Bloomberg Markets: Asia 05/09/2024

It is almost 11 a.m.in Singapore, in Shanghai. Welcome to Bloomberg Markets asia.I'm Haslinda Amin. Here are the top stories.Asian bonds fall, extending the selling pressure seen in treasuries.That's also supporting the dollar. Equities in the region mixed after aflat day on Wall street. Also ahead, president biden says he'llhold additional shipments of offensive weapons to Israel if it proceeds with aground invasion of Rafah. And I'm Yvonne Man live from the CapitalMarkets Forum here in Hong Kong, where the city's stock exchange is trying toattract more Saudi money.

Here in the city where here exclusivelyon the HK Air CEO Bonny Chan. And later, we're joined live by the CEOof one of the city's biggest ETF providers, CSP, this evening.And we're certainly looking forward to those conversations.Vaughn, Let's take you to markets first, where Errol Hong is on top ofdevelopments around stocks like last year, bonds getting sold off, investorspretty much adopting a wait and see attitude.Yeah, there is a lot to rate through today.So bear with me. As we saw that set up from Wall Street,it was a pretty flat close.

And today Asian stocks are mostly lower,say for Japan and China for different reasons.In China, we've seen tech and property rebounding property as Hangzhou scrappedthose home buying restrictions. And the idea here that other tier twocities will follow suit, that's also boosting the commodity iron.All those prices ticking higher there in Japan.We have the likes of ORIX after its earnings release.We also got the news about the share buyback.So those are among the stocks, individual names that are lifting theJapanese benchmark.

But we're also seeing the sell off inbonds after a tepid ten year Treasury auction and the yields in Australia aswell as New Zealand, you're seeing big moves about six, seven basis points.And don't forget, we also have a 30 year auction in the US to get through latertoday. We're also keeping an eye on dollar yendip below 155.5 earlier but is now weakening again after that.Digesting of what we've got from the BOJ summary of opinions but listed the boardbecause there's a lot to rate through as well when it comes to developments outof Japan. As we heard from the BOJ chief in thepast hour or so, speaking in parliament,.

Talking about the need to raise rates ifthe price trends upwards as expected. And this is coming just shortly afterthe summary of opinions show there was a lot of discussion about rate hikes andthis is against the backdrop for context of the recent meeting between Newitterand Kishida, seemingly giving the green light to monetary policy to help cap theweakness in the Japanese currency. So all in it looks like that meeting inJune is a lively one and you can see why the bonds today in Japan coming underpressure. Of course, part of the global picture.Don't forget. Also we have another tricky 30 yearauction to get through tomorrow as well.

That's right.And of course, yen traders are on edge right now.April Hong, thank you so much for that. We have breaking news, a line on countrygarden. It says that it can't make that interestpayments on the yuan bond, of course, be got in seeking assistance on that.And now it's saying that kind of guidance saying that it can't makeinterest payments on that Yuan bond. We'll keep you posted on furtherdevelopments. Let's get you back to market to bring inour first guest who expects a dollar to remain strong in US Treasury yields tobe rangebound.

Charlie Jamieson is CEO of JamiesonCoote Bonds, a privately owned high grade bond manager, and he joins us fromMelbourne. Charlie, good to have you with us.Your assumptions on what the Fed might be doing, because right now it does seemlike traders are in a pretty much quagmire, undecided what the Fed's goingto do. Yeah.Look, the Fed have kind of stated that they want to be data dependent, which isquite unusual. Normally, they would have some strategyfor this part of the cycle as they would see growth start to slow.They might look to start to move to rate.

Cuts.But given the weakness of their own modelling through the Covid period,they've become very data dependent and that's leading them to to not do a wholelot. Clearly, this rise that we've seen insome pricing pressures, we have CPI next week to take another look at that ispushing out any expectation that rate cuts might come.What is interesting though is the Fed had the chance to acknowledge that lastweek and they didn't. That's really puts some floor under USTreasury yields for now, combined with a larger than expected curtailing of thecuts program.

And so we've seen yields just come backinto the middle of this range there around four and a half percent.It's hard to see them moving more than, say, 20 basis points away from thatright now until we get more certainty on the price picture or the growth picture,which has certainly been slowing in the United States of light.It's not quite as exceptional as it was previously.Still very good, but but not as good as it was.So, Charlie, how is your portfolio looking right now?Have you made any changes of late? Look, we still favor suddenly Europeanrights.

