Can AI Mania Outrun Rising Oil Risks? | Insight With Haslinda Amin 7/23/2026

[00:00:02]PAUL: ASIAN MARKETS BEING PULLED BY TWO POWERFUL FORCES -- A OPTIMISM DRIVING THE CHIP RALLY WHILE SURGING OIL PRICES PROVIDE INFLATION FEARS.

[00:00:12]I AM PAUL ALLEN. WE DIVE DEEPER INTO THE STORIES THAT MATTER WITH CRUCIAL CONTEXT.

[00:00:21]THE MIDDLE EAST CONFLICT IS WIDENING.

[00:00:23]ATTACKS ON OIL TANKERS AND FRESH U.S.

[00:00:24]STRIKES ON IRAN ARE RAISING RISKS OF A BROADER REGION ESCALATION. INVESTORS ARE WAITING THE BALLOONING COST OF AI. ALPHABET IBM AND GOOGLE SHARES UNDER QUESTION ON WHETHER THE MASSIVE SPENDING WILL SUSTAIN RETURNS. J.P. MORGAN SEES INVESTORS ROTATING BEYOND CROWDED AI WINNERS WITH CHINA TECH, INDIA AND SOUTHEAST ASIA POISED FOR A CATCH-UP WITH RISING OIL PRICES PLAYING'S WORLD SPORT. WE WILL SPEAK TO RAJIV BATRA.

[00:00:59]ALSO, IT IS ASSET MANAGEMENT SECTOR IS BOOMING AS INVESTORS RUSHED TO TAP INTO THE RAPIDLY GROWING EQUITY MARKETS.

[00:01:03]TOP EXECUTIVES FROM NEWLY LISTED SBI FUNDS WILL BE JOINING THE SHOW TO DISCUSS HOW THEY PLAN TO SEIZE THE OPPORTUNITY.

[00:01:17]♪ LET'S GET TO OUR TOP STORY. YEMEN'S HOUTHIS SAY THEY HAVE ATTACKED TWO OIL TANKERS ON THE RED SEA, LEARNING TO OPEN A NEW FRONT IN THE IRAN WAR.

[00:01:44]A TANKER REPORTED BEING STRUCK SOUTHWEST OF THE SAUDI RED SEA COAST. SAUDI ARABIA DID NOT IMMEDIATELY COMMENT ON THE ATTACK, BUT ENERGY PRICES HAVE JUMPED AFTER THIS APPARENT EXPANSION OF THE CONFLICT TO THE RED SEA WHICH HAS EMERGED AS A VITAL WORK FOR CRUDE EXPORTS.

[00:02:00]SECRETARY OF STATE MARCO RUBIO IS THE U.S.

[00:02:04]IS OPEN TO NEGOTIATIONS WITH MILITARY OPTIONS WILL CONTINUE.

[00:02:10]>> WE REMAIN OPEN TO DIPLOMACY, TO WORKING IT OUT BUT RIGHT NOW THEY DON'T SEEM TO BE SERIOUS ABOUT THAT, SO WE WILL CONTINUE TO PROTECT SHIPPING. AT THE SAME TIME, WE ARE GOING TO DEGRADE THEIR ABILITY TO TARGET GLOBAL SHIPPING. PAUL: FOR MORE, LET'S GET TO BLOOMBERG EAST ASIA GOVERNMENT EDITOR JON HERSKOVITZ. WHAT MORE DO WE KNOW ABOUT THE HOUTHI CLAIMS OF ATTACKING TANKERS? JON: WE HEARD CLAIM THAT THEY USED MISSILES AND DRONES TO ATTACK TWO SAUDI OIL TANKERS, CAUSING FIRES AND CAUSING 10 SHIPS TO RETREAT. THESE CLAIMS CANNOT BE VERIFIED, BUT THERE IS EVIDENCE OF DISRUPTION AS REPORTED EARLIER. THE U.S.

[00:02:56]MARITIME TRADE OPERATIONS CENTER SAID ONE TANKER REPORTED BEING HIT JUST BEFORE THE HOUTHIS MADE THESE CLAIMS.

[00:03:04]ANOTHER TRACKING SERVICE SAID ABOUT SIX SHIPS HAD REROUTED AFTER THE HOUTHIS MADE THEIR THREATS.

[00:03:10]WE HAVE NOT HEARD FROM SAUDI ARABIA GET TO CONFIRM WHAT HAS HAPPENED. THERE IS SOME EVIDENCE OF SOME SHIPS TURNING AROUND, REROUTING BUT WHAT THE WHO -- HOUTHIS CLAIM HAPPENED, WE DON'T HAVE FULL VERIFICATION YET. PAUL: GIVE US A SENSE OF HOW MUCH OF THE THREAT THIS GROUP POSES IN TERMS OF OPENING A NEW FRONT POTENTIALLY IN THE WAR, THIS TIME OF THE RED SEA. JON: YEAH, THIS GROUP THREATENS THE RED SEA FROM ABOUT 2023 TO 2025. AT THE BOTTOM OF THE RED SEA, THERE IS THE CHOKEPOINT WHICH BEFORE THE HOUTHIS BEGIN THEIR CAMPAIGN, 10% OF GLOBAL TRADE WENT THROUGH THAT PASSAGEWAY.

[00:04:01]THAT NUMBER WENT DOWN TO ABOUT 3% AS OF 2025.

[00:04:07]THE SAUDI'S HAVE BEEN REROUTING THEIR OIL WHICH WAS DESTINED FOR THE STRAIT OF HORMUZ TOWARDS THE RED SEA.

[00:04:15]IF THEY CANNOT USE THE STRAIGHT AT THE BOTTOM, THEY WILL GO THROUGH THE SUEZ CANAL AND THIS RAISES COST BECAUSE IT MEANS A LONG TRIP AROUND AFRICA FOR OIL, A LOT OF WHICH ARE HEADING TO ASIAN MARKETS. THE EFFECTS FOR THE TRANSPORT OF OIL THERE, IT REALLY COULD AFFECT SHIPPING GOING THROUGH THE RED SEA. AND FOR CUSTOMERS IN ASIA THAT RELY ON OIL FROM THE MIDDLE EAST, AND JUST AS ANOTHER IMPEDIMENT FOR A SUPPLY OF FLOWS GET INTO ASIAN MARKETS IN AN ORDERLY MANNER. PAUL: THAT IS BLOOMBERG EAST ASIA GOVERNMENT EDITOR JON HERS KOVITZ. MARKETS ARE ALSO GETTING NERVOUS ABOUT THE COST OF THE AI BUILDUP.

[00:04:59]ELON MUSK'S AI AMBITIONS ARE GETTING A REALITY CHECK AS TESLA'S PROFITS SLIDE, DESPITE STRONG PERFORMANCE IN THE AUTOMOTIVE BUSINESS. ALPHABET DOUBLING DOWN ON THE AI RACE, LIFTING ITS SPENDING OUTLOOK AS TECH GIANTS COMPETE TO BUILD INFRASTRUCTURE BEHIND THE TECHNOLOGY.

[00:05:16]LET'S GET TO BLOOMBERG'S EXECUTIVE EDITOR FOR TECHNOLOGY TOM GILES FOR MORE. TOM, ALPHABET LIFTING ITS PLANS.

