Xi Outlines Imaginative and prescient for Elevated Cooperation With Arab States | Bloomberg: The China Level to 5/30/2024

Mostly right on your dashboard here thismorning. And you continue to see this followthrough from this bond selloff that really has gone global now, reallystarted what we saw in the US session with that seven year, a bond auctionthat came out for pretty tepid demand. The European session as well after wesaw German inflation pick up and you're seeing that really spill over to Asiasovereign bond space here this morning. Take your Aussie ten year yield.We're up from seven basis points after yesterday, having some of the worst selloffs in the whole year in the Aussie bond market.JGB yields also taking higher.

We continue to see those declines inthis JGB market and dollar yen. Take a look.As Dave mentioned, we're at one 5738 levels right now.So basically it has eroded all the gains that we saw if in fact they didintervene last month. So certainly that says something.Right. And whether we are getting closer to 160now and what happens then is certainly another concern for Japan.But we did hear from that BOJ board policy board member did, talking about,you know, this weekend does mean maybe we might see some more price pressuresin inflation and maybe that does prompt.

A sooner than expected rate hike thatcertainly helped the yen stay a bit stronger briefly here, but we're stilltalking about around 157 levels here. Right now.U.S. futures are slightly down about 4/10 of1%. It's actually not quite down.I was actually down quite a bit during the Asia session as well.The Nasdaq saw one of the worst sort of sessions we've seen a year also.So it's basically the reaction function is to sell bonds as well as to sellstocks, because we basically have seen now, this concern is not really, though,so much in the bond market about.

Inflation, but really what happens withthis budget deficit and the like. And is that going to mean higher yieldsat a time when the Fed is not in a rush to cut rates as well?We talk about these yen pair, as we mentioned yesterday, you guys aboutpound sterling sterling yen. We're watching Euro yen now.We're approaching very close to actually those record level highs for euroagainst the Japanese currency were just around that 200 level for sterling yen.And we're watching, of course, the rest of these young pairs here, but allseeing at least today, a little bit more strength coming through for the yen thismorning in terms of what we're seeing.

When it comes to China.Obviously, the renminbi is one of concern.After the onshore rate, we hit the weakest level since November.We're still seeing a bit of a back foot here when it comes to China.Futures here this morning. Seven 2721 for the offshore right here,right now. But we're approaching the end of May,Dave, where, you know, we thought April was bad for the renminbi.We're getting to worse when it comes to this month and when really when we'veseen broad dollar weakness. It really hasn't benefited the currencyin China at all.

No.In fact, it has sold off in May, as they say.And really, we're looking at the fix of the day.I should be out in about 10 minutes or so.Right. So the reason we bring that up is, youknow, yesterday's at seven 1106 was already the weakest of the year.And do we get even more weakness or are we at a point that if one is pointingout that the PBOC might need to stand fast, as they say, along the currencyand currency markets as well right now, very quickly to allow the yuan weaknesstoo.

So we're also very close and just tomention too, so we're down about 9% now in the US tech index from the peak,which effectively puts a correction in sight, a technical correction.That level specifically is at 3721 on the Hang Seng Tech index.Watch it very closely. Futures are pointing lower as well.And of course, also happening right now in Beijing, of course, China is hostingArab leaders. They're watching for any lights, ofcourse, coming through out of the Chinese president.And of course, a briefing that out of the Ministry of Defense and also theMinistry of Commerce.

Right now, back to the big market storyhere as well. And as, Yvonne, you were pointing outhere, of course, the strong dollar story is coming in and we still have to lookahead, of course, to this inflation print out of the US.Yeah, I mean, that's still the big one for this Friday, right?So certainly we're still dealing with some milestones and at least some eventrisks to what to expect here in markets today.Let's bring in Mary Nicholas. She's our main strategist, joining usout of Singapore. I'll start with sort of this question ofthe day, Mary, maybe of where the yen is.

Going.Right. Looks like we're getting closer to 160now and brings us back to those intervention risks.What is your team looking at in particular?Yeah. I think one of the key things here fortoday is just how much traders test that resolve on 160, because that's the lasttime we we see suspected intervention was what the end touch the 160 level wecould see that yet again. Obviously the uptick in yields globallyhas obviously had an impact on dollar yen and that's likely to continue,especially heading into the numbers, as.

You mentioned, and then some of theother data that's coming out that's implying that there's some stagflationor risks in the US from the Fed Beige Book.But also we're getting the the path of inflation globally, whether fromAustralia or from Germany, is not that straightforward.So that's putting upward pressure on yields and that's going to likely putpressure on the on the yen as well. Mary.And on the equity market side of things here in Asia, as we know, of course,we're looking at some sort of a downtrend.I think the benchmark we're down seven.

In the last eight sessions, the US, notnot to that extent, but it seems like equity markets globally have sort of hita wall of consolidation this week. What do you think is behind that?Yeah, I think actually a lot a large part of it has to do with yields.I think there's a connection there where the higher yields are stoking thisconcern more more broadly to investors, not only to bond investors, but ofcourse also to equity investors and the fact that yields are going to stayhigher for longer, or the fact that because of inflation is having an impacton on equity markets. And yes, you might not be seeing asdramatic, let's say in the in the US,.

But you are seeing a very evidently inin Asia and that's obviously going to take take a lot of notice in what'shappening in the US bond markets and of course with the dollar.Mary, thank you so much. Mary Nicola There are MLive strategistsgetting us warmed up here for the Thursday session ahead.We're just about 23 minutes away from the opening bell, right?Well, still ahead, we'll take you straight back.Also in Singapore is the city Macro Party investor conference taking placethere, of course, for a deep dive into China's economic policies with cityadvisor David Lubin.

Of course, there we go.And looking at Asia and we're still going to be in Singapore, Asia is a keyfocus at a major tech summit in Singapore today our very own and I'lljewellers is there live for us. Well.Thanks, Yvonne. Yeah.Really busy couple of interviews coming up in the hours ahead, but this onecoming up in particular is of great interest because we're going to bespeaking with the FCC now. This is the US agency pretty muchregulates anything that's communications based in the US as well.The focus of this interview, well,.

There's lots of different talkingpoints. There's a couple of deals that have gonethrough that could perhaps attract some level of regulatoryscrutiny. That's T-Mobile and us tell you that I'mtalking about this. There's greater focus and and andcriticism perhaps of Huawei in particular.So it's that US-China connection that's very much a focus as well.And of course, that countdown to the US election in November and that riskperhaps that could be used to misinform dis inform as well in voters that areheading to the polls.

So great line up in the hours ahead.But as we said, speaking with the US FCC this hour.Plenty more coming up. This is Bloomberg. Good Thursday morning.Welcome back to watching the China show. We're just a couple of minutes away fromthe reference rate at the dead. This one is going to be fairlyconsequential. Well, obviously depends what they do.Could move, markets could move. The reason we say that as well is therenminbi. So we're looking at a chart here of youhave the midpoint, which is in whites,.

You have the trading bands, 2% eitherside, of course, of that midpoint. You have the offshore currency inyellow, which has now ventured beyond where that upper limit is of the onshorerate, which is your line in blue. And we're very close now on the renminbito hitting the week end of the trading. But in fact, just another way of lookingat this, it's a 2% spread, of course, from the midpoint up and down.The next chart actually shows you this and how close we actually are to thatspecific level. So the last time we actually hit 2% wasback in late April. That was April 26.We're extremely close at this point in.

Time.And the reason this fix will be fairly consequential is if we do get one thatis on the stronger side, say, of 7-Eleven, I'm just putting out a roughline to the sound here. That effectively one pulls in where youare in a trading that the 2% trading band limit and effectively freezes ifthat does happen freezes the currency the onshore currency at around theselevels. And that could provide a boost reallyfor markets which frankly, if you look at price action today, they need a boosttoday. Yeah, I mean, I got a good post me on myblogs about how influential the renminbi.

Is when it comes to the whole carrytrade among em. Well, that's certainly one thing we'llbe discussing as well as head to the city Macro Pan Asian Investor Conferencenow in Singapore, where we're joined by our next guest.David Lubin is a city advisor and a senior research fellow at Chatham House.David, it's great to have you here. Certainly we can start off with thecurrent Chinese currency and obviously we haven't seen a month like this wheredespite the broad dollar weakness, we are still seeing renminbi that isweakening. And maybe it does show that this is moreabout Chinese fundamentals now than a.

Stronger dollar story.What is your take overall of the economy now in China?I think the renminbi, the pressure the renminbi is under says more about the USin a way than it does about China itself.The most reliable guide to the near term renminbi is the US-China interest ratedifferential. And since, you know, the market'sexpectation is that US rates are higher for longer, that puts pressure on thatinterest rate differential and therefore sucks capital out of China towards theUS. So it's really the sense in which the UStightening US monetary policy and the.

