WEBVTT - Markets, Chevrolet, and Hunter Biden (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.960 my co host Matt Miller. Every business day we bring 0:00:07.000 --> 0:00:11.560 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moven news. Find the Bloomberg Markets podcast 0:00:15.600 --> 0:00:18.479 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.040 at Bloomberg dot com slash podcast Listen. Our next guest 0:00:22.120 --> 0:00:24.840 is firmly in the soft landing camp as well. He 0:00:24.880 --> 0:00:26.920 expects a growth of around one and a half percent 0:00:26.960 --> 0:00:28.960 for the rest of the year and inflation to continue 0:00:29.000 --> 0:00:32.640 to decline. But market's kind of up and down today 0:00:32.640 --> 0:00:35.600 on concern that the elevated inflation that we've seen in 0:00:35.640 --> 0:00:38.559 recent data points, the core CPI reading still at four 0:00:38.600 --> 0:00:40.680 point seven percent, is going to stay with us for 0:00:40.760 --> 0:00:42.559 some time to come. And part of that problem is 0:00:43.320 --> 0:00:47.199 the super core gauge of prices that Powell watches so closely, right, 0:00:47.240 --> 0:00:53.479 the services excluding housing has actually risen in the last reading. 0:00:53.600 --> 0:00:55.960 And another part is that some elements of the depressed 0:00:55.960 --> 0:01:01.520 CPI readings like airline tickets and medical costs aren't expected 0:01:01.560 --> 0:01:05.279 to continue to drop. And then got the housing picture 0:01:05.319 --> 0:01:07.280 to add to all of that, so let's welcome in 0:01:07.360 --> 0:01:10.240 Bob Heater. He's a head of Investment Policy and Strategy 0:01:10.280 --> 0:01:13.000 group over at Silvercrest Asset Management. Bob, welcome the program. 0:01:13.080 --> 0:01:17.640 Thanks for joining us in the Interactive Broker Studio. Why 0:01:17.800 --> 0:01:21.080 are you optimistic that inflation will continue to decline? 0:01:21.440 --> 0:01:23.039 Well, I think one of the reasons is that we've 0:01:23.080 --> 0:01:26.360 seen most of the inflationary fuel dissipate, so monetary growth 0:01:26.760 --> 0:01:30.120 has all but flat lined here. You've seen all of 0:01:30.120 --> 0:01:33.520 the supply chain problems dissipate. The index that's widely maintained 0:01:33.560 --> 0:01:35.679 and followed there really only hit normal just a few 0:01:35.720 --> 0:01:38.800 months ago. You've seen a lot of the demand swings 0:01:38.800 --> 0:01:41.160 in the economy start to normalize. We're still seeing some 0:01:41.280 --> 0:01:44.640 of that, but supply and demand a bit more stable 0:01:44.720 --> 0:01:46.960 and allowing companies to really produce at a level that 0:01:47.160 --> 0:01:48.960 they need to to keep prices in check. And so 0:01:49.280 --> 0:01:52.360 I'm relatively optimistic on the pace of inflation continuing to 0:01:52.400 --> 0:01:55.120 decline from an economic perspective, but I think from a 0:01:55.120 --> 0:01:57.040 market perspective, we've maybe gotten a little bit of ahead 0:01:57.040 --> 0:01:58.560 of ourselves and there's a bit more work to do. 0:01:59.240 --> 0:02:05.360 It's interesting because these CPI figures don't necessarily look ahead 0:02:05.400 --> 0:02:09.320 to things like rising oil prices and the impacts. I mean, 0:02:09.639 --> 0:02:11.160 when we think of the FED, they're looking at this 0:02:11.200 --> 0:02:13.360 core number that strips out all this other stuff, that 0:02:13.480 --> 0:02:18.880 is the stuff that consumers potentially feel most strongly. Is 0:02:18.919 --> 0:02:21.720 this going to change the FEDS thinking? Is this going 0:02:21.760 --> 0:02:24.000 to change their reaction to some of these data that 0:02:24.040 --> 0:02:24.480 we get. 0:02:24.680 --> 0:02:26.000 So the way that I look at that on a 0:02:26.040 --> 0:02:28.680 go forward basis of trying to estimate the pace of 0:02:28.720 --> 0:02:30.480 the decline in CPI, and I think that's the real 0:02:30.520 --> 0:02:32.480 open question mark for markets here. 0:02:32.880 --> 0:02:33.480 I think you're right. 