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Speaker 1: Hello, and welcome to The Credit Edge, a weekly markets podcast.

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Speaker 1: My name is James Crumbie. I'm a senior editor at Bloomberg.

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Speaker 1: Today's guests are Diva Patil, who covers India's credit markets

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Speaker 1: for Bloomberg News from Mumbai. She's been all over some

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Speaker 1: of the biggest stories from Asia recently and we're delighted

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Speaker 1: to have her on the show. We're also pleased to

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Speaker 1: welcome Cecilia Chan, who looks at Chinese consumer product companies

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Speaker 1: and casinos, among other things, for Bloomberg Intelligence. Cecilia joins

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Speaker 1: us from Hong Kong. We'll be discussing the reopening of

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Speaker 1: China's economy with her in a bit. That's a story

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Speaker 1: that has huge implications for global finance and I really

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Speaker 1: look forward to hearing Cecilia's take on that. But before

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Speaker 1: we look at China, Divia, what's the mood in India

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Speaker 1: right now? It's been one of the fastest growing economies.

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Speaker 1: How is it emerging from COVID and what are the

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Speaker 1: big risks there? Oh, India is actually one of the

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Speaker 1: fastest growing economies in the world and the local demand

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Speaker 1: is the main driver for that for that growth right now,

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Speaker 1: Currently in India. What's rocking the financial markets and is

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Speaker 1: making headlines is the story behind the tycoonon Gotham Adani

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Speaker 1: and his companies and also Vedanta's very interesting. Yeah, it's

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Speaker 1: a vast economy and a huge population that rivals China,

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Speaker 1: so we're watching that one very closely. But but you

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Speaker 1: mentioned that, Danny, before we take into that credit story

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Speaker 1: the listeners who may not be familiar, what is Adani

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Speaker 1: and why do we care? And why has it dominated

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Speaker 1: the headlines in Asia and all around the world over

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Speaker 1: the last few months. Yes, the attorney name has dominated

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Speaker 1: headlines worldwide in recent times and it has to be

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Speaker 1: because Gotham Adani became Asia's richest man last year and

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Speaker 1: was second only to Elon Musk in the world at

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Speaker 1: one point, and unlike Musk, Adani was relatively unknown outside India. Now,

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Speaker 1: to give a brief back about the man himself, he

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Speaker 1: was born to a small textile motion family in nineteen

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Speaker 1: sixty two in the western state of Gujarat. He dropped

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Speaker 1: out of university and began his career sorting diamonds for

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Speaker 1: a firm in Mumbai. He later imported materials, used and

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Speaker 1: manufactured goods, but by the nineties. Mid nineteen nineties he

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Speaker 1: was managing the Mundra Port, a port which he now owns.

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Speaker 1: And as the years passed by, he emerged as India's

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Speaker 1: infrastructure king, diversifying from mine, sports and power plants into airports,

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Speaker 1: data centers and defense. You know. In fact, to give

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Speaker 1: some numbers, Adani has gained control of seven airports and

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Speaker 1: almost a quarter of India's air traffic. In fact, you know,

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Speaker 1: he has also unveiled plans to boost renewable energy capacity

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Speaker 1: almost eight folds by twenty twenty five. Now, what has

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Speaker 1: got him to the spotlight is one hundred page research

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Speaker 1: report issued in a late Jane with the It was

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Speaker 1: a report from Hinden Work Research, and the report has

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Speaker 1: accused the billionaire of pulling the largest korn in corporate history.

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Speaker 1: It alleged the Adorny Group of stock manipulation and accounting

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Speaker 1: fraud and you know that has triggered an unprecedented route

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Speaker 1: in the in bonds and shares of the Adorney Group. Now,

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Speaker 1: the conglom rate has strongly refuted and repeatedly refuted all

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Speaker 1: the allegations made by the US shot seller and has

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Speaker 1: called them focus. But there's a lot of concerns still

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Speaker 1: over whether it can pay back it's huge debtload. And

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Speaker 1: the news really has shown a light on all of

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Speaker 1: the Indian companies, the way they run, the way they're structured,

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Speaker 1: their complex you know, capital arrangements, and the shell companies

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Speaker 1: that they have, and all of the other you know,

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Speaker 1: the sprawling businesses that they run. What is the latest

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Speaker 1: news on that in terms of you know that their

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Speaker 1: actual equity prices, that bond prices. How's the market reacting

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Speaker 1: to the latest news right? So Ever, since the Hiddenburgh

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Speaker 1: research report was out, there was an unprecedented route in

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Speaker 1: the in the company's bonds and stocks. But over a

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Speaker 1: period of time, we've seen investor confidence restored back. We've

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Speaker 1: seen most of the Adanney bonds are out of the

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Speaker 1: distressed territory, which is they're trading above the seventy cents mark.

