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Speaker 1: Let's get to our guest. Frederico Bazzoni is with US

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Speaker 1: Investment Banking CEO Advantage Capital Markets. He joins from Hong Kong.

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Speaker 1: Thanks for being with us, Frederico. So, one of the

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Speaker 1: things that came out of this FED minutes that we

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Speaker 1: had today the downshift not only to a fifty basis

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Speaker 1: point rate hike in December, but a real concern here

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Speaker 1: about overtightening. And I'm wondering whether or not you think

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Speaker 1: that the days of a strong dollar are in the

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Speaker 1: rear view mirror, so to speak. Morning Frong Kong. Well,

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Speaker 1: clearly the is not a surprise. What what did this

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Speaker 1: idea is today night or over night? Yea and Hong Kong. Uh,

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Speaker 1: it's a little bit of soften on on the policy,

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Speaker 1: and clearly the dollar will be a little bit under pressure.

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Speaker 1: We are see now probably a change or not altitude. Well,

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Speaker 1: we need to see some consistency coming through. All right,

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Speaker 1: let's get fed on the Fed's take. Are they going

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Speaker 1: to be willing to slow these rate hikes, Frederico, not yet.

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Speaker 1: I think they're waiting. I think there would be very

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Speaker 1: very wait and see tuition. They're clearly uh, send a

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Speaker 1: sign on to the market that they need to monitor.

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Speaker 1: They are quite probably happy what's happening and in term

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Speaker 1: of controlling, but that's not the only to wait a

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Speaker 1: little bit longer. Yeah. One of the other things that

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Speaker 1: came out of the Fed minutes the economist at the

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Speaker 1: FED now seeing the risk of recession to pretty much

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Speaker 1: a coin toss fifty fifty here and I'm and I'm

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Speaker 1: sharing that extends beyond the shores of the US, and

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Speaker 1: you may be worried about recession and some other key

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Speaker 1: markets that you invest in right as the right that

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Speaker 1: that's probably the main concern the session and how the

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Speaker 1: speed of the control is affecting. And that's why probably

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Speaker 1: now they are they're they're really concerned. They are there's

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Speaker 1: gowing down a little bit and they want to see

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Speaker 1: what's going on. Clearly, in Asia we've got a different place,

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Speaker 1: as you know, the economies are growing a little bit

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Speaker 1: faster than the rest of the world. But still the

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Speaker 1: concern easier. What is the concern over when we finally

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Speaker 1: see some kind of positive reopening on the China story,

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Speaker 1: Because every time it looks like we're getting to that point,

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Speaker 1: there are more flare ups and then you have these

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Speaker 1: horrific pictures of what's happening at the fox complant too.

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Speaker 1: Of course you're right. I mean the China is the

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Speaker 1: strong market and the sort of benchmarket for for for

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Speaker 1: all the other economies. Uh. We as VCM, we're quite

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Speaker 1: positive on China. Uh the control on the COVID control,

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Speaker 1: it's clear it's a policy. So we will wait now

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Speaker 1: to see how they're going to to open. But as

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Speaker 1: the as the old people in the market say, the

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Speaker 1: market knows a little bit quicker and faster than than

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Speaker 1: the rest. And you saw the action the last couple

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Speaker 1: of days and the last couple of weeks on on

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Speaker 1: on the financial markets, particuly here in Hong Kong. I

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Speaker 1: think there is already probably view the China will open,

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Speaker 1: and I'm quite keen to see what how the market

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Speaker 1: will oopen today. By the way, so looking at some

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Speaker 1: of the movement that you're doing in your investment banking

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Speaker 1: unit you have had a launch and looking at some

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Speaker 1: different geographical focus to tell us what you're looking at.

