Japan Reaffirms Plan to Deploy Missiles Near Taiwan | The China Show 11/24/2025

Japan Reaffirms Plan to Deploy Missiles Near Taiwan | The China Show 11/24/2025

ANNABELLE:
9:00 A.M. IN SHANGHAI SHENZHEN AND HERE IN HONG KONG YOU’RE WATCHING THE CHINA SHOW, I’M ANNABELLE DROULERS WITH DAVID INGLES.
DAVID: GOOD MORNING. WE ARE COUNTING DOWN TO THE
OPEN OF MARKETS. LET’S GET TO YOUR TOP STORY IS.
STOCKS ARE GAINING AFTER A VOLATILE WEEK ON OPTIMISM ABOUT
POTENTIAL RATE CUTS IN DECEMBER AND REPORTS THE U.S.
WILL ALLOW NVIDIA TO SELL AI CHIPS TO CHINA. ANNABELLE:
JAPAN HITS BACK AT CHINA AS TENSIONS SPIRAL OVER THE PRIME
MINISTER’S COMMENTS ABOUT TAIWAN.
TOKYO SAYS IT WILL DEPLOY MISSILES TO A MILITARY BASE
NEAR THE ISLAND. DAVID: PLUS WE ARE DIGGING INTO
LENOVO’S LATEST RESULTS WITH THE CFO JOINING US AS REVENUE
BEAT STREET ESTIMATES IN A SIGN THAT IT IS STRONG. GOOD MONDAY MORNING TO ALL OF
YOU. A LOT TO GET THROUGH AS OBVIOUSLY WE ARE GOING INTO A
FRESH TRADING WEEK. WE ARE COMING OFF THE WORST
WEEK FOR RISK ASSETS, INCLUDING BITCOIN
GIVING INTO THAT WORST WEEK SINCE ABOUT AUGUST. BITCOIN HAD
A BIT OF A CRAZY WEEKEND. WE WERE DOWN TO ABOUT 81,000.
WE ARE UP NOW TO ABOUT 80 6000 AND IT UNDERSCORES WHAT A
TERRIBLE WEEK IT HAS BEEN. A CONVERSATION TO BE HAD WITH
DECEMBER BEING PRICED AS A BASE CASE. SWAPS ABOUT 62. FLIP THE PAGE GOING INTO THE
DECEMBER MEETING. ALL OF THAT IS TO SAY THAT WE
ARE GETTING SLIGHTLY OFF THE EDGE AS FAR AS THE AI BUBBLE
CONVERSATION IS CONCERNED. ALSO HELPING IS PERHAPS THE FED
PUT WHICH IS PLAYING OUT ACROSS RISK ASSETS.
WE ARE BETTER BY ABOUT 1%. PERHAPS IT DOES HELP WE WERE
DOWN OVER 3% FRIDAY. JAPAN IS SHUT SO NO CASH
TREASURIES TODAY. CALL IT FLAT RIGHT NOW.
NIKKEI FUTURES GOING INTO THE OPEN TODAY.
WE WILL TALK ABOUT LENOVO. A COUPLE MOVING AVERAGES TO
WATCH. WE TOOK OUT SEVERAL TO THE
DOWNSIDE. THERE HAVE ALSO BEEN CHANGES TO
THE INDEX. DECEMBER 8 IS THE EFFECTIVE
DATE. BIG NAMES COMING OUT. WE HAVE A BOND OPTION TODAY AND
ABOUT 97 BILLION REM ON THREE YEAR BONDS.
A LEVEL TO WATCH COMING UP ON YOUR SCREENS ON THE HANG SENG
TECH WE WERE ON BEAR MARKET WATCH FRIDAY.
WE DID NOT GET TO THAT LEVEL. THE 3% DROP PUTS US CLOSE TO
THAT LEVEL. LOOKING AT THE EARLY PRICING IT
LOOKS LIKE WE WILL GO THE OPPOSITE WAY.
POINTS FOR SOME GAINS GOING INTO THE MONDAY OPEN. ANNABELLE:
TWO THEMES INVESTORS ARE LOOKING AT.
FIRSTLY YOU HAVE THE CHANCE OF A FED CUT IN DECEMBER BACK ON
THE TABLE AGAIN. SO THAT HAS BEEN INDICATED.
THE OTHER THING THAT CAME ON FRIDAY WAS OUR BLOOMBERG SCOOP
WAS ESSENTIALLY THE U.S. ADMINISTRATION COULD ALLOW
NVIDIA TO SELL CHIPS TO CHINA. THAT IS SIGNIFICANT BECAUSE
USUALLY BE TALK ABOUT THE H 20 BUT THE H-200 IS MORE ADVANCED.
THESE ARE BOTH POSITIVE FACTORS BUT THERE ARE COUPLE DIFFERENT
LEVELS. THEIR MARKET FOR HSTECH, 50 DAY
MOVING AVERAGE, 200 DAY MOVING AVERAGE FOR THE CHINA GAUGE.
MACAU CASINOS WE COULD SEE SOME STRENGTH BECAUSE WE ARE SEEING
BETTER VISITOR ARRIVALS. EARNINGS TO WATCH, ALIBABA AND
MEITUAN THE BIG FOCUS FOR THIS WEEK.
WANT ONE CHINA IS WHAT TO WATCH AND IT IS ONE OF THE LARGEST
RICE CRACKER AND FLAVORED DRINK MANUFACTURERS IN THE WORLD.
AND YOU MENTIONED THOSE INDEX CHANGES REACTIONS AS WELL.
DAVID: PROCESSED FOODS. I DON’T MEAN THAT IN ANY
NEGATIVE WAY. ANNABELLE: IT CERTAINLY SOUNDED LIKE YOU
DID. 65% OF PEOPLE’S DIETS. DAVID: PROCESSED FOODS.
WE SHOULD PULL BACK A LITTLE FROM THAT. THAT IS NOT TO UNDERSCORE ANY
NEGATIVITY JUST TO BE CLEAR. TWO THINGS.
WE WILL GET TO THE FED LATER ON WITH PAUL DOBSON JOINING US. THE NVIDIA STORY IN OUR SCOOP,
WHAT DO WE KNOW EXACTLY? THIS STORY KEEPS CHANGING ON A
WEEK TO WEEK BASIS. ANNABELLE: USUALLY WE TALK ABOUT THE AGE
20 BECAUSE THAT IS THE CHIP THAT HAS BEEN DESIGNED — THESE
ARE BOTH FROM THE HOPPER SERIES. RIGHT NOW IT IS THE BLACKWELL
ARCHITECTURE SELLING IN THE U.S. AND WE ARE RAMPING UP TO RUBEN
ARCHITECTURE. HOPPER COME YOU ARE A COUPLE
ITERATIONS BEHIND. H-200 WAS DESIGNED FOR THE
GLOBAL MARKET, IT HAS MORE BANDWIDTH.
OVERALL IT IS A BETTER FUNCTIONING CHIP.
MAYBE THE TRUMP ADMINISTRATION COULD LOOK TO ALLOW NVIDIA TO
SELL THOSE CHIPS INTO MAINLAND CHINA. IT WOULD BE A BIG WIN FOR
NVIDIA AND CHINA. DAVID:
THE NVIDIA STORY, THE RESULTS LAST WEEK UNDERSCORED THE FACT
THE ASSUMPTION FOR CHINA IS ZERO BUSINESS.
ANYTHING ON TOP OF THAT BECOMES A BONUS.
HOW DOES THIS DOVETAIL INTO THE BUBBLE CONVERSATION? ANNABELLE:
I THINK IT IS ADJACENT BECAUSE I THINK THE WAY WE THINK OF THE
AI BUBBLE CONVERSATION IS THIS HUGE INFRASTRUCTURE BUILDOUT IN
THE U.S. AND THE IMPACT IT IS HAVING ON
MEMORY CHIP PRICES. WE ARE GOING TO TALK TO LENOVO
ABOUT THAT. THE CHINA STEEL LORI IS STILL
THAT BIG QUESTION. EVEN IF YOU RELAX THESE
RESTRICTIONS, DO YOU END UP IN THE SAME SITUATION AS THE H-20
WHERE SALES COULD RESTART, BUT THIS SITUATION IS BEIJING IS
TELLING US MAINLAND COMPANIES NOT TO BUY THEM? DAVID: OK. EVEN THOUGH THEY CAN SELL IT
DOES NOT MEAN THEY WILL. WE WILL GET TO THE NVIDIA STORY
IN A MOMENT BUT THE POINT YOU ARE MAKING IS LENOVO IS COMING
ONLINE. THE WHOLE CONVERSATION AROUND
SUPPLY CONSTRAINTS, WE DON’T SEEM TO HAVE ENOUGH CHIPS
AROUND THE AI PLAY AND MEMORY CHIP PRICES LEADING TO COSTS.
MARGIN PRESSURE AND HOW IT MIGHT BE ABLE TO WEATHER THAT
BETTER THAN OTHERS. WE WILL GET TO THAT WITH THE
CFO IN A MOMENT. SPEAKING OF EARNINGS, WE ARE
ALMOST DONE WITH EARNINGS SEASON. WE ARE NOW LOOKING AT A 62%
PROBABILITY THE FED WILL CUT IN DECEMBER.
THAT IS A MOVING TARGET OF COURSE BUT THE DATA SUGGESTS
THINGS MIGHT NOT BE AS ROSY OF HIS — ROSY AS ONCE THOUGHT.
LOOKS LIKE SOME SOLID FOOTING FOR RISK ASSETS GOING INTO THE
MONDAY SESSION TODAY. PAUL: SO FAR, SO GOOD.
WE HAD A LITTLE BIT OF A WOBBLE WHERE BITCOIN TOOK A DIP IN THE
KOSPI WENT WITH IT BUT IT HAS COME BACK UP HIGHER.
THE DRIVER IS FED BETS. MY COLLEAGUES TELLING ME THE
MOMENT THE FED ODDS DROPPED BELOW 50% A COUPLE WEEKS BACK
IS THE STARTING GUN FOR THE DOWN LEAD WE SAW IN EQUITIES IN
THE U.S. AND GLOBALLY AS WELL. THE FACT THERE IS NOW THE HOPE
THAT THE FED MAY CUT INTEREST RATES IN DECEMBER AFTER ALL
SEEMS TO BE GIVING THE MARKET MORE CONFIDENCE.
WILLIAMS IS SEEN AS QUITE CLOSE TO JEROME POWELL.
MAYBE THE FED GOVERNOR IS WITH HIM AND IF THAT THE CASE WE ARE
AROUND ABOUT SIX FOR A CUP. PERHAPS A DOVISH MEETING.
THE MARKET IS TAKING THAT AS REASSURANCE. ANNABELLE:
REASSURED BUT TO WHAT EXTENT I AM WONDERING.
IF YOU LOOK AT OPTIONS MARKETS THEY ARE SIGNALING A GROWING
ANXIETY. I THINK GENERALLY WHEN YOU HAVE
THE MARKET POSITIONING THIS HEAVY IS THERE ANY TEMPTATION
NOW TO LOCK IN THE PROFITS? PAUL:
IF YOU HAVE NOT TAKEN THAT THE NEXT COUPLE OF WEEKS WHAT HAVE
YOU BEEN DOING? ON THE FLIPSIDE THERE IS A VERY
BIG SPLIT AT THE MOMENT BETWEEN THOSE SAYING NO, WE ARE GOING
TO HEAD FOR A DEEPER CORRECTION. WE SAW SOME COMMENTS THAT WERE
WELL READ AMONG OUR CUSTOMERS BUT AT THE SAME TIME YOU HAVE
PEOPLE THINKING THIS IS A DIP IN THERE WILL BE DIP BUYERS
COMING BACK IN. THE MARKET TYPICALLY DOES WELL
AT THIS TIME OF YEAR. THERE IS SCOPE FOR US TO GO
EITHER WAY DEPENDING ON MOMENTUM AND POSITIONING AND
HOW MUCH THAT STARTS TO CORRECT. BITCOIN HAS BEEN HAVING A
BEARING SOMEHOW ON THE REST OF MARKETS RECENTLY SO PEOPLE ARE
STILL NERVOUSLY WATCHING THE CRYPTO SPACE.
THERE IS ALSO THE PROSPECT ESPECIALLY IF WE FIRM UP OUR
CONDITION THAT THE FED WILL CUT AFTER ALL THAT THE MARKET WILL
CONTINUE TO PUSH HIGHER FROM HERE. ANNABELLE:
BITCOIN PRICES GOING BACK DOWN TO THE $86,000 LEVEL.
THAT WAS PAUL DOBSON. LET’S SHIFT TO ANOTHER MAJOR
STORY. THAT IS JAPAN PLANNING TO DEPLOY MISSILES TO A SOUTHERN
MILITARY BASED CLOSE TO TAIWAN THAT COMES AMID TENSIONS
BETWEEN COMMENTS TAKAICHI MADE ABOUT THE ISLAND.
IT GOES WITHOUT SAYING THAT THIS IS SOMETHING THAT IS
LIKELY TO PROVOKE QUITE A STRONG REACTION FROM CHINA.