[00:05:25]WHAT HAVE ANALYSTS GOT TO SAY ABOUT THIS? TOM: THIS COMPANY, WE THOUGHT THEY WERE SPENDING A LOT BEFORE AND THIS QUARTER, THEY CAME OUT AND SAID HOLD MY BEER, WE ARE SPENDING EVEN MORE. THESE ARE UNPRECEDENTED NUMBERS IN THE HUNDREDS OF BILLIONS OF DOLLARS RAISING AS MUCH AS $205 BILLION. IT SPEAKS TO THE URGENCY OF OBTAINING THE CHIPS IN THE DATA CENTERS THAT ARE NEEDED TO FULFILL THEIR AI AMBITIONS. THIS IS A COMPANY THAT IS ADVANCING IN CLOUD COMPUTING. IT'S ADVANCING IN BUILDING MODELS. IT'S WEAVING GEMINI, ITS LARGE LANGUAGE MODEL, AND TO SEARCH, INTO CODING, INTO A WHOLE HOST OF SERVICES. THE COMPETITIVE ENVIRONMENT IS INTENSIFYING ACROSS THE U.S. BECAUSE GEMINI IS COMPETING WITH ANTHROPIC, OPENAI. AND WE'VE BEEN TALKING A LOT ABOUT IN ASIA. NOW THEY ARE HAVING TO CONTEND WITH INCREASINGLY SOPHISTICATED AND COMPETITIVE MODELS HERE IN CHINA, JUST AS WE SAW A RECENTLY WITH MOONSHOT, SUCH AS WE'VE SEEN FOR A WHILE WITH DEEPSEEK.

[00:06:44]THE LIST GOES ON AND ON OF OF OF OTHER COMPANIES THAT ARE GIVING GOOGLE A RUN FOR ITS MONEY.

[00:06:52]THAT GIVES YOU CONTEXT OF WHY THEY ARE SPENDING SO MUCH.

[00:06:56]THE QUESTION ON THE MIND OF INVESTORS IS WHEN WILL THAT PAY OFF? WHEN WILL ALL THAT INVESTMENT RESULT IN REAL CHANGES, REAL GROWTH TO REVENUE AND PROFIT FOR GOOGLE? AND WILL IT HAPPEN IN A TIMELY MANNER? IT IS HARD TO GET OUR HEADS AROUND THESE LARGE NUMBERS, $200 BILLION PLUS, FOR THE ENTIRE YEAR BECAUSE IT IS JUST UNCHARTED TERRITORY.

[00:07:19]WE'VE NEVER SEEN THEM SPEND THIS MUCH.

[00:07:22]SO, INVESTORS ARE ANTSY. PAUL: LET'S TALK ABOUT TESLA AS WELL, ALSO BURNING CASH. PROFITS SLIPPING, WHICH HAS BEEN WELL TELEGRAPHED. SPENDING ON ROBOTICS AND AI, BUT JUDGING BY THE MARKET REACTION, IS IT SAFE TO SAY INVESTORS PREFERRED TESLA WHEN IT WAS MAKING CARS? TOM: IT IS HARD TO SAY HOW MUCH OF THIS IS A VERDICT ON THEIR ROBOTIC AMBITIONS. IN SOME INSTANCES, PEOPLE ARE SAYING THAT ON ONE HAND, YOU HAVE GOOGLE GETTING PUNISHED FOR SPENDING TOO MUCH OR POTENTIALLY SPENDING TOO MUCH ON CAPEX. THE QUESTION FOR TESLA IS IS IT SPENDING ENOUGH? ARE THEY SPENDING AT A RATE THAT WILL SATISFY THEIR TARGET FOR 2026, I THINK IS $26 BILLION? THE QUESTION ON EVERYONE'S MIND IS ARE THEY SPENDING FAST ENOUGH TO REACH THAT BY THE END OF THE YEAR? AND ARE THEY BEING AMBITIOUS ENOUGH? PAUL: THAT SIDE OF THE EARNINGS STORY.

[00:08:28]WE ARE GETTING DETAILS ABOUT HOW THE OPENAI MODELS MANAGED TO BREACH AI STARTUP HUGGING FACE'S INTERNAL SYSTEMS. THEY USED A CHINESE MODEL IN THE END TO CARRY OUT FORENSIC ANALYSIS OF THE WHOLE INCIDENT, AFTER WHICH ASKED TO USE PROPRIETARY MODELS GOT BLOCKED BY SAFETY GUARDRAILS.

[00:08:45]WHAT DOES THAT TELL US ABOUT ANY NUMBER OF THINGS, INCLUDING THE RELIABILITY OF CHINESE AI MODELS? TOM: YES, TO YOUR QUESTION, WHEN YOU'VE GOT ALTERNATIVE CHINESE MODELS TO HELP YOU FIGURE OUT WHAT'S GOING ON -- WRONG OR RIGHT OR WHAT IS TO EFFECTIVE ABOUT OPENAI, YEAH, THAT SPEAKS TO THE EFFECTIVENESS OF THE MODELS.

[00:09:09]TO MY POINT EARLIER, THEY ARE GETTING A LOT BETTER AND THEY ARE SHOWING THAT -- WHEN WE HAVE CONVERSATIONS ABOUT THE BEST MODELS, THE TOP MODELS AROUND THE WORLD, YOU CANNOT JUST CAN FIND THAT CONVERSATION TO TWO PLAYERS, ANTHROPIC AND OPENAI. WE HAVE TO BROADEN THAT CONVERSATION.

[00:09:27]WE HAVE TO THINK MORE EXPANSIVELY TO SAY AND ADMIT THAT CHINA'S MODELS ARE PRETTY DARN GOOD.

[00:09:33]YEAH, WE ARE GOING TO TURN TO THEM WHEN WE NEED TO, WHEN WE NEED TO DO FORENSICS ON WHAT HAPPENED WITH OPENAI.

[00:09:41]AGAIN, TO ITS CREDIT, OPENAI, THIS BREACH OF HUGGING FACE WAS UNPRECEDENTED. IT WAS NOT PLANNED.

[00:09:47]IT WAS NOT WHAT THEY ASKED IT TO DO, BUT IT DOES SPEAK TO HOW INCREDIBLY POWERFUL THIS IS.

[00:09:58]AND IT SUGGESTS TO ME AND OTHER PEOPLE THAT OPENAI MIGHT HAVE TO EVEN TIGHTEN THE GUARDRAILS THAT IT PUTS AROUND EVEN THE WAY IT TESTS, BECAUSE REMEMBER, THIS HAPPEN IN A TESTING ENVIRONMENT. IT WAS SUPPOSED TO BE OPERATING IN WHAT THEY CALL A SANDBOX. THE TOOL EXPANDED BEYOND THAT SANDBOX AND IT GOT INTO THE OPEN WEB AND THAT IS WHERE IT HACKED INTO HUGGING FACE. PAUL: YEAH, IT WAS A SOMEWHAT CHILLING MORNING. TOM GILES, THANK YOU.

[00:10:31]LET'S TAKE A LOOK AT THE MARKETS AROUND THE ASIA PACIFIC THIS THURSDAY.

[00:10:38]WELL, WE'VE GOT KOREA WITH A RELATIVELY NORMAL DAY FOR ITS STANDARDS. STILL UP 2.5%. WE HAD SOUTH KOREAN GDP COMING IN AT A BEAT EARLIER, 3.7%. SK HYNIX COMING UP NEXT WEEK SO THAT SHOULD BE SOMEWHAT INTERESTING AS WELL.

[00:10:53]ELSEWHERE, WHAT HAVE WE GOT? INDONESIA DEFINITELY A WORTHY MENTION, UP 1.2%. NOW INDONESIAN STOCKS ON THE CUSP OF A BULL MARKET, UP 20% SINCE THAT JUNE LOW.

[00:11:06]WHAT A DIFFERENCE A FEW WEEKS HAS MADE FOR THAT MARKET.

[00:11:10]OUR NEXT GUEST HAS AN OVERWEIGHT CALL ON SOUTH KOREAN STOCKS AND EXPECTS EMERGING MARKET EARNINGS IN THE SECOND QUARTER TO BE STRONG AS WELL. CONCENTRATION INTO THE KOREAN TECH AND MEMORY SPACE.