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Speaker 1: And we've also seen certain stocks of the group pair losses.

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Speaker 1: Now that has come by because you know, there have

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Speaker 1: been banks like JP Morgan and Goldman Sachs who have

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Speaker 1: told their clients that they see part value in Ardane's

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Speaker 1: bonds because of the underlying assets. And similarly, as we

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Speaker 1: had also seen that Rajiv Jens JQUG Partners has bought

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Speaker 1: shares in adorney groups from the family Trust again on

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Speaker 1: the basis of hardcore assets now a partial this. Adani

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Speaker 1: and his aids have been in a damage repair mode. Uh.

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Speaker 1: They have you know, they are they're trying to project

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Speaker 1: themselves as as very responsible borrowers. They're prepaying their debt,

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Speaker 1: they are paying the debt on time. They have also

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Speaker 1: cut down on their aggressive growth targets and all kinds

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Speaker 1: of firefighting is being done by the management to restore

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Speaker 1: back the confidence. So basically, we had a ton of

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Speaker 1: news for weeks. It was very, very negative and only

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Speaker 1: over the last few days it seems to have calmed

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Speaker 1: down a bit. Has the liquidity crisis been resolved. So

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Speaker 1: I wouldn't say that the liquidity crisis has been completely resolved,

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Speaker 1: but yes, it's it's it's a lot better because the

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Speaker 1: taikoon uh you know um uh is on road shows.

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Speaker 1: They are you know, speaking to a lot of investors.

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Speaker 1: They're detailing their refinancing plans. They they have also you

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Speaker 1: know repaid uh uh. They have also repaid close to

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Speaker 1: two to two point five billion dollars worth of loans

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Speaker 1: which were packed by shares. So a lot of a

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Speaker 1: lot of efforts are being taken by the by the

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Speaker 1: group and they are in a constant touch, the constant

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Speaker 1: touch with their investors to make sure to you know,

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Speaker 1: to highlight that the company's finances are in control. These

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Speaker 1: are not just local investors, right, there are investors all

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Speaker 1: around the world. Absolutely, These are just not local investors.

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Speaker 1: These are investors all around the world. And that's that's

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Speaker 1: also because you know, the conglum Rate has raised about

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Speaker 1: eight billion dollars from the international bond buyers in recent

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Speaker 1: years and an equal amount from global banks in form

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Speaker 1: of foreign currency loans. So investors across the globe are

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Speaker 1: being affected and that's one of the reasons why the

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Speaker 1: group is meeting investors also globally. They started off with

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Speaker 1: the you know, investor meetings in Singapore and Hong Kong.

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Speaker 1: They had one in their headquarters in India and Gudart.

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Speaker 1: Currently they are in Dubaile, London and US. So they

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Speaker 1: are meeting, touching base with all investors. And one reason,

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Speaker 1: you know, one of the reasons why investors had brought

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Speaker 1: into the Attorney Group was because you know, they betted

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Speaker 1: that the tycoon strategy of dovetailing his interest with the

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Speaker 1: government's development program would pay off. So what's the latest?

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Speaker 1: What are we watching for next? Is there a big

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Speaker 1: maturity coming to you? Is there some kind of trigger

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Speaker 1: that might put them into more trouble? So currently, there

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Speaker 1: is no big maturity coming due for the Attorney Group companies.

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Speaker 1: In fact, there are interest payments that are due, but

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Speaker 1: so far the group has always shown that they have

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Speaker 1: paid the interest on time. Even even the group has

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Speaker 1: mentioned that you know, they that the companies face no

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Speaker 1: material refinancing risk and uh and uh and and there

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Speaker 1: are no liquidity near term liquidity requirements by the company.