0:02:33.480 --> 0:02:35.120 There are a number of things that are likely to 0:02:35.120 --> 0:02:37.520 put some upward pressure on CPI, and the energy complex 0:02:37.520 --> 0:02:40.359 certainly being one of those. The one that's the biggest one, 0:02:40.360 --> 0:02:42.400 of course, on the downside is housing. And so when 0:02:42.400 --> 0:02:44.560 we look through some of those estimates of how much 0:02:44.560 --> 0:02:47.440 of the contribution from CPI from housing well over two percent, 0:02:47.960 --> 0:02:49.920 it looks like maybe middle of next year. 0:02:49.800 --> 0:02:51.239 That starts to go flat. 0:02:51.560 --> 0:02:54.640 So if I add back in more energy inflation than 0:02:54.680 --> 0:02:57.360 we have currently and I take out the housing, I 0:02:57.400 --> 0:02:59.600 get to a point where I sort of estimate we 0:02:59.680 --> 0:03:02.080 hit that two percent FED target sometime in the middle 0:03:02.120 --> 0:03:04.240 of next year, so we're still a ways away from that, 0:03:04.600 --> 0:03:06.200 and then beyond that, we still have to ask the 0:03:06.280 --> 0:03:08.000 question what will the FED do if and when we 0:03:08.080 --> 0:03:09.760 hit that two percent? So I think that's why the 0:03:09.760 --> 0:03:12.639 market's struggling a little bit here. With inflation's improved a lot, 0:03:12.720 --> 0:03:14.360 I think we factored most of that in and we're 0:03:14.360 --> 0:03:15.880 sort of looking for some additional fuel. 0:03:16.400 --> 0:03:17.840 What do you think do you think the Fed is 0:03:17.880 --> 0:03:19.880 going to hold at this level? 0:03:19.960 --> 0:03:20.200 Right? 0:03:20.280 --> 0:03:22.840 And what in twenty twenty four start to cut. 0:03:23.200 --> 0:03:24.960 I think it won't be at least until the middle 0:03:25.040 --> 0:03:27.200 or late in twenty twenty four until they start to cut. 0:03:27.520 --> 0:03:29.400 I think I base that somewhat on the comments that 0:03:29.440 --> 0:03:32.120 we saw from New York Fed President Williams talking a 0:03:32.120 --> 0:03:35.600 little bit about the restrictiveness of policy increases as inflation 0:03:35.720 --> 0:03:38.160 comes down. So if we do see inflation coming down 0:03:38.200 --> 0:03:39.760 a bit, I think they may cut just a bit 0:03:40.240 --> 0:03:42.040 just enough over that too. 0:03:42.080 --> 0:03:42.200 Right. 0:03:42.240 --> 0:03:46.720 This is the passive hike that we got basically yesterday, 0:03:46.760 --> 0:03:49.520 right when CPI came down, even though rates were the same, 0:03:50.440 --> 0:03:52.280 essentially gives you a higher real. 0:03:52.160 --> 0:03:54.640 Rate, yes, And I think even that process, though, will 0:03:54.640 --> 0:03:56.360 take some time. It's not like they're going to take 0:03:56.400 --> 0:03:58.400 you know, two hundred or three hundred bases points out 0:03:58.400 --> 0:04:01.320 in a single meeting. It'll be thissured pace of very 0:04:01.360 --> 0:04:03.000 slow cuts later in the year. So I think there's 0:04:03.040 --> 0:04:05.840 still a long timeline for rates being a bit elevated 0:04:05.880 --> 0:04:08.120 here and creating a bit of a drag on the economy. 0:04:08.520 --> 0:04:13.480 Yeah, the ponderous twenty five basis points. Then we'll see 0:04:13.600 --> 0:04:15.800 and we'll pause, and we'll see in that kind of 0:04:15.840 --> 0:04:19.640 message impact on corporate profits. I mean, are we at 0:04:19.640 --> 0:04:23.120 the end of a potential earnings recession where we see 0:04:23.120 --> 0:04:24.000 things improve from here? 0:04:24.320 --> 0:04:26.360 I think we're getting close to that. So I based 0:04:26.400 --> 0:04:28.240 that on two things. One is, I do think economic 0:04:28.240 --> 0:04:31.480 growth is mostly stabilized. And while I think we'll be 0:04:31.560 --> 0:04:33.359 running at around one and a half percent, it certainly 0:04:33.360 --> 0:04:34.800 could be a little bit lower than that in the 0:04:34.800 --> 0:04:38.599 next few quarters if the rate stress and bank stress 0:04:38.600 --> 0:04:41.080 weighs more heavily than I'm expecting. But I think in 0:04:41.120 --> 0:04:43.039 terms of looking out to next year, there's reason for 0:04:43.080 --> 0:04:45.960 some optimism. I've started to see some signals in earnings 0:04:45.960 --> 0:04:48.480 reports this past quarter that companies are making improvements in 0:04:48.520 --> 0:04:51.240 productivity enhancement, and I think some of that has been 0:04:51.360 --> 0:04:53.799 masked by the wild swings we've had in the economy 0:04:53.800 --> 0:04:55.560 in the past few years. Now that we get back 0:04:55.600 --> 0:04:57.520 to a much more stable backdrop, I think some of 0:04:57.520 --> 0:04:59.560 those productivity gains will start to flow through. So I 0:04:59.560 --> 0:05:01.960 wouldn't be surprised if next year is marked by a 0:05:01.960 --> 0:05:04.440 period of slightly increasing margins and getting a little bit 0:05:04.440 --> 0:05:05.760 of upside on the earnings. 0:05:05.800 --> 0:05:07.360 What do you think about the labor fight? So they 0:05:07.400 --> 0:05:12.159 two you know, industry specific and spread out. You've got 0:05:12.320 --> 0:05:15.479 you know, labor fight over streaming, you've got a labor 0:05:15.480 --> 0:05:18.279 fight and automotive production. But there's some big numbers that 0:05:18.320 --> 0:05:19.080 we're looking at. 0:05:19.000 --> 0:05:21.000 Right yes, and I think we saw some of that 0:05:21.040 --> 0:05:24.520 in different industries during the pandemic, particularly in service industries. 0:05:25.080 --> 0:05:27.320 My take on that is that I think an overall 0:05:27.400 --> 0:05:29.880 cost basis for companies, they can manage it. So it's 0:05:29.920 --> 0:05:31.719 good for the consumer, it's good for the people getting 0:05:31.760 --> 0:05:33.799 increase pay. But I think you do that with perhaps 0:05:34.160 --> 0:05:36.159 less headcount, and we've started to see some of that. 0:05:36.320 --> 0:05:39.160 Companies holding the line on headcount, or companies that in 0:05:39.160 --> 0:05:41.600 industries that have been disrupted in the pandemic at staffing 0:05:41.680 --> 0:05:44.159 levels lower than they were in twenty nineteen. And higher 0:05:44.160 --> 0:05:46.440 capacity in terms of the number of customers they're serving. 0:05:46.480 --> 0:05:49.080 So wages might be going up on a basis of 0:05:49.160 --> 0:05:52.160 hourly wages for employees, but lower headcount or flatheadcount on 0:05:52.240 --> 0:05:54.360 higher revenue, okay for margins. 0:05:54.360 --> 0:05:56.599 So at bottom line for stocks we're at we're just 0:05:56.680 --> 0:05:59.000 under s and P forty five hundred, right, we come 0:05:59.040 --> 0:06:00.440 in about two and a half or so the last 0:06:00.440 --> 0:06:04.200 couple weeks. But you think we're gonna remain at this 0:06:04.360 --> 0:06:08.599 level give or take into twenty twenty four, and then 0:06:08.800 --> 0:06:11.440 you're constructive on the index from there, Yes, basically. 0:06:11.440 --> 0:06:13.320 I mean it's always, of course tough to time these 0:06:13.360 --> 0:06:15.400 things point to point, but I think we're really struggling 0:06:15.400 --> 0:06:17.520 for some fuel here. There's not much reason to be 0:06:17.600 --> 0:06:21.040 overly optimistic, not much reason to be overly pessimistic. Stocks 0:06:21.040 --> 0:06:23.600 look relatively fairly priced to me, and I think it'll 0:06:23.600 --> 0:06:26.200 be until later in the year until investors start focusing 0:06:26.240 --> 0:06:28.800 on what does the path look like for twenty twenty four, 0:06:28.839 --> 0:06:31.640 maybe start to put some realistic expectations on inflation and 0:06:31.680 --> 0:06:34.359 FED policy, start to take a closer pencil to earnings 0:06:34.360 --> 0:06:36.119 in twenty four, that we start to get any fuel 0:06:36.120 --> 0:06:36.880 to the upside. 