1 00:00:00,120 --> 00:00:02,679 Speaker 1: Let's take a close look at what's happening in market 2 00:00:02,720 --> 00:00:06,360 Speaker 1: tacks action with our guest as she's Chanda, founder and 3 00:00:06,440 --> 00:00:11,480 Speaker 1: CEO of Crystal who joins from Singapore, She's thanks for 4 00:00:11,480 --> 00:00:13,159 Speaker 1: being with us. I mean, we're seeing a lot of 5 00:00:13,160 --> 00:00:16,120 Speaker 1: defensiveness across the equity space, and I think we can 6 00:00:16,200 --> 00:00:19,040 Speaker 1: chalk this up to a lot more hawkish FED speak. 7 00:00:19,680 --> 00:00:22,560 Speaker 1: Is there some point in the not too distant future 8 00:00:22,600 --> 00:00:26,159 Speaker 1: where you see things kind of reaching a peak? In 9 00:00:26,200 --> 00:00:30,120 Speaker 1: so far as interest rate concerns are yecually, I think 10 00:00:30,200 --> 00:00:32,800 Speaker 1: the bar has been raised again. So as the data 11 00:00:32,840 --> 00:00:36,240 Speaker 1: came out on inflation as well as the payrolls this month, 12 00:00:36,720 --> 00:00:40,279 Speaker 1: it clearly said that whatever the print was expecting in 13 00:00:40,360 --> 00:00:42,559 Speaker 1: terms of the dots next year, that has been moved up. 14 00:00:42,880 --> 00:00:46,479 Speaker 1: But we still think that by Q one three we 15 00:00:46,520 --> 00:00:50,520 Speaker 1: should see a peak in the rate hikes, probably closer 16 00:00:50,520 --> 00:00:53,440 Speaker 1: to four twenty five or five percent. Do you think 17 00:00:53,479 --> 00:00:56,520 Speaker 1: that we have accurately priced and we think we've pressumed 18 00:00:56,520 --> 00:00:59,880 Speaker 1: these aggressive tightening cycles? But what's happening on the g 19 00:01:00,040 --> 00:01:02,240 Speaker 1: a political front as well. I mean, what we've seen 20 00:01:02,280 --> 00:01:04,880 Speaker 1: in the UK has shown how much volatility can happen 21 00:01:04,920 --> 00:01:07,679 Speaker 1: in markets, how much is priced in in terms of 22 00:01:07,720 --> 00:01:10,800 Speaker 1: some of the other geopolitical risks. I think what is 23 00:01:10,840 --> 00:01:15,679 Speaker 1: notable is that the inflation is more structural and not 24 00:01:15,800 --> 00:01:17,840 Speaker 1: something that may come down that easily. It's not just 25 00:01:17,920 --> 00:01:20,840 Speaker 1: the supply side, it's also what the jeopolity of politics are. 26 00:01:21,800 --> 00:01:25,200 Speaker 1: You know, kind of export restrictions being imposed between countries, 27 00:01:26,000 --> 00:01:29,160 Speaker 1: and you see that, Yes, if there is any kind 28 00:01:29,200 --> 00:01:33,280 Speaker 1: of a fiscal issue or bad planning that's coming out 29 00:01:33,280 --> 00:01:35,200 Speaker 1: from the governments, it leads to what's happening in the UK. 30 00:01:35,920 --> 00:01:37,639 Speaker 1: I don't think there's a lot of it being priced 31 00:01:37,680 --> 00:01:40,760 Speaker 1: in because the markets are opening that sanity prevails and 32 00:01:41,120 --> 00:01:43,400 Speaker 1: uh and and the governments are taking the better steps. 33 00:01:44,160 --> 00:01:47,039 Speaker 1: But I think the market is still underpricing the kind 34 00:01:47,080 --> 00:01:49,800 Speaker 1: of risks that could happen coming out of geo politics. 35 00:01:50,320 --> 00:01:52,600 Speaker 1: What about the risk of recession. I mean, if we 36 00:01:52,640 --> 00:01:55,800 Speaker 1: talk about maybe, if you're right, let's say four seventy 37 00:01:55,880 --> 00:01:58,520 Speaker 1: five to five percent topping out in the first quarter 38 00:01:58,560 --> 00:02:01,160 Speaker 1: of next year, and so far as read funds are concerned, 39 00:02:01,640 --> 00:02:04,320 Speaker 1: has the market fully discounted the likelihood that we're going 40 00:02:04,320 --> 00:02:07,919 Speaker 1: to have much much slower growth. Let's call it a contraction. 