Expectation that U.S.monetary policy remains tight, act as a kind of magnet for capital flows fromthe rest of the world, which is why it's not just the renminbi but other emergingeconomy currencies and the yen that are all under pressure.In fact, it's possible to argue that in the last few weeks we've seen slightlybetter news out of the Chinese economy, starting with the April Politburomeeting, which committed to providing more support for the housing market,allowing for central bank funding of state owned banks and local governmentsto scoop up unsold property, easing housing purchase restrictions across anumber of cities in China.

And indeed, industrial productionfigures for April showed for the first time since May 2022 that the growth rateof industrial production of private companies in China is outstripping thegrowth rate of state owned companies. So there's actually some reasonably goodnews taking place in China, which slightly sort of flies in the face ofthe news coming from the foreign exchange market.Yeah. And David, to your point, do you thinkauthorities have a reason to step in? Should they step in and stabilize or isactually a weak currency doing China some favors right now, particularlyaround the export story, too?.

I would say that allowing the nominalexchange rate, the dollar exchange rates to weaken doesn't really do much forChinese exports, particularly against the background where in the last coupleof years the real effective exchange rate of the renminbi, in other words,the trade weighted inflation adjusted exchange rate has already depreciated byaround 15%. So there's Chinese exports are alreadysuper competitive and so they don't need additionalexchange rate support from that point of view.There is one sense, though, in which a weaker exchange rate might might beconvenient for the Chinese authorities,.

Which is that on balance a weakernominal exchange rate might help to ease the threat of deflation in China.You know, in other words, to the extent that a weaker nominal exchange ratehelps to raise the domestic price base level in China, that may help to kind ofdeal with the deflation problem that China's kind of flirting with.Yeah. I was about to ask about the inflationpart of the conversation. David, just hold on just very quicklyhere. So we had the reference rate of the dayout, seven 1111 against the US dollar. That's the sort of playground in thesort of parameters of the playground.

Today.David, let me bring you back in on the conversation around inflation.Do you think this inflate the lack of inflation in China?Is that is that something you think authorities have a toolbox toeffectively stimulate and get themselves out of this this current hole, David?I think it's very tough. By far the most reliable tool to kind ofallow the Chinese economy to exit this deflation trap would be substantialfiscal loosening. But for all sorts of reasons, theChinese authorities are really quite reluctant to deliver that fiscalloosening.

One reason is that philosophically theyare just against to what they call welfarism.They don't like the idea of handing out money to households for doing nothing,partly because that their their idea is that once you start handing out cash,it's difficult to bring it back. And so it's a sort of slippery path tounstable public finances. And maintaining stable public financesis a big priority for the Chinese authorities.But there's also a kind of behavioral factor behind their unwillingness todeliver a massive fiscal support, which is the idea that they don't want to kindof both a culture of dependence.

They don't want the Chinese authoritieswant to make sure that Chinese households remain nimble and robust anddon't become, if you like, lazy in the way that Xi Jinping once described LatinAmerican countries for their tendency to rely on on fiscal handouts.So there's both both a kind of fiscal or financial stability aspect to China'sunwillingness to stimulate, but also a kind of behavioural aspect as well.You mentioned financial stability and it's interesting, you know, when you'reseeing I want to broaden out to what we're seeing in the global economy,particularly in the US, where you're starting to see disinflation stall abit, maybe in parts of Europe as well,.

You're starting to see PMI is are stillresiliently strong. I mean, is there a cost to this sort ofrobust growth that we're seeing in the world?Yes, I think that's right. I mean, you know, the good news is, asyou say, we've had three consecutive months of global manufacturing PMI above50. So there is a sense in which the longmanufacturing recession that the world was under during the course of 2023 iscoming to an end. But at the same time, global commodityprice inflation is now becoming a threat to CPI, one of a major contributor tothe disinflation process in 2023 and.

Early 2024 in advanced economiescertainly was the fact that global commodity prices have experiencednegative growth. In other words, there's been deflationin global commodity prices during the course of 2023 and early 2024, accordingat least to the World Bank's Commodity Price Index.In April 2024, we had the first month of positive inflation in global commodityprices since late 2022 and as goods and you know the price of goods, inflationstarts to increase, then the threat to CPI becomes more evident.And so global CPI, or at least advanced economy CPI, is more likely to bethreatened upwards by this revival of.

Global commodity prices, which in turn Iguess is to some extent a function of this global manufacturing revival.Yeah, David, we were we were speaking with Olivier Blanchard the other day andhe was off the same view that almost nothing that brought inflation down wasbecause of tighter monetary policy. Do you think monetary policy officials,particularly at the Fed, should be tempted to tighten policy even furtherif that's the case? And separately, do you think Fed ratesare restrictive enough at this point in time to bring together that last miledown on inflation? I think it's worth being patient at thisstage.

You know, real interest rates in theUnited States are relatively high by historical standards.And because we have evidence at the moment that the labor market issoftening. I would imagine that it makes sense forthe Fed to pause, not rush in either to hikes or cuts in order to see whetherthis apparent weakness in the labor market and the weakness of retail sales,for example, starts to kind of feed through into inflation expectations.In other words, it's worth waiting for some time in order to see whethereconomic weakness in the United States can do the job of monetary policy orwhat it can assist to the job of.

Monetary policy by easing inflationarypressures in the near term. David, fantastic insights is anunderstatement. Thank you so much for your time.David Lubin there, Citi Advisor and senior research fellow at Chatham House.Going into the open today, just under 9 minutes away.The dollar is stronger bottom if your screens and equity markets broadweakness across the region. Plenty more ahead.This is the China show. It's a big cover story that we'refollowing for you today. A Chinese court has dismissed a casefiled by a local consumer against Apple.

Over commission fees for purchases viaits app store. An unpublished verdict seen byBloomberg. The Shanghai Intellectual Property Courtruled that Apple has not abuse its status despite dominating themarketplace. Apple is defending its app store fees onmultiple fronts, including in the US and Europe.China's state backed Silk Road Fund is selling its stake in Italian tire makerPirelli, valued at around $553 million. Silk Road will sell its 9% holding withprice guidance at an 8% discount to Pirelli's last close.Rome has moved to limit the fund's.

Influence over the tire maker, citingnational security concerns. Sources say Saudi Arabia is set tolaunch a secondary offering of shares in oil giant Saudi Aramco that could raiseover $10 billion. We're told the sale could happen as soonas Sunday, with informal interest already from investors across the MiddleEast and Europe. Proceeds will fund initiatives todiversify the Saudi economy away from oil.Going into the open today. Deal a weakness across these markets,3/10 of 1% to the downside here. The level to watch is at a bottom ofyour screens on the tech index.

So just about 30 points from that levelfrom current levels. So I would imagine I mean, the questionis, do we get a further 1% down from current levels?If you see the possibility of yields globally over the next, what is it, 7hours of melting up even further, then probably you could make a case that weare seriously at risk of entering a correction today.Otherwise might just be a typical down day.All that being said, that we are down seven days in the last eight in HongKong and also across the region. A couple of stocks to watch here on yourscreens, Xpeng.

And of course, conversations aroundReuters, I believe reporting this, that some of these tariffs are part of theconversation today as far as Europe is concerned here.There's also and we're also looking at some of these solar stocks as well.So China actually came out with their current projections on the reductions ofemissions this year, 2024. We'll talk more about that in a moment.Logan Group, there we go on your screens as well.And well, yeah, the company said to be engaging JP Well, Bank it's tapping thethe bankers and the financial markets here in terms of justice being able torefinance some of these loans as well at.

Forward for the company.Yeah and that $8 billion restructuring they say really hinges on that loan thatthey might get to for that luxury tower. So certainly that's one to watch.Unchanged for the free market here right now.But we're still watching the property as given what we've been seeing acrossthese down pans being reduced in big tier one cities as well.Hang Seng, though, we are lower about a third of 1%, 727 We are offshore, right?Onshore markets are opening up. We'll see how the onshore you and tradesnow at those November lows. This is the trying to show the open isnext.

Welcome back.Your watching the China show tonight at the open of markets here.And it is not just talking about China, but really a sea of red across globalmarkets here this morning. I just really start off in the bondmarket and the sell off that we're seeing across fixed income yields arecontinuing to tick up here and the Asia session.And that is starting to feel a little bit of worry when it comes to the equityrallies that we've seen. So consolidation all across the boardhere. We're seeing a lot of declines in Japanand looks like Hong Kong and China also.

