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20:57
PDT

Investors are shifting focus from India to Korea and Taiwan.

– India's lack of AI stocks is weighing heavily on its equity market.

– Funds focused solely on India are underperforming.

– Expectations for AI infrastructure improvements in India are low.

– Investor sentiment is currently negative towards Indian equities.

AI infrastructuremarket rotationemerging markets

▸ Full transcript

where intelligence meets capital. Bloomberg Tech, live in San Francisco with Emily Chang and Tom Giles. SF is back, baby! Join leading CEOs, tech visionaries, and industry icons for an unparalleled event. What is the fate of search? We are definitely investing for the long run. We want to help these players develop to bring their product to market. I think it will be possible to make changes to our genome. Technology has been the driver of more abundance in productivity. Bloomberg Tech decodes the future June 3rd and 4th in San Francisco. It was 30% of the levered buyout market; therefore, it was 30% of the levered lending market and therefore it is just overrepresented and subject to attack. But we should not deny that change is coming, and change is not coming just in data centers and AI. As a world, we are building infrastructure. We're building energy. We're doing energy transmission. We're building next-gen manufacturing, we're ramping defense, and we're doing this thing called AI and data. We're essentially spending every dollar since the creation of FIRE, and we're doing it all at once. We will see the largest need for capital ever. And that's what we've seen so far this year. And so now to your specific question, it's about underwriting. There are a number of very strong US tech companies who run diversified businesses, Amazon, Google, Microsoft, who are interested in seeing these centers built and are interested in not consolidating the debt on their balance sheet.

Analysis

Investors are increasingly rotating away from Indian equities due to a lack of AI-related stocks and infrastructure, opting instead for markets like Korea and Taiwan. This shift is exacerbating the underperformance of India-focused funds, as the market grapples with a prolonged period of disappointment and stagnation in AI advancements.

The current sentiment among investors suggests a cautious outlook for India, with expectations that significant improvements in AI infrastructure may take another year or two. This delay could hinder India's ability to capitalize on future efficiencies in user industries, creating a cycle of underperformance that may persist until the market sees tangible advancements in AI technology.

🔍 India 🔍 Korea 🔍 Taiwan 🔍 Samsung

20:52
PDT

Samsung shares up amid renewed negotiations.

– Labor union threatened an 18-day strike over wage disputes.

– Government mediation has provided a glimmer of hope.

– Tensions remain high despite positive developments.

– Potential strike could have significant economic repercussions.

labor negotiationseconomic impact

▸ Full transcript

South Korea's Prime Minister is urging a compromise, warning a walkout could cost the economy $1 trillion a day. Let's go live to Seoul and senior tech reporter Yulim Lee. Yulim, the question really is whether this strike can be averted. If you take a look at Samsung shares, they are up. That's right. So Samsung management and the labor union have been in talks over these wages since December. But they have not been able to narrow their differences all this month. So the union has threatened to go on an 18-day strike starting this Thursday. So things are moving really fast and it's really tense. But the latest development is that Samsung's management and union have agreed to return to the negotiation table, mediated by the government. This is giving a ray of hope because the standoff has been really, really bad. As of last week, the outlook was pretty bleak because the union was really saying that we are not going to even talk to you. We're just going to go on a strike. So this is a really positive development right now that they are talking. This follows over the weekend when we have seen the top leadership from the government as well.

Analysis

Samsung shares have risen as management and the labor union have agreed to return to the negotiation table, mediated by the government, potentially averting an 18-day strike. This development comes after a period of escalating tensions, where the union had threatened to strike due to unresolved wage disputes since December.

Smart money should note that while the immediate outlook has improved with renewed negotiations, the underlying labor tensions could still pose risks to Samsung's operational stability and market performance. Investors should remain cautious as the situation evolves, given the significant economic implications of a potential strike.

🔍 Samsung 🔍 South Korea

20:48
PDT

Steel prices in India are expected to remain stable and range-bound.

– Investors are disappointed with the lack of AI stocks in India.

– Capital is rotating away from India to markets with stronger AI exposure.

– The steel industry is undergoing significant capacity expansion.

– Internal accruals are expected to fund most of the growth in steel capacity.

AI infrastructuresteel market dynamicscapital rotation

▸ Full transcript

So in that context, as and when this phase of AI infrastructure build-out moves to how AI would create efficiency or in user industries, that's where probably India would come into being. At this point in time, we don't have a solid figure, but it's probably a year and a half, two years down the road as the optimism on AI infrastructure chips, etc., subsides to go into user industries. And I'd like to give an analogy. Basically, when refrigeration came in, the biggest market cap, biggest gains were not made by those who got that technology. It was actually made by vaccine makers who actually used this technology to boost their revenues. Great analogy there, Abhishik Vishnoy, our senior Asia equities reporter. Now, still to come an insight, Samsung shares jump as it enters make-or-break wage negotiations aimed at averting a damaging strike. We'll get you the latest from Seoul. This is Bloomberg. The US power grid faces the challenge of meeting rising demand at a magnitude that hasn't been seen for decades. In the next few years, US data centers could consume electricity that's comparable to millions of homes. Our answer is...

Analysis

India's steel prices have stabilized, recovering from historical lows, with expectations of range-bound pricing in the near term. However, the lack of AI infrastructure and related stocks is causing investor disappointment, leading to a rotation of capital away from India towards markets like Korea and Taiwan.

Smart money should note that while steel pricing appears balanced, the broader market sentiment is weighed down by the absence of AI-related investments, which could hinder India's equity performance. The analogy drawn with refrigeration highlights that the real gains may come from industries leveraging technology rather than those producing it directly.

🔍 JSTW Steel 🔍 Posco 🔍 JFE 🔍 India 🔍 Korea 🔍 Taiwan

20:45
PDT

Investors are disappointed with India's lack of AI stocks.

– Capital is rotating towards markets like Korea and Taiwan.

– Funds focused on India are underperforming compared to EM funds.

– The absence of AI-related growth is creating a vicious cycle.

– Concerns are rising about India's future growth potential.

AI stock shortagecapital rotationinvestor sentiment

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The lack of AI stocks is causing investors to look for compute chips and AI models, which India currently does not have. They are making efforts, but this absence is weighing heavily on the market. I don't want to use jargon, but it's becoming like a rotation player or a funding source where exposure is taken away from India and deployed into markets like Korea or Taiwan. Even on the funds side, there are examples where India-only funds have suffered significantly. Many funds have been catapulted into EM funds or bundled with Korea exposure. All this points towards investors searching for AI stocks and market cap even in India. Due to this lack, it is becoming a sore point, creating a vicious cycle that weighs on Indian equities. The pain has lasted for more than a year. When can India realistically come out of this? What are investors telling us? Currently, investors are very disappointed. Gary Deggan mentioned that this isn't a dip to buy, as he is looking at terminal value cases for India that may need revision. Adil at Clay Group noted that India's index is tied to past stories and lacks AI, resulting in a structural underweight position.

Analysis

Investors are increasingly disappointed with India's equity market due to a lack of AI stocks and compute chips, leading to a rotation of capital towards markets like Korea and Taiwan. This trend has created a vicious cycle, weighing heavily on Indian equities as funds shift exposure away from India amidst concerns over its growth potential in the AI sector.

Smart money should note that the current underperformance of Indian equities is tied to historical narratives rather than future potential, as investors are seeking growth in AI-related sectors that India currently lacks. The sentiment among investors suggests a cautious outlook, with some questioning whether India's terminal value needs to be revised downward due to these structural issues.

🔍 India 🔍 Korea 🔍 Taiwan

20:42
PDT

Rupee depreciation is impacting costs and debt levels.

– JSW Steel plans to expand capacity significantly to meet domestic demand.

– Steel prices in India are expected to remain stable in the short term.

– Internal accruals will primarily fund JSW's expansion plans.

– Energy security and supply chain reliance are key risks for India's growth.

supply chain riskcurrency depreciationsteel demand growth

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Hydro, etc., at a fast pace in India. Efforts will have to be made to become more energy self-reliant as we grow our economic path over the next two decades or so. Important for every manufacturing organization is also to create an industrial ecosystem in India and reduce the reliance on external supply chains to the extent possible. The government has taken a lot of measures to give structural reforms to the country to enable that to happen. I think everybody is taking steps to improve the self-reliance of supply chains as we develop our economy. What might derail India's growth? The risks, as I said, one is the medium-term energy security, and that's something which we need to look at. We need to develop the supply chains which are coming right now, any kind of critical components which are coming from international markets. The other one which we need to look at and introspect and see what we can do about is the depreciation of the rupee as we build our economy. Jayan, just one final question before we let you go. We understand that you divested 25 million shares on the National Stock Exchange. Why is that? We have not, JSTW Steel has not divested any shares. JSTW Energy, which held some shares of...

Analysis

The Indian rupee is under pressure due to a significant current account deficit, with expectations of negative balance of payments for three consecutive years. Despite these challenges, JSW Steel's CEO remains optimistic about India's steel demand growth, projecting a capacity expansion of 120 to 130 million tons over the next six to seven years.

🔍 JSW Steel 🔍 India 🔍 Posco

20:39
PDT

Indian rupee down 2.1% against USD, testing record lows.

– JSW Steel plans to expand capacity by 16 million tons over seven years.

– Internal accruals expected to fund most of JSW's expansion.

– Steel prices in India are stabilizing after recent corrections.

– Foreign investors have withdrawn $42 billion from India since 2024.

currency depreciationsteel demand growthinflation riskforeign investment outflows

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JSW Steel alone, including our recently signed joint ventures with JFE and Posco, can incrementally add about 16 million tons to go to 78 million tons in India. This capacity expansion would happen over a period of seven years, and that's how we are spending in the range of about two and a half billion dollars, two to two and a half billion dollars every year to expand this capacity. It is a big expansion plan. I'm just wondering if you need new funding for it? We don't expect we would require much funding because the generation of the internal accruals would be more or less sufficient. You will borrow incrementally to maybe replace some of the more expensive debts. But most of the growth will come from internal accruals. You talked earlier about your joint venture with Posco. Could you give us an update on that? What's the status? So we have concluded the joint venture agreement for a greenfield steel plant in Orissa along with Posco. The steel plant would be for a capacity of about 6 million tons. Posco has a downstream facility of about 2 million tons in Maharashtra, for which they wanted to backward integrate for a steel-making facility. And that's how we got into a joint venture to set up that facility.

Analysis

Negative sentiment persists in the market as the Indian rupee tests record lows amid rising inflation and a deepening bond sell-off. JSW Steel's CEO highlights that internal accruals will primarily fund their significant capacity expansion, indicating confidence in future demand despite current economic pressures.

The ongoing geopolitical tensions and rising energy costs are complicating the economic landscape, yet JSW Steel's planned expansion reflects a long-term bullish outlook on steel demand in India. The company's reliance on internal funding suggests a strong operational cash flow, which could be a positive signal for investors amid broader market volatility.

🔍 JSW Steel 🔍 Indian Rupee 🔍 Posco 🔍 Brent Crude 🔍 India

20:37
PDT

Steel prices in India are currently around $600 per ton.

– Prices are expected to remain stable for a few months due to seasonal factors.

– Recent price corrections have brought steel prices back to sustainable levels.

– Long-term demand for steel in India is projected to grow significantly.

