1 00:00:01,960 --> 00:00:05,520 Speaker 1: This is Bloomberg Intelligence. We're really getting into that the 2 00:00:05,600 --> 00:00:08,960 Speaker 1: streaming's arm three additions, looking at that and saying we 3 00:00:09,039 --> 00:00:11,880 Speaker 1: can really build a nice niche for ourselves in depth 4 00:00:11,880 --> 00:00:16,320 Speaker 1: research and data on two thousand companies and dirty industry. 5 00:00:16,800 --> 00:00:19,480 Speaker 1: The dollar is the dominant concept in the planet. I 6 00:00:19,520 --> 00:00:22,520 Speaker 1: think the opposition is not turning progression of what Microsoft 7 00:00:22,560 --> 00:00:26,040 Speaker 1: can do with this technology. Going forward, Bloomberg Intelligence with 8 00:00:26,200 --> 00:00:31,120 Speaker 1: Alex Steel and Paul Sweeney on Bloomberg Radio. Over the 9 00:00:31,160 --> 00:00:33,160 Speaker 1: next hour, we're going to dig inside the big business 10 00:00:33,200 --> 00:00:35,960 Speaker 1: stories impacting Wall Street and the global markets. Each and 11 00:00:36,000 --> 00:00:38,360 Speaker 1: every week we provide in depth research and data on 12 00:00:38,400 --> 00:00:41,559 Speaker 1: some of the two thousand companies and industries are analysts 13 00:00:41,560 --> 00:00:43,720 Speaker 1: cover worldwide. Today, we're going to take a look at 14 00:00:43,720 --> 00:00:47,800 Speaker 1: the revenue recovery for MGM resorts, plus the UK residential 15 00:00:47,800 --> 00:00:50,960 Speaker 1: renovation gets a boost from the housing hot streak. But first, 16 00:00:51,040 --> 00:00:53,920 Speaker 1: let's talk about travel. Are you going anywhere for the 17 00:00:53,920 --> 00:00:55,880 Speaker 1: rest of the summer, Are you making any plans for 18 00:00:55,920 --> 00:00:58,600 Speaker 1: the winter, and what does that mean for the airline stocks, 19 00:00:58,640 --> 00:01:00,640 Speaker 1: hotel stocks, the whole thing to any us now. Bloomberg 20 00:01:00,640 --> 00:01:04,840 Speaker 1: Intelligence Senior Airlines analyst George Ferguson George this past week, 21 00:01:04,880 --> 00:01:08,360 Speaker 1: in a surprise move, the EU didn't stop US citizens 22 00:01:08,600 --> 00:01:10,840 Speaker 1: from coming into the EU and be able to vacation 23 00:01:10,840 --> 00:01:13,760 Speaker 1: that they're going to reevaluate in the next two weeks. 24 00:01:13,760 --> 00:01:17,640 Speaker 1: What's intercontinental travel like right now? So I think that 25 00:01:17,720 --> 00:01:20,000 Speaker 1: was one of the few good news points on trans 26 00:01:20,040 --> 00:01:24,360 Speaker 1: atlantic travel. So trans atlantic travel is I would say, 27 00:01:24,360 --> 00:01:30,040 Speaker 1: a hodgepodge of requirements and regulations right now. The most 28 00:01:30,080 --> 00:01:32,520 Speaker 1: besuttling to me, I think, is that the US has 29 00:01:32,560 --> 00:01:37,600 Speaker 1: excluded a lot of our key partners from Europe, the Germans, 30 00:01:37,720 --> 00:01:41,000 Speaker 1: the you know, the English and such, from even coming 31 00:01:41,040 --> 00:01:44,560 Speaker 1: here quarantine or not, um, you know, But we can 32 00:01:44,560 --> 00:01:47,880 Speaker 1: go there to some of the countries and some of 33 00:01:47,880 --> 00:01:50,440 Speaker 1: them we have to quarantine. Some not usual in the 34 00:01:50,480 --> 00:01:53,800 Speaker 1: southern hemisphere, the ones that like and need travel the 35 00:01:53,840 --> 00:01:57,040 Speaker 1: most have the least restrictions. But we're starting to see, 36 00:01:57,520 --> 00:02:00,560 Speaker 1: you know, a major spike in some of the some 37 00:02:00,640 --> 00:02:02,960 Speaker 1: of the virus activity down there. So it makes me 38 00:02:03,040 --> 00:02:07,120 Speaker 1: wonder how long that's gonna last, or how long US 39 00:02:07,560 --> 00:02:08,919 Speaker 1: travel is going to want to go there. So I 40 00:02:09,000 --> 00:02:11,440 Speaker 1: just call it a ridiculous hodgepod right now, really hard 41 00:02:11,480 --> 00:02:13,960 Speaker 1: to figure out, very country dependent. Where are we just 42 00:02:14,080 --> 00:02:18,200 Speaker 1: in U S domestic uh capacity right now Georgia, it 43 00:02:18,200 --> 00:02:20,400 Speaker 1: seems like there's more planes on the ground and in 44 00:02:20,480 --> 00:02:23,200 Speaker 1: the air. Where are we in terms of that capacity? Yeah, 45 00:02:23,240 --> 00:02:25,640 Speaker 1: so US capacity as you know, as we sort of 46 00:02:25,760 --> 00:02:29,160 Speaker 1: near the end of the summer travel season. Uh, you know, 47 00:02:29,200 --> 00:02:31,480 Speaker 1: some of the low cost carriers are even flying more 48 00:02:31,520 --> 00:02:35,200 Speaker 1: than they did in twenty Lots of carriers are I 49 00:02:35,240 --> 00:02:41,440 Speaker 1: would say, within ten or fifteen percent of of levels UM. 50 00:02:41,560 --> 00:02:43,520 Speaker 1: And this is just on leisure travel. So I'd say 51 00:02:43,600 --> 00:02:46,160 Speaker 1: from a leisure travel perspective, from what we've heard from 52 00:02:46,200 --> 00:02:49,359 Speaker 1: a lot of them is that they're back to level. 53 00:02:49,400 --> 00:02:51,400 Speaker 1: So it's been quite a nice bounce back on leisure 54 00:02:51,520 --> 00:02:54,720 Speaker 1: in the US and the domestic market. Does that hold 55 00:02:54,760 --> 00:02:57,799 Speaker 1: up with Delta so well? I think there's a couple 56 00:02:57,800 --> 00:03:00,560 Speaker 1: of problems. I think Delta is a bit of a problem. UM. 57 00:03:00,720 --> 00:03:02,520 Speaker 1: I seem to think we're not going to ever go 58 00:03:02,639 --> 00:03:06,120 Speaker 1: back to the lockdowns that we saw. I think we 59 00:03:06,160 --> 00:03:08,160 Speaker 1: understand the virus too much. There's some people that just 60 00:03:08,200 --> 00:03:11,400 Speaker 1: won't I think, you know, refrain as much as they 61 00:03:11,560 --> 00:03:13,920 Speaker 1: would maybe last March when they didn't understand what was 62 00:03:13,960 --> 00:03:17,040 Speaker 1: at risk. UM. So I think Delta does take some 63 00:03:17,080 --> 00:03:20,640 Speaker 1: demand off the table. But I think more importantly is 64 00:03:20,680 --> 00:03:23,840 Speaker 1: the business travel right. I think the leisures closing, by 65 00:03:23,840 --> 00:03:26,520 Speaker 1: the heavy leisure seasons closing, kids are going back to school. 66 00:03:27,000 --> 00:03:28,560 Speaker 1: It's going to make it harder for mom and dad 67 00:03:28,600 --> 00:03:30,200 Speaker 1: to get away with the kids. If you don't have kids, 68 00:03:30,240 --> 00:03:33,240 Speaker 1: that just you know, it's it's it's easier. And companies 69 00:03:33,240 --> 00:03:36,760 Speaker 1: though starting to push back that return to office. I 70 00:03:36,760 --> 00:03:40,120 Speaker 1: think employees need to be back in the office before 71 00:03:40,120 --> 00:03:43,240 Speaker 1: the companies really flesh out what travel policies are going 72 00:03:43,280 --> 00:03:46,040 Speaker 1: to be. And so I think without that sort of 73 00:03:46,040 --> 00:03:48,640 Speaker 1: return to office or pushing it back, I think we're 74 00:03:48,640 --> 00:03:51,520 Speaker 1: not going to see that business travel for longer. And 75 00:03:51,520 --> 00:03:54,840 Speaker 1: I think that really hurts the fall season and winter 76 00:03:54,920 --> 00:03:56,800 Speaker 1: season this year because of that. And I think and 77 00:03:56,920 --> 00:03:59,560 Speaker 1: Delta has an effect on that. And we're talking about 78 00:03:59,560 --> 