MINMIN: THIS IS SOMETHING TO WATCH OUT
FOR, WHAT CHINA WINDOW. I SUSPECT THEY MIGHT RESPOND
WITH COUNTERMEASURES, POTENTIALLY MORE MILITARY
DRILLS. THIS WAS THE FIRST TRIP ON THE
JAPANESE PRIME MINISTER TO THE ISLAND JUST EAST OF TAIWAN. ON A CLEAR DAY YOU CAN SEE
TAIWAN WITH THE NAKED EYE. THE JAPANESE PRIME MINISTER
SAYS THEY ARE PLANNING TO DEPLOY MISSILES TO THIS AREA.
WE ALL KNOW ABOUT OKINAWA WHICH IS THE LARGER ISLAND TO THE
EAST WHICH HOLDS A U.S. MILITARY BASE. RECENTLY THERE HAS BEEN A U.S.
TREATY THAT MOVES SUPPLIES FROM OKINAWA.
OF COURSE THIS IS SOMETHING THAT SHOWS JAPAN’S CONCERN OVER
CHINA’S AGGRESSION AND THREATS OVER TAIWAN IN THE REGION AND
PART OF JAPAN’S MILITARY BUILDUP. DAVID:
BOTH PARTIES WERE AT THE G20. DID WE SEE ANYTHING FROM THAT
ON THE TOPIC? MINMIN: NO. TAKAICHI WAS KEEPING A DISTANCE
FROM PREMIER LEAGUE. IT WAS WELL TELEGRAPHED.
WE KNEW CHINA DID NOT INTEND TO MEET WITH TAKAICHI.
TAKAICHI MENTIONED THIS DOESN’T MEAN SHE IS CLOSING THE DOOR
FOR DIALOGUE. THIS COMES AFTER CHINA
SUBMITTED A LETTER TO THE U.N. SAYING THEY HAVE VOWING TO
RESOLUTELY DEFEND THEMSELVES IF JAPAN DARES TO INTERVENE
MILITARILY AND JAPAN IS SAYING ALL THE CLAIMS FROM CHINA ABOUT
JAPAN CHANGING ITS STANCE ON TAIWAN IS COMPLETELY BASELESS.
SO YOU ARE SEEING THE WAR OF WORDS RATCHETING UP. THE CHINESE EMBASSY IN JAPAN
POSTED ON TWITTER THAT IT HAS JUSTIFICATION TO DEFEND ITSELF
WITHOUT NEEDING APPROVAL FROM THE U.N., CITING THIS WORLD WAR
II-ERA CLAUSE THAT USE TO GERMANY AND JAPAN.
BUT JAPAN IS SAYING THIS IS OBSOLETE. DAVID:
MINMIN LOW OUR CHINA CORRESPONDENT.
JUST TO TELL YOU WHAT IS AHEAD, WE HAVE A VERY BIG INTERVIEW
COMING UP. THE LENOVO CEO WINSTON CHENG
WILL BE JOINING US TO TALK ABOUT THE REASON EARNINGS BEAT.
THERE IS A VERY SPECIFIC AI ANGLE TO THEM.
THEY HAVE BROKEN IT APART AS FAR AS REVENUE GOES SO REALLY
JUST A JUXTAPOSITION AGAINST THE WHOLE AI CONVERSATION
TAKING PLACE. AND WHO REMEMBERS MEMORY?
COUNTING DOWN TO THE OPEN OF TRADE IN GREATER CHINA,
SHANGHAI, SHENZHEN, AND HERE IN HONG KONG. 17 MINUTES AWAY.
THIS IS “THE CHINA SHOW.” ♪ ANNABELLE:
LENOVO GROUP POSTED BETTER THAN EXPECTED REVENUE FOR THE
SEPTEMBER QUARTER THANKS TO ITS INCREASED MARKET SHARE IN
GLOBAL PC’S AND ROBUST DEMAND FOR AI SERVICE.
LET’S BRING IN WINSTON CHENG, CEO OF LENOVO.
THANK YOU SO MUCH FOR JOINING US.
I THINK WE CAN GET STARTED WITH A BIG PICTURE QUESTION WE ARE
SEEING IN THE MARKET RIGHT NOW, WHICH IS THE CONCERN WE ARE
GETTING FROM A LOT OF COMPANIES AROUND MEMORY CHIP PRICES.
THAT IS SOMETHING THAT COULD HAVE AN IMPACT ACROSS YOUR
BUSINESS DIVISIONS. YOU SPOKE ABOUT THIS IN THE
EARNINGS CALL ABOUT HAVING A LOT OF THOSE CONTRACTS IN PLACE
ALREADY THAT ARE SECURED AT LEAST FOR
THE SHORT AND MEDIUM-TERM, AND BEING A BIG BUYER AS WELL.
WHAT IMPACT DO YOU SEE AND WHEN? WINSTON:
WE HAVE A LOT OF EXPERIENCE NAVIGATING THROUGH DIFFERENT
SUPPLY AND DEMAND DYNAMICS. OF COURSE COVID WAS ONE AND OF
COURSE 10 YEARS AGO THERE WAS ALSO SOME SHOCKS IN THE MARKET.
WITH RESPECT TO THIS CURRENT ENVIRONMENT, OUR REVENUE GAINS
AND OUR MARKET SHARE GAINS HAVE BEEN VERY SIGNIFICANT PART OF
THIS. IF YOU RECALL BACK IN JUNE,
PROBABLY A LOT OF PEOPLE WERE TALKING ABOUT PULL AHEAD DEMAND
FROM THE U.S. WITH RESPECT TO TARIFFS.
THEY WERE SEEING THE SECOND HALF SLOW DOWN.
WE WERE REALLY QUESTIONING WHETHER THE MARKET WAS RIGHT
AND WE WERE WRONG BUT WE CONTINUE TO SEE ORDERS VERY
STRONG AND YOU SEE THAT IN TERMS OF A SEPTEMBER QUARTER
BEING VERY STRONG AND WE THE HIGHEST EVER SHARED 26%.
EVEN HIGHER ON THE 31% SHARE. ON THE BACK OF THOSE WE HAVE
STRONG REVENUE GROWTH AND WE HAVE BEEN ENGAGING WITH SOME
PLIERS WHO CONTINUE TO BUY SO THAT HAS BEEN VERY HELPFUL.
WE ALSO SAW MEMORY PRICES GOING UP. WE HAVE ALSO BEEN HOLDING
LONGER WEEKS OF INVENTORY IN TERMS OF CRITICAL COMPONENTS.
THAT IS ALSO THERE TO POSITION PRESIDENT TRUMP — TO POSITION
OUR FUEL GROWTH. DAVID: WHAT ASSUMPTIONS ARE YOU MAKING
GOING INTO NEXT YEAR? WINSTON:
THE MARKET IS WORRIED ABOUT COSTS AND THEREFORE MARGINS.
BUT I THINK OVERALL YOU CAN THINK ABOUT THE OTHER DYNAMICS
WOULD BE SUPPLY. THOSE WHO HAVE THE SUPPLY THEN
WILL BE ABLE TO HAVE A POSITION IN THE MARKET.
AND WE WOULD SAY THAT POTENTIALLY THERE ARE MARGIN
OPPORTUNITIES AS WELL IN TERMS OF BOTH MARGIN OPPORTUNITIES
BUT ALSO A SHARED GAIN OPPORTUNITY. ANNABELLE:
WHAT DOES THAT STOCKPILING OPPORTUNITY LOOK LIKE?
WEEKS, MONTHS? ARE YOU KEEPING THOSE INVENTORY
LEVELS? WINSTON: I WOULD SAY WE ARE PROBABLY
OVER 50% OF OUR USUAL LEVELS. SO, I THINK IT IS SIGNIFICANT
IN TERMS OF OUR WEEKS OF INVENTORY AS A RELATES TO
CRITICAL COMPONENTS. ANNABELLE: WHAT SORT OF PRICING ADVANTAGE
DO YOU EXPECT TO GIVE THEM? WHAT PRICE DO YOU LOCK IN AT
AND WHERE DO YOU THINK PRICES WILL TREND? WINSTON:
THE PRICE WILL BE VERY HIGH AND IT HAS BEEN UNPRECEDENTED IN
TERMS OF THIS RATE DRIVEN BY AI DEMAND.
SO THIS WILL PROBABLY BE A LONGER TREND.
BUT I THINK OVERALL, CERTAINLY FOR THE REMAINING OF OUR FISCAL
YEAR WHICH IS ANOTHER SIX MONTHS A YEAR, PLUS WE HAVE
LONGER CONTRACTS ALSO IN PLACE. I THINK FROM THAT PERSPECTIVE
WE FEEL QUITE COMFORTABLE. IN TERMS OF THE PRICING
DYNAMICS, CURRENTLY WE ARE THERE TO COMMIT BASED ON OUR
SCALE. THE BEST PRICE TO THE MARKET
AND BENEFIT OUR CONSUMERS. SO WE CONTINUE TO COMMIT TO
THAT AND OF COURSE OUR CHANNEL PARTNERS AS WELL, WHICH ARE
VERY IMPORTANT FOR OUR BUSINESS. SO REALLY READING AND MAKING
SURE WE KNOW WHAT THE MARKET LOOKS LIKE BUT ALSO BALANCING
THAT TO MAKE SURE THAT WE DON’T NECESSARILY FAVOR ONE SIDE OR
THE OTHER BUT STRIKE THAT BALANCE OVERALL IN TERMS OF OUR
COMMITMENT TO OUR SHAREHOLDERS AND OUR SHADOW PARTNERS AND
CUSTOMERS. DAVID: IT SEEMS VERY CLEAR FROM THE
EARNINGS CALL AND YOUR COMMENTS NOW, CORRECT ME IF I AM WRONG,
THAT OF ANY OF YOUR PEERS YOU ARE PROBABLY IN THE BEST
POSITION TO, LET’S SAY, MANAGE THAT UPWARD INCREASE IN COST
MEASURES. CAN I ASK YOU A DIRECT QUESTION?
ARE YOU RAISING QUESTIONS OR AN — ARE YOU RAISING PRICES WERE
NOT? WINSTON: FOR US, DEPENDING ON THE
CHANNEL INVENTORY LEVELS AND OTHER ASPECTS, WE WOULD JUST —
WE WOULD ADJUST ACCORDINGLY. IN TERMS OF THE FOURTH QUARTER
OF THE CURRENT CALENDAR YEAR. IT IS STILL VERY STRONG IN
TERMS OF THE MARKET GROWTH FOR US RELATIVE TO THE REST OF THE
MARKET. WE HAVE BEEN GROWING VERY
STRONG. FROM THAT PERSPECTIVE WE CAN
STILL LEND OUR SCALE. ESPECIALLY COMING INTO THE
HOLIDAY SEASON, WE WANT TO MAKE SURE EVERYBODY HAS A VERY GOOD
HOLIDAY SEASON. SO I THINK WE WILL TRY AND
MAINTAIN THAT PRICE. ANNABELLE: BUT GOING INTO 2026 YOU ARE
PLANNING PRICE HIKES? WINSTON: I THINK GIVEN THAT OVERALL, THE
PRICES ARE GOING SIGNIFICANTLY, I THINK WE WILL HAVE TO STRIKE
THAT BALANCE GOING FORWARD. BUT AGAIN, IT IS BETWEEN PRICE
AND AVAILABILITY. YOU REALLY HAVE TO STRIKE THAT
BALANCE. THOSE THAT HAVE THE COSTS WILL
BE IN THE MARKET. CAN YOU GET THE SUPPLY AT THAT
COST? I THINK WE WILL BE ABLE TO GET
THAT SUPPLY. DAVID: OVERALL, HOW DOES DEMAND LOOK
FOR PC’S CURRENTLY? IT IS THE PEAK OF COURSE.
EVERYONE WANTS A NICE LENOVO FOR CHRISTMAS. ANNABELLE:
I HOPE SO. WINSTON: WE HAVE BEEN GROWING VERY
STRONG DOUBLE DIGIT. LAST QUARTER WAS VERY STRONG,
THE JUNE QUARTER. OVER 20%. NOW WE ARE AT 15% AND REALLY
BALANCED. WE CAN CONTINUE TO LEVERAGE
THAT TO DRIVE OUR GROWTH GOING FORWARD.
WE ARE SEEING PROBABLY IN THE DECEMBER QUARTER ALSO BEING
VERY STRONG. OVERALL I THINK WE FEEL VERY
COMFORTABLE. ANNABELLE: YOU SPOKE ON THE EARNINGS CALL
ABOUT THE MIDDLE EAST MANUFACTURING BASE THAT YOU
HAVE. WHAT IS THE OPPORTUNITY THAT
YOU SEE THERE, ESPECIALLY AS YOU HAVE THE U.S.
APPROVING ADVANCED CHIP SALES? WINSTON:
I WAS JUST THERE IN OCTOBER AND IT IS AMAZING.
IN FEBRUARY I WAS THERE TO THE GROUND OPENING AND LITERALLY IT
IS A DESERT WITH NO PIPES, NO WATER, NO POWER.
AND IN OCTOBER IT WAS A FULL BUILT PLANT WITHOUT THE LINES,
BUT WE ARE IN THE PROCESS OF PUTTING IN THE LINES FOR
PRODUCTION AND WE START PRODUCTION IN TERMS OF TEST
PRODUCTION IN DECEMBER. FROM THAT PERSPECTIVE, IT HAS
BEEN AMAZING PROGRESS. YOU CAN SEE A LOT OF
ANNOUNCEMENTS THAT HAVE BEEN COMING UP BETWEEN THE U.S.
