WEBVTT - Disney Drops Relocation Plans and Applied Materials Earnings

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<v Speaker 1>This is Bloomberg Daybreak Asia for this Friday, May nineteenth

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<v Speaker 1>in Hong Kong, Thursday May eighteenth in New York and

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<v Speaker 1>coming up today.

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<v Speaker 2>The S and P five hundred hits a nine month

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<v Speaker 2>high on signs US lawmakers are making progress on debt

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<v Speaker 2>ceiling talks.

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<v Speaker 1>Traders speculate the Fed will keep rates higher for longer

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<v Speaker 1>as inflation remains elevated.

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<v Speaker 2>And Ali Baba is set to explore IPOs for its

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<v Speaker 2>logistics and grocery arms while spinning off its cloud business.

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<v Speaker 3>China key issue on day one of G seven world

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<v Speaker 3>leaders visit Hiroshima memorial and symbolic gesture of unity. US

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<v Speaker 3>and Taiwan agree on trade deal and two sides of

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<v Speaker 3>the debt ceiling debate definitely softening. I'm at Baxter with

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<v Speaker 3>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 Apples, Spotify, the Bloomberg Business

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

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<v Speaker 2>Good morning, I'm Doug Chrisner and I'm Brian Curtiz.

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<v Speaker 1>Here are the stories we're following today. US treasure yields

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<v Speaker 1>rising on speculation that the FED will need to keep

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<v Speaker 1>interest rates higher for longer as inflation remains elevated. It

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<v Speaker 1>comes with some commentary from two FED officials. Now. Dallas

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<v Speaker 1>FED President Lorie Logan said the case for a rate

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<v Speaker 1>pause is unclear with high levels of inflation, and she

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<v Speaker 1>said upcoming data could show that it's appropriate for the

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<v Speaker 1>FED to skip a meeting before acting on monetary policy,

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<v Speaker 1>but act it might have to do in the meantime,

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<v Speaker 1>giving a slightly different position. FED Governor Philip Jefferson said

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<v Speaker 1>he's watching for any delayed effects from past rate hikes.

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<v Speaker 5>History shows that monetary policy works with long and variable lags,

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<v Speaker 5>and that a year is not a long long enough

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<v Speaker 5>period for demand to feel the full effects of higher

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<v Speaker 5>interest rates.

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<v Speaker 1>Charjpal has an opportunity to provide more guidance on policy when,

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<v Speaker 1>as Doug mentioned, he will be speaking at a FED

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<v Speaker 1>conference in Washington tomorrow. The FED meets next on June thirteenth.

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<v Speaker 2>Well after the bell, we heard from Applied Materials the

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<v Speaker 2>company is expecting sales to decline in the current quarter,

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<v Speaker 2>though not as sharply as analyst had feared. The story

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

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<v Speaker 6>Applied is the biggest maker of semiconductor making machinery. It

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<v Speaker 6>said fiscal third quarter sales will be about six point

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<v Speaker 6>one five billion dollars, compared with six point five to

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<v Speaker 6>two billion a year earlier. Analysts had estimated five point

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<v Speaker 6>nine to seven billion. Makers of memory chips are struggling

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<v Speaker 6>with a historic lot of inventory, forcing them to cut

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<v Speaker 6>spending on equipment upgrades and new factories. That has hurt

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<v Speaker 6>orders for companies such as Applied Materials, threatening a pandemic

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<v Speaker 6>era growth run in New York. Charlie Pellett Bloomberg Daybreak Asia.

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<v Speaker 1>Walt Disney says it's dropping plans to relocate two thousand

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<v Speaker 1>California employees to its new corporate campus building in Florida.

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<v Speaker 1>It will also close a luxury Star Wars themed hotel

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<v Speaker 1>at Walt Disney World.

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<v Speaker 4>Now.

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<v Speaker 1>This comes as the company is involved in a high

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<v Speaker 1>profile fight with Florida Governor On DeSantis. Tensions have been

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<v Speaker 1>high since Dessantas signed legislation that took control of a

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<v Speaker 1>board that oversees municipal services at Disney World. That came

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<v Speaker 1>after Disney had publicly opposed a state law that limits

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<v Speaker 1>the discussion of gender issues in public schools. The company

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<v Speaker 1>has since sued. Let's get more here from Bloomberg's Chris

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<v Speaker 1>Paul Mary.

