1 00:00:00,040 --> 00:00:02,679 Speaker 1: Let's get to our guest, Lorraine Tan, director of Asia 2 00:00:02,720 --> 00:00:06,920 Speaker 1: Equity Research at Morning Star. Lorraine, I want to ask 3 00:00:06,960 --> 00:00:10,840 Speaker 1: you questions that I might otherwise put to a political analyst. 4 00:00:11,480 --> 00:00:13,160 Speaker 1: But but do you think that we are seeing a 5 00:00:13,200 --> 00:00:17,040 Speaker 1: little bit of of a reduction intentions now? Even though 6 00:00:17,040 --> 00:00:20,040 Speaker 1: we mentioned UM in our news flow, some of the 7 00:00:20,040 --> 00:00:22,760 Speaker 1: actions being taken by China. Is it a little bit 8 00:00:22,800 --> 00:00:27,920 Speaker 1: calmer today than yesterday? Uh, it probably is a little 9 00:00:27,960 --> 00:00:31,480 Speaker 1: bit calmer because UM, there's no you know, there's no 10 00:00:31,640 --> 00:00:36,240 Speaker 1: breakout of of of anything violent. I guess in that sense, 11 00:00:36,400 --> 00:00:39,919 Speaker 1: so there's there no accidents in the Straights for example. Well, 12 00:00:39,960 --> 00:00:42,800 Speaker 1: I think that does help UM, but overall, I don't 13 00:00:42,880 --> 00:00:46,040 Speaker 1: think it reduces the trend of jew. The heightened jew 14 00:00:46,159 --> 00:00:50,040 Speaker 1: political um this between the US and China that seems 15 00:00:50,080 --> 00:00:53,880 Speaker 1: to be here to stay. We're also looking at the 16 00:00:54,200 --> 00:00:57,480 Speaker 1: I guess hit that we're saying to taiwan assets. There's 17 00:00:57,520 --> 00:01:00,280 Speaker 1: kind of an interesting call coming through from so Gen 18 00:01:00,480 --> 00:01:03,400 Speaker 1: that you should short Taiwanese stocks while buying South Korean 19 00:01:03,440 --> 00:01:05,360 Speaker 1: shares as a hedge and really try and get your 20 00:01:05,640 --> 00:01:08,280 Speaker 1: exposure to the chip makers that way. Is that sort 21 00:01:08,280 --> 00:01:12,560 Speaker 1: of something that you would be looking at too UM No, 22 00:01:12,840 --> 00:01:15,679 Speaker 1: I think we tend to favor We tend to favor 23 00:01:15,840 --> 00:01:21,160 Speaker 1: the company's individual um characteristics more so so. I think 24 00:01:21,200 --> 00:01:24,800 Speaker 1: if there's a quality company like t s MC is um, 25 00:01:24,840 --> 00:01:28,560 Speaker 1: we definitely continue to to bobby buyers of t SMC 26 00:01:28,720 --> 00:01:32,760 Speaker 1: over others because of the its own competitive advantages. The 27 00:01:32,880 --> 00:01:35,920 Speaker 1: property was in China Lorraine very much at the center 28 00:01:36,000 --> 00:01:39,679 Speaker 1: of investors, I guess fears for how you position towards 29 00:01:39,760 --> 00:01:42,480 Speaker 1: the latter part of the year. You quite like Swire 30 00:01:42,520 --> 00:01:44,600 Speaker 1: properties though, and we've got a lot of concerns that 31 00:01:44,680 --> 00:01:47,240 Speaker 1: the developers earnings risk could actually escalate on these rate 32 00:01:47,319 --> 00:01:49,960 Speaker 1: hikes were seeing from the FED. Just tell us what's 33 00:01:50,000 --> 00:01:55,040 Speaker 1: behind your pick here? Yeah, I think the Swire pick 34 00:01:55,240 --> 00:01:58,760 Speaker 1: is very much you know, an entity that that you 35 00:01:58,800 --> 00:02:04,760 Speaker 1: know them has very long history of solid management strategy. 