AND THE SAUDIS AROUND AI AND SAUDI ARABIA IS IN A VERY
STRATEGIC POSITION TO LEVERAGE A LOW-COST POWER TO DRIVE AI
INFLUENCING AND TRAINING GOING FORWARD.
FROM THAT PERSPECTIVE WE ARE VERY MUCH ALIGNED VISION 2030.
WE HAVE THE LARGEST PLANT IN THE WORLD THAT WE HAVE THERE IN
TERMS OF COMPREHENSIVENESS. WE HAVE DESKTOP, PC,
SMARTPHONES AND SERVERS. NO ONE PLANT OUTSIDE OF CHINA
DO WE PRODUCE ALL FOUR, AND WE ARE DOING THAT AND SAUDI ARABIA.
WE ARE VERY COMMITTED TO THAT MARKET AND WE ARE GOING TO
DRIVE THE AI COMMITMENT THAT THEY HAVE THERE IN TERMS OF
OPPORTUNITIES AND TO CAPTURE THAT REVENUE OPPORTUNITY AS
WELL. WHICH PREVIOUSLY WERE MOSTLY
AROUND PC’S FOR US IN THE MARKET, AND NOW WE CAN HAVE A
SUBSTANTIAL OPPORTUNITY TO GROW ON OUR SMARTPHONE AND SERVER
BUSINESS AS WELL. DAVID: I THINK YOU ALSO RECENTLY
DISCLOSED AI-SPECIFIC REVENUES, WHICH I WANT TO ASK YOU A FEW
MORE QUESTIONS ABOUT IF YOU DON’T MIND.
WINSTON CHENG, CEO OF LENOVO, IS HOPEFULLY ABLE TO STAY ON TO
CONTINUE THE CONVERSATION. VERY QUICKLY LOOKING AT HANG
SENG INDEX AND A CURRENCY, WE’RE PUNCHING HIGHER 1%.
WE WILL TAKE A SHORT BREAK AND BE BACK.
THIS IS “THE CHINA SHOW.” ♪ DAVID: ALL RIGHT.
GOING INTO THE MONDAY SESSION, I AM NOT READY FOR THIS WEEK, I
DID NOT SLEEP WELL LAST NIGHT. HOW DID YOU SLEEP? ANNABELLE:
I SLEPT OK. IT WAS OK, I WILL LEAVE IT
THERE. [LAUGHTER] DAVID: IF WE ENTER A BEAR MARKET
TODAY, WHICH IT DOES NOT LOOK LIKE WE WILL, THAT MIGHT GIVE
US SOMETHING TO TALK ABOUT. BUT AS YOU CAN SEE, WE WILL
LOOK AT SOME OF THESE THINGS TODAY. BETTER BY 1.1%. THERE WERE CHANGES TO THE
INDEXES THAT WERE ANNOUNCED WHICH WE CAN GET TO LATER,
EFFECTIVE DECEMBER 8. ANNABELLE: ONE OF THE BIG SUBTRACTIONS
FROM THE CHINA GAUGE IS HAIDILAO. JUST A
NOTE, WE HAVE A TRADING DEBUT AT A GOOD DAY IF YOU ARE
LISTING IN HONG KONG BECAUSE WE ARE SEEING THIS STOCK HERE UP
AROUND 40%. THAT’S AN ALUMINUM SMELTING
COMPANY. THAT IS MY AUSTRALIAN ACCENT.
WE WILL HAVE THE OPEN NEXT. THIS IS BLOOMBERG. ♪ DAVID:
GOOD MORNING AND WELCOME BACK. 40 SECONDS TO THE OPENING BELL.
LEFT SIDE IS THE OPENING SHOT AND HONG KONG OF COURSE.
THE SILHOUETTE OF THE MOUNTAIN RANGE AND HOPEFULLY NOT A
MIRROR IMAGE OF THE STOCK CHART IN SIX MONTHS.
WE HIT A SPEED BUMP LAST WEEK ON RISK ASSETS. IT IS LOOKING LIKE WE ARE DOING
BETTER ON SENTIMENT GOING INTO THE OPEN. ANNABELLE:
A COUPLE THINGS INVESTORS ARE LOOKING AT. FIRSTLY IT IS THE ODDS OF A FED
CUT BEING BACK ON THE TABLE FOR DECEMBER. DAVID:
A CHRISTMAS GIFT FROM POWELL. ANNABELLE:
IT IS AT 60% ODDS NOW. THE OTHER FACTOR IS OUR
BLOOMBERG SCOOP WE HAD FRIDAY TALKING ABOUT THIS POSSIBILITY,
MAYBE WASHINGTON ALLOWS NVIDIA TO START SELLING H-200 CHIPS
INTO THE MAINLAND MARKET. THESE ARE POSITIVE FACTORS FOR
THE MAINLAND. WE HAD WEAKNESS INTO FRIDAY AND
SAW THE GOLDEN DRAGON INDEX DOING A BIT BETTER AS WE CAME
THROUGH THAT FRIDAY’S SESSION. LET’S TAKE A LOOK AT HONG KONG
IN THE OPEN THIS MORNING BECAUSE WE ARE WRAPPING UP
EARNINGS SEASON BUT THERE ARE BIG NAMES WE ARE WATCHING.
ALIBABA AND MEITUAN. DAVID: I AM NOT READY. ANNABELLE:
PARDON? DAVID: I AM NOT READY. EMOTIONALLY. ANNABELLE: THE BIG THING IS THE FOOD PRICE
WARS AND QUICK COMMERCE WARS YOU ARE SEEING EIGHT INTO JD’S
BOTTOM LINE AND PROBABLY WILL DO THE SAME FOR ALIBABA AND
MEITUAN. TODAY IN THE SESSION IT IS ALSO
THE REACTIONS WE GET TO INDEX CHANGES.
THERE ARE A COUPLE WE ARE WATCHING.
IN NO EVENT BIOLOGICS BEING ADDED.
HAIDILAO’S BEEN REMOVED FROM THE CHINA GAUGE.
JUST SOME OF THE DIFFERENT MOVERS WE ARE TRACKING AND WE
ARE CONTINUING TO WATCH LENOVO. DAVID: ABSOLUTELY.
STILL WITH US HERE ON SET FOR SOME FINAL THOUGHTS, WINSTON
CHENG, CFO OF LENOVO. THANK YOU FOR STICKING AROUND.
IF THE FIRST QUARTER THE COMPANY HAS DISCLOSED
AI-SPECIFIC REVENUES. TELL US WHY YOU DID THAT AND
HOW YOU FIGURE OUT WHAT THEY ARE. WINSTON:
IF YOU TRACK LENOVO GOING WAY BACK THAT HAPPENS WE HAVE A 10
YEAR CYCLE IN TERMS OF PLANNING. 2005, WE HAVE ACQUIRED THE PC
BUSINESS FROM IBM AND WE WON GLOBAL. 2015, WE ACQUIRED MOTOROLA’S
SMARTPHONE BUSINESS AND X86 WHICH GIVES US DIFFERENT
PRODUCT LINES IN TERMS OF THE VALUE PROPOSITION WE HAVE TODAY.
2025, WE CLOSED A TRANSACTION AND HAVE A STRATEGIC
PARTNERSHIP THERE. THAT ALSO HAPPENS TO BE AI.
WE ARE CALLING THIS THE AI DECADE. INTERNALLY DISPLAYING AI ACROSS
THE BOARD WHERE TODAY WE ARE BEST IN CLASS.
WE HAVE OUR OWN AI AGENTS TO TRACK AND ENABLE EFFICIENCY OF
OUR SUPPLY CHAIN. FROM AN EXTERNAL PERSPECTIVE IN
TERMS OF THAT AI OPPORTUNITY WHERE WE ARE LEVERAGE TO AI PC
SMART PHONES AND DEVICES SIDE BEING VERY IMPORTANT CHANNEL
FOR AI DEPLOYMENT GOING FORWARD AND OF COURSE DIRECT TO
CONSUMER. ON THE INFRASTRUCTURE SIDE EVEN
MORE SO TODAY WITH TRAINING AND LATER ON WITH ENTERPRISE AND
SMB WITH INFERENCING. WE ARE WELL-POSITIONED TO
DELIVER THAT TO THE MARKET. ANNABELLE:
YOU MENTIONED THIS IS THE AI DECADE SO I FEEL LIKE MAYBE THE
DIRECTION YOU WILL TAKE THIS QUESTION.
THE AI BUBBLE, WE HAVE SPOKEN OF RISING COMPONENT COSTS.
WHAT IS THE TRAJECTORY FOR IT OVER THE COMING MONTHS? WINSTON:
THE END DEMAND IS VERY SOLID BUT IF YOU LOOK AT THE SERVER
MARKET WHICH HAS ALREADY GROWN SEVERAL TIMES IN THE LAST 10
YEARS, AND IF YOU LOOK AT THE TOP SIX HYPERSCALERS TODAY
REALLY HAVING A SPENDING OF $3 TRILLION, THOSE ARE BACKED BY
VARIOUS FUNDAMENTAL DEMANDS AND TRAINING. THAT IS FUNDAMENTAL.
THE NEXT WAVE OF WHAT THEY CALL THE NCP’S TODAY I THINK IS
FUNDED BY PRIVATE MARKET. THOSE WHO HAVE STRONG UPTAKE IN
TERMS OF THE REVENUE THAT IS ALREADY THERE IN PLACE AS WE
RAISE FUNDING. WE ARE VERY COMFORTABLE TO DO
BUSINESS WITH RESPECT TO THIS GROUP.
ALSO A LOT OF OTHER GROUPS COMING ONTO THE MARKET.
WE ARE LOOKING CLOSELY TO ENABLE OUR BUSINESS TO CAPTURE
THIS OPPORTUNITY. A LOT OF THE BUBBLED COULD
EVENTUALLY BE ON THE RUN UP A SIDE BUT THE FUNDAMENTALS OF
INDUSTRY IS A LONG-TERM TREND. DAVID:
THAT IS HELPFUL TO KNOW THAT WHERE THE RUBBER MEETS THE ROAD
THERE DOES NOT SEEM TO BE PERMEATING AS MUCH.
WINSTON, HAVE A GREAT WEEK AHEAD.
WINSTON CHENG, CFO OF LENOVO. LET’S BRING IN HELEN HSU TO
HELP US SET UP FOR THE MARKETS WEEK.
LET’S START OFF WITH THIS AI BUBBLE, THIS DEBATE COULD YOU
CAN MAKE A CASE ON THE BEAR OR THE BOTH SIDE.
WHICH SIDE ARE YOU ON? HELEN: THE MAIN CONCERN IS ON TWO
FRONTS. PRIVATE MARKET VALUATIONS WHICH
HAVE GOTTEN QUITE LARGE IN THE RECENT FEW QUARTERS.
THERE IS NO REAL DEBATE. EVERYBODY REALIZES WHETHER YOU
ARE LOOKING AT LATE STAGE GROWTH INVESTING OR EVEN MORE
RECENTLY EARLY STAGE INVESTING, VALUATIONS HAVE GONE TO QUITE
HIGH LEVELS. THAT IS ONE CONCERN TO SET
ASIDE. THERE IS SOME CORRELATION BETWEEN PRIVATE AND PUBLIC
MARKET VALUATIONS BUT IF YOU LOOK AT MOST OF THE PUBLIC
MARKET STOCKS THE MULTIPLES ARE NOT CRAZY.
ASSUMING THEY CAN DELIVER THE TYPE OF GROWTH PEOPLE ARE
EXPECTING AFTER ONE OR TWO YEARS SUSTAINABLY THAN ON A
PG&E BASIS THEY LOOK OK. THE KEY QUESTION IS CAN IT
DELIVER THE GROWTH CURRENTLY FORECAST BY THE MARKET.
THERE HAS ACTUALLY BENT UPWARD REVISIONS IN TERMS OF CAPEX
SPENDING AND THE PACE OF INVESTMENT INTO THE SPACE.
MOST OF THE ECOSYSTEM SUPPLY CHAIN UPWARD REVISIONS.
THE QUESTION IS LOOKING FORWARD IS IT GOING TO BE FLAT VERSUS
EXPECTATIONS OR MAY BE SLOWER VERSUS ALREADY VERY HIGH
EXPECTATIONS. THAT IS THE SECOND BUBBLE
PEOPLE ARE WORRIED ABOUT WHICH IS THIS A BUBBLE.
FOR MOST OF THE HYPERSCALERS THERE IS A HUGE LANDGRAB.
EVERYBODY LONGER TERM POTENTIAL IS IMMENSE AND EVEN IF THE ROI
NEAR TERM IS NOT SO CLEAR, PEOPLE ARE VERY MUCH WILLING TO
SPEND AGGRESSIVELY IN THE NEXT ONE TO TWO YEARS.
THE REASON WHY THERE HAS BEEN A BIT OF A PULLBACK RECENTLY IS
BECAUSE THE MARKET HAS THIS NEW CONCERN WHICH IS EVEN IF
EVERYONE WANTS TO SPEND VERY AGGRESSIVELY, ARE WE GOING TO
RUN INTO SUPPLY-SIDE BOTTLENECKS?
