1
00:00:00,040 --> 00:00:07,000
Speaker 1: Bloomberg Audio Studios, podcasts, radio News.

2
00:00:10,640 --> 00:00:14,640
Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Krisner. In Japan,

3
00:00:14,760 --> 00:00:19,440
Speaker 2: Prime Minister Takeiichi is facing a diplomatic test after angering

4
00:00:19,560 --> 00:00:24,360
Speaker 2: China with her remarks about Tokyo's position on the Taiwan issue. Now,

5
00:00:24,440 --> 00:00:28,520
Speaker 2: China's Foreign ministry demanded the Takichi retract her remarks. However,

6
00:00:28,920 --> 00:00:32,000
Speaker 2: she's refused, and that's created a bit of a standoff

7
00:00:32,000 --> 00:00:35,200
Speaker 2: between Japan and its largest trading partner, and it may

8
00:00:35,280 --> 00:00:39,400
Speaker 2: weigh on the Japanese economy, particularly if China were to

9
00:00:39,440 --> 00:00:43,600
Speaker 2: impose sanctions or even cut supplies of critical minerals. Earlier

10
00:00:43,600 --> 00:00:45,720
Speaker 2: today in New York trading, the yen broke to the

11
00:00:45,720 --> 00:00:48,680
Speaker 2: weak side of one fifty five against the dollar. And

12
00:00:48,840 --> 00:00:50,960
Speaker 2: in a moment we'll take a closer look at the

13
00:00:51,000 --> 00:00:53,960
Speaker 2: macro across the Eight pac But we begin here in

14
00:00:54,000 --> 00:00:56,960
Speaker 2: the States, where the equity market retreated ahead of the

15
00:00:56,960 --> 00:01:00,360
Speaker 2: earnings from Nvidia do after the bell on Wednesday. There

16
00:01:00,400 --> 00:01:03,160
Speaker 2: was also some anxiety tied to the release of two

17
00:01:03,280 --> 00:01:06,720
Speaker 2: readings on the US labor market to Thursday. Joining me

18
00:01:06,800 --> 00:01:10,399
Speaker 2: now is Matt Sale. He is Executive EP also head

19
00:01:10,440 --> 00:01:15,199
Speaker 2: of Investments at Tortoise Capital, joining from Kansas City. Matt,

20
00:01:15,240 --> 00:01:17,920
Speaker 2: thank you. We've got these earnings that will drop Wednesday

21
00:01:17,920 --> 00:01:20,640
Speaker 2: after the bell from Nvidia. As you know, we've seen

22
00:01:20,680 --> 00:01:23,920
Speaker 2: a bit of doubt here as to the sustainability of

23
00:01:24,000 --> 00:01:26,880
Speaker 2: this AI cap X spend, and I think we can

24
00:01:26,959 --> 00:01:29,800
Speaker 2: agree that good numbers from in Vidia would go a

25
00:01:29,880 --> 00:01:34,200
Speaker 2: long way to quell that uncertainty. Are the Nvidia earnings

26
00:01:34,240 --> 00:01:36,600
Speaker 2: a big question marked for you or do you feel

27
00:01:37,040 --> 00:01:40,000
Speaker 2: a level of confidence that the company will deliver as

28
00:01:40,000 --> 00:01:40,880
Speaker 2: it has in the past.

29
00:01:42,000 --> 00:01:45,000
Speaker 3: We think demand continues to be very strong for their chips,

30
00:01:45,319 --> 00:01:48,040
Speaker 3: so not a concern for us. I think the market's

31
00:01:48,080 --> 00:01:51,880
Speaker 3: been a little skittish recently obviously around AI. I'll tell

32
00:01:51,880 --> 00:01:54,320
Speaker 3: you we do not think this is a bubble by

33
00:01:54,360 --> 00:01:58,120
Speaker 3: any stretch. We've been really focused on how much the

34
00:01:58,240 --> 00:02:01,560
Speaker 3: hyperscalers are spending. They're going to spend and big four

35
00:02:01,640 --> 00:02:04,640
Speaker 3: three hundred and fifty billion dollars this year, a big

36
00:02:04,720 --> 00:02:07,440
Speaker 3: year every year, a big quarter over quarter, and it's

37
00:02:07,520 --> 00:02:10,320
Speaker 3: only going to continue to grow. An our view, and

38
00:02:10,919 --> 00:02:13,120
Speaker 3: we think there's you know, X, we are at the

39
00:02:13,240 --> 00:02:17,079
Speaker 3: very early stages of AI adoption in our country. It's

40
00:02:17,120 --> 00:02:19,680
Speaker 3: a very small percentage you're actually using AI effectively.