00:04:04,200 Speaker 1: the Delta variant, not Delta airline point airline conversation. I'm 79 00:04:04,200 --> 00:04:07,880 Speaker 1: sure that folks Delta appreciate clarifying that. George, all right, 80 00:04:07,960 --> 00:04:11,680 Speaker 1: So it's it's interesting people were hoping by this time 81 00:04:11,720 --> 00:04:14,520 Speaker 1: we'd have, you know, more vibrant trans atlantic I'm more 82 00:04:14,600 --> 00:04:18,840 Speaker 1: vibrant maybe intercontinental European travel, but this delta variant has 83 00:04:18,920 --> 00:04:22,640 Speaker 1: really put a wrinkle in that. Are the airlines Are 84 00:04:22,680 --> 00:04:27,800 Speaker 1: they preparing for a slower than expected kind of third 85 00:04:27,800 --> 00:04:31,880 Speaker 1: and fourth quarter? Are they guiding down? So uh, as 86 00:04:31,920 --> 00:04:34,159 Speaker 1: of right now, we don't see that. We've just finished 87 00:04:34,520 --> 00:04:38,520 Speaker 1: earning season. Um you know, most of them were pretty 88 00:04:38,680 --> 00:04:42,520 Speaker 1: upbeat on booking trends. They were, I mean, there were 89 00:04:42,560 --> 00:04:46,719 Speaker 1: some of them that would readily admit that business travel 90 00:04:46,880 --> 00:04:49,960 Speaker 1: is a is a short booking window, um you know, 91 00:04:50,000 --> 00:04:52,360 Speaker 1: meaning business travels usually book within a couple of weeks. 92 00:04:52,760 --> 00:04:54,440 Speaker 1: And so they said they look at we don't we 93 00:04:54,480 --> 00:04:57,159 Speaker 1: don't have a sense for where businesses going, and we 94 00:04:57,240 --> 00:05:00,000 Speaker 1: do see a taper in leisure. But most of them, 95 00:05:00,279 --> 00:05:04,160 Speaker 1: we're pretty upbeat. So I don't see them guiding yet, 96 00:05:04,279 --> 00:05:06,719 Speaker 1: but we'll be. We're watching closely. Right now. There are 97 00:05:06,800 --> 00:05:10,479 Speaker 1: enough flight attendants and pilots to do stuff. There are 98 00:05:10,640 --> 00:05:14,240 Speaker 1: challenges with labor Like everywhere else in the economy, pilots 99 00:05:14,279 --> 00:05:18,280 Speaker 1: are pilots are very I don't know what the right 100 00:05:18,279 --> 00:05:20,320 Speaker 1: there may be sticky, you know sort of labor force 101 00:05:20,400 --> 00:05:23,320 Speaker 1: because they've got such a specialized skill set, and the 102 00:05:23,440 --> 00:05:26,520 Speaker 1: challenge there is more getting them trained and having them 103 00:05:26,600 --> 00:05:28,800 Speaker 1: current to fly the equipment that you've got at the 104 00:05:28,839 --> 00:05:31,520 Speaker 1: airline at this point, right, And some airlines cut part 105 00:05:31,520 --> 00:05:33,720 Speaker 1: of the fleet, so they might not need pilots that 106 00:05:33,800 --> 00:05:36,640 Speaker 1: fly X y Z, but they need flots pilots of 107 00:05:36,680 --> 00:05:39,400 Speaker 1: fly pdqes and so they got to get them trained 108 00:05:39,440 --> 00:05:41,039 Speaker 1: and move them to move them to what they have 109 00:05:41,080 --> 00:05:43,159 Speaker 1: in the fleet. Others haven't been flying for a while. 110 00:05:43,800 --> 00:05:46,000 Speaker 1: That's a little bit of a challenge. That's a challenge 111 00:05:46,040 --> 00:05:49,400 Speaker 1: for the for the full service carriers, you know, the 112 00:05:49,480 --> 00:05:53,479 Speaker 1: United the Deltas, the American um. The low cost guys, 113 00:05:53,520 --> 00:05:55,159 Speaker 1: they're having a problem because I think they're trying to 114 00:05:55,520 --> 00:05:57,599 Speaker 1: take a lot of market share here and we're seeing 115 00:05:57,640 --> 00:06:01,719 Speaker 1: companies like Spirit, I think, really push the amount of 116 00:06:01,720 --> 00:06:04,279 Speaker 1: capacity they put in the marketplace without having the appropriate 117 00:06:04,360 --> 00:06:07,520 Speaker 1: levels of reserve airplanes and other um, you know, on 118 00:06:07,640 --> 00:06:11,040 Speaker 1: pilots that aren't that are in reserve ready to meet 119 00:06:11,240 --> 00:06:13,360 Speaker 1: you know, the need if they have a weather event 120 00:06:13,440 --> 00:06:16,159 Speaker 1: or something like that. And that's hurt that we've seen 121 00:06:16,160 --> 00:06:18,640 Speaker 1: that recently. So I think the low cost guys are 122 00:06:18,680 --> 00:06:20,640 Speaker 1: pushing it. The full service guys do have a genuine 123 00:06:20,680 --> 00:06:23,440 Speaker 1: sort of training problem. Okay, George, thank you very much. 124 00:06:23,440 --> 00:06:27,400 Speaker 1: George ferguson Bloomberg Intelligence, senior Airlines analyst. All right, coming 125 00:06:27,440 --> 00:06:29,440 Speaker 1: up on the program, we look at which mining and 126 00:06:29,480 --> 00:06:32,440 Speaker 1: metals companies are best positioned for the transition to a 127 00:06:32,480 --> 00:06:36,039 Speaker 1: low carbon world. You're listening to Bloomberg Intelligence on Bloomberg Radio, 128 00:06:36,120 --> 00:06:38,760 Speaker 1: providing in depth research and data on two thousand companies 129 00:06:38,760 --> 00:06:41,560 Speaker 1: and a hundred and thirty industries. You can access Bloomberg 130 00:06:41,600 --> 00:06:43,960 Speaker 1: Intelligence through the I go on the terminal, I'm Alex 131 00:06:43,960 --> 00:06:46,839 Speaker 1: Steel and on Paul Sweeney. It's thirteen minutes past the hour, 132 00:06:47,000 --> 00:06:56,120 Speaker 1: and this is Bloomberg. This is Bloomberg Intelligence with Alex 133 00:06:56,120 --> 00:07:00,679 Speaker 1: Steel and Paul Sweeney on Bloomberg Radio. Well, we spend 134 00:07:00,680 --> 00:07:02,839 Speaker 1: a lot of time on this program talking about the 135 00:07:03,080 --> 00:07:07,960 Speaker 1: s G investing environmental social governance. It's growing in popularity. 136 00:07:08,040 --> 00:07:10,080 Speaker 1: This time we want to take a look at how 137 00:07:10,160 --> 00:07:13,360 Speaker 1: the metals and mining industry fairs under this analysis. For 138 00:07:13,400 --> 00:07:16,160 Speaker 1: that we welcome Bloomberg Intelligence E s G analysts, Shaheen 139 00:07:16,280 --> 00:07:20,000 Speaker 1: contractor just at first blush Shine. It would seem to 140 00:07:20,040 --> 00:07:23,240 Speaker 1: me the medals of mining companies might not score very 141 00:07:23,240 --> 00:07:24,920 Speaker 1: well on E s G. Is that a is that 142 00:07:24,960 --> 00:07:27,440 Speaker 1: a poor bias on my part? So I think medals 143 00:07:27,440 --> 00:07:30,920 Speaker 1: and minings have always been sort of the traditional discycling 144 00:07:30,960 --> 00:07:34,800 Speaker 1: in gas, but the traditional folk surface not flat. But 145 00:07:35,280 --> 00:07:37,440 Speaker 1: I think the benefit of that is they picked up 146 00:07:37,440 --> 00:07:41,640 Speaker 1: the game fairly early on in the process. And I 147 00:07:41,640 --> 00:07:45,240 Speaker 1: think we're seeing a number of minors that have ramp up. 148 00:07:45,320 --> 00:07:48,680 Speaker 1: A number of them have set these gobbon reduction goals 149 00:07:48,720 --> 00:07:51,760 Speaker 1: of the last euros, so I would say, probably something 150 00:07:52,040 --> 00:07:56,440 Speaker 1: I haven't seen before. So you kind of ranked them light, right, 151 00:07:56,520 --> 00:07:59,640 Speaker 1: So you go over forty six metal and mining companies 152 00:08:00,200 --> 00:08:02,360 Speaker 1: before we get into like who scored well and who didn't. 153 00:08:02,600 --> 00:08:05,320 Speaker 1: What were your criteria, because a lot of times you 154 00:08:05,480 --> 00:08:08,080 Speaker 1: I feel like companies say one thing and do another. 