[00:11:26]LET'S GET TO RAJIV BATRA NOW AT J.P. MORGAN.

[00:11:28]THANK YOU SO MUCH FOR YOUR TIME TODAY.

[00:11:32]I JUST WANT TO GET YOUR SENSE OF WHAT A GOOD ALLOCATION IS FOR KOREA AT THE MOMENT CONSIDERING IT IS VERY VOLATILE AND THE WORST-PERFORMING INDEX IN ASIA THIS MONTH. RAJIV: THANKS FOR HAVING ME BACK ON THE SHOW.

[00:11:50]KOREA HAS GONE THROUGH A VOLATILE PHASE OVER THE PAST FEW WEEKS, BUT THAT IS MORE DUE TO THE TECHNICAL ISSUES.

[00:11:58]WE CAN SEE THE LEVERAGE IN THE MARKETS OVERALL.

[00:12:00]THE CROWDED POSITION THAT HAS BUILT UP.

[00:12:07]BUT A RECENT DRAWDOWN WE HAVE SEEN, 75% OF THE ROLLOVER HAS ALREADY HAPPENED IN THE LEVERAGE ETF'S.

[00:12:14]SIMILARLY, THE STRUCTURES ARE GETTING RESOLVED OVERALL.

[00:12:19]INTERESTINGLY, HYPERSCALERS HAS STARTED TO PUT IN THE RESULTS AND WE HAVE SEEN THE GUIDANCE WAS WITH THE MARKET WAS LOOKING FOR IS STARTING TO COME. IT IS NOT FULLY DONE YET, BECAUSE AUGUST 16, YOU WILL GET MOST OF THE HYPERSCALERS WILL REPORT. BUT TAKING ALL OF THIS INTO ACCOUNT, WE REMAIN BULLISH ON THE TECH SECTOR WHICH REMAINS THE DOMINANT AND KEY THEME IN KOREA AS WELL AS EMERGING MARKETS.

[00:12:48]BEYOND THAT, WE STILL PREFER INDUSTRIALS, DEFENSE, AS WELL AS BANKS WHO ARE THE BENEFICIARIES IN KOREA. PAUL: IT HAS BEEN A STELLAR YEAR FOR THE KOSPI, VOLATILITY NOTWITHSTANDING. ALTHOUGH, DOWN 20% SINCE THE JUNE PEAK. WHEN YOU SEE THOSE SORTS OF PULLBACKS, IT SEEMS LIKE YOU LOOK AT THOSE AS BUYING OPPORTUNITIES RATHER THAN THE HEAT COMING OUT OF THE MARKET.

[00:13:11]RAJIV: A FUNDAMENTAL STAY INTACT AND MEET YOUR EARNINGS WITH THE MARKET IS FORECASTING THIS QUARTER NORTH OF 400% GROWTH IN KOREA, MSCI KOREA EQUITIES AND CLOSE TO 45% EARNINGS GROWTH IN 2027. IF ALL THESE NUMBERS ARE GETTING MET OR BEAT, THESE MARKETS WILL CONTINUE TO RALLY.

[00:13:38]THAT IS WHERE OUR PRICED TARGET OF 12-MONTH DOWN THE LINE IS LARGELY BEING SURMISED ON EARNINGS GROWTH RATHER THAN REWRITING ONLY. THE RISK PREMIUM MAY CONTINUE TO REMAIN BECAUSE OF MARKETS OPERATING ON A DO VERY CONCENTRATED DOLLAR BET. QUESTIONS WILL CONTINUE TO COME REGARDING THE MONETIZATION OF THE AI FREIGHT, HOW LONG THE DEMAND SUPPLY IMBALANCE REMAINS ON THE TECH HARDWARE, THE CHIP INDUSTRY SIDE.

[00:14:11]FINALLY, WHEN WE ARE GOING TO SEE THE CASH FLOWS AND REVENUE RETURNS FROM HYPERSCALERS. TAKING ALL THESE FACTORS INTO ACCOUNT AND THE VOLATILITY WHICH THE KOSPI HAS SEEN OVERALL, IT IS FAIR TO SAY THE MARKET WILL BE DRIVEN BY THE FUNDAMENTALS IN EARNINGS GROWTH RATHER THAN ANY KIND OF VALUATION REWRITING. -- RE-RA PAUL: WE SEE THE KOSPI COME OFF SINCE THE JUNE PEAK. COMPARE THAT TO INDONESIA, UP SINCE THE JUNE DROP. THEY BULL MARKET NOW FOR INDONESIA'S INDEX. WHAT IS DRIVING THIS?

[00:14:45]WHAT HAS BROUGHT AROUND THAT TURNAROUND? RAJIV: YOU CAN SEE THE TECHNICAL ROTATION STARTED IN THE MARKET SINCE EARLY JUNE ON THE BACK OF THE INDONESIA ANNOUNCEMENT OF U.S.-IRAN THAT LED TO A ROLLOVER OF OIL BY THE IMPORTER.

[00:15:02]OIL PRICES KEPT GETTING LOWER. BEYOND THAT, REGARDING INFLATION, IT IS GETTING HEATED UP TO A MASSIVE TIGHTENING CYCLE ACROSS SOUTH ASIA REGION AND IN OTHER EM COUNTRIES.

[00:15:16]EVEN DEBT STARTED RECEIVING IT. THAT LED TO A RALLY BEYOND NON-AI, WHICH INCLUDES INDIA, WHICH INCLUDES SOME DOMESTIC PARTS OF CHINA, TWO. THE SUSTAINABILITY OF THE BULL MARKET ROTATION IS DEPENDENT ON WHETHER THE OIL PRICES CAN START DECLINING, AND THAT IS A TOUGH CALL TO MAKE.

[00:15:43]IN THE CURRENT SITUATION WHERE GEOPOLITICS TENSIONS STARTED RISING AGAIN, BEYOND THAT WE NEED TO WORRY THAT U.S.

[00:15:49]RATES ARE GETTING HIGHER. IF YOU LOOK AT THE BOND MARKET, BOND MARKETS ARE DRIVING IN A HIKE IN SEPTEMBER.

[00:15:58]AND THEN THE LAST TROUBLE FOR THE EM, DXY.

[00:16:01]IT IS WELL ABOVE 100. WE HAVE SAVED 2% IN DOLLAR LAST MONTH AND MONTH TO DATE DOLLAR IS AT A HIGHER LEVEL WHICH IS NOT GOOD NEWS FOR THE NON-AI MARKET WHICH INCLUDES DEFICIT MARKETS AS LESS OIL IMPORTERS. PAUL: YOU STILL GOT STOCKS AND INDONESIA ARE RISING, UP 1.25% AT THE MOMENT AGAINST THE BACKDROP OF RISING OIL PRICES.

[00:16:29]BRENT AT 96.20 EIGHT. HELP A SQUARE THAT CIRCLE IN TERMS OF YOU MENTIONED SUSTAINABILITY.

[00:16:34]COULD WE SEE A REVERSAL SOONER RATHER THAN LATER? RAJIV: IT IS DEPENDENT ON HOW HIGHER OIL CAN GROW AND WHAT HIGH LEVEL IT CAN SUSTAIN. RIGHT NOW THE EQUITY MARKET IS MORE IN THE NON-AI WORLD DUE TO THE FACT OR RATHER THAN THE POSITIVE EARNINGS DIVISION. WHY DID THEY COME INTO THE PICTURE?

