WEBVTT - First Republic Plunges and Tech Earnings Continue

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<v Speaker 1>This is Bloomberg day Break Asia for this Wednesday, April

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<v Speaker 1>twenty sixth in Hong Kong, Tuesday April twenty fifth in

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<v Speaker 1>New York, and coming up today.

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<v Speaker 2>First Republic Bank is said to be considering selling up

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<v Speaker 2>to one hundred billion dollars in assets. Shares plunge as

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<v Speaker 2>much as fifty percent.

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<v Speaker 1>Alpha Met's quarterly revenue beats analyst estimates as ad sales recover.

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<v Speaker 2>And Microsoft reports strong sales and profit with increased demand

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<v Speaker 2>for cloud services.

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<v Speaker 3>Germany announcing intentions to improve relations with China. Biden makes

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<v Speaker 3>reelection bit official, China loosens travel test restrictions, I Space

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<v Speaker 3>Japan as disappointing, and to Moon mission. I'm at Baxter

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<v Speaker 3>with Global News.

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<v Speaker 4>That's all straight ahead on Bloomberg Daybreak Asia, the business

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<v Speaker 4>news you need to start your day in just one

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<v Speaker 4>fifteen minute podcast available on Apple, Spotify, the Bloomberg Business App,

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<v Speaker 4>and everywhere you get your podcasts.

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<v Speaker 1>Good morning, I'm Doug Chrisner and I'm Brian Curtiz. Here

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<v Speaker 1>are the stories we're following today. We hear that First

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<v Speaker 1>Republic Bank is exploring divesting fifty to one hundred billion

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<v Speaker 1>dollars worth of long dated mortgage and securities as part

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<v Speaker 1>of a broader rescue plan. The sales are aimed at

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<v Speaker 1>reducing the mismatch between the bank's assets and liabilities, and

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<v Speaker 1>buyers may be offered some incentives to pay above market rates.

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<v Speaker 1>Here's Bloomberg Shinali Bassok.

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<v Speaker 5>There may be sweeteners for potential buyers here, that's part

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<v Speaker 5>of the deal here. Potentially warrants are preferred equity as

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<v Speaker 5>an incentive to buy some of these assets. Remember when

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<v Speaker 5>we looked at First Republic, loans at the end of

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<v Speaker 5>the quarter were one hundred and seventy three billion, but

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<v Speaker 5>deposits were one hundred billion. There are a lot of

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<v Speaker 5>concerns about the strength of the balance sheet here. But

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<v Speaker 5>the hope here is that by getting Whittf's assets, selling

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<v Speaker 5>these assets at above market value, there can be something

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<v Speaker 5>here for the buyer to hang on to.

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<v Speaker 1>We hear that Fresh Republic may need the US government

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<v Speaker 1>to facilitate negotiations with some of the largest banks in

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<v Speaker 1>the country to try to stabilize the lender as it

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<v Speaker 1>executes its turnaround. First Republic shares dropped as much as

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<v Speaker 1>fifty percent today in the session.

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<v Speaker 2>We heard from Microsoft after the closing Bell. The company

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<v Speaker 2>reported quarterly profit and sales above expectations. Sales of the

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<v Speaker 2>company's Azure cloud computing business were up thirty one percent. Now,

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<v Speaker 2>these positive results were due in large part to resilient

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<v Speaker 2>corporate demand not only for software, but services as well,

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<v Speaker 2>delivered over the Internet. We got some reaction from Bloomberg's

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<v Speaker 2>onnarrog Rana.

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<v Speaker 6>That's very good, which means that the increased cost of

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<v Speaker 6>computing because of new AI applications, at least what they

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<v Speaker 6>have lot so far, is not eating away from the profit.

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<v Speaker 6>In terms of growth, I think it's going to take

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<v Speaker 6>a few quarters before we see growth coming.

