Chinese language Shares Rise as Indian Markets Stabilize | Bloomberg: The China Characterize 6/5/2024

Good morning.We're just half an hour away from the market opens in Hong Kong, Shanghai andShenzhen. You're watching the China show.I'm Yvonne Man. If you're wondering where David Inglesis, he's right there straight at the Bloomberg Wealth Summit right here inthe city where he is going to be speaking imminently with the Hong Kongmonetary authority chief Edu. Let's listen in.So give it up. So we're at the wealth summit.And one of the things that I constantly grapple with is how Hong Kong as a citymeasures its progress as a wealth hub.

And what the CMA's role is in ensuringthat you are on path for those objectives.Right? Well, as you know, Hong Kong has beenthe largest asset wealth management center in Asia for a number of years andwe are continuing to improve our platform through a number of initiativesthat we do in collaboration with other regulators and also with the government.Let me just give you a very, very broad survey of what we've done just in thepast year. There are three areas that we've pushedout new initiative. One is the new schemes introduced by thegovernment.

One is on single family office, a taxconcession scheme. So if any single family office comesinto Hong Kong investing 30 million USD and they will be entitled to the taxconcession. The second one, and I was told by manyprivate banks here that the response from the clients has been veryenthusiastic. So I'm glad to see that.And if there should be any further refinements to the regime to let us knowand we're very happy to take it up. The second scheme is called the CapitalInvestment Entrance Scheme that was just introduced in March.So for any individual investing about 4.

Million USD into who qualifies as inHong Kong, they can get on one passport. And I was told again by the governmentthat in just two months they've already got 140, 50 applications.So the response has been quite and quite positive.And this actually brings in new sources of capital into the wealth scene of HongKong. The second area is to increase theconnectivity of the wealth products in Hong Kong with the mainland And youaware of the Wealth Connect. Wealth Management Connect 1.0.That was introduced about 18 months ago. It was a very, very cautious start withrestrictions on quarter on products or.

Even on selling process.But it was a smooth start. That's how you do relaxation in China.You have an orderly, smooth start and then you try to widen it.And we did the widening in it at the end of February with one of my friendConnect 2.0 by increasing the individual quota, relaxing the eligibilitycriteria, especially for the South Bank flows, our capital coming from themainland individuals to Hong Kong, expanding the suite of products fromjust bonds into equities and make it easier for the marketing and sellingprocess. And and the numbers that we see in Marchand April coming into May, it's actually.

A very significant increase in thesouthbound flows, both in terms of the number of new accounts and in theremittances that were made. And of course, we will not stop there.We are already looking into whether there could be possibilities of wealthconnect 3.0 and if so, what could be in it?And we are talking to the industry very closely about what's needed.Is it a quota or is it a scope of products or is it the selling process?So the connectivity has been increased very significantly through the worldConnect you buy zero. And just very briefly, on the first areais on our own regulatory arrangements.

There's always a balance betweenregulatory, especially investor protection and the ease of business forour wealth managers and taking account of the feedback from the industry.In July last year, we, together with the Securities and Futures Commission,introduced a new circular, basically making it easier in terms of certainrequirements in suitability and disclosure for the wealth managers todeal with what we call the sophisticated professional investors.So that means to wealth players with a certain amount and with certainexperience, they can they can actually waive some of the suitability anddisclosure requirements.

So in all these three tracks, newschemes, new capital connectivity and regulatory refinements are actually anongoing process and we welcome continuous discussion with the industry.So that. You can actually tell us what we shoulddo to to even further enhance our wealth management center in Hong Kong.Right. And I think Amy and Annabel here, ofcourse, to talk a little bit more about what they want to hearfrom you, from any wealth management 3.0.Do you have a rough timetable of when you want to get that in place?And also based on the feedback that.

You're you're hearing from marketparticipants? What's a sense of what they want?Well, I think it's still early days. We've just introduced Wealth Connect2.0. But what?Well, what I think Amy and Annabel will tell you more what they want.But there are things like, you know, for example, the quota.Okay. Currently individual quota is up to 3million R&B, but that's actually not quite enough for private bank clients.Is there a way to have a separate channel to capture the private bankclients?.

The selling process.It's been a lot easier, smoother than before.But can can can it be further streamlined or can the marketing be abit more active? Can the education be done better?So I think there are still areas we can look into in terms of improvements.Okay. Yeah.And you bring in 3 million HKD. That's that's Tiny Edie, 3 million R&B,R&B, that's still here. You're talking about wealth, whichactually has the biggest need for diversification in on the on on themainland.

Right.Because what the well for the ultra high net worth they've got their ways ofinvesting globally but for the wealth for the middle class they need todiversify most of their assets. Personal assets are actually either inthe the housing sector or in Chinese equities.And they have a very big need for diversification, I think, Wolf, canactually provide them with this easy, convenient and ready access.So the the affluent, the the the poorer of the group,as you say, there's been a certainly conversations on on our shows a lot.And we have a lot of asset allocators.

Here in a you know, an increasinglybigger allocation of people's wealth are going into alternatives outside thepublic markets, into private markets, real estate infrastructure, privateequity, private credit. As a regulator looking at that, that'san area of the market that is less liquid, it's less transparent.Are you concerned over the risks? How are you looking at that from afinancial stability perspective? Right.As you know, we ourselves as an investor has been going into private markets for15 years already. So we kind of know the market.And you're right, in terms of the risk.

Profile and especially the liquidity.When I look at the, for example, you know, private credit has beena very trendy area in the last like bubble to Alibaba.And when I look at it from the financial stability perspective, I thought thethere are individual areas that we would need to look at, for example, with thelack of data, the leverage that they're having, etc..But I don't think, at least for now, that the industry is creating anysystemic risk to the financial system for several reasons.One, if you look at the majority of the investor base, is mostly long terminstitutional investor who can sell out.

Through cycles, who don't really haveliquidity needs. So there's not really a lot of liquiditymismatch in in that portfolio. The leverage that we see for fromindividual private credit funds is actually not it.They just use their clients capital to lend to those in need.And in a way they're filling in the need that's left by the banking sector.The more risky part, the mezzanine. And they also also go into some of thecompanies to help them turn around. So I thought the systemic consequencesso far is limited, but is an area that we will collectively in the regulatoryforum, we will need to continue to keep.

An eye on and try to gather more data,especially in a few areas. One is the, as I say, leverage, andsecond is to interest interconnection with the banking sector.Will that be more interconnected? So far, currently there's not a lot, butwill in future. The banks and the private creditcompanies will actually collaborate more by underwriting, byeven participating in loans. The third one is whether private creditand private market will be further retail lives.If you if you further sell it to retail market where people have differentliquidity needs, they might want.

Immediate liquidity.You know, when these markets are very illiquid, there will be a mismatch andthere will be problems. So I think these are the three areasthat we will keep an eye on. But so far is is manageable.Plus, in Asia, I think the industry is growing by compared with a very central.System in Asia. Probably credit is due very, very small,but we'll keep an eye on it. Yeah.And not to scare anyone, but is regulation more regulation the answeryou suspect? Well, at least more transparency, moredata, more disclosure.

So you know what's going on there, moredisclosure. And for the regulatory community tocollect more data on not just primary credit, but generally on non-bankfinancial institutions that cover private market and also, for example,hedge funds. Right.The just to pivot very quickly, I know we're running out of time.The Hong Kong is very been very active, increasing its links with the MiddleEast back and forth. What it what something we can expect tosee this year as far as well. We've been actually focusing on twocorridors building infrastructure,.

Building business links.One is the China Hong Kong Middle East corridor, where we see a lot of tradeinvestment is flowing through this corridor.The other is China, Hong Kong, Asia and corridor.Again, you know, China is the biggest trading partner of ASEAN countries.And I was in the Middle East, both in Riyadh and Abu Dhabi, Dubai, last year,having bilateral talks with the central banks, trying to create more paymentlinks, for example, infrastructure links.And I was also bringing the banking associations to, for example, UAE tryingto build business links.

There are there's actually a very strongwish for off the of the two central banks to build these links together withus to enhance more trade to be settled, for example in R&B currencies or in USdollars why not versus by some into local currencies, whether it's R&B orwhether it's Durham. And there's a lot of interest ininvesting into this part of the world as well.Asia in particular, China, Hong Kong. But there needs to be more education.They need to know the means to get into this market.How to use Hong Kong food to connect schemes to enter the Chinese market.So I think there's a lot that we can do.

Together to enhance this kind of interlinkage between the two regions. Is there are there any specific programsthat you think would be in place in the next 12, 24 months?There's one that's already in place that's already entering the minimumviable product. I thought I mentioned a project calledAmbridge last year. It's aCbdc central bank digital currency projecttrying to enhance cross-border payment and make it faster and cheaper is doneunder the BIS umbrella with China, Hong Kong, UAE and Thailandparticipating and is a lot faster.