0:06:37.040 --> 0:06:40.560 Are there any sectors, any pockets of opportunity that you 0:06:40.600 --> 0:06:41.280 were looking at? 0:06:41.520 --> 0:06:44.480 So I like three sectors in particular. I think consumer, 0:06:44.720 --> 0:06:47.680 discretionary and industrials are still benefiting from strong demand. I 0:06:47.720 --> 0:06:50.240 think that will continue, and I think select pockets and 0:06:50.279 --> 0:06:54.320 technology where they've shown the opportunity to ab productivity enhancing 0:06:54.320 --> 0:06:57.240 and be be able to increase their own margins relatively efficiently. 0:06:57.279 --> 0:06:59.360 I think there's some upsides to earnings there as well. 0:07:00.080 --> 0:07:04.040 Can I ask what's the impact of saying generative AI 0:07:04.160 --> 0:07:05.000 in an earnings call? 0:07:05.240 --> 0:07:07.680 Yes, it's certainly showing up in every call. So I've 0:07:07.680 --> 0:07:09.200 been trying to weed through a lot of that and 0:07:09.680 --> 0:07:12.840 shut out the noise of just mentioning AI for hopeful 0:07:12.880 --> 0:07:15.880 purposes and companies that are actually deploying things. I think 0:07:15.880 --> 0:07:17.640 we're still very early in that it's a lot of 0:07:17.680 --> 0:07:19.960 mentions and not a lot of activity, but we're starting 0:07:19.960 --> 0:07:21.200 to see some of it pop through, and I think 0:07:21.200 --> 0:07:24.080 we're starting to again see companies producing more revenue on 0:07:24.120 --> 0:07:26.480 flat headcount. And that's beneficial, but is it. 0:07:26.680 --> 0:07:28.560 A game changer? I mean, I saw a story the 0:07:28.600 --> 0:07:33.320 other day that the Chinese have ordered five billion dollars 0:07:33.360 --> 0:07:35.360 worth of chips from Nvidia trying to get in under 0:07:35.360 --> 0:07:38.200 the wire while they can. That's a massive number. 0:07:38.360 --> 0:07:40.600 It is a massive number, and I think some of 0:07:40.640 --> 0:07:42.600 it will be hugely productive and some of it will 0:07:42.600 --> 0:07:45.080 be hugely wasteful. And that's really the challenge in sorting 0:07:45.120 --> 0:07:47.800 through company by company who's able to manage these things 0:07:47.800 --> 0:07:50.679 well and deploy the technology to productivity benefit. 0:07:51.120 --> 0:07:53.160 And then you have the kind of Inflation Reduction Act 0:07:53.200 --> 0:07:56.240 and all of these long term investments in manufacturing. I mean, 0:07:56.240 --> 0:07:58.440 do we see the impact of those in the near 0:07:58.600 --> 0:08:00.400 term or is this something you're looking out for twenty 0:08:00.400 --> 0:08:01.240 twenty five, twenty six. 0:08:01.240 --> 0:08:03.120 I think we're seeing some of it presently. In terms 0:08:03.120 --> 0:08:06.200 of economic growth. We're certainly seeing construction spend and manufacturing 0:08:06.440 --> 0:08:08.240 has ticked up quite a bit. We haven't seen it 0:08:08.280 --> 0:08:10.000 on the job front. I think hiring has been very 0:08:10.000 --> 0:08:12.360 difficult there. So I do think the hiring cycle of 0:08:12.400 --> 0:08:14.920 it will take some time, and maybe that's potentially over 0:08:14.960 --> 0:08:16.760 time and offset to some of the other jobs that 0:08:16.800 --> 0:08:18.280 get lost in other areas. 0:08:18.680 --> 0:08:20.880 All right, Bob, thanks so much for joining us, Bob Teeter. 0:08:21.200 --> 0:08:23.800 They are from Silvercrest Asset Management. Really appreciate your time 0:08:23.840 --> 0:08:25.120 in the studio with us. 0:08:26.200 --> 0:08:30.040 You're listening to the Team Can's live program Bloomberg Markets 0:08:30.080 --> 0:08:32.000 weekdays at ten am Eastern. 0:08:31.680 --> 0:08:34.760 On Bloomberg dot Com, the iHeartRadio. 