You talk about potentially avoiding a hard landing in Beijing but the Chinese economy is surely slowing down. The latest
headlines right now out of South Korea's 20 they export numbers. Exports to China falling eleven point two percent year on year.
Are you at all concerned about the latest economic data whether it's from within the country or from neighboring countries
signaling of a slowdown. And does Beijing have the means necessary to really offset this.
Sure. I'm not surprised that the Korean export numbers are weak because China's imports numbers last month were quite weak and
that was due to some of the Covid related measures and also the property market slowdown. And I think that Chinese markets
certainly reflect the economic headwinds that the country is facing. And I think that Korean and perhaps Taiwanese equities
also reflect some of this slowdown as well. And I think that China's amplified economic headwinds right now could have wider
range and impacts around the region. I am still a little bit surprised at the number. South Korea
first 20 days chip exports falling seven and a half percent year on year already. The market was so pressured in the past few
weeks really concerned about those tech exports from South Korea and of course Taiwan also very heavily dependent on this sector.
So how does this set us up when it comes to north and northeast Asian trading.
Sure. Well if we even look at our inventory levels in the US inventory levels are back to normalized levels. And and so I
think that part of this is is you know part of the business cycle that we're seeing now when I think about North Asia South
Asia. When it comes to markets I think North Asia will continue to see a bit of soft patch given that global growth is slowing.
But if I look at Southeast Asia South Asia I think that there continues to be a bit of lags especially as those economies
reopen and and places like Thailand Malaysia and Indonesia should benefit from their winter time peak tourist season.
David when you take a look at the broader longer term growth outlook for China it does seem like we're in for this new normal
of slower structural growth. Right. Where do you see the opportunities of that the sectors the types of companies that
could do well even in that environment. Sure. I think that the sectors that we see policy support
especially in green energy alternative energy like wind and solar electric vehicles electric vehicle batteries high tech
manufacturing these. Paul these sectors will continue to continue to do well.
We are also seeing the Korean one trading at the weakest since 2009 so fresh high for the the dollar one comparing and we're
seeing the one falling just about eight tenths of a percent against the dollar. So now extending that loss for a fourth day
obviously on the back of those trade numbers. How do you see the currency headwinds playing out either favorably or unfavorably
in this region. Well I think that that there continues to be a bit of economic
headwinds for the Korean market. The Korean economy. I think a lot of it will depend on how quickly
the Chinese market and economic model starts to see a bit of a base there and to start to see kind of a rebound. I think that
will certainly impact on the Korean economy and also the Korean one also to see if we'll see additional fiscal stimulus measures
coming out from the Korean government. How closely are you watching what's happening in Jackson Hole
this week. What do you want to hear and how could how do we hedge in Asia. I mean there will be a volatile week won't it.
Sure. Well I'll be watching very closely. But Fed Chair Jay Powell is saying and I think that I think the expectation is
that he may pivot to be a little more dovish but I'm not I'm not so sure. I think that the message that he wants to send is that
that inflation remains too high in the US and that the Fed continues to want to focus on bringing inflation down which
means that the Fed will continue to tighten our liquidity and hike rates
when it comes to financial conditions. We really have seen them really as ease again. And that's not necessarily what the Fed
wants to see. Right. So we get any commentary around how much more needs to be done. What will they really mean for risk
assets. Well I think that the crux will be dependent on the trajectory
of the Fed tightening path. And I think right now the conversation and narrative has moved from you know a 75 or 100
basis point hike to say a 50 to 75 basis point hike in the September meeting. And I think that markets will interpret that
and try to suss out what is the pathway going forward. I'm in the camp that I think that it's more in the 50 to 75
basis point hike in that equities can up can do well in this in this environment.