WEBVTT - Precious Metals in Focus, Hang Lung Properties Earnings 

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Dead Christner. We're

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<v Speaker 2>keeping a close eye on the precious metals market. This

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<v Speaker 2>is after silver cratered in the Friday session in New York,

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<v Speaker 2>where the spot price fell twenty six percent. Joining me

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<v Speaker 2>now is Bloomberg strategist Mark Cranfield, who is in our

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<v Speaker 2>studio in Singapore. Mark, thank you for being here. Some

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<v Speaker 2>analysts were tracing the selloff that we had in the

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<v Speaker 2>precious metals market to news on Kevin Walsh being selected

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<v Speaker 2>as President Trump's nominee to lead the FED. He's been

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<v Speaker 2>known as an inflation hawk, so with that and at

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<v Speaker 2>least the history that he has, the dollar was able

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<v Speaker 2>to strengthen quite a bit. In New York trading Friday,

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<v Speaker 2>we were up about nine tenths of one percent. Was

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<v Speaker 2>that the only factor here in the pullback in metals prices.

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<v Speaker 3>It's very unlikely that it is the only thing. Probably

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<v Speaker 3>the coincidental timing of the announcement on Friday probably helped

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<v Speaker 3>to spook the market a bit more. A big part

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<v Speaker 3>of what was going on in silver and gold in

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<v Speaker 3>the past couple of weeks is the massive build up

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<v Speaker 3>of retail positioning, both in the US and China especially,

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<v Speaker 3>so we've seen some extraordinary outperformance where the futures prices

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<v Speaker 3>priced in China have been actually even further ahead than

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<v Speaker 3>those priced in the US, So you've seen very large

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<v Speaker 3>volumes of retail participation in the US markets. We've actually

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<v Speaker 3>had reports that the silver etf from at certain times,

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<v Speaker 3>the trading in there by retail people has been more

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<v Speaker 3>extreme than in Nvidia, which is normally their favorite equity stock.

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<v Speaker 3>So you can see that speculation was building up dramatically

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<v Speaker 3>throughout January, it was going to turn at some point,

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<v Speaker 3>it was already starting to crack, and then you had

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<v Speaker 3>the Wash announcement at the same time, so that probably

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<v Speaker 3>helped to fuel more of it. But if you want

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<v Speaker 3>to point the fingers in one particular direction, it's retail

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<v Speaker 3>trading and the fact that they were very quick to

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<v Speaker 3>try and booking the gains that's seen from earlier in

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<v Speaker 3>the month.

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<v Speaker 2>Do we have a sense of whether these were leveraged positions,

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<v Speaker 2>levered long so that when you get a move that

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<v Speaker 2>goes against your trade and it may be that you

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<v Speaker 2>are forced to liquidate the position. Is is that likely

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<v Speaker 2>do you think a part of the story highly likely?

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<v Speaker 3>Especially in China. It's very typical that Chinese investors have

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<v Speaker 3>leverage when they're using futures contracts, whether it's for equities,

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<v Speaker 3>for metals, for currencies, whatever they're trading, they love to

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<v Speaker 3>use leverage. And if you look at the size of

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<v Speaker 3>transactions was extraordinary, which again points to the fact that

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<v Speaker 3>these were mostly enhanced by more than not just single

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<v Speaker 3>buy and hold positions. These were leverage positions.

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<v Speaker 2>So I mentioned that Kevin Warsh has been selected as

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<v Speaker 2>President Trump's nominee to lead the FED. We had a

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<v Speaker 2>stronger dollar as a result of that move. I mentioned

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<v Speaker 2>earlier that he has been viewed in the past as

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<v Speaker 2>an inflation hark. What do you think this nomination means

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<v Speaker 2>for global bond markets?

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<v Speaker 3>The bond vigilantes are not going to give Kevin wash

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<v Speaker 3>much of a honeymoon if he does become Chairman of

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<v Speaker 3>the Federals. They're going to really test him on his

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<v Speaker 3>inflation credentials. So of course things may change if he

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<v Speaker 3>gets the job, But in the past he has said

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<v Speaker 3>that he thinks that AI will help to reduce inflation

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<v Speaker 3>costs across the board for American companies, which may well

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<v Speaker 3>pan out. He has also said he would like to

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<v Speaker 3>reduce the Federal Reserve balance sheet. Trying to achieve both

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<v Speaker 3>looks pretty ambitious. Also, there's question marks over whether the