155 00:08:08,120 --> 00:08:12,840 Speaker 1: But even more importantly they say like carbon intensity versus 156 00:08:13,040 --> 00:08:17,120 Speaker 1: you know, versus my own operations, and and those make 157 00:08:17,200 --> 00:08:21,520 Speaker 1: a difference and how you measure it absolutely, And so 158 00:08:21,680 --> 00:08:25,440 Speaker 1: our ranking is really looking at these carbon reduction goals. 159 00:08:25,480 --> 00:08:29,000 Speaker 1: So these are bi common schools, And what we're really 160 00:08:29,040 --> 00:08:32,560 Speaker 1: doing is we're starting companies on two pillars. So one 161 00:08:32,600 --> 00:08:35,439 Speaker 1: is a historic pillar which looks that sort of reduction 162 00:08:35,480 --> 00:08:38,640 Speaker 1: trend over five years and along with the current intensity, 163 00:08:39,360 --> 00:08:42,160 Speaker 1: and the second is more sort of forward looking at 164 00:08:42,280 --> 00:08:46,120 Speaker 1: we're here we're quantifying these forward looking reduction goals and 165 00:08:46,440 --> 00:08:49,800 Speaker 1: really comparing it to a temperature aligned benchmark. So the 166 00:08:49,880 --> 00:08:51,520 Speaker 1: end of the day, we're just saying, you know, who's 167 00:08:51,520 --> 00:08:55,320 Speaker 1: aligned with the Paris goals, who's ambitious enough. UM to 168 00:08:55,440 --> 00:08:57,959 Speaker 1: your point, of course, they're They're tricky, which is why 169 00:08:58,000 --> 00:09:00,520 Speaker 1: we've come up with this standardized way of the things. 170 00:09:00,520 --> 00:09:03,360 Speaker 1: So there's three ways to kind of measure stuff. Like 171 00:09:03,400 --> 00:09:06,840 Speaker 1: one is Scope one and two, which are basically the 172 00:09:06,920 --> 00:09:11,160 Speaker 1: carbon reduction using your own power, so you're using less. Uh. 173 00:09:11,320 --> 00:09:15,720 Speaker 1: The other is the types of energy that you're using, 174 00:09:15,720 --> 00:09:17,800 Speaker 1: so instead of using coal, maybe you use solar. And 175 00:09:17,840 --> 00:09:20,560 Speaker 1: then the other is the products that you produce and 176 00:09:20,679 --> 00:09:23,040 Speaker 1: cutting that or any of these guys tackling Scope three 177 00:09:23,080 --> 00:09:26,480 Speaker 1: because in the oil community, Scope three is so hard 178 00:09:26,559 --> 00:09:28,719 Speaker 1: to do because it's basically trying to tackle emissions and 179 00:09:28,800 --> 00:09:30,719 Speaker 1: like jet fuel and what you're driving in your car. 180 00:09:31,000 --> 00:09:34,560 Speaker 1: Yeah yeah, UM. I think Scope three for things like 181 00:09:34,600 --> 00:09:36,720 Speaker 1: oil and gas is the elephant in the room. I 182 00:09:36,760 --> 00:09:39,559 Speaker 1: think if you go beyond that to other sectors, it 183 00:09:39,640 --> 00:09:42,240 Speaker 1: isn't so much of a focus. I think the one 184 00:09:42,280 --> 00:09:45,400 Speaker 1: company that comes to my mind that is tackling scope 185 00:09:45,400 --> 00:09:49,120 Speaker 1: three is UM if I remember right, it's mim um. 186 00:09:49,160 --> 00:09:52,959 Speaker 1: But again other than that, it's largely just operation emissions 187 00:09:52,960 --> 00:09:56,079 Speaker 1: because I think if you you know, you have transportation 188 00:09:56,080 --> 00:09:58,040 Speaker 1: will in gas. That's really were Scope three is the 189 00:09:58,080 --> 00:10:01,040 Speaker 1: elephant in the room. Well it comes to metals and mining, 190 00:10:01,080 --> 00:10:04,760 Speaker 1: but not that yet, so shooking for metals and mining company, 191 00:10:04,800 --> 00:10:08,880 Speaker 1: what do they actually do to improve their E s 192 00:10:08,920 --> 00:10:12,320 Speaker 1: G kind of footprint if you will? Sure so you 193 00:10:12,360 --> 00:10:15,520 Speaker 1: know for for it really depends on the metal produced, 194 00:10:15,520 --> 00:10:20,160 Speaker 1: and it's just so diversified. Giving the example of aluminium, 195 00:10:20,600 --> 00:10:23,840 Speaker 1: so aluminium is again just one of the most common 196 00:10:23,880 --> 00:10:29,000 Speaker 1: intensive industries, and over there it's things like increasing scrap 197 00:10:29,040 --> 00:10:33,200 Speaker 1: based production, which is much less common intensive, and also 198 00:10:33,520 --> 00:10:37,560 Speaker 1: decomganizing the power sector for example, because aluminium just uses 199 00:10:37,600 --> 00:10:41,880 Speaker 1: a lot of electricity. But it varies very different metals. 200 00:10:41,880 --> 00:10:44,560 Speaker 1: But where he is literally from company to company, mind 201 00:10:44,559 --> 00:10:47,160 Speaker 1: to mind. But to that point, and take a look 202 00:10:47,160 --> 00:10:48,719 Speaker 1: at the carbon scores that are the worst and that's 203 00:10:48,720 --> 00:10:53,400 Speaker 1: gonna Rio and Glencore is that is a thing u 204 00:10:53,760 --> 00:10:57,760 Speaker 1: so real Dento has a fair amount of operations and 205 00:10:57,840 --> 00:11:01,640 Speaker 1: aluminum and just the way the score is design aluminum 206 00:11:01,679 --> 00:11:04,760 Speaker 1: being so common intensive has to reduce submissions by a 207 00:11:04,840 --> 00:11:08,679 Speaker 1: lot more than other diversified minors. So by before they 208 00:11:08,720 --> 00:11:11,920 Speaker 1: automatically tend to tend towards the lower end of their 209 00:11:11,960 --> 00:11:15,200 Speaker 1: score of our score card. Again, just because there's so 210 00:11:15,280 --> 00:11:18,880 Speaker 1: much more carbon intensive than any other metal and tend 211 00:11:18,920 --> 00:11:21,800 Speaker 1: to having sort of phenom in that UM would weigh 212 00:11:21,840 --> 00:11:23,760 Speaker 1: down on them just like any other company. Like you 213 00:11:23,800 --> 00:11:27,240 Speaker 1: will see Hinda Core, you'd see rustles towards the bottom. 214 00:11:27,280 --> 00:11:30,720 Speaker 1: So shehan, is there any regionality to this? Are our 215 00:11:30,800 --> 00:11:34,160 Speaker 1: European damasile companies do they do better? Because it seems 216 00:11:34,200 --> 00:11:37,000 Speaker 1: to me I have s G concerns or G s 217 00:11:37,080 --> 00:11:39,000 Speaker 1: E s G issues are more pronounced in Europe than 218 00:11:39,120 --> 00:11:41,720 Speaker 1: perhaps or more advanced than they are in the US. 219 00:11:41,800 --> 00:11:44,080 Speaker 1: So do we see that in some of the results, 220 00:11:44,080 --> 00:11:47,080 Speaker 1: in some of the performance of these companies. Suppose you're right, 221 00:11:47,120 --> 00:11:49,319 Speaker 1: I think for most sectors we do see the street 222 00:11:49,400 --> 00:11:52,520 Speaker 1: nudisms where Europe is leading. I think the metics and 223 00:11:52,600 --> 00:11:55,480 Speaker 1: minings I didn't see it just because everything is so 224 00:11:55,720 --> 00:12:00,440 Speaker 1: globally spread like Africa, South South America or theations are 225 00:12:00,520 --> 00:12:03,800 Speaker 1: just diversified. I think the medicine minings, it was more 226 00:12:03,880 --> 00:12:06,880 Speaker 1: by sub industry and what I mean by that is 227 00:12:07,520 --> 00:12:12,520 Speaker 1: base metal companies had far more goals and precious metals again, 228 00:12:12,600 --> 00:12:16,400 Speaker 1: base metal example, aluminum, it's much more common intensive, which 229 00:12:16,440 --> 00:12:19,199 Speaker 1: is why it's