Let's get to our guests now. Vicki is portfolio manager of Asian Equities at Rebecca, joining us from Hong Kong. Before we get to your views on broader Asia, I just wanted to get your macro viewpoint to Vicky, because we have this weak US economic data that's pulled the dollar a little lower bond where is giving a bit of a reason to pause, But we've still got the market very much pricing in higher long term rates. How hawkish do you expect the FED to be at Jackson Hall?
Good morning, Very glad to be here. I'm not an expert on the US rates, but if I take a slightly longer term view, I actually do think that inflation should not be overlooked, given the fact that wages are probably still going to grow, and given that we're in energy transition globally, I do believe that there's probably a longer term that we have to go in terms of work interest rates will be and that would be very different compared to what we're used you know, what we're
used to over the past ten years. So I do think that from a little bit longer term perspective, we should be um preparing for maybe a longer term normalization of prices and interest rates, all right, but their movement in rates and in the dollar very much plays into what we see across Asia as well. If we see an extension of dollar strength in the weeks ahead, what kind of outlook does that or how does that kind
of change your outlook for Asian equities? Right So, in the past, obviously there has been certain vulnerabilities within the Asian economies when it comes to dollar fluctuations. But if we look at right now, what's happening is actually that several markets in Asia is becoming structurally better positioned against
developed economies. Actually, so we're talking about, for example, in Nesia in Southeast Asia is um now running a current count surplus, very different picture compared to let's say around the DFC time or even the Asian Financial crisis times. So I think some structural elements are really at play for several key Asian markets, and I think we should not lose sight of that um from even the short
term dollar fluctuations. And what markets are you looking at is potentially being I guess isolated or buffered from a potential global recession. Asia definitely have several of those markets in India is a big one, and the Philippines actually in a way is also largely isolated. So a lot of these countries actually they have their very strong domestic story. They have the economies are less um um integrated into
the global economy. So when there's a global recession, these markets very likely will do better when we look at the reopening trade too. It's very interesting you say the likes of the Philippines is one that could be isolated from global recession. We've seen a massive pickup in Southeast Asia tourism as well, helping the likes of the bar the tie economy. These markets that you also see some
optimism for UM on a relative basis. I prefer Indonesia and the Philippines of or India and Thailand, and that is largely due to fundamental reasons where I find my stock ideas, but also largely due to um the valuation
of different countries and stocks that are trading there. We spake to one of your colleagues earlier in the week talking about the LPR cuts, the MLF cuts and how much further we can really see stimulation in the Chinese economy if we are not kind of seeing this COVID zero policy completely being wiped out and giving this chance for the economy to recover. How do you kind of
view investing in Chinese equities when there's still so many headwinds? Right, the Chinese equity market has been extremely volatile, and it's very driven by the policy change day to day, and I think it's really helpful to keep a slightly longer term reveal here where the policy is going. And I think we're unlikely to get one very clear signal from one day to another that we're accessing. I think is more likely that it will go slowly and steadily out
of this zero COVID policy into a normalization. So from that perspective, I think people very focused. Being very focused short term and not taking a long term picture means that people don't see we still have one of the largest reopening stories coming up in Asia globally as well, so knowing what happened after reopening has happened globally coming back to this market, I think that's the most exciting part of Chinese aquities. If you take let's say one of you and when do we see a bottoming of
the property market. I mean, we saw earlier this week as well China, as I mentioned, cutting those borrowing costs but also planning these special developer loans worth as much as twenty nine point three billion dollars. If you look at market action this week, it didn't really move the
needle that much. But when do we see I guess an upturn coming through in this battered property market, right, So I think when it comes to property policy, I think one thing is very clear that the the central government obviously takes the view of warehousing market should be within the whole economy. So from that perspective, I do not expect an outright UH stimulus. But then I also do see that they expect um to support this market
to prevent prices from keep stropping. So from that perspective, I do believe that we will see and the bottoming of the property market gradually. But having said that, I am still concerned about all these debts that's been linked
to property developers that's that's already out of operations. So a lot of these debts needs take needs to take time to be digested by the market over time, but the survivors will actually probably face a much better future also given where the share prices are um, there are very very cheap stocks out there, So from that perspective, I think there is opportunity within this sector. And let's
talk about Hong Kong. I mean, yesterday we had that report that quarantine could be eased for a business summer in November. Didn't either move stocks either, and and one of our analysts put it that, you know, traders don't really want to buy into the reopening rally into Hong Kong until they're confident that quarantine is completely going away. What's your view on on investing in Hong Kong at the moment. I do think that it's very hard to say short term whether there is policy and certainty in
terms of opening up. But I think again the trend is very clear, So from that perspective for Hong Kong, it is also a matter of time before the society fully reopens. I guess it's hard to living here. Is hard to imagine that it happens immediately, but I think steadily and slowly it is coming out of this um of of this this this situation and back to normalization and kase. Just a final quick question on sustainability of
saying this is an exciting long term trend. Absolutely, we are very excited about investing in sustainable sustainability leaders and
enablers in Asia. We believe that most of the global funds that are focused on sustainability actually overlook our region as a very important part of sustainable development globally, so we've we look for companies that are benefiting from energy transition and lifestyle change in the region, and a lot of these docks are, like I mentioned, ignored by the market and are actually offering great long term value for
investors and alpha. Vicky, thanks for coming on. Vikichi puort Folio, a manager of Asian equities at Rebecca, joining us from Hong Kong here on Bloomberg Daybreak Asia