WEBVTT - Apple Record Earnings, Traders Weigh Big Tech, Fed Chair Pick Countdown

0:00:02.480 --> 0:00:10.680
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

0:00:11.520 --> 0:00:14.960
<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Doug Risner. After

0:00:15.000 --> 0:00:18.000
<v Speaker 2>the bell. In the US, Apple reported record sales for

0:00:18.040 --> 0:00:21.360
<v Speaker 2>the holiday period. Revenue jump sixteen percent to one hundred

0:00:21.400 --> 0:00:24.040
<v Speaker 2>and forty three point eight billion dollars. Now, this is

0:00:24.079 --> 0:00:28.120
<v Speaker 2>for the quarter ending December twenty seventh. These results reflect

0:00:28.400 --> 0:00:31.320
<v Speaker 2>strong demand for the iPhone seventeen, as well as growth

0:00:31.360 --> 0:00:35.080
<v Speaker 2>in services and a rebound in China. Here is Bloomberg's

0:00:35.080 --> 0:00:35.960
<v Speaker 2>Mark German.

0:00:36.120 --> 0:00:40.159
<v Speaker 3>Massive, massive quarter. This is a home run, their greatest

0:00:40.240 --> 0:00:44.560
<v Speaker 3>quarter ever by orders of magnitude. It's a gigantic bee

0:00:44.720 --> 0:00:49.760
<v Speaker 3>on overall revenue. China is back. You have a big

0:00:49.800 --> 0:00:54.000
<v Speaker 3>bet on the iPhone in particular. Eighty five billion dollar

0:00:54.120 --> 0:00:57.560
<v Speaker 3>quarter is just insane. The installed based two and a

0:00:57.600 --> 0:01:00.360
<v Speaker 3>half billion. The numbers are just beyond excellent.

0:01:00.520 --> 0:01:03.040
<v Speaker 2>That was Bloomberg's Mark German shares and Apple. We're up

0:01:03.080 --> 0:01:06.280
<v Speaker 2>about one percent in late US trading. The dollar weekend

0:01:06.400 --> 0:01:09.280
<v Speaker 2>slightly in New York trading, with the Bloomberg Dollar Spot

0:01:09.319 --> 0:01:12.479
<v Speaker 2>Index down a tenth of one percent. That doesn't seem

0:01:12.520 --> 0:01:16.000
<v Speaker 2>to capture though the story. In the foreign exchange this week,

0:01:16.040 --> 0:01:18.919
<v Speaker 2>we saw a lot of volatility not just in the dollar,

0:01:19.400 --> 0:01:21.800
<v Speaker 2>but in the euro and the Japanese yen as well.

0:01:21.959 --> 0:01:25.720
<v Speaker 2>Let's take a closer look now with David finnerdy Bloomberg's

0:01:26.080 --> 0:01:29.520
<v Speaker 2>rates and FX strategist. David is on the line from Melbourne.

0:01:29.600 --> 0:01:32.280
<v Speaker 2>Thank you so much for being here. Can we just

0:01:32.400 --> 0:01:34.800
<v Speaker 2>take a step back, David, Can you describe for me

0:01:34.920 --> 0:01:37.680
<v Speaker 2>what this last week has been like for the dollar

0:01:37.720 --> 0:01:39.600
<v Speaker 2>and some of the forces that have been at play.

0:01:40.000 --> 0:01:42.080
<v Speaker 1>Well, I think certainly you'd have to go to get

0:01:42.120 --> 0:01:45.280
<v Speaker 1>starting this sheet is last week. That was Friday, just

0:01:45.360 --> 0:01:47.800
<v Speaker 1>off the Bank of Japan eating when there was a

0:01:47.840 --> 0:01:50.320
<v Speaker 1>speculation that the Minister of Funds may have it to

0:01:50.320 --> 0:01:52.800
<v Speaker 1>be it looks like they didn't. Then later that trading

0:01:52.920 --> 0:01:57.360
<v Speaker 1>day Bank New York seemed to or at least did

0:01:57.400 --> 0:02:00.320
<v Speaker 1>to make check, which was a signal pre single point mention.

0:02:00.720 --> 0:02:04.240
<v Speaker 1>Now that really sparks volatility dollar yen, because the market

0:02:04.240 --> 0:02:06.760
<v Speaker 1>there was going to we're all long dolly en. We've

0:02:06.760 --> 0:02:10.160
<v Speaker 1>got to start perversing those positions, particularly as Dotty and

0:02:10.240 --> 0:02:14.120
<v Speaker 1>sold off. What's happened since then is that volatility, which

0:02:14.200 --> 0:02:17.679
<v Speaker 1>was more relatively more related to just dolly En, has

0:02:17.680 --> 0:02:20.200
<v Speaker 1>got a bit more border This week, and what you've

0:02:20.240 --> 0:02:22.880
<v Speaker 1>seen is President Champ has come out and he said, look,

0:02:23.240 --> 0:02:27.280
<v Speaker 1>the dollar's decline and he's not too concerned about it.