41
00:02:20,240 --> 00:02:23,120
Speaker 2: So we got news today about Amazon coming to market

42
00:02:23,160 --> 00:02:26,600
Speaker 2: with about fifteen billion in debt. We know that the

43
00:02:26,680 --> 00:02:30,960
Speaker 2: hyperscalers more recently have been financing a lot of this

44
00:02:31,040 --> 00:02:34,840
Speaker 2: build out, not with the cash funded model predominantly, but

45
00:02:34,880 --> 00:02:38,240
Speaker 2: they're making greater use of debt vehicles. Is that a

46
00:02:38,280 --> 00:02:40,360
Speaker 2: concern to you at all?

47
00:02:40,480 --> 00:02:42,960
Speaker 3: I mean, these companies have a higher credit rating than

48
00:02:43,000 --> 00:02:47,200
Speaker 3: the US government, So the short answer is absolutely not.

49
00:02:47,760 --> 00:02:49,960
Speaker 3: If you look at the free cash flow generation again

50
00:02:49,960 --> 00:02:52,880
Speaker 3: of the Big Four, the numbers are literally massive. So

51
00:02:53,720 --> 00:02:55,480
Speaker 3: you know, I think it makes sense to issue some debt.

52
00:02:55,520 --> 00:02:58,920
Speaker 3: It's cheap debt, but I think they don't necessarily need

53
00:02:59,000 --> 00:03:03,079
Speaker 3: to by any stretch unless spending really ramps up. But there,

54
00:03:03,400 --> 00:03:05,960
Speaker 3: you know, we're talking hundreds of billions of dollars of

55
00:03:06,040 --> 00:03:08,800
Speaker 3: free cash flow projected next year across the Big Four.

56
00:03:09,000 --> 00:03:11,679
Speaker 3: So not a concern for US. Financial is not a

57
00:03:11,720 --> 00:03:12,760
Speaker 3: concern for US at all.

58
00:03:13,040 --> 00:03:15,040
Speaker 2: We know the earning story as it relates to some

59
00:03:15,080 --> 00:03:18,600
Speaker 2: of these AI behemoths has been a driving factor in

60
00:03:18,880 --> 00:03:21,480
Speaker 2: pushing equity prices higher. I think it's fair to say

61
00:03:21,760 --> 00:03:25,040
Speaker 2: another part of the story is expectations that we're going

62
00:03:25,080 --> 00:03:27,680
Speaker 2: to get a lot more in the way of FED easing.

63
00:03:27,880 --> 00:03:31,280
Speaker 2: We heard today from FED Governor Chris Waller, who repeated

64
00:03:31,320 --> 00:03:34,679
Speaker 2: his view that the FED should cut the policy rate

65
00:03:34,720 --> 00:03:37,720
Speaker 2: by twenty five basis points in December. He's squarely focused

66
00:03:37,760 --> 00:03:40,640
Speaker 2: on the weakness in the labor market. Would you agree

67
00:03:40,840 --> 00:03:43,400
Speaker 2: with that approach to monetary policy right now?

68
00:03:44,160 --> 00:03:47,600
Speaker 3: I think we'll see a cut either in December or

69
00:03:48,360 --> 00:03:50,680
Speaker 3: in the next two meetings. We're very likely to see

70
00:03:50,680 --> 00:03:53,200
Speaker 3: a cut in our view. Frankly, I know the job

71
00:03:53,240 --> 00:03:56,480
Speaker 3: market has shown some signs of weakness, but with all

72
00:03:56,480 --> 00:04:00,280
Speaker 3: the AI spending, it's just very hard for us to

73
00:04:00,320 --> 00:04:03,280
Speaker 3: foresee a recession just given the amount of economic activity

74
00:04:03,320 --> 00:04:07,080
Speaker 3: tied to the capital spending side. So there will be

75
00:04:07,120 --> 00:04:10,200
Speaker 3: some you know. I know for recent college grads it's

76
00:04:10,240 --> 00:04:12,280
Speaker 3: a little harder to get those entry level jobs, I

77
00:04:12,320 --> 00:04:16,200
Speaker 3: think partially because of AI. So something we're watching. But frankly,

78
00:04:16,720 --> 00:04:19,920
Speaker 3: we don't see the economies cool at anytime anytime soon.