– The external environment remains volatile, impacting pricing stability.

steel market dynamicsprice stabilitylong-term demand growth

▸ Full transcript

In India, we would be able to offset the cost and incrementally add to the spread in this quarter, which is our expectation. Also, looking at steel prices in India, they've recovered somewhat because of the safeguard taxes. I'm just wondering if you see stability in the prices. What's your own projection? So yes, we do see prices to be range-bound as of now. If you really look at the prices in the Asian side, typically they're in the range of $550 to $600, while India is in the range of $600 or so per ton. In Europe, prices are about $800 plus, and in the United States, they're about $1100 plus. I think in India, the pricing is very balanced. Given the volatility in the external environment, I would say the prices would be range-bound for now. We would be stable probably for a few months as we go into a seasonally monsoon quarter. However, I would also like to mention that the steel prices have moved up from historical lows in the October-December quarter, which was a six-year low. The price corrections that have taken place are bringing it back to a balanced, sustainable level only.

Analysis

Steel prices in India are expected to remain range-bound, currently around $600 per ton, as the market stabilizes after recent corrections from historical lows. The external volatility is likely to keep prices balanced for the next few months, particularly as the monsoon season approaches.

Despite the challenges posed by rising energy costs and geopolitical tensions, the long-term demand for steel in India remains strong, with expectations of significant capacity expansion in the coming years. This suggests that while short-term fluctuations may occur, the fundamentals for growth in the steel sector are intact.

🔍 JSW Steel 🔍 India 🔍 steel 🔍 Asian steel market

20:35
PDT

India's steel demand has increased significantly post-COVID.

– JSW Steel plans to add 12-15 million tons of steel capacity annually.

– Rising energy costs and supply chain issues are acknowledged but not seen as deterrents.

– The CEO emphasizes the importance of proactive capacity planning.

– Economic fundamentals in India are viewed as strong for future growth.

steel demand growthsupply chain challengesenergy costsinfrastructure investment

▸ Full transcript

Growing forward, we would incrementally add about 12 to 15 million tons of steel every year. For that, we would need to create capacity in the remaining years of about 120 to 130 million tons by the end of the next six to seven years to meet that demand in the domestic market. Are you factoring in the complications and challenges from the Iran war? We are conscious of the fact that energy costs have gone up and the challenges of the supply chain have become more prolonged. However, if I look back and see the kind of crisis we have gone through in the last six years, including the pandemic and various wars, the steel demand in India has grown from 100 million tons just pre-COVID to now 164 million tons. So, irrespective of the bumps we have faced on the road in this journey, I think things have evened out. We are conscious of the current challenges, but we are not letting that be the only driver for our decision-making for the future. We do feel that the economic fundamentals are strong and the growth for the next decade or two would be strong. Any steel plant takes about four to five years to build, and I think you need to take a call in advance so that you have the capacities in place when the demand comes in.

Analysis

India's steel demand has surged from 100 million tons pre-COVID to 164 million tons, despite ongoing challenges such as the Iran war and rising energy costs. The CEO of JSW Steel remains optimistic about future growth, emphasizing the need for proactive capacity building to meet domestic demand over the next decade.

Smart money should note that while geopolitical tensions and inflationary pressures are significant, the underlying economic fundamentals in India appear robust. The steel sector's resilience amidst these challenges suggests potential opportunities for investment in infrastructure and related industries as demand continues to grow.

🔍 JSW Steel 🔍 India 🔍 Iran 🔍 steel

20:32
PDT

Indian rupee faces significant depreciation pressures.

– Current account deficit and trade deficit are worsening.

– JSW Steel's costs are rising due to currency depreciation.

– Government measures may not effectively stabilize the rupee.

– Foreign investment outflows are a growing concern.

currency depreciationcurrent account deficitforeign investment

▸ Full transcript

They don't seem to be. I mean, we had the rupee surging past 96 just on Friday. That's right. So it will take some time for the effect to reflect in the market probably. But the rupee is falling because there is huge pressure on the current account deficit. The balance of payments is expected to be negative for three consecutive financial years. There are pressures on the current account deficit, trade deficit, and balance of payments. So, the rupee is reflecting that. On top of that, a lot of outflows are happening. So hopefully, these measures will address some of it and save some reserves. Anup, thank you so much for that update. Bloomberg sells Asia. Economic Governor reporter Anup Roy in Mumbai. Well, joining us exclusively now is Jayan Acharya, MD and CEO at JSW Steel, India's biggest steel maker by capacity. Good to have you with us, Jharned. First off, we've been talking about the rupee and the weakness in the currency. How are you assessing the spiraling down of the currency? Yes, the foreign exchange impact, the depreciation of the rupee in the last year has been quite steep. We almost had a 10 to 11 percent depreciation and that has caused an increase in cost and an increase in overall debt levels, etc., which is there.

Analysis

The Indian rupee is under significant pressure, reflecting a deteriorating current account deficit and negative balance of payments expected for three consecutive years. This depreciation, which has reached 10-11% over the past year, is increasing costs and overall debt levels for businesses like JSW Steel, as highlighted by CEO Jayan Acharya.

Smart money should note that the Indian government's recent measures to curb outflows and stabilize the rupee may not be sufficient to counteract the ongoing economic pressures. The situation suggests a prolonged period of currency weakness, which could impact foreign investment and economic growth in India.

🔍 JSW Steel 🔍 India 🔍 Indian rupee

20:29
PDT

Market sentiment is negative due to geopolitical tensions and inflation concerns.

– Brent crude oil prices have surged, impacting inflation and currency stability.

– The Indian rupee is testing record lows, down 2.1% against the USD.

– Foreign investors have withdrawn $42 billion from India since late 2024.

– India is tightening import rules to defend the rupee and preserve reserves.

geopolitical riskinflation pressurecurrency stability

▸ Full transcript

Right now, taking a look at where we are in terms of sentiment. Negative sentiment in the market, of course, stocks are extending that slide from record highs, with a deepening bond sell-off in the Iran war deadlock finally weighing on sentiment. This is adding to rising inflation concerns, with Brent crude at about $111 a barrel after adding almost 8% just last week. We're, of course, waiting for the rupee to open, extending declines. The rupee seems to be testing yet another record low, and Indian stocks in particular are also declining amid pressure from a surge in oil prices that's worsening inflation risks and pressurizing the rupee, which has been testing new record lows. Foreign investors, by the way, have been pulling out; they have withdrawn about $42 billion since the end of 2024. In terms of the Indian rupee, it's trading at 6.1387 right now, down about 2.1001 percent versus the USD. The 10-year yield is surging like the rest of Asia, currently standing at 7.64. Now, India has tightened rules for imports of silver, one of several measures to preserve foreign exchange reserves and defend the rupee after the currency sank to an all-time low. Bringing South Asia economics and government reporter Anup Roy in Mumbai. Anup, take us through the steps the Indian government has been taking to curb those outflows. Last week...

Analysis

Negative sentiment is prevailing in the market as stocks continue to slide from record highs, driven by a deepening bond sell-off and the ongoing Iran conflict. Rising inflation concerns are exacerbated by surging oil prices, with Brent crude reaching approximately $111 a barrel, further pressuring the Indian rupee which is testing new record lows.

Smart money should note that foreign investors have withdrawn about $42 billion from India since the end of 2024, indicating a significant loss of confidence. The Indian government's recent tightening of silver import rules aims to preserve foreign exchange reserves, highlighting the urgency of stabilizing the rupee amidst these economic pressures.

🔍 India 🔍 Brent crude 🔍 Indian rupee 🔍 foreign investors

20:25
PDT

Indonesia's government confidence is rising.

– Capital markets are performing well despite challenges.

– AI sector lacks a strong narrative in Indonesia.

– Investment opportunities may be selective.

– Regional competitiveness could be impacted.

economic confidenceAI sector challenges

▸ Full transcript

Dan keberatan di Indonesia, terutamanya pada bagaimana pemerintahnya akan memasukkan kecuali kekuatan yang kita bincangkan. Kita ada keberatan kekuatan di Indonesia, seperti yang kita cakap, kita juga ada kepercayaan kekuatan di ekonomi. Saya rasa pemerintahnya akan mengalami kepercayaan kekuatan yang sekarang diberi kepercayaan. Jadi, ada beberapa kekuatan. Stux di Indonesia mencari kaya tapi kami mengejar eksposya. Mereka kaya sebabnya. Terima kasih, Pruksa. Saya Fon Thong dari Aberdeen Investment. Masih sedia ini. Kita bercakap secara eksklusiv. Kita bercakap dengan CEO Jaya Nacharia tentang kemahiran Iran dan pembentangan kebanyakan capital ini sejauh ini untuk $2.5 billion. Teruskan bersama kami. Ini Blumberg. Untuk kemampuan. Apabila AI menyebutkan perjalanan, ROI berubah lebih baik. Ia bermula dengan Adobe.

Analysis

Indonesia's government is experiencing a confidence boost in its economy, which is reflected in the strength of its capital markets. However, there are underlying challenges, particularly in the AI sector, that could impact future growth prospects.

Smart money should note that while Indonesia's capital markets are currently robust, the lack of a strong AI narrative may hinder its competitiveness compared to other regional players. This could lead to selective investment opportunities as the market adjusts to these dynamics.

🔍 Indonesia 🔍 AI sector 🔍 Jaya Nacharia

20:22
PDT

China prioritizing energy security and tech localization.

– Investment in battery storage systems is strong in China.

– Chinese tech supply chain lagging behind Taiwan and Korea.

– India lacks a robust AI narrative and supply chain integration.

– Selectivity in investment is crucial for navigating Chinese markets.

energy securityAI localizationsupply chain dynamics

▸ Full transcript

China. One I've mentioned about energy security. So whether you talked about a battery storage system within China where investment is going strong, this is also going to be pretty strong globally as well as many countries have woken up to the urgent need to increase the energy security. The second theme in China that we really like is also about China localization. And in this case, it's the tech AI play where I think self-sufficiency needs continue to be on the government's agenda for many years and trying to close that gap with the US. So within the tech supply chain, we do quite like that. And from the way that the markets have moved, the Chinese supply chain has lacked that of Taiwan and Korea. So I think broadly, there are bright spots. We just need to be a bit more selective within that and really sticking to fundamentals. And your thoughts on India? I think India is in a slightly challenging space at the moment. Number one, the reason why they have lagged broadly is because they don't really have India's AI story. They are not really part of the AI supply chain either. So when you compare to the other four, they have lagged. So that's the first reason.

Analysis

China is focusing on energy security and localization in technology, particularly in AI, as it seeks self-sufficiency to compete with the U.S. The Chinese supply chain is showing potential, but investors need to be selective and stick to fundamentals due to varying performance across sectors.

India is currently facing challenges, particularly in the AI space, as it lacks a significant presence in the AI supply chain compared to its regional counterparts. This gap may hinder India's growth prospects relative to other Asian economies, making it less attractive for investors focused on tech advancements.

🔍 China 🔍 India 🔍 AI 🔍 battery storage 🔍 tech supply chain

20:20
PDT

Chinese internet stocks are underperforming despite solid earnings.

– AI and cloud spending growth is expected to accelerate.

– Margin improvements in cloud businesses are anticipated.

– Valuations may rise when market sentiment improves.

– Current weak sentiment presents a potential contrarian opportunity.