Joining it.Dave. Yeah, we're set to join this that thisparade to the downside right now. And certainly when you look at the fixout of the U.S., certainly not giving us a reason to expect a backstop from Chinaas far as the conversation is concerned here, we're going into the open today.We're down seven in the last eight days on the equity markets, whether that's inHong Kong or across the region. Here is what the real pain is.If one is pointing out that this melt up we're seeing for actually two days now,when you look at yields yesterday, a good example is when you look at yieldsin Australia.

Worst day for Aussie long in bond tothis year. So far we're continuing to see that theGB yields and dollar yen more in the macro story a bit later and perhaps whywe're also looking at GBS right as an anchor this this this this uncorrelatedasset to what you're seeing globally. So ten year yields at 2.3%.We're looking at declines here, 3600. Again, it's been an extremely tightrange onshore on price. So actual vol is actually come down thatvolumes have come down even more more So a chart of that in a moment here, flipthe boards please, if we can have a look at where we are in Hong Kong.So this dollar strength story has also.

Pushed up well but the Hong Kong dollar,Hong Kong dollar to the highest level here in about three weeks or so.So at about these levels, but at 781 right now, 47 against the US dollar,that takes you actually back to the highest in since early May as well.So three week low on the Hang Seng index and at 3751 and I think we have thatlevel coming up bottom of your screens, the level to watch on the Hang Seng techindex below, which if we close below that level today, that puts us into atechnical correction on the Hang Seng tech index, which is about, I would say,about 330 points when current levels do we have that for our viewers?That's going to fight, I promise you.

I promise you my producers are not goingto let me down. That's going to fire in about 10 secondsor so. Yeah, Tencent, HSBC and Alibaba areseeing some declines right now as well as promised, CSI, 300 volumes alsocoming through here as well. So we're looking at volumes coming down.You have your 50 day average. So yesterday we actually hit the lowesthere, about the lowest since the rally actually started on the CSI 300.So we'll watch this very, very closely. My producers let you down.There's no I was waiting. Oh, there we go.Thank you so much.

There we go.Tease of all the goodness. Coming up, 3721.There we go. Well, it's interesting, right?What's really causing this sort of correction?Right. You know, obviously, we've seen a lot ofthese big tech firms like Tencent, Alibaba slashing prices.Are you also talking about, you know, rising global tensions with China andthe G7 as well? It's really starting to hit some ofthese large caps as well. So certainly we'll continue to watch, ofcourse, whether we do enter into that.

Technical correction or not.Let's get more insights from our Asia equities reporter, Charlotte Yang.Now. She's with us.It's interesting, despite all the sort of red that we're seeing in markets, youknow, Morgenstern had a pretty interesting note about being lessbearish about China. Now, in particular is because we'reseeing a lot of buybacks. Yeah.So the Morgan Stanley Investment management, this New York based fund was1.5 trillion under management. They actually, you know, getting addingChinese equity exposure and cautious.

Optimism boosted by stock buybacks we'veseen in the nation you know after we had this official campaign talking about howyou really need to boost investor returns with more dividends and morebuybacks and so on, This asset manager, you know, they've largely avoidedChinese equities over the past few years and due to a lot of structure issueswith the economy. So believe me, you know, they havereducing that underweight, underweight on China because of that.And they believe that was was increasing shareholder return along with valuationsactually stock prices continuing to rise.And they've also linked that campaign.

With the corporate reforms we've seen inJapan, Korea, which has to be helpful to the respective equity marketsas well. These and dividends have also done verywell as a strategy. Yeah, yeah, it's dividend stocks havebeen emerging as a winner in the market. And so we're actually seeing that gaugetracking dividend stocks in China outperforming the benchmark CSI by morethan triple. And an analysis by BloombergIntelligence found that the MSCI China index, those companies that have adividend you know on sector have actually outperforming the benchmark bymore than five percentage points over.

The past three years.And that's better than the other factors such as value or like EPS.And then and also it's very interesting that there's also expectation that theyellows, which now could continue to ride for like more than 5%, which isoutperforming some of the like more more than double that ten year governmentbonds, as well as some of the rental products in China.So I think there's also a lot of optimism from investorsaround the into those dividend stocks as well, because those are just better thanthe others. Okay.What else are you watching?.

There is a team watching today.Yeah, I think after today with we're watching the TV space as well becauseit's a Reuters reporter talking about how the EU tariffs that was expected tohave a mixed ally on June 5th and that could put off a bit later.And also definitely the Henson Tech index we're seeing know close to aconnection correction of 10% point I think, right now.So that's definitely what we're watching today.Fantastic. Charlotte, thank you so much.Charlotte Yang their Asia for Asia equities team Now on to tech andearnings here so Didi came out with.

Earnings late yesterday in Asia.So net loss widening in the March quarter as higher marketing costs andalso losses in its. Speaking of Evy here in evy maker x pongout where does revenue boost let's bring in Sara Zhang our China tech reported totalk us through of course what was behind that really more context and whatwas behind this loss. Yeah it was definitely more of a mixedbag this time. We saw that their sales were up 15%, butactually the net loss did widen, like you mentioned from the year before, andthat's primarily because of their stake in the EV maker Xpeng.If we remember from last year, last.

August, they made a deal with xpeng tosell their smart car development. AAM and as part of that they got a 3.25%stake in xpeng that obviously lost a lot of market value in the past quarter.So that weighed really heavily on their on their net profit overall though Imean this is a company that's still dealing with a lot of transitions,right? Whether it's at the top of managementalso whether they are going to list in Hong Kong.What do we know about those things so far?Exactly. I think those are the two big questionsthat investors are wanting to know more.

About right now.So we saw that the co-founder, Jing Liu, she stepped down from her president andboard director roles after almost a decade in those roles.And the CFO, Alan Joel, he stepped up to that boardposition. Now Jean is in sort of a permanentpartner position. We're not really sure what that willmean for the company going forward. As for the IPO, we're looking for clues.You know, are they going to be able to release this year as they've beenplanning in Hong Kong? Will they get the kind of valuation theywant?.

Will regulators.Okay. That those are all questions that wewant to know the answers to. Well, Hyundai's global CEO is confidentin the automakers bet on growing U.S. demand for electric vehicles while stillinvesting in hybrids. We spoke exclusively with JoseMourinho's, who also gave an update on the progress of Hyundai's New Georgia EVplant. Well, we are still very confident.And I say visiting our plant in Savannah last week, and I'm happy to report thatwe'll be able to produce a three months ahead of schedule.So by October this year, we will start.

Producing our very popular and uniquefiles. So I think that's that's great.We're very confident. And then as I've said many times, wecontinue to double down on our bid for electrification, and we're happy tocontinue with that. To your question about the hybrid, we'vealso seen that the evolution of EV sales in the industry, maybe not as fast aseverybody expected or as the regulation it would expect.And then we have seen also that a number of consumers are bidding for maybealternative fuel types beyond, say, ice like hybrids and plug in hybrids.And that's why we have decided that in.

Our plant in Savannah, we're going toproduce also hybrid vehicles. This is going to imply, of course, anincrease on investment, but we believe is needed.And we are very happy to see the reaction of our dealers and ourstakeholders as we have announced that is the Ioniq five.By the way, great to see you as well. Hosie the Ioniq five and hit the market,wowing a lot of people with the sort of icy emulation and sporty performance.Is that thing sold out already? I mean, what what are the orders lookinglike for that? Well, ionic five is unbelievable.I seen a few urinals like you might know.

Really well.This car can do is more than 640 horsepower.E just made it to the performance car of the year in the world car event thattook place in New York in April. And this is only after two yearsearlier. The only five became work out of theyear, end of the year, and design even car of the year.I think this is one of the few cars that could raise you in one of yourmotorcycles and bid you. But then I leave it to an opportunity inthe future. I look forward to it.Josie.

Listen, the price tag continues to gethigher as these cars gain popularity with consumers.Obviously, the Ionic has done well. This one costs, I think, north of$65,000. And the Genesis product is doing so wellthat you're able to take more price there.Do you see that power increasing even as it's falling for your competitors?Well, we really do see the power increase, so we really believe that thefuture is going to be electric. So it's not a matter of if, but when youdo go to Europe, I think there is about a 20% mix of events.You go to all the regions like China,.

It's about 30%.We are staying stable in the United States, about 8%.But in our case, we continue to do very well this year.To date, we have increased our sales of EVs by more than 50%, and last year wedoubled our sales of EVs. Jose Munoz They're the global CEO ofHyundai with speaking exclusively with our colleague, of course, there, MattMiller writes from there, we'll take you straight back to Singapore, where theAsia Tech X Summit is taking place. And of course, our colleague Bill isstanding by there with our next big guest Bill.Thanks, Dave.