We've got the Bank of England tonight.The UK look likely to to be setting up for a rate cut.We saw the Riksbank cut rates yesterday. We still think that Canada and NewZealand can cut rates in the near term. The US not so much.So we certainly have a favouring in our global portfolios to be underweighttreasuries to some degree versus those markets that are going to see moreactive central bank movements. But none of these central banks can getvery far without the Fed participating. They are at risk of of devaluing theirown currencies if they let those interest rate differentials get too far.We're seeing Japan really struggle with.

That concept right now.Whether this kind of perpetual weakness in the yen is causing issue.So, you know, we do have a favor for those markets that are certainly alittle bit further into their restrictive right settings.They've had higher transmission mechanisms and we're seeing that bitethrough their own macro domestic data, whereas the US has been reallyexceptional and certainly would be towards the back of that pack foranybody that might be looking for rate cuts later this year or certainly into25. Charlie, just hang tight.We have to treat numbers out of China.

That we've been waiting for.And we have April exports in USD times rising one and a half percent year onyear versus an estimate of 1.3%. So better than expected April imports inUSD terms rising 8.4% year on year. The estimate was for 4.7%.So again, both a beat and of course exports in particular have been surging,which has been a cause of concern for U.S.and European business leaders as well as politicians.Remember, they've been talking about overcapacity, bearing in mind as wellthe yuan and the lack of inflation in China, prompting pretty much overseassells at the expense of perhaps other.

Exporting nations.Again, those April exports and import numbers coming in better than expected.Charlie, just an overview and your thoughts on how China's economy is doingin how you might view its assets. Yeah, certainly things have been gettingbetter there of late. We've noted that activity has beenpicking up and certainly after some concern earlier in the year, thesenumbers are looking better, which is a good news story, no doubt.Certainly as we sit here in Australia, we're very heavily predicated to thoseoutcomes. And so it's great to see China startingto stand on its own two feet a little.

Better.And that kind of points to just the change in step function as we go aroundthe globe. Certainly after central banks andeconomies seem to move in unison as we came out of the COVID experience.And we're now seeing that economies are running at different cadences and thendifferent rhythms. Certainly China has been in thedoldrums, but is picking up. Well, as I said earlier, we've noted theUS just starting to slow down. Europe, which has been on the back foot,starting to step forward a little bit. So it's very interesting as we think toour global portfolios that there are now.

These divergences that are occurring andthere's actually quite a bit more to look at as we think about, you know, ourrelativities with asset allocation amongst those geographies.Charlie, we talk about yields and how attractive they're looking.They have not been this high for a very long time.Do you keep chasing yields? What's the right strategy?Well, yields are high, there's no question.But cash rates are also very high. So they're all in combination.But certainly, you know, it's for fixed income to be a very investable assetclass again, where we couldn't really,.

You know, make those arguments at thedepths of COVID. It had portfolio, you know, need andwant for liquidity and negative correlation at times under the higherinflation environment. Those correlations have moved morepositive. So the change in inflation over thebalance of this year will be absolutely critical.As we've noted, they've just picked up a little bit.They're certainly not high like they were inside 22, but they're just notfinishing off on that last mile that central bankers want to say.So we do think that that, you know, the.

Yield story is certainly, you know, veryencouraging for investors. It's brewing, allowing them to build updefensive allocations in their portfolios that they may have avoidedfor quite some time. And certainly the broad expectation isthat the next major moves from central banks, as we saw last night from theRiksbank, will be interest rate cuts. Now we feel that that will be prettymild. So there's nothing huge in that in thatspace, but certainly it's a positive development for fixed income.Charlie, thank you so much for that. Charlie Jamison, CEO of Jamison CooteBonds there.

Just to recap, the China trade data thatcame in just earlier exports year on year coming in higher by one and a halfpercent estimates well for 1.3%, imports coming in way better than expected,jumping 8.4% versus 4.7 in terms of estimates, perhaps suggesting an economythat is indeed recovering. Bear in mind that the yuan has beenpretty like lost it, pretty weak inflation or lack thereof in China,helping to boost those exports as well. Now still ahead, we're live at theCapital Markets Forum in Hong Kong. Hear why the new CEO of the stockexchange is bullish about their IPO pipeline.That exclusive conversation coming right.

Up.Keep it here with us. This is Bloomberg. Just recapping some of the lines we'regetting from country got in it saying that it can't make that interestpayments on its yuan bond. It has said that it's not made thatinterest payment guarantee bond in what may be the first of its case.Of course this on the back of China's Hangzhou city removing all restrictionswe know about a lot of Chinese cities have been easing home buying policies toboost sales to prop up the sector. Let's get more from our very own DavidIngles.