IS THERE A POWER PROBLEM, A LABOR PROBLEM INSTALLING THE
DATA CENTERS? THEY HAVE PUSHED BACK THE PLAN
BY ONE OR TWO QUARTERS BECAUSE THEY SAID THEIR DATA CENTER
SHALL SUPPLY-SIDE ISSUES. THAT IS SOMETHING PEOPLE ARE
WORRIED ABOUT. WILL THE PACE BE SLOWER THAN
EXPECTATIONS? IF THERE IS A MEANINGFUL
SLOWDOWN IN TERMS OF THE PACE OF CAPEX, I DO THINK THE MARKET
IS SET FOR A CONSOLIDATION, GIVEN HOW MUCH IT HAS ALREADY
GONE UP ON HIS AI THEME. ANNABELLE:
HOW MUCH IS THAT A CONCERN? POST-NVIDIA EARNINGS LAST WEEK
IT SEEMS IT HAS BEEN A LITTLE SOOTHED, THOSE MORE TOPLINE
FEARS, LET ALONE DIGGING INTO DEPRECIATION COSTS AND OTHER
ISSUES YOU JUST MENTIONED. SEEMS LIKE THE FOCUS IS MORE ON
THE FED. HOW MUCH LONGER DO WE STICK
WITH THAT? HELEN: THE FED ISSUE IS THE SECOND
THING THAT HAS BEEN WEIGHING DOWN THE MARKET.
THERE WAS HIGH EXPECTATION ABOUT THE NUMBER OF RATE CUTS,
ESPECIALLY GIVEN CHANGES IN THE FED THAT ARE UPCOMING.
MORE RECENTLY IT SEEMS LIKE THE ADMINISTRATION’S CONCERN HAS
EXPANDED TO THE INFLATION THAT U.S. CONSUMERS ARE FEELING, HAVE
BEEN FEELING FOR QUITE SOME TIME. IT IS VERY MUCH A K-SHAPED
CONSUMER POPULATION IN THE U.S. WHERE THE RICH AND THOSE
BENEFITING FROM THE INCREASE IN PROPERTY PRICES AND THE STOCK
MARKETS ARE SPENDING MORE AGGRESSIVELY IN LUXURY AND
TRAVEL AND SO ON, BUT THE VAST, VAST MAJORITY OF THE POPULATION
IS GETTING HIT PRETTY HARD, AND NOW GETTING HIT EVEN HARDER
BECAUSE OF THE IMPORT TARIFFS F ROM DONALD TRUMP. THE TRUMP ADMINISTRATION IS
PERHAPS GETTING MORE SENSITIVE OF THIS GOING INTO THE MIDTERM
ELECTIONS NEXT YEAR AND THEREFORE SOME OF THE DIALOGUE
HAS BEEN, WELL, IF THE DATA ISN’T SO BAD SO FAR AND
INFLATIONARY PRESSURES ARE STILL AROUND, DO WE PUSH BACK
RATE CUTS. THAT SAID, THERE’S LIKELY TO BE
ANOTHER RATE CUT IN DECEMBER. MAYBE THERE WILL BE A PAUSE IN
THE BEGINNING OF NEXT YEAR BUT THEN THE NEW CHAIRMAN COMES IN
IN THE SECOND QUARTER AND WE WILL SEE MORE AND MORE STRAIN
IN TERMS OF THE PAYROLL NUMBERS AS WELL. BECAUSE BASICALLY THERE IS
QUITE A LOT OF IMPACT FROM AI-RELATED PRODUCTIVITY GAINS
ARE READY. WE ARE ALREADY STARTING TO HEAR
ABOUT REDUCED DEMAND FOR CODING TALENT IN THE U.S. AND CHINA.
I THINK THAT WILL START TO INTENSIFY AS PART OF THE
DIALOGUE NEXT YEAR, AND THAT WILL PROBABLY PUT MORE PRESSURE
IN TERMS OF OVERALL EMPLOYMENT CONCERNS. DAVID:
THE MARKET SEEMS VERY SENSITIVE TO EVEN THE DAILY CHANGES IN
PRICING AROUND THE FED, AND WHAT SWAPS ARE TELLING US.
DO YOU THINK THE MARKETS ARE AT SUCH EXTREME LEVELS THAT WE
NEED THE FED TO CUT INTEREST RATES FOR THIS BULL MARKET TO
CONTINUE INTO NEXT YEAR? HELEN: IT IS MORE OF A SENTIMENT
INDICATOR AND AN INDICATOR OF THE FED OVERALL.
IT IS NOT JUST WHETHER A RATE CUT IS A QUARTER LATER OR
EARLIER. IT IS ABOUT INDICATION ABOUT
WHETHER THE CESSATION OF QT IS EVENTUALLY GOING TO LEAD INTO
QE AND HOW WILLING THE FED IS TO PUT A PUT ON THE OVERALL
MARKET AND ECONOMY. IT IS ALSO ABOUT WHERE THE
TERMINAL RATE IS GOING TO END. RIGHT NOW FOLKS ARE HANDING IT
TO HANDLE BY THE END OF 2026. A COUPLE WEEKS IT WAS STILL
BACK TO THREE HANDLE. IT IS NOT NECESSARILY JUST THAT
ONE RATE CUT, IT IS THE INDICATION OF MONETARY POLICY.
DAVID: HOW DO CHINESE STOCKS BEHAVE
NEXT YEAR? DO THEY BEHAVE AS PART OF A
BROADER EQUITY COHORT, OR DO YOU THINK THERE IS ALMOST A
NATURAL HEDGE, SOMETHING NOT CORRELATED TO THE BROADER TRADE
GOING INTO 2026? HELEN: PROBABLY STABLE.
THIS YEAR CHINESE EQUITIES HAVE HAD A TREMENDOUS BOUNCE DESPITE
THE FACT THE TRADE WAR HAS GOTTEN WORSE AND DESPITE THE
FACT WE HAVE ACTUALLY HAD MEANINGFUL DECELERATION IN
TERMS OF ACTUAL MACROECONOMIC INDICATORS, IN TERMS OF
INVESTMENT IN PARTICULAR EXPORTS HAVE BEEN STRAINED AND
CONSUMPTION HAS DECELERATED VERSUS PREVIOUS EXPECTATIONS AS
WELL. BUT THERE IS MORE HOUSEHOLD
SAVINGS MOVING INTO THE EQUITY MARKET AS THE GOVERNMENT HAD
WANTED, AND THERE IS MEANINGFUL SUPPORT, ESPECIALLY FOR THE
LARGE CAPS WHICH ARE THE DIVIDEND YIELDING STOCKS, WHICH
ARE STILL YIELDING FOUR TO 5% AND A SHARE MARKET WHICH IS
MUCH HIGHER VERSUS WHAT YOU CAN GET FROM A BANK THESE DAYS.
I THINK THAT PUTS A BIT OF A FLOOR IN TERMS OF THE DOWNSIDE
RISK FOR THE OVERALL MARKET. BUT IN ORDER FOR THINGS TO MOVE
UP MORE MEANINGFULLY, YOU NEED TO SEE A COUPLE THINGS.
YOU NEED TO SEE CONSUMER SENTIMENT STABILIZE WHICH I
THINK WILL BE PARTIALLY DEPENDENT ON THE PROPERTY
MARKET AND PRICING STABILIZING WHICH IS STILL ELUSIVE TO SOME
EXTENT. AND SECONDLY, SOME POSITIVE
NEWS ON THE TRADE FRONT. MAYBE THE SUPREME COURT IN THE
U.S. WILL CHALLENGE THE TRUMP TARIFFS MORE.
IF SO, THAT WOULD DEFINITELY BE POSITIVE FOR SENTIMENT TOWARDS
CHINA OR SOME INCREMENTAL PROGRESS TOWARDS EUROPE AND THE
REST OF THE WORLD THAT GIVES PEOPLE MORE CONFIDENCE THAT
CHINESE EXPORTS CAN BE MORE RESILIENT DESPITE ALL THE
ISSUES WITH THE U.S. THOSE ARE THE ELEMENTS WE HAVE
TO WATCH OUT FOR. ANNABELLE: THAT WAS HELEN ZHU, MANAGING
PARTNER AND SEE OF NF TRINITY. JUST AS WE HAVE BEEN SPEAKING
THERE HAS BEEN BREAKING NEWS. IT IS A LEADERSHIP CHANGE AT A
LARGE INDONESIAN INTERNET PLATFORM COMPANY.
THEY HAVE ANNOUNCED SOME CHANGES HERE, APPOINTING A NEW
CEO TO REPLACE THE OUTGOING ONE. THIS IS A SHIFT THAT HAS JUST
BEEN ANNOUNCED THIS MORNING. WE ARE NOT GOING TO TIE IT TO
THIS, BUT THERE HAS BEEN REPORTING INCLUDING FROM
BLOOMBERG ON THIS. WE HAD A SCOOP RECENTLY SAYING
THERE HAS BEEN A PUSH BY SOME OF GOTO’S BACKERS LIKE SOFTBANK
THAT HAD BEEN LOOKING TO REPLACE THE CEO.
SO IT CERTAINLY COULD BE A DRAMATIC TWIST. THERE ARE TALKS
ABOUT AN ACQUISITION BY GRAB AS WELL.
BUT THAT IS JUST BACKGROUND, NOT NECESSARILY LEADING TO THIS.
DAVID: MORE ON THIS AS THEY COME THROUGH.
CERTAINLY BIG NEWS ON DIFFERENT ASPECTS INTERWOVEN. RIGHT.
JUST AHEAD, THE U.S. SAYS IT IS MAKING PROGRESS ON A
PEACE PLAN WITH UKRAINE. THE DETAILS ABOUT THOSE TALKS
IN GENEVA, JUST AHEAD. THIS IS BLOOMBERG. ♪ ANNABELLE: THE U.S.
SECRETARY OF STATE MARCO RUBIO SAYS PRESIDENT TRUMP’S PROPOSED
DEADLINE TO SECURE UKRAINE’S SUPPORT FOR A U.S.-BACKED PEACE
PLAN BY THURSDAY IS NOT SET IN STONE.
HIS COMMENTS COME AFTER U.S. AND UKRAINIAN OFFICIALS MET ON SUNDAY IN GENEVA,M AND AS TRUMP
PRESSURES KYIV ARE A DEAL. >> IT IS PROBABLY THE MOST
PRODUCTIVE DAY WE HAVE HAD ON THIS
ISSUE, MAY BE IN THE ENTIRETY OF OUR ENGAGEMENT BUT CERTAINLY
IN A VERY LONG TIME. BUT WORK REMAINS AND BECAUSE
THIS CONTINUES TO BE A WORKING PROGRESS, I DON’T WANT TO
DECLARE VICTORY OR FINALITY. DAVID: LET’S BRING IN OUR SENIOR
EDITOR WITH US TO HELP US UNDERSTAND THE DETAILS.
HOW CLOSE ARE WE THEN? >> IT CERTAINLY LOOKS LIKE THEY
ARE MAKING SOME PROGRESS. SECRETARY OF STATE SAID THEY
ARE WILLING TO MOVE THE DEADLINE AROUND.
IT SUGGESTS THAT THEY FEEL THAT THEY CAN MOVE FORWARD.
BOTH SIDES SIGNAL THEY ARE HAPPIER WITH WHAT HAPPENED IN
GENEVA THAN PREVIOUSLY THE UKRAINIANS ALSO SIGNALED SOME
OF THE IMPORTANT ISSUES FOR THEM HAVE MADE IT INTO A
REVISED FRAMEWORK. AS HE SECRETARY OF STATE SAID A
LOT OF WORK STILL REMAINS TO BE DONE BUT IT DOES SEEM LIKE
THERE IS SOME PROGRESS BEING MADE. ANNABELLE:
WHAT ARE THE STICKING POINTS AND WHAT IS THE WORK THAT NEEDS
TO BE DONE? THIS SEEMS TO HAVE REALLY TAKEN
UKRAINE BY SURPRISE. THEY DIDN’T EVEN HAVE ENOUGH
TIME TO PREPARE. >> ARE REPORTING SHOWS THE
ORIGINAL 28 POINT PROPOSAL THE PRESIDENT ROLLED OUT WAS MOSTLY
THE RESULT OF WORK WE THE U.S. AND RUSSIA.
SO THE UKRAINIANS WERE IN THE DARK ON THAT.
THERE ARE CERTAIN THINGS IN THAT WHERE IT’S HARD TO SEE
UKRAINE ACCEPT. THIS INCLUDES GIVING UP
TERRITORY RUSSIA HAS NEVER BEEN ABLE TO CONQUER. THEY WANT REASSURANCES GOING
FORWARD AFTER A PEACE AGREEMENT. THERE ARE CERTAIN POINTS THAT
NEED TO BE WORKED OUT IN TERMS OF HOW ANY CEASE FIRE OR
CESSATION OF HOSTILITIES MIGHT WORK.
SO THERE IS A LOT MORE THAT STILL NEEDS TO BE DONE BUT IT
LOOKS LIKE THE SIDES ARE AT LEAST ENGAGED.
THERE IS A CHANCE THEY COULD GET SOME OF THEIR POINTS ACROSS.