It's almost instantaneous settlement, alot cheaper than the current cost, and we've already entered a minimum viableproduct stage using trade settlement as the use case and UAE is involved andvery shortly there will be another Middle Eastern country joining.Okay. I think we're down to our last 90seconds. I think we have some questions for them.On the lighter side of things, Eddie, we will get to our favorite topic in amoment for you. So the advice for young people onbuilding wealth. All right.It's very hot.

But I for be patient, don't believe inany of anybody who tells you that there's a product.There's no reason high return. It doesn't exist.And if somebody tells you that it's likely that they are scammers andthey're trying to scam your money, so you need to protect your savings, that'sone. But but the medium longer term, I stillbelieve in diversification. That's actually the focus of theexchange fund, even as a very, very big institutional investor, we actually areclinging to diversification as diversification is the best way to havea even risk adjusted returns in the long.

Run.The best investment you've ever made. Money or money are not money becauseyou're be in my position for such a long time.I have a lot of too many restrictions on the investments.Okay. So my my best investment, the investmentthat I have is fixed deposit with many of the banks here.And you don't want to you don't want to invest in that.Well, which bank offers the best deposit to Holder?You know me, I do shop around anything with the last 15 seconds.Anything on the Hong Kong peg is not.

Going to change.I want to record. Okay, now.And you'll give us a heads up, Right? All right.That's all we have time for. Thank you so much, Eddie.You ladies and gentlemen. All right.Thank you very much. All right.Wide ranging conversation there with David with, of course, the issue heremay head. Eddie, you talk a little bit more aboutways that he wants to really up the wealth quote, our products.There are really ways to really expand.

That wealth connect here in Hong Kong aswell. We're going have plenty more coming upfrom the Bloomberg Wealth summit in Hong Kong.I'll be hearing from Amy Lowe from UBS. Ronnie and Adrian Chan, the father andson from Harlem Properties, and Bonnie Chan, the Hong Kong exchange CEO,speaking with Stephen Engle throughout the day as well.If we look at the market action as well, you know, you certainly have beentalking a little bit more about India. That certainly is still a top story heretoday, but we're tracking beyond that here this morning.We're still a little bit on the back.

Foot when it comes to equities.You watch what's been going on in the Treasury market.So that rally seems to have stabilized a bit, but it's been a massive drop inyields. We're talking about close todouble digit drops in yields on the ten year.And we saw the biggest two day decline in yields in the ten year all of thisyear basically on the back of that JOLTS data.So it's been a combination of bad data. Now from the ISM to now the labormarket. We'll see how the jobs report fares andthe end of the week here.

But the job openings basically hit thelowest since 2021. Fed swaps now are also now pricing inthe first cut in November. There's also higher odds that we mightsee a cut in September now. So you're seeing Asian bonds reallytrack that rally across treasuries here. We're still watching oil markets, justgiven how we've seen, I think about five or six days now of losses there afterthat Opec+ meeting, of course. And we're basically falling to thelowest in four months or so. Copper also falling below 10,000 aswell. If you look at those LME contracts.So certainly has given a lift to dollar.

Yen in some ways.One 5532 for the currency. We also had the euro that's slightlyweaker here this morning, but we have also a Bank of Canada decision later on.Also could be could be talking about a pivot to cuts as well, except for theboards here. And watch what happens in India.Futures here this morning looks like things have stabilized just a little bitafter what was the political shocker that people did not see coming or atleast the US markets of China, Modi's BJP party losing that majority for thefirst time since he took power. And basically on a percentage basis wesaw the Sensex fall the most in four.

Years.If you look at just wealth destruction overall, it may have been one of theworst we've seen in history out of India.Those Adani assets certainly saw a massive plummeting there.We'll track how things fare out, but looks like things could be stabilizing,at least in the green. As futures are pointing out here today,the China approach is looking like this year at the open.Looks like we're poised for some gains here as well, too.34 year Chinese ten year yield. We're not seeing a whole lot movement inthe currency.

That fixed was crossing last year.But at seven 1097, we're focusing a little bit more on the auto sector heretoday. Property did really well yesterday, sowe'll see if that continues. Of course, we're coming out of thoseopens. Coming up at the bottom of the hour,This is the China show. Punia said that today's victory was thevictory of the world's largest democracy.This is the victory of unbreakable allegiance put into the Constitution ofIndia. This party didin our third term.

This country will see a new chapter ofbig decisions passed locally, and they are highly capable.This is Modi's guarantee or the key guarantee.The main thing that this election has setthe country has unanimously and clearly stated we do not want Mr.Narendra modi and Mr. Ahmed Shah to be involved in the runningof this country. We do not like the way they run thiscountry. That was the Indian opposition leader,Rahul Gandhi there, and the Prime Minister Narendra modi, speaking afterthat surprise swing away from the ruling.

BJP in national elections.Let's get to our Bloomberg Markets Asia anchor Haslinda Amin.She's been in New Delhi working furiously here the last few days.And what a shocker this was has. And then the first question really iswhat went wrong for the BJP? Well, obviously, a lot went wrong.Vaughan. This is the largest democracy in theworld. And Modi himself said that.And the people have cast their votes rejecting the status quo.They want change. Modi talked about the Modi guarantee.Well, he's talked about the Modi.

Guarantee for some time now andincluding during his campaign. And that Modi guarantee has not workedfor the people at all in terms of how it landed after the vote count.We have Modi's BJP party securing 241 seats.Now, that is the biggest number of seats for any party, but it falls short of thesingle party majority, which the BJP has had for the last two elections.And number two, get to 72. Now, what that essentially means is thatthe BJP has to get the support of its allies, the two allies in its alliance.But the problem is this really the leaders of the two parties areunreliable.

Historically, they have flip flop interms of their allegiance, depending on what they get in return for theirallegiance. So it remains to be seen if Modi's BJPcan convince them to fall into that camp.There is a risk that the two parties will decide to go with the opposition.So in the coming days, expect horsetrading.Essentially, you can expect the same from the opposition.They secured about 229 seats. They will try to get the seats fromModi's allies. Yeah, And what does this all mean for,of course, Modi's reform agenda?.

Certainly the big question there has.Linda, thank you. Our Bloomberg Markets Asia anchor has anamen. Joining us from New Delhi with thelatest. In the next hour, we're looking at theeconomic implications of a weaker BJP mandate.Emkay Global financial services. Madhavi Aurora will be joining us on whyshe sees some market reforms slowing. What does this mean for the economicgrowth story for India? We have plenty more coming up.This is bloomberg. All right.We are taking a look at this free.

Market.Looks like we are looking decently well well, with slight gains here when itcomes to the Hang Seng, we're just trading around the 18,500 level or so.It is tech is flat this morning. We're also watching that currency atseven 2484. But futures in China also still lookingpretty good. And some of the stocks to watch here.We're focusing on the EV segment a little bit.There was some news for the likes of BYD.Also, NIO was able to get some well, trip.com, I should say.My apologies there.

We're following there after proposingthis convertible note and City did mention that could create some negativesentiment as well. We're also watching as I talked aboutthe EV segment. So they've been talking about this onroad pilot for connected vehicles that did get approval.So we're watching a few sort of names here.It doesn't seem like it's moving the stock too much here as well.But we're still tracking that oil story given the fact that we continue to seesome downtrend when it comes to crude prices here and we continue to see theseenergy stocks are falling in tandem with.

Crude this morning.You're watching the China show. The Open is next.This is Bloomberg. All right.Good morning and welcome back. And watching the China show.We're coming to you live out of several places today.As you can see, Of course, that is a live shot of Bloomberg Wealth summittaking place here in Hong Kong. That is Animal Spring, of course, ofHSBC. Talking to our colleague Erik Schatzkeron stage. I'm right outside, of course, where thatis taking place here at the Conrad.

Hotel.Welcome to the program and good morning. And Yvonne, let me bring you back in, ofcourse, in a conversation. It's not just about wealth, it's aboutthese markets. It's about this ECB decision.Of course, coming up, it's all about India.So the different strands to the market story today, including maybe some datacoming out of Australia in a moment. Yeah.And you kind of wonder if given just this wobble in India stocks, are westarting to see something of a correction?Is that going to help the outperformance.

In China in some ways and maybe morerotation back into the mainland is certainly one discussion that we'relooking at here today. So after we saw one of the worst sort ofdays in four years for India stocks, does that actually trickle through inany way to benefit China? Not so much so far in this open.If you take a look at how mainland markets are looking at right now, CSI300 is slightly lower by about a fifth of 1%.It looks like, you know, we're not seeing a whole lot more women in the jobmarket as well. Some of these big cat names are notseeing big moves either.

So it's pretty slow going.If you take a look at how onshore is looking out here right now, there's nota whole lot catalyst to really tell you about either.But it was interesting, Heidi, Andrew from J.P.Morgan was saying there is still now a risk that the PBOC may only just cutonce this year, just given where the Fed story is and the like.So that certainly could lead to some concerns with on the currency as wellthere. But you take a look when it comes to theHong Kong market, obviously we've been talking about this well, summit in HongKong.