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Speaker 1: UM sources have been telling us that, you know, the

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Speaker 1: company may look to refinance or replace with new fundraising

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Speaker 1: basically the Adanney Green Energy bonds. UM sources have told

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Speaker 1: us that the company may replace the existing dollar notes

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Speaker 1: with more longer term fifteen year kind of maturity. But

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Speaker 1: UM the groups a CFO or Robbie Singh at one

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Speaker 1: of the recent gatherings is clearly mentioned that the group,

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Speaker 1: the conglomerate itself isn't looking to refinance debt or to

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Speaker 1: inject capital. When we talk to the lenders and the

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Speaker 1: investors here How are they feeling about this situation? Are

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Speaker 1: they reassured? Are they much common now? Are they're happy

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Speaker 1: to lend mores this company? So yeah, of course they

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Speaker 1: are reassured because we must take into account that most

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Speaker 1: of Adani's debt is backed by hardcore assets. These are

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Speaker 1: cash generating assets and these are projects that will earn

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Speaker 1: a revenue over a period of time. Now, as far

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Speaker 1: as lending, that isn't very clear. I think still a

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Speaker 1: lot of investor confidence, A lot of confidence has to

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Speaker 1: be built into the creditors for you know, fresh lines

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Speaker 1: to be started. And as you mentioned, it's a very

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Speaker 1: key business for India and for the government. It's very

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Speaker 1: close to the Modi government. Is that an area of

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Speaker 1: reassurance for investors that it's so close to the government

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Speaker 1: or is it an area of risk? No? No, absolutely,

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Speaker 1: he is perceived Gotham Adani is perceived to have very

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Speaker 1: close ties with Prime Minister and Arendramodi. In fact, you know,

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Speaker 1: both of them hail from the same same state of Kujarat.

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Speaker 1: And you know, the tycoon's meteoric growth mirrors Moody's own

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Speaker 1: political journey to the top elected office. In fact, you

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Speaker 1: know um Aardani's corporate strategy also runs very parallel with

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Speaker 1: Mode's effort to develop the Indian economy. And you know,

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Speaker 1: when more they promised to reliable electricity connections to more Indians,

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Speaker 1: Ardani had doubled down on coal fired power production in fact,

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Speaker 1: and this this alignment is just not reflective in the

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Speaker 1: domestic affairs, but it also extends to the foreign affairs.

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Speaker 1: And in twenty twenty one, um, you know, Adani began

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Speaker 1: construction of a major potent Sri Lanka, and officials from

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Speaker 1: both the countries told that the project was was you know,

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Speaker 1: uh prompt you know, promoted by the Modi government because

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Speaker 1: they wanted to keep the Chinese influence away from the

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Speaker 1: island nation. So it's it's it's very clear. And obviously

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Speaker 1: investors also do take you know, the take confidence from

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Speaker 1: the fact that the tycoon Dani himself runs his corporate

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Speaker 1: strategy which is very close to India's own strategy. Is

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Speaker 1: it simply too big to fail? Yes, I mean see

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Speaker 1: the damage to billionaire Gotham Adani's empire could derail Prime

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Speaker 1: Minister and Arren Modi's economic plan. As the conglomerate operates

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Speaker 1: the largest chunk of infrastructure projects, including green energy in

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Speaker 1: Asia's third largest economy. In fact, Modis opponents you know,

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Speaker 1: have also highlighted that there are millions of small investors

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Speaker 1: which could be at risk because of the exposure of

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Speaker 1: state owned institutions in Adani's businesses. So largely yes, I mean,

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Speaker 1: failing of Adani could risk halting you know, Mod's economic

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Speaker 1: plan for the country. And when we step back a

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Speaker 1: bit and look at the situation, I mean, I know

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Speaker 1: we're in the midst of the storm. Here's still bit.

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Speaker 1: But is paying back the debt enough to save Danny?

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Speaker 1: Is that? Is that what they need to do or

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Speaker 1: is it really more of an issue of transparency. It's

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Speaker 1: more of an issue of transparency. Obviously, the debt load

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Speaker 1: is big, it's close to thirty billion dollars, but most

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Speaker 1: of his debt is also backed by a lot of

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Speaker 1: hardcore cash generating assets. So it is about debt, but

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Speaker 1: at the same time, it is also about transparency, about

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Speaker 1: corporate governance, about you know, decoding. Uh, the lot many

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Speaker 1: companies that he has in monitious um so it and

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Speaker 1: even the public float of his shares itself is pretty low,

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Speaker 1: so it does need a lot of transparency. So beyond

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Speaker 1: the situation. This is a situation that has caused you

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Speaker 1: huge ructions. It's called everyone's attention across the world. What

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Speaker 1: are the bigger implications for India's credit markets and even

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Speaker 1: beyond India, you know, to other emerging markets. Yeah, I

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Speaker 1: mean Adani in fact, has been one of the biggest

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Speaker 1: issuers from the Indian credit market in recent years. Eight

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Speaker 1: billion dollars in a very short span of time is

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Speaker 1: what he has followed. And investors across the globe, you know,

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Speaker 1: they brought into his into his death because they wanted to.