They've put all of this in perspectivefor us. Yeah, so this is important because it'sa test case has for if you remember back in 2022 there was there was a program toand well, effectively the aim of the program back then was to allow some ofthese developers that were effectively shut out of the capital market to issuebonds and for investors to then look at those bonds as something I step back.To some extent now this was back in 2022.Now, some of those bonds and this is the first test case of that because therewere two interest payments due today on Yuan bonds.Right.

So we're looking at about I'm giving youthe rounded up figure here, 66 million renminbi over two coupon payments, 9.1million. So that interest payment is actually duetoday. Now, we did some reporting, of course,in Bloomberg yesterday that Country Garden was seeking help from thatprogram. And we just mentioned earlier on to paythe interest, because we now understand based on these loans coming through,that they can't make those payments. Right.So we'll try and get to the bottom of this.That's what we know so far.

We have until the end of the day just toput that into context for us. But again, it's a test case for aprogram that was put in place to backstop confidence.At this point in time, we've yet to wait and see.That's the that's the market story of the property story today.The other bit, this is the fundamental story more in Hangzhou and you mentionedthis Hangzhou was the latest major Chinese city to come out in losing.Losing their property restrictions and home purchase restrictions in a bid toboost the property market. And we've come in from a lot of citiesso we've here on your screens Hangzhou,.

Changsha, Chengdurecently I think this week Shenzhen also came out with something similar in thecase of Hangzhou, and I'll read you a statement in Mandarin.So let me just rephrase that here. That Hangzhou City has removed allrestrictions on residential purchases, effective on Thursday.The city will also strengthen credit support for the property sector,including lower mortgage payments for some homebuyers.Hangzhou will no longer review the qualifications of homebuyers in what isthe latest step in what is the latest city to come out and help boost, ofcourse, this fundamental story that of.

Course, when you talk about this in thecontext of markets, it's a story, of course, that we will continue to followbecause that story remains. Of course, it's a structural issue.For many long, only investors has tried all the moves, pretty much liftedsentiment somewhat, but still the benchmark for the property sector downabout 50% year to date. David Inglis, thank you so much forthat. Let's stay with Hong Kong.Hong Kong Exchange CEO Bonnie Chan says she's anticipating the comeback of bigticket IPOs to the city. She spoke to Bloomberg as the exchangehosted the Capital Markets Forum in.

Partnership with Saudi Tadawul.Our China show co-anchor Yvonne Man is at the event and joins us now for moreon some of the headlines coming out of that interview you did.Yeah. You know, she was very optimistic and infact, she. Vonnie Chen, how things changed.See, I was right behind me in a panel right now talking a little bit moreabout the collaboration that she sees with, of course, the Middle East.But first and foremost, now, this is a time when Hong Kong needs those newlistings and they need more investors. And in particular, when it comes to whathappened just two weeks ago when we.

Heard from the CCRC, the Chineseregulator, initiating some of these support measures for the IPO market andbasically encouraging industry leading names to list here in Hong Kong, shesays it brings her a lot of hope and they've gotten a lot of calls andinquiries and still she mentioned about 100 applications on the IPO pipeline sofar. Here's more from our conversation withSunny Chan. AndI think what we want to focus on at HK is really, first of all, to play to allChina strengths, really build on it. I think that's all Trump Cup definitely.And then surrounding it, really three.

Strategic imperatives that we arevery focused on. The first one being our efforts tocontinuing to continue building the market vibrancy and to create thatnetwork effect. What that entails is really to bringmore issuers, more investors and more products into the ecosystem.You mentioned about that what your predecessor, Nicholas Agassi, talkedabout, this great IPO pipeline that was coming.Yes. When do you think this will finallymaterially. Yes, I think well, first of all, as youprobably know, only a few weeks ago on.

The 19th of April, the CSC issued fivemeasures which will provide a lot of support toour capital markets, three of which are very closely related to the stockconnect mean, including a relaxation of the ETF eligibility standards, theinclusion of rates into the Connect franchise as well as the South by R&Bcounter infusion into the Stock Connect. Also, there is a very exciting one,which is the fifth one, which is to bring high quality right top notchcompanies from the mainland to come in list in our market.I think all that is creating a lot of excitement and I will share with youthat actually, since the announcement of.