So a lot of news could come out fromthere. But here you're seeing a betterenvironment when it comes to offshore markets.We're up about a quarter of 1%. Property still seems to be doingdecently well. We're watching very closely what's beengoing on in the HS tech side of things as well.Tencent and Alibaba still doing pretty well.Alibaba's up close to 1% this morning. We talk about what's been going on inthe EV segment. Perhaps that's what's helping to keepit.

Just check a little bit more elevatedhere today. So some of these local carmakersbasically are getting the OCH when it comes to this sort of on road connectoror the like here. So it's a program, but certainly we'rewatching very closely with the boards. Can we take a look at how theseautomakers are faring? The pre-market, they didn't quite reactto much, but are a pilot of connected vehicles.There you go. You're starting to see some more greenacross some of these automakers. Big ideas, up about 1% or so.We're talking about lonely energy or.

Solar energy as well.Of course, they've been talking a little bit more about how the industry isbasically going to have to adjust. Basically, there's been challenges.We talk about the price of solar and all that.So they are adjusting some of their production plans as well.The stock slightly in the red here trip come out with a convertible bond andit's leading to some negative sentiment around that.But I think it's about $1.3 billion. There you go.That's going to be due in 2029. The stock down some 3%.And yesterday it was a killer day for.

Some of these property stocks wereactually doing quite well. We are now just down 3%.A little bit of a correction there for some of these stocks like Sun, Ocean andChina. Blanca, death.Yeah. Okay.Well, let's get to some data coming through as well.And certainly it's a very important part as far as Australia goes, severalstrands of the story. We're using the GDP numbers as a way toreally get into this, a slight mess, if you can even call it a mess here.That's according to the median estimate.

For the quarter year on year numberscoming through bottom of your screens with perhaps more important is about anhour back. The RBA governor just concluded her herher testimony to the Senate there in Australia talking about how inflation issomething they're watching. It's something that they will takeaction on if it does not head back to the bad.So it's something that she considers the risks are balanced.Source price action is about price levels and price growth is concerned,although it is something that they're very cognizant of at this point in timeand at this point in the cycle that I.

Understand to the top of the next hour,the Treasurer, Jim Thomas, will be speaking at ten Hong Kong time, ofcourse, and we'll see, of course, whether or not we get more context onthese numbers coming through as well. And if you're looking at some of thesemarkets do their. Yeah.We're looking at, you know, what's been going on in the yields of some of thesesovereign bonds. Right?So we're down eight basis points for the Aussie ten year year.That certainly does show what we've been seeing across treasuries overnight.Well, you're starting to see data in the.

US really start to kind of play outhere. And that, you know, I think it's thoselast four days we've seen that U.S. ten year yield fall close to 30 basispoints. Right?So there is a bit of a different narrative that's going on.It's not so much the inflation concerns now, but really about growth that mightlead to this bond rally to continue. That's according to some analysts outthere. At least We you see the U.S.ten year yield. We stabilized a bit.We're basically just up about one basis.

Points at 433 levels right now.Certainly that the whole discussion about higher rates, how is that going toimpact deal activity and fund raising? Are both that impacted, of course, aboutoverall this whole environment when it comes to asset managers?And let's talk to one of them now with the world's largest infrastructureinvestors, Macquarie Asset Management, its group had been way is joining us nowthis morning. Ben, it's great to see you here in theregion. And obviously it's been interesting,right? It's been we talk about the growingconcerns about higher for longer rates.

It's also been a tougher environment forrenewable energy in that market as well. There is this projected rebound in 2025for you guys. Are those two factors in any way goingto weigh on that profit rebound? Good morning and thanks for having meon. And David, it's always great to be withyou. I'm look, I think there's no doubt thelast year has been a has been a much more difficult year from fund raisingand also deployment. And that was simply to the fact thatinvestors and asset managers and broader stakeholders were getting used to a highrates world and trying to recalibrate.

Their business, their business cases.And as a consequence, we had a real spread between the bid in the askbetween buyers and sellers. And I think as people have got more usedto the world we find ourselves in and about to rethink their business cases,rethink the sort of returns that have got in and got more comfortable with theenvironment. Confidence is coming back into themarket and I think we're seeing that, you know, that institutional investorsare starting to allocate and be more positive about supporting fund raising.And equally we're starting to see the M&A market pick up.So I think we feel pretty positive about.

That.I think as you are specifically as it relates to energy transition, I thinkwe've got to look beyond the headlines there.The amount of investing around the world has tripled in the last three years,from $900 billion to 1.9 trillion sorry, more than doubled in the lastthree years. And I think that what that underlines isthat there's a huge investment thematic here.But was there some pause or some repricing?There was. And that's appropriate because thingslike the cost of capital and supply.

Chains caused some friction or or theneed for people to review the approach they were taking.I think market consensus is still expecting, you know, once this droughtin sales of renewable assets starts to fade a bit, that your profits couldsurge as much as close to 90%. Do you think that's a bit of anambitious target here right now? What would it take to get there, Ben?I mean, I think. Yeah.So I don't think anyone is exactly sure how.Yeah. Sort of what the uptake will be and whatthat could mean.

Results are generally we wouldn'tforecast that, but I think we're certainly cautiously optimistic.If you just look at some of the transactions that have occurred over thelast sort of week, that there is a real appetite for investors to be exposed toenergy transition. There is a huge slate of opportunities.You know, we have more than 100 gigawatts of renewable energy indevelopment and there will be opportunities to monetize that over thecoming years. So we're not in a rush to do that.We want to do that in an orderly way where it makes sense from a returnspoint of view.

But I would say that we don't look atthis thematically, we don't look at this opportunity in sort of one year blocks.You know, we think that there's an opportunity over the next 10 to 15 yearsto build a business that's the same size as our infrastructure business todaythat, you know, has more than 180 portfolio companies around the world inany energy transition. But that will not be a linear journeyand is, of course, affected by things like interest rates and marketconfidence. But if you're playing the long termgame, I think we all see that this is probably the business biggest investmentfanatic of our lifetimes.

Ben, David here, you mentionedinfrastructure. You mentioned the longer term timehorizon that you guys use in investing, which I guess in many ways keeps youagnostic to political cycles. I need to just get your thoughts onIndia and infrastructure. Those two things come to mindimmediately. And you know, with these results comingthrough, I just want to get your thoughts.A week or mandate perhaps for Narendra modi.Does that change in any way, the way you think about India?Yeah, I think it's I think it's a really.

Important question.So two things I'd say is, one, we've been investing in the infrastructure formore than 15 years. It's obviously a great market in termsof it has a real need to build and operate new assets there to helpfacilitate the the ongoing growth of India.And it also has a huge need for capital, particularly foreign direct investment.And we don't think that will change because of the Modi election.We don't we think that continues to be very good tailwinds in India.But like all markets, as we go through a political process, there is sometimesthe need to pause or there may be a.

Little bit more caution.But I think what's made in India, what's made India an attractive market over thelast four or five for the last 5 to 10 years will continue to make India anattractive market over the next five, over the next 5 to 10 years becausethere's a massive need for infrastructure.There's broadly very good supporting government policies and I don't thinkthat they'll they'll change materially depending what happens in the next fewmonths in India. And there's also a need for capital.And so that is really a very a very good combination of factors to see ongoinginvestment.

And I think many of our peers around theworld, like ourselves, recognize that and will continue to deploy capital insuch a scale and important market. And for a foreign firm like yourself,have you yourself noticed that things on the infrastructure side in India havethings actually well, have things really picked upduring during Narendra modi's of course stayed in power and do youexpect that to continue, I guess is the key question.In other words, is there a level of consistency that you're confident thatwe can expect still? Yeah, I think that's our answer, inshort, would be yes.

I think the policy work that the Modigovernment has done over the last ten years has been very significant.I think it's one of the most important and positive bodies of work,particularly as it has come in terms of stimulating and creating moreopportunities for infrastructure investment.And I think that will continue on because India needs that investment.Infrastructure is the building blocks of developing economies into developednations, and so we wouldn't expect that to change.So I think that's a market that we remain very positive about.Like many markets around the world,.

What about markets like China?Obviously, there's a big push into infrastructure there.They've been talking about this $1 trillion infrastructure plan to boostthe economy. Are you seeing more signs of opportunitythere in China now, especially as you talk about renewable energy, which is abig priority for the president? Yeah, I think two things there.I think. First of all, China has done a very goodjob of driving its own infrastructure development, particularly over the last25 years. I think there was more renewableenergy invested in and installed last.

