1 00:00:00,080 --> 00:00:03,520 Speaker 1: Let's get to the solid How Hong chief economists that 2 00:00:03,680 --> 00:00:07,640 Speaker 1: Grow Investment Group and somebody who has been a strategist 3 00:00:07,680 --> 00:00:10,560 Speaker 1: for much of his professional career. So we need some 4 00:00:10,640 --> 00:00:13,920 Speaker 1: strategy from you today. How Hong, we had we had 5 00:00:13,960 --> 00:00:17,119 Speaker 1: this lift in in China markets and in fact it 6 00:00:17,280 --> 00:00:21,240 Speaker 1: fed through to global markets generally on the idea that 7 00:00:21,280 --> 00:00:25,119 Speaker 1: maybe by the springtime we would see some relaxation of 8 00:00:25,120 --> 00:00:27,960 Speaker 1: of the COVID zero policies. So they've come out and 9 00:00:28,000 --> 00:00:33,640 Speaker 1: said no, but people want to believe should they Um, 10 00:00:33,880 --> 00:00:36,400 Speaker 1: yes they should. But at the same time, you know, 11 00:00:36,440 --> 00:00:39,800 Speaker 1: people should look past the headline UM and look in 12 00:00:39,840 --> 00:00:44,760 Speaker 1: the details in the communications on Saturday, right, So basically, uh, 13 00:00:45,400 --> 00:00:50,600 Speaker 1: destination for senior population has been re emphasized. And also 14 00:00:50,720 --> 00:00:52,880 Speaker 1: you know some of the cities that have been overdoing 15 00:00:52,920 --> 00:00:56,640 Speaker 1: COVID zero has been named criticized as well. And so 16 00:00:56,800 --> 00:00:59,360 Speaker 1: after the after the press con, you know, you see 17 00:00:59,400 --> 00:01:01,480 Speaker 1: a few seeds come out and say, you know, we 18 00:01:01,520 --> 00:01:03,880 Speaker 1: did it wrong and we're going to relax some of 19 00:01:03,920 --> 00:01:08,280 Speaker 1: our standards. So you know, there are changes on the margin, UM, 20 00:01:08,440 --> 00:01:10,560 Speaker 1: and and that gives us hope, you know, because of 21 00:01:10,800 --> 00:01:14,800 Speaker 1: moving towards the right direction, because there are sins also 22 00:01:14,959 --> 00:01:17,800 Speaker 1: that by the time the official announcement comes of the 23 00:01:17,920 --> 00:01:23,640 Speaker 1: end of COVID zero, that's too late from an investing perspective. Uh, 24 00:01:23,720 --> 00:01:26,680 Speaker 1: that's correct, you know, because the market tend to lead 25 00:01:27,160 --> 00:01:30,720 Speaker 1: the actual event, right, So there's no thing saying that 26 00:01:30,760 --> 00:01:33,200 Speaker 1: you know, you should you know, by buying rumors down 27 00:01:33,240 --> 00:01:35,480 Speaker 1: the news. Right. So I think now it is probably 28 00:01:35,520 --> 00:01:38,039 Speaker 1: what's happening in the market, and there's a lot of 29 00:01:38,120 --> 00:01:40,920 Speaker 1: room to to move to the upside. I often cite 30 00:01:40,920 --> 00:01:43,440 Speaker 1: Ali Bob on this show just because it was a 31 00:01:43,560 --> 00:01:46,759 Speaker 1: victim of the tech crackdown. It's been a victim victim 32 00:01:46,800 --> 00:01:50,200 Speaker 1: of some of the COVID policies and slowed down generally. Uh, 33 00:01:50,280 --> 00:01:52,960 Speaker 1: and the risk off sentiment in China. This is stock 34 00:01:53,040 --> 00:01:56,000 Speaker 1: that traded over three and traded down to about sixty. 35 00:01:56,440 --> 00:01:57,960 Speaker 1: So you don't need to be a genius. No, No, 36 00:01:58,120 --> 00:02:01,120 Speaker 1: that's an eight percent drop and it's a quaint low 37 00:02:01,200 --> 00:02:04,760 Speaker 1: valuation for the company. Would you be a buyer at 38 00:02:04,800 --> 00:02:09,560 Speaker 1: these levels these days? Yeah? I think you know, we should. 39 00:02:09,720 --> 00:02:12,480 Speaker 1: We should continue to build our positions, you know, as 40 00:02:12,560 --> 00:02:15,280 Speaker 1: the dogs the stuff still under you know, sort of 41 00:02:15,320 --> 00:02:19,000 Speaker 1: general pressure. So you know, the store had you know, 42 00:02:19,240 --> 00:02:21,919 Speaker 1: really good week last week, you know, on the back 43 00:02:22,000 --> 00:02:26,360 Speaker 1: that of the reopening expectation and also whispers in the 44 00:02:26,400 --> 00:02:29,400 Speaker 1: market about you know, the Chinese are audits has been 45 00:02:29,440 --> 00:02:33,040 Speaker 1: going well and the US auditing team is live in 46 00:02:33,080 --> 00:02:37,040 Speaker 1: Hong Kong earlier than expected. So I would say that, 47 00:02:37,120 --> 00:02:39,600 Speaker 1: you know, at this valuation level, you know, because the 48 00:02:39,639 --> 00:02:41,800 Speaker 1: casual is very, very strong. You know, for many of 49 00:02:41,840 --> 00:02:46,120 Speaker 1: these Chinese platform companies, it's difficult to deny the value 50 00:02:46,160 --> 00:02:49,560 Speaker 1: they have they have to offer. What else do you 51 00:02:49,600 --> 00:02:51,760 Speaker 1: like in Chinese stocks at the moment, because they've been 52 00:02:51,840 --> 00:02:56,239 Speaker 1: pretty beaten up and there are some bargains to be had. Yeah, 53 00:02:56,320 --> 00:02:58,919 Speaker 1: that's why if you look at the consumption sector, it's 54 00:02:58,960 --> 00:03:01,679 Speaker 1: another sort of a big bit upset, bitt and upsector. 55 00:03:02,520 --> 00:03:05,440 Speaker 1: Uh that is on the author many of the stocks 56 00:03:05,440 --> 00:03:07,440 Speaker 1: are treating at about you know, the very low single 57 00:03:07,520 --> 00:03:11,919 Speaker 1: digit right now. So you know, if the reopening policy 58 00:03:12,040 --> 00:03:15,320 Speaker 1: does rolled out, you know, next March, then you know, 59 00:03:15,360 --> 00:03:18,160 Speaker 1: we should see the Chinese consumer coming back to life 60 00:03:18,160 --> 00:03:20,960 Speaker 1: in the biggest After all, people have been locked up 61 00:03:21,000 --> 00:03:23,640 Speaker 1: for you know, you know, almost three years now. You know, 62 00:03:23,680 --> 00:03:27,799 Speaker 1: people want to want to experience the better side of life, 63 00:03:29,120 --> 00:03:31,360 Speaker 1: and what are some of the latest signs in the 64 00:03:31,440 --> 00:03:35,160 Speaker 1: property sector that would lead you in one direction or 65 00:03:35,160 --> 00:03:41,000 Speaker 1: the other. Property it is still a overhang on on 66 00:03:41,200 --> 00:03:44,640 Speaker 1: the Chinese economy, to be honest, I mean obviously even 67 00:03:44,720 --> 00:03:48,600 Speaker 1: though housing is for living in offer speculation. This term 68 00:03:48,840 --> 00:03:52,760 Speaker 1: wasn't mentioned in presidentship speech, but it was written in 69 00:03:52,880 --> 00:03:57,480 Speaker 1: the in the in the draft of the speech. So 70 00:03:59,120 --> 00:04:01,480 Speaker 1: it seems to us that you know, there are sort 71 00:04:01,480 --> 00:04:04,680 Speaker 1: of debate going on within within the top leadership, and 72 00:04:04,720 --> 00:04:07,880 Speaker 1: therefore you know, he chose not to mention it, but uh, 73 00:04:08,120 --> 00:04:12,320 Speaker 1: leaving the words the wording in the in the draft 74 00:04:12,400 --> 00:04:15,200 Speaker 1: of the speech. So what that means is there's a 75 00:04:15,480 --> 00:04:18,839 Speaker 1: tested sort of you know, concession right to the other 76 00:04:19,279 --> 00:04:22,800 Speaker 1: side of the debate. But having said that, um, you know, 77 00:04:22,880 --> 00:04:28,200 Speaker 1: after a very brief rebound in the secondary market transaction, uh, 78 00:04:28,279 --> 00:04:31,719 Speaker 1: the cells herein yourself growth continue to sort of sliding. 79 00:04:32,360 --> 00:04:34,719 Speaker 1: So that doesn't look good. So that continued to be 80 00:04:34,880 --> 00:04:38,400 Speaker 1: and overhang on the Chinese economy. We're seeing a really 81 00:04:38,440 --> 00:04:40,920 Speaker 1: good rally in Hong Kong today, and in fact that 82 00:04:41,000 --> 00:04:42,800 Speaker 1: last week was pretty good as well. We're better on 83 00:04:42,800 --> 00:04:46,680 Speaker 1: the hang Sing by almost two percent. Right now, How 84 00:04:46,720 --> 00:04:48,920 Speaker 1: do you explain this is all the peasants of now 85 00:04:49,000 --> 00:04:54,279 Speaker 1: Priceton is the only way up. Um. Well, I think 86 00:04:54,680 --> 00:04:57,440 Speaker 1: the Hong Kong market and in general, the the overall 87 00:04:57,520 --> 00:05:01,560 Speaker 1: Chinese space has been sold down very reaggressively in the 88 00:05:01,600 --> 00:05:04,440 Speaker 1: past couple of weeks. So you know, normally when the 89 00:05:04,480 --> 00:05:09,799 Speaker 1: market is at this extreme oversaw level, you tend to rebound, uh, 90 00:05:09,800 --> 00:05:12,359 Speaker 1: either for technical reason or for us amount of reason. 