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Speaker 1: Let's get to our guest. Ken Wong is with US.

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Speaker 1: He is portfolio special as specialist for Asian equities at

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Speaker 1: east Spring Investments. He's on the line from Singapore. Can

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Speaker 1: we can talk about the macro in a moment as

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Speaker 1: it relates to the FED and the path of interest

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Speaker 1: rates and the dollars story. Give me your take on

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Speaker 1: where things stand with a semiconductor issue. After the Biden

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Speaker 1: administration moved to further restrict China's access to uh the

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Speaker 1: cutting edge chip technology that the US has right now,

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Speaker 1: we're seeing a lot of damage across the not only

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Speaker 1: US chip space, but chips in Japan and in South

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Speaker 1: Korea as well. Yeah, I mean, unfortunately, that's going to

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Speaker 1: be a you know, sort of a knee jerk reaction

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Speaker 1: because the fact this is that a lot of the

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Speaker 1: very chains companies today, um, you know, still do rely

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Speaker 1: on a lot of semi conductor chips from you know,

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Speaker 1: global companies and particular you know, sort of what China's

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Speaker 1: pushed towards electric vehicles. There's been really a growing demand

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Speaker 1: for semi conductor chips. And also this is one of

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Speaker 1: the reasons why, you know, over the past couple of

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Speaker 1: years China has really been increasing their capex UH for

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Speaker 1: their own domestically product production of semi conductor chips. So

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Speaker 1: you know, we're getting to a point now where you know,

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Speaker 1: potentially that could escalate things further. Potentially that could also

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Speaker 1: be opportunities for semi conductor related companies within China to

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Speaker 1: really step up the process of developing semi conductor chips.

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Speaker 1: What about when we're looking at some of the big

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Speaker 1: earnings we're talking about the big slide in t SMC

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Speaker 1: and it's going to report later in the week, are

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Speaker 1: you expecting some more downward revisions? Definitely, you know within

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Speaker 1: Asia Chapin I would say, aside from China, where we

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Speaker 1: expect for earnings UH to potentially have tropped ready when

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Speaker 1: it comes to consensus earnings estimates for three for most

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Speaker 1: of Asia UM, they're still heading towards a lower trajector

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Speaker 1: when it comes to consensus earnings growth UM. And so

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Speaker 1: it's one of those situations where you know, right now,

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Speaker 1: overall market expectations are not looking so well right now

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Speaker 1: for any meaningful earnings upgrade for time being. You know,

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Speaker 1: when we look at chip exports for the first ten

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Speaker 1: days of the month, coming out of South Korea down

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Speaker 1: more than I'm I'm wondering whether or not you want

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Speaker 1: to try and catch the falling knife here. Are there

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Speaker 1: opportunities to put money to work in the chips mace

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Speaker 1: or are you going to just avoid things for the

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Speaker 1: time being right now? Yeah, we wanted to step back

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Speaker 1: and basically look to see where the opportunities are now. Obviously,

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Speaker 1: if there's certain companies which are going to be trading

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Speaker 1: substantial well below their intrinsic value. Being a value style investor,

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Speaker 1: especially you know, across the Asia region, especially within Theia

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Speaker 1: the Emerging Asia space as well, you know, we do

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Speaker 1: look for opportunities when it comes to you know, sort

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Speaker 1: of where stops to trading well blow the intrinsic value,

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Speaker 1: especially given some of the large corrections that we can see.

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Speaker 1: I wanted to get some of your thoughts on where

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Speaker 1: opportunity is when we are looking at these are fears

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Speaker 1: of a global recession and central bank tightening. You're looking

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Speaker 1: at India and China as potential I guess gainers in

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Speaker 1: terms of some and I'm at growth. Yeah, that's where

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Speaker 1: exactly we're looking for opportunities. The fact is is that

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Speaker 1: when you look at economic growth for this coming year,

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Speaker 1: we still see you know, fairly strong robust growth coming

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Speaker 1: from both India as well as China. UM. And also

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Speaker 1: at the same point, you know, when you look at China,

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Speaker 1: the fact is is that inflation is not an issue.

