Bloomberg Markets: Asia 05/14/2024

It's almost 1 p.m.in Sydney, 11 a.m. in Singapore, in Shanghai.Welcome to Bloomberg Markets Asia. I'm Paul Allen.Here are the top stories. Asian stocks treading water as tradersawait the US CPI print for fresh clues on Fed policy.Hong Kong stocks giving up earlier gains ahead of earnings from tech giantsAlibaba and Tencent. Japanese bond yields surging to decadeplus highs on bets. The BOJ will further reduce debt buyingto ease pressure on the ailing yen. Plus, Janet Yellen admitting China mayretaliate against any tariff hikes from.

The Biden administration.We'll hear exclusively from the US treasury secretary.All right. Let's get straight to markets, though.Take a look at how that faring overall. Hong Kong and Singapore keeping an eyeon things over. Yeah.Paul, we're seeing Asia stocks moving sideways.You get the feeling this is the way it's going to be until we get the US CPIprint that is projected to show moderation, but not enough to prompt theFed rate cuts. We did see Chinese equities starting theday on the front foot, but they pulled.

Off session highs even ahead of thosebig tech earnings out of China. Keeping an eye as well on what we'reseeing on Asia, effects the threat of tariffs on China along with potentiallyhigher inflation. Not a good mix for Asian currencies inJapanese bonds. The sell off from yesterday continues,though. We had the BOJ reducing its purchases inthe 5 to 10 year zone our strategists say won't be surprising if it startsdoing the same in the 3 to 5 years zone. On the yield on the two year.It's hitting the highest since 2009, on the ten year since 2012, after the war.Let's take a closer look at what we're.

Seeing in Chinese tech.1010 music beat on earnings. That's explaining some of the surge.But that optimism as well on what we're seeing potentially on their earnings gofrom Tencent and Alibaba to help justify these lofty valuations.So the board again, let's take a look at how Tencent's stock price has beenfaring since the January bottom. Despite that rebound, we're actuallyseeing the consensus price target and it hasn't budged much.I think it's actually lower than what we saw in January.So reflecting a bit of the analysts caution towards some of these Chinesetech stocks.

All right.Thanks, April. For more on those big China Techearnings, let's bring in Bloomberg's Asia equities reporter, Charlotte Yang.And Charlotte, I just want to pick up on what April was pointing out there,particularly when it comes to Tencent. I mean, got some pretty lofty valuationsthere. Revenue growth is expected to slow down.What are we expecting to hear today, particularly in terms of share buyback?Yes, sir. Investors are on their eyes.You know, two of China's most expensive valued tech companies, Tencent, Alibabaand West Tencent investors are closely.

Watching on whether there will be signsof a turnaround in scaling business. Remember that earlier in April, it wasthis early and expected gaming blockbuster that really boosted itsshare price. And another thing that investors areclosely watching is whether it's about Tencent's commitment to shareholderreturns. So our data analysis showed that Tencenthas accelerated a stock buyback in the first quarter where since mid-Januarywe're saying they have and they have lifted their daily repurchase of sharebuybacks to over 1 billion HKD. And the company earlier this year hassaid that they are going to come to over.

100 billion HKD of buyback this year.And so far they have bought about a quarter of that.But back then, you know, market was doing so bad, Tencent is like below itsintrinsic value but now was on the rebound.Investors wander up to 40% of share price, a rebound since January when thecompany's still committed to that pace of stock buyback.Yeah, that ten cent rebound. Same thing with Alibaba.It's part of a broader story, right? We've got the MSCI China up 27%, Ithink, year to date. How convincing is that rally, though?Yes.

So I you know, I think the streetconsensus is that China stocks as the worst is behind bed.Our colleague spoke to a number of big funds, including Pictet AssetManagement, Fidelity International. But a sense we got from them is thatthey still see the recent rally as a rotational play on valuations where theChina earnings they see hasn't yet delivered and wells and definitely theChina tech companies, as that's going to report this week, including Telecom andBaidu, will provide more and more signs on that front.But in general, I think investors really need China earnings to deliver to to toconvince them that this is more of a.

Structural story rather than justtechnical opportunities. And so far, for the constituents of Mr.China that have reported as of yesterday, actually 30% actually said10% of them have. So Aslam, a not profit behind beforeexceptional item. So that's not encouraging sign and tomany was a big powder that I still standing on the sidelines.All right Bloomberg's Asia equities reporter Charlotte Yang there.And you can also turn to your Bloomberg for more on those China tech earnings.Go to t live. Go.That's a t ivy go.

