China, United States, Vietnam discussed on Biz 1190 Overnight featuring Bloomberg Radio
Now for a look at the markets gills. Debra not a great day for Asian investors. We are seeing the Asia Pacific index down by about six tenths of one percent. So it's actually on track for its biggest daily loss this week. You can say China's markets coming off its recent highs, the CSI three hundred extending losses in the afternoon session, along with weakness. In Hong Kong. Of course, a lot of these supplies and rivals E getting hit today. The Hong Hong Kong Hang Seng weaker by three quarters of one percent. The Nikkei being dragged down by that strength in the yen again, actually, holding a one wake high ahead of the news. And of course, the US jobs report, and then the dollar holding up pretty well as well seventy four five and use of JP Morgan pretty bullish on this currency. Even though we had yet another week raid on the economy today retail sales missing expectations with a rise of just point one of one percent month-on-month in January Yousef. Thank you very much for that. Julia. The CD is cut forecasts for world economic growth this year, citing tensions and political uncertainty. The organization slash the outlook for most merging markets as well. And that that a sharper slowdown in China would have huge consequences for global growth and trade. Joining us now is Mark mobias. He's the co founder and partner at capital partners. Welcome back to the program Mars back early on in the year in January, you're saying bike Witty's any with a focus on India. Brazil and Turkey since then we've had this grossing Zion. He comes through the central banks are throwing a Shifter tune as well. There's more Moebius started recalibrating as well. Well, if you look at the index, the Marcus index, you'll see that the recovery has been terrific. I mean after a long period of decline, we've seen a very very nice pickup. And the index is moving up at a good pace. A lot of that. Of course is what's happening in Brazil and China China is coming back, and I believe that the opportunities terrific now in emerging markets who's we now still at a down turn the down the point compared to where we were many years ago, and the company is going to be very nice, I think, but the growth has moderated and you look at some of the statistics from the city economic surprise index, and we've taken some of the regional subsets of that, and you compare the data that we have today whereas the first week of March compared to a year ago and the economics surprises have just dramatically dropped into the negative. So a lot of negative economic surprises across emerging markets across China and senior as well. But it's not a concern for you know, because a lot of that is backward. Looking looking at the data that we had last year and the beginning of this year looking I think it's gonna be a lot better. Your the interesting aspect notice the latest trade figures for the US trade deficit is up. What does that mean? It means that the China trade war has not really had that impact that they expected. In other words, a lot of the. Yes, it's true that perhaps exports from China. On the downturn. But allow that trade is moving to other parts of the world Bangladesh, Vietnam, Egypt Turkey, all these countries are gonna benefit from this. Because the the exports that China's been making is going to be shifted to these countries. So it's very very interesting phenomenon that we're seeing at this stage. The big news of the days that the US president is now even more keen to get a deal done to try and give the stock market in the US a little bit of a boost. Do you believe that he can pull through with something in the in the short term? I believe that quite possible because both sides China, of course, wants a deal. I would say China wants to deal more than the US wants a deal, but you must remember look at the stock market in the US. It's had an incredible recovery has jumped up from the low point. So I think there's not that much pressure on Trump to do deal. But I think there's more pressure on the Chinese what about? Opportunities in China. You said you're keen to do more in China. But at the same time, the valuations, especially on some of the main stock exchanges. They're getting quite quite frothy to say, the least I mean, you looking here at seventy percent of equities on the Shanghai and Shenzhen benchmarks. They're trading above the level of seventy. That's just one indicator. We put together a charts as well for clients to to get that extra perspective. But you still seeing pockets of what we're seeing is not for the large cap stocks. We're going to low and middle cap stocks. So that's where the value is. I believe in China and in many other parts of the world, India's a very good example of that. So I mean with China, and this is again, the GT that I was referring to just moments ago, China, you're keen on I want to say to the region for a minute because in the past you've said that you're not keen on Saudi Arabia because of the killing of dementia Shuki journalist, even though the traditional players around the inclusion, which is really tried to test method of making money in a very full amount of ties, exactly. Saudi Arabia getting back on your radar. Yeah. Has a size and scale might be too hard to ignore. That's reality of that's true going into the index having it the heavy awaiting is going to have an impact. There's no question about that. Because, you know, at least half of the money is index oriented, but I think it's gonna take a while. It's gonna take a few years before, you know, people really feel comfortable about what's happening in Saudi Arabia. Nevertheless, there's no question money will be four in the index. Yeah. But you're not ready to Saudi Arabia diversification. Play yet. Not yet. I'd prefer to go to Egypt. Egypt is your top play in the region. Definitely Egypt is in the region. Why Egypt more attractive than the rest of the region? The reforms that are taking place you seeing quite a lot of reforms stability, and the government is pretty good at this stage of the game. And the great companies real great entrepreneurs. And we believe that many opportunities again, of course, what we define as a small and mid cap may be large gap in Egypt in terms of market cap. But we're looking at temendous opportunities there. What's going to happen with with Europe and breaks if we're waiting for the beat to come out with their announcement later on day? Central banks general have become a lot more dovish. Is Europe at an inflection point to the downside here is that what we need to either Europe is not going to be doing very much for a while eastern Europe is different. If you take a country, like Romania Poland interesting things happening in eastern Europe. But the rest of Europe is in really a slump simply because the withdrawal of the UK from the European Union is going to have a negative effect on not only the UK, but also Europe in general and the uncertainty. That's really the bottom line really is no leadership in the UK to say look with the direction we're going to be moving walkways. We've space many times over the years. And I know you as a man who likes valuations to be low and for there to be a lot of return in a short amount of time. Brexit has arguably brought down by the oceans across asset classes in the UK. Is there a point where you would say, okay. This is getting with the interesting for me despite the. That's happening on the political side. Oh, there's no question. We always looking forward. I mean, we're to look at we, of course, look at the rear view mirror to see what's happened. But we're looking forward to see where these companies are going to be moving into the future. But at this stage, the uncertainty just too great. Not worth it. And if you could choose one top trade in the world right now, which one would it be Vietnam. Vietnam. Vietnam, Vietnam, stocks across the board of a Vietnam across the board. But particularly Vietnam socks. Okay. Thank you very much for that. Mark mobias there. He's a co founder and partner at the Moebius capital partners. Let's keep the conversation going around that part of the world because as hitting back and Washington's claims that Dede's China in espionage at suing the United States government for barring its equipment from certain network saying it's unconstitutional to punish without a fair trial. NDA congress act it. Arena as Josh jewelry and executioner. Correspondent Tom MacKenzie is at the Hawas headquarters in Shenzhen, Tom. What's the chronology of events? Looking like what comes next? The suing of the US government is what's been announced officially today, by the way. And they are saying the congressional Bill was passed in twenty nine teen. That effectively bans telecoms companies in the US from using technology is unconstitutional that it doesn't give them the right to reply that it damages that business in the US is challenging with this case. And it follows of course, what we've seen from wa wait challenging and suing the Canadian government over what they said was a.