[00:17:01]YOU COULD SAY THE RISING PRESSURE HAS OIL STARTING SLIDING LOWER. MOST OF THE INVESTORS GOT CAUGHT ON THEIR OWN FOOT BECAUSE THEY WERE MASSIVELY UNDERWEIGHT IN THE NON-AI SPACE. NOW WHEN THERE IS SOME HEADWIND, PEOPLE ARE NOT FULLY BELIEVING THE STORY THAT OIL IS INCHING TOWARDS THE 300 MARK OR TENDS TO STAY IN THAT LEVEL FOR A LONGER DURATION.

[00:17:29]IF OIL MAINTAINS THAT LEVEL FOR LONGER, THAT IS FAIR.

[00:17:33]THAT DOWNWARD CYCLE STARTS FOR NON-AI.

[00:17:35]RIGHT NOW, WHAT YOU ARE SEEING FOR THE PAST 1.5 MONTHS, 11%, INDONESIA AROUND 20%, CAME ON THE BACK OF THE EASING HEADWIND. LOOKING AT THE SCENARIO, OIL, DOLLAR AND RATES, THESE HEADWINDS ARE, AGAIN, BACK ON THE TABLE. IT WILL HURT US THROUGH THE DOWNWARD EARNINGS DIVISION. PAUL: IN TERMS OF INDONESIA, MSCI HAS BEEN CONSISTENT -- HAS BEEN EXPRESSING CONCERNS ABOUT THE GOVERNMENT, AS WELL.

[00:18:09]OF THESE HAVE GONE AWAY. DO YOU THINK INVESTOR FEARS ARE ON THE MARKET ARE OVER AND IN ANTICIPATION OF REFORMS COMING?

[00:18:17]RAJIV: MOST CONCERNS REGARDING THE INDEX INCLUSION OR WHAT MSCI WAS LOOKING FOR, THE POLICYMAKERS ARE RIGHTLY TRYING TO ADDRESS IT.

[00:18:29]WE HAVE SEEN REFORMS BEING ANNOUNCED BY POLICYMAKERS TO MAKE SURE THERE IS ENOUGH LIQUIDITY AND THEY CAN MANDATE EVERYONE IN THE INDEXES. RIGHT NOW THE MARKET IS NOT FULLY PRICING THAT IN YET. IF YOU LOOK AT THOSE INVESTOR POSITIONING, THE UNDERWEIGHT ON INDONESIA FROM FOREIGN INVESTORS ARE QUITE HUGE. THEY ARE NOT UNDER OWNING IT BUT THE POSITIONING DOES NOT AT A PEAK LEVEL FROM WHAT INDONESIA ENJOYED UNTIL THE END OF THE LAST YEAR WHERE THE PAST FIVE YEARS TO 10 YEARS.

[00:19:07]IF INVESTORS START RISING, INDONESIA WILL REMAIN THE BENCHMARK AND MSCI, GIVEN WHAT POLICIES HAVE DONE, I THINK INFLOWS WILL START COMING BACK TO INDONESIA AND THE RALLY, WOULD YOU ASKED ME IN THE LEAD QUESTION, WILL BECOME MORE SUSTAINABLE FOR INDONESIAN EQUITIES. PAUL: A GOOD DAY TO HAVE YOU WANT BECAUSE A FEW HOURS AGO, J.P.

[00:19:33]MORGAN PUT OUT A NOTE UPGRADING THAI STOCKS, DOWNGRADING PHILIPPINES. TALK US -- TAKE US TO THAT CALL.

[00:19:38]RAJIV: AS I HIGHLIGHTED EARLIER, THERE IS LOTS OF EXTERNAL HEADWINDS THE REGION IS FACING.

[00:19:46]SOUTHEAST ASIA IS AN EXPORTER IN THE REGION SO WHEN THERE ARE EXTERNAL HEADWINDS, THE FIRST TO COME UNDER TROUBLED IS THE REGION OVER THERE, SO WE ARE WATCHING THE ESCALATION WHICH MEANS HIGHER OIL PRICES, SECOND, BECAUSE OF THE HIGH RATES AND STRONGER DOLLAR, THE SENSITIVITIES IS QUITE HIGH.

[00:20:11]AND THEN, LASTLY, THE FEAR OF SUPER EL NIÑO HAVE NOT GONE ALL THE WAY. SO THAT IS MAKING US A BIT UNDERWEIGHT ON THE EQUITIES WITH THE SHARP REBOUND OF 11%, WHICH WE HAVE SEEN.

[00:20:26]WE ARE LOOKING AT THE POCKETS THAT CAN STILL HAVE A SUSTAINABLE EARNING GROWTH, AND THAT IS WHERE THAILAND FITS THE BILL BECAUSE OF EXPOSURE TO THE AI STOCKS WHERE THE AI UNIVERSE, WHICH WILL BE THE BENEFICIARY OF THE HIGHER GROWTH FOLLOWED BY THE TRADE AN EXPORTER REVENUE, AND BEYOND THAT, THE POLITICAL STABILITY, WHICH IS GIVING SOME TAILWINDS TO THE ECONOMY, AND SOME REBOUND.

[00:21:02]ON THE CONTRARY, THE PHILIPPINES, THERE ARE LIMITED CATALYSTS THAT CAN LEAD TO A RE-RATING.

[00:21:11]AND BEYOND HIGH OIL PRICES, THE CONCERNS OF STRONGER EL NIÑO -- REMEMBER, PHILIPPINES ARE A HUGE IMPORTER OF NOT JUST ENERGY BUT FOOD ITEMS, ALSO. SO THAT WILL BE A CONCERN.

[00:21:21]BEYOND THAT, IF YOU ARE HEADING TOWARDS HIGH RATES AND STRONGER DOLLAR, PHILIPPINES, EQUITIES OR PHILIPPINES CORPORATE EARNINGS ARE QUITE SENSITIVE. THIS IS A REASON WHY WE DOWNGRADED PHILIPPINES EQUITIES TO UNDERWEIGHT AND UPGRADED THAI EQUITIES TO NEUTRAL. PAUL: BEFORE WE LET YOU GO, I WANT TO GET YOUR THOUGHTS ON INDIA, AND OTHER MARKET AT THE INTERSECTION.

[00:21:48]VERY VULNERABLE TO RISING OIL PRICES.

[00:21:52]A NUMBER OF GUESTS TALKED ABOUT IT AS BEING A HEDGE AGAINST THE AI RALLY, SO IT IS A SENSIBLE ALLOCATION FOR INDIA AT THE MOMENT? RAJIV: INDIA HAS EMERGED ON THE AI TRADE. WHEN YOU LOOK AT OUTPERFORMANCE, YOU HAVE MONTH TO DATE I REALLY GOOD OUTPERFORMANCE THROUGH ASIA. THE BIG DRIVER FOR INDIA TO MOVE HIGHER IS CONSENSUS EXPECTATION FROM INDIA IS NOT VERY HIGH. THE EARNING FULL GROWTH CONSENSUS HAS DROPPED TO 10% TO 11%, THE CURRENT NUMBER.

[00:22:22]BEYOND THAT, IF YOU LOOK AT VALUATION, PREMIUM HAS DECLINED OVERALL. AND THAT IS NOW LEADING TOWARDS MAKING A COMEBACK. PAUL: GREAT. WE ARE OUT OF TIME UNFORTUNATELY. THANK YOU FOR YOUR INSIGHTS.

[00:22:39]RAJIV BATRA, HEAD OF ASIA AND CO-OF EMERGING MARKET EQUITY STRATEGY AT J.P. MORGAN. WE HAVE PLENTY MORE AHEAD.

[00:22:44]THIS IS BLOOMBERG. ♪ PAUL: WELCOME BACK. YOU ARE WATCHING "INSIGHT."

[00:23:06]THE OIL PRICE KEEPS DRIVING HIGHER. 96.36 FOR BRENT.