Those five measures, we have received somany calls you wouldn't believe from potential issuers really wanting toexplore doing an IPO in our market. So that's going to add on to the alreadyquite robust pipeline. Now in terms of when the IPO has beenlined up since those measures come through, we have the the 100companies, all applicants in the pipeline already.And I think with the latest measure and, you know, really that excitement and alot of proactive measures in terms of reaching out to us, I can really onlysee that building up. So for us, obviously we need the marketconditions to also be a lot more.

Conducive to getting the IPO done.But I think what we've seen lately, especially the last two weeks of April,was giving us a lot of hope. Yeah, Yeah.Well, they mentioned the Beijing that they will support leading industrynames. What is your interpretation of that?Are we going to get these blockbuster names coming back here in the.So my interpretation, first of all, in terms of sector, what we can do reallyto complement the the domestic exchanges in the mainland is to focus on the neweconomy. That's what we have done very well since2018.

And as you know, we have issued a newchapter in our listing rules, Chapter 18 CE, which focused on what we callspecialist technology. And these are really the sectors I thinkinvestors are most interested in at this juncture, including things likeartificial intelligence, new energy, new materials, quantum computing.And so while I have I will I really want to sort of see more names coming.And I don't know whether they are only confined to the space.I have a feeling that a lot of them will be in the specialist technology space.So the big question is, you know, though, do those mega names include thelikes of and financial duty, even Saudi.

Aramco seeking their second listing,possibly choosing Hong Kong as a destination?Those are all, of course, questions that we ask.She didn't want to put too much in terms of individual names has, but certainlythere has been a lot of what she calls matchmaking going on here at the capitalmarkets, where we've seen as warming of ties between China as well as the MiddleEast and in particular, they're really wanting to get more, you know, Saudiinvestors in India to this market to potentially replace what the U.S.and European investors have basically shied away from this market due togeopolitical tensions and the like.

So how do you get access?Right. Well, see us PE they have one Saudi ETFthat launched back in November. We're speaking to the CEO of the AssetManager Dimension in just a couple of minutes to tell her about how things aregoing with that ETF and what other opportunities are in store when it comesto the Saudis markets. That's right, Yvonne Man.We'll be right back. Plenty more ahead.Keep it here with us. This is great. Welcome back.President Biden says he will hold.

Additional shipments of offensiveweapons to Israel if it goes ahead with a ground invasion of Rafah.He told CNN that the potential loss of civilian life is, quote, just wrong.I made it clear that if they go into Rafa, they haven't gone on Rafa yet.They're going to Rafa. I'm not supplying the weapons that havebeen used historically to deal with Rafa, a deal with the city, deal withthat problem. We're going to continue to make sureIsrael is secure in terms of Iron Dome and their ability to respond to attacks.I came out of the Middle East recently.Senior editor Bill Faris joins us now.

With more Bill.What's the latest? Well, as you just heard, President Bidenand the U.S. holding up some of these weaponsshipments, not all of them, but weapons that Israel has sought and wanted to getfor a while. This is a package of almost 3500 bombsof different different sizes. It is definitely a warning shot to theIsraelis and a breach in the relationship that could widen if, as asthe president warned, Israel goes on with this ground offensive.I think it's also an attempt to try to put a little more pressure onnegotiators who are meeting in Cairo.

This week to try to get a breakthrough.We saw we saw the two sides come fairly close together last week.Hamas making some changes to a draft and Israel rejecting that.So there is an attempt to try to see if they can cross that last hurdle and geta cease fire in place, even if it's a temporary one, to allow somehumanitarian aid and exchange of hostages or prisoners.The thing is, Biden himself is under a lot of pressure.Republican leaders now pressurising him to perhaps speed up aid to Israel.That's right. The U.S.Congress and President Biden just passed.

This $4 billion in extra military aidfor Israel. That's not part of what's being held upnow. But there is a risk that more aid willbe held up. And politically, it's always verydifficult. It's going to be very difficult forPresident Biden to continue to distance himself from the U.S.Israel relationship. So it's kind of a matter of time to seehow much pressure the White House is willing to sustain and how much theIsraeli government is willing to sustain.All right, Bill, thanks so much for.

That.Senior editor Bill Farris. Well, let's take a look at markets rightnow. China property pretty much in play onthe back of country, got in its onshore unit saying it cannot make interestpayment of a 3.95% state guaranteed bond by an initial deadline of May 9th.And that's according to a filing. The company will make every effort tofully repay the interest within the grace period.The guarantor will fulfill duty if payment is not made within that graceperiod. Take a look where we are in terms ofthose property plays.

