1
00:00:02,560 --> 00:00:05,520
Speaker 1: This is Bloomberg day Break Asia for this Wednesday, April

2
00:00:05,519 --> 00:00:08,800
Speaker 1: twenty sixth in Hong Kong, Tuesday April twenty fifth in

3
00:00:08,880 --> 00:00:10,680
Speaker 1: New York, and coming up today.

4
00:00:10,560 --> 00:00:13,640
Speaker 2: First Republic Bank is said to be considering selling up

5
00:00:13,640 --> 00:00:16,800
Speaker 2: to one hundred billion dollars in assets. Shares plunge as

6
00:00:16,880 --> 00:00:18,040
Speaker 2: much as fifty percent.

7
00:00:18,320 --> 00:00:23,080
Speaker 1: Alpha Met's quarterly revenue beats analyst estimates as ad sales recover.

8
00:00:22,880 --> 00:00:26,640
Speaker 2: And Microsoft reports strong sales and profit with increased demand

9
00:00:26,760 --> 00:00:27,840
Speaker 2: for cloud services.

10
00:00:28,080 --> 00:00:32,160
Speaker 3: Germany announcing intentions to improve relations with China. Biden makes

11
00:00:32,240 --> 00:00:36,840
Speaker 3: reelection bit official, China loosens travel test restrictions, I Space

12
00:00:36,960 --> 00:00:40,240
Speaker 3: Japan as disappointing, and to Moon mission. I'm at Baxter

13
00:00:40,280 --> 00:00:41,080
Speaker 3: with Global News.

14
00:00:44,120 --> 00:00:47,800
Speaker 4: That's all straight ahead on Bloomberg Daybreak Asia, the business

15
00:00:47,840 --> 00:00:50,279
Speaker 4: news you need to start your day in just one

16
00:00:50,400 --> 00:00:55,320
Speaker 4: fifteen minute podcast available on Apple, Spotify, the Bloomberg Business App,

17
00:00:55,360 --> 00:00:57,320
Speaker 4: and everywhere you get your podcasts.

18
00:01:00,120 --> 00:01:03,240
Speaker 1: Good morning, I'm Doug Chrisner and I'm Brian Curtiz. Here

19
00:01:03,240 --> 00:01:05,880
Speaker 1: are the stories we're following today. We hear that First

20
00:01:05,920 --> 00:01:09,760
Speaker 1: Republic Bank is exploring divesting fifty to one hundred billion

21
00:01:09,840 --> 00:01:13,160
Speaker 1: dollars worth of long dated mortgage and securities as part

22
00:01:13,240 --> 00:01:16,160
Speaker 1: of a broader rescue plan. The sales are aimed at

23
00:01:16,160 --> 00:01:20,120
Speaker 1: reducing the mismatch between the bank's assets and liabilities, and

24
00:01:20,440 --> 00:01:24,319
Speaker 1: buyers may be offered some incentives to pay above market rates.

25
00:01:24,400 --> 00:01:26,080
Speaker 1: Here's Bloomberg Shinali Bassok.

26
00:01:26,319 --> 00:01:29,080
Speaker 5: There may be sweeteners for potential buyers here, that's part

27
00:01:29,120 --> 00:01:31,920
Speaker 5: of the deal here. Potentially warrants are preferred equity as

28
00:01:31,920 --> 00:01:34,759
Speaker 5: an incentive to buy some of these assets. Remember when

29
00:01:34,760 --> 00:01:37,280
Speaker 5: we looked at First Republic, loans at the end of

30
00:01:37,319 --> 00:01:39,800
Speaker 5: the quarter were one hundred and seventy three billion, but

31
00:01:39,959 --> 00:01:42,600
Speaker 5: deposits were one hundred billion. There are a lot of

32
00:01:42,640 --> 00:01:44,920
Speaker 5: concerns about the strength of the balance sheet here. But

33
00:01:44,959 --> 00:01:47,600
Speaker 5: the hope here is that by getting Whittf's assets, selling

34
00:01:47,640 --> 00:01:50,760
Speaker 5: these assets at above market value, there can be something

35
00:01:50,760 --> 00:01:52,400
Speaker 5: here for the buyer to hang on to.

36
00:01:53,920 --> 00:01:56,440
Speaker 1: We hear that Fresh Republic may need the US government

37
00:01:56,480 --> 00:01:59,520
Speaker 1: to facilitate negotiations with some of the largest banks in

38
00:01:59,560 --> 00:02:02,480
Speaker 1: the country to try to stabilize the lender as it

39
00:02:02,600 --> 00:02:06,200
Speaker 1: executes its turnaround. First Republic shares dropped as much as

40
00:02:06,320 --> 00:02:08,920
Speaker 1: fifty percent today in the session.

41
00:02:09,160 --> 00:02:11,920
Speaker 2: We heard from Microsoft after the closing Bell. The company

42
00:02:11,919 --> 00:02:16,360
Speaker 2: reported quarterly profit and sales above expectations. Sales of the

43
00:02:16,400 --> 00:02:20,680
Speaker 2: company's Azure cloud computing business were up thirty one percent. Now,

44
00:02:20,680 --> 00:02:23,920
Speaker 2: these positive results were due in large part to resilient

45
00:02:23,960 --> 00:02:27,800
Speaker 2: corporate demand not only for software, but services as well,

46
00:02:27,840 --> 00:02:30,959
Speaker 2: delivered over the Internet. We got some reaction from Bloomberg's

47
00:02:31,080 --> 00:02:31,959
Speaker 2: onnarrog Rana.