And you can get commentary and analysisfrom bloomberg's expert editors. And we're going to get more on marketsincluding china right now with rajiv DeMello, global macro portfolio managerat GMR asset Management. Raji, thanks so much for joining us.I just want to pick up on what Charlotte was talking about there in terms ofthose tech earnings. We've seen Chinese tech stocks puttingin a pretty impressive rally. But is all the good news priced in atthis point? And is the earnings story really thatconvincing, do you think? Well, thank you both for having me.I think it's part of a broader, broader.

Topic in terms of China's recoveryand the measures which have been taken over the past six months now to turnaround an economy which are slowing down at the end of last year, boosting it andsupporting markets with with purchases by the the home team, the national team.Earlier this year in February. So getting those animal spirits backinto the Chinese market is probably part of the policy makers intentions.And they have a window to do this in terms of doing getting markets for theChinese market, stabilizing an upward trajectory before the US elections getto close and the noise around protectionism and China bashing gets toostrong.

Yeah, well, we'll have a sense of howthat plan is going. Later on this week, we're going to getto industrial production, retail sales as well.The expectation is we'll see something of a modest rebound there.What are your expectations, do you think, some of these policies areworking? Is the Chinese economy starting to turna corner? Well, the Q1 data did show animprovement. We need to see confirmation for thesecond quarter. It's most likely that we will see someweakening of a strong Q1.

So I'm not too optimistic for theimmediate batch of data. But what's more encouraging is theimplementation of a series of policies which keep keep going on to support themarket. And initially that didn't have an impacton on equity markets. Now it is having and I think it'scritical for for China to keep that going.And that includes, you know, a lot of different types of fiscal and monetaryand currency policies. Yeah, we've we've seen an environmentalso of shrinking credit.Loan growth has been disappointing as.

Well.But even against that backdrop, some of China's financial stocks have beenperforming very, very strongly, up about 8.7% this month.Do you put that all down to the national team?What's going on here? How do you explain that?I think the national team contributed to the initial surge in February and March,and then that's taken over was taken over by significant underweightpositions being covered. But now I think there's expectations andI expect rate cuts to come in. We believe they've been pre-announcedand signalled.

I think they're imminent.It would make a lot of sense for China to ease on in monetary policy supportthis this recovery, especially at this time before the trade war with the US,goes to another level early next year. It will the PBOC does ease does providesome rate cuts that's probably going to come at the expense of a weakening yuan.How do policymakers get the balance right?Yeah, that's always been that challenge when one looks at you and those over thelast ten months, it's been broadly stable against the dollar.Our policymakers in China are very sensitive to any movements in the in theyuan against the dollar because it sort.

Of conveys confidence.But when one looks at the trade weighted basket, which is really the officialpolicy measure, looking at how China's currency of evolving against a basket ofits trading partners, the Chinese currency is not doing too badly at all.It's actually appreciated quite a bit. So I don't think they should worry toomuch about the currency. And even if it does weaken a bit, it'sits volatility has been very low and it could it could weaken without reallyhurting confidence. So a rate cut, even if it does create aweakness in the currency, I don't think it's a bad thing for China.All right.

Rajiv DeMello of the Gamma AssetManagement is going to be sticking around.We'll look ahead to the upcoming US CPI numbers a little bit later.But want to get some breaking news across the terminal.At the moment, we're hearing news that Uber is planning to buy a hero'sfoodpanda Taiwan business, the price being at $950 million.So that news just crossing the Bloomberg terminal now, Uber to buy hero'sdelivery hero's a foodpanda Taiwan business for 950 million.Those are all the details we have on that at the moment.Oh, well, the transaction is targeted to.

Close in the first half of 2025.Companies have also entered into an agreement for Uber to purchase 300million and newly issued ordinary shares of delivery Hero as well.So that news just crossing now over to buy delivery hero's Foodpanda Taiwanbusiness for 950 million. Okay.Still to come, we'll take a deep dive into India's markets with CredenceFamily office. They'll be joining us to talk about thekey risks to stocks and the preferred stock to plays as well.That's coming up just ahead. Also, lesser known entrepreneurs arejoining the ranks of India's ultra.

