid items and the other things trump is injecting -- objecting to. that is not part of the covid stimulus. it's a separate thing. shery: bloomberg's bruce einhorn with the latest on the stingless package. the reason we need the second biggest stimulus package here in the united states is because of the global pandemic really spreading across the united states. biontech saying it's vaccine will likely be effective against the reported new covid variant. the chief promotional officer says they also do not anticipate any shipping challenges in the u.k. despite recent travel restrictions. >> we do not anticipate shipping challenges. we ship via plane, boat, and lory. if the channel -- lorry.

if the channel is shut, there are other routes into the united kingdom. >> what about transport conditions? at -70s to be stored degrees celsius. is that making it a little bit tricky? you have to develop the rollout logistics to be able to leverage. sean: don't forget that together with pfizer, we designed the shipping boxes to act as -70 freezers so we simply put the vials, intos in the this shipper boxes, which have dry ice in them, to keep them at -70. we packed them and ship them. don't see any issues there at all. >> what are some of the other factors that would have an influence on your decision to either keep capacity targets where they are or increase them?

7an: i think that there's billion people worldwide that we would want to vaccinate with our vaccines or any ability to increase the capacity would help to achieve that end. we have already said this is a global pandemic and for those who want answers to our vaccine, we will give them access through purchase agreements. that still remains the aim. i think that we are very focused on that and if we can increase capacity to do that quicker, than that is what we will do. onjust a closing question these different variants of the coronavirus, so is it correct to say that your design of the vaccine has an ability to be strains?d to different

different variants of the coronavirus? sean: that is exactly right, and that is one of the enormous attractions of using mrna, the ability to making new vaccines extraordinarily quickly as one of the significant advantages, which is one of the things we started with pfizer with flu 18 months ago. now we can apply that to the covid virus. it is the speed with which you thathange your vaccine makes mrna particularly useful in a pandemic situation where you are seeing changes to the virus. the virus so far, the variance we have seen so far, have not affected the efficacy of the vaccine. biontech chief commercial officer sean marett.

major overhaul a being considered on hong kong's stock benchmark. details in a moment. this is bloomberg. ♪ s is bloomberg. ♪

paul: hang seng index is considering wide-ranging changes to the stock benchmark in hong kong. if approved, they will dilute the influence of the largest companies. sophia has the details.

what do we know? >> good morning. this proposal, the hang seng onex is asking for feedback the competition. that the industry them warm12 of proposals to reduce that to six and that will make it, according to the index provider, more balanced representation for the major industries. capschange the way between for companies. it's currently at 10% for companies like hsbc and tencent and 5% for secondary listings. we are talking alibaba, shares with unequal voting rights like xiaomi. interesting one. the index provider wants to

obtain a level of hong kong representation in the index. they are saying this is the benchmark that represents the situation and they want to keep it that way. even now, there's a lot of chinese companies that are ipo year.ning up next there is one proposal to ensure that at least an appropriate amount of companies, currently 25, are classified as hong kong companies. they represent the hong kong economy. shery: given the homecoming chinese listings you mentioned, were these changes inevitable at this point? dominance of financials and the hsi has really -- it has really dragged it down. this year, the index dropped 7%. a lot of that has to do with the terrible year that hsbc had. hsbc is one of the biggest stocks on the benchmark. and you know, while the rest of

the world, the stock markets were really strong, tech was very strong in the u.s., the hang seng index, which has all these companies listed, i mean, the hong kong stock exchange has always tech companies, these giants listed, but is not represented in the hsi because of these rules that have been in really, it was formed back in the late 60's. it just really -- it's a significant overhaul to capture the growth for the chinese tech giants. asking forseng is some feedback on all of this. it is not a done deal yet. you can make a response until january 24. it's going to succeed in making it a better index. sofia: we talked to some people yesterday and today this morning and it makes sense.

it will be support for it also. tracking the etf index, if you are a fund manager in hong kong, you want to have an index that is doing well. captures an index that hong kong's economy as such but really captures the best companies here in the stock exchange. my sense is that there will be support for changes. we will see if all of the proposals get the support and if there's any proposed tweaks to this and then hang seng is suggesting that the period can be short as a year, which is quite short as you consider the significant overhaul that this implies. mayamount of turnover attract in the hang seng, a lot of these companies are good. they are anticipating an

increase of as much as 20% in turnover. a one year transition period. shery: sofia horta e costa there. out next, it's been a rough end to the year for jack ma after the cancellation of his ant group ipo. what will 2021 hold? this is bloomberg. ♪