36 00:02:04,960 --> 00:02:07,600 Speaker 1: Then it's also got a very strong financial position as well. 37 00:02:08,080 --> 00:02:11,560 Speaker 1: We're also we also like Swire because of the anticipated 38 00:02:12,040 --> 00:02:16,280 Speaker 1: recovery of Hong Kong. We're looking for obviously musing in 39 00:02:16,360 --> 00:02:18,680 Speaker 1: the COVID restrictions to which seems to be on the 40 00:02:18,720 --> 00:02:21,040 Speaker 1: cards for Hong Kong, and they were expecting it to 41 00:02:21,200 --> 00:02:24,160 Speaker 1: retail activity pick up um. I think all that points 42 00:02:24,200 --> 00:02:28,839 Speaker 1: to some of recovery in mental income for swire Um, 43 00:02:28,840 --> 00:02:31,280 Speaker 1: and that's part of the reason why we do like it. 44 00:02:31,280 --> 00:02:35,080 Speaker 1: It is obviously trading at low values that sort of 45 00:02:35,080 --> 00:02:37,960 Speaker 1: reflects all the use that's been going on, especially with 46 00:02:38,000 --> 00:02:42,120 Speaker 1: the uncertainty of the reopening of Hong Kong. Takes a 47 00:02:42,200 --> 00:02:45,560 Speaker 1: lot of faith, but very interesting and good to hear. 48 00:02:45,840 --> 00:02:50,720 Speaker 1: Lorraine Hansing index obviously tumbling below twenty thousand. We started 49 00:02:50,720 --> 00:02:54,839 Speaker 1: off around twenty five thousand earlier this year. I want 50 00:02:54,840 --> 00:02:57,320 Speaker 1: to get you to muse over something. It takes me 51 00:02:57,360 --> 00:02:59,360 Speaker 1: a minute to lay it out. I mentioned I didn't 52 00:02:59,400 --> 00:03:01,120 Speaker 1: think there was any thing all that new and what 53 00:03:01,200 --> 00:03:03,880 Speaker 1: the Fed speakers said, And we also had some recent 54 00:03:03,960 --> 00:03:06,919 Speaker 1: data showing that US job openings in June fell to 55 00:03:07,000 --> 00:03:09,680 Speaker 1: a nine month low. Now that's a sign of weakening 56 00:03:09,760 --> 00:03:12,680 Speaker 1: job growth and perhaps a weakening economy. And you'd think 57 00:03:13,240 --> 00:03:16,760 Speaker 1: that that would lead to a bid in US treasuries. Yeah, 58 00:03:16,840 --> 00:03:19,720 Speaker 1: just the opposite happened. So I want to raise the 59 00:03:20,080 --> 00:03:24,200 Speaker 1: sort of elephant in the room question is it I mean, 60 00:03:24,240 --> 00:03:27,200 Speaker 1: how likely is it that China, as the biggest holder 61 00:03:27,240 --> 00:03:30,080 Speaker 1: of treasuries, is dumping treasuries now and using the so 62 00:03:30,200 --> 00:03:36,160 Speaker 1: called nuclear option. Yeah, that's a good question. I I 63 00:03:36,160 --> 00:03:39,840 Speaker 1: wondered that myself too, But I don't know when they're 64 00:03:39,880 --> 00:03:43,400 Speaker 1: not going to say, until you know there's any updating 65 00:03:43,480 --> 00:03:48,480 Speaker 1: the data. Um, I think it's it's I mean, I 66 00:03:48,520 --> 00:03:51,960 Speaker 1: think it's going to be a last resort for China. 