48
00:02:32,280 --> 00:02:35,880
Speaker 6: That's very good, which means that the increased cost of

49
00:02:35,960 --> 00:02:38,920
Speaker 6: computing because of new AI applications, at least what they

50
00:02:38,919 --> 00:02:41,560
Speaker 6: have lot so far, is not eating away from the profit.

51
00:02:41,800 --> 00:02:43,520
Speaker 6: In terms of growth, I think it's going to take

52
00:02:43,560 --> 00:02:46,119
Speaker 6: a few quarters before we see growth coming.

53
00:02:45,880 --> 00:02:50,240
Speaker 2: In Bloomberg's onarrog Rana. Now, going forward, Microsoft is placing

54
00:02:50,400 --> 00:02:54,519
Speaker 2: massive bets on artificial intelligence. The company is investing ten

55
00:02:54,639 --> 00:02:59,320
Speaker 2: billion dollars into Open AI and a new bing search

56
00:02:59,600 --> 00:03:03,800
Speaker 2: chat Microsoft is opening. The increase will help future sales

57
00:03:03,800 --> 00:03:06,880
Speaker 2: of not only Azure, but search ads as well, along

58
00:03:06,919 --> 00:03:11,359
Speaker 2: with office productivity programs. Shares and Microsoft were up about

59
00:03:11,680 --> 00:03:13,359
Speaker 2: five percent in late US trading.

60
00:03:14,720 --> 00:03:17,639
Speaker 1: Yeah, and you can contrast that with Google. So right

61
00:03:17,639 --> 00:03:20,079
Speaker 1: now you've got Google shares up about two point four

62
00:03:20,160 --> 00:03:23,720
Speaker 1: percent and just looking at Microsoft shares up eight point

63
00:03:23,760 --> 00:03:28,079
Speaker 1: two percent. In late trading, Alphabet reporting first quarter sales

64
00:03:28,080 --> 00:03:31,560
Speaker 1: and profit that did top analyst estimates. The results show

65
00:03:31,600 --> 00:03:36,200
Speaker 1: that Alphabet's search advertising business is weathering an economic downturn.

66
00:03:36,520 --> 00:03:40,120
Speaker 1: It also performed well even as Google faces heightened competitive

67
00:03:40,120 --> 00:03:43,640
Speaker 1: threats from Microsoft and open Ai. We heard earlier from

68
00:03:43,640 --> 00:03:45,240
Speaker 1: Bloomberg's man Deep Singh.

69
00:03:45,440 --> 00:03:48,840
Speaker 7: It was, you know, given the macro environment, probably the

70
00:03:48,880 --> 00:03:51,760
Speaker 7: best print that we have seen, you know, from Alphabet

71
00:03:51,840 --> 00:03:55,440
Speaker 7: in terms of digital ad spending holding up and no

72
00:03:55,600 --> 00:03:59,720
Speaker 7: impact whatsoever from chat GPT. Look, everyone talked about, you know,

73
00:03:59,800 --> 00:04:03,840
Speaker 7: how howuch at GPT would hurt search volumes. None.

74
00:04:03,960 --> 00:04:07,000
Speaker 1: Alphabet's closely watched Cloudy and it also made money for

75
00:04:07,040 --> 00:04:09,400
Speaker 1: the first time, reporting profit of some one hundred and

76
00:04:09,440 --> 00:04:13,440
Speaker 1: ninety one million dollars. Alphabet shares, as mentioned, are gaining

77
00:04:13,440 --> 00:04:15,560
Speaker 1: in the after hours, although they are off the best

78
00:04:15,640 --> 00:04:17,800
Speaker 1: levels of the day, which was up four percent and

79
00:04:17,960 --> 00:04:19,760
Speaker 1: at the moment two point three percent.

80
00:04:19,920 --> 00:04:22,520
Speaker 2: We had a lot of weakness in semiconductor stocks during

81
00:04:22,520 --> 00:04:26,040
Speaker 2: the regular session. The Philadelphia Semiconductor Index was down today

82
00:04:26,040 --> 00:04:29,039
Speaker 2: by three point four percent, and then after the bell,

83
00:04:29,240 --> 00:04:33,479
Speaker 2: Texas Instruments with a lackluster forecast for the current quarter.

84
00:04:33,640 --> 00:04:35,440
Speaker 2: The story from Bloomberg's Charlie Pellett.

85
00:04:35,600 --> 00:04:40,080
Speaker 8: TI is the chip industry's most diversified maker of electronic components,

86
00:04:40,120 --> 00:04:43,360
Speaker 8: and it indicates that a slump in demand is spreading

87
00:04:43,360 --> 00:04:48,040
Speaker 8: two previously unscathed areas. The outlook suggests that even the

88
00:04:48,120 --> 00:04:51,840
Speaker 8: chip industry's bright spots, such as the industrial market, are

89
00:04:51,880 --> 00:04:55,880
Speaker 8: getting swept up in the broader slowdown. Texas Instruments gets

90
00:04:55,920 --> 00:04:59,240
Speaker 8: a large portion of its revenue from factory equipment, and

91
00:04:59,279 --> 00:05:02,719
Speaker 8: that had helped the company's sidestep of sales slide suffered

92
00:05:02,720 --> 00:05:07,440
Speaker 8: by personal computers and smartphones in New York. Charlie Pellett

93
00:05:07,440 --> 00:05:08,840
Speaker 8: Bloomberg Daybreak Asia.