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Speaker 1: They were betting on India's strong economic growth. So any

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Speaker 1: failure would definitely have repercussions across credit markets. Let it

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Speaker 1: be India or let it be overseas. Has this sort

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Speaker 1: of news scared away for an investors so far? I

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Speaker 1: wouldn't say that it has scared them away, but definitely

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Speaker 1: they are weighing the situation very closely. They follow in

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Speaker 1: the dates very closely. They are looking they're watching out

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Speaker 1: for every news headline that's coming up about prepaymentary financing,

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Speaker 1: private placements. In fact that the group is on road

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Speaker 1: shows currently, so clearly there is there is a lot

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Speaker 1: of interest, and every every move of the tycoon and

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Speaker 1: his group is being watched very carefully. Yeah, Pas, Bloomberg News,

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Speaker 1: thank you so much for joining us. This is a

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Speaker 1: fascinating story with broad implications, and we look forward to

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Speaker 1: reading all of your scoops on the Bloomberg terminal and

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Speaker 1: of course at Bloomberg dot com. Switching gears a bit here.

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Speaker 1: As I mentioned earlier, we are very fortunate to have

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Speaker 1: Cecilia Chan from Bloomberg Intelligence who's based in Hong Kong.

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Speaker 1: What's the mood on the ground where you are, Cecilia.

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Speaker 1: The masks came off only very recently, after one of

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Speaker 1: the longest mandates for wearing them of anywhere in the world.

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Speaker 1: How are people feeling about that? Yeah, actually, it's great.

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Speaker 1: Everybody is a mask. Well, well, surprisingly, I think like

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Speaker 1: if you'll walk on the street, fifteen percent of people

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Speaker 1: are still wearing the mask. And but then in the

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Speaker 1: Bloomberg office most of us a mask. And finally I

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Speaker 1: can see some faces you know, of our colleague. That's great,

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Speaker 1: that's great. The last time I was there, there was

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Speaker 1: a fear of a very hefty fine if you didn't

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Speaker 1: wear a mask. Even in the Street, which seem seemed

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Speaker 1: quite surprising to me because I live in New York. Yeah,

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Speaker 1: people tend to still wear of masks and in some

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Speaker 1: crowded places like in the trains and the US. So yeah,

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Speaker 1: so we're here really to talk about the reopening of China,

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Speaker 1: which has started since early December. But it's a huge

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Speaker 1: story for the global economy. It will feed through to rates,

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Speaker 1: it will feed through to growth, It has all sorts

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Speaker 1: of implications for inflation. So the whole world really is

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Speaker 1: very very fixated on this story, and you're right on

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Speaker 1: top of it in terms of these sectors and the

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Speaker 1: companies you cover. So just kind of wanted to get

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Speaker 1: a sense from you broadly. You know, where are we

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Speaker 1: in that big reopening that China is going through right now? Well,

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Speaker 1: China has been reopened for like three months really and

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Speaker 1: so well at the beginning there was a searching in

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Speaker 1: COVID infections, but then this has since Pete so we

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Speaker 1: see that like the mobility measures are now recovering back

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Speaker 1: to the pre COVID level, and we do see consumers

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Speaker 1: coming out start shopping in physical shops and then going

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Speaker 1: to restaurants to eat, and so we do see like,

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Speaker 1: for example, factors in catering offline, retail, house and tourism

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Speaker 1: related services. They are benefiting from this our China's we're opening.

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Speaker 1: So those are the main sectors that we think will

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Speaker 1: do best out of this. Yep, that's what we are thinking.

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Speaker 1: And so with consumers really getting back to the stores,

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Speaker 1: physical stores, bricks and mortar suspending, how does that affect

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Speaker 1: the e retailers that I know you cover quite intensively. Yeah, well,

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Speaker 1: for the e commerce growth, we think it will slow

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Speaker 1: down a bit compared to the total retail cells because

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Speaker 1: we are now forecasting, for example two twenty three, the

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Speaker 1: total retail cells will grow by seven percent this year

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Speaker 1: versus last year is like a minus serop on two percent.

