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Speaker 1: Let's get to our guests now. James Tor, Southeast Asia

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Speaker 1: CIO at HSBC Global Private Banking and Wealth, joining us

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Speaker 1: from Singapore. Obviously want to talk about your views on

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Speaker 1: the Asian markets. But when it comes to the global picture,

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Speaker 1: do you agree with what we heard from Eddia Danny

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Speaker 1: that the Fed should consider stopping its tightening campaign because

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Speaker 1: of the stress in financial markets. Well, I think, to

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Speaker 1: take a step back, what we're seeing is that central

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Speaker 1: banks have shown that they are willing to see a

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Speaker 1: slower economy just to beat inflation, and I think they

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Speaker 1: want really a somewhat a weaker labor market. So I

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Speaker 1: think markets to actually focus therefore on how much heights

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Speaker 1: will actually slow growth down. And I think earnings, uh,

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Speaker 1: the season that's coming up will be key. And of

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Speaker 1: course earnings forecasts have been coming down, but of course

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Speaker 1: you're gonna expect negative guidians and and and and stuff

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Speaker 1: like that. But I think in terms of strategy, investors

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Speaker 1: should actually be positioned a bit more defensively in terms

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Speaker 1: of sectors stands um in the in the weeks ahead indeed,

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Speaker 1: and when it comes to the earnings, it really is

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Speaker 1: whether or not a lot of the bad news has

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Speaker 1: been factored in, and that way you can see some

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Speaker 1: upside in equities or will they disappoint and push new loads.

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Speaker 1: What's your view there? Yeah, well, I think quite a

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Speaker 1: bit of the bad news are already in the price.

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Speaker 1: We kind of maintain our neutral allocation to global equities

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Speaker 1: to kind of benefit if there is any bounds up

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Speaker 1: from here. And clearly there are plenty of quality companies

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Speaker 1: with visilian earnings, manageable leverage um and of course with

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Speaker 1: so many rate heights already priced in, I think the

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Speaker 1: downside for earnings bounty for ratios looks a bit more

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Speaker 1: limited from here. So I think it's it's going to

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Speaker 1: be quite a kind of a new ones approach you

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Speaker 1: on the different shape and go for geographies and markets

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Speaker 1: that's still and companies that still have uh robust earnings growth.

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Speaker 1: So where are those companies? What geographies as well are

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Speaker 1: you looking at? Well? At this stage, we we still

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Speaker 1: continue to be in terms of equity markets, we can

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Speaker 1: you be overweight in the US. Within Asia, we like

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Speaker 1: Hong Kong and Thailand because of the reopening prospects, and

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Speaker 1: of course in terms of sectors, we want to be

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Speaker 1: a bit more defensive looking at consumer staples and perhaps

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Speaker 1: some selected names in energy. You're talking as well, though,

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Speaker 1: that you like the Hong Kong and Thailand story. I mean,

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Speaker 1: Thailand is already reopening and is very seeing some strong

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Speaker 1: upside there. Hong Kong is one that we're looking forward

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Speaker 1: to as quarantine ends. Just tell us where I guess

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Speaker 1: the opportunity is there. Is it just the reopening Stokes?

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Speaker 1: I mean, Hong Kong is such a big picture when

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Speaker 1: you look at the tech regulatory crackdown as well well.

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Speaker 1: I think for Hong Kong's case, it's it's really the

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Speaker 1: story of reopening. I think that's quite interesting there, and

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Speaker 1: but of course we didn't reopening. You also want to

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Speaker 1: look at domestic we kill landlords, financial services, airlines. Ultimately,

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Speaker 1: I think that whole pent up demand for for tourism

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Speaker 1: and consumption. I think that would actually bode well for

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Speaker 1: a lot of undervalue assets within Hong Kong. So we

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Speaker 1: have been seeing intervention from a number of central banks

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Speaker 1: across Asia to really transtem the decline in their currencies.

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Speaker 1: With their strength in the dollar, where are you kind

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Speaker 1: of seeing for the momentum for the dollar against the

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Speaker 1: likes of some of the majors as well, like the

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Speaker 1: pound and euro. While I think the dollar remains our

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Speaker 1: favorite currency, and I think it's quite clear that the

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Speaker 1: dollar would continue its appreciation path, especially against UH, the

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Speaker 1: British pound or even the Euro. So it's really because

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Speaker 1: of the relatively our performance of the US economy being

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Speaker 1: but also because the fat is going to continue to

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Speaker 1: kind of slay this inflation dragon within its economy. So

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Speaker 1: I think from that perspective, you're gonna expect quite a

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Speaker 1: strong dollar in the weeks and months ahead. And of course,

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Speaker 1: given the whole global uncertainty outlook, votes well for the dollar.