ANNABELLE: AS WE HAVE IN THAT SCOOP YOU
ALSO HAVE REPORTING AROUND EUROPEAN OFFICIALS RACING AS
WELL TO OFFER A COUNTER PROPOSAL AND TRY TO BUY UKRAINE
A BIT MORE TIME ON THIS FRONT. BLUSH PENCE JOINING US. ISRAEL SAYS IT HAS KILLED
HEZBOLLAH’S MILITARY CHIEF IN A RARE AIRSTRIKE ON BEIRUT THAT
IS AN ALMOST YEAR OLD CEASE FIRE WAVERING.
THE IDF SAYS THE ATTACK KILLED HEZBOLLAH’S CHIEF OF GENERAL
STAFF. THAT IS THE MILITANT GROUP’S
SECOND IN COMMAND. THE STRIKE LEFT FIVE PEOPLE
DEAD AND 28 OTHERS INJURED. SEVERE FLOODING ACROSS CENTRAL
VIETNAM HAS KILLED 90 PEOPLE AND LEFT 12 OTHERS MISSING.
VIETNAM’S MINISTRY OF AGRICULTURE AND ENVIRONMENTS
HAS MORE THAN 1100 HOMES WERE DAMAGED AND AT LEAST 80,000
HECTARES OF RICE AND CROPS DESTROYED.
EARLY ESTIMATES PUT THE TOTAL ECONOMIC DAMAGE AT ABOUT $340
MILLION. WE WILL HAVE PLENTY MORE AHEAD.
THIS IS BLOOMBERG. ♪ >> TO KEEP PUSHING THE
FRONTIERS YOU NEED TO BUILD NEW TYPES OF AI INFRASTRUCTURE AND
HARDWARE AT SCALE AND I AM EXCITED ABOUT THE PATH IN THE
U.S. AND WITH FOXCONN. FOXCONN’S EXPERIENCE BUILDING
HARDWARE AT MASSIVE SCALE MAKES THEM THE IDEAL PARTNER FOR THIS
AND I’M LOOKING FORWARD TO EXPLORING TOGETHER WHAT THIS
CAN LOOK LIKE. WE WILL SHARE INSIGHT ACROSS
THE AI INDUSTRY AND FOXCONN WILL USE THAT TO DESIGN AND
PROTOTYPE NEW EQUIPMENT THAT CAN BE MANUFACTURED IN AMERICA.
ANNABELLE: THAT WAS SAM ALTMAN SPEAKING IN
TAIPEI. OF COURSE THIS WAS A DAY WHERE
IT WAS REALLY THE BIG ANNOUNCEMENT WAS THIS
PARTNERSHIP WE ARE SEEING BETWEEN OPENAI AND FOXCONN
BECAUSE THESE COMPANIES HAVE WORKED TOGETHER INDIRECTLY AND
WILL NOW BE JOINING FORCES DIRECTLY ON HARDWARE TO BUILD
OUT AI DATA CENTERS. WE HAD A REALLY GREAT
CONVERSATION WITH THE CHAIRMAN FROM FOXCONN TALKING ABOUT THE
SCALE OF THIS PARTNERSHIP, SAYING THEY ARE LOOKING TO
SPEND UP TO $5 MILLION. I WAS VERY CURIOUS TO
UNDERSTAND THE OPPORTUNITY HE SEES.
HE WOULD NOT COMMENT BECAUSE HE DIDN’T WANT TO CONTRIBUTE TO
CONCERNS AROUND AI BUBBLE FEARS AND FISCAL SPENDING.
BUT I DID REALLY PUSH HIM ON THE COMPUTER POWER AND HOW MUCH
CAPACITY THEY WOULD BE LOOKING TO ADD. BUT TAKE A LISTEN. >> ONE PER WEEK.
ONE PER WEEK IS OUR GOAL. WE CAN START WITH ONE GIGAWATT
PER MONTH. ANNABELLE:
YOU THINK YOU CAN ADD ONE GIGAWATT PER YEAR? >> STARTING THE SECOND HALF OF
THE YEAR. ANNABELLE: SO YOU THINK YOU CAN DANCE SIX
GIGAWATTS NEXT YEAR? >> I AM NOT SURE. IT TAKES TIME.
EVENTUALLY WE ARE GOING TO GET THERE. ANNABELLE:
LET’S TALK ABOUT THIS OPPORTUNITY IN THE U.S.
YOU HAVE SAID PART OF THIS IS ABOUT MAKING AMERICA AND IT IS
VERY AMBITIOUS. WHAT IS THE CAPEX YOU NEED TO
DEDICATE TO THE STATES? >> CAPEX WISE IS MAYBE $1
BILLION TO $1.5 BILLION TO START WITH TO BUILD THE FACTORIES AND
CENTERS, TO BUILD THE WORKING CAPITAL REQUIRED, TO BUILD THE
DATA CENTER. THAT IS TOTALLY DIFFERENT. THAT REQUIRES A HUGE AMOUNT OF
MONEY. AND WITH THAT, WE ARE GOING TO
WORK. ANNABELLE: WHAT ARE THE BIGGEST CHALLENGES
WITH SCALING UP IN THE U.S.? >> SHORTAGE OF LABOR.
IT IS NOT LABOR COSTS, IT IS SHORTAGE OF LABOR. ANNABELLE:
HOW DO YOU GET AROUND THAT? WHAT ARE THE CONVERSATIONS LIKE
AND WHAT ARE THE BIGGEST SHORTFALLS THAT YOU SEE? >> WE HAVE TO WORK CLOSELY WITH
SCHOOLS AND THE GOVERNMENT. WE HAVE TO WORK WITH LOCAL
AGENCIES AND GOVERNMENTS TO GET THEIR PEOPLE READY FOR THE KIND
OF JOBS WE REQUIRE. DAVID:
THAT WAS THE FOXCONN CHAIR IN TAIPEI ON FRIDAY. ALL RIGHT.
A BRIEF LOOK AT MARKETS. WE ARE DOING WELL GENERALLY
SPEAKING. WE WILL GET INTO THE MINUTIA UP
LATER ON BUT IN TERMS OF STOCK MOVERS ACROSS THE GREATER
CHINESE MARKETS, IF WE ARE LOOKING AT SOME OF THE CHIP
PLAYS THEY MIGHT BE DOWN TO NVIDIA.
WHEN I SAY AGAIN, THE NOTION THE CHINESE MARKET IS A MARKET
THAT IS FEASIBLE TO GET INTO AND THE OPPOSITE EFFECT AS FAR
AS A REACTION IN THE MARKETS ACROSS CHINESE NAMES.
CASINOS, 10.8% I BELIEVE WAS THE PICK UP AS FAR AS THE DATA
GOES. THERE WE GO. RIVALS WERE BETTER BY ABOUT
1.5% SPLITTING THE DIFFERENCE. VERY QUICKLY HAVE A LOOK AT
WHERE WE ARE AS FAR AS THE CHINESE DASHBOARD IS CONCERNED
AND WE ARE LOOKING AT DECENT GAINS. YOU KNOW WHAT?
I WANT TO ASK MY PRODUCER IS YOU GUYS — IF THE HANG SENG
CHINA INDEX CARD IS READY BECAUSE I WANT TO SHOW MY
VIEWERS THE MOVING AVERAGE IN FOCUS TODAY FOLLOWING THE WEEK
THAT WE HAD LAST WEEK AND THE REASON THAT SHOULD BE QUITE
RELEVANT TODAY IS THERE IS A TECHNICAL ASPECT TO THE BOUNCE
WE ARE SEEING TODAY. WE CUT THROUGH MOVING AVERAGES
LIKE A KNIFE THROUGH BUTTER. IT ALSO HAPPENS TO BE THE LOW
OF THE AUGUST 28 SESSION WHICH GIVES YOU QUITE A BIG DROP.
IT SEEMS LIKE WE ARE BOUNCING OFF THAT LEVEL GOING INTO THIS
WEEK. ANNABELLE: A GREAT LEVEL TO BE WATCHING.
HELEN WAS JUST WITH US SHARING HER OUTLOOK GOING INTO NEXT
YEAR. DAVID: WHAT WAS INTERESTING ABOUT THE
CORRELATIONS LAST FEW WEEKS, WHEN WE ARE GETTING A RALLY
ACROSS GLOBAL MARKETS, CHINA TENDS TO NOT PLAY ALONG IN
TERMS OF COORDINATION WHEN THINGS ARE IN A DOWNDRAFT,
CORRELATION SNAPS BACK TOGETHER WHICH IS THE POINT ASSET
ALLOCATORS ARE TRYING TO FIGURE OUT. PLENTY MORE AHEAD.
THIS IS “THE CHINA SHOW.” ♪ ♪ >> WELCOME BACK.
TAKING A LOOK AT THE HANG SENG. WE CAME INTO THE DAY WE WERE
WONDERING IF THERE WOULD BE ANY CHANCE GOING BACK TO THE BEAR
MARKET TERRITORY. WE HAVE THAT ALREADY.
ON THE GOLDEN DRAGON INDEX ON FRIDAY.
SEEMS LIKE IT AS OPTIMISTIC. THERE IS OPTIMISM AROUND THE
U.S. AND CHINA IN TERMS OF NVIDIA
CHIP SALES. PLUS BRINGING THE FED INTO THE
CONVERSATION. DAVID: WHEN YOU LOOK AT HOW THE PRICE
ACTION IN THE CHARTS ON FRIDAY DID IN THE OVERNIGHT SESSION,
THERE WAS VERY CLEAR ONCE THE CONSUMER CONFIDENCE, THE
CONSUMER ORIENTED DATA AROUND THE U.S.
CONSUMER AND HOW THE CHANGE IN COMPLEXITY AND THE APPEARANCE
OF RISK ASSETS AND THE BOUNCE WE SAW. YOU HAVE BITCOIN COMING
THROUGH. YOU OUT AGAIN ACROSS U.S.
TREASURIES UNDERSCORING THAT IN MOST RECENT WEEKS THE FED DID
NOT MATTER AS FAR AS THE MACRO PICTURE WAS CONCERNED.
HE WAS GEOPOLITICAL TENSIONS AND EARNINGS.
IT WAS REALLY THE COMEBACK OF THE FED THAT IS LEADING TO WHY
WE ARE SEEING THIS TODAY. >> THAT IS RIGHT.
YOU ARE REALLY GETTING AN INDICATOR. THE KOSPI, TAIWAN AS WELL, THEY
ARE THE OUTPERFORMERS IN THE SESSION.
A PRETTY STRONG START TO THE WEEK AS WE ALSO LOOKED TO WRAP
UP EARNINGS SEASON. WHAT IS REALLY NOTABLE IN WHAT
HAS BEEN INTERESTING TO WATCH IT IS BITCOIN. THE BEARING OF THE PRICE ACTION
WE ARE SEEING EVEN OVER THE WEEKEND. DAVID:
IT REALLY HAS BEEN A DECENT LEADING INDICATOR FOR RISK
ASSETS. THE FACT THAT IT IS PHRASED
THIS WAY, IT IS STILL QUITE FUNNY, I CANNOT GET MY HEAD
WRAPPED AROUND IT. WE ARE RALLYING INTO 81,000.
AT 1.I THOUGHT 80,000 WAS GOING TO BE IT.
THEN WE HAVE THIS TURNAROUND IN RISK APPETITE.
THAT IS WHERE WE ARE AS FAR AS CONCERNS. TAKING A STEP BACK, AMIDST THIS SEEMING WOBBLE IN RISK ASSETS,
SHE PUT THIS OUT ON LINKEDIN. I KNOW YOU SAW IT OVER THE
WEEKEND. WHEN YOU LOOK AT THE MOVING
AVERAGES, IT IS STILL VERY MUCH POINTING TO THE UPSIDE.
THE LONGER TERM EQUITY BULL MARKET REMAINS INTACT WITH
SHORT-TERM, MOST IF NOT ALL OF THE TECHNICAL INDICATORS AND
CHARTS ARE POINTING TO A DEEPENING IN THE CORRECTION
OVER THE SHORT TERM BECAUSE WE HAVE NOT QUITE SQUEEZED OUT AND
WE ARE NOT BACK ALL THE WAY TO OVERSOLD TERRITORY. WHEN YOU LOOK AT TWO THINGS,
WHAT WE HAVE DONE IS WE HAVE PUT THIS ON A CHART FOR YOU TO
ACTUALLY HAVE A LOOK AT THAT. JUST TO POINT OUT.
WHAT COLOR IS THAT? PURPLE? THANK? — PINK? THIS GAP IS OVERSOLD TERRITORY.
SLIPPING INTO THE NEGATIVE AS FAR AS THE OF THE MOMENT GAUGE
HAS CONCERNED. IT POINTS TO MORE ROOM ON THE
DOWNSIDE AMIDST THIS. THIS IS A BULL MARKET THAT
TAKES YOU ALL THE WAY BACK TO 2020. AS THE CHART GOES.
JUST WATCH THE TECHNICALS. AS PERHAPS A TRADING INDICATOR
HERE. GIVEN WHERE WE ARE SO FAR. AND EXPECTATIONS OVER THE NEXT
TWO DAYS OR SO. >> THERE ARE THE TECHNICALS AND
THEN THERE IS THE EARNINGS PICTURE AS WELL.