79
00:04:20,080 --> 00:04:22,440
Speaker 2: There's been a lot of change in the labor market,

80
00:04:22,440 --> 00:04:25,120
Speaker 2: as you well know. Much of it is structural, with

81
00:04:25,560 --> 00:04:29,320
Speaker 2: immigration policy changing, and I was struck by some data

82
00:04:29,360 --> 00:04:32,839
Speaker 2: coming out of the Cleveland Fed notices of impending mass

83
00:04:32,920 --> 00:04:36,600
Speaker 2: layoffs by US companies surging in the month of October

84
00:04:36,920 --> 00:04:39,560
Speaker 2: to among the highest level on record. So the Cleveland

85
00:04:39,640 --> 00:04:44,159
Speaker 2: FED found that some thirty nine thousand Americans were given

86
00:04:44,200 --> 00:04:47,559
Speaker 2: advance notice last month, as required under the Warren Act.

87
00:04:48,200 --> 00:04:51,200
Speaker 2: So there's something going on in the labor market. How

88
00:04:51,240 --> 00:04:54,960
Speaker 2: it's deteriorating. Do you think that we don't have complete

89
00:04:55,080 --> 00:04:59,760
Speaker 2: visibility into the structural shift or the structural changes that

90
00:04:59,839 --> 00:05:01,920
Speaker 2: are producing these mounting job losses.

91
00:05:02,920 --> 00:05:04,920
Speaker 3: It's hard to see who's not you know, what industry

92
00:05:05,000 --> 00:05:08,160
Speaker 3: is not going to be disrupted by AI. But clearly,

93
00:05:08,240 --> 00:05:13,159
Speaker 3: you know, the early signs were the Challenger layoffs, factory workers.

94
00:05:13,880 --> 00:05:19,120
Speaker 3: There's a huge number increase in layoffs. So I think,

95
00:05:19,400 --> 00:05:22,560
Speaker 3: you know, there's some very obvious industries that will be

96
00:05:22,640 --> 00:05:26,039
Speaker 3: impacted or job types that will be impacted. But I

97
00:05:26,040 --> 00:05:29,240
Speaker 3: think we're just at the very early stages of understanding what,

98
00:05:29,480 --> 00:05:32,359
Speaker 3: you know, what this all looks like. I mean, at Tortoise,

99
00:05:32,400 --> 00:05:35,800
Speaker 3: we have not had to hire as many analysts historically

100
00:05:35,839 --> 00:05:38,240
Speaker 3: we would. That's just you know, one kind of real

101
00:05:38,279 --> 00:05:40,640
Speaker 3: life anecdote. You know, we're just we've been able to

102
00:05:40,640 --> 00:05:44,320
Speaker 3: be more efficient. So again I take every industry going

103
00:05:44,360 --> 00:05:45,880
Speaker 3: to be disrupted to some degree.

104
00:05:46,240 --> 00:05:50,120
Speaker 2: How are you approaching an investment strategy these days? Are

105
00:05:50,120 --> 00:05:53,120
Speaker 2: you a little conservative now given some of the lofty

106
00:05:53,200 --> 00:05:56,479
Speaker 2: valuations that are attached to the AI trade, are you

107
00:05:56,560 --> 00:06:00,120
Speaker 2: being a little defensive? Are you participating in some of

108
00:06:00,160 --> 00:06:03,320
Speaker 2: the rotation that we have seen lately away from let's

109
00:06:03,320 --> 00:06:06,600
Speaker 2: say big cap tech and into things like healthcare or

110
00:06:06,640 --> 00:06:07,760
Speaker 2: even the financials.