Wealthy.We'll tell you some more about these under the radar billionaires later thishour. This is Bloomberg. It shows the resilience of Americanconsumer restructure may be higher and we can talk about that.But the reality is it's in decent shape. There's a thousand things can go wrongtomorrow. Right now, everything's in pretty goodshape. Bank of America CEO Brian Moynihan.They're touting the strength of the US consumer, and that's despite highinterest rates.

However, there are growing signs ofpressure on household finances. A New York Fed survey says US consumerexpectations for inflation rose last month.Prices are expected to jump at an annual rate of 3.3% over the next year, andthat is the highest rating since November.That also mirrors recent findings from the University of Michigan showing ayear ahead of inflation expectations in early May at a six month high.All right, Rajiv DeMello, global macro portfolio manager at Gamma AssetManagement, still here with us. He thinks the Fed's likely to cut ratesin July.

Rajiv, that's increasingly a lonelyposition. Doesn't give the Fed much time to gathermore data. What's your base case here?Well, inflation. There are many signs that inflation ismoderating and the Fed doesn't have too much time or too many meetings until theend of the year to actually get rates down and real rates.That means the actual nominal rate that we all know minus inflation has beengoing up because inflation, even though it's sticky, has been coming down.So the Fed needs to send a signal somehow that it's starting a path ofrate cuts and it probably can't do that.

In September, which might be better interms of timing because of its proximity to US elections, which is highlycontested and will be heating up. So it'll be very difficult for the Fedto move just the meeting before elections, and then it's got twomeetings after that. So that's why, you know, I continue tothink that July is a better time for the Fed to start easing.That would suggest that inflation is going to come down a little bit.But one of the risks that we're going to get an upside surprise this week.And what's keeping inflation so sticky, in your view?Absolutely.

I mean, we've had many upside surprisesin the beginning of this year on inflation.I think at every meeting, a lot of market participants expected inflationto come down only to be disappointed. And I think the Fed also was verydisappointed. And that strength in inflation has beenpinned down to services, which has been higher, inflation has been high in theservice sector. Unfortunately, a lot of signs also pointthat inflation is not coming down as fastas it could have. The the second order effects which arethere, wages remain high, wage inflation.

Has come down and we look at lots ofmeasures of wage inflation and cost of employment, but hasn't declined thatfast. Nevertheless, as we at Fed funds wherethey are, is still a huge gap above where inflation is.And of course for the Fed, it's a credibility game, right?They they want to show that they are fighting against inflation, but theyalso don't want to precipitate a recession.Well, obviously, investors would love to see a rate cut.But if we're completely objective about this, looking at the US economy doesn'tneed the stimulus of a rate cut.

Yes, the US economy has been strong andit has been stronger than expected over the past few quarters.Yet there are signs that it's moderating somewhat.The challenge is that the softer data, the business surveys show a bit of thatmoderation. When one looks at ISM surveys or PMIs,you know, those types of business surveys, which typically tend to be, youknow, a little bit earlier than the hard data, but they haven't yet beenconfirmed by the harder real data, which tends to be a bit slower.But the Fed's job is not to look back at the past, but to be to be ahead of thecurve.

And so if it's just seeing signs of anormalization growth and not seeing a recession, a slowdown,that does give it the room to actually start to ease policy, which is which isvery tight. By all all measures compared to thepast, of course, the one pronounced effect ofhigher for longer rates has been a very strong US dollar.How long do you see this enduring and how is dollar strength informing yourdecisions about rate? Yeah, the dollar.The dollar, as you mentioned, is has been helped by these higher for longerrates due to the stronger inflation in.

The US.But the US growth has also been stronger and it's all a relative story so long asEurope and China and Japan. What kind of on the weaker side thatalso gave an additional fundamental reason to be long dollars.However, they're catching up. We're seeing that Europe is posting somepositive GDP growth numbers after two quarters of negative at the last end oflast year. So Europe is turning.China we just talked about a bit earlier is recovered in Q1.And even though growth might moderate, it'll still be quite positive in Q2.And then Japan actually is actively.

Intervening now to to to to resist ourfurther strength, the dollar. So, you know, dollar is probably comingto the close to the end of its of its strengthening cycle.But it's it's a slow top but it's a topping process.Yeah. Just before we let you go, I'd like toget your views on Japan, particularly the yen.It's weakening again. One 5643 right now.How's the appetite for intervention in Japan right now?Well, they've done maybe three more rounds of intervention, significantamounts of dollars have they've sold.

