1
00:00:00,000 --> 00:00:01,640
Speaker 1: We're gonna take a look at some of the market

2
00:00:01,639 --> 00:00:04,360
Speaker 1: action today with our guest Banny Lamb. He has head

3
00:00:04,360 --> 00:00:08,840
Speaker 1: of research at CEB International Investment, joining from our studios

4
00:00:08,880 --> 00:00:11,760
Speaker 1: in Hong Kong. Banny, thanks for being with us. Was

5
00:00:11,800 --> 00:00:14,440
Speaker 1: talking earlier about the fact that it was very much

6
00:00:14,480 --> 00:00:17,000
Speaker 1: a story about interest rates here in the States. We

7
00:00:17,120 --> 00:00:19,920
Speaker 1: heard from the FED Vice Chairlyle Brainerd saying that maybe

8
00:00:20,000 --> 00:00:22,279
Speaker 1: the FED should begin to moderate the size of these

9
00:00:22,760 --> 00:00:26,560
Speaker 1: rate increases. It seems like the markets already at that

10
00:00:26,680 --> 00:00:30,320
Speaker 1: place of accepting a fifty base basis point move in December,

11
00:00:30,360 --> 00:00:33,880
Speaker 1: but the FED is not yet prepared to say that

12
00:00:33,920 --> 00:00:38,160
Speaker 1: it's close to stopping it's UH stands on raising rates.

13
00:00:38,280 --> 00:00:40,879
Speaker 1: Do you think that in the new year three that

14
00:00:40,960 --> 00:00:43,400
Speaker 1: we could see sometime in the first quarter the FED

15
00:00:43,960 --> 00:00:47,240
Speaker 1: hitting the pause button, so to speak. Yeah, I think

16
00:00:47,240 --> 00:00:49,120
Speaker 1: for the I think the first quarter of A two

17
00:00:49,240 --> 00:00:53,000
Speaker 1: or two three I likely to see, actually, we're maintaining

18
00:00:53,080 --> 00:00:56,560
Speaker 1: the tightening stand with a faw mile increases in the

19
00:00:56,600 --> 00:01:00,960
Speaker 1: interest rates for the first two FMC meetings. I think

20
00:01:01,200 --> 00:01:04,080
Speaker 1: for a moment we have to keep the tightening stands

21
00:01:04,120 --> 00:01:06,440
Speaker 1: because I think the information is still at the high level,

22
00:01:07,040 --> 00:01:10,040
Speaker 1: and I will also see that the inflations maybe like

23
00:01:10,080 --> 00:01:13,360
Speaker 1: a maybe state flat actually in the first quarter next year.

24
00:01:13,840 --> 00:01:16,520
Speaker 1: But we have to wack a cautious about like the

25
00:01:16,600 --> 00:01:19,440
Speaker 1: data because the data actually is a lacking effect is

26
00:01:19,600 --> 00:01:23,399
Speaker 1: very big. And also remember that last year actually this

27
00:01:23,520 --> 00:01:26,160
Speaker 1: year UH to to two, we have a very big

28
00:01:26,200 --> 00:01:29,360
Speaker 1: increases in industry already. The lack effects on the demand

29
00:01:29,400 --> 00:01:32,920
Speaker 1: destruction that means affecting already demand and also affecting the

30
00:01:32,959 --> 00:01:35,839
Speaker 1: economic growth is very high. That would be a fact

31
00:01:35,880 --> 00:01:38,880
Speaker 1: reflected in the next couple of months. So I think

32
00:01:38,920 --> 00:01:43,000
Speaker 1: there will be cautious about like keeping the tightening stand yes,

33
00:01:43,200 --> 00:01:45,840
Speaker 1: but at the same time, for the size of the

34
00:01:46,000 --> 00:01:47,640
Speaker 1: like a rate high, I think they would be like

35
00:01:47,720 --> 00:01:50,160
Speaker 1: a maintainer at a fairly low level in the first quarter,

