And while your initial thoughts when you saw the news.
I think first of all, the overall Asia financial markets.
I would say is actually quite stable. A lot of the bank capital ratios are
actually quite healthy in Asia. We don't have the kind of issues that
some of the U.S.
regional banks or even kind of Credit Suisse is having at this juncture in
time. However, seeing how the kind of European
markets behave to us, 81 will probably have a kind of shadow effect in terms of
the Asian market. So we probably need to look through in
terms of what's happening as as the European and U.S.
market opens later today as well to see the real impact.
Is there that big contagion risk? So you think you know what areas of the
market that you cover is maybe more particularly vulnerable to that?
I think at this juncture, the sentiment is definitely a little bit weaker
compared to the past few weeks or the past few months.
Given the China reopening, that's probably a healthy kind of minute for
investors to kind of take stock in terms of what things are.
It will probably means that some of the kind of strong rebound that we've seen
probably will get a little bit pressured.
But overall, I think if we look at the fundamentals in the longer run, I think
Asia or even China slightly in kind of different business and economic cycle
and even monetary cycle compared to us. For example, China last week just did a
triple out cut and is release about 500 billion dollars into the market.
And at the same time, that kind of helps in quarter end liquidity.
It also put those funds out there with the new neatly chopped me chang that
they're going to be more pro-business, much more accommodative and supportive
when it comes to monetary policy, particularly to the private sectors as
well as the household sectors as well. You mentioned other triple our cut.
Should I expect a policy cut then? There is actually we do think that
there's that possibility forward NPR cut this particularly related to the
property sector in order to kind of stimulate long growth or the mortgage.
And to its the property sector, in a sense is a complete kind of policy
because end of last year it was more about the supply side is more about
stabilizing the overall property sectors, ensuring that properly get
completed. And and now it's more focusing in terms
of inducing demand coming from household in and kind of that's why the potential
policy rate cut could reignite some interest in terms of property purchases
as well. And we've also seen the first two months
in terms of property sales data have stabilized.
Some may see Tier 1 cities kind of picking up as well on the ground.
We do see more active traffic when it comes to those sales center for
properties. I think the other two indicators that
we've picked up that we think is quite interesting is that, one, some of the
tie tier bank cities that land bank prices have kind of come to the higher
end of the expectations. That's definitely a good sign that
developers are gradually coming into the market purchasing land.
And there's also some peel activity on the property sectors, online purchases
as well, which is also good sign. The other thing that we also picked up
is that a low, medium production and steel production actually have to pick
up a little bit as well in terms of single digit for as the year began,
which is also related to some of the construction materials.
So I think overall the kind of trajectory is more kind of moving up to
a recovery, much more evident compared to a one quarter go on property sector.
Your outlook is that on credit spreads, making that in making the triple our cut
in. Are they trying to massage rates lower?
And do we get lower rates do moving forward?
Yes, I think there's a I mean, there's definitely potential for PR cut and
somewhere down the road, I think depends on how the economy recovery is.
That could potentially be a little bit more flexibility when it comes to policy
rate cuts as well, which means that we do think that at this juncture in time,
China could potentially a lot more interesting compared to the last year as
well, because last year we have the U.S. rate hike.
We have a very strong U.S. dollars now coming into kind of towards
the end of the rate hike cycle. China's more on the kind of supportive
easing policy stands. And China government bonds or even China
bonds still provide that diversification benefits, particularly on this kind of
risk and where environment investors could potentially look for somewhere
that they can hedge. And I'm trying to see if you could
potentially be looking interesting.