Dollars to to buy in at key levels, verycleverly taking advantage of market overextension.In the first instance, when we broke the 160, taking advantage of the FOMCmeeting as well. Slightly dovish tone by the FOMC and andJapan sold more dollars. So Japan's done this intervention.Now it's a question of credibility. If it doesn't slow the pace ofdepreciation of the yen, then it'll be much more difficult for Japan to counterit. But at the same time, Japan knows verywell the policymakers know very well that fundamentally it has to tightenpolicy to counter the the weakening yen.

And so I think that's the messagethey'll be sending. The next step, of course, isquantitative tightening in terms of after so much bond buying, reversingsome of that, that would send signals to the market, which are even more sureabout about in a yen strength than just intervention.And we are seeing multi-year highs in touching distance for a number ofJapanese treasuries right now. But we've got to leave it there.Rajiv DeMello of GMA Asset Management, thanks so much for your insights there.Still to come. Janet Yellen admits China mightretaliate against the Biden.

Administration's plans tariff increases.Our exclusive interview with the US Treasury secretary coming up next.This is Bloomberg. Treasury Secretary Janet Yellen saysChina could always retaliate against any steps the US takes to protect itscritical new industries. Yellen declined to confirm Bloombergreporting that the Biden administration is about to hike tariffs on Chinesegoods, including electric vehicles. But she told us exclusively about thepresident's thinking on trade tensions. He believes it's unacceptable, as I do,to be completely dependent on China in these areas.And he wants to make sure, given that.

China is really not playing by the rulesin the sense they have enormous subsidies in critical areas of advancedmanufacturing is resulted in overcapacity.He wants to make sure that the stimulus that's being provided through theInflation Reduction Act to support these industries in these are industries thatare creating good manufacturing jobs in parts of the country that have beenoverlooked or have suffered from deindustrialization in the past.The president wants to make sure that he protects these investments.And I don't want to get ahead of the 301 review, one tariffs.But this is a commitment that President.

Biden has made.And I agree with that. I was in China just a couple of weeksago and made clear that we would not allow Chinese overcapacity to harm ouremerging industries. Does the U.S.want a trade war, though, with China? We we believe that we should have a deepand productive and we do in most areas, trade and investment relationship.We're working to stabilize our economic relationship.We do not wish to disengage from China economically, but we do think that theplaying field should be fair. And China engages in unfair practiceslike massive subsidies of industries.

They have decided are critical.And those are cases where we will act to protect ourselves.We've seen Beijing in the past, though, respond and it's become tit for tat.Are you expecting a response? Could they go after Tesla or maybeAmerican farm products? Well, President Biden believes thatanything we do should be targeted to our concerns and not broad based.And hopefully we will not see a significant Chinese response.But that's always a possibility. U.S.Treasury Secretary Janet Yellen there speaking exclusively to Bloomberg'sAnnmarie Horden.

All right.So let's take a look at how Apple suppliers are doing in China at themoment, because, of course, we did get the news that Apple is going to startselling its vision pro outside of the US for the first time.This is the headset that retails at a three and a half thousand dollars.But Apple's been holding training sessions recently.It's been flying employees from its international stores to get training onhow to demonstrate that device. So customers in Germany, France,Australia, Japan, South Korea, Singapore and China could soon get their hands onthe Apple Vision Pro.

So we've got Apple stock.So Apple suppliers rising at the moment. Also taking a look at shares ofartificial intelligence related and game stocks in China as well.They've been advancing after openai launched a faster and cheaper AI modelthat is GPT four also handles other languages besides English.All right, let's take a look at Mac and movers as China heads to its lunchbreak. We've got more coming up in a moment.This is Bloomberg. Glorious day on Sydney Harbour picked agood day to look at. It has been raining for like two weekssolid here, so that's a very welcome.

Sight.Also welcomed the news that Jim Chalmers, the Australian Treasurer,probably going to be handing down his second budget surplus.That's happening a little bit later on this evening.And we've got the Aussie dollar right now just above $0.66.As we await that news, though, the lock up has begun and that will release inabout 6 hours time and we'll know precisely what the contents of thatbudget is. And one of the centrepieces in thebudget is going to be a policy known as the Future Made in Australia, and that'sgot similar interventionist ambitions to.