Year in China than the rest of the worldcombined. And often that's being done by highlycompetitive, very high performance local companies in China.I'd say from an international investors perspective, I think everyoneunderstands that besides the US and India, China is one of the most excitingand scale markets to invest in, particularly from an infrastructurepoint of view, but probably it's a little bit more muted at the moment thansome of those other markets. And that's probably because of justpeople being a little bit more cautious about where China is in terms of apolicy point of view.

But certainly over the medium to longterm, having been know have been having been again, an investor in Chinainfrastructure over the sort of the last 15 to 20 years, we think that is a veryprospective market, but probably other markets at the moment are moreattractive either from a need of capital or from a policy point of view.Ben, I want to get your thoughts as well on artificial intelligence and not somuch, of course, the technology itself, but certainly the you know, I read morethan a few articles and research papers that suggest that, you know, the worldwill need a shocking amount of power capacity to simplyto simply tide us through this this.

Major shift into A.I..And I'm wondering, for a firm like yourself that overseas funds, forexample, is there a does this already present a viable opportunity around datacenters, power upgrades, what have you? Or is it something that's less tangibleat this point in time? No, I think it's totally tangible,David. We're we're seeing the impact right nowof AIG on a number of our portfolio companies across a number of sectors,particularly things like datacenter businesses where there is just arapacious hunger for particularly hyperscale clients to get more capacityand to and certainly to contract more.

Capacity.Way more appetite than we've seen over the last ten years.But even in other parts of our portfolio companies, things like our industrialgas businesses that service semiconductor companies certainly againto be able to support and fuel that AI boom.You're certainly seeing the demand on those industrial gas businesses.I think the biggest question for us is going to be how we then indeed powerthat over time. And I think working with hyperscaleclients, the very big tech companies, working with governments andcommunities, we're already starting to.

Come up with answers about how we canintroduce additional green energy that can helpmake sure that we've got enough energy to take advantage of the boom.So that's certainly a very big opportunity of that and a large amountof the renewable energy that we are developing today.A large about is that actually is all about sort of corporate offtakearrangements for people like the tech companies so that we can take advantageof the high growth opportunities but at the same time be able to do it in a waythat is sensible from a net zero point of view and from a community point ofview.

Ben, thank you so much for joining us.Ben Way, that group had a quarry Asset Management joining us exclusively fromSingapore this morning. We'll leave you with live pictures backat the Bloomberg Wealth Summit in Hong Kong.That is we're sticking with. There you go, Sonia loud.She is joining from the legal and general investment management CIO, alsospeaking with our very own Erik Schatzker.And she's joining us also in the show. What David, from the event in about anhour's time. We've got plenty more ahead.This is Bloomberg but is understanding.

The.We had a first taster right during the pandemic. So I told Bloomberg Scoop, We've learnedthat Airbus is negotiating a major sale of A330NEO aircrafts to China, and thetalks are gaining momentum after President Xi Jinping visited his Frenchcounterpart, Emmanuel Macron, last month.For more, let's bring in our Bloomberg's global business reporter, Angus Whitley,on this. So, I mean, 100, that's a pretty bignumber. Angus, just tell us how big of a dealcould this be?.

It's certainly a big numberon any benchmark and more than a hundred.We're hearing Airbus say it's a 13 year. That's the upgraded model of the A330.That's a big wide body aircraft. And we're hearing the order.It would go to several large Chinese airlines, although the terms of thedeals are still being discussed. The timing of of of this deal isuncertain as well. And as is the case with large Chineseorders slightly unusual in that they're bought by a state owned procurementagency. And then the planes are sort of sharedout amongst large airlines like Air.

China, China, Southern China, Eastern.And as you said, what's interesting is that we're hearing that the talks havegained momentum. Talks to this deal at least have gainedmomentum since President Xi's visit to the French, his French counterpart,President Macron, last month. So, I mean, this just it's such adivergence then of what we're seeing with China and how they're dealing withAirbus and Boeing, which, you know, China has once again halted imports fromBoeing so far. So are we likely to see this gap?Why don't even further? That's right.What we've seen in the past and we'll.

Probably see again is that these largeplane orders become bargaining chips, if you like, where it comes to politicaland economic ties and the progress of these orders, the negotiations when itcomes to Airbus deals or Boeing deals, for that matter as well.Quite often there is a status of of diplomatic ties or political tiesbetween China and the US or China and Europe.They're both manufacturing emblems. And it's still possible that thisplanned Airbus deal for more than 100 a330neos could get wrapped up in invarious other diplomatic disputes. For example, we're hearing today thatthe European Commission is going to levy.

Duties on Chinese electric cars fromJuly. And we heard before that that thatsector or that plan could trigger retaliatory measures on on aviation.So it's still possible that the Airbus deal may become involved in those kindof issues when it comes to two European levies on Chinese electric vehicles,which we know Chinese authorities are upset about.Angus, thank you. Angus Whitley there, our global businessreporter, joining us with the latest when it comes to Airbus.We just got some new data coming through from China.This is the Chasing China PMI services.

Data.So coming out better than expected. So that's coming out at 54, which is asizable B from what economists were expecting of a 52 and a half sort ofprint here. So at least looking better than themanufacturing numbers that we've seen, although the private gauge numbers stilllooked pretty good when it came to manufacturing, it was the official one.So we did see that contraction and we're seeing basically the highest in 10 to 11months when it comes to that PMI services print here as well.And what's really helping that look, Aussie dollar is being gained benefitingfrom it after, of course, that better.

Than expected data as well.We've got plenty more ahead. This is Bloomberg. Don't believe in any of anybody whotells you that there's a product, there's no reason high return.It doesn't exist. And if somebody tells you that it'slikely that they are scammers and they're trying to scam your money, soyou need to protect your savings, that's one.But but the medium longer term, I still believe in diversification.That's actually the focus of the exchange fund, even as a very, very biginstitutional investor.

We actually are clinging todiversification. Diversification is the best way to havea even with adjusted returns in the long run.I think that was at a you they're speaking with me.It's just across a couple of meters from where I am right now, of course, insidea ballroom at the Conrad Hotel. A couple of things.I think that was the latter part of our conversation where we effectively askedthem for investment advice and really fittingly enough, asking a person wherebecause of his position, he's actually only allowed to keep his money in inbank deposits.

Two other things that he mentioned, too,as well. So they're looking at private creditsimply from a financial stability perspective, more transparency, becausethere's a lot of money going into that space.So you would imagine it's attracting attention from regulators as theasset allocation for a lot of the wealth that's coming through.And the other one was on the wealth Connect and how they're expanding.They're looking to expand the program. It's a wealth connect 2.0.Now they're possibly looking at 3.0. Not a lot of details, but certainly he'slaid the groundwork for further opening.

Up as far as those two things areconcerned. Yeah, he mentioned that 3 millioninvestment was made not enough for some of these private bank clients.So certainly there is scope for them to maybe raise that a little bit more.But certainly it's just a slew of other guests we're having where you are.Ronnie Chan certainly is going to be the highlight there, along with his son,Adrian Chan from Hanlan Properties Asia, of course, just taking over for thebusiness there as well. So we'll talk a little more about theproperty market in Hong Kong as well as in China.Bonnie Chan, also the Hong Kong exchange.

CEO joining Steve and along one on onediscussion there later on this morning as well.Another check of the markets. Of course, we are seeing a decent rally,though. Take a take on here when it comes toHong Kong. So still say Hong Kong, better thanA-shares here this morning. We're seeing gains about 1% as tech hasgathered. A bit more momentum here.Again, we're up about 1% for that gauge there.It shares also doing quite well. So looks like we're set for another dayof gains here in China.

A little bit on the weaker side, 725 Butthat's housing services number did come out better than expected, which did movesome of the currencies here this morning in Asia.This is Bloomberg. Welcome back.Your watching the China show. We're about half an hour into thesession here. That's the view, of course, of thepeople in Hong Kong. On your left.On your right is an Hang Hang Seng index.That is coming up slightly off its peak. We're up still about 1.2%.Volumes are on the lighter side of.

Things, about a quarter lighter thanusual at this point in time. Certainly, we're still waiting forcatalysts, at least on price were higher.Also, the shares index, bottom of your screen, we're also seeing a rally takingplace there. We'll take you straight back now to theBloomberg wealth summit taking place here in the city and you'll be seeing ina couple of moments, if not already, our colleague, of course, our chief NorthAsia correspondent, Stephen Engle. There he is, of course, on stage withthe UBS Global Wealth Management Asia. And they had their annual.So let's listen in.

What they popped in market and some ofthe high yield bonds. Soinstead of being right in general, in the past so many years they've beenquite a home buyers. They really looking at globaldiversification, both in terms of jurisdiction as well as asset classes.But obviously, you know, Asian ties are also very versatile.Yeah. So once the opportunity come, then theywill also look at but all along we've been saying is quite a satellite.You still have to head to corporate succession and then for satellite, thenyou can venture into some of the themes.