more metal for operations again, which is 230 00:12:19,240 --> 00:12:22,640 Speaker 1: why companies are setting these goals. Precious metals not so 231 00:12:22,760 --> 00:12:26,400 Speaker 1: cognit intensive, yes, and a focus less of a priority. Yeah, 232 00:12:26,400 --> 00:12:28,240 Speaker 1: it feels like copper goal kind of get a little 233 00:12:28,280 --> 00:12:31,360 Speaker 1: bit of a easier paths that. Um, they do, and 234 00:12:31,679 --> 00:12:34,360 Speaker 1: they should because it's not that govern intensive. It comes 235 00:12:34,360 --> 00:12:36,720 Speaker 1: down to sort of cause some things like that. Are 236 00:12:36,840 --> 00:12:42,439 Speaker 1: the our investors rewarding these companies for that? So you know, 237 00:12:42,600 --> 00:12:44,720 Speaker 1: that's a great question, and I still have to do 238 00:12:44,840 --> 00:12:47,640 Speaker 1: the analysis for metals, but I can give you what 239 00:12:47,720 --> 00:12:51,120 Speaker 1: I did as an exampt for utilities, where we saw 240 00:12:51,200 --> 00:12:54,880 Speaker 1: that you know, companies with higher bi common scores were 241 00:12:54,920 --> 00:12:57,920 Speaker 1: more likely to be held in any sc fund. So 242 00:12:58,000 --> 00:13:02,280 Speaker 1: clearly e SG investors our prioritizing these I would say 243 00:13:02,360 --> 00:13:06,520 Speaker 1: these issues now, I would wait to see what kind 244 00:13:06,559 --> 00:13:09,800 Speaker 1: of analysis at least to medalsine mining, but um, that's 245 00:13:09,800 --> 00:13:13,319 Speaker 1: what we had for utility, So definitely something prioritized for 246 00:13:13,440 --> 00:13:17,240 Speaker 1: at least the resource in times to enviolently heavy sectors Yeah, 247 00:13:17,280 --> 00:13:20,080 Speaker 1: like metals and mining, I'm just wondering at you know, 248 00:13:20,120 --> 00:13:22,800 Speaker 1: I know this is becoming a bigger and bigger issue 249 00:13:22,920 --> 00:13:27,360 Speaker 1: for managers, for board members, for shareholders, this focus on 250 00:13:27,440 --> 00:13:30,440 Speaker 1: e s g S in addition to you know, the 251 00:13:30,440 --> 00:13:32,480 Speaker 1: income statement and the balance sheet and things like that. 252 00:13:32,840 --> 00:13:36,080 Speaker 1: In the metals and mining space. What's what's the sense 253 00:13:36,120 --> 00:13:39,319 Speaker 1: you get from from management in terms of their commitment UM. 254 00:13:39,360 --> 00:13:42,640 Speaker 1: I think medals and minings is again like an industry 255 00:13:42,679 --> 00:13:46,600 Speaker 1: that's just being early exposed to just because it's amongst 256 00:13:46,600 --> 00:13:50,160 Speaker 1: the resource intensive sectors. I think the one thing I've 257 00:13:50,160 --> 00:13:53,599 Speaker 1: been seeing from metals and mining companies is an increasing 258 00:13:53,679 --> 00:13:58,000 Speaker 1: focus on safety, so things texicality rates, incident rates, and 259 00:13:58,480 --> 00:14:01,360 Speaker 1: I'm seeing an increasing number of companies that sort of 260 00:14:01,440 --> 00:14:05,400 Speaker 1: executive compensation and dial this back to things like safety 261 00:14:05,440 --> 00:14:08,600 Speaker 1: and to some extend also emission. So you know that 262 00:14:09,080 --> 00:14:13,439 Speaker 1: compensation and center gives you a dijected sort of monetary 263 00:14:13,480 --> 00:14:16,679 Speaker 1: bush to do these things. So definitely more of a 264 00:14:16,760 --> 00:14:19,160 Speaker 1: focus from that. Yeah, it's sort of like they had 265 00:14:19,200 --> 00:14:21,320 Speaker 1: to have the right to operate for so long in 266 00:14:21,320 --> 00:14:24,320 Speaker 1: different countries that they couldn't mess it up. UM that 267 00:14:24,360 --> 00:14:27,840 Speaker 1: they already have in some ways better practices um or conditioned. 268 00:14:27,840 --> 00:14:29,240 Speaker 1: I guess all right, she hean thinks a lot, she 269 00:14:29,280 --> 00:14:32,720 Speaker 1: can contractor joining us Bloomberg Intelligence E s G analysts. 270 00:14:32,960 --> 00:14:34,880 Speaker 1: Coming up on the program, we look at the revenue 271 00:14:34,880 --> 00:14:38,080 Speaker 1: recovery for MGM Resorts. You're listening to Bloomberg Intelligence on 272 00:14:38,160 --> 00:14:40,920 Speaker 1: Bloomberg Radio, providing in depth research and data on two 273 00:14:40,960 --> 00:14:43,480 Speaker 1: thousand companies and a hundred and thirty industries. You can 274 00:14:43,480 --> 00:14:46,280 Speaker 1: access Bloomberg Intelligence through b I go, I'm a terminal, 275 00:14:46,360 --> 00:14:48,960 Speaker 1: I'm Alex Steel and Paul Sweeney. It's twenty five minutes 276 00:14:48,960 --> 00:14:56,920 Speaker 1: past the hour, and this is Bloomberg. This is Bloomberg 277 00:14:56,960 --> 00:15:01,840 Speaker 1: Intelligence with Alex Steel and Paul Sweeney on Bloomberg Brady. 278 00:15:02,720 --> 00:15:04,120 Speaker 1: We'll be here each and every week at this time 279 00:15:04,160 --> 00:15:07,240 Speaker 1: tapping into our Bloomberg Intelligence analysts covering some two thousand 280 00:15:07,240 --> 00:15:10,800 Speaker 1: companies and industries worldwide. Well as you wind up having 281 00:15:10,840 --> 00:15:12,760 Speaker 1: a delta variant, we can have it pretty much all 282 00:15:12,800 --> 00:15:15,760 Speaker 1: across the world. How does that affect different sectors? That's 283 00:15:15,760 --> 00:15:18,840 Speaker 1: what we've been working on throughout Bloomberg Intelligence. One particular 284 00:15:18,840 --> 00:15:21,560 Speaker 1: area want to focus on now is the gaming stocks 285 00:15:21,600 --> 00:15:25,480 Speaker 1: like MGM, Las Vegas sands. What's the implication there. So 286 00:15:25,560 --> 00:15:29,000 Speaker 1: let's welcome Bloomberg Intelligence senior Gaming and Lodging analyst Brian Edgar. 287 00:15:29,080 --> 00:15:31,720 Speaker 1: All Right, so delta varians running rampant here, who's getting 288 00:15:31,760 --> 00:15:35,000 Speaker 1: hurt the most? So I think if you look at 289 00:15:35,120 --> 00:15:36,720 Speaker 1: you know, they look at MGM as kind of a 290 00:15:36,720 --> 00:15:40,480 Speaker 1: proxy for the industry, certainly like in the second quarter, 291 00:15:40,600 --> 00:15:43,200 Speaker 1: and thinking about what that means, I would say, you know, 292 00:15:43,280 --> 00:15:46,200 Speaker 1: the cow market in Asia got hit particularly hard where 293 00:15:46,200 --> 00:15:48,600 Speaker 1: we're still at a half of twenty nine teams pre 294 00:15:48,680 --> 00:15:52,080 Speaker 1: pandemic level of gaming activity. Part of that is because 295 00:15:52,120 --> 00:15:56,080 Speaker 1: there was an outbreak in Guangdong Province, which is a 296 00:15:56,120 --> 00:15:59,440 Speaker 1: major feeder market for Macau, and that definitely affected some 297 00:15:59,480 --> 00:16:01,360 Speaker 1: of the traffic in for it. That's been an ongoing 298 00:16:01,400 --> 00:16:04,920 Speaker 1: issue for McCallan could be uh for a while. So 299 00:16:05,080 --> 00:16:08,400 Speaker 1: that resolves when moved to the US. Las Vegas actually 300 00:16:08,440 --> 00:16:10,920 Speaker 1: has been on a bit of an upswing and close 301 00:16:11,000 --> 00:16:14,320 Speaker 1: to her back to pre pandemic levels UH, and it 302 00:16:14,440 --> 00:16:18,440 Speaker 1: benefited when the market went back to full resort documency 303 00:16:18,600 --> 00:16:21,440 Speaker 1: back in June. And yes, the question going forward is 304 00:16:21,440 --> 00:16:25,080 Speaker 1: whether or not um the arrival of the delta variant 305 00:16:25,080 --> 00:16:28,200 Speaker 1: will affect what we expected to happen, which is, you know, 306 00:16:28,240 --> 00:16:31,640 Speaker 1: a big uptick in convention activity as we get to 307 00:16:31,680 --> 00:16:33,520 Speaker 1: the fall months, and that we really have to watch 308 00:16:33,520 --> 00:16:37,560 Speaker 1: and see carefully. So what are the gaming companies in 309 00:16:37,560 --> 00:16:41,360 Speaker 1: the big hotels telling the street about that convention business? 