0:08:34.040 --> 0:08:36.800 App and the Bloomberg Business App, or listen on demand 0:08:36.840 --> 0:08:38.400 wherever you get your podcasts. 0:08:40.120 --> 0:08:43.120 So there's a company in the Philippines called Ancass I 0:08:43.160 --> 0:08:46.400 believe I have the pronunciation right. They have four million downloads, 0:08:46.400 --> 0:08:49.080 they have thirty thousand biker partners, and they are essentially 0:08:50.000 --> 0:08:54.800 an uber that runs on two wheels rather than four. 0:08:54.880 --> 0:08:57.680 Let's bring in the CEO right now. Vancast George Royeka 0:08:58.280 --> 0:09:01.040 joins us to talk more about the growth that they've 0:09:01.440 --> 0:09:04.280 seen in the market. George, thanks so much for your time. 0:09:04.400 --> 0:09:09.080 I'm an avid motorcyclist, so I love the idea, but 0:09:09.240 --> 0:09:12.160 how exactly does this work? I mean I imagine people 0:09:12.400 --> 0:09:13.640 sometimes fall off. 0:09:15.120 --> 0:09:17.560 Well, hi guys, thanks for having me here. Well, you know, 0:09:17.559 --> 0:09:20.040 we're very close here in our side of the world, 0:09:20.080 --> 0:09:22.760 and I much love to give I'm in transportation, right, 0:09:22.800 --> 0:09:25.959 so you do got to hug your driver unfortunately. 0:09:26.000 --> 0:09:29.080 Or fortunately depending on you know, everybody needs a hug 0:09:29.080 --> 0:09:33.360 once in a while. What kind of growth have you shown, 0:09:33.400 --> 0:09:35.840 because I know you have a goal of getting to 0:09:36.960 --> 0:09:40.760 creating a million jobs, and right now you've got thirty thousand. 0:09:42.200 --> 0:09:44.000 So actually we're at fifty thousand now. 0:09:44.120 --> 0:09:44.400 Wow. 0:09:44.840 --> 0:09:46.920 I think it's a few months ago we grew quite 0:09:46.920 --> 0:09:51.480 significantly and we're about eight million downloads as of date. 0:09:51.800 --> 0:09:52.599 Wow. 0:09:52.640 --> 0:09:55.560 Well, yeah, what what spurred that growth because I know 0:09:56.200 --> 0:09:58.480 very recently as of March it was it was quite 0:09:58.480 --> 0:09:59.640 a bit less, right March. 0:10:00.880 --> 0:10:02.840 Yeah, Well, I think in the you know, in our 0:10:02.880 --> 0:10:05.640 part of tow congestion is you know it's a big 0:10:05.679 --> 0:10:08.280 problem and a lot of the streets here, even the 0:10:08.280 --> 0:10:12.720 main thoroughfares, it's just riddled with you know, cars and 0:10:12.760 --> 0:10:16.640 buses and there's not enough infrastructure. So you know, a 0:10:16.760 --> 0:10:20.439 ten kilometer drive can take about two hours one way. 0:10:20.960 --> 0:10:24.480 So that's that's that's very bad. So you know, there's 0:10:24.520 --> 0:10:28.080 a really neat, big need for small, agile vehicles. You know, 0:10:28.200 --> 0:10:32.280 Indonesia has led the way for for these types of transportation, 0:10:32.800 --> 0:10:35.000 and this is something that we're seeing as a trend 0:10:35.000 --> 0:10:36.280 all over to Southeast Asia. 0:10:36.920 --> 0:10:39.280 So what does your growth look like like going forward? 0:10:39.320 --> 0:10:42.640 If you double your download since March and you've almost 0:10:42.720 --> 0:10:45.160 doubled your your driver pool, what do you expect in 0:10:45.200 --> 0:10:46.120 the next year or two. 0:10:47.640 --> 0:10:52.640 Yeah, well yet another we're experiencing double digit growths, right, 0:10:52.720 --> 0:10:55.480 so this is something that we're expecting over the next 0:10:55.840 --> 0:10:59.280 you know, twelve months even just the balance here. Right now, 0:10:59.320 --> 0:11:03.080 we're only the metropolitans and we're now expanding to the cities. 0:11:03.120 --> 0:11:06.640 There's about maybe another twenty odd cities that will be 0:11:06.679 --> 0:11:10.160 launching in the next sixty days. So it's been a 0:11:10.200 --> 0:11:13.560 it's been you know, quite busy for us this past 0:11:13.559 --> 0:11:14.120 few months. 