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Speaker 1: Very interesting question. I love the questions. Investment America. We

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Speaker 1: just launched the platform two weeks ago, so we are,

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Speaker 1: as you can say, a new a new a new

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Speaker 1: new camera investment banking community. But within the long and

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Speaker 1: strong track record, what is very interesting now we see

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Speaker 1: a lot of a lot of focus from the deal

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Speaker 1: point of view on the dead side. We are coming

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Speaker 1: from a very easy liquidity, very easy money in the

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Speaker 1: last couple of years, and clearly now the equity side

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Speaker 1: is a little bit more difficult. The death side or

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Speaker 1: the criticide is becoming super attractive. We saw a lot

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Speaker 1: of invested in the last couple of weeks and and

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Speaker 1: they're all asking for the same structural deals. Protection the

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Speaker 1: downside and kick it on the up side. We are

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Speaker 1: running out seven live deals and we see probably more

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Speaker 1: attention now on the Asian market than before, so I

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Speaker 1: think the market is coming back. So we have no

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Speaker 1: more just moments ago reducing it's a GDP forecast for

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Speaker 1: China for the year down from two nine to two eight.

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Speaker 1: That's not a big move, and then for the new

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Speaker 1: year down from an earlier forecast for three down to

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Speaker 1: four percent. We're also on high alert for the possibility

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Speaker 1: of a triple our cutcoming very soon. So clearly the

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Speaker 1: economy needs some help. But when you're in the credit space,

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Speaker 1: are you worried about risk if if the quality begins

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Speaker 1: to falter a bit. I mean, could we be seeing

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Speaker 1: much more away from property, much more in the way

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Speaker 1: of default on the mainland. Absolutely right. In term of protection,

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Speaker 1: I think in China we are pretty much done in

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Speaker 1: term of real estate correction. Uh. What we're seeing now

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Speaker 1: clearly it's a flight to quality. I think on the

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Speaker 1: dead side, we probably would look at deals who are

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Speaker 1: very secure in term of protection, but with company they

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Speaker 1: need help, they need support to growth in the market,

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Speaker 1: and it where probably you'll see a lot of deals

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Speaker 1: now focusing you'll see probably right sector getting a texture

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Speaker 1: from from the investors. You will not see probably money

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Speaker 1: going to heavy sector right now. Uh. And I think

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Speaker 1: you'll probably you'll see a lot of focus on E

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Speaker 1: s G um company sector, a lot of focus on

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Speaker 1: the meditech and agritech. Yeah. Indeed, I was just at

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Speaker 1: the Bloomberg New Economy Forum last week and there was

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Speaker 1: a lot of talk about E S G about sustainability,

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Speaker 1: talk us about some of the thoughts that you have

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Speaker 1: in terms of opportunities for disruptive technology too. Excellent question. Again,

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Speaker 1: this is a technology of course, we had a lot

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Speaker 1: of band news coming around the market. In the last

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Speaker 1: couple of weeks. There's a lot of cleaning up. Uh.

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Speaker 1: We at the CME advantage. We are trying to focus

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Speaker 1: quite a lot on a new technology and we are

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Speaker 1: seeing some again good company coming back to the market.

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Speaker 1: I think a lot of consolidation UM, probably of China

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Speaker 1: right now and other markets Southeast Asia, particularly Singapore, Thailand, Indonesia.

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Speaker 1: But I think the fintech and the new technology will

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Speaker 1: be absolutely the focus of the market. Talk to me

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Speaker 1: a little bit about the structured finance market on the mainland.

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Speaker 1: CDs is away. Credit of fault swaps is a way

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Speaker 1: of protecting against It's kind of an insurance policy when

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Speaker 1: you're taking a position in credit. Is this a developed

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Speaker 1: product space right now on the mainland or is there

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Speaker 1: still al ways to go to get a good quality

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Speaker 1: CDs linked to some of the credit investing that you're doing,

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Speaker 1: super super careful market. I think for for the distress

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Speaker 1: side of the market, you need to be now extremely concerned. UM.

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Speaker 1: I would say the quality is there, but you need

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Speaker 1: to search a little bit deeper. Uh. There's a lot

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Speaker 1: as you know, a company in in in almost distressed

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Speaker 1: situation on the real estate side. UM. Probably uh, the investors,

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Speaker 1: with the smart investors starting to go back to China.

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Speaker 1: They are looking for quality and they're looking for protection. Alright,

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Speaker 1: Federica pleasure, thanks for coming on to our program. Federico

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Speaker 1: Bazzoni as investment banking see or Vantage Capital Markets with

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Speaker 1: us in our Hong Kong studio