36
00:01:50,240 --> 00:01:53,480
Speaker 1: first and the second quarter maybe like a safe Next year,

37
00:01:54,120 --> 00:01:57,600
Speaker 1: nothing happened, nothing increases. Maybe the second half of next

38
00:01:57,640 --> 00:02:00,560
Speaker 1: year you will see some of the possible tease after

39
00:02:00,880 --> 00:02:04,680
Speaker 1: rate decreases. It's an interesting point you make fat about

40
00:02:04,680 --> 00:02:06,880
Speaker 1: the lagging factor, because we just heard from the Reserve

41
00:02:06,920 --> 00:02:09,000
Speaker 1: Bank of Australia within the last hour as well with

42
00:02:09,080 --> 00:02:11,440
Speaker 1: their minutes of the last meeting saying well they thought

43
00:02:11,440 --> 00:02:14,640
Speaker 1: about going with fifty basis points in November ended up

44
00:02:14,639 --> 00:02:17,480
Speaker 1: doing twenty five because they were worried about that lagging

45
00:02:17,520 --> 00:02:20,080
Speaker 1: impact of the rate hikes so far that haven't washed

46
00:02:20,120 --> 00:02:22,720
Speaker 1: through the economy. So with that in mind, do you

47
00:02:22,800 --> 00:02:26,960
Speaker 1: feel there's a risk that the fit may have already overtightened. Yeah,

48
00:02:27,000 --> 00:02:31,440
Speaker 1: I think there's some risk because I think the data, um,

49
00:02:31,480 --> 00:02:34,760
Speaker 1: you're always like a lacking behind. And also like if

50
00:02:34,800 --> 00:02:38,440
Speaker 1: you want to stop destruct your demand, actually like I

51
00:02:38,480 --> 00:02:41,480
Speaker 1: don't buy anything. And also that I put the brick

52
00:02:41,600 --> 00:02:44,760
Speaker 1: on the growth. It's very easy. So in this if

53
00:02:44,800 --> 00:02:48,280
Speaker 1: this happens, actually the fat has to be like a

54
00:02:48,280 --> 00:02:51,440
Speaker 1: slow time rate hike. First second is like I do

55
00:02:51,560 --> 00:02:54,359
Speaker 1: something on like a keeping the like an engine of

56
00:02:54,440 --> 00:02:57,799
Speaker 1: the growth to get to continually on the like the

57
00:02:57,800 --> 00:03:00,359
Speaker 1: next couple of months. That is very important for the

58
00:03:00,520 --> 00:03:04,560
Speaker 1: like essential banks, like the positioning. So I will see

59
00:03:04,600 --> 00:03:07,320
Speaker 1: you like the necking effect is huge, and I will

60
00:03:07,400 --> 00:03:11,680
Speaker 1: see like maybe especially after the holiday season in Christmas time,

61
00:03:12,000 --> 00:03:14,520
Speaker 1: you will see like a pick like a shortage of demand.

62
00:03:14,880 --> 00:03:18,160
Speaker 1: That would be like maybe pushing the fact actually is

63
00:03:18,160 --> 00:03:22,120
Speaker 1: slow down even further on the right height. So later

64
00:03:22,160 --> 00:03:24,960
Speaker 1: today for China, we're going to get the data for

65
00:03:25,040 --> 00:03:29,200
Speaker 1: October activity. I'm looking at retail sales, industrial production likely

66
00:03:29,240 --> 00:03:31,680
Speaker 1: to reflect a lot of the damage that we have

67
00:03:31,720 --> 00:03:34,200
Speaker 1: seen as a result of COVID curbs, not only to

68
00:03:34,320 --> 00:03:37,800
Speaker 1: the production side, but the consumption side as well. But

69
00:03:37,880 --> 00:03:41,360
Speaker 1: then last Friday from Beijing, maybe a little bit of