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<v Speaker 3>CPI data in the US is still really the quality

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<v Speaker 3>that we used to get in terms of the data

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<v Speaker 3>in the past. So the bond vigilances are not going

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<v Speaker 3>to give him much time. They're going to You can

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<v Speaker 3>already see the YELD curve was pushing higher on Friday,

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<v Speaker 3>and that's an understandable response to the fact that you're

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<v Speaker 3>going to have a potentially a new chairman coming in

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<v Speaker 3>who's going to have the very quick persuade markets that

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<v Speaker 3>on the one hand, he might think the interest rates

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<v Speaker 3>can come a bit lower and yet he can keep

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<v Speaker 3>inflation under control. Those two very hard to get them

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<v Speaker 3>in sync unless you're going into recession, and there's no

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<v Speaker 3>suggestion that the US is going into recession anytime soon.

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<v Speaker 2>I want to change gears and talk a little bit

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<v Speaker 2>about artificial intelligence, because we heard over the weekend from

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<v Speaker 2>Nvidia CEO Jensen Wong. He was saying that his companies

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<v Speaker 2>proposed one hundred billion dollar investment in open Ai was

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<v Speaker 2>never a commitment, although to be fair, back in September,

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<v Speaker 2>in Vidia did sign a letter of intent, and the

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<v Speaker 2>indication at that time was that the company planned to

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<v Speaker 2>invest planned my emphasis here to invest as much as

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<v Speaker 2>one hundred billion in open ai, ostensibly to support new

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<v Speaker 2>data center construction and the build out of other AI infrastructure. Friday, though,

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<v Speaker 2>the Wall Street Journal said this plan had stalled, and

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<v Speaker 2>I think that Huang over the weekend and in Taipei

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<v Speaker 2>was ask about this report. The journal went on to

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<v Speaker 2>say that One privately emphasized that that one hundred billion

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<v Speaker 2>dollar agreement was non binding. Do we have a sense

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<v Speaker 2>here of what's happening. It seems like one may have

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<v Speaker 2>been doing a bit of damage control over the weekend.

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<v Speaker 3>I think one thing you need to help us understand

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<v Speaker 3>this situation is the whole market cap pricing of open

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<v Speaker 3>ai and the backbone it has provided to all the

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<v Speaker 3>hype about AI pricing within the market. So if you trace,

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<v Speaker 3>particularly over the past year, every time open ai does

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<v Speaker 3>a fundraising, its implied market cap goes higher and higher

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<v Speaker 3>each time. It adds fuel to the speculation across the

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<v Speaker 3>AI sector. So as of going in towards the end

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<v Speaker 3>of last year, open Ai was thought to have a

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<v Speaker 3>market cap above eight hundred billion US dollars. People are

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<v Speaker 3>speculating they're going to bring an IPO. In fact, there

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<v Speaker 3>was a report last week that the IPO is probably

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<v Speaker 3>for the fourth quarter of this year. Maybe they're going

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<v Speaker 3>to be the first trillion dollar company for an IPO

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<v Speaker 3>in the United States. However, if major investors such as

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<v Speaker 3>Nvidia are questioning whether they want to be involved in

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<v Speaker 3>all these fundraisings, suddenly that continuous upward path of the

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<v Speaker 3>market cap of ai open Ai is under question. If

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<v Speaker 3>that stalls, the whole AI space is under threat because

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<v Speaker 3>people need to see an continuing step up in the

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<v Speaker 3>valuation to keep on investing in the outlook for AI

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<v Speaker 3>in general. So really it's the crux of the whole

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<v Speaker 3>AI bubble. If open Ai suddenly the valuation peaks, that's

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<v Speaker 3>bad news across the sector and it affects everybody who's

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<v Speaker 3>been speculating on the AI bubble.

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<v Speaker 2>Well, it's interesting because over the weekend we learn that

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<v Speaker 2>Oracle is planning to raise between forty five billion and

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<v Speaker 2>fifty billion US dollars this year to build additional capacity

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<v Speaker 2>for the company's cloud infrastructure. When you get news like that,

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<v Speaker 2>doesn't that help engender a little bit more optimism or

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<v Speaker 2>at some level of enthusiasm, or do you think right

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<v Speaker 2>now it's a little dangerous to conclude.