0:02:27.600 --> 0:02:30.840
<v Speaker 1>That was basically a green light for traders say, okay,

0:02:31.160 --> 0:02:33.520
<v Speaker 1>we've been looking for reasons to show mc donald again,

0:02:34.040 --> 0:02:36.720
<v Speaker 1>and they basically jumped on that. So you've seen for

0:02:36.840 --> 0:02:40.880
<v Speaker 1>dollar's appreciation pick up speed against a variety of comancy.

0:02:40.919 --> 0:02:44.080
<v Speaker 1>Now not just the end the euro ulti year highs,

0:02:44.080 --> 0:02:46.400
<v Speaker 1>so did sturning this year Ossie. Dollar's been on a

0:02:46.440 --> 0:02:49.160
<v Speaker 1>tail eight league. So it's been basically been certainly the

0:02:49.200 --> 0:02:53.359
<v Speaker 1>G ten space and EM space. You've seen this poor

0:02:53.480 --> 0:02:56.800
<v Speaker 1>dollars sell off that's going and has been going on.

0:02:56.919 --> 0:03:00.560
<v Speaker 1>That was initially triggered by last week's events by Expan,

0:03:00.760 --> 0:03:03.840
<v Speaker 1>but that was escalated given Trump's comment.

0:03:04.080 --> 0:03:07.560
<v Speaker 2>So give me your sense of how FED policy enters

0:03:07.600 --> 0:03:11.040
<v Speaker 2>this conversation, because today we had President Trump saying that

0:03:11.120 --> 0:03:14.679
<v Speaker 2>he will announce his nominee for FED chairman tomorrow that's

0:03:14.720 --> 0:03:17.520
<v Speaker 2>Friday in the US, and earlier in the day Trump

0:03:17.639 --> 0:03:20.880
<v Speaker 2>reiterated his expectation that this new leader will be lowering

0:03:20.960 --> 0:03:24.239
<v Speaker 2>interest rates. It was curious today we didn't see much

0:03:24.320 --> 0:03:26.440
<v Speaker 2>in the way of movement in the treasury market. It

0:03:26.480 --> 0:03:29.880
<v Speaker 2>seems as though the market right now expects that we're

0:03:29.919 --> 0:03:33.360
<v Speaker 2>going to see lower rates in twenty twenty six, although

0:03:33.400 --> 0:03:35.760
<v Speaker 2>the swaps market is not pricing in the next rate

0:03:35.840 --> 0:03:37.040
<v Speaker 2>cut until June.

0:03:37.160 --> 0:03:40.520
<v Speaker 1>Right, yeah, I mean basically what the market is saying,

0:03:40.600 --> 0:03:45.000
<v Speaker 1>whoever is named as the next FED president, the market's

0:03:45.000 --> 0:03:48.520
<v Speaker 1>going to seem like it's the four penalates are out there, Walla,

0:03:48.640 --> 0:03:52.560
<v Speaker 1>ride awars, and you're looking for also on the divis

0:03:52.640 --> 0:03:55.119
<v Speaker 1>end of the scale spectrum. So the markets go, look,

0:03:55.120 --> 0:03:58.720
<v Speaker 1>whoever Rump picks. Understandably, he's could pick someone who he

0:03:59.080 --> 0:04:02.560
<v Speaker 1>is aligned with his policies, which cuts. So the market's going, okay,

0:04:02.560 --> 0:04:05.080
<v Speaker 1>you're going to cut. The new FED governor won't get

0:04:05.160 --> 0:04:08.720
<v Speaker 1>in till May, so really the new statement or policy

0:04:08.720 --> 0:04:13.160
<v Speaker 1>meeting becomes really the first Bible play until then, expectations

0:04:13.160 --> 0:04:16.960
<v Speaker 1>are you look what present sorry Fred chair Power said

0:04:16.960 --> 0:04:20.479
<v Speaker 1>this week is markets sort of stabilize only from unemployment rate.

0:04:20.760 --> 0:04:23.360
<v Speaker 1>So he goes, things are quite balanced. They're looking for

0:04:23.440 --> 0:04:26.480
<v Speaker 1>more data if they were to cut. So the market's

0:04:26.520 --> 0:04:29.119
<v Speaker 1>going to realistically, given everything that's going on with FED,

0:04:29.760 --> 0:04:32.159
<v Speaker 1>we don't see them in a hurry to cut, so

0:04:32.320 --> 0:04:35.480
<v Speaker 1>really won't happen until the new FED chair gets in,

0:04:35.560 --> 0:04:38.279
<v Speaker 1>which will be in May, which makes for summer months

0:04:38.320 --> 0:04:41.360
<v Speaker 1>of June July realistically the most viable option they think

0:04:41.520 --> 0:04:43.479
<v Speaker 1>from the first rate cut, and then they look into

0:04:43.480 --> 0:04:46.520
<v Speaker 1>another rate cut in the second half the year. Again,

0:04:46.600 --> 0:04:50.120
<v Speaker 1>I do think whoever comes in though, between now and May,

0:04:50.560 --> 0:04:52.880
<v Speaker 1>a lot of economic days are coming out, and if

0:04:52.880 --> 0:04:55.000
<v Speaker 1>that data comes out on the strong side, it will

0:04:55.000 --> 0:04:58.320
<v Speaker 1>be interesting sees the market actually goes back those expectations.

