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Speaker 1: Let's get to another Eddie. He is Eddie Low, the

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Speaker 1: c i O of may Bank Group Wealth Management. He's

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Speaker 1: on the line from Singapore. Eddie, thanks for being with us.

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Speaker 1: We saw what the Bank of England did. It just

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Speaker 1: underscores this concern not only about inflationary pressures, but the

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Speaker 1: fact that we may be looking at a recession globally

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Speaker 1: right now. Were you in that on that for me?

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Speaker 1: Do you think that is a high probability event right?

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Speaker 1: I think if you look at the Bank of England's

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Speaker 1: latest action hiking fifty basis point, that is actually pretty

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Speaker 1: much expected. And what is concerning is really the the

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Speaker 1: central Bank talking about, you know, a prolonged recession from

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Speaker 1: the fourth quarter and yet inflation remaining persistently high and

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Speaker 1: elevator even going into three and this is actually equal

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Speaker 1: not just you know, we we've seen this kind of comments,

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Speaker 1: not just from the Bank of England. The RBA recently

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Speaker 1: made a similar statement and obviously the US Fed. So

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Speaker 1: so overall we do expect we are actually seeing increasing

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Speaker 1: downside risk to growth and therefore corporate endings. And because

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Speaker 1: of that, in terms of investment strategy, in terms in

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Speaker 1: terms of portfolio allocation, we maintain a pretty defensive stance.

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Speaker 1: So a defensive stance, what does it mean across emerging

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Speaker 1: Asia as well? Because these growth concerns very much overtaking

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Speaker 1: inflation acts here, right, I think in terms of that's

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Speaker 1: the allocation, we currently still maintain an underweight um stance

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Speaker 1: or allocation to equities including Asia actual plan equities like China. Right. Uh,

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Speaker 1: And we are very selected. We really want to seek

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Speaker 1: shelter in defensive sectors such as consumer stables as well

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Speaker 1: as how care stocks. Not in contrast, we are actually

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Speaker 1: suggesting to our finds too maybe take another look at

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Speaker 1: fixs income because we thought that there are actually increasing

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Speaker 1: or interesting opportunities, particularly on the sovereign bonds front. We

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Speaker 1: believe that because of these growing growth cons and um

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Speaker 1: taking a treasury yields are likely to or other the

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Speaker 1: tame trail. Yeals are not likely to be test the

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Speaker 1: new high, the recent heights of three point five percent.

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Speaker 1: In fact, we believe that they're going to trend lower

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Speaker 1: to two point five percent. And we know that historically

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Speaker 1: treasury yields tend to do well in times of downtowns

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Speaker 1: because they will benefit from a flight to safety. So

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Speaker 1: is that the only area if you're looking at sovereign

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Speaker 1: and fixed income. I'm wondering whether there are other jurisdictions

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Speaker 1: outside the US that you would be tempted to take

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Speaker 1: a position in. Right well, I think apart from sovereign bonds,

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Speaker 1: we do um suggest to our investors and clients to

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Speaker 1: take a look at some of the shorter data investment

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Speaker 1: red bonds. Now granted, corporate credits are not going to

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Speaker 1: be immune to a downtown in the economy because poplate

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Speaker 1: spreads are likely to widen. But if you were to

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Speaker 1: stick to something the shorter you know, investment bated bonds,

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Speaker 1: triple B rating and above, I think you could still

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Speaker 1: get some defensive carry on that front. But definitely I

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Speaker 1: think we are encouraging our clients really to avoid the

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Speaker 1: higher credits, including those in the Asia region and and

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Speaker 1: and on that front, we are actually currently underweight um

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Speaker 1: in terms of higher credits in both developed markets as

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Speaker 1: fast Asia. We're looking to the reaction to Ali Baba's

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Speaker 1: results when Hong Kong opens in ten minutes time. I mean,

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Speaker 1: we saw the a d R s rise and there

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Speaker 1: was quite a rarely ahead of the earnings yesterday. Do

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Speaker 1: you think a lot of the negativity has now been

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Speaker 1: priced into the tech space. Well. Indeed, I think if

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Speaker 1: you look at the performance of Ali Baba itself, the

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Speaker 1: absolute numbers were not impressive, but because of the fact

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Speaker 1: that the expectations of a weaker growth bid for revenue

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Speaker 1: or earnings has been priced in, so I think it

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Speaker 1: was it was better than it was deemed to be

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Speaker 1: better expected, which caused a rebound and share crisis. So overall,

