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Speaker 1: Let's get to uh guess. David Chow he is with

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Speaker 1: us for the half hour. David is the apack X

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Speaker 1: Japan strategist at a investco. He joins us from Hong Kong. David,

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Speaker 1: thanks for being with us. We're trying to determine and

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Speaker 1: it's not an easy exercise, trust me, whether this is

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Speaker 1: kind of market attempt at to find a bottom here,

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Speaker 1: Is this a durable move higher than you think, or

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Speaker 1: are we going to retest these low levels that we

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Speaker 1: saw earlier. Well, I think that there could be a

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Speaker 1: strong argument that this is a dead uh cap market

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Speaker 1: bounce here, given that we probably haven't moved through peak

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Speaker 1: fed hawkishness yet and it's still uncertain the direction of

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Speaker 1: the U. S economy whether it really will have to

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Speaker 1: see recessionary risks this year or next. But I would

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Speaker 1: say that we're much closer to the market bottom now

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Speaker 1: than we were, you know, a while back. So I

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Speaker 1: think that for investors that are looking whether to jump

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Speaker 1: in head first, I, you know, I think that we'll

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Speaker 1: see some continued market volatility, but we are kind of

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Speaker 1: bumping along that bottom where do investors jump in? Because

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Speaker 1: we saw that Bank of America survey indicating extreme gloom

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Speaker 1: among investors. Well, I think that when it comes to

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Speaker 1: investing one on one union buy low, cell high, right,

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Speaker 1: and so when investment sentiment is so poor, so dour

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Speaker 1: um sentiment. Uh, you know, it's it's tough to see

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Speaker 1: it taking another dip. Per se that it could be

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Speaker 1: a condition where it's right to start thinking about buying now.

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Speaker 1: I'm not calling for investors to to be buying risk

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Speaker 1: assets right now. I think that there are other assets

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Speaker 1: that are a lot more attractive. We saw the sell off,

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Speaker 1: and bonds yields right now are a lot more attractive,

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Speaker 1: especially for government bonds. Government bond yields um. I think

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Speaker 1: uh could could be a little volatile for the time being,

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Speaker 1: but I think that this is certainly an asset class

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Speaker 1: that is a lot more attractive when you look at

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Speaker 1: the opportunities in Asia right now, we're going to get

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Speaker 1: the China open at the bottom of the hour. We're

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Speaker 1: also expecting the loan prime rate on the one in

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Speaker 1: five years. Give me your your outlook for Asia, Well,

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Speaker 1: I think the outlook for Asia, um, Well, let me

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Speaker 1: touch on China first. I think there are a couple

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Speaker 1: of strong reasons that the Chinese economy should rebound in

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Speaker 1: the second half UM and driven mostly by COVID restrictions

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Speaker 1: being eased. And we saw the rebound already take place

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Speaker 1: in June, and I think that should continue for the

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Speaker 1: rest of UM the year, while also saying significant policy

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Speaker 1: easing both on the monetary policy and greater fiscal stimulus side.

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Speaker 1: Now there are some storm clouds gathering though for China

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Speaker 1: and cuts really the uncertainty. David Chow, Asia Pacific extrapan

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Speaker 1: strategists at Investo joining us on the line from Hong Kong.

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Speaker 1: We just heard there that loan prime rates kept unchanged,

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Speaker 1: but still a lot of concerns about the property sector

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Speaker 1: in China. And you've got these buyers now protesting against

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Speaker 1: paying mortgages. Do you stay away from the property sector

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Speaker 1: at the moment, David, I think so. I think that

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Speaker 1: the property market has not found a bottom yet, and

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Speaker 1: this recent development of homeowners striking on not paying their

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Speaker 1: mortgages on on uncompleted or unfinished flats, I think that

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Speaker 1: only adds to the negative sentiment towards the property market.

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Speaker 1: And already the impact has been pretty swift in and

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Speaker 1: UM and significant. If we look at the first couple

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Speaker 1: of weeks of the property market in terms of home sales.

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Speaker 1: And you know, if I look at the number of

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Speaker 1: UM of interest payment coupons coming up for July and August,

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Speaker 1: they're quite a significant number UM. And so I think

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Speaker 1: that for investors that are looking at China property, perhaps

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Speaker 1: in the fourth quarter would be a better time to

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Speaker 1: consider this very unloved asset class. And then there's this

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Speaker 1: story that we were talking about earlier from the Wall

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Speaker 1: Street Journal saying that Chinese authorities are preparing to impose

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Speaker 1: a fine of more than a billion dollars on d

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Speaker 1: D Global over breaches to their data security. Where do

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Speaker 1: you come down when it involves Chinese technology firms? Are

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Speaker 1: you a buyer? Well, I'm a lot more constructive on

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Speaker 1: the tech industry in China over the property market. I

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Speaker 1: think that um, this fine that was levied, I think

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Speaker 1: that you know, this is a removal of an overhang

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Speaker 1: that UM that that was really that that started about

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Speaker 1: UM a year or so ago with additional regulatory measures

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Speaker 1: on the technology industry. I think since then, the government

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Speaker 1: has now recognized that UM, that the focus is on

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Speaker 1: prioritizing economic growth and stability and might push off and

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Speaker 1: hold on some of these regulatory measures. So while we're

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Speaker 1: not out of the woods yet with with UM, the

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Speaker 1: tech industry, UM and and some of these regulatory issues UM,

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Speaker 1: I think that work. We're in the clear at least

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Speaker 1: in the time being. UH and I think that the

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Speaker 1: tech industry looks quite attractive at these levels. We're not

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Speaker 1: out of the woods though as well. In terms of

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Speaker 1: the COVID zero policies to how does that play out

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Speaker 1: and what are you looking at in terms of currency

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Speaker 1: moves to well, I think that's a huge crux of

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Speaker 1: whether China is going to be able to have a

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Speaker 1: significant second half rebound or not. And I think so

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Speaker 1: far the government's actions towards what they call this dynamics

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Speaker 1: zero COVID policy, it's not going to shift, at least

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Speaker 1: not before the November Party Congress. And so the government

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Speaker 1: certainly wants to present a very an image where they

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Speaker 1: have the pandemic under control and that they're stabilizing the economy. Now,

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Speaker 1: whether trying to evolves its pandemic policy outter that or not,

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Speaker 1: I still think that it's some I think that what

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Speaker 1: they're going to do is take more piecemeal and more

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Speaker 1: targeted measures and have a gradual relaxation and easing of

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Speaker 1: these restrictions. We've been talking a lot about the risk

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Speaker 1: to China as a result of the substantial risk that

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Speaker 1: is gripping the European economy right now. Do you think

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Speaker 1: that China is going to be held back by the

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Speaker 1: weakness that we're seeing on the European continent. Yes, I

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Speaker 1: think so. I think that you know, we have three

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Speaker 1: main risks in China. We talked about to COVID and

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Speaker 1: certainty the property market, and the third is really when

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Speaker 1: it comes to Chinese exports to places like Europe and

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Speaker 1: the US. And so while I think recessionary risks are

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Speaker 1: much greater in Europe than in the US, these are

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Speaker 1: two of China's largest trading blocks and partners, and so

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Speaker 1: as there continues to be a bit of consumer and

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Speaker 1: household and also business sentiment weekends there that could be

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Speaker 1: you know, a hurdle for for Chinese products and exports.

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Speaker 1: All right, David, thanks as always, David Chow, Asia Pacific

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Speaker 1: X Japan Strategist at Investco. This is Bloomberg