The US Inflation Reduction Act.Here's a little something I put together on it earlier.Australia's economic strength has been built on digging stuff up and shippingit out. It's an old idea which has paid off andnow another old idea is being revived, adding value to those raw materialsfirst. This week in Canberra, billions in newspending will be thrown at green steel, critical minerals processing, solarpanel manufacturing and other local industries.They want a future made in Australia as all of that is not replacing privateinvestment in the opportunities of the.

Future but attracting more of it.That will require some public investment and we need to make sure we get valuefor money for that. A future made in Australia is a flagshippolicy of the Albanese Government as it eyes an election campaign likely nextyear. In many ways it was born out ofcompetitive necessity, the US as the Inflation Reduction Act.Japan has the Green Transformation Act. Canada and France are giving billions intax credits to companies developing clean energy.Direct government intervention is having a moment worldwide, and Australiadoesn't want to be left behind.

An early recipient of a $260 millionloan has been Alfa HP, which produces high purity, alumina oxides, nitratesand sulfates. Critical minerals key to the energytransition. Australia has abundant critical mineraldeposits but limited manufacturing, with the global supply chain dominated byChina. Skeptics warn reducing that dominancewill require more than nationalist policies and cheap loans, I think iscritical for Australian to build its own build a so-called alternative supplychains for critical minerals and processing.But to replace or challenging China's.

Dominance is impossible because China'spower is not just in the processing technologies.Is the entire value chain supply chains behind it.With extreme sadness that I confirm thought that would have stopped buildingcars in Australia. It's worth remembering it was only adecade ago that government subsidies for car manufacturing in Australia werepulled, causing Ford, GM and Toyota to shut down local production.Subsidies and tax breaks are now back for future facing industries, at leastfor as long as the political climate encourages it.

All right.For more on what to expect from tonight's budget, let's get to oureconomics reporter, Swati Pandey. And, of course, Swati.A lot of stuff gets released in advance of budget, so we've already heard quitea bit about some of the future Made in Australia grants.But what don't we know? What secrets are being held back thatwe'll get tonight? So we are still waiting to hear moreabout which future made in Australia, how much money they are putting into itand how much will be allotted to this year, if at all.One of the things that economists are.

Still waiting to see is how much of thespending is is it going to be and whether it will be inflationary or not,whether it helps or hinders the obvious inflation fight.The Government has said that there will be some targeted cost of living relief.We already know there are some legislated tax cuts, but what thesetargeted relief measures are and how much of it will be inflationary, if atall. So I think that is a very close eye onwhether the spending is higher or not and whether it adds to inflation.And what about we saw some relief from the previous budget on energy prices.Could we anticipate anything there?.

I'm very unlikely.The government has not flagged and they are they have been talking abouttargeted measures. However, it will help the inflationfight if they do bring if they can do some sort of subsidy.There could be rental assistance, though, which was already there in theprevious budget. Maybe they can extend it in terms ofenergy. There hasn't been much and thegovernment and both RBA and government have said that it's likely temporary,the spike that we are seeing. So two surpluses in a row we'reexpecting and that's quite rare.

It hasn't happened too often in recentmemory. But how enduring is it?What are the forward estimates going to say?Are they going to keep going? It's not enduring.And so we are expecting the government to forecast swinging back into red fornext financial year and the following year as well.In fact, the government has already flagged that the estimates are worsethan the December forecasts. So which actually means that the budgetwill be stimulatory in the forward years, even though in this financialyear they are showing surplus.

They are probably spending more.And that's the question. Well, where are they spending?All right. Economics reporter Swati Bandy there.Thank you. And let's take a look now at some topgeopolitical stories that we are following.A US trade group is pushing for higher levies on used Chinese cooking oil.Soybean crushers say a flood of used oil is weakening demand for US crop basedingredients used in renewable diesel and sustainable aviation fuel.The group that represents the biggest US soybean processors wants levies to behigher than the current 15 and a half.

Per cent rate.Senior South Korean and Chinese diplomats have held their first face toface talks in Beijing in about six years.Chinese Foreign Minister Wang Yi reportedly told his Korean counterpart,Cho Teo, that both sides should oppose trade protectionism.A trilateral summit with Japan that's expected to happen later this month inSeoul. The US has ordered a Chinese cryptomining company off a property that it bought near a Wyoming Air Force basethat houses nuclear missiles. The US Committee on Foreign Investmentsays the proximity of mine, one.