91 00:05:12,640 --> 00:05:14,040 Speaker 1: And then at the same time, you know, if you 92 00:05:14,040 --> 00:05:17,039 Speaker 1: look at the market level, right, so, the CSI stree 93 00:05:17,160 --> 00:05:20,280 Speaker 1: hundred is at the level that was seen, you know 94 00:05:20,400 --> 00:05:24,919 Speaker 1: three years ago when covid uh, you know, first broke 95 00:05:24,960 --> 00:05:27,400 Speaker 1: out in China. Al right, so, and the Hong Kong 96 00:05:27,480 --> 00:05:29,920 Speaker 1: is even lower than that. So I found it hard 97 00:05:29,960 --> 00:05:31,960 Speaker 1: to believe that, you know, after three years of working 98 00:05:32,000 --> 00:05:34,840 Speaker 1: on the competing the virus, you know, with all these 99 00:05:34,960 --> 00:05:38,000 Speaker 1: vaccines and drugs in place, we actually works off than 100 00:05:38,080 --> 00:05:40,120 Speaker 1: three years ago. You know, I found it really hard 101 00:05:40,160 --> 00:05:42,400 Speaker 1: to believe. And I think, you know, the market don't 102 00:05:42,600 --> 00:05:45,839 Speaker 1: agree with me. Yeah, well, Hanks in the X traded 103 00:05:45,880 --> 00:05:48,560 Speaker 1: back to like two thousand seven levels. You think fifteen 104 00:05:48,640 --> 00:05:53,480 Speaker 1: years these companies of up their profits many times. But listen, um, 105 00:05:53,520 --> 00:05:55,840 Speaker 1: you know, for those people who are thinking about being positive, 106 00:05:55,880 --> 00:05:59,800 Speaker 1: there still are a number of issues negatives. For one, 107 00:06:00,440 --> 00:06:03,400 Speaker 1: UM President, she pretty much made it clear that they're 108 00:06:03,520 --> 00:06:08,720 Speaker 1: they're they're focused on national security now perhaps even UM 109 00:06:08,760 --> 00:06:12,880 Speaker 1: even at the expense of focusing on the economy. Number 110 00:06:12,960 --> 00:06:17,000 Speaker 1: two is, even though COVID COVID policy may get better 111 00:06:17,320 --> 00:06:20,800 Speaker 1: in time, you still have a general regulatory clamped down. 112 00:06:20,839 --> 00:06:24,120 Speaker 1: And then also you have geopolitical issues. So it's it's 113 00:06:24,120 --> 00:06:28,960 Speaker 1: certainly not smooth smooth waters. Yeah, that's that's correct, and 114 00:06:28,800 --> 00:06:32,359 Speaker 1: and I think that is why market bottoming is really 115 00:06:32,360 --> 00:06:35,920 Speaker 1: a process and is a very volatile process rather than 116 00:06:35,960 --> 00:06:38,960 Speaker 1: a day uh. And we're publish seeing that right now, 117 00:06:39,080 --> 00:06:42,760 Speaker 1: so you know, more likely than not, market volocility will 118 00:06:43,279 --> 00:06:45,919 Speaker 1: uh rise further from here, you know, either because of 119 00:06:45,960 --> 00:06:50,320 Speaker 1: the fat or or because you know, some other risks 120 00:06:50,520 --> 00:06:54,080 Speaker 1: that is still in place in the Chinese market. But 121 00:06:54,160 --> 00:06:56,200 Speaker 1: having said all that, UM, I think going into two 122 00:06:56,240 --> 00:06:59,480 Speaker 1: thousand twenty three, UM next March, then you have the 123 00:06:59,520 --> 00:07:01,640 Speaker 1: new leader, she'd be in place, right, So the easiest 124 00:07:01,640 --> 00:07:05,720 Speaker 1: way to stimulate the Chinese economy is really to reopen it. Uh. 125 00:07:05,760 --> 00:07:08,400 Speaker 1: And you can see, you know, from the market reaction 126 00:07:08,800 --> 00:07:12,760 Speaker 1: last week and today, the market is really really hoping 127 00:07:12,800 --> 00:07:15,400 Speaker 1: for some good news in that. Yeah, but unfortunately, maybe 128 00:07:15,400 --> 00:07:17,600 Speaker 1: by the time they open, you'll have recession in Europe 129 00:07:17,640 --> 00:07:20,160 Speaker 1: and you'll have recession in the United States. That's what 130 00:07:20,200 --> 00:07:22,880 Speaker 1: the bond market is telling is so it probably doesn't 131 00:07:22,960 --> 00:07:25,600 Speaker 1: necessarily mean that reopening is going to be the boon 132 00:07:25,720 --> 00:07:27,760 Speaker 1: that perhaps it could be. How long we're out of 133 00:07:27,760 --> 00:07:30,280 Speaker 1: time unfortunately now, but we'll talk again soon. Thanks very 134 00:07:30,360 --> 00:07:33,679 Speaker 1: much for joining US Chief Economists yet grow Investment Group.