Agile property up by more than 9% rightnow. Log in also is surging soon China vodkain positive territory on the back of that as well we have China's Hangzhoucity removing all restrictions. Coming up, we head back to the capitalmarkets forum in Hong Kong for an exclusive interview with CBS OPIS AssetManagement CEO. More on that later this hour.This is glenmaggie and. And welcome back here watching BloombergMarkets Asia. Let's do a check in on China markets,how they're faring on the back of that.

Trade data, which we got April Hong ontop of that in April. Those export numbers showing perhaps arecovery. Yeah, exports.But perhaps more importantly, those import numbers that were much betterthan expected, seemingly showing that demand is coming back.And China, finally we're seeing a bit of that rebound potentially, and that isgiving investors something to cheer about as markets in the mainland justabout hit to the lunch break. We saw following the data, the Chinesestocks extending gains. We're seeing the dollar.China also pulling closer towards the.

722 level.And this is on the day when there's a lot to digest on the property.Fund foot the board and take a closer look at what we're seeing out of HongKong stocks as well. We're seeing the Chinese tech namesdoing quite well today. We did get an upgrade for the likes ofMeituan on the price target from Citi. But that reminder, I think comingthrough from country, Gordon, about how these distressed developers are stillstruggling. It says it won't make that interestpayment on that state guaranteed U.N. bond.Just another reminder of the real estate.

Woes on a day where investors are alsodigesting Hangzhou, that top tier cities scrapping home buying curbs.So we're seeing also the Chinese develop as the gauge of them in Hong Kongextending gains today. But flip the board because as you know,has we've seen the real estate troubles and the status of Hong Kong as afinancial hub among the challenges for the stock market there.Indeed, amid all this, Hong Kong has been trying to attract more fund flowsand too much fanfare. We did see that Saudi ETF debut back inNovember. But since then, worth highlighting howvolumes have actually been coming down.

Something we're keeping an eye on.That's right. Let's dig deeper.April Hong, let's go back to Yvonne at the Capital Markets Forum, Hong Kong.She's with our next guest. Yvonne, take it away.That's right. And it is, of course, the issuer of thatETF that Avril just talked about, the CSO, the asset manager, asset manager,CEO Ding Chun joins us now here at the Hong Kong Strange discussion.It's always great to have you in the program.You talked about the Saudi ETF a few months ago.It was the rising star.

How are things looking here right now interms of the cross listing with the mainland?And I'm going to get straight to it. What's the latest?Okay. Thank you.Thank you. To have me here.You know, last quarter, we launched a Saudi ETF, a Hong Kong Stock Exchange.We've got a lot of attention globally because it's the largest Saudi ETF.Globally. We raise about 1 billion US dollar.And since then the market performed very well, goes about 10%.And we constantly see cash inflow into.

This products.And as you said, you know we already apply to cross this seeing this productcoming in China and where is surprisingly, you know, in mainlandChina, a lot of market has been quite open this way in this listing.So we will have, you know, both Shanghai and Shenzhen Stock Exchange to list inthis cross discipline the feeder funds of this subsidiary products.You currently have two applications looking to cross this year, Saudi ETF inmainland China. I think what's high Pine Bridge AssetManagement, they submitted their application.There hasn't been that much movement,.

Though.But I look at one of your Singapore products like as cute Cuba's P aminister and that was approved by CSR within a few weeks.Yeah. What are some of the main factors do youthink behind why this approval process is delayed?So this process is take a little bit longer time I think is because on theone side is because it was, you know, after we hand in application there was abig holidays of China's, you know, China New Year and only new year.I also there's also there's another, you know,partners actually is our headquarter.

China Southern Fund is also try to getinto the game and China is also one you know with Shenzhen stock exchange alsoapply for the application. So my best guess is we will have likethe two feeder funds were listing the same day to Tuesday exchange.So that takes a little bit time. Okay.But so far from the regulator, the feedbacks are all very positive.Yeah, we don't have major issues doing that.I think you've talked about maybe the second half we might see this as finallylaunched. So yeah, it would be a second halfbecause of the for a formula in China.

After, you know, the ETF was approved,they probably needs to another month to prepare for the listing.Yeah. So we talked a little bit more about thethe inception of the Saudi ETF. I mean you said it's been doing well.Volumes though, have come down a bit since its inception.What are some ways that you see us, what we can do to really pump liquidity intothis ETF? And there may be more money and morefunds in? Yeah, exactly.So I think for that part we need to, you know, to do more client location toraise more worries about this U.S.