WE ARE AT THE TAIL END OF THE REPORTING SEASON IN CHINA BUT
YOU STILL HAVE SOME BIG NAMES ON DECK THIS WEEK. COMING UP WE HAVE TWO OF THE
BIG ONES TO WATCH, ALIBABA AND MEITUAN.
THAT IS THE STORY AROUND THE FOOD DELIVERY WARS.
WERIDE WILL BE INTERESTING AS WELL.
THEY ARE ALREADY LISTED ON THE NASDAQ. LI AUTO NIO, SOME OF THOSE
STRIKES — STOCKS. WYNN MACAU WILL BE A VERY
INTERESTING ONE TO WATCH. THIS HAS BEEN A LOVE STOCK FOR
A LONG TIME. AS ASIA DOES NEAR THE END OF
THE REPORTING SEASON, BLOOMBERG INTELLIGENCE SEES EARNINGS
ACROSS THE ASIA-PACIFIC COMING IN BETTER THAN EXPECTED.
PUSHING PROFITS TO AROUND THE HIGHEST LEVELS SINCE THE END OF
THE GSE. DAVID: IT REALLY COMES AMID THIS DAILY
BASIS WE KEEP DRUMMING UP THESE CONCERNS OVER EVALUATIONS AND
MULTIPLES THAT HAVE WEIGHED ON TECH STOCKS GLOBALLY. LET’S BRING IN OUR STRATEGIST
HERE. NICE TO SEE YOU. GOOD MORNING. WHEN PEOPLE TALK ABOUT A TECH
BUBBLE, THAT IS USUALLY NOT THE CASE. HOW DOES THAT NATION —
NOTIONAL NARRATIVE PRIMATE? >> OBVIOUSLY THERE WILL BE SOME
KNOCKOFF EFFECT FOR CHINA. IF WE ARE TALKING ABOUT
EVALUATION BUBBLE OR AN AI BUBBLE, CHINA EVALUATIONS ARE
FOR THE BIG TECH STOCKS TRADING AT ROUGHLY 25%. OVERALL CHINESE EVALUATIONS,
AFTER THE RECENT DECLINE ARE AVERAGING OUT.
WE DO NOT SEE A EVALUATION BUBBLE IN CHINA.
CHINESE STOCKS ARE LESS FROTHY. ANNABELLE:
THE MARKET ACTIVITY WE HAVE SEEN RECENTLY, IT HAS BEEN VERY
VOLATILE. PEOPLE HAVE BEEN TALKING ABOUT
A HEALTHY CORRECTION. WHAT IS YOUR ANTICIPATION? >> IT HAS NOT FALLEN INTO PANIC.
THIS SUGGESTS THAT THE RECENT CORRECTION IS STILL HEALTHY.
SENTIMENT HAS NOT REACHED EXTREME LEVELS.
THAT IS TYPICALLY ASSOCIATED WITH A NEGATIVE REFORM.
NOT THAT SURPRISING. DAVID: HOW ARE WE SET UP FOR NEXT YEAR?
>> PRICES HAVE RISEN THIS YEAR.
NEXT YEAR WILL BE ABOUT RECOVERY.
AND THOSE COMPANIES THAT CAN DELIVER GROWTH.
CHINA TECH IS EXPECTED TO SEE THAT INFLECTION.
EARNINGS ARE EXPECTED TO ACCELERATE. THE RECENT SUPPLY-SIDE REFORM
SHOULD LIST THESE SECTORS AS ♪ ANNABELLE:
TAKING A LOOK AT SHARES THIS MORNING AND INDONESIA AS THE
INTERNET SERVICES COMPANY IN INDONESIA, THERE IS THAT A
LEADERSHIP RESHUFFLE THIS MORNING. THAT MOVE IS EXPECTED TO SPEED
THE TAKEOVER OF THE COMPANY. THIS IS SOMETHING WE HAVE BEEN
REPORTING ON. WE HAD SCOOPS ON THIS.
STOCKS ARE MARGINALLY HIGH HERE. THE COMPANY PUTTING THAT OUT IN
A STATEMENT. DAVID:
THAT WOULD BE IN A GAP BETWEEN THE CURRENT SITUATION AND
REALITY. ONE THING WE ARE TRACKING RIGHT
NOW IS THE TRADING DAY BEGINNING. ANNABELLE:
IT IS A WORD THAT CONTINUES TO TRIP ME OUT.
I HAVE TO REMEMBER IT. IT IS A GOOD DAY FOR A LISTING
IN HONG KONG. VERY DIFFERENT INDUSTRIES.
WE ARE ON WATCH. YOU HAVE CONSUMER
PHARMACEUTICALS. LOOK AT SOME OF THE UPCOMING
NAMES. THAT HAS A LOT OF PUBLIC
INFORMATION ON IT. JUST THE AMOUNT OF STUFF THAT
HAS BEEN FILED. THAT WILL COME ONLINE.
JOINING US FOR MORE ON WHAT THIS YEAR HAS BEEN WITH THE
OUTLOOK IS FOR NEXT YEAR IS THE HEAD OF EQUITY CAPITAL MARKETS
AT UBS. HOW MUCH SLEEP HAVE YOU GOTTEN
THIS YEAR? HOW BUSY HAVE YOU AND YOUR TEAM
IN? >> IT HAS BEEN A CRAZY YEAR.
ESPECIALLY THE HONG KONG MARKET. THINK ABOUT WHAT WE HAVE. EVERY PROJECT HAS BEEN BOOMING
THIS YEAR. ANNABELLE: DOES HE CONTINUE INTO NEXT YEAR?
>> THINGS WILL SLOW DOWN A LITTLE BIT. WE SAW THAT.
MOVING INTO NEXT YEAR, WE SEE MORE THAN 300 COMPANIES FILING
FOR THEIR HONG KONG IPOS. WE HAVE A LOT OF COMPANIES
ALREADY IN THE PREPARATION PHRASE FOR THEIR JANUARY
AXILLARY OFFERINGS AS WELL. DAVID:
WHAT CONVERSATIONS ARE YOU HAVING WITH HIM?
I KNOW THIS IS CONFIDENTIAL BECAUSE IT IS ABOUT THE
MARKET’S. ARE PEOPLE WORRIED ABOUT
EVALUATIONS? >> IT DEPENDS ON HOW YOU SET
THE RANGE. DAVID: THAT IS PART OF YOUR JOB. >> THE MARKET SENTIMENT IS
THERE. WHEN YOU LOOK AT A VALUATION
FOR THE REGION, IT IS STILL ON A HIGH COMPARED TO HISTORICAL
LEVELS. IT IS STILL A DISCOUNT. EVERYTHING WILL CONTINUE.
ANNABELLE: WHAT IS THE PIPELINE? A LOT OF THAT HAS BEEN DEALS.
SOME OF THEM COMING BACK FROM THE U.S. >> I THINK FOR THIS YEAR IT WAS
DOMINATED BY THAT. THESE ARE ALL THINGS ON
EXISTING COMPANIES. THEY ARE NOT SO MANY.
ONLY THREE COMPANIES. THAT ARE BRAND-NEW LISTINGS IN
HONG KONG. WE DO EXPECT TO SEE PICKUP
ACTIVITY AND THAT. DAVID:
WHAT SPECIFIC TYPE — SPECTERS DO YOU THINK WE WILL GET A
BRAND-NEW ONES NEXT YEAR? >> THAT WILL CONTINUE. INCLUDING THE BRAND-NEW ONES.
ANNABELLE: WHAT SORT OF CONVERSATIONS DO
YOU HAVE WITH THESE COMPANIES? THAT WAS ON THE SAME DAY.
THEY BOTH WANT A LISTING. ESPECIALLY THE TECH SPACE. >> I THINK FOR A LOT OF THESE
COMPANIES, AS LONG AS THEY GET THE RIGHT APPROVALS, THEY DON’T
WANT TO KEEP THE PROCESS ROLLING.
THEY WANT TO GET IT IS NOT AS QUICKLY AS POSSIBLE. DAVID:
SPEAKING OUT, LET ME BORROW THAT LAST THING YOU MENTIONED.
GRAB THIS WINDOW OF OPPORTUNITY. YOU WOULD ANY OF YOUR PEERS
HAVE HAD TREMENDOUS SUCCESS. WHAT IS THE OUTLOOK FOR FEES?
WE HAVE SEEN A LOT OF PRESSURE ON THAT RECENTLY? >> YOU MEAN WITH THE PERCENTAGE?
DAVID: WHAT IS THE OUTLOOK IN TERMS OF
THE COMMERCIAL SIDE? THERE IS A LOT OF ACTIVITY. >> A LOT OF COMPETITION.
A LOT OF ACTIVITY. I THINK FOR SURE THAT THE LARGE
VOLUMES HELP WITH THE FEES IN GENERAL. FOR SOME IT IS THE PRODUCT
TYPES. IT IS A LOWER RATE. IN GENERAL. TECHNICALLY THESE ARE ALSO FOR
THAT. THE RATE IS NORMAL.
IT IS HISTORICAL. WE ARE SURE THAT THAT IS HAVING
A BETTER YEAR. DAVID:
PEOPLE ARE PROBABLY COUNTING THE BONUSES ALREADY.
AHEAD OF THE MARCH ANNOUNCEMENT. ANNABELLE:
WE CAN HAVE THAT BONUS CONVERSATION. [LAUGHTER] GOING BACK TO THAT AROUND THE
FEES. DO YOU WANT TO SEE BETTER NUMBERS THE NEXT YEAR IF YOU DO
HAVE MORE OF THOSE ORIGINAL LISTINGS >> YES.
MORE NEW LISTINGS. ALSO CONTINUING STRONG MOMENTUM.
WE HOPE NEXT YEAR WILL BE AN EVEN BETTER YEAR THAN THIS YEAR.
MOMENTUM IS NOT STOPPING YET. DAVID:
WHAT IS YOUR OUTLOOK FROM YOUR CONVERSATIONS?
FOR THE ASIAN MARKET. THE LISTINGS?
IN THE ASIAN MARKETS? >> I THINK FOR THE ASIA
LISTINGS IT IS ALSO DRIVEN BY REGULATORY APPROVALS ETC..
IF YOU LOOK AT THE SECONDARY MARKET, PEOPLE ARE EXPLORING
THAT MARKET AS WELL. THERE ARE INFLOWS INTO THE
ASIAN MARKET. WE VALUE BOTH ASIA AND HONG
KONG’S TAIEX — STOCKS EQUALLY. THERE IS A DIMINISHING OF THAT
GAP. THIS SONG THE BACK OF A LOT OF
ATTENTION. THE GETTING THE YEAR HAS BEEN
QUITE BIG. WE DO SEE INVESTORS BEGINNING
TO FOCUS ON THE REGION. A LOT OF THE QUALITY COMPANIES,
FOR THOSE WHO ALREADY HAVE THAT LISTING, THEY WERE DOING THAT
ALREADY. DAVID: THEY DID THAT AS WELL.
ANNABELLE: WHAT IS THE HOLD UP ON SOME OF
THE ONES FOR THE MAINLAND? THAT IS A NAME THAT STANDS OUT
AS ONE OF THE MOST PROMISING ROBOTICS COMPANIES.
THERE IS A LOT OF INTEREST IN THIS ONE.
HUMANOID ROBOTS WILL SEE EXPONENTIAL GROWTH IN THE NEXT
12 MONTHS. HOW COME THERE IS THIS DELAY?
THIS IS A LISTING WE HAVE BEEN TALKING ABOUT FOR SEVERAL
MONTHS NOW. >> THE MARKET HAS SO MUCH OF AN
EXPECTATION. THEY ARE GOING THROUGH THEIR
OWN PROCESS. JUST LIKE THERE ARE COMPANIES
IN HONG KONG GOING THROUGH THEIR OWN PROCESS.
LET’S CONTINUE TO MONITOR AND SEE WHAT COMES OUT. DAVID:
BEFORE WE ASK YOU ABOUT THE REST OF THE REGION, WHAT IS THE
RISK TO ALL OF THIS MOMENTUM? PEOPLE KEEP TALKING ABOUT A LOT
OF REASONS TO REMAIN BULLISH. IS THERE A RISK IN YOUR VIEW
THAT WE SHOULD BE COGNIZANT OF? >> I THINK A LOT OF FAVORABLE
FACTORS THIS YEAR INCLUDING THE GEOPOLITICAL OUTCOME WAS BETTER
THAN WE ORIGINALLY FEARED. THERE HAS BEEN INNOVATION.
ACCOMMODATIVE POLICIES. THESE ARE ALL FACTORS. I THINK A LOT OF THE STOCK
PERFORMANCE WILL BE DRIVEN BY GROSS. THE FUNDAMENTALS OF THE
COMPANIES IN THE REGION. DAVID:
THE LIQUIDITY CONDITIONS AS WELL. >> EXACTLY. DAVID:
WE JUST CAME FROM SINGAPORE LAST WEEK.
WE WERE SPEAKING WITH THE CEO. THEY HAVE HAD A DECENT YEAR
RELATIVELY SPEAKING. WHICH OUTLOOK FOR THE REST OF
THE REASON IS THERE? WHAT STANDS OUT TO YOU? >> HONG KONG WILL CONTINUE TO
BE A DRIVER IN THE REGION. STILL THE MAIN DRIVER.