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<v Speaker 3>That combined with what Jensen Huang is saying, some investors

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<v Speaker 3>will look at that and say, Wow, that's looking like

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<v Speaker 3>a peak in the investment cycle to me, and maybe

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<v Speaker 3>it's time for me to step aside. Still a chance

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<v Speaker 3>that some other investors will be more optimistic. But if

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<v Speaker 3>you look at the performance of Nazdak futures, for example,

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<v Speaker 3>they have not been making new highs in the way

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<v Speaker 3>that you would expect if people were so optimistic. How

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<v Speaker 3>comes Nestak futures are not taking making record highs in

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<v Speaker 3>the way that the SMP index has. For example, just

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<v Speaker 3>look at last week the diversion between Meta and Microsoft

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<v Speaker 3>Metas shares popped up, Microsoft collapsed. So it's not a

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<v Speaker 3>uniform response to what you're seeing in earnings and the outlook,

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<v Speaker 3>and that is completely different to what we were seeing,

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<v Speaker 3>say six twelve months ago, when everything was good news

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<v Speaker 3>in the tech space.

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<v Speaker 2>So we've got earnings in the week ahead from Alphabet

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<v Speaker 2>and Amazon, obviously two players in the cloud space. And

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<v Speaker 2>I think the market's going to be very attentive to

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<v Speaker 2>any suggestion that CAPEX is perhaps a little bit off track.

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<v Speaker 2>Is that the focal point that we need to kind

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<v Speaker 2>of remain fixated on cap X.

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<v Speaker 3>It's about investors are going to be looking for. You've

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<v Speaker 3>been spending a lot of money already, you plan to

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<v Speaker 3>spend more money. Where's the return in relation to the

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<v Speaker 3>amount of money you're putting into these data centers and

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<v Speaker 3>other aspects of your business. There comes a point when

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<v Speaker 3>you can tell investors for several months that yes, we

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<v Speaker 3>promise these things in the future. Eventually the future arrives,

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<v Speaker 3>and Navidia may have just told us now's the time

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<v Speaker 3>to start calculating whether we're really going to get the

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<v Speaker 3>payback on these investments or not. It's going to be

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<v Speaker 3>a much tougher week. Alphabet and Amazon would have to

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<v Speaker 3>be pitch perfect to satisfy investors this week. Any question

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<v Speaker 3>marks and you could see quite a big reversal in

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<v Speaker 3>the market.

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<v Speaker 2>Mark. Before I let you go, I have to ask

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<v Speaker 2>about bitcoin. We saw the price in weekend trading here

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<v Speaker 2>in the States break below seventy seven thousand. We're trading

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<v Speaker 2>it around that level now in the overnight session, can

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<v Speaker 2>you help me understand what's going on here with the

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<v Speaker 2>crypto space a little bit?

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<v Speaker 3>Well, crypto is the biggest threat to kryptos really was

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<v Speaker 3>the rise of precious metals when we had the rallies

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<v Speaker 3>in gold, silver plating, when they started to build up.

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<v Speaker 3>That was a serious threat because part of the attraction

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<v Speaker 3>of cryptos was that they were an alternative to other

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<v Speaker 3>major currencies and they were possibly potentially a safe haven

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<v Speaker 3>if there was going to be a blow up in

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<v Speaker 3>other markets where precious metals do a much better job,

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<v Speaker 3>they attracted a lot more money. So people were gradually

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<v Speaker 3>removing the from the crypto space anyway, So cryptos has

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<v Speaker 3>gone into a backseat situation here. It's possibly on a

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<v Speaker 3>decline that which will continue unless gold and silver go

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<v Speaker 3>back to the kind of levels they were a year ago.

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<v Speaker 3>The forward looking space or crypto is not as exciting

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<v Speaker 3>as it has been in the past.

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<v Speaker 2>Mark, it's always a pleasure, Thanks so much, Bloomberg Strategist

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<v Speaker 2>to Mark Cranfield, joining us from Singapore here on the

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<v Speaker 2>Daybreak Asia podcast. Welcome back to the Daybreak Asia Podcast.

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<v Speaker 2>I'm deg Krisner. Developer Hong Long Property says the real

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<v Speaker 2>estate markets in both Hong Kong and on the Chinese

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<v Speaker 2>mainland do remain under strain. We had the chance to

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<v Speaker 2>catch up with the company's chairman, Adril Chan. Adriel spoke

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<v Speaker 2>with Bloomberg TV host David Inglesse and Evonne Mann after

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<v Speaker 2>Hong Long released its latest results.