111
00:06:08,080 --> 00:06:11,400
Speaker 3: Yeah, basically all we do is energy and infrastructure. So

112
00:06:11,520 --> 00:06:14,400
Speaker 3: what we have done is the energy sector has not

113
00:06:14,560 --> 00:06:17,440
Speaker 3: had a huge year, but it is a big beneficiary

114
00:06:17,560 --> 00:06:22,000
Speaker 3: from surging demand, whether electricity or the natural gas to

115
00:06:22,360 --> 00:06:26,240
Speaker 3: produce the electricity, those names are barely up this year.

116
00:06:26,240 --> 00:06:28,680
Speaker 3: If you look at the energy infrastructure companies, utilities have

117
00:06:28,720 --> 00:06:31,440
Speaker 3: done a little better, so we see good value there,

118
00:06:31,560 --> 00:06:35,279
Speaker 3: especially relative to the growth. And then on the you

119
00:06:35,279 --> 00:06:37,400
Speaker 3: know kind of picks and shovels of AI, so think

120
00:06:37,480 --> 00:06:42,080
Speaker 3: cooling infrastructure, the data centers themselves, you know, any number

121
00:06:42,160 --> 00:06:46,560
Speaker 3: of the digital infrastructure. Those names do have relatively high

122
00:06:46,600 --> 00:06:49,960
Speaker 3: priced earnings ratios, but the growth is massive, so they're

123
00:06:50,000 --> 00:06:53,599
Speaker 3: paid ratio is actually pretty attractive. You mentioned in Vidia earlier,

124
00:06:54,600 --> 00:06:56,800
Speaker 3: and you know, I think there's a consensus view that

125
00:06:56,839 --> 00:06:59,560
Speaker 3: it's overvalued if you look at the growth. I mean,

126
00:07:00,800 --> 00:07:05,679
Speaker 3: it's not expensive relative to the growth, assuming that growth continues,

127
00:07:05,680 --> 00:07:06,600
Speaker 3: which we believe it will.

128
00:07:07,160 --> 00:07:11,600
Speaker 2: I'm trying to understand investors sentiment visa VI bitcoin. I

129
00:07:11,600 --> 00:07:14,480
Speaker 2: know we're down sharply from that October high of around

130
00:07:14,520 --> 00:07:17,960
Speaker 2: one hundred and twenty six thousand, right around ninety two

131
00:07:18,000 --> 00:07:21,560
Speaker 2: grand at the moment. Do you see bitcoin and the

132
00:07:21,640 --> 00:07:28,360
Speaker 2: volatility in that trade as impacting broader risk asset psychology.

133
00:07:28,560 --> 00:07:32,000
Speaker 3: I think it's absolutely, you know, whether it's causing it

134
00:07:32,440 --> 00:07:37,280
Speaker 3: or a symptom, probably more so the latter. We do. Actually,

135
00:07:37,680 --> 00:07:41,520
Speaker 3: we like the bitcoin miners. We don't invest in bitcoin directly,

136
00:07:41,560 --> 00:07:45,360
Speaker 3: but we like the minors because they have access to electricity.

137
00:07:45,520 --> 00:07:48,960
Speaker 3: They've built out their quote unquote data centers you know,

138
00:07:49,000 --> 00:07:52,640
Speaker 3: gosh five years ago and have already have access to electricity.

139
00:07:52,800 --> 00:07:57,200
Speaker 3: They're repurposing those now to provide high performance compute and

140
00:07:57,800 --> 00:08:00,720
Speaker 3: speed to market with electricity. That's the game factor, and

141
00:08:01,720 --> 00:08:04,200
Speaker 3: we see a tremendous value proposition here. We think these

142
00:08:04,200 --> 00:08:08,200
Speaker 3: companies are totally going to re rate from trading at

143
00:08:08,360 --> 00:08:10,520
Speaker 3: very low multiples to trading it. You know, if they

144
00:08:10,600 --> 00:08:13,560
Speaker 3: trade like the traditional data centers. You know, these are

145
00:08:13,960 --> 00:08:17,080
Speaker 3: massive returns that we can see. So yeah, we don't

146
00:08:17,560 --> 00:08:20,800
Speaker 3: directly invest in bitcoin, but we do like the miners,

147
00:08:21,040 --> 00:08:23,040
Speaker 3: and I think it's just a function of kind of

148
00:08:23,040 --> 00:08:26,120
Speaker 3: you know, recent risk off trade in terms of Bitcoin

149
00:08:26,240 --> 00:08:26,600
Speaker 3: being off.