70
00:03:41,480 --> 00:03:44,680
Speaker 1: movement towards the change, right, a relaxation of some of

71
00:03:44,680 --> 00:03:46,840
Speaker 1: the controls not only on the property market but on

72
00:03:46,920 --> 00:03:50,040
Speaker 1: COVID policy as well. Give me your view on what

73
00:03:50,160 --> 00:03:53,600
Speaker 1: you're seeing happening right now, Benny, with with respect to

74
00:03:53,640 --> 00:03:57,920
Speaker 1: the mainland Chinese economy, Yeah, I think for the UH

75
00:03:58,240 --> 00:04:03,680
Speaker 1: COVID policies actually um um serio dynamic serial policies continue

76
00:04:03,680 --> 00:04:08,640
Speaker 1: remain intact actually until next year. Uh. Actually a kind

77
00:04:08,680 --> 00:04:12,800
Speaker 1: of relaxations actually in line with their scientific evidence actually

78
00:04:12,880 --> 00:04:15,720
Speaker 1: will not be like a quite a factors like the

79
00:04:15,800 --> 00:04:19,160
Speaker 1: economic coup of China too much because we are recuprising

80
00:04:19,160 --> 00:04:22,279
Speaker 1: in all these things already. But for the rescue plan

81
00:04:22,360 --> 00:04:25,159
Speaker 1: actually on the property sector side, I think that is

82
00:04:25,200 --> 00:04:28,880
Speaker 1: a significant because right now you see, I think China

83
00:04:29,080 --> 00:04:31,839
Speaker 1: is that they want to use the market way actually

84
00:04:31,880 --> 00:04:36,280
Speaker 1: to solve their problems, actually the property sector's problems. And

85
00:04:36,560 --> 00:04:39,320
Speaker 1: I think now is on the like property developer sides.

86
00:04:39,400 --> 00:04:42,840
Speaker 1: Actually you have to like give them more actually lending

87
00:04:43,240 --> 00:04:46,719
Speaker 1: actually to pop up their or developments and also selling

88
00:04:46,760 --> 00:04:50,239
Speaker 1: the property in the market get the cash. Actually soft

89
00:04:50,279 --> 00:04:53,320
Speaker 1: there death issues. That is like a very important things

90
00:04:53,360 --> 00:04:56,320
Speaker 1: like they're doing right now. Actually the sixteen points after

91
00:04:56,400 --> 00:05:01,040
Speaker 1: rescue plan package actually very good. Actually wishing forward for

92
00:05:01,080 --> 00:05:04,160
Speaker 1: the solving the problem, actually focusing notes for the market.

93
00:05:04,400 --> 00:05:08,080
Speaker 1: Actually a problem can be solved. We saw a huge

94
00:05:08,160 --> 00:05:11,920
Speaker 1: move high for Chinese property stocks traded in Hong Kong.

95
00:05:12,000 --> 00:05:15,040
Speaker 1: I mean, look at Country Garden better by fort yesterday.

96
00:05:15,279 --> 00:05:19,760
Speaker 1: Does that look a bit overcooked to you? But remember that,

97
00:05:19,839 --> 00:05:22,320
Speaker 1: like how much they have. I think the stock price

98
00:05:22,400 --> 00:05:24,520
Speaker 1: they have, I think like a one year ago is

99
00:05:24,680 --> 00:05:27,880
Speaker 1: much much higher than now. So I think they dropped

100
00:05:27,920 --> 00:05:30,520
Speaker 1: a lot and now I think they are like a

101
00:05:30,640 --> 00:05:33,839
Speaker 1: writing back. Um, but remember that, Um, they still have

102
00:05:34,040 --> 00:05:36,919
Speaker 1: some more time for them to like to solve the problems.