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<v Speaker 4>We're seeing a bit more price discovery, at least in

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<v Speaker 4>the Hong Kong property market, and we're starting to see

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<v Speaker 4>the market kind of sense that in some ways that

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<v Speaker 4>there might be some recovery underway. Do you think that

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<v Speaker 4>we've found a bit of a bottom.

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<v Speaker 5>It feels like we found a bit of a bottom, definitely.

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<v Speaker 5>If you look at our retail sales numbers, they've been

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<v Speaker 5>coming back. Second half last year was strong. Fourth quarter

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<v Speaker 5>was especially strong. We broke records in terms of occupancy,

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<v Speaker 5>foot traffic and retail sales. So it does feel like

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<v Speaker 5>it's coming back. Hong Kong a little bit weaker. We're

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<v Speaker 5>still finding the bottom there. I think we found it,

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<v Speaker 5>but we'll have to see how the retail numbers come

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<v Speaker 5>out these next couple of months. So overall mainland China

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<v Speaker 5>definitely giving us casts for some hope. That being said,

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<v Speaker 5>I think the numbers are strong, but we're still a

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<v Speaker 5>little bit careful on the outlook.

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<v Speaker 6>What assumption t making on mainland retail leasing specifically along

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<v Speaker 6>the luxury space. Of course, you mentioned that's a bright

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<v Speaker 6>spot for you guys.

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<v Speaker 5>So for January so far has been a little bit down,

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<v Speaker 5>basically flat from last January.

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<v Speaker 1>Okay.

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<v Speaker 5>The bright spot is that January last year was Chinese

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<v Speaker 5>New Year. This year, Chinese New Year is in February,

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<v Speaker 5>so we're hoping that that means good retail sales uplift

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<v Speaker 5>and we think that it's tracking.

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<v Speaker 4>It looks like you've been quite active in expanding your

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<v Speaker 4>China retail using portfolio ri cities.

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<v Speaker 7>Like Shanghai, Hanjo Wu Shi.

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<v Speaker 4>How do you compete with some of these domestic big

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<v Speaker 4>names and big developers and landlords like China Resources Land

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<v Speaker 4>for example in this market.

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<v Speaker 5>So the way I describe ourselves as we're a small

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<v Speaker 5>and beautiful and you know, so we have to do

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<v Speaker 5>things in a slightly different way.

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<v Speaker 1>Definitely, we don't have the scale.

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<v Speaker 5>Everything from finance cost and access to capital is different,

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<v Speaker 5>so we have to really try to stand out in

0:12:35.800 --> 0:12:39.880
<v Speaker 5>terms of doing things as high quality, as niche and

0:12:40.080 --> 0:12:42.800
<v Speaker 5>as high and as possible, and that's what we continue

0:12:42.840 --> 0:12:43.079
<v Speaker 5>to do.

0:12:43.480 --> 0:12:45.760
<v Speaker 1>What we've announced recently is our V three, which.

0:12:45.600 --> 0:12:49.480
<v Speaker 5>Is starting an asset light path and this is definitely

0:12:49.480 --> 0:12:52.200
<v Speaker 5>going to make better use of our capital, especially when

0:12:52.200 --> 0:12:55.480
<v Speaker 5>that's constrained. We're working on reducing our gearing, and the

0:12:55.559 --> 0:12:58.120
<v Speaker 5>question is how do you expand while reducing your gearing,

0:12:58.440 --> 0:13:00.920
<v Speaker 5>And that's basically with us light. So that's what we've

0:13:00.960 --> 0:13:03.280
<v Speaker 5>been doing, and only in the cities where we have

0:13:03.360 --> 0:13:06.600
<v Speaker 5>the strongest presence and the best performance already, So that's

0:13:06.640 --> 0:13:08.760
<v Speaker 5>where we're working to Expand.

0:13:09.040 --> 0:13:10.880
<v Speaker 6>How does that So what does it mean as far

0:13:10.880 --> 0:13:13.360
<v Speaker 6>as a business model, it's concerned So you imagine asset light,

0:13:14.160 --> 0:13:16.520
<v Speaker 6>So try to explain that to a five year old

0:13:16.520 --> 0:13:17.040
<v Speaker 6>for example.