Or idea opportunistic idea that you cancapture the market flow. So those trends will be to where I knowyou're co-head in Singapore is looking at India, looking at Australia.Obviously the Fed in the yields there have attracted lots of investment, butthe Fed might not be, you know, tight for so long.It's higher and longer. But when it turns what could be thereturns back to this part of the world? Yeah, I think that's that's the reasonwhy the situation is so important and really keep versatile and be able tocapture some of this opportunity. And to your earlier point, that's alsowhat UBS has been doing, especially with.

The integration now, is to verycomplementary because historically UBS is very, very strong in the GreaterChina region. So with that the acquisition actually sinto a book, the India, the Australia and alsopotentially Thailand and some of the some of theSoutheast Asian country. So I could hope for us, Hong Kong andSingapore still are our core hubs in Asia.And then our strategy is how we're going to also expand and further grow ourestablished market that it grew Taiwan domestic because we are the biggestforeign bank in Taiwan, domestic,.

Australia, India and also Apex, becausewe have over 100 plus bankers, pharmacists in and covering Asia, a 60of them speak Mandarin. So that's the kind of franchise we have.And then longer term, how are we going to grow China and India?Because this are the biggest two biggest growth market in the region as well.Speaking of the family offices, what still needs to be done if we talk aboutthis home market here to attract those family offices that might have left ortrying to get them to come here, because a lot of the wealth, obviously, withthis transitional generational transition that we're expecting, becausea lot of I think two thirds of the.

Billionaires in China are entrepreneurs.Their first time money, they need to pass it on.And over the next decade or so, we're going to see a lot of wealth transitionto the next generation. So what's the opportunity at hand forHong Kong? Oh, grow a lot of opportunity.I'm talking about the world. I'm sure you are talking about 2.5trillion asset that would be transferred to the next gen by 2030, according tothe WEALTH-X report. So that's a lot of potential for privatebank like us to provide that kind of services.So obviously I think China remain to be.

One of the top market because weconducted the survey to all the members, because I as a chair of the Board ofManagement Association, basically all of the executive committee and the membershave been telling us that China remains to be the biggest growth market.I think what the government has been doing with the capital investmententrance scheme that I did talk about earlier helps because right now wealready receive 150 application and we also got a lot of inquiry and actuallymy 30 year plus history experience, I've been also witnessing a lot of familyoffice set up in Hong Kong. Well of multi-thousand, okay, a fewthousand.

But how are we going to also even eithereven attract more to come in? And that's where Eddie referred to itthis morning about the multi corridor in the Middle East corridor, the Asiancorridor, and in addition to the China market.Okay. So I think that's also the differentscale text scheme will be helpful because one of the strengths of you ofHong Kong is of law, simple tax scheme and also the very well-establishedregulatory system to protect the investor as well as the connector beinga super connector, the multi I mean the connectivity that Hong Kong can bringthrough all these different corridor.

I think that that will be very helpful.Did you hear anything from the H Kim Eddy this morning on what kind ofchanges you'd like to see an expansion of the wealth connect?Yes, and actually that's also something we've been advocating and proposing tothe government on behalf of the whole Kong of Wealth Management Association,because right now, even though they raised a quarter to 3 million renminbi,that's not really the settlement for the private bank yet because they speciallygiven the pyramid scheme. So officially the quota is it is an areathat we need to further increase as well as the part offering, because I thinkone of the strengths of Hong Kong is.

Also the advisory capability plus alsothe well, the kind of breadth and depth of the product offering and the platformhere. So how I can elaborate on those.And the other channel, which we also discussed because right now is moreexecution only. So how we can leverage on Hong Kongstrength being on advisory. So we've been also exploring potentialadvisory licensing within the Grey Bay area, so that that's also something theindustry has been looking into. But that should be something thatBeijing would be open to. They want to create this single market,if you want to call it with still.

Boundaries, obviously with Hong Kong ofthe Greater Bay. So what are you pushing forward to getthat license is something we are exploring and also have been discussingwith with the industry and also with the regulators there.Tell me how your plans are affected by obviously the integration of the twoparent banks. Now, I understand it's pretty muchcomplete and that Asia is going to be your priority.Hong Kong first, then Singapore and Japan.What are your plans? Oh, the integration of light goes on.Well, and this is unprecedented and.

Historic, despite the fact that this isnot the first time I went through the integration with 29 years.Actually, the first one was between Union Bank of SASSA and a Swisscorporation, the two biggest banks there.And I was from SBC. So it went it goes all well.And actually we just completed the parent by merger on May 31st, and thatallow us to really deliver the Soca strong with a fully integrated team fromNubia and see. Yes and that definitely helped.And then as you said, then we will have the system migration and a credit cardmigration.

Hong Kong will go first, followed by,say, now PA and then the rest of the world.And so we are very excited because this is really the power of the two, verycomplementary, both in terms of the platform, the offering and the expertisethere. Obviously in the banking community herein Hong Kong, there's been a bit of a confidence crisis.Almost every bank has has laid off some employees, including UBS, I believeabout 70. But you have one of the biggestportfolio of wealth management advisors. We're going to leave it there.But that was UBS is Amy Lowe speaking.

With our chief North Asia correspondentStephen Engle there at the Bloomberg Wealth Summit here in Hong Kong.Of course, we're going to jump in a little bit later on once we do see somemore conversations taking part here. But certainly we're tracking thesemarkets here this morning and we're seeing when it comes to Asia, China isstill looking a little bit weak. If you take a look at how stocks aredoing, we're pretty much flat and you're seeing some sizable declines when itcomes to the Nikkei. The cost is still up about 1%, though.So we're still seeing that market doing quite well and we're seeing a little bitmore weakness when it comes to the yen,.

Although it's at 155 level.So it has sustained some of that strength or at least loosening a littlebit of the gains here. But take a look.When it comes the bond market, it's still that rally that's underway when itcomes to some of these Asia bonds. Take a look at how Australia is doinghere today. Oil still a big story here today.I think we're on track for six days of gains or losses, I should say, for Brentand crude here. We're at $73 for WTI as we speak, andwe're talking about China as well. Still seems to be sort of bucking thetrend.

If you take a look at how Hong Kong isdoing here today. So we continue to see HSBC is doing wellin session highs. Here right now.Dave did mention, though, that volumes are a little bit light compared to thistime around. His tech, though, seems to be drivingthat here once again. And we're watching these.The small caps, though, are heading lower here this morning.But Shanghai crude really falling. What we've been seeing with broader oilbenchmarks here, we're down close to 2% in Shanghai.For oil, India, still the big story here.

Today, if you take a look at how futuresare looking light, though, they were still in positive territory just a fewminutes ago. The fact that we heard from Narendramodi himself vowing to hold power via coalition does seem to show maybe someof these, you know, maybe we'll see a little bit more stabilization, maybe notready to take over some of these ETFs and the like here.But Nifty Futures are still punching a slightly higher here this morning.Still a lot of questions of what this coalition is going to look like.This is the first time Modi has had to have a coalition since he took power.And what does that mean for his mandate.

And how much of the political capitaldoes he have to push forward when it comes to some key reforms?Let's bring in Mahdavi Arora, now lead economist at Emkay Global FinancialServices. It seems like there was you know, if youask political analyst, what went wrong with this election, was that the BJPparty maybe focus a little more on this whole Hindu agenda, not so much reallycapturing this India growth story, right where there was those that have beenleft out, whether it's from widening income inequality, you have unemploymentthat continues to be high and rising living costs.I'm just wondering, what does this.

Election outcome tell you about what'sreally happening on the ground and in the economy?Hi. Morning.So interesting results if you look at the, you know, tentative results on therural point of view as well, it has fallen along 40% for the India versuswhat we saw in 2019 are clearly shows that the rural segment of the economy ishas not really turned up well for the India government.If you look at the spending backing of India over the last five years,especially post-COVID, there's been a consistent fall in the rural andagriculture development spend overall of.

Percent of GDP,especially in the revenue expenditure side, which obviously meant that, youknow, with the kind of distress stress rather you were seeing in the economywas buoyed. There wasn't much focus of thegovernment in terms of doing the revenue expenditure let's spend on reliefsegment. And to that extent, I think the mandatehas sort of shown that probably the policy spend should have been partlyfocused on revenue expenditure as well, apart from capital expenditure.Do you see? You know, what does this mean for allthese neo reforms that he had laid out.

In his campaign, whether it's land,whether it's labor reforms? Do those take a backseat now or becausethey can can they still continue? Well, absolutely.I think, you know, we are looking at a very different political reality.The equations are being very different. The equation or the political implosionthat the party will have to work with. I think it will lead to a policyrethink, but indeed does. I think the fact the market reforms thatyou said little bit later about your own political reforms withregard to having elections or going ahead, all of thatwill take a back seat.