150
00:08:26,880 --> 00:08:28,880
Speaker 2: Okay, we'll see where we go from here. Matt, always

151
00:08:28,880 --> 00:08:31,520
Speaker 2: a pleasure. Thank you so very much. Matt Sali from

152
00:08:31,600 --> 00:08:35,800
Speaker 2: Tortoise Capital. Matt is executive VP also head of Investments,

153
00:08:36,080 --> 00:08:39,200
Speaker 2: joining from Kansas City. Here on the Daybreak Asia podcast.

154
00:08:47,040 --> 00:08:50,080
Speaker 2: Welcome back to the Daybreak Asia Podcast. I'm Doug Christner.

155
00:08:50,520 --> 00:08:53,280
Speaker 2: Stocks across the Asia Pacific are feeling a bit of

156
00:08:53,320 --> 00:08:56,280
Speaker 2: pressure after a decline in US equities. We had the

157
00:08:56,360 --> 00:08:58,520
Speaker 2: S and P five hundred down about nine tenths of

158
00:08:58,559 --> 00:09:02,640
Speaker 2: one percent, closing below it's fifty day moving average for

159
00:09:02,679 --> 00:09:05,800
Speaker 2: the first time in one hundred and thirty nine sessions. Clearly,

160
00:09:06,080 --> 00:09:08,960
Speaker 2: risk assets are out of favor. That would very much

161
00:09:08,960 --> 00:09:12,439
Speaker 2: include bitcoin. It was down sharply today from its October

162
00:09:12,520 --> 00:09:15,960
Speaker 2: high of one hundred and twenty six thousand, currently around

163
00:09:16,200 --> 00:09:19,960
Speaker 2: ninety one thousand, and in that decline, bitcoin has lost

164
00:09:20,000 --> 00:09:23,600
Speaker 2: about six hundred billion dollars in total market value. According

165
00:09:23,600 --> 00:09:27,360
Speaker 2: to data compiled by Bloomberg. We got some macro analysis

166
00:09:27,360 --> 00:09:30,800
Speaker 2: earlier from Kelvin Tay. He is the regional CIO for

167
00:09:30,960 --> 00:09:34,760
Speaker 2: UBS Global Wealth Management. Kelvin spoke with Bloomberg TV host

168
00:09:34,920 --> 00:09:38,280
Speaker 2: Cherry On in April Hong and the conversation began with

169
00:09:38,320 --> 00:09:42,040
Speaker 2: a question on what's driving the price action of markets

170
00:09:42,080 --> 00:09:42,720
Speaker 2: in the APEC.

171
00:09:43,080 --> 00:09:45,120
Speaker 4: I think in Asia, the dominating news right now is

172
00:09:45,120 --> 00:09:48,679
Speaker 4: basically the the tensions between China and Japan and how

173
00:09:48,720 --> 00:09:51,480
Speaker 4: that is actually playing out. But as you know, Jeo

174
00:09:51,520 --> 00:09:55,280
Speaker 4: politics have never had an overriding shadow on the equity

175
00:09:55,280 --> 00:09:57,400
Speaker 4: markets itself, and you know it tends to actually fit

176
00:09:57,480 --> 00:10:00,040
Speaker 4: up after a couple of a couple of weeks. You

177
00:10:00,040 --> 00:10:02,559
Speaker 4: don't think this is anything different. I think what's more

178
00:10:02,600 --> 00:10:05,240
Speaker 4: interesting in Asia is roughly with regards to the movement

179
00:10:05,240 --> 00:10:07,240
Speaker 4: where the dollar is concerned. I mean, the dollar has

180
00:10:07,280 --> 00:10:10,480
Speaker 4: actually been very strong against across the board all Asian currencies,

181
00:10:10,600 --> 00:10:13,480
Speaker 4: with perhaps the exception of the Tawanese dollar last week.