0:13:17.440 --> 0:13:20.280
<v Speaker 5>So if I go back, our last version, version two

0:13:20.400 --> 0:13:22.640
<v Speaker 5>was really asset heavy, where we'd buy a plot of land,

0:13:22.840 --> 0:13:25.200
<v Speaker 5>we'd develop it, and then we lease it. So this

0:13:25.360 --> 0:13:27.160
<v Speaker 5>is really where we're leasing the plot of land or

0:13:27.200 --> 0:13:30.360
<v Speaker 5>leasing an existing mall and operating it. So if you

0:13:30.400 --> 0:13:33.200
<v Speaker 5>look at chying to reach a real estate prices, you

0:13:33.240 --> 0:13:36.840
<v Speaker 5>know they feel like they've topped out. It's hard to

0:13:36.840 --> 0:13:39.120
<v Speaker 5>see a lot of upside in the near to medium

0:13:39.200 --> 0:13:41.880
<v Speaker 5>term and therefore, you know, so we used to want

0:13:41.880 --> 0:13:45.280
<v Speaker 5>to capture that capital upside, and now we're more about

0:13:45.000 --> 0:13:50.800
<v Speaker 5>capturing the operational upside, so increasing our operational exposure without

0:13:51.240 --> 0:13:53.000
<v Speaker 5>having too much capital exposure.

0:13:53.200 --> 0:13:55.760
<v Speaker 4>You mentioned Hong Kong's recovery might be a bit not

0:13:56.480 --> 0:13:58.800
<v Speaker 4>I mean, maybe not as solid right now as mainline

0:13:58.800 --> 0:14:01.880
<v Speaker 4>of what you're seeing. At what point are you going

0:14:01.920 --> 0:14:05.040
<v Speaker 4>to start looking at maybe opportunities then, I mean, are

0:14:05.040 --> 0:14:07.440
<v Speaker 4>you looking to sell more properties or even acquire any

0:14:07.480 --> 0:14:08.920
<v Speaker 4>new projects in Hong Kong this year?

0:14:09.080 --> 0:14:11.559
<v Speaker 5>So in Hong Kong, we've really been working hard to sell.

0:14:11.920 --> 0:14:13.839
<v Speaker 5>Last year, we actually sold a lot, we contracted a

0:14:13.840 --> 0:14:15.719
<v Speaker 5>lot of sales, but we're not going to recognize a

0:14:15.720 --> 0:14:17.920
<v Speaker 5>lot of it until this year. So last year was

0:14:17.960 --> 0:14:21.160
<v Speaker 5>actually a good year for sales, but that'll be recognized

0:14:21.200 --> 0:14:21.520
<v Speaker 5>this year.

0:14:21.840 --> 0:14:23.520
<v Speaker 1>We're looking to sell down more.

0:14:23.680 --> 0:14:25.880
<v Speaker 5>We still have some properties for sale, mostly on the

0:14:25.920 --> 0:14:28.320
<v Speaker 5>high end, but we have some remaining in aperture.

0:14:28.840 --> 0:14:30.440
<v Speaker 1>So that's what we're looking to do.

0:14:30.600 --> 0:14:33.520
<v Speaker 5>Obviously, if good opportunities come by, I think we're happy

0:14:33.560 --> 0:14:35.960
<v Speaker 5>to buy as well. We do feel like the markets

0:14:36.000 --> 0:14:38.800
<v Speaker 5>have bottomed, or at least we found the bottom on

0:14:38.800 --> 0:14:39.160
<v Speaker 5>this round.

0:14:39.200 --> 0:14:40.640
<v Speaker 7>What do you think is driving this recovery.

0:14:41.200 --> 0:14:42.040
<v Speaker 1>So in Hong Kong.

0:14:42.040 --> 0:14:45.880
<v Speaker 5>By in Hong Kong, there's a lot of mainland New

0:14:45.920 --> 0:14:49.600
<v Speaker 5>Hong Kong people coming in. The talent scheme has definitely

0:14:49.640 --> 0:14:52.560
<v Speaker 5>brought in and brought up rental levels, and as these

0:14:52.600 --> 0:14:54.680
<v Speaker 5>people have rented now for a couple of years, they

0:14:54.680 --> 0:14:57.280
<v Speaker 5>may be looking to buy. These tend to be slightly

0:14:57.320 --> 0:15:00.560
<v Speaker 5>higher end buyers. So I'm more bullish the top end

0:15:00.600 --> 0:15:02.960
<v Speaker 5>of the market than i am on the mass. I

0:15:02.960 --> 0:15:05.520
<v Speaker 5>think the mass has seen sort of a structural rerating

0:15:05.520 --> 0:15:07.800
<v Speaker 5>over the past couple of years. It'll be some time

0:15:07.840 --> 0:15:09.920
<v Speaker 5>before that comes back, Whereas I think the high end

0:15:10.040 --> 0:15:13.400
<v Speaker 5>is definitely more cyclical and therefore more resilient for us.