Yeah, well, I'm really pleased to saythat we're joined here this morning by the Federal Communications Commissionchairwoman. This is Jessica Rosenworcel.And. And Jessica, I just want to start off bysaying that people that are unfamiliar, perhaps with the US FCC, this is thesort of agency that oversees all communications in the US.So So you're in Asia. It's quite a whistle stop tour.But you were just telling me that a lot of your your counterparts in the ASEANregion are converging here at this summit.What's the sort of main message and.

What's the main themes of theconversations that you're having here? Well, there's a digital transformationthat's happening worldwide, and it's affecting small and big countries alike.So this is a terrific opportunity to talk with other countries in theirbackyard. In their backyard.What are the sort of main risks that you're seeing here?Because, of course, there's been a quite a level of scrutiny that we've seen fromthe US FCC on the likes of China's Huawei, for instance.Is that coming up in the conversations that you're having?Well, we're talking about network.

Security, of course, but we're alsotalking about how to make sure broadband and Internet access reaches every one ofour citizens. And we're having early discussions aboutartificial intelligence That's really important.And what are the themes of the conversations that you're having aroundAI in particular? Well, I think at this point we want toshare our intelligence, what we're seeing happen in our own borders.And it's really important to me that we not just talk doom and gloom about thistechnology, but that we find optimistic uses for it and include that in theconversation as well.

What are you seeing on A.I.within your own borders? Well, we're seeing a lot of interest anda lot of investment. I think there are some creative usesthat are emerging that are going to change our economies.But, you know, there are malicious uses, too.And those malicious ones, what are you focusing in on that?Well, I think there's a lot of concern about the use of it in politicalcampaigns. And I know at the Federal CommunicationsCommission, we have proposed, at a minimum, having transparency inadvertisements for political campaigns.

About whether or not AI technology hasbeen used. Yeah, this is a really big theme, ofcourse, because we're approaching the US election and that is one of the greatestrisks of AI. Of course it's around deepfakes, it'saround misinformation, disinformation. Do you think what the FCC is proposingis enough? Well, I think these are very bigchallenges and we're dealing with them not just in the United States, butglobally. But it's also important in the UnitedStates that we abide by our Constitution.We have a long tradition of the First.

Amendment, which prevents governmentfrom restricting freedom of speech. So that's got impact on how will chooseto deal with this. What's been the reception so far then tothose proposals? So those proposals are just out and mycolleagues are taking a look at them back in the United States.But one thing we did last week was we found we find someone responsible for aI voice voice cloned call that purported to be from President Biden withmisinformation about where and when to vote.We tracked down who was responsible. We find that individual and we find thecarrier that carried that call.

Okay.But we can shift away, perhaps from from Ally in the election, because the otherfocus, as we were discussing, is around risk could be posed by other actors inthe system. And one of the things that the FCC isdoing right now is investigating how U.S.phones use signals from foreign satellites.So what's the status of that approach? That investigation is underway.So I don't have new information to share.But all of our phones taken information from global positioning systems.And we want to make sure when it takes.

In that information, it is secure.What are you expecting to find in that, though?Because there's been several independent analysts or experts in this field thathave said that even if you are taking in information or pings from othersatellites like from China, like from Russia, there's perhaps limited impactfrom that. Are you expecting to see the same or areyou looking for something else? Well, it's early days in ourinvestigation, so I can't quite tell you where we're where we're going to windup. But I think we want to understand theseissues better because remember those.

Phones, they're in our pockets, ourpurses and our palms at all times. We want to know where they're gettinginformation from. Do you think there's been enoughfunding, then? Because because part of the criticismhere is that there's the U.S. is perhaps been slow to deploy newsatellites into the system. Do you see that happening as well?Well, the more satellites you have reaching you on your phone, the moreaccurate your information will be about global positioning.So there's a lot of value to have updated satellites.And I definitely want to see our Defense.

Department continue to launch thosesatellites. I think that's important not just fordefense, but for our economy, which uses those signals, too.What about the deals? Because, of course, it's not justtensions between the US and China that we focus on leading up to the USelection later this year. We're also seeing greater scrutinythat's being applied to deals like and not within your your purview but or yourremit. But say for instance, Nippon Steel'staker of U.S. Steel and another one that could perhapsattract some level of scrutiny is Sony's.

Bid for Paramount's assets incombination with Apollo. What's your view on that deal?Well, I can't talk to any specifics about with deals that are not before usright now, but we'll take a look at the facts if anything comes before myagency. All right.Jessica wasn't all that very much. Thanks so much for your time, notesJessica Rosenworcel. We also rather the Federal Commissioncommunications chairman from the U.S. seven.All right. Great stuff, Bell, Thanks so much.And more coming out from the Asia Tech.

Summit in Singapore.We're speaking live with the Communications and Information Minister,General Puducherry there. This is Bloomberg. Well, China's president Xi Jinping, ismeeting with Arab leaders this week as Beijing seeks deeper ties in the region.For more, let's go to our China economy editor James Baker with the latest onreally what's on the agenda this time around.James? Good morning.I mean, I think obviously the first thing is going to be on the agenda is,is the conflict in Gaza and the effects.

It's having in the broader region.China's not a direct party to that in the way that America is or the or thecountries that are that have come for the summer.But, you know, it is having effect on Chinese exports.Shipping costs are rising because of the the continued attacks in the Red Seaforcing ships to reroute about that I China has said that they want to see anend to the conflict in Gaza, both for humanitarian reasons and also becauseit's having those kind of economic spillover.So I think that's going to be the first the first item on the agenda.So, you know, China's ability to.

Actually change the situation on theground is quite limited. The other things that they would want todiscuss, I know that they're going to discuss is is further economiccooperation. There's going to be there's been a slewof announcements of Chinese investment into the Middle East and to Saudi Arabiaas a lot of money going to the United Arab Emirates for various differentprojects. And so, you know, that investment andtrade is also going to be quite high on the agenda.And those countries are very much welcoming Chinese investment and not inthe sense of, you know, this is a way.

Of, you know, separate themselves in theU.S. But, you know, I think a lot ofcountries around the world looking at the China-U.S.conflict all the time as sort of rivalry right now and saying we can play thesetwo off against each other, we can get money from the U.S., we can getinvestments in the U.S. like the deal recently Microsoft did toinvest more into Saudi Arabia. But we can also get money from China.And so, you know, it's beneficial for many countries around the world to sortof play off the two superpowers and see what they can get out of that rivalry.So I think, you know, those are the main.

Topics that we're going to see discussedtoday. James, do we have any more informationon the potential deals that that may get announced?I mean, to your point, right, when we get these very high levelsummits taking place and political leaders gathered in one place, typicallyin the side rooms and these side conversations, are these businessleaders trying to hammer out some deals. If you can maybe give us more context ifyou have any information. I don't have any information about newdeals. I mean, obviously at these things,there's lots of there's always a high.

Level announcement and signing of amemorandum of understanding on various different sectors.I think we'll probably see something similar today.I was just at the signing ceremony a few days ago for the president of theequatorial or Equatorial Guinea, where again, there was a number of thesememorandums of understanding it was signed on cooperation.And so I think we'll see a lot of those kind of high level things.I think if there is real deals and real money changing hands due to this summit,those dirty jobs aren't going to come out this week, but they will sort ofdribble out over the next weeks and.

Months as the companies involvedactually do their due diligence and finalize whatever deals they're talkingabout. But I think you can expect furtherinvestment into, for example, Saudi Aramco, which investment in China, butalso for their Chinese investment into the petrochemical processing sector inSaudi Arabia. I think those are the kind of thingsthat might be we might see some. James maker there are trying to economyeditor on the latest here from that this year's China Arab summit and we're justgetting a line here of the Chinese president that already China will behosting the 2026 version of that event.

Right.Well, the start story, short story on markets is everything is down at metals.So well, we'll see whether it's changes or not.Equity markets are down. Bonds are still feeling the pain affectsmarkets in the well. The contrast to the US dollar, SouthKorean one is down about three fourths of 1%.The Taiwan dollar, you go effectively down to less when you don't see whatmight be a big story moving forward is where we go with the Japanese currency.More on that story and a lot more on the way in the next hour of the China show.This is Bloomberg.

Welcome back to the China show.Here's a look at the CSI 300 just a half hour into the session.It looks like we're gaining a little bit more traction to the upside here.And take a look at that. You're seeing a little bit more of that,a rotation or at least reversal in the tech space as well.We were talking about entering into that technical correction.Looks like we might we might, Dave, avoid that today.Yeah, it's quite a reversal we're seeing, although there doesn't seem tobe any indication that we're entering a new sort of trading range to the upside,certainly having consolidating at these.