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<v Speaker 2>In Bloomberg's onarrog Rana. Now, going forward, Microsoft is placing

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<v Speaker 2>massive bets on artificial intelligence. The company is investing ten

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<v Speaker 2>billion dollars into Open AI and a new bing search

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<v Speaker 2>chat Microsoft is opening. The increase will help future sales

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<v Speaker 2>of not only Azure, but search ads as well, along

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<v Speaker 2>with office productivity programs. Shares and Microsoft were up about

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<v Speaker 2>five percent in late US trading.

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<v Speaker 1>Yeah, and you can contrast that with Google. So right

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<v Speaker 1>now you've got Google shares up about two point four

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<v Speaker 1>percent and just looking at Microsoft shares up eight point

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<v Speaker 1>two percent. In late trading, Alphabet reporting first quarter sales

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<v Speaker 1>and profit that did top analyst estimates. The results show

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<v Speaker 1>that Alphabet's search advertising business is weathering an economic downturn.

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<v Speaker 1>It also performed well even as Google faces heightened competitive

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<v Speaker 1>threats from Microsoft and open Ai. We heard earlier from

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<v Speaker 1>Bloomberg's man Deep Singh.

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<v Speaker 7>It was, you know, given the macro environment, probably the

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<v Speaker 7>best print that we have seen, you know, from Alphabet

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<v Speaker 7>in terms of digital ad spending holding up and no

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<v Speaker 7>impact whatsoever from chat GPT. Look, everyone talked about, you know,

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<v Speaker 7>how howuch at GPT would hurt search volumes. None.

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<v Speaker 1>Alphabet's closely watched Cloudy and it also made money for

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<v Speaker 1>the first time, reporting profit of some one hundred and

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<v Speaker 1>ninety one million dollars. Alphabet shares, as mentioned, are gaining

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<v Speaker 1>in the after hours, although they are off the best

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<v Speaker 1>levels of the day, which was up four percent and

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<v Speaker 1>at the moment two point three percent.

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<v Speaker 2>We had a lot of weakness in semiconductor stocks during

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<v Speaker 2>the regular session. The Philadelphia Semiconductor Index was down today

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<v Speaker 2>by three point four percent, and then after the bell,

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<v Speaker 2>Texas Instruments with a lackluster forecast for the current quarter.

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<v Speaker 2>The story from Bloomberg's Charlie Pellett.

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<v Speaker 8>TI is the chip industry's most diversified maker of electronic components,

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<v Speaker 8>and it indicates that a slump in demand is spreading

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<v Speaker 8>two previously unscathed areas. The outlook suggests that even the

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<v Speaker 8>chip industry's bright spots, such as the industrial market, are

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<v Speaker 8>getting swept up in the broader slowdown. Texas Instruments gets

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<v Speaker 8>a large portion of its revenue from factory equipment, and

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<v Speaker 8>that had helped the company's sidestep of sales slide suffered

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<v Speaker 8>by personal computers and smartphones in New York. Charlie Pellett

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<v Speaker 8>Bloomberg Daybreak Asia.

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<v Speaker 1>Apple plans to put AI to work as your personal

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<v Speaker 1>wellness coach. Let's get that story from Bloomberg's Tracy Junkie.

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<v Speaker 9>Apple has made health and wellness features central to devices,

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<v Speaker 9>including the Apple Watch. People with Knowledge tell Bloomberg that

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<v Speaker 9>Apple is now working to combine data from the watch

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<v Speaker 9>with machine learning to create a personalized coaching service code

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<v Speaker 9>named Quartz. The aim is to motivate people to exercise

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<v Speaker 9>and improve their eating and sleeping habits, plus moderate people

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<v Speaker 9>to pay for the service. Apple is also developing a

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<v Speaker 9>mood tracker that will be added to the current health

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<v Speaker 9>app this year. I'm Tracy Johnkie Bloomberg Daybreak Asia.

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<v Speaker 1>I'm Brian Curtis, along with Doug Christner and Rashad Salama

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<v Speaker 1>will join us in a few moments. Our guest coming

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<v Speaker 1>up is Poojamalk, partner at Niepun Capital, So that should

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<v Speaker 1>be an interesting discussion, Dug, a lot more give and take.