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Speaker 1: And does that main here for Asia, because as I mentioned,

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Speaker 1: we have seen some intervention coming through you look at

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Speaker 1: the likes of China, India, Japan. Is it going to

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Speaker 1: be another currency crisis for Asia? Well, I think in

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Speaker 1: Asia it's going to be a fairly new ones approach. Um,

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Speaker 1: of course, you would have certain currencies being a little

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Speaker 1: bit more resilient, particularly UH, let's say the sing dollar

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Speaker 1: for example, in the country where the central bank would

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Speaker 1: also be tightening policy as well. But of course you

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Speaker 1: do have certain countries in which the central banks might

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Speaker 1: not tighten as much compared visa be the fat but

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Speaker 1: I think by and large, I think most Asian countries

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Speaker 1: have stronger UH economic fundamentals compared to the last few years.

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Speaker 1: Over the last few years is built up a fairly

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Speaker 1: strong foreign reserves UH, and I think from that perspective, UH,

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Speaker 1: it will be kind of a differentiation in terms of

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Speaker 1: performance of its rency. But clearly I think the dollar

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Speaker 1: strength would persist visibly most Asian currencies UM in the

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Speaker 1: mind's ahead. All right, let's talk more about your opportunities.

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Speaker 1: You mentioned before neutral on Asian equities as a whole,

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Speaker 1: with overweight on Hong Kong and Thailand, but you're also

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Speaker 1: looking for an allocation to investment grade bonds. Why is

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Speaker 1: this so important right now? Well, I think, at least

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Speaker 1: for us in the investment grade space, a lot of

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Speaker 1: the the pricing of interest rate, especially on the short end,

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Speaker 1: we think it's already in the price. So I think

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Speaker 1: from that perspective, we think that there are opportunities, especially

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Speaker 1: in the shorter end of the curve. Particularly there's short

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Speaker 1: to medium term investment grade bonds across Europe, and of

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Speaker 1: course the quality appeal of a lot of these investment

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Speaker 1: grade bonds in Asia would actually stand out as a

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Speaker 1: portfolio diversifier in this fairly of volatile times. So I

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Speaker 1: think that's where we think for investors at the sidelines,

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Speaker 1: I think it's what it makes sense to be in

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Speaker 1: a very short dated investment grade bonds, and I think

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Speaker 1: that's where we think at least the short term opportunities

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Speaker 1: that would be before nibbling into riskier assets. And we

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Speaker 1: talked earlier about whether or not the FED needs to

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Speaker 1: stop with their aggressive timing. How are you on on

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Speaker 1: a bigger, more broader macro level that we are going

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Speaker 1: to be facing some kind of downturn globally, and of

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Speaker 1: course what that means for this part of the world too,

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Speaker 1: when you are a little bit more buffeted from some

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Speaker 1: of those inflationary pressures. Well, I think for the fair

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Speaker 1: it's very likely that they will still pursue the rate

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Speaker 1: hiking up stunts. But I think we are starting to

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Speaker 1: see the effects of tightening policy biting the economy. The

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Speaker 1: recent manufacturing data in the US is slowing down. But

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Speaker 1: I think what's key is the reading from the labor market.

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Speaker 1: So we have non fund pay rolls at the end

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Speaker 1: of this week, so these are indicators that would actually

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Speaker 1: determine how much more we're the fat hike. So I

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Speaker 1: think these are the things to watch out for. Clearly,

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Speaker 1: um it will have ramifications for the region, particularly manifested

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Speaker 1: through whether it's monetary policy or it's through a stronger dollar.

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Speaker 1: It might be a bumpy right ahead, but I think

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Speaker 1: clearly there is still some UH strength in the region,

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Speaker 1: especially those economies with reopening story or with a big

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Speaker 1: domestic demand. Alright, I hope it's not to bumpy. Let's

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Speaker 1: see James Jo thank you, Southeast Asia CIO at hs

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Speaker 1: b C Global Private Banking and Wealth with US