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<v Speaker 7>Disney sued said that the move to disband the board

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<v Speaker 7>of that municipal district was wrong. It was Recali Tori

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<v Speaker 7>Desanta says he's going to fight the suit, and so

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<v Speaker 7>things just seemed to be escalating. Bob by Her recently said,

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<v Speaker 7>you know, it doesn't this state care about jobs, doesn't

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<v Speaker 7>it care about investment, and so, you know, given the

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<v Speaker 7>unpopularity was moved internally, this was sort of an no

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<v Speaker 7>brainer for him to just say, all right, well, we're

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<v Speaker 7>also simultaneously sending a message to Florida.

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<v Speaker 1>Disney did not mention the dispute with Dissentis specifically in

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<v Speaker 1>either the hotel closing announcement or in the note to

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<v Speaker 1>employees canceling the relocation plan. It only said that conditions

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<v Speaker 1>had changed since the staff moved to Florida was first

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<v Speaker 1>announced about two years ago.

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<v Speaker 2>Ali Baba said it will explore initial public offerings for

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<v Speaker 2>both its logistics and its grocery arms, while at the

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<v Speaker 2>same time spinning off its twelve billion dollar cloud business.

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<v Speaker 2>The story from Bloomberg's Joan Wong.

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<v Speaker 8>This kicks off the first phase of a much anticipated

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<v Speaker 8>breakup to try and revive anemic revenue growth. The spin

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<v Speaker 8>off of Ali Baba's cloud division will happen within the

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<v Speaker 8>next twelve months via a stock dividend distribution to shareholders.

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<v Speaker 8>The intention is for it to become an independent, publicly

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<v Speaker 8>listic company. This announcement came after Baba reported single digit

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<v Speaker 8>revenue growth for the third consecutive quarters. Try one's largest

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<v Speaker 8>e commerce company, Adibaba remains a barometer for consumer demand

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<v Speaker 8>in the country. Its lackluster showing could be an indicator

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<v Speaker 8>that China's recovery may be taking longer than once anticipated.

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<v Speaker 8>For now, Adibaba will look to push cost cuts to

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<v Speaker 8>shore up margins. Ali Baba ADRs fell five percent in

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<v Speaker 8>New York. In Hong Kong joined One Bloomberg Debrigaisia, and that.

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<v Speaker 1>Sets up an interesting session here in Hong Kong. We're

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<v Speaker 1>watching closely to see how Alibaba trades here well. Relations

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<v Speaker 1>between China and Australia have taken another positive step, with

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<v Speaker 1>China announcing that imports of Australian timber will resume after

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<v Speaker 1>two years of restrictions. Bloomberg's Paul Allen has.

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<v Speaker 9>More China halted imports of Australian timber and twenty twenty,

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<v Speaker 9>a trade worth one point one billion dollars at the time,

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<v Speaker 9>saying it found pists in some shipments. That discovery, however,

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<v Speaker 9>coincided with trade strikes against Australian coal, bali wine and seafood.

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<v Speaker 9>Relations between the two countries sound following Australia's coal for

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<v Speaker 9>an independent investigation into the origins of COVID nineteen. Since then,

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<v Speaker 9>the government in Australia has changed, allowing for a reset

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<v Speaker 9>of relations. China says Australian exporters have now satisfied the

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<v Speaker 9>conditions of Chinese customs and what Australia is a trade

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<v Speaker 9>minister Don Farrell is calling a great outcome. Farrell is

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<v Speaker 9>hopeful the risk of China's trade restrictions can be lifted

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<v Speaker 9>this year. Paul Allen, Bloomberg day Break Asia.

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

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<v Speaker 1>want to ask you a question here. It's a rhetorical question.

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<v Speaker 1>If you could answer it, I'd vote for you for president. Maybe.