0:04:58.480 --> 0:05:02.000
<v Speaker 1>Obviously the data comes in weak, particularly labor force and

0:05:02.080 --> 0:05:05.240
<v Speaker 1>employment rates, they start start ticking. Then the market it's

0:05:05.279 --> 0:05:08.440
<v Speaker 1>given any green knights. Oh we're happy passing three rate cuts.

0:05:08.600 --> 0:05:09.640
<v Speaker 1>It's given any chance.

0:05:09.760 --> 0:05:12.599
<v Speaker 2>So we've been talking about US dollar weakness. We've also

0:05:12.720 --> 0:05:16.320
<v Speaker 2>been talking about much more in the way of FED accommodation,

0:05:17.160 --> 0:05:20.360
<v Speaker 2>and you look at those two things kind of in total,

0:05:20.800 --> 0:05:23.960
<v Speaker 2>it's easy to figure out why we're seeing many of

0:05:23.960 --> 0:05:26.680
<v Speaker 2>the precious metals just rally in the past week, although

0:05:26.760 --> 0:05:29.559
<v Speaker 2>to be fair, gold and silver did pull back today

0:05:29.560 --> 0:05:31.960
<v Speaker 2>from record highs. What do you make of this rally

0:05:32.000 --> 0:05:34.600
<v Speaker 2>that we have seen among precious metals and whether or

0:05:34.640 --> 0:05:37.839
<v Speaker 2>not this is a durable move or whether maybe we

0:05:37.880 --> 0:05:39.520
<v Speaker 2>could see a significant pull back.

0:05:40.880 --> 0:05:44.680
<v Speaker 1>I think certainly what happened with gold. When you start

0:05:44.760 --> 0:05:49.320
<v Speaker 1>doing things in I couldn't hyperbolic shape, you start going

0:05:49.360 --> 0:05:53.479
<v Speaker 1>basically skyward than any market that does that tends to

0:05:53.520 --> 0:05:56.159
<v Speaker 1>have a correction. It's got ahead of itself. Now the

0:05:56.240 --> 0:05:58.440
<v Speaker 1>question becomes in a long term play, even as a

0:05:58.440 --> 0:06:01.919
<v Speaker 1>more correction, it's the long trend still upwards, and I

0:06:01.920 --> 0:06:03.880
<v Speaker 1>think at the moment there's no reason to say that

0:06:03.960 --> 0:06:06.440
<v Speaker 1>it's not upwards. It may be not at the same pace,

0:06:06.520 --> 0:06:08.320
<v Speaker 1>made more of a grind, and the idea of this

0:06:08.520 --> 0:06:11.599
<v Speaker 1>sort of the basement trade is away from the dollars.

0:06:11.720 --> 0:06:14.719
<v Speaker 1>We say, given the policies that we see how the

0:06:14.720 --> 0:06:18.359
<v Speaker 1>market's reacting to President Trump's policies at the moment, it

0:06:18.440 --> 0:06:23.560
<v Speaker 1>does appear that their stances well basically not necessarily completely dedollarized.

0:06:23.560 --> 0:06:25.320
<v Speaker 1>I think they'll be too drastic, but there is a

0:06:25.360 --> 0:06:28.160
<v Speaker 1>move to say, let's move away from dollar and its commodities.

0:06:28.760 --> 0:06:30.880
<v Speaker 1>Was a safe haven, you could say, so. I think

0:06:30.920 --> 0:06:36.040
<v Speaker 1>that trend at the moment will continue. Particularly think look ran,

0:06:36.920 --> 0:06:39.680
<v Speaker 1>what may developing. Iran is a worry for the market.

0:06:40.320 --> 0:06:43.080
<v Speaker 1>If and this isn't if if President Trump was to

0:06:43.279 --> 0:06:46.400
<v Speaker 1>basically launch an attack on Iran, then I would obviously

0:06:46.480 --> 0:06:48.640
<v Speaker 1>have impact on oil prices and all this sort of stuff,

0:06:48.800 --> 0:06:51.560
<v Speaker 1>and I think commodities then would even just get an

0:06:51.640 --> 0:06:54.600
<v Speaker 1>additional boost. So certainly in the near term, while yes

0:06:54.760 --> 0:06:57.520
<v Speaker 1>you're seeing the correction in gold and some other quantities,

0:06:57.560 --> 0:07:00.240
<v Speaker 1>the general trend, I would still say risks US good

0:07:00.279 --> 0:07:01.440
<v Speaker 1>to them to go higher.

0:07:01.600 --> 0:07:04.560
<v Speaker 2>Yeah, we had oil soaring today after the President warned

0:07:04.640 --> 0:07:08.880
<v Speaker 2>Iran to make a nuclear deal or face military strikes.