103
00:05:37,360 --> 00:05:39,960
Speaker 1: And but this is a good start and the good

104
00:05:40,000 --> 00:05:43,640
Speaker 1: beginnings for like helping all the record Chinese developers, Like

105
00:05:44,000 --> 00:05:46,920
Speaker 1: we're building their portfolios and we're building the like a

106
00:05:47,000 --> 00:05:50,520
Speaker 1: financial positioning that would be helpful for like a healthy

107
00:05:50,720 --> 00:05:53,440
Speaker 1: like a property market developments in China in the future.

108
00:05:53,640 --> 00:05:58,000
Speaker 1: Benny Doug was mentioning a moment ago the consumer in China,

109
00:05:58,560 --> 00:06:01,960
Speaker 1: our sentiment looking you what you're anticipating as we are

110
00:06:02,040 --> 00:06:05,720
Speaker 1: getting these subtle indications that change might be coming in

111
00:06:05,839 --> 00:06:09,239
Speaker 1: terms of COVID zero, I think for for the moment

112
00:06:09,279 --> 00:06:12,919
Speaker 1: because you can see so last settle months data. Actually

113
00:06:12,960 --> 00:06:16,520
Speaker 1: the convict problem with the lockdowns actually is really affecting

114
00:06:16,839 --> 00:06:20,479
Speaker 1: the consumption pattern actor of the people. And uh, I

115
00:06:20,520 --> 00:06:22,960
Speaker 1: would say, like the most important thing for China right

116
00:06:22,960 --> 00:06:27,599
Speaker 1: now is uh like just helping like improving the convict

117
00:06:27,880 --> 00:06:31,080
Speaker 1: conditions first. After that, I think there's a lot of

118
00:06:31,120 --> 00:06:34,839
Speaker 1: PANDU demand actually accumulating for the last several of months.

119
00:06:34,880 --> 00:06:37,680
Speaker 1: That would be like a explosive actually in the market.

120
00:06:38,120 --> 00:06:41,280
Speaker 1: So uh, for a moment for China is a face

121
00:06:41,360 --> 00:06:43,560
Speaker 1: to face you go up, go out to buy something,

122
00:06:43,600 --> 00:06:47,800
Speaker 1: act consuming goods or on the line like buying foods

123
00:06:47,800 --> 00:06:51,360
Speaker 1: also very proper in China. That is a very good momentum.

124
00:06:51,400 --> 00:06:55,440
Speaker 1: Actually we see like once actually the convict policies like

125
00:06:55,720 --> 00:06:59,080
Speaker 1: well continue we will see zero continued policy. But the

126
00:06:59,120 --> 00:07:02,479
Speaker 1: most important thing is the health condition is like improving

127
00:07:02,760 --> 00:07:05,479
Speaker 1: and it got end the control that we we see

128
00:07:05,600 --> 00:07:07,880
Speaker 1: like maybe in the next couple of months. We just

129
00:07:08,000 --> 00:07:11,000
Speaker 1: heard from Ed that the Chinese Vice President, Wong Chi

130
00:07:11,080 --> 00:07:14,000
Speaker 1: Shan is at the Bloomberg New Economy Forum, and one

131
00:07:14,000 --> 00:07:16,080
Speaker 1: of the points that he made was that is that

132
00:07:16,480 --> 00:07:19,480
Speaker 1: it's imperative essentially for China and the US to find

133
00:07:19,600 --> 00:07:23,280
Speaker 1: ways of getting along. We know that President's Biden and

134
00:07:23,360 --> 00:07:26,720
Speaker 1: she met earlier on the sidelines of the G twenty.

135
00:07:27,000 --> 00:07:29,920
Speaker 1: Give me your sense of where we are in this relationship.