94
00:05:09,640 --> 00:05:13,400
Speaker 1: Apple plans to put AI to work as your personal

95
00:05:13,440 --> 00:05:17,080
Speaker 1: wellness coach. Let's get that story from Bloomberg's Tracy Junkie.

96
00:05:17,120 --> 00:05:20,480
Speaker 9: Apple has made health and wellness features central to devices,

97
00:05:20,520 --> 00:05:23,640
Speaker 9: including the Apple Watch. People with Knowledge tell Bloomberg that

98
00:05:23,680 --> 00:05:26,359
Speaker 9: Apple is now working to combine data from the watch

99
00:05:26,400 --> 00:05:30,680
Speaker 9: with machine learning to create a personalized coaching service code

100
00:05:30,760 --> 00:05:34,479
Speaker 9: named Quartz. The aim is to motivate people to exercise

101
00:05:34,560 --> 00:05:37,800
Speaker 9: and improve their eating and sleeping habits, plus moderate people

102
00:05:37,800 --> 00:05:40,760
Speaker 9: to pay for the service. Apple is also developing a

103
00:05:40,800 --> 00:05:43,240
Speaker 9: mood tracker that will be added to the current health

104
00:05:43,279 --> 00:05:47,000
Speaker 9: app this year. I'm Tracy Johnkie Bloomberg Daybreak Asia.

105
00:05:47,760 --> 00:05:51,120
Speaker 1: I'm Brian Curtis, along with Doug Christner and Rashad Salama

106
00:05:51,160 --> 00:05:53,840
Speaker 1: will join us in a few moments. Our guest coming

107
00:05:53,880 --> 00:05:57,920
Speaker 1: up is Poojamalk, partner at Niepun Capital, So that should

108
00:05:57,920 --> 00:06:01,800
Speaker 1: be an interesting discussion, Dug, a lot more give and take.

109
00:06:01,880 --> 00:06:04,120
Speaker 1: So we had a take day in the markets, as

110
00:06:04,160 --> 00:06:06,400
Speaker 1: you pointed out, it was a real risk off, David.

111
00:06:06,440 --> 00:06:09,200
Speaker 1: Now you look at the futures. Nasdak I mini's up

112
00:06:09,240 --> 00:06:11,640
Speaker 1: one point four percent, So here we go again.

113
00:06:11,880 --> 00:06:13,799
Speaker 2: Yeah, a lot of the earnings after the bell giving

114
00:06:13,839 --> 00:06:17,440
Speaker 2: positivity to the Nasdaq one hundred contract. But you got

115
00:06:17,480 --> 00:06:19,400
Speaker 2: to pay attention, and I think, Brian, to the bond

116
00:06:19,440 --> 00:06:21,919
Speaker 2: market and the signal it may be sending right now

117
00:06:22,160 --> 00:06:25,480
Speaker 2: with this big move lower right across the curve today.

118
00:06:25,839 --> 00:06:27,440
Speaker 2: And I was struck by the fact that in the

119
00:06:27,480 --> 00:06:31,040
Speaker 2: swaps market right now it seems to be pricing in

120
00:06:31,160 --> 00:06:35,039
Speaker 2: just twenty one basis points in FED tightening from current levels,

121
00:06:35,040 --> 00:06:36,600
Speaker 2: which as you know, would be less than a full

122
00:06:36,680 --> 00:06:39,520
Speaker 2: quarter point move. So right now the market seems to

123
00:06:39,560 --> 00:06:42,080
Speaker 2: be very, very divided on what the Fed may begin

124
00:06:42,400 --> 00:06:42,720
Speaker 2: to do.

125
00:06:43,320 --> 00:06:45,400
Speaker 1: Yeah, and in terms of June is down to only

126
00:06:45,480 --> 00:06:48,719
Speaker 1: nine percent for a hike. But obviously a lot of

127
00:06:48,720 --> 00:06:50,719
Speaker 1: this comes down to the data. You mentioned the consumer

128
00:06:50,800 --> 00:06:54,279
Speaker 1: confidence was weak, yet some of the economic data that

129
00:06:54,320 --> 00:06:57,320
Speaker 1: we've seen has been reasonably solid. I wanted to get

130
00:06:57,360 --> 00:06:59,840
Speaker 1: a quick word in Doug on this possibility of a

131
00:07:00,040 --> 00:07:03,479
Speaker 1: property tax coming in China, and we were speaking with

132
00:07:03,520 --> 00:07:07,039
Speaker 1: a China economist yesterday about possible reforms that might be

133
00:07:07,160 --> 00:07:11,119
Speaker 1: good for nurturing along the economy. But it wasn't tax

134
00:07:11,200 --> 00:07:13,600
Speaker 1: hikes that we were talking about. It was the possibility

135
00:07:13,880 --> 00:07:17,559
Speaker 1: of tax cuts. So at the moment, given where they are,

136
00:07:17,720 --> 00:07:20,840
Speaker 1: although this is probably inevitable to bring in a property tax,

137
00:07:20,880 --> 00:07:22,240
Speaker 1: that timing does not look good.

138
00:07:22,400 --> 00:07:22,600
Speaker 10: Yeah.

139
00:07:22,640 --> 00:07:25,560
Speaker 2: The infrastructure, from what I understand, Brian, has been put

140
00:07:25,600 --> 00:07:29,520
Speaker 2: in place, this nationwide real estate registration system, so it

141
00:07:29,560 --> 00:07:32,040
Speaker 2: appears to be a property tax is just one step

142
00:07:32,080 --> 00:07:32,600
Speaker 2: away from this.