41 00:02:09,160 --> 00:02:11,640 Speaker 1: See with each rate hike, the property of recession goes 42 00:02:11,720 --> 00:02:15,000 Speaker 1: higher and higher, and we're seeing the cracks happening in 43 00:02:15,320 --> 00:02:17,680 Speaker 1: tech sectors, we're seeing in what's happening the mortgages in 44 00:02:17,680 --> 00:02:21,000 Speaker 1: the US. But it totally depends on where the FED 45 00:02:21,080 --> 00:02:25,280 Speaker 1: starts giving less hawkish signals. But yes, if you do 46 00:02:25,400 --> 00:02:27,680 Speaker 1: hit close to five percent or FED funds, I think 47 00:02:27,680 --> 00:02:29,799 Speaker 1: the proberty of recession will be very, very high. It's 48 00:02:29,880 --> 00:02:32,720 Speaker 1: almost like a united side. And I guess then the 49 00:02:32,800 --> 00:02:35,720 Speaker 1: question is how deep is this recession? With having calls 50 00:02:35,760 --> 00:02:39,120 Speaker 1: that you could see some turnarounds in Asian equities in 51 00:02:39,160 --> 00:02:42,360 Speaker 1: particular in twenty three. If it is a short recession 52 00:02:42,400 --> 00:02:46,200 Speaker 1: globally or in the US, what's your view? Short recessions 53 00:02:46,200 --> 00:02:50,400 Speaker 1: are quite quite a YouTube pick kind of outcomes. I 54 00:02:50,400 --> 00:02:52,919 Speaker 1: don't think that if recession comes, it's going to last 55 00:02:52,960 --> 00:02:56,000 Speaker 1: for less than a year. But you will see different 56 00:02:56,040 --> 00:03:00,120 Speaker 1: countries come out differently or less relatively stronger, especially the 57 00:03:00,120 --> 00:03:02,960 Speaker 1: ones which have more domestic demand. A lot depends on 58 00:03:03,080 --> 00:03:04,880 Speaker 1: what's happening in China and what comes out of it. 59 00:03:05,240 --> 00:03:08,200 Speaker 1: But countries, you know, where you have the communities cycle 60 00:03:08,240 --> 00:03:09,960 Speaker 1: in favor, it's in the Indonesia or if you have 61 00:03:10,000 --> 00:03:13,440 Speaker 1: domestic demand its like in India. Now there is a 62 00:03:13,520 --> 00:03:16,959 Speaker 1: lot more positivity possible over there in terms of the 63 00:03:17,000 --> 00:03:20,440 Speaker 1: GDP growth. Currencies are a different volume altogether though. Well 64 00:03:20,520 --> 00:03:23,160 Speaker 1: let's touch on that very quickly in about fifteen seconds. 65 00:03:23,240 --> 00:03:25,200 Speaker 1: Is there much more on the way of dollar strength 66 00:03:25,280 --> 00:03:28,360 Speaker 1: do you think given that the rate hikes and what 67 00:03:28,440 --> 00:03:31,079 Speaker 1: the Treasury moves are showing, the dollar strength is still 68 00:03:31,120 --> 00:03:34,440 Speaker 1: in momentum. We were hoping and thinking that it's in 69 00:03:34,480 --> 00:03:36,680 Speaker 1: the last leg, but and then towards the end of 70 00:03:36,680 --> 00:03:39,840 Speaker 1: December it ends. But it looks like this dollar strength 71 00:03:39,880 --> 00:03:41,760 Speaker 1: is likely to go into next year. We want to 72 00:03:41,760 --> 00:03:44,320 Speaker 1: get your thoughts in terms of what is attractive for 73 00:03:44,360 --> 00:03:46,680 Speaker 1: Asian stocks when you look at the short term horizon, 74 00:03:47,440 --> 00:03:50,680 Speaker 1: given we are hoping that China is reopening will kick 75 00:03:50,720 --> 00:03:53,000 Speaker 1: off in twenty three and as we mentioned earlier, the 76 00:03:53,080 --> 00:03:57,040 Speaker 1: US recession doesn't go beyond a year. Yeah, so China 77 00:03:57,080 --> 00:03:59,800 Speaker 1: differitely is in some kind of deep valued d tree. 78 00:04:00,360 --> 00:04:03,240 Speaker 1: H Well, there's a lot expected, you know, in terms 79 00:04:03,280 --> 00:04:06,800 Speaker 1: of COVID easing or other physical packages coming out of there. 