310 00:16:41,400 --> 00:16:44,040 Speaker 1: Because when I think of Vegas again, pretty much every 311 00:16:44,040 --> 00:16:46,320 Speaker 1: time I've been to Vegas, it's been with a convention. 312 00:16:46,880 --> 00:16:49,200 Speaker 1: Um is that business going to come back in this 313 00:16:49,280 --> 00:16:51,600 Speaker 1: year or or is it delta pushing out next year? 314 00:16:52,640 --> 00:16:54,880 Speaker 1: So the bookings and again a lot of this is 315 00:16:54,880 --> 00:16:57,120 Speaker 1: happening as you can understand in real time, but the 316 00:16:57,160 --> 00:17:00,840 Speaker 1: bookings business on the books for a fall and going 317 00:17:00,840 --> 00:17:04,880 Speaker 1: into twenty two have been actually quite strong. The real 318 00:17:04,960 --> 00:17:07,720 Speaker 1: question is as we approached the actual dates, depending on 319 00:17:07,800 --> 00:17:13,080 Speaker 1: how companies adjust their travel UH policies, etcetera, whether or 320 00:17:13,080 --> 00:17:15,439 Speaker 1: not that by the resulting cancelations, but at least the 321 00:17:15,440 --> 00:17:18,360 Speaker 1: book of business going into this period, as of the 322 00:17:18,400 --> 00:17:22,080 Speaker 1: company's most recent comments during the earning season, we're actually 323 00:17:22,160 --> 00:17:25,280 Speaker 1: quite favorable. So that leads to my next question, how 324 00:17:25,280 --> 00:17:28,280 Speaker 1: many how much cancelation can these guys stand given the 325 00:17:28,280 --> 00:17:29,879 Speaker 1: fact that you know that I think the industry has 326 00:17:29,960 --> 00:17:34,040 Speaker 1: weathered being with all casino was shut back in uh 327 00:17:34,320 --> 00:17:39,400 Speaker 1: last March through June and has endured pretty significant capacity invitations. 328 00:17:39,440 --> 00:17:42,199 Speaker 1: Now that the markets back to fulcumancy, I guess you 329 00:17:42,200 --> 00:17:46,080 Speaker 1: could argue that they've been stress tested quite well, notwithstanding 330 00:17:46,080 --> 00:17:49,280 Speaker 1: what might happen with the delta variants. So you know, 331 00:17:49,359 --> 00:17:51,520 Speaker 1: it is an issue. What has happened during the downturn 332 00:17:51,640 --> 00:17:54,720 Speaker 1: is that of laws vecas from knights at a company 333 00:17:54,760 --> 00:17:58,480 Speaker 1: like MGM that we that we would normally be occupied 334 00:17:59,520 --> 00:18:04,200 Speaker 1: by goers has since taken up by casino customers, which 335 00:18:04,280 --> 00:18:06,960 Speaker 1: is the less attractive business. It's lower price, and the 336 00:18:07,040 --> 00:18:09,160 Speaker 1: question is whether or not they have to go back 337 00:18:09,160 --> 00:18:13,040 Speaker 1: to depending on that lower price casino customer, that leisure customer, 338 00:18:13,440 --> 00:18:16,920 Speaker 1: if the convention activity is somehow disrupted. All right, so 339 00:18:17,200 --> 00:18:19,880 Speaker 1: we've done Macaumy, we'll go back there in Vegas. Now, 340 00:18:19,880 --> 00:18:23,520 Speaker 1: how about the regional markets around the country. Um, you 341 00:18:23,520 --> 00:18:25,440 Speaker 1: know they I think they did a little bit better. 342 00:18:25,440 --> 00:18:29,159 Speaker 1: They're less dependent upon that convention business. What's the outlook 343 00:18:29,160 --> 00:18:31,520 Speaker 1: for some of the regional gaming? Regional give me out 344 00:18:31,760 --> 00:18:34,280 Speaker 1: is actually quite strong. I mean when we look at 345 00:18:34,840 --> 00:18:37,320 Speaker 1: MGM in the second quarter and we compare all these 346 00:18:37,359 --> 00:18:41,000 Speaker 1: results to the second quarter of because most of these 347 00:18:41,000 --> 00:18:44,439 Speaker 1: casinos were closed during the second quarter of When we 348 00:18:44,480 --> 00:18:47,520 Speaker 1: look at that, the regional gaming revenue is actually up 349 00:18:48,000 --> 00:18:51,760 Speaker 1: about six percent versus the second quarter of nineteen, which 350 00:18:51,800 --> 00:18:54,399 Speaker 1: is pretty impressive. And not only that, because the companies 351 00:18:54,440 --> 00:18:59,159 Speaker 1: are still operating with significantly scaled back wayburn marketing UH, 352 00:18:59,200 --> 00:19:01,960 Speaker 1: they seem some at least significant margin improvement. So we're 353 00:19:01,960 --> 00:19:05,200 Speaker 1: not only seeing a return to pre pandemic levels of 354 00:19:05,320 --> 00:19:09,040 Speaker 1: revenue in the regional markets, but also very strong margin 355 00:19:09,080 --> 00:19:12,240 Speaker 1: games and even flow through because of the fact that 356 00:19:12,280 --> 00:19:15,840 Speaker 1: the cost base has been um uh paired down so 357 00:19:15,880 --> 00:19:19,399 Speaker 1: significantly during the pandemic. Most other industries are dealing with 358 00:19:19,560 --> 00:19:23,840 Speaker 1: worker shortages, all have input cost increases, wage increases, et cetera. Um, 359 00:19:23,840 --> 00:19:27,280 Speaker 1: how about these guys. Let's I mean, you can go abroad, 360 00:19:27,320 --> 00:19:29,520 Speaker 1: but I was thinking more specifically of the US and like, 361 00:19:29,560 --> 00:19:31,480 Speaker 1: who how what do they do to margins? Like how 362 00:19:31,480 --> 00:19:34,800 Speaker 1: do they pass that on, et cetera. So I think 363 00:19:34,960 --> 00:19:37,439 Speaker 1: what could happen And it's something that companies have mentioned 364 00:19:37,480 --> 00:19:41,000 Speaker 1: is an expense um category that they're watching carefully. Is 365 00:19:41,600 --> 00:19:44,199 Speaker 1: although most of the hotel companies, for example, we follow 366 00:19:44,480 --> 00:19:48,439 Speaker 1: manage and receive revenue or profit based fees as a 367 00:19:48,520 --> 00:19:52,639 Speaker 1: form of compensation uh for managing or franchising those at 368 00:19:52,640 --> 00:19:54,920 Speaker 1: heels UM, you know there is a chance that's the 369 00:19:55,000 --> 00:19:58,360 Speaker 1: so called house profit margins, the margins at the hotel 370 00:19:58,440 --> 00:20:01,680 Speaker 1: owner level could be under some pressure to the extent 371 00:20:01,760 --> 00:20:04,720 Speaker 1: that we see rising waiver costs. Of course, they're going 372 00:20:04,760 --> 00:20:07,600 Speaker 1: into this period just as we said for the CASEDO 373 00:20:07,680 --> 00:20:11,840 Speaker 1: company is having significantly reduced and uh right size their 374 00:20:11,880 --> 00:20:15,439 Speaker 1: their cost structure and the labor structure to accommodate a 375 00:20:15,800 --> 00:20:17,960 Speaker 1: what in many cases has been a smaller audience. So 376 00:20:18,320 --> 00:20:21,760 Speaker 1: as Awkwudcity begins to return UM and as you see 377 00:20:21,960 --> 00:20:25,199 Speaker 1: waiver and staffing levels returned to pre pandemic levels, you 378 00:20:25,240 --> 00:20:26,760 Speaker 1: know this could be a cost issue. We're going to 379 00:20:26,800 --> 00:20:29,919 Speaker 1: have to watch to the extent that waiver accounts for 380 00:20:30,000 --> 00:20:33,880 Speaker 1: such a significant portion of the expense space of both 381 00:20:33,920 --> 00:20:37,520 Speaker 1: hotel companies and casino companies. Great stuff, Brian super appreciate. 