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<v Speaker 1>So we had a take day in the markets, as

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<v Speaker 1>you pointed out, it was a real risk off, David.

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<v Speaker 1>Now you look at the futures. Nasdak I mini's up

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<v Speaker 1>one point four percent, So here we go again.

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<v Speaker 2>Yeah, a lot of the earnings after the bell giving

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<v Speaker 2>positivity to the Nasdaq one hundred contract. But you got

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<v Speaker 2>to pay attention, and I think, Brian, to the bond

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<v Speaker 2>market and the signal it may be sending right now

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<v Speaker 2>with this big move lower right across the curve today.

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<v Speaker 2>And I was struck by the fact that in the

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<v Speaker 2>swaps market right now it seems to be pricing in

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<v Speaker 2>just twenty one basis points in FED tightening from current levels,

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<v Speaker 2>which as you know, would be less than a full

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<v Speaker 2>quarter point move. So right now the market seems to

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<v Speaker 2>be very, very divided on what the Fed may begin

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<v Speaker 2>to do.

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<v Speaker 1>Yeah, and in terms of June is down to only

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<v Speaker 1>nine percent for a hike. But obviously a lot of

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<v Speaker 1>this comes down to the data. You mentioned the consumer

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<v Speaker 1>confidence was weak, yet some of the economic data that

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<v Speaker 1>we've seen has been reasonably solid. I wanted to get

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<v Speaker 1>a quick word in Doug on this possibility of a

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<v Speaker 1>property tax coming in China, and we were speaking with

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<v Speaker 1>a China economist yesterday about possible reforms that might be

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<v Speaker 1>good for nurturing along the economy. But it wasn't tax

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<v Speaker 1>hikes that we were talking about. It was the possibility

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<v Speaker 1>of tax cuts. So at the moment, given where they are,

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<v Speaker 1>although this is probably inevitable to bring in a property tax,

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<v Speaker 1>that timing does not look good.

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<v Speaker 10>Yeah.

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<v Speaker 2>The infrastructure, from what I understand, Brian, has been put

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<v Speaker 2>in place, this nationwide real estate registration system, so it

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<v Speaker 2>appears to be a property tax is just one step

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<v Speaker 2>away from this.

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<v Speaker 1>Yeah, this has been coming for a decade or so.

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<v Speaker 1>And as mentioned, it would be probably good for the

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<v Speaker 1>Chinese economy because it would be raising tax from the

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<v Speaker 1>wealthier classes, so it would be good for a lot

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<v Speaker 1>of the people that Hi Jinping is trying to help

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<v Speaker 1>with the common prosperity. So it's coming, but the timing

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<v Speaker 1>again just doesn't look all that great. By the way,

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<v Speaker 1>you can learn a lot more about this on the terminal,

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<v Speaker 1>not only from our piece, our news piece, but also

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<v Speaker 1>from the China Today column. It's time now for global news.

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<v Speaker 1>Germany is openly announcing today that it wants to improve

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<v Speaker 1>relations with China in the coming months. At Baxter has

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<v Speaker 1>Global News from the nine to sixty newsroom in San Francisco.

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<v Speaker 1>As you like to say, it.

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<v Speaker 3>Is yeah, thank you, Brian. Yeah. Chancellor Olive Schultz has

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<v Speaker 3>invited Chinese Premiarily Tying for talks in Berlin June twentieth.

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<v Speaker 3>It is the latest bid by Germany to ease attentions

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<v Speaker 3>between Europe and Beijing. Schultz wants to talk global peace

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<v Speaker 3>and tackle climate change while setting out changes to the

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<v Speaker 3>status quo in Taiwan and it's official President Joe Biden

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<v Speaker 3>launching his twenty twenty four campaign for reelection and vitio

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<v Speaker 3>on video once again saying freedom is on the line.

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<v Speaker 1>Around the country.