0:07:08.920 --> 0:07:11.280
<v Speaker 2>I think WTI in New York trading was up around

0:07:11.280 --> 0:07:13.680
<v Speaker 2>three and a half percent. Similar move in Brent crude

0:07:14.040 --> 0:07:16.600
<v Speaker 2>during New York trading. But as we get ready to

0:07:16.640 --> 0:07:18.680
<v Speaker 2>wrap up the week and maybe we can look a

0:07:18.720 --> 0:07:21.880
<v Speaker 2>little bit as to what we may get next week,

0:07:22.160 --> 0:07:25.640
<v Speaker 2>will volatility be with us still or do you expect

0:07:25.680 --> 0:07:27.680
<v Speaker 2>markets to kind of calm down at least in the

0:07:27.720 --> 0:07:28.400
<v Speaker 2>short term.

0:07:28.960 --> 0:07:31.080
<v Speaker 1>They'll come down a little bit, But I think volatinity

0:07:31.080 --> 0:07:32.960
<v Speaker 1>is sully for the near term. Is head to stay

0:07:32.960 --> 0:07:33.240
<v Speaker 1>with a.

0:07:33.240 --> 0:07:33.760
<v Speaker 4>Poison for it.

0:07:33.920 --> 0:07:35.800
<v Speaker 1>If you look at option and pie volatility, it's comes

0:07:35.840 --> 0:07:39.360
<v Speaker 1>a little bit but still relatively elevated. I mean, next

0:07:39.360 --> 0:07:42.600
<v Speaker 1>week you have an RBA decision where the market is

0:07:42.760 --> 0:07:45.240
<v Speaker 1>picing about sixty seven cent chance for a great hike.

0:07:46.040 --> 0:07:48.440
<v Speaker 1>So if that was the philosophy, see the ousix then

0:07:48.480 --> 0:07:52.160
<v Speaker 1>gains and they could pull Kimi with it. Obviously, developments

0:07:52.440 --> 0:07:55.440
<v Speaker 1>on Iran that could, if it's happened, could kick off

0:07:55.480 --> 0:07:58.720
<v Speaker 1>at any time. So I do think sunny for the

0:07:58.720 --> 0:08:03.840
<v Speaker 1>near term. Mark is going to stay on edge, given

0:08:04.040 --> 0:08:07.520
<v Speaker 1>just all the geopolitic events gone going, and with central

0:08:07.560 --> 0:08:10.760
<v Speaker 1>bank seasons coming. So I think a bit of calm

0:08:10.800 --> 0:08:13.800
<v Speaker 1>maybe today because we're going to month ends and people

0:08:13.840 --> 0:08:16.480
<v Speaker 1>will get ready for next week. But the markets could

0:08:16.480 --> 0:08:19.000
<v Speaker 1>be very wary that you know, it could kick off

0:08:19.040 --> 0:08:21.280
<v Speaker 1>again at any one time. All you really need at

0:08:21.280 --> 0:08:23.920
<v Speaker 1>the moment is President Trump to send one headline on

0:08:24.240 --> 0:08:27.600
<v Speaker 1>the dollar or on ivan or something like that, and

0:08:27.640 --> 0:08:30.200
<v Speaker 1>all of a sudden the markets back into you know,

0:08:31.120 --> 0:08:33.560
<v Speaker 1>back into sell motes or some a dollar moller nightly.

0:08:33.800 --> 0:08:35.760
<v Speaker 2>Okay, David, we'll leave it there. Thank you so much

0:08:35.760 --> 0:08:39.360
<v Speaker 2>for being with ub. Bloomberg's David fennerdy FX and rates strategist,

0:08:39.840 --> 0:08:43.199
<v Speaker 2>joining from Melbourne today here on the Daybreak Asia podcast.

0:08:49.679 --> 0:08:52.640
<v Speaker 2>Welcome back to the Daybreak Asia Podcast. I'm Derek Prisner.

0:08:52.920 --> 0:08:56.680
<v Speaker 2>Tech stocks across the Asia Pacific are performing significantly better

0:08:56.720 --> 0:09:00.280
<v Speaker 2>than their US counterparts did in the regular session. Pulse

0:09:00.360 --> 0:09:03.160
<v Speaker 2>results after the US closed seemed to be driving that

0:09:03.200 --> 0:09:06.360
<v Speaker 2>positive sentiment across the APEX. And that's where we begin

0:09:06.440 --> 0:09:10.000
<v Speaker 2>our conversation with Harold Vonda Linda. He is head of

0:09:10.080 --> 0:09:14.520
<v Speaker 2>Asia Pacific Equity Strategy at HSBC. Harold spoke with Bloomberg

0:09:14.559 --> 0:09:17.240
<v Speaker 2>TV host Annabel Drulers and David and Glace.

0:09:17.800 --> 0:09:19.720
<v Speaker 5>Let's just kick off on that text story. I know

0:09:19.760 --> 0:09:20.959
<v Speaker 5>that this is the year that you're going to be

0:09:21.040 --> 0:09:23.040
<v Speaker 5>looking beyond the AI rally, but at least in the.