80 00:04:07,320 --> 00:04:10,520 Speaker 1: But you're waiting to see what happens this Sunday when 81 00:04:10,560 --> 00:04:12,880 Speaker 1: there when the meeting kind of concludes and what the 82 00:04:12,960 --> 00:04:17,320 Speaker 1: new Neion leadership looks like. But in terms of looking forward, 83 00:04:17,680 --> 00:04:20,160 Speaker 1: quite optimistic on how things could play out over there, 84 00:04:20,240 --> 00:04:22,840 Speaker 1: especially since domestic demand is likely to be robust as 85 00:04:22,920 --> 00:04:26,360 Speaker 1: COVID restrictions is if they actually take the easy stance. 86 00:04:26,400 --> 00:04:30,480 Speaker 1: There also certain other economies like the Indonesians or Vietnam 87 00:04:30,520 --> 00:04:33,160 Speaker 1: India as we spoke with, domestic demands should be quite proposed. 88 00:04:33,320 --> 00:04:36,479 Speaker 1: So she's does that mean you you add to positions 89 00:04:36,560 --> 00:04:38,839 Speaker 1: or take new positions On the equity side, are you 90 00:04:38,960 --> 00:04:43,880 Speaker 1: more interested in fixed income opportunities? At this point? The 91 00:04:44,000 --> 00:04:47,520 Speaker 1: short data at fixed income in dollars investment grade is 92 00:04:47,680 --> 00:04:50,800 Speaker 1: a very clear winner. You know, today you have interest 93 00:04:50,880 --> 00:04:54,359 Speaker 1: rates and short corporate bonds going to like five percent, 94 00:04:54,880 --> 00:04:57,839 Speaker 1: which really makes it easy for a certain portfolios to 95 00:04:57,880 --> 00:05:00,400 Speaker 1: deploy cash, and that restricts the amount of money that 96 00:05:00,440 --> 00:05:02,920 Speaker 1: can go into equities. So you see the traditional sixty 97 00:05:02,960 --> 00:05:06,040 Speaker 1: four portfolio, you need to have sixty person let's say, 98 00:05:06,080 --> 00:05:09,640 Speaker 1: in equities to earn a particular return today. Even if 99 00:05:09,680 --> 00:05:13,280 Speaker 1: the fixing come you could get there. So definitely short 100 00:05:13,480 --> 00:05:15,679 Speaker 1: I G is there. But at some point in time 101 00:05:15,880 --> 00:05:18,800 Speaker 1: when the rate hikes, pressure is oh unless increation is 102 00:05:18,880 --> 00:05:21,280 Speaker 1: tamed down, which you're hoping to see in Q one, 103 00:05:21,560 --> 00:05:26,000 Speaker 1: then you should see the equity pullback coming in interesting 104 00:05:26,040 --> 00:05:28,360 Speaker 1: you highlight one of the problems in the UK pension 105 00:05:28,360 --> 00:05:30,160 Speaker 1: fund system. Of course, that's all to do with the 106 00:05:30,240 --> 00:05:32,560 Speaker 1: volatility we've seen in the last forty four days or 107 00:05:32,600 --> 00:05:36,919 Speaker 1: so with sterling. What sort of stability do we see now? 108 00:05:36,960 --> 00:05:39,320 Speaker 1: I know in Singapore and Parliament yesterday they we're talking 109 00:05:39,360 --> 00:05:45,360 Speaker 1: about this too. Many people have pension funds in British pounds. Yes, 110 00:05:45,360 --> 00:05:48,080 Speaker 1: it is clearly this kind of an uncertainty, whether there's 111 00:05:48,120 --> 00:05:51,039 Speaker 1: a lack of clarity from the leadership or the economic packages, 112 00:05:51,440 --> 00:05:54,560 Speaker 1: it's very unsettling for everyone, especially the pension funds and 113 00:05:54,600 --> 00:05:58,080 Speaker 1: especially the people who have a larger pension portfolio independency. 114 00:05:58,240 --> 00:06:00,920 Speaker 1: So clearly the market wants to see a clear sign 115 00:06:00,960 --> 00:06:02,760 Speaker 1: of leadership, which is why I think it's right that 116 00:06:02,800 --> 00:06:05,960 Speaker 1: they are trying to get the next leader decided pretty 117 00:06:06,000 --> 00:06:08,840 Speaker 1: much within two three days or let's say a week, 118 00:06:09,160 --> 00:06:11,479 Speaker 1: and that's the signal that the market wants to see, 119 00:06:12,120 --> 00:06:14,880 Speaker 1: because you cannot have this kind of stability in markets 120 00:06:14,920 --> 00:06:17,480 Speaker 1: if at the leadership level you don't have any clarity. 