[CC may contain inaccuracies] We are now getting the latest breaking news that China has hold a natural sound exports to Taiwan after this visit. We're
hearing that that is actually a component necessary for the production of semiconductors.
You don't necessarily like Taiwan at this moment under way. Taiwan and Korea equities. Tell us how this actually really
heightens your view. Certainly. So their fundamental drivers behind us in addition to
the deep. We've seen an increase in geopolitical tensions between China a U.S. and China and Taiwan fundamental drivers.
And such a base case for us is that we expect global growth to slow down and export heavily dependent countries like Korea and
Taiwan will be extremely vulnerable. We expect to see a slowdown DAX spots in those regions. And in addition if you take a look
at the data from 2020 and 2021 we've seen excess global supply coming out of Taiwan specifically even tech components. So we
expect the outflows to continue on the back of slower demand on the back off geopolitical tensions and the equity markets and
these affects markets to make this speech. And you're also not liking the offshore yuan despite the fact that it's been pretty
resilient. Why yes. So our point of view is is as such the the China because he has the capability to actually ease and is
actually going against the DAX for central banks in the world. So with inflation in China fairly benign. And with China really
one thing to support growth. We expect the interest rate differential between China and most
of most of the markets to actually widen especially for versus the dollar. In addition to that in our view that global growth
is expected to slow down. We expect the trade balance in China to actually weaken more and this will actually weaken exports
slower demand for exports and NYSE photo from the year. So in our view this year it is likely to weaken to its spread 6 1 8 6
1. That's how we see it. When it comes to equities direction does it feel like markets are looking for an excuse to be
optimistic despite the fact that there is still a lack of support when it comes to Fed pivot as well as the fact that
guidance and outlooks from from corporate earnings have on the whole been pretty bad.
Yes we do see animal spirits coming in. Everyone reading between the lines of what the Fed might do in the next coming few
sessions. We're still in the camp that the Fed will push deep into restricted territory and that rates between 10 and 15 to
400 basis points would be possible. We expect that to eventually slow demand result in contraction. We've seen two quarters of
consecutive contraction in the U.S. We don't think it's and we expect to see a few more and these coming in consecutive
quarters. I think that it's really hard to deny that that a recession is definitely on the cables. So they're not natural.
Knock on implication would be a downgrade in earnings. And if that happens we expect the equity markets to sell off that. So
we're very fairly cautious on this front even though we saw the same animal spirits early on. We don't think it's good.
Right where do you see the biggest risk when it comes to the credit space right now. Yeah within the credit space it's mainly
for Asia specifically it's been in China. The main issue around how the property market may potentially blow up even further
even with the Chinese central bank as well the China policy makers wanting to focus on China housing being for people to
stay and not for investments. That has actually seen some knock on implications across the broader broader credit space. We've
seen sell off in widening spreads not only in China but also in the age of markets even though most other Asian markets have
very little exposure to China. So some form of contagion knock on implications.
As a result of this issue within our space as active managers we do see significant opportunities to actually get those that have
no relation to China related shallow spaces within India spaces within the Asian space. They look pretty attractive right now
and we look at the apparent good credit spreads credit levels right now.