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<v Speaker 11>Mag you're extremists, We're light enough to take on those

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<v Speaker 11>bedrock freedoms, cutting social security and you've paid for your

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<v Speaker 11>entire life, while cutting taxes from very wealthy, dictating what

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<v Speaker 11>healthcare decisions women can make, banning books, and telling people

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<v Speaker 11>who they can love all I'm making it more difficult

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<v Speaker 11>for you to be able to vote.

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<v Speaker 3>He says they're strong record of legislative achievement in spite

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<v Speaker 3>of the obstruction of the MAGA Republicans and a battle

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<v Speaker 3>again for the soul of the Republic. Bloomberg's Mario Parker

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<v Speaker 3>on Bloomberg's Balance of Power notes. The video opened with

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<v Speaker 3>scenes from the January sixth insurrection as a first attack

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<v Speaker 3>on Republicans.

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<v Speaker 12>They're almost giddy looking at poles, saying that there's a

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<v Speaker 12>rematch for twenty twenty. Not thirty seconds into the video,

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<v Speaker 12>President Biden was evoking MAGA. I mean that was a

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<v Speaker 12>clear sign and that's the fight they want.

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<v Speaker 8>To see them.

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<v Speaker 3>Yeah. Mario also saying it's time to make some money

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<v Speaker 3>and that a group of potential donors will come to

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<v Speaker 3>the White House the end of the week. GOLP presidential

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<v Speaker 3>candidate Nikki Haley is out today talking about the issue

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<v Speaker 3>of abortion, which is sure to become a major campaign issue.

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<v Speaker 3>She says what is needed is consensus.

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<v Speaker 13>No one talks about finding consensus. Everyone goes to the

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<v Speaker 13>barricades and attacks the other side. They turned a sensitive

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<v Speaker 13>issue that has long divided people into a kind of

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<v Speaker 13>gotcha bidding war.

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<v Speaker 3>Yeah, she says she wants to save as many babies

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<v Speaker 3>as can be saved. But that agreement of how to

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<v Speaker 3>be reached, well, she says, it can't be political. China

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<v Speaker 3>will no longer require travelers to the country to provide

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<v Speaker 3>a negative PCR test result. This opens the door to

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<v Speaker 3>get rid of a major deterrent for visitation since China

0:10:21.720 --> 0:10:26.719
<v Speaker 3>has emerged from COVID isolation in January. Disappointment today at

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<v Speaker 3>the end of Japan's I space landing process on its

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<v Speaker 3>mission to the Moon.

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<v Speaker 14>And now we are at the moment of planned landing

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<v Speaker 14>time again. Everyone, please give us a few moments to confirm.

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<v Speaker 3>Moments past our.

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<v Speaker 14>Mcc crew standing by waiting to confirm. You can really

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<v Speaker 14>feel at tension and despair and it is so difficult

0:10:50.760 --> 0:10:54.040
<v Speaker 14>feeling hollowless now, But all we can do is cheer

0:10:54.040 --> 0:10:54.440
<v Speaker 14>them up.

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<v Speaker 3>Yeah. And later the crew assembled, mission head Takashi Hatamata.

0:10:58.920 --> 0:11:05.400
<v Speaker 15>We confound DOT. We have established the communication until very

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<v Speaker 15>end of randin.

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<v Speaker 3>Yeah, and lead them to conclude the lander was damaged

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<v Speaker 3>not able to communicate. But note that the launch happened

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<v Speaker 3>in December, thrown into orbit by SpaceX Falca Iron rocket,

0:11:16.400 --> 0:11:18.880
<v Speaker 3>orbiting the Moon for three months, picking up data and

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<v Speaker 3>sending it home.

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<v Speaker 15>We are very proud of the fact that we have

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<v Speaker 15>already achieved many things during this mission.

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<v Speaker 3>WAM and prepare for missions two and three. Global News

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<v Speaker 3>powered by more than twenty seven hundred journalists and analysts

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<v Speaker 3>in over one hundred and twenty countries in San Francisco.

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<v Speaker 3>I'm at Baxter.

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<v Speaker 8>This is Bloomberg.