Small tonnages.So for us, definitely we we try to do it also.We want to, you know, borrow the opportunity of launching the feederfunds in mainland China to raise awareness of all these smallcommunities, you know, at least regionally.Yeah. Hopefully we can bring more flows inthere. You've been telling me about your travelplans and it's been quite busy doing China and seems like you've beentraveling a lot to the Middle East. What's next then?What are your plans in the Middle East.

Now?So as in Middle East Market, it's a very interesting market.The capital markets is growing very fast.A lot of sea are still growing. I would see, for instance, like SaudiETF, they only have like nine ETF, so their total size is around like 150million U.S. dollars.That's small, but we see huge potentials over there.And last year we screened Saudi ETF, Hong Kong stock change and maybe laterin June. And also we try to be like a bridgeto way traffic.

We also like to bring in west oftwenties Hong Kong and China to Middle East investors.So we do a lot of work groundwork to do that.Yeah, fine partners. Yeah.Are you playing up ETFs purely focused on I'm just Saudi right now.Are you looking at other Gulf countries as well Because Hong Kong exchanges, Imean, they've been flirting with Abu Dhabi, Qatar, Yahoo!Dubai as well, exchanges. Any potential for those markets?Yeah, We are also, you know, doing research and talking with the localpartners, try to look at opportunities.

For those.MARQUEZ Well, I also a lot of their local institutions come to approach tous, try to have like sort of collaborations with us as well.There's been reports that, you know, the CSO, BATF has been really backed by onebig name, which is the sovereign wealth fund of Saudi Arabia.Are you talking to other big Gulf sovereign wealth funds out there,whether it's a little bit like the law in Abu Dhabi or and Qatar?Saudi Arabia? Yeah.We obviously, you know, for those names, we already have a relationship withthem.

We talk with them or continuity, youknow, hey, we say to them and we just wait for the right time.All right. Products to see how we can collaboratewith those Saudi with those sovereign wealth funds as wellin terms of Saudi ETFs. So could we see more of those coming,too? Yeah, I think definitely.You know, we're doing research. There's more research.When we look at the market more deeply, we find out there's more interesting,you know, sector. So asset classes will be interesting toall, you know, regional investors.

I want to pivot a little bit because,you know, because this is a capital markets forum for Hong Kong as well asSaudi. I mean, this Hong Kong market has beenon fire, it seems, and really just going coming back into this bull market whereyou have multiple sort of ETFs that track not just the share but a sharemarket. What are you seeing in terms of sharesright now? Yeah, So obviously, you know, this isthe hottest market for this quarter globally.So very fortunately, we have our largest pension tech ETF, which is three orders.Is it this specific ETF for the fourth.

Quarter for this quarter is already up25% while we see some, you know, profit taking from these specific productsaround $150 million. Utah, you know, taking profitredeemed from this product. On the other hand, we also see anotherfresh start, which is to able to track for a 50 year.Yeah, we see very strong you know you usual in that specific quarter as well.We see like 100 it's more than 180 million inflow into that product.Yeah. For the past quarter.Yeah. What does that tell you right now.Are people more bullish about this word.

Because you know you have these inverseproducts. Yeah.That also track these benchmarks. Are you seeing investors also betting onbetting against or betting for this rally?So this is a very good question. So for different investors, they havedifferent views. So for the past couple of years, I thinkthe main problem for this Hong Kong and mainland China market is people don'thave that much of a confidence or trust to this market.But right now, we see, you know, the major rally, also the confidence fromsome certain of the.

Investors coming back will keep comingback. And we willdefinitely, you know, will come off this because majority of our are you it's webase our a-shares out or Hong Kong shares.But I think the behind these stories it's our main tool drivers of this firstof all is because of the reason macro economic data is they have separate thebenchmark that better expectation. And also there is another thing I thinkis very important and not a lot of people are talking about is the news.The new chairman of CSR said, Oh yeah, I'll get into the office and he's doingsomething.

It's very interesting.He's trying to clean the whole system to improve the quality of listing companyand to encourage the listing company to pay more dividend to it.I think that will give us a new era of investment into China and Hong Kong.You know, it's an ongoing process. So we are still monitoring and we try tobring interesting products to to all my clients as well.You're definitely feeling that change right now.Before we go, I want to get your take on what's been going on with crypto.So CFP decided not to launch a spot crypto ETF this time around.If you missed out in the first round, it.