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Speaker 1: But online retail growth is going to slow down a

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Speaker 1: bit to around five percent this year versus eleven percent

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Speaker 1: last year. And so we do think that online retail

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Speaker 1: cells to slow down a bit, but then at the

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Speaker 1: same time, I think it's still going to grow. The

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Speaker 1: reason is because the consumers authorities changed their purchasing pattern

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Speaker 1: to online instead of offline, and also there's some easing

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Speaker 1: of COVID costs or logistic disruption, and so it's going

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Speaker 1: to actually help people to buy. But at the same time,

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Speaker 1: I think in the first quarter we will do see

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Speaker 1: like people starting to buy more from the physical shops,

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Speaker 1: but then later on it will go They will go

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Speaker 1: back to the online purchasing. So are you noticing that

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Speaker 1: where you are a lot more people are in the

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Speaker 1: shops now? Yep, definitely. And we do see like tourists

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Speaker 1: coming back to Hong Kong. And is it what are

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Speaker 1: they buying most? Is it discretionary self? Is it I

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Speaker 1: don't know, jewelry, is it TVs? Mean? What what's what's

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Speaker 1: getting defined right now? Well, I think the first day

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Speaker 1: will still the first stage will still be like restaurants,

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Speaker 1: you know, benefiting from that, and then um, the discretionary

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Speaker 1: spending like apparels, jewelry, they may come later, you know.

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Speaker 1: And so yeah, that is what we are podcasting right now. Okay,

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Speaker 1: So within the sectors, when the ones you're talking about,

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Speaker 1: which companies are we really looking at? Which which ones

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Speaker 1: we focus in terms of winners and losers if you like. Well,

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Speaker 1: if we are saying about the for the e commerce business, um,

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Speaker 1: I think Ali Baba JD dot com these two are

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Speaker 1: the giant um e commerce retellers in e retellers in China,

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Speaker 1: and so those two definitely will benefit from that UM.

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Speaker 1: And also there's another company commedy to one UM. It's

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Speaker 1: a each is the largest UM Chinese local services company

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Speaker 1: which provides like food delivery UM and also like two

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Speaker 1: hotels and rooms booking, et cetera. And so this company

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Speaker 1: will also benefit from the from the pickup of our

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Speaker 1: local demand. And are there any companies that are still

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Speaker 1: struggling with with the reopening that won't do so well?

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Speaker 1: Do you think? Uh? Well, I think for the e

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Speaker 1: commerce treaded issuers because those are the giant ones, right

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Speaker 1: and so probably they will benefit from that. Even though

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Speaker 1: the online UM sales will growth will slow down a bit,

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Speaker 1: but then because of the marsh market position et cetera UM,

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Speaker 1: and so it's going to support their their their UM

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Speaker 1: the position. But at the same time, we do see

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Speaker 1: some companies like competition, you know, pricing competition from for

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Speaker 1: the for these e commerce and retell us UM for example,

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Speaker 1: from the social UM e commerce that we set like

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Speaker 1: for example, the platforms that involve like short videos, you know,

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Speaker 1: those ones are the competition for the for our credit issuers.

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Speaker 1: But UM, we don't think this will be a big

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Speaker 1: credit risk for them for now. So when you look

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Speaker 1: at it from a credit standpoint, this is obviously the

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Speaker 1: credit edge we're talking about here. We have a lot

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Speaker 1: of people that look at that that angle of things.

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Speaker 1: How do you how does this all play out? Are

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Speaker 1: they particularly cheap sectors at the moment or cheap companies

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Speaker 1: or very rich ones or how how priced in is

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Speaker 1: this whole reopening right now? Well, I think part of

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Speaker 1: the reopening has already priced in into the e commerce issuers.

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Speaker 1: But we do see that UM they will still like

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Speaker 1: have UM tightening potential for Ali, Babajd, dot Com, um

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Speaker 1: and made one. The reason is because if we compare

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Speaker 1: them to the US UM e retellers, they still have

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Speaker 1: the potential to tighten. And especially we don't think there

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Speaker 1: are a lot of UM risks on on these e

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Speaker 1: commerce businesses um And especially because they have very good

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Speaker 1: UH financial fossibility, they have very strong balance sheet strength

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Speaker 1: and so it's going to support their their tread to profile.