paul: a quick check of the latest business flash headlines. apple's plan to enter the self-driving electric vehicle market is getting positive reviews with analysts saying the company has what it takes to be a major force in the sector. the backing follows a reuters report which says apple aims to launch an autonomous car powered by in-house batteries by 2024. that sent apple shares to the highest since september. tesla felt for a second day. elon musk says tim cook rejected a possible meeting three years tesla.discuss buying mosk tweeted he reached out during the difficult rollout, adding he would have sold to apple for 1/10 of its current value. it's about $60 billion. tesla was burning cash in 2017 but musk took the meeting. untill delay raising fees

next june. it follows criticism from retailers on the cost of doing business with what the company -- thatwilkes told sellers logistic firms have already announced fee hikes and that in normal times, amazon would be doing the same. amazon will continue to exorbitant the cost. shery. shery: let's turn to jack ma. two months since he spoke out against chinese regulators, his ant group mac ipo has unraveled and the billionaire has vanished. ma's ant group has defined the chinese financial landscape, starting with alipay 17 years ago before expanding into wealth management, consumer lending, and insurance. handled 75% alipay of online payments in china. wechat has chipped away at the lead but ant is fighting back, turning it into a portal for all

kinds of services. as of mid-2020, alipay had more than 700 million active users, spending $17 trillion in the 12 months through june. in 2020, ant's biggest revenue maker is the credit tech business, driving plans to create a new consumer finance company. another pillar of the ant group is wealth management. it accounts for 15% of revenue. beyond china, the group is building its presence in the rest of asia to serve chinese customers traveling overseas. at home, its dominance has come under scrutiny by chinese regulators. the company faces clamp down on its consumer lending business and needs to apply for more licenses as well as increase its capital buffer so it faces a slim chance of going public before 2022. alibaba is also being punished by china's antimonopoly watchdog for violations. it's been a tough year for the billionaire. let's get more on the future of jack ma and ant group.

lulu chen joins us on the line from hong kong. what is the latest with jack ma and ant? jack ma has gone rather quiet, hasn't he? lulu: the expected changes and crackdowns have narrowed the providing its ipo according to our sources and we have been told that jack ma has been advised by the government but not required by the government to not leave the country. it does mean that while the billionaire is in trouble or face a tremendous challenge, he is not completely out. also, we have learned that the government has set up a joint task force to oversee ant, and on the board, it includes the financial stability committee and also the central bank. they are talking with a special task force that has been set up by ant, also wanted -- almost on

a daily basis, and ant's chairman and ceo are overseeing the task force personally. we have also been told by sources that ant has not been given specific guidance on what to actually overhaul. according to the regulations that have been announced. the draft proposals that are still at work right now, we understand that ant probably needs to increase its capital buffer and also increase the amount of code lending that it is -- co-lending that it is doing right now, increasing it from 2% to one third, but the overriding message is that the company needs to rethink its business. shery: this is not the first time he that jack ma or his business faced challenges so how does this clash with regulators compare with past instances? lulu: this is the biggest challenge that jack ma and his

trillion dollar empire might have faced, but he does have a history of clashing with regulators even since the inception of ant. alipay, which was the first product, was operating in a legal gray area, and jack ma has said on multiple occasions in the past to encourage his staff to keep running the business that if somebody has to go to jail, he would be the first. started operating in a gray legal area, until they were recognized formally by the country, they were still going into head-to-head with regulators, including when the company created the money market lending also the credit business. every new business that they have created has been a battle because they are breaking news territories and pushing the envelope, and some would say that has hurt the interest of

china's traditional state owned shery: lenders. to your point, -- state owned lenders. shery: to your point, we saw this crack down on jack ma, given that so far, authorities in beijing have really tried to foster entrepreneurs, make an example of being able to build such huge tech giants within china. what sort of example will this set for the next generation of chinese entrepreneurs? lulu: it does make you think jack ma and tencent are now under the gun and these are national champions that the country was trying to uplift just a few years ago. what does it mean for the rest of the entrepreneurial scene? for ant, there was so much riding on this ipo, the largest ipo, and half of it took part in china. it was also a means to a milestone, some saw as a milestone, to set up the capital

markets, the new tech board in china. the message is very clear here, which is stability and the party, and in that process, because jack's business probably was seen as threatening the stability of the state owned lenders in the existing financial system, and that is why we are seeing this regulatory clampdown. lulu chen in hong kong for us. coming up, we will look at some of the pboc's priorities in 2021 our guest. he is also an advisor to the central bank. plus, do not miss our exclusive chat with the ceo of a low-cost carrier about how it is adapting to the virus fallout. our markets coverage continues as we look ahead to the start of trade in hong kong, shanghai, and xinjiang. standby for "bloomberg markets:

china open." this is bloomberg. ♪

>> it is 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i'm tom mackenzie. >> i am haslinda almond. we are counting to the open in trade in the chinese mainland and hong kong. as. futures flipped president -- slipped as president trump questioned the corona