I think the fiscal consolidation, peopleprobably still remain on the course of the election all.But there was a time pre especially post I did where there were talks about thefact that, you know it's a good answer the government has gotten from theReserve Bank of India, which is close to 1.4% of GDP, would probably be sort ofsaved by the government and they'll target a very aggressive fiscal deficitor consolidation. It's like 25 as they come.In part, that looks to be a little different at this point in time.I think we will be seeing a will not be seen as a 5% fiscal deficit in it by 25and probably a bit of a skew towards.

Revenue expenditure versus capitalexpenditure. But will I think the consolidation worseis that by 2024 will continue and the broad macro contours are also looking tobe at this point in time seem for me. Mahdavi.David here. So just to pick up on one of your pointsthere, we were speaking with the former RBI governor, Raghuram Rajan.I think it was about a week and a half ago at one of the conferences here inHong Kong. And one of the things he brought up,which actually stood out to me was the, you know, India, the percentage of jobsthat is being created in the.

Agricultural sector is actually goingup, which is not necessarily a bad thing.But if you look at India, where it wants to be, it becomes a bad thing.And I'm wondering what reforms you think should be in place to get the jobs wherethey need to be growing for people then to be spending?I think the policy focus on manufacturing will continue because thatgives jobs for the less skilled labour and probably semilabour, which is which is where you see a lot of this disconnect as well asdiscontent. But I think that with the policy of abloodbath, this may not change.

I think they will continue to focus onthat manufacturing operation. But that is the best way to move peopleout from agriculture. It was semi vocational jobs.That will be the next move was the government of job creation and all ofagriculture to, you know, the industrial sector.And I think construction manufacturing continues to be big field of play thatthat's what I'm saying. The policy shift may not immediately bevery different to what it was in the past five years, but there would be someskewed spend which would give immediate relief to the ruling class or theK-shaped story that we saw in India.

Mahdavi And you mentioned the growthclip earlier. Do you think India, in its current, youknow, the the economic capacity of the economy, do you think 8 to 9% growth isis something that we should be expecting from this economy?And also, if if that is the case, do you think that becomes an inflation problemor do you think that becomes a is that a sustainable growth that we should beexpecting to see? We need to understand the fact thatIndia will enjoy the fruits of past reforms, right?Last year, the policy direction has been very clear.We can debate whether, you know, it led.

To certain mix of skewness in theeconomy overall. But I think the next five year we shouldbe able to enjoy the past reforms needs. And apart from that, of course, the 7 to8% plus kind of growth that we saw in 524 or 8.2%, would that we like 24 waslargely technical, right, because it was a GDP versus gross value, a differentialthat was being reflected because of lower spend by the government of Indiaon subsidies. I think the trend would be removed.The noises should be somewhere close to two and a half to 7%.Any which which I hope in the next five years should continue hoping that, youknow, the reform led growth story.

Continues.We have to see how politically political equation really play a part.There was definitely a strong quality gap on the big opportunity because a lotof dynamics for any we as of now, I think the growth trend is pretty muchsomewhere close to six and a half to seven and a half percent.That doesn't change for me immediate in 25, we are looking at a six and a halfpercent GDP growth, which I think is lower than the street.But my sense is that you probably would see correction in if 25 because a lot ofthings which were favorable enough for me not going on to be acceptable for usirrespective whatever equation would.

Have played in the political space.Well, but I will leave it there. Thank you so much.Mahdavi Arora, their lead economist at Emkay Global Financial Services.We continue, of course, on our Indian election coverage here and we heard fromMilan Vaishnav. He's a director and a senior fellow inthe South Asia program at the Carnegie Endowment for International Peace.He talked with our podcast team about the state of Indian workers.People are severely underemployed. They're working multiple jobs, they'reworking part time, they're working in the informal sector.They don't have guaranteed wages.

They don't have social insurance to alarge extent through their employer. Right.And so that is the problem that we need to tackle.And I think the biggest thing that they can do there is really try to figure outhow to create jobs by harnessing both manufacturing and the services sector.And you can hear more from that conversation on the big Tech Asiapodcast. New episodes drop every Wednesday oniHeartRadio, Apple Podcasts and Spotify. Allright. So we'll leave you now with livepictures as we go into a short break.

The Bloomberg Wealth summit in Hong Kongtaking place. And as you can see on stage, that is awhile. The father and son duo there, Ronnie andAdrian Chan. And the topic of conversation, theproperty problem. More from the event after this break.Stay with us. You're watching the China show.The rest of you will be okay, but it won't be particularly good, particularlybad. I was totally wrong. Welcome back.Let's get back to the Bloomberg Wealth.

Summit now right here in Hong Kong,where this is a panel with very Lulu Lulu that's hosting it here right nowwith, of course, Ronnie and Adrian Chan from Hong Leong talking about theoverall property problem, whether it's in Hong Kong or in China right now.Let's listen in. The risks of the global community nolonger seeing Hong Kong as international and how to address them.The risk is real. America is stopping a lot of money fromcoming from flowing to mainland China. And because Hong Kong around part ofChina. So they don't want them to follow HongKong as well.

So this is our politics.So let's make sure in our own head that we get it clear that something is realeconomics, something is political and political things to win changes.But it may not change quickly, but sooner or later it will change.So let's not look at a political event and think that it is an economic eventonly. Of course, it affects the economy and itaffects our business and many others business, but is really a politicaldimension to it that, you know, beyond our control, I think all the time, thewhole world work to readjust whole world.We work to rebalance in what shape and.

Form?We're not 100% sure. I have some thoughts, some ideas on it,but you know, it's not going to be the same as before.And so let's make sure. My message to everyone is let's makesure that our heads are clear what is political and what is purely economical.And so, you know, when it comes to political market, wow.Is a wild place. So.And turning this issue back to Hong Kong property.The residential prices are now are at levels even below before the governmentscrapped all the buying curbs.

What do you think is the reason behindthis? Well, first of all, I think a lot ofpeople don't analyze the fundamental economic reason why Hong Kong's realestate is market is being challenged. To me, it's a very rather simple one.I've been observing this market and I've been in play in playing in this marketfor the last 40 some years. First of all, under the British highland price policy, they still deny it, but it's crazy to deny itthat way. The British companies can repatriate alot more because of less tax here and because of the high land price policy,you don't have to have high taxes.

So they get to repatriate more.For Hong Kong people, it's not a bad thing either.You know, wealthy make people feel good when the real estate prices go up andthe government doesn't. That can have low salary tax as well ascorporate tax. So there are many good, good points.So the British is the first one that really kept real estate prices up.The second one is Beijing. In the negotiation of 1904, 1997,Beijing was afraid that the British will sell a lot of land at high prices and toand take their money out. And so they make sure that there's only50 hectares.

Per year of supply.So with limited supply of land, prices continue to go up.Number two, Number three, the Hong Kong people,16% roughly of Hong Kong people owned it owns.We don't want to see prices fall and and real estate is such big has become sucha big thing in the economy. You use it to mortgage you to start abusiness somewhere for example. And then finally the land, the yellowribbon people, the the the anti-government people, the so-calledpro-Democrat people. They're not Democrat.Don't be fooled by them again anyway.

So those guys anything the Hong Konggovernment want to do, anything that Beijing wanted to do, they say no.So the Hong Kong government want to sell the land and they said no.So, you know, they they probably hate developers, those guys, but they endedup helping the developers keep prices up.And so when you think about it for 50 years, starting roughly in theseventies, that these four groups of people have limited the land supply ofHong Kong. And as a result, there's no no place togo for real estate prices is up. However, with the 219 riot on thestreet, which is so violent, is.

Unbelievable.What is so violent and the police is so restrained.I just want to clear again in history that,oh, those guys are now because of thenational security law and out of the before Article 23.So the opposition, which is purely for political reasons, again, not economicreasons, they damage Hong Kong economically for their own politicalgain. So as a result, once that is removed forthe first time in 50 years, that the Hong Kong government can finally supplyland in a more reasonable, more.

Economically sensible way, that meansmore sufficient. And so when that happens, the after 50years of high land price policy, how can real estate prices come down?So what's the big deal? Now, of course, I know if you own aapartment, it's a big deal. Or if you want to buy an apartment,well, and you're happy. It's a big deal, too.You're happy. But overall, when you look at theeconomy and look at the Hong Kong real estate sector, we are seeing the biggeststructural change in 15 years. And so for prices to go down is to beexpected, right?.

Isn't it?It's it's so clear what it's really about.There I was Ronny and Adrian Chen from Hong Leong property speaking withBloomberg's Lulu Chen. Very up.Many more coming up. This is going to united the wrong guy tocome in to speak. 11:29 a.m.in Tokyo. Japanese market remains about lunchbreak and we continue to see them extending this sort of slide here thismorning. Obviously, the yen volatility is onefactor here.