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<v Speaker 1>I'm Brian Curtis here in Hong Kong alongside Rashad Salamat

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<v Speaker 1>and as you heard there at Baxter on News and

0:11:46.960 --> 0:11:49.280
<v Speaker 1>Krisner looking at markets. So we've got it all covered

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<v Speaker 1>for you. And our guest is Pooja Malik, partner at

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<v Speaker 1>Nipun Capital, and she's here to provide the pithy comment.

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<v Speaker 1>So Pooja, thanks very much for joining with us or

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<v Speaker 1>joining us. You're just looking at markets here and how

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<v Speaker 1>to navigate through this. We've had a period of low volatility,

0:12:07.440 --> 0:12:12.640
<v Speaker 1>but you'd almost think that given the really diverse outcomes

0:12:12.640 --> 0:12:15.480
<v Speaker 1>that we're seeing from earnings and from economic data that

0:12:15.520 --> 0:12:18.600
<v Speaker 1>we should see an increase in volatility. Would you buy

0:12:18.679 --> 0:12:19.560
<v Speaker 1>volatility here?

0:12:20.720 --> 0:12:22.960
<v Speaker 10>Yeah, you're absolutely right. I think weal city is set

0:12:23.000 --> 0:12:26.760
<v Speaker 10>to rise across the world as well as in emerging

0:12:26.840 --> 0:12:31.320
<v Speaker 10>markets in Asia, and the market can come from manufacturers. There's,

0:12:31.400 --> 0:12:34.720
<v Speaker 10>of course, the geopolitical risks, the situation between the US China,

0:12:35.000 --> 0:12:37.920
<v Speaker 10>with other countries like Korea and Germany now sort of

0:12:38.080 --> 0:12:41.160
<v Speaker 10>being involved in the middle. There's also tailed risk coming

0:12:41.200 --> 0:12:44.400
<v Speaker 10>from the high levels of interest rates in the US,

0:12:44.720 --> 0:12:46.800
<v Speaker 10>So I see a lot of risk on the horizon

0:12:46.800 --> 0:12:49.240
<v Speaker 10>that their quer market is manufacturing in as of now.

0:12:50.240 --> 0:12:52.760
<v Speaker 16>Well, tell me something, what's going on with First Republic?

0:12:53.080 --> 0:12:56.320
<v Speaker 16>How worried are you about that? And perhaps other banks

0:12:56.360 --> 0:12:58.840
<v Speaker 16>finding themselves in the same position in the weeks and

0:12:58.920 --> 0:12:59.520
<v Speaker 16>days to come.

0:13:00.960 --> 0:13:02.880
<v Speaker 10>I have no doubt that a lot of other banks

0:13:02.920 --> 0:13:06.800
<v Speaker 10>are in similar positions. The extent of how bad the

0:13:06.840 --> 0:13:09.800
<v Speaker 10>situation is, of course varies, and the access to new

0:13:09.840 --> 0:13:13.680
<v Speaker 10>capital to cover some of these problems also varies. And

0:13:13.800 --> 0:13:15.560
<v Speaker 10>I said that, I think the good news is that

0:13:15.679 --> 0:13:19.400
<v Speaker 10>emerging market banks are more or less isolated from this issue.

0:13:19.920 --> 0:13:22.280
<v Speaker 10>You know, most central banks in em have been raising

0:13:22.320 --> 0:13:24.480
<v Speaker 10>weights for a while, and rates are quite deep in

0:13:24.559 --> 0:13:26.560
<v Speaker 10>those markets, and I would say the grates might be

0:13:26.640 --> 0:13:30.600
<v Speaker 10>even behind us in most of em The banks mem

0:13:30.640 --> 0:13:33.400
<v Speaker 10>have also been very resilient because they've been through crisis

0:13:33.400 --> 0:13:35.200
<v Speaker 10>in the past and have learned from that, so they're

0:13:35.280 --> 0:13:38.040
<v Speaker 10>very well capitalized. So the good news here is that

0:13:38.120 --> 0:13:42.680
<v Speaker 10>banks across emerging markets seem very stable and less vulnerable

0:13:42.720 --> 0:13:46.880
<v Speaker 10>to this interest rate situation, whereas regional banks in the US.