182
00:10:13,679 --> 00:10:15,600
Speaker 4: But you know, a strengthening of the dollar is usually

183
00:10:15,679 --> 00:10:18,040
Speaker 4: quite negative for Asian equities because the very strong and

184
00:10:18,120 --> 00:10:22,240
Speaker 4: viskrrelation between equities in Asia and the US dollar. So

185
00:10:22,280 --> 00:10:24,040
Speaker 4: we do need the dollar to actually have a breather

186
00:10:24,160 --> 00:10:26,800
Speaker 4: before we can actually expect the Asian equities to continue

187
00:10:26,840 --> 00:10:27,640
Speaker 4: to outperform this year.

188
00:10:28,559 --> 00:10:33,920
Speaker 5: Kelvin, you were talking earlier about dollar and the rebounds

189
00:10:33,960 --> 00:10:38,560
Speaker 5: impact on Asia stocks. Is it time to perhaps relook

190
00:10:38,600 --> 00:10:42,000
Speaker 5: what we're seeing and not just Taiwan dollar, perhaps Korean

191
00:10:42,240 --> 00:10:45,440
Speaker 5: one given the possibility of intervention.

192
00:10:46,400 --> 00:10:49,600
Speaker 4: Absolutely, I've always thought that, you know, the Asian currencies

193
00:10:49,600 --> 00:10:51,560
Speaker 4: cannot weaken too much against the dollar, not in this

194
00:10:51,679 --> 00:10:55,280
Speaker 4: kind of geopolitical landscape, because if the if the US

195
00:10:55,320 --> 00:10:58,400
Speaker 4: government imposes fifteen percent ERFFS on you and you depreciate

196
00:10:58,400 --> 00:11:01,320
Speaker 4: your currency ab about ten percent, that in some ways

197
00:11:01,360 --> 00:11:04,839
Speaker 4: actually neutralizes the impact of a terrorists. So I think

198
00:11:04,840 --> 00:11:08,560
Speaker 4: there is to some extent, you know, some caution about

199
00:11:08,559 --> 00:11:11,280
Speaker 4: how much the dollar can actually strengthen, or rather how

200
00:11:11,360 --> 00:11:14,760
Speaker 4: much the Asian currencies can actually weaken against the US dollar.

201
00:11:15,000 --> 00:11:16,959
Speaker 4: And I think in the crosshairs of the US Treasury

202
00:11:17,000 --> 00:11:18,920
Speaker 4: is basically the Japanese n right now. And I think

203
00:11:18,920 --> 00:11:21,360
Speaker 4: the Treasury Secretary is on quite a few occasions pointed

204
00:11:21,360 --> 00:11:24,000
Speaker 4: out that the BOJ is actually behind the curve where

205
00:11:24,000 --> 00:11:26,760
Speaker 4: inflasion targeting in Japan is concerned. So I don't think

206
00:11:26,840 --> 00:11:29,240
Speaker 4: the Japanese government, where the Ministry of Finance is concerned,

207
00:11:29,360 --> 00:11:32,560
Speaker 4: will allow the yen to weaken dramatically without intervening in

208
00:11:32,600 --> 00:11:35,439
Speaker 4: the market. And of course intervention could perhaps actually help

209
00:11:35,520 --> 00:11:38,920
Speaker 4: on a one week basis, but after that is basically

210
00:11:38,960 --> 00:11:41,040
Speaker 4: what the BOJA is going to do where the Japanese

211
00:11:41,160 --> 00:11:43,640
Speaker 4: n is concerned. The market believes that the BOGI will

212
00:11:43,679 --> 00:11:46,520
Speaker 4: likely hike in December, and so do we. But post

213
00:11:46,760 --> 00:11:49,320
Speaker 4: that hike itself, what is the trajectory for the next

214
00:11:49,400 --> 00:11:51,959
Speaker 4: six months with regards to the Japanese en. As you

215
00:11:52,000 --> 00:11:54,199
Speaker 4: can see, the Japanese and has actually weakened quite sharply

216
00:11:54,480 --> 00:11:57,160
Speaker 4: in the last two months to one fifty five right now,

217
00:11:57,400 --> 00:11:59,560
Speaker 4: and the previous law was basically about one sixty one

218
00:11:59,559 --> 00:12:01,720
Speaker 4: sixty one, so we we're not that far away from

219
00:12:01,760 --> 00:12:03,760
Speaker 4: that kind of levels. But I do think that you

220
00:12:03,800 --> 00:12:06,480
Speaker 4: would like to see BOG intervention as we move closer

221
00:12:06,520 --> 00:12:07,200
Speaker 4: to those levels.