Chinese tech recoveryAI and cloud growthmarket sentiment

▸ Full transcript

The Iran conflict situation highlights the need for energy security. Globally, China is strong in the supply chain and is driving this domestically as well. Broadly, things are not looking too bad for China, and we are continuing to find opportunities there. Some say that perhaps Chinese internet stocks are looking for some kind of catalyst to go higher. Alibaba's earnings came and went, and nothing happened. Yes, and I think that's the broad weak sentiment that we have on the Chinese stocks because if you look at the breakdown of earnings, whether it's Alibaba or Tencent, things are actually on track. They are saying that AI growth, especially in cloud spending, is going to go higher and will accelerate. They are talking about margin improvements in the cloud business as well. I think that is the key change we see within the last few quarters. In the past, when you looked at the relative valuation between Chinese cloud or internet-related companies versus that of the U.S., the difference was in the concern around whether Chinese margins could be increased to be closer to the level of the U.S. This quarter, the guidance has been pretty clear. We do think that sets pretty good fundamental support for valuations to go higher when sentiment returns, so we are watching it closely.

Analysis

Chinese internet stocks are currently facing weak sentiment despite earnings reports from major players like Alibaba and Tencent indicating that growth in AI and cloud spending is expected to accelerate. The guidance from these companies suggests a potential for margin improvements that could support higher valuations once market sentiment shifts positively.

Smart money should note that while the current outlook appears subdued, the fundamentals for Chinese tech, particularly in cloud services, are showing signs of strength. This divergence between sentiment and underlying performance may present a contrarian investment opportunity as the market adjusts to these positive signals.

🔍 Alibaba 🔍 Tencent 🔍 China

20:17
PDT

China's growth is hindered by geopolitical tensions and past trade deal failures.

– Oil shocks are straining corporate confidence and household spending in China.

– Xi Jinping's upcoming visit to Washington could impact trade relations.

– There is a contrarian view favoring an overweight position in China.

– Strategic reserves may only provide temporary relief from economic pressures.

geopolitical riskChina economic outlookoil market impact

▸ Full transcript

Back in the first trade war when soybeans were part of the deal, they did not fulfill the obligation, obviously, because shortly after that deal was struck, we had some geopolitical ruptures, of course, between China and the United States, the spy balloon and the like, and then COVID hit. So China didn't match those numbers that they had pledged to. And now, of course, there are geopolitical headwinds and growth challenges, not to mention this global route in the bond market. So there are stresses for sure that are going to impede China. Not to mention China can only kick the can down the road so far on its own oil shock because of its strategic reserves. It kind of has a buffer right now. But again, that's going to eventually, and if not already, weigh on corporate confidence spending. Households will keep their money tight to their chest. And again, then we are back to the same discussion six months from now: how does China kickstart its domestic economy against all these headwinds? And that's about the time when Xi Jinping, of course, is scheduled to go to Washington, DC, well, less than six months, September 24th. Steve, thank you. Chief North Asia correspondent Stephen Angle. Pruxah, I'm Thong Thong, and I'm still with us, head of Asia PAC, Agri-Tiz and Aberdeen Investments. Pruxah, you're overweight China. What's the conviction? Yes, I think if you were to look at it, and I have to say that this is more of a contrarian trade from us given that China is very much.

Analysis

China faces significant geopolitical and economic headwinds that are likely to impede its growth, particularly in light of past unfulfilled trade obligations and current oil shocks. The challenge remains for China to stimulate its domestic economy amidst these pressures, especially with Xi Jinping's upcoming visit to Washington, DC, which could influence trade dynamics.

Smart money should note that while there is a contrarian view favoring an overweight position in China, the underlying risks from geopolitical tensions and domestic consumption challenges could lead to volatility. The reliance on strategic reserves may provide temporary relief, but corporate confidence and household spending remain critical factors to monitor.

🔍 China 🔍 United States 🔍 Xi Jinping 🔍 soybeans 🔍 oil

20:15
PDT

China aims to stabilize trade with the U.S. by increasing agricultural imports.

– Soybeans and agriculture products are prioritized in trade discussions.

– APEC trade ministers will meet to address trade concerns amid geopolitical tensions.

– Energy shocks from the Iran conflict are influencing trade dynamics.

– China's trade strategy may shift towards more stable partnerships.

trade stabilityagricultural importsgeopolitical tensions

▸ Full transcript

Consumption has dropped off considerably, highlighting the difficulty in stimulating demand in this economy. Coming out of the summit with Donald Trump, Chinese policymakers want stability in their relationship with the United States due to uncertainties in the Middle East. They cannot solely rely on exports, as this raises trade concerns with major partners like the U.S. On Friday, APEC trade ministers will meet in Suzhou, China, to discuss these issues against the backdrop of energy shocks from the war in Iran. The key takeaway from the summit is that soybeans and agricultural products will be prioritized to stabilize trade, with China expected to return to historical averages of agricultural imports from the U.S. The pledge includes $17 billion for non-soybeans and about $12 billion for soybeans in 2024.

Analysis

China is focusing on stabilizing trade relations with the U.S. by prioritizing agricultural imports, particularly soybeans, amidst ongoing geopolitical tensions. The upcoming APEC trade ministers' meeting will address these trade dynamics against the backdrop of energy shocks due to the conflict in Iran.

Smart money should note that China's reliance on U.S. agricultural products could signal a shift in trade strategy, potentially easing tensions with the U.S. This move may also indicate a broader trend of countries seeking stability in their trade relationships amid global uncertainties.

🔍 China 🔍 United States 🔍 soybeans 🔍 APEC

20:09
PDT

Investors should adopt a selective approach in portfolio management.

– Upcoming Chinese corporate data will be pivotal for market direction.

– Focus on companies demonstrating resilience amid market changes.

– Inflation and consumption trends are critical for future growth.

– Market dynamics are shifting, requiring careful analysis of individual stocks.

selective investment strategyChina economic indicators

▸ Full transcript

Keadaan? Ya, saya rasa ini adalah keadaan yang kita perlu berdiri dan mencari keadaan yang penting. Jadi, apa yang kita telah lakukan di depan portfolio kita adalah memastikan kita berdiri dengan keadaan, kita berdiri dengan nama yang kita mempunyai perasaan yang lebih positif di jalanan terhadap konsensus dan keadaan yang kita masih berdiri dengan keadaan. Jadi, saya rasa ini adalah tentang keadaan dan memastikan bahawa kita tidak dapat mengalirkan kekuatan kekuatan kemari. Ia tidak mungkin adalah pukul berat yang berjalan-jalan, tetapi mungkin akan menjadi lebih selektif dan benar-benar mengalirkan beberapa lagu-lagu yang kita lihat yang tidak berjalan-jalan juga. Jadi, ia adalah nama yang kita mencari dalam rotasi ini. Pruksa Hengtai, lebih jauh lebih awal, dengan Pruksa Ayam Fung Thong dari Aberdeen Investment. Tetapi, ada keputusan yang akan datang. Kejutan China mengenai kejadian yang berlalu perusahaan dan penggunaan konsumasi, perusahaan tersebut di April. Kita mengajar perusahaan. Selanjutnya, berhenti di sini bersama kami. Ini Blum Back.

Analysis

Investors are advised to remain selective in their portfolio choices as market conditions evolve, with a focus on companies that show resilience amid changing dynamics. The upcoming data from China regarding corporate performance and consumption trends will be crucial for understanding the broader economic landscape.

The shift towards a more selective investment strategy highlights the importance of identifying strong performers that can withstand market volatility. Smart money should pay attention to the implications of China's economic indicators, as they may signal broader trends affecting global markets and inflation expectations.

🔍 Aberdeen Investment 🔍 China 🔍 JSW 🔍 Samsung

20:07
PDT

Oil prices expected to stay high, impacting inflation.

– Potential for slower growth due to inflationary pressures.

– Earnings revisions in Asia remain positive, driven by AI.

– Market correction is possible but timing is uncertain.

– Long-term low interest rate cycle may be ending.

supply chain riskinflation outlookAI investment

▸ Full transcript

Difficulties, as well as the increased cost in terms of raw material costs that come with the supply chain. Brookes, are we looking at a new era of high inflation and high rates? Are we fundamentally looking at a new environment here? Yes, I think so. I think we have been in a very long cycle of low interest rates. How long and how much inflation will come through will really depend on how the oil price situation and how long the Strait of Hormuz remains closed. Based on our base case scenario, which is done by a global macro research team, we do expect oil to remain at or near $120 through May and $100 through the third quarter. That means that we are likely to see inflation rising in many countries, which will also lead to a slower level of growth. So we're looking at a potential correction, and how deep that might be? I think it's a bit too early to tell because, like I said, what has been driving the rally so far has really been underpinned by AI, as well as the continuous spending that we are seeing in AI and the demand that has been driving that. So I think so far what you see is that we are seeing upward earnings revisions within Asia, and that has been driving the strike of the...

Analysis

The market is bracing for a potential new era of high inflation and interest rates, driven by sustained high oil prices, which are expected to remain around $120 through May and $100 into the third quarter. This environment could lead to slower growth and a potential market correction, although current earnings revisions in Asia remain positive due to ongoing AI demand.

Smart money should note that while inflationary pressures are rising, the underlying strength in AI-driven earnings could provide a buffer against deeper corrections. The interplay between oil prices and inflation will be crucial in determining the trajectory of growth and market stability in the coming months.

🔍 oil 🔍 AI sector 🔍 Asia 🔍 central banks

20:04
PDT

Long-end yields are at risk of losing control.

– Potential for a credit market crisis if yields continue to rise.

– Equity markets may face significant damage from bond market instability.

– Rising mortgage rates could impact consumer spending.

– Investors should seek safer asset classes.

bond market instabilitycredit market risk

▸ Full transcript

The bond vigilantes, right? They'll bring on that A game. How might this play out? What is the worst scenario here? Well, we could literally lose control of long-end yields. We're already seeing signs that the market really has got very, very little support in the 30-year sector. You could easily get a period of days where bonds just are in free form. And a mistake like that, where the policymakers sit back and allow it to happen, obviously will spill quickly into equity markets. You think equity markets have come off a little bit so far? That's nothing compared to the kind of damage that will be done then. We will be starting to talk about how it will affect banks, how it will affect their lending ability to banks, to the housing sector. What does it mean for people that their mortgage rates are going through the roof, especially in a country like the United States where rates are already extremely high? And that brings a feedback into the margin lenders, the people who are not as policed as carefully as the Federal Reserve polices the major banks in the United States. And suddenly you have a vicious spike cycle which goes into the credit market. And once the credit market is in trouble, all bets are off. Nobody can survive a crisis in the credit market. Bloomberg and live strategist Mark Cranfield there with a stock warning. So what does this seismic shift in bonds mean for stocks and where might investors find shelter? Let's hear from our producer, I am Tong Tong, head of APEC Equities at Aberdeen Investments. Proxah, your thoughts, how might this impact?

Analysis

Long-end yields are showing signs of losing control, which could lead to a chaotic bond market and significant repercussions for equity markets. A failure by policymakers to address rising yields could trigger a crisis in the credit market, impacting banks and mortgage rates, particularly in the U.S.

Investors should be cautious as the bond market's instability may spill over into equities, creating a feedback loop that exacerbates lending issues. The current environment suggests that smart money should consider sheltering in less risky assets as the potential for a credit market crisis looms.

🔍 United States 🔍 Federal Reserve 🔍 Aberdeen Investments

20:02
PDT

Long-term yields are rising rapidly, indicating market volatility.

– Japanese government faces challenges with increased debt sales.

– Policymakers need to act quickly to prevent further market deterioration.

– High oil prices continue to exert inflationary pressure.