Seems like just given the lacklusterperformance we've seen so far in some of these ETFs that launched, are youfeeling a bit vindicate? Are you happy with this decision rightnow? Yeah, I will say, you know, as industryeven we always welcome new products, new ideas to the market.So unfortunately the idea first batch says help.We cannot, you know, introduce the physical spot Bitcoin ETF on the marketbut we're glad those three. Other peers introduced us.And for us, the problem is we are still, you know,closely working with our Hong Kong.

Bodies, our partners.Try to do that because to to to provide a successful ETF, you cannot only relyon fund managers, you're still needs custodians, market makers, PDS,everybody on the same page. So but for us, unfortunately, you know,a lot of our other counterparties are not ready yet.And by the way, we actually we launched the future based Bitcoin ETF 2022, whichis platform where well, they track using futures to check the price trends.Is it a matter of if or when? I mean, is it is it just delayed rightnow? Are you thinking maybe in a few monthstime or you know that you might actually.

Launch one more, please?Depends on you know, depends on, you know, how ready we are.Okay. So CSP, we we well, obviously wellprudent and we we know we have fiduciary duty need to fulfill.If we were not ready, we're not ready. If we're ready, we will do it.John, it's great to have you, as always, in trend.And that was the CSO Asset Management CEO joining us here at the CapitalMarkets Forum at the Exchange House. I'll send it back to you guys.Yeah. She talks about prudence, not aboutthing.

Yvonne Man great conversations.Thank you so much for that. They'll still ahead.Ernst and Young India shares their outlook on the renewable sector.Hear how the outcome of the elections could impact the industry's growth.That is next. Keep it here with us.This is Mumbai. Welcome back.You watching in the Focus? Let's do a check on Indian markets.We're counting down, of course, to that. India open the day when investors arepretty lackluster when it comes to the stock market.In fact, when it comes to India, it is.

The gauge of volatility.The VIX index that has risen in its longest streak, even underscoringgrowing uncertainty over the outcome of the nation's general elections aspolling is into its final phase. While India's kicking off pretty much inline with the rest of the region on the pressure, Sensex index down 2/10 of 1%.Nifty bank index also under pressure there.Well, let's stay with India. India's political parties are bettingbig on renewables in their election manifestos.Prime Minister Modi, for instance, is promising to ensure energy independenceby 2047 and to reduce petroleum imports.

Let's discuss India's energy transitionand renewable sector outlook with someone who has worked extensively ontransactions in conventional as well as renewable power and infrastructure.Srishti Ahuja is a partner at Ernst and Young India, joining us from New DelhiKristie. Good to have you with us.Now, when it comes to possibly a third term of Modi's government, I mean, whatpolicies would help push renewables the right way?Well, first of all, thank you for having me on the show host Linda.Actually, what we've seen is that renewables by itself, just based oncommercial met.

It demands a lot of investment becauseit does today offer the lowest levelized cost of energy your entire week.And India today is the fourth largest renewable energy market.And just based on the contracted capacity, it will actually be the thirdlargest market. So what we're seeing is that there is alot of investment going into the sector. Decarbonization is a global megatrendfor investment and the government policies that are actually kind ofsupporting that growth. So, you know, whether it comes to thekind of benefits are giving to long term investors or waiver of transmissioncharges or concessional tax rate,.

Increasing the allocation for renewableenergy sector. So all of these are augur well for therenewable energy market in India. So having said that, Christie, how muchof that renewable push in India is contingent on Modi's government gettingre-elected? So what has happened is that, you know,the Modi government has actually put up a machinery which is now fueling itself.So it is a bit like a nuclear reaction. Once it once you've set it in place, youknow, it is it is kind of propelling itself.So I would say that Indian renewable energy market is in that space.The other interesting thing is that, you.

Know, renewables today, you know, isactually much larger, a much larger team.So it is today energy transition. It goes, for example, green hydrogen,very India set an ambition of being, you know, an export, one of the largestexporters globally, or whether it is, for example, biofuels, which encompassesthe renewable natural gas, 2G, ethanol. So all of these areas today, a lot ofinvestment has gone in. We are starting off from a good base.So so we feel that regardless of the outcome of the elections, you know, thesector is in a good space. Having said that, other risks, though,to that renewable push.

If another government were to come intopower. Oh, see, there are two three gatingitems, I would say the first one being, you know, evacuation.I think the evacuation infrastructure today is the biggest bottleneck insetting up capacity on the ground. I think all the other factors are welltaken care of. The government has planned a very largeinvestment scheme into evacuation, but that remains one big bottleneck.I think the second bottleneck is probably the supply chain.So, you know, for example, in India today, there's a manufacturing capacityof about ten gigawatt of modules,.