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<v Speaker 1>To what degree is Ali Baba a key man risk story. Now,

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<v Speaker 1>we know that there's been a lot of action, regulatory

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<v Speaker 1>action and such on a lot of these tech companies,

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<v Speaker 1>but Baba is really kind of stumbling here. It had

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<v Speaker 1>a modest sales miss, It had a little bit of

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<v Speaker 1>weakness in cloud revenue, the first decline ever on year

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<v Speaker 1>on year terms. And I know you can explain away

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<v Speaker 1>a lot, but it does seem like with jack Ma

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<v Speaker 1>out of the picture, the company has stumbled a little.

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<v Speaker 1>And you wonder whether or not you know that's going

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<v Speaker 1>to be the case at other Chinese tech companies.

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<v Speaker 2>So one of the criticisms I think is that the

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<v Speaker 2>company may be a little bloated and maybe it's become

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<v Speaker 2>a little inefficient. Maybe that argues for some type of reorganization,

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<v Speaker 2>which seems to be what the company is doing right now.

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<v Speaker 2>The other thing that I wonder about is the extent

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<v Speaker 2>to which there is a lot more competition facing this

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<v Speaker 2>company in a way that it had not encountered previously.

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<v Speaker 6>Yeah.

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<v Speaker 1>Absolutely. A good example is another story we have today

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<v Speaker 1>that may Twan will launch an app in Hong Kong,

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<v Speaker 1>and it's an example of a Chinese company wanting to

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<v Speaker 1>do business outside Hong Kong, and it's actually killed Ali

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<v Speaker 1>Baba on the food delivery service business in Chine. It's

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<v Speaker 1>by far number one, So that's kind of an example

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<v Speaker 1>of that. What else is really big today? Well, we've

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<v Speaker 1>got a good tone to the market and another really

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<v Speaker 1>strong day for tech. I heard you guys chatting in

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<v Speaker 1>the previous show about a big tech and what's happening.

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<v Speaker 1>I have an interesting point. The valuations are just getting

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<v Speaker 1>back to the twenty nineteen levels before you had AI

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<v Speaker 1>really sweeping through here. So think about that. Can you

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<v Speaker 1>argue that there's a lot more room to run given

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<v Speaker 1>that interesting positioning?

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<v Speaker 6>It could be the case.

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<v Speaker 2>And what was interesting today, Brian, we had a spike

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<v Speaker 2>in yield and that didn't really hold back the tech group.

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<v Speaker 2>And if you look at what the yield did, particularly

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<v Speaker 2>on the two year, in terms of creating some dollar strength,

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<v Speaker 2>we have the dollar on a tear and a great

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<v Speaker 2>deal of weakness as we get set for trading in

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<v Speaker 2>Japan in the end. Right now with a one thirty

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<v Speaker 2>eight handle, that's pretty hard to believe.

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<v Speaker 1>Yeah, I mentioned that dollar strength though. We'll put that

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<v Speaker 1>to Belita Own who's coming up shortly, Chairman of Adulton

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<v Speaker 1>Investments and always good to have her on the program.

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<v Speaker 1>Now it's time for Global News. The G seven meetings

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<v Speaker 1>have kicked off, with the US saying China will be

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<v Speaker 1>the key issue. Ed Baxter has Global News in the

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<v Speaker 1>nine to sixty newsroom.

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<v Speaker 3>Yeah right, Brian, Now, US is saying starting with geopolitical

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<v Speaker 3>security concerns, but also competition. National Security Council spokesman John

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<v Speaker 3>Kirby and speaking with Bloomberg's Amory hor Durn says, yeah, China.

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<v Speaker 10>The G seven leaders will absolutely spend quite a bit

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<v Speaker 10>of time here, as you would expect they would certainly

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<v Speaker 10>here in Japan talking about the challenges that the PRC represents.

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<v Speaker 10>They will think, I'm convinced of it that you'll see

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<v Speaker 10>at the end of those discussions that they'll all speak

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<v Speaker 10>with one voice about about how we need to treat

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<v Speaker 10>that particular competition from not just from a security perspective,

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<v Speaker 10>from an economic perspective, from a diplomatic perspective.

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<v Speaker 3>Kirby says G seven will represent one voice. The group

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<v Speaker 3>expected also to turn the heat on Russia regarding Ukraine. Meanwhile,

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<v Speaker 3>President Biden, addressing Japan's Prime Minister Fumio Keisha, I think the.