382 00:20:37,600 --> 00:20:40,960 Speaker 1: Brian Egger Bloomberg Intelligence, a senior gaming and ladging analyst. 383 00:20:41,200 --> 00:20:43,119 Speaker 1: Coming up on the program, we check in on the 384 00:20:43,160 --> 00:20:46,160 Speaker 1: buoyant UK housing market and look at how hybrid working 385 00:20:46,200 --> 00:20:49,720 Speaker 1: model is impacting European real estate investment trust. You are 386 00:20:49,800 --> 00:20:53,000 Speaker 1: listening to Bloomberg Intelligence on a Bloomberg Radio providing in 387 00:20:53,040 --> 00:20:55,280 Speaker 1: depth research and data on two thousand companies and a 388 00:20:55,359 --> 00:20:58,600 Speaker 1: hundred and thirty industries. You can access Bloomberg Intelligence through 389 00:20:58,640 --> 00:21:00,840 Speaker 1: b I go on the terminal and Alex Steele and 390 00:21:00,880 --> 00:21:03,120 Speaker 1: I'm Paul Sweeney. It's thirty nine minutes past the hour, 391 00:21:03,280 --> 00:21:11,560 Speaker 1: and this is Bloomberg. This is Bloomberg Intelligence with Alex 392 00:21:11,560 --> 00:21:15,560 Speaker 1: Steel and Paul Sweeney on Bloomberg Radio. Mention the health 393 00:21:15,600 --> 00:21:18,560 Speaker 1: of an economy in that it's critical to understand the 394 00:21:18,600 --> 00:21:20,920 Speaker 1: health of its housing market. Let's do that for the UK. 395 00:21:21,800 --> 00:21:25,359 Speaker 1: At one point, housing market was on fire, The rental 396 00:21:25,440 --> 00:21:29,120 Speaker 1: market was on fire, the stocks related to housing building 397 00:21:29,160 --> 00:21:32,720 Speaker 1: construction were on fire. Are they still well? As Shantara Bali, 398 00:21:33,200 --> 00:21:37,440 Speaker 1: senior analyst from Bloomberg Intelligence for Business Services that joins us. Now, 399 00:21:37,840 --> 00:21:39,919 Speaker 1: so just broad stroke, real quick, where's the state of 400 00:21:39,920 --> 00:21:43,760 Speaker 1: the housing market within the UK? Hi? There? Um? Yes, 401 00:21:43,840 --> 00:21:47,240 Speaker 1: So the housing market is still very hot. Actually, um, 402 00:21:47,480 --> 00:21:51,359 Speaker 1: it's continued to grow strongly, sort of rebounding from the pandemic. 403 00:21:51,920 --> 00:21:54,480 Speaker 1: Um and that appears to be underpinned for the next 404 00:21:54,560 --> 00:21:57,040 Speaker 1: I would say, for the next few months. In terms 405 00:21:57,080 --> 00:22:00,280 Speaker 1: of looking at how the data is progressing. So yeah, um, 406 00:22:00,400 --> 00:22:02,840 Speaker 1: still still very hot markets. All right, let's talk about 407 00:22:03,400 --> 00:22:07,880 Speaker 1: the you know, the repair, the maintenance, the improvement of 408 00:22:08,080 --> 00:22:11,480 Speaker 1: existing housing stacks and apartments. I mean that's also a 409 00:22:11,560 --> 00:22:13,800 Speaker 1: hot sector in the U s as people remodel their 410 00:22:13,800 --> 00:22:15,800 Speaker 1: home because they're gonna be like, well, I've been living 411 00:22:15,800 --> 00:22:17,520 Speaker 1: in this thing nonstoff for a couple of years and 412 00:22:17,520 --> 00:22:20,160 Speaker 1: who knows how much longer. So talk to us about 413 00:22:20,240 --> 00:22:22,760 Speaker 1: that type of spending in the UK and maybe how 414 00:22:22,800 --> 00:22:27,360 Speaker 1: some investors are looking for exposure. Yeah. So, um, it's 415 00:22:27,480 --> 00:22:30,280 Speaker 1: I think it's exactly the same trend in the UK. 416 00:22:30,440 --> 00:22:34,240 Speaker 1: So that spend fell off quite strongly at the beginning 417 00:22:34,240 --> 00:22:37,760 Speaker 1: of the pandemic with lockdowns that we had here sort 418 00:22:37,760 --> 00:22:41,199 Speaker 1: of an early but it's come back very very strongly. Um. 419 00:22:41,320 --> 00:22:43,399 Speaker 1: The last data point, which is May that we have 420 00:22:43,520 --> 00:22:46,800 Speaker 1: for UK data is up ninety three, so it is 421 00:22:46,840 --> 00:22:48,920 Speaker 1: a very very strong year over year, but that's part 422 00:22:48,920 --> 00:22:53,120 Speaker 1: of a reflection of last year's weakness. But I think 423 00:22:53,119 --> 00:22:55,000 Speaker 1: you're right in terms of the trend and what what's 424 00:22:55,080 --> 00:22:58,879 Speaker 1: driving that. Partly there's pent up demand from that lost 425 00:22:58,920 --> 00:23:01,520 Speaker 1: a couple of months from the lockdown last year. Partly 426 00:23:01,600 --> 00:23:06,320 Speaker 1: there's underlying strength in this kind of product given we're 427 00:23:06,359 --> 00:23:08,280 Speaker 1: in a pandemic and people are spending more time at 428 00:23:08,320 --> 00:23:10,800 Speaker 1: home and they want to make their homes better. Plus 429 00:23:10,880 --> 00:23:13,840 Speaker 1: the fact people are not paid taking paid vacations abroad 430 00:23:13,880 --> 00:23:15,320 Speaker 1: as much as they would normally do, so they have 431 00:23:15,400 --> 00:23:18,879 Speaker 1: more money to plow into their houses. And then the 432 00:23:18,880 --> 00:23:21,000 Speaker 1: final point, as we all leaded to earlier, that when 433 00:23:21,000 --> 00:23:23,080 Speaker 1: the housing market is strong, this is also good for 434 00:23:23,119 --> 00:23:26,439 Speaker 1: repair and modeling because the data shows over time that 435 00:23:26,520 --> 00:23:28,960 Speaker 1: most people spend on their houses when they've just moved. 436 00:23:29,200 --> 00:23:30,679 Speaker 1: So all of those things of all moving in the 437 00:23:30,760 --> 00:23:33,480 Speaker 1: right direction currently. I so well know that from moving 438 00:23:33,520 --> 00:23:36,200 Speaker 1: during the pandemic as well. Um, what stocks are most 439 00:23:36,200 --> 00:23:41,560 Speaker 1: exposed and what's prized into that? So the company's I 440 00:23:41,640 --> 00:23:44,400 Speaker 1: look at which are exposed to this space. Travis Perkins 441 00:23:44,440 --> 00:23:48,600 Speaker 1: which is the UK's biggest building material distributor, Grasston which 442 00:23:48,640 --> 00:23:51,679 Speaker 1: is also in the similar market. Um. And then finally 443 00:23:51,720 --> 00:23:54,639 Speaker 1: and Howden Joinery which is the the UK's biggest kitchen 444 00:23:54,680 --> 00:23:58,200 Speaker 1: sitting company. So these companies are sort of linked into 445 00:23:58,960 --> 00:24:02,800 Speaker 1: into this trend. Um they I would say they've recovered 446 00:24:02,880 --> 00:24:04,720 Speaker 1: very well in terms of share price. A year. Today 447 00:24:04,720 --> 00:24:08,320 Speaker 1: they've outperformed the general market by something like um and 448 00:24:08,359 --> 00:24:11,280 Speaker 1: it's been mirroring the sort of the underlying data they've 449 00:24:11,320 --> 00:24:13,800 Speaker 1: been raising guidance, et cetera. So I think a strong 450 00:24:13,840 --> 00:24:18,200 Speaker 1: recovery is priced in um in terms of what's happened 451 00:24:18,240 --> 00:24:20,840 Speaker 1: to the share prices. But from here it looks like 452 00:24:20,960 --> 00:24:25,200 Speaker 1: momentum from an earnings perspective is still pretty good. Um, 453 00:24:25,200 --> 00:24:27,720 Speaker 1: there's no reason to sort of be nervous about sort 454 00:24:27,720 --> 00:24:32,080 Speaker 1: of the growth of renovation data or repair data, etcetera. 