Partner's operation to a strategicmissile base is a significant national security risk.The company must now sell the real estate that it bought back in 2022.All right. Plenty more ahead.This is Bloomberg. Welcome back to Bloomberg Markets Asia.You're watching the Indian Focus. Recapping some key data now, India'sinflation rate little changed in April. Food prices remained high, and that'scomplicating the outlook for interest rate cuts.CPI rose 4.83% from a year earlier. That was slightly lower than theprevious months rating.

The RBI has kept its benchmark rate atsix and a half per cent for more than a year now, and that's staying hawkish asinflation remains above target. Right.Our next guest believes India's central bank might not match the Fed, cut thecuts and the rate easing cycle. Let's bring in Chanterelle Agarwal, CEOof Credence Family Office, a wealth advisor with more than $1,000,000,000 inassets under administration. Chanterelle, thank you so much forjoining us. I just want to start with your outlookfor the RBI. What's the path ahead?So outlook for the year I think the.

Market.So you know there is some noise around calling the markets frothy.So there are two parts to the market though, earnings multiple and theearnings growth multiples. I think there is no argument that themultiples don't look cheap. But on the earnings growth side, I thinkthere are a lot of loopholes which look positive.Right? So something like segment growth, powerconsumption, home sales, accelerating all these levels, which will build up tothe internal economy. That is something of a sense of strengtharound this.

Obviously, there is a debate around orrural consumption not coming through an urban consumption satellite base.I think that that is more of a tailwind for us coming out.And we're hoping that, though, with the whole of the rural consumption coming upto pace, so we should see good growth numbers coming to start.The infrastructure and growth narrative in India is a very strong one.But when you're advising some of your wealthy clients, how does the venturestory look? How is the interest there?Oh, well, clients. Okay, So we don't think this has been agreat illusion, honestly.

So, you know, after the whole inclusionin the bond index, we expect a lot of movement around the around the G6 sideof the government, which has really happened.So you see no, you know, 14, 14 and a half billion dollars coming in, which isthe first time after five years we have total net positive on the bond marketinclusion and the money coming in to India right down 70% was thereafter.You know, we got included in the indexes, but strangely through we haveseen a lot of interest coming on the private equity side of the markets.But it would be three reason that's particularly the flavor of four or thetypical bull market.

So the question is how long does itstay? But for now, I think that is just a lotof interest on on the private equity and structure side of the market.Yeah. And in terms of venture capitalinvesting, what sort of sectors are they looking at outside of thatinfrastructure picture? How is the tech story looking?Oh, no. Venture capital typically started withfintechs. People are trying and investing in tothe new India. So we know consumer tech agritechdefense is catching up a lot because of.

The whole, you know, India driventheory. And recently you've read this articlewhere Russia is now importing defence articles from India.So I think from the whole fintech side, people are now moving out to moreinnovative industry consumption, staking consumption, and any consumer tech istaking up a lot of space in the venture capitalist mind and largely because theway India is structured, right? So if there is a demographic dividend,we have to grow at 18%. For that matter, there will be still alot of spends on the consumer discretionary versus typical FMCproducts.

So new innovative side of theconsumption, I think that is taking a lot of consensus and focus from theventure capital investing. In terms of your own family officebusiness, are you finding that there's a lot more competition around these days?And what sorts of new products are you developing?I think a ligament should last time. The pie is only getting bigger, right?So, I mean, if you if you if you just look at some parameters and again, thisis not the right way to look at it. We're just 3% invested in the equitymarket today. India as a whole buy is just 3% of theglobal GDP.

And in India, our focus is just three or4% in the equity market right now, assuming even if it just doubles and notonly goes to ten, 15 odd percent just to boost the market markets, it is actuallydoubling in the next 4 to 5 years. Right.So there is actually the pie is very, very big.There is enough space for lots and lots of us to come in and make meaningfuldifference or wait all to competition. I think more than competition, there isa lot of healthy competition that's so shaping of the industry.And are you having any trouble attracting talent?Oh, yes and no.