[00:23:12]PRESIDENT TRUMP SAYS THEY PLAN TO STRIKE BRIDGES AND POWER PLANTS AROUND IRAN.

[00:23:19]HOUTHIS ATTACKING TANKERS AT THE ENTRANCE OF THE RED SEA, PUTTING PRESSURE ON OIL PRICE. EQUITIES AND MIXED PICTURE.

[00:23:25]PRETTY DAY IN HONG KONG. HANK SANG UP BY 1.20 5%, KOSPI UP BY 2.6%, DESPITE MIXED REACTION TO SOME TECH EARNINGS WE SAW FROM THE U.S.

[00:23:40]THE ASIA-PACIFIC GO IN POSITIVE TERRITORY.

[00:23:43]STILL TO COME, SPI FUND MANAGEMENT'S -- SPI'S FUND MANAGEMENT HAD THE LARGEST IPO OF ANY SO FAR IN 20 26.

[00:23:51]THE COMPANY CEO AND EXECUTIVE PRESIDENT JOIN US EXCLUSIVELY NEXT TO DISCUSS THE FIRM'S PLANS. THIS IS BLOOMBERG.

[00:24:06]PAUL: WELCOME BACK. LET'S TAKE A QUICK LOOK AT WHERE MARKETS STAND AND MAINLAND CHINESE MARKETS.

[00:24:14]JAPAN MARKETS COMING BACK ONLINE.

[00:24:19]THE NIKKEI UP BY ABOUT.5%. CSI 300 SOFTER BY ABOUT.25%.

[00:24:27]KOSPI IS THE STAR OF THE SHOW. THE FIRST TIME THIS WEEK.

[00:24:32]CHIPMAKERS ARE HAVING A GOOD DAY.

[00:24:37]EARLIER, TESLA PROFIT MISSING ALPHABET FALLING AFTER BOOSTING ITS CAPEX FORECAST LOOK UP TO $200 BILLION.

[00:24:44]THAT MEANS MORE CHIPS WILL BE NEEDED.

[00:24:46]KOREAN CHIPMAKERS PERFORMING STRONGLY.

[00:24:49]THE CRUDE PRICE PERFORMING STRONGLY AS THE SITUATION CONTINUES TO ESCALATE NOT JUST AROUND THE STRAIT OF HORMUZ, BUT ALSO AROUND THE RED SEA WITH HOUTHI REBELS SAYING THEY ATTACKED TANKERS AT THE GATE OF TEARS. A NUMBER OF COMPANIES REPORTING TODAY. THE PHARMACEUTICAL COMPANY WILL BE REPORTING TODAY, OFF THE BACK OF THE TARIFFS ON PHARMACEUTICALS ANNOUNCED BY THE U.S. YESTERDAY. TAKE A LOOK AT THE RUPEE, HOVERING AROUND RECORD LOWS AGAIN.

[00:25:27]TRADERS ON WATCH FOR POTENTIAL INTERVENTION, REALLY FEELING THE PRESSURE FROM THE RISING OIL PRICES.

[00:25:32]ALSO CONCERNS AROUND INFLATION, EXTERNAL RISKS AS WELL.

[00:25:34]YIELDS TICKING UP AS WELL. THE 10 YEAR AT 6.8% AT THE MOMENT. ONE OF THE STANDOUTS THIS WEEK HAS BEEN THE STRONG DEBUT OF SBI FUNDS, SIGNALING HEALTHY INVESTOR APPETITE FOR LARGE OFFERINGS.

[00:25:54]JOINING US NOW IS THE SBI MANAGEMENT CIO ALONG SIDE HIS EXECUTIVE PRESIDENT. THANK YOU FOR YOUR TIME.

[00:26:05]DIBESISH, I WOULD LIKE TO START WITH YOU.

[00:26:09]CAN YOU TALK TO US ABOUT WHAT YOUR KEY PRIORITIES ARE NOW OVER THE NEXT FEW YEARS OR SO? ARE YOU GOING TO EXPAND THE PRODUCT SUITE, BIGGER DISTRIBUTION NETWORK, NEW PRODUCTS? WHAT DO YOU HAVE IN MIND?

[00:26:21]DEBASISH: THANK YOU. THANK YOU, ALL THE INVESTORS AROUND THE GLOBE AND IN INDIA FOR SUPPORTING OUR IPO.

[00:26:30]PRIORITIES FOR THE NEXT THREE TO FIVE YEARS WILL BE FOUR CATEGORIES FOR ONE IS DEMOCRATIZING THE INVESTMENTS AND INVESTMENT -- IN INDIA, WE HAVE 1.4 BILLION PEOPLE BUT HARDLY 10% ARGAN AND FLAT -- INVESTMENT PLATFORMS. BRINGING THESE FROM THE CITIES TO THE TOWNS TO MAKE INVESTMENTS AS QUICK, AS EASY AS POSSIBLE FOR THE CITIZENS.

[00:27:10]AGAIN, A LARGE NUMBER OF INVESTORS WILL FOCUS ON FISCAL DELIVERED.

[00:27:17]INVESTING, GIVING THEM ADVICE, AI RESOLUTIONS.

[00:27:20]THESE WILL BE OUR PRIORITIES FOR THE COMING YEARS.

[00:27:26]INVESTMENT IS ABOUT VALUE CREATION.

[00:27:30]WE WANT TO ADD VALUE FOR ALL INVESTORS AND SHAREHOLDERS.

[00:27:34]FINALLY, WE WANT TO GROW IN NEW AREAS LIKE PAYMENTS, WHERE ALREADY ACCELERATING WITH SBI FUNDS LIMITED. WE ARE TRYING TO EXPAND OUR BUSINESS. THANK YOU. PAUL: I WOULD LIKE TO ASK YOU AS WELL, THIS LISTING MAKES YOU THE NUMBER TWO LISTED ASSET MANAGEMENT BEHIND THE MARKET LEADER, YOUR COMPETITOR. DO YOU FEEL WHAT DEBASISH OUTLINED? WILL IT BE ENOUGH TO MAKE YOU THE NUMBER ONE FUND MANAGER, WHAT ELSE NEEDS TO BE DONE?

[00:28:11]R.S.: THANK YOU FOR HAVING US. IT IS A GREAT QUESTION.

[00:28:17]AT THE END OF THE DAY, IT IS MORE THAN THE MARKET CAP.

[00:28:23]WE HAVE 15% MARKET SHARE NEXT OF THE LARGEST MANAGER.

[00:28:30]WE THINK THE VALUE -- WE'RE NOT HERE -- EVENTUALLY, IT WILL BUILD FOR WHAT THE BUSINESS WE'VE CREATED.

[00:28:40]NOT JUST IN TERMS OF THE ABILITY TO RAISE ASSETS.

[00:28:45]WE HAVE VERY LARGE INSTITUTION PLAYER IN INDIA.

[00:28:49]A LARGE PORTFOLIO OF MONEY FOR INVESTORSS.

[00:28:53]WE ALSO HAVE MASSIVE PLANS IN TERMS OF GROWING THE BUSINESS.

[00:28:58]I THINK THE MARKET WILL VALUE US ACCORDINGLY AND WE FEEL AS A MARKET LEADER, WE SHOULD BE FAIRLY VALUED IN COMING DAYS.

[00:29:07]PAUL: WE HAVE SEEN RETAIL PARTICIPATION IN THESE MUTUAL FUNDS RISING SHARPLY IN RECENT YEARS.

[00:29:12]CAN YOU TALK TO US ABOUT THE TRENDS YOU ARE NOTICING IN DOMESTIC INVESTOR BEHAVIOR?

[00:29:21]R.S.: THANK YOU.

