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Speaker 1: Let's get to our guests. Ken Wong, as Asian equity

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Speaker 1: portfolio specialist at the Spring Investments, on the line for

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Speaker 1: us from Hong Kong. So once again we have heard

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Speaker 1: China will unswervingly stick to COVID zero. It doesn't seem

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Speaker 1: like investors really believe that though, when you look at

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Speaker 1: the price action we are seeing, apart from, of course

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Speaker 1: the dip that you're seeing potentially in the oil market,

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Speaker 1: but it's been such an incredibly volatile ten days or

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Speaker 1: so since we started to get these rumors that there

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Speaker 1: is a path to a reopening. Your thoughts on on

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Speaker 1: how you try and play this until we get some

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Speaker 1: kind of concrete action or confirmation from authorities. Yeah, it's

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Speaker 1: it's very hard because the fact is is that you know,

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Speaker 1: last week, you know, there was a lot of positive

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Speaker 1: vibes coming out, and then over the weekend, you know,

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Speaker 1: there were concerns because when you look at the overall

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Speaker 1: number of COVID cases, you know, past few days it

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Speaker 1: has gone up, and so I think that, you know,

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Speaker 1: it's very hard to speculate specifically around that. But ultimately,

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Speaker 1: you know, what we try to do is when we

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Speaker 1: look at the potential reopening within China, you know, what

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Speaker 1: potential sectors could benefit as a result of China reopening,

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Speaker 1: and we really want to focus on that because when

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Speaker 1: it comes to investing in China, our belief is is

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Speaker 1: that you know, you do really have to focus on policies,

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Speaker 1: understanding you know, how that can have an impact on

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Speaker 1: corporates and their earnings. And then based on that, you know,

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Speaker 1: really to focus on, you know, specifically identifying those companies, uh,

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Speaker 1: you know, before China does reopen. And so tell us

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Speaker 1: again what kind of stick does I guess you're looking

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Speaker 1: at there on that reopening theme and also in terms

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Speaker 1: of what China is giving in terms of policy support.

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Speaker 1: There's a few things we look at, I mean, especially

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Speaker 1: when it comes to reopening. You know, our focus will

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Speaker 1: be on some of the consumer discretionary areas. You know,

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Speaker 1: when we look at you know, some of the leisure areas,

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Speaker 1: entertainment related, uh, those potentially could be a benefit. Airlines

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Speaker 1: again could also be a benefit. And then sort of

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Speaker 1: for more medium to longer term basis, our belief is

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Speaker 1: looking at, you know, some of the tech self reliance,

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Speaker 1: looking at the new energy, looking at specifically you know,

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Speaker 1: the renewables you know, these are really going to be

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Speaker 1: sort of some of the key areas that we focus on,

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Speaker 1: both short as well as meet into long term. What

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Speaker 1: I thought was interesting on Friday was the basket that

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Speaker 1: we're looking at of reopening stocks across the region. So

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Speaker 1: you look at the likes I mean, you mentioned airlines there,

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Speaker 1: but Korean cosmetic stocks for example, we're rallying pretty hard.

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Speaker 1: I mean, we are just waiting for an official confirmation.

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Speaker 1: But when it comes to some of the big moves

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Speaker 1: that we've seen in those types of players, is it

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Speaker 1: already priced in or is there further kind of upside

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Speaker 1: for some of these sex sectors and stocks. No, there

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Speaker 1: definitely can't be further upside. The fact is that you know,

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Speaker 1: we know that there's a lot of landing in the

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Speaker 1: sidelines waiting to wanting to or wanting to reinvest back

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Speaker 1: in China. But the fact is is that there needs

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Speaker 1: to be a bit more clarity from a lot of

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Speaker 1: investors point of view. And so that's why you know,

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Speaker 1: a lot of investors, especially the overseas ones right now,

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Speaker 1: will tend to be more cautious and waiting on the

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Speaker 1: sideline to see, you know, when they can get a

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Speaker 1: bit more clarity from the Chinese government in regards to

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Speaker 1: COVID policies. But again, before that, you know, you do

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Speaker 1: really need to you know, be positioned in certain sectors

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Speaker 1: that you know when to be opening does happen, you

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Speaker 1: know that could potentially already be after the fact, So

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Speaker 1: you do need to speculate a bit in regards to

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Speaker 1: what sector's cap band fit as it resolved reopening. So

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Speaker 1: we are seeing some pretty big cools in terms of

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Speaker 1: where we see rates peak in the mirror, raising their

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Speaker 1: estimate to a range of five and a half to

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Speaker 1: five point seven, Buckley saying it is finger in the

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Speaker 1: estimate rather than high science. But how much I guess

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Speaker 1: for the blood letting can we expect in the treasury

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Speaker 1: market as we wait to see the FED funds right peak. Yeah,

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Speaker 1: that's very difficult to say at the moment because the

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Speaker 1: fact is that what's still you know, fairly higher than

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Speaker 1: strugglingly expected economic figures coming from the US. Potentially the

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Speaker 1: Fed can actually go through this interest rate rising pattern

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Speaker 1: again in three and that's why there seems to be

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Speaker 1: a lot of people now on the streets being a

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Speaker 1: bit more concerned, you know, how much further the ft