67 00:03:52,080 --> 00:03:56,240 Speaker 1: I think internally, I mean, you can say that geopolitics 68 00:03:56,280 --> 00:03:58,120 Speaker 1: at this point would be a lot of would be 69 00:03:58,160 --> 00:04:01,800 Speaker 1: more rhetoric than anything else. So until you know, obviously 70 00:04:02,520 --> 00:04:07,360 Speaker 1: something a trigger of leads to greater action. But I 71 00:04:07,440 --> 00:04:11,040 Speaker 1: don't really see that quite happening yet. I think the 72 00:04:11,160 --> 00:04:13,880 Speaker 1: Chinese priorities are definitely to get some of the trade 73 00:04:13,960 --> 00:04:17,760 Speaker 1: terrorists removed, so those negotiations are ongoing. I think as 74 00:04:17,800 --> 00:04:21,080 Speaker 1: far as China goes, they do realize that they domestically, 75 00:04:21,120 --> 00:04:23,839 Speaker 1: they have their own economic issues that they need to 76 00:04:23,880 --> 00:04:27,159 Speaker 1: deal with. Some first and foremost is how to get 77 00:04:27,200 --> 00:04:30,400 Speaker 1: themselves out of the COVID restrictions in a COVID lockdown. 78 00:04:30,920 --> 00:04:33,440 Speaker 1: So I think that's much more key to the domestic 79 00:04:33,480 --> 00:04:37,280 Speaker 1: recovery for China. And when it comes to that domestic recovery, 80 00:04:37,320 --> 00:04:39,680 Speaker 1: as we're looking for I guess opportunity as well. You 81 00:04:39,720 --> 00:04:42,159 Speaker 1: mentioned some of your picks earlier. But tell us what 82 00:04:42,279 --> 00:04:44,440 Speaker 1: else you're looking at, particularly as we start to see 83 00:04:44,640 --> 00:04:50,719 Speaker 1: a little bit more potential improvement in these macroeconomic conditions. Yeah, so, 84 00:04:50,880 --> 00:04:53,840 Speaker 1: I mean we're looking at because of the uncurnety out there, 85 00:04:53,839 --> 00:04:55,599 Speaker 1: and a lot of that is to do obviously with 86 00:04:56,120 --> 00:04:59,880 Speaker 1: how prolonged inflation is, how UM and especially supplies to 87 00:05:00,240 --> 00:05:02,680 Speaker 1: issues particularly and that has thought to do with the 88 00:05:02,760 --> 00:05:06,520 Speaker 1: U yukoreine war as well. UM. We still tend to 89 00:05:06,600 --> 00:05:09,440 Speaker 1: favor companies that we think are able to pass on 90 00:05:09,960 --> 00:05:13,000 Speaker 1: the you know, writing costs or one companies that we 91 00:05:13,040 --> 00:05:17,240 Speaker 1: think are are basically leaders in their markets and also 92 00:05:17,360 --> 00:05:21,240 Speaker 1: trading at steep discounts different valuesn't it. So this is 93 00:05:21,279 --> 00:05:23,520 Speaker 1: going to be companies like it could be p SMC 94 00:05:23,680 --> 00:05:27,520 Speaker 1: as I mentioned previously. Also some of the Chinese internet players, 95 00:05:27,560 --> 00:05:29,560 Speaker 1: I mean Ali Baba has taken a hit. The A 96 00:05:29,720 --> 00:05:32,400 Speaker 1: D R D listening is still remains, but you know, 97 00:05:32,440 --> 00:05:35,320 Speaker 1: with their shift to UM, with their application for the 98 00:05:35,360 --> 00:05:39,400 Speaker 1: primary listing in Hong Kong and improving the cidity of 99 00:05:39,400 --> 00:05:42,360 Speaker 1: their Hong Kong shares trade, we think that that's an 100 00:05:42,400 --> 00:05:45,160 Speaker 1: opportunity to pick up there. That cash flows for Ali 101 00:05:45,200 --> 00:05:47,640 Speaker 1: Baba are very strong as it is for ten Cent 102 00:05:47,760 --> 00:05:50,960 Speaker 1: as well, so Alibaba, ten Cent, Yum China I see 103 00:05:50,960 --> 00:05:52,479 Speaker 1: as well. Are and great to chat to you. We'll 104 00:05:52,520 --> 00:05:55,200 Speaker 1: see you again later on TV. Laur Intan, director of 105 00:05:55,240 --> 00:05:58,240 Speaker 1: Asia Equity Research. At morning start, on the line from Singapore. 106 00:05:58,680 --> 00:05:59,520 Speaker 1: This is Bloomberg.