[00:29:27]WHAT HE TALKED ABOUT, IT ALL STARTED WITH DIGITIZATION OF THE STACK. THIS PICKED UP STEAM. THE PARTICIPATION BY THE INVESTORS IN INDIA IS NOT GOING THROUGH THE ROOF.

[00:29:43]A LARGE CAMPAIGN HAS BEEN INVESTED IN AND IT IS IMPACTING A LOT OF YOUNG INVESTORS.

[00:29:50]WE'VE BEEN EXPANDING THE MARKET BY WHAT WE CALL BEYOND THE TOP 30. SBI, OUR OWN PARENT COMPANY, HAS MASSIVE BRANCHES.

[00:30:04]SBI HAS AROUND 550 BILLION CUSTOMERS.

[00:30:07]IT IS A MASSIVE -- MILLION CUSTOMERS.

[00:30:09]IT IS A MASSIVE BASE OF INVESTORS.

[00:30:14]THE EXPECTATION TO GO BEYOND THAT WITH SAVINGS AND OTHER INTERESTS SECURITIES TO MORE MARKET CAPABILITIES.

[00:30:24]THAT IS GROWING AND I THINK WE ARE BENEFITING FROM THAT.

[00:30:27]IN THE COMING DAYS, WE WILL UNLOCK THAT FASTER. PAUL: DEBASISH, I WANT TO GET BACK TO YOU TO DISCUSS THE EXPIRATION OF THE LOCKOUT PERIOD. THIS DEBUT, YOU ARE ONLY A COUPLE OF DAYS OLD LISTED ON THE MARKET.

[00:30:43]ONCE THAT LOCKOUTPERIOD EXPIRES, DO YOU ANTICIPATE AMUNDI WITH ANYMORE STEAK DILUTION? DEBASISH: THIS IS THE FIRST STEP OF DIVESTMENT.

[00:31:00]BOTH PARENTS SABI AND AMUNDI INVESTED.

[00:31:04]WE HAVE PLANS FOR THE INCOMING 10 YEARS.

[00:31:08]THEY ARE IN PLACE, BUT THE BOARD WILL DECIDE IN TIME.

[00:31:16]AS PART OF THE QUESTION YOU ASKED, THE DEMOCRATIZATION THAT IS HAPPENING. WE HAVE A LARGE NUMBER OF THE POPULATION, INTO INVESTMENT. WE HAVE THE BIGGEST INSTITUTION NETWORK.

[00:31:35]IT MAKES THIS POSSIBLE ACROSS THE COUNTRY IN THE COMING YEARS.

[00:31:37]THANK YOU. PAUL: YOU TALK ABOUT YOUR WIDE MOATS.

[00:31:42]YOU ALSO HAVE THE LOWEST OPERATING EXPENSES AMONG INDIAN ASSET MANAGERS. HOW WILL YOU MAINTAIN THAT AND IS THE CURRENT APPROACH SUSTAINABLE? DEBASISH: GOOD QUESTION.

[00:32:00]IT HAPPENED IN MUTUAL PRODUCTS, ANNOUNCED IN LINE IN THIS AREA.

[00:32:04]MORE OR LESS, IT IS A SIMILAR WAY OF DELIVERY TO THE CUSTOMER'S. THE SKILL OF OPERATION WILL MAKE A DIFFERENCE. THAT IS WHAT WE MEAN ABOUT DEMOCRATIZATION, MOVING INTO CITIES AND THE METRO CENTERS..

[00:32:23]THIS SCALE WILL MAKE A DIFFERENCE.

[00:32:29]PAUL: I WOULD LIKE TO GO BACK TO YOU NOW IF I CAN. ONE OF THE FEATURES OF THE INDIAN MARKET HAS BEEN FOREIGN INFLOWS THAT TAPERED OFF A LITTLE SINCE THE SURGE WE SAW AT THE START OF THE YEAR.

[00:32:43]WHAT IS YOUR OUTLOOK FOR FOREIGN INFLOWS FOR INDIA OVER THE NEXT 12 TO 18 MONTHS, AND WHAT FACTORS DO YOU FEEL ARE SHAPING INVESTOR SENTIMENT IN INDIA? R.S.: I CAN GIVE YOU ANECDOTAL EVIDENCE FROM PEOPLE AROUND THE WORLD I'VE BEEN TALKING TO. OUR INTERACTION WITH THEM HAVE BEEN VERY POSITIVE.

[00:33:09]THE IPO LASTLY, WE HAVE MASSIVE PARTICIPATION FROM GLOBAL INVESTORS. THE MONEY FROM SOVEREIGN WEALTH FUNDS AND EXCHANGE FUNDS WITH INVESTORS.

[00:33:24]THAT TELLS YOU IT IS MASSIVE. INDIA HAS IN SUCH QUICK PROCESS IN THE COUNTRY. IN THE COMING DAYS, APPETITE SHOULD GO UP.

[00:33:35]THE INDIAN APPETITE IS SO LARGE AND I WANTED TO BRING YOU ONE DATA POINT. INTERNALLY, WE HAVE SYSTEMATIC INVESTMENT PLANS. THEY CONTRIBUTE A BIG PART OF THE MONEY WE GET.

[00:33:53]THIS IS CLOSE TO ABOUT 15 MILLION CUSTOMERS WHO INVEST EVERY MONTH WITH US.

[00:34:02]WE HAVE A LARGE PIPELINE AND, LIKE I SAID, THE GLOBAL INVESTORS AS WELL. PAUL: HALF I WOULD LIKE TO ASK YOU ALSO TO WHAT DEGREE DO YOU FEEL A WEAK RUPEE HAS BEEN SUPPORTING FOREIGN INFLOWS AS WELL?

[00:34:19]IT IS A GOOD DAY TO TALK ABOUT THIS BECAUSE IT IS GETTING NEAR RECORD LOWS AGAIN. DO YOU HAVE A FORECAST FOR THE CURRENCY ALSO? R.S.: I DON'T THINK WE HAVE ANY FORECAST BUT WE BELIEVE THE RUPEE -- FOR THE TIME BEING. THINGS PLAY OUT GLOBALLY AND WE AS AN ASSET MANAGER, EVERYTHING WE HAVE IS IN INDIAN CAPABILITY.

[00:34:51]WE HAVE SOME U.S. INVESTORS AS WE DO FOR INDIAN INVESTORS FOR THE MUTUAL FUND GROUP.

[00:34:57]I THINK THE RUPEE IS A GREAT ENTRY POINT FOR MULTIPLE INVESTORS.

[00:35:11]AS AN EMERGING MARKET ENTITY IN INDIA, INVESTORS HAVE ALREADY BEEN FACTORY IN THE RUPEE, BUT MAY BE CURRENT LEVELS OF 97 IS A VERY GOOD LEVEL FOR THE INVESTOR. PAUL: WE ARE JUST HEARING THE RBI HAS BEEN SELLING DOLLARS AND THE FOREIGN MARKET TO SUPPORT THE RUPEE.

[00:35:31]DEBASISH, CAN YOU TALK TO US ABOUT HOW INVESTORS SEE THE EARNINGS OUTLOOK FOR INDIAN COMPANIES?

[00:35:38]AND WHAT IS YOUR FORECAST FOR THE NEXT YEAR? DEBASISH: SO, THE COMPANIES IN INDIA HAVE BEEN DOING WELL.

[00:35:51]THERE HAS BEEN PRIVATE SECTOR INVESTMENT, AS YOU ARE SEEING NOW.

[00:36:00]THAT WAY THE INVESTMENT CLIMATE WILL BE VERY BOLD FOR THE COMING QUARTERS. THE PRIVATE SECTOR INVESTMENT GOES UP.