136
00:07:30,000 --> 00:07:34,320
Speaker 1: There's been a great deal of um increase in the

137
00:07:34,480 --> 00:07:38,520
Speaker 1: level of geopolitical risk, the tensions that exist, particularly when

138
00:07:38,560 --> 00:07:43,360
Speaker 1: it comes to very sophisticated and advanced semiconductor technology. And

139
00:07:43,400 --> 00:07:46,600
Speaker 1: I'm wondering whether or not we can expect much more

140
00:07:46,720 --> 00:07:48,680
Speaker 1: in the way of tension this kind of tip for

141
00:07:48,800 --> 00:07:52,080
Speaker 1: tat will it escalate? And will that mean that markets

142
00:07:52,120 --> 00:07:54,280
Speaker 1: are going to struggle for some time to to figure

143
00:07:54,280 --> 00:07:58,320
Speaker 1: this out. I think yesterday you see like on both

144
00:07:58,320 --> 00:08:02,280
Speaker 1: side actually day like telling you the like our bottom

145
00:08:02,320 --> 00:08:06,120
Speaker 1: line is and uh, of course, like we cannot be

146
00:08:06,200 --> 00:08:09,120
Speaker 1: like a soft everything in the one meeting. And but

147
00:08:09,320 --> 00:08:12,960
Speaker 1: I will say, actually the sentiments yesterday is quite good

148
00:08:13,080 --> 00:08:16,400
Speaker 1: and also improving and also like you keep the talk

149
00:08:16,520 --> 00:08:20,280
Speaker 1: going on. That is good for everyone. So if for

150
00:08:20,440 --> 00:08:23,720
Speaker 1: other like a sector sensions or or other like things

151
00:08:23,760 --> 00:08:26,640
Speaker 1: on the band man on the exports, on those things,

152
00:08:26,920 --> 00:08:28,640
Speaker 1: I think we're still like a long way to go

153
00:08:28,760 --> 00:08:31,840
Speaker 1: for both sides to talk about and also discuss. Okay,

154
00:08:32,040 --> 00:08:34,840
Speaker 1: but I will see like um doing all these things

155
00:08:34,880 --> 00:08:38,360
Speaker 1: actually hurt both countries, not like a one or band

156
00:08:38,440 --> 00:08:40,920
Speaker 1: for the other. That we will see like in the

157
00:08:41,040 --> 00:08:43,679
Speaker 1: maybe next six months or one year, you will say

158
00:08:43,720 --> 00:08:46,240
Speaker 1: a lot of lots of discussions and uh, also we

159
00:08:46,360 --> 00:08:48,960
Speaker 1: see like a US is also getting aggressive actually in

160
00:08:49,000 --> 00:08:51,640
Speaker 1: discussing lots of issues of China. That is a good

161
00:08:51,640 --> 00:08:53,840
Speaker 1: thing I will see. And I hope that there's true

162
00:08:53,840 --> 00:08:58,200
Speaker 1: political risk, like it's not escalating, it's like a decelerating.

163
00:08:58,280 --> 00:09:00,640
Speaker 1: That is what we want to see in the coming year.

164
00:09:01,679 --> 00:09:03,320
Speaker 1: I just want to get to one of your calls,

165
00:09:03,360 --> 00:09:06,120
Speaker 1: your overweights the global oil stocks at the moment, but

166
00:09:06,520 --> 00:09:09,240
Speaker 1: we've got open cutting its production forecast as I mentioned,

167
00:09:09,240 --> 00:09:12,839
Speaker 1: those crude supplies rising, recession risks still bubbling away in

168
00:09:12,880 --> 00:09:16,560
Speaker 1: the background. So what's the boat case for oil? My

169
00:09:16,640 --> 00:09:19,400
Speaker 1: bookcase on oil is a first round on the on

170
00:09:19,440 --> 00:09:23,320
Speaker 1: the supply side. First as the sphere capacities. And second one,

171
00:09:23,400 --> 00:09:25,920
Speaker 1: I think on the because they reduced the de mental

172
00:09:26,040 --> 00:09:29,559
Speaker 1: forecast actually because of a maybe China becot affected by

173
00:09:29,600 --> 00:09:34,480
Speaker 1: dynamics Polo comic policies. Actually on the health conditions in China.