– Potential spillover effects into equities and risk assets.

bond market volatilityinflation riskcentral bank policy

▸ Full transcript

When yields are rising quickly, especially at the long end of the yield curve, exactly as you're seeing today, whether it's 30-year treasury, 30-year JGBs, and of course our old friend in the gilt market as well, which hasn't even opened yet today, but that's heading towards the 6% area as well. So it really is pretty chaotic. Central banks can do a lot to control short-term yields; that's where interest rate policy comes into play. There is not a great deal they can do about the long end of the curve. They can often quickly lose control of it, and we're beginning to see the early signs of that right now. Not great timing from the Japanese government to be talking about an extra budget when obviously they will need to increase debt sales at the same time. The timing of that really couldn't have been much worse as well, and that's just adding fuel to an already difficult situation they have there. This really has every chance of spiraling out of control unless we get some soothing words quickly from policymakers to say that they are planning to rein in spending where they can and they've got a plan to bring down inflation. Unless they get ahead of this, this could turn very ugly. What happens in the bond market there, we begin to see some sign inequities, but it certainly isn't taking it fully on the chin yet. There could be a lot worse to come there, and it will spill over into other risk assets as well. And of course, in the background, as you mentioned earlier, oil prices are still very high, not showing any signs of coming down either. Mark, are there any implications or are there any suggestions from policymakers that they are willing to step in and provide that support?

Analysis

Rising yields, particularly at the long end of the yield curve, are creating chaos in the bond market, with 30-year treasuries and JGBs reflecting this trend. The Japanese government's timing for discussing an extra budget amidst increasing debt sales could exacerbate the situation unless policymakers act swiftly to control spending and inflation.

Smart money should note that the bond market's instability could spill over into equities and other risk assets, indicating a potential broader market correction. The lack of immediate support from policymakers raises concerns about the sustainability of current market conditions, especially with persistently high oil prices adding to inflationary pressures.

🔍 Japan 🔍 30-year Treasury 🔍 30-year JGB 🔍 gilt market 🔍 oil prices

20:00
PDT

India's stock market may drop from the top five globally.

– AI trade is influencing global investment flows.

– The Iran war is causing supply chain disruptions.

– Oil prices are rising amid geopolitical tensions.

– Global bonds are experiencing a sell-off.

supply chain riskAI investment trendsgeopolitical tensions

▸ Full transcript

India's stock market is on the verge of dropping out of the world's five biggest for the first time in three years as the artificial intelligence trade reshapes global investment flows. We'll talk market strategy with Aberdeen's Asia Pacific Equities head, Phuk sa Ayam Thong Thong, who says investors should keep AI valuations at front of mind. Plus, more on the impact of supply chain snarls caused by the Iran War, with the CEO of India's biggest steel maker, JSW, and Samsung in last chance talks to avert a strike that could inflict severe economic damage on South Korea. Shares are gaining today, helping the Kospi bounce back from correction territory. Our top story today is the deadlock in the Iran war, roiling global markets as oil prices rise, global bonds extend the sell-off, and stocks slide further from record highs. Trump's social media post warning Iran that the clock is ticking shows that the two sides are still far from an agreement on unlocking the Strait of Hormuz. For more, we're joined by Bloomberg M-Life Strategist Mark.

Analysis

India's stock market is on the brink of falling out of the world's top five for the first time in three years, driven by shifts in global investment flows due to the artificial intelligence trade. The ongoing deadlock in the Iran war is exacerbating market volatility, with rising oil prices and a sell-off in global bonds impacting stock performance significantly.

Investors should be particularly attentive to the implications of AI valuations as they reshape market dynamics. Additionally, the geopolitical tensions surrounding the Iran war could lead to further disruptions in supply chains, which may have lasting effects on various sectors, including energy and manufacturing.

🔍 India 🔍 Iran 🔍 JSW 🔍 Samsung 🔍 oil prices

19:57
PDT

Formula One is experiencing rapid growth and transformation.

– Established brands are adapting while newcomers are gaining traction.

– Data-driven strategies are becoming essential for profitability.

– Emotional responses are being replaced by analytical approaches.

– Commercialization of motorsports is creating new revenue streams.

sports commercializationdata analytics in sports

▸ Full transcript

And yet they still think you're not gonna say it. Our players are back to take a look under the hood of the business of Formula One. Hi, I'm here to see Pierre Gasly. Welcome to my workplace. Do you feel pressure? Massive. Massive pressure. Pierre is the best example that we can be very proud of the past to look after the future. From the iconic brand setting the standard... Oh, boy. Can you imagine Ferrari without racing? No, and I say no, no, no. To the newcomers, forging ahead. I grew up my whole life racing against the boys. This global phenomenon continues to chart new territory. This was a tennis court eight days ago. I can't even believe that. And the speed of the business has never moved faster. My car might stop. I'll still be driving something. Probably very fast. So exciting. This season, we're along for the ride. Making money isn't about drowning in emotions. It's about understanding what's actually happening. Markets are the best way to glean signal from noise, and that is what we try to do every morning. This is Bloomberg Surveillance.

Analysis

The Formula One business continues to evolve rapidly, with both established brands like Ferrari and newcomers making significant strides. The emphasis on understanding market dynamics over emotional responses highlights a strategic approach to profitability in a fast-paced environment.

Investors should note the increasing commercialization of motorsports, which may present new revenue opportunities. The focus on data-driven decision-making suggests that companies leveraging analytics could outperform traditional players in this space.

🔍 Ferrari 🔍 Formula One

19:51
PDT

Robot Phoenix's IPO debut shows robust demand for robotics investments.

– The company is expanding its humanoid robot offerings, enhancing versatility in automation.

– Projected increase in overseas revenue signals a strategic shift towards global markets.

– Southeast Asia is identified as a key growth area for robotics applications.

– The company aims for profitability through increased sales of robot bodies.

robotics investmenthumanoid technologySoutheast Asia growth

▸ Full transcript

You talked earlier about how your supply chain can almost be 100% domestic. I wonder how much you are expecting your export numbers to account for the business in two to three years from now? What's the ratio going to be like? You know, last year, 10% of our revenue was acquired from foreign customers, and we will increase that number this year. Maybe, let me guess, we might increase it by one or two percent, maybe to 12% of our revenues this year will be coming from our overseas customers. Would you look into humanoid robots? Yes, of course. You're interested? Yes, we launched our humanoid robots last year, and we named it Ho-Jean, which means 'whole new gene.' I love it. Yes, a whole gene. Our humanoid robots can work side by side with our traditional industrial robots because our industrial robots can do the fast, precise, and rigid tasks. However, we also need some versatility and flexibility, and for this part, humanoids can add better value because they can learn. They can listen to our oral instructions or mimic human performance.

Analysis

Robot Phoenix shares surged 83% on their debut in Hong Kong, indicating strong investor interest in the robotics sector. The company plans to increase its overseas revenue from 10% to an estimated 12% this year, reflecting a growing focus on international markets.

🔍 Robot Phoenix 🔍 China 🔍 Southeast Asia

19:48
PDT

Robotics sector is expected to consolidate with a few dominant players.

– Focus on increasing sales of robot bodies for better profit margins.

– Economies of scale will enhance profitability for robotics companies.

– Southeast Asia presents significant growth opportunities for automation.

– China's robotics industry is reliant on US technology for components.

robotics consolidationprofitability strategiesSoutheast Asian market growth

▸ Full transcript

I think it's a normal pattern. You can see in other industries, this happens a lot, right? But time after time, there will be some dominant players, and there will be some merchant acquires. I think maybe in five or ten years' time, there will be some big players, like the past four big houses existing in China. We are a company focused on the light industry, and we are all-inclusive robot body and solutions suppliers. I think we are on the right track and on the right path. Maybe we hope we can become one of the big players here. What about the path to profitability? What does that look like for your business? Yes, and we have some very crystal clear paths to profitability. The first one is to increase the sales ratio of our robot bodies because we have many kinds of robot bodies. The gross profit margin for the robot bodies is better than the solutions. Since we can sell more amounts of our robot bodies, we can benefit from the economy of scales, and we can also build our automatic lines, which use our robots to build our robots. The second one is to increase the high.

Analysis

The robotics industry is poised for consolidation, with expectations of dominant players emerging in the next five to ten years. Companies focused on light industry robotics are on a clear path to profitability by increasing sales of robot bodies, which offer better margins than solutions.

🔍 robotics industry 🔍 China 🔍 Southeast Asia

19:46
PDT

Southeast Asia is experiencing a boom in robotics applications.

– Automation is increasingly replacing human labor in various sectors.

– China's robotics industry relies on U.S. technology for key components.

– The region presents significant investment opportunities for automation solutions.

– Market growth in Southeast Asia may lead to increased competition.

automation growthsupply chain dependencySoutheast Asia marketrobotics investment

▸ Full transcript

Southeast Asia as markets. I wonder what is your sense of which pockets in these markets have the most potential for your business to go? Yes, we already have many customers in Thailand, Singapore, Malaysia, and also Indonesia, these kinds of Southeast Asian countries. Normally, our robots help the consumer electronics lines, food and beverage lines, and some daily chemicals lines. We have just launched an automatic warehouse in Malaysia, which works very well. I think since Southeast Asia is also booming, it gives us a better chance to help them directly get into the automatic line and escape human labor. Tell us a little more about the supply chain. How dependent do you think is China's robotics industry on U.S. technology components, for example, when it comes to sensors, software tools, and the like? I always think U.S. talents have a gift for inventing brand new things. For example, big data and VR started in Silicon Valley.

Analysis

Southeast Asia's robotics market is expanding, with significant opportunities in consumer electronics, food and beverage, and daily chemicals. The region's growth is prompting companies to automate processes, reducing reliance on human labor.

China's robotics industry remains reliant on U.S. technology for components like sensors and software, highlighting a potential vulnerability. Investors should note the interplay between regional growth and dependency on foreign technology, which could impact supply chain stability.

🔍 China 🔍 Southeast Asia 🔍 Malaysia 🔍 Thailand 🔍 Singapore 🔍 Indonesia

19:42
PDT

Robot Phoenix shares gained 83% on debut.

– Strong interest in robotics amid AI advancements.

– Chinese market offers diversification opportunities.

– Geopolitical tensions may boost demand for technology.

– Investors are shifting focus towards innovative sectors.

robotics investmentAI advancementsgeopolitical impact

▸ Full transcript

Join leading CEOs, tech visionaries, and industry icons for an unparalleled event. What is the fate of search? We are definitely investing for the long run. We want to help these players develop to bring their product to market. I think it will be possible to make changes to our genome. Technology has been the driver of more abundance in productivity. Bloomberg Tech, Decode the Future, June 3rd and 4th in San Francisco. Robots who walk, talk, and perform tasks just like us. It's the stuff of science fiction, right? This is not science fiction anymore. The age of the humanoid is here. With robots as smart as we are, rather than replace us, can they help us? Through mobile private networks with ultra-low latency, a technician can operate a robot. We are able to mirror human behavior. They can go where humans shouldn't or can't. Now we have robots delivering technology for good in our society. All right, we are taking a look at one listing debut here today. It's Robot Phoenix. There you go, 83% gains here on the first day of trade, and certainly they are also really interested in what their plans are going to be for overseas markets, production numbers, and the like. Certainly going to be a big one here and a big theme that we've been seeing globally where robotics seem to be still that very hot trade when it comes to AI and the likes.

Analysis

Robot Phoenix shares surged 83% on their debut in Hong Kong, highlighting strong investor interest in the robotics sector amid ongoing AI advancements. The robust performance reflects a broader trend where robotics and AI are becoming increasingly integral to market dynamics, suggesting a shift in investment focus towards these technologies.

Investors should note that the resilience of the Chinese market, coupled with the growing appetite for robotics, presents unique opportunities for diversification. The current geopolitical climate, particularly in the Middle East, may further drive demand for innovative technologies, making this sector a key area for strategic investment.