[00:36:21]IT IS BOTH PRIVATE AND PUBLIC. WE SEE THE INDUSTRIES IN THIS SECTOR. [INDISCERNIBLE] PAUL: WE'VE ONLY GOT A COUPLE MINUTES LEFT OR A MINUTE OR SO. I WOULD LIKE TO FINISH AND CAN YOU TELL US ABOUT WHAT YOU FEEL THE BIGGEST OPPORTUNITIES ARE FOR SBI FUNDS AND THE INDIAN MARKET MORE GENERALLY GOING FORWARD? R.S.: THE RISK IS LARGELY CONTAINED AT THIS STAGE.

[00:37:00]I THINK THE POTENTIAL UPSIDE FOR THE MARKET IS VERY HIGH.

[00:37:04]MARKET VOLATILITY IS KIND OF BEHIND US.

[00:37:07]THAT RISK IS ALWAYS THERE FOR AN ASSET MANAGER PLAYER LIKE US.

[00:37:14]I THINK POTENTIAL OPPORTUNITIES ARE IMMENSE.

[00:37:17]THE FIRST BIGGEST OPPORTUNITY WE SEE -- AND NOW AND HELPS US ACROSS THE BOARD.

[00:37:31]I THINK IN THE COMING DAYS, YOU WILL SEE THE OPPORTUNITY PLAYING OUT IN THE MARKET FOR US. PAUL: ALL RIGHT, SBI FUNDS MANAGEMENT, EXECUTIVE PRESIDENT, THANK YOU SO MUCH FOR JOINING US TODAY.

[00:37:49]STILL TO COME, THE U.S. AND INDIA PRESSING AHEAD WITH TRADE TALKS EVEN AS PRESIDENT TRUMP THREATENS NEW TARIFFS ON GENERIC DRUGS. WE TAKE A LOOK AT WHAT IS AT STAKE FOR ONE OF INDIA'S MOST IMPORTANT EXPORT SECTORS AND WHETHER A DEAL IS STILL WITHIN REACH. THIS IS BLOOMBERG.

[00:38:17]PAUL: WELCOME BACK. YOU ARE WATCHING "INSIGHT."

[00:38:23]LET'S TAKE A LOOK AT THE MARKET OPEN IN INDIA.

[00:38:26]WE DID HAVE A LITTLE SELLING IN THE PREMARKET.

[00:38:31]ALSO ABOUT POINT 50%, THE NIFTY I.T.

[00:38:33]INDEX ALSO ABOUT BY THE SAME. INDIAN RUPEE HITTING HISTORIC LOWS, A SHORT TIME AGO, HEARING THAT THE ARE B.I.

[00:38:42]WAS SELLING ALMOST TO PROP UP THE CURRENCY.

[00:38:43]NOT HAVING MUCH OF AN IMPACT. A COUPLE OF STOCKS WE ARE WATCHING, THE PHARMACEUTICAL COMPANY UP TO PERCENT.

[00:38:51]ANOTHER PHARMACEUTICAL COMPANY DOWN 1.2%.

[00:38:53]THEY WILL BE ANNOUNCING EARNINGS LATER TODAY.

[00:38:56]WE'VE ALSO HEARD FROM THE PRIME MINISTER, MAKING HIS FIRST REMARKS ON THE PROTESTS THAT HAVE BEEN GRIPPING DELHI FROM STUDENTS. HE SAYS HE HAS ASKED AUTHORITIES AND OFFICIALS TO TAKE NEEDED STEPS TO FAST-TRACK COURTS TO ENSURE SWIFT PUNISHMENTS FOR THOSE INVOLVED. THAT IS PRIME MINISTER MODI MAKING COMMENTS ON A POST ON X. STAYING ON INDIA, IT IS PUSHING TO REACH FINAL TRADE AGREEMENT WITH THE U.S., EVEN AFTER WASHINGTON ISSUED NEW TARIFF THREATS ON PHARMACEUTICAL PRODUCTS. TOP DIPLOMATS FROM BOTH COUNTRIES HAVE BEEN ON THE SIDELINES OF THE MEETING IN MANILA, AND WE ARE JOINED NOW WITH MORE.

[00:39:38]WHAT CAME OUT OF THOSE MEETINGS BETWEEN RUBIO AND THE FOREIGN MINISTER? MINMIN: IT LOOKS LIKE THE TWO SIDES WERE DISCUSSING THAT DEAL WHICH HAS BEEN UNDER NEGOTIATION FOR MORE THAN A YEAR.

[00:39:54]MARCO RUBIO SAYS IT COULD POTENTIALLY BE CONCLUDED IN TWO MONTHS TO FOUR MONTHS TIME. HE SAYS MOST DETAILS HAVE BEEN IRONED OUT EXCEPT ONE SECTION WHICH IS OVERCAPACITY THAT COULD LEAD TO 12 POINT 5% TARIFFS ON INDIAN GOODS.

[00:40:13]IT JUST YESTERDAY, THE U.S. ANNOUNCED ADDITIONAL 100% TARIFFS ON GENERIC DRUGS BEING EXPORTED TO THE U.S.

[00:40:21]THAT WOULD KICK IN IN TWO YEARS TIME AND LESS DRUG MANUFACTURERS MOVE PRODUCTION TO THE U.S.

[00:40:27]CAREER EXPECTED A FOREIGN MINISTER TO RAISE RATES BUT APPARENTLY IT WAS NOT DISCUSSED. AT THIS POINT, IT IS NOT CLEAR WHETHER INDIA WOULD SECURE ANY EXEMPTIONS, GIVEN THEY WILL BE JUST APPORTIONMENT LEE AFFECTED. THEY ARE THE LARGEST SUPPLY OF THOSE GENERIC DRUGS TO THE U.S. ONE OF THE KEY STRATEGIES FOR INDIA TO DEAL WITH THOSE TARIFFS IS TO DIVERSIFY ITS TRADE. THAT IS WHY HE ALSO MET WITH FOREIGN MINISTERS. HE WILL ENGAGE WITH THEM TO EXPAND THE SUPPLY CHAIN AND BOOST ECONOMIC RESILIENCE. PAUL: MARCO RUBIO ALSO HAD A HIGH-PROFILE MEETING WITH THIS CHINESE COUNTERPART, WHAT WAS THE READOUT FROM THAT? MINMIN: THE TWO MEN MET FOR MORE THAN ONE HOUR YESTERDAY EVENING, AND THE CHINESE LEADERS SAID IT WAS POSITIVE AND CONSTRUCTIVE.

[00:41:18]NO SUPPLIES THE MAIN MESSAGE FROM CHINA WAS FOR THE U.S.

[00:41:21]-- NO SURPRISE THEM A MESSAGE FROM CHINA WAS FOR THE U.S.

[00:41:23]THAT THERE IS ONE PRINCIPAL. MARCO RUBIO SAID THE TWO SIDES WILL IMPLEMENT THE BOARD OF TRADE SOMETIME BEFORE SEPTEMBER BEFORE PRESIDENT XI'S PLAN TRIP TO WASHINGTON.

[00:41:35]THIS WAS FIRST ANNOUNCED DURING THE PRESIDENTIAL SUMMIT IN BEIJING. IT COULD POTENTIALLY REDUCE TARIFFS ON AT LEAST $30 BILLION WORTH OF GOODS AND NONSENSITIVE SECTORS. IT IS NOT CLEAR WHETHER THEY DISCUSSED TECH AT ALL. IT DID NOT FEATURE IN THE CHINESE FOREIGN MINISTRY STATEMENT.

[00:41:58]OF COURSE, THIS HAS BEEN THE KEY STICKING POINT BETWEEN THE TWO SIDES, ESPECIALLY AFTER KIMI K3, WITH THE U.S.