143
00:07:33,320 --> 00:07:35,520
Speaker 1: Yeah, this has been coming for a decade or so.

144
00:07:35,640 --> 00:07:38,040
Speaker 1: And as mentioned, it would be probably good for the

145
00:07:38,160 --> 00:07:41,640
Speaker 1: Chinese economy because it would be raising tax from the

146
00:07:41,680 --> 00:07:44,480
Speaker 1: wealthier classes, so it would be good for a lot

147
00:07:44,480 --> 00:07:47,720
Speaker 1: of the people that Hi Jinping is trying to help

148
00:07:47,800 --> 00:07:51,000
Speaker 1: with the common prosperity. So it's coming, but the timing

149
00:07:51,000 --> 00:07:53,240
Speaker 1: again just doesn't look all that great. By the way,

150
00:07:53,280 --> 00:07:55,320
Speaker 1: you can learn a lot more about this on the terminal,

151
00:07:55,320 --> 00:07:58,720
Speaker 1: not only from our piece, our news piece, but also

152
00:07:58,800 --> 00:08:02,320
Speaker 1: from the China Today column. It's time now for global news.

153
00:08:03,880 --> 00:08:07,440
Speaker 1: Germany is openly announcing today that it wants to improve

154
00:08:07,520 --> 00:08:10,840
Speaker 1: relations with China in the coming months. At Baxter has

155
00:08:10,880 --> 00:08:14,840
Speaker 1: Global News from the nine to sixty newsroom in San Francisco.

156
00:08:15,320 --> 00:08:16,320
Speaker 1: As you like to say, it.

157
00:08:16,280 --> 00:08:19,880
Speaker 3: Is yeah, thank you, Brian. Yeah. Chancellor Olive Schultz has

158
00:08:19,880 --> 00:08:23,880
Speaker 3: invited Chinese Premiarily Tying for talks in Berlin June twentieth.

159
00:08:24,200 --> 00:08:26,600
Speaker 3: It is the latest bid by Germany to ease attentions

160
00:08:26,600 --> 00:08:30,640
Speaker 3: between Europe and Beijing. Schultz wants to talk global peace

161
00:08:30,680 --> 00:08:33,720
Speaker 3: and tackle climate change while setting out changes to the

162
00:08:33,720 --> 00:08:37,559
Speaker 3: status quo in Taiwan and it's official President Joe Biden

163
00:08:37,600 --> 00:08:40,679
Speaker 3: launching his twenty twenty four campaign for reelection and vitio

164
00:08:40,800 --> 00:08:44,360
Speaker 3: on video once again saying freedom is on the line.

165
00:08:44,120 --> 00:08:44,840
Speaker 1: Around the country.

166
00:08:44,880 --> 00:08:47,240
Speaker 11: Mag you're extremists, We're light enough to take on those

167
00:08:47,240 --> 00:08:51,000
Speaker 11: bedrock freedoms, cutting social security and you've paid for your

168
00:08:51,120 --> 00:08:54,440
Speaker 11: entire life, while cutting taxes from very wealthy, dictating what

169
00:08:54,520 --> 00:08:58,880
Speaker 11: healthcare decisions women can make, banning books, and telling people

170
00:08:58,960 --> 00:09:01,840
Speaker 11: who they can love all I'm making it more difficult

171
00:09:01,880 --> 00:09:03,120
Speaker 11: for you to be able to vote.

172
00:09:03,280 --> 00:09:06,640
Speaker 3: He says they're strong record of legislative achievement in spite

173
00:09:06,640 --> 00:09:09,560
Speaker 3: of the obstruction of the MAGA Republicans and a battle

174
00:09:09,559 --> 00:09:12,840
Speaker 3: again for the soul of the Republic. Bloomberg's Mario Parker

175
00:09:12,960 --> 00:09:15,400
Speaker 3: on Bloomberg's Balance of Power notes. The video opened with

176
00:09:15,520 --> 00:09:19,079
Speaker 3: scenes from the January sixth insurrection as a first attack

177
00:09:19,360 --> 00:09:20,360
Speaker 3: on Republicans.

178
00:09:20,559 --> 00:09:23,880
Speaker 12: They're almost giddy looking at poles, saying that there's a

179
00:09:23,920 --> 00:09:27,320
Speaker 12: rematch for twenty twenty. Not thirty seconds into the video,

180
00:09:27,520 --> 00:09:30,600
Speaker 12: President Biden was evoking MAGA. I mean that was a

181
00:09:30,640 --> 00:09:32,680
Speaker 12: clear sign and that's the fight they want.

182
00:09:32,559 --> 00:09:33,000
Speaker 8: To see them.

183
00:09:33,280 --> 00:09:35,880
Speaker 3: Yeah. Mario also saying it's time to make some money

184
00:09:36,160 --> 00:09:38,440
Speaker 3: and that a group of potential donors will come to

185
00:09:38,440 --> 00:09:41,359
Speaker 3: the White House the end of the week. GOLP presidential

186
00:09:41,400 --> 00:09:44,199
Speaker 3: candidate Nikki Haley is out today talking about the issue

187
00:09:44,240 --> 00:09:47,800
Speaker 3: of abortion, which is sure to become a major campaign issue.

188
00:09:47,840 --> 00:09:50,200
Speaker 3: She says what is needed is consensus.