0:11:14.240 --> 0:11:18.199 Yeah, sounds like it. I mean, are the chief customers 0:11:18.880 --> 0:11:23.600 of your service? Are they people going to work? Are 0:11:23.640 --> 0:11:29.720 they leisure travelers? How would you describe who is using 0:11:29.760 --> 0:11:31.080 and cast at any given time. 0:11:32.160 --> 0:11:36.240 I think we're alternative, you know, mode of transport really 0:11:36.559 --> 0:11:39.480 really one for emergency use cases for people want to 0:11:39.480 --> 0:11:44.840 get to their destination much faster, you know, for work especially, 0:11:44.880 --> 0:11:48.079 and also to get home to their families. Right, that's primary. 0:11:48.200 --> 0:11:52.440 So really the workforces are the main constituency for for 0:11:52.559 --> 0:11:57.440 my writers. Second would be really just anybody that you 0:11:57.480 --> 0:12:01.560 know would like to get there faster for for whatever reason. 0:12:01.920 --> 0:12:02.120 Right. 0:12:02.200 --> 0:12:05.439 So our demographic is quite large, so you'll see in 0:12:05.480 --> 0:12:08.200 the morning, in the evening rush hour, it's really more 0:12:08.240 --> 0:12:10.720 of the workforce and a little bit of the you know, 0:12:10.800 --> 0:12:14.960 more guys that need an affordable motor transportation because taxis, 0:12:15.000 --> 0:12:18.400 as you can imagine, can get very expensive, especially when 0:12:18.440 --> 0:12:21.800 you're when you're on the road for for a long time. 0:12:21.840 --> 0:12:24.680 You know, an hour or two hour drive would really 0:12:24.720 --> 0:12:27.120 be would cost you a lot more. So we have 0:12:27.240 --> 0:12:30.199 those people that want a more efficient ride and also 0:12:30.240 --> 0:12:33.760 a more cheaper ride. But in the you know, throughout 0:12:33.800 --> 0:12:36.560 the day, as you go closer to you know, the weekend, 0:12:37.360 --> 0:12:41.280 it gets pretty congested, even in the off peak hours, 0:12:41.480 --> 0:12:44.200 so you just really get a wider demograph for even 0:12:44.240 --> 0:12:47.240 the more affluent base that just wants to get to 0:12:47.400 --> 0:12:49.400 places faster. So it's I think it's a little bit 0:12:49.400 --> 0:12:53.880 of both. And as we expand to the provincial cities, 0:12:54.920 --> 0:12:58.559 there's actually less and less cars and more motorcycles. If 0:12:58.559 --> 0:13:01.800 you go outside of Metro Manil, the racial between cars 0:13:01.840 --> 0:13:05.000 to motorcycle is eighteen is to one, So we become 0:13:05.040 --> 0:13:08.520 the dominant form of transportation. As you can imagine, buying 0:13:08.520 --> 0:13:11.679 a motorcycle is a lot cheaper than getting a car. 0:13:12.120 --> 0:13:14.240 So this is something that a lot of people use, 0:13:14.320 --> 0:13:16.760 as you know, not just their family car, not just 0:13:16.800 --> 0:13:19.120 their work car, but also as a means for livelihood, 0:13:19.160 --> 0:13:21.760 which is what we're trying to really espouse is give 0:13:21.840 --> 0:13:22.760 people more jobs. 0:13:22.920 --> 0:13:25.640 George, you, I mean, it seems like from looking at 0:13:25.679 --> 0:13:29.520 your CV, you've been very active and still are in 0:13:29.760 --> 0:13:35.680 media and content creation, entertainment, that sort of thing. Now 0:13:35.679 --> 0:13:41.600 transportation is a wholly different industry. How did that transition happen? 0:13:41.800 --> 0:13:44.360 And what does what does your exit look like? Do 0:13:44.400 --> 0:13:46.439 you have an IPO planned? 0:13:47.640 --> 0:13:49.840 I think everybody wants to have that type of exit. 0:13:49.920 --> 0:13:52.640 Right for now, we're just trying to open to more 0:13:52.679 --> 0:13:56.800 cities and serving more customers. I think my media background 0:13:56.840 --> 0:14:00.320 really helps and telling the story, and it is the 0:14:00.360 --> 0:14:04.760 story of freedom getting unshackled from traffic. You know, in 0:14:04.880 --> 0:14:07.840 the Philippines, especially in the Metro Manila, a lot of 0:14:07.880 --> 0:14:11.080 your major and minor decisions revolves around where you live 0:14:11.160 --> 0:14:12.719 and how far it is to get to where you're 0:14:12.720 --> 0:14:15.240 supposed to go, whether it's going on a date or 0:14:15.320 --> 0:14:18.360 you know, putting your kids through school. The daily commute matters. 