222
00:12:09,520 --> 00:12:11,840
Speaker 1: What can the BOJ do at this point when you

223
00:12:11,880 --> 00:12:15,400
Speaker 1: have the new pro easing Prime Minister Takaichi and also

224
00:12:15,440 --> 00:12:17,440
Speaker 1: at the same time you had the last quarter GDP

225
00:12:17,600 --> 00:12:21,160
Speaker 1: numbers actually contracting and giving her ammunition for the fact

226
00:12:21,200 --> 00:12:24,160
Speaker 1: that the economy does need support, and let me add

227
00:12:24,240 --> 00:12:27,080
Speaker 1: to that the layer of geopolitical tensions when you have

228
00:12:27,200 --> 00:12:29,880
Speaker 1: China Japan going at it, what does that mean for

229
00:12:29,960 --> 00:12:30,840
Speaker 1: the currency as well?

230
00:12:32,880 --> 00:12:33,080
Speaker 3: Well?

231
00:12:33,240 --> 00:12:36,640
Speaker 4: You do need to basically balance your fiscal policy expansion

232
00:12:36,640 --> 00:12:39,240
Speaker 4: and your monetary stillness as well. The BOG needs to

233
00:12:39,400 --> 00:12:42,440
Speaker 4: exhibit independence and not be sweet by what the Prime

234
00:12:42,440 --> 00:12:45,120
Speaker 4: Minister or the government wants them to do. That will

235
00:12:45,120 --> 00:12:49,280
Speaker 4: actually bring credibility into the Japanese and into the boj's

236
00:12:49,360 --> 00:12:54,360
Speaker 4: monetary policy stillness, right, So you don't want the BOG

237
00:12:54,480 --> 00:12:56,880
Speaker 4: to be in lockstock and barrel with the government itself.

238
00:12:57,000 --> 00:12:59,320
Speaker 4: You need to actually be careful and mindful of the

239
00:12:59,320 --> 00:13:01,800
Speaker 4: fact that you know, a very week and will basically

240
00:13:01,840 --> 00:13:04,000
Speaker 4: result in higher inflation for the down the road, and

241
00:13:04,040 --> 00:13:06,440
Speaker 4: you certainly don't want that coming in when the economy

242
00:13:06,440 --> 00:13:08,640
Speaker 4: is actually slowing down. Then you have a very very

243
00:13:08,640 --> 00:13:11,320
Speaker 4: tricky situation to actually try to get out from so

244
00:13:11,480 --> 00:13:14,319
Speaker 4: yes on a fiscal stimulus site. That's positive, that's pro

245
00:13:14,760 --> 00:13:17,679
Speaker 4: pro growth, but on the Japanese en side, you really

246
00:13:17,679 --> 00:13:19,719
Speaker 4: have to watch and make sure that the end does

247
00:13:19,840 --> 00:13:22,800
Speaker 4: not weaken dramatically further from here, because moving from one

248
00:13:22,880 --> 00:13:25,160
Speaker 4: forty six to one fifty five right now was quite

249
00:13:25,200 --> 00:13:27,679
Speaker 4: a sizeable move with regards to the Japanese and and

250
00:13:27,720 --> 00:13:29,920
Speaker 4: the dollar, right so you don't want that momentum to

251
00:13:29,920 --> 00:13:32,880
Speaker 4: actually be built into expectations. And if furthermore, if the

252
00:13:33,120 --> 00:13:36,480
Speaker 4: BOG loses credibility, then whatever they try to say to

253
00:13:36,520 --> 00:13:39,400
Speaker 4: try to manage the movement of the Japanese in is

254
00:13:39,400 --> 00:13:41,760
Speaker 4: actually going to follow dead years and the industry is

255
00:13:41,800 --> 00:13:44,000
Speaker 4: just basically going to you know, just going to disregard

256
00:13:44,040 --> 00:13:47,079
Speaker 4: whatever the bulga has to say and shortly en dramatically,

257
00:13:47,160 --> 00:13:49,520
Speaker 4: then we're going to be in a lot of trouble there.