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Speaker 1: can raise it. So again, you know, we're very much

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Speaker 1: with the consensus, you know, sort of covering around that

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Speaker 1: range um and so you know, we're not trying to

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Speaker 1: our forecasts and understand what's going on there. But the

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Speaker 1: fact is is that, you know, fore our expectations is

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Speaker 1: that you know, US economic growth will gradually starts to

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Speaker 1: slow down further, and ultimately, you know, when we look

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Speaker 1: at inflation numbers, it will start to decline a bit,

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Speaker 1: but we're still looking for probably around at four or

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Speaker 1: five percent inflationary growth free in the US. The dollar strength,

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Speaker 1: as we know, playing into havoc in terms of a

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Speaker 1: number of emerging markets and Asian markets in general. China

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Speaker 1: today ending its streak of stronger than you expected, you

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Speaker 1: want fixing setting the reference right there at seven sports

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Speaker 1: two to nine two against the dollar. What sort of

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Speaker 1: further implications are we expecting to see in terms of

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Speaker 1: the PBOC trying to guide this currency amidst a strong dollar. Yeah,

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Speaker 1: they're trying to do this very careful because the fact

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Speaker 1: is is that, you know, while they do want to

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Speaker 1: you know, sort of put the currencies that a slightly

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Speaker 1: weaker position, trying to attract a bit more foreign direct

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Speaker 1: investments going forward. The fact this is that you know,

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Speaker 1: they have to be also mindful is to kind of

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Speaker 1: where they set their currency level as well, especially compared

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Speaker 1: with the rest of Asia, where you know, you have

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Speaker 1: again depreciating significantly. You know, in India you have their

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Speaker 1: currency you know, haven't fallen quite a bit as well.

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Speaker 1: So ultimately, you know, there is a fight for foreign

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Speaker 1: direct investments going back into various markets here within Asia,

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Speaker 1: and so as a result, you know, it's gonna be

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Speaker 1: very interesting to see what central banks do going forward,

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Speaker 1: because ultimately Asian economies here have a very different pattern

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Speaker 1: when it comes to inflationary pressures, and so as a result,

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Speaker 1: you know, they might not need to necessarily, you know,

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Speaker 1: be on a similar trajectory and pattern as to what

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Speaker 1: the FET is doing in the US. We've talked about

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Speaker 1: your views there on on China and the reopening. What

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Speaker 1: about in terms of some of the other opportunities that

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Speaker 1: you're seeing across Asia. When we look at the Regional

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Speaker 1: Benchmark Index, which very much underperformed the S and P

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Speaker 1: five hundred over the last three months or so, do

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Speaker 1: we see a bit more of a stronger conviction rally

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Speaker 1: into the latter part of the year, there could be

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Speaker 1: in particularly you know, we still continue to like India.

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Speaker 1: The fact is that while India is actually one of

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Speaker 1: the best performing markets here today, especially when you look

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Speaker 1: at uh it's returns on local currency basis, the fact

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Speaker 1: is is that, you know, there's still a lot that's

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Speaker 1: going on which we see as quite positive in regards

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Speaker 1: to India. You know, with India fully reopening, with specifically

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Speaker 1: you know, more companies increasing their capex, we're expecting to

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Speaker 1: see further earnings growth. We're looking to see specifically more

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Speaker 1: companies also going through their IPO process within India. We're

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Speaker 1: definitely seeing a lot of positives again, more economic activities

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Speaker 1: which are training in the right direction as well. So

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Speaker 1: despite the fact that markets are trading at you know,

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Speaker 1: for earnings multiples of twenty some AMT times earnings, we're

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Speaker 1: still seeing a lot of positives. We're seeing India similar

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Speaker 1: to kind of where China was about twenty years ago.

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Speaker 1: And so when you look at some of the industries,

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Speaker 1: like the financial industries, for the consumption side, for more

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Speaker 1: real estate companies being listed, you know, there is definitely

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Speaker 1: more opportunities when it comes to stock pickings within India

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Speaker 1: and just very quickly Hong Kong. I mean, we had

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Speaker 1: the sevens over the weekend. Is is the reopening kind

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Speaker 1: of slowly happening there? It is to some extent. The

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Speaker 1: fact is that you know, we've had the sevens. There's

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Speaker 1: gonna be further events happening here in Hong Kong over

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Speaker 1: the next few months. But ultimately it's still gonna be

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Speaker 1: very important to see, you know, when does Hong Kong

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Speaker 1: go to that next step instead of just zero plus

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Speaker 1: three to most other Asian countries where it goes basically

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Speaker 1: having a zero plus zero and so there isn't really

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Speaker 1: that medical surveying spirit, so it will be interesting to

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Speaker 1: see whether or not, you know, Hong Kong gets there.

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Speaker 1: But ultimately we are seeing things gradually opening up and

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Speaker 1: hopefully you know, more foreign investors coming back into Hong

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Speaker 1: Kong as well and making it easier for you to

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Speaker 1: come back and forth to Singapore. Was great to see

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Speaker 1: last month. Can thanks as always. Ken Wong is Asian

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Speaker 1: equity portfolio specialist at a Spring Investments on the line

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Speaker 1: for us from Hong Kong