174
00:09:35,080 --> 00:09:37,559
Speaker 1: But I will see like a China is a recovering

175
00:09:38,000 --> 00:09:40,679
Speaker 1: and also once we're recovering, actually demount for oil will

176
00:09:40,720 --> 00:09:43,600
Speaker 1: be rising. So I would like a quite positive actually

177
00:09:43,840 --> 00:09:45,800
Speaker 1: um for a moment where have a shot we lifted

178
00:09:46,000 --> 00:09:49,120
Speaker 1: like corrections of the oil price, but we will see

179
00:09:49,200 --> 00:09:52,120
Speaker 1: like we bounding in the coming months, So I would

180
00:09:52,160 --> 00:09:55,000
Speaker 1: like a positive on the oil stocks. Penny, let's shift

181
00:09:55,000 --> 00:09:57,120
Speaker 1: gears and look at some of the other markets and

182
00:09:57,200 --> 00:10:00,480
Speaker 1: jurisdictions outside of China in the apack reach. Paul was

183
00:10:00,520 --> 00:10:03,280
Speaker 1: talking a moment ago about this shockingly weak reading that

184
00:10:03,320 --> 00:10:06,719
Speaker 1: we had on Japanese GDP for Q three negative one

185
00:10:08,160 --> 00:10:11,080
Speaker 1: does this or is this a reflection of the weakness

186
00:10:11,120 --> 00:10:14,640
Speaker 1: on China and the inability of Japan to benefit in

187
00:10:14,840 --> 00:10:18,160
Speaker 1: on the export side of things from a strong Chinese economy,

188
00:10:18,280 --> 00:10:20,880
Speaker 1: or is something else happening in Japan that we should

189
00:10:20,920 --> 00:10:25,199
Speaker 1: be concerned about. I think Japan, I think every people

190
00:10:25,240 --> 00:10:28,080
Speaker 1: knows that that you're trying product export is strong, but

191
00:10:28,200 --> 00:10:31,559
Speaker 1: at the same time they input all the like accessories

192
00:10:31,640 --> 00:10:34,920
Speaker 1: actually build that expot and that the price for the

193
00:10:35,040 --> 00:10:38,920
Speaker 1: grow like a communities and also like energies in the past,

194
00:10:39,000 --> 00:10:43,160
Speaker 1: like a six months, actually is still high. For also

195
00:10:43,240 --> 00:10:46,040
Speaker 1: there's a lot of disruptions to the supply chain. So

196
00:10:46,120 --> 00:10:48,680
Speaker 1: for for Japan is even they have a new orders,

197
00:10:49,040 --> 00:10:52,120
Speaker 1: they have a will be affected by the disruption. Second

198
00:10:52,240 --> 00:10:54,920
Speaker 1: is you see the coming new orders in the coming

199
00:10:54,920 --> 00:10:58,199
Speaker 1: six months actually is a falling. It's because of the

200
00:10:58,360 --> 00:11:01,520
Speaker 1: like a groupal recession risks come going up. So all

201
00:11:01,600 --> 00:11:05,840
Speaker 1: these things actually hurting Japan. And also week like a

202
00:11:06,040 --> 00:11:09,200
Speaker 1: Japanese dollars may not be quite benefiting the whole country.

203
00:11:09,320 --> 00:11:12,360
Speaker 1: So I would like a little bit pessimistics about the

204
00:11:12,440 --> 00:11:16,200
Speaker 1: outlook for japan economy. Benny, thank you so much for

205
00:11:16,240 --> 00:11:18,560
Speaker 1: being with us. Benny Lamb is head of Research at

206
00:11:18,600 --> 00:11:22,839
Speaker 1: CEB International Investments. Joining us from our studios in Hong

207
00:11:22,920 --> 00:11:24,560
Speaker 1: Kong here on Daybreak Asia