258
00:13:50,040 --> 00:13:53,079
Speaker 2: That is Calvin Tay, the regional CIO for UBS Global

259
00:13:53,080 --> 00:13:57,000
Speaker 2: Wealth Management, speaking earlier with Bloomberg TV host Sherry On

260
00:13:57,360 --> 00:14:00,600
Speaker 2: and April Hong. And before we go, let's take a

261
00:14:00,600 --> 00:14:03,800
Speaker 2: look today at the maker of the children's song Baby Shark.

262
00:14:04,240 --> 00:14:07,560
Speaker 2: This company is Pink Pong. It shares our soaring as

263
00:14:07,600 --> 00:14:11,040
Speaker 2: they debut in a South Korean ipo. But the question

264
00:14:11,280 --> 00:14:14,960
Speaker 2: is whether all of this is sustainable. Here is Bloomberg

265
00:14:15,000 --> 00:14:17,320
Speaker 2: Asia Stocks reporter, your King Lee.

266
00:14:17,520 --> 00:14:19,600
Speaker 6: Yeah, so it's not just the costpaper, cost of but

267
00:14:19,640 --> 00:14:22,760
Speaker 6: overall Asian markets are down today. But the podcats of

268
00:14:23,320 --> 00:14:26,240
Speaker 6: excitement coming from the small cap costom market. From the

269
00:14:26,240 --> 00:14:29,120
Speaker 6: Pink Pong's trading the view today, it's not more than

270
00:14:29,440 --> 00:14:32,960
Speaker 6: it was actually about sixty percent at the open, so

271
00:14:33,640 --> 00:14:37,720
Speaker 6: after the IPO was at the top price, at the

272
00:14:37,720 --> 00:14:42,600
Speaker 6: top of the marketed range, and that probably values the

273
00:14:42,640 --> 00:14:46,000
Speaker 6: company at more than five hundred billion one that was

274
00:14:46,040 --> 00:14:49,000
Speaker 6: at the top of this marketed IPO price range. But

275
00:14:49,080 --> 00:14:53,240
Speaker 6: whether this first day pop is sustainable and that probably

276
00:14:53,280 --> 00:14:57,400
Speaker 6: depends on how the company goes ahead with the intellectual

277
00:14:57,440 --> 00:15:00,480
Speaker 6: properties and character development that are in the pipeline. So

278
00:15:00,520 --> 00:15:04,160
Speaker 6: there are some source of optimism because the company's baby

279
00:15:04,240 --> 00:15:08,040
Speaker 6: Shark has been it has been a blockbuster hit with

280
00:15:08,120 --> 00:15:10,880
Speaker 6: this YouTube sensation, but the company was also able to

281
00:15:10,920 --> 00:15:15,480
Speaker 6: develop the next characters such as Bebe Finn that's still popular,

282
00:15:15,760 --> 00:15:18,320
Speaker 6: and the company has been highlight highlighting during the rotio.

283
00:15:18,360 --> 00:15:21,280
Speaker 6: That is, reliance on the baby Shark has been going down,

284
00:15:21,320 --> 00:15:23,280
Speaker 6: So there's some Pockutsov optimism.

285
00:15:23,360 --> 00:15:26,280
Speaker 2: That is, Bloomberg's Yuk Yung Lee shares in Pink Fong

286
00:15:26,680 --> 00:15:29,920
Speaker 2: had been up by more than sixty percent. Thanks for

287
00:15:29,960 --> 00:15:34,600
Speaker 2: listening to today's episode of the Bloomberg Daybreak Asia Edition podcast.

288
00:15:34,920 --> 00:15:38,040
Speaker 2: Each weekday, we look at the story shaping markets, finance,

289
00:15:38,400 --> 00:15:41,440
Speaker 2: and geopolitics in the Asia Pacific. You can find us

290
00:15:41,520 --> 00:15:45,720
Speaker 2: on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere

291
00:15:45,720 --> 00:15:48,840
Speaker 2: else you listen. Join us again tomorrow for insight on

292
00:15:48,880 --> 00:15:52,960
Speaker 2: the market moves from Hong Kong to Singapore and Australia.

293
00:15:53,440 --> 00:15:55,920
Speaker 2: I'm Doug Prisoner and this is Bloomberg