Levels here.So 3622 CSI with 3800 and the Hang Seng Tech index.So we're still a ways away in terms of the the highs that we had a couple ofweeks back. In fact, just to your point, right thesecond actually, we're on watch for action.Right. So we're still bucking the trend,though, today overall across the against the backdrop of weakness across theregion. Now, all that being said, perhaps yourbiggest market story today away from these Chinese markets is this melt upstill we're seeing across the bond.

Yields, Right?So there we go on your screens are meeting all your tents effectively herewith the exception of China, which is, of course, a uncorrelated asset, as theysay, of course, in this group. So we're now trading at 110 right now isvery much in focus. And the Japanese ten year yield, that'sa new 2011 high on that. The Kiwi dollar, we should be getting tobudget. There we go.Bottom of your screens and also the ten year yield in Australia.We're coming off a CPI print which was on the hotter side of things yesterday,not to mention this, just this move away.

From duration yesterday, the last twodays or so, two days of bear flattening on the yield curve, bear steepeningrather on the yield curve and oh, sorry, bearflattening. Okay.I'm just getting my my, my my terminology is mixed up and also goinginto the CPI report. Right.So where are we on this conversation around the Fed cutting rateseffectively? I'll put it very bluntly, the commentarycoming through this week and I'll bring your attention to the the the commentscoming out of Neel Kashkari yesterday.

That he said informally, Fed officials,most of them, if not all, have not taken a rate hike off the table as far astheir if the data merits that, they will respond either way, the data starts tocome in, then they will, of course, bring those cuts back on.Yeah, you heard from just now David Lew was saying no, maybe it's time to be abit of patient about this whole situation.Maybe we shouldn't jump the gun on that. Maybe, you know, we could still see ratehikes. But certainly it seems like rate cutshave been delayed, if not derailed by that thing since there seems to be a lotof commentary that we've been hearing so.

Far.But today it seems like it's not really about an inflation concern, though.I mean, it's really what we saw on these bond auctions, these concerns aboutthese deficits that maybe could drive yields higher, you know, more so thanreally the inflation picture itself. But then we still have a package to dealwith on Friday. Yeah, And hopefully that does not add tothe list of woes in this market. And of course, when you look at dollaryen, which is the top row on the right side, one 5745, which effectively takesthat exchange rate back to levels where we did have suspected intervention, It'sstill suspected, right?.

Yes.I think tomorrow is it the last day to find out if the Ministry of Finance isgoing to? But does it even matter at this point?Because you basically have your rates. Okay.That came from the apparent intervention a few weeks ago.Yeah, we're back there. I was joking yesterday with Mary Nicola.So you had this rate differential in Japan.Yeah. And then they're doing this at themargin, right? Yeah.Like taking three bottles of tequila and.

Then taking half an Advil and thinkingthings are going to be okay. Yeah, right.Yeah. Like do more of an offset.Global equities have done exceptionally well though this year going into thisweek and consolidation. Joining us here on set, Thomas Rup, Asiachief investment officer at VP. Good morning and thanks for coming inand thanks for staying and listening to our banter just there.Why have global equities done very well and held up despite all, all the badnews that Yvonne and I just laid out there?Well, it's mainly two parts, I would.

Say.First one, clearly, while earnings hold up very well, that's also and the secondone clearly was on the US side with growth coming in better than expected.So basically six months ago we were still talking about the recession.That has also changed that. We have also better growth.At the same time, we also see it on a global level, manufacturing coming up,coming better, which has also supported the equity story there, which is whywe've seen a very strong performance, especially in the US over the last fewmonths. Are you concerned at all by this rise upin yields in the bond markets now?.

Is that going to impact equities in anyway? Well, we're starting to see yieldsalways impact the equity markets. But I think what's important for us,especially over the last few days, people, it's all about interest rates.Also what they are. We take one step back.So basically for us, the disinflation trend is still our base case.So we expect rates to cut by end of this year.And we should also not forget that we have now one week of slightly betternews on the Microsoft, but we had four weeks more negative news at that.So IBM.

Looking forward for next week's jobmarket. If we still see further weakness in theyear for inflation to slightly come down towards the end of the year.Are you are you expecting this US equity market to just keep going until we,we're told otherwise effectively weaken the equity landscape currently underwayto us equity based valuation point of view?We see it at elevated levels, we see better opportunities out there.That's also one reason why we have an overweight in emerging markets.At the same time, we have also reduced our underweight in Europe to neutral aswe see also growth picking up and also.

Better valuations.That's why we have been manoeuvring with internal equity lending.Rate cuts are coming in next week. I mean the ECB is effectively expectedto cut rates. How much does that go into that decisionto raise your from underweight? Well, that was one of the consideration.But the more important one was really the surprise on the GDP growth where wehave seen even the segment of Europe, Germany growing at the 0.2%.At the same time, we have to see seen the same with France.The cell phone states still holding up much better.So you really have Spain and Portugal.

Leading the race with a 0.7% GDP growth.So also data with the summer months, we expect that to also continue especiallyas a they of will also benefit from tourism during the summer months.Okay. You mentioned em you're looking a littlebit more positively. Is China fitting in to that as well,just given the rally we've seen so far? China fits into that.So that's also where we have increased our overweight within in emergingmarkets in middle of March. And we have just reiterated also that wewe still believe the recovery has legs and that's also where we seemore potential there.

But of course, it's never a straightline. That's also where we we we also expect aconsolidation and that's also where. But the underlying picture has clearlychanged if supportive measures coming in from the the policy side and especiallythe willingness to do something, I think that's really what has really changed.And the recovery is is ongoing. Hmm.What exposure do you have in China right now?Specifically, what we've seen is a no way to in China itself, exposure wiseitself, it's a technical overweight. So also what is important to the longterm structural story that still needs.

To be solved with if demographics beforethat. But short term, over the next two monthsyou're still positive the China I think the debate is and largely still Chinastill a tactical trade more than more than anything else.Do you subscribe to that view or do you think we're slowly moving into a partwhere this goes beyond tactical at this point in time?The China is in fact back, but for us at the moment, we we still we still for us,it's still a technical trade for now. So that's also where we still need tosee more measures, especially on the consumer side, especially the consumerreally getting into into it and the.

Properties.That's also what needs time, right? That's what we've seen also in Spain inoh eight in the US. That takes years to solve.So at least we believe we have seen right now the bottom coming in.Also if the policy measures coming in and also more expectedduring the July plenum. Okay, what where else are you lookingaround in terms of the the the equity space that I mean, we mentioned a littlebit of Europe. I mean, obviously in this part of theworld, Japan is still something that continues to be maybe a longer trendstory versus tactical.

I mean, how are you looking at Japantuna for Japan? We're currently in a neutral weight.So for us, it has a space in yesterday location for sure.Long term story, we still believe it is going to play out and especially the atthe process coming out from the deflation into inflation.That's also where we see it. It takes time.That's also why Abenomics took more than ten years to get there.That's also where what we see the corporates, the corporates getting moreprofitable. At the same time, you've seen the wagegrowth.

That's also where we are a bit moreoptimistic despite for sure. We have seen now also some news that theconsumer is still not fully buying into the story, but we believe that the justtakes more time and it still has its place in that location.And what about income, for example, or fixed income, to be more exact?And how are you looking at fixed income stacked against cash, given that theyield curve is still pretty much inverted?Like what value do you think there is in fixed income rates?There is value on fixed on fixed incomes.So for us, we are currently overweight.

Fixed income over equities.Oh, we we still see kind of the yields for sure.We have now the story with yields coming higher again, but we'll still believethat it's kind of more or less kept to the top.It is really. High level, high level of resistance toreally increase rates. And we also expect that it's a goodopportunity to get into fixed income, but it's still high quality whichcounts. And with high yield, it's more theshort, short duration tenure, 2 to 3 year tenure, which we look at.B But you still get compensated with an.

Inverse yield curve getting high yieldsat the same time, corporates still being at a bit better positioned with a bettergrowth across. Okay.Yeah. Thank you so much about their chiefinvestment officer Asia for Asia at VP Bank joining us here in the Hong Kongstudio. Still ahead, BHP walks away from his $49billion bid for Anglo, marking an end to a five week battle between two ofmining's biggest names. We have details coming up.And we'll just take you straight back here, of course, to the New Zealandwhere the government is presenting its.

First budget in a couple of lines comingthrough as well. And by the way, you're looking at, well,conversations that we had the finance minister in the room there fordelivering the budget speech there. A couple of things.You have tax cuts in focus, plus, of course, other things.I was just getting the more pertinent lines as we speak, the tax cuts in theorder of about 15 billion, that's Kiwi dollars over the course of the next fouryears. That's not point number one.It has been budget deficits, 13.4, 20, 24 to 2025.And you're also looking at an increased.