0:13:47.360 --> 0:13:49.640
<v Speaker 10>Definitely I could see more problems looming ahead.

0:13:50.960 --> 0:13:52.360
<v Speaker 16>I just want to get to where we are in

0:13:52.600 --> 0:13:54.080
<v Speaker 16>this part of the world. And you know, the whole

0:13:54.120 --> 0:13:57.040
<v Speaker 16>reopening story. Is that something which is now in the

0:13:57.040 --> 0:13:58.640
<v Speaker 16>rear view mirror and is it done?

0:14:00.000 --> 0:14:03.079
<v Speaker 10>I think so. I think we have seen the headlines

0:14:03.320 --> 0:14:07.320
<v Speaker 10>relating to the reopening story, but we're still seeing earnings

0:14:07.320 --> 0:14:11.800
<v Speaker 10>recovery on the ground. Earnings for Chinese companies both this

0:14:11.920 --> 0:14:14.600
<v Speaker 10>year and next year are projected to be in double

0:14:14.640 --> 0:14:17.480
<v Speaker 10>digit The next year will be particularly strong. So I

0:14:17.520 --> 0:14:22.240
<v Speaker 10>think we will see the recovery story play out and

0:14:22.320 --> 0:14:26.280
<v Speaker 10>translate into earnings over the next twelve to twenty four months,

0:14:26.560 --> 0:14:29.920
<v Speaker 10>and that will hopefully then act as a mechanism or

0:14:29.920 --> 0:14:33.040
<v Speaker 10>a catalyst for rerating equities as well.

0:14:33.360 --> 0:14:36.200
<v Speaker 1>China is its own big beast. But for the rest

0:14:36.240 --> 0:14:37.840
<v Speaker 1>of the world. And I know you've been pushing emerging

0:14:37.840 --> 0:14:41.240
<v Speaker 1>markets in this discussion, but isn't the key question still

0:14:41.280 --> 0:14:43.720
<v Speaker 1>if the US goes into recession, all bets are off.

0:14:43.840 --> 0:14:45.760
<v Speaker 1>So how you figure that is what you.

0:14:45.720 --> 0:14:49.640
<v Speaker 10>Want to do in em or No, If the US

0:14:49.680 --> 0:14:53.200
<v Speaker 10>goes into recession, definitely there's huge rapper cussions for ams,

0:14:53.240 --> 0:14:57.600
<v Speaker 10>especially for globally exposed stocks, so thinking Korea, Taiwan, the

0:14:57.640 --> 0:15:01.040
<v Speaker 10>supply chain, et cetera. We're seeing more and more signs

0:15:01.080 --> 0:15:03.520
<v Speaker 10>of decoupling between US and China, which is a good

0:15:03.520 --> 0:15:06.520
<v Speaker 10>thing because if the US does go into recession, we're

0:15:06.560 --> 0:15:09.120
<v Speaker 10>still seeing five percent growth in China, so that will

0:15:09.120 --> 0:15:14.040
<v Speaker 10>somewhat offet the effect for US specifically, we are saying

0:15:14.120 --> 0:15:16.800
<v Speaker 10>very close to domestic themes. We are saying away from

0:15:16.840 --> 0:15:21.080
<v Speaker 10>globally exposed stocks and we're looking for true emotional market

0:15:21.080 --> 0:15:25.920
<v Speaker 10>stocks that are exposed to the dynamics of local demand.

0:15:26.160 --> 0:15:31.000
<v Speaker 10>So stocks like telecom, hospitals, medical services, stocks that are

0:15:31.000 --> 0:15:35.560
<v Speaker 10>benefiting from growth in domestic markets and reopening.

0:15:35.600 --> 0:15:40.000
<v Speaker 16>Actually when he comes to hospitals because of healthcare tourism.