189
00:09:50,320 --> 00:09:54,200
Speaker 13: No one talks about finding consensus. Everyone goes to the

190
00:09:54,240 --> 00:09:58,040
Speaker 13: barricades and attacks the other side. They turned a sensitive

191
00:09:58,080 --> 00:10:01,520
Speaker 13: issue that has long divided people into a kind of

192
00:10:02,360 --> 00:10:03,400
Speaker 13: gotcha bidding war.

193
00:10:03,760 --> 00:10:06,000
Speaker 3: Yeah, she says she wants to save as many babies

194
00:10:06,040 --> 00:10:08,720
Speaker 3: as can be saved. But that agreement of how to

195
00:10:08,800 --> 00:10:12,559
Speaker 3: be reached, well, she says, it can't be political. China

196
00:10:12,600 --> 00:10:15,040
Speaker 3: will no longer require travelers to the country to provide

197
00:10:15,040 --> 00:10:18,160
Speaker 3: a negative PCR test result. This opens the door to

198
00:10:18,200 --> 00:10:21,680
Speaker 3: get rid of a major deterrent for visitation since China

199
00:10:21,720 --> 00:10:26,719
Speaker 3: has emerged from COVID isolation in January. Disappointment today at

200
00:10:26,720 --> 00:10:29,920
Speaker 3: the end of Japan's I space landing process on its

201
00:10:30,280 --> 00:10:31,479
Speaker 3: mission to the Moon.

202
00:10:31,480 --> 00:10:34,880
Speaker 14: And now we are at the moment of planned landing

203
00:10:34,960 --> 00:10:39,000
Speaker 14: time again. Everyone, please give us a few moments to confirm.

204
00:10:39,200 --> 00:10:40,440
Speaker 3: Moments past our.

205
00:10:40,480 --> 00:10:46,480
Speaker 14: Mcc crew standing by waiting to confirm. You can really

206
00:10:46,480 --> 00:10:50,640
Speaker 14: feel at tension and despair and it is so difficult

207
00:10:50,760 --> 00:10:54,040
Speaker 14: feeling hollowless now, But all we can do is cheer

208
00:10:54,040 --> 00:10:54,440
Speaker 14: them up.

209
00:10:54,960 --> 00:10:59,320
Speaker 3: Yeah. And later the crew assembled, mission head Takashi Hatamata.

210
00:10:58,920 --> 00:11:05,400
Speaker 15: We confound DOT. We have established the communication until very

211
00:11:05,559 --> 00:11:06,880
Speaker 15: end of randin.

212
00:11:07,120 --> 00:11:10,000
Speaker 3: Yeah, and lead them to conclude the lander was damaged

213
00:11:10,040 --> 00:11:12,840
Speaker 3: not able to communicate. But note that the launch happened

214
00:11:12,840 --> 00:11:16,080
Speaker 3: in December, thrown into orbit by SpaceX Falca Iron rocket,

215
00:11:16,400 --> 00:11:18,880
Speaker 3: orbiting the Moon for three months, picking up data and

216
00:11:18,920 --> 00:11:19,640
Speaker 3: sending it home.

217
00:11:19,679 --> 00:11:22,920
Speaker 15: We are very proud of the fact that we have

218
00:11:23,120 --> 00:11:26,840
Speaker 15: already achieved many things during this mission.

219
00:11:26,880 --> 00:11:30,880
Speaker 3: WAM and prepare for missions two and three. Global News

220
00:11:30,880 --> 00:11:33,600
Speaker 3: powered by more than twenty seven hundred journalists and analysts

221
00:11:33,600 --> 00:11:36,439
Speaker 3: in over one hundred and twenty countries in San Francisco.

222
00:11:36,600 --> 00:11:37,280
Speaker 3: I'm at Baxter.

223
00:11:37,559 --> 00:11:38,880
Speaker 8: This is Bloomberg.

224
00:11:38,960 --> 00:11:42,960
Speaker 1: I'm Brian Curtis here in Hong Kong alongside Rashad Salamat

225
00:11:43,160 --> 00:11:46,679
Speaker 1: and as you heard there at Baxter on News and

226
00:11:46,960 --> 00:11:49,280
Speaker 1: Krisner looking at markets. So we've got it all covered

227
00:11:49,320 --> 00:11:52,360
Speaker 1: for you. And our guest is Pooja Malik, partner at

228
00:11:52,440 --> 00:11:56,560
Speaker 1: Nipun Capital, and she's here to provide the pithy comment.

229
00:11:57,000 --> 00:11:59,480
Speaker 1: So Pooja, thanks very much for joining with us or

230
00:11:59,559 --> 00:12:03,480
Speaker 1: joining us. You're just looking at markets here and how

231
00:12:03,520 --> 00:12:07,040
Speaker 1: to navigate through this. We've had a period of low volatility,

232
00:12:07,440 --> 00:12:12,640
Speaker 1: but you'd almost think that given the really diverse outcomes

233
00:12:12,640 --> 00:12:15,480
Speaker 1: that we're seeing from earnings and from economic data that

234
00:12:15,520 --> 00:12:18,600
Speaker 1: we should see an increase in volatility. Would you buy

235
00:12:18,679 --> 00:12:19,560
Speaker 1: volatility here?