Another 30 gigawatt coming up.But most of this is mostly dependent on import of cells.So you know that entire, you know, supply chain, that would be the secondconstraint. And the third constraint would beavailability of project finance. You know, given the recent, you know,RBI circular draft circular for provisioning, we could see some hiccupsaround that. But really, if these three aspects areaddressed, the sector will be good, you know, in a good position to attract moreinvestment. Hmm.Sure.

Talk to us about the deals that you'reseeing so far in terms of flows. Have you seen marquee deals, forinstance, in recent months? Yes.So a lot of deal activity has, Linda. And, you know, there are various typesof drivers. So, you know, on the supply side, forexample, you know, the homegrown platforms, while all of these platformsare already backed by very large investors because there is a hugecapacity coming online for bidding, for setting up, there is a constant need ofcapital. So that's one big driver on the supplyside when it comes to, let's say, the.

International utilities who are veryactive in India, they have a constraint that they cannot consolidate too much ofdebt from an emerging markets like India on their global balance sheet.So they are in the constant mode of setting up projects, monetizing them andthen setting up additional capacity. So I would say these are the two bigdrivers on the supply side. On the demand side, I think thesovereign wealth funds, pension funds are very active in India becauserenewables offer a good defensive asset class.The only missing piece over there is that, you know, the to the the thetariffs are not linked to inflation.

So it does not offer a hedge to currencyrisk. But other than that, the asset classsticks for these long term patient capital investors and similarly forprivate asset managers, because there is a lot of capital for decarbonisation andthe sector offers visible growth which which then, you know, is ripe for yieldcontraction and increasing returns, that's a second driver for demand ofthese deals. And you know, given this kind of ofsupply and demand, we are seeing a lot of deal activity like in the last two orthree years, about 100 deals have got consummated in the market.And what I'm also seeing is that there.

Is a healthy competition on deals.So, you know, on each transaction there are multiple bids, right.But it's not the if that the investors become uncomfortable.Recently we had the RBI on its direction on project financing.I'm just wondering how that might impact renewables.So it will definitely have a bearing personally.You're absolutely right. And what will happen is that, you know,the I mean, if I if I try to convert this into what would be the impact oncost of borrowing, my assessment is that it will add about 5200 bips to the costof borrowing.

What it will also do is it will make itmore difficult for under construction projects to get financing because theprovisioning loans have been increased. Similarly, because there is a minimum tolife now prescribed refinancing, which is considered as par for the course forthe sector, will become more difficult. But, you know, the good thing is thatthe government has set up these institutions like Finance Corporation,Renewable Energy Corporation, IRENA, which are specialised in renewableenergy lending. So to a certain extent, you know, therisks will be the impact of this would be mitigated, but for sure it will havea bearing.

Christy, thank you so much for yourinsights today. Srishti Ahuja and and young India,plenty more ahead. Keep it here with us.This is Bloomberg and. And.Worries we are following. Nomura has joined Jp morgan in limitingdealings with Asian hedge fund giants GMT, which is facing charges in HongKong of insider trading. Sources say Nomura won't add moreleverage or new positions to its dealings with the surrounding the fund.Its founder, Simon Sadler, and a former.

Dealer say they will vigorously defendthemselves against the charges. I'm holding shares tumbled in lateFriday after the firm gave a lukewarm sales forecast for the fiscal year tothe chip design he sells of 3.8 to $4.1 billion for the period.But Apple is predicting sales of just over 4 billion.The forecast raises concerns the tech industries a spending spree might beslowing and Intel is warning its second quarter sales will fall below themidpoint of its projections due to a new U.S.ban on chip exports to Huawei. The chipmaker is maintaining its guidedrange of 12 and a half to $13.5 billion.

Intel still expects sales and earningsper share to grow this year. Sources say the US revoked licenses,allowing Huawei to buy chips from Intel and rival Qualcomm earlier this week.Now let's take a look at markets and UK assets in particular as we come down tothat b0e decision and is set to stand pat keeping rates at 5.25%.Traders looking for clues on whether Governor Bailey will start cutting ratesat the next meetings in June and August after a dovish shift in tone.He faces a divided committee on when to actually cut rates.Well, that is it. From Bloomberg Markets, Asia Horizons,Middle East and Africa is next.

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