Bond program of about 12 billion Kiwialso over four years. In terms of the outlook for the economyand government revenue, weaker economy means less tax revenues.Kiwi assets right out of your screens. Plenty more ahead.This is the China sea island is experiencing some. Welcome back.You're watching the China show. This is a live look at, of course,what's actually this week. It's become fairly cooler.And on the mercury side of things, of course, it's come down ever so slightly.It's become a lot more windy.

Andmaybe the the clouds on the horizon are what's signaling something might be uponus right now. 3/10 of 1%.18 five right now the Hang Seng index dollar China slightly to the downside.So some strength coming through. Although when you take a look at this,what over that 72 hour period, it's really been quite a big move up in justdollar against not just the renminbi, but also against IMF here.We're also watching very closely what's been going on in the courtrooms there.Of course, the Hong Kong 47, the so-called group that was named for thenumber of defendants that was charged.

Under Beijing's national security lawabout 20, 20 few years ago, two years ago.We are expected to hear a verdict from that about their faith.But of course, a lot of these are prominent lawmakers that we've heardfrom them talk to before. They've been jailed for about two yearsnow or more. So we might be learning their fatetoday. Yes, that's happening.We will be breaking that to you, of course, once we do get information onthat verdict out of the courtroom. In the meantime, though, we keepspeaking of Hong Kong, and this really.

Pivots more back to the economy link tolink asset management link. You might know even better than theasset management. Of course, the company behind the rateactually sees challenges ahead for the real estate for its real estateportfolio as a recovery in Hong Kong. And China remains slow.Not a firm of course as we mentioned runs Hong Kong listed link rates whichjust reported an 11% annual jump in revenues.Although when you look at net property income, that coming in slightly softerthan expectations. The executive director and CEO, GeorgeHong Choi, joined us on shows earlier.

And spoke to us exclusively.There's a lot of macro headwinds, obviously.Retail market recovery has been slower in Hong Kong and China, but we have beenvery lucky to have the assets in Australia and Singapore.Both of those group of assets have done very well.We have also manage our capital and hedging and balance sheets well enoughto protect ourselves against an interest rate increase.The link rates, Hong Kong retail occupancy was actually quiteinteresting, a record high of 98% in March.Do you see kind of retail headwinds.

Coming from Shenzhen competition andwhat are the strategies to try and maintain this share?The sunshine leakage has been headlined in the media and also a lot of theanalysts coverage. We think that it is manageable for us,mostly because we have community shopping centers,really people coming for daily necessity.So the portfolio itself has been quite resilient.I think the big picture for Hong Kong, apart from people going to China, whatwe've lacking is that the government have not reversed the change in thepolicy to allow people in Shenzhen, for.

Example, to come on a multiple visitvisa. And until that policy comes back toreverse to where we were before 2018, where we had a peak in retail andtourist spending, that that will take a while for our recovery to come.Can you give us your views on, I guess, what you've seen in terms of this gonorth trend? Right.We're seeing people heading more towards Guangdong Province and spending theirmoney there. Has that had a big impact in terms ofHong Kong businesses and retail? Yeah, it is part of Hong Kong becomingpart of Greater Bay Area.

It is a desire for the government andthe region to integrate more and for people to to travel, to become moreprosperous. And I it has been a little bit more oneway for us going up and this sort of people coming down.So I think that's something that we need to encourage the government to change.But otherwise, I mean, this is a long term development that that willcontinue. Now, as a owner of shopping centers, weneed to make sure that they continue to footfall.The shopping centre need to be interesting with the right tenant mixwith that and shoppers will continue to.

Come.And I think that's a strategy that we have continue over the last many yearsand would continue to protect us with a very high occupancy with a lot oftenants demand. Have you done anything to repositionyourself in that regard? Because I know you've also recentlybought Ivanka's Mall in Shanghai. Would you be looking to take advantageof more opportunities like that, particularly as a number of developersengage in necessary fire sales? The portfolio remix has continue andwe'll continue to look at ways to recycle capital and also to look atinteresting assets to acquire.

What I mean by interested in that, Sothey have to come at the right price. Obviously we are demanding higher returngiven funding costs have gone up and you know, to the extent that something likea cheap owl and a Porsche will come along,we will be very quick to react because we are sitting on a very strong balancesheet relative to a lot of our competitors.We have a team to really be able to deploy and integrate the assets into ourportfolio very quickly. So we stand ready to look at differentopportunities and we are and not just in China but across the region as well.George Hong Choi there, Link Asset.

Management CEO speaking with us earlieron DAYBREAK. Asia.We just have some breaking lines crossing.We're just talking about that national security trial.We are learning from our colleagues that are at the courtroom right now that thecourt has found 14 opposition figures guilty in the city's largest yetnational security trial. We don't know who they are at thispoint. Of course, we were talking about therewas a total of the so-called Hong Kong 47 were including prominent activistslike Joshua Wong, former lawmaker.

Claudia Mo, who were accused ofconspiring to subvert state power by holding unofficial primary elections.We might be just waiting for more news on what this means for the rest of the47 here right now, But certainly this goes to show it is another step where weare in this whole national security legislation, Dave.And I think sentencing is going to be quite telling as well.Yeah. On top of the actual verdict itself,might even tell us more, just given the broader context, ofcourse, of these conversations. So yeah, this is a breaking news out ofHong Kong this hour.

We'll get more details on the story in amoment. We'll take a break.On the other side of that, we'll be back with the full story.But. In your head, then disappointment. Okay.Just to get you up to speed here, some stories we're tracking at this point.A Chinese court has dismissed a case filed by a local consumer against Appleover commission fees for purchases by its app store.So this in this unpublished verdict seen by Bloomberg, the Shanghai IntellectualProperty Court ruled that Apple had not.

Abused its status despite dominating themarketplace. Now Apple is defending its app storefees on multiple fronts, including in the U.S.and also in Europe. China's state backed Silk Road Fund isselling its stake in Italian tire maker Pirelli and is valued at around 553.That's million of U.S. dollars.Now, Silk Road will sell its 9% holding with price guidance at an 8% discount tothe company or the stock's last close. Now, Rome has certainly moved to limitthe fund's influence over an auto maker, citing national security concerns.Now, metal platforms has removed.

Hundreds of Facebook accounts allegedlyassociated with the converts influence campaigns from countries including Chinaand Israel. Its quarterly threats here.Reports noted that some air tools to generate disinformation no matter.Also says it found a network from China sharing air generated images offictitious policy movements, which is a sensitive issue, of course, for forIndia. Now, China is sending a new pair ofpandas to Washington's National Zoo, now reversing course after having taken backall the animals on loan to the US and a zoo.It says the pandas will stay through the.

Course all the way through April of2034. In keeping with past agreements, the twobears and any offspring will remain Chinese property.A previous set of pandas left D.C. or Washington back in November after adisagreement. Or maybe they overstayed their visa.There we go. Okay, now let'sdo just an update here, of course. And you're looking at live picturesoutside the court. In fact, here in Hong Kong, where theverdict has not come through. So we're talking about the Hong Kong 47.So a total of 47 people.

Of course, we're looking at verdicts inthat 16 contested. The charges receive their verdictstoday. And we understand from the 16, ofcourse, 14 had been found guilty, two have been acquitted.Yeah. Is what we're hearing here from thistrial right now, we've been talking about the number of people.I mean, there's crowds forming outside. More than 200 members of the public havewatched this trial at the court in western Kowloon.Some were lying overnight as well. We're hearing some diplomats, includingthose from the EU, France and the US,.

Were among some four representativesobserving this hearing as well. So what this is what we're hearing herethis morning. We'll get you an update coming up withour team that has been watching this trial very closely.In terms of markets here today, we're watching very closely when it comes tothe clean energy, the EV space as well. Obviously, there's been a lot of talkabout these solar stocks have been very much in focus, but really some of theseemission targets in the light that we heard from China.So watching very closely, China also gradually removing some of these any ofpurchase restrictions.

You're seeing the likes of BYD up some1% here right now. And we're watching Aussie agriculturestocks as well on the back of news that China will be lifting imports on beeffrom Australia. So in many ways, the beef between thetwo on this specific issue has certainly come down a little bit.And we're looking at some of these names as well on your screens.These are not the Aussie agriculture stocks.Can you flip the boards, please, if we can.There we go. Thank you so much.There we go.

We're up 3% on some.And sort of the broader read, of course, is the opposite side of things.Right? We're headed into the Tokyo lunch break,a market update with an update on this verdict here in Hong Kong ahead.This is the China show. More on this breaking news story now.A Hong Kong court has found 14 opposition figures guilty in the city'slargest yet national security trial that targeted scores of pro-democracyactivists. Got to Alan Wan or China economy andgovernment. Ed joining us now with more on this.Allan, I mean, just bring us up to.