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Speaker 1: The fact is that when you look at overall interest

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Speaker 1: rate policies, there's definitely going to be you know, further

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Speaker 1: loosening when needed. Fiscal policies will also provide more support

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Speaker 1: to the country as well. UM, So there are potential

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Speaker 1: you know, uh, specific evaluation opportunities when it comes to

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Speaker 1: investing in places like China India. UM, it's really focusing on,

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Speaker 1: you know, sort of the growth opportunities, focusing on specifically

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Speaker 1: where you know, we're expecting the country to be heading

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Speaker 1: over the next couple of years when it comes to

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Speaker 1: earnings growth potential. So here in the States, uh, we're

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Speaker 1: looking forward to I guess you could say the holiday

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Speaker 1: shopping season as being a key driver of some of

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Speaker 1: the retail price section. Today, Adobe issued a new fork

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Speaker 1: cast for online holiday spending, and they're predicting massive discounts,

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Speaker 1: price cuts for computers, electronics, toys, that type of stuff.

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Speaker 1: And I'm wondering how you think margins are going to

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Speaker 1: hold up in the current environment. Is there still I

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Speaker 1: know you're talking about relatively low level of inflation in

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Speaker 1: Asia visa via the US, but are you seeing any

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Speaker 1: evidence of price pressure? Not at the moment. But what

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Speaker 1: we do expect to see potentially is, you know, especially

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Speaker 1: for a lot of Asian exporters. You know how with

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Speaker 1: the slowdown in the US effect overall bottom line for

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Speaker 1: a lot of the exporters. And we know for a

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Speaker 1: fact that overall, when you look at consumer sentiment in

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Speaker 1: places like the US, it continues to trend downwards. And

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Speaker 1: it's going to be important to see, you know, how

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Speaker 1: this holiday season is going to shape up when it

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Speaker 1: comes to overall sales figures, and if sales figures do

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Speaker 1: come in weaker than expect it, and that definitely will

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Speaker 1: have a fairly big impact on a lot of the

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Speaker 1: Asian exporters um. And it's also one of the situations

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Speaker 1: now when we look at you know, places like China,

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Speaker 1: they're actually exporting less to the US and more to Asia,

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Speaker 1: and so you know, with potential only slow downs in

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Speaker 1: the US, it might not necessarily have as deep of

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Speaker 1: an impact to Chinese exporters because their focus and their

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Speaker 1: attention now is actually more on Asian countries. You know,

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Speaker 1: a big part of the growth story is China reopening.

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Speaker 1: When we look at Japan reopening as of today, how

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Speaker 1: much is that kind of stummied by the fact that

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Speaker 1: Chinese tours still can't get in. That could be a

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Speaker 1: fairly robust issue because you know, pre COVID we have

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Speaker 1: seen a big majority of Chinese tourists being a fairly

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Speaker 1: big spender when it comes to sales and when it

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Speaker 1: comes to you know, purchasing goods and services within Japan.

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Speaker 1: The fact is that you know, with Japan opening and

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Speaker 1: with the weekend, it will help to some extent because

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Speaker 1: there is still going to be quite a bit of

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Speaker 1: pinned up demand from a lot of tourists from other

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Speaker 1: parts of the world, and so this definitely will benefit Japan.

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Speaker 1: But the other important aspect for Japan is, you know,

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Speaker 1: when you do start to have an influx of individuals

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Speaker 1: going in, is that going to also help foreign dark

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Speaker 1: investments because in fact that with the weekend, that does

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Speaker 1: have the opportunities potentially for investors to go back into

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Speaker 1: Japan to see specifically opportunities when it comes to investing

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Speaker 1: in the country again. You know, we saw a little

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Speaker 1: bit of weakness in the price of crude oil in

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Speaker 1: the New York session, but that's the first sign of

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Speaker 1: weakness we have seen in about five days. And in

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Speaker 1: that five day period, New York crude was up seventeen

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Speaker 1: as the market focused on the reduced production coming out

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Speaker 1: of OPEC. Plus where does oil and the potential for

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Speaker 1: oil to remain elevated, where where does that enter your thinking?

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Speaker 1: Very quickly, well, when it comes to oil prices, you know,

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Speaker 1: with any weakening of oil prices, it definitely does help

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Speaker 1: some of the Asian countries like India as well as

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Speaker 1: Indonesia when it comes to them being major importers. And

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Speaker 1: so it's gonna be one of those situations where when

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Speaker 1: we look at the opportunities, if oil can continue to

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Speaker 1: stay at relatively low levels, it does definitely benefit some

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Speaker 1: of the Asian countries here who tend to be bigger importers. Yep,

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Speaker 1: all right, Kenn, thank you, We'll see you on TV

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Speaker 1: shortly to Ken Wong is Asian equity portfolio specialist at

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Speaker 1: the Spring Investments on the line for us from Singapore

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Speaker 1: here on daybreak. Asia