[00:42:06]ACCUSING MOONSHOT AI OF ILLEGALLY ACCESSING THESE THIRDS SERVICE SERVERS.

[00:42:11]THIS POTENTIALLY COULD DERAILED ANY POTENTIAL GOOD FEELINGS BETWEEN THE TWO SIDES. PAUL: YOU ALSO GOT TO SPEAK WITH THE CANADIAN FOREIGN MINISTER YESTERDAY. WHAT WERE THE KEY TAKEAWAYS?

[00:42:27]MINMIN: I SPOKE TO HER YESTERDAY AND ASKED HER REACTION TO THE ADDITIONAL 50% TARIFFS THE U.S.

[00:42:35]IS IMPOSING ON CANADA AND WHETHER OR NOT CANADA WOULD CONSIDER SOME CONCESSIONS TO THE U.S.

[00:42:42]IN EXCHANGE FOR LOWER TARIFFS.

[00:42:44]CANADA IS LOOKING TO DIVERSIFY ITS TRADE AGAIN, A STRATEGY TO SHIELD THE IMPACT AGAINST U.S. TARIFFS. HAVE A LISTEN.

[00:42:53]>> WE ARE DOUBLING NON-US TRADE OVER THE NEXT 10 YEARS, BUT WE ALSO WANT TO MAKE SURE THAT WE HAVE A VERY STABLE AND DISTINCT, SOVEREIGN APPROACH TO OUR ECONOMIC FUTURE, AND THAT MEANS DIVERSIFYING TRADE.

[00:43:12]>> I SUPPOSE THIS IS PARTLY TO SHIELD FROM THE IMPACT OF U.S.

[00:43:14]TARIFFS. SPEAKING OF THAT, THERE IS AN ADDITIONAL 50% TARIFFS FROM THE U.S.

[00:43:21]SITTING CANADIAN GOODS IN 30 DAYS TIME.

[00:43:24]DURING THIS 30 DAY PERIOD, IS CANADA WILLING TO LOOK AT OFFERING CONCESSIONS TO THE U.S. IN EXCHANGE FOR LOWER TARIFFS?

[00:43:36]>> LET'S REMEMBER THAT CANADA AND THE U.S.

[00:43:38]HAVE BEEN CLOSE TRADING PARTNERS FOR DECADES AND DECADES. WE ARE BOUND TOGETHER BY GEOGRAPHY. THE PRIME MINISTER SPOKE WITH THE PRESIDENT YESTERDAY, AND THEY AGREED TO INTENSIFY TALKS RELATING TO TRADE. THAT WILL BE UNDERTAKEN BY OUR MINISTER FOR CANADA U.S. TRADE AND ARE FULL TRADE NEGOTIATOR. AT THE SAME TIME, WE HAVE TO REMEMBER, WE CAN DO MULTIPLE THINGS. AT THE SAME TIME.

[00:44:07]THEREFORE, PURSUING THIS DIVERSIFIED TRADE AGENDA, MAKING SURE WE HAVE THESE FREE TRADE AGREEMENTS WITH OTHER COUNTRIES, SUCH AS THE PHILIPPINES, WE ARE NEGOTIATING A PARTNERSHIP AGREEMENT WITH INDIA RIGHT NOW.

[00:44:25]WE SIGNED A FREE-TRADE AGREEMENT WITH INDONESIA IN LATE 2025. THOSE ARE JUST EXAMPLES OF THE WAY WE DIVERSIFY WHILE TRADE TALKS WITH THE U.S. ARE ONGOING.

[00:44:39]RIGHT NOW, WE ARE THE ONLY G7 COUNTRY THAT HAS A FREE-TRADE AGREEMENT WITH EVERY OTHER G7 COUNTRY.

[00:44:45]THAT IS THE FOUNDATION OF OUR TRADE DIVERSIFICATION POLICY.

[00:44:52]BUT WE ARE GOING A STEP FURTHER WITH THOSE OVER 20 AGREEMENTS AND SECURITY DEFENSE AND ECONOMIC MATTERS WITH FREE-TRADE NEGOTIATIONS THAT ARE OCCURRING NOW.

[00:45:03]>> ONE OF THE BIG CONCERNS IS INFLATION BROUGHT ABOUT BY THE IRAN WAR. I WONDER AS AN ENERGY EXPORTER, AS KENNEDY'S ENERGY EXPORTER, IS YOUR ENERGY SALES TO ASIA INCREASING AFTER THE IRAN WAR?

[00:45:16]>> IT IS A GOOD POINT TO HIGHLIGHT CANADA'S COMPETITIVE ADVANTAGE IN THE AREA OF ENERGY. WHETHER IT IS LNG FROM OUR WEST COAST, WHETHER IT IS CLEANER CONVENTIONAL, OR WHETHER IT IS NUCLEAR, SOLAR OR WIND POWER, CANADA IS A LEADER.

[00:45:36]WE WILL BE THE ONLY G7 COUNTRY WORKING ON THE SMR TECHNOLOGY, FOR EXAMPLE, OUT OF DARLINGTON, ONTARIO.

[00:45:43]ALL OF THAT TO SAY THAT ENERGY FIGURES QUITE PROMINENTLY IN BOTH OUR BILATERAL AND MULTILATERAL CONVERSATIONS, AND AROUND THE TABLE THIS MORNING, I HEARD SIGNIFICANT INTEREST FROM COUNTRIES ENSURING THERE IS ENERGY COOPERATION ON CLIMATE CHANGE.

[00:46:03]MINMIN: THERE YOU GO. DIVERSIFYING TRADE AND INCREASING NON-U.S. EXPORTS. IN FACT, DOUBLING THAT THE NEXT DECADE. THAT IS A KEY STRATEGY FOR CANADA. THAT IS WHY THEY ARE IN THE PROCESS OF IT NEGOTIATING THE FREE-TRADE AGREEMENT WITH OZZY ON COUNTRIES. ACCORDING TO THE MINISTER, THAT WILL BE CONCLUDED BY THE END OF THE YEAR. I ALSO ASKED ABOUT HER RELATIONSHIP WITH CHINA. SHE GOT TO MEET WITH THEM FOR IMPROVEMENT -- FOREIGN MINISTER AND IT SEEMS IT IS QUITE A NUANCED RELATIONS. WE SAW A WARMING UP OF RELATIONS AS CANADA LIFTED TARIFFS, THE 100% TARIFFS ON CHINA EV'S BUT WHEN IT COMES TO CHINESE INVESTMENTS, THAT SEEMS A SENSITIVE TOPIC.

[00:46:51]PAUL: BORREGO, BLOOMBERG IS IN A CAMBODIA TOMORROW FOR EXCLUSIVE MINISTERS WITH THE PRIME MINISTER AND HIS TOP MINISTERS.

[00:47:01]THAILAND, ENERGY SECURITY INITIATIVES, AND RELATIONS WITH CHINA. THAT IS FROM 7:00 A.M.

[00:47:10]HONG KONG TIME FRIDAY, 7:00 P.M. TIME THURSDAY IN NEW YORK.

[00:47:13]IN HALF AN HOUR, BLOOMBERG REPORTERS WILL BE ONLINE TO ANSWER YOUR QUESTIONS ABOUT INDIA STUDENT PROTESTS, THE GOVERNMENT RESPONSE, AND WHAT IT MEANS FOR INDIA'S POLITICAL OUTLOOK. THAT IS AVAILABLE FOR TERMINAL SUBSCRIBERS AND ON BLOOMBERG.COM/LIVE.

[00:47:30]HORIZONS MIDDLE EAST & AFRICA IS UP NEXT. THIS IS BLOOMBERG.