0:15:13.840 --> 0:15:19.920
<v Speaker 6>I mean, it's really been noticeable the pickup in tourists,

0:15:20.240 --> 0:15:23.480
<v Speaker 6>visitor flow, let's just call it tourists and businesses. And

0:15:23.520 --> 0:15:25.680
<v Speaker 6>we've had a lot of mega events. We're moving into

0:15:25.760 --> 0:15:29.080
<v Speaker 6>March where traditionally it's a mega event month. Right, you

0:15:29.080 --> 0:15:30.720
<v Speaker 6>have everything from ark Basil all the way to the

0:15:30.720 --> 0:15:34.120
<v Speaker 6>sevenths Tangibly, is that starting to show up? As far

0:15:34.160 --> 0:15:36.600
<v Speaker 6>as you talked about foot traffic, but what about lisas

0:15:36.920 --> 0:15:40.440
<v Speaker 6>and retail sales for example, is that starting to pick

0:15:40.520 --> 0:15:40.800
<v Speaker 6>up too.

0:15:40.920 --> 0:15:43.840
<v Speaker 5>We're really happy that foot traffic is picked up, and

0:15:44.200 --> 0:15:47.080
<v Speaker 5>we're not as happy at the retail sales. They haven't

0:15:47.080 --> 0:15:50.480
<v Speaker 5>picked up the say at the same pace that traffic has.

0:15:50.680 --> 0:15:53.960
<v Speaker 5>It's usually lagging, a lagging indicator. But we're gonna have

0:15:53.960 --> 0:15:57.840
<v Speaker 5>to work harder to transmit those foot traffic into sales.

0:15:58.160 --> 0:16:01.640
<v Speaker 5>And you know, right now, the the appeal of Shenjin

0:16:01.760 --> 0:16:04.160
<v Speaker 5>is still strong Hong Kong people. Even though it sounds

0:16:04.160 --> 0:16:06.480
<v Speaker 5>like they're going up a little bit less, it's still

0:16:06.640 --> 0:16:07.920
<v Speaker 5>difficult to compete on price.

0:16:10.280 --> 0:16:12.760
<v Speaker 4>You we still were still able to maintain your occupancy

0:16:12.880 --> 0:16:16.760
<v Speaker 4>rate during these turbulent times, right ninety offices, Yeah, yeah,

0:16:17.160 --> 0:16:20.360
<v Speaker 4>of your office portfolio, despite the headwinds, but revenue was

0:16:20.360 --> 0:16:21.320
<v Speaker 4>still kind of edging lower.

0:16:21.320 --> 0:16:23.520
<v Speaker 7>I mean because of following rents.

0:16:23.320 --> 0:16:26.040
<v Speaker 4>Of course, do you think that that's the next place

0:16:26.080 --> 0:16:27.680
<v Speaker 4>to follow in terms of this recovery. But now that

0:16:27.720 --> 0:16:29.800
<v Speaker 4>we've seen at least when it comes to the housing

0:16:29.840 --> 0:16:32.520
<v Speaker 4>market is recovering, that maybe rental is going to be

0:16:32.560 --> 0:16:33.360
<v Speaker 4>the next thing to watch.

0:16:33.720 --> 0:16:36.320
<v Speaker 1>I would really like for office rents to rise this year.

0:16:36.640 --> 0:16:39.480
<v Speaker 6>That's what I love how you started answer already.