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Speaker 1: So we do see that these three companies they may

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Speaker 1: still have a potential tightening. But if you talk about

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Speaker 1: like for example, the advertising um UH that the advertising

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Speaker 1: companies like a wayboard but I do then these two

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Speaker 1: may suffer a little bit, performance may come um like

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Speaker 1: their earnings performance may actually recover slightly slower than these

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Speaker 1: e commerce businesses. The reason is because the evietellers, they

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Speaker 1: tend to benefit from the China's re opening because consumers

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Speaker 1: will spend, right. But at the same time, for the advertisers,

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Speaker 1: they may want to make sure that there is enough

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Speaker 1: pick up in the consumer confidence and then they will

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Speaker 1: start spending on the advertisings. Right. So for way Board especially,

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Speaker 1: the pick up of earnings will be slightly slower than,

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Speaker 1: for example, the ev tellers, and even for buying. Very interesting.

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Speaker 1: We're talking about US dollar debt, right, not talking about

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Speaker 1: local currencies. It's dollars denominated. Yes, it's all dollar denominating ones.

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Speaker 1: And there's a fair amount of participation already from international investors. Yeah,

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Speaker 1: that's right, Okay. Interesting. One of the big trades, I mean,

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Speaker 1: I look quite closely at US credit and I was

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Speaker 1: looking at the high yield trades of last year, and

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Speaker 1: one of the most successful was buying bond in casinos

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Speaker 1: based in Macau, which is the you know, basically the

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Speaker 1: big vegas of China. UM and there just seemed to

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Speaker 1: be this huge rebound in those in those bonds. What's

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Speaker 1: going on there at the moment, Cecilia, what do you

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Speaker 1: what's your view of that of that sector? Yeah, UM,

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Speaker 1: the sector actually review it positively. The reason is because

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Speaker 1: of gain um Chinese reopening in December and also UM

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Speaker 1: they have uh we started they have resumed the group

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Speaker 1: visas and also the e visas for the Chinese tourists

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Speaker 1: to come to Macau. UM that would that happened since

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Speaker 1: like November, and so actually we do see Macau's gross

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Speaker 1: gaming revenue recovering and during the past like Lunar New Year,

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Speaker 1: we do see that there's a rebound in recovery. Actually

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Speaker 1: during um UH the GGL during the Chinese You year,

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Speaker 1: it rebounded to sixty percent of twenty nineteen level. And

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Speaker 1: so it's actually um surprised, a surprise to the market.

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Speaker 1: And so for our BI team, we actually revise our

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Speaker 1: roast gaming revenue forecast for Macau this year to fifty

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Speaker 1: two percent of pandemic level, compared to our previous forecast

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Speaker 1: of forty two percent base. Previously, we thought there could

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Speaker 1: be like some uh maybe the COVID cases with spike

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Speaker 1: and then it will it will slow down the recovery,

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Speaker 1: but actually it's not. People are I guess the panel

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Speaker 1: demand is just so key, you know, from China, and

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Speaker 1: so people come to to to Macau during Chinese year.

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Speaker 1: And then um, I guess the next step will be

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Speaker 1: on the sustainability of the recovery, whether people will really

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Speaker 1: like come back to Macau, you know. And so far

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Speaker 1: we do see that, um, it's actually improving, yeah, gradually,

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Speaker 1: and then the sustainability is there, and especially um you know,

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Speaker 1: the tourist attractions around Macau like Hong Kong, Wang Joe

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Speaker 1: and high Land Province, they are also opening and so

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Speaker 1: it attracts the tourists to come to um for example,

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Speaker 1: to my Cow and to Hong Kong, you know. And

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Speaker 1: so yeah, so we do see Macau is recovering quite

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Speaker 1: quite nicely. Yeah, you expected to get back to one

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Speaker 1: hundred percent anytime soon, Oh well, one hundred percent maybe

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Speaker 1: in twenty twenty four, because we do see like tourists,

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Speaker 1: maybe the Chinese tourists may also go to I don't know,

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Speaker 1: to to other Asian countries like Korea, which just announced

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Speaker 1: that they are no longer checking the coca tests from

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Speaker 1: from from the China from China for the Chinese tourists,

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Speaker 1: and so yeah, I think there will be some like

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Speaker 1: demand going to overseas traveling. Yeah, okay, very interesting. We

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Speaker 1: can never talk about credits seriously without discussing risk. And

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Speaker 1: obviously regulatory risk is one of the keys affecting the

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Speaker 1: China Chinese Internet and gaming market. Um, how do you