We have seen actually the yen strengthenabout one and a half percent the last two sessions or so.We're seeing a little bit of coming off of that right now.But 155 level certainly doesn't bode well for some of these exporters today.That's why we're seeing stocks down about a 10th of 1%.The Nikkei 1% losses for the topics here.Did you see yields also lower by three basis points as well?Your Asia markets dashboard is looking like this year right now pretty muchJapan is leading that sort of trend of pretty mixed across equities, but mostlylower here this morning.

We're flat when it comes to the Asiabenchmark. U.S.futures are still punching slightly higher.The dollar is basically flat. Obviously, that US jolts data certainlydid send a lot of the swaps and the Fed pricing back to maybe putting more ratecuts back on the table, maybe even a little bit as early as September.So that's really not bode well for the equity market, though, just given someof these growth concerns now. But most sectors are still, you couldsay, in the green in Asia here today. Let's head back to the Bloomberg Wealthsummit.

David English is saying by he's with ournext guest, Dave Ramsey. Oh, yeah.Ron, thank you so much for joining me. Here on set is Sonia Loud, CIO at legaland General Investment management. She was just of course on stage early onhere at the wealth summit, fittingly enough, talking about uncertainty andinvesting through that. It's very nice to see you in Karachi.I just look at the the next few months and the major event risk, if we couldcall it that, the Fed, you know, you could make the argument you and I weretalking a hike, a hold or even a cut or maybe a cut in the elections, U.S.elections.

How do you how do you do your job?Right. That's a very good question.But you've summarized it quite nicely, right, that investors are faced with anincredibly complex backdrop. So you've mentioned geopolitics.There's politics and of course, there's fundamentals.And we believe it's always very important to really prepare and run thescenarios and what will really matter to markets, because it's very clear if youjust take a step back and you just looked at media headlines, you could getincredibly depressed, right? Because it's mostly about humanitariancrisis, it's about geopolitics.

And then you look at markets and youcould believe you are in a parallel world, right?Because markets seem to be actually quite buoyant.And this is why it's important to look step by step and make sure youunderstand particular with regards to geopolitics and politics, how will theyinfluence fundamentals because they are the drivers for the actual marketnarrative. And unfortunately, if we have to say,and this is where the disconnect is coming in, so far, geopolitics have hadvery little impact on growth and inflation.And as such, the market is very focused.

On how these will change and how centralbanks will react. Now, as you've already mentioned, youknow, central banks, we have seen a massive shift in the narrative.We started the year with strong expectations for six seven cuts from theFed, similar for the ECB, Bank of England, and now we're talking aboutpotentially flat because it turns out that services inflation in particular isfar stickier than what we've expected. So investors should really startthinking about how will the US election we had the India election resultsyesterday. How will elections potentially influencethat, that narrative?.

And it's interesting because in Indiathis is potentially a different narrative than in the US.I strongly believe in the US actually fiscal policy is the one area marketsshould focus on. The starting point is a deficit of sevenand a half percent. Both parties seem to be aligned.That fiscal expansion is part of the narrative and you have to wonder whenwhen the bond market will stop thinking, okay, there's no time premium right now.The government, if we are continuing it, continue to support your fiscalexpansion. What are you paying that there has to besome sort of term premium priced in just.

For the state starting point where weare? And the scenario is for you as far asthe US elections go, does it need to be at well, first, do we get a clean sweepacross? Well, it is something to consider.How bad is that melt up going to be given that both essentially want thesame thing and don't have any business being in treasuries, given what seems tobe almost a foregone conclusion? I think that that's too quick.But you are raising a really important point is the chances of a clean sweep,because at the end of the day, if you know, whoever gets the White House, youknow, we've seen, you know, hung.

Parliaments and we see if, you know, ifthe Senate and the House with different parties, you're not getting a lot done.So the clean sweep is what markets should focus on, because as we've justdiscussed, fiscal policies for both is expansionary.But the Republicans probably will take it a step further.So this is what we will be looking at. The headlines will be dominated byimmigration, reproduction rights in some states.So there will be a lot of noise and of course, the legal issues of of DonaldTrump. But at the end of the day, it is whatmatters for.

Growth and inflation that will drive themarket. Of course, there will be noise, therewill be volatility. But at the end of the day, lookingthrough this is what really matters for fundamentals that will drive the equitymarkets in particular and the bond market.Now, are Treasuries interesting? We believe, yes.Simply for the reason that, of course, again, there will be volatility.And let's face it, we have a lot of volatility in bond markets already.But if you believe that, you know, let's assume we're staying flat, then youstill have a good chance that.

Particularly in the context ofheightened geopolitical risk, there is a, you know, a diversification benefitof including treasuries in your portfolio.Right. So let's maybe you that set aside thecapital appreciation element of treasuries or fixed income.Generally speaking, what role does income play now?I guess is the question is another very good question, because there finally isincome in fixed income. We haven't had this for a long period oftime. And even now, if you look at moneymarket funds, you get up to a 5% yield.

So this is actually what investors andwe're seeing increasingly that the fixed income complex is looked at differentlysimply because you can generate a level of income that we've not had for a longperiod of time. And we actually used to buy bonds forthe for the capital appreciation rather than the income.This has now turned around and that means as well, that diversification willbe a very different concept now because, you know, in the past buying the S&P 500probably wouldn't have done a very good job for you.But now, thinking about the geopolitical context as well, we have to assume thatthe chances of a terrorist event are.

Higher.Can you hedge for that? No, you can't.So diversification will play a far more important role.And this is where, of course, then the bond market will play probably again,the role that it used to play as a diversification and a hedge,particularly against very volatile markets.We've obviously seen, you know, investors take a step further from that.They've looked outside public markets as an additional hedge of that, if youwill. How do you think about alternatives,equally important as part of the.

Diversification narrative?Right. So you are looking for uncorrelatedincome streams, uncorrelated asset classes, and of course, private marketswill offer you a different profile compared to public markets.And we are already seeing this over the past five or ten years that, of course,the move into private has played a big role in asset allocation considerations.And we definitely believe that this will continue probably different in differentareas. We've seen a big push into privateequity as the preeminent driver of of asset allocation.But private debt, of course, has really.

Picked up, as is infrastructure.And there's real themes underpinning this.So if you consider the the energy transition decarbonisation, that is ofcourse themes that will continue and they will continue to need a lot ofcapital which we currently are seeing is predominantly provided by privatemarkets. Right.I need to ask you about India and you brought up India, interestingly how youdescribed it, how politics affects fundamentals.This is a market that demanded a premium for a long time.It's trading at double the price of.

China.Has anything that's happened in the elections make you change your mind andwould you buy this dip is what I want to get to.So to start with, it is very interesting to see the outcome of the electionbecause it's very clear that Modi didn't achieve what everybody expected him toachieve, i.e. that he was able to increase hismajority. Why is that?Because we believe inequality has played a far bigger role in the election thanoriginally assumed. If you look at India, what is missingvery clearly is how do you provide jobs.

To the masses?There is, of course, a very strong business case around particularservices, the IT industry in the country.But if you compare it to China, what India doesn't have is this broad basedmanufacturing that allows you to provide jobs to so many people.And in such, of course, you have the cost of living crisis hitting a largepart of the population to a much greater extent than, for example, in China.And of course, this is policies so far have been incredibly business friendly.They were friendly. And it turns out that potentially hewill have to balance this more in.

Considering how we can address thatinequality aspect. So what we would expect is that thiswill have a slightly dampening impact, but we're still talking about thefastest growing large economy in the world.Now, there has been a lot of froth in the equity market.So we probably have to expect that there's a bit of a setback.But we're so very excited about the inclusion of of the bonds into into theJp morgan emerging market bond. So there's still a lot of excitement.Just broadening the accessibility to the Indian market, we believe will will do alot of positive, but we have to wait and.

See what kind of policies and what kindof coalition he can put together to move the country forward.Sonia, speaking of excitement, is getting exciting right here, so we haveto leave it there. On your loud.Thank you so much. By the way, it's nice to see you incollege students again when in fact, it's the CIO, their legal and generalinvestment one. Yeah, I can barely hear you.I'm not sure if you're there. I trust you are.It's quite loud here. So, anyway, I'm going to throw it backto my area, to the Hong Kong studios and.

Hope you're there.Don't worry. Yeah, I got it from here.More big interview was a great one. There was Sonja coming up from theBloomberg Well summit in Hong Kong. Next up, as our dialogue with the HongKong exchange CEO Bonnie Chan speaking with Stephen Engle on the ground therejust a couple of hours or so. Stay with us.We have more on the India election, of course, and that outcome shocker puttingmore ahead. This is Bloomberg. What is happening today is really, inthe long run, really good for India.

Because it forces India to choose adifferent course from the one it has been on, of course, which has led tomuch wider unemployment and distress than needed in the country.It's a shocker of a result and there's no doubt I can't put a number on it, butthere's no doubt a major part of the bull market in India over the last fewyears has been the results of the reforms that this government did.The threat that China poses are kind of across multiple domains.And that means India, knowing that they're outmatched by China on most ofthose fronts, needs strong partnerships. It's not just the United States, butJapan, Australia, other key partners.