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<v Speaker 11>Quote is we face the most one of the most

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<v Speaker 11>complex environments in recent history, security environments, and I couldn't

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<v Speaker 11>get any more. But I'm proud that the United States

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<v Speaker 11>and Japan are facing it together.

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<v Speaker 3>So on China, Bloomberg's Andre Hordern and Hiroshima says, if

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<v Speaker 3>there's any sticky agreement, it is there.

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<v Speaker 12>We can see a bit more tension between these leaders,

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<v Speaker 12>especially between the Europeans and the United States on how

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<v Speaker 12>much they want to The new vogue word is d

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<v Speaker 12>risk not decoupled from China, and we do if the

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<v Speaker 12>administration wants to put forward some sort of path about

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<v Speaker 12>economic coersion when it comes to China, about making sure

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<v Speaker 12>these countries are aligned on a multilateral approach.

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<v Speaker 3>Anne Marie says the G seven leaders going to the

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<v Speaker 3>Hiroshia Memorial later in the day huge for Prime Minister Kishia.

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<v Speaker 3>It is, of course his hometown. China has blasted the

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<v Speaker 3>US on what it calls coercive diplomacy. At the G seven,

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<v Speaker 3>US and Taiwan have agreed on a trade initiative and

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<v Speaker 3>a bid for closer ties. This is the first tangible

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<v Speaker 3>result under an initiative announced last year. It will streamline customs,

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<v Speaker 3>reduce wait times for trucks and vessels and improve regulation.

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<v Speaker 3>Some better news today from both sides on the debt

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<v Speaker 3>ceiling talks in the US House, Speaker Kevin McCarthy.

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<v Speaker 13>Where we were a week ago and where we are

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<v Speaker 13>today is a much better place because of you. We've

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<v Speaker 13>got the right people in the room discussing it in

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<v Speaker 13>a very professional manner, with all the knowledge and all

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<v Speaker 13>the background from all the different leaders of what they want.

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<v Speaker 13>I said, I know, and I can see where a

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<v Speaker 13>deal can come.

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<v Speaker 3>Together, and many a Democratic Senator Kirsten Cinema also saying

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<v Speaker 3>those people on both sides are great and that she's

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<v Speaker 3>glad that they're in place. As for the issue of

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<v Speaker 3>some kind of work requirement for some entitlements, well, I'm

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<v Speaker 3>bloomberg today, she said, sure, let's look at it.

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<v Speaker 12>The reality is, in our country we've long had modest

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<v Speaker 12>work requirements for some entitlement programs and continuing those makes

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<v Speaker 12>relevant sense.

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<v Speaker 3>So we shall see. On the PGA leader board, Bryce

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<v Speaker 3>En de Chambeau is sitting on top. He's the only

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<v Speaker 3>one at four under to this point, and he's through

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<v Speaker 3>his round today, followed at by Scheffler and Connors at

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<v Speaker 3>three under, two under grouped up Bradley Streika, Scott Cole

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<v Speaker 3>and at one under Justin Sue. We'll continue to follow

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<v Speaker 3>that for you Global newspower by more than twenty seven

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<v Speaker 3>hundred journalists and analysts in over one hundred and twenty countries.

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<v Speaker 3>In San Francisco, I'm at Baxter and this is Bloomberg.

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<v Speaker 1>Hi everybody, I'm Brian Curtis, along with Rashad's Salama. This

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<v Speaker 1>is Bloomberg Daybreak Asia. As mentioned, our guest is Balita Ong,

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<v Speaker 1>chairman of Dalton Investments. Balita, we talked about dollar strength

0:12:28.520 --> 0:12:31.360
<v Speaker 1>here of late and yields moving back up again doesn't

0:12:31.400 --> 0:12:35.360
<v Speaker 1>seem to have really set back the equity markets, but

0:12:35.440 --> 0:12:36.600
<v Speaker 1>how long can that last.