🔍 Robot Phoenix 🔍 China 🔍 Hong Kong

19:40
PDT

Yen weakening towards 159 against the dollar.

– Inflationary pressures expected to persist due to Middle East crisis.

– Strong investor interest in renewable energy and robotics.

– Chinese market viewed as stable and attractive for investment.

– Potential for higher yields and rate hikes in the region.

inflationary pressuresrenewable energy investmentrobotics sector growthChinese market stability

▸ Full transcript

The Chinese market here in the region is relatively resilient, and policy is relatively well understood and clear. I would suggest the volatility is a little less of a concern to investors than you're seeing in other parts of the world. So when you think of the investment needs that companies clearly have in the region and you marry that with what we're seeing behind us, which is clients coming into the region to look for opportunities to invest, I think you've got a stable value proposition that companies are going to take advantage of and investors are going to look to participate in. It feels relatively robust compared to other parts of the world. Ryan, we gotta leave it there, but thanks so much for the time. Ryan McCappen there of BNP Paribas. Hope you guys have a good rest of the conference there. And yeah, help us shake one of those robots' hands for us. Two, speak your robots. Robot Phoenix Shares soaring on their train debut today in Hong Kong. We have the chairman Zhang Sae joining us exclusively next to talk about the company's post-IPO plans. This is Bloomberg.

Analysis

The Japanese yen is weakening, moving towards the 159 handle against the dollar, as investor concerns about oil prices and inflation intensify. The macro backdrop suggests persistent inflationary pressures, particularly influenced by the ongoing Middle East crisis, which could lead to higher yields and potential rate hikes across the region.

Investors are showing strong interest in the renewable energy and robotics sectors, indicating a shift towards frontier technologies amidst traditional energy challenges. The Chinese market remains resilient, providing a stable investment environment that may attract more foreign capital despite global volatility.

🔍 Japanese yen 🔍 China 🔍 BNP Paribas 🔍 Robot Phoenix Shares 🔍 Middle East

19:37
PDT

High investor interest in the EV supply chain, particularly in robotics and battery components.

– Geopolitical tensions are creating diversification opportunities in the Chinese market.

– Advancements in robotics are rapidly evolving and attracting investor attention.

– The traditional energy sector is facing challenges, prompting a shift towards renewables.

– Clients are looking for structural changes in investment strategies.

EV supply chainroboticsgeopolitical riskrenewable energy

▸ Full transcript

Robust here in the region, and there's a lot of opportunity for clients to look at acquiring further in that space. It seems to be quite robust, and the interest seems to be pretty high. On that front, you've just outlined some of the outlook for ECM. Is there a particular part of the EV supply chain that you think investors or you're advising investors to focus a bit more on? Well, we're here talking about the whole spectrum, and our agenda is covering everything from batteries to OEMs to the components and even the robotics element of that landscape. We've got robots wandering around behind me shaking hands with clients, and it's incredible how fast the agility of those robotics has come on in the last few years. So the whole sector seems to be benefiting from the backdrop in the Middle East, to be honest. It's also true that China, as a market, offers a lot of diversification. So clients can look at the market through China and really find diversification that isn't necessarily always available in every other part of the world.

Analysis

Investors are increasingly focusing on the electric vehicle (EV) supply chain, with a notable interest in robotics and battery components. The backdrop of geopolitical tensions in the Middle East is creating opportunities for diversification, particularly in the Chinese market.

The agility and advancements in robotics are becoming a significant draw for investors, indicating a shift towards integrating technology in traditional sectors. This trend suggests that smart money should consider not just the EV market but also the broader implications of robotics and renewable energy technologies in their portfolios.

🔍 China 🔍 electric vehicles 🔍 robotics 🔍 renewable energy

19:35
PDT

Strong interest in renewable technologies amid challenges in traditional energy.

– Foreign investors are net selling in Taiwan and Korea's AI hardware sector.

– Clients are shifting focus towards the buy side in renewable investments.

– The turnout at the conference reflects a significant appetite for structural change.

– Investors are repositioning around both AI and renewable sectors.

renewable energyAI investmentmarket repositioning

▸ Full transcript

Renewables are becoming increasingly important, especially in this part of the world, including China, which is recognized as a cutting-edge provider of these technologies. It is not surprising that clients are joining us today, as investors are keen to hear more about this story at a time when the traditional energy sector looks very challenged. Brian, we talked about how foreign investors have started to sell out or at least net sell in markets like Taiwan and Korea, particularly in some of these hardware names within the AI space. How are investors you’re talking to repositioning around not just this AI revolution but also around the whole renewable space now? Clients are interested in adding to their portfolios, and the interest we’re seeing today is on the buy side of that equation. The region is very strong.

Analysis

Investors are increasingly interested in renewable technologies, particularly in the context of a challenging traditional energy sector. The strong turnout at the conference indicates a significant appetite for structural change among clients, with a notable shift towards the buy side in the renewable space.

Foreign investors are net selling in markets like Taiwan and Korea, particularly in AI hardware names, suggesting a repositioning strategy. This trend highlights a potential divergence in investment focus, with a growing interest in renewables that could reshape market dynamics in the region.

🔍 China 🔍 Taiwan 🔍 Korea

19:32
PDT

Inflation expectations are rising due to geopolitical tensions.

– Bond yields are under pressure, affecting global markets.

– The current inflationary environment is likely to persist.

– AI advancements may contribute to inflationary pressures.

– Regional currencies are facing additional stress.

inflationary pressuresgeopolitical riskbond market volatility

▸ Full transcript

In New York last week, we saw bond yields slipping further, wider also in Japan as you've highlighted. I think there's less pressure in the region, and I think certainly as we look towards China, a little less pressure than we might expect in other parts of the world. Do you think that expectations for hotter inflation are sort of taking hold right now? Brian, I'm just wondering, this higher yield—are we at this new range that's here to stay, or do you think that what we're seeing in inflation is still short-lived? Once the strait-up from Israel fits, it's hard to imagine that inflation repressions are going to be short-lived anywhere. Obviously, the longer the closure persists in the Middle East, those inflation repressions are going to persist. As you've mentioned, they're having an impact on global markets. They're having an impact here in the region, and I would imagine that we're going to be talking about inflationary pressures, pressure on regional currencies, pressures on various market bond yields. I think that we're going to be talking about them for some time. It's tough to say how long the current impasse will last in the Middle East.

Analysis

Expectations for persistent inflation are solidifying, driven by geopolitical tensions in the Middle East, which are impacting global markets and bond yields. The current inflationary pressures are likely to remain a topic of discussion for an extended period, complicating the outlook for monetary policy and regional currencies.

Smart money should note that the interplay between rising yields and inflationary fears could lead to sustained volatility in bond markets. Additionally, the implications of AI advancements and their economic impact may further exacerbate inflationary trends, challenging central banks' responses.

🔍 Japan 🔍 China 🔍 Israel 🔍 BNP Paribas

19:29
PDT

30-year Treasury yields above 5% are a key risk factor for the AI trade.

– Investors are increasingly using exotic options to hedge against market volatility.

– Rising inflation and potential rate hikes are creating a cautious market sentiment.

– China's focus on low-cost AI implementation may reshape competitive dynamics.

– The derivatives market is active as investors seek alternative strategies.

bond yieldsAI tradeinflation concernsderivatives market

▸ Full transcript

Look at how those gains that we saw a couple of weeks back on the yen have just been eroded. You're looking at dollar-yen moving towards that 159 handle at a time when investor concerns are really front and center on oil prices, inflation, and whether the strait gets reopened. Yvonne. Yeah, and in Asia certainly that's where all that energy crisis remains right where you take a look at what Japan we have poor talking about how they might have to spend more in this extra budget here as they deal with this Middle East crisis. And that's probably why you're seeing long-end yields, not just in the JGB market, but really regionally and globally, heading higher here. So certainly there's a concern that it's not just the oil hit, it's not just the inflation hit, but there also is this AI boom that is leading to a lot of supercharged economies here as well that could actually lead to maybe higher yields, more inflation, and potentially more rate hikes from central banks across the region. There's a lot of red on the board today. Let's get more with Brian McCappen, APEC deputy head of global markets at BNP Paribas. He joins us from the bank's Global Electric Vehicle and Mobility Conference in Hong Kong. So Brian, we want to talk a bit about how perhaps as investors look for other ways into frontier technology, it's not just about AI, it's about robotics as well, which I'm sure you have a lot to say on, but talk to us about this macro backdrop when inflation seems.

Analysis

The recent rise in 30-year Treasury yields, now at 5.15%, is raising concerns among investors about the sustainability of the AI trade, with many anticipating a cautious market outlook. The derivatives market is seeing increased activity, particularly in exotic options like look-back puts and dispersion trades, as investors navigate the uncertainty created by higher bond yields.

Investors are grappling with the dual pressures of rising inflation and potential rate hikes, which could dampen the AI boom. The focus on cost optimization and low-cost AI implementation in China suggests a strategic pivot that may influence global market dynamics, particularly in technology sectors.

🔍 US Treasury 🔍 Baidu 🔍 Alibaba 🔍 Japan 🔍 BNP Paribas

19:27
PDT

Adobe is focusing on a long-term transformation strategy.

– Bloomberg is launching new equity indices based on data-driven methodologies.

– The shift to transparent benchmarks may disrupt traditional market metrics.

– Investors should prepare for potential volatility as benchmarks evolve.

– Institutional interest may grow in more reliable market indicators.

market benchmarksdata-driven investing

▸ Full transcript

Changes for the better. It starts with Adobe. I'm very excited about our ReInvention story today, which is literally 160 years in the making. The ReInvention was trying to bring a company into the trends of the future. Equity indices built on opinions? That's the old way. The new way is Bloomberg Equity Indices, built using transparent, rules-based methodologies that are more responsive to changes in the markets, powered by 450 billion daily data points, and backed by research from hundreds of global experts, delivering benchmarks driven by the markets, not opinions. Bloomberg Equity Indices, get evolved benchmarks for today's equity markets. Some see heroes. Others only egos. We see the era of billionaire athletes. While others follow the noise, we follow the money. Welcome to Balance of Power; you're watching Bloomberg Deal. Welcome.

Analysis

Adobe is undergoing a significant transformation, emphasizing a ReInvention story that aligns with future trends. The introduction of Bloomberg Equity Indices aims to provide more transparent and responsive benchmarks, moving away from traditional opinion-based metrics.

Smart investors should note that the shift towards data-driven equity indices could reshape market benchmarks, potentially leading to increased volatility as traditional metrics are challenged. The focus on transparency and responsiveness may attract institutional investors seeking more reliable indicators in uncertain market conditions.

🔍 Adobe 🔍 Bloomberg

19:21
PDT

China's AI push emphasizes cost efficiency.

– Baidu's performance may not meet market expectations.

– Rising yields are a significant risk factor.

– Solid numbers may not translate to positive market reactions.

– Core businesses of Chinese tech firms are under pressure.

cost optimizationAI sector dynamicsrising yieldsmarket expectations

▸ Full transcript

Those big discounts are due to a very cost-efficient model. There's a real focus on cost optimization. While the performance may be slightly outside the top ten, being 11th is still not bad; you're getting solid performance at a very low price. That defines China's push globally in AI to lead on low-cost implementation. Again, it's defined by the government strategy to try and accelerate the proliferation of AI. I think that would determine everything. So, while the headline numbers from Baidu should be solid, you could almost pre-record this and play it again next quarter. There will be solid numbers, but to what extent is that anticipated by the market? Can they incrementally outperform market expectations as time goes on? That's harder and harder to do, and with the backdrop of increasing risk aversion and rising rates, the risk is we get solid numbers but still see market disappointment.