Like that.So our guests on of course, the India election and around a modi is somestunning setback here, losing that majority in parliament.We're continuing our India coverage here this morning.I want to bring our our Bloomberg Opinion managing editor for more of aperspective on this. Ruth, I know you've lived in India forfor some time, but it's it's the outcome of this was something that was sodifferent from these exit polls. Ruth Pollard Can you tell us a bit moreabout what the message from this election was to the world and tomarkets?.

I think the message was that neither theexit pollsters nor the pundits were listening to the Indian voters when theywere looking at how Modi was performing in this election.This election was all about Modi. It was brand Modi.His photograph was on everything from vaccination certificates to bags of riceto posters throughout India during the G7.And. And voters have said, we're not buyingbrand Modi anymore. They didn't want his muscular Hindunationalist form of politics, which basically targeted the India's Muslimminority with some fairly heated.

Rhetoric that has no doubt resulted inactual violence on the ground. What resonated with voters this timearound, I think, is the opposition alliance, his message, and that wasaround support for unemployment, price support for farmers, defence of theconstitution and social justice for women.And I think if we can take one thing away from that, it's that we need tobalance Modi's economic reforms with the more social agenda that the oppositionalliance is pushing. Yeah, and it begs the question of howdoes is this not any more about marketing, but really about governance,Right.

I mean, how do you think this this lackof a majority is going to change how Modi is going to lead as a primeminister? And what does it tell us about hisfuture as prime minister? Well, it must be an incredibly humblingexperience for him. It's a setback that I don't think he'sever faced once in his political career. And there's no sugarcoating it.This is this is a huge loss for Modi. It's a loss of face and it's a loss offaith in in his very hardline Hindu nationalist agenda that he pushed fromthe moment he took power in 2014. And certainly he escalated that in thelead up to these polls.

Modi will obviously have to temper theway he governs. If he does manage to form an alliance,he'll need to listen to coalition partners as opposed to taking them forgranted. And he'll also need to listen to themessage the voters sent to him, which is, you know, we don't want you just togovern for the billionaires of India or for the investors who are flooding intothe stock market to make their billions. We want you to govern for us, the votersas well. And so that's a humbling message forsomeone like Narendra modi to receive after ten years in power.Do you think this changes at all India's.

Growth trajectory in any way?I mean, when people talk about 8%, even 9% growth for India, is that now atrisk? Do you think?Some commentators are saying it is, of course.And, you know, perhaps six or 7% growth would be a more realistic figure?Certainly Modi will have trouble getting some of his economic reforms through theparliament. Perhaps perhaps it will just take morenegotiation to push that through. But nobody is expecting India's growthtrajectory to change overnight. We don't have a government in India yet.We know that both the opposition.

Alliance and the governmentcoalition meeting today, there'll be horse trading going on and I think it'sway too soon to say whether in any concrete way India's growth will will beless than 8% going forward. Ruth, great to have you.Thank you so much for joining us for this poll out there.A Bloomberg Opinion managing editor joining us out of Tokyo.You can get more insights on the election results and what it means forIndia's economy in this online discussion that's happening right now.Our very own medical Doshi is speaking with Neil Conte Mishra, access bankchief economist and a member of the.

Indian Prime Minister's EconomicAdvisory Council. That is on live go for terminalsubscribers. And Dave, of course, when it comes tothe markets and what does this mean for this India open after that tumbling ofstocks the rupee obviously bonds have been vulnerable of late, but are wegoing to see investors buy this, Deb, or is this the beginning of some sort of acorrection? That's the key question.Yeah, it certainly is. And you know, that webinar plays a verybig part of this because information at this point in time is going to be keyhere.

We know investors have over theovercorrected and they were overenthusiastic on Monday with that popin the markets they had to correct and then even more generational losses.Yeah, I mean the single biggest day in terms of just disruption in the wealthmarket on an absolute dollar basis we saw yesterday.And to your point, we're getting some stability right now in Indian futures.Here's a three day look that we had on Monday.That massive fall from grace on Tuesday and a couple of hours in, we're about 2hours into the end of the session right now.And we are relatively stable.

It's the tail you see right side of yourscreen on. So we'll see what happens in the nexthour, of course. Lots more, of course, in store.Yep. I think Goldman Sachs just came out withtheir latest note saying, yes, they are buying into this weakness.What you're seeing when it comes to some of these economic policies and like arenot really going to change the trajectory of where stocks are going togo. That's according to an article there.Coming up, an update on China's historic space mission to the dark side of themoon and why it may have left a.

Patriotic lunar message.We got the China brief coming up next. This is Bloomberg. Here is your China brief, a look atwhat's making headlines in national newspapers and trending online.Lots of reporting about regulations. Now, the Shanghai Securities News saysChina's top SUV regulator is banning firms from establishing or increasingtheir investments in certain financial institutions.The report says some companies, such as Hubei Energy, have already put uprelevant assets for auction. Another article says the PBOC willaccelerate legislation in key areas,.

Including anti-money laundering.The central bank is also reportedly set to expedite the revision of foundationallaws to ensure legislation keeps up with the Times.And the Securities Times is saying that the PRC is proposing five measures toboost the social credit system that includes strengthening privacy measuresand improving the effectiveness of credit supervision.So plenty to digest on that front as well.Online, though, it's really about space right there.More interested in what's been going on with, of course, this just journey tothe far side of the moon that China had.

Successfully implemented here this weekas well. Officials say the Chang'e six lunarLander collected some samples and even left a Chinese flag on the far side ofthe moon before blasting off for its return to Earth.Also leaving a little bit of a patriotic message as they do.We have that picture to show it. Let's bring in our China correspondentin Manila to explain what's really been the social media response so far.Yeah, it's really something that has really captured the imagination of theChinese people because this space craft before, well, as it blasted off, theytook a picture of what it left behind.

And there was this imprint thatresembles a Chinese character for song dong or song, which is the Chinese, thefirst Chinese character in the word for China.And so people are sending around this picture and they're commenting about howproud a moment this is for China, because, of course, China was the firstto land on the far side of the moon back in 2019, and they just did it again.And also interesting, some commenters also mentioned kind of make fun of thisby saying that, oh, look, the far Side of the Moon is now an inalienable partof China. It's belonged to China since historictimes.

So it kind of making reference that thestandard lines that the Chinese Foreign ministry often use when they asserttheir sovereignty over Taiwan in the South China Sea.Oh, yeah. I mean, some people like it looks like across, doesn't really look like a Chinese care debate.I see it, though. Yeah.Take a look at the significance of this milestone for China.Yeah, it's a huge milestone because, I mean, it's an amazing feat ofengineering because it's very hard to land on the far side of the moon becauseof communication issues.

You would have to use a satellite torelay communications with a spacecraft, and it's also not very flat.So they had to use an autonomous detection system to find a relativelyflat surface. And they also targeted this South Poleat the base. And it is one of the largest and oldestimpact craters known to mankind. And the significant thing about landingthere is, because it's so gigantic, is 13 kilometers deep.That means it allows the Chinese to pick up samples that could have been ejectedfrom deep within the moon's mantle when this crater was created billions ofyears ago.

So this is a material soil that hasnever been seen by men before. The Chinese scientists obviously havefirst dibs on analyzing them. And then foreign scientists can alsoapply to take a look at them. And it's all part of this space racewith the United States as well. Yeah, very interesting stuff.Thank you. Mimi Lowe, there are China correspondentjoining us now. Juan, of course, that moon landing andwe're talking a lot when it comes to markets here this morning.Obviously, we're just a few minutes away from that India open.That's going to be the key thing here.

We're watching a bit more on the evespace. We talked about the bids and Neos.They did get this approval for on road pilot of connected vehicles.So we're starting to see that trade really flow through here.We're also also watching some of those Tesla suppliers.They talked about their China shipments were slowing down a bit as well.And we're also watching when it comes to India.There you go. Well, this is what we're seeing acrosssome of these ETFs of late, but futures are still punching higher.We're up about half of 1%.

We talked about maybe things might calmdown a bit after we start to slowly digest the setback for Modi and his BJPparty. But him vowing to hold power amidst thiscoalition, he has to form now. And the government did maybe send somesigns that things could be stable for now.Obviously, what was really hit the hardest yesterday was Adani assets,right? We talk about how their infrastructureplans have been aligned with President Modi's, of course, reform plans and thelike. And basically like take a look whathappened yesterday.

Right.Basically close to 20% losses for basically all ten of Adani stocks thatfell. They basically erased almost $45 billionin group market value. That was even bigger than the hit fromthe Hindenburg research from about a year ago.Biggest one day loss for an Asian billionaire ever when it comes to GautamAdani, his wealth dropping by nearly $25 billion on Tuesday we got.Plenty on tap. Has it?Joining us with more India coverage.

Sharing is caring!