0:16:40.200 --> 0:16:43.200
<v Speaker 5>That was really what dragged our numbers last year because

0:16:43.240 --> 0:16:45.240
<v Speaker 5>offices have been tough, both in Hong Kong and in

0:16:45.280 --> 0:16:48.600
<v Speaker 5>the mainland. It actually took away some of the gains

0:16:48.600 --> 0:16:51.760
<v Speaker 5>that we made in retail. So retail's done well, office

0:16:51.840 --> 0:16:54.120
<v Speaker 5>is not so much. I don't see the end in

0:16:54.200 --> 0:16:57.040
<v Speaker 5>sight for office is just yet. Of course, here in

0:16:57.080 --> 0:17:00.000
<v Speaker 5>Hong Kong, we're talking about the IPOs and the financial

0:17:00.160 --> 0:17:03.160
<v Speaker 5>services industries helping with that occupancy, but there's still a

0:17:03.160 --> 0:17:05.800
<v Speaker 5>lot of occupancy, especially here in central and so I

0:17:05.800 --> 0:17:08.040
<v Speaker 5>think occupancy has to come up before prices are going

0:17:08.080 --> 0:17:10.640
<v Speaker 5>to come up, and I don't yet see the end

0:17:10.640 --> 0:17:10.920
<v Speaker 5>to that.

0:17:11.320 --> 0:17:13.840
<v Speaker 6>And the strategy to maintain the sort of ninety percent

0:17:13.880 --> 0:17:15.480
<v Speaker 6>occupancy rate is that. Do you think that's going to

0:17:15.480 --> 0:17:18.800
<v Speaker 6>be down to price? Supply seems to be an issue,

0:17:18.840 --> 0:17:20.120
<v Speaker 6>I think, is what you're mentioning too.

0:17:20.320 --> 0:17:21.760
<v Speaker 5>Yeah, so I think there's still gonna be a little

0:17:21.760 --> 0:17:25.720
<v Speaker 5>bit of price pressure because occupancies haven't fully caught up yet.

0:17:26.000 --> 0:17:29.919
<v Speaker 5>In the main end of China, it's also tough offices.

0:17:30.040 --> 0:17:32.439
<v Speaker 5>I think it's you know, I've had this discussion with

0:17:32.480 --> 0:17:33.760
<v Speaker 5>a lot of my friends and peers.

0:17:33.960 --> 0:17:35.480
<v Speaker 1>Is it cyclical or is it structural?

0:17:35.760 --> 0:17:37.480
<v Speaker 5>And when you're having that discussion, it's not a good

0:17:37.480 --> 0:17:39.840
<v Speaker 5>discussion to have. That means that things are bad, and

0:17:39.920 --> 0:17:42.840
<v Speaker 5>so I don't yet see the end for office rentals

0:17:42.880 --> 0:17:43.640
<v Speaker 5>in China yet.

0:17:43.760 --> 0:17:45.840
<v Speaker 7>What is the answer to that though? Is it cyclical

0:17:45.920 --> 0:17:46.520
<v Speaker 7>or more structural.

0:17:47.160 --> 0:17:49.800
<v Speaker 5>My answer is actually that it's more cyclical, and I

0:17:49.800 --> 0:17:52.359
<v Speaker 5>think that if the economy comes back, when it comes back,

0:17:52.680 --> 0:17:55.800
<v Speaker 5>office rents will come back. You know, there's still that dynamism,

0:17:56.320 --> 0:17:58.720
<v Speaker 5>and if they can reignite that, then I think that

0:17:58.800 --> 0:18:02.000
<v Speaker 5>offices can come back, at least at the high end

0:18:02.000 --> 0:18:02.520
<v Speaker 5>of the market.

0:18:02.960 --> 0:18:06.560
<v Speaker 2>That is Honglong Property Chairman Adril Chan speaking to Bloomberg

0:18:06.600 --> 0:18:09.639
<v Speaker 2>TV host David Englase and Evon Mann here on the

0:18:09.680 --> 0:18:15.280
<v Speaker 2>Daybreak Asia Podcast. Thanks for listening to today's episode of

0:18:15.320 --> 0:18:19.440
<v Speaker 2>the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look

0:18:19.440 --> 0:18:23.240
<v Speaker 2>at the story shaping markets, finance, and geopolitics in the

0:18:23.280 --> 0:18:26.520
<v Speaker 2>Asia Pacific. You can find us on Apple, Spotify, the

0:18:26.560 --> 0:18:30.560
<v Speaker 2>Bloomberg Podcast YouTube channel, or anywhere else you listen. Join

0:18:30.680 --> 0:18:33.679
<v Speaker 2>us again tomorrow for insight on the market moves from

0:18:33.720 --> 0:18:38.199
<v Speaker 2>Hong Kong to Singapore and Australia. I'm Doug Chrisner, and

0:18:38.320 --> 0:18:39.480
<v Speaker 2>this is Bloomberg