0:12:37.200 --> 0:12:40.640
<v Speaker 14>It's good to be back. Dollar strength is for the

0:12:40.760 --> 0:12:43.200
<v Speaker 14>US not a problem. It's just a problem for everybody

0:12:43.200 --> 0:12:48.800
<v Speaker 14>else because of the potential impact on inflation. Dollar strength

0:12:48.840 --> 0:12:53.000
<v Speaker 14>in fact helps countries that are largely exporters and can

0:12:53.040 --> 0:12:57.400
<v Speaker 14>boost growth for them through growth and exports. So it's

0:12:57.440 --> 0:12:59.600
<v Speaker 14>a matter of which countries are suffering the most from

0:12:59.640 --> 0:13:02.360
<v Speaker 14>inflation where it presents the bigger problems. In the case

0:13:02.360 --> 0:13:06.320
<v Speaker 14>of China for example, for now, or Japan, where inflation

0:13:06.520 --> 0:13:09.160
<v Speaker 14>has been you know, at zero for decades but is

0:13:09.200 --> 0:13:12.720
<v Speaker 14>finally coming up. Perhaps it's not such a big problem currently,

0:13:13.200 --> 0:13:18.080
<v Speaker 14>but the reality is that the dollar strength is here

0:13:18.200 --> 0:13:22.080
<v Speaker 14>now and is here because of the significant still significant,

0:13:22.679 --> 0:13:26.280
<v Speaker 14>very significant interest rate differential. But the fact is that

0:13:26.360 --> 0:13:30.920
<v Speaker 14>the US budget deficit is enormous and that will over

0:13:31.000 --> 0:13:34.439
<v Speaker 14>time put pressure on the strength of the dollar. That

0:13:34.480 --> 0:13:38.560
<v Speaker 14>plus the you know, geopolitical issues that really make you

0:13:38.640 --> 0:13:40.840
<v Speaker 14>wonder how much you should keep in dollars if you're

0:13:41.720 --> 0:13:45.760
<v Speaker 14>a country that has to be conservative about its reserves

0:13:46.160 --> 0:13:49.199
<v Speaker 14>because given them what was done with Russian reserves. You know,

0:13:49.240 --> 0:13:52.920
<v Speaker 14>if you're a country that worries about having your reserves

0:13:52.920 --> 0:13:55.480
<v Speaker 14>taken over by the US, then you might want to diversify.

0:13:56.400 --> 0:13:58.960
<v Speaker 15>Belita, And it's quite out at you because we do

0:13:59.000 --> 0:14:03.600
<v Speaker 15>seem to have also the the dollar gold relationship reinstated

0:14:03.640 --> 0:14:07.760
<v Speaker 15>that I should i say an inverse relationship that they

0:14:07.760 --> 0:14:08.080
<v Speaker 15>do have.

0:14:08.720 --> 0:14:12.480
<v Speaker 14>It's true, I personally think that gold makes a logical

0:14:13.400 --> 0:14:16.720
<v Speaker 14>as a logical alternative to the dollar, given the state

0:14:16.760 --> 0:14:19.640
<v Speaker 14>of the world today and given no obvious successor to

0:14:19.680 --> 0:14:22.240
<v Speaker 14>the dollar as a reserve currency. But you know, day

0:14:22.280 --> 0:14:25.360
<v Speaker 14>to day fluctuations or even weeks awak fluctuations are for

0:14:25.880 --> 0:14:28.880
<v Speaker 14>me and for us at Dalton impossible to predict, and

0:14:29.040 --> 0:14:32.000
<v Speaker 14>gold is not actually an area that we invest in.

0:14:32.320 --> 0:14:34.040
<v Speaker 14>It's just not in our wheelhouse.

0:14:34.480 --> 0:14:36.920
<v Speaker 1>So we noted the dollar strength along with yields popping

0:14:36.960 --> 0:14:40.040
<v Speaker 1>back up again, it suggests that perhaps the bets are

0:14:40.480 --> 0:14:42.800
<v Speaker 1>in the process of getting raised. A lot on whether

0:14:42.840 --> 0:14:44.280
<v Speaker 1>the FED hikes in June.