Speed.Oh, we're hearing so far. Yeah.So the court has stopped a majority of those defendants guilty today forsubversion related crimes. They were involved in holding anunofficial primary election, looking to win a majority in Hong Kong'slegislature. And that was seen as an act to challengethe state's power. Okay, so what are we watching on fornext? So we understand just the backdrop.So 4716 decided today, 14 are guilty, two acquitted.What's next?.

Yeah, The next interesting thing is thisafternoon, the judges will explain the reasoning for why they found themguilty. And the two people who are found notguilty were the first acquittals since Beijing imposed the NSL on Hong Kongcouple of years ago. Be very keen to see why that is the casein a couple of days. In the coming weeks, probably.They'll also sentence the defendants and we'll wait to find out how heavy thepenalties will be. Yeah, you mentioned about this is thefirst time we're seeing acquittals. How significant is that?Does that tell us a bit more about how.

Severe and how willing the government isin cracking down on national security? We have to wait to see what the judge'sreasoning is, to be honest. They are the first acquittals becauseuntil now, the national security law has had a 100% conviction rate.Yeah. Okay.And I guess context there is because 60 to 69 actually contested the charges.Another 16, of course, to actually got what that what they want.Well one what they wanted. Yeah you mentioned so the 31 then havethey pleaded guilty. Yeah.31 of them are charged have pleaded.

Guilty.They include some prominent activists like Joshua Wong or former lawmakerClaudia Mo. Usually pleading guilty gets you alighter sentence while we will be looking for the sentencing inparticular, how important is that? Those crimes carry a maximum penalty oflife in prison. So it would be.Well, it's it obviously it would be watching out for how heavy the judgeswill lay down those sentences. Alan, thank you so much.Alan Wong there, getting up to speed here.This courtroom, by the way, is quite.

Near where we are here in the centralstudios in Hong Kong. Our China economy and government editorthere writes very quickly here across these markets, we're looking at declineshere, 8/10 of 1% on the regional benchmark here, 4/10 of 1%.And S&P futures, just about every single sector is down today.This melt up in bond yields, the strength we're seeing in the US dollarcoming back as well. Asia, extra pence, 7/10 of 1%.The Chinese benchmark so have been bobbing all over the place.We opened actually lower, reversed higher.And then I believe right now we're just.

Really just underwater as well acrosssome of these benchmarks. Yeah, it's a good it's a good day to seewhat a get a pulse check of where people are investing here.Right now. Everything seems to be a sea of red.Let's get to in Dallas. This is a digital wealth platform.They published its first private wealth Insights report into high net worthindividuals in Hong Kong, also in Singapore.And this is what they found. 62% of respondents in Hong Kong arelooking to increase their allocations to private market strategies and hedgefunds.

So sticking out of public markets fornow, while 40% across both markets are willing to take some risks to theircapital. Let's get more now from Stephanie Rand,managing director and head of Hong Kong at in Dallas.She joins us now. So key takeaways from all this?Well, it's very interesting to see some of the differences and the nuancesbetween the two regions, both Singapore and Hong Kong, obviously key wealth hubsof the region. So as we said, overall, we've seeninvestors, high net worth investors across both regions interested toincrease their exposure to alternatives,.

Particularly private markets and hedgefunds. But when we drill down into kind of thereasons why they're interested, it is quite interesting that there are somenuances for Hong Kong investors. They actually have a stronger preferenceto increase allocation. They mentioned a primary reason is toincrease diversification and sort of reduce risks in their portfolios.And I think that's kind of understandable because of what we'veseen in the Hong Kong and China markets in the past couple of years.It's obviously underperformed global markets and we all have home bias in ourportfolios.

Right.So Hong Kong investors are looking to kind of how can I diversify myportfolios more with private markets and hedge funds?Their correlation to public markets are kind of lower for Singapore investors.Quite interesting. Their primary reason of increasing thatallocation is actually looking to increase returns.And also they stated they want to make sure their portfolios can make sure thatit compensate for the high inflation they've seen in Singapore.So we've seen both markets are interested to increase the allocation,but.

There is a slight nuance in terms of thereason. Yeah, the drivers to the same locationhere. Do we do we have an idea to what extentthey want to increase those allocations to in into let's call it alternatives.So as a wealth advisor and we focus on sort of the affluent segment as opposedto early high net worth segment, what we want to proliferate.So our name is Call in Dallas. It's kind of an endowment investing forfor individuals. So we're not asking investors to put allyour money into private markets or hedge funds or we're saying according to yourinvestment objectives or risk tolerance,.

Have some allocation to to sort of helpyou achieve your investment goals. Whether we talked about diversificationor it's increasing your returns. So if your risk tolerance slightlylower, you can look at 10%, 20%, if it's higher, 30% or we've seen endowmentfunds go up to 40%, 50%. So it really depends on the person'spreference. And I think particularly foralternatives, we always warn our clients, yes, you can harness a liquidpremium, but there are additional risks such as liquidity as well as a longerlockup periods potentially. Yeah.So it's really important.

Jamie Dimon had an interesting noteabout private credit, about if things turn sour, If things turn sour, that's aproblem. We never seen it in bad markets before.Is that something that you're looking at as well?I mean, how how closely are high net worth individuals looking at privatecredit? So so interestingly, with with all thatinterest in private credit, we've seen in the survey as well, private creditstood out to be sort of the most interesting asset class for ourinvestors as well. But we're also agree that there is kindof a lot of interest in the market.

And when we recommend managers orproducts to our clients, we make sure we do due diligence on the managers thatthey really have a track record. So we we have seen managers that havegone through the GFC. They've tracked records of 28, 30 years,newer managers who kind of jump on the bandwagon and just just starting newfunds. Because of this new hype, we're a bitmore worried. So we, we as an advisor, we help clientskeep and make sure that they don't have to worry about some of these theseconcerns that they have. Right.That's the manager have that experience.

To weather through the cycles, etc..Yeah, the counterparty risk really, if you think about it, what is the I thismight be a stupid question. What is the ideal time horizon to getinto private markets for for high net? This is it for you because you mentionedthe liquidity, right. So how much how much time do I need notto see my money? So Exactly.Definitely. If it's rainy day money, No, that's notthe right pocket of money. 3 to 5 years, you can potentially lookat some more liquid kind of alternatives.And obviously, I think for when we.

Recommend to clients, we always thinkabout the most long term bucket of your money.But obviously we understand for individuals circumstances couldpotentially change. So I think one very interestingdevelopment in the alternative space is the development of evergreen structures,what we call semi liquids as well. So obviously the underlying is still inliquid assets, but managers have a set of structures that if individuals needthat liquidity, they have that window, whether it's quarterly, whether it'ssemiannual, so that in case they need that liquidity, they can still get that.But obviously, as I mentioned, if this.

Is really a short term bucket, wewouldn't recommend our clients to over allocate or chose.But if you're looking at harnessing sort of long term retirement bucket, it issomething that you could potentially consider because that's why all the longterm big institutional investors, the pension funds allocate to this segment,it's because you harness the long term compounding returns of this asset classand where within the alternative space are you find the best returns.How does it compare to stocks, bonds, cash right now?So for us and I think it shows in the in the in the report, I think the biggestbenefits for individual investors, it's.

Not necessarily all looking at highrisk, high reward, but is the diversification effect.So we've seen sort of most interest for clients looking at the lower end of thespectrum of the of the alternative products such as the Multi-strategyhedge funds, the likes of the Millennium Point72 Valley, actually.So these hedge funds, they are targeting kind of very reasonable 10% per annum,but they're very focused on downside protection.So again, going back to what I mentioned, a lot of Asian investors haveseen kind of volatilities in China, Hong Kong markets recently.They're very concerned, how can I.

Protect the downside?And these kind of alternative products, especially some subsegment, can helpthem provide that diversification. Right.We talked about private credit, obviously harnessing the high interestrates. So we've seen a lot of interest in thatkind of. Diversifier not necessarily the higherrisk that the faces. Those because again those you reallyneed long term horizons and we want to educate our clients more.But we've seen sort of the primary sort of objectives not necessarily oh, juiceup your returns by buy it by ten, ten.

Times, but more, more and more to makeyour portfolios more resilient. And do you suspect and this certainlythrows a story for do you suspect they will still feel the same if and when?And we're seeing the rally already starting here in China.And when rates come down to do you suspect this trend to continue?This trend will remain calcified around private markets.So if you asked me last year and if the rally began last year, maybe my answerwould be different. I think, interestingly, the downturn hasbeen so prolonged that I think this mindset of diversification and sort ofrisk reduction has sort of finally.

