[CC may contain inaccuracies] Your take Catherine on what we heard from the BBC just this morning. What's what's the overall initial reaction. So it's not
too unexpected. And just like we've seen over the past couple of years when we look at the drivers of the market it continues to
be the flashing of the records economic recovery and the pace of the recovery. And very importantly common policy response is
they really have started the new year in a different position. Let's say other global banks we do expect to see further easing
or supportive measures like monetary wise as well as from a fiscal sense as well.
OK. Is this it though. I mean last week Hong Kong stocks if I'm getting my statistics correctly here had the best week in
something like 14 mines. So to a large extent most other sectors ex property for example have started to just come off the bottom
as far as I guess price and obviously as a function of valuations here. Do you think we've seen it. Is this it that
that turns the ship around finally. Well I think it's a recognition that the inflection point of
hawkish policy really was that the third quarter of last year. But it's all going to be all out easing. It's going to be very
targeted. And the key is always when it comes to policy responses in China is that of stability. And really
interestingly when we look at the market last year the value names were outperforming but it was mainly because a lot of the
well loved growth names were underperforming. So this year we do expect those value names from an absolute perspective to start
doing better. So you know again what's key for us in terms of this market environment is really being diversified being
cognizant also of any downward revision earnings. When it comes to earnings especially when you see MSCI China 40 percent you're
probably going to see some negative surprises coming through. So that earnings certainty in this market really it's Kate.
Yeah and I think people are focusing a lot on this whole value rotation now you're seeing some of that in Asia. I'm just
wondering does it disrupt the tech rebound especially that now some of these Chinese mega skeptic planes are actually deep
value plays. It does an interesting bit of a barbell approach because not
only do we have an exposure to lots of unloved old economy value type of sectors and stocks but also the smoke. So many names
within small caps whether it's single consumer related looking very attractive to say I don't think that necessary thing. We're
never going to hear any further new regulatory. Why we're all going to continue to hear this. But it's really filling in the
gaps from the big announcements. We had regulatory license so common prosperity
still going to be key. And in terms of this policy environment the macro has weakened. Hence why you're going to get more of
these stability or supportive measures being introduced into the economy.
Katherine it took one weekend for us to start. Well for us to go from maybe they're going to hike in March to maybe they will
hike by 50 basis points. I'm talking about the Fed here. How does that affect if any your approach or allocation to risk
assets. Interestingly even lastly one of the key risks we felt looking
at the Asian markets was the potential correction of the market in developed markets.
And so once we started seeing that policy shift. What happens to all that free money that households were getting. And with
inflation that's globalization at rates that we are seeing are consumers willing to spend or pay X amount for a product if they
don't see that the transfer of cash to the government balance sheets the household balance sheet that's being taken away. So
definitely the key words in this one. Also from a Chinese perspective when we look at the correlation between the mainland
stock market and the S&P 500 is incredibly low and it's almost like China's been there done that and now they're starting a new
cycle. So it's obviously a very different positioning or scenario than what we're seen. So if you could take anything
away from that the biggest risk really is really the policy response or policy mishap from a global perspective.