Analysis

China's AI sector is focusing on cost optimization, with a strategy to lead globally through low-cost implementations. However, rising yields and increasing risk aversion may hinder the ability of companies like Baidu to exceed market expectations despite solid headline numbers.

Investors should note that while Baidu's performance may appear stable, the pressure from rising rates could lead to a significant disconnect between actual results and market anticipation. The ongoing challenges in the core business of major Chinese tech firms suggest that the narrative of future growth may be increasingly difficult to sustain.

🔍 Baidu 🔍 Alibaba 🔍 China 🔍 AI sector

19:19
PDT

Inflation concerns are shifting focus from rate cuts to potential rate hikes.

– Baidu's first-quarter profit dip highlights ongoing challenges in the tech sector.

– Consensus estimates for Baidu have been significantly downgraded.

– The tech sector's core businesses are under pressure from various market factors.

– Investors should be cautious about overhyped AI prospects.

inflation risktech sector challenges

▸ Full transcript

We're talking about rate hikes now, and of course, following on from producer inflation that was already hot out of Japan last week, CPI at the end of the week. So a couple of things on the table this week. Yvonne? Yeah, it'd be interesting to see those 10 minutes whether we see any sort of dissents and really what they're looking at in terms of what they do with inflation, right? Because, you know, Kevin Warsh is largely seen as in some ways, I don't know, maybe he has been talking about in favor of rate cuts. Can he still deliver that in the face of these rising inflation fears out there? Bayou is also set to report its largest first-quarter profit dip since 2019 today as it faces pressure from price wars, weak consumer sentiment, and oversupply. Lumbering intelligence maintains that the company's AI prospects remain overhyped. Let's bring in Robert Lee, our senior analyst. He joins us now. OK, it looks like another set of weak earnings for Bayou. Do you see an inflection point anytime soon? Well, I guess the sell side has been trying to call that for the best part of two years, and just to quote a number from the terminal, if you look at consensus estimates, they've been downgraded by 52% relating to the year 2027 since March last year. So in no way am I trying to criticize former colleagues on the sell side; it's not an easy job, but this sort of jam tomorrow argument keeps, you know, has been the playbook for the last two years, and it's just not coming through in the numbers. There are some parallels between Baidu and Alibaba in that their core business is under immense pressure.

Analysis

Rising inflation fears are complicating the outlook for rate cuts, with discussions now shifting towards potential rate hikes. Baidu is expected to report its largest first-quarter profit dip since 2019, facing challenges from price wars and weak consumer sentiment.

The significant downgrade of Baidu's consensus estimates by 52% since March last year indicates a persistent struggle for the company, reflecting broader pressures on its core business. This situation mirrors Alibaba's challenges, suggesting that the tech sector may be facing a prolonged period of underperformance despite AI hype.

🔍 Baidu 🔍 Alibaba 🔍 Japan 🔍 US Federal Reserve

19:16
PDT

30-year Treasury yield at 5.15% raises caution among investors.

– High bond yields may negatively impact the AI trade.

– Investors are utilizing exotic options like look-back puts.

– Dispersion trades are gaining traction, focusing on single-name stock volatility.

– Market sentiment is leaning towards caution in the near term.

bond yieldsAI tradederivatives marketvolatility strategies

▸ Full transcript

In the next three to six months, the biggest risk factor is bond yields. A lot of them are pointing out that if the 30-year Treasury yields stay consistently above 5%, they expect that to knock off the AI trade. Today, as you just reported, the US Treasury 30-year yield is at 5.15%. Overall, the narrative will probably lean towards a cautious side in the near term. Against this backdrop, do investors see this selling as a buy opportunity, if at all? A lot of people are actually playing in the derivatives market right now because it is really hard to call whether the AI trade will actually resurface as a winning trade in the backdrop of higher bond yields. Some of them are piling into the so-called exotic options trade called look-back puts. These are the type of put options that can reset at higher levels when the market rallies. These are a little bit more expensive, but they outperform the plain vanilla put options in an environment where the market rallies before it actually plunges. Another options trade people are looking at, regardless of where the cash market is going to go, is the so-called dispersion trade, which is betting on the high volatility on single-name stocks instead of on index level because options are volatility on index.

Analysis

The US Treasury 30-year yield has reached 5.15%, raising concerns that sustained high yields could dampen the AI trade. Investors are increasingly turning to derivatives, particularly exotic options like look-back puts, as they navigate the uncertain market environment.

Smart money should note the shift towards high volatility strategies, such as dispersion trades, which focus on single-name stocks rather than index-level volatility. This indicates a cautious sentiment among investors as they prepare for potential market fluctuations driven by bond yield movements.

🔍 US Treasury 🔍 AI stocks 🔍 single-name stocks

19:14
PDT

Spike in yields raises inflation concerns.

– China's 30-year yield under pressure despite economic data.

– AI rally losing momentum due to higher yields.

– South Korean equities recovering from initial declines.

– Reflation not yet evident in the markets.

inflation concernsglobal debt marketsAsian equitiesAI sector dynamics

▸ Full transcript

First, follow the noise. We follow the money. Hong Kong to learn more. Bloomberg Invest Hong Kong, where intelligence meets capital. Alright, continuing to track how the spike in yields and the concerns about inflation are playing out across global debt markets. Certainly, Japan and the US have been in focus. You're also seeing a bit of pressure on the 30-year yield in China, which is interesting given the numbers that we got out of the Asian giant just at the top of this hour. It doesn't look like reflation is stirring. Take a look at the rest of the Asia Pacific as well in terms of stocks on a day where the South Korean benchmark is continuing to manage some momentum. It's really erased the declines from the start of the session on a day where, of course, the AI rally seems to be bogged down a little with these higher yields. Our Asia equities managing at the salienting.

Analysis

Yields are spiking, raising concerns about inflation across global debt markets, particularly in Japan and the US. The pressure on China's 30-year yield is notable, especially given the recent economic data from the region, suggesting that reflation is not yet taking hold.

Smart money should note that while the AI rally is losing momentum due to higher yields, South Korean equities have managed to recover from earlier declines, indicating potential resilience in the face of rising interest rates. This divergence could signal opportunities in specific Asian markets amidst broader global trends.

🔍 China 🔍 Japan 🔍 South Korea 🔍 US 🔍 AI sector

19:09
PDT

Tariffs are still a key concern in US-China trade.

– Investment in non-sensitive areas may see less regulatory scrutiny.

– Policymakers are cautious about implementing stimulus.

– Economic data suggests a K-shaped recovery.

– Future meetings between US and China could influence trade dynamics.

US-China trade relationstariff policyinvestment certaintyK-shaped economy

▸ Full transcript

Resilient and expected to address tariffs and the impact of the war. We're expecting a couple of meetings to come later in the year from both sides. If there was one risk that you would highlight, what would it be? Well, I think a tariff is definitely still the focus, and we're aimed at normalizing the trade between the two countries. I think basically last year, we saw the record low in terms of the share of US-China trade as a percentage of China's total trade with the rest of the world, below 9%. So there's a lot of room for improvement. But on top of that, the statement regarding the bottle of investment also caught my eye. Basically, Secretary Besan said something like they want to have a pregame such that the investment into the non-sensitive, non-strategic areas will not get referred to CFIUS. That would be preferred by the business, providing a lot of certainty in terms of talking about investment potentially into the US. You mentioned the K-shaped economy. What is the proper policy prescription to fix that? I mean, it seems like policymakers now are waiting to see without really implementing any stimulus; they pulled back on fiscal spending in March. Do you see that they could actually be implementing stimulus after these numbers? I'm not so sure about that for now. I think overall the situation is still uncertain.

Analysis

Tariffs remain a focal point in US-China trade relations, with expectations for normalization as both sides plan future meetings. The recent statement from Secretary Besan regarding investment in non-sensitive areas suggests a potential easing of restrictions, which could provide more certainty for businesses looking to invest in the US.

The current K-shaped economy indicates a divergence in recovery, with policymakers hesitant to implement stimulus despite disappointing economic data. This cautious approach may signal that any forthcoming measures will be limited, impacting growth expectations and market sentiment.

🔍 US 🔍 China 🔍 Secretary Besan

19:07
PDT

China and the US aim for stable relations despite rivalry.

– The term 'constructive strategic stability' reflects a willingness to collaborate.

– Expectations for tariffs post-301 investigations may stabilize.

– Pragmatism in US-China relations could influence market sentiment.

– Youth unemployment remains a challenge in China.

US-China relationstariff policyeconomic stability

▸ Full transcript

See more measures such as creating internships and trying to give more training, etc., playing out. You mentioned the Trump-Xi summit. China had a very interesting line in that readout: constructive strategic stability. Yes. What does that mean? I know you're really good with rhetoric and really deciphering what China's interests are. Do you think that's been reflected in what it shows with US interests as well? I do think so. Because last year, we have seen many two rounds of movement. After the Boussine meeting of the two presidents, we seem to enter a new period where both sides signal that despite the rivalry on many different fronts, they will continue to work with each other. I think pragmatism actually matters quite a bit. In this specific summit, I think China and the US definitely send a signal that they are going to seek a relatively stable relationship while working with each other on different fronts. What are your assumptions on where tariffs are going to land? We still have those 301 investigations that conclude at the end of the summer, and Trump has talked about the threat of raising those tariffs again. What are your assumptions right now? Actually, previously I thought after the 301 investigation we would end up with some tariffs more or less on par with what we started with at the beginning of the year before the IEPA ruling.

Analysis

China and the US are signaling a desire for a relatively stable relationship despite ongoing rivalry, as indicated by the recent Trump-Xi summit's emphasis on 'constructive strategic stability.' This pragmatism suggests both nations are willing to collaborate on various fronts, which could influence future trade dynamics.

The upcoming conclusion of the 301 investigations may lead to tariffs that stabilize around current levels, contrary to expectations of significant increases. Smart money should note that this could mitigate immediate trade tensions and provide a clearer outlook for businesses reliant on US-China trade.

🔍 China 🔍 United States 🔍 Trump 🔍 Xi Jinping

19:05
PDT

PMI data indicates potential recovery in SMEs.

– Youth unemployment remains a significant challenge.

– Export orders show improvement after two years.

– Economic growth may be supported by SMEs.

– Domestic consumption still lagging despite export strength.

economic recoveryyouth unemploymentSME growthexport performance

▸ Full transcript

What do we know about how that might play out in the next couple of months? Is what we're seeing in the data today already a sign of things to come? Well, I think for the data today, it's pretty much a summary of what happened previously. What's interesting is what's going to happen next. For that, I think the end of April print of the PMI actually tells the story. Actually, it's been a while since we saw this more enterprise PMI revert back to 50, and the same is true for the medium-sized enterprise. Counterintuitively, the subindex of the export order PMI actually reverted to above 50 after almost two years. So that tells me probably we will see more support on the SME side, and those are actually quite powerful in creating jobs and supporting economic growth. What are you seeing among the youth and the jobless in China at this stage? And does that also figure into your view of the narrative that things are stirring among the smaller firms in China? Well, I think the youth unemployment rate continues to be a challenge in China, as we can see from the data.

Analysis

China's PMI data shows a potential shift, with the enterprise PMI returning to 50 and export order PMI exceeding 50 for the first time in nearly two years. This suggests a possible resurgence in support for small and medium enterprises (SMEs), which are crucial for job creation and economic growth.