0:15:39.560 --> 0:15:42.160
<v Speaker 10>Exactly in fact, one of the stocks that we favor

0:15:42.720 --> 0:15:46.400
<v Speaker 10>is a Thailand hospital stock called Bamaran Grad, and it's

0:15:46.440 --> 0:15:47.880
<v Speaker 10>exactly the thesis you stated.

0:15:48.560 --> 0:15:51.080
<v Speaker 1>Yeah, absolutely, such a famous one.

0:15:51.840 --> 0:15:52.080
<v Speaker 6>You know.

0:15:52.360 --> 0:15:55.320
<v Speaker 1>The property text story in China in a sense is

0:15:55.360 --> 0:15:59.560
<v Speaker 1>a great little microcosm for looking at China. There's a

0:15:59.600 --> 0:16:02.040
<v Speaker 1>lot of things that they would like to do, but

0:16:02.080 --> 0:16:04.240
<v Speaker 1>they're held back a little bit because they're trying to,

0:16:04.280 --> 0:16:08.000
<v Speaker 1>as I put it earlier, nurture this economic recovery. You'd

0:16:08.000 --> 0:16:10.200
<v Speaker 1>almost think that they would be trying to remove some

0:16:10.280 --> 0:16:12.840
<v Speaker 1>of the friction, some of the fees and charges and

0:16:13.480 --> 0:16:16.200
<v Speaker 1>some of the taxes that they have that are holding

0:16:16.240 --> 0:16:20.760
<v Speaker 1>the economy back. Yet it just so happens that one

0:16:20.800 --> 0:16:22.640
<v Speaker 1>of our big stories today is that they've put in

0:16:22.680 --> 0:16:25.640
<v Speaker 1>this registration system. It now would enable them to put

0:16:25.640 --> 0:16:28.800
<v Speaker 1>in a property tax. Do you agree with our take

0:16:28.880 --> 0:16:31.480
<v Speaker 1>that that's kind of a good long term story but

0:16:31.680 --> 0:16:33.200
<v Speaker 1>might be disastrous at the moment.

0:16:34.560 --> 0:16:36.960
<v Speaker 10>Definitely agree that this may not be the right time

0:16:37.000 --> 0:16:39.760
<v Speaker 10>to do it. Having said that, I think the government

0:16:39.880 --> 0:16:43.200
<v Speaker 10>is more focused on refund that is the kind of health,

0:16:43.280 --> 0:16:46.800
<v Speaker 10>the technology, the data, the AI and the semi conductor sectors.

0:16:46.920 --> 0:16:49.800
<v Speaker 10>Right now, given what's happening with the US and rest

0:16:49.800 --> 0:16:52.520
<v Speaker 10>of the world. So that's a theme where you're likely

0:16:52.560 --> 0:16:56.800
<v Speaker 10>to see positive reform versus the common prosperity story is

0:16:56.800 --> 0:16:58.480
<v Speaker 10>sort of a long term thing that they almost have

0:16:58.600 --> 0:17:01.920
<v Speaker 10>to stick with, not viewing that so much in as

0:17:01.960 --> 0:17:04.399
<v Speaker 10>sort of a short term problem to fix. But I

0:17:04.520 --> 0:17:09.359
<v Speaker 10>would expect more positive support for tech and semiconductor in

0:17:09.400 --> 0:17:10.480
<v Speaker 10>the new term.

0:17:10.560 --> 0:17:12.880
<v Speaker 16>Indeed, So I want to get a said sols really

0:17:13.080 --> 0:17:14.920
<v Speaker 16>of what you are looking at in terms of the

0:17:16.200 --> 0:17:18.879
<v Speaker 16>you know, the geopolitical situation here as well, and is

0:17:18.880 --> 0:17:21.240
<v Speaker 16>there any way of actually actually playing that.

0:17:21.720 --> 0:17:25.240
<v Speaker 10>The geopolitical situations actually worsen before it gets better, right,

0:17:25.400 --> 0:17:29.560
<v Speaker 10>you know, with a US trying to get Korea on

0:17:29.600 --> 0:17:32.560
<v Speaker 10>its side instead of ally all the Western nations together.