0:14:18.960 --> 0:14:21.040 So this is something that I think a lot of 0:14:21.040 --> 0:14:23.920 people use just because it allows them to do a lot, 0:14:24.040 --> 0:14:26.960 you know, more things in the day and being able 0:14:27.000 --> 0:14:31.000 to really create that relate that compelling story to people 0:14:31.560 --> 0:14:34.520 is something that really has helped our company grow. 0:14:35.200 --> 0:14:37.920 All right, great talking to you, George, and we wish 0:14:37.960 --> 0:14:39.800 you the best luck. Will continue to watch to see 0:14:39.840 --> 0:14:45.920 if this astronomical growth goes forward. George Royaka there. He's 0:14:45.960 --> 0:14:48.520 the CEO of Ancas and the Philippines. It's like the 0:14:48.600 --> 0:14:50.800 uber I Guess of motorcycles. 0:14:51.200 --> 0:14:54.840 You're listening to the tape Can't Live program Bloomberg Markets 0:14:54.880 --> 0:14:58.640 weekdays at ten am Eastern on Bloomberg Radio. Tune it up, 0:14:58.680 --> 0:15:00.120 Bloomberg dot Com. 0:15:00.000 --> 0:15:01.280 The Bloomberg Business App. 0:15:01.320 --> 0:15:04.080 You can also listen live on Amazon Alexa from our 0:15:04.160 --> 0:15:08.520 flagship New York station, Just say Alexa, play Bloomberg eleven thirty. 0:15:10.320 --> 0:15:13.640 So our question of m Live Question of the week 0:15:13.920 --> 0:15:16.840 is has the commercial real estate crisis escalated? 0:15:16.960 --> 0:15:17.840 We asked this. 0:15:17.760 --> 0:15:20.440 At a time when we work sharers are slumping. It's 0:15:20.480 --> 0:15:23.560 not become kind of a penny stock memish thing. And 0:15:23.600 --> 0:15:26.360 the question is, has you know, has this crisis really 0:15:27.040 --> 0:15:30.640 begun and gotten crazy? And the person I want to 0:15:30.640 --> 0:15:34.600 ask about this is Mark Dixon. He's the CEO of IWG. 0:15:35.360 --> 0:15:41.320 This is a brand that includes Regis spaces HQ signature. 0:15:41.440 --> 0:15:47.400 Actually we were competitor. So the question here is what 0:15:47.520 --> 0:15:50.960 is the outlook. I mean, have enough people returned to 0:15:51.200 --> 0:15:56.080 office that a lot of these office spaces can move 0:15:56.160 --> 0:15:59.480 forward into the future. So, Mark, thank you so much 0:15:59.480 --> 0:16:03.040 for joining us. I mean, you say eight million plus 0:16:03.080 --> 0:16:05.720 people use IWG workspaces. 0:16:06.840 --> 0:16:07.480 What are you. 0:16:07.520 --> 0:16:10.640 Seeing in terms of the trends of people coming back? 0:16:11.120 --> 0:16:15.080 Is this escalating and what's the way forward as we 0:16:15.120 --> 0:16:16.040 get back into the farm. 0:16:16.840 --> 0:16:21.040 Yeah, well, look, thanks very much for having me. We're 0:16:21.080 --> 0:16:23.400 in a similar business that we work, but we're not 0:16:23.480 --> 0:16:27.320 exactly the same. Our network is very diversified. 0:16:27.520 --> 0:16:27.720 You know. 0:16:27.800 --> 0:16:31.360 We a large part of our customers were actually already 0:16:31.400 --> 0:16:32.120 working from home. 0:16:32.200 --> 0:16:33.400 We have a. 0:16:33.360 --> 0:16:37.240 Significant business supports people working from home. We also have 0:16:38.080 --> 0:16:42.160 buildings very much in the suburbs and in rural locations, 0:16:42.200 --> 0:16:46.239 not just in the big cities. So what we published 0:16:46.240 --> 0:16:50.680 this week, actually the day before, we work's announcement record 0:16:50.720 --> 0:16:53.840 results for us with our revenues up to record levels 0:16:54.960 --> 0:16:58.640 and also profits hitting a record level. So you know, 0:16:58.680 --> 0:17:01.800 for us, we're producing seeing a lot of cash and 0:17:01.960 --> 0:17:06.040 we're growing very quickly. So the market has changed. It's 0:17:06.080 --> 0:17:08.680 not that the real estate market is not there anymore. 