However, the persistent challenge of youth unemployment indicates that while SMEs may gain traction, broader economic recovery remains uneven. The data reflects a complex landscape where export strength does not necessarily translate to domestic consumption or job stability.

🔍 China 🔍 SMEs 🔍 EV cars 🔍 semiconductors

19:03
PDT

China excels in exporting AI-related products.

– Industrial production is slowing, raising concerns.

– Domestic consumption remains challenged despite export strength.

– AI boom may not translate to sustained economic growth.

– Investors should monitor the balance between exports and domestic consumption.

AI export growthdomestic consumption challenges

▸ Full transcript

Job creation will probably support consumption. When it comes to trading, Liu, when the export numbers came out a couple of weeks ago, it showed that AI boomed. The worries are that the transmission into the consumption side is coming quite slow and is quite challenged. How do you see that playing out? Right. So we still see that China actually excelled in exporting EV cars as well as some semiconductors. What do you make of this AI boom? We saw it in the trade data just a week ago; everything that's AI-related in the supply chain that China seemed to be exporting and importing. How sustainable is that? Because I'm even looking at industrial production numbers, which happen to support it by exports. Even that is slowing down now. So was that just kind of front-loading, or do you think the trend can continue and drive exports further? I think basically this is a global AI story. If we believe in AI, it can eventually boost.

Analysis

China's export performance remains strong, particularly in AI-related sectors like EV cars and semiconductors, but there are concerns about the slow transmission to domestic consumption. Industrial production is also showing signs of slowing down, raising questions about the sustainability of this export-driven growth amidst a global AI narrative.

The current data suggests that while exports are buoyed by AI advancements, the underlying domestic consumption challenges could hinder long-term growth. Smart money should note the potential disconnect between export strength and domestic economic health, which may impact future market dynamics.

🔍 China 🔍 EV cars 🔍 semiconductors

19:00
PDT

China's retail sales growth significantly missed expectations.

– Industrial production growth also fell short of forecasts.

– Fixed asset investments showed a negative print.

– Property investment continues to decline sharply.

– Overall economic indicators suggest a softening recovery.

China economic dataproperty marketinvestment trends

▸ Full transcript

Yeah, you know Samsung certainly seems to be coming up with some progress in these negotiations to possibly avert a strike. We're still waiting for more details coming through from that meeting, but here you go: the activity data for China for April has just been released. I'm looking at the retail sales number, which is at 0.2 percent, so that is quite a sizable miss from the median estimates here right now. Honestly, we were expecting a 2 percent sort of print. Industrial production also was short of expectations at 4.1 percent, and we're also seeing a slowdown there from the previous month when it comes to fixed asset investments. It's a negative print now, we're talking about negative 1.6 percent. So quite a miss on multiple fronts here today. If you take a look at property investment, that continues to show double-digit contraction at 13.7 percent, which was also a miss there, and property sales when it comes to residential property sales are also in negative territory. Overall, it seems like this is a pretty soft set of numbers.

Analysis

China's April economic data reveals significant misses across key indicators, with retail sales at 0.2% versus expectations of 2%, and industrial production at 4.1%. The persistent contraction in property investment at 13.7% signals ongoing weakness in the sector, raising concerns about the broader economic recovery.

The negative trends in fixed asset investments and residential property sales suggest that the anticipated rebound in China's economy may be faltering. Investors should closely monitor these developments, as they could impact global market sentiment and investment strategies in related sectors.

🔍 Samsung Electronics 🔍 SK Hynix 🔍 China 🔍 PBOC

18:57
PDT

Samsung and SK Hynix stocks have more than doubled this year.

– Foreign investors sold a record $13 billion in Korean equities last week.

– Nvidia's earnings report is a key upcoming event for semiconductor stocks.

– Inflation fears are negatively impacting risk appetite in the market.

– Retail investors are currently supporting the market against foreign selling.

semiconductor market dynamicsforeign investment trendsinflation impact on equities

▸ Full transcript

Oh, hello there. Just wanted to say, Primer is back. Oh-ho-ho. We've been scouring the frontiers of science and technology to help explain the difference between the next gold rush and whatever this thing is. And in season two, we're upping the stakes. More danger. Now, that is some high-grade uranium mineralization. We used to have a stable climate on this Earth. Right now, we do not. More science. We're pushing the inflow of technology in multiple directions: software, hardware, chemistry, physics. The cable is like very cold. And more CEOs can nail the photo shoot. Hundreds and hundreds of billions of dollars are at stake. While the problems are economic, the solutions are too. And yes, we will be talking about AI. There is a lot of humanoid hype out there. But our future doesn't run on hype; it runs on innovation. Watch season two on all these lovely channels. Welcome to Bloomberg This Weekend. I'm David Groene. I'm Lisa Matej. And I'm Christina Rafidi. We're tracking breaking news today from Wall Street to Washington. Let's start over season. Bloomberg This Weekend. Bringing a little Bloomberg into your weekend routine. Watch, listen, stream. Bringing you up-to-the-minute global news whenever and wherever it happens. I'm Hazlita Armin and I'm in double Switzerland, and this is Bloomberg.

Analysis

The semiconductor sector, particularly Samsung and SK Hynix, is facing pressure from rising yields and inflation fears, impacting investor sentiment. Foreign investors are taking profits after significant gains, while retail investors continue to support the market, indicating a potential tug-of-war in equity dynamics moving forward.

The upcoming Nvidia earnings report could serve as a critical indicator for the semiconductor stocks, with many investors closely monitoring yield movements. Despite recent sell-offs, the substantial growth in Samsung and SK Hynix positions suggests that smart money may be positioning for a rebound after consolidation.

🔍 Samsung 🔍 SK Hynix 🔍 Nvidia 🔍 South Korea 🔍 PWC 🔍 Evergrande

18:53
PDT

JGB 30-year yield at 16 basis points, highest since 1999.

– U.S. Treasury 30-year yield at 5.15%, highest since 2023.

– Equity markets, particularly in Hong Kong, are declining.

– Inflation fears are resurfacing, impacting market sentiment.

– Geopolitical comments are adding to market volatility.

inflation fearsbond market volatilityequity market pressure

▸ Full transcript

Invest like the future is watching. For today's equity markets, we're seeing the deepening of the sell-off in global bond markets. The JGB 30-year yield is currently at 16 basis points, reaching a 420 handle, the highest we've seen since 1999. The Treasury market's 30-year yield is also at 5.15%, the highest since 2023. Oil fears and inflation concerns are back, especially after the April numbers from the U.S. Additionally, Trump's comments last week about the Strait of Hormuz reopening have roiled the markets, contributing to the pain in equity markets. The Hang Seng is lower by about 1%, while the onshore markets remain relatively flat. We are expecting a data dump shortly, as seen in the live pictures from the Bureau of Sustainable.

Analysis

Global bond markets are experiencing a sell-off, with the JGB 30-year yield reaching its highest level since 1999 at 16 basis points, while the U.S. Treasury 30-year yield hits 5.15%, the highest since 2023. Inflation fears are resurfacing, exacerbated by recent U.S. economic data and geopolitical comments, leading to a decline in equity markets, particularly in Hong Kong, which is down by about 1%.

The significant rise in bond yields indicates a tightening financial environment that could pressure equity valuations, especially in high-growth sectors. Investors should be cautious as the market reacts to inflationary pressures and geopolitical uncertainties, which may lead to further volatility in both bond and equity markets.

🔍 JGB 🔍 U.S. Treasury 🔍 Hong Kong 🔍 equity markets

18:48
PDT

Foreign investors are likely to take profits from Samsung and SK Hynix.

– A consolidation phase may precede further gains in semiconductor stocks.

– The Evergrande lawsuit against PWC could impact perceptions of auditing in distressed firms.

– The Chinese property crisis remains a significant risk factor for investors.

– Market sentiment may shift based on the outcome of the legal proceedings.

semiconductor market dynamicsChinese property crisisauditing risks

▸ Full transcript

Much of that gain has come from Samsung Electronics and SK Hynix. So I think a lot of the foreign investors are now dealing with this massive growth of their Samsung and SK Hynix position in their portfolio. And now it looks like a good time for them to take profit. But after some of the consolidation and possible pullback, a lot of investors are expecting cost-b to resume its gains. Yeah, I mean, even if there's a 20% bear market here, we're still talking about back to levels since what? April. So I mean, it's been a stellar rally to say please. You'll go thank you, our Asia Equities reporter there. You'll go only during this latest when it comes to Samsung. Let's turn to another company that we've been focusing on for a while now, China Evergrande, and its liquidators head to court today for the opening of their lawsuit against PWC in a case set to test the scope of claims against auditors of insolvent companies. Let's bring in our Bloomberg reporter, Trista Sheenian-Law. She joins me here. So this case really centers on PWC's auditing work on Evergrande. What are we watching out for? So this is actually the first public hearing between PWC and Evergrande liquidator. And it comes more than two years after the liquidator filed a lawsuit against PWC. And as we mentioned earlier today, here we focus on its auditing work of Evergrande, which is quite a symbol of the Chinese property crisis. You know Evergrande defaulted back in 2021. And today's video is really interesting because early on, you know...

Analysis

Samsung Electronics and SK Hynix have seen significant gains, prompting foreign investors to consider taking profits. Meanwhile, the ongoing legal battle involving China Evergrande and PWC highlights the risks associated with auditing practices in distressed companies, particularly in the context of the Chinese property crisis.

Investors should note the potential for a consolidation phase in semiconductor stocks, which could set the stage for renewed gains. Additionally, the outcome of the Evergrande lawsuit may influence investor sentiment towards Chinese equities and the broader property market.

🔍 Samsung Electronics 🔍 SK Hynix 🔍 China Evergrande 🔍 PWC 🔍 Chinese property market

18:46
PDT

Samsung and SK Hynix stocks have more than doubled this year.

– Higher yields are creating a negative macro backdrop for semiconductor stocks.

– Foreign investors sold a record $13 billion in Korean equities last week.

– Retail investors are currently dominating market buying activity.

– Nvidia's earnings report is a key upcoming event for market direction.

interest rate risksemiconductor market dynamics

▸ Full transcript

Where yields are picking up, this whole inflation fear is really kind of roiling overall the semiconductor space here. What is the outlook for Samsung in terms of the stock moving forward? Yeah, absolutely. Higher yields are threatening Asia's artificial intelligence trade. South Korea is one of the markets investors are closely watching for the possibility of a potential interest rate hike. So what we're seeing today is this negative macro background, all this background noise that is not very favorable to the risk appetite for high-flying stocks such as the semiconductor names like Samsung and SK Hynix. Both of the stocks have more than doubled so far this year. So I think investors will be closely watching the yields as well as Nvidia's earnings due later this week for the direction of Samsung and SK Hynix share prices going forward. Yu-Giang, this is a market that's gotten to these levels from the buying thanks to the retail army. Foreigners are still selling into this market. I mean, what are the signals you're gleaning from this? Yeah, absolutely. So I think last week we kind of saw this tug of war between retail investors and foreign investors. Foreign investors reduced a record $13 billion amount of Korean equities last week alone.

Analysis

Higher yields are impacting the semiconductor sector, particularly affecting stocks like Samsung and SK Hynix, which have seen significant gains this year. Investors are now closely monitoring interest rate trends and Nvidia's upcoming earnings report for further direction in these stocks.

The recent tug of war between retail and foreign investors indicates a shift in market dynamics, with foreign investors reducing their holdings significantly. This could signal a potential correction or increased volatility in the semiconductor space as retail investors continue to drive demand.