0:09:23.520 --> 0:09:25.760
<v Speaker 4>Fort the moment, no needs for that.

0:09:25.880 --> 0:09:27.520
<v Speaker 6>Ye try to ignore it.

0:09:27.679 --> 0:09:30.760
<v Speaker 7>Ignore no, absolutely, So this is the only story in

0:09:31.320 --> 0:09:34.160
<v Speaker 7>the region. Uh, maybe China's a story as well, but

0:09:34.400 --> 0:09:38.600
<v Speaker 7>it's basically the only story we said at the beginning

0:09:38.679 --> 0:09:40.360
<v Speaker 7>year that will be in this year. We're going to

0:09:40.440 --> 0:09:43.720
<v Speaker 7>also have to look beyond because India's maybe recovering and

0:09:43.720 --> 0:09:46.360
<v Speaker 7>maybe something in Alsia, but that's not really happening at

0:09:46.360 --> 0:09:47.080
<v Speaker 7>the moment.

0:09:46.920 --> 0:09:48.959
<v Speaker 4>So the story remains in Northeast Asian.

0:09:49.000 --> 0:09:53.000
<v Speaker 7>So for the North Asia story, right, Korea, Taiwan, shortages

0:09:53.040 --> 0:09:56.560
<v Speaker 7>in tech stocks, very strong earnings upgrades in the in

0:09:56.600 --> 0:09:57.240
<v Speaker 7>these markets.

0:09:57.240 --> 0:10:00.599
<v Speaker 6>Absolutely, that's our starting point in Korea to zero in

0:10:00.679 --> 0:10:04.800
<v Speaker 6>on that market value. I mean, the discounts clearly disappeared,

0:10:05.080 --> 0:10:07.520
<v Speaker 6>the career discounts. What does the earning story look like?

0:10:07.520 --> 0:10:09.840
<v Speaker 6>Do you think it will justify a further reradio.

0:10:09.920 --> 0:10:11.640
<v Speaker 4>The earning story is very strong. I mean, look at

0:10:11.640 --> 0:10:12.520
<v Speaker 4>how careers performed.

0:10:12.559 --> 0:10:15.240
<v Speaker 7>If you look at the valuations of the market, it's

0:10:15.400 --> 0:10:17.200
<v Speaker 7>it's moved up a little bit, not so much because

0:10:17.240 --> 0:10:19.439
<v Speaker 7>the earnings have gone out so much as well. And

0:10:19.520 --> 0:10:21.719
<v Speaker 7>what we now see in terms of positioning is that

0:10:21.960 --> 0:10:24.560
<v Speaker 7>people have already got a lot of exposure in Taiwan.

0:10:24.600 --> 0:10:27.840
<v Speaker 7>They can't really buy them much more because you can't

0:10:27.840 --> 0:10:30.160
<v Speaker 7>have an Asian portfolio when only one stock in it

0:10:30.640 --> 0:10:31.280
<v Speaker 7>in Taiwan.

0:10:31.480 --> 0:10:34.959
<v Speaker 4>So exactly. So, actually, as that market continues.

0:10:34.600 --> 0:10:36.760
<v Speaker 7>To perform, you see that people actually have to sell,

0:10:37.120 --> 0:10:39.280
<v Speaker 7>so they try to build that exposure somewhere else, and

0:10:39.280 --> 0:10:41.720
<v Speaker 7>that's helping Korea as well. So you see them rotating

0:10:41.800 --> 0:10:45.280
<v Speaker 7>into into the SEX and these these talks, of course,

0:10:45.400 --> 0:10:47.440
<v Speaker 7>and there is still room for that to grow.

0:10:47.960 --> 0:10:49.520
<v Speaker 4>Global funds are coming in as well.

0:10:49.640 --> 0:10:51.360
<v Speaker 7>You just mentioned earlier on there's a bit of rotation

0:10:51.440 --> 0:10:53.480
<v Speaker 7>in the US market, so you see that they're looking

0:10:53.559 --> 0:10:56.160
<v Speaker 7>for a kind of AI place outside of the US,

0:10:56.440 --> 0:10:58.520
<v Speaker 7>and then careers you offerous choice.

0:10:58.559 --> 0:11:00.599
<v Speaker 5>Then so you think there's this is the year that

0:11:01.080 --> 0:11:04.560
<v Speaker 5>the career really just continues to be the standout in

0:11:04.600 --> 0:11:06.600
<v Speaker 5>the Asian region or are you looking at other markets

0:11:06.600 --> 0:11:09.600
<v Speaker 5>as well, of course as Japan, or there's Taiwan Hong Kong.

0:11:09.880 --> 0:11:11.160
<v Speaker 5>Which one do you think is going to be the

0:11:11.160 --> 0:11:14.559
<v Speaker 5>biggest beneficiary. I guess of that rotation away.