455 00:24:32,160 --> 00:24:36,120 Speaker 1: So that there they performed very well, but there's still 456 00:24:36,200 --> 00:24:38,760 Speaker 1: a more momentum to come. It seems. Yeah, that's kind 457 00:24:38,760 --> 00:24:40,119 Speaker 1: of where I wanted to go, because I think a 458 00:24:40,160 --> 00:24:41,879 Speaker 1: lot of people here in the States they're saying, we 459 00:24:42,320 --> 00:24:45,160 Speaker 1: do have a housing boom here, low mortgage rates, people 460 00:24:45,600 --> 00:24:48,800 Speaker 1: you know, moving out and wanting more space, and understanding 461 00:24:48,840 --> 00:24:52,120 Speaker 1: that that's similar in the UK. The real question though, 462 00:24:52,200 --> 00:24:54,280 Speaker 1: is how long does it last? When are people are 463 00:24:54,280 --> 00:24:55,680 Speaker 1: going to be like, wait a minute, I don't want 464 00:24:55,680 --> 00:24:57,760 Speaker 1: to live in the middle of nowhere. I are in 465 00:24:57,800 --> 00:24:59,439 Speaker 1: the burbs. I want to be back in the city. 466 00:25:00,359 --> 00:25:03,400 Speaker 1: What are some of your companies saying about that? So 467 00:25:03,880 --> 00:25:06,240 Speaker 1: I think It's a very good question because I think 468 00:25:06,920 --> 00:25:08,680 Speaker 1: in the short in the short term, everyone is so 469 00:25:08,880 --> 00:25:11,240 Speaker 1: has been focused on their cash flow and now the 470 00:25:11,280 --> 00:25:13,440 Speaker 1: rebound that's coming through, so it's kind of sort of 471 00:25:13,520 --> 00:25:16,520 Speaker 1: getting their business back on track in terms of opening 472 00:25:16,560 --> 00:25:18,840 Speaker 1: their outlets or paying dividends, and someone say it's very 473 00:25:18,840 --> 00:25:20,800 Speaker 1: it's still very much about that. But I think the 474 00:25:21,040 --> 00:25:24,480 Speaker 1: key risk, as you highlighted in the question, is how 475 00:25:24,600 --> 00:25:27,000 Speaker 1: how transient is this. Is this something that can last 476 00:25:27,400 --> 00:25:29,280 Speaker 1: over the medium term or is there something very much 477 00:25:29,320 --> 00:25:31,480 Speaker 1: just just gonna last while the pandemic is kind of 478 00:25:31,480 --> 00:25:34,080 Speaker 1: playing through as it were, So once we all return 479 00:25:34,160 --> 00:25:37,400 Speaker 1: to officers and so on over over time with vaccines 480 00:25:37,440 --> 00:25:39,080 Speaker 1: and so one, does that then lead to us sort 481 00:25:39,080 --> 00:25:42,000 Speaker 1: of fall off in UM in this kind of demand 482 00:25:42,000 --> 00:25:44,040 Speaker 1: that we're seeing. I think the other thing I would 483 00:25:44,040 --> 00:25:46,240 Speaker 1: add to that is that house prices have been very 484 00:25:46,240 --> 00:25:49,640 Speaker 1: strong here in the UK, so UM there's a risk 485 00:25:49,680 --> 00:25:52,240 Speaker 1: that there may be too strong to support a longer 486 00:25:52,359 --> 00:25:55,000 Speaker 1: term recovery. So there's a there's a risk that maybe 487 00:25:55,040 --> 00:25:57,520 Speaker 1: things have got a bit too expensive and that could 488 00:25:57,560 --> 00:26:01,639 Speaker 1: stall any eventual recovery. But we're not there yet, and 489 00:26:01,640 --> 00:26:03,840 Speaker 1: in the short term, it seems like everything is moving 490 00:26:03,840 --> 00:26:05,800 Speaker 1: in the right direction, but there is that question mark 491 00:26:05,800 --> 00:26:08,400 Speaker 1: over the medium term. Thank you so much for Intelligence 492 00:26:08,440 --> 00:26:11,480 Speaker 1: Business Services analyst as Shantara Bali. Let's turn into the 493 00:26:11,480 --> 00:26:14,760 Speaker 1: world of reats and the impact of a hybrid work world. 494 00:26:14,800 --> 00:26:17,879 Speaker 1: The question is on the other side of this pandemic, 495 00:26:17,960 --> 00:26:20,880 Speaker 1: in a delta world, what will the work living at 496 00:26:20,920 --> 00:26:23,240 Speaker 1: home type of dynamic look like and what does that 497 00:26:23,320 --> 00:26:26,720 Speaker 1: mean for commercial real estate from where we welcome Sue 498 00:26:26,800 --> 00:26:30,600 Speaker 1: moundon Bloomberg Intelligence senior property analysts. So, so, what are 499 00:26:30,640 --> 00:26:34,360 Speaker 1: the companies saying here as we try on a global 500 00:26:34,400 --> 00:26:41,080 Speaker 1: scale to reopen, Well, there's they're saying at the moment that, um, 501 00:26:41,640 --> 00:26:46,440 Speaker 1: their tenants are really just refurbishing their space to try 502 00:26:46,480 --> 00:26:49,920 Speaker 1: and hope with more meeting rooms, UM, more space to 503 00:26:49,960 --> 00:26:52,600 Speaker 1: be able to have zoom calls UM and less space 504 00:26:52,680 --> 00:26:56,000 Speaker 1: per desks UM. And they're busy doing that at the moment, 505 00:26:56,040 --> 00:27:00,840 Speaker 1: but not really reducing their space requirements too much. I 506 00:27:00,920 --> 00:27:02,720 Speaker 1: do think those are over the course of the next 507 00:27:02,800 --> 00:27:06,680 Speaker 1: eighteen months, maybe two years, as we all come back 508 00:27:06,720 --> 00:27:08,440 Speaker 1: to work and we all settle down to a more 509 00:27:08,480 --> 00:27:13,080 Speaker 1: hybrid pattern, that then maybe some more profound impacts on 510 00:27:13,080 --> 00:27:16,120 Speaker 1: the space that we're using and what the tenants really 511 00:27:16,160 --> 00:27:18,359 Speaker 1: want to that point, before we get to like what 512 00:27:18,400 --> 00:27:21,520 Speaker 1: they may want, I guess the question is when do 513 00:27:21,600 --> 00:27:24,560 Speaker 1: they make that decision because with so much uncertainty, like 514 00:27:24,600 --> 00:27:26,600 Speaker 1: our our leases up at a certain point, does something 515 00:27:26,640 --> 00:27:28,480 Speaker 1: have to be locked in, like what's the time frame 516 00:27:28,560 --> 00:27:32,240 Speaker 1: for that? Yeah, so the s leases are important in 517 00:27:32,280 --> 00:27:34,840 Speaker 1: the UK. They can be quite long. In the continent 518 00:27:34,920 --> 00:27:37,399 Speaker 1: there maybe three years or nine years altogether, but with 519 00:27:37,480 --> 00:27:40,720 Speaker 1: three or six year breaks UM. So it does vary 520 00:27:40,880 --> 00:27:45,679 Speaker 1: enormously what the lease lengths are UM two. But also 521 00:27:45,840 --> 00:27:49,040 Speaker 1: that the thing is that, um the cost of UM 522 00:27:49,160 --> 00:27:52,160 Speaker 1: your office is quite low in comparison with the cost 523 00:27:52,160 --> 00:27:54,800 Speaker 1: of your staff, for example, and so it's probably not 524 00:27:54,840 --> 00:27:58,320 Speaker 1: the immediate priority. All the occupiers are saying they want 525 00:27:58,320 --> 00:28:00,400 Speaker 1: to be able to attract talent so they into good 526 00:28:00,400 --> 00:28:03,479 Speaker 1: place for their you know, their staff to go. But 527 00:28:03,520 --> 00:28:05,879 Speaker 1: at the same time, you know, if they wanted to 528 00:28:05,920 --> 00:28:09,600 Speaker 1: cut their costs by they could sub let a very 529 00:28:09,640 --> 00:28:14,399 Speaker 1: small portion of their property. So that's a decision that 530 00:28:14,440 --> 00:28:17,239 Speaker 1: will come further down the line in the you know, 531 00:28:17,280 --> 00:28:21,679 Speaker 1: working through