Engaged into some investors mind.I say we always, as individual investors particularly have the memory of like agoldfish. So a lot of times, yes, we're seeingmore interest back into Hong Kong, China market given the rebound.But I think because they've been, quote unquote, hurt so many times in the pasttwo or three years, that I think for a lot of investors, particularly thoselooking at preserving wealth preservation, not necessarily, oh, Ineed to look for my next 10 million, 20 million.They are really focused on risk management as well as diversification.And we've also seen sort of in the past.

Two or three years, a lot of black swanevents, large public banks could go bust.Geopolitical risk. So I think four four, it feels quitedifferent. If you asked me previously, I would say,yeah, maybe people might pull back into high risk again.But I think this downturn is long enough to kind of ingrain this into someinvestors mind. All right, Stephanie, great stuff.Thanks so much for bringing that report to us.Stephanie Yuan, managing director and head of Hong Kong at in Dallas.And of course, if you are a Bloomberg.

Subscriber, you can catch up with all ofour interviews by using our interactive function TV.Go can join the conversations and instant messages questions to our teamand guests throughout our live shows as well.Check it out at TV. Go.This is Bloomberg. Right this big deal.No more. The BHP group walking away from itsbattle to acquire Anglo American in what would have been the biggest mining dealin over a decade here In a decade, roughly speaking there.Let's get the details on this story.

MARTIN Richard joins us right now.MARTIN, why did they walk away? Five weeks since the news broke thatthey were going to try and create this biggest mining deal in over a decade.BHP CEO Mike Henry did finally have to to walk away.The reason is pretty simple. There was there was just no appetite onthe Anglo side to engage with BHP. BHP management made an initial informaloffer, raised their bid, raised it again yesterday before the final deadline inthe UK for them to make a formal bid. They set out a whole document outliningwhat remedies they have for some of Anglo's concerns.It still wasn't enough for Anglo to even.

Engage in any concrete way, so BHP said,okay, we're not going to go ahead with this.So where does this leave both these companies now?MARTIN Obviously, BHP, Mike Henry, he still wants to look for those copperassets. Where else can he find it?Yeah. So as we've said all along, the mainmotivation for this was to get Anglo's copper mines mostly in South America,very high quality assets. BHP CEO Mike Henry has long said thecompany wants to focus on expanding its copper business.This would have been a huge transaction.

Towards doing that.You it has to look at other options that aren't that many options in terms ofexpanding in copper. It could potentially consider comingback to another effort to buy Anglo later on.It has to wait another six months or it could wait until Anglo has gone aheadwith its big restructuring of its own, come back again.But then the problem with that is it might face competition.Once Anglo has slimmed down. You could see companies like Glencore,like Rio Tinto, others come in and compete with BHPfor that those assets.

All right.We'll see how things go in six months. Martin Ritchie, thank you.Our commodities reporter joining us out of Shanghai there.Another story we're focusing on, oil markets as well.Now, when it comes to what Bloomberg has been learning, Saudi Arabia is preparingto formally launch a secondary offering of shares in oil giant Saudi Aramco assoon as Sunday. Now, sources say the share sale couldraise over $10 billion. That's our Asia oil trading reporter,Elizabeth Lo. She's on the line with us right now.Elizabeth, baby, tell us what's the.

Likely implications for the market.Yes. So this latest development is comingalmost five years after Saudi Arabia raised around $30 billion for Aramco'sIPO, which was the world's biggest IPO, and it looked like they'd had a round offunding. So these proceeds from the share sale, Iexpect it to go into an initiative that will help the take the Saudi SaudiArabian economy away from crude oil into other investments such as artificialintelligence, sports, tourism and projects such as the massive $1.5trillion neom. I think it's also coming at a timearamco's share price has been under some.

Pressure from opec+ oil production curbsbut still endless are placing Aramco stock at a premium to otherinternational energy funds. So it's definitely a developmenteverybody is watching. Speaking of development here, Marathonoil is being bought out. Tell us by who.Tell us by how much and what that means for the wider sector here, Liz.Yeah, so pretty another pretty big deal. We've seen ConocoPhillips acquiringMarathon Oil in a $17 billion deal. So this deal will expand ConocoPhillipsfootprint, footprint in domestic shield fields from Texas all the way to NorthDakota and give it those as far as.

Equatorial Guinea.So it's combined this marathon marathon, it will have around 2000 locations whereit can go back into order, shale wells and then again with new techniques thatwill help it to attack more hydrocarbons.So it does look like a trend that's been happening that we've seen other similardeals by oil producers in a bid to gain more drilling sites.It does look like more companies are betting that oil and gas demand is goingto be robust for longer than previously expected.Liz, thank you so much. Elizabeth hello.There are asia oil trading reporter on.

Just the latest here.So this massive share sale that's about to come in, of course, this deal, $17billion there, right. Oil prices flat.Looking at my screens right now, plenty more ahead.This is this is Bloomberg. Well, here is your try to brief thismorning a look at what's making headlines at national newspapers thismorning. And Shanghai Securities News isreporting that authorities are looking to gradually lift purchase restrictionson new energy vehicles across regions. Now, that's according to their latestcarbon reduction plan, which focuses on.

Areas such as energy industry andtransportation. There's another article out there thatsays that China's housing market is heating up.So as authorities rolled out a broad rescue package for the sector two weeksago. The report says over 70 cities haveintroduced similar policies, including Gwangju and Nanjing and Shanghai.But the piece also sees some challenges on the horizon, including the financialburdens for some of these sources as they look to large scale acquisitions.Now, China's English language media are highlighting the State Council's report.A lot of details in this one, but.

Effectively criticizing the US and theirhuman rights record there. Another report cites things like allegedracism, gun violence, political polarization as human rights violationsthere in America. And China has long pushed for its owndefinition of human rights and has been, of course, growing its influence in thehuman UN Human Rights Council. For more context on this report, whichby the way, comes out annually here, Stephen Engle, our chief North Asiacorrespondent is here with us. What is China trying to achieve?What's the what's what's the answer to the big picture question?Yeah, look, I mean, it's easy for me to.

Come out here and maybe say, you know,that's the pot calling the kettle black. But I look at these very separatelyright there. China can level these allegationsagainst the United States, whether it's society or the police brutality or theborder crisis or the drug problems. They can do that.And the United States has leveled many allegations against China.Okay. I think the merits of such argumentsstand on their own. So we can't say, well, China does this.How can they be doing a double standard by saying this?So let me just put that disclaimer out.

There.The fact is and I've read through the extract of this, basically it was 35 or30 pages of of allegations about the United States saying while a rulingminority in the United States holds political, economic and socialdominance, the majority of the ordinary people in the U.S.are increasingly marginalized with their basic rights and freedoms beingdisregarded. Well, okay, that might be true, but putsome attribution to this as well. I call on the State Council to do that.The U.S. is what it is, warts and all.It's an open book.

A democracy is an open book.And social media and media is an open book.It's not censored necessarily. There's polarization in the US media,obviously, and, you know, people, human nature to take numbers that fit theirnarrative. And that's what essentially Beijing isdoing. They're looking at the the the societalills in the United States and using it for their own propaganda.That's just basic. He's acknowledged that's what they'reobviously doing now in the U.S. This report says human rights isessentially a privilege enjoyed by only.

A few.But again, what's a few? Where's the attribution?That's my only criticism of this report, because, again, there is another thelast sentence that I will highlight. Nearly three quarters of ChineseAmericans had experienced racial discrimination in the past year.55% fear that hate crimes or harassment would jeopardize their personal safety.That means 5.4 million Chinese Americans in America.That means 4 million. Again, they're not attributing any ofthis data to any survey or anything. So you have to take these kind of thingsa little bit with a grain of salt, but.

Also understand there are problems inthe United States for sure. Now we go, Steve.Thank you so much, Stephen Engle there, chief north asia correspondent.You're just back to Marquette. So a couple of things here.So the Chinese chip stocks are rallying and might be on the back of this sort ofdevelopment yesterday where you have Samsung, of course, and the the thelabor there, of course, and union. Well, the union is planning that firststrike, of course. Just keep that in mind, broadlyspeaking, though. So you're looking at yields as wellhere.

This melt up continues across theregion. We did get the details on the budgetthis hour out of New Zealand. So the one lead continues and goes intothe rest of the region where you are seeing effectively most of these assetsare in the red. The risk assets, to be more specific,are in the red today. Yeah.And it's interesting, right? We're just on the eve of that Fedinflation gauge. Right.So, you know, does this actually continue or, you know, if we see asofter print, is that going to relieve.

Some of the pain that we're seeingacross the sovereign bond markets here? But yeah, you're seeing the pain acrossmultiple asset classes here today, whether it's stocks.To take a look at how Japan's doing, we're down one and a half percent.And even when it comes to commodities, with iron ore in Singapore down some 2%,that's it for us here at the China show.

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