121 00:06:17,720 --> 00:06:21,240 Speaker 1: Speaking of instability in currency markets. The Japanese n right 122 00:06:21,279 --> 00:06:23,120 Speaker 1: now is trading on the weak side of one fifty 123 00:06:23,160 --> 00:06:26,280 Speaker 1: against the green back, and Jewels has been wondering for 124 00:06:26,440 --> 00:06:30,440 Speaker 1: days now when when Japanese authorities will intervene to support 125 00:06:30,440 --> 00:06:33,839 Speaker 1: the currency. Do you think that's imminent or are always 126 00:06:34,120 --> 00:06:38,640 Speaker 1: always away from that. I think we've started seeing more 127 00:06:39,320 --> 00:06:42,760 Speaker 1: verbal intervention, talking about that we're okay with the depreciation 128 00:06:43,040 --> 00:06:45,720 Speaker 1: and let the currency be weaker for longer. It's only 129 00:06:45,720 --> 00:06:49,120 Speaker 1: the speed that matters and so on. Also, the last 130 00:06:49,160 --> 00:06:51,920 Speaker 1: intervention in September was close to twenty billion, and if 131 00:06:51,960 --> 00:06:54,360 Speaker 1: anything needs to be done has to be larger sized, 132 00:06:54,600 --> 00:06:57,040 Speaker 1: And that intervention didn't really achieve much, right, You went 133 00:06:57,040 --> 00:06:59,080 Speaker 1: from one six to like one three and then back 134 00:06:59,080 --> 00:07:02,360 Speaker 1: to one fifty. So so intervention, unless it's in size, 135 00:07:02,680 --> 00:07:04,760 Speaker 1: it may not result in much. And I think that's 136 00:07:04,760 --> 00:07:06,760 Speaker 1: where the buj is taking the right stance. We're just 137 00:07:06,800 --> 00:07:09,960 Speaker 1: talking about the speed of depreciation rather than the extent 138 00:07:10,040 --> 00:07:13,480 Speaker 1: of deposition. Al Right, almost the end of October hard 139 00:07:13,520 --> 00:07:15,400 Speaker 1: to believe, so only a couple of months left in 140 00:07:15,440 --> 00:07:17,800 Speaker 1: the year. What's your kind of best bit to take 141 00:07:17,840 --> 00:07:21,840 Speaker 1: advantage of all of the volatility and of course the fact, 142 00:07:21,840 --> 00:07:23,880 Speaker 1: as we mentioned earlier, we still don't know what other 143 00:07:24,000 --> 00:07:26,280 Speaker 1: risks could emerge. But if you had to take a 144 00:07:26,280 --> 00:07:29,360 Speaker 1: bit today, what would you look at. I'd still like 145 00:07:29,400 --> 00:07:30,960 Speaker 1: to play it safe for the next two months, you know. 146 00:07:31,000 --> 00:07:34,080 Speaker 1: So whatever many people have made all let's they not 147 00:07:34,120 --> 00:07:36,239 Speaker 1: having for the losses. They're just going to preserve whatever 148 00:07:36,320 --> 00:07:38,960 Speaker 1: cash you have the deploying it. In short, that it 149 00:07:39,040 --> 00:07:42,080 Speaker 1: once waiting for the two rate hikes to finish, and 150 00:07:42,120 --> 00:07:45,400 Speaker 1: then hoping that the hawkishness that has been shown by 151 00:07:45,400 --> 00:07:47,920 Speaker 1: Fair goes down, and then start the new year with 152 00:07:48,280 --> 00:07:51,760 Speaker 1: somewhat positivity and coming back into discuss it all. Right, Yes, 153 00:07:51,840 --> 00:07:54,120 Speaker 1: let's hope it is a positive and calm a new year. 154 00:07:54,200 --> 00:07:56,440 Speaker 1: As she's channing to founder and CEO Crystal on the 155 00:07:56,480 --> 00:07:59,600 Speaker 1: line from Singapore, probably not when we're all talking about recession. 156 00:07:59,680 --> 00:08:00,520 Speaker 1: We can hand Slafe