0:14:44.360 --> 0:14:47.360
<v Speaker 14>Your thoughts there, I personally, I don't think the FED

0:14:47.400 --> 0:14:50.560
<v Speaker 14>will hike in June. We have seen a moderation in

0:14:50.600 --> 0:14:54.600
<v Speaker 14>the rhetoric from the FED governors, and we have seen

0:14:54.720 --> 0:14:57.800
<v Speaker 14>significant progress and inflation from you know, a peak of

0:14:57.920 --> 0:14:59.720
<v Speaker 14>what was at nine point one percent in June until

0:14:59.760 --> 0:15:02.840
<v Speaker 14>the as print was about right around five percent. We've

0:15:02.880 --> 0:15:06.600
<v Speaker 14>also seen some weakness in the labor numbers and in

0:15:06.640 --> 0:15:13.320
<v Speaker 14>some way to moderation, and clearly the bank failures have

0:15:13.480 --> 0:15:17.040
<v Speaker 14>led to tighter credit conditions. So with all that going on,

0:15:17.240 --> 0:15:19.560
<v Speaker 14>I think it makes sense for the FED to take

0:15:19.600 --> 0:15:21.880
<v Speaker 14>a pause. Interest rates have gone up five percent in

0:15:21.920 --> 0:15:24.320
<v Speaker 14>a year and it does take time for that to

0:15:24.360 --> 0:15:26.880
<v Speaker 14>flow through to the real economy, and we are seeing

0:15:26.920 --> 0:15:30.680
<v Speaker 14>the impact now. You know, all this depends on what

0:15:30.760 --> 0:15:34.640
<v Speaker 14>happens before the June meeting. If we get a further

0:15:34.720 --> 0:15:38.480
<v Speaker 14>moderation of the inflation numbers. I think it's very likely

0:15:38.480 --> 0:15:40.080
<v Speaker 14>that the federal hole pad for now.

0:15:41.000 --> 0:15:44.120
<v Speaker 15>Benita when you look at then how you actually navigate

0:15:44.160 --> 0:15:48.480
<v Speaker 15>all this? Is there any playbook for having a particular

0:15:48.480 --> 0:15:51.160
<v Speaker 15>type of portfolio given where the economy is? I know

0:15:51.200 --> 0:15:54.440
<v Speaker 15>every situation is unique, but certainly, you know, is there

0:15:54.480 --> 0:15:56.760
<v Speaker 15>anything out here with you know, when you've got a

0:15:57.040 --> 0:16:01.000
<v Speaker 15>low unemployment middle too high inflation at the same time

0:16:01.000 --> 0:16:03.040
<v Speaker 15>and rising interest rate environment.

0:16:03.440 --> 0:16:06.480
<v Speaker 14>So we invest one company at a time, and it's

0:16:06.520 --> 0:16:09.280
<v Speaker 14>based on the merits of the company, so strong balance sheet,

0:16:09.320 --> 0:16:13.360
<v Speaker 14>strong cash flows, well managed, long track record of operations.

0:16:13.400 --> 0:16:16.640
<v Speaker 14>And where you find all that and have found it

0:16:16.640 --> 0:16:19.200
<v Speaker 14>for a long time is Japan. The issue with Japan

0:16:19.280 --> 0:16:23.440
<v Speaker 14>always has been that, you know, the Japanese companies kept

0:16:23.480 --> 0:16:26.440
<v Speaker 14>cash in the company and didn't give it back to shareholders.

0:16:26.760 --> 0:16:30.640
<v Speaker 14>And that's cost almost a decade now of corporate governance reform.

0:16:30.840 --> 0:16:34.480
<v Speaker 14>But finally, with recent announcement in January by the Tokyo

0:16:34.480 --> 0:16:38.520
<v Speaker 14>Stock Exchange putting down strict criteria and a timeline as

0:16:38.520 --> 0:16:42.880
<v Speaker 14>to when Japanese companies have to improve their financial ratios,

0:16:43.360 --> 0:16:46.920
<v Speaker 14>we are seeing a return of foreign investors into Japan

0:16:47.000 --> 0:16:48.840
<v Speaker 14>and the marketers you know, has been very strong this

0:16:48.960 --> 0:16:51.680
<v Speaker 14>year up between you know, fourteen and sixteen percent dependent

0:16:51.760 --> 0:16:55.320
<v Speaker 14>the index you're looking at. So where bullish on Japan?