INDIA WILL REMAIN ACTIVE. THEY HAVE A LONG LIST OF IPA —
IPO BACKLOG AS WELL. THE KOREAN MARKET WILL SEE
INCREASED ACTIVITY. WITH THEIR EXPOSURE TO AI
RELATED CYCLE. TAIWAN WILL SEE A HOT START IN
JANUARY. THEY HAVE ANNOUNCED A BUNCH OF
TECH RELATED BUSINESS. I THINK A QUITE A FEW OF THE
BROADER REGION WILL CONTINUE TO SEE ACTIVITY INTO NEXT YEAR. DAVID:
LOOKS LIKE THEY WILL BE BUSY. MAYBE HIRING. WE WILL SEE.
UNFORTUNATELY WE ARE OUT OF TIME. THE HEAD OF EQUITY CAPITAL
MARKETS. WE ARE ABOUT 52 MINUTES INTO
THE SESSION. PLENTY MORE AHEAD. ♪ ♪ DAVID:
LET’S TALK ABOUT TODAY’S BIG TAKE. THEY SOLD $3 MILLION OF BONDS. OFFERING RETURNS THAT CAN BE
DOUBLE THE OFFICIAL INTEREST RATE LISTED.
THAT IS ACCORDING TO SOME BANKERS WE SPOKE TO. GOOD MORNING.
THANK YOU FOR COMING ON THE SHOW. HOW DOES THIS WORK,
EFFECTIVELY? >> THE WAY IT WORKS IS MANY OF
THESE LOCAL GOVERNMENT FINANCING VEHICLES WHEN THEY GO
TO MARKET THEY NEED TO BORROW MONEY.
THE REVENUES IN THE CASH FLOW IS WOBBLY.
THEY NEED TO OFFER RELATIVELY HIGH RATES TO BE ABLE TO GET
INVESTORS ON BOARD. AT THE SAME TIME THEY ARE
WORRIED ABOUT PUBLICLY OFFERING 60% YIELD ON THE BOND BECAUSE
THEY ARE WORRIED THAT IN THE FUTURE THEY WILL HAVE TO PAY
SIMILARLY HIGH YIELDS TO BORROW FROM THE BOND MARKET AGAIN.
THE WORKAROUND IS THEY WILL SELL A BOND AT AN 8% COUPON.
THEN THEY WILL PAY THE INVESTORS EITHER HAS A
CONSULTING FEE OR THEY WILL PAY THE BANK A CONSULTING FEE.
AND RETAIL THAT MONEY TO THE INVESTOR SO AT THE END OF THE
DAY THE INVESTOR IS MAKING 60% YIELD AND SOMETIMES MORE.
ANNABELLE: THIS IS A PRACTICE THAT HAS
BEEN SANCTIONED AND COMPANIES HAVE BEEN CAUGHT IN THE ACT.
BOND INVESTORS HAVE BEEN ASKED TO RETURN THE ADDITIONAL
PAYOUTS. HOW EXACTLY IS THIS CONTINUING
TO FLOURISH? >> >> REGULATORS HAVE CAUGHT
ONTO THIS PRACTICE ON THE MAINLAND.
THEY HAVE CRACKED DOWN, AS YOU SAID.
THE COMPANIES THAT HAVE BEEN DOING THIS HAVE BEEN SANCTIONED.
THE ADDITIONAL MONEY THEY HAVE PAID OUT TO INVESTORS HAS BEEN
CLAWED BACK. BECAUSE OF THIS ACTION BY
CHINESE REGULATORS, A LOT OF THIS IS STARTING TO MOVE
OFFSHORE. THIS IS WHERE WE ARE SEEING AN
UPTICK IN THIS. IN HONG KONG. WHICH CHINESE REGULATORS DO NOT
HAVE THE REACH. WHERE THIS IS BEEN DONE ON THE
SIDE. IF AN INVESTOR WANTS TO PARTAKE
IN WANT OF THESE DEALS, THEY REALLY HAVE TO KNOW THE RIGHT
PERSON. WE EXPECT AS THIS BECOMES MORE
CLEAR THAT THERE WILL BE MORE REACTION. DAVID: THANK YOU. ♪ DAVID: WELCOME BACK.
SOME NEWS ON ALIBABA. WE HAVE A NUMBER NOW.
10 MILLION IN THE FIRST WEEK. THE MARKET IS REACTING TO THIS
INFORMATION. WE ARE GETTING AN INITIAL
REACTION ACROSS MARKETS BY PRICE.
WE WILL SHOW YOU VOLUMES IN A MOMENT. 4% HIGHER ON ALIBABA.
YOU LOOK AT THE BENCHMARK. IT IS RISING.
WE ARE GETTING A BREATH. IT IS NOT JUST A SPECIFIC STOCK.
SPEAKING OF VOLUMES, COMING UP ON YOUR SCREENS, THEY LOOK TO
THE BLOOMBERG TERMINAL. JUST TO SHOW YOU. IT IS THE WHITE LINE THAT YOU
SEE FOR THIS TIME OF THE DAY. EFFECTIVELY WHAT YOU’RE LOOKING
AT IS ONCE THE NEWS DROPPED, THAT SPIKE IN VOLUMES THAT PUTS
US ON TRACK FOR 140 MILLION SHARES TRADED FOR THE DAY.
WE STARTED OUT TODAY WITH THIS INFORMATION.
IT WAS AT THE BEGINNING OF THE SESSION.
THERE WAS A BOUNCE BACK PRICE. THAT SPIKED IN THE LAST MINUTE.
GIVEN THE INFORMATION THAT WE HAVE RIGHT NOW.
THE MARKET IS REACTING. AND REACTING QUITE POSITIVELY
TO THIS NEW INFORMATION COMING THROUGH. ANNABELLE:
IT IS INTERESTING THAT EXHIBITION YOU HAD. THE? .
WHAT IS THE FUNDAMENTAL TECHNOLOGICAL CHANGE THAT YOU
ARE SEEING? WHAT IS MORE CONCERNS AROUND
THE BUBBLE SIDE OF FINANCIAL EVALUATIONS? OUR NEXT GUEST IS OF THE
SOUTHERN UNIVERSITY OF SCIENCE AND TECHNOLOGY.
HE HAS DEVELOPED A POWER LAW SINGULARITY MODEL.
THE IDEA HERE IS LOOKING AT DIFFERENT PHENOMENON AT LOOKING
IF WE ARE SEEING ANY ACTIVITY. HE JOINS US THIS MORNING.
THANK YOU VERY MUCH FOR TAKING YOUR TIME TO SPEAK TO US.
WE CAN GET STARTED WITH THE GENERAL QUESTION.
ESPECIALLY THE MARKETS RIGHT NOW THERE IS SO MUCH FOCUS ON
THE AMOUNT OF SPENDING, THE LEVEL OF INFRASTRUCTURE BUILD
DEMAND THAT WE SEE. DO YOU SEE ANY SIGNS OF A
BUBBLE MARKET ACTIVITY RIGHT NOW? >> NOT SO MUCH IN CHINA. WE SEE IT IN THE INTERNATIONAL
MONETARY MARKET. IN AI.
CISCO AND OTHER INDICES LIKE IBEX AND ALPHABET.
NEGATIVE MODELS IN CRYPTO. >> HELP US UNDERSTAND.
WHY DO YOU STOP IT CRYPTO PACIFICALLY WHEN YOU SAY
INEVITABLE? I IMAGINE IT IS SOMEWHAT
DEPRESSED. DEFLATED IF YOU WELL. IF YOU CAN GIVE US MORE
SPECIFICS, WHAT DOES THIS TELL YOU AND ARE THERE SIGNS THAT WE
MIGHT SEE SOME INFLATION OF CRYPTO? MOVING FORWARD? >> A NEGATIVE BUBBLE IS
ESSENTIALLY LOOKING AT THAT. THIS PRICE ACCELERATION IS
SUPER EXPONENTIAL. A NEGATIVE BUBBLE BRINGS THE
AXIS DOWN. IT IS REFLECTING IN EXUBERANCE
IN THE NEGATIVES. A FEAR. WHEN WE SAY A NEGATIVE BUBBLE
WE EXPECT A REBOUND. TYPICALLY FOR BITCOIN.
WE SEE THERE HAS BEEN ACCELERATION.
WE SEE A LIKELY REBOUND IN THE COMING WEEKS. DAVID: OK. PROFESSOR, MAYBE THE SECOND
HALF A STEP BACK. I AM CURIOUS, WHAT GOES INTO
THE MODEL? WHAT MAJOR ASSUMPTIONS GOING TO
THAT AS YOU PLUG THAT IN? MY UNDERSTANDING THE
FUNDAMENTALS ARE NOT PART OF THAT. >> AS YOU KNOW, FUNDAMENTALS
ARE EXTREMELY HARD TO QUANTIFY. IN PRINCIPLE A BUBBLE IS IN
EXCESS OF FUNDAMENTAL VALUE. IF YOU KNOW THE FUNDAMENTAL
VALUE BY A FACTOR OF TWO, THAT MEANS IT IS ESSENTIALLY NOT
USEFUL. ON ONE LEVEL, WE USE THIS.
THE EXUBERANCE IS CHARACTERIZED BY SUPER EXPANSION. THAT MEANS COMPOUNDING INTEREST
AND GROWTH. THIS IS SUPER EXPONENTIAL. THE PRICE IS GROWING
EXPONENTIALLY. EVERYTHING IS EXPONENTIAL. WE ARE DETECTING THE SPECIFIC
SIGNATURES OF EXUBERANCE. IT COULD BE RATIONAL. WITH OPTION DERIVATIVES YOU CAN
GET THIS POSITIVE FEEDBACK. THAT IS THE KEY WORD. IT IS QUITE SURPRISING.
THE FEAR OF MISSING OUT AT OTHER MECHANISMS GIVE RISE TO
THESE EXPLOSIONS. WHICH OCCUR ON DIFFERENT TIME
SCALES. IN ADDITION TO THIS MODEL THERE
IS THIS IDEA OF A LOT OF FEAR AND EXUBERANCE. THE MARKETS CLIMB A WALL OF
WORRY. THAT IS WHAT WE ARE DETECTING.
IN THIS SUPER EXPANSION. ANNABELLE:
YOU MENTIONED ABOUT THE MODEL INDICATING WE WILL SEE A
RECOVERY IN PRICES IN THE NEXT FEW WEEKS.
WHAT IS THE LEVEL YOU ARE LOOKING AT? >> WE ARE NOT LOOKING AT THE
LEVELS OR THRESHOLDS. WE ARE NOT LOOKING AT THE
MODELS. WHAT WE DO IS QUANTIFY WHERE
THE PROBABILITY OF THERE ARE CRASHES.
WE DON’T PREDICT LEVELS. WE PREDICT TIMES WHEN THE ARE
RECEIVE IS NOT SUSTAINABLE. LEADING TO A CRASH.
IT COULD BE A HIGH VOLATILITY IMPACT.
THIS IS WHAT WE ARE LOOKING AT. TRYING TO FIGURE OUT THE
PRECISE TIME AT THE PRECISE LEVEL. IT IS NOT POSSIBLE IN OUR
OPINION. IDENTIFYING A WINDOW OF
PREDICTABILITY WHERE YOU HAVE THIS KIND OF REGIME.
THAT IS WHAT YOU CAN DO. IT IS VERY IMPORTANT FOR RISK
MANAGEMENT. A COMPLETELY DIFFERENT
PORTFOLIO. AS YOUR RISK IS DERIVATIVES.
THIS KIND OF THING. DAVID:
PROFESSOR, I NEVER THOUGHT I WOULD HAVE THE OPPORTUNITY TO
BRING UP THE SECOND LAW OF THERMODYNAMICS. TO YOUR POINT, WITH THE MODEL
PREDICTS IF I’M UNDERSTANDING CORRECTLY IS IF WE ARE NEAR OR
OUT THERE RATHER AT THE THRESHOLD OF INSTABILITY, I
WONDER WHAT YOUR MODEL TELLS YOU ABOUT THE SPECIFIC GROUP OF
VERY LARGE TECH STOCKS IN THE U.S. AND WHETHER OR NOT THEY ARE
CLOSE IF NOT ALREADY IN THAT TIME OF DISORDER. >> IS A VERY GOOD QUESTION.
IT IS NOT RELATED TO THAT. THE QUESTION IS INTELLIGENT. THEY ARE HIGH DIMENSIONAL. I CALL THE POCKETS OF
PREDICTABILITY. AS IF THERE IS A KIND OF
CONDENSATION OPINION OR VIEWS. SOCIAL IMITATION AND SO ON.
THAT CLASS TO DIMENSIONS OF THE SYSTEM INTO A CLEARER DYNAMIC.
A POCKET OF PREDICTABILITY. INDEED THE FINANCIAL BUBBLES
WHEN THEY’RE CLOSE TO A PANIC, THEY BECOME PREDICTABLE.
RIGHT NOW YOU ARE ASKING YOU WHAT IS GOING ON.
THERE IS NOT MUCH GOING ON IN CHINA.
