Let's get to our guest. Daniel Lamb is with us. Daniel is head of Equity Strategy, It's Standard chartered Wealth Management. He joins us from our studios in Hong Kong. Daniel, thanks for being with us. I think we have to begin with the pm I data for the month of November. Both sentiments from the government in China, uh show us further in contraction. This really shouldn't come as a surprise, right, We've seen very stringent COVID restrictions and curtailed domestic demand.
Where do we go from here? Do you think? Oh, it shouldn't be a surprise at all because of the COVID situation in China. Um, But investors they have been looking ahead. I mean in November, for example, the Hansling index was up, you know, nearly four thousand points from the bottom of October. So investors are still expressing the view that further reopening it's going to continue in China, It's going to happen. But in the Niata there's going
to be a lot of volativity, isn't there. What's your temptation to look for wagons or to sit on the sidelines. Oh no, I think UM investors should be looking for levels to enter because you know, the reopening direction is
quite clear for the next six to twelve months. UM. If you look at the latest pull back back on Monday morning, it went all the way down to about sixteen thousand, eight hundred and Handstand Index, which is you know, if you look at the range of the movement um that fourteen th six hundred to eighteen four andre that's exactly six full bnaturi tradesmen, and then it met with
very heavy volume buying. UM. If you notice that the Handstand Index has been going up on strong volume, but when they have days of pull back, the volume has been relatively small. That shows that investors are still net buying Hong Kong China equities and they're looking by the dip. So I would think that in the Hanks in the case of Hanks and Index, if it pulls back to say around the seventeen thousand level, it should be quite a strong by from there. Do we know that who
is buying? I mean, is it primarily institutions versus retail at this point? And is there durability in this trend? I mean, I'm thinking this could be kind of a you know, a bear market trap. Well, that the different ways of looking at this, but um, if you look at the policy direction, it's been on the positive side, right reopening and also the property backstop. Um. If you look at the US dollar has been weakening and that's
helping em and Chinese equities. So there is potentially more links going on for this, and I'm expecting that the index could go above nineteen thou by the year end. In terms of who is buying, I think is you know across the board, is institutions and also the retails also coming in. And is much of that demand coming from off shore or do you see it from coming from within China? Well, um both, I think yes, on
shore and off shore. When you look at some of the other economies in the Asia Pacific that rely on the growth story in China, I'm thinking of Taiwan, I'm thinking of South Korea in particular. Are you as positive on those markets? Well, I think that's um. The first you know direct benefit um from the potential you know further reopening, it is going to be the Chinese equities. UM, So that would be the market that will be focusing upon in Asia X Japan, Daniel, I want to get
your thoughts on the growth outlook for China. We've got the i m F warning that it might be trimming its forecast down to three point two percent this year four point four percent in the next. The risks are on the downside, causing to the I m F. What's your outlook and more support measures do you see coming from policy markers? I believe that the key is still the speed of the reopening UM. Once that reopening continues and hopefully may acceaglerate UM, then the growth can likely
pick up. I mean it's going to improve first of all, the ease of movement mobility and also improve the I guess some amend the supply chain disruption that it's been causing. Do you suspect that that consumer confidence or at least sentiment among the retail person in China is going to pivot that quickly after everything people have been through for the last three years, it's going to improve. UM. But I, like I said in the first part of the show, UM,
the markets the investors are looking beyond these UM. If they see for the measures of reopening, then I think the markets would take it quite favorably. I think the market is going to run ahead of the of the improvement in growth. We've also seence a number of support measures unveiled for the property sector. UM. That sector has a lot of problems. I'm not going to unpack them now. But do you think we've seen the worst of it? Though? And I feel like I asked that question every time? Well,
I believe that this time is for real. There's a very strong backstop that the government has put forward with the sixteen point Plan. UM. They're all designed to improve the timely delivery of the new flats and also allow the property developers to manage the finance and introduce new
strategic investors via yesterday's announcement of equity refinancing. So if you look at the how your bonds, they have rebounded very strongly, a lot of distress, name have doubled from the bottom over the past a few weeks, and similarly for the property stocks in China as well. UM. But having said that, UM, the government has made it very clear that properties are made for living and not for speculation. So basically you have a situation where the downside appears
to be much more limited than before. But what about the upside? The upside is probably going to be I guess limited as well for the for the longer term, right, because the earnings, you know, they can stabilize, but they're not going to improve drastically. I mean, like we said that, you know, growth is still relatively um slow by Chinese standard, and that would feed through to property demount. You seem pretty positive, and I'm wondering if there's anything that concerns
you right now. I mean you feel like maybe the markets and the economy are on the verge. Well, you said that the markets are out in front of the turn in the economy, but the worst seems to be behind. Is where China and is concerned. Well, that depends on the point of view, right, because the markets have been the biggest underperforming major market globally until October, So we're
really starting from a very low base. And the number of low hanging fruits in China, I believe it's much more than the rest of the world, like the US for example. Yes, um, you know, the inflation number has been coming off, but there's still fat rate heights ahead. But in terms of China, they have room to ease, so right to be speaking, they can outperform the US alright, Daniel Lamb on that night, we will have to leave it, but thank you so much for joining us on Bloomberg Daybreak.
Asia very optimistic, Daniel Lamb, their head of equity strategy at Standard Charted Wealth and Management,