0:16:56.080 --> 0:16:58.600
<v Speaker 1>Yeah, it's the second best performer of the big markets

0:16:58.600 --> 0:17:03.480
<v Speaker 1>in Asia after Taiwan. And I was ready to feed

0:17:03.520 --> 0:17:06.880
<v Speaker 1>into a question about that because it has popped pretty well,

0:17:06.920 --> 0:17:12.200
<v Speaker 1>and we've seen that in Europe in relation to other benchmarks.

0:17:12.480 --> 0:17:15.000
<v Speaker 1>The gains are kind of already in but you think

0:17:15.000 --> 0:17:16.680
<v Speaker 1>that there's still more momentum there.

0:17:17.119 --> 0:17:19.840
<v Speaker 14>Well, you think it's a long runway because Japanese companies

0:17:19.880 --> 0:17:24.280
<v Speaker 14>are still very cheap and the change in behavior by

0:17:24.320 --> 0:17:29.800
<v Speaker 14>management and the improvement that needs to be seen is

0:17:29.840 --> 0:17:33.240
<v Speaker 14>still very far away. It's a very long runway. So,

0:17:33.280 --> 0:17:37.240
<v Speaker 14>for example, the Tokyotok Exchange, one of the requirements for

0:17:37.359 --> 0:17:40.320
<v Speaker 14>listing in the prime section is a focus on price

0:17:40.359 --> 0:17:43.240
<v Speaker 14>to book, and they're requiring price to book be more

0:17:43.280 --> 0:17:46.960
<v Speaker 14>than one, and about half the companies that would be

0:17:46.960 --> 0:17:50.160
<v Speaker 14>eligible for the Prime section and the main section are

0:17:50.200 --> 0:17:52.480
<v Speaker 14>below one, which is astonishing when you think about it.

0:17:52.640 --> 0:17:54.960
<v Speaker 14>How can it be that the Japanese market as a

0:17:54.960 --> 0:17:57.800
<v Speaker 14>whole has no debt and actually has a net cash,

0:17:57.960 --> 0:18:00.840
<v Speaker 14>and how can it be that so many companies trade

0:18:00.840 --> 0:18:02.320
<v Speaker 14>with the price to book of below one. That just

0:18:02.359 --> 0:18:04.080
<v Speaker 14>doesn't make any sense. But yet that's the way it's

0:18:04.080 --> 0:18:06.440
<v Speaker 14>been for a long time. So it's a long it's

0:18:06.480 --> 0:18:07.680
<v Speaker 14>a long runway.

0:18:08.160 --> 0:18:10.320
<v Speaker 15>Very quickly gives us sense to some of your topics.

0:18:11.040 --> 0:18:15.800
<v Speaker 14>We like the companies in Japan that meet, you know,

0:18:15.840 --> 0:18:19.920
<v Speaker 14>the basic requirements that we have in terms of filtering

0:18:21.080 --> 0:18:23.920
<v Speaker 14>the attractiveness of a company. But we also like companies

0:18:23.920 --> 0:18:26.520
<v Speaker 14>that are in strategic spaces. So for instance, ri and

0:18:26.560 --> 0:18:29.280
<v Speaker 14>I is a long term favorite of ours. It makes

0:18:30.080 --> 0:18:34.560
<v Speaker 14>uh environmentally friendly gas heaters uh and it's a leader

0:18:34.640 --> 0:18:38.359
<v Speaker 14>in the world in that in that product. We like

0:18:38.520 --> 0:18:41.120
<v Speaker 14>Bagtaka Fuji, which is not as well known as company,

0:18:41.440 --> 0:18:45.919
<v Speaker 14>but it's a pretty standard sort of chip distributor in Japan.

0:18:45.960 --> 0:18:49.359
<v Speaker 14>But it has this wonderful growth area which is ignored,

0:18:49.400 --> 0:18:52.639
<v Speaker 14>which has to do with services provided to companies. So

0:18:52.640 --> 0:18:55.600
<v Speaker 14>so you know, companies like that are still very reasonably priced.

0:18:55.960 --> 0:18:58.879
<v Speaker 1>Excellent, Thank you very much, Belita Belita Ang, chairman of

0:18:58.960 --> 0:19:03.800
<v Speaker 1>Dalton Investment. This is Bloomberg Daybreak Asia, your morning brief

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