236
00:12:20,720 --> 00:12:22,960
Speaker 10: Yeah, you're absolutely right. I think weal city is set

237
00:12:23,000 --> 00:12:26,760
Speaker 10: to rise across the world as well as in emerging

238
00:12:26,840 --> 00:12:31,320
Speaker 10: markets in Asia, and the market can come from manufacturers. There's,

239
00:12:31,400 --> 00:12:34,720
Speaker 10: of course, the geopolitical risks, the situation between the US China,

240
00:12:35,000 --> 00:12:37,920
Speaker 10: with other countries like Korea and Germany now sort of

241
00:12:38,080 --> 00:12:41,160
Speaker 10: being involved in the middle. There's also tailed risk coming

242
00:12:41,200 --> 00:12:44,400
Speaker 10: from the high levels of interest rates in the US,

243
00:12:44,720 --> 00:12:46,800
Speaker 10: So I see a lot of risk on the horizon

244
00:12:46,800 --> 00:12:49,240
Speaker 10: that their quer market is manufacturing in as of now.

245
00:12:50,240 --> 00:12:52,760
Speaker 16: Well, tell me something, what's going on with First Republic?

246
00:12:53,080 --> 00:12:56,320
Speaker 16: How worried are you about that? And perhaps other banks

247
00:12:56,360 --> 00:12:58,840
Speaker 16: finding themselves in the same position in the weeks and

248
00:12:58,920 --> 00:12:59,520
Speaker 16: days to come.

249
00:13:00,960 --> 00:13:02,880
Speaker 10: I have no doubt that a lot of other banks

250
00:13:02,920 --> 00:13:06,800
Speaker 10: are in similar positions. The extent of how bad the

251
00:13:06,840 --> 00:13:09,800
Speaker 10: situation is, of course varies, and the access to new

252
00:13:09,840 --> 00:13:13,680
Speaker 10: capital to cover some of these problems also varies. And

253
00:13:13,800 --> 00:13:15,560
Speaker 10: I said that, I think the good news is that

254
00:13:15,679 --> 00:13:19,400
Speaker 10: emerging market banks are more or less isolated from this issue.

255
00:13:19,920 --> 00:13:22,280
Speaker 10: You know, most central banks in em have been raising

256
00:13:22,320 --> 00:13:24,480
Speaker 10: weights for a while, and rates are quite deep in

257
00:13:24,559 --> 00:13:26,560
Speaker 10: those markets, and I would say the grates might be

258
00:13:26,640 --> 00:13:30,600
Speaker 10: even behind us in most of em The banks mem

259
00:13:30,640 --> 00:13:33,400
Speaker 10: have also been very resilient because they've been through crisis

260
00:13:33,400 --> 00:13:35,200
Speaker 10: in the past and have learned from that, so they're

261
00:13:35,280 --> 00:13:38,040
Speaker 10: very well capitalized. So the good news here is that

262
00:13:38,120 --> 00:13:42,680
Speaker 10: banks across emerging markets seem very stable and less vulnerable

263
00:13:42,720 --> 00:13:46,880
Speaker 10: to this interest rate situation, whereas regional banks in the US.

264
00:13:47,360 --> 00:13:49,640
Speaker 10: Definitely I could see more problems looming ahead.

265
00:13:50,960 --> 00:13:52,360
Speaker 16: I just want to get to where we are in

266
00:13:52,600 --> 00:13:54,080
Speaker 16: this part of the world. And you know, the whole

267
00:13:54,120 --> 00:13:57,040
Speaker 16: reopening story. Is that something which is now in the

268
00:13:57,040 --> 00:13:58,640
Speaker 16: rear view mirror and is it done?

269
00:14:00,000 --> 00:14:03,079
Speaker 10: I think so. I think we have seen the headlines

270
00:14:03,320 --> 00:14:07,320
Speaker 10: relating to the reopening story, but we're still seeing earnings

271
00:14:07,320 --> 00:14:11,800
Speaker 10: recovery on the ground. Earnings for Chinese companies both this

272
00:14:11,920 --> 00:14:14,600
Speaker 10: year and next year are projected to be in double

273
00:14:14,640 --> 00:14:17,480
Speaker 10: digit The next year will be particularly strong. So I

274
00:14:17,520 --> 00:14:22,240
Speaker 10: think we will see the recovery story play out and

275
00:14:22,320 --> 00:14:26,280
Speaker 10: translate into earnings over the next twelve to twenty four months,

276
00:14:26,560 --> 00:14:29,920
Speaker 10: and that will hopefully then act as a mechanism or

277
00:14:29,920 --> 00:14:33,040
Speaker 10: a catalyst for rerating equities as well.

278
00:14:33,360 --> 00:14:36,200
Speaker 1: China is its own big beast. But for the rest

279
00:14:36,240 --> 00:14:37,840
Speaker 1: of the world. And I know you've been pushing emerging

280
00:14:37,840 --> 00:14:41,240
Speaker 1: markets in this discussion, but isn't the key question still

281
00:14:41,280 --> 00:14:43,720
Speaker 1: if the US goes into recession, all bets are off.

282
00:14:43,840 --> 00:14:45,760
Speaker 1: So how you figure that is what you.