0:17:33.359 --> 0:17:37.240
<v Speaker 10>The way we're putting this is to stick with smaller

0:17:37.280 --> 0:17:39.920
<v Speaker 10>cap stocks mid cap stocks, and if you look here today,

0:17:39.920 --> 0:17:42.800
<v Speaker 10>it's small cap domestic Chinese stocks as measured by the

0:17:42.840 --> 0:17:47.399
<v Speaker 10>CSI one thousand have outperformed MSCI China by almost eight percent.

0:17:48.440 --> 0:17:50.960
<v Speaker 10>So that's I think a thing that's likely to continue,

0:17:51.040 --> 0:17:54.399
<v Speaker 10>which is small cap stocks, stocks that are give to

0:17:54.520 --> 0:17:57.600
<v Speaker 10>was the domestic economy, stocks that are not in technology.

0:17:58.640 --> 0:18:02.120
<v Speaker 10>We're looking at consumer staples. We're looking at dolcom stable

0:18:02.359 --> 0:18:07.480
<v Speaker 10>cash flow yielding stocks that are unlikely to be impacted

0:18:07.480 --> 0:18:09.760
<v Speaker 10>by the geopolitical situation, or it least likely to be

0:18:09.840 --> 0:18:14.160
<v Speaker 10>impacted less than high momentum, has absoluty growth or staying

0:18:14.200 --> 0:18:16.640
<v Speaker 10>away from those teams in the.

0:18:16.560 --> 0:18:18.960
<v Speaker 1>Big broad macro story and what the FED does and

0:18:19.000 --> 0:18:21.879
<v Speaker 1>how the US economy is doing. One final question, we

0:18:21.960 --> 0:18:24.679
<v Speaker 1>talked about the diversity of outcomes. Today. You had the

0:18:24.720 --> 0:18:28.439
<v Speaker 1>earnings from Visa in Chipotle and McDonald's that were all

0:18:28.480 --> 0:18:33.159
<v Speaker 1>pretty strong and looked pretty solid. Microsoft and Google, you know,

0:18:33.240 --> 0:18:37.400
<v Speaker 1>the big monster tech companies also very strong, and yet

0:18:37.400 --> 0:18:39.480
<v Speaker 1>you know, we've had a lot of misses too. How

0:18:39.480 --> 0:18:41.520
<v Speaker 1>do you put it all together into a strategy.

0:18:41.920 --> 0:18:45.320
<v Speaker 10>Yeah, I think this portion is going up definitely in

0:18:45.359 --> 0:18:48.320
<v Speaker 10>the US, but also across the world in China as well. Right,

0:18:48.320 --> 0:18:51.960
<v Speaker 10>we've seen sectors really outperformed, and we've seen information technology,

0:18:51.960 --> 0:18:55.080
<v Speaker 10>consumer discretionary vice super voltails actually down for the year.

0:18:55.160 --> 0:18:58.680
<v Speaker 10>At this point, this disportion is really creating a strong

0:18:58.720 --> 0:19:02.760
<v Speaker 10>opportunity for ACTIVEMN and for stock picking. So again we

0:19:02.800 --> 0:19:05.320
<v Speaker 10>see the way to play this as sticking with strong,

0:19:05.440 --> 0:19:10.719
<v Speaker 10>consistent dividing using stocks sticking with domestically oriented stocks, sticking

0:19:10.760 --> 0:19:13.400
<v Speaker 10>with mid caps well cap stocks, and staying away from

0:19:13.560 --> 0:19:18.400
<v Speaker 10>high momentum hyped teams like batteries or even very high

0:19:18.440 --> 0:19:19.480
<v Speaker 10>gloth internet stocks.

0:19:19.640 --> 0:19:22.680
<v Speaker 1>Pooja, thanks so much for joining us. Pooja MALEG, partner

0:19:22.760 --> 0:19:27.520
<v Speaker 1>at Nippon Capital. This is Bloomberg Daybreak Asia, your morning

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