Oh, of course.In desert Island base. Oh, so that is a lot of guys who are nowlooking at innovative careers that I'm in the CFTC.And so there's a lot of talent, a lot of educational talent happening.Unfortunately. Oh, I think some part of the talent alsogets migrated to other countries. Right?So that that so the that that kind of is is missed out from the crowd.But you know there's just a lot of young budding talent.Oh, I'm not challenging the whole traditional way of looking and doingthings.

I think that's more interesting.And that's actually you would need in a country like India, which is now lookingat more financial independence and financial innovativeness, the to seethat. Of course, there was a sizeable and verywealthy Indian diaspora around the world as well, including here in Australia.Do you have any strategies to capture some of that business?So I think I'll keep it simple as what our those of you know, a lot of peopleare looking at Indian markets more from the purview of stable governments, fromstable equity markets and stable regulations and all.So I think the motto is keep it simple.

The market has a lot of ideations aroundthis, a lot of interesting ideas from the private equity side, which are nowgetting listed, which will in some sense broaden the whole horizon of market.I think all betting on good managers, betting on good product ideations iswhat we strongly recommend to all our side of investors.We usually don't get into any of, you know, any any structured fancy products.Keep it simple, keep it simple with a good manager,or even if by keeping it simple, does that mean that you're finding theregulatory environment quite easy to operate in?I'd say I'm finding it more stable.

And the budget the last budget was theexact example of over. A boring budget is the best budgetbecause then there are no regulatory changes in some sense.So the minister, the finance minister signalled that the we are stable rateand that was a complaint that a lot of us had on indirect.Oh well, they could be regulatory changes or undefined regulatory changes.I think the motto on the budget was we keep it stable, we're keeping it simple,and that was more like a quote unquote invitation to us to come and invest inIndia because things are going to look more and more stable from from yourregulatory side.

We beat on the currency side.I think that's a welcome change. All right.John Challenger, while CEO of Credence Family Office, thank you so much forjoining us. And of course, markets in India havejust opened. Let's see how we're tracking at themoment. We've got the Sensex in positiveterritory in the early going better by about a quarter of 1%, Some of the othermarkets also pushing into positive territory.It's been a bit of a mixed picture around the Asia Pacific today though alot of the other indexes modestly.

Negative territory, but India buckingthat trend and also sticking with India, It's now halfway through its seven stagenational elections. Voting's now underway in Jammu andKashmir, other constituencies as well. So for more on this, let's get to ourBloomberg reporter advice in Mumbai. So advice, how's voter turnout been sofar and do we have a sense of what it's saying about support for the BJP?As of last night at around 8 p.m., the voter turnout across 96 states, 96 seatsacross ten states and union territories was around 62%.Most analysts are looking at voter turnout in the last four phases.The first four phases have gone to vote.

And they've said it's a little lowerthan the 2019 polls seem bigger than the 2019 polls.And we're seeing that this could be attributed for many reasons.One is that there's a heat wave in India, record temperatures across theregions. So maybe voters aren't turning out inthe numbers that were expected. But the other is that there is no one orconsolidated theme around this election. There's not one singular message that'spushing voters out to the voters. So they are concerned that because ofthe lack of one clear message from the ruling party, from the Narendra modi ledgovernment, that that could be a signal.

That maybe there is a less enthusiasmfor the BJP this time around. Although that being said, all shows arepretty much split at this stage on whether that means that BJP will get thesame seats that it did during the 2019 polls.Whether they will reach the 400 mark, which is what the target of the party,the junta party, is, or whether they will miss the mark of 300 seats, whichis what their 2019 polls. Yeah, well, of course, during Narendramodi's term, India has been minting billionaires at a pretty brisk pace.Besides some of these well-known names like Adani, there's a whole lot of namesand entrepreneurs that we haven't heard.

Of that are not in the ranks of theultra wealthy. Now, I know you've been looking intosome of them and what the billionaire class or the rise of the billionaireclass says about government policy. What are you learning?Over the last decade, India's minted more billionaires than ever in itshistory. And this is a.Emblematic of sort of the government policies and the growth that we've seenin the country over the last decade. Barring a few bumps in the road.Well, particularly the COVID 19 pandemic.India's growth rate has been fairly.