283
00:14:45,720 --> 00:14:49,640
Speaker 10: Want to do in em or No, If the US

284
00:14:49,680 --> 00:14:53,200
Speaker 10: goes into recession, definitely there's huge rapper cussions for ams,

285
00:14:53,240 --> 00:14:57,600
Speaker 10: especially for globally exposed stocks, so thinking Korea, Taiwan, the

286
00:14:57,640 --> 00:15:01,040
Speaker 10: supply chain, et cetera. We're seeing more and more signs

287
00:15:01,080 --> 00:15:03,520
Speaker 10: of decoupling between US and China, which is a good

288
00:15:03,520 --> 00:15:06,520
Speaker 10: thing because if the US does go into recession, we're

289
00:15:06,560 --> 00:15:09,120
Speaker 10: still seeing five percent growth in China, so that will

290
00:15:09,120 --> 00:15:14,040
Speaker 10: somewhat offet the effect for US specifically, we are saying

291
00:15:14,120 --> 00:15:16,800
Speaker 10: very close to domestic themes. We are saying away from

292
00:15:16,840 --> 00:15:21,080
Speaker 10: globally exposed stocks and we're looking for true emotional market

293
00:15:21,080 --> 00:15:25,920
Speaker 10: stocks that are exposed to the dynamics of local demand.

294
00:15:26,160 --> 00:15:31,000
Speaker 10: So stocks like telecom, hospitals, medical services, stocks that are

295
00:15:31,000 --> 00:15:35,560
Speaker 10: benefiting from growth in domestic markets and reopening.

296
00:15:35,600 --> 00:15:40,000
Speaker 16: Actually when he comes to hospitals because of healthcare tourism.

297
00:15:39,560 --> 00:15:42,160
Speaker 10: Exactly in fact, one of the stocks that we favor

298
00:15:42,720 --> 00:15:46,400
Speaker 10: is a Thailand hospital stock called Bamaran Grad, and it's

299
00:15:46,440 --> 00:15:47,880
Speaker 10: exactly the thesis you stated.

300
00:15:48,560 --> 00:15:51,080
Speaker 1: Yeah, absolutely, such a famous one.

301
00:15:51,840 --> 00:15:52,080
Speaker 6: You know.

302
00:15:52,360 --> 00:15:55,320
Speaker 1: The property text story in China in a sense is

303
00:15:55,360 --> 00:15:59,560
Speaker 1: a great little microcosm for looking at China. There's a

304
00:15:59,600 --> 00:16:02,040
Speaker 1: lot of things that they would like to do, but

305
00:16:02,080 --> 00:16:04,240
Speaker 1: they're held back a little bit because they're trying to,

306
00:16:04,280 --> 00:16:08,000
Speaker 1: as I put it earlier, nurture this economic recovery. You'd

307
00:16:08,000 --> 00:16:10,200
Speaker 1: almost think that they would be trying to remove some

308
00:16:10,280 --> 00:16:12,840
Speaker 1: of the friction, some of the fees and charges and

309
00:16:13,480 --> 00:16:16,200
Speaker 1: some of the taxes that they have that are holding

310
00:16:16,240 --> 00:16:20,760
Speaker 1: the economy back. Yet it just so happens that one

311
00:16:20,800 --> 00:16:22,640
Speaker 1: of our big stories today is that they've put in

312
00:16:22,680 --> 00:16:25,640
Speaker 1: this registration system. It now would enable them to put

313
00:16:25,640 --> 00:16:28,800
Speaker 1: in a property tax. Do you agree with our take

314
00:16:28,880 --> 00:16:31,480
Speaker 1: that that's kind of a good long term story but

315
00:16:31,680 --> 00:16:33,200
Speaker 1: might be disastrous at the moment.

316
00:16:34,560 --> 00:16:36,960
Speaker 10: Definitely agree that this may not be the right time

317
00:16:37,000 --> 00:16:39,760
Speaker 10: to do it. Having said that, I think the government

318
00:16:39,880 --> 00:16:43,200
Speaker 10: is more focused on refund that is the kind of health,

319
00:16:43,280 --> 00:16:46,800
Speaker 10: the technology, the data, the AI and the semi conductor sectors.

320
00:16:46,920 --> 00:16:49,800
Speaker 10: Right now, given what's happening with the US and rest

321
00:16:49,800 --> 00:16:52,520
Speaker 10: of the world. So that's a theme where you're likely

322
00:16:52,560 --> 00:16:56,800
Speaker 10: to see positive reform versus the common prosperity story is

323
00:16:56,800 --> 00:16:58,480
Speaker 10: sort of a long term thing that they almost have

324
00:16:58,600 --> 00:17:01,920
Speaker 10: to stick with, not viewing that so much in as

325
00:17:01,960 --> 00:17:04,399
Speaker 10: sort of a short term problem to fix. But I

326
00:17:04,520 --> 00:17:09,359
Speaker 10: would expect more positive support for tech and semiconductor in

327
00:17:09,400 --> 00:17:10,480
Speaker 10: the new term.

328
00:17:10,560 --> 00:17:12,880
Speaker 16: Indeed, So I want to get a said sols really

329
00:17:13,080 --> 00:17:14,920
Speaker 16: of what you are looking at in terms of the

330
00:17:16,200 --> 00:17:18,879
Speaker 16: you know, the geopolitical situation here as well, and is

331
00:17:18,880 --> 00:17:21,240
Speaker 16: there any way of actually actually playing that.

332
00:17:21,720 --> 00:17:25,240
Speaker 10: The geopolitical situations actually worsen before it gets better, right,

333
00:17:25,400 --> 00:17:29,560
Speaker 10: you know, with a US trying to get Korea on

334
00:17:29,600 --> 00:17:32,560
Speaker 10: its side instead of ally all the Western nations together.