how we deal with a hybrid environment, hybrid 532 00:28:21,720 --> 00:28:24,840 Speaker 1: working environment. So the last time I was in London 533 00:28:24,880 --> 00:28:28,119 Speaker 1: and Middaly was two years ago. Now. Um, I was 534 00:28:28,200 --> 00:28:32,159 Speaker 1: just amazed that despite Brexit, in all the doom and gloom, 535 00:28:32,280 --> 00:28:34,879 Speaker 1: all you could see around the city of London was 536 00:28:35,320 --> 00:28:38,840 Speaker 1: cranes building new structures in the city of London. Outside 537 00:28:38,880 --> 00:28:42,640 Speaker 1: the city of London. What's the London real estate market 538 00:28:42,680 --> 00:28:46,720 Speaker 1: like these days? So actually, for officers, the supply of 539 00:28:46,720 --> 00:28:50,080 Speaker 1: officers isn't that huge. I know, we had Brexit, um 540 00:28:50,160 --> 00:28:52,320 Speaker 1: and you know then we have a pandemic, and so 541 00:28:52,480 --> 00:28:55,400 Speaker 1: construction has slowed down a lot. For officers. There's a 542 00:28:55,440 --> 00:28:58,880 Speaker 1: lot of home building going on, and I actually believe that, um, 543 00:29:00,080 --> 00:29:01,920 Speaker 1: you know, they're the sort of problems that we're facing 544 00:29:01,960 --> 00:29:05,560 Speaker 1: here is that to come in UM that all the 545 00:29:05,640 --> 00:29:09,240 Speaker 1: officers have to be UM what we call EPC compliant, 546 00:29:09,280 --> 00:29:10,840 Speaker 1: which means that they have to be a l B 547 00:29:11,080 --> 00:29:14,680 Speaker 1: ranked for climate change in their emissions and the energy 548 00:29:14,760 --> 00:29:18,280 Speaker 1: that they consume. And not much of the London stock 549 00:29:19,040 --> 00:29:22,880 Speaker 1: actually compliance with that at the moment. So there is 550 00:29:22,880 --> 00:29:28,280 Speaker 1: a big concern amongst the community office community as to 551 00:29:28,400 --> 00:29:30,120 Speaker 1: how much money they're going to have to spend to 552 00:29:30,160 --> 00:29:33,280 Speaker 1: get their offices to that state. And I think what 553 00:29:33,360 --> 00:29:35,920 Speaker 1: that's going to drive one of the reasons that there 554 00:29:35,920 --> 00:29:38,880 Speaker 1: are others as well, will drive a lot of the 555 00:29:38,880 --> 00:29:41,840 Speaker 1: these sort of obsolete space, all the stranded assets if 556 00:29:41,840 --> 00:29:45,200 Speaker 1: you like, because they they're not compliant UM will be 557 00:29:45,240 --> 00:29:49,640 Speaker 1: converted into residential or to other uses as well, and 558 00:29:49,760 --> 00:29:52,760 Speaker 1: about well, you know, during that renovation process they'll solve 559 00:29:52,840 --> 00:29:58,760 Speaker 1: both both the energy compliant problems as well as getting 560 00:29:59,000 --> 00:30:02,000 Speaker 1: the property use is aligned more with demand, which is 561 00:30:02,040 --> 00:30:04,400 Speaker 1: the big thing that we're facing at the moment. So 562 00:30:04,480 --> 00:30:08,200 Speaker 1: aside from UM longer term having to retrofit their offices 563 00:30:08,240 --> 00:30:11,120 Speaker 1: to fit the climate rules, UM in an immediate basis 564 00:30:11,160 --> 00:30:12,680 Speaker 1: in terms of trying and bring people back. You were 565 00:30:12,720 --> 00:30:15,040 Speaker 1: starting to mention this before, but what are the souped 566 00:30:15,120 --> 00:30:19,000 Speaker 1: up cool things that officers are going to try and do. Well. 567 00:30:19,040 --> 00:30:22,680 Speaker 1: They want more immunities in the properties UM. You know, 568 00:30:22,720 --> 00:30:24,960 Speaker 1: they want some meeting space, and I think there's mixed 569 00:30:25,080 --> 00:30:29,640 Speaker 1: use sort of campus style. UM is really gaining some traction. 570 00:30:30,280 --> 00:30:34,200 Speaker 1: British Land already has you know, sort of campus style properties. 571 00:30:34,240 --> 00:30:36,560 Speaker 1: You know, it's spit like Canary Walls really which I know, 572 00:30:36,640 --> 00:30:39,200 Speaker 1: you know well, which has a huge shopping center at 573 00:30:39,200 --> 00:30:41,440 Speaker 1: the bottom, and it's got lots of residential towers now 574 00:30:41,480 --> 00:30:44,800 Speaker 1: and as well as offices. So the ability to network 575 00:30:45,200 --> 00:30:49,120 Speaker 1: physically as well as online is important. But the other 576 00:30:49,160 --> 00:30:52,520 Speaker 1: thing is we're finding around Paris and London that there 577 00:30:52,520 --> 00:30:56,880 Speaker 1: are sort of clusters of certain types of industry or 578 00:30:57,440 --> 00:31:01,240 Speaker 1: office users. So there's the Knowledge Quarter, there's the Life 579 00:31:01,240 --> 00:31:04,520 Speaker 1: Sciences Quarter, there's you know, the city the financial Quarter, 580 00:31:05,200 --> 00:31:09,480 Speaker 1: and and tech quarters obviously as well. And so that 581 00:31:09,680 --> 00:31:13,640 Speaker 1: the buildings and the communities there will move towards sort 582 00:31:13,640 --> 00:31:18,080 Speaker 1: of attracting those employees. And I think that's something that 583 00:31:18,120 --> 00:31:19,960 Speaker 1: we'll see a lot more of going forward, so much 584 00:31:19,960 --> 00:31:23,400 Speaker 1: more mixed use places like London. Central Paris has always 585 00:31:23,440 --> 00:31:25,200 Speaker 1: been much better because it always had a lot of 586 00:31:25,240 --> 00:31:28,400 Speaker 1: residential in it that the City of London was. You know, 587 00:31:28,440 --> 00:31:30,880 Speaker 1: I think we've spoken about this before, but the City 588 00:31:30,880 --> 00:31:34,040 Speaker 1: of London, um, you know, it's very much just offices, 589 00:31:34,240 --> 00:31:37,200 Speaker 1: and um they've already now said that they're going to 590 00:31:37,240 --> 00:31:39,800 Speaker 1: allow planning for more residential. So I think it will 591 00:31:39,840 --> 00:31:43,040 Speaker 1: be switching buildings to a better use that hazards and 592 00:31:43,120 --> 00:31:48,000 Speaker 1: then communities. It's near good transport networks, um, there is 593 00:31:48,200 --> 00:31:51,880 Speaker 1: you got good ventilation for well being, that people can 594 00:31:51,920 --> 00:31:54,160 Speaker 1: control their mental health. All those sorts of things are 595 00:31:54,200 --> 00:31:56,840 Speaker 1: going to be really important going forward, and it will 596 00:31:56,880 --> 00:31:58,840 Speaker 1: take a year or two, I think for that to 597 00:31:58,920 --> 00:32:01,560 Speaker 1: go through the system and for us to really understand 598 00:32:02,480 --> 00:32:04,600 Speaker 1: how much office space is needed. But they'll be space 599 00:32:04,640 --> 00:32:07,520 Speaker 1: needed for other things, all right, So thank you so much. 600 00:32:07,520 --> 00:32:11,360 Speaker 1: We really appreciate that, Sue Bunden, Bloomberg Intelligence, Senior Property Analysts. 601 00:32:11,640 --> 00:32:14,400 Speaker 1: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, 602 00:32:14,440 --> 00:32:16,960 Speaker 1: providing end upth research and data on two thousand companies 603 00:32:16,960 --> 00:32:21,000 Speaker 1: and industries. And remember you can access Bloomberg Intelligence through 604 00:32:21,080 --> 00:32:23,120 Speaker 1: b I go on the Terminal and alex Steel and 605 00:32:23,160 --> 00:32:25,440 Speaker 1: on Paul Sweeney. It's fifty seven minutes past the hour, 606 00:32:25,560 --> 00:32:26,840 Speaker 1: and this is Bloomberg