Strong and because of incredible amountof spending on infrastructure, we've seen a number of infrastructure,billionaires and large real estate billionaires emerge.You know, some of these billionaires, you know, Bloomberg's estimated thewealth around the time that the Modi government came into power was around$1,000,000,000 or less than $1,000,000,000.Today, they've crossed six, seven, $8 billion of some of these real estatemoguls, you know, would have had less than 10 million square feet of propertyunder their belt in 20 1415 today, that well, about 40 to50 million square feet of because of.

Government spending acrossinfrastructure, because of reforms in land acquisition, real estate.We've seen many of these billionaires leverage those policies and also benefitfrom these policies. So just as the Indian government'sspending on infrastructure, for instance, has gone from about ₹1.6trillion in 2014 to about 11 trillion as of the last budget earlier this year,we've seen that that money sort of trickle down to large infrastructureplayers such as Larsen Toubro and the Adani Group, but also smallerinfrastructure players that are today billion dollar that are billion dollarbalance sheets or we've seen medium size.

Companies become large billion dollarcompanies. We've seen national players becomeinternational players. And similarly, we've seen this on theconsumer side, just as the middle class has been booming.But capita income in India has grown considerably over the last decade.Of the more consumption that's happening, we've seen a lot ofcompanies, of smaller companies that were perhaps not as well known or tenyears ago now become household brands and household names across the country.We've looked at $5 billion in particular who really seen their wealth boom overthe last decade.

We have listed or not listed theircompanies on the stock exchanges. They tend to hold these companies verytightly with large stakes. But there are dozens, dozens and dozensof Indian billionaires that are not as well known as some of the bigger names.And we've just looked at five of them on Bloomberg, this one.All right. So that's starting to change.Getting a bit of publicity now. Reporter advait lapper there in mumbai.Let's look at some of the other stories that we're following in india.Media reports say 14 people have been killed and dozens injured after abillboard collapsed during a firestorm.

In Mumbai.Rescue operations were ongoing. Authorities worried that about 20 to 30people could still be trapped under the rubble.The Treasury tragedy comes a week before the financial capital votes and thenational elections. Bloomberg has learned that aluminiumproducts maker Novella is aiming to complete its planned U.S.IPO as soon as next month. Novella is owned by a unit of HindalcoIndustries controlled by Indian billionaire Kumar Mangalam, Birla, andAllco is said to be seeking to raise about $1.2 billion in the IPO and Maytargets a valuation of about 18 billion.

We have plenty more to come.This is Bloomberg. Welcome back.Here are some of the top corporate stories that we're following.Chinese property developer Agile has defaulted for the first time on publiclyissued dollar bonds. The Guangdong based company says it hasnot paid interest within a grace period that ended on May 13 on dollar bonds duenext year. Agile says it will engage financial andlegal advisers to evaluate its capital structure and liquidity.Anglo American said to update investors on its plans for the business today, andthis is after it rejected a second.

Approach from BHP.BHP had sweetened its offer by almost 15%, valuing Anglo at $43 billion.Anglo, though, says the offer undervalues its business whilereiterating its rejection of the proposed deal structure.GameStop shares soared alongside other meme stocks as speculation swirledaround a return to social media. By Keith Gill.You might know him better as Roaring Kitty, A post on social media platform Xshowed a man leaning forward with what looked like a gaming controller.Some traders are interpreting that to mean that Gill is coming back intoaction.

He shot to fame, of course, in 2021 byrallying day traders on Reddit in a bid to squeeze GameStop short sellers.Openai is launching a faster and cheaper version of the AI model that underpinsits chat bot chat GPT. The company has debuted GPT four, whichit says is better at handling text, audio and images in real time.Openai says the updates will be available to users in the coming weeks.The startup is working to hold on to its lead in a market that's gettingincreasingly crowded. Okay, let's take a look at how atracking on the markets at the moment. A number of things we're watching.Of course, we're going to get earnings.

I'll get to that in a minute.JGBs are kind of interesting, closing in on multi-year highs.The 40 year JGB yields closing in a number that we haven't seen since 2011.The yen continuing to weaken there. As I mentioned, a lot of earnings outtoday. We're going to hear from Alibaba,Tencent, Sony, watching Tencent for a possible buyback.Sony might see its revenue decline. Not a lot of new game titles out therefor the PlayStation. And here's a look at what's moving onthe global markets at the moment. Broadly speaking, kind of a risk off dayaround the Asia Pacific.

We do have the Sensex in India now justnudging into negative territory after a positive stop.

Sharing is caring!