0:11:14.679 --> 0:11:17.360
<v Speaker 7>If there's a rotation, I think there's some interesting things

0:11:17.400 --> 0:11:21.400
<v Speaker 7>happening in China. There are interesting things happening in India,

0:11:21.480 --> 0:11:23.880
<v Speaker 7>but it's slow and it's not so visible yet, so

0:11:24.160 --> 0:11:26.200
<v Speaker 7>that might well be a story that just takes time

0:11:26.280 --> 0:11:29.000
<v Speaker 7>before the earnings are recovering there. There's a bit more

0:11:29.200 --> 0:11:32.040
<v Speaker 7>stimulus has taken place, so it looks like the earning

0:11:32.080 --> 0:11:34.520
<v Speaker 7>story is picking up in India, but it's very slow,

0:11:34.600 --> 0:11:36.480
<v Speaker 7>so at the moment, it's not something that gets a

0:11:36.480 --> 0:11:39.280
<v Speaker 7>lot of attention. So that might be something that happens

0:11:39.720 --> 0:11:40.080
<v Speaker 7>in an.

0:11:40.040 --> 0:11:40.720
<v Speaker 4>XT quarter or so.

0:11:40.960 --> 0:11:43.680
<v Speaker 7>But we also see money coming back into China. That's interesting,

0:11:43.760 --> 0:11:46.280
<v Speaker 7>and this is not mainland Chinese money that was the

0:11:46.320 --> 0:11:49.240
<v Speaker 7>main driver for last year, but we actually seen money

0:11:49.240 --> 0:11:51.320
<v Speaker 7>coming from Europe and also from the US, and in

0:11:51.360 --> 0:11:53.880
<v Speaker 7>particular on the US that's not something we've seen over

0:11:53.920 --> 0:11:54.839
<v Speaker 7>the last couple of years.

0:11:54.840 --> 0:11:58.719
<v Speaker 4>But they're starting to go back into Chinese stocks as well.

0:11:59.040 --> 0:12:02.120
<v Speaker 6>Do you get a sense that that will will continue,

0:12:02.160 --> 0:12:04.800
<v Speaker 6>because that, I mean, that was for many years the

0:12:05.000 --> 0:12:09.280
<v Speaker 6>potentially the incremental buyer of this Chinese market. You know,

0:12:09.520 --> 0:12:12.240
<v Speaker 6>you know, we're underweight China. We've been massively still underweight

0:12:12.240 --> 0:12:13.920
<v Speaker 6>when you look at the positioning, right, So I want

0:12:13.920 --> 0:12:15.560
<v Speaker 6>to get a sense of I.

0:12:15.520 --> 0:12:17.400
<v Speaker 7>Mean, you're absolutely right. Two years ago, I think we

0:12:17.440 --> 0:12:20.199
<v Speaker 7>actually spoke about this one. Everybody said, oh, it's about

0:12:20.240 --> 0:12:23.320
<v Speaker 7>Asia x China or emerging markets x China. That story

0:12:23.440 --> 0:12:26.240
<v Speaker 7>is gone. A lot of US funds said, no, we're

0:12:26.240 --> 0:12:28.600
<v Speaker 7>not going to buy China. Is there's no interest in

0:12:28.600 --> 0:12:31.560
<v Speaker 7>this whatsoever. Difficult to sell. But now we have a

0:12:31.559 --> 0:12:34.320
<v Speaker 7>different dynamic. We have a wik dollar, so you want

0:12:34.960 --> 0:12:38.240
<v Speaker 7>non US assets. Europe is already they went last year

0:12:38.240 --> 0:12:41.120
<v Speaker 7>into Europe. Now they're looking somewhere else. Emerging market shows up,

0:12:41.400 --> 0:12:43.640
<v Speaker 7>and then you need to find markets where there's a

0:12:43.679 --> 0:12:45.600
<v Speaker 7>good growth story. You know, we just spoke about Korea,

0:12:45.640 --> 0:12:47.240
<v Speaker 7>but in China things are picking up as well, look

0:12:47.240 --> 0:12:49.720
<v Speaker 7>at the Apple results right. That gives another confidence, Hey

0:12:49.760 --> 0:12:53.480
<v Speaker 7>there are there is something going on there. The market

0:12:53.559 --> 0:12:56.920
<v Speaker 7>has performed pretty well last year, so I think the

0:12:56.920 --> 0:12:58.080
<v Speaker 7>interest is starting to come.

0:12:58.000 --> 0:12:58.360
<v Speaker 4>Back in there.

0:12:58.360 --> 0:13:00.720
<v Speaker 6>Do you get is the four Do you think the

0:13:00.760 --> 0:13:05.640
<v Speaker 6>formula for China this year will be what worked last year,

0:13:05.679 --> 0:13:08.880
<v Speaker 6>which is you know your your platform company, some of

0:13:08.920 --> 0:13:12.080
<v Speaker 6>the financials on income and dividends, and I think materials

0:13:12.120 --> 0:13:15.120
<v Speaker 6>did quite well. Or is there a cyclical story, a

0:13:15.160 --> 0:13:16.680
<v Speaker 6>rebound that we might be sleeping.

0:13:16.720 --> 0:13:18.480
<v Speaker 4>I think there will be a bit of a cyclical story.

0:13:18.600 --> 0:13:19.199
<v Speaker 4>I think. Okay.

0:13:19.280 --> 0:13:22.280
<v Speaker 7>So the interest is to a large extent, has been

0:13:22.320 --> 0:13:25.240
<v Speaker 7>in dividend yielding stock sort of safe investments, and this

0:13:25.360 --> 0:13:29.000
<v Speaker 7>is mainland Chinese buying Chinese stocks, initially in Hong Kong.

0:13:29.040 --> 0:13:31.120
<v Speaker 7>Then they went to the Asia market later on and

0:13:31.160 --> 0:13:33.280
<v Speaker 7>they bought Bank of China and these sort of companies

0:13:33.520 --> 0:13:35.440
<v Speaker 7>gave you a good yield, ye have very safe sort

0:13:35.440 --> 0:13:35.959
<v Speaker 7>of investment.

0:13:37.640 --> 0:13:40.280
<v Speaker 4>What we now see is interest going into other sectors.

0:13:40.640 --> 0:13:45.200
<v Speaker 7>So Ai China Ai biotech is coming up quite often,

0:13:45.480 --> 0:13:47.440
<v Speaker 7>and then you have these other sort of sectors that.

0:13:47.360 --> 0:13:48.079
<v Speaker 4>Do pretty well.

0:13:48.400 --> 0:13:51.000
<v Speaker 7>Power equipment is doing very well because you're building out

0:13:51.040 --> 0:13:55.440
<v Speaker 7>all sorts of UH networks in China as you need that.

0:13:55.679 --> 0:13:57.640
<v Speaker 7>So there are these industries where there is no walk

0:13:57.760 --> 0:14:01.840
<v Speaker 7>supply where things are happening. This is where the focus

0:14:01.920 --> 0:14:03.880
<v Speaker 7>is shifting in that direction as well.

0:14:04.480 --> 0:14:07.360
<v Speaker 5>The IPA pipeline, though in Hong Kong is still very.

0:14:07.520 --> 0:14:09.640
<v Speaker 4>Robust, coming into robust is under statements.

0:14:11.360 --> 0:14:14.360
<v Speaker 5>Sure, and I'm wondering if you think that there's any

0:14:14.400 --> 0:14:17.480
<v Speaker 5>concerns about liquidity being drained from the secondary market on

0:14:17.520 --> 0:14:18.160
<v Speaker 5>that basis.

0:14:19.040 --> 0:14:19.640
<v Speaker 4>Yeah, we have.

0:14:20.160 --> 0:14:22.480
<v Speaker 7>Last time we looked three hundred and sixty IPOs in

0:14:22.520 --> 0:14:26.320
<v Speaker 7>the pipeline, so that's a lot and some of them

0:14:26.360 --> 0:14:29.000
<v Speaker 7>are big, some of them are smaller companies as well.

0:14:29.040 --> 0:14:32.120
<v Speaker 7>There's a lot of these Ai companies that need capital

0:14:32.160 --> 0:14:32.880
<v Speaker 7>so they're listing.

0:14:34.160 --> 0:14:36.320
<v Speaker 4>There is a lot of As I said, there's.

0:14:36.280 --> 0:14:40.120
<v Speaker 7>The Chinese local money, mainland Chinese money coming into Hong Kong.

0:14:40.440 --> 0:14:42.640
<v Speaker 7>You now have foreign money coming there as well, so

0:14:42.680 --> 0:14:45.400
<v Speaker 7>there's a lot of lacidity around. So I'm not worried

0:14:45.800 --> 0:14:48.320
<v Speaker 7>that that will drain money out of the secondary market.

0:14:48.520 --> 0:14:50.800
<v Speaker 7>It might happen from one week to another if there's

0:14:50.800 --> 0:14:54.400
<v Speaker 7>a real big IPO, but not structurally so at least

0:14:54.480 --> 0:14:57.360
<v Speaker 7>not at the moment if that would happen. Though, Let's

0:14:57.360 --> 0:14:59.520
<v Speaker 7>say it's difficult to sell your IPO, you get to

0:14:59.560 --> 0:15:02.000
<v Speaker 7>lower your then you see that that three sixty number

0:15:02.200 --> 0:15:05.040
<v Speaker 7>probably goes lower, because then some companies might say, let's

0:15:05.040 --> 0:15:06.840
<v Speaker 7>wait a little to the market is a bit stronger.

0:15:07.160 --> 0:15:10.240
<v Speaker 7>So that's a moving target as well. But I'm not

0:15:10.320 --> 0:15:12.000
<v Speaker 7>overly worried. Liquidity is really.

0:15:11.840 --> 0:15:12.280
<v Speaker 4>Good to them.

0:15:12.680 --> 0:15:15.840
<v Speaker 6>Key to the liquidity issue formula will be will be

0:15:15.880 --> 0:15:18.000
<v Speaker 6>the fed we heard from the US President earlier. I

0:15:18.080 --> 0:15:19.440
<v Speaker 6>want to play it out for years, and we'll talk

0:15:19.480 --> 0:15:25.520
<v Speaker 6>about it soon. Let's play it out, guys, please, what day.

0:15:25.320 --> 0:15:26.920
<v Speaker 3>Will you be announcing your bet here.

0:15:26.840 --> 0:15:27.600
<v Speaker 2>Peck next week?

0:15:28.240 --> 0:15:29.840
<v Speaker 4>Tomorrow morning, tomorrow morning?

0:15:31.640 --> 0:15:33.240
<v Speaker 3>What day will you be announcing your.

0:15:33.160 --> 0:15:34.400
<v Speaker 2>Bet here peck next week?

0:15:35.040 --> 0:15:36.640
<v Speaker 4>Tomorrow morning, tomorrow morning?

0:15:37.080 --> 0:15:39.440
<v Speaker 8>Do you know I'm Lage was saying tomorrow. But just

0:15:39.480 --> 0:15:44.560
<v Speaker 8>an outstanding person and a person that won't be too

0:15:44.640 --> 0:15:47.600
<v Speaker 8>surprising to people. It's going to be somebody that is

0:15:47.680 --> 0:15:51.960
<v Speaker 8>very respected, somebody that's known to everybody in the financial world.

0:15:52.000 --> 0:15:54.320
<v Speaker 8>And I think it's going to be a very good choice.

0:15:54.360 --> 0:15:57.680
<v Speaker 8>I hope so much. On your short listen on my

0:15:58.080 --> 0:15:59.400
<v Speaker 8>reasonably short list year.

0:16:01.960 --> 0:16:05.280
<v Speaker 6>So Harold Kevin Hasset, Chris Waller, Kevin warsh Rake, Wrider.

0:16:05.400 --> 0:16:08.320
<v Speaker 6>Doesn't matter who among the four eventually gets us.

0:16:08.360 --> 0:16:10.840
<v Speaker 7>No, this is an important position, so it matters, and

0:16:10.920 --> 0:16:13.400
<v Speaker 7>in conversations that we have a client, it comes up

0:16:13.440 --> 0:16:14.240
<v Speaker 7>with who it might be.

0:16:14.320 --> 0:16:16.240
<v Speaker 4>I mean, we don't know it, so every second guess.

0:16:16.720 --> 0:16:22.680
<v Speaker 7>But it does matter because uh, we need the independence

0:16:22.720 --> 0:16:23.120
<v Speaker 7>of the fat.

0:16:23.160 --> 0:16:24.359
<v Speaker 4>That's really important.

0:16:24.800 --> 0:16:28.320
<v Speaker 7>We're also in a strange situation whereby we now actually

0:16:28.400 --> 0:16:33.040
<v Speaker 7>see that the inflationary prescires remain. The market is saying,

0:16:33.160 --> 0:16:34.560
<v Speaker 7>you know, in the beginning of the year as well,

0:16:34.560 --> 0:16:37.160
<v Speaker 7>there's going to be raate cuts coming through, but increasingly saying, ah,

0:16:37.600 --> 0:16:40.120
<v Speaker 7>maybe not so much. We actually don't think there will

0:16:40.120 --> 0:16:41.640
<v Speaker 7>be a rad cut this year. We don't even see

0:16:41.640 --> 0:16:43.520
<v Speaker 7>a ray cut next year. So there's a bit of

0:16:43.520 --> 0:16:45.800
<v Speaker 7>a recalibration in the market in the opposite direction.

0:16:46.520 --> 0:16:48.440
<v Speaker 4>So you need somebody who can, who.

0:16:48.400 --> 0:16:52.600
<v Speaker 7>Can who can lead an institution of course with yeah

0:16:52.640 --> 0:16:54.240
<v Speaker 7>and and co credible policies.

0:16:54.320 --> 0:16:55.760
<v Speaker 4>It's incredibly important.

0:16:55.840 --> 0:16:58.160
<v Speaker 2>That was Harold von de Linda, head of Asia Pacific

0:16:58.200 --> 0:17:02.480
<v Speaker 2>Equity Strategy at HSPs. He was speaking with Bloomberg's Annabel

0:17:02.600 --> 0:17:05.359
<v Speaker 2>Drulers and David Nglace bringing it to you here on

0:17:05.359 --> 0:17:11.359
<v Speaker 2>the Daybreak Asia Podcast. Thanks for listening to today's episode

0:17:11.440 --> 0:17:15.439
<v Speaker 2>of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we

0:17:15.480 --> 0:17:19.359
<v Speaker 2>look at the story shaping markets, finance, and geopolitics in

0:17:19.400 --> 0:17:22.560
<v Speaker 2>the Asia Pacific. You can find us on Apple, Spotify,

0:17:22.720 --> 0:17:26.200
<v Speaker 2>the Bloomberg Podcast YouTube channel, or anywhere else you listen.

0:17:26.640 --> 0:17:29.520
<v Speaker 2>Join us again tomorrow for insight on the market moves

0:17:29.600 --> 0:17:34.080
<v Speaker 2>from Hong Kong to Singapore and Australia. I'm Doug Chrisner,

0:17:34.280 --> 0:17:35.679
<v Speaker 2>and this is Bloomberg