IN THE REST OF THE WORLD WE SEE A NUMBER OF BUBBLES BUT NOT AS
BAD AND SYSTEMIC AS A FEW YEARS AGO. ANNABELLE:
I AM LOOKING IN YOUR NOTES AND I CAN SEE YOU HAVE WRITTEN
DRAGON KINGS. CAN YOU GIVE SOME MORE INSIGHTS
ON WHAT YOU MEAN BY THAT EXACTLY? >> THIS IS A REACTION TO THE
CONCEPT OF A BLACK SWAN. MANY PEOPLE KNOW ABOUT THAT.
THIS IS THE POPULAR VIEW THAT THERE ARE EVENTS, EXTREME
EVENTS , UNKNOWNS. IT WAS PUT FORWARD IN 1930.
THERE ARE EVENTS YOU CANNOT EVEN IMAGINE WHAT OCCUR. NO CRISIS CAN BE UNDERSTOOD IN
ADVANCE. IT COULD BE AN EARTHQUAKE OR A
LANDSLIDE. THEY COULD BE A FINANCIAL CRASH.
EXTREME EVENTS THAT ARE DIFFERENT FROM THE OTHERS. THE KING OWNS A BIG PART OF THE
WEALTH OF THE COUNTRY. IT IS OUTSIDE THE NORMAL
DISTRIBUTION OF BOTH OF THE CITIZENS. THERE IS A FACT THAT THERE IS A
SPECIAL MECHANISM THAT GIVES RISE TO THIS.
I THANK YOU FOR ASKING THIS QUESTION. THIS LARGE EVENT, IT REFLECTS
MATURATION TOWARD UNCERTAINTY. AND IT RESULTS FROM AMPLIFYING
A SPECIAL MECHANISM. THAT IS WHAT GIVES THEM SOME
CREDITABILITY TO MAKE OF DIFFERENT FROM THE OTHER EVENTS.
JUST TO GIVE YOU AN EXAMPLE, MOST OF THE TIME THE CRASHES,
THEY WERE DOWN. OVER THE LAST FEW MONTHS.
THIS IS WHAT I DO CARE ABOUT IS AN INVESTOR.
I DON’T CARE ABOUT THAT EVERY DAY. THIS OCCURS THROUGH COALITIONS
OF NEGATIVITY. IT SET AROUND. THIS IS WHAT I TECHNIQUES ARE
CAPTURING. THIS IS REFLECTED IN THE
PROGRESSIVE EVOLUTION. THIS REDUCTION. AND PLUS APPLYING THIS
MECHANISM THAT GIVES RISE TO THIS.
THESE GREAT CRASHES THAT WE ARE INTERESTED IN. DAVID: THE ABILITY TO IDENTIFY THE
CANARIES IN THE COAL MINE, THE PRECURSOR TO THESE EVENTS, LET
ME PHRASE THE QUESTION QUITE SIMPLY GIVEN A LOT OF THIS IS
GREEK TO ME REALLY. WHAT IS THE POSSIBLE TRIGGER
THAT YOU THINK CAUSES THE MOST AMOUNT OF WIDESPREAD PAIN TO
THE MOST ASSET MANAGERS OUT THERE?
WHAT IS THE ONE RISK WE SHOULD BE PAYING ATTENTION TO?
OR THE PRECURSORS TO THAT RISK? >> THERE ARE MANY RISKS.
THE WAY I SEE IT IS AS AN EXAMPLE OF THIS. THIS PAIN ON MY FINGER IS ON
STABLE PAIRWISE IT FLOATING. WHY IS IT CRASHING. ONE POSSIBILITY IS THE FACT
THAT I AM MOVING MY FINGER. MAYBE I HAVE PARKINSON’S
DISEASE. I DO NOT, OF COURSE. THIS IS WHAT YOU ARE COMMENTING
ON YOUR PLATFORM. THE CHAIRMAN OF THE FEDERAL
RESERVE SAID THIS AND THAT. TRUMP OPENS HIS DOOR AND ISSUES
A STATEMENT. ETC.. THESE ARE NOT TELLING THE WHOLE
STORY. THE STORY IS IN FRONT OF YOU. IT IS THE MATURATION TOWARD
INSTABILITY. WITH THIS FEEDBACK. THIS PHENOMENON.
TO BE ANSWERING YOUR QUESTION, WHAT SHOULD WE LOOK AT? YOU SHOULD LOOK AT THE LARGE
MECHANISM. THE IMPORTANT TO MECHANISM THAT
GIVES RIGHT TO POSSIBLE FEEDBACK.
THEN THE SYSTEM BECOMES FRAGILE. BECOMES MORE SUSCEPTIBLE TO
ALMOST ANYTHING. IT CAN MAKE THE SYSTEM COLLAPSE.
THIS IS WHEN WE WORRY. COMMENTATORS HAVE SUCH A HARD
TIME WHEN CRASHES HAPPEN. THEY ARE JUST LOOKING AT THE
LAST STATEMENT OF THIS OR THAT PERSON. THE LAST GEOPOLITICAL
DEVELOPMENT. WHEN THEY SHOULD LOOK TOGETHER
WITH THE UNDERLYING ISSUE. YOU TAKE A PERSON.
WHY DO YOU FEEL ILL? YOU HAVE THE PROXIMATE CAUSE,
YOU HAVE A COLD. YOU WERE SUBJECTED TO SOME
MICROBES OR SOMETHING LIKE THIS. THE OTHER CAUSES YOUR IMMUNE
SYSTEM HAS WEAKENED OVER THE YEARS. YOUR AGE, FOR EXAMPLE. YOU HAVE BEEN EXPOSED TO A LOT
OF STRESS AND SO ON. BAD FOOD. EVERYTHING IS EVOLVING THROUGH
THIS COMBINATION OF MATURATION. THE CAUSES GO UP AND DOWN.
THEY ARE HITTING THE SYSTEM CONTINUOUSLY. AS STRESSORS. DAVID:
PROFESSOR, THANK YOU SO MUCH. TO BE HONEST I PROBABLY
UNDERSTOOD 15% OF THAT. I DO NOT BLAME MY EVOLUTIONARY
INHERITANCE OF NOT BEING A SMART EIGHT AT THIS POINT.
THANK YOU FOR HELPING IN LIGHTNESS. MORE TO COME.
CERTAINLY ON THIS. THE PROFESSOR AT THE SOUTHERN
UNIVERSITY OF SCIENCE AND TECHNOLOGY.
I AM STILL REELING FROM THAT CONVERSATION.
MAYBE A STEP OR TWO DOWN IN TERMS OF THE INTELLIGENT SCALE
BUT NOT THE SIGNIFICANCE. THAT IS NOT A DIFFERENT MATTER.
AN INTERVIEW WE DID WITH THE ONE MOBILE CEO.
HIS STRATEGY AT HEAD. ♪ ♪ ANNABELLE: HE TOLD US THE COMPANY HAS
ENOUGH INVENTORY FOR THE HOLIDAY SEASON.
HERE IS SOME OF IT TO LISTEN BACK TO. >> WE ACTUALLY HAVE A LOT OF
EXPERIENCE IN NAVIGATING THROUGH DIFFERENT SUPPLY AND
DEMAND TIMES. COVID WAS ONE. 10 YEARS AGO THERE WERE SOME
SHOCKS IN THE MARKET. OUR MARKET SHARE GAINS HAVE
BEEN VERY SIGNIFICANT. IF YOU RECALL BACK IN JUNE,
PROBABLY A LOT OF PEOPLE WERE TALKING ABOUT DEMAND FROM THE
U.S. WITH RESPECT TO TARIFFS. THEY WERE SEEING A SECOND HALF
SLOWDOWN. THERE WAS A QUESTION WHETHER IT
WAS RIGHT OR WRONG. YOU SEE THAT BEING VERY STRONG. WE HAVE BEEN IN ENGAGING WITH
SUPPLIERS. THAT HAS BEEN VERY HELPFUL.
WE HAVE SEEN PRICES GOING UP. WE HAVE BEEN HOLDING LONGER.
IN TERMS OF COMPONENTS. THAT IS RELATED TO OUR POSITION.
DAVID: WHAT FINANCIAL ASSUMPTIONS ARE
YOU MAKING GOING INTO NEXT YEAR? ON MEMORY CHIPS AND THE KEY
COST? >> I THINK THE MARKET IS
WORRIED ABOUT COST. AND MARGINS. OVERALL IF YOU THINK ABOUT
THAT, WE HAVE A POSITION IN THE MARKET. ANNABELLE:
WHAT DOES THAT STOCKPILING LOOK LIKE. >> WE ARE ABOUT 50% OF HER
USUAL LEVELS. WE HAVE INVENTORY. ANNABELLE:
WHAT KIND OF PRICING ADVANTAGE DO YOU EXPECT THAT TO GIVE YOU?
WHERE DO YOU THINK PRICES WILL TREND? >> THE PRICE IS GOING VERY
HIGH, OF COURSE. I THINK IT IS UNPRECEDENTED.
THIS WILL PROBABLY BE A LONGER TREND.
CERTAINLY FOR THE REMAINING OF OUR FISCAL YEAR. WE HAVE LONGER-TERM CONTRACTS. THAT WOULD BENEFIT OUR
CUSTOMERS. DAVID: THIS FISCAL YEAR, ARE YOU
RAISING PRICES ARE NOT RAISING PRICES? WHAT IS THE PLAN? >> ACCORDING TO THE LEVEL, WE
WOULD ADJUST ACCORDINGLY. WE CAN LEND THAT SCALE.
ESPECIALLY COMING INTO THE HOLIDAY SEASON. ANNABELLE:
GOING INTO 2026, ARE YOU PLANNING PRICE HIKES? >> WE DETERMINED THAT AFTER
ALL, THE PRICES ARE GOING UP SIGNIFICANTLY.
I THINK WE WILL HAVE TO TRY TO STRIKE THE BALANCE GOING
FORWARD. IT IS BETWEEN PRICE AND AVAILABILITY. DAVID:
THAT WAS THE LENOVO CEO TALKING ABOUT THIS UNPRECEDENTED AI
SQUEEZE WHEN IT COMES TO COSTS. WE ARE WELL-POSITIONED.
WE WILL GET THAT INTERVIEW. CHECK THAT OUT. PLENTY MORE AHEAD.
THIS IS BLOOMBERG. ♪ ♪ ANNABELLE: WELCOME BACK.
SOME OF THE BIG STORIES WE’RE TRACKING THIS MORNING. ACCORDING TO AN EXCHANGE FIVE
INCOME OF THE NEW ENTITY WILL HAVE 1.4 BILLION IN CAPITAL. BILL ACKMAN IS GETTING READY TO
HAVE AN IPO FOR PERSHING SQUARE NEXT YEAR.
HE IS SPEAKING WITH ADVISORS AND HAS INFORMED INVESTORS THAT
A LISTING MAY COME AS SOON AS THE FIRST QUARTER.
THE WALL STREET JOURNAL ALSO REPORTED THAT HE MAY ENLIST A
NEW INVESTMENT FUND AT THE SAME TIME. IN A UNIQUE DOUBLE IPO.
DAVID: BEFORE WE GO, JUST A LOOK AT
SOME STOCK MOVERS. 10 MILLION DOWNLOADS IN THE
FIRST WEEK. INVESTORS ARE GETTING SOME
NUMBERS TO CHEW ON. AS FAR AS TANGIBLE BUSINESS.
CHINA STOCKS ARE ON THE UP. SOME DEFENSE STOCKS IN FOCUS.
COMING UP ON YOUR SCREENS. HERE WE GO AT THE BACK OF THIS
ESCALATION. PARTIAL ESCALATION AS FAR AS
JAPAN GOES. THEY’RE BUILDING SOME MISSILE SYSTEMS. THE MARKET IS REACTING
ACROSS SOME OF THESE NAMES HERE. YOU CAN SEE THAT THE HANG SENG
IS ESSENTIALLY REVERSING THOSE LOSSES WE HAD AT THE END OF
LAST WEEK. 1.5% HIGHER. OPTIMISM MIGHT BE AROUND SALES
ON THE MAINLINE MARKET. ALSO THIS OPTIMISM AROUND THE
FED IS A CUT ON THE WAY IN DECEMBER.

“Bloomberg: The China Show” is your definitive source for news and analysis on the world’s second-biggest economy. From politics and policy to tech and trends, Yvonne Man and David Ingles give global investors unique insight, delivering in-depth discussions with the newsmakers who matter.

Chapters:
00:00:01 – Bloomberg: The China Show opens
00:03:07 – What to watch in Greater China today
00:04:44 – Trump team floats idea of selling Nvidia H200 chips to China
00:09:48 – Japan to deploy missiles to island near Taiwan
00:13:11 – Lenovo’s Winston Cheng on business outlook
00:28:23 – NF Trinity’s Helen Zhu on markets outlook
00:35:21 – Alert: GoTo taps new CEO in step toward Grab takeover
00:36:41 – Marco Rubio sees leeway on Ukraine deadline
00:40:21 – Foxconn plans multibillion-dollar US AI push
00:46:19 – Asia nears reporting season
00:55:41 – UBS’ Ivy Hu on Hong Kong, Asia IPO outlook
01:06:10 – Banned Chinese bond tactic turns 8% yields into 16%
01:08:58 – Alibaba’s main AI app sees strong debut
01:10:30 – SUSTech’s Didier Sornette on tracking signs of a financial bubble
01:24:39 – Lenovo’s Winston Cheng on AI demand
——–
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