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Speaker 1: expect that to play out? I mean, what are the

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Speaker 1: chances of an easing of those risks this year? Well

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Speaker 1: for Macau game gaming actually, after the government entered into

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Speaker 1: the new ten year gaming concessions with the six licensees, UM,

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Speaker 1: we think the biggest regulatory risk should be eliminated. And

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Speaker 1: also with the opening of Macau and China's order and

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Speaker 1: so it should support Miccau tourism recovery. And so we

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Speaker 1: actually don't see um incremental risk for the Macau gaming

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Speaker 1: sector in the coming maybe mixed, UM like twelve to

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Speaker 1: twenty four months, we don't see that. And so yeah,

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Speaker 1: for Macau gaming, we are not to worry about UM

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Speaker 1: regulatory risk and for the China Internet risk previously, regulatory

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Speaker 1: risks really is the biggest risk for the factor. UM.

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Speaker 1: But I guess um starting from twenty and twenty two,

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Speaker 1: we do see that there are some easing of the

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Speaker 1: regulatory risk, but we won't say it disappeared. And so

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Speaker 1: but as UM like currently they are, China is having

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Speaker 1: the two sessions meeting right, and then they do mention

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Speaker 1: that china economic growth will be the key focus. And

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Speaker 1: also back in December they have the Central Economic Work

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Speaker 1: Conference and then they also mentioned the same thing, and

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Speaker 1: they also said they would support the internet companies in

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Speaker 1: for example, in development and also creating chops, and they

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Speaker 1: should also focus in self reliance and self improvement. And

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Speaker 1: so we think that that actually suggests the industry over

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Speaker 1: side maybe like let's heavy ended in the future. And

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Speaker 1: so we do see that, for example, in twenty twenty

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Speaker 1: twenty two, there are some positive regulatory with the development

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Speaker 1: for example, the fintech Giant Ends Group, which Ali Baba

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Speaker 1: owned about a third of the ownership, they got approval

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Speaker 1: to raise one point five billion US dollar for its

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Speaker 1: consumer finance units and so and also like important gains,

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Speaker 1: a few approvals have resumed so which that will benefit

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Speaker 1: like ten cents. And so we do see that there

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Speaker 1: are some easing of the regulatory risks in the internet sector,

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Speaker 1: and so UM I think in the past year, we

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Speaker 1: do see that these major internet companies have been like

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Speaker 1: showing that they can manage the risk and adjust their

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Speaker 1: strategies to cope with the regulatory changes, and so I

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Speaker 1: think that will also help the interests the internet insurance

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Speaker 1: to maintain their strong credit profiles. That's it, thank you. So,

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Speaker 1: just going back to the reopening in very broad terms,

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Speaker 1: is there any chance that the government might reverse the

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Speaker 1: current policy and go back to any of the lockdowns,

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Speaker 1: any of the restrictions, any of the COVID policy that

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Speaker 1: we've seen over the last few years. I hope now,

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00:27:36,840 --> 00:27:39,840
Speaker 1: but at least well, the government has been mentioning kept

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00:27:39,840 --> 00:27:43,399
Speaker 1: mentioning about the focus now is on economic growth, and

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Speaker 1: so I don't really see the country, you know, reverting

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Speaker 1: back to a zero zero COVID policy, because it's actually

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Speaker 1: like we're really ruining the economic growth. So but we

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Speaker 1: don't know. I cannot as a for the government. Okay, great, well,

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Speaker 1: let's hope you're right, Cecilia. It's very important to keep

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Speaker 1: on top of those sectors right now and get a

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Speaker 1: handle on the reopening of China's economy. One of the

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Speaker 1: biggest stories in global finance right now we'll read all

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Speaker 1: of your analysis of Chinese consumer companies and the sector

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Speaker 1: with great interest on the Bloomberg Terminal. Thank you so much.

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Speaker 1: Cecilia Chan of Bloomberg Intelligence, thank you, and thanks again

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Speaker 1: to Diva Patil from Bloomberg News. Read all of her

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Speaker 1: scoops on the terminal and at Bloomberg dot Com. Really

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Speaker 1: important to keep an eye on that at Danny's Story.

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Speaker 1: No matter where you're based, Diva and her team will

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Speaker 1: continue to break a lot of news about that in

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Speaker 1: the coming weeks. I'm James Crumbie. It's been a pleasure

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Speaker 1: having you. See you next week on the Credit Edge.