335
00:17:33,359 --> 00:17:37,240
Speaker 10: The way we're putting this is to stick with smaller

336
00:17:37,280 --> 00:17:39,920
Speaker 10: cap stocks mid cap stocks, and if you look here today,

337
00:17:39,920 --> 00:17:42,800
Speaker 10: it's small cap domestic Chinese stocks as measured by the

338
00:17:42,840 --> 00:17:47,399
Speaker 10: CSI one thousand have outperformed MSCI China by almost eight percent.

339
00:17:48,440 --> 00:17:50,960
Speaker 10: So that's I think a thing that's likely to continue,

340
00:17:51,040 --> 00:17:54,399
Speaker 10: which is small cap stocks, stocks that are give to

341
00:17:54,520 --> 00:17:57,600
Speaker 10: was the domestic economy, stocks that are not in technology.

342
00:17:58,640 --> 00:18:02,120
Speaker 10: We're looking at consumer staples. We're looking at dolcom stable

343
00:18:02,359 --> 00:18:07,480
Speaker 10: cash flow yielding stocks that are unlikely to be impacted

344
00:18:07,480 --> 00:18:09,760
Speaker 10: by the geopolitical situation, or it least likely to be

345
00:18:09,840 --> 00:18:14,160
Speaker 10: impacted less than high momentum, has absoluty growth or staying

346
00:18:14,200 --> 00:18:16,640
Speaker 10: away from those teams in the.

347
00:18:16,560 --> 00:18:18,960
Speaker 1: Big broad macro story and what the FED does and

348
00:18:19,000 --> 00:18:21,879
Speaker 1: how the US economy is doing. One final question, we

349
00:18:21,960 --> 00:18:24,679
Speaker 1: talked about the diversity of outcomes. Today. You had the

350
00:18:24,720 --> 00:18:28,439
Speaker 1: earnings from Visa in Chipotle and McDonald's that were all

351
00:18:28,480 --> 00:18:33,159
Speaker 1: pretty strong and looked pretty solid. Microsoft and Google, you know,

352
00:18:33,240 --> 00:18:37,400
Speaker 1: the big monster tech companies also very strong, and yet

353
00:18:37,400 --> 00:18:39,480
Speaker 1: you know, we've had a lot of misses too. How

354
00:18:39,480 --> 00:18:41,520
Speaker 1: do you put it all together into a strategy.

355
00:18:41,920 --> 00:18:45,320
Speaker 10: Yeah, I think this portion is going up definitely in

356
00:18:45,359 --> 00:18:48,320
Speaker 10: the US, but also across the world in China as well. Right,

357
00:18:48,320 --> 00:18:51,960
Speaker 10: we've seen sectors really outperformed, and we've seen information technology,

358
00:18:51,960 --> 00:18:55,080
Speaker 10: consumer discretionary vice super voltails actually down for the year.

359
00:18:55,160 --> 00:18:58,680
Speaker 10: At this point, this disportion is really creating a strong

360
00:18:58,720 --> 00:19:02,760
Speaker 10: opportunity for ACTIVEMN and for stock picking. So again we

361
00:19:02,800 --> 00:19:05,320
Speaker 10: see the way to play this as sticking with strong,

362
00:19:05,440 --> 00:19:10,719
Speaker 10: consistent dividing using stocks sticking with domestically oriented stocks, sticking

363
00:19:10,760 --> 00:19:13,400
Speaker 10: with mid caps well cap stocks, and staying away from

364
00:19:13,560 --> 00:19:18,400
Speaker 10: high momentum hyped teams like batteries or even very high

365
00:19:18,440 --> 00:19:19,480
Speaker 10: gloth internet stocks.

366
00:19:19,640 --> 00:19:22,680
Speaker 1: Pooja, thanks so much for joining us. Pooja MALEG, partner

367
00:19:22,760 --> 00:19:27,520
Speaker 1: at Nippon Capital. This is Bloomberg Daybreak Asia, your morning

368
00:19:27,560 --> 00:19:30,199
Speaker 1: brief on the stories making news from Hong Kong to

369
00:19:30,320 --> 00:19:31,760
Speaker 1: Singapore and Wall Street.

370
00:19:31,800 --> 00:19:35,760
Speaker 2: Look for us on your podcast feed every day, on Apple, Spotify,

371
00:19:36,040 --> 00:19:38,000
Speaker 2: and anywhere else you get your podcasts.

372
00:19:38,040 --> 00:19:40,600
Speaker 1: You can also listen live each day on Bloomberg eleven

373
00:19:40,680 --> 00:19:43,040
Speaker 1: three to zero in New York, Bloomberg ninety nine to

374
00:19:43,080 --> 00:19:46,280
Speaker 1: one in Washington, Bloomberg one oh sixty one in Boston,

375
00:19:46,560 --> 00:19:49,040
Speaker 1: and Bloomberg nine sixty in San Francisco.

376
00:19:49,119 --> 00:19:51,960
Speaker 2: Our flagship New York station is also available on your

377
00:19:52,000 --> 00:19:57,240
Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus.

378
00:19:57,400 --> 00:20:00,800
Speaker 1: Listen coast to coast on the Bloomberg Business app, Sirius

379
00:20:00,920 --> 00:20:05,160
Speaker 1: XM Channel one nineteen, the iHeartRadio app, and on Bloomberg

380
00:20:05,240 --> 00:20:06,040
Speaker 1: dot Com.

381
00:20:06,200 --> 00:20:09,320
Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Join us again

382
00:20:09,359 --> 00:20:11,359
Speaker 2: tomorrow for all the news you need to start your

383
00:20:11,440 --> 00:20:16,080
Speaker 2: day right here on Bloomberg Daybreak Asia