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Speaker 1: I think this the same applies to the broader Chinese

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Speaker 1: tax sector. But what we are focusing on is on

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Speaker 1: the future outlook, the guidance on the future I look

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Speaker 1: and I think that matters more to share price performance

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Speaker 1: down the road. And in terms of recovery. Unfortunately, we

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Speaker 1: believe that while we think that recovery is in place,

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Speaker 1: it's going to be gradual rather than v shaped. Given

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Speaker 1: the fact that you still see a lot of macro

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Speaker 1: hid winds uh you know in China, and obviously regulator

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Speaker 1: regularly tightening within China itself, although we are seeing the

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Speaker 1: busing intensity, but that is not completely out of the way.

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Speaker 1: Plus the fact that given the rising US China attentions,

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Speaker 1: so we could hear more noises about the listing of

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Speaker 1: Chinese styles in the US and that could trigger some

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Speaker 1: near term share volatility. So therefore, I guess you know

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Speaker 1: there are long term opportunities, but investors need to be

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Speaker 1: patient onunderstruction. Well, let's tease out that issue of US

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Speaker 1: China tensions. Japan had been reporting earlier than China fired

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Speaker 1: some missiles over the Taiwan during some mill terry drills.

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Speaker 1: Prime Minister Kishi Da demanding the China stop these drills.

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Speaker 1: Where are you when it comes to geopolitical risk right now?

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Speaker 1: Is is what the market seems to be signaling. I mean,

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Speaker 1: there doesn't seem to be a great deal of concern

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Speaker 1: right now reflected in asset prices right. Indeed, that I

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Speaker 1: think I noticed, how can we've noticed that before the

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Speaker 1: Pelosi visit, we did see some negative reaction in the

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Speaker 1: hunting index, but after the visit the reaction was rather muted. UH.

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Speaker 1: And I think China obviously is showing displeasure through more

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Speaker 1: military drills and some trade restrictions on Taiwan. But we

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Speaker 1: do not believe that they will engage all their uh,

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Speaker 1: they will be motivated to engage in really a direct

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Speaker 1: minetary confrontation with Taiwan. So overall, the market impact on

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Speaker 1: this incident will likely be contain unless, of course, accidents

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Speaker 1: were to happen, and obviously we don't wish to see

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Speaker 1: that accident happening. But having said that, you know, beyond

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Speaker 1: this episode, we do expect for the escalation of US

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Speaker 1: China attentions, especially ahead of the U S midterms in November.

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Speaker 1: So I think that is something that is going to

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Speaker 1: be a cause for market volatile volatility as well, and

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Speaker 1: perhaps a concern for some of the big US companies

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Speaker 1: if we do see a China consumer backlash. Oh yeah, indeed,

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Speaker 1: I guess uh. Chinese market is actually quite important for

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Speaker 1: a number of the big US companies, although we have

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Speaker 1: really not seen Chinese companies imposing restrictions on these companies

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Speaker 1: selling into China in a big way. But noises with

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Speaker 1: regards to US China attentions are obviously will have the

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Speaker 1: impact of the sentiment on this US companies as well,

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Speaker 1: no doubt about this. We've seen a lot of volatility

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Speaker 1: and currencies as well be end much stronger today. The

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Speaker 1: dollar pulled back during New York tradity, but we're not

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Speaker 1: that far from a twenty year high. Against the majors.

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Speaker 1: Give me your outlook very quickly at in about thirty seconds.

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Speaker 1: What what can we expect from currency markets? Right? I

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Speaker 1: think that if you look at the dollar currency US dollar,

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Speaker 1: it has actually been one of the best performing currency

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Speaker 1: yet today, but recently has been pulled back because of

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Speaker 1: these expectations of affect of it or more doublished tech stunts.

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Speaker 1: But we believe that that may be pre mature given

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Speaker 1: a sect that we are still seeing very high inflation

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Speaker 1: and we don't know whether that's going to modelate meaningfully

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Speaker 1: for the fat to pivot as well. So therefore, uh,

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Speaker 1: you know, burrying the short term short softness, we think

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Speaker 1: that the dollar will actually remain, will be be supported

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Speaker 1: act in the near term, and that actually will be

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Speaker 1: negative for the other major concies. Alright, Eddie, will see

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Speaker 1: you on TV in a couple of hours to double

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Speaker 1: shift for you. Eddie low c I O and Maybank

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Speaker 1: Group Wealth Management on the line from Singapore for US

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Speaker 1: here on daybreak Asia. This is Bloomberg