🔍 Samsung 🔍 SK Hynix 🔍 Nvidia 🔍 South Korea

18:40
PDT

Company is in a fast growth stage.

– IPO is a potential funding avenue.

– Focus on technology and product development.

– Optimism about Southeast Asian markets.

– Collaboration with customers on product needs.

IPO potentialSoutheast Asian marketsR&D investment

▸ Full transcript

Good customers are supporting us not just by placing orders but also helping us in developing new products that better fit their needs and working together on legislation and regulation with the government. It's interesting too, Sean, maybe you can tell us a bit more; there have been reports and some chatter that you guys are looking at an IPO sometime soon. Can you give us any sort of update on that? Well, everything you've heard is most likely unofficial. At this stage, we're expanding vastly and really in a very fast growth stage, so we're definitely open to all ways of collecting more funds from all sources, including an IPO. But for the business and R&D, our plan is very clear and straightforward: we need more money to develop better technology and more products for our customers, and we're open to all funding sources. You spoke earlier about Singapore being a way to showcase what is possible with the business; what are the other Southeast Asian markets that you're really optimistic or banking on at this stage? Thank you.

Analysis

The company is in a rapid growth phase and is considering an IPO as a potential funding source to enhance its technology and product offerings. This reflects a strategic openness to various funding avenues to support its expansion and R&D efforts.

Investors should note that the emphasis on developing better technology and products indicates a commitment to innovation, which could position the company favorably in competitive Southeast Asian markets. The mention of Singapore as a showcase suggests that the company is leveraging regional strengths to attract further investment and market interest.

🔍 Southeast Asia 🔍 Singapore 🔍 IPO

18:35
PDT

China's vehicle sales target set at 80,000 for 2025.

– Regional conflict in the Middle East impacting operations.

– Company focuses on technology investment for safety and efficiency.

– Continued product diversification to meet customer demands.

– Vehicles providing essential services during crises.

automotive growthgeopolitical risktechnology investment

▸ Full transcript

Well, China has been growing rapidly in the past few years. In 2023, we've sold about 200 units; in 2024, 2,000; and in 2025, 20,000. This year, we have a very aggressive plan of going, I think, close to 80,000 if possible. Challenges are there, of course, because for tons of driving, it eventuates a safety efficiency that we care the most. We have more vehicles running on the road where we'll be able to see more corner cases in different climate scenarios, different operating scenarios, etc. So we'll be continuously investing and digging deeper into the technology itself. Meanwhile, we'll try our best to provide more products for our customers to meet their requirements in different fields. You also have a presence in the Middle East, correct me if I'm wrong, in the UAE. I mean, how has the war affected some of these plants at all? Well, it's sad to say that the regional conflict definitely brought some challenges to our business and to the local people. It's glad that our vehicle, even in a crisis like this, is able to help local people in delivering water.

Analysis

China's vehicle sales are projected to surge from 200 units in 2023 to 80,000 in 2025, indicating aggressive growth plans despite safety and operational challenges. The ongoing regional conflict in the Middle East has posed difficulties for business operations, yet the company's vehicles continue to provide essential services to local communities during crises.

Investors should note the company's commitment to technology investment and product diversification, which may enhance resilience against market fluctuations. The ability to adapt and meet customer needs in various fields could position the company favorably in a competitive landscape, especially in times of geopolitical instability.

🔍 China 🔍 UAE 🔍 automotive sector

18:33
PDT

Robot Phoenix's IPO was highly oversubscribed, indicating strong retail interest.

– Alibaba Health and JD Health are experiencing declines.

– New home prices fell by 0.19% and used home prices by 0.23% in April.

– First-tier cities are showing signs of recovery in the housing market.

– Analysts are debating the potential for recovery in lower-tier cities.

IPO interesthousing market stabilization

▸ Full transcript

So you are seeing the likes of Alibaba Health and JD Health are lower this morning. And we have to talk about this debut, Robot Phoenix. We are seeing what has been a very punchy start of trade here. First day of listing here, they talk, you know, they of course are a robotics company which has been doing very well in this market. But the retail portion, get this, look at that. According to reports, was 14,800 times oversubscribed. So plenty of interest from the retail side of this for this stock. Aval, you're checking this home price data. What do we got? Yeah, for the month of April, we're seeing a slower decline on both the new and used home prices. So for new homes, a decline of about 0.19 percent on month, 0.23 percent if you're looking at used home prices. Of course, the housing sector slowdown has certainly been front and center amid the Chinese economic wobbles that we've seen of late in the month of April. Yeah, and I think it goes with the sort of trend that we're starting to see that maybe things are starting to bottom out. Of course, this is really a first-tier city sort of story for now when you talk about cities like Shanghai, we talk about cities like Shenzhen that seem to be driving some of the recovery in this market. So, you know, there's a big question of whether this actually broadens out to second to third-tier cities as well. But certainly that has been the big debate among a lot of these property analysts out there.

Analysis

Alibaba Health and JD Health stocks are lower this morning, while Robot Phoenix has made a strong debut, being 14,800 times oversubscribed in retail interest. The housing market shows signs of stabilization with a slower decline in new and used home prices, particularly in first-tier cities like Shanghai and Shenzhen, suggesting a potential bottoming out of the sector.

The oversubscription of Robot Phoenix indicates robust retail investor confidence in the robotics sector, which could signal a broader trend towards technology investments. Additionally, the slight recovery in home prices in major cities may suggest that the worst of the housing market downturn could be over, which is critical for overall economic sentiment in China.

🔍 Alibaba Health 🔍 JD Health 🔍 Robot Phoenix 🔍 Shanghai 🔍 Shenzhen

18:30
PDT

Bond sell-off linked to energy crisis.

– Equity markets in Asia under pressure.

– Samsung's labor negotiations show mixed signals.

– Chinese bond market remains resilient.

– Crude oil prices rising, nearing $110.

bond market volatilityenergy crisis impactinflation concerns

▸ Full transcript

Jesse at more supply. Yvonne? Yeah, we're talking about more fiscal strains and the like for these governments as they deal with this energy crisis. And certainly, that does add more fuel to this bond sell-off, right? And at what point is this really going to lead to more pain for equity markets? We're already seeing that across Korea, across Taiwan, across Japan; of course, these were the darling sort of markets given the whole AI hardware sort of trade. And now we're seeing that being roiled here today, especially in Korea. At least we got some slightly more positive news when it comes to Samsung and where they are in negotiations with the labor union. But then again, there still is that risk of some sort of strike with that company. So there you go. Oshun markets are doing a little bit better against the tide. Take a look at the CSI 300. We are lower by about four-tenths of one percent. Shenzhen is also falling just moderately here this morning. We're watching, of course, the bond market in China, which is a little bit more resilient to some of the external bond market fears we're seeing when it comes to oil and inflation as of now. But look at Shanghai Crude; we are elevated once again, we're up 6% and really following that move with Brent and WTI. As we talked about, Brent is back to 110 as we get closer to, of course, what happens with the Strait of Hormuz, right? We're back to that sort of reality there as well. Chips are seeing a little bit of sell-off here when it comes to Cambercon Tech, where we're lowered by about a third of one percent, but CATL is lowered by one. You take a look at what comes to the Hong Kong dashboard. Of course, we're just moments away. We just got that new home price that just came through here. We'll get that.

Analysis

The bond market is experiencing a sell-off driven by fiscal strains from the ongoing energy crisis, impacting equity markets across Asia, particularly in Korea, Taiwan, and Japan. Despite some positive news from Samsung regarding labor negotiations, the risk of strikes remains, adding uncertainty to the market outlook.

Investors should note that while external pressures are affecting bond yields, the Chinese bond market appears more resilient. The rise in crude oil prices, particularly Brent nearing $110, signals potential inflationary pressures that could further complicate the economic landscape.

🔍 Samsung 🔍 Korea 🔍 Taiwan 🔍 Japan 🔍 Brent 🔍 WTI

18:23
PDT

U.S.-China business dialogue is being institutionalized.

– No immediate major deals announced by top executives.

– 30-year Treasury yield hits highest level since 2023.

– JGB yields are also rising, indicating global bond market trends.

– Optimism exists for future trade relationship improvements.

U.S.-China relationsbond market trends

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Much engaged with the American Chamber of Commerce in China, as well as actually on some of the haves and having some of our companies that are on our board of governors. But they're not disappointed. They feel that this is just a long-term process, that if there are issues that they need to work with the Chinese, I think the messaging coming from both of our leaders is that this relationship and the relationship between our companies and China is critically important. We have a lot to offer, and it's a process of moving forward with the dialogue. And that may take, that's a lot of this is going to be taking place after the summit. So, in between, between now and the next touchpoint between the two leaders, we'll see what kind of progress that we're making. And hopefully we'll have, it won't be underwhelming, it will be overwhelming so we'll see what happens as we proceed through the year. James, we have to leave it there but thank you James Zimmerman there, chairman of Amgen China joining us from San Diego, also our thanks to Steve, our chief minister correspondent of course in Beijing for us. I just want to check when it comes to where bond markets are right now we're focusing on the Treasury market as well when it comes to the 30-year yield we are now at the highest level since 2023 so we're talking about a 515 handle now for the long end of the curve. JGBs are also moving in tandem. In fact, that 30-year JGB yield certain 20 basis points.

Analysis

The U.S.-China business dialogue is being institutionalized, signaling a commitment to stabilize relations and enhance trade, despite the absence of immediate major deals from top executives. This long-term process is viewed positively by business leaders, who believe it will foster clarity and predictability in U.S.-China economic interactions.

The current bond market dynamics, with the 30-year Treasury yield reaching its highest level since 2023, indicate a tightening financial environment. Investors should note the correlation between U.S. yields and Japanese Government Bonds (JGBs), suggesting a broader trend in global fixed income markets that could impact capital flows.

🔍 U.S.🔍 China 🔍 Amcham China 🔍 Treasury market 🔍 JGBs

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U.S. business leaders are preparing for potential China-related political tensions.

– The importance of U.S.-China relations is highlighted for global economic stability.

– No major deals were announced by top executives during the recent summit.

– Dialogue is seen as a positive step, but tangible outcomes are lacking.

– Regulatory concerns continue to weigh on business sentiment.

U.S.-China relationsregulatory risksinvestment strategy

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The U.S. economy, gas prices, affordability, and health care will be significant issues besides China on the agenda for the midterms. The business community is prepared for some China bashing that may take place, but they also need to advocate for the importance of the U.S.-China relationship for the economy, not just for the U.S. and Chinese economies, but for the world economy as well. Political issues will arise with the upcoming elections, and there is hope that China will not be the focus of attention. However, the business community is ready to ensure that the relationship moves in the right direction. James, were you disappointed that the large contingent of top U.S. executives, including Jensen Huang, Elon Musk, and Tim Cook, did not announce significant deals for the H-200 AI accelerator or any movement on self-driving robotaxis for Tesla?

Analysis

The U.S. business community is bracing for potential political tensions regarding China as the midterms approach, emphasizing the importance of U.S.-China relations for global economic stability. Despite a high-profile delegation of U.S. executives, no significant deals were announced, indicating a cautious approach to engagement with China amidst ongoing regulatory concerns.

Smart money should note that while the dialogue between U.S. and Chinese leaders is a positive step, the lack of immediate tangible outcomes from top executives suggests underlying hesitance in making bold commitments. This could signal a prolonged period of uncertainty in U.S.-China relations, impacting investment strategies in both markets.

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