0:17:08.880 --> 0:17:13.440 It's changed, and it's changed we think fundamentally and forever. 0:17:14.000 --> 0:17:18.600 And this is really technology changing how people can work 0:17:18.680 --> 0:17:21.480 and most importantly where they can work. So we're the 0:17:21.560 --> 0:17:25.520 leaders globally in hybrid work. We operate in one hundred 0:17:25.560 --> 0:17:32.000 and twenty countries. We have four thousand locations and companies 0:17:32.040 --> 0:17:35.800 and individuals are working with us in a completely different way, 0:17:35.880 --> 0:17:37.199 and that business is growing. 0:17:38.000 --> 0:17:40.040 I will say, I will I will say that we 0:17:41.080 --> 0:17:44.680 Bloomberg News used Regis office space. I remember visiting the 0:17:44.760 --> 0:17:47.040 Regis and Munich when I was a CUB reporter twenty 0:17:47.119 --> 0:17:50.639 years ago, and at my Berlin office right on the 0:17:50.640 --> 0:17:53.840 Brandenburg Gate, there is a Regis in our building. I 0:17:53.840 --> 0:17:57.600 imagine we started out leasing that space as well. So 0:17:57.640 --> 0:18:01.040 you've been around for a while, because I've been around 0:18:01.080 --> 0:18:04.280 for a while. Does does that give you some advantage 0:18:04.320 --> 0:18:10.480 over a bombastic upstart like a we work? I mean, 0:18:10.520 --> 0:18:11.320 you're very different. 0:18:12.160 --> 0:18:15.400 We're very different business do we work? So Look, there's 0:18:15.440 --> 0:18:18.960 nothing wrong with the industry that we works in. It's 0:18:19.119 --> 0:18:21.040 just you know, they had a bad start. I mean 0:18:21.080 --> 0:18:23.480 they started at the top of the market. They grew 0:18:23.600 --> 0:18:26.480 very quickly, had a lot of capital, were the opposite 0:18:26.920 --> 0:18:30.199 the entire business has been built with three hundred million 0:18:30.680 --> 0:18:35.080 of core capital, and you know we have created everything 0:18:35.160 --> 0:18:40.280 from that. But you know, overall, you know, this isn't 0:18:40.320 --> 0:18:43.720 this is new real estate. This is digital real estate. 0:18:43.760 --> 0:18:47.200 This is providing space to people on a platform. We 0:18:47.200 --> 0:18:51.720 were doing it for Bloomberg fifteen years ago, right at 0:18:51.760 --> 0:18:56.120 the beginning of Bloomberg basically, and many many other companies 0:18:56.200 --> 0:18:59.000 use us around the world and it is a growing 0:18:59.040 --> 0:19:00.400 part of the real estate industry. 0:19:01.320 --> 0:19:05.520 So talk to me about the small towns, the I 0:19:05.520 --> 0:19:08.199 guess non traditional places that you're setting up some of 0:19:08.240 --> 0:19:10.440 these offices. I know this is a key strategy for you. 0:19:11.160 --> 0:19:15.679 What's the thinking there in terms of well from a 0:19:15.680 --> 0:19:19.840 company perspective too, why do they rent office space in 0:19:19.920 --> 0:19:22.360 places outside of major metro centers. 0:19:22.960 --> 0:19:26.560 Look, we don't rent office space just to sort of 0:19:27.080 --> 0:19:29.760 I know, we're not in the real estate business as such. 0:19:29.920 --> 0:19:33.400 You know, we provide workspace as a platform. So when 0:19:33.440 --> 0:19:37.159 we sign people up or companies up, they're using us 0:19:37.160 --> 0:19:40.359 across the whole platform. So they're not it's not companies 0:19:40.440 --> 0:19:44.120 taking space generally in one particular location. 0:19:44.520 --> 0:19:46.800 Sure, but why are they looking at these small a 0:19:46.880 --> 0:19:47.680 small town areas. 0:19:47.760 --> 0:19:50.159