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Speaker 1: Let's get to our guest. It's Thomas Fong, head of

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Speaker 1: China Global Markets at UBS. Tommy, thanks for joining us

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Speaker 1: here on the program. There's a little better tone in

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Speaker 1: markets this morning. Some are ascribing that to the policy

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Speaker 1: package from China yesterday, but as I pointed out earlier,

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Speaker 1: we've had some brokerage calls, not least of which from

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Speaker 1: Jeffreys saying there's nothing really exciting there. Of your thoughts, well, first,

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Speaker 1: thanks for for having me Brian. Um, Yeah, I do

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Speaker 1: think you know, China Asia market would continue to be uh,

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Speaker 1: you know, ranch bomb, couple of UH scenario in the

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Speaker 1: near turn, but there are potential upside really as you mentioned,

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Speaker 1: driven by the policies, a betides what happened over the

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Speaker 1: parts twenty four hours. The Central Bank of China continue

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Speaker 1: to pump liquidities with the consistent cut on on the

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Speaker 1: race for what mof for LPR and all of those

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Speaker 1: UH could potentially it really helped the market, right. Tell

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Speaker 1: me when we look at the likes of, say, what

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Speaker 1: happened to Logan Group though, how much does that just

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Speaker 1: kind of really exacerbate the very big concerns you're seeing

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Speaker 1: in the property market, and how much further, this potentially

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Speaker 1: still has to run, which really just puts to that

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Speaker 1: whole view of how investable is China. Well, I think

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Speaker 1: property uh sector has been you know, very well analyzed, UM,

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Speaker 1: so my view has been consistent in terms of the

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Speaker 1: private sectors. UM will continue to face pressure with the

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Speaker 1: three right lines and the deleveraging efforts from the top,

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Speaker 1: but overall I think to stay owned and also the

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Speaker 1: overall banking sector very well sort of protected. So the

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Speaker 1: key focus is really not to spin over from the

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Speaker 1: proper property sector's capital markets performance into the real economy

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Speaker 1: and also the broader UM sectors. Tell me, once we

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Speaker 1: get past COVID, do you think that Chinese consumers will

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Speaker 1: be in a sense liberated and just you know, explode

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Speaker 1: with revenge spending or do you think they might stay

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Speaker 1: cautious given what's happening in the property market. But that's

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Speaker 1: a great questions, Briant. I would think, UM, the ward

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Speaker 1: is very much connected the consumers behavior in many ways,

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Speaker 1: uh more similar than different. When we see the pump

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Speaker 1: up demand across the world with the inflation we are

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Speaker 1: UM in many ways still fighting against China. Would would

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Speaker 1: be no difference. Yes, the consumer confidence being China and

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Speaker 1: a few other Asian countries are more correlated to the

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Speaker 1: property prices, but the property prices in some way chapter

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Speaker 1: relatively stable level. Tommy wanted to get more of your

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Speaker 1: thoughts on on where you invest in yesterday that explang

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Speaker 1: conservative third quarter guidance very much disappointed market participants, but

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Speaker 1: this is a sector that many people, including yourself like.

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Speaker 1: Tell us your views on the e V battery outlook here. Well,

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Speaker 1: I think our top ideas for China in the near

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Speaker 1: term are you the the upstring of the the EAVY

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Speaker 1: supply chain, which battery are included renewable as well, which

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Speaker 1: really strengthened from the end of the July pol Beuro

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Speaker 1: meeting where we take cute, So that's really the area

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Speaker 1: will have the policy tel one as well. I'm curious

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Speaker 1: your thoughts about whether or not President she will get

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Speaker 1: tougher or softer after the Party Congress. Well, Brian, that's

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Speaker 1: that's a great question. Uh, I don't. I don't think

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Speaker 1: it's realistic UM to expect any you know, senior leaders

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Speaker 1: in major nation to really change their view dramatically, so

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Speaker 1: so I would definitely see that UM sort of consistency

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Speaker 1: to play out. But with election out of the way, um,

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Speaker 1: there would be um new leaders in the Standing Committee

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Speaker 1: of the Politburo and the various state council and the

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Speaker 1: government official will also be getting their new turn. So

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Speaker 1: they're telling me one of the way their KPI yeah,

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Speaker 1: will be renewed. Yeah. One of the reasons I mentioned

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Speaker 1: that is that you know, you see a push from

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Speaker 1: Leka Chong the Premier there runs a little counter to

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Speaker 1: what President she is espousing, and in fact you even

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Speaker 1: hear that a little bit from Leo Huh who is

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Speaker 1: the chief Economic advisor to the President. So I'm just

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Speaker 1: wondering whether or not there's potential therefore a moderately big

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Speaker 1: change in policy after she is ensured getting a third term.

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Speaker 1: And I don't want you to to to maybe address

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Speaker 1: politics because that's really above both of our pay grades.

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Speaker 1: But really as it applies to the economy and regulation, yeah,

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Speaker 1: I think so I'm pretiously optimistic. It's a bit of

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Speaker 1: like you know, a chairman is driving the direction of

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Speaker 1: the company, where the CEO really need to deliver qually results.

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Speaker 1: So primarily and whoever the Vice Premier um in charging

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Speaker 1: the future will continue to focus on economic growth, which

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Speaker 1: is good used to the to the market. Tell me

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Speaker 1: what is the complication for authorities when you've got if

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Speaker 1: you are near two year low. And now this Reuter's

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Speaker 1: report as well that the Effects Regulator has warned banks

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Speaker 1: against shorting the currency. It is a balance act, Julian.

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Speaker 1: But overall, I would definitely see that PBO see a

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Speaker 1: little bit more um receptive in terms of a relatively

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Speaker 1: weaker currency on the backdrop of you know, US dollar strengthening,

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Speaker 1: right and then if it will help in many ways

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Speaker 1: the exporting sectors, but they need to balance that in

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Speaker 1: terms of the capital flow and also potentially input of inflation,

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Speaker 1: which is not happening yet in China. Curious about your

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Speaker 1: thoughts on high yield outside of property in China. Well,

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Speaker 1: you know, property is you know, the good uh, you know.

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Speaker 1: I think with the current market dynamic it will be

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Speaker 1: quite challenging. I would say there will be spingover effect

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Speaker 1: to the rest of the HIO in the at least

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Speaker 1: near term. All right, Tommy, thanks for your insights. Thomas Fang,